FINANCE COMMITTEE OF COUNCIL
CITY
HALL, 100 LOCKVILLE ROAD
WEDNESDAY,
SEPTEMBER 17, 2008
EXPENSE
SUBCOMMITTEE
9:10
P.M.
1. Finance Committee of Council’s Subcommittee to review Expenses opened at 9:10 P.M., with Mr. Fix, Mr. Sauer, and Mr. Sabatino present. Others present were Tricia Sanders, Cristie Hammond, Tim Hansley, Lynda Yartin, Chris Schornack, Paul Lane, Jennifer Frommer, Larry Jones, and others.
2. APPROVAL OF MINUTES OF September 3, 2008, Meeting. Mr. Sauer moved to approve; Mr. Sabatino seconded the motion. Roll call was taken with Mr. Fix, Mr. Sabatino, and Mr. Sauer voting “Yea.” Motion passed, 3-0.
3. SCHEDULED MATTERS:
A. Review and discussion regarding outsourcing Building Department activities. Mr. Fix stated the committee had received a memorandum from Mr. Lane regarding the cost difference for inspections using different rate structures.
Mr. Lane stated we currently have an in-house person who does building inspections and that cost works out to $34.43 per inspection. He stated as shown in his memo, the quotes he received for these inspections were at the hourly rate of $60 and the per inspection rate of $55. Mr. Fix stated then it would be possible to save approximately $5,000 per year if we were to outsource building inspections using the hourly rate provided by Asebrook.
He stated for electrical inspections our current format, based on 277 inspections through August 15th, equals a cost of $78.32 per inspection, and under our old format we paid Mr. Lewis at $35 per inspection. Mr. Sabatino clarified that Mr. Lewis does have an annual contract with the City. Mr. Fix stated if we would go to a per inspection rate we would run into the possibility that Mr. Lewis might not be available when we need him. Mr. Lane stated he does anticipate that the per inspection rate will increase to $45. Mr. Lane stated the quote he received from Asebrook was at $55 per inspection. Mr. Fix stated then we could save approximately $8,000 using the $45 per inspection rate.
Mr. Lane continued that for plumbing inspections our current format averages out to $110.53 per inspection, and in the past we paid Mr. French $35 per inspection. Mr. Lane stated Asebrook had provided a quote of $55 per inspection.
Mr. Lane clarified that the contracts for the electrical and plumbing inspectors were based on the number of inspections in 2006 and 2007, and obviously those were higher than this years numbers. He stated continuing to use the two-year averages, the annual fee would continue to decrease over the next few years because the number of inspections would decrease. Mr. Fix stated as these are annual contracts there is no guarantee the inspectors would agree to the contract as we average it.
Mr. Fix stated it appears there is a potential savings of approximately $28,000 if you add up all of these figures and he would suggest that when we go into the 2009 budget process Mr. Lane will present to Council his proposal on how he feels we should do these inspections. He stated Council will then have the opportunity to discuss how we should structure a contract in 2009. Mr. Sabatino stated this Subcommittee’s task was to identify potential ways of doing things in a manner that would create some economies and that sort of thing by looking at the processes of how we do things, and it is his opinion that the way we are approaching paying for these services is not the most cost effective way. Mr. Fix stated he did not disagree with Mr. Sabatino, but these contracts are in effect this year, so when Mr. Lane goes to do the contracts next year he was hopeful he would see there is $28,000 in savings that could have happened in 2008 by doing it the per inspection way and he will put together numbers for 2009 based on per inspection and bring a budget back that reflects the most cost effective way to do it.
Mr. Sabatino stated at Mr. Fix’ request he had contacted the two companies Mr. Lane had spoken with, and he had provided correspondence from them for the subcommittee members to review. Mr. Lane distributed a copy of the contract with Mr. Phillips, our Chief Building Officer, for the members to review as well.
B. Review and discussion regarding cost savings of in-house City Engineer. Mr. Hansley stated he would ask Mr. Jones to address this issue as he has been working on this memo with staff. Mr. Sabatino stated the memo the committee had received seems to basically reiterate that it would come down to the skill set of the individual involved in the potential hire. Mr. Jones stated he felt that was one of the key assumptions, and he felt there was universal agreement that because of employment circumstances today the market is attractive in terms of what we might be able to find in an engineer. Mr. Sabatino questioned Ms Frommer if the proposed pay might be higher than we would need to pay and Ms Frommer stated she would just note that recently published information on city engineers noted that the City of Upper Arlington’s engineer just left the City and he had a salary of $85,000. Ms Frommer stated she felt the City would be looking in the roadway/traffic minded person, and she felt that person would exist in this salary range. Mr. Sabatino clarified that with the greater number of years of experience you get into more specialization. Mr. Sabatino stated his question was what was the likelihood that we would find someone who would have enough broad-based experience that we would not be contracting out a lot of things, and Ms Frommer stated she would feel better about some of the assumptions in the memo if we had the luxury of sending out an advertisement and getting some feedback in to look at. Ms Frommer stated, however, the numbers did include a presumption that not all of the work would be able to be handled by one engineer. Mr. Sabatino clarified that the $20,000 figure in the memo is an estimate only on the amount that might still be spent for outsourcing general engineering work. Mr. Fix stated, as he understood it then, an argument could be made that the City could hire an engineer for between $57,500 and $95,000. He further clarified the memo being discussed had been disseminated to all of Council. Mr. Fix stated when we go into budget discussions and look at the engineer’s contract renewal, the decision could then be made as a Council as to what direction they wanted to take. Mr. Hansley stated as Ms Frommer’s contract will be up for renewal in January, it would be helpful tonight if he could clarify who would be negotiating that contract. Mr. Fix stated he would like the review and discussion of this memorandum to be added to the next Finance Committee agenda. Ms Frommer stated should a new contract not be completed by the first of January, she felt they would honor the $9,600 per month retainer on a month-to-month basis. Mr. Hansley stated he would still like to understand the process for negotiating the contract, would it be done by Committee, staff, or what process? Mr. Fix stated in the past the contract was negotiated by staff and brought to Finance Committee, and he would suggest that Mr. Hansley do that at the same time Finance reviews this memo. Ms Frommer stated the decision of Council would be key in the negotiation of her contract because if the services are changed, that would change the dollar amount.
C. Review and discussion regarding draft summary of Subcommittee findings to date. Mr. Fix stated Mr. Schornack had provided a letter for review of the subcommittee regarding the potential savings identified by this subcommittee. Mr. Sabatino stated the draft summary states that no potential savings have been identified at this point in the building department, and he did not agree with that. Mr. Schornack stated he had prepared this summary prior to Mr. Lane’s presentation this evening. Mr. Sabatino stated he felt some potential savings have been identified and discussed, and Mr. Fix suggested the summary stated that potential savings in the Building Department have not been finalized at this point. Mr. Sabatino stated he did not agree with the last two sentences in the summary and he would not sign that. Mr. Sauer stated he agreed with Mr. Sabatino, and, in fact, did not agree with the entire last paragraph that stated the subcommittee has adopted a “wait and see” approach. Mr. Fix stated he agreed with removing the last sentences, but the first part just basically said that if we made cuts it would affect our services. Mr. Sabatino stated he thought it made a conditional commitment of importance to some of the functions and, by and large, all of the functions listed in No. 6 could be funded by the Bed Tax and whether or not the income tax passes shouldn’t have any relevance on the City’s attitude to these things. Mr. Fix stated the last paragraph did not refer only to No. 6, but the point was that if we made cuts, we will be making a sacrifice in either the service we provide our constituents or the relationships we have with all of the groups in No. 6. Mr. Sabatino stated he did not agree with that at all, and Mr. Sauer stated he felt the last paragraph could be deleted, and he did not feel the summary should refer to the income tax issue at all. Mr. Fix suggested the closing paragraph read, “The members believe all areas identified as possible savings add value to the City’s operations and relationships with outside grounds and organizations.” Mr. Sauer stated he would not have a problem with that. Mr. Fix stated point No. 6 only states that if these were cut it would affect outside organizations often dependent upon City funds and donations, and that is a fact. He stated if these are cut it would affect those people, and they do rely on our funding. Mr. Sabatino stated he still wasn’t sure he agreed with No. 6, and he didn’t really know why it had to be included. Mr. Fix stated whether or not these are funded from the Bed Tax, from the General Fund, or whatever, did not matter to what this sentence says; which is, that if we make these cuts it would affect these outside organizations that are dependent upon City funds. Mr. Hansley stated if the income tax fails, he felt this is where the cuts should start. Mr. Sauer inquired if Mr. Sabatino could agree with the statement that if the cuts were made it would affect these organizations and the last paragraph being the one sentence Mr. Fix had suggested earlier. Mr. Fix stated the whole summary was just areas that the subcommittee had identified for possible further review and discussion, and these are areas the subcommittee has identified as potential savings. Mr. Sabatino stated he would have to see the final version before he knew if he would sign it, but he thought he could live with it in that format. Mr. Sauer stated he would like the third sentence in the paragraph immediately following the listing of departments that begins, “Although the committee…” be deleted because he felt the subcommittee had found areas of savings and remove the word “also” from the next sentence. Mr. Sabatino suggested the second sentence in the second paragraph read “potential change” rather than “reductions.” Mrs. Sanders stated in the first paragraph the word “possible” should be deleted before “reductions” in both the first and third sentences. Mr. Fix stated he would request Mr. Schornack make the recommended changes to the summary letter and forward a clean copy to all the subcommittee members and at the next meeting, October 1st, if everyone concurred it could be signed and forwarded to the entire Finance Committee.
4. ADJOURNMENT. There being nothing further, Mr. Sauer moved to adjourn; Mr. Fix seconded the motion. Mr. Fix, Mr. Sauer, and Mr. Sabatino voted "Aye." Motion carried, 3-0. The Expense Subcommittee adjourned at 10:15 P.M., September 17, 2008.
RESPECTFULLY SUBMITTED:
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