CITY HALL, 100 LOCKVILLE ROAD

WEDNESDAY, OCTOBER 8, 2008

COUNCIL BUDGET WORK SESSION

7:00 P.M.

1. CALL TO ORDER. Mrs. Hammond opened the Budget Work Session at 7:00 P.M., with the following members present: Mr. Sabatino, Mrs. Hammond, Mr. Smith, Mr. Sauer, Mr. Wisniewski, Mrs. Sanders and Mr. Fix. No members were absent. Others present were: Tim Hansley, Stacey Bashore, Mayor O'Brien, Linda Fersch, Lance Schultz, Molly Schwartz, Eric Vannatta, Paul Lane, Larry Jones and others.

2. SCHEDULED MATTERS:

A. Overview of proposed 2009 Budget Mr. Hansley stated we would urge

Council to adopt a budget that is balanced. He stated that we prepared the budget with the assumption that the Income Tax levy will pass and if not the adjustments will be made by mid-November. Mr. Hansley stated it will be easier to make reductions. Mayor O'Brien asked what the comfort level was of the current proposed budget and Mr. Hansley stated that 2009 looks good on the assumption that the Income Tax passes and even if it fails 2009 is not the crisis year. He stated that 2010 will be the crisis year and as we look at the continuation of the hiring freeze and layoffs to save money will begin in 2009, so we will have to start making the cuts early. Mr. Hansley stated that our income tax is not growing at the rate that is supporting the necessary expenditures that are growing. He stated that our highest uncontrollable costs are the labor and health issues.

B. Review of proposed 2009 General Fund Department Budget- Mrs. Fersch stated that we would like to focus on the General Fund for this meeting. Mrs. Fersch reviewed the debt schedule with the Committee. She stated that we may look into more permanent bonds when things ease up a little. Mrs. Fersch stated we will go through these in more detail with Dennis Schwallie when he comes. Mrs. Fersch stated she could provide Council with a list of the current debt and the various interest rates and payments.

The Finance Committee requested that the budget be presented in an easier to read format so that information can be found easier. Mr. Sabatino stated the way it is now we have to look in several places to find things and with technology the way it is now we should be able to have it presented in an easier format. Mr. Wisniewski stated that the technology

we have is not that great and we don't have the money to replace it.

Mayor's Court- Mr. Fix asked where the revenue was shown for the Mayor's Court and Mrs. Fersch stated it is shown on the general fund as a line item. Mrs. Fersch stated we estimated $124,000 and we originally budgeted $135,000 in revenue. Mr. Sabatino asked why tickets were down and Mrs. Schwartz stated that we are down as far as traffic citations and criminal citations are coming up rapidly due to delinquent tax cases. Mr. Fix asked if delinquent tax cases had been sought after in the past and Mrs. Schwartz stated we have, but not with the same intensity and there is zero tolerance policy now. Mr. Sabatino asked why the projected estimated traffic citations was down and Mr. Wisniewski said that is 2007 to 2009 and this has nothing to do with Mayor's Court. Mr. Fix asked if the red light cameras were put in does that money come into the Mayor's Court fund as well and what the estimate would be and Mr. Hansley stated the estimate was in the range of $75,000. Mr. Fix stated it is fairly simple because there is only one person in the office and there are very limited expenditures outside of that other than the magistrate and prosecutor and it pays for itself.

Building Regulations Department- Mr. Sabatino stated that we don't drive the numbers and if building happens we get it. Mr. Fix stated that we drive the rate of what we charge for the services. Mr. Smith clarified that the only revenue source came from the permit fees. Mr. Fix stated that we can drive the dollar amounts that we collect for each one. Mr. Hansley stated we took a conservative estimate for revenue as far as the housing market. Mr. Sabatino clarified that if any changes needed to be made in the fees recommendations will be made. Mr. Fix stated we asked the question of whether we contract out our permit process and he didn't remember what conclusion we came to. Mr. Sabatino stated we talked about it and we encouraged Mr. Lane to look at something that is more relative to the actual activity performed. Mr. Lane stated it was left that staff would determine what scenario we felt was best and staff has not had a chance to do that. He stated this budget would reflect a socialized or a per inspection fee. Mr. Hansley stated that this budget allows for the worst case scenario on the expense issue and we felt that the issue was unresolved as a whole. He stated that the worst case scenario is maintaining it the way it is now with low volume and we may be recommending a change to the Finance Committee than the amount would be lower. Mr. Fix clarified that on the revenue side the rates will be looked at and there will be a recommendation on whether they need to be changed. Mr. Hansley stated that is part of the problem of starting the budget in October because numbers are still coming in. Mr. Fix clarified that they will come back to Finance after they figure out the numbers for 2009 and once we agree to that it will be reflected in the budget. Mr. Wisniewski stated that we need to look at more of a decrease for the budget projections on the revenue side for next year. Mr. Lane stated we are trying to get a volunteer program up and running and he thought there was some money tucked away this year for it. He asked if it would be possible to create a volunteer coordinator fund just for volunteer services. Mr. Sabatino stated he thought it was a great idea because it is gets people in the community to take more pride in it. Mr. Sauer asked if we were spending any money on miscellaneous office furnishings this year and Mr. Lane stated they would be purchasing chairs. Mr. Vannatta stated it would be around $2,500 to purchase the chairs and we have had the original chairs since we moved here in 1992. Mr. Sauer stated if there is money sitting there and it is not a necessity and we are looking for money for a volunteer coordinator it seems like the prudent thing to carry it over for that. Mr. Hansley stated it would be used from the same general fund money. Mrs. Hammond asked everyone to make a note for that section of the budget to see if we could add any money for the volunteer budget.

Lands and Buildings- Mr. Fix clarified there was no revenue for Lands and Buildings. Mrs. Fersch stated that it lists key projects that have been worked on. Mrs. Hammond asked if everyone noticed the large amount we are forced to pay for telephones and Mr. Vannatta stated a lot of it is due to dedicated circuits that we pay for monthly for connectivity from City Hall to other locations. He further stated that we have renegotiated with AT&T and have saved some money and we continually look at ways to save money. Mr. Fix asked about a $15,000 expense for computer software and Mr. Vannatta stated that it was cut last year and it gives us the ability to purchase several Adobe software and an office calendar system because our exchange server died on us a couple of months ago. He stated that the actual exchange server would cost us $22,000 to replace and this software costs around $3,000 to $4,000, so it is a considerable savings. Mr. Fix asked that a list be provided to show what the $15,000 would be spent on for the computer software and what the benefits would be. Mr. Fix asked what 101.54230 was for and Mr. Vannatta stated it went from $3,000 to $15,000 so we can replace our oldest computers and he was basing the figure on $800 to $1,000 per computer to replace. Mr. Fix asked for a schedule of the computers that need to be replaced. Mayor O'Brien suggested having a desktop management program to contract the service and part of the contract could be negotiated to include replacement of computers and upgrades. He stated that way everyone would be on the same page at the same time. Mr. Fix asked if this was something that has been looked at and Mr. Hansley stated that a City that is well funded would do that, but the problem is you are tied into that contract and it is a fixed cost every year. Mr. Fix stated it would be worthwhile to look at for this year's budget. Mr. Sabatino stated it would be the same as an older fleet of trucks where it costs more to maintain them than to lease them. He stated there may be a cost benefit there. Mayor O'Brien stated that if we do a risk analysis across the board when you compare a truck breaking down versus our exchange server crashes and losing the exchange server hurts more. Mr. Fix asked about the property taxes going down and Mrs. Fersch stated we will be given property tax exemptions and what happens when we buy property we have to pay for the first year of taxes. She stated this year the property for the assisted living facility was a lot split and we had to pay for the whole property, but the facility is going to reimburse us for the portion that is theirs. Mrs. Sanders asked what the maintenance and repairs were for the Building Department and Mr. Vannatta stated this is the second year that we have put in for a furnace because the building department has a 20 year old HVAC system that is in the ceiling and the money is to replace and relocate the units. He stated we also looked at putting an air handler at the front door during the winter to help keep the cold air out. Mrs. Hammond stated hopefully there would also be a small benefit in the efficiency of the heating and cooling on our electric bills. Mr. Sabatino asked about $1,500 for landscape supplies that haven't been used for this year and is on for next year and Mr. Vannatta stated it was for supplies for City Hall and Mrs. Fersch stated sometimes the Parks Department has paid for it because they buy it in bulk. Mr. Sabatino asked why it is requested again for next year if it hasn't been spent and Mr. Wisniewski stated that Parks picked up the cost this year, but may not be able to next year. Mayor O'Brien stated that the planting that was done was completed by the employee volunteers and that may not be able to happen again. Mrs. Hammond asked about the Carnegie Library equipment and Mr. Vannatta stated that is in Land and Buildings, but Steve Carr is over that. Mr. Hansley stated we are responsible for the exterior of the building. Mr. Sauer asked about the replacement flags and Mr. Vannatta stated we will get a discount in December for all of the United States flags that we order so that is why we wait until then. He stated that once the tattered and torn flags come down they are disposed of properly. Mr. Sauer asked if Lands and Buildings was responsible for furnishing this whole building and Mr. Vannatta stated it would be anything this building needed if it breaks.

The Committee recessed at 8:33 p.m. and reconvened in Work Session at 8:38 p.m.

Planning and Zoning- Mr. Fix asked if there was any revenue and Mrs. Fersch stated there is some for zoning and engineering fees. She stated that part of the fees are from the construction department too.

Engineering- Mr. Smith clarified that half of the staff engineer's salary comes from utilities. Mrs. VanCleave stated the construction inspectors switched from building inspection to the engineering department so that is why there is a difference. Mr. Hansley stated they were somewhat misnamed because they were doing inspections in the public right of way and the engineering field. Mr. Fix asked about bringing an engineer in house and Mr. Hansley stated it is an unresolved issue in Finance Committee at this point and this budget is assuming no change. Mr. Sabatino asked if there were any inspectors being compensated socialistically and Mrs. VanCleave stated we have a set fee schedule and they bill out their time to get reimbursed. She stated she has a proposal before the City Manager and Finance Director to redo the engineering fees based on what other cities have been charging and we are grossly undercharging our services. Mr. Smith asked what the Professional Services was for and Mrs. VanCleave stated that is our contract with Stilson or other engineers for items outside of the retainer. Mrs. Fersch stated that the fund for Professional services comes out of a lot of budgets so this does not reflect the total. She stated this is General Fund so if it something that relates to street or Stormwater or water and sewer the bill will be charged to that fund. Mrs. VanCleave stated it could also come into use if we need some kind of policy review and Mr. Smith stated we haven't used any this year. Mr. Hansley stated we can take it out and if we need to we can come back for more. The Committee agreed that the Professional Services account should be reduced down to $10,000.

Mayor O'Brien stated that one of the expenses in the budget is for the Fairfield County Board of Health for $89,170 and we have been looking at other options and we could contract with Franklin County. He stated that current the County charges us a cost against our property valuation and divides that figure and Franklin County charges per capita so there is a costs savings associated with that. Mayor O'Brien stated he spoke with Mayor Smith from Lancaster regarding this and the JEDD and Mayor Smith stated we would not hurt them if we pulled out of the Fairfield County Board of Health because the cost is spread across the communities that are contracting with them. He further stated that we may want to consider looking at the other options. Mrs. Fersch stated if we created our own board of health the state would have to approve that. Mr. Wisniewski asked what the cost savings would be from Fairfield to Franklin and Mrs. Fersch stated it would be around $20,000 to $30,000 because they base it per capita. Mr. Wisniewski stated that it is not a decrease in services, but it is a savings. Mrs. Fersch stated that we could have Franklin County come and talk to us and they also have a commercial plumbing inspection program where they would only charge us for 60% of whatever fee we collect, so we get to keep the other 40%. Mr. Fix asked what do we know about the Franklin County Board of Health and Mrs. Fersch stated that all of the suburbs around us except Worthington is with them. Mr. Fix asked if the City of Columbus was an option and Mrs. Fersch stated that is also an option and she has a call in to them as well. Mr. Fix stated that with the Columbus Board of Health and the Franklin County Board of Health we need to be careful and know what we are getting into before we make the switch. Mr. Hansley stated his experience with Franklin County Board of Health is a reasonable level of service for what you pay. Mr. Sabatino asked how this affected the health department clinic and Mrs. Fersch stated that the clinic is what is drawing the general district health down because of Medicare payments and third party managed care and there is a plan on reorganizing under 503C so they would have their own credit. Mr. Sabatino clarified that the City had no obligation to provide a clinic. Mayor O'Brien stated that if we make a decision to switch we need to let them know early enough so they can plan their budget. Mr. Fix asked about the Township and Mayor O'Brien stated they are aware that we are looking into options. Mayor O'Brien stated he talked to Lancaster about the JEDD and they are willing to join at some point in time and they are not going to take action until Canal Winchester and Pickerington have voted on it. He stated that is because they feel that is the respective thing to do because they are the most distant party in this. Mayor O'Brien stated he was not trying to rush it, but we agreed to a timetable that we are trying to stick to. Mrs. Fersch stated she would mention that we are exploring our options at the next Board of Health meeting.

Mr. Wisniewski asked that the discussion return to the debt expenses. He stated that with the Wastewater Fund we can do the initial draw to get the money to pay for the sewer plant expansion and wait for the following year when it would be due. Mr. Fix clarified that the DEFA loan is a straight loan and Mrs. Fersch stated that we haven't drawn anything on it. Mrs. Fersch stated she provided information on the TIF revenues and what we have collected on them and the corresponding debt. Mr. Fix asked when the TIFs would expire and Mrs. Fersch stated it would be in ten years from the original start date of each TIF. Mr. Fix asked what the leftover burden would in 2012 and Mrs. Fersch stated there is a school payment that is due on both the COVER and the Cycle Way TIF that we will have to pay. Mrs. Fersch stated that the TIFs can be renewed and extended up to 30 years. Mr. Fix asked if they could be turned into notes or bonds and Mrs. Fersch stated they are notes now, but they are negotiated notes with U.S. Bank so that they don't affect our ten-mill certificate. She stated that we could negotiate with another bank if we wanted to or we could go conventionally and put them all together with the other notes. Mrs. Fersch stated that for tracking purposes it is better to do what we are doing now. Mr. Sauer asked if we are required to pay a certain principal amount for each one of the notes and Mrs. Fersch stated that we are not and that is the advantage of a note. Mr. Sauer stated that we could pay interest only on one of them and then pay all principal on another note to get it paid off quick and wanted to know if we have ever worked the numbers to see if that saves us interest. Mrs. Fersch stated that it really doesn't because we have combined them as one whole issue and the only thing would be the TIF's. Mr. Wisniewski asked about the reverse osmosis fee and Mrs. Fersch stated we are getting a $1,000,000 capacity fee from the hospital and instead of borrowing the full amount we thought we could use that for it. Mr. Sabatino asked why we couldn't use that money to pay off the existing debt and Mrs. Fersch stated that we can but then we have to turn around and borrow for this. Mr. Sabatino stated that from what he understood the County is fighting EPA on the reverse osmosis issue so why would we do anything until that has been resolved with the County. Mrs. Hammond stated as she understood it we missed the deadline there was to fight it so she didn't think it would make any difference. Mr. Hansley stated we didn't file in a timely fashion. Mr. Fix asked if the only option to fix the problem was reverse osmosis and Mr. Wisniewski stated there are several options and we have asked them to come back with those. Mrs. Fersch stated that we looked at 2008 projects that were still on the books for Impact Fees and estimated what they would be for next year based on what we have already collected. Mr. Hansley stated that we have to base the budget on what seems logical at the time, but we are hoping it will be higher. Mrs. Fersch stated that we are now getting the money for Cable Franchises and Mr. Hansley stated that gross part of the bill is being taxed at a 5% term and the bills are now reflecting that accordingly. Mr. Fix asked about the Income Tax and Mrs. Fersch stated that we are being conservative on the increase for next year because we figure there will be confusion on getting the word out to people. Mr. Hansley stated that we are conservatively basing the budget on the passage of the income tax and we won't realize the full value of it until 2010. Mr. Fix asked about the reimbursement on 101.00049200 and asked what it was for and Mrs. Fersch stated it was an insurance reimbursement for damages. Mr. Hansley stated that we have applied for $100,000 reimbursement for the damages from Hurricane Ike and there is a good chance we will get some of that money back. Mr. Wisniewski asked about health insurance and Mrs. Fersch stated that it looks like there will be a 15% increase so we added that across the board and we found out Delta Dental will be 7%. She stated that the Insurance Committee will meet next week to make a recommendation. Mr. Smith asked about the cellular antennae rental and Mrs. Fersch stated that Nextel pays us monthly and the other is paid once a year.

3. ADJOURNMENT. There being nothing further, Mrs. Hammond closed the Budget Work Session at 9:05 P.M., October 8, 2008.

RESPECTFULLY SUBMITTED:

____________________________________

Stacey L. Bashore, Municipal Clerk

ATTEST:

Cristie Hammond, Council President Pro Tempore