WEDNESDAY, JUNE 3, 2009

REGULAR MEETING

7:00 P.M.

1. ROLL CALL. Mr. Fix called the meeting to order at 7:00 P.M., with roll call as follows: Mr. Sabatino, Mrs. Hammond, Mr. Smith, Mr. Fix, Mr. Sauer, Mrs. Sanders, and Mr. Wisniewski were present. No members were absent. Others present were Mayor O’Brien, Tim Hansley, Lynda Yartin, Linda Fersch, Chris Schornack, Fred Holmes, Deb Chuvalas, and others.

2. APPROVAL OF MINUTES OF May 6, 2009, Regular Meeting. Mr. Sabatino moved to approve; Mr. Sauer seconded the motion. Roll call was taken with Mr. Smith abstaining, and Mrs. Hammond, Mr. Fix, Mr. Sabatino, Mr. Sauer, Mr. Wisniewski, and Mrs. Sanders voting “Yea.” Motion passed, 6-0.

3. FINANCE DEPARTMENT.

A. Finance Director’s Report. Mrs. Fersch stated she had provided a written report to the Committee and she would answer any questions. Mrs. Fersch stated she is in the process of finishing up our management letter that goes into the CAFR report, and the CAFR will be filed by the end of June.

B. Review and request for motion to approve draft ordinance amending the 2009 appropriation, Ordinance 2008-92. Mrs. Fersch stated she has no appropriations at this time.

C. Presentation by Volunteer Energy on proposed contract and rate structure for gas aggregation program. Mr. Fred Holmes stated he had provided a draft contract for the Council to review. He stated he had provided two pricing options and he would like to clarify a couple of things up front. He stated all of the municipal accounts are signed up under the variable option, which is Option 2. Mr. Holmes further stated the City has three accounts and after reviewing the last 12 months and comparing what the City would have paid with Columbia Gas and what you did pay with the variable price, the City saved $1,559. He stated they had provided two options and reviewed both pricing options with the Committee. He stated Option 1 is a guaranteed savings of 10 percent below the Columbia Gas GCR, and Option 2 is a variable price and that is what the City’s current accounts are on. Mr. Holmes stated he had done a comparison on the City’s current accounts using both Option 1 and Option 2, and you would do slightly better with the variable price. He stated, however, the issue was how conservative Council wanted to be. Mr. Holmes stated further he could not guarantee that their prices would be lower than Columbia Gas every month, but over the 12-month period they would normally beat the ten percent guaranteed savings. Mr. Holmes stated Columbia has talked about getting out of the supply business in April 2010, but that could be extended on out. Mr. Holmes stated once that happens there will be no GCR so you would have to go to a variable type pricing model. Mr. Wisniewski stated Option 1 states once the GCR is no longer in effect, a fixed price could be negotiated and he felt we would rather a variable price be negotiated. Mr. Holmes stated it would automatically go to a variable price so a fixed price would be negotiated. Mr. Wisniewski stated he would prefer the contract stated that at that time a variable price would be negotiated. Mr. Smith stated he agreed with Mr. Wisniewski and perhaps it should read a new price be negotiated. Mr. Holmes stated that could be changed to however Council wanted it. Mr. Fix clarified that Council would be making a decision for all City residents who were with Columbia Gas and have not chosen a private supplier. Mr. Holmes stated the residents do have the opportunity to opt out of the program if they wish. Mr. Sabatino clarified that there would not be several options to choose from, if you were in this program there is only one option that is available. Mr. Holmes stated that was correct and Council would be selecting the pricing option for that program. Mr. Smith stated the whole idea behind this is that there is safety in numbers and with the volume that we are aggregating together, a company such as Volunteer Energy can get us a price break. Mr. Wisniewski stated when Columbia Gas gets out of this in the future, everyone will have to pick a supplier, but the communities that have already aggregated will have already done that. Mr. Wisniewski stated what we are trying to do right now is for our residents we will buy in bulk from Volunteer Energy and they will give us the best price possible with a guaranteed savings. Mr. Sabatino stated he wanted to know if all of Volunteer Energy’s purchases were tied to the futures market. Ms Chuvalas stated that not all of their purchases were tied to the futures market, naturally the watch it, but they have people in their office that are buying, selling, and trading contracts every day. She stated they track the futures market, but there are no guarantees. She stated the only guarantee they are giving is that with Volunteer Energy, because of the way they do business, they will save you money. Mr. Smith stated Volunteer Energy is in the business of having gas available to sell, and how they get their hands on the gas to sell is not for the customer to decide. He stated their incentive is to make more money to have their gas available to sell at a much lower price. He stated because we are aggregating our residents and we will be a larger volume, we should be able to participate in that incentive.

Mr. Fix stated the question before the Committee tonight is whether we should go with an option that has a fixed savings off of Columbia Gas or a variable savings off the market. Mr. Smith stated he had contacted other cities that had gone with an aggregation program. He stated the cities that had fixed price contracts were very sorry they had done that. He stated he felt if we can guarantee our residents a ten percent savings over what they are paying today to Columbia that is where we should go. Mrs. Hammond stated she agreed with Mr. Smith and as long as the residents will get a definite savings over the year, it would make them happy. Mr. Wisniewski stated he would prefer to go with Option 1 with Option 2 automatically kicking in when the gas recovery goes away. Mr. Sauer stated he agreed with Mr. Smith who is very knowledgeable on this issue. Mr. Smith stated he would like to state that there has been no announcement that Columbia Gas is going to get out of the supplier business. Ms Chuvalas stated that is correct, the papers have been filed with PUCO, but there is nothing definite. Mr. Sabatino stated then we could conceivably go through the entire first contract under that option so he felt we should go that way. Mrs. Sanders stated she agreed with Mr. Wisniewski that Option 2 should be added to the contract to kick in when Columbia Gas did stop being a supplier. Mr. Smith clarified that residents who do have contracts with another supplier can opt into this program, however, they need to fulfill their obligation to their current supplier. Mr. Smith stated there are several residents who have contracts with Volunteer Energy, and clarified they will be able to opt in to this program.

(Mr. Sauer stated he had been called to work and was excused from the meeting.)

Mr. Fix stated the price that they were choosing was, in effect, a variable price because it is off of Columbia’s price. Mr. Holmes stated that was correct, Columbia adjusts their price every month. Mr. Smith stated it is an indexed variable price. Mr. Fix stated then instead of going off of the New York Stock Exchange price for gas we would be going off of Columbia’s price for gas. Mr. Holmes stated that was correct, it would be a guaranteed ten percent off the GCR. He stated he would have to include that in the letter sent to the residents, that their price each month may not be lower, but over the year it would be. Mr. Holmes stated on the draft contract he wanted to make sure that everyone understood the Community Reinvestment Program. He stated Volunteer Energy Services would contribute $.05 per one thousand cubic feet of natural gas that is supplied through the aggregation program to the City of Pickerington. He stated these funds would be deposited into a special account established by the City and may be used as the City’s matching funds for programs such as, but not limited to, Community Development Block Grants, transportation enhancement, or for any project the City approves by resolution or ordinance. He stated should the City have a park project, a sidewalk project, or a downtown beautification project, as long as it is passed by ordinance or resolution these funds may be used.

Mr. Fix clarified that the next step would be to have Mr. Hansley finalize the contract, have the law director review it, and bring it back to Finance with the adoption ordinance. Mr. Holmes stated now that Council has chosen a price, two public hearings must be held for the public and they must be at least two weeks apart. He stated he would start putting together the application packet for the PUCO, but the residents must be advised that if they are behind in their bill, in order to participate in the program, they must be current in their bill. He further stated if they would get more than two months behind on their bill they would be dropped from this program. Mr. Holmes stated it is important in these public hearings that this information be put out so people would not be dropped from the program and not know about it. Mr. Sabatino clarified that if someone is in the program and decides to opt out, then wants to get back in, they can’t just be guaranteed that, it must be approved by Volunteer Energy. Mr. Holmes stated this was to prevent someone from being in the program in January, opt out in February, come back in March, opt out in April, etc. Mr. Hansley stated the program is covered by PUCO, not Volunteer Energy, and Ms Chuvalas stated there are some regulations of the PUCO and the utility, Columbia Gas of Ohio. Mr. Hansley stated he would suggest to interface the public hearings with the normal second and third readings on the ordinance. He stated it would be advertised as much as possible so people would understand what they were doing. Mr. Smith moved to approve the draft contract choosing the pricing set forth in Option 1, with Option 2 being implemented automatically when the GCR is no longer in effect; Mr. Sabatino seconded the motion. Roll call was taken with Mr. Fix, Mrs. Sanders, Mrs. Hammond, Mr. Smith, Mr. Wisniewski, and Mr. Sabatino voting “Yea.” Motion passed, 6-0.

Mr. Holmes stated he will amend the contract and bring it back with all the forms for the law director to review, and once the signatures are obtained, he will file the application with the PUCO. He stated PUCO has up to 30-days to approve the contract and at that time the City will receive a Certificate of Ohio Natural Gas Aggregator. He continued once you are granted that Certificate, Volunteer Energy will request the names of customers from Columbia Gas and a letter will be sent to them from the City explaining the program. He stated the residents normally have 21 days to choose to opt out and the terms and conditions are sent to each individual with the opt out form at the bottom of the sheet. Mr. Holmes stated they would try to move as quickly as possible so the program can be in effect prior to the winter season.

Mr. Wisniewski asked if the Committee should set a public hearing date and Mr. Hansley inquired if there were some formal language required by PUCO regarding the hearings. Mr. Holmes stated he had some standard language and he would provide that. Mr. Fix inquired if the hearing should be scheduled before or after PUCO’s approval, and Mr. Holmes stated it could be done either way as long as it is advertised. Mr. Smith stated we actually do not have a negotiated contract as yet and Mr. Fix stated the contract should be completed prior to the next Council meeting. Mr. Fix clarified that the members did not feel the contract had to come back to this Committee, but could be forwarded to Council for a first reading on the next Council agenda. Mr. Fix then stated the public hearings could be scheduled for immediately prior to Council when it is scheduled for a second and third reading. Mr. Hansley stated that action could be taken by Council after the first reading. Mr. Sabatino clarified the ordinance that is currently on the agenda for a second reading is the framework and states that Volunteer Energy will be our supplier, while this ordinance will be the how it is supplied, the pricing, etc. Mr. Hansley stated once the first is passed, we can officially deal with this as the goal is to get this done by fall. Mr. Sabatino clarified then the first ordinance gives Mr. Hansley the authority to deal with Volunteer Energy. Mr. Hansley stated that is correct, it is complicated but we are required to do both.

D. Review and discussion regarding staff recommendations and comparisons of RITA and Insource Solutions proposals. Mr. Hansley stated it is unfortunate Mr. Sauer had to leave as Mr. Sauer met with himself, Mrs. Fersch, and Mr. Schornack this afternoon to answer some questions he had on the report. Mr. Hansley stated Mr. Sauer was more concerned about the gross savings and still supported RITA if you looked at just the numbers. Mr. Hansley stated if you looked at just the numbers, we should probably go with RITA. He stated, however, as pointed out in the report, staff looked at customer service, the local based services we need and gave a lot of credit for that. He stated the decision is how you weigh that, and in the report staff states they do not believe, at this time, there is enough evidence to make the change to RITA. He stated there may come a time when RITA would be the best option; when the numbers would be more dramatic and the customer service is poor from our point of view. Mr. Hansley stated he felt Mr. Sauer had accepted that and has no issue with Insource or questions the value of the customer service, he just values the cost savings more than he does the customer service. Mr. Fix determined no members wished to speak on behalf of going with RITA. Mr. Sabatino stated he would like to state that with enhancing how we do the income tax in the future with the program presented by Insource gives us much more than just some efficiencies in the income tax department, it gives us the ability to create a communication framework with our citizenry. Mr. Sabatino stated he had a discussion with Mr. Sauer before the meeting and had told him that the cost savings and potential future cost savings doesn’t reside totally with the tax department. Mr. Sabatino stated by utilizing the program that was presented we can help efficiencies in other departments as well. He stated his view is that it is not just a dollars and cents issue, but creating a much higher level of efficiency and upgrading our technology to current standards as opposed to trying to upgrade the tax department as cheaply as we can. Mr. Hansley stated he had made the point to Mr. Sauer that any technology increases that come through the income tax situation may be translated over to our utility billing side and to some other communication things we are using. Mr. Hansley stated we can pay for it and justify out of income tax alone, but it may be that we will learn other ways to deal with e-processing utility bills and things like that and we are already looking into some of those opportunities. Mrs. Sanders stated she has been a supporter of RITA only in that it would bring us up to date with technology in the tax department. She stated she would be willing to let that go as long as she is assured that we are going to continue to look at something like Insource because she does feel we are a little behind the times. She stated a company like Insource might be a little bit of a compromise to help bring us up to speed. She stated she felt, however, our tax department was doing great with everything they are bringing in. Mr. Fix stated the question was if there was a consensus behind getting the software process moving. Mr. Wisniewski stated he had not seen any clear figures on what would be required for start up costs. Mr. Schornack stated the implementation schedule included in the report was provided by Insource and it shows this would be implemented over a three year period. Mr. Schornack stated we would need to appropriate additional funds for this year, and the remaining in 2010 and 2011. He stated this would allow the cost to be broken up over a period of time and would allow Insource to build their system and update the technology. Mr. Sabatino stated it would also allow our staff to get acquainted on an easier schedule than by making a major change all at one time. Mrs. Fersch stated as it shows, we would need to appropriate $8,000 for Insource and there is also a CMI cost that we need to ascertain. Mr. Schornack stated that is correct, we have not received that quote from CMI that would allow us to bring those forms into our current system, and he would estimate it would not be over $5,000. Mr. Sabatino clarified that we already have a relationship with Insource because they initiated our tax tool. He further clarified we have had that for two years and we are very satisfied with the support provided by Insource. Mr. Fix inquired if it would be appropriate at this point to ask staff to come back to the next Finance Committee meeting with a firm proposal on costs and the timeline in doing this, and Mr. Hansley stated that would be appropriate. Mr. Fix moved to authorize staff to prepare the appropriation ordinance needed to implement the first two phases of the Insource Solutions proposal for consideration at the next Finance Committee meeting; Mr. Sabatino seconded the motion. Mr. Sabatino stated that should we enhance our collection rate our costs would to up with RITA, and with Insource those funds would remain in the City. Roll call was taken with Mrs. Sanders, Mrs. Hammond, Mr. Wisniewski, Mr. Sabatino, Mr. Fix, and Mr. Smith voting “Yea.” Motion passed, 6-0.

4. PERSONNEL DEPARTMENT.

A. Personnel Director’s Report. Mrs. Fersch stated she had provided a report to the Committee and she would answer any questions. She stated she has been busy hiring for seasonal workers the pool.

Mr. Wisniewski inquired what we were down to in the Parks Department as far as personnel goes and Mrs. Fersch stated we have Mr. Ross, Mr. Carr, a temporary that works half days to work with the registrations, and we have one maintenance worker and a parks supervisor. Mr. Wisniewski stated there had been discussion in the past as to moving the Parks Department under Service and having one director in that arena. Mr. Wisniewski stated the Parks Department seems to be pretty sparse and it seems we could approach this from one director over everything. Mr. Wisniewski questioned how we would go about getting a recommendation and getting some traction on this. Mr. Hansley stated Council sets the positions and staff fills those positions with people, so the organization and staff levels are up to Council. Mr. Hansley stated he did not recall discussion on this other than being touched on a couple of times during the Finance Expense Subcommittee, but if there is support of Council to reorganize or draft a new organizational chart for Council to review he can do that. He stated it would then take a vote of Council to modify the organizational chart we have now. Mr. Wisniewski stated if we did reorganize with something like that, it seemed we could deal with one administrative assistant. Mr. Hansley stated he felt that a little simplistic because it is not just parks, it is parks and recreation. Mr. Wisniewski stated he understood that, but he felt we could handle the volume of program sign ups by other methods such as on-line or mail in registrations. Mr. Smith questioned if it would be appropriate to ask the City Manager to look into this and provide Council with a comparison showing the pros and cons such as had just been done with Insource versus RITA. Mrs. Sanders stated as a member of the Parks and Recreation Board there are a lot of projects they would like to get started, and Mr. Carr says he does not have time. She stated if the two departments were combined, it would be adding a little help to the Parks Department. Mayor O’Brien stated he felt one of the benefits would be that one manager would have sight over all of it and be able to fluctuate resources back and forth to where they are needed. Mr. Smith stated he would like to see Mr. Hansley look at the current organizational chart and make whatever recommendations he felt appropriate for efficiencies across the board because our current organizational chart is pretty old. He stated if Mr. Hansley would look at it in today’s reality he could see if there are any other changes that should be made. Mr. Sabatino stated another reason to look at it is to see how our new City Engineer will fit into it as well. Mr. Hansley stated the timing seemed right to do this because if there are going to be some changes made then they could be incorporated into the 2010 budget. Mayor O’Brien stated further he would like to know if Council would like him to pursue getting a communications intern in for the summer and they could help us develop a plan for the fall for some sort of communications type things. Mayor O’Brien further stated he agreed with Mr. Smith that it would be prudent to take a look at our overall structure. Mr. Hansley stated he felt he could have something for this Committee to review at the August Finance meeting if that is what the Committee wished. Mr. Smith moved to request the City Manager to look at the current organizational staffing and provide a review to Finance Committee in August 2009; Mrs. Sanders seconded the motion. Mr. Smith stated he wanted to clarify this was not about drastic changes in levels of service or anything like that. Roll call was taken with Mrs. Hammond, Mr. Fix, Mr. Smith, Mr. Sabatino, Mr. Wisniewski, and Mrs. Sanders voting “Yea.” Motion passed, 6-0.

5. CHAIRMAN: Mr. Fix stated he had received a call with regard to PYAA being interested in building a storage facility on their ball fields. He stated they have had two trailers for years that they store their equipment in and they are looking to replace them with a 1,200 square foot storage building. Mr. Fix stated PYAA is asking the City to waive the impact fees and the fees charged for inspections. Mr. Fix stated he had spoken to Mr. Hansley and Section 1486.03(d)(1) of our Code allows for a waiver of impact fees on any new nonresidential development that does not increase demand on public facilities. Mr. Fix further stated staff would support this request with the justification that the storage building is for a non-profit agency that is replacing existing storage trailer units and the new structure would not increase the demand for public facilities. Mr. Fix stated he was in agreement with staff’s recommendation on waiving the impact fees of approximately $600. Mr. Hansley stated the building and permit fees would be approximately $1,200. Mr. Wisniewski questioned if those are fees the City would have to pay. Mr. Hansley stated Mr. Parsley would do most of the inspection but since there are electrical inspections, we would have to pay that inspector. Mrs. Hammond questioned if they weren’t supposed to come before the Committee and request this, and Mr. Hansley stated the difference in this is that our interpretation of the Code for this particular user is they should not be charged in the first place because there is no impact, so this is not a waiver per se. Mr. Fix stated the question is on the cost of the inspections and Mr. Hansley stated the only outside fee would be the electrical inspection and everything else should be done in house. Mr. Sabatino stated it would probably not be a major cost for the electrical inspection, and Mr. Wisniewski stated he did not see anything wrong with asking them to pick up the cost of anything that goes outside of our staff. Mr. Fix stated then it seemed that the Committee concurred in waiving everything except the hard costs. Mr. Fix moved to waive all building and permit fees associated with the PYAA storage facility except for the cost of any inspections or reviews, such as electrical inspections or review by the CBO; Mr. Smith seconded the motion. Roll call was taken with Mrs. Hammond, Mr. Sabatino, Mr. Smith, Mr. Fix, Mr. Wisniewski, and Mrs. Sanders voting “Yea.” Motion passed, 6-0.

6. OTHER BUSINESS:

A. Pickerington Local School District Board Meeting – Update. Mrs. Sanders stated graduation was Saturday. She stated today was the last day of school and things should be ready to go in September.

7. MOTIONS:

A. Motion for Executive Session under Section 121.22(G)(1)b, Matters involving an employee’s or public official’s employment, Section 121.22(G)(2), Purchase or sale of public property, Section 121.22(G)(3), Conference with law director regarding pending or imminent court action, and Section 121.22(G)(4), Matters involving bargaining sessions with public employees. Mr. Fix stated an executive session was not required this evening.

8. ADJOURNMENT. There being nothing further, Mr. Smith moved to adjourn; Mrs. Hammond seconded the motion. Mr. smith, Mr. Wisniewski, Mr. Fix, Mrs. Sanders, Mrs. Hammond, and Mr. Sabatino voted "Aye." Motion carried, 6-0. The Finance Committee adjourned at 8:25 P.M., June 3, 2009.

RESPECTFULLY SUBMITTED:

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Lynda D. Yartin, Municipal Clerk