CITY OF PICKERINGTON

                                           FINANCE COMMITTEE OF COUNCIL

                                               CITY HALL, 100 LOCKVILLE ROAD

                                               THURSDAY, SEPTEMBER 25, 2003

 

                                                          REGULAR MEETING

 

                                                                      7:30 P.M.

 

1.         ROLL CALL.  Mr. Wright called the meeting to order at 7:40 P.M., with roll call as follows: Mr. Wright and Mr. Fox were present.  Mr. Parker was absent.  Others present were: Joyce Bushman, Lynda Yartin, Linda Fersch, Susan Crotty, Susan Sheikh, Dale Kocarek, Peter Ross, Jennifer Wray, Rita Ricketts, Bob Harding, Kirk Richards, Mike Maurer, Dennis Boruszewski, Jeannette Boruszewski, Jeff Kraus, and others.

 

2.         APPROVAL OF MINUTES OF August 20, 2003, Regular Meeting.  Mr. Fox moved to approve; Mr. Wright seconded the motion.  Roll call was taken with Mr. Wright and Mr. Fox voting “Yea.”  Motion passed, 2-0. 

 

3.         FINANCE DIRECTOR:

 

A.        Review and request for motion to approve draft ordinance amending appropriation ordinance 2002-142.  Mrs. Fersch stated the Committee had received a new draft appropriation ordinance this evening that will replace the one received in their packets.  She stated on the FEMA fund she is appropriating the $1,303 we received on the grant to reimburse the street fund for snow removal; in the General Fund, Building regulations she is appropriating $40,000 for plan reviews and as this is a pass through item she is appropriating money she has actually received; Heath Department an increase of $193; Trust Fund appropriation of $112,000 and this is also a pass through account for construction inspection fees; and, Park Capital Improvement Fund she is appropriating $86,000 which is the City’s share of the Clean Ohio Conservation Grant proposal.  Mr. Fox moved to approve and forward to Council; Mr. Wright seconded the motion.  Roll call was taken with Mr. Fox and Mr. Wright voting “Yea.”  Motion passed, 2-0. 

 

B.         Finance Director’s Report:

 

            (1)        Health Department.  Mrs. Fersch stated she had provided a written report to the Committee.  She stated further she would be happy to answer any questions. 

 

            (2)        CORMA.  Mrs. Fersch stated she attended a meeting on September 11th, and she would be happy to answer any questions.   

 

C.        Fairfield National Bank Depository Update.  Mrs. Fersch stated she had provided the Committee a copy of a letter from the bank regarding Visa/Master Card services.  She stated Mayor’s Court would like to use Visa and Master Card, and the utilities department has had several inquires for that as well.  She stated in order to do that, since so many would be using it, they are proposing that we have a $100,000 compensating balance where we wouldn’t earn interest.  She stated their interest rates are the best around and we do have a lot of money with them.  She stated further she had provided a handout to the Committee regarding e-payments from US Bank.  Mrs. Fersch stated we can have more than one active depository account.  Mrs. Fersch stated US Bank will send representatives out to review this program if we would like.  Mr. Wright stated he would like to have them come to the next Finance Committee meeting and review the program for the Committee members.  Mrs. Fersch stated in the hand out a web site address is listed so if the Committee members would like to review that information prior to the next meeting they may know what questions they want answered and so forth.  Mrs. Bushman stated our goal is to let any payment, water, sewer, parks, etc., be made electronically.  Mr. Wright stated he would like to coordinate this system with the Visa request as well so we are not duplicating efforts. 

 

D.        Review and request for motion to approve draft resolution to create Diley Road Improvement Fund.  Mrs. Fersch stated this fund would be for monies that we borrow and receive interest on for the Diley Road project we will be doing over the next several years. 

 

E.         Review and request for motion to approve draft resolution to create Building Regulations Trust Fund.  Mrs. Fersch stated she felt that for money that comes in and will be paid out in a like amount, it would be better to keep it separated.  She stated this will be strictly a pass through fund and will not affect the General Fund. 

 

F.         Review and request for motion to approve draft resolution to create Clean Ohio Conservation Grant Fund.  Mrs. Fersch stated since we may possibly be receiving money on the parks grants we have submitted, she would like to have a separate fund for that. 

 

Mr. Wright clarified this was for the creation of these funds only, there was no appropriation required.  Mr. Fox moved to approve and forward to Council the Resolution to create a Diley Road Improvement Fund, the Resolution to create a Building Regulations Trust Fund, and the Resolution to Create a Clean Ohio Conservation Grant Fund; Mr. Wright seconded the motion.  Roll call was taken with Mr. Fox and Mr. Wright voting “Yea.”  Motion passed, 2-0. 

 

G.        Review and discussion regarding Ordinance 2003-42, “An Ordinance authorizing the issuance of not to exceed $3,500,000 of bonds for the purpose of paying part of the cost of refunding the City’s water system improvement bonds, series 1994, dated as of April 1, 1994, and wastewater treatment plant improvement bonds, series 1995, dated as of August 1, 1995, and matters related thereto.”  Mrs. Fersch stated Mr. Ross of Fifth-Third Bank was present to provide an update for the Committee.  Mr. Ross stated this Committee had stated the refunding would go forward only if there was a four percent savings for the City.  Mr. Ross provided a handout to the Committee members for their use.  Mr. Ross stated the preliminary official statement has been printed on the issue and they are waiting until it looks like there is a good opportunity to go forward.  He stated the plan right now is, if conditions stay where they are at this point, they will go forward and hopefully before the end of the month they can close.  Mr. Ross stated the percentage they are looking at right now is around 4.732 percent.  Mr. Ross stated he would like direction from the Committee on one issue.  He stated in the discussions we have talked about essentially refunding all of the outstanding bonds, even though certain of those bonds are not callable until 2004/2005.  He stated if it turns out there is a change in the market and he is not able to get the four percent savings by calling all of the bonds, but was able to get four percent savings by calling only the bonds from 2005 forward, then he would like to be able to move forward on that basis.  Mr. Wright stated he would like to ensure that the ordinance Council adopted allowed for that.  Mrs. Bushman stated the goal was to maximize the savings on refinancing our bonds and if that required packaging the refinancing differently, it is still an acceptable process.  Mr. Wright stated as the bonds can be refinanced only once in their lifetime, if we were not looking at all the bonds, we could look at the remainder at some point to maximize the savings there.  Mr. Mapes, after reviewing Ordinance 2003-42, stated it was written in a way that would allow that flexibility.  Mr. Wright clarified that since the flexibility is in the legislation, this Committee did not need to take any action to allow this.  Mr. Ross stated he had received three good competitive rates back from bond insurers and he had chosen the best one, so the City would be going into the market with a full rating on the bonds.  Mrs. Fersch stated in order to make sure this is done properly, and since the money will not actually flow through her books, she needs to check with the State Auditor to see if she needs to do any appropriation, such as we have had to do when we do note rollovers.  Mrs. Fersch stated if she does need to do an appropriation she would request the ability to add it to the appropriation ordinance just approved by the Committee.  Mr. Fox and Mr. Wright concurred they would approve that addition to the appropriation ordinance if required. 

 

4.         PERSONNEL:  

 

A.        Review and request for motion to approve renewal of City’s health insurance.  Mrs. Sheikh stated she had provided a memo to the Committee members regarding the renewal with Central Ohio HealthCare Consortium.  She stated the Central Ohio Health Care Consortium Board met yesterday morning and released the rates for 2004, and in an effort to keep health care costs in line they have made some changes to the benefit package.  Mrs. Sheikh stated they are increasing the co-pay for an emergency room visit from $50 to $100, with the co-pay being waived if admitted within 48 hours for the same condition or through the emergency room.  She stated they are also limiting the number of chiropractic visits to 24 per year with a maximum of $45 per visit.  She stated there would be no change in the deductible, however, it has been waived on almost everything in the past and now it will apply for all services with the exception of those that are paid at 100 percent.  Mrs. Sheikh stated the other change is in prescription drugs.  She stated they are increasing the percentage the employee pays, and also adding on a minimum dollar amount.  She stated they will also force generic drugs beginning in 2004 and will pay for band name drugs only when a generic drug is not available.  She stated the minimum amount an employee will pay for a prescription is $5.00.  Mrs. Sheikh stated the City’s cost for medical insurance increased approximately 12.14 percent, vision increased 2.1 percent, dental 7.13 percent, and pharmacy increased approximately 35 percent.    Mrs. Sheikh stated our contract with COHCC will be for three years and these are the rates for 2004.  She continued with regard to our contract for the Vision Service Plan, the rate is locked in for two years.  She stated we are getting our rates for Delta Dental through the Central Ohio Health Care Consortium at reduced rates, and that is for a period of one year.  She stated this will be the second year of a two year contract with Union Central for our life insurance and there is no change in rates on that.  Mrs. Sheikh stated when the City joined the consortium last year, we were paying an additional $5,000 per month for claims, and that was put into a side fund in case we had a bad year.  She stated the City is doing a really good job this year, and it looks like, if nothing changes between now and the end of the year, we will be refunded that $60,000.  She stated we will probably not receive it until towards the middle of next year because we have to take into consideration the run out claims period.  Mrs. Sheikh stated she had just received the rate information, and the consortium would like to have a commitment from the City prior to the end of October.  She stated she would request three readings on the legislation by the end of the month, although it was not necessary to have emergency legislation.  Mr. Fox moved to approve the renewal of the City’s health insurance with Central Ohio Health Care Consortium; Mr. Wright seconded the motion.   Roll call was taken with Mr. Wright and Mr. Fox voting “Yea.”  Motion passed, 2-0. 

 

5.         DEVELOPMENT DEPARTMENT:

 

A.        Development Director’s Report:

 

            (1)        Chamber of Commerce Report.  Ms Crotty stated she had provided a written report to the Committee.  She stated the Taste of Pickerington will be on October 4th, and this year it is combined with the Community Showcase. 

 

            (2)        Rt. 33 S.E. Regional Growth Alliance Report.  Ms Crotty stated the last discussion with District 5 officials was positive and it looked like they are willing to include a Pickerington or Allen Road interchange.   

 

            (3)        Fairfield County Visitor’s and Convention Bureau Report.  Ms Crotty stated she had nothing to add to her written report.     

 

            (4)        Mid-Ohio Regional Planning Commission Report.  Ms. Crotty stated she had nothing further to report.   

 

B.                 Project Updates

 

            (1)        Business Retention and Expansion Study.  Ms Crotty stated she had nothing new to report this evening.     

 

6.         LEGAL DEPARTMENT:

 

A.        Monthly review of law director services.  Mr. Wright stated the Committee had received a copy of Mr. Mapes’ monthly report. 

 

B.         Review and request for motion to approve draft ordinance to renew Law Director’s contract.  Mr. Wright stated this would be discussed during the Executive Session.

 

C.        Review and request for motion to authorize Hill Road/East Street Connector Phase IIB property right-of-way acquisition.  Mr. Wright stated this would also be discussed during the Executive Session. 

 

7.         CHAIRMAN:

 

A.        EPA DEFA WPCLF

 

            (1)        Review and discussion of preliminary draft EPA DEFA WPCLF amortization schedule and wastewater capacity fee analysis.  Mrs. Bushman stated she had met with the bond council, the finance director and Mr. Korcarek and reviewed the financing necessary to proceed with the plant expansion.  She stated she would like to note that we have been working on this expansion for almost nine years.  She stated the Committee had been provided with a water/wastewater fee community comparison chart that compares our fees with our peers, and it also compares water and wastewater capacity fees.  Mrs. Bushman stated the capacity fees are the fees the builders pay to tap into the lines, and this is a one time charge the builder pays.  Mrs. Bushman continued we are recommending that we increase our sewer tap fee to $3,600 in 2004.  She stated there is no increase required for water and wastewater rates.  Mrs. Bushman further stated the Committee had been provided a chart with projections for water and wastewater.  She stated she would like to remind everyone that the number of projected users per year is lower in sewer because a large portion of the Diley Road area is served in the Canal Winchester/Pickerington water and sewer agreement.  She stated we provide water but not sewer, and also, some of the areas are sewered by Fairfield County Utilities.  Mrs. Bushman stated the basis is if you look at the average number of homes projected on an annual basis it averages out to about 189 homes per year, which has historically and statistically been our growth average for the last ten years.  She stated we averaged 185 homes per year from 1992 to 2002, and as a point of comparison the growth in the unincorporated area was 187 homes per year.  Mrs. Bushman stated this is based on about the same growth pattern from the previous ten years for the next ten years, and this will more than adequately serve the debt service required for the expansion.  Mrs. Bushman stated with increasing our sewer tap capacity fee to $3,600 she would like to note that currently Fairfield County’s capacity fee is $3,670, Canal Winchester’s fee is $4,468, Groveport’s fee is $3,880, and Lithopolis’ fee is $4,000, so we would still have the lowest capacity fee for sewer in the area as compared to our peers.  Mr. Kocarek stated he was provided a copy of a letter he intended to hand deliver to the Ohio EPA – DEFA in response to a September 15th letter the City of Pickerington received to begin this financial discussion.  Mr. Kocarek stated the financial plan takes in all of the pertinent elements that are required to demonstrate our debt retirement to the Water Pollution Control Loan Fund.  He stated the City has also set aside $200,000 for small capital improvements and repairs that are not covered in the normal operating and maintenance budget.  Mr. Kocarek further stated this letter will give the EPA the information they need.  Mr. Wright clarified the spreadsheet does take into consideration the automatic percentage increases and with the proposed increase to $3,600 it will then have an annual three percent increase.  Mrs. Bushman stated that was correct, there would be a one-time adjustment to the capacity fee and then it would increase three percent each year.  She further stated the wastewater projections were based on an average growth of 168 homes per year and for the two combined it comes out to an average of about 189 or 190.  Mrs. Ricketts clarified the projections were based on the proposed twelve million dollar loan.  Mrs. Ricketts stated she did not see where 189 homes at $3,600 would equal the approximate $760,000 pay out per year.  Mrs. Fersch stated some of the user fees pay off the debt as well.  Mrs. Bushman stated we passed an ordinance a couple of years ago revising our schedule in the internal rate allocation to meet the EPA requirements that so much of a percentage of what you collect goes toward capital and so much toward operation and maintenance. She stated that has already been formulated and put in place.  Mrs. Ricketts stated as she understood it the 189 homes are just the ones that would pay sewer capacity fees, it does not necessarily mean the number of houses built in the City of Pickerington.  She stated some homes could be built in the City, but in the areas not on our sewer lines so they would not pay into this.  Mrs. Bushman clarified what she had stated was that the average number of new homes on this projection chart for the sewer expansion is 168, then you also have water projections for the water utility, and when you combine the two it becomes an average for both utilities of about 190 homes a year, for both utility debts.  She stated the number of homes required per year in sewer is lower because as Mrs. Ricketts had stated, for example, Sycamore Creek is on the Canal system.  Mrs. Ricketts stated then that 168 homes would be paying sewer capacity fees.  Mrs. Bushman stated that was correct, it was based on an average of 168, and our ten year average growth has been about 185 to 187 homes per year.  Mrs. Bushman stated we are looking at a steady growth pattern, based on historical growth, that is more than adequate to cover debt service without increasing rates.  She stated further Council and Mrs. Fersch  have done a very good job of fiscally managing the City and we have the equivalent of a triple A rating and we are able to do this expansion that has been planned for over nine years without a rate increase.  She stated our sewer and water rates have been consistent for over twelve years.  Mr. Borusewski questioned if there were homes that would be built where the tap fees have been waived or reduced, and Mrs. Bushman stated in the agreements he referred to the majority of those were water related tap fees and there was only one area that was sewer related, and she stated further the County has been in conversations with the City about working out a compromise so that developer can connect into the County system.  Mrs. Bushman stated the plant expansion covers our corporate boundaries as they are today and follows the approved 208 plan for the whole region, so it follows the EPA regional plan for this central Ohio region and it does not duplicate service areas.  Mrs. Bushman stated the debt repayment would be a combination of user fees and sewer tap fees.  Mrs. Fersch stated we also have a fair share ordinance that is not in the calculations.  She stated as developments come on, Council has passed legislation where the developer pays his fair share for a line that has already been built that we have debt on.  Mrs. Fersch stated so far this year $86,000 has been paid as a fair share.  Mrs. Bushman stated that is correct, the developers reimburse the City for their share of the cost of the main sewer trunk.  She stated the lines in the development are paid for and built by the developer.   Mrs. Bushman stated this has been on the books for about six years and has been a very successful way to do this.  Mrs. Bushman stated further the City was very conservative on these projections.  Mr. Kocarek stated that was correct, and there is no way you can compute these figures exactly.  Mrs. Bushman stated further you need to consider the housing market, such as right now with the interest rates so low.  She stated when we gave the historical average over the past ten years, the City and the unincorporated area developed at much the same pace; there were highs and lows, but for the purposes of projections we looked at averages over time.  Mr. Fox moved to authorize the City Manager to submit the application to the Water Pollution Control Loan Fund for the wastewater treatment plant expansion project, and concurring with the projections presented to the Committee; Mr. Wright seconded the motion.  Roll call was taken with Mr. Wright and Mr. Fox voting “Yea.”  Motion passed, 2-0. 

 

Mr. Mapes stated he would like to clarify this motion also included the Sycamore Creek Sanitary Sewer Replacement and he wanted to make it clear that was part of this project.  Mrs. Bushman stated that was correct. 

 

            (2)        Review and request for motion to authorize City Manager to submit application to the Water Pollution Control Loan Fund for the wastewater treatment plant expansion project.   Mr. Wright stated this was taken care of in the previous motion.

 

8.         OTHER BUSINESS:    

 

            A.        Review and request for motion to approve draft ordinance adopting Capital Improvements Plan (CIP) for 2003-2007.  Mr. Wright stated the Committee had received a copy of the draft CIP.  Mrs. Bushman stated this is the 11th year for our Capital Improvements Plan and it is the document where we plan out all of our capital projects on a five year basis and they are integrated into our budget.  Mrs. Bushman stated the appropriate sections of the Plan have been reviewed by Safety Committee, Service Committee, and Parks Board.  Mr. Fox moved to approve and forward to Council; Mr. Wright seconded the motion.  Roll call was taken with Mr. Fox and Mr. Wright voting “Yea.”  Motion passed, 2-0. 

 

 

9.         MOTIONS:  

 

            Mr. Wright moved for an 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. Fox seconded the motion.  Roll call was taken with Mr. Wright and Mr. Fox voting “Yea.”  Motion passed, 2-0. 

 

Finance committee adjourned into Executive Session at 8:45 P.M., and reconvened in open session at 10:10 P.M.

 

Mr. Fox moved to approve the draft ordinance to renew the Law Director’s contract; Mr. Wright seconded the motion.  Mr. Wright clarified the main change to the contract is that it would use the existing base rate of 2003 for the law director and his secretary’s salary, and that would be tied to the language which is similar to the City Manager’s contract where the same raise that everyone else in the City gets would be applied to those base rates.  Roll call was taken with Mr. Fox and Mr. Wright voting “Yea.”  Motion passed, 2-0. 

 

Mr. Fox moved to authorize Hill Road/East Street Connector Phase IIB property right-of-way acquisition; Mr. Wright seconded the motion.  Roll call was taken with Mr. Fox and Mr. Wright voting “Yea.”  Motion passed, 2-0. 

 

10.       ADJOURNMENT.  There being nothing further, Mr. Fox moved to adjourn; Mr. Wright seconded the motion.   Mr. Fox and Mr. Wright voted "Aye."  Motion carried, 2-0.  The Finance Committee adjourned at 10:20 P.M., September 25, 2003.

 

RESPECTFULLY SUBMITTED:

 

 

________________________________

Lynda D. Yartin, Municipal Clerk