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HomeMy WebLinkAbout10-10-16 Finance Committee MinutesDUBLIN CITY COUNCIL FINANCE COMMITTEE MEETING OF THE WHOLE Monday, October 10, 2016 Council Chambers Minutes of Meeting Mr. Keenan, Finance Committee Chair, called the meeting to order at 6:17 p.m. Council members present: Mr. Keenan, Mr. Lecklider, Ms. Alutto. Other Council members present: Vice Mayor Reiner, Ms. Salay, Mayor Peterson. Ms. Amorose Groomes was absent. Staff present: Ms. Mumma, Mr. Stiffler and Ms. LeRoy. Consent Agenda Ms. Alutto moved to approve the minutes of the meeting of August 10, 2016. Mr. Lecklider seconded the motion. Motion carried. Ms. Mumma stated that the two topics on the Finance Committee agenda are the third quarter 2016 Financial Update and the annual Cost of Services Study recommendations.  FINANCIAL UPDATE – THIRD QUARTER 2016 General Fund Revenue: Income Tax Revenues: Ms. Mumma indicated that in Third Quarter 2016, Income Tax revenue increased 2.18% over the third quarter year-to-date revenue in 2015. This was driven by an increase in Withholdings -- the City’s largest source of revenue – of 2.3%. Individual returns increased 9.0%, and Net Profits decreased 3.0%. This decrease has been consistent through each quarter, as the City lost a large net profit payment from an employer that is no longer with the City. This is a good report, considering that, beginning in the third quarter, a reduction in revenue from Chase began to be reflected as they started to relocate their employees from the City. Compared to our revised Income Tax estimate, the expectation is to exceed the revised projection, which was used for the 2017-2021 CIP -- $85,590,000. It is worth noting that for the City to just meet that minimum projection, the City could decrease in the fourth quarter 18.5%. Although, it is anticipated that the City will exceed that projection, it will remain conservative. The City’s top ten employers were down 2.3%; the top 50 were down 1.4%; the top 100 were down 1%; and the top 250 employers remained unchanged. With the top 500 employees, withholdings began to be higher. On a positive note, this means that the City is not entirely dependent upon its large taxpayers. Fines, Licenses, Permits: Fines and Forfeitures were up approximately $34,000; Licenses and permits increased approximately $310,000 which is reflective of the building activity within the City. A few weeks ago, a supplemental appropriation occurred because the City’s expenditures related to Inspections and Contract Services had increased significantly due to that building activity. Finance Committee of the Whole October 10, 2016 Page 2 Intergovernmental Revenue: Local Government Funding revenue did not perform as well as last year. Although it is not a large source on which Dublin has depended, it is indicative of the State’s General Revenue Fund. Charges for Services are down, as well. In part, that is driven by what Dublin charges other entities for fuel. Because fuel costs have been lower and the City’s expenses in this category are lower, less revenue has been received. However, that is not considered a negative due to the offsetting reduction in expenditures. Interest: As a result of the recent software conversion, Interest from prior months continues to be posted. Although Interest Earnings show a decline, it is simply a timing issue. General Fund Expenditures: General Fund Expenditures totaled $70.2 million, a decrease of $10 million over the same period in 2015. Advances: This year, there have been a number of advances, including those for the Service Center renovations and for the roadway improvements that were discussed at prior Council meetings. Last year, there was a large advance related to the Riverside Drive/SR161 roundabout and realignment project. General Fund Expenditures Capital: Excluding advances, the fund is up about $5 million over the same period of time last year. The main driver of that is the Capital Costs. The City purchased two significant sections of land this year: (1) Rings Farm, on which the City has annual payments, and (2) the land at Rings and Frantz Road for the Nationwide economic development incentive. Those expenses totaled over $3 million. Therefore, of the $5 million in increased Expenditures compared to the same period of time in 2015, $3 million is attributable to Capital Expenditures. Personnel Services: This expenditure has increased approximately 14%. Some of that increase is due the three pay periods in the third quarter versus the fourth quarter of last year. Some of it also is reflective of organizational changes. A number of positions were filled last year, but were not in place for the entire year. This year, they have been present for the entire year. There have also been salary increases, and, most notably, the increase in Benefits cost. Ms. Alutto inquired if Vacancy Credits are utilized. Ms. Mumma responded that they are not. This is a cash analysis. General Fund Balance: Ms. Mumma stated that over all, the City’s financial health remains strong, with a General Fund balance of nearly $50 million as of September 30. This represents 71.4% of the 2016 budgeted expenditures. The balance is lower than that reflected in prior quarters. Part of that is a result of the Advances that have been in anticipation of the Bond Issue. This includes the bond issue that Council will consider tonight, which will reimburse $9 - $10 million to the General Fund, and the Finance Committee of the Whole October 10, 2016 Page 3 costs that will be incorporated in next year’s Bond Issue. The City’s financial position is strong, well in excess of the 50% reserve. Hotel-Motel Tax Revenue: Staff’s report also detailed the performance of Hotel-Motel tax revenue, which, on a gross level, increased 7.7% over 2015. The City’s cash records reflect a decrease, however, because the City now designates 35% of that to the Dublin Convention and Visitors Bureau (DCVB). Through the Third Quarter, DCVB has received $800,515 in hotel-motel tax revenue – an increase of 48% over the amount they received last year through the third quarter. Similarly, the Dublin Arts Council is now receiving 25% of the actual revenue. They have received $575,000 -- an increase of $134,000 over the same period last year. Mr. Keenan inquired what Personal Services entails. Ms. Mumma responded that Personal Services would be Salaries, Benefits, Travel/Training, and tuition reimbursement – personnel costs. Mr. Keenan stated that is typically Payroll plus approximately $35%, in general terms. Ms. Mumma responded affirmatively. Mr. Keenan stated that in the second column of Revenues, Third Quarter Year-to-Date, should 2016 be 2015? Ms. Mumma responded that is correct. Mr. Keenan inquired if this is posted on the web. Ms. Mumma responded that it is not yet posted, but will be posted after the correction is made.  COST OF SERVICES Mr. Stiffler reviewed the 2016 Cost of Services report and recommendations. This year, a full cost of services analysis was conducted, which is consistent with the City’s practice since 2013 to alternate between an inflation and a comprehensive analysis. The elements considered in this study are salaries, fringe benefits, operation/maintenance costs, building occupancy costs and debt service costs for municipal buildings. There have been no debt service costs this year or last, but there will be next year for the Justice Center. That will be a factor considered in the next cost of services analysis. Also considered are overhead and fixed asset replacement costs. The goal is to match the service revenue to the fully burdened hourly rate of the service costs. This year, there were only a few minimal changes in most departments and divisions, including: - Building Division - $5 - $10.00 permit fee increases - Court Services - $19 to $20 increase - Engineering - $5.00 permit fee increases - Non-residential private waste disposal - $15 increases - Parks and Planning – no changes - Police – Firearm Permit - $5 increase. This fee is for the background check for a firearm purchase in Dublin, although, currently, there is no location in Dublin that sells firearms. - Recreation Services – no fee increases. However, a $200 deposit for the Kaltenbach park rental is proposed. This facility is receiving some upgrades that are similar to the Talla rooms, which have a $200 deposit. This protects the City’s investment in the facilities. Finance Committee of the Whole October 10, 2016 Page 4 Because the facility is in high demand, it also ensures a reservation is not made without serious intention to use the space. - Public Works – increases to fees for spilled load cleanup, property repair and salt surcharges. - Washington Township fleet maintenance – increase from $85 to $89, following the fully- burdened hourly rate of an auto mechanic. - Events - A change to the fee structure for external events is proposed. The current $125 application fee will be eliminated and will be replaced by a 50% cost recovery of the City’s costs for providing pre-event planning services for events that will fall into one of three new tiers. This new fee will be phased in over two years to allow external events adequate time to budget for the increased fees. Current fees for City personnel, such as Streets or Police, utilized by an external event will remain unchanged. Fees: Tier 1 - $50; Tier 2 - $325; Tier 3 - $1,100. The goal of phasing the fees is to allow the events time to budget for the changes. Vice Mayor Reiner inquired if the increase in the Event fee reflects the real cost. Mr. Stiffler responded that the attempt is to capture a 50% recovery for Tier 2 and Tier 3 events. These are the costs associated with review and planning services before the event can occur. Vice Mayor Reiner inquired if there is a possibility this increase could discourage some people, even though it reflects only a 50% recovery. Ms. LeRoy responded that staff has noticed a significant increase in inquiries regarding the City’s fees and events. Columbus has increased the cost of some of their race permits, depending on the race; some are as high as $3,000. This prompted their review of Dublin’s external event fee. This change will ensure there is a not a race occurring every weekend and that there is some cost recovery. Vice Mayor Reiner inquired if Tier 3 would be a race event. Ms. LeRoy responded that it would be a large race or a route that hasn’t been used previously. If it is a route that has been used often, it could be a Tier 2. Tier 3 is for events that will involve additional time for staff planning. Vice Mayor Reiner inquired if the intent is that it might discourage some unwanted, additional events. Ms. LeRoy responded that it could be a result, but it wasn’t the initial intent, which was a recognition that the $125 fee was not recovering any of the amount of time staff was spending on the application. Mr. Lecklider stated that in view of Columbus’s increased rates -- Dublin does not want to be the community where everyone goes to hold their event due to the greater expense elsewhere. It is fine to do our fair share, but it is preferable that not all the events come here due to their strain on City Police and City services. Ms. Crandall stated that the City has the ability to refuse any event that comes forward on the basis of the date or proposed location. Vice Mayor Reiner inquired if the $200 fee pays for the event cleanup, how are the maintenance Finance Committee of the Whole October 10, 2016 Page 5 costs of the structure being addressed? Does the $200 cover that, as well? Mr. Stiffer responded that his understanding is that the $200 is a refundable security deposit. The cost for maintaining the structure should be built into the rental fee -- that is typically where those costs are recovered. The refundable deposit is to protect against any damage. Vice Mayor Reiner inquired if there is an additional fee that was not mentioned. Mr. Stiffer responded that there is a fee for renting the Kaltenbach facility. Mr. Keenan inquired if Washington Township has a fee for running medics to some of those races, certainly the larger events. Ms. LeRoy responded that, currently, they do not, but they are reviewing their policy as most other Fire Departments do charge a fee for that service. Vice Mayor Reiner inquired if the race events held within the City would reimburse all the associated Police expenses. Different streets are shut down for these races. Ms. LeRoy responded that when Police or Parks staff are required to be at the event, the City has a 100% cost recovery. The 50% recovery refers to the services provided during the normal work day. The 100% recovery is for any additional hours provided for the event that are not part of their normal work day. Ms. Alutto inquired if the event fee is actually for staff’s planning to accommodate the event. Ms. LeRoy responded that is correct. Vice Mayor Reiner inquired the cost to hold a standard street race. Ms. LeRoy responded that depends on the scope of the race. There are two tier rates that the event could be required to pay. Most Police services are special duty, but the fee is more if Police coverage must be called in. The fee can be from $500 for a simple event up to $6,000 for a half marathon. It depends upon how many roads must be closed and the length of time involved. Vice Mayor Reiner stated that the revenue stream for these events is good, so it is desirable to ensure that the City is totally reimbursed for its services. Mr. Stiffer thanked Council for their review. Ms. Mumma stated that the revised cost of services ordinance will be scheduled for a first reading at the next Council meeting. It was not scheduled for tonight’s Council meeting should there have been any changes that Council wanted to be made. There was no additional discussion. The meeting was adjourned at 6:38 p.m. ___________________________________ Clerk of Council