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HomeMy WebLinkAbout08-09-10 Finance Committee MinutesDUBLIN CITY COUNCIL FINANCE COMMITTEE OF THE WHOLE MEETING Monday, August 9, 2010, 6:00 p.m. Council Chambers Minutes of Meeting Mr. Gerber, Chair, called the meeting to order at 6:00 p.m. Council Members present: Vice Mayor Salay, Mr. Keenan, Mr. Gerber, and Ms. Chinnici - Zuercher were present. Staff present: Ms. Grigsby, Mr. Thurman, Mr. Smith, Chief Epperson, Mr. Harding. Mr. Keenan moved to approve the minutes of the April 12, 2010 Finance Committee of the Whole meeting. Vice Mayor Salay seconded the motion. The minutes were unanimously approved. Mr. Gerber noted that there are three items scheduled for Finance Committee. discussion. • Dublin Cornet Band Bicentennial Hotel /Motel Tax Grant Application Tim Jameson, 7629 Tartan Fields Drive presented an overview of their Bicentennial application. The organizational meeting for their group was on June 23, 2010. The people who will be serving on their Advisory Committee are listed on page three of the application. They are working on a partnership with Dublin City Schools for rehearsal and performance space. The Dublin Cornet Band's performances on July 3 rd and at the DubCrawl this past Thursday were well received. Since his presentation to Council on June 14, a 30 -piece British brass band has been organized, incorporating many of the Dublin Cornet Band members. This group will bring a positive music image to Dublin locally and when they perform further afield. There are several potential events they can create under the auspices of the City's event department. These events should not only add to the cultural fabric of the community, but also draw people to the City, and bring in additional dollars. The application provides information about their fiscal plans, short and long -term. They appreciate Council's consideration of their request for an $18,000 grant to be used to purchase music, equipment and certain band instruments that individual members typically do not own. These are durable items that should last 20 -30 years. Mr. Gerber inquired if the instruments would be insured. Mr. Jameson responded that they would. Ms. Chinnici - Zuercher stated that she is happy that the community has been able to tap his expertise to develop this opportunity for the community. Mr. Jameson responded that he is happy to do so. Mr. Keenan stated that most of the hotel -motel funds have been allocated. He requested clarification of the remaining available funds for 2010. Finance Committee of the Whole August 9, 2010 Page 2 Mr. Thurman responded that $89,900 remains in the bed tax fund. Mr. Gerber stated that he heard the band on July 3 and at the DubCrawl, and he enjoyed both occasions. Mayor Lecklider inquired if the organization must formalize the 5013C process to receive grant money. Mr. Jameson responded that the Dublin Arts Council will act as their fiscal agent until they have officially received their 5013C. Mayor Lecklider noted that the money will go to the Arts Council as a "pass through." Mr. Jameson responded that he and Mr. Guion are currently working on the details of having that money passed through their organization. Mr. Gerber stated that he checked with Ms. Gibson regarding that practice last week, and she indicated the disbursement could appropriately be handled in that manner. Mr. Keenan inquired if the grant money would be paid to them as receipts were received for the various instruments. Mr. Thurman responded that as the City received the receipts, the money would be paid to the Dublin Arts Council, who would, in turn, pass the funds to the Dublin Cornet Band. Mr. Jameson stated that he would likely to purchase the instruments with a personal credit card, then be reimbursed. Ms. Chinnici - Zuercher inquired if the instruments would all be purchased from the same source. Mr. Jameson responded that they would purchase them from wherever they could obtain both the best price and the best service. Ms. Chinnici - Zuercher inquired if a purchase order would also work. She does not believe it is best for Mr. Jameson to put that amount of money on a personal credit card. Mr. Thurman stated that a purchase order could be issued to the Dublin Arts Council. After receiving the receipt, the City could pay out the money within the time frame in which they would need it to pay the credit card bill. Ms. Grigsby noted that the City processes payment twice per week. Therefore, if the City receives a bill on Monday, it can be processed on Tuesday. They can also look at other options to pay once the invoice is provided or a proposal received of an estimated cost. Seventy -five percent of the amount could be paid, then, once the receipt is received, the remaining 25 percent could be paid. This mechanism would ensure they received the paperwork. Mr. Keenan moved to recommend a grant in the amount of up to $18,000 to fund purchase of instruments and other expenses. Ms. Chinnici - Zuercher seconded the motion. Mr. Gerber, yes; Mr. Keenan, yes; Ms. Chinnici - Zuercher, yes. Finance Committee of the Whole August 9, 2010 Page 3 Mr. Gerber noted that this recommendation will be made to Council at the Council meeting immediately following this meeting tonight. • 2nd Quarter 2010 Financial Update Ms. Grigsby presented an overview of the materials. The first quarter information was also provided to enable Council see the process that has occurred this past year in regard to income tax projections. Revenues The 2010 budget amount was based upon a 3.9% decrease from year 2009. However, through the second quarter of 2010, revenues are up 2.91 %, and that has been consistent from the first quarter through the second quarter. $1.13 million in additional income tax revenues were collected through the first six months of 2010 compared to the first six months of 2009. The income tax collections through the second quarter exceeded the budgeted amount by approximately $2.4 million. Last year at this time, the income tax revenues were down 7.5% compared to 2008. Comparing last year this time to the end of June 2010, revenues are significantly higher this year. The projection is that 2010 revenues will be flat compared to 2009 -- that is the information that was provided in the tax budget that Council adopted earlier this year, as well as the CIP the Council will be reviewing next week. However, based upon the fact that the last four months of 2009 were down significantly, it looks hopeful that 2010 revenues will actually be up at the end of this year -- based upon the current information, approximately two percent up compared to 2009. Again, the documents submitted to the County, as well as the CIP Council will be reviewing, have conservatively assumed income tax revenue will be flat. Expenditures The expenditures for the General Fund through July 2010 are down slightly compared to 2009 expenditures, once an adjustment was made for the additional pay in 2009. They have conservatively projected that the expenditures will be up two percent by the end of the year, however, they are now down, so it is hoped that the two - percent up projection will prove to be conservative. When CIP and Operating budgets are discussed, one of the key financial indicators is the General Fund balance. The City's target balance is 50% of the General Fund expenditures including the Operating transfers. The percentage at the end of 2008 was 60 %, and at the end of 2009, it increased to 65 %. With regard to where the General Fund is this year, the end of year projection is 68 %. If expenditures were to remain flat, that percentage would increase to 69 %. A couple of items that are indicators of the local economy are property taxes and service payments — the payments in lieu of taxes in the City's Tax Increment Financing (TIF) districts. The City has not yet received all of the second half distribution of property taxes, but based upon what has been received from Franklin County, the assumption is that the tax revenue will be flat or up slightly from 2009. Only Franklin County 2010 service payments have been recorded at Finance Committee of the Whole August 9, 2010 Page 4 this time. Union County payments have not yet been received; however those are minimal — the only TIF district in Union County is the Tartan West TIF. However, the Franklin County service payments are up considerably as compared to this point in time last year. More detail on that information will be provided in the overview for the CIP budget discussion next week. Staffing information was provided for the last quarter update regarding the vacancies that were identified for the 2010 Operating Budget compared to current staffing. Information in the back of Council's packets shows an update of vacancies as of July 31, 2010. Last fall when the Operating Budget was prepared, there were 23 unfunded positions. As of the end of July 2010, there are 28 positions that are vacant or unfunded. Nine of those are current vacancies — the date they became vacant is provided. Compared to what was projected in the 2010 Operating Budget, we could be down almost ten percent the rest of the year and meet the current projections. We could be down four percent and be flat with last year's income tax revenues. Based on last year's revenues, it is hopeful that revenues will be up in the last quarter — that the current trend that is up two — three percent will continue. They are watching the discussion regarding a potential Federal income tax rate change for next year. That could have an impact on the local income tax revenue this year if people try to accelerate their wages this year rather than in 20101. There could be a spike at the end of 2010 for that reason, and an effort to lower their 2011 salaries and wages. Conseqently, for the CIP budget, the 2011 projection for revenue is flat, as well. Ms. Chinnici - Zuercher inquired why an increase in Expenditures has been projected, when in recent weeks, there have been more resignations. Ms. Grigsby responded that their goal is to remain conservative with projections. There is still uncertainty due to the turn - around of the economy. Ms. Chinnici - Zuercher inquired what could cause an increase in Expenditures later in the year? Mr. Keenan responded that probably nothing would; it is budgeting methodology. Ms. Chinnici - Zuercher inquired if it is principle of budgeting. Ms. Grigsby responded that it is. With some things such as fuel costs or an early snow season can cause an increase. The goal is to be more conservative with Expenditures. Mr. Keenan stated that Income Revenue is projected low and Expenditures are projected high. Ms. Chinnici - Zuercher inquired the reason the Economic Development Administrator position was never funded. Ms. Grigsby responded that position was part -time. What Mr. McDaniel has done is to use various economic development consultants to perform those duties. Finance Committee of the Whole August 9, 2010 Page 5 Vice Mayor Salay inquired if the consultant activity is ongoing within that department. Ms. Grigsby responded that it is; there are three or four consultants Mr. McDaniel is currently using. Mr. Keenan stated that the TIF revenue appears to be steady. A number of TIF districts will be expiring in the next four or five years. Ms. Grigsby responded that many of those have been modified from the original legislation to expand them. Most of them will continue for several years. The only TIF district in which there will be a reduction next year is the McKitrick TIF. Once the Phase 1 and Phase 2 improvements are paid for, it will be converted to a non - school TIF. It is projected that with the current fund balance and the annual service payments that will be received, it will be possible to continue retiring the debt on Phase 2 and pay the projected debt on Phase 8. Mr. Keenan stated that there have been a couple of smaller parcels that have been abandoned — the City has been reimbursed for what had been acquired. Does that money go into the General Fund or into another fund? One such parcel abandonment was the Post Road interchange. Ms. Grigsby responded that the reimbursement went into the construction fund established for that purpose. Mr. Keenan noted that the process then is "from whence it came, it is returned." Ms. Grigsby affirmed that it is. Mr. Keenan noted that for larger pieces, that adjustment would be reflected in the CIP, which will be reviewed within a couple of weeks. Ms. Grigsby affirmed that it would. Once a decision is made on the pending cases, a decision can be made where to show that. Mr. Gerber stated that he is used 2008 as his base. It appears that the income tax revenue is still approximately 3.25% below 2008 levels. Ms. Grigsby confirmed that is the case. Last year, it remained at the 2006 level. This year, it has improved to just below 2008's level. Mr. Gerber inquired if Expenditures are also at 2008 levels. Ms. Grigsby responded that they are up from that slightly, but below 2009 levels. Ms. Chinnici - Zuercher inquired if a running total is kept on how many jobs have been created and lost. Ms. Grigsby responded that Economic Development tracks the information as far as the incentive agreements that are approved by Council, the number of jobs created, and, as best they can, track what also leaves the City. That is difficult to track; in some cases the City is unaware. With income tax, however, information is maintained annually on the number of W2s that are filed year to year. In some cases, that is not a good indicator, because there can be many FTEs and turnovers in jobs. Finance Committee of the Whole August 9, 2010 Page 6 Ms. Chinnici - Zuercher inquired how that situation is at this time. Ms. Grigsby responded that from the income tax standpoint, it is remaining relatively consistent from year to year. Last year, the majority of the decrease it income tax revenues related to net profit payments that the corporations make. With the larger companies, on the withholding side it had to do with the absence of bonuses or pay increases. There weren't any significant layoffs that the City was aware of. It was a reflection of the total payroll of the companies. Ms. Chinnici - Zuercher inquired if there was a relationship to employment versus vacancy space — a formal formula that commercial realtors may use that would be helpful to consider. Ms. Grigsby responded that they probably do have a formula — staff can look into that. We do try to keep on top of the vacancy rates. Mr. McDaniel has pointed out that Dublin does not have a lot of large space available where there would be contiguous vacancies. However, an effort is made to track he vacancies within the City, and as companies call to inquire, the City can provide assistance with their space needs. Vice Mayor Salay stated in her conversations with him, Mr. McDaniel has appeared to have an up -to -date awareness of which companies are coming or going within the City. Ms. Grigsby noted that the City does work with a couple of companies who provide that data. Mr. Keenan inquired if they would also be factoring in the nationwide job loss situation. Ms. Grigsby stated that for the current CIP review, staff made some adjustments in their 2010 projections to account for that situation. Mr. Gerber stated that when he looks at the 2010 Recap by Type, he sees withholding, net profit, and individual accounts. It appears that the withholding accounts are holding steady. The City has done a good job retaining employees within the City. The individual accounts, however, are markedly down. Ms. Grigsby responded that the percentage is the dollar amount. It is not that much in waived dollars. Also, Westerville's rate increased from 1.25% to 2.0 %. Anyone who lived in Dublin and worked in Westerville, the .75% Dublin previously received, it didn't receive in 2010. The last four months of last year, the withholdings were down. It looks hopeful that withholdings this year will remain steady or even increase by the end of the year. [Mrs. Boring arrived at 6:30 p.m.] Mayor Lecklider inquired if the projected collections for this year are $63,309,470. Ms. Grigsby confirmed the amount. Mayor Lecklider noted that the amount will still be down compared to 2009. Finance Committee of the Whole August 9, 2010 Page 7 Ms. Grigsby responded that the current projections are that the amount will flat or equal to 2009. Through the second quarter, we have been up about 2.9% for the same period of time in 2009. Discussion of Mayor's Court fees The meeting was adjourned at p.m.. Clerk of Council