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HomeMy WebLinkAbout04-09-12 Finance Committee MinutesDUBLIN CITY COUNCIL FINANCE COMMITTEE MEETING Monday, April 9, 2012 Council Chambers Minutes of Meeting Ms. Chinnici - Zuercher, Chair, called the meeting to order at 6:00 p.m. Finance Committee members present: Ms. Chinnici - Zuercher, Mr. Gerber, and Mr. Keenan. Other Council Members present were Mrs. Boring and Vice Mayor Salay. Staff present: Ms. Grigsby, Ms. Mumma, Mr. Thurman, Ms. Gibson, Mr. Hammersmith. Consent Agenda Approval of Finance Committee minutes 1. January 10, 2011 2. April 11, 2011 3. August 1, 2011 4. October 10, 2011 5. January 17, 2012 Mr. Gerber moved approval of the consent agenda items. Mr. Keenan seconded the motion. Vote on the motion: Ms. Chinnici - Zuercher, yes; Mr. Gerber, yes; Mr. Keenan, yes. First quarter 2012 - Financial Update Ms. Mumma, Deputy City Manager /Director of Finance & Administration presented the report. Included in the Committee packet was a summary of the 1 sc quarter revenue and expenditures. She reported the following: 1. General Fund revenue. For the quarter, $15.2 million was brought in, down slightly as compared with 1 st quarter 2011. However, excluding transfers and advances as well as miscellaneous revenue, the revenue is actually up by 3.5 percent from the 1 sc quarter 2011. 2. Income tax revenues. As the information indicates, this revenue is up 2.29 percent over the same period of time last year, with $17.7 million in revenue in the 1 sc quarter of 2011 versus $18.1 million in the 1 sc quarter of 2012. January began slowly, but the revenues quickly rebounded in February and again in March. Today, the trend continues with revenues improving over the same period last year. The key date for income tax revenues is the tax deadline of April 17 this year, but the income tax revenues are up as a whole in 2012. 3. The withholding accounts, which comprise over 80 percent of the income tax revenues, are up 3.4 percent over the same period of time last year. Businesses continue to do well — hiring additional employees or paying additional wages, as reflected in these accounts. 4. Net profits and individual accounts are down at this time, but this is not significant as there is more activity to come with the April 17 deadline approaching. Finance Committee April 9, 2012 Page 2 5. There will be more refined information at the 2 nd quarter with respect to annual reconciliations of businesses. Those were not due until the end of February, and are therefore not all reviewed at this time. By the end of the 2 nd quarter, staff can provide a better breakdown of where the top 10 businesses stand, and how many new W -2s have been filed for the year. 6. From tax year 2009 through 2010, there were 20 new business taxpayer entities. The number of business taxpayer entities went from 3,644 to 3,660 businesses. By the end of the 2 nd quarter, an update of this information will be provided. 7. Through March of 2012, business taxpayer entities are up by 19. So despite the fact that some businesses may be closing, the net effect is 19 additional taxpayers to the community. 8. In terms of W -2s, from 2009 to 2010, the number of W -2s increased by approximately 2,000. This relates to additional hires or new business hiring. 9. The City continues to encourage electronic filing, and correspondence sent to taxpayers provides options for receiving correspondence and filing electronically. More information will be available at the August update about numbers of taxpayers filing electronically. 10. The Tax Department is working on a secure e-mail system, which allows better correspondence with businesses to review confidential information or questions that arise during tax time. 11. Other revenues of note in the 1 sc quarter include: • Licenses and permits. Positive increases for the year, driven by some inspections at Tartan Ridge as well as commercial and residential inspections. • Sale of fuel revenue has increased, but there is a corresponding increase in expenditures. The usage of entities that purchase fuel from the City has been consistent. 12. Hotel /motel tax revenue. This fund is up 13% over the same period of time last year. All of the hotels, except for one, increased their collections through the 1 sc quarter. 13. Property taxes. These revenues decreased approximately 5.95% from the 1 sc quarter of 2011 to the 1 sc quarter of 2012. This was anticipated, based on the property valuations for parcels in the City of Dublin done by the county auditor. The decreases in valuations were at a rate of 4.4 percent. The net result was a decrease valuation of approximately $90.1 million. Therefore, a 5.95% reduction translated to approximately $106,000. 14. Service payments from TIFs. These payments increased in 2012, despite the fact that there was an overall decrease in valuation, mainly driven by the Board of Revision decision to reduce the value of the Wendy's parcel. There were a number of TIF parcels added — the improvements around Dublin Methodist Hospital, as well as additional improvements in Shier - Rings. These balanced out the decline in valuation, bringing an increase in service payments of approximately 16.5 percent over 2011. Service payments are paid either annually or semi - annually, based on the property owner preference. There were some who paid their full tax bill or payments in lieu of taxes at the outset of the Finance Committee April 9, 2012 Page 3 year, so there may be a balancing out of this when the second half distribution is received in the third quarter of the year. 15. Other TIF areas with increases included the Woerner - Temple TIF, specifically with the IGS building coming online; the Delta Energy TIF, which was new this year; the Dublin Methodist Hospital, which was new this year; and the improvements at Bridge and High. Ms. Chinnici - Zuercher asked about the hotel -motel taxes and whether the DAC and DCVB distributions are based on the previous year's collections to ensure there are not major fluctuations in the revenue stream. Ms. Mumma responded that the Dublin Arts Council lease agreement, executed several years ago establishes a set dollar amount provided to them each year. The DCVB receives 25 percent of the actual hotel -motel tax revenues, which is automatically deposited into the fund for this entity. 16. General Fund expenditures. For the period, the expenditures were up $3 million but the key factors driving this higher were a $1.7 million capital expenditure for the purchase of the property from The Ohio State University. When a portion of this property is sold to Nestle in the upcoming weeks, some of this revenue will be returned. This is a timing difference and accounts for a large part of the increase. Deducting transfers and advances to other accounts, the General Fund expenditures are actually up 5.6% up over the same period of time last year. Other Projects and Programs expenditures were up approximately 34 percent from the same period last year. That is a timing issue — refuse payments in 2012 included an additional payment not made in 2011. Contract Services expenditures increased 9 percent over the same period of time last year. It is driven by expenditures within Information Technology, such as maintenance of equipment and professional services, and some Planning services such as the Goody Clancy report with respect to the BSC Corridor. These expenditures may have been encumbered in previous years but paid out in first quarter 2012. Travel and training expenditures are down 2 percent over the same period of time last year. Personnel Services expenditures were about even, and were $16,000 under the same period last year. Therefore, from an expenditure standpoint in the General Fund, the City spent $15.8 million versus last year at this time where $12.7 million was spent. 17. General Fund balance. The General Fund balance ended the quarter at $44.3 million, which is 75 percent of the 2012 expected expenditures, including transfers. Therefore, the balance remains healthy. At the end of 2011, the GF balance was approximately $79 million. Mr. Gerber stated that residents have asked him about the savings for the City related to the few snow and ice events this season. Ms. Mumma responded that on a purely cash basis, January through March 2011 versus January through March 2012, the City spent $633,320 last year and $191,554 this year. There is overtime labor involved, but not all of it is attributable to snow Finance Committee April 9, 2012 Page 4 events. In 2011, the City spent $61,000 on overtime for the first three months, and in 2012, $21,700 for overtime for the first three months. In addition, there is a savings in salt used as well. Mrs. Boring stated that the Columbus Dispatch included information about the City of Columbus diverting those savings to road maintenance. Is Dublin considering doing additional road maintenance or repairs, given this savings? Ms. Mumma responded that the bids were just received for the street maintenance program and Council will review that at the next meeting. Out of the $4.2 million budgeted for 2012 roadway improvements, it came in five percent less than the Engineer's estimate. There could be some capacity for adding more street maintenance or roadway improvements. This is continually evaluated at the administrative level — where improvements are needed and not programmed. Ms. Grigsby added that staff has regular infrastructure meetings, and the discussion has been that if more improvements are identified than are currently programmed, staff will consider bringing additional funding requests to Council. Staff recognizes the importance of maintaining the infrastructure. Mr. Reiner asked if the City purchases salt and stores it, and will have less expenditure next year given the little use of salt this season. Ms. Mumma responded that the City is required to purchase a minimum amount of salt, and if the City does not meet this minimum, there is a storage fee imposed. She has discussed this with Mr. Burns, and he is working with the company to have the storage fee waived. There is a finite capacity in the City salt barns. The City will reduce the amount of salt purchased next year, based on the remaining salt supply purchased this year. Mr. Gerber noted that he has some questions about the CIP update report in the packet. This is a later item listed on the agenda. Mr. Keenan asked about TIFs. He would like to have a schedule of the dates the current TIFs expire. Ms. Grigsby responded that there are not many in that category, as most TIFs provide for a large number of improvements to be funded. It is tracked by TIF district. Mr. Keenan asked that this be provided in the next packet. Hotel -Motel Tax Grant Process Ms. Mumma stated that the Finance Committee meeting requested during the grant process in December of 2011 that the City consider ways to streamline the process. One area reviewed was for organizations that receive funding year after year, perhaps there could be an administrative approval for these — if the organization is not requesting a higher amount than it has requested in any of the previous five years, and conditioned upon the dollar amount not exceeding the amount received in any of the five previous years. Of course, they would have to meet all the requirements of the grant application, filing the follow -up reports, etc. The grants would be reviewed Finance Committee April 9, 2012 Page 5 administratively and brought to Finance Committee for approval and recommendation to Council, without having a presentation from the grant applicant. This change would affect two organizations — the Dublin Kiwanis Frog Jump and the Arthritis Foundation Classic Auto Show and Cruise -in. Staff also provided that any higher requests than those of previous years for these two groups would be reviewed by Finance Committee. Secondly, the Committee requested information about how community bands are funded and that information is in the packet. There is an exhibit that shows the grants given by the Dublin Arts Council and the Dublin Foundation during the past five years. The City is waiting for information from the Dublin Foundation regarding the grant requests made; they have provided information only on the grants funded. The last item requested was information about whether there are some grants that should fall under the DAC umbrella. Staff believes that discussion with the DAC is needed regarding the percentage of their endowment that should be reserved for grants. The City can encourage organizations to go to the DAC to apply for grant funds, and those same applicants will continue to have the ability to apply for hotel -motel tax grants from the City. As the agreement with the DAC is reviewed, this matter should be considered further. Ms. Chinnici - Zuercher stated that the issue has been raised previously about the amount of money distributed to the DAC that is expected to be re- granted to community arts organizations. The City did receive from Mr. Guion the community arts grant history, which reflects that very little was granted by the DAC in the last year. It seems that every question about the role of the DAC and distribution of the money brings the response that it will be addressed in the MOU or the contract. As far as she is aware, there has not been a signed MOU in several years. She is confused about how long this will continue without definitive decisions. She is aware that the DAC does not receive 25 percent of the actual hotel -motel tax funds collected, but rather a flat amount as outlined in the lease agreement. Is the City giving the DAC adequate funds to do what the City expects them to do? If so, how are they held accountable to doing that? Ms. Grigsby stated that these discussions have been ongoing, and recently, those discussions were re- initiated with the DAC. Ms. Ott and Mr. Guion have met and are currently identifying the issues and items that need to be addressed in the agreement. Ms. Chinnici - Zuercher stated that there is therefore not a signed agreement in place. Ms. Grigsby responded that is correct. Ms. Chinnici - Zuercher asked how this can be actualized. As a result of not having an agreement in place or a MOU, it is confusing to both sides about who is doing what and who is responsible for certain things. Is there something Council needs to do in regard to having a formal agreement signed? She has not seen any draft agreement in a very long time. Finance Committee April 9, 2012 Page 6 Ms. Grigsby responded that there was a draft agreement discussed with the Community Development Committee, and there have been discussions between Mr. Guion and Ms. Ott. As far as timing, Ms. Ott can provide information on that. Ms. Ott responded that she does not want to make a commitment about timing without discussion with Mr. Guion. She presented to the DAC Administration the draft agreement, and they provided preliminary feedback to her on the agreement. There are some areas of disagreement, which need to be worked through prior to bringing the draft back to the DAC Board and to Council. Ms. Chinnici - Zuercher asked for clarification of whether this administrative discussion occurred recently. Ms. Ott responded that she and Mr. Guion met last fall, and the agency was not in agreement with the City Administration's position on some items. Ms. Grigsby added that in the last few months, the City has focused on the Art in Public Places program and the next placement — specifically, the process and coming to agreement on the process so that it could be included in the agreement. Mr. Reiner asked if a compromise is possible in these discussions, and will staff give information to Council about the areas of disagreement so that they can discuss it further? Ms. Ott responded that there will definitely be some items for Council to discuss. Staffs goal was to handle as much as possible at the administrative level, but there are some differences of opinion about funding levels, and expectations from funding for grants. In the Community Development Committee meetings of 2007 and 2008, direction was provided regarding expectations at the Committee level and using those as the basis for negotiation. The full Council has not provided feedback yet, but the Committee review was a starting point to come to resolution. Ms. Chinnici - Zuercher asked for clarification — this goes back to 2007 and 2008? Ms. Ott responded that this is the third or fourth rendition of working through this agreement. Ms. Chinnici - Zuercher recommended that Council consider having the Community Development Committee meet with Ms. Ott and review again the points under consideration and the problem areas. Council can then either affirm the City's position or give different direction. Vice Mayor Salay stated that she served on this Committee and would be interested in re- engaging on this issue. It was the consensus of those present to have the Community Development Committee schedule a meeting, with other Council Members invited to attend, to review what was discussed, the draft agreement last proposed, and the points of contention. This needs to be moved beyond the administrative level, as much is at stake —the Art in Public Places program, the DAC building the City owns, etc. Finance Committee April 9, 2012 Page 7 Ms. Chinnici - Zuercher asked if there are other issues Council Members would like to raise at this point about the process for grants, specifically the administrative process proposed for the Frog Jump and Classic Auto Show. (There were no further comments.) She added that she would like staff to provide information about who is following through on the submission of follow -up reports from the applicants, and how the applicants are reminded of the fact that reports are due. These are substantial grants and the requirements for reporting are not excessive. Ms. Gibson noted that she can provide this information. There is a tickler file maintained to ensure those follow -up reports are sent in, and the letter indicates that the grant can be rescinded if the follow -up reports are not provided. Toward the end of the year, staff confirms that the reporting has been submitted, and the purchase order is closed. Those carryover monies are then available for future grants. She will provide all of this information to the Committee. CIP Update Mr. Gerber commented that the Dublin Road multi -use path was scheduled for construction this year, and the report indicates it will be delayed until next year. Mr. Hammersmith responded that the design began in the fall of 2011, and meetings with the impacted property owners have been ongoing. A meeting was held today with the appraisers and negotiators as this phase begins. The design was complicated and did require more time than some, and trying to work with property owners to minimize and mitigate impacts also delayed the design. The acquisition of easements for the project is time consuming as well, and it is difficult to estimate how long that will take. Mr. Gerber noted that many residents have spoken highly of how staff has handled the interactions with them about the design of the path and impacts on their properties. Mr. Gerber suggested that the City be more proactive in notifying the residents of the status of the project and explaining why the delays have occurred. Mr. Hammersmith responded that staff intends to communicate with the property owners once the timeline is better understood. The same holds true for the Brand Road multi -use path. Ms. Grigsby added that for both projects, there are some areas where the construction and negotiation with the property owners is simpler than others — staff is looking to potential phasing, if possible, so that some connections — street to street segments -- are available earlier. Staff will continue to provide Council with updates. Mr. Hammersmith stated that a good example on Brand Road is for the section from Earlington /Brandonway going east to Dublin Road — it is a fairly easy segment and requires easements from only two property owners. It could likely be done more quickly than the portion from Muirfield Drive to Earlington. Mr. Gerber emphasized he is interested in the status of the Dublin Road South bikepath, given the expectations and desires of the residents. Perhaps there are some segments that could be done earlier. Mrs. Boring asked about the status of Emerald Parkway Phase 8. It seems to be moved back again on this update. Finance Committee April 9, 2012 Page 8 Ms. Grigsby responded that one issue discussed is that of right -of -way acquisition and working as closely as possible with the property owners to come to an agreed upon acquisition cost. Recently, based on a discussion with Council, staff has sent additional letters to 7 or 8 of the property owners and has had one reply. These discussions will continue. At some point, if the City cannot come to terms with property owners, the eminent domain process will be commenced. Mrs. Boring stated that if all of these negotiations are completed by August, the bidding process would then occur. What is the timing for that portion? Mr. Hammersmith responded that he estimates six to seven weeks from advertising for bids to having Council approve a bid. Mrs. Boring stated that the City hopes to begin this project no later than 2013, correct? Mr. Hammersmith responded that is correct, adding that some underground work such as sanitary and storm sewer could be done over the winter, with the roadway work done in more favorable weather conditions. The meeting was adjourned at 6:40 p.m. Clerk of Council