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HomeMy WebLinkAbout04-28-14 Finance Committee - minutesDUBLIN CITY COUNCIL FINANCE COMMITTEE MEETING Monday, April 28, 2014 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, Vice Mayor Gerber and Mr. Lecklider. Council members present: Mayor Keenan Staff present: Ms. Grigsby, Ms. Mumma, Mr. Thurman, Ms. Gibson, Mr. O'Brien. Consent Agenda • Finance Committee Minutes of October 14, 2013 • Finance Committee Minutes of November 6, 2013 • Finance Committee Minutes of November 25, 2013 Vice Mayor Gerber requested a change to the minutes of November 25, 2013: on page 5, second sentence of second paragraph, change "he" to "they;" on page 8, last sentence, after "...close down parts of the City," add "...at the same time as the St. Patrick's Day parade." Vice Mayor Gerber moved approval of the consent agenda items with the changes as indicated. Ms. Chinnici - Zuercher seconded the motion. Vote on the motion: Ms. Chinnici - Zuercher, yes; Vice Mayor Gerber, yes. Mr. Lecklider abstained. • Financial Update — First Quarter 2014 Ms. Mumma stated that the meeting materials included an outline of the City's financial position through the First Quarter of 2014. The City's General Fund balance continues to be healthy, hovering around 98% of the City's planned 2014 expenditures. This is an increase from year end 2013, which is primarily due to an increase in income tax revenue. Usually, the first quarter of any year is unpredictable in income tax revenues. However, the City has experienced a stellar first quarter, and Income Tax Revenues are up 13.8% over the same period of time last year, by $2.5 million. Growth was seen each month of the first quarter, with Net Profits and Withholdings both increasing. Withholdings Ms. Mumma noted that, looking more specifically at the different components of our Withholdings: the top 10 businesses were up almost 32% for the First Quarter; the top 50 were up 18 %; the top 100 were up 20 %; and the top 500 were up 16 %. So, overall, Withholdings were up 15% for the First Quarter. Income Tax Revenue The month of April is the largest month in income tax revenue. Through Friday, overall Income Tax collections were up 4.1 %, nearly 10 %, over April 2013. General Fund Expenditures Excluding Transfers and Advances, City Expenditures were up 9.5 %, approximately $870,000. The major part of that increase -- $700,000 is simply a timing difference. Normally, all economic development incentive payments are made in April. Personnel costs are even with last year. Finance Committee of Dublin City Council April 28, 2014 Page 2 Supplies and materials are up 15% due to increased fuel costs. Overall, Expenditures are in line with last year. General Fund Revenues General Fund revenues are up 12.6% over the first quarter of 2013, and as she indicated earlier — that is primarily attributable to an increase in income tax revenue. It is important to note that the City's building activity is also up 17.5 %. Hotel /Motel Tax Revenue Hotel /Motel tax revenue through the first quarter 2014 reflects an increase of 4.2% over the first quarter of 2013. The total 2013 collections were up 3.9% over 2012. The highest month of collections was November, which was due to The Presidents Cup. She would like to follow up on the discussion with Council last December regarding this fund. The amount reflected in the packet memo is the unencumbered fund balance, approximately $3.3 million. Because of the overall health of these funds, they will be used to the extent possible for the art component of the 270/33 interchange project. Ms. Chinnici - Zuercher inquired the cost of that art project. Ms. Mumma responded that the cost is not yet finalized, but the last figures she received related to the construction, specifically the form liners, was $260,000. Including some contingencies, the cost estimate is $300,000 - $320,000. Ms. Chinnici - Zuercher inquired if that cost includes the artist's fees. Ms. Mumma responded those numbers are related only to the construction cost. Currently, she is evaluating the overall design expenditures to date, and trying to segment out what was just design of the art component. There are different design components — the streetscape, the hardscape, and irrigation system. The intent is to attribute as much as possible to the Hotel /Motel Tax Fund, if it is relevant to the art work. Ms. Chinnici - Zuercher stated that, ultimately, Council would like to have information regarding the total cost for the art component. Hopefully, it is not significantly more than the original cost estimate. TIF Funds Ms. Mumma reported that overall collections through the first half are up 19.3% over 2013. In packet materials, she highlighted the TIF areas that had significant changes over the prior year's valuation. Those areas were: the Perimeter West TIF, due to the Dublin Springs facility coming on with full value; the Shamrock Blvd TIF due to the Wendy's construction; and a valuation increase in the Bridge and High TIF. There was a decrease in the River Ridge TIF. She contacted the County about this, and they indicated it was attributable to the vacancies that exist on that property. The annual Tax Incentive Review Council meeting will be held next Tuesday, May 6, at 4:00 p.m. in Council Chambers. Mr. Lecklider stated that his sense is that the occupancy at River Ridge is beginning to improve. Is the City able to request that be re- evaluated at particular times? Mr. Gerber responded that he does not believe the City has the authority to do that. Finance Committee of Dublin City Council April 28, 2014 Page 3 Ms. Grigsby responded that the County conducts reappraisals every six years and updates every third year, so typically adjustments are made every three years. Ms. Chinnici - Zuercher inquired if this evaluation was last done in 2013. Ms. Mumma responded that the County indicated that due to a backlog, the last valuation was filed in 2012 for tax year 2011. It took the County some time to get through all of the requests for the Board of Revisions to make a decision. Ms. Chinnici - Zuercher inquired when this reduction would take effect. Ms. Mumma responded that it was retroactive back to tax year 2011. If evaluation occurs every three years, River Ridge would be reevaluated in 2014. A property owner can file that request at any point in time; it does not have to be in conjunction with a normal reappraisal year. In this case, the reappraisal was done in 2011. Ms. Grigsby noted that although they do conduct automatic evaluations, because of what was occurring with the economy, the Board of Revisions had a large number of requests for reductions — this was one of those. Mr. Lecklider inquired if this will be reappraised during the next year or two. Ms. Grigsby responded that the value that was lost as part of the Board of Revision case, at some future point will be reinstated in the valuation. The City would receive additional payments from thatincrease. Mr. Keenan inquired if some entities hire individuals to appeal these re- evaluations. Ms. Mumma responded that they do. In fact, in this case, the School District did file a counter complaint, but the Board of Revision ruled in favor of the property owner. Mr. Keenan stated that the School District will likely address this again. Ms. Grigsby responded this is in a TIF district, so it is a little different, but the Schools may follow up on it because it is within their school district. Vice Mayor Gerber noted that this has been a distressed property, so it is nice to see some positive activity. Ms. Grigsby responded that there is much more activity there than a year ago. Ms. Chinnici - Zuercher stated that the financial situation seems to bode very well for the City of Dublin due to how well the corporate sector is doing. Is some of the financial health related to the diversity of the economic development mix? During a recession, if a city's economic activity is not focused primarily on one industry/area, the recession would have less impact, and when the situation improves, the improvement would be greater due to the diversity. Ms. Mumma responded that Dublin has that diversity. It is not dependent upon any one company or industry. When breaking down the top 10, 50 and 100 taxpayers, all of those businesses are up. There have also been some years when the top 10 taxpayers were down, but the rest have made up for that. This proves that the value of small businesses should not be under - estimated. Ms. Mumma introduced the City's new Chief Accountant, Jerry O'Brien. Since the first of February, he has been working on the City's CAFR and audit. He comes to Dublin from the State of Ohio Auditor's office. Committee members welcomed Mr. O'Brien. Finance Committee of Dublin City Council April 28, 2014 Page 4 New Business Mr. Gerber stated that four to five years ago during discussion about hotel /motel tax applications, the Committee discussed long -term goals for City events, such as the July 4th celebration, St. Patrick's Day parade and Irish Festival. In some cities, those events are conducted by a private entity. Perhaps now is the time for the Committee to consider whether that would work in Dublin. Although the City would need to be involved in a transition process for several years, he believes that option should be evaluated. In the cities where this has been the most successful, the community grass roots effort seems to flourish. The City has been trying to achieve this participation for some time, but he doesn't believe it is the role of City government to encourage that participation. Ms. Chinnici - Zuercher stated that the Dublin Irish Festival began in that manner, but the City ultimately took over the organization of the event. Has staff in more recent years looked into this potential, either in regard to an individual activity or collectively? Ms. Grigsby responded that staff has not looked specifically at having another organization handle the events. This concept has come up at different times. With the Irish Festival, it would be very difficult, based upon the size of this event and how it has matured. It is important to note that as long as DIF has good weather, it has been able to cover its direct costs. In regard to the St. Patrick's Day event -- in the past, this City event included the Blarney Bash. That was discontinued, and there has been discussion about having another group sponsor that event. There are opportunities to consider. The City of Dublin is different from most other communities from the aspect that hotel /motel tax revenue has been used for this purpose. It is something that staff can evaluate and provide Council with the pros and cons of different models for events. Vice Mayor Gerber stated that it may be determined that this would not work for Dublin. However, the hotel /motel tax monies could go to another organization for this purpose, so that is not necessarily an issue. Ms. Chinnici - Zuercher stated that she believes this occurs in Columbus. Some of the races are managed by a for profit company, not necessarily a not for profit. This may not occur for the type of events that Dublin provides. There are different configurations. In some cities, a not for profit is set up exclusively for this purpose by the city. In essence, the city funds them but the not for profit organizes the event. If staff would conduct a cursory review of this option and if some option is pursued, it would be for the 2016 budget timeframe. Ms. Grigsby responded that she anticipates that if the City were to change how it handles events, it would take some time and could not happen in 2015. Mr. Gerber stated that it would be a significant change. Some parts could transition to another entity; some could be retained by the City. In some cities, their convention and visitors bureau takes the lead. There are different ways in which to approach this. The meeting was adjourned at 6:20 p.m Clerk of Council