MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
FEBRUARY 14, 2006
Chairperson Lehman called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 1:00 p.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Lehman said that they left off yesterday after hearing scenarios presented by departments. He said they discussed some possible changes to get down to the $3.50 levy, and Budget Coordinator Rich Claiborne had given them a list of items to consider.
Claiborne presented a summary of the department requests. First of all he addressed additional ideas building on recommendations. He said there was a surplus of $914,088. He said that if they were to honor all department requests they would need an additional $282,978. If the Rural Fund idea was removed, which was the Board’s recommendation from February 13, 2006, that would reduce the number by $174,891 and leaves a balance of $456,219. He said they could ramp up for the future trails plan by catching up the equipment rotation for the Conservation Department, and that would be $111,000. There would then be a remaining balance of $345,219 to be used as buffer for the building project or to apply to the Trails project. He said the idea is not to just have a band-aid for the next two years, but rather to have a long-term plan to support the budget. He said one idea would be to create a 28E agreement with the schools and piggy back on the School Local Option Tax that is currently being reviewed. Such an agreement could be 50-50 or maybe a 75-25 split. He said that if they get the footing for that, perhaps the County could get its own Local Option Tax with a sunset of 5 years to be ear-marked for capital projects.
Stutsman asked if the departmental requests are included in the tentative budget. Claiborne said the budget did include those requests. Lehman said they would have to subtract something to get to the $3.50 levy. Claiborne said they are over by $591,905 to get to $3.50, without the bonding.
R. Sullivan said that if they look at Claiborne’s recommendations from February 13, 2006, he thought the first two ideas were very good. Stutsman agreed. The ideas are to apply the $60,000 saved for a DHS telephone project that is no longer necessary to the Capital Expenditure transfer, and to reduce the $45,000 saved and available from purchasing cardiac monitors from the Ambulance budget and reallocate it for expenditures within the department.
Stutsman suggested the Board discuss staffing, and what staffing should be included in the FY 07 budget since this is the biggest ongoing expense that the County incurs. Neuzil said that Public Health, the Sheriff’s Department, and Human Resources are the three departments which requested employees. Stutsman said that Public Health is requesting 1.75 FTEs. Stutsman read from the request, which said that the Clerk II position will improve the efficiency of the administrative vision, and the addition of this position will enable current administrative staff to utilize and maintain untapped functions of the GEMs system as well as develop and improve upon other administrative systems. Part of the department’s mission is to promote and provide environmental, personal, and public health to the Johnson County citizens. Professional staff time in all divisions will be saved for carrying out the department’s mission.
Neuzil said that what the Board has done in the case of some other departments was to not necessarily give them a new employee but at least bump a half-time position up to full-time position. He said that they could do this for Public Health, and that might help them. Stutsman said that there were two different requests. Neuzil said that there were three requests, since Public Health Department Director Ralph Wilmoth was also requesting a .25 FTE Disease Prevention Specialist. Lehman said that it looked like the request for two vehicles was taking priority over the part-time expansion. Neuzil agreed that the Public Health vehicles need to be replaced. Harney said that if the department could get by one more year without the personnel, that would be the best decision since adding vehicles is a one-time purchase, whereas adding personnel is an ongoing cost.
Neuzil said that the employee request that struck him as the most important was the position for Disease Prevention Specialist over a Clerk position. He said this would be a .25 full time increase. The request claims that right now there are 1.5 FTEs, and that existing Disease Prevention Specialists are involved in expanding duties, and the volume of infectious disease work exceeds the capacity of current staffing levels. Neuzil said this seems to him to be an important priority. Harney added that one of the issues that Wilmoth has is that the HIV grant the department usually gets is moving to the State, so they won’t be getting this money that they depended on previously. R. Sullivan said he had some trouble with the request for a purchasing clerk, and asked whether the volume was really there to support that position. Stutsman said that it sounds like it’s a matter of entering the claims into the GEMs system and using the untapped functions of the GEMs system. Lehman said that if they were getting along without this position, they should try to get along without it for another year. The Board decided to approve the purchase of the vehicles ($30,000) and the quarter-time expansion of a Disease Prevention Specialist ($11,840) for the Public Health Department.
Lehman said that Human Resources requested a full-time position. Harney said he knows their workload has increased, but he thought this was another position that could be put on hold. Lehman said that part of what happened is that they had to replace a person with a lot of experience. Neuzil said his only concern with that is there are some duties that Human Resources is working on such as the Communications Committee and the County Fair, and he assumes that if they don’t approve the additional position, Human Resources will no longer be able to work on these projects. R. Sullivan said that he was confused by the explanation which didn’t make sense to him. He said that it seems to him that Human Resources either needs to hire a new person who has the needed skills and let the part-time person go, or upgrade the position before they hire a brand new person. Stutsman said she would support waiting a year on this position. Harney said that some of the extra things that the department does can be assigned to a committee. Stutsman said that so many of the things Human Resources has done has helped with communication with the public, but they won’t be able to do this next year.
Lehman introduced Springsted and Associates Representative Tony Roetlin to address the Board about the pros and cons of bonding. Roetlin said that Springsted had worked with the County in the past in terms of borrowing and financial matters. Lehman asked Roetlin to describe some of the advantages of bonding. Roetlin said that in Iowa counties can borrow money for certain things. Most of the framework governing what can be borrowed, over what term and how much, has to do with State law, although there are a few Federal tax laws that come into play that have to do with at what point you can borrow for what type of expenditure in what financial year. Roetlin explained that according to Federal tax law, counties can borrow for future expenditures but not past expenditures. The State Code has a list of essential county purposes and general county purposes. Essential county purposes are those purposes for which a county can borrow using general obligation (G.O.) bonds which are repaid through a debt service levy, a new separate incremental tax levy for which there is a straight forward hearing process, after which you issue debt, get the proceeds and fund the purpose or complete the project and repay the money over an amount of time which can be six months to 20 years. There is also a list in the Iowa Code of general county purposes. Those are purposes for which the county must have a referendum or an election of all eligible voters in the county. Counties are fairly restricted as to the types of things they can borrow for without an election. That restriction is much more purpose driven than dollar or tax-rate driven. The primary one that counties use in Iowa is called public buildings. New buildings, renovations, or rehabilitation of an existing building qualifies. The dollar amount that can be borrowed is dependant upon the population of the county. In Johnson County the amount is $800,000 per project. Roetlin said it is not inconceivable that a building would be comprised of several projects over time. He explained that it would be possible to have the building be one project and the parking lot for the site be a separate project.
Roetlin said that a general obligation bond is repaid using the debt service levy which extends a new property tax across not only the valuation that across which the operating levies are extended, but also across TIF districts, which is close to $5 billion in total. He said the debt service levy gets extended across a larger tax base. One thing that happens is that for any dollar amount of expenditures that is paid through cash, the pennies per thousand of tax rate to cover that expenditure made from an operating fund will be slightly higher than the pennies per thousand through the debt service fund to cover that if it was a very short bond issue. He said that this was done in Johnson County in the past with one year bond issues. He explained that they could take the same expenditure and stretch it out over its useful life. Neuzil said that the County has bonded in the past and they have been advantageous because they were able to draw from the TIF. He said they all have opinions on TIFs, but he said that extending it over many years would be a policy change for the Board. Neuzil said that if they were getting into borrowing money that had to be paid back in future years this was a whole different story.
Roetlin said there were a couple of rationales for borrowing and spreading it over time. He said the chief negative is that they would end up paying more in total. He said that aside from tax savings which come from the two valuations being different, they would far outspend that difference in tax rate from spending over two tax bases. He said that they would have allocated the money over time, and if that building is serving taxpayers in the County as they are moving in and out as they tend to do in any county, they are making sure that the taxpayers served over the time it’s used are paying. Another rationale is that as municipalities have facility needs over time, the tax rate if the County paid cash for each of those buildings as they happened would pop up at that time. He said this produces a lumpy tax rate, and some municipalities decide that they want a smoother tax rate. The other thing is that the debt service fund allows it to shift expenditures from limited operating funds to a debt service fund which is limited in some ways but maybe not in others. He said it is not limited in rate or amount, but it is limited as to purpose without a referendum, whereas the general basic fund is limited to amount or rate, and the general supplemental is limited to purpose. He said that some things that wouldn’t necessarily fit into the general basic fund, and cannot be paid through the supplemental could be financed through the debt service fund.
Lehman said that in the past the County has been at or above the $3.50 per thousand dollar valuation. He said they have used bonding to get them down to that or below it, and when they have been below it they haven’t tried to fill it back up. He said they have done this for one year, and the current suggestion is to bond for two or five years. Lehman expressed concern that this will compound their issues. Stutsman said they have never bonded for operational expenses. Roetlin said that in Johnson County they have never stretched operational expenses beyond the current fiscal year because of the math of the tax base differential due to TIF they have switched those expenditures two or three times from an operating fund to a debt service fund, but they haven’t paid them in the next fiscal year and incurred interest to stretch them out into another fiscal year. He said it would be legally impossible or financially imprudent to take operating expenditures and finance them over five or twenty years, and they aren’t suggesting that. He said that what he is talking about in this situation is capital expenditures, expenditures that the Board is planning on making anyway from the general basic or supplemental funds. M. Sullivan said that the recommendation is to only bond for capital projects, not for any operating expenses. Lehman asked what the impact would be to a business owner who is paying taxes in a TIF’d area. Roetlin replied that a taxpayer in a TIF district is paying the same taxes as they would if they were un-TIF’d, it is just going into a different account. Lehman clarified that with bonding they would be making a government community share their tax dollars with Johnson County, which would extend their TIF. Roetlin agreed, and added that they would not have a business complain about having their taxes raised. Neuzil asked whether if they bond $800,000 which is spread out, if next year when the county puts away $1 million for capital improvements, would they have to give an extra $200,000 to go towards paying off the bond.
Roetlin explained that when a County borrows, they file a bond resolution with the County Auditor that says the Auditor shall extend the term’s fiscal year’s tax of a specific amount of dollars per year. The County Auditor will extend that, and it won’t have any impact on the County budget in terms of general basic, general supplemental, or how much the County puts into the capital projects fund. He said that the debt service levy will be positive. The total tax rate will be higher by that amount. Neuzil asked where that would fall as far as its category. Roetlin replied that it is a separate fund which comes with incremental revenues to pay it back. Stutsman asked whether the revenue comes from access to the TIF dollars that couldn’t be accessed before. Roetlin replied that they would be using a debt service fund levy which is extended across all of the County’s valuation including TIF. Stutsman asked what the advantage of this is. Roetlin answered that the purpose is to access an available tax levy that is not currently being accessed for expenditures which are taking room in the $3.50 in the general basic. Stutsman asked how they would pay it back. Roetlin explained that the County’s revenues would increase to cover the debt.
R. Sullivan asked if the public’s tax rate will be higher. Roetlin agreed that the whole pie will be slightly bigger but the slice for what the County is spending it on will just be in a different spot. Stutsman said that right now the County doesn’t get any revenues from TIF dollars, and in this case it would get some. Lehman said that in the past when they have bonded, they have brought it below the $3.50 and have left it there. He said it might be a tax savings of $5 for citizens. However, he said that in this case the County has a lot of priorities here, and it needs to be filled back up. Stutsman said they have to decide what the reason is for doing the bonding: is it to buy things they can’t afford because of the levy limit, or is it to reduce taxes. Harney said he prefers to bond, not for long term, and for that to hold down taxes for the general public, and to pick up some of the revenue that the government is holding back in TIF’d areas. He said he didn’t like extending it very far, but would like to get it in a year or so. Stutsman said the Board has to weigh if it is advantageous to do that.
Roetlin said that in the past the bonding has been done for a variety of amounts, and some of it was for operational expenditures, but they were always expenditures the County was going to make anyway, like insurance. He said that the reason they were comfortable with this from a financial prudence perspective was that they were going to repay the debt in the fiscal year that those expenditures were going to be made anyway, however they were financed. He said that they were just switching funds to a fund that spread that expenditure over a larger tax base, and it was paid off quickly. If the interest rate was 2%, that meant they paid 2% more for those expenditures, but the expenditures were spread over a 9%-10% greater tax base. That meant that the rate was enough lower that they were still 7-8% to the good. This wasn’t a profit for the County, but was passed on to taxpayer in the form of a lower rate.
R. Sullivan agreed with what Lehman was saying, and said that if they keep this discussion separate in terms of bonding and not look at the backfill but just at what they would gain by the bonding, that would be the best approach. He said these are two different political decisions. Roetlin said that what they are discussing today is fundamentally from what was done in the past. Previously, the Board had just asked which fund they would pay the bond from. In this case, they might be saying that it is getting harder and harder to pay for the things the Board wants to do for Johnson County residents from the operating levy and also fund the capital expenditures on a pay as you go basis. He said that if the Board is finding that to be the case, they could decide to borrow and stretch the expenditure over a larger timeframe because that expenditure can legally be switched to the debt service fund and it can be financially prudent to do that.
Neuzil claimed that it comes down to the question of when they reach the point of making money, and when they get to the point of losing money because they haven’t paid it back soon enough. Roetlin said that he could not make an accurate estimate, but said that in this case they are talking about financing the projects, not making money. He said that there is a middle position, which says that they doing this for both reasons, they just don’t want to pay more interest than they are spreading it over in terms of tax base. He said that 17% of the County’s valuation is in TIF districts, which means that the County could afford to pay 17% interest. If rates are 3.50 for one year debt, which they are today, and if they increase every year, he said they would break even after four or five years. Neuzil said that they don’t want to get too far out from that, and they don’t necessarily want to pay it back all in one year which would mean a big boost in property taxes over one year, paying back $800,000 in one year rather than spreading it over four years. He said that what this is a basic opportunity to take money out of the capped general fund and find another avenue, but in the end it’s still an impact. Stutsman said that for the individual tax payer it is not a significant increase. M. Sullivan said that it would be about a penny and a half. He said that if they spread it over five years it will be more, over ten years it would be less. Stutsman said she would prefer to do it over a shorter period of time so they could reevaluate it.
Harney said his concern is that they have a lot going on right now, and he doesn’t want to build a lot of debt. Roetlin said they will get the levy to pay for it, but the tax bill that everyone will receive will have another column in it now. He said that all tax payers would pay a debt service tax levy. Roetlin said that any local unit that overlaps a TIF district accesses the debt service levy, in theory there is some incremental extension of the end date where all the debt is paid off. Lehman said he had asked Coralville officials if this would make an impact, and they said it was minimal. Stutsman said they didn’t ask Johnson County when they TIF’d.
Harney said he likes the idea of bonding better than moving items to the rural levy. He asked what this will do to the County’s future bonding. Roetlin said there are a couple of ways to look at debt capacity. The statutory State of Iowa constitutional debt limit is 5% of the valuation, which is $250 million. He said there isn’t a county in Iowa that exceeds that limit. He said that the rate for the debt service levy is unlimited. He said that the issue is, when they do future issues that require no voter approval, how will they fit the debt service payment in without adversely impacting the taxpayers, and for issues that require voter approval in terms of debt, depending on how the whole levy has been managed, what will their likely response be. He said that because Johnson County has no debt out, they could pay an $800,000 issue over five years and not have any constraints in bonding for more. Roetlin said that as a county they have their own list of things they can borrow for with a simple hearing in the code, and they can borrow for anything with a vote.
Stutsman said that the County has always had the philosophy to not incur a lot of debt, but cities don’t necessarily have that philosophy. R. Sullivan said that the proposal in front of them has to do with bonding specifically for a new building. Claiborne said it is removing the $1.5 million transfer from general basic to capital projects, cutting it down to $700,000 and bonding for the $800,000. Stutsman said that then they would have those additional dollars to work with out of the general fund if they need it. Claiborne agreed. R. Sullivan clarified that they wouldn’t have to do this, but they could. Stutsman said that this was true unless they decide that these things aren’t things they want to budget for this year. R. Sullivan said that this is why they need to be clear that it’s two different issues, because they don't have to do these things even if they went with the debt service levy. Roetlin added that to the extent that they move out of the general basic, they could use those funds for any purpose. Harney said that this is what concerns him, because he doesn’t want to replace that if they’ve lowered it long-term. Lehman said that this year they have more items to consider. Harney said that bonding isn’t so bad if it is a one year expenditure, but he doesn’t want it to continue every year. Neuzil agreed.
Roetlin said they could just establish a dollar amount, and decide that that was the amount of capital expenditures that they were interested in financing. R. Sullivan said it makes sense to bond even if they’re under, because it provides an opportunity to take money from the TIF districts. He said he sees no reason not to bond, even if they decided to lower the general fund levy. Stutsman agreed as long as the interest rate is favorable, and it is short term. She said that one thing they haven’t factored here is that there is a cost to go through this process. Roetlin said that there is an interest cost, a legal cost, a fee for the consultant, and potentially a fee for a financial intermediary like an underwriter or broker. He said that in the past when the County has borrowed, they have underwritten it locally and there hasn’t been a dollar amount charge up front just for the job of taking the loan and splitting up and reselling it. Stutsman said that Hills Bank has been very good to the County in doing that, and has saved the County some dollars by doing this. Neuzil said that even after all the fees, it is still advantageous to do this because the County could draw money from the TIF districts.
Neuzil asked what capital projects they’ve decided to bond on. Claiborne said they would have to determine that. Neuzil asked how they came up with the $800,000. Harney expressed concern that building a communications center would cost more than this amount. Roetlin replied that they could have $800,000 towards that project. He said that there is a special authority in the code that allows a county and its county seat city to join together in a special purpose authority legal entity, which is 346.27 in the Code. He said that Scott County has used this to build a joint city-county jail, as did Muscatine County.
Harney said that Iowa City has said that they would finance the Joint Communications Center, and Johnson County could pay them back. He said that this might mean Johnson County would need to get the cash from another source other than the debt service account. Roetlin said they would need to get more specifics to answer this question. He said that he doesn’t think they could have two separate bonds for the building and the equipment. Lehman said that they don’t’ want to paint themselves into a corner, and he doesn’t want to send the impression that the County has unlimited taxation to tap into. He said that what R. Sullivan is saying is that if they are over the 3.50, they might as well use the $800,000 if they can make it work out and drop the levy down below the 3.50. He said that bonding is a very definite option, but there is some concern about the years they would take to pay it back. He asked when they would make this decision.
Roetlin replied that they would decide the term when they borrow the money and issue a debt instrument. He said that for the time period they have been talking about, if they don’t do it locally it won’t be pre-payable without some penalty. If it is done locally, it could be pre-payable. Neuzil asked if the County bonds $400,000 of bonding capacity against the DHS building, if next year they could do another $400,000. Roetlin said they could. Neuzil said they have to publish this budget next week, and asked if they should just assume that it’s going to work out. Roetlin replied that when the County borrows money through the debt service fund, it does not need to legally be part of the budget process. He said they do not need to publish a notice or include it in the estimates in any way. He advised the Board to put up a pre-levy, a resolution which indicates how much they are going to borrow and for what general purpose. He said that they could estimate the interest rate, come up with some figures, and the bond council could draft a pre-levy resolution which will be filed before March 15, 2006. As long as the Board does this they will receive debt service funds in the coming October and April to pay for that loan. He said they could work out the exact purposes, amount and term at that point. Neuzil asked whether they have communicated this idea to the Treasurer and the Auditor. M. Sullivan said they haven’t, but they will once the Board makes the decision.
Harney asked whether the items that are listed now to put in the debt service fund are considered separate from the $800,000 maximum. M. Sullivan read a list of many separate projects. Roetlin said it was quite possible that that amount could be any amount below, at, or above that $800,000. He said that the items listed could all be part of the same project, but if the list was $1 million, they would have to split up the projects. Stutsman said that they needed to make the decision whether they were going to take advantage of this, and could work out the details at a later date. Harney asked how long the process would take. Roetlin said it would take about two months at the longest. Stutsman asked whether the reason they would want to do it quickly is to get the taxes sooner. Roetlin replied that the Board would want to file a bond resolution in anticipation so that the Board could have a levy for this by March 15 that’s good for collection this coming fiscal year because if they don’t do this they will have to do capitalizing interest, which eats into the project. After they have put the resolution up and they know they are going to get the debt service levy funds, then they have to decide as an entity when exactly they want to start borrowing. However, they should consider that rates could go up or down. He said this would be much more of a concern if they were going to borrow over a longer term. However, the Board could wait until June 1, 2007 to borrow it if they wanted to. He said the real issue is to know whether or not they will borrow so that a bond lawyer can put up a levy. Once they put up the levy they are obligated to borrow.
Lehman said that although the concept here is not new to the Board, some of the details are. Neuzil asked Roetlin to give the Board a chart of when this stops being advantageous. Neuzil said that he was satisfied with bonding $800,000. Stutsman said she was too. Lehman said he was willing to keep it on the table. Neuzil said it was important that they give direction to M. Sullivan and Claiborne. Harney said he would be willing to approve this. Stutsman asked whether they could just do it over one year. M. Sullivan said they have done this in the past. Neuzil said the reason they did it like that was because over one year they make money. Over four or five years they don’t make money, but it’s easier to pay back. Lehman clarified that by making money they meant that they pass the cost on to the tax payers. Stutsman said she would be most comfortable with doing it one year at a time. Neuzil said that one year would be a mistake. Lehman said that he would like to see two to three years maximum. R. Sullivan said that there comes a point when it doesn’t make a difference. Lehman said it does make a difference if they have another project next year. Roetlin said that he could put together a chart that shows what the tax rate per thousand would be for every taxpayer in the county and what that means for each portion of a house assessed at $100,000 if the County borrows $800,000. He said that from there he evaluates where the tipping point would be based on that TIF versus non-TIF valuation. He said that he could also show if they did it over that four and a half years what would happen in the second year if they wanted to finance it this way. He said that his understanding is that over the past five years the County has averaged $800,000-$1 million per year in deposits to the capital projects funds.
Lehman said that he saw it as a situation where they would be able to borrow the money, but was concerned about whether they would be able to pay it back, and that was the information he was looking for. Harney said that he wanted to see the numbers that Roetlin would come up with in order to evaluate how it will impact the individual tax payer. Harney asked whether this would go against rural residential or whether it would go across the ag land as well. Roetlin replied that it applied to everything, just like the general basic. He said that in this situation they would always be able to make the payments, but the question was what they wanted the taxpayers to pay in which years, and what the Board thinks the taxpayers want to pay in which years.
Stutsman asked if they had to make the decision about the years today. Roetlin said they did not. R. Sullivan clarified that they just needed to make the decision about the $800,000. Roetlin said the only reason they needed to make that decision was so that he could compile some numbers. Stutsman asked where they were at as far as dollars to work with. Claiborne said that assuming they get the $800,000 they will use the $105,000 saved up between the unnecessary DHS phone system and the $45,000 saved from ambulance, which brings the amount to $905,000. He said that right now they are up to 3.63472, in dollars that is $591,905. Lehman clarified that 3.62 is $591,000 over the 3.50 levy. Claiborne agreed, and said that they have to make up $591,905 to get back to 3.50. If they do the bond and use the savings, they are at 3.05. He said that if they do the $800,000 bond and use the $105,000 in savings, that brings them to $905,000, and they would take the $591,905 off of that at that is what would be available for departmental requests. Lehman clarified that they would then be under the levy. He said that if they use this $905,000 and subtract the $591,000 that makes them under the levy by about $313,095. Claiborne said that they could either reduce the $350 or add the backfill.
R. Sullivan suggested they go back to the February 13, 2005 agenda, and mentioned Claiborne’s suggestion to transfer 10% of the Sheriff’s patrol budget from Rural Basic to General Basic. He said he thought they should do it just from a fairness standpoint. Lehman said he was trying to compare this to the Senior Center where people in Iowa City are being taxed from Iowa City as well as from the General. He asked if this would mean that the rural people would be taxed twice.
R. Sullivan said they would not because it was a different part of the Sheriff’s budget. He said that right now, citizens of Iowa City and Coralville are paying for some of the rural patrol, and Claiborne suggested transferring 10% of the budget to rural. R. Sullivan said that whether they cut or raise taxes, a percentage needs to shift to rural for a user fee, since it seems like the people in the cities are paying for something that they aren’t benefiting from. Lehman asked R. Sullivan for some history, and asked what other counties have done. R. Sullivan replied that last year it was 51 out of 99, and this year they said it would be about 70. He said that ISAC said if they just throw out a number it will be challenge and that will be lost. The counties who justify what it costs to do it have been successful. Harney asked why they would want to do this now if they are going to do the bonding. R. Sullivan said that it was a fairness issue. Harney asked how they were going to do it when the do the combined communications center, since that would mean another jump for the rural side. R. Sullivan disagreed, and clarified that this is a specific service that can only be attributed to rural. He said that the policy is to get the direct beneficiary to pay. He said that in this case there is a direct beneficiary - the rural - that ought to pay a portion of this as opposed to the general fund paying the whole thing.
Harney said he would like to see some more information from the Sheriff before doing this. R. Sullivan pointed out that the Sheriff had given them this information last week. Stutsman said that he was talking about all the patrol. R. Sullivan said that this is only rural. Stutsman asked whether they spent every day, gallon of gas in a rural area. R. Sullivan said that 32.9% of all time is not attributable to a town, is not jail deputies, transporting prisoners. It is only rural patrol.
County Sheriff Lonny Pulkrabek said that patrol eats up by far the most of resources in the Sheriff’s Department. He said that they wanted to be very conservative in the numbers. He said that any training of patrol deputies is not included in these calculations. He said that every patrol deputy does a patrol log for every shift. They took that whole patrol log and dissected it, added up the hours spent in the different sub groups and the 32.9% is what they got that was not attributable to anything else other than rural patrol. He said they do not include anything out of the budget items for patrol forms, minor equipment, uniforms, cell phones, dispatch or anything other than patrol. He said that every time a patrol officer is dispatched into a rural area, there is dispatch time taken up, but they did not calculate it.
Stutsman said that she had a problem with paying for services received in government, because then people will pick and choose what they want to pay for. Pulkrabek said he understood, but pointed out that Stutsman was advocating that the towns to pay more than their fair share for this service. Stutsman argued that she was not advocating, that Pulkrabek was advocating, and that the City Councils are going to decide whether they pay more. Pulkrabek said that the contract was with the County. He said that when they talked at the budget presentation, Stutsman said she was glad that he was looking at adjusting that. He went on to say that last year when they were adjusting the fees for firearms permits they tried to adjust how the services were paid for by who uses them. Lehman pointed out that what Pulkrabek was trying to do was to negotiate with the Board for the rural people the same as he is negotiating with the cities. Lehman said that he understood the principle of what Pulkrabek was saying.
Pulkrabek conceded that this was controversial. He said that ISAC is doing a survey of Sheriffs and their budgets which shows what some of the other Sheriff’s Departments do to justify theirs. The big one is Story County, where 100% of their patrol comes from the rural fund. Pulkrabek said he disagreed with this, but he did want them to think about his proposal. Harney asked whether this would be almost $2 million that would go into the rural fund. Pulkrabek said it would. Neuzil clarified that Claiborne suggested 10% of that.
Stutsman said it was important to remember that in the rural areas there weren’t as many tax payers to absorb this as there are county-wide. She said that there are 21,000 people in rural Johnson County, but there are not that many taxpayers. She said this would be a huge hit to rural residents. R. Sullivan said that Claiborne’s estimate was that it would be $9 per $100,000. Lehman clarified that the police are patrolling all that property out there. Pulkrabek said it was a good discussion to have, although he does understand that this is a change in philosophy. Harney said he wasn’t against the rural areas paying for this, but he expressed concern that things are going to keep creeping up. R. Sullivan said that creeping wasn’t a bad thing if it was creeping towards fairness. Stutsman said that nothing is fair in this world, and part of the message this would send is to pit rural against urban, the way it is in the state. She said that it was worked for years this way. R. Sullivan said that they already have a rural and an urban fund, and to some extent they are pitted against each other by virtue of the statute.
Harney said that the farmers taking the risk of drought and so on year in and year out get driven to jobs in town. To put something across their ag land as well as their house just adds to these difficulties and they go further and further in the hole. Neuzil asked if the numbers from February 13, 2006 assume the 10%. Claiborne said that all of the work papers attached to the 13th assume everything on the front sheet. Neuzil said that even with the 10% added into the rural fund, rural ag land would be decreased by 2.1%, or $18 less per person. Neuzil said that this is on page 11. Most of the ag categories are going down even if it is increased by $174,000. Harney asked what is increased. Stutsman said if they move that soon they will be taking the whole Sheriff's patrol out of it. R. Sullivan said that he doesn’t think that is fair argument. She replied that Pulkrabek said so right in his memo. According to Stutsman, Pulkrabek said that a gradual step process will go smoother starting with 10%. R. Sullivan said up to 32.9%, which is the fairness cutoff. He commented that he thinks they are talking about an issue of fundamental fairness, that is, who should be funding it. The City of Solon in their contract with the Sheriff's Department ought to pay what it costs to provide service to their City, he said. They shouldn't pay more or less, and R. Sullivan indicated that it should be the same for the unincorporated areas. R. Sullivan added that the unincorporated areas are only going to 10% which is only part of what would be even. Pulkrabek said that when he was talking about 50%, he was talking about 50% of that 32.9%. He noted he would not advocate for all of the patrol budget to come out of the rural fund.
Pulkrabek added that when they put the budget together in November, they didn't know where the jail housing was going. It turns out that they are going to come in right on budget this year. He said he projected a 3% increase from what they spent last year. He suggested that they lower that by about $44,000. The reason is that last year they spend $559,000, and this year they are on pace to spent about $500,000. Neuzil said that jail transport is one thing, but he wonders of the Treatment and Alternatives Subcommittee may come up with additional requests for other jail diversion programs. Pulkrabek said that there is a line item for jail alternatives of $25,000, and he doesn't think they will spend that full amount this year. Neuzil said that he isn't sure if that committee is done generating ideas or still working. Pulkrabek said that they are looking to expand the number of people on that committee. Neuzil said that the MECCA program that they added cannot be fully paid for out of MH/DD and there is the expansion idea for the Kirkwood OWI program or monitoring prisoners.
R. Sullivan said that it is kind of a separate issue because whether they raise or lower the Sheriff's budget, R. Sullivan still favors the 10% move. Neuzil said that he doesn't disagree that there is some justification for this, but there is no doubt that this will go up every year. He wondered if they shouldn't start at 5% and work up to 10% over five years. As far as budgets, this would be probably the most significant change in philosophy in 20 years, said Neuzil. He thanked the Sheriff's office for bringing up the possibility, but thinks that 10% is a bit of sticker shock. Stutsman asked where they came up with 10%. Stutsman said that she would rather say that they would pay for one deputy patrol out of the rural fund. Neuzil said that because of the needs of the Sheriff's Department, he does see the need for an additional deputy. He said that it is more a matter of are they ready to institute this general philosophy. Stutsman said that she has been on this Board for 12 years and this has never been brought up, and she doesn't know why. She said she thought it was interesting.
Harney said that they need to step back and think about why has it come to this. He commented that the real reason is that they have been at maximum levies. M. Sullivan added that they are growing. Harney said that with the TIFs in place, that is money that is not coming back into their budget. So, they haven't been able to grow in that way. He noted that he thinks that is why other counties are doing this. R. Sullivan said that he wants to be on record that if they decided today to cut the levy to 2.5% instead of 3.5%, he would still advocate for this because he thinks it is the fairest way to do it. Stutsman said that what isn't fair to her is that they would be asking fewer people to absorb the cost of that budget. R. Sullivan said that he would be asking people who use a specific service to pay for that service. Neuzil said that they all use that service. Pulkrabek said not rural patrol. Neuzil said that if he is traveling on a rural road and has a problem, it is the rural patrol who will be there. R. Sullivan said that they are talking about 10% of 32%, or 3.2% that Claiborne is asking for. Lehman asked how long of a transition period did some of others use. Neuzil said that it is a combination of the rollback, the general fund cap, and the lawsuits that have been successful that has allowed this to occur. Once Lyon County won its case and Story County won its case, everyone has realized it is okay now, said Neuzil. He said he thinks 10% might be hard to start out with.
Stutsman asked if they got a definite amount that rural taxes would be increased. Neuzil said that if it is 10%, it would be $8.92 per $100,000. Lehman said that they are $313,000 under 3.5, and by doing this, that would add another $174 to that total. Lehman noted that once they go in this direction, they and future Boards won't go back and maybe they shouldn't. R. Sullivan said that if the Board wants to cut back the amount, he would be agreeable to that, yet he does like Claiborne's proposal. Stutsman said that she is really disappointed that they are going down this road. Neuzil said that he would throw out the figure of 5% or $87,500. Lehman said that he puts himself in the place of being a rural farmer and no one likes to see their taxes go up. At the same time, Lehman said it is hard to argue against R. Sullivan argument that something good would come of that money.
Jim Dean, past president of Johnson County Farm Bureau, said that they are not happy with R. Sullivan's argument. He commented that he agrees with Neuzil that this is a major change in the Board's philosophy. He said that if they bust a methamphetamine lab in the rural areas, that would benefit not just the rural areas but the city as well. He said that his main argument is that he hates the Board to decide this in just a week's time especially since the increase will continue to go up over time. Dean said that 19% of Johnson County residents are rural residents and would pay 33% of County taxes. He asked that the Board at least put this decision on hold for another year and have a public discussion throughout the County. He asked that they come to the Farm Bureau and explain their position, and give the Bureau a chance to present their ideas on the issue.
Harney said that the County has changed so much in that there are more rural residents who are not farmers and they don't have a way of breaking that apart. Dean said that many of them are making their livelihood from farming, and their taxes are their business cost. R. Sullivan said that he likes the idea of involving the people in the discussion and it might be worth the time to do that. Dean said that what he really objects to is making this an urban versus rural civil war. He said that the Board makes some good points, but this is a big philosophical change for Johnson County. Neuzil said that they do tax to the fullest people who live in the City and they haven't come close to taxing to the fullest the rural residents. Lehman said that if he were to move into town, his view might change. Harney said it is a matter of off-setting costs. Concerning the jail, he wonders how many people in the rural area use the jail in comparison to the number in the cities. Yet, everyone is paying for it. R. Sullivan said but there everyone is paying the same. Harney said that the usage is different though.
Neuzil said that what it comes down to is if they think that people in the rural area should pay a little more for the services of the Sheriff's Office because the court system has made it eligible to say that the Sheriff's Office is something that the rural people should pay a little more for. R. Sullivan said that it isn't necessarily that. He still thinks the percentage ought to happen even if the overall cost were less because it is a matter of a fundamental fairness issue. He noted that he wants to make clear that he is talking from a philosophical standpoint and not a dollar standpoint. Lehman said that it might be more of a timing issue. Stutsman said that they don't need to do it today when other counties did. Stutsman said that she doesn't like to just keep thinking about how they can get more money. Lehman said that they do run pretty tight ship. He stated that he isn't quite ready to act now but would like to hear from other farm bureaus and ag organizations. He noted that he doesn't think the direction is wrong but would like to know more. Stutsman said that she needs more information. Lehman thanked R. Sullivan for bringing up the issue. Harney said that he thinks waiting a year is a good idea especially since they do not have to act in order to meet the budget.
Neuzil said that the question back to Claiborne is that without that money out of the general fund, are they still under the cap. Claiborne said that will be about $160,000 under. Claiborne said that the concern was the dispatchers. Harney said he would like to see the dispatchers included in the budget. Neuzil said he doesn’t have any problem with that because the need is there. Claiborne added that with the $44,000 decrease in the jail, they would have about $200,000. Pulkrabek said that Mental Health Diversion Coordinator Melinda Lamb who is handling the jail diversion program said that there is an indirect correlation between the diversion program and the decrease in the amount spent on transporting inmates out of the County. Neuzil said that they are still giving $500,000 to Linn County for their jail. Stutsman said that they are going to pay that money either way. Pulkrabek said that anytime a bigger jail is built, the chances are good that the operating expenses will be higher. He said that the current jail is not set up in the most efficient way to have fewer deputies watcher higher numbers of people.
Stutsman said that she hopes Pulkrabek is aware how generous the Board is being with his requests, and she thinks that the Board should have had Shramek in a meeting when they were deciding to cut a position in her department so that she could have a chance to defend it.
Claiborne said that they will be around $200,000 because the cars for the Health Department are already in capital expenditures, so they don't have to add anything there. If they do go on with HR, they are going to take $1,700 out of capital expenditure and $1,900 out of HR's budget. If they honor the full Sheriff's request, that would them at about $200,000. M. Sullivan noted that that does not include the HR position. Harney said that this is doing exactly what he asked not to do which is putting in long term costs and filling up that budget with money they are saving. R. Sullivan said they might to do a straw poll on the Sheriff's positions because it sounds like Harney may not want them. Harney said he wants to make sure they get the dispatchers but wonders if they could wait on the deputy. Pulkrabek said that the sex offender law is what is causing a problem. Harney said that he is just trying to be fair in that they had to cut a position out of Human Resources that is also important. Neuzil asked if they could do a straw poll. M. Sullivan said that the money they are talking about with the $200,000, items one, two, and three are the additional requests. Claiborne said that four and five are already in the department budgets; those are there just for reference.
Stutsman said they can't do anything with 23 because those are under contract. Lehman said that they have already put in the request for the neighborhood resource center. M. Sullivan said those are already in the budget. Lehman said that they need to look at the Sheriff's Department and the Block Grants. Neuzil added Department 24. R. Sullivan said that he has some comments on Department 20. He noted that he is a big supporter of UAY, but he thinks a nearly 14% increase in an already big budget is too much. He would like to see a $4,000 increase instead. R. Sullivan said that he doesn’t think that any single agency should go above a 4% increase. Neuzil wondered if anyone would consider saying that they want one million dollars to go to United Way agencies. Stutsman asked how much they would have to cut. She said they could say that they aren't going to take on any new things which would take out Uptown Bill's and the James Gang. She said the Star grant is a new one because the County is not supposed to be a yearly match. R. Sullivan said that is a tough one because of the 4-to-1 federal dollars. R. Sullivan said he doesn't think that the UAY budget needs to increase so much, and he noted that because Uptown Bill's is a new organization, they should get about $1,000 not $10,000. Neuzil said they didn’t' give anyone more than a 3% increase last year, and this year their budget is even tighter. Harney said that he is for freezing them for now. M. Sullivan asked if they are talking about UAY or all of the block grants. M. Sullivan asked where the Board got the form they are referring to. R. Sullivan said it is from Linda Severson. M. Sullivan said that the form has just specific grants not the whole block grant.
Stutsman said that she thinks all of them should be cut. R. Sullivan said that he doesn't think that doing it across the board is the most fair because they don't know how well all of these are doing. He noted that he hopes that next year when they have Social Services Coordinator Amy Correia guiding them, it would be more strategic. Neuzil said that if they look at County needs, it doesn't make sense to have an increase for these organizations when they are turning down some of the needs of their own departments. Neuzil said that collectively, they gave a 1% last year. He said they could match what they gave last year. Stutsman said that the organizations keep getting federal dollars cut. Harney said that the County can't keep on footing the bills that the Federal government can't handle. Stutsman said that the County does benefit from them though. Lehman said that the organizations are not all asking for the same amount or the same percentage. Neuzil said that they could do the allocated FY 06 budget for everyone except Uptown Bill's, which they can increase some as Harney recommended. Stutsman said that she doesn't think that she wants to add to Uptown Bill's without having more information. She said that she would also like to zero out the James Gang. Neuzil said that they need to make a more formal request. Stutsman added that she was bothered that they weren't going to any other entity. Stutsman said maybe next year.
Neuzil asked what they were going to allocate to Uptown Bill’s. Neuzil said he was fine with $1,000. Harney said he preferred $5,000 because they were keeping people off of the streets. R. Sullivan said it depended on what they were going to do with the rest of these things. Neuzil said they were going to keep it the same. R. Sullivan said he thought they needed to reorganize this money. Stutsman said that that would be Correia’s job. Lehman clarified that that would be next year, and R. Sullivan was concerned about this year.
Neuzil asked whether they wanted to add Uptown Bills. Harney said he did, Lehman agreed since they were doing a service that would cost MH/DD some money. Lehman said he wouldn’t have a problem with $3,000. R. Sullivan agreed. Neuzil pointed out that all of these allocations would be reevaluated by Correia. He asked if they should just go ahead and reallocate the same amounts for the rest of these for FY 06. Harney said he was in favor of that. Neuzil said that they would then keep the allocations the same, but add $3,000 to Uptown Bills, and the Star Grant cash match to $10,000, provided they get the grant. R. Sullivan said they were also going to give $25,000 to ICAD. He said that $25,000 for ICAD and zero more for Shelter House doesn’t seem right. Lehman said that ICAD is creating businesses for taxation and creating jobs. R. Sullivan said that he was in favor of the ICAD money, but he thinks they could give some more to the agencies. Neuzil said that if they have more money they should give it to human resources to provide services through County government. R. Sullivan said that he thinks the money should go to social services. Stutsman said the biggest one is MECCA, and this town has a lot of issues with substance abuse.
Lehman said that going back to the funding of 2006 they are saving another $70,000 minus $13,000. Neuzil asked whether they would put that money towards capital improvements. Lehman clarified that the County has roughly another $250,000 to get back to the 3.50 levy that could be used for this. Claiborne clarified that they would keep Department Block Grants, $1,353, 000 but are going to add Uptown Bills $3,000, Star Grant $10,000 and ICAD $25,000. Lehman said he didn’t hear any support for adding a long time expenditure, which would be HR position. R. Sullivan said he wasn’t satisfied with the response of why they can’t have three FTEs. He said he didn’t understand why they say they need either 2.5 or 3.5. Neuzil said he didn’t quite understand the threat to Human Resources either. He said that he knows it was a tough year down there for transition, but hopefully it will be a good year. Stutsman said that usually with new positions they ask for two years. Harney asked where they would even put that person. Neuzil said that he was okay with postponing this, and thought that if they had extra money it should to towards capital projects. Harney said he agreed, and said that even if they decided that she needed a new person in the middle of the year, they could hire someone part-time.
Stutsman asked whether all the department were getting what they asked for in their budgets except the ones with personnel and the block grants. Claiborne replied that Public Health didn’t get everything they asked for, just the cars and the Disease Prevention Specialist. He said that the Board is waiting on Human Resources, and the Sheriff is getting all three positions. Stutsman said that she is okay with the dispatchers but has an issue with the Deputy Sheriff. Lehman asked for a straw poll. Neuzil, R. Sullivan and Lehman supported it. Harney said he would support it reluctantly. Neuzil said that next year they would not be looking at this office as much. Claiborne continued, saying that they would hold the Block Grants at last year’s level, but would add $3,000 for Uptown Bill’s, $25,000 for ICAD, and $10,000 for the Star Program. R. Sullivan said that he would like to see at least a 1% increase for the human services because they are going to suffer so much from federal cuts this year.
The Board then discussed funding Conservation, and agreed to give an increase. Neuzil asked whether they were going to fund the family resource centers. Stutsman said that they told the communities that the County would match their dollars. Neuzil asked whether they should just keep the same amount in for Lucas, and match North Liberty and Coralville. Harney said that Lucas has a heavy burden, and it is addressing kids in the rural areas. Neuzil said there was not consistency in the way these centers were funded. Stutsman argued that there was consistency, but they are getting further and further afield from it. She said the plan was to fund those communities and resource centers that were in the unincorporated areas. Neuzil said he didn’t have much problem doing that if they keep the line on the other parts of the budget. He said he still thinks that the family resource center should be the 20 Block Grant. Stutsman agreed. Neuzil said that if they combine all of that together, they are giving $13,000 plus an additional $20,000. Stutsman said the one that took a huge jump this year was North Liberty, but their needs reflect the increase. Neuzil said that one of Correia’s jobs will be to get a hold of this. Lehman asked if there was a consensus to keep this. Stutsman said she supported it, and hoped that Correia would help them keep track of it. Neuzil said that they would increase the budget by $28,500 plus $10,000 for the Star Program, $3,000 for Uptown Bills, they are increasing the discretionary funding by over $40,000. Stutsman recommended they take the funding for Lucas down to $5,000. R. Sullivan said he would rather micromanage Department 20 than Department 45. Neuzil asked if he would hold the line on Family Resource Centers at $40,000 and give the extra $28,500 to DHS. R. Sullivan said he might do something in the middle, but he opposed saying they would cut it from Lucas specifically. Stutsman said she only mentioned Lucas because it was a new program. Lehman asked what the consensus was for Lucas. Neuzil said it was hard for him to justify giving an additional $28,500 to the resource centers and also give an additional more than $13,000 to the Block Grants 20. Stutsman said she didn’t have a problem with that. R. Sullivan said he didn’t either. R. Sullivan said that he would rather have Lucas have the whole $10,000 and make UAY’s increase $9,000. Neuzil said that right now what’s on the table is what they got last year, which is $104,000. Stutsman said she still advocated for $5,000 for Lucas. Lehman took a straw poll for Department 45, which would leave Lucas at $5,000 and the other ones increases as they are asked, and maintain the 2006 level in Department 45 with the previously stated increases. Three Board members agreed that they were fine with this. Lehman said that would leave them with $250,000 under the 350 levy.
Auditor’s Office Administrative Secretary Casie Kadlec pointed out that they hadn’t yet discussed the Compensation Board recommendations and what increases they wanted to give to the elected officials. She said that the recommendation was 6% for the Board of Supervisors and 4% for everyone else. Stutsman said she would propose lowering each of those by one percent.
Stutsman said that she felt like they were giving the Sheriff’s Department the impression that he can get whatever he asked for, and she had a problem with this. She said she was not willing to fund just one department at the expense of the discretionary funding. She said one other thing was that she was bothered that Pulkrabek was present at the meeting today, because it wasn’t fair that the other department heads weren’t present. Neuzil said that there were other departments who didn’t get cut as well, but Stutsman pointed out that the Sheriff got over $400,000 in increases. Stutsman said that they need to treat Pulkrabek the same as any other department head. Neuzil said that he thought the most important expenditure that County government makes is public safety, but he did agree that it was not fair that Pulkrabek was present at this discussion. Lehman said that they need to offer to spend time with Pulkrabek rather than send him a message through budgetary cuts. R. Sullivan said that rather than not having Pulkrabek present at this discussion, they should have all the department heads present. Harney argued that the Board had already heard the arguments. Neuzil said that he thought that at this point they should only invite the department heads present unless they have a question for them.
Claiborne said that in the figure that’s on the worksheets, the Elected Officials were already increased 3.5%, which is not the recommendation of the Compensation Board. Harney said that he thought they should at least get the 4% increase because that’s what the unions are getting. Kadlec pointed out that if the Board gives the 4% to the other elected officials, they will have to take the 6% increase. She said that the law is that the increase has to be proportionate. Kadlec said that according to the Compensation Board packet, the total budget number for a 1% increase for all the elected officials was $11,000. R. Sullivan said he was making a list of things they were putting off for next year. He said that if they were going to implement these raises, they need to change the deputies to assistants. Stutsman asked why they wanted this. Neuzil said that it is because there are no rules for hiring or firing a deputy. R. Sullivan said that they should lay it out for next year what they are going to do. Stutsman said this is ironic, because the Elected Officials argue that the deputies are not getting longevity pay, but there is a way they could get longevity pay, which is to reclassify their job. Neuzil said that would be an expensive situation, because the salaries would increase. Neuzil said he would like to take the recommendation of the Compensation Board, and if there was any additional money after taking the recommendation, to apply it towards capital improvements. Stutsman said she was not supportive of this increase. R. Sullivan pointed out that they do make significantly less than other elected officials.
Recessed at 3:50 p.m.; reconvened at 3:55 p.m.
M. Sullivan asked about the levy for Conservation. They discussed this, and noted that there was a significant increase for Conservation. Claiborne said that replacements came out to $111,000. Neuzil pointed out that in Graves’ actual number budget, it shows an increase of up to $62,000 for motor vehicle purchases and park maintenance, which is a $25,000 increase from the year before. R. Sullivan said that $32,000 is for a dump truck replacement. Stutsman said they need to find whether this is included in the budget or not. Neuzil said that this budget without employees goes up over $100,000. M. Sullivan said that the budget includes everything. Regarding Conservation, Neuzil said they needed help identifying what their top priorities are, whether there are grant opportunities, and what matching funds are available. Stutsman said they also have to discuss who is going to take care of them. Lehman asked if this should be part of a strategic planning meeting. Stutsman said she wasn’t ready to make a decision about Conservation. Harney said he wasn’t ready either.
Harney asked about upgrading electronics. R. Sullivan said he wasn’t interested in this until they decided what would happen with the building across the street. Neuzil said what they heard from Facilities Manager David Kempf would be to expand the current Board room. Stutsman said that she didn’t think it was a good investment to replace the electronic equipment if they were going to move the building. Stutsman asked if there was money in the budget to hire anyone to help with strategic planning this year. M. Sullivan said there was some, but not a lot.
M. Sullivan asked if they wanted to decide who was going to do what service area for the presentation. Neuzil proposed that they put this on the agenda for next week’s meeting.
Adjourned at 4:25 p.m.
Attest: Tom Slockett, Auditor
By Casie Kadlec, Recording Secretary