MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
JANUARY 26, 2007
Chairperson Harney called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:02 a.m. Members present were: Pat Harney, Larry Meyers, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Budget Coordinator Rich Claiborne said this would be the last budget meeting. He said that he made a last minute change. Different beginning and ending balances carrying over from 2006 and 2007 dropped the levy way below the $3.50. He said that he talked with Deputy Auditor Chris Edwards who suggested the Board look more at $2 million to $2.1 million instead of $2.6 million. If they leave about $500,000 flex, they will come close. Harney expressed concerned with what they are doing with the Rural Fund. He asked how much they are raising taxes. Neuzil said some go down and others go up. Stutsman asked why they are targeting 3.50. Executive Assistant Mike Sullivan said they had to target the $3.50 to access the General Supplemental Fund. Claiborne said it’s up to the Board if they want to fund positions. He thought that $2 million for a down payment on the new building is a good idea because they would then not have to borrow as much.
R. Sullivan said he would like to see the salary survey come back into the budget. Claiborne said that they are going to do half of it in 2007 and then the payment in 2009. Stutsman said that she thinks they will have enough in May to come up with that $100,000. Neuzil said he doesn’t have a problem adding the salary survey, but would like to keep in mind the six major initiatives that were their main priorities. Also, they will have some debt to pay off as well. Harney asked if they have paid off last year’s bond yet. M. Sullivan said they will in June 2007. R. Sullivan said that if they don’t stretch them three years, they don’t get the maximum benefit of stretching it over the TIF district. M. Sullivan said that they can also keep their debt service levy pretty steady. M. Sullivan said that they are paying it back out of debt service, so they would be taxing for it. Harney said that raises taxes each time they do that. M. Sullivan said that when they go two to three years out, it lessens the impact on the levy rate. One year is about 17 cents, two years is roughly 8 cents, and three years is roughly a nickel. Harney said that they are still adding to it every year, and the payments keep getting higher. M. Sullivan said they will always have a limit to the money they can bond for. They can never bond for more than 10% of their budget when they are borrowing to pay. Neuzil said that the philosophy of the Board is that they want to pay off these things before it costs the County. They are saving by using the entire TIF district. They don’t want to get to the point where after three years, they aren’t able to pay off what they need to pay. Harney said that their policy has been to pay everything in one or two years not beyond.
R. Sullivan said that Springstead and Associates Representative Tony Roetlin suggested two or three. M. Sullivan said the last time he talked with Roetlin, they asked him the question of where is the point where it is not to their advantage to borrow when they are paying the notes back. He said that Roetlin said after three years, it no longer to the County’s advantage to extend the note out that far. Harney thought it depended on the interest rates. M. Sullivan said it always depends on that, but it is a guarantee that if they extend a note out three years, they are going to pay more interest. M. Sullivan said that if they can take $800,000 and tax the debt service levy over a two-year period of time, they would cut the levy rate in half. Harney said that he understands that and agrees. The problem is that when they start spending on personnel, which is a long-term cost that will continue. Stutsman said that it requires discipline from the Board. Claiborne said that the bonding decisions from the other day are not reflected in the current document because he needs a decision from the Board today on how far they want to take that out so that he can get together with County Treasurer Tom Kriz to work out a schedule. Neuzil said they need background as far as the impact over time. Claiborne repeated that one year is about 17 cents, two years is 8 cents, and three years is a nickel. So, if they want to go two years, it would have about an 8 cent levy impact.
R. Sullivan said that Springstead might have to help them answer at what point it starts to cost the County money. M. Sullivan said that three should be the maximum. Harney said he is more comfortable with two. Stutsman said she is comfortable with three, but they need to stay committed to that. Neuzil said that this Board of Supervisors has been paying off their debt before it has an impact on the General Fund, so it is working. R. Sullivan asked if Claiborne could remind them of what they chose to cut at Wednesday’s meeting. Claiborne said that they are bonding the left over $350,000 on the Health and Human Services Building and for technology. They are bonding for a new Communication Center and the SEATS building. Claiborne said they removed the funding for the family resource centers for the schools. Stutsman said that Information Services Director Jean Schultz came in with a bare bones technology budget. Claiborne said that by Iowa Code, they can bond for technology and are doing that. M. Sullivan said that this won’t in any way alter Schultz’s technology replacement schedule.
R. Sullivan asked if they approved the Health position. Claiborne said he did not put any personnel in the Board of Health. M. Sullivan said that some of the Board wanted to see how things were going to shake out before they made a final decision so that is not in the current figures.
R. Sullivan asked if they had $100,000 in the budget. Claiborne said that originally it was at $200,000, and they knocked it down to one. M. Sullivan said the idea is that they would put aside $100,000 now because the set aside $500,000 in the Rural Fund for road improvements and maintenance. Neuzil said that one of the members of the newly formed trails committee said that they wanted $200,000. They have $100,000 in General and $100,000 in Rural to equal the $200,000. He said that he had talked to Terry Dahms, who is already thinking about putting together a link between Mehaffey Bridge and Ely. M. Sullivan said that they also wanted to have money to leverage any grants or federal funding. Stutsman said that is in a capital projects line, so they can carry that over.
Claiborne said that Kempf’s projects such as Administration Building repair and Courthouse repair will be bonded for at $205,000. The Health and Human Services Building has a balance of $350,000 that can be bonded for. The salary study is going to be put back in. Trails funding is down to $100,000. He said that quite a few departments came back with better revenue estimates, and these new figures are included. They decided to bond for technology. Neuzil asked if they are factoring in improvements to the Administration Building. M. Sullivan said they are factoring that into FY 09. By the time they get the HHS building built they will have already worked their FY 09 budget. That would be the time to program the Administration into that budget. Neuzil said he is assuming that some of the improvements are not going to happen until people have moved out of the building.
Claiborne passed around an updated Block Grant budget. Neuzil said they aren’t making any changes to this. Stutsman said that they talked about the Soil and Water Conservation position. She said she isn’t ready to put anything in the budget for that because there are things they still need to work out with that. Harney said he wants to leave it in. She said she wants to leave in the position but not the benefits package. Harney said it should have benefits. Claiborne said they put the $12,000 aside in the Rural Fund for that. Neuzil said he thought it was $44,000 already set aside. Stutsman said she didn’t remember that. Claiborne said that the funding is there, but they had not yet decided how it was going to be managed. R. Sullivan said that he got the impression that there were at least three Board members that said to either hire him or give him money to buy insurance. Claiborne said that the other day, the Board had decided to get the funds there and to work out the details later. R. Sullivan asked if they agree that the rest of the money is going to go toward capital projects. Claiborne said that he and Edwards would like leave $500,000 there for a cushion. Neuzil said that is what they have done in the past. R. Sullivan asked how much Claiborne needs. He asked if the $500,000 is appropriate. Claiborne said if it isn’t, he can send out a notice to the Board saying that they need to cut back. Stutsman said if there is more, she would like to put it toward the building. Neuzil agreed. M. Sullivan suggested that when they do these kinds of projects in the future, they pass a reimbursement resolution. That way, they can reimburse themselves through the debt service levy if they need to or choose to. They pay now out of the existing budget and then get reimbursed. R. Sullivan asked how they ended up with this much carryover. Neuzil said part of it is from R. Sullivan's initiative which was to have departments go back and look at their revenue estimations. Claiborne said that the beginning balance for FY 07 was understated, but he and Edwards fixed that.
Harney asked how much they have set aside for transporting inmates. County Sheriff Lonny Pulkrabek said $530,000. He said he just got a sheet showing all the billing through December 2006, and they are at about $550,000 a year. The problem is there’s no way to predict it. Each monthly average is different. Last year they brought back $110,000, but that isn’t what is happening now. For FY 09, he said that would be the only significant adjustment, up to $630,000. Neuzil said they are now at the point where it is costing them more to house prisoners out-of-County than to build a new jail. Stutsman said she doesn’t think they are there yet. Neuzil said it has to do with construction costs now versus two years from now. He added that whatever money is going to jail alternatives is going to be going into operating expenses for the new facility. Stutsman said that this is the consequence of putting more patrol officers on the roads, that there will be more arrests. Pulkrabek said that he believes the officers do an outstanding job of administering the law. He said until they have a specific plan for a future building, it is going to be difficult to get their hands around the operational costs. As far as the cost increasing for housing prisoners, if the average daily population grows by 3.3 inmates, then it costs about $25,000 per year to house an inmate out-of-County. Pulkrabek said that there has been a spike in serious crimes. The people that they are housing in the jail are people that need to be there.
Neuzil said he likes the idea of a limitation at the State level. The rollback is, to him, protection of the taxpayers. R. Sullivan said they can keep the limits, but the rollback is the killer. Claiborne said that they need a decision today. There will be three issues for bond. The first will consist of Kempf’s projects of $205,000 and the Health and Human Services building. The second issue is the SEATS building at $800,000. The third will be technology at roughly $717,000. He asked what term the Board wants, one, two, or three year. Harney said two years. Neuzil asked at what point it isn’t advantageous for them to wait. Claiborne said after three years. Neuzil, Stutsman, Meyers, and R. Sullivan were for three years. M. Sullivan said that they can always pay their debt off early, and because it is municipal debt, there is no penalty for that. Harney asked about the interest rate. Stutsman asked why they can’t lock in the interest rate. Harney said they do, but they have to figure out what it is going to be based on the payback plan. M. Sullivan said they had Springstead working with Moody to rate the County, which is going to cost $8,000-$16,000, but will save the County a half percent on the interest rate. He said that the current $800,000 they borrowed was at 3.74%. When they can find local institutions to compete at the national rates they are lucky. R. Sullivan said that if they can secure the AAA bond rating, they can save $4,900 per $800,000 that they bond for. M. Sullivan said that he thought it would be closer to $49,000. Stutsman asked why they need to get rated. M. Sullivan explained that they want to be sure they are rated so they get the best-marketed interest rate. Claiborne said that when a debt approaches ten million, they have to be rated.
Claiborne said he would finish the numbers, and give the Board an update. He said if they need to get together, he will let them know. He said he will be able to finish the State form the following week for publication. The Board agreed to have the budget public hearing on March 8, 2007 and adopt the budget on March 15, 2007. M. Sullivan said that Claiborne is doing an impressive job with the budget especially considering that he has only been working for the County for 15 months. He said he can’t stress this enough.
Harney asked if the Board is interested in a training officer for Ambulance Service. Stutsman said that she and Meyers talked to Ambulance Director Steve Spenler about that. They told him that it probably was not going to be approved, and Spenler was disappointed. R. Sullivan said that the Sheriff doesn’t have a training officer and they have 90 employees, whereas Spenler has 25. R. Sullivan said that he would like to send out a thank you to the department heads who took a hard look at their budgets and really squeezed on short notice. M. Sullivan said he can take care of that. He said that the relationship that Claiborne has with the department heads helps a lot when he has to call and ask them to drop what they are doing for an hour or two and get numbers to him. Stutsman said that she has heard no complaints about the budget coordinator from department heads. R. Sullivan said that he has not either, and that wasn’t the case previously. Claiborne said that if there are any other decisions to make, he will let the Board know, but he thinks this should be the last one.
Adjourned at 9:57 a.m.
Attest: Tom Slockett, Auditor
By Casie Kadlec, Recording Secretary