MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
FEBRUARY 1, 2008
Chairperson Sullivan called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:00 a.m. Members present were: Pat Harney, Larry Meyers, Terrence Neuzil, and Rod Sullivan; absent was Sally Stutsman.
Budget Coordinator Rich Claiborne reminded the Board that they approved $100,000 for trails from the General Basic Fund and $500,000 for capital improvements from the Rural Basic Fund in the current fiscal year. This money still needed to be used. Harney asked if that was for roads. Claiborne replied that the money allotted for capital improvements could be used for roads. Claiborne stated that the Board did the same budgeting and funding in FY 2009. R. Sullivan stated that he spoke with County Engineer Greg Parker and learned that he is able to set aside the $500,000 for capital improvements without any problem. R. Sullivan asked if the County would be able to earmark the $100,000 that the Board set aside for trails in the current fiscal year. Claiborne responded that the County would need to amend the budget if they didn’t use that money in FY 2008, but used it in FY 2009.
Claiborne reported that the $5,500,000 down payment on the Health and Human Services Building is operating revenue from the General Basic Fund. That is money that is already there, and is not an additional levy, because the Board has set aside money to save up for that expense. Meyers asked if any of the $9 million already talked about had been put in the levy for the Health and Human Services Building. Claiborne responded that it was not.
Claiborne said the County has $2,708,742 as an additional down payment on the Health and Human Services Building for a total outlay, including last year’s down payment of $8,208,742. The total project cost for the Health and Human Services Building should be $12,500,000, which leaves a little over $4,000,000 left to be paid from the General Basic Fund. Originally the County had been very conservative on a ten year payback, which is similar to a bank note, which will not require a debt levy. The building can probably be paid for in less than five years. R. Sullivan asked if the $2.7 million that the Board had set aside as a down payment for FY 2009 included the $1 million dollars that the County owes as budget. Claiborne replied that was included.
Claiborne said the Joint Communications Center levy is for construction of the building and towers. The levy should drop in the next few years after the infrastructure is built and only operating expenses remain. Neuzil asked what the levy was at. Claiborne responded that the levy is still at 77 cents. Neuzil asked if that meant $77.00 on a $100,000 house. Claiborne said that was the correct rate, but with the rollback the residential tax impact would actually be less than that.
Claiborne said the County is bonding $1,200,000 this year for the remodeling of the current Administration Building and expenses for furniture for the new building. $1,600,000 has been bonded for the SEATS and Secondary Roads Facility, and that $335,000 has been bonded for new election machines for the Auditor’s Office. $162,000 was bonded for capital repairs to the Courthouse and the Administration Building. $2,200,000 was also bonded for the Conservation Headquarters Facility, which is on an eight-year payback as some of the other bonds are. Claiborne said that this will help keep the yearly levy amount fairly even.
Claiborne summarized staff and hours additions. The Board increased part-time paramedic hours for the Ambulance Department, law-clerk hours for the County Attorney’s Office, community health nurse hours for Public Health, and programmer hours for Information Services. The Board allowed for a new Civil Clerk II position at the Sheriff’s Department, which Claiborne reported should be budget neutral or even produce additional revenue. The Sheriff’s Department will maintain the Detective Sergeant position that the Board had looked at for a couple years. The Medical Examiner will add a contracted Social Worker to their staff. SEATS will also add a full-time driver. Claiborne said that the Board approved hiring two custodians under Physical Plant, rather than contracting for cleaners, which should save the County approximately $35,000. The Board increased the number of Conservation part-time seasonal workers. MH/DD will add a Clinical Supervisor position. Neuzil asked about the cost of the additional seasonal Conservation workers. Claiborne stated they would cost $29,000 for three or four months.
Claiborne reported that the General Supplemental levy will increase roughly $.85, of which $.77 is due to the Joint Communications Center. The Debt Service Levy will increases from about $.18 to just over $.34. This will drop after FY 2010 as some bonds will be retired. Claiborne reported that the overall increase in taxes is just under $1 or $61.24 per $100,000 valuation for an Iowa City resident. Neuzil stated that the rollback apparently has a big impact. Rural residents will actually see their levy decrease, as well as rural ag land and building owners, even with the added levy for the Joint Communications Center. Iowa City residents will see an increase of $61.00, while someone who owns ag land or an ag building will see a decrease of $48.00. Claiborne said this year’s levy is about $7.49, while last year’s was $6.49. The levy for rural residents went down almost $.47.
Harney said that he is still not satisfied with the amount of increase in the budget. He said the bond for the Conservation headquarters was not on the budget until the last part of the budget cycle. If the Board had waited just one year for that project, taxpayers would pay a nickel less in the levy, which adds up to $400,000 interest over an eight year period. He said it would be in the County’s best financial interest to wait one year to bond for the Conservation Facility. R. Sullivan said it will cost the County more if they wait; Neuzil agreed. Harney responded that it may because of inflation, but he does not think that the overall impact will be any more, and it would keep the levy at a lower rate to bond later. Claiborne said that that only amounts to $5.00 on a $100,000 home. R. Sullivan said the overall increase in taxes is just over $1.00. 77 cents of that is that is the Joint Communications Center, which the Board expected. Harney said that the Board also knows it will be less if the County waits a year. R. Sullivan said that it comes back to an argument that Neuzil has been making. He said when the Board decided to do these projects the Board members had to ask themselves if they were going to let the Joint Communications Center impact the way the Board meets the service needs of County residents. R. Sullivan stated that the Board members had decided that they didn’t wait to do that. Harney said that the strategic plan did not include the Conservation facility, which was slipped in ahead of the Ambulance garage.
Neuzil said that Conservation has been requesting the new facility for at least three to four years, and the necessity of a new Conservation facility goes well beyond some of these other projects. Neuzil said that the Joint Communications Center is also not in the Board’s strategic plan. Neuzil stated that as far as he was concerned the County could only put $1,000,000 towards the Joint Communications Center and the Center would still move forward, a director would still be hired, and a board put together. Harney said that in doing that they wouldn’t have the money for the payback on the borrowings. Neuzil said that they would. Harney disagreed. Neuzil commented that the levy impact for Iowa City residents will go up slightly while the impact for rural residents will actually decrease. He said that the residents will be getting a lot of improved services for their levy increase, including the start of a Joint Communications Center, the Health and Human Services Building, the Conservation facility, the SEATS and Secondary Roads facility, and improvements to existing County structures.
Harney said he doesn’t question the need for the new facilities, but he doesn’t think the County needs to do it all in the same year. He said the SEATS and Secondary Roads facility will end up costing more than what was estimated. Neuzil stated that the cost of the Joint Communications Center came in $10 million above the estimate. Harney said that that is just an estimate and costs could decline. Neuzil said he is comfortable moving forward with the budget, but if he was going to cut down anywhere it would be in the Joint Communications Center levy.
R. Sullivan said that construction costs will continue to go up in the future, costing taxpayers more in the future. Facilities Director David Kempf said construction costs have gone up 8% or more annually in the past few years. Harney said that he disagrees with that. He said that this year the Health and Human Services Building is costing $125 per square foot, and the SEATS facility is costing $200 per square foot. Both buildings were office buildings and the cost difference could be attributed to architects.
R. Sullivan commented that architects would not get cheaper either, and that he does not agree with taking a nickel off this year to delay it two years. Harney said he wanted to keep the levy down. R. Sullivan said that he doesn’t think one nickel will make a big difference to taxpayers; however, if the projects are delayed for a couple years, the costs could be millions. Harney said that a nickel will have an impact on an elderly individual with restricted income, or on poor people that are unable to pay their taxes. R. Sullivan said that tax payments benefit lower income residents more than they benefit high income residents, because lower income residents are more likely to take advantage of county services. Harney said that forces individuals to come in and ask for County benefits, when they can make it if the County doesn’t increase their taxes. R. Sullivan said that the County offers services for those who need them. The poorest people have an option, while the rest can afford an extra six dollars. Harney said that he was hearing R. Sullivan say that he is asking them to come in and ask for welfare because the County is raising taxes. R. Sullivan told Harney he was hearing it incorrectly, and that services paid for by taxes benefit lower income people more than they benefit higher income level at the local level.
Neuzil said if the Joint Communications Center wasn’t a part of the FY09 budget, every levy would see tax decreases. The Board has committed to the Joint Communications Center and that has resulted in a 2% increase in taxes for those in incorporated areas. He said that it will have a $61.00 impact on Iowa City residents, and residents will probably be surprised that it’s not higher. Harney said that it’s $61.00 worth of taxes per $100,000 valuation, and there are very few $100,000 homes any more. He said that it will amount to a couple hundred dollars for a lower income home, and he is trying to keep that impact down. Neuzil asked Harney why he doesn’t agree to putting only $1,000,000 towards the Joint Communications Center then. Harney responded that the Joint Communications Center has criteria it has to meet. He said that if they get the bonding out, they have to start paying it back. Neuzil said they will start paying it back, and commented that Harney is against the Conservation Department, but for the Joint Communications Center. Harney remarked that he is not against the Conservation Department, but that it should wait a year. R. Sullivan said that the County does not have a budget problem. Neuzil asked Harney why he thought the Conservation facility could wait, but not the Joint Communications Center. Harney commented that he thought that the County had a budget problem with the impact on a taxpayer, and a couple hundred dollars is a lot of money to a low-income family. R. Sullivan said that low-income families don’t own $200,000 houses. Harney said there are very few houses under $100,000 any more. R. Sullivan said that only 50% of the families in Johnson County own homes. Harney said that they are paying the tax through rent.
Neuzil said they can start the process of the Joint Communications Center and its board and director by putting $1,000,000 towards it and the impact would reduce the taxes by $50 or $60. Harney said the Joint Communications Center won’t move forward without the money. Neuzil said that the money is there. Harney said that they are running two operations, the current operations centers that taxpayers are being taxed for and for the new facility. Harney said that the bonds will have to be paid back and the County can’t start collecting taxes until next fall, which would result in pushing the whole thing back a year or two. He said Iowa City’s Communication Center can’t wait that long. Neuzil said the project will move forward with $1 million or with $3.7 million. Harney said that would not be on the timeline they need. Neuzil said that everything moves forward, it only means that you pay more later. Harney commented that Neuzil has not set in on the subcommittee meetings. He told Neuzil that Iowa City Planning and Community Development Director Jeff Davidson was just in to speak to the Board. Neuzil stated that Davidson told the Board that Iowa City would take whatever the Board offered. Harney responded that that was because Iowa City had to. Neuzil said that the Board has the authority to give however much the Board wishes for the Joint Communications Center. Neuzil told Harney that he could agree to offer Iowa City less money for the Joint Communications Center now, which would lower resident’s taxes. Harney said that he would not agree to give less because the money is needed to get the Joint Communications Center started.
R. Sullivan said that he doesn’t think Iowa City needs the money for the Joint Communications Center any worse than anyone else needs it for their projects. R. Sullivan said that he felt that this budget was put together with the interests of everyone in Johnson County in mind. Harney asked Neuzil and R. Sullivan if they wanted the Joint Communications Center. R. Sullivan said that he wanted every project listed in the budget worksheet. Neuzil commented that he was comfortable with the budget worksheet too, but if Harney was so concerned with the tax impact, one option would be to offer less to Iowa City to get the Joint Communications Center started. Neuzil said he thought it was amazing that the amount of infrastructure projects and services will be done with such a low tax impact, even with a $.77 increase for the Joint Communications Center. Harney said that he thought the tax increase was going to be $1.05 until yesterday. Neuzil said he thought there was a need for a rollback system as far as the entire tax system structure in general. Neuzil commented that rural residents would actually see a decrease in the percentage of change in their taxes. Harney said that he tries to make those decisions based on need rather than want, and can’t see doing all of these projects in the same year.
Neuzil said that he is comfortable moving forward and showing the numbers to taxpayers. The Board could then decide to lower the numbers, but could not raise them. He said if there was an area to lower, it would be the Joint Communications Center, and it would continue to move forward even if the County contributes less money this year. Harney said that the SEATS facility came in $1 million more than planned.
R. Sullivan asked Claiborne to describe the process from this point forward because there is the opportunity to lower certain line items. Claiborne reported that the State has not released the budget software for the state form due to a Senate file that affects MH/DD. Unless this software comes out in the next day or two he is not sure that the he will be able to publish the budget notice by the February 7, 2008 Board meeting, as planned. Neuzil asked if the Board would still vote on the budget around March 6, 2008. Claiborne responded that he would hope it would be around that time. Neuzil said that some of the Board members might be gone around that time for National Association of Counties (NACo) meetings and Iowa State Association of Counties (ISAC) meetings. Claiborne said the County cannot move forward until the State has the software ready, but he could get the draft budget on the County’s website today if the Board agreed. R. Sullivan said that was a good idea, but it should be clear that it is only a draft and that the proposed budget can still be reduced. Claiborne asked the Board if they would like the summary and budget packet on the website and the Board agreed.
Neuzil said that it should also be highlighted that the County is now spending nearly $800,000 per year on jail rental alone, without counting transportation costs to and from other jails or staff costs. He said part of the reason that he has been aggressively pursuing some of the current projects is because the Justice Center will need to be addressed and the Board has had estimates that a new facility will cost over $50 million. Meyers said that the costs of a Justice Center will dwarf the costs of a Joint Communications Center. Neuzil said that the County could have a lot of these current projects paid off in two or three years and then let taxpayers know that a bigger project and bigger cost is looming. He said he feels this would have a better impact on taxpayers, and that this is why he plans on supporting the current budget. Neuzil said Johnson County hasn’t truly invested in infrastructure since 1984 when the Administration Building was built.
Harney said the facilities need to be built, but he is concerned with the levy. He said a multi-million dollar conservation bond issue will be coming up to the taxpayers, probably by the fall. He said that he also supports building some type of new jail facility, but it’s a matter of when and what will be done.
Claiborne commented that bonding includes TIF districts, which grew 7% this year. Neuzil said the burden on Iowa City residents for the proposed tax levy wouldn’t be nearly as high if the County could tax the $800 million of property in TIF districts. Harney said that the Emergency Management Levy does not tax into the TIF areas. R. Sullivan said that the County didn’t collect $2.8 million this year because of TIF districts. Harney said that the TIF districts will still receive services such as the Joint Communications Center, even though they incur no costs. He said the Board should have asked the Legislature for some type of change to tax TIF areas for public purpose projects.
R. Sullivan the current Board has aggressively pursued capital projects. Right now they may look like expenditures only, but will be more profitable when the County stops paying rent and sells some other buildings. Harney said that he hopes the Legislature changes the rollback on commercial property. R. Sullivan said if the Legislature changes the rollback, they will gouge the little old lady that Harney had talked about earlier. He stated that he doesn’t think the Legislature will do that this year. Neuzil said that gives the Board even more of a reason to do these projects now. Harney stated that they will do this over eight years rather than two if they waited a year for one of the projects. R. Sullivan stated that this is a debt levy. Claiborne said a debt levy takes care of itself. Harney said that it is still tax dollars. R. Sullivan said that the eight year payment program is simply how long the Board determined they wished to pay it back. Harney said that it is still tax dollars.
Neuzil said getting these projects paid off is advantageous for getting a Justice Center in the future. Harney said that it was not advantageous if the County was going to take eight years to pay for it. R. Sullivan asked Harney if he would rather pay the projects off in two years. Harney responded that he would. R. Sullivan stated that they could do that. Harney suggested waiting a year or two, until the Heath and Human Services Building was paid off. R. Sullivan commented that it will hurt taxpayers more to pay these projects back in two years rather than eight. Meyers said that the County might not have a large surplus in the future. Last year they had a $5.5 million surplus, while this year the County only has a $2.7 million surplus. Harney said that the surplus is reduced because the County added another project. R. Sullivan remarked that it is not the result of the County adding another project, and the debt services levy is not the general fund. Claiborne said if the bond is shortened from eight years to two years, the $61 increase will end up being over $100. Claiborne explained that the Board decided to put it out eight years to keep taxes fairly stable over the time period.
Neuzil said all of the projects the County is looking at will be started with most actually being completed in two years. This will line the County up to get ready for the big one, which is the Justice Center. The County is spread fairly thin right now because of the amount of work that is being accomplished. Neuzil stated that because the projects will be completed in two years or less the County resources will be ready to build the Justice Center. Neuzil said taxes are going up only because the County is adding $.77 to the General Supplemental levy to pay for the Joint Communications Center. Neuzil said that the County will have additional funding next year and will have to determine how to use it. He said that operating expenses will come out of the General Supplemental levy. Neuzil said that it will leave $700,000 to $800,000 to use as needed, because dispatchers now paid out of the General Fund will be paid out of the General Supplemental.
R. Sullivan said he feels there is misinformation amongst the public about how the County will use the extra money. There is no extra money for FY08 and a good chance there will be no extra money for FY09. As long as there is a County Communications Center at the Sheriff's Office, the County has to pay for it, and until the current County Communications Center is closed, there will be no extra money. There may be extra money for a future budget, but that might be two or three budgets away. Neuzil stated that he is comfortable with moving forward to put the $3.7 million towards the Joint Communications Center but if there is room to reduce the current budget it should be cut from that line item and the Joint Communications Center could still move forward. Harney asked Neuzil if the $3.7 million is based on the eight-year projection for paying off the Joint Communications Center. Neuzil said that if the County decided on an eight-year plan, then its down payment must be $3.7 million. If the Country decides on a 12-year plan, then the County could put a smaller payment down this year. If taxpayers overwhelmingly demand that taxes cannot increase, he will look to pay the Joint Communications Center off over a longer period of time.
R. Sullivan said that Johnson County is the one of the most educated counties in the U.S., and if taxpayers want taxes lower than the current rates, the taxpayers must explain to the Board what they don't want the County to do, and not simply say don't spend the money. Neuzil said he did not expect to hear that from rural residents since their taxes will decrease.
Meyers said that the County should be aggressive with the Communications Center issue because the Jail is only down the road a little ways. The price tag for the Jail could go way up from what current projections is right now. He said that the County is supposed to have two representatives on the Joint Communication Center Board, but in theory they could be outvoted. Meyers said that every time the Joint Communication Center Board adjusts the levy does not mean the County should have to adjust their levy. Meyers stated that from the presentations he has seen, the $.77 levy is in a state of fluctuation. Meyers said the timeline and process do not seem to be written in stone and the process might not get completely done in the next fiscal year. He would like see the Communications Board find a way to reduce their levy by $.05, rather than the County changing their projects.
Neuzil stated that the Joint Communication Center is having an impact on the tax dollars the County is asking from the residents. Residents understand the need and agree that law enforcement officials need to communicate with each other, and it would be an incredible opportunity to have Iowa City and Johnson County be able to work together on projects. Neuzil said the County will be blamed for increased taxes based on the 28E agreement, but the 28E agreement is a project that all cities signed off on and worked together on. Meyers said that Iowa City's communication system is falling apart, and if there were no 28E agreement and Iowa City had to get its own new system, the amount the City would spend is not much different from the increase they will see in this levy.
Harney said that $.77 is the best guess for the levy at this time, but there is no question in his mind that the $.77 will decrease. That is one reason he wants to wait one year. Harney said there are a lot of unknowns to plan for in order to cover the areas they cannot talk in or out of. Harney said that once it is put into place the County will know where they are at. Neuzil agreed that there is no question in his mind that the levy will go down, because the projects will be off the list. Over the next two or three years it will be easier for people to realize the Justice Center is coming. Neuzil said that it will spread the projects out more. Harney said that his is not against conservation or Kent Park, but he has an issue about things appearing in the budget when the County has not discussed them.
League of Women Voters Representative Rebecca Reiter asked if property taxes were going to go down for the rural residents because their land was not as valuable. R. Sullivan said that it is actually because the land is more valuable. Reiter asked how the property taxes are going down for the rural residents. Neuzil said there are a number of factors including the Assessor reevaluation, the rollback, and actual valuation. In FY08 the County taxes on rural ag land were $974. This year when you go through the actual valuation plus the assessor's reevaluation and equalization, the tax bill is $926 per $100,000 of land. R. Sullivan said that the land went up 7% in value and then the rollback is applied. Meyers said that land is actually worth more. Neuzil said the rural levy was kept fairly stagnant. The residential General Fund plus the General Supplemental actually equaled more, and that has a bigger impact on the residential, especially in Iowa City, than it would on a rural resident. Meyers said that the ag and residential were only going up within 4% of each other. Neuzil said that ag dwellings went up 2%, or $9, from the year before. Neuzil said that the extra $.77 has had the biggest impact on people that live in Iowa City that pay County taxes. He said for Iowa City and University Heights residents, only 16 to 17 cents of the total tax dollar went to the County. A City resident does not pay as much in County taxes because the County does not have as many services.
R. Sullivan said the only taxes paid by rural township residents are to the County and school district, and how it is interesting to look at how they break it down. Neuzil said that at $61, when factoring in all the projects including the Joint Communication Center and it is less than $77 surprised him. The reason that happened is because of residential rollback. When a resident has a $100,000 house, they will be charged 44% of that value this year. The rollback rate went down this year, which is why it has less than an impact.
Reiter asked if there are already towers that can be used for the Joint Communication Center. Harney said that the County asked to have them researched to see if there are towers that can be used. Harney said in hindsight, when towers were put up the County should have had them permitted through Planning and Zoning and should have said that public safety can get on those towers at any time. Now the County will have to pay to get on some of the towers. One problem they run into is the height needed to get in and out of low areas. At least two towers will have to be built. R. Sullivan said he has discussed an ordinance change to require the towers to allow governmental use with Planning and Zoning, and their staff is doing research and have found that a number of jurisdictions do have that type of ordinance. Neuzil said that the request of $3.7 million was a worse case scenario. He said one reason Iowa City residential taxes are going up as much as they are was because the Assessor increased Iowa City valuations by 10, where everywhere else is fairly stagnant. Meyers said the same thing happened to rural residents last year when the County Assessor did his revaluations. They don't know what will happen in a couple years, when the assessments are done again, whether the County will get affected by the mortgage crisis and falling home values.
Kempf said the Board is passing the $.77 Joint Communications levy is because the County is the only government entity that had the authority to do so. Harney said that it falls under Emergency Management. Meyers said that Iowa City does not have the authority to tax county residents. Neuzil said as an Iowa City resident, his County taxes are going up because of the Joint Communications Center, but his tax bill would have gone up just as much if instead the City would have to tax for the communications tower, center, and equipment. The need had to be taken care of, whether it came out of the City budget or the County budget, but because it will be a County levy, the Supervisors were the fall guy when it comes to that issue. Neuzil said that the study has shown that Iowa City residents save money by having this be a joint communications center, rather than separate City and County systems. Harney said that is not an operational cost savings. Neuzil said that was correct, but there were technology and efficiency savings.
Harney said he believes it is irresponsible for the County to provide $2 million plus to a Conservation facility where they have never seen a diagram of what it will be or where it will go, and he cannot approve something he has not seen. Neuzil said that in that case, Harney can't approve the Joint Communication Center either. Harney said they had drawings of the Communication Center. R. Sullivan said that he, Neuzil and Stutsman went on the Conservation site visit and saw the diagrams and site. Harney said he had asked to see it, but never has. Neuzil said it sounded like it was similar to the SEATS building. Neuzil said that the diagrams are important and he would like to see the same thing for the Communications Center, which does not even have a location yet. Harney said that was because of the engineers study. Meyer said it points out the difficulties of the issue as to whether everything they are hoping to get done will get completed. Neuzil said the County still needs to find a location and get three Supervisors to agree to a location. Harney said that part of the problem is that they can't have a design without a location. Neuzil said the tension about the budget is higher this year than it has been since he joined the Board in 2001, because it is new for the County to pay for something out of the General Supplemental fund. If they took out the Joint Communication Center, they would be where they always are.
R. Sullivan said the Compensation Board salary recommendations will be on the February 7, 2008 agenda. Meyers said that that would allow Stutsman to be present. R. Sullivan stated that that recommendation is just like everything else in the budget and that it could go down, but it cannot go up. R. Sullivan commented that the budget is safe and it will not increase. Claiborne said that the budget the Supervisors have includes the recommended pay increase.
Adjourned at 10:05 a.m.
______________________________________________________________________
Attest: Tom Slockett, Auditor
By:
On the _______ day of _____________________, 2008
By John Deeth, Recording Secretary
Sent to the Board of Supervisors on March 4, 2008 at 6:00 p.m.