MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
OCTOBER 19, 2009
TABLE OF CONTENTS
Page
Discussion: FY 2010 Department Budgets............................................................................ 1
Capital Projects (85)................................................................................................. 1
Physical Plant (17).................................................................................................... 2
Other........................................................................................................................ 3
Discussion: Scheduling of Future Budget Meetings.................................................. 9
Chairperson Neuzil called the Johnson County Board of Supervisors to order in Room 203B of the Johnson County Health and Human Services Building at 9:02 a.m. Members present were: Pat Harney, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Budget Coordinator Rich Claiborne said they always start with Capital Projects to see where the Board is interested in new projects on the horizon for their budget year and possible debt pay down. Usually the last or second to last budget meting they revisit this to see what funds are available. Neuzil said they need to recap what their strategic planning goals are. Executive Assistant Andy Johnson said they identified building up the reserves, paying down debt, or identified projects. Rural economic development and addressing the justice center were also goals. Neuzil said when they talk about capital projects there is an issue because they have the justice center and the potential of trying to save a few dollars in case they need to acquire property. The Health and Human Services Building is pretty much paid off and they want to have some money in reserve. Stutsman said building the reserves is mainly for bonding. Claiborne said this will be carved out at the end of the budget cycle. He asked if the Board is interested in the Ambulance Building during the 2011 budget even though they are waiting for a study to come back. Stutsman asked if the study will be done by the first of the year.
Facilities Director David Kempf said they are looking to have the study back in the first part of December. He didn’t add anything to capital project except some additional funding for the Sheriff's Office. They have some money already set aside to do some remodeling once the Joint Communications Center is operational and they move the dispatchers out. He said they already have $250,000 set aside and he asked Claiborne to put an additional $250,000 aside. They have money set aside for the tuck pointing of the Courthouse and for the Armory project. Stutsman said Kempf got IJobs money for the Armory project. Kempf said yes and it is 75/25. He said they already had money budgeted for demolition so they will use those monies for the 25% match to that grant. Neuzil asked if they would use the Debt Service Fund for that project or money already set aside. Kempf said that money was already set aside. Neuzil asked if there are any overruns to consider with the project at the Administration Building. Kempf said they are still within their budget for that project. Kempf said the spring window project was part of the CDBG money. He has money budgeted for the County's portion. The total cost for that project is $250,000 and $236,900 of that is from the CDBG block grant.
Stutsman said part of the Ambulance study is to determine where they should build an ambulance department and asked if cost will be part of it. Kempf said yes. Stutsman thinks they need to start putting away money for the Ambulance Department because their need for space will continue to grow. The justice center will be big but it will be a bond issue. Harney thinks they need to set some aside as well. He thinks it could go on the Armory Property and they could build it up to the level of the Administration Building. Kempf said that will be more difficult than he thought because the DNR is being restrictive on altering any flood plains. He said they are looking at the Health Department site, the Fisher site, the Armory, and a satellite location at Secondary Roads. Sullivan said Iowa City is in need of a new central fire location so they should look at working together. Harney would like to put money aside but he is going to be cautious of spending money.
Sullivan would like to put something in, see how the budget process goes, and decide from there. Harney said there has been some discussion about maybe closing the Hope House and proposing the County use that for a temporary location for prisoners. Neuzil said a lot of this comes back to bonding capacity. He thinks they would use the Debt Services Fund to pay for a capital project like the Ambulance. He thinks there is enough support to keep it on the list. Sullivan said setting aside money in this department should be done so cash is available to make necessary purchases. With construction however, it makes sense to follow what was done for the Conservation buildings. Neuzil said in their strategic planning they talked about avoiding fluctuations. They all want to be fiscally responsible as far as the impact on taxes. Neuzil asked if the Space Needs Committee forwarded anything on.
Harney said they need to look at setting some money aside for whatever may be needed for the justice center. Sullivan said this committee's recommendation was to set aside a couple million so if they need to use it they can. If they don't use it they still need to have that money in reserve. Neuzil said he would rather refer to it as jail alternatives. Stutsman said they need to address the Medical Examiner's Office, as she had not realized before, that they were in need of different space. Kempf said the Medical Examiner's Office is getting two additional offices and so for the interim, those needs are met. He said the Space Needs Committee will certainly reevaluate the needs together with the Ambulance Department since they are both 24 hour per day operations.
Sullivan asked if this included some of the additional expenses for securing parking. Kempf said some is in this budget and some is in the current year's budget. He tried to keep the budget as flat as possible and the increases are for cost of living such as utilities which they do not control. Harney asked how he is adjusting all the rental properties they used to pay. Kempf said the North Governor Street property and the old Public Health Department paid their own utility bills so their budget should come down substantially but now those utilities have been added into the Facilities Management budget. The rent was also paid from individual department budgets so there will be some substantial decreases there also. Stutsman asked if the budgets are coming down substantially. Claiborne said they are already seeing around a $280,000 savings in rent and utilities. Stutsman asked if that is in the next year's budget. Claiborne said that is now, with this year's budget. Stutsman wanted to be sure that people are saving money in their budgets and not just transferring what they were spending on utilities into something else. Sullivan said some of their budget should have been transferred to Kempf and some should just be eliminated.
Claiborne said with the new building they have no history of utilities and so they had to submit a budget amendment. Kempf said he is requesting $33,000 for gas and $62,000 for water and electricity. Those are all based on energy usage modeling as part of the LEED certification and they are falling close to what they projected. Kempf said they are no longer renting the apartments in the Fisher Building so we do not have to pay those taxes any more.
Claiborne said the Jail remodel will be paid for by Department 44. For Department 85 he has the Ambulance Building and Reserves. Kempf said they are having problems with the TVs at the Jail. They are required to supply cable TV and it will probably require buying all new TVs and security boxes. Sullivan asked if those could be transferred to a new facility. Kempf said yes. Stutsman asked what the projected costs for that equipment is. Kempf said he budgeted $20,000 figuring $500 to $600 per basic LCD TV TV, $500 to $600 per security box, and installation.
Kempf said he would like to do some landscaping around the Administration Building, redo the parking lot lighting, and install some new signs. He said if he needed to cut 2% from his budget he could cut it there. Neuzil asked if there was anything in this budget for employee wellness on the third floor of the Health and Human Services Building. Kempf said no because he thought the Public Health Department would oversee that. Sullivan said the building rents are zeroed out on the spreadsheet but there is $60,000 in parking fees for 2010. Kempf said that needs to be amended out. Sullivan said that is going to be too high for FY10, but he wondered why zero is entered for FY11. Kempf said that was an oversight. Neuzil asked if Kempf projects $60,000 in revenues from parking fees. Sullivan asked if the maintenance expenses are figured in. Kempf said yes. Neuzil said in the future some of the parking fees could be used for Wellness or bus passes and not just maintenance.
Neuzil said Shueyville did a presentation to the Board about their road project. The County has always used the Five Year Road Plan to update or upgrade a road. This situation is unique because there is an opportunity to do some cost sharing with the City of Shueyville. He said they would have to look at using the Debt Service Fund or bonding to pay for this project. Claiborne said there was a change to Section 331.441 in the 2009 Code to state that essential County purpose now includes roads and that does not fall under the $1.2 million limit. Neuzil asked if the Board wants to use its bonding capability to do a road project which is something they have never done. Another issue is the tax fluctuation process. Claiborne said it is $2.4 million so it is not cost effective to extend it out over 18 or 19 years. He said he figured on a two or three year bond.
Neuzil said if they did this project they would fill in any freed up money, taxes would go up, and it gives no flexibility for the County to do any other project. Claiborne thinks that the Ambulance project would be around $2 million and they could possibly cash flow that. That is what they did for the HHS Building. Sullivan thought the maximum bonding is around $10 million before they would move into an increased risk level. He doesn’t understand why they would be prohibited from an Ambulance Building if they did this and asked why they couldn't bond for it. Harney and Neuzil said they could. Harney said that would just increase taxes but he would prefer to bond for it because it spreads it over a larger base. Neuzil said if they want to keep the level of taxation the same as last year, they can’t add projects. He asked if the obligation that that a city gives to the County is 100% secure. Claiborne said if they did this the County Attorney's Office would have to review the document. There is a non-appropriation agreement where the City could say there are some red flags so if the Board decides they want to do this, their legal team would need to rewrite the agreement.
Stutsman asked if everyone is on board with this project if they can figure out how to finance it. Sullivan said some of his concerns are whether they do it in the typical Secondary Roads process, and what will the final product be. He said he would want to do the complete street if they are going to invest in this. Neuzil thinks this should be in the Five Year Road Plan and if they can get the City of Shueyville to cost share in the project, it’s doable. They would have to bump a project off the Five Year Road Plan and he would rather go that route. Neuzil said if they are going to bond they have to decide if this will be the top road project and he isn’t sure if this is the top project in the County. Neuzil does think this project could bump another project off their list. Sullivan said the Board knows this is a road that needs work. Harney agreed but isn’t sold that bonding is the way to go. There may be stimulus dollars they can work into a Secondary Roads Budget. County Engineer Greg Parker said stimulus dollars will not be able to be used on this project because one requirement of those projects is that they are shovel-ready. Harney clarified that he meant stimulus dollars might free up other money which they could then channel to this project.
Stutsman thinks the project needs to be done and is interested in the bonding capability because the legislature gave Counties this option. Harney said he is concerned if they decide they aren’t going to pay the County back down the road. Stutsman said they need to make sure it is written in such a way that there is no question about whether they’ll pay back. Shueyville City Engineer Dave Schechinger said there is a draft agreement that the City’s bonding attorney put together for review as a first attempt at a 28E agreement. There are going to be a lot more details that need to be ironed out before they are at a point where they can start this project. Neuzil said this will increase taxes and not allow them to do any other projects. He doesn’t know if this is the top project and would rather do it during the Five Year Road Plan. He would be very interested in bumping off the Mehaffey Bridge Road project and inserting this instead. He doesn’t know if there is an ability to still go through the 28E agreement but just not using their bonding capability. Sullivan said this is a unique situation because this is a city small enough to do this. The attractive thing about this is that Shueyville is willing to pay this back, granted it’s over a long time. If they just put this in the Five Year Road Plan Shueyville wouldn’t have any obligation to pay it back. Sullivan wanted to know if Shueyville would still do a pay back if the County prioritizes it in the Five Year Road Plan.
Schechinger said he can present that to them. Based on past conversations this is a priority and he doesn’t know if where it is located in their financing structure is going to have a big impact on whether they pay it back. He said the timing could be an issue because they have set up a TIF district so it stays active longer extending their repayment period. Schechinger said they have gone through the required steps so they can work with the timing. Initially the problem was that they already started to draw from that TIF district. They had a 20 year period they could do that so the longer they put if off the less the City has available. Neuzil said this is similar to what they just did with the City of Hills where the County does a project within a city limit and that city pays the County back a portion of that over a several year period. There is a lot of uncertainty about where they will be two to three years out. He said if they add this to the Five Year Road Plan, it means another road project will be taken off. Stutsman said if they bond for this they don’t have to make any adjustments to the Five Year Road Plan. Neuzil said it would be a separate tax increase on the Debt Service Fund. Sullivan said this will be uncharted territory if they take a road out of the typical road process and treat it differently.
Stutsman said this is interesting circumstances because the City of Shueyville is willing to pay the County back. Parker said the estimates for the Road Use Tax are down and the monies they received as part of the transfer of jurisdiction from the City of Shueyville have gone down. He said the dollars they are receiving are shirking but the expectation is still growing. Parker said the construction coming up with the stimulus dollars they received, made the County match dollars they weren’t planning to expend out of their construction budget. Therefore, if they talk about putting 120th Street in the plan, the possibility of not having funds available two years out is a good possibility. Harney asked if the State is backing out on the amount of transfer funds they provided for those roads or if the scale dropped down some. Parker said the projected Road Use Tax dollars they receive as part of their budget annually has gone down for 2011. The projected amounts they have received from Shueyville, just under $14,000, have gone down projected for 2011. Parker said Road Use Tax dollars and transfer of jurisdiction are different fund sources.
Parker said the State made them take off the Farm-to-Market routes through Shueyville. It is the only city in the County they were required to do that for and those dollar amounts have gone down. Stutsman thinks this should not be part of the Five Year Road Plan and they should take advantage of the opportunity set out by the legislature in bonding for this. Time is an issue in this project because Shueyville has to move on this so the County could lose an opportunity and later on, the County will pay for this whole project. Stutsman said they can do this without making any drastic changes to the Five Year Road Plan. Neuzil said taxes will be significantly increased with just this project and that is not adding anything else to the Debt Service. Stutsman asked why they couldn’t do it over five years. Claiborne said the interest gets really high. Harney asked if they have things coming off that would offset the $0.06. Claiborne said in FY2011 and FY2012 the Debt Levy will free up about $0.15 as some older bonds retire. In three years they will have $0.25 drop off. Stutsman asked if Shueyville can step up their payback. Schechinger said the money they are proposing to pay is coming from TIF revenue that is remaining. That is everything that is available. He said the rest of the money is the Road Use Tax which is used for snow removal and road maintenance. Schechinger said even if they put all that money in it wouldn’t make a big difference.
Neuzil asked if the City of Shueyville has reached their cap as far as taxing capability. Schechinger said he didn't have that information. Neuzil said somehow a $2.4 million project has to be paid and if the County has to pay for it over a three year period, it means a significant tax increase for Johnson County taxpayers. He said they have to decide if they are willing to do that for this one project which means they can’t add anything else to the Debt Services Levy without taxing even more. Sullivan asked at what point Shueyville might decide to take their $1.7 million off the table, leaving the County to pay for it alone. He said right now Secondary Roads is putting a lot of money into patching the road. Parker said he didn’t want to invest a lot of money in patching if the Board was going to consider construction. In the spring they will probably have to do some patching and the estimate for that is $300,000. He said every year the road will need patching so they will be spending a lot.
Neuzil asked Parker how much patching is scheduled for Mehaffey Bridge Road because if they aren’t going to do a lot of maintenance on that road, then why wouldn’t 120th Street be more of a priority that Mehaffey Bridge Road. Parker replied that looking at a global picture of activities, over the last five years they spent a lot of money on State transfer of jurisdictions. If they had not received those transfers, Secondary Roads would probably be in a better position financially because they would have been addressing Johnson County roads. He said that next year will be the end of the State transfer of jurisdictions except for Herbert Hoover Highway. Herbert Hoover Highway is a safety problem for the County and there have been several fatalities there. Parker said the County should consider doing something with that road even though the Board requested that the Mehaffey Bridge Road project be added to the Five Year Road Plan.
Harney asked for some clarification on transfer of jurisdiction roads and funds. Parker said when the State transfers roads to the County, the County receives about $254,000 a year for a ten year period, totaling roughly $2.5 million. The Oak Crest North project was $3 million so they burned that money up in one project and are now financing the rest of those transfer of jurisdictions out of the Five Year Road Program funding. Parker said the stimulus dollars have helped but they had to do a large match out of the Farm-to-Market fund to cover the difference. They will be in the hole on Farm-to-Market funds and he doesn’t know how much. By going negative on Farm-to-Market funds the DOT could freeze them from using those funds until they build the balance back up. Right now the Farm-to-Market funds are frozen until January 1, 2010.
Parker said all the miles the State transferred to the County and paid $2.5 million for isn’t even a scratch on what it has taken to repair those to good shape. Stutsman said their Five Year Road Plan is going to fix those roads. Neuzil asked if there is an interest in keeping or adding this to Capital Projects Debt Service. He said the Board will not be making any decision on this until January or February, 2010. Claiborne said the revenue stream replenishes the General Basic Fund and eases up the County subsidy as it relates to the $3.50 cap on the General Basic Fund. Neuzil said it comes down to if they are willing to raise taxes. Sullivan said the Board has to decide on a time frame and if they willing to do it one way or the other. Then Parker could tell Shueyville they are on and the Board could decide on the funding mechanism later. Schechinger said the City of Shueyville is looking for a commitment that they are going to do this project together. If the City doesn’t use their money this year, they will lose it, and so they need a decision. Neuzil said they can’t use it this year anyway. Schechinger said if they begin design on projects, those costs are eligible for reimbursement. They have already to out on a limb and started to do some of the survey on this so if this comes about, it will move quickly.
Stutsman said she is interested in doing this project and later determining if they are going to bond or add it to the Five Year Road Plan. Claiborne said as they see what Department 85 money is available, they might be able to cash flow $1 million and bond for the other $1.4 million to avoid the $0.06 tax increase. Neuzil said that would mean no savings. Sullivan said he wants to do a complete street as part of the Five Year Road Plan and move some projects on the Road Plan to pay for it. Harney said the price would increase if they do the whole street. Stutsman thinks the rural side of the street should meet rural road standards. Schechinger said the proposal they presented earlier was that from James Street to Curtis Bridge Club Road would be an urban section with curb and gutter. The other part would be from James Street to Interstate 380 which would have six foot asphalt paved shoulders. Schechinger said this street is being designed to be expandable in the future. Sullivan asked if the urban stretch will have a sidewalk on one side. Veenstra & Kimm, Inc. Transportation Engineer Leland Belding said a sidewalk is not included on this estimate.
Neuzil said there is an interest in seeing this road complete; the question is whether the Board will use its bonding capacity or the Five Year Road Plan. He said they will have to work with the City of Shueyville to determine if they are willing to negotiate this project with the County's staff and discuss a pay back plan using the Five Year Road Plan process. Sullivan would like to know what it would cost to have a sidewalk in that plan. He asked if Shueyville residents would want to go another 30 years without a sidewalk, and said he would really like the City of Shueyville make the extra investment and put in a sidewalk.
Parker said this estimate is based on next year's construction, and each year that projects get postponed, the costs will rise 10% to 30%. Claiborne said another financing option is to bond partially, maybe not cash flow. Some of it could be in Secondary Roads budget but Claiborne said he could increase the Rural Basic transfer budget, where there was a considerable drop there last year. Stutsman said that means only the rural tax payers are paying for this project. Claiborne said they would be splitting between the Debt Levy and the Rural Basic Fund. Neuzil said that is how they have always paid for roads. Harney asked if the bank was still interested in cost sharing some improvements to that road. Schechinger said they are working with the new owners of the bank. Schechinger asked if they need specific direction to work with the County's Bond Counsel. He said if Shueyville is going to continue with the design then they need some assurance they are going to do this project because they do not want to lose any money. Harney asked if they could work with Secondary Roads with the design and preparation. Schechinger said they can use TIF money for the design, but they don’t want to be in a situation where they have a completed design that won't be used.
Sullivan said taxpayers may be concerned about this project when they see the increase in their property taxes. He would like to see this project replace or bump some things in the Five Year Road Plan so they can still get the same result, and still have the same deal with Shueyville. Parker said if they were to do it in the Five Year Road Program obviously that would be a no interest type construction/payment activity. He said he knows that Assistant County Attorney Andy Chappell had some concerns about extending longevity out for payments from cities to the budget. Parker said Chappell mentioned that he does not want to see zero interest loans to other entities. Stutsman said that is a question for bond counsel. Parker said for his budget he would like them to not bank out funds like that because it would take them 20 years to recover that money and in the meantime, his department is out that money.
Stutsman supports doing the bond even though it might be a large tax increase and she asked Claiborne to continue to look for other possibilities. Sullivan said they appreciate that Shueyville is willing to do this at all because they are not required to. Neuzil is interested in moving forward. Stutsman asked if the Board is giving Shueyville the authority to work with bond counsel. Parker said County Treasurer Tom Kriz told him that if they are going to work together he needs direction from the Board. Neuzil said they have to determine that if they put this project in the Five Year Road Plan, can Shueyville still pay that back. Parker said this is unique situation and they do not have responsibilities like this to any other city in the County. As the population of Shueyville grows the road will become the responsibility of the City of Shueyville.
Recessed at 10:30 a.m.; reconvened at 10:35 a.m.
Neuzil said they will postpone the November 23, 2009 meeting to December 7, 2009 at 9:00 a.m. Claiborne said the Auditor's Office is the only department scheduled for that date. Stutsman and Harney said they have a conflict with the November 9 meeting date. Neuzil said they will postpone the November 9 meeting to December 14, 2009 at 9:00 a.m. Claiborne said Technology, Board of Supervisors, Human Resources and Information Technology are scheduled then. The Board also scheduled a meeting on December 16, 2009 at 1:00 p.m. in case they need the time.
Executive Assistant Andy Johnson said the Anderson and Larkin Public Accountants representatives had not arrived yet.
Adjourned at 10:44 a.m.
______________________________________________________________________
Attest: Tom Slockett, Auditor
By:
On the _______ day of _____________________, 2009
By Meaghan Mercer, Recording Secretary
Sent to the Board of Supervisors on November 19, 2009 at 2:30 p.m.