MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
JANUARY 27, 2010
TABLE OF CONTENTS
Page
FY11 Budget Work Session.................................................................................................... 1
Joint Emergency Communications Center..................................................................... 1
Mental Health/Disability Services (46)......................................................................... 7
FY11 County Budget Public Hearing Notice and Submission of Budget to State............. 7
FY11 County Employee Salaries.................................................................................. 8
FY11 County Budget: General Discussion.................................................................. 14
Other................................................................................................................................... 18
Chairperson Stutsman called the Johnson County Board of Supervisors to order in the Johnson County Health and Human Services Building at 1:30 p.m. Members present were: Pat Harney, Terrence Neuzil, Janelle Rettig, Sally Stutsman, and Rod Sullivan.
Budget Coordinator Rich Claiborne said he attended the January 27, 2010 Joint Emergency Communications Center (JECC) Policy Board (Policy Board) meeting earlier in the day. He said they reviewed the projected fund balance, which is slightly over $2.5 million including the Fire grant yet to be received from the City of Iowa City. He said that after much negotiation amongst the Policy Board members, they agreed to drop the levy from $.75 to $.70 and use the subsequent difference in the reserve. Claiborne said he adjusted the Block Grant 20 from $2,554,000 to $2,283,000, which is a General Supplemental expense.
Stutsman said that they voted on lowering the levy, and noted that the Board of Supervisors actually has no say in or authority over the JECC budget, they can just comment about it. She said that the Policy Board presents the operating budget, and then the Board of Supervisors approves that budget. Claiborne said that the operating budget is not managed by the Board of Supervisors.
Rettig asked how the JECC can overspend the Equipment Bond budget by $1.1 million. Rettig said that the Board did not authorize this, and asked how there can be a negative balance for equipment. Claiborne said that he does not know how the Policy Board spent their money, but overall, when including operations, they are to the good. Rettig replied that they did not have the authority to overspend the Equipment balance. County Treasurer Tom Kriz said that the amount of Bond money borrowed was $4.1 for the building and $11 million for equipment. He said he doesn't know if there is an authority to overspend, but the money would have to come from some other source, and in this case it comes from the JECC operating budget, which they tax for. Stutsman said that they can spend operating funds for equipment. Kriz said that is what the JECC is having to do in this case.
Sullivan said that he views the Emergency Management Association (EMA) Equipment Grant and the Fire Equipment Grant as expenses, but he does not see them as revenues. He asked if they would have been revenues into this budget at some point. Executive Assistant Andy Johnson said he asked Deputy Auditor Dana Aschenbrenner for an explanation, and as Johnson understood it, the expenses are in the expense lines and subtracting out the revenues usually zeros out. Claiborne said that whether or not it is above or below the line, it is the same effect. Sullivan said that the Policy Board received a certain amount of money in tax dollars, but according to the January 27, 2010 budget worksheet, they spent $1 million more than they received. He asked where that $1 million came from and if it was a result of those grants, and if so, Sullivan wants to know why that is not evident in the budget worksheet.
Rettig agreed, saying the budget worksheet shows no input on revenues. Sullivan asked, if they received grants for $2.8 million why isn't there revenue for that. Claiborne said that whether it is reported as revenue minus expense, or it's deducted from the expense, the bottom line is the same. He said that the net amount is the same. Johnson said that without the grants, the deficit would be larger. Claiborne agreed. Sullivan asked why they would spend over $1 million more than was available. Claiborne said that someone from the Policy Board would have to answer that question. County Sheriff Lonny Pulkrabek replied that he has no idea why they would spend over $1 million more than was available, and he did not hear this discussed at the Policy Board meeting earlier in the day. Sullivan said that the proposed budget data is very unclear; he just wants to know what money came in, what was spent, and why.
Policy Board Legal Representative Jeff Stone said that the System Purchase Contract was signed and approved by the Policy Board in December 2008. He said at that time, they did not have an accurate count of all users of the mobiles and portables. He said throughout the last year they have developed an accurate count. Stone said a change order was approved by the Policy Board two or three months ago, approving the purchase of additional items for the mobiles and portables so the end users have the equipment they need and want.
Sullivan asked how it is possible to spend $12 million on equipment when only $11 million was available. Stutsman asked where the Policy Board was planning to come up with the money. She said she understands that change orders do happen, but she asked how they were going to get additional dollars to pay for that equipment. Stutsman asked if the Policy Board was planning to take the money from the operating budget. Stone confirmed this. Stone said that the bond amount of approximately $11 million for the equipment was determined based on the system contract that was signed in December 2008. Stone reminded the Board that at that time, the Policy Board did not have an accurate count of how many mobiles and portables were needed. He said the Board knew there was money in the budget that was available for operations; it was a priority to make sure that the firemen, police officers, and sheriff’s deputies have the proper equipment. He explained that this is why the Policy Board entered into a change order of approximately $1 million to provide the end users with the proper equipment.
Rettig said that the authorization for this debt for equipment was $11,142,000. She said that according to this budget, they are actually spending $15 million. Rettig said that she was under the impression that some of the grants the JECC received would offset some of the money the local taxpayers were paying for this project. However, she said, this is not what happened. Rettig noted that not only did the grants not save local taxpayers any money, but the Policy Board over spent by an additional $1.1 million on equipment. She said $11 million was budgeted for equipment, and according to the January 27, 2010 budget worksheet, the JECC will spend $15 million on equipment. That is $4 million over budget. Stone said he did not create that document. Rettig replied that according to Accounting this is what has been spent or is obligated. Stutsman said it should be clarified that Stone is not the accountant on this project, so the Board can ask him questions, but he may not be in a position to answer them all. Rettig said that she understands, but nonetheless, equipment is $3,900,000 over budget according to the documents presented to the Board.
Kriz said that the grant money was removed prior to borrowing. Neuzil said that is why the County did not have to borrow as much money. Stone said that the Firefighter Grant of approximately $906,000 was directly used to purchase approximately 210 portable devices for firefighters across Johnson County. He said that every single fire fighter portable was not paid for by Johnson County taxpayers; Iowa City Fire Chief Andy Rocca got the grant and it was used directly to purchase those portable units. Sullivan noted that that makes more sense, knowing that the grant money came out before borrowing. Neuzil said that he is perfectly comfortable with this, because in the first year of the project, the Board approved a blanket amount of money that did not go to any specific area, but into general operations. He said he is glad the Policy Board spent down some of the money from that original year instead of asking for more money.
Sullivan agreed, but he said the consultants are supposed to be skilled in making accurate budget projections. He said he is not happy with their performance if they missed by $1.1 million, a significant 15%.
Stone said that at the time the system purchase contract was signed, the Policy Board knew that approximately $4 million would be needed for the mobile and portable devices. He repeated that they just did not have an accurate count. He said, for example, for many volunteer fire departments in rural areas, the Policy Board entered a placeholder of one, which was the best estimate available at that time. Sullivan said it seems that's what the consultants are paid to do, and that they would have done a better job. Stone said that the person who the Policy Board contracted with was not going to determine this before the contract was signed, but rather after it was approved. Stone said the Policy Board arrived at the best estimate, which was ultimately approximately 25% off, putting the final budget closer to $5 million rather than the $4 million estimate.
Kriz said that he was instructed to borrow a net affect, not a gross affect. Claiborne said that this is similar to the JECC building. He said that although it is a $5.5 million building, the County only bonded approximately $4.1 million because a portion of the $1.44 million of the General Supplemental Levy of 2009 was to go towards reducing the bonding. Sullivan said that he would like to see a regular report on projects like this. He said he doesn’t know why the Cities of North Liberty, Coralville, and Iowa City wouldn’t want the same thing. He said it makes a lot of sense to know where the project is financially. Stutsman agreed. She said that she knows the Board does not have any control over the budget, but a regular report would allow them to air any concerns.
Claiborne said while accounting is still done in the Auditor's Office until June 30, 2010, he can get this kind of information from the Auditor’s Office. Sullivan said that it would be good to report this information on an ongoing basis. Stutsman said the taxpayers need the information too; they are ultimately responsible for paying for these projects, so the process needs to be clear and transparent.
Sullivan said he is glad that the levy was dropped to $.70, but he would have preferred it had been done another way. Rather than taking $1 million out of reserves, he would have cut the budget. Sullivan said reserve money was used to fund positions and expenses that he doesn’t think are necessary. He said he would much rather have seen the Policy Board cut what they are going to spend rather than dip into reserves.
Rettig concluded that the budget didn’t change at all. Sullivan said that the budget is $2.283 million. Claiborne said that is the amount being taxed for, but the original amount of $2,554,401 is still the JECC budget. Sullivan said that they did not reduce the budget a single cent, but are paying for it through reserves. He said the problem is the fat in the budget. By paying from reserves, the problem will reappear next year, plus the future newly hired employees will be permanent expenses in the budget; they are not going to be laid off. Neuzil asked if those positions were authorized to be expended. Claiborne said the positions are funded but not filled. Pulkrabek said that that is not entirely accurate. He said that the Systems Analyst position was funded and authorized to fill, and the positions of Clerk and Operations Manager were funded but not authorized for hire.
Harney said that there was no discussion at the morning meeting about the budget itself; the discussion was about the levy and the proposed change. Sullivan said he would rather have had the discussion be about the budget because the budget is the problem that the County will have to deal with from here on out. Harney noted that part of the problem is working with an unknown. He said that once things get into place and projections determine the actual operation costs, then everyone will have a good idea of what the budget has to be in the future. Harney said the Policy Board has made the decision that this will be the budget for the next year, and they did not want to look into changing it at this point. He noted that next year there will probably be some changes to the budget.
Sullivan said he wishes the Policy Board had considered the extensive feedback he offered. He said the Policy Board never told him why they disagreed with Sullivan. Harney said that is unfortunate because the Policy Board was expecting the Board of Supervisors to attend their meeting earlier today. Rettig said the Board of Supervisors was not even been asked to participate in the scheduling of that meeting. Harney said that the Policy Board was not willing to change the meeting time because it was the only time everyone was available. He said they needed to meet the deadline for the Board of Supervisor's January 27, 2010 meeting. Stutsman said she did not realize that the Board was being asked to attend the Policy Board meeting.
Sullivan said that he has addressed the Policy Board before and didn't have much luck, so he just walked away. Neuzil said he assumes the other governmental entities that support this project are probably hiring similarly. He said the hiring authorities seem to have no problem hiring for positions where the County has to impose a tax. Neuzil said he does not understand why all these positions are necessary when the current two dispatch centers do not need these positions. He said that his job as Supervisor, however, is to tax for whatever the Policy Board recommends. Neuzil said the Board has no other authority other than to try to convince its representatives to reflect what the Board wants in the future.
Harney said Policy Board members explained why those new positions are necessary at today's meeting. He noted that Iowa City has many more positions than this, while the Sheriff’s Office does not have as many, although they do have some supervisory staff. Harney said that with all of these components merging to form one operating unit, the hiring recommendations do not seem to be overdone. Sullivan said he is sure that when the League of Women voters pushed for this project, they did not advocate spending as much money as possible. He asked how the Sheriff’s Office runs a dispatch center that serves all of Johnson County except Iowa City, and how it is staffed. Sullivan asked why the Sheriff's Office wouldn’t be used as a model for the JECC. Stutsman said it almost seems like the Policy Board thinks they have a blank check; the Policy Board thinks they can do whatever they want and just send the bill to the taxpayers. She said that Supervisors, other elected officials, and department heads are accountable to the taxpayers. However, there seems to be no oversight with the JECC.
Sullivan said that the Sheriff’s Office has been operating for 100 years. He said he understands that a couple people were added because they were stretched thin, but he does not think there is any justification for adding new management. Sullivan said he wished the Policy Board would have cut their budget instead of raiding their reserve. Rettig said the fact remains that the JECC has submitted a budget that is 27.72% over what is in the current fiscal year, and they plan on the County taxing 14.1682% more than was taxed for the project last year. She noted that she doesn’t think consolidating government services is actually supposed to cost more. Rettig said if that is the case, then the Board ought to carefully consider what it wants to consolidate in the future. Rettig said that consolidation has been suggested for schools, superintendents, and counties, but if it will cost the County 180% more, then perhaps that is not the correct path to take.
Sullivan said that Rettig’s sentiment is good, but in defense of the budget, he said that the JECC was created to improve service. He said improving service is another reason to consolidate. Rettig said that they are currently talking about the operating budget and not the equipment or building funds, two totally different things. Sullivan said that the Board knew in advance that they were going to spend a lot of money on equipment, and he was and still is prepared to do that. Sullivan said that he is really upset about the new positions, and he does not think the taxpayers should be asked to fund them.
Rettig said that until she saw the January 27, 2010 budget worksheet report, she was under the impression that the equipment budget was not overspent. She said she was unaware that they had overspent it by $1.1 million, and she thinks this is irresponsible. Rettig stated that the Board is meeting to discuss the operating budget, but the JECC is robbing the operating budget to subsidize overspending on the equipment budget. Sullivan said the County pays consultants tens of thousands or even hundreds of thousands of dollars, and in this case their estimates are wrong by over $1 million; but then the Board justifies other expenses based on the consultant's recommendations. Sullivan said that the consultants have already proven that they cannot do this.
Harney said that what Rettig said is true on paper because it was lowered to 68% last year when it should not have been. Since that occurred, it puts a spike in the budget. Harney stated that the Board of Supervisors makes many amendments to its own budget over the course of a year, there are a lot more than what is in the JECC budget. He said the equipment budget increase was due to the unanticipated costs of the portable radios. He said the majority of that money was spent on providing those radios to out-of-county township fire departments that provide services in Johnson County such as Kalona, Riverside, and West Branch. Harney said that individuals in those fire departments needed the radios, so the Policy Board decided to furnish them at least on a one-time basis, but now it appears the County may continue to supply the radios.
Neuzil stated that when the Board of Supervisors has to make an adjustment to its budget, they know that means they have less money in the future, and therefore cut back on spending. He noted in this instance, because the JECC did not change their budget, they did not cut back. Neuzil reasoned that because this additional cost is present, something else may have to be put on hold for a while. He asked if one of the recommended new positions could be held back for a while to help pay for the overspending in the equipment budget. Neuzil said this would show responsible taxation and responsible budgeting; the County cannot realistically just keep taxing. He said that is the frustration, while he appreciates the effort to lessen the burden on taxpayers, this is still a significant amount of money to be asking for when the Board has been trying to hold the line on spending.
Stutsman said that when the Supervisors realize they do not have enough money, they quit spending. She noted that it doesn't sound like this is an alternative for the Policy Board because they think they can keep taxing for whatever they want. Rettig said the JECC spending this extra money is not reducing the burden on the taxpayers because the County overtaxed the taxpayers in previous years. She noted that the JECC now has a higher reserve than the entire County itself. Rettig said although they are not raising more taxes this year, they are just spending last year's tax revenues. Rettig stated that the taxpayers still paid the bill. She said she understands the Board cannot do anything in the current 28E Agreement, but she finds it unacceptable. Rettig expressed that if the Board of Supervisors is not able to exercise better oversight of the JECC budget, then it needs to discuss the future of this joint project.
Sullivan said he is a resident of Johnson County and of Iowa City, and he would like to think that Iowa City thinks this is unacceptable, as well as North Liberty and Coralville. He said North Liberty spoke about not hiring for certain positions this year because of budgetary reasons, but that did not happen with the JECC. Stutsman said good points have been made, but the bottom line is that the Board will go with the $.70 levy and put it into the budget.
Sullivan said that if the Board feels strongly enough about this, they should send their representatives a message as to how they want them to vote. He said if the Board has strong feelings about what should or should not be in the budget, then they need to vote to send a resolution so that the Board's representatives vote accordingly. Stutsman said that can be discussed, but she also thinks she wants to hear from Policy Board members about their rationale for these positions and for managing things the way they are. She said she would like to have a joint meeting with the Policy Board at some time to discuss why they came up with this budget and why it was so important to overspend the equipment budget by so much. Stutsman said the other entities involved in the project could be included in this joint meeting. Neuzil said a classroom at the JECC would be a good setting for the meeting. Neuzil asked if the $.70 levy is in the current budget document. Claiborne confirmed this.
Claiborne said he received a late MH/DS update and reminded the press this is a draft copy; the levies are there, but the document still needs a lot of editing. Claiborne said he put the new MH/DS numbers in the budget, and the purpose today is to reflect on the tax and levy sheets. He said the detail will be filled in during the next few days.
Rettig asked what the deadlines are for submitting the budget. Claiborne said the State form must be ready for publication on either February 9 or 10, 2010. He said he needs to confirm the exact date. Rettig asked if the budget can still be revised after the Budget Hearing. Claiborne said the budget can only be reduced after the hearing. Stutsman said it cannot be increased.
Neuzil asked when the Board has to publish the proposed budget and the public hearing notice. Claiborne said at the February 11, 2010 Formal Board Meeting, the Board approves the proposed budget, sets the public hearing date for March 3, 2010, and gives the Auditor's Office the authority to publish. Claiborne said for a few weeks after the public hearing, the Board may reduce the budget. The final budget is due at the State on March 15, 2010.
Rettig asked what the deadline is for submitting the form to the State. Claiborne said the form has to be done February 9 or 10, 2010 in order to meet public notice deadlines. Harney said that it has to be done on February 11, 2010, and the public hearing is on March 3, 2010. Claiborne said that completing the State form is an intense two-week process. He said it requires filling in numbers and tying them back to GEMS, balancing with the State, and getting the taxes right. He said it cannot just be completed in a day or two. He said that if the Board is not completely happy with the numbers today, he still has time to adjust the State form. However, he said that this flexibility will end late on February 8 or 9, 2010, as he has to begin the process of completing the State form. He also noted that once the budget is published, the Board can still reduce anything; they just cannot increase the budget.
Stutsman asked if everything the Board talked about and gave approval for is included in this budget. Claiborne said yes. Neuzil noted that they are not quite done with the budget discussion because they still need to talk about salaries. Stutsman asked if he meant salaries for non-bargaining individuals. Neuzil said for every employee who is not union. Harney noted that another position they didn't talk about was Johnson County Soil & Water Conservationist Kate Giannini. Harney said they usually have a percentage in the budget for her in comparison with County employees. Sullivan asked if Claiborne penciled in anything for either of those. Claiborne responded that he did include an estimate that is above 2%, which will cover FICA and IPERS.
Stutsman asked if Claiborne has a personnel number in the budget for the non-bargaining employees. Claiborne responded that the number includes all personnel. Stutsman asked what he put in the budget for non-bargaining employees. Claiborne said he would have to look. Sullivan said that non-bargaining employees are getting the same as the Administrative Unit employees and the only ones in question are the ten elected officials. Neuzil said the Board does not have to complete it that way. Neuzil said his decision on that is based in part on what the Board wants to do with the Compensation Board recommendations.
Neuzil said that if the Board’s philosophy is to try to lower the amount they have given in the past, he is concerned about how the level of management compared to the level of the administrative deputies continues to widen. Neuzil stated that if the Board chooses to accept the 2% recommendation from the Compensation Board, or whatever number the Board settles on, then it should be across the board for every non-union salary. Claiborne said all the elected positions appear on the State form, so once he hears from the Board, he must include those salaries also. Neuzil said that they need to decide on salaries for the ten elected officials, the ten administrative deputies, and the 200 or so non-union employees.
Rettig asked if there are ten administrative deputies that are tied to their elected officials’ salaries. Sullivan said it might be slightly higher than that. Neuzil said there are five deputies in the Auditor’s Office and one in the Sheriff’s Office. Sullivan said there are three in the Treasurer’s Office and two in the Recorder’s Office. Sullivan said he thought other management employees were tied to the Sheriff’s salary. Neuzil said no. Stutsman said that is 11 total administrative deputies. Neuzil said he thought Kriz was using only two deputies, but maybe he is back to three again. Stutsman said there are three, and Sullivan named the three as Deputy Treasurers Betty Sass, Koleen Hoffman, and Jim Pregon. Rettig asked if the Board is sure that there is only one administrative deputy in the Sheriff’s Office. Neuzil said there is only one.
Stutsman said that the proposal by Neuzil is for a 2% raise for all non-union employees. Neuzil said not necessarily; he thinks that whatever the Board decides for themselves and the administrative deputies should be the same for all non-bargaining employees. Neuzil said he wants to get away from the idea that whatever the Board negotiates with the union is what gets negotiated for everyone else other than elected officials and administrative deputies.
Sullivan said that the Board’s tradition has been that other than the ten elected officials and 11 administrative deputies, everyone else who is non-bargaining receives the same as whatever is negotiated for the Administration Bargaining Unit. Other Board members agreed. Sullivan said he would like to stay with this tradition. Neuzil said that basically every other employee is getting a larger increase than the elected officials and administrative deputies. He said his biggest concern is that if the Board chooses to go with no increase, then that discrepancy is even greater. Neuzil said if the Board chooses to lower the asking of the Compensation Board, then that would be in part because of a philosophy that the Board should not accept as much as others are getting. He said in order to make it fair, the change should impact more than 21 people.
Harney said that one argument the Board has always heard, for example from the Sheriff’s Office, is the concern that deputies' salaries are closing in on the other supervisory staff. He said that pretty soon the deputies are making as much or more with overtime than what the supervisory staff is earning, and the deputies are putting in the hours. Stutsman said that her argument is that the County does not need to have deputies; they could have administrative assistants. Harney said he was talking about the Deputy Sheriffs. Stutsman asked if the other elected officials, not the Sheriff's Office, could change the position title from deputy to administrative assistant so they would be on the County’s pay-scale like everybody else.
Sullivan said that Pulkrabek said only one person is tied to his salary. Pulkrabek said that he is not positive, and that Sheriff's Captain-Chief Deputy Joe Lalla might also be tied to his salary at 80%. Pulkrabek said that Harney is talking about salary compaction. Pulkrabek said that there is not much incentive for people to take a promotion to sergeant because there is a minimal pay increase, a lot more responsibility, and a lot less opportunity to make any overtime pay. Pulkrabek said that the reason the administrative deputy title cannot be changed in the Sheriff’s Office is that it would completely change their retirement plan. As a sheriff’s deputy, there is a retirement plan that is part of IPERS, and if the deputy title changed to an administrative position title, the retirement would fall under the Rule of 88 which is different than what they have for law enforcement for deputies.
Pulkrabek stated that it is difficult when the union members get a raise and the sergeants and lieutenants get a smaller raise or no raise at all. Sullivan said that they will get what was negotiated by the Administrative Unit. Stutsman said that is only if the Board chooses to go with that. Sullivan said that is what has traditionally been done. Pulkrabek said that there still is salary compaction. Sullivan said that the only compaction would be between them, Sheriff's Major Steve Dolezal, and Pulkrabek. Pulkrabek said Lalla would also be included. Rettig asked if Pulkrabek thinks he has two people tied to his salary. Pulkrabek replied yes, he thinks so.
Rettig stated that there are 22 people who are outside of non-bargaining status. Sullivan said these 22 are affected by the elected officials' pay. Neuzil asked if the Board is comfortable with the recommendation from the Compensation Board. If not, Neuzil said he wants to know why, and why they wouldn’t apply that to all the employees within the Board's authority. Rettig asked Neuzil what he thinks the Board should do. Neuzil explained that if the Board is going to keep the 2% raise, then it should be 2% for everybody. Rettig asked if he wants to keep the 2%. Neuzil said he is okay with that if it is what everyone else wants. He said if someone else wants 0%, then he is fine with that as well. Neuzil said that whatever the Board decides, he thinks it should be the same for all 200 plus employees.
Sullivan said he wishes the Board could just make the decision that would only impact the ten elected officials and not the other employees. He said it bothers him more that this decision affects the administrative deputies. Sullivan said that rather than increase the number of people for whom the Compensation Board’s recommendation impacts from 22 to 200, he would prefer to reduce the number of people for whom it impacts to the ten elected positions. Sullivan would like to tell the elected officials to find a different job classification for the administrative deputies because then the deputies can receive the 2.75% raise. Neuzil said that for now, that is not an option. Stutsman said that the Board needs to have that discussion down the road.
Neuzil said he understands what the Compensation Board did, and he thinks they made a reasonable decision to cut back in light of the current economy. He said even though the Board negotiated a 2.75% for the union employees, cutting back a little for non-union employees sends a message and Neuzil thinks that is perfectly fine. Neuzil said he thinks it would be fair for all involved, that if the Board philosophically believes that they should cut back, perhaps even more than 2%, then that cut back should apply to everybody.
Sullivan reasoned that elected officials ran for the job knowing the salary, and without a guarantee of higher pay. Sullivan said he thinks the ten elected officials have to take leadership roles in this situation; however he feels sorry for the deputies, particularly long term deputies. He said he wishes there was a way to separate deputies from the elected officials' salary. Stutsman replied that except for the Sheriff's deputies, there is a way if there is willingness to do that.
Rettig asked how many employees are in the non-bargaining group and Board members concluded there are around 200. Rettig said her opinion is that they should follow the Administration Union's raise. Stutsman said she is uncomfortable with a 2% raise, because it is way too high, and she would be happy to freeze it. Neuzil asked Rettig to explain her reasoning. He asked Rettig, if she thinks the amount for elected officials and administrative deputies should be lowered, then why doesn't she think the Board should apply the same philosophy to all the employees within the Board's authority. Rettig replied because of salary compression. She said she doesn't think that administrators need to earn more than their subordinates, but she thinks if that happens, it could create conflicts. Neuzil said this situation has occurred in the Auditor's, Recorder's, Treasurer's, and Sheriff's Offices. Rettig said she thinks these are two different decisions. Neuzil replied that he thinks the Board has an opportunity here, and if the Supervisors truly believe they ought to cut back during these economic times, then the Board should show leadership and do so across the board. Stutsman asked if Neuzil is suggesting a 0% raise to elected officials. Neuzil replied that whatever the Board decides on should be applied to everyone, other than union people.
Sullivan said leadership in this situation calls for accepting less pay than his subordinates. He said he is willing to take less than people who work under him. He said the contract which has been negotiated will allow the Board to do this and he feels there is no reason to drag down 150 employees and their families. Neuzil said just drag down 22 employees. Sullivan answered, yes, and he would prefer it to be only ten employees. Pulkrabek asked if the Board decides to freeze elected officials' salaries, would they do the same for department heads but give raises to the non-union employees working with department heads. Stutsman replied that is another alternative. Neuzil said that is splitting it up even more. Harney suggested another issue is present. The Board negotiated a 2.75% raise this year, plus for some 3% the following year. Harney reminded Board members that the results of the Compensation Study show that some employees will be getting more money and some will be getting less if the Board follows through with that; but with COLA, plus merit, plus the pay raise, some employees could receive a pay raise of 5% or greater.
Pulkrabek said that no one in the Sheriff's Office has the opportunity for merit raises. He said that as an elected official, he, or anyone else in the Sheriff's Office, is not eligible for merit. This is why they were a little uptight about having longevity pay removed. Pulkrabek said if the Board decides department heads receive the same raise as the Administration Unit, then they are also eligible for merit. He said he thinks that in the current fiscal year, some department heads received a 4.5% to 5.5% raise. Pulkrabek said this is hard for some of his staff to accept because they are the ones dispatched during a snow storm in the middle of the night when most others are tucked away at home. He said it makes sense to treat everyone equally or fairly. Stutsman asked why the Sheriff's deputies do not receive merit increases. Pulkrabek said his office has never had that. Rettig replied that at a previous meeting, a reading of the Iowa Code governing these compensation issues suggested to Board members that a grey area might exist. Pulkrabek agreed. Rettig asked if that was ever settled with County Attorney Janet Lyness and Pulkrabek replied he hasn't heard anything since the last meeting.
Rettig said that if it is true the Iowa Code stipulates Sheriff's Office employees will never be allowed to receive merit raises, perhaps the Board should consider retaining longevity pay for Sheriff's employees. Neuzil said that right now, longevity for Sheriff's Office employees is still in place. Rettig said nobody's longevity is gone yet. Stutsman said the Board has budgeted to remove longevity. Rettig repeated that if longevity is removed, and Sheriff's Office employees are not eligible for merit raises, then the Board should revisit whether longevity is removed from Sheriff's Office employees.
Neuzil reiterated he is comfortable reducing the 2% request, but he thinks it ought to be applied to everyone. He does not feel comfortable with freezing salaries either, so perhaps the amount should be set at half of what was negotiated with the units. Neuzil said this sends the message that the economy is tight but the County still appreciates its employees. Rettig asked how many people are included in the group of elected officials' deputies who are tied to their elected officials, and department heads. Sullivan said that the department head's salary for Public Health, Conservation, Veteran's Affairs, and Emergency Management are set by that department's commission, and the Board can only provide a salary recommendation. If the commissions assigned a larger increase than the Board budgeted for, then they would have to come up with the extra money. Rettig asked if there would then be 11 people the Board has control over. Stutsman said she thinks that is correct.
Neuzil recommended a 1.4% raise based on half of what was negotiated. He said he would like to see the same for every non-union employee. Sullivan said he is not interested in making a change to a long standing policy. He said he would like to see employees get the Administration Unit raise, with the exception of the 22 people, either elected officials or those tied to elected officials. Stutsman asked if Sullivan is accepting the 2% recommendation from the Compensation Board. Sullivan said no, 2% is too high. Rettig asked Sullivan if he is opposed to pulling out the 11 department heads. Sullivan replied he is opposed for this year, but would think about it for future years.
Rettig clarified that one salary decision the Board will make will apply to the 22 people. Stutsman noted that Sullivan recommended 2.75%. Rettig asked for clarification if those people would also have an increase in their health insurance contribution. Stutsman said yes, and added that parking charges would also be assessed and longevity removed. Rettig said she is alright with that. Harney said that is a fine recommendation and he does not want to see those employees pay cut below the others.
Stutsman summarized the Board's agreement to go with a 2.75% merit increase for all non-bargaining employees. Neuzil recommended a 1.4% raise for elected officials and deputies, which is half of what the Board negotiated with the unions. Stutsman said she is okay with that. Sullivan said he would like to take a minute or two to make a few calculations. He said he wants to figure out what the total will be on the County budget. Neuzil reminded Sullivan that minutes ago they had an opportunity to cut hundreds of thousands of dollars. Sullivan said he is interested in clarifying these decisions for the reporters in the audience.
Rettig said she thinks that 1.4% is too high. She asked if the 22 people follow the same insurance as the Administration Unit. Sullivan said yes. Rettig said they will then be paying more for insurance. If those 22 salaries are frozen, the end result on their paycheck would be a pay cut, and parking will also be deducted from the paycheck. Rettig said she is interested in a number that doesn’t really increase salaries but yet compensates for the additional charges. She thinks that might be close to half a percent.
Sullivan said if it were 1.4% and it were applied to at least the 10 elected officials, the cost to the County would be about $9,600. Neuzil said in the $80,000,000 budget. Claiborne said that all but MH/DS, Elections, and Secondary Roads, are paid from the General Basic Fund and with General Basic being capped, the money will be detoured. Neuzil said the tax effect will be the same. Sullivan said he is interested in explaining to the public that there is no trade off between the Board's salary and other County projects.
Stutsman asked if she is correct that the increase for parking charges and family insurance would total approximately $390 per employee. Sullivan said he would say about $400 annually. Neuzil said that everyone is now talking like gigantic fiscal agents when Board members just had an opportunity to cut hundreds of thousands of dollars and now all of a sudden, no one wants to cut. Stutsman replied that at the same time, the Board took the opportunity to be fair to a number of employees. Sullivan calculated that the increase should be close to eight tenths of one percent. Rettig said she meant the increase in health insurance and parking. Sullivan and Rettig concluded it would be right around $400 per person. Sullivan stated that instead of giving a percentage increase, the Board could give a hard dollar, for example a $500 increase, to each elected official and deputy. Stutsman acknowledged that the Board could do that. Rettig said that would change the percentage of what they make compared to their boss.
Harney said he is not in this for the money but he is considering the other elected officials and deputies, a majority of whom are behind what their comparables earn. He said he could agree with the 1.4% recommendation. Stutsman polled the Board members. Rettig said no to the 1.4%, she would prefer something lower. Sullivan said he too would prefer a lower percent, but would not put up much resistance. Claiborne summarized that the Board decided on 2.75% for the non-bargaining employees and 1.4% for elected officials and deputies.
Board members referred to the FY11 Budget worksheet tax calculation page of their handout. Rettig said these salary decisions are made in a vacuum and when looking at the final proposed budget, she is uncomfortable with the tax increases. She said the effect of the decrease in the County-wide tax levy was an increase in taxes due to the rollbacks and assessed valuation. Rettig was hoping that number would be close to stable. The JECC is coming in $283,000 higher than what had been allocated in the budget. Sullivan said he thinks Rettig might have misspoken. He said taxes did not go up because of the cuts, which he thinks is what Rettig said. Rettig said no, she did not mean to say that. She said taxes are going up because of the rollback; in spite of the fact that the County cut the levy. Sullivan said they are actually going up in spite of the fact that the County cut the levy. Sullivan said he is explaining for the purposes of anybody who might be writing a newspaper article.
Sullivan said it is beyond the Board's control if taxes go up even though the levy rate is cut; that is the rollback. He said they could try to cut even more to make up for the impact of the rollback. Stutsman and Sullivan agreed and said the next step is to determine what to cut. Stutsman said she thinks the budget is pretty lean already. Sullivan asked Rettig if what he says makes sense. Rettig said yes. Sullivan said he does not want to put words into her mouth; he wanted to make sure that is what Rettig was saying. Rettig said the budget is $2.3 million more than the 2009 tax askings. Even though the levy decreased, the actual tax askings have increased. Stutsman and Sullivan agreed. Rettig said she was hoping that they would find that that didn't impact taxes as high as 3.8%. She said that in this tax asking, the Board is actually taxing 3.8% higher if they go through with this budget.
Claiborne said $900,000 of that is due to valuation that is beyond the Board's control. He said that is not increased spending from a department, it is an increase in valuation. Rettig said she understood. Sullivan said a homeowner with a $100,000 valuation will pay slightly more because of the rollback. Stutsman said it would be interesting to plug in what the Board would have to cut from the budget in order to maintain a status quo tax asking for 2010. Sullivan said it appears to be $2.3 million. Claiborne said the Board can't cut the General Basic Fund or MH/DS. He said they would have to cut the General Supplemental Fund. Claiborne said they are obligated to the Debt Services Levy. Sullivan said it would almost have to come out of the General Supplemental Fund. Rettig asked, if she found $283,000 to cut, how much that would change the taxes. Claiborne asked Rettig to repeat her question. Rettig asked if she only found enough to offset the additional that the JECC was putting in, would that change the taxes. Neuzil replied that that would change the overall tax budget. Stutsman said she is always in favor of a lower tax budget, but she doesn’t think that at this point they can cut enough out of this budget to make a difference. She said they are pretty committed to everything to this point. Stutsman said that if the Board really wants to make budget cuts, it must prioritize this in the year ahead and focus strategic planning on making a difference in taxes. Sullivan said he is not embarrassed about the current budget. Stutsman said the taxpayers always ask why taxes are so high and how they can be lowered. Sullivan said he is not proud of the JECC budget but he is proud of the individual departmental budgets and invited the public to analyze the budget line by line.
Neuzil said a large expense in this budget is the transfer of money from the General Fund to Secondary Roads. He said he thinks a lot of people are asking for more road maintenance and the Board is putting a significant amount of money towards that.
Rettig said the budget includes the negotiated salary increase of 2.8% as well as 7% or 8% insurance costs. Therefore, other than the limited number of items the Board approved, and employment costs, departments were held to holding their budgets steady. She said overall there is a 3.8% increase to the countywide tax asking and 27.4% to the Rural Basic tax asking, and the total Rural tax increase would be 5.5%. Neuzil said that depends on which line Rettig is referring to, for example Ag dwellings versus Ag buildings. Rettig said she is referencing page ten of the January 27, 2010 draft budget worksheet and everything is averaged together.
Stutsman asked Board members if they are okay with this budget or if they want to make any cuts. Neuzil said he is okay with it in part because of where they started. He said the Board's established priorities before this budget was set have been addressed. They invested in increasing response times for Ambulance and for deputies; they have improved the maintenance of roads and prioritization of projects; and they have kept tax increases at a minimum, in part by keeping the levy lower than last year. Neuzil said the Board has also paid off the Health and Human Service Building debt. He said the County was successful in accomplishing these priorities.
Neuzil said the Board was also able to build up some reserve as recommended by the Finance Committee and Kriz. Sullivan said about 23 positions were requested and the Board only approved two in the Sheriff's Office and two part-time positions in Ambulance. Harney said he doesn't think there has been any expanded Tax Increment Financing (TIF) Districts in the past year but there will probably be some next year. He said there still should be an expanded valuation base because there should be added growth in the county that should be helping to build that.
Harney also said he thinks the County does not need to buy the houses near the Sheriff's Office. He said he thinks the new facility can be built within the footprint of the street south of the Courthouse and around the Courthouse. Harney added he thinks the Board can still work with the General Services Administration. Sullivan said he doesn’t think that will work but he would rather hear from Novak Design Group Architect Jim Novak first. Neuzil said they have put that in the budget under Capital Projects and he is comfortable keeping that in the budget. Sullivan agreed. Stutsman asked Rettig if she is comfortable leaving the houses in the budget. Rettig replied yes for now, until they see the Space Needs Study, but she doesn’t think they should buy them now either. Neuzil agreed and said this gives them the ability though. Sullivan said that gives the Board the ability to buy the houses 18 months from now. Neuzil said even if they choose not to buy the houses, the money could be invested towards the justice center infrastructure.
Stutsman said at one time, the Board discussed making some adjustments in the Emergency Management Association (EMA) budget and asked if anyone wants to talk about that now. Neuzil said he is not interested in penalizing any department. Harney said he isn't interested in budget adjustments. Rettig said she would be. Stutsman said Emergency Management Coordinator Dave Wilson asked for a fancy truck. Neuzil said the Board didn’t fund that entirely. Sullivan said he is extremely disappointed with Wilson's votes on the JECC but he is not going to punish the public for that, so he is not interested in cutting that budget. Claiborne informed the Board that Wilson asked for $95,000 for the truck and the Board gave $60,000.
Rettig said she doesn't see where the reserves were increased and it seems to her they are actually going down. She referenced page eight of the document. Neuzil said it comes from primarily the General Fund. Claiborne said right, they are adding about $1.8 million. Neuzil said to be eligible to go into General Supplemental Fund they had to max out on the $3.5 cap in the General Basic Fund, which is less than what the Finance Committee wants. The ultimate reason to build up the reserve is to get a better bond rating. Rettig asked which line went up $1.8 million. Sullivan asked which page Rettig is referencing in the budget worksheet. Stutsman asked if Claiborne is on page eight and Claiborne said yes. Claiborne said the County is starting FY10 with a huge General Basic Fund and a lot of that is the JECC bond money that expenses out during FY10. He said the FY10 ending balance/FY11 beginning balance is $2.1 million. Claiborne said that according to the Auditor's Office, the FY11 ending balance should be $2.69 million. That will actually be much higher because the Capital Projects/Reserve is $1.8 million from General Basic. Claiborne said the projected General Basic Fund balance is $2.6 million and will probably be well over $4 to 5 million.
Harney asked if the Conservation Bond to pay for the buildings is seven years. Claiborne said he thinks eight years. Rettig said this year, the General Basic/General Supplemental will start FY11 with a beginning balance of $2.6 million and an ending balance of $5.4 million, which accounts for the $1.8 million increase in reserves. Claiborne said right, these are minimal budget figures. The Auditor's Office wants the ending balances included, but in reality, they are always more because departments don’t spend beyond their expenses and usually bring in more revenue than they estimate. Claiborne said they do not show interest earned in either the beginning or ending balance. Rettig said that begs the question of whether they are putting too much money in reserves at once. She said reserves are increasing from $2.68 million to $5.4 million, which Claiborne believes is a low estimate. Claiborne said that depends on how the department budgets come in.
Harney asked if the HHS Building were paid off, would that cost $3 million. Claiborne said the County owes $1 million on the HHS. Rettig asked if that is in the budget. Claiborne said that is the Board's discretion. Rettig asked if that would then lower the cash balance. Claiborne said this is the total minimum. The $2.6 million will be much higher because they will not spend the entire amount they budget for and more revenue will come in than what is budgeted for. There already is $1.8 million budgeted as Reserve/Capital Expenditures, so between $1.8 million and the extra money from budgeting activity, there will be the $1 million to pay off the HHS and whatever else the Board decides to do.
Rettig asked again if the Board wants to tax that much this year to increase the reserves that quickly. She said she believes that reserves should go up, but this is a 641% increase in the General Supplemental in one year. Neuzil said right, but it comes out of the amount of money necessary from the General Basic Fund to be eligible for the General Supplemental Fund. He said cuts can't be made from the General Basic Fund. Rettig said but it is a 641% increase in the General Supplemental Fund and not the General Basic Fund.
Sullivan asked Rettig what page she is referring to and she answered page nine, the beginning and ending fund balances of FY11. Stutsman asked if that means the Board would cut the levy and asked if they can do that for General Basic. Neuzil asked why it shows that some of that comes out of General Supplemental rather than out of General Basic for reserve. Claiborne asked Neuzil what he is looking at and Neuzil replied the second line on page nine that shows balance expenses of 641%. Claiborne said this is a draft page, and today he came prepared to talk about the levies. He said he needs to review the worksheet further before it becomes a final draft. Neuzil said Claiborne needs direction from the Board in regards to how to set the levy for each of these to determine how much is taxed.
Stutsman asked, in conjunction with page 11, are Board members okay with what will be the final impact. Neuzil said it is absolutely flooring how much the Ag Building tax lowers. It shows that they just don’t know what the State of Iowa is going to determine for certain. Harney said it doesn't make sense that big commercial properties are dropping down to nothing. Neuzil said the tax drops $240, and that no tax has ever done that. He said that is an amazing drop. Neuzil said it's interesting how hog confinements could have a factor on someone's farm building. Claiborne said from the last discussions they had, most of the items on page 11 of the draft budget worksheet are single digits. Neuzil said the only one that is not in single digits is the Ag Land in Iowa City and he doesn't think there is a lot of that left. Claiborne said the rest of the items are single digit increases, for example Commercial/Other Cities is down. Sullivan said taxes are going up $6.67 for taxpayers living in a $100,000 house in Solon, Oxford, or Lone Tree, which isn’t too bad for all the County services they receive. Neuzil said taxes are going up $10.50 for an Iowa City resident.
Stutsman asked if this includes the JECC. Claiborne said this is the whole budget. Sullivan repeated that for someone living in one of the County's small cities, a tax increase of $6.67 isn't too bad. Neuzil added that the rural residents are going to expect the level of service to increase. Sullivan agreed saying rural residents are going to pay a little bit more but they are hopefully going to get some better roads. Stutsman said it sounds like there is consensus to move ahead.
Claiborne said over the next few days he will review the budget and prepare a final copy. Stutsman asked if any more budget meetings are scheduled. Claiborne said into, unless something comes up, in which case a meeting will be scheduled. He said he will send an official copy to Board members and when they give Claiborne informal approval, he will begin preparing the State form. Claiborne said there will still be a little time between when the Board receives the budget and before the final copy must be submitted to the State, so if Board members want something different, they can tell Claiborne. Sullivan said he would like the Board to write a press release explaining the budget. Stutsman asked if they can wait for a final copy. Sullivan said yes, and he imagines Johnson would write the press release but that Claiborne will plug in the numbers. Claiborne said Neuzil wrote it last year. Neuzil said all the Board members can review the press release.
Stutsman said the Board is giving Claiborne direction to plug in the final numbers and then send it to Board members for final approval. Claiborne said once he gets approval from three Supervisors, he will prepare the State forms. Stutsman said they will have to put an item on a Formal Meeting agenda to approve the publishing of the proposed budget. Claiborne said that is scheduled for February 11, 2010 at the Formal Meeting beginning at 6:30 p.m. Neuzil said if something comes up, they can address it at the Board's meeting on February 4, 2010.
Stutsman announced that Board members will be moving back into the Administration Building on February 3, 2010. Claiborne said if he is busy preparing the budget, he may move his office later.
Adjourned at 3:01 p.m.
By Nancy Tomkovicz, Recording Secretary