Stutsman: Moving down to Item 4, Business from the County Auditor. Discussion/Action Regarding December Revenue and Expense Reports. We have Dan Stolze from the Auditor’s Office and Deana Pillard from the Board of Supervisors’ Office, who are our budget gurus.

Deputy Auditor Dan Stolze: I can be called a guru.

Jordahl: Can you sit in a different posture, acting as a guru?

Stolze: No, no. I’ve been called worse.

Stutsman: This is something that we go through every month. Dan comes up from the Auditor’s Office and kind of gives the Board an overview of where we’re at as far as expenses and revenues for the County. With that, why don’t you walk us through.

Stolze: Thank you. I guess just a couple a thing to point out, on the expense budget report that you have, what we’ve done is we’ve highlighted 6 departments. They’re all in General Basic, that look like they might be a little bit over the budget at this point. This is kind of a tough month because while it’s 50% from the standpoint of the months, if you take into account the number of payrolls that we’ve processed and the number of weekly voucher runs that we’ve had, we’re actually a little bit more than 50%. We’ve processed 14 or our 27 payrolls, so that’s actually 52%. Since personnel is such a large part of each budget, you really can’t look at whether total department is over 50% or not. It could be at 51 or even 52% and still be within where they should be. We’ve also had processed 51% of our weekly voucher runs so far this year. I can’t just give you one specific number in terms of a percentage. What I did is I took all that into account to determine whether or not it looked like they might be a little bit over or within their budget. We highlighted the ones… It doesn’t look to me like there’s anything really significant. 3 departments that we had highlighted for you last month have dropped off. I think that’s what you are probably going to tend to see, is just monthly fluctuations that different departments have because a particular month they have higher expenses than what they do other months.

Jordahl: Dan, I don’t have an accountant’s mind. Can you help me with these parentheses?

Thompson: Deficit.

Jordahl: It’s like revenues. It’s a negative revenue, therefore it’s an expense, but it’s not an expense, because it’s what? I get lost in the double negatives.

Stolze: The revenue report, if you just kind block out those parentheses and just look at them as regular numbers and regular percentages. I don’t know really why it’s set up that way. But those are just to show that the revenues are different from the expenditures, but they’re just the same. It’s the same number and the same percentages. I don’t know why they’re in parentheses like that.

Jordahl: But if you look at page 3, and you have Joint Disaster Services highlighted and then City Assessor, Special Appraisals highlighted.

Stolze: OK.

Jordahl: You got, on the one hand, the first line is all parenthesized, but in the 2nd line, the same number as is under Actual, does not have parentheses around it. I need help with that.

Stolze: Well, the ones that you see highlighted down from Emergency Services on, those are agency funds, so there are not County funds involved, and we just highlight those because we don’t have the same authority over those as we do over all the other County funds. I just highlight those just so you know which ones they are.

Jordahl: OK, take Emergency Services as your example then, and back up above it, Special Resource Enhancement. You got the same situation, they’re all with parentheses under Special Resource Enhancement, but the first line under Emergency Services…

Stutsman: I think Jonathan is questioning the format with the parentheses, and I heard you say earlier, Dan, that the parentheses really don’t have any bearing as far as negatives or positives.

Stolze: On the revenue report, right. If everything has got parentheses around it…

Jordahl: But it doesn’t. Under Emergency Services, Unexpended Balance does not have parentheses around it. That’s why I’m confused.

Stolze: OK. I see what you’re saying. Well, it’s because, in this case, since all of the numbers that are shown, actual and budget, originally are in parentheses because this is the revenue report, in that case because they had only budgeted $7,000, but it shows 146 actual. Then the unexpended balance has to be a positive number without parentheses around it because it’s the difference between the 2, and because the original numbers are in parentheses, then the difference would not have parentheses on it. It’s just the way this format is set up. Just like over on the Expenditures side, you’d see the same thing. If you’ve got something… If you look under Employee Group Health Trust, which is right at the bottom of page 2 on the Expense Report, that’s not a fund that we budget anything for, because it’s actually budgeted in each department. But it’s got actual $1,082,000, so when you look at unexpended balance, it’s in parentheses, because it’s the difference between the 2 numbers, and since the beginning 2 numbers don’t have parentheses, then the difference would have to have… It’s just the way the report’s set up.

Jordahl: What I’m trying to just grasp here is does one mean that we do have money and one means we don’t have money? It’s that level of understanding I want to try and grasp.

Stolze: Well, if you’re looking on the Revenue Report, if you see anything in Unexpended Balance that does not have parentheses around it, that means you’re over budget. You’ve received more than what was budgeted. That’s all that would indicate.

Thompson: Do you have any reason why Emergency Services got $140,000 more than they expected?

Stolze: I couldn’t tell you that right off hand, because I wasn’t involved when the budget was submitted originally. I guess I don’t have a good answer for you on that one. That’s just an example of why the reports are set up the way they are. On the Expense Report, in the Unexpended Balance column, if you see anything in parentheses, that means that they’ve over-expended the budget, which of course we wouldn’t like to see happen. The only reason it happens in that one line item, again, because that’s kind of a different type of thing that we just show all the expenditures made out of that health trust. But they’re actually budgeted in each individual department, so that’s why there’s no budget figure for that.

Jordahl: But it says Unexpended Balance at the top of that column.

Stolze: Right. See, they’re all positive numbers on the Expense Report, because that indicates that that much of their budget still hasn’t been spent yet.

Thompson: In this case, unexpended balance means monies we have yet to receive.

Jordahl: You don’t see why I have difficulty grasping that?

Stolze: Yes, I agree with you. I can look and see if we can get that format changed.

Jordahl: I just want to understand it.

Stolze: I don’t know exactly why it’s set up that way.

Stutsman: Well, what I want this morning, I don’t want to spend any more time talking about format, and Dan, if you could do anything you could to clear that up or work with Jonathan…

Jordahl: I don’t care about the format. Leave the format the same. I just want to understand what it means.

Stutsman: Let’s let Dan proceed, and maybe he can…

Stolze: Well, I guess from your standpoint, the main thing, if you’re looking at the Expense Report, as long as you’ve got a positive balance in that Unexpended Balance column, that means that there still are budget funds that haven’t been spent. If you’re looking at the Revenue Report, as long as you see in that same Unexpended Balance column, if you see a balance with parentheses around it, that means that they have not received all of their budget yet. For the most part at this point, you would expect to see the Unexpended Balance column in the Revenue Report with parentheses around them, because they should not be up to the budget yet in terms of receipts. You would expect to see a positive number on the Expense side, because, of course, they should not have spent their budget yet.

Jordahl: OK, so you’ve highlighted under the Expense Report on page 2, Employee Group Health Trust.

Pillard: Those are only highlighted so that you know those are departments that the County does not control. Those are just for your reference so that you know that those are not under County control.

Stolze: Those are what we call Agency Funds.

Pillard: That’s why it’s not highlighted all the way across.

Stolze: Maybe we shouldn’t highlight those next month.

Stutsman: I think that is confusing.

Stolze: That was really just more for your benefit.

Stutsman: Quite frankly, I just don’t know if this is a good format to use, because it seems like we need to see more trends than monthly, because like you said, Dan, there’s so much that goes on within these departments from month to month. One month can look bad, and then in the next month they get their grant fund, or whatever. There’s so many variables that this sound byte or this snapshot picture doesn’t give a true indication. I almost think we might be better served to have a verbal report from you saying this is what’s happening. We’re concerned about this department, or you need to be aware of this, rather than… I think this does serve to confuse us, who don’t deal with this day to day. Now that’s my thoughts. I don’t know if the Board has any other thoughts on that.

Duffy: I don’t agree with that. I think this is great.

Thompson: I like getting a copy of it, too.

Jordahl: But what does it mean?

Thompson: But the verbal part would be…

Lehman: It’s a summary.

Duffy: I’d like to ask, on the Expense side, it should be 50% expended, because we’re halfway through the year. This is December. Some of these are 52%, over 53%, 55% is getting a little higher than what I thought, but the State has something to do with that. That (inaudible) 52%. Auditor and Elections, we knew that was going up.

Stolze: Right.

Duffy: That’s not one that really worries me, but these others are awfully close, it looks like.

Stolze: The only one that I’m aware of right now is the Election Department, because of an additional election in October that was not originally budgeted for, and they will probably have to get a budget amendment. Other than those, the other ones that we have highlighted could very well just be, you know, monthly fluctuations. Nobody is really substantially over where I would calculate that they should be at this point on the Expenditure side. In fact, we’re only about, total County wide budget, we’re only at 48% expended.

Duffy: We’re still at 2% on the total.

Stolze: The Expenditure side looks like it’s actually in pretty good shape.

Duffy: How about the Revenue side?

Stolze: The Revenue side… It’s basically at 50% overall, which is probably about what you’d expect at this point because it’s halfway through the year. We’ve basically collected half the tax receipts, which is so much of what our total revenue is. Did you highlight these over here on the Revenue side?

Pillard: (Inaudible) the Health Department?

Stolze: OK. It’s hard to tell on the Revenue side, because again, the timing of grants and things like that can have such a big impact of where they’re at this point, but overall County wide, we’re basically right at 50% of our revenues at this point.

Thompson: We’re at 48% of our expenditures. That’s not bad.

Duffy: It’s awful hard to project revenues. That’s a thing that really concerns me, then, more than the expenses really and they’re too far out of line.

Thompson: Talk a little bit about the MH/DD fund. Last month it was at about 1% over. They were concerned about that.

Stolze: They seem right in line, now.

Thompson: If it’s at 50% now, including the extra pay period, are you concluding that on a cash basis it’s OK?

Stolze: Well, it looks like they’re at 50% total, and actually, if they were even a little bit above that, they could still be right in line, because again, of the extra… We’re actually at about 52% of the payrolls and 51% of regular payments. Last month kind of brought them back in line a little bit. It looks OK at this point.

Jordahl: There was a discussion of that question, the MH/DD fund at the meeting of the Planning Council. There was this question of the discrepancies Carol mentioned between cash and accrual accounting. When I spoke with you downstairs, you and Chris, that was clarified to some extent. I’m not sure I could repeat it. Do you want to try?

Stolze: The reports that you see here are all done on a cash basis. This is strictly total receipts recorded during that 6 months period and total expenditures. What we have to do at the end of our fiscal year to do our financial reports that the Auditor’s come in and look at, we have to convert to what we call an accrual system, which is the way every entity has to report themselves, whether they’re profit, for profit, not for profit, government, whatever. But governments are unique because they typically work on a cash basis system all the time, primarily because of budgeting. It’s just a lot easier to do it that way. At the end of the year, the fund balance that was on that sheet that you were looking at in that meeting last Thursday, that was an accrual basis balance. What that did is it, in effect, took the checkbook balance as of the end of June and we took into account all payments that they were obligated to make as of that date, but they hadn’t been made yet. Items that were paid in July and August that reverted back to claims prior to June 30. We also accrue revenues the same way. Any revenues that they collected generally in July and August that again reverted back to anything prior to June 30, we also include those.

Thompson: Don’t you also take out the prior year expenses that accrued to the previous year?

Stolze: Yes, that’s all worked out. It’s through this process every year, we take the prior year accruals and we reverse those out so it’s a total wash in terms of how it affects next year’s financial report. What happened in this case, as of June 30, we accrued a substantial… I think it was like $800,000 in additional expenses to that fund that hadn’t been paid yet, but that they were going to owe, and we accrued about $60,000 in revenue. Because the expenditures that we added on were so much more than the revenues, it dropped their balance down substantially, but their checkbook balance as of June 30 is just simply what any checkbook balance would be. It’s what it was as of that date. If you just looked at the cash basis balance, it was like $1,550,000, something like that. Their fund balance was, I think, $740,000. There was a big difference, but it was related strictly to the fact that we had to convert that from a cash to an accrual basis to comply with the County standards. It would be kind of like, if you’re looking at your checkbook balance today and you see X amount of dollars in there, that’s what you really have. If you tried to figure out what I owe the rest of the month and you took all of that out before you’d actually written the checks, that kind of what an accrual, what we do an accrual basis.

Jordahl: The accrual question for that is maybe more detailed than we need to go into on MH/DD right now, as is the question of what carryover balance is necessary. That probably should be discussed at a time when we’re discussing the issue of carryover balances in that department.

Thompson: It appears that the State, in their accounting system, uses the accrual carryover balance, which is lower. But the 1.5 million would be what shows up in the County Carryover Fund.

Stolze: Right. That would have been the actual cash that they had at that time.

Thompson: It’s just an accounting difference.

Jordahl: Can you tell us in terms of the carryover, is there a need for that… I’m getting a sense this is off the agenda.

Stutsman: Yes, I think so. I think we want to stick to this Revenue and Expense report and just get an update on that.

Stolze: I think what we’ll do from this point on is, basically, not highlight those agency funds. We’ll just highlight the other ones that we think are over budget on the expense side.

Stutsman: Within this same format, and then with your oral report on where we’re at, and the basic overview. Is that OK?

Jordahl: Kind of like, what do we need to know.

Thompson: On the Revenues, was there some explanation for why the Board of Health is only at 43%?

Stolze: We haven’t been able to determine that yet. My guess is because so much of what they do is funded through grants, a lot of it could just be timing of collections. That’s what I would guess.

Stutsman: Does the Board want to direct Dan to find out?

Duffy: Good idea.

Stolze: Basically, the ones we highlight we tried to find out anyway. Then, if you ask them, we know we just… I didn’t get this done until late Friday, so we just haven’t had time to put (inaudible).

Lehman: I think that’s the summary we’d like to have, whether we ask for it, or if you critique it ahead of time it’ll save a lot of the questions. There may be really simple answers for a lot of these. You say grant has accounted for you.

Stutsman: Quite frankly, it sounds like you were under pressure to get this put together month. I certainly don’t have any problem if you wait until the following week to give you a little bit more time to…

Stolze: I was hoping, when I put on the agenda that we would have this, we kind of got thrown off because of the holiday yesterday.

Stutsman: You didn’t want to come in yesterday?

Stolze: No. I was willing, but nobody else was here.

Lehman: Doors locked.

Stolze: We can get that for you and make sure you know.

Stutsman: Good. Any other questions? OK, thank you very much.

Recessed at 10:05 a.m.; reconvened at 10:14 a.m.

Stutsman: Back in session for the informal meeting for the Johnson County Board of Supervisors. Sorry for the slight delay. We had some copies that we needed to have made. We have with us Scott Klugland from the City of Iowa City, and he is here instead of Karin Franklin. Scott will talk to us about the Scott Boulevard and Rochester Avenue annexation on the southeast corner of Scott Boulevard and Rochester Avenue. Scott, I know Carol probably told you. This came before the Board. We’re making it a policy to review these annexations. We had a number of questions, so we thought the best thing to do is just have you or Karen come in and explain what the plans are for the City with this particular annexation and kind of bring us up to date about what’s going on.

Iowa City Planner Scott Klugland: I’ll just give you a brief run through of what the proposal is and I’ll answer any questions that you have specifically. As your agenda indicates, this is a request for a voluntary annexation of about 27 acres. It’s part of a larger parcel that includes about 5 acres that’s already in the city limits, and that’s property to a depth of about 250 feet along Scott Boulevard that has already been annexed. Property is vacant and I believe currently in the County that property along Herbert Hoover Highway is owned commercially. The balances owned are (inaudible) for multi-family residential. The proposal is to annex this property and zone the northern 12.5 acres community commercial, and the southern half residential at about 8 units per acre. We do have 2 sanitary sewer projects that are programmed in our Capital Improvements Plan, which, when completed, will serve this area. They’re both programmed for the Fiscal Year 2001. It will be some time, although not a long time, before we’ll be able to provide services for this property, for it to be developed. One additional benefit that would result if the annexation is approved is that the Iowa City Care Center would then be contiguous to the city limits and could apply for annexation. They have some problems with their lagoons right now, as I understand it. They’re failing. They really need to have City services available. Upon approval of this annexation, that property would be contiguous and could then apply for annexation as well and take advantage of the City services when the improvements are made in 2001. Staff is recommending approval of the annexation. We feel it meets our annexations policy and it’s in the best interest of the City and the development of that property to have City services available when it is developed. The Planning and Zoning Commission will be considering this at their meeting later this week on the 20th, and then it will move on to City Council. At this point, we just have the staff recommendation available. That’s what’s being proposed in a nutshell. I don’t know if that answers any specific questions that you may have.

Jordahl: It kind of looks like you’re creating an island there with…what’s his name again?

Lehman: Zychek Department.

Klugland: Zychek Property’s actually in the City already. It’s in the City zoned residential. It’s not in that use right now, and it would not be part of this rezoning application, if the property is annexed. It would remain a separate parcel, would continue to be zoned RS 5, but we expect that, at some point, that property would redevelop. We’re hoping to work with the owner of this property to design their commercial development to allow that to be integrated in at some point in the future.

Jordahl: Thank you.

Stutsman: The road, lower West Branch. We always get into discussion about who’s going to take over the maintenance of the road. How does it work in this proposed annexation?

Klugland: We haven’t really talked about that in detail at this point. We do have the Sterling House property on the corner, which is already in the City, has already been developed.

Stutsman: Is that where that RS 8? Where’s Sterling House?

Klugland: Sterling House would be in the northeast corner of Scott Boulevard or West Branch Road.

Stutsman: OK.

Klugland: We really haven’t been dealing with the applicant as far as a development plan at all. They haven’t been ready to submit that yet, and to be perfectly honest with you, we haven’t talked much about lower West Branch Road. I guess that’s something that we should be doing here. We’ll get that process started, I guess. That was an oversight on my part in not addressing the maintenance of that roadway in the staff report.

Thompson: Do we maintain it from Scott Boulevard all the way west?

Klugland: There’s a small stretch in there that’s in the City right now, and I’m not sure how that’s handled. I would expect that everywhere from there to the east would be under County maintenance at this point.

Lehman: Going to probably rent it as a turn around point for snowplow, it’s not going turn around in the middle of a…If you annexed out, say, a quarter of a mile if you’re in the middle of an open stretch, they usually do a share or will trade for a different area.

Klugland: When the RSA Properties developed, I would expect there would be at least one roadway cutting north from lower West Branch Road. Maintenance issues would have to be worked out, and that would be a potential turnaround point.

Stutsman: I’m trying to get a sense of the timing of this. When do we work out that maintenance agreement?

Klugland: We should probably talk about it now.

Stutsman: Yes. I’m almost sorry that Mike Garner isn’t here.

Jordahl: Did you say the west side or the east side of the road would be…

Klugland: I would imagine from Scott Boulevard east, right now, is under County maintenance.

Jordahl: You’re saying that there would be a subdivision road on the east side of the rezoning, or the annexation?

Klugland: We really haven’t seen the development plan, but I would expect that from lower West Branch Road, heading north, there would be at least one, if not 2, roadways, when this subject property is developed, is what I was saying.

Thompson: Would you take the whole road from Scott Boulevard to here, and then half of it to there? Is that what…

Klugland: I’m not sure of the specifics. That’s something that we’d have to work out.

Stutsman: Well, I don’t know if it would be best to take half. I think it would be better to take the City just to maintain it.

Thompson: Since you’re obviously going to annex this part too, eventually.

Stutsman: How do you do half a road?

Klugland: We’ve annexed up to the center line before and then had agreements as to who was going to maintain it. In some situations, I can recall one in particular, the County agreed to maintain the roadway even though half of it was in the City limits in exchange for the City maintaining in another area. Generally, it’s getting the County Engineer and the City Engineer together to discuss (inaudible).

Lehman: The arrangement they have now, the County takes care of Sycamore, although about halfway down it turns to the County and we take care of Deer Creek and (inaudible) Quarry.

Duffy: What do we do with Tiffin?

Jordahl: Well, Tiffin annexed both sides of the road there.

Duffy: They said take the whole road.

Thompson: They maintain it, too.

Duffy: Really, what people don’t quite understand, across from Joe Zychek's, you’ll see a sign, Seven Sisters Road, in with a hilly road. That gravel road is the City.

Thompson: It’s this road here, right?

Duffy: Yes. To the left there, that would have to be in the City, too, that farm land.

Klugland: Right.

Duffy: This is really City anyway, it’s City-owned.

Klugland: If you look at the location map, the dashed line is the current corporate limits line, and that extends directly north up to the Interstate.

Stutsman: All the way to the Interstate?

Klugland: I believe so.

Stutsman: Oh. Well, getting back to the issue about maintenance of the road, will you be in touch, then, with Mike Gardner?

Klugland: Definitely, yes, we’ll have to work that out, and we’ll report back to you before the annexation is approved as to what the discussions are and the solutions.

Jordahl: An interesting point for that discussion seems to be, I haven’t been out there to check this, but it looks like lower West Branch road turns to gravel halfway through that section without any intervening roads?

Duffy: It’s calcium chloride.

Stutsman: Oh, I was wondering what map you were looking at. How do you tell that? But you’re looking at (inaudible).

Jordahl: It’s what? Seal coat then, out to halfway through this section and then turns to gravel?

Duffy: It used to be seal coat all the way over as it swings north, by Interstate 80, but most of it is heavy application.

Lehman: I think it’s seal coat clear out to Wapsi, and the City has done Wapsi south as it comes along Windsor Ridge.

Jordahl: This is not what our most recent County map shows.

Klugland: That would be Taft. That comes along Windsor Ridge.

Jordahl: It shows that it turns into gravel before Taft.

Klugland: It may, I can’t recall. I was out there recently when we were working on the Northeast District Plan. I can’t recall exactly where that transition occurs.

Jordahl: But that might inform the maintenance discussion. We do one type of maintenance and you the other.

Stutsman: This was how many acres, Scott?

Klugland: The annexation is about 26.5. The total rezoning area is about 31.2 acres.

Duffy: Scott, even if Mike isn’t here, getting back to the road. You annex half the road. That will be pavement. It looks to me like this half and half on the road. I don’t feel the County should pave half a road if it’s going to be annexed into the City. That’s about what it looks like to me.

Klugland: I would expect that as the development for the RSA parcel comes in, we would probably expect the developer to extend the road out there if road improvements are going to occur at this time. We would work that out over a certain period of time, that roadway would be improved.

Stutsman: Are there any other questions for Scott from Board members? You’ll get together with Mike and then we’ll get back together to talk about that road agreement.

Klugland: I’m sorry we didn’t have that resolved. That’s an oversight on my part, I think.

Thompson: You’ll get that in there by the time we here about it from the City Development Board?

Klugland: Yes. We’ll let you know as soon as we get that issue worked out.

Stutsman: All right.

Duffy: Good report.

Jordahl: I guess I’m wondering if that’s a question for Rochester as well, or is that Iowa City all the way on the north side, you say?

Klugland: As far as the maintenance of that roadway from Scott Boulevard to the east? I’m not sure who maintains that at this point.

Jordahl: I guess those are both questions, both north and south.

Stutsman: Yes. All right.

Thompson: Thank you.

Stutsman: Does the Board want to address a letter to the City Development Board about this annexation?

Jordahl: Why don’t we wait until the road questions are resolved.

Thompson: We’re not at that point right now. This is just a courtesy notice for the County, and then it will go before the City Council, and from there it will go to the City Development Board.

Stutsman: OK. There’s plenty of time to work out the maintenance on that road. OK. Thank you very much, Dan.

(Continued in Part 3)