Chairperson Thompson called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 1:35 p.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

Thompson said County Auditor Tom Slockett presented her with a list of expenditures that the County has made in the last 60 days, for which they could have bonded, under Iowa regulations. She said to do that, the public has to be notified within 60 days that the government entity intends to bond for the bill in question. She said this notice has to be given whether or not the entity goes ahead and bonds. Thompson reported that Slockett was wondering if the Board would like to discuss this at the current meeting, in case the Board would want to bond. She asked what the other Supervisors thought of this? Stutsman said she is interested in Slockett’s information, but didn’t know if she was willing to make a decision today. Stutsman said she has hesitation because the County has a long policy of not having debt, and said considering this would represent a big policy change. Lehman thought they should hear about it, first; Slockett isn’t saying to do it, but just presenting information.

Slockett said what they need to talk about right away is passing a Resolution, because every week they wait will result in reduced options for bonding, should they decide to do it later. Stutsman asked for clarification on this. Slockett showed the Supervisors a list of $478,000 of bills recently paid, on such items as remodeling the Administration Building, the Courthouse, and the Fisher Building. He said these qualify as essential County purposes under the Iowa Code, and as long as the Board identifies these expenditures within 60 days, and pass a Resolution of Intent to Bond, the Board can decide at any time during the fiscal year to bond. Slockett presented a copy of a Resolution from Bonding Attorney Bob Josten. Slockett said the Board can pass the resolution and then decide not to bond, without commitment.

Slockett said that County Financial Advisor Tony Roetlin would be comfortable visiting with the Board about this issue. Roetlin was willing to come to the meeting this afternoon, but White was uncomfortable with this, because Roetlin was not listed on the agenda. Slockett said Roetlin could attend the Board meeting next Thursday, if the Board wishes, for both the formal and informal meetings. Slockett said it would take a long time for him to discuss this in detail, but wondered if it could be placed on the agenda for Thursday’s meeting for Discussion/Action? He said he would work with Budget Coordinator Jeff Horne to also add upcoming expenses for essential purpose. Stutsman asked if they could still do this, even if the items have already been paid for? Slockett said yes, for 60 days. He said this is a federal regulation; they could go back beyond 60 days, but it costs 2% on the interest rate of the bond, and the bond would have to be a taxable bond. Stutsman asked why the County would want to bond for expenses already paid? Slockett replied that because of the TIF situation, a bond can be placed in the County’s debt service levy, which is taxed against all the TIF valuation, which means for the same levy amount, you get 9% more money. He said that for all taxpayers outside of the TIF areas, it’s cheaper for them to purchase through bonds than cash. Slockett acknowledged the accuracy of Stutsman’s earlier point that this is a dramatic change from the way the County has looked at things in the past. Slockett said this has to do with the large number of TIFs in the County; now, it is to the taxpayer’s advantage to bond, rather than to save up and pay cash. Slockett said this is only true if the County can pay for the expense in the same year in which they bond; it’s still a good idea to put money away, and save it, rather than paying for bonds over a large number of years. He said, though, that there are many expenditures that the County is now making, regularly, that could be made through bonds. Slockett said they have to actually buy the bonds, and pay them back. He said a bond could be held for any length of time, whether it be a year or a month. Slockett said a lot of this is highly technical, so input from experts like Josten and Roetlin would be important.

Thompson summarized that a resolution next week would reserve the Board’s right to bond for those expenses that are about to fall out of the 60-day window. Slockett affirmed this, but said there is only $2,000 that will fall off by next Thursday’s meeting, but said his feeling is to pass the resolution, to keep all of the options open. Thompson said that another large bill for the Administration Building construction would also be beyond 60 days if the Board didn’t pass the resolution next week. Slockett agreed.  Thompson repeated that the Board would not be making the decision to bond, but reserving the right to do so in the future. Lehman asked if this would be a way for the County to recoup lost taxes from a TIF area, and Slockett said yes. Harney asked if the bonds cost the County anything? Slockett said yes, because they have to pay interest on them, and there are also some administrative costs. Harney wondered if the 5% offset the savings. Slockett said he didn’t know, because he is just figuring this out, and has been asking questions and sending emails about the issue. Slockett said that he only recently realized that most taxpayers, those outside the TIFs, would actually save money by bonding. He said this has never been true in the past.

Neuzil said bonding would make sense if the Board would choose not to tax so much, but said if it will be used to tax more, he wasn’t sure about it. Stutsman said this is why she thought they should have a thorough discussion about this issue. Slockett said that Neuzil’s idea would be an option; expenses could be taken from the General Fund, and put into the Debt Service Levy, and this would save the County 3%-4%. Slockett warned that the temptation will be not to do that, but to increase taxes instead. Slockett agreed with Lehman’s comment that it was also important to identify projects in the future that could be paid for by this bonding method. Thompson noted that if they passed the resolution at the next meeting, the Supervisors would have until the end of the fiscal year to decide whether or not to bond. Slockett confirmed this, and said there are advantages to doing this within the fiscal year, because if they do not bond before the budget is prepared, by March 15th, then the County will not be able to include the levy in next year’s budget.

Thompson asked if there was consensus from the Board to put the resolution on the agenda, and invite Roetlin to a future meeting? Stutsman suggested that the Board pass the resolution, but then hold a work session with a thorough presentation about the bond issue. She said a work session would allow the Supervisors to devote their full attention and time to this important issue. She said she has a number of questions about the process of bonding, and how much it costs, and they could be addressed in a work session. Stutsman said a work session could also educate the community for the public hearing. Harney said he has a number of questions, including how it affects the County’s bond rating. Slockett added that any additional, future expenditures that qualify as essential purposes can be included in the bond as well. The Supervisors thought that February 13th, at 9 a.m., could serve as the time to have the work session on the bonding issue; Slockett said he would inform Roetlin and Josten. There was some discussion about whether Josten should be included, and whether he would or would not charge the County for the trip. Stutsman thought the County should pay Josten’s expenses, if applicable. She thought that because of the importance of this issue, the Supervisors should have as much expert advice as they needed.

Horne said he and Human Resources Administrator Lora Shramek would start with the payroll and personnel for this year. Shramek gave a PowerPoint presentation discussing non-bargaining benefit and compensation change considerations as they relate to the budget, and began with non-bargaining benefit change considerations, which are longevity bonus, vacation, and sick leave. On the current longevity bonus schedule, bonuses are given in the month of November, in a lump sum. Employees who have worked the following number of years receive these bonuses:

After 4 but not less than 11 years $500

After 11 but not less than 16 years $600

After 16 but not less than 20 years $700

After 21 years $800

Shramek said the proposed longevity schedule increases the 11-16 category to $625, the 16-20 category to $750, and the 21+ category to $900. She reminded the Board that County Attorney J. Patrick White asked the Board of Supervisors to adopt this new schedule last year, because the Administrative Bargaining Unit received this benefit as of their 7/1/2001 contract. Stutsman asked if the Admin unit was the only unit with the new schedule, and Shramek replied yes. Stutsman thought that this will be a bargaining issue with the other units as well, and Shramek agreed, and said that all the bargaining units will be open next year. Thompson asked if the updated longevity bonuses were on the Sheriff’s schedule this year, and Shramek said yes, it was. Currently, Shramek said, there are currently 34 employees in the $500 category, 17 in the $600, 14 in the $700, and 34 in the $800. She said this particular benefit, then, costs the County $64,200. If the increased longevity schedule is approved, Shramek said, the new cost would be $68,725, based on the employees that worked for the County in 2001. She said the total difference is $4,525. Stutsman noted that this is only for non-bargaining employees, and Shramek agreed. Harney asked what bargaining employees get; isn’t it the same thing? Shramek said currently, the only bargaining unit that has the increase is the Admin unit, about 70 employees. Lehman thought the Sheriff will possibly have the increased schedule, as well; Stutsman and Shramek said that hasn’t been formally decided, but it is on the table. Stutsman asked what the projected total cost to the County will be, if and when the new schedule appears in all the contracts? Shramek said she did not know these numbers, but said the $68,725 figure represents over 100 employees. Neuzil asked when they renegotiate the remaining union contracts; was it next fiscal year, or next calendar year? Shramek said the renegotiations began in fall of 2002, for contracts effective July 1, 2003. Neuzil said the question is whether the Board should do this now, or wait until next fiscal year, when everyone would be equal? Stutsman said this is a very good point.

Next, Shramek discussed the non-bargaining vacation schedule. Currently, employees earn vacation based on their years of service to the County, according to this schedule:

1-4 years of service 2 weeks

5-9 years of service 3 weeks

10-19 years of service 4 weeks (the current maximum)

Shramek said the proposed schedule would add a 5th week of vacation at 20 or more years of service. Lehman asked who has this benefit now? Shramek said currently the Sheriff’s Office, the Sheriff’s Office Administration, the Administrative Unit, and the Secondary Roads Unit all have this benefit. Shramek said the first department to receive this benefit was the Sheriff’s Office, and the County lost this in arbitration. Stutsman said it has the biggest impact in Secondary Roads, who already has the benefit. Lehman said they had to hire a couple of new employees to cover the extra vacation; Stutsman agreed, and said Secondary Roads also uses a lot of overtime to cover it. Shramek said this benefit would affect approximately 17 employees. She said the employee’s compensation is the same, but the additional week of vacation obviously means a loss of productivity, and it might result in possible overtime and/or additional personnel. Shramek said that the 17 individuals that would be affected are mostly managerial, and are spread out very evenly amongst various departments, so the impact would be somewhat lessened.

Shramek moved on to the non-bargaining sick leave payout, upon retirement or leaving the County with at least 20 years of service. The criteria, Shramek said, is this: employees leaving or retiring from Johnson County with 20 or more years of continuous employment would be paid out 25% of their accumulated sick leave, in a lump sum. The maximum amount of accruable sick leave, according to current County policy, is 120 days of sick leave, so an employee with this maximum would be paid for 30 days of sick leave. Currently, she said the Ambulance, SEATS, Secondary Roads, Sheriff’s, and Social Services contracts all include this benefit, which is 5 of the 6 collective bargaining units. The Administrative unit and non-bargaining employees do not have this benefit, Shramek reported that less than half of the County have this benefit. Shramek said it will affect approximately 24 employees, depending upon the effective date. If the Board makes it retroactive to July 1, 2001, it would include 24 employees; if it is effective July 1, 2002, it would be 19 employees. Shramek said she included the Conservation Board and Board of Health, assuming that if the Board of Supervisors adopts it, these 2 boards would follow suit. Stutsman noted that passing the policy retroactive to July 1, 2001, would mean that it would come out of this year’s budget. Harney asked why they would do this? Thompson asked if the plan Shramek has proposed is exactly the same as the union contracts; she answered yes, and said she wouldn’t want to change it in any way.

Stutsman and Thompson agreed that everyone should be treated the same. Neuzil agreed, and said the only question is whether or not the Board would pass the policy retroactively. Shramek said she based the cost consideration for this benefit on an average annual salary of $50,000, which is in the ballpark. Based on this salary, a 30-day payout is $5,769.60; this figure times the 24 affected employees is $138,470.40, the maximum liability to the County. Neuzil noted this expense would not happen every year. Shramek said yes, that this was the worst-case scenario, if all 4 of the 24 employees retired in the same year. Shramek noted this is also figuring at the maximum of 30 days; if an employee had a serious illness, and spent down their sick leave, the numbers would be less. Stutsman asked if there are any studies that show that a policy such as this one lessens abuse of sick leave? Shramek said there are studies that show that abuse of sick leave is less when employees are allowed to convert sick leave to vacation time, a policy the County currently has for employees who have accumulated at least 90 days of sick leave. Shramek said she is not aware of any studies that show paying out sick leave at retirement lessens the use of sick leave. Thompson thought that in the few years before retirement, people would be saving up; Neuzil and Shramek agreed. Shramek said that of the 24 employees, almost all were at the maximum accruable sick leave level of 120 days.

Shramek said she is not able to discuss health care coverage at this meeting, as she is meeting with Wellmark Representatives on January 23rd, and will have numbers for the Supervisors at that time. She reported that life insurance, long-term disability, flexible spending, and dental care coverage will not have rate increases, thanks to the Joint Purchasing Agreement.

Shramek continued by explaining the compensation change considerations for non-bargaining employees, which includes 2 areas: the cost of living adjustment (COLA), and the 8-step pay plan. She showed comparisons involving COLAs for the 6 non-bargaining contracts, 5 of which are currently settled. She said the Secondary Roads and Administrative Unit are at 4%, and the Ambulance, SEATS, and Social Services are at 3.75%. She said that the September terrorist attacks, and the recession, both impact this number. Shramek recommended that for non-bargaining employees, the Board should not go below a 3.75% COLA, or above a 4% COLA. Thompson asked if there are numbers detailing what each 1% increase in COLA would cost the Board. Horne said that for non-bargaining employees, each 1% COLA increase costs $60,921, and one-quarter of that would be $15,230. Stutsman clarified that this is for non-bargaining employees: department heads and management, but not for elected officials or their deputies. Shramek and Horne affirmed this. Thompson and Horne said that a 3.75% COLA, then, would cost the County $228,453; a 4% COLA would be $243,683. Thompson asked how many employees this would cover; Horne said it was 130. Stutsman noted they still had to add in elected officials and deputies; Shramek said this was an additional 21 employees, 10 elected officials and 11 deputies. Thompson asked what the total would be if they added in the unions? Horne called the Supervisors’ attention to a sheet he had handed out, a 2-page expense summary. Stutsman summarized that the County is going to have well over a million-dollar payroll increase this year, and asked if they have done that before? Shramek said she isn’t sure. Horne said that each 1% of COLA, for all employees, is $108,496.

Stutsman asked if the Supervisors need to make decisions today about these issues, or is today’s meeting only informational? Horne said this meeting was to get the Supervisors started. Thompson wondered what it would cost to give 4% to the supervisors in the departments where the unions already have negotiated 4%, and leave the others at 3.75%? Shramek thought it also makes a difference whether or not the Supervisors are going to change the other benefits. She said if they were to approve some or all of those, it would make a difference.

Stutsman said she is having a hard time with the concept of longevity. She said longevity was put in before the County had the pay scale and merit increases, and said she had a hard time giving longevity bonuses to people for just showing up to work. She wondered about continuing the longevity, now that the merit increase system is in place. Harney said it was kind of like a double bonus; employees get the longevity bonus, the merit increase, and then a couple extra weeks of vacation as well. Shramek cited statistics for comparison, saying that of the 6 counties that are comparable to Johnson County, 3 have longevity bonuses, and 3 do not. Executive Assistant Mike Sullivan noted that the Board passed the longevity increases in the past because there was nothing else. Thompson said that the Social Services bargaining units both had step raises from the beginning, and then they added longevity to that. Neuzil said it came back to a fairness issue; if longevity is in the bargaining units, then how can they deny it to non-bargaining? Stutsman wondered how they could take it out of the bargaining units; she said if they can’t take it out for everyone, then she isn’t interested in taking it out. Shramek noted that Linn County bargained longevity out of their Sheriff’s contract, and bargained a 4-year contract, with substantial increases, as part of that. Sullivan said that would be the way to do it, to bargain it out. Neuzil noted that all contracts are open next year.

Stutsman noted that the cost on Shramek’s handout does not reflect the total cost of longevity, with all County employees; Shramek confirmed this, and said her worksheet only included the 130 non-bargaining employee. Stutsman said the County is blessed to have a lot of long-term employees, and the cost starts to add up. Lehman wondered if they were just going to be taking money from one hand and giving it to the other, by bargaining out longevity and giving merit increases. Stutsman said she would rather put the money into the merit, and increase that part of the pay scale. She noted that not all employees have a merit aspect to their salary, so this might not work. Stutsman said she thought someone should be rewarded for doing a good job, through merit raises. Shramek said this is a valid point. Harney added that with merit, supervisors often hear complaints from employees about playing favorites. Shramek said deputies would be eligible for longevity if they weren’t already at the salary cap allowed under the Code, but they already are.

Neuzil said if the Board chooses to give non-bargaining employees 3.75% increase, then it would mean elected officials would get a 7.5% increase. 6 times 75% would give the Sheriff, the Recorder and the Treasurer 4.5%. Horne said it would be a $103,000 increase for the 5 elected officials. Thompson asked Stutsman if she wanted an explanation of how the process is decided. Stutsman said yes. Neuzil said the Sheriff, the Recorder and the Treasurer are recommended at 6%. The Attorney and the Auditor are recommended at 5%. The Board’s COLA is recommended at 10% and the Board chooses to take 75% of that, then everyone else gets 75% of their recommendations. So, 75% times 10%, 6% and 5% would equal the numbers previously given. Horne said there is a $4,111 increase for each 1% of the Board’s increase. Neuzil said it’s not a huge amount of money, but if the Board wants to be consistent with everyone’s increases, then 75% of 5% equals 3.75%. Neuzil said the Auditor and Attorney will be getting 3.75%. Neuzil said the Compensation Board recommended the 3 different numbers. Thompson said it would be a $13,000 raise for the Board. Horne said for the Board, each 1% was $4,111.36. Thompson said for each Board member it would be an increase of $13,125. Neuzil said the Compensation Board had wanted to weight the Supervisors higher, because the Supervisors hadn’t taken pay increases a few years in the `90s. Thompson said the total for elected officials and deputies would be around $30,000.

Stutsman asked if they could be given figures for the increases. She said if they figured what the different categories would be given at the different increases, the Board could see what the impact would be. Thompson said she would wanted to see the COLA calculated at 3.75% for the Administration Unit for the non-bargaining people. She wanted to compare the salaries between the supervisors and the highest paid person that they would supervise. She said if the difference was close, the Board needed to think about giving the same raise to management as they were to the unions. Shramek said there are already employees, that with overtime exceeds a supervisory position. Thompson said salary, not overtime was more important.

Stutsman asked if the Board wanted to give direction considering the non-bargaining 5th week vacation or the sick leave payout. Thompson said she had the same feeling about the sick leave payout as Stutsman did about longevity. She said sick leave was something that was given in case they have the misfortune of getting sick, if employees don’t have to use it, they should consider themselves lucky. Lehman said the employees think if they’re not going to get compensated then they’re going to use it. Stutsman asked if it was equal per dollar amount that they get for sick leave. Thompson said if the employees earned the sick leave at a lower salary, they get paid at the salary they leave under. Neuzil asked what COLA the Board gave non-bargaining last year. Shramek replied 4% for non-bargaining. Neuzil said he didn’t think the Board could do what it did last year, because they don’t have the money to do that. Stutsman agreed that it was adding up. Neuzil asked to be able to look at different ranges of numbers, from 3.25-4%, for non-bargaining units. Thompson said she was happy with 3.75% unless the Board doesn’t have the money. Stutsman said the other option would be ignoring the other benefits. Thompson said over time, the Board would be pressured to do all the benefits, so maybe since most of the unions have the sick leave payout, the Board should consider that one. She said she would not be in favor of making it retroactive. Shramek said from an employee perspective, they would value the 5th week vacation more. Thompson said they shouldn’t do it all in one year. Neuzil summarized the Board was leaning towards the 3.75% increase and looking towards the 3 different benefit options, either doing all, none or in between.

Shramek said in regards to the non-bargaining pay plan, which is the step and merit plan, in central services they have the $40,000 allocated to the individual departments based on the employees performance evaluation ratings. She said the plan started with the 1% step and 2% merit increases. Last year was 1% step and 2.5% merit increases. She said she needed to asked for another $10,000 for July 1, 2002 due to the following reasons: 1) on July 1, 2002 the Conservation Board adopted the HR pay plan, 2) additional employees were added into the pay plan out of the bargaining unit or new employees, 3) the added amount for the increase in merit pay. Thompson asked if the merit pay was working well. Shramek it is working very well. Stutsman said the Board agreed to that plan, so they need to support it.

Thompson asked if the Board understood why she was worried about the pay differentials with supervisors. Lehman said they were getting close to no differential in some areas. Thompson said she was concerned with the Administrative Unit and Secondary Roads. Shramek said there was one case in Secondary roads that was problematic, but that included overtime. The Board agreed that overtime shouldn’t be counted. Thompson told Shramek without overtime if the pay was going to come together, to let the Board know. Stutsman said she didn’t think it was a big issue if they don’t count the overtime. Sullivan said HR did a good job of taking care of the gaps before they started the merit program.

Recessed at 2:40 p.m.; reconvened at 2:45 p.m.

Neuzil said on the expenditure side of the budget, there isn’t much of a difference, it’s revenues that are the problem. Horne explained the expense summary sheet. He said all departments listed on the sheet come from the General fund. The sheet shows FY02 and the increase or decrease for FY03. Stutsman asked if the block grants shown are the total monies requested. Horne said it was the total in addition to last year. Horne said the sheet showed predetermined COLAs, so any non-bargaining merit increases that were as step raises are included in the sheet, as well as any settled COLAs. Neuzil asked if any supervisor’s increases were included if they hadn’t been settled. Horne told him they were in proposed COLAs at 3.75% including non-bargaining. Thompson said that included the Board, so if the Board changed their increase, the figure would change. Horne said the proposed COLAs were only for people that weren’t settled yet. Thompson clarified that it was only for the Sheriff’s department and the non-bargaining employees. Thompson asked Horne if he included elected officials and deputies in the proposed COLAs. Horne said it included everyone at 3.75% in the proposed COLAs, but he would change it when there were fixed numbers.

Neuzil asked if there was a cap on the general supplemental tax levy. Horne said some services they tax for could be moved into supplemental funds. Thompson said to assume the whole budget is in the General Basic Fund, then some things can be moved to General Supplemental. Once the Board has taken enough out of General Basic to fill up General Supplemental at the $3.5 tax rate and both the cups are full, then the Board can’t tax any more without a referendum. Horne said that some programs are left in the General Basic fund, because the County has to be at the $3.5 level to be able to have the Supplemental fund. Horne said the MH/DD fund is it’s own fund, which has increased a little from last year if payroll adjustments are considered. The block grants, under the Rural Basic fund, include the Libraries, JCCOG, Soil and Water conservation and landfills. He said he was thinking of increasing the landfill line item because they have had to amend the numbers in the past. Horne said that Secondary Roads has a transfer that comes from the Rural fund and the General Fund computed in the beginning of the Fiscal Year, which is not part of the Rural Basic fund.

Stutsman asked why there is still a Courthouse Centenary fund. Horne replied that it is money that White has collected from donations that they might use in the future. Neuzil asked why the REAP line item went down $113,000. Horne said most of the fund was spent acquiring the Tomash property. Horne said he included voting machines and financial software in the Capital Projects budget. Thompson clarified that the Technology and Capital expenditures items included everything that was requested so far. Horne said yes, it was the amount set for spending projects. Neuzil said the difference between the FY02 budget and the tentative FY 03 budget was about a 3.3 or 3.5% increase. Horne said there were about 1.2 million total payroll adjustments.

Next Horne went over the revenues side of the budget. He said that Public Health is loosing more revenue than they are cutting expenses. Thompson said this could possibly be from employees who were paid by grants, if the grants had run out. Horne said with grant employees Public Health makes it known that they’re being paid from a grant and their job is contingent on continued grant funding. Horne said the Sheriff had some increased revenues from his contracts. He said SEATS revenue is decreasing. Horne continued that the Treasurer’s revenues increased a little, but Central Services decreased. Stutsman asked if that was due to interest. Horne said it was the general interest lost that comes into the fund, but it wasn’t the total interest for the County. He said they expected that to go down this year. Platting fees were increased in Planning and Zoning. Horne said the Heritage money was taken out of the Nutrition budget. He said the Elections department is reporting less revenues. Horne said MH/DD is expecting better revenues this year. Thompson said MH/DD had done a good job increasing the revenues. Horne said Block Grant revenues have decreased and part of that is the loss of the rural interest. Secondary roads revenue expense adjustment decreased $250,000 for next year, which was a number provided by the Auditor’s office. Thompson summarized that the County has a 1% increase in expenditures and a 7% decrease in revenues, not counting property taxes.

Horne said the transfer to Secondary Roads is the maximum amount based on the population and valuation of the census. Technology, Capital Expenditures and Capital Products are also at the maximum amount. The Conservation Trust estimates revenues that will be transferred next year to the General Fund. Horne said the transfer for the General Supplemental fund is bigger this year then last. He said the transfer from Rural Basic to Secondary Roads is at the minimum. Lehman asked about the money in the Roads Construction Escrow fund. Thompson said the money came from Secondary Road’s contracts with subdivisions.

Horne moved onto the tax askings. He said the worksheet shows what the tax askings are total and how the County gets to the 3.5 mark. He said there is no new growth dollars, currently new growth dollars are negative. Stutsman asked if it was from the rollback and Horne said yes. Horne explained that growth dollars are based on the consumer price index. Neuzil said last year the County taxed a total of $12,134,000 and this year’s estimate is $12,891,000. Horne said the amount of the transfer to the General Supplemental fund would be what is reduced. The General fund will be taxed at the $12,891,000 no matter what. Thompson said the maximum would be if the County had increased the Supplemental to 5 million dollars, then they couldn’t tax more without a referendum. Horne said they always tax to the maximum of the General Fund every year so they can use the Supplemental Fund. Neuzil said there hasn’t been much new growth in the Rural Fund. Stutsman said building permits are steady. Lehman asked when a house is taxed. Thompson said the first year someone lives in a new house, they only pay taxes on the land. The following year, the house is taxed. People are paying last year’s tax this year. They decided to ask the Assessor the specifics on collecting taxes on new homes.

Horne said the worksheet shows the projections for the beginning fund balances for this year. Secondary Roads is 9% under budget right now. Thompson clarified that the County’s beginning balance for FY 03 will be almost 3 million dollars less then the beginning balance for FY 02. Horne said the County is not carrying excess reserves right now. If the County faced a property tax limitation, it wouldn’t effect the County, because their balances are low. Horne discussed the ending fund balances, where the County would be at the end of the next fiscal year. He said the recommended carry over is to have enough money to pay bills for the first 2 months of the year.

Horne continued with changes in property taxes for the next fiscal year. He explained that to get the increase down to 0%, there would have to be major cuts. Several million dollars would have to be cut from the budget to decrease the tax increase to about 3%. Stutsman commented that this was even without the decision packages. She asked what direction the Board wanted to take. Horne reiterated that salaries were included in that numbers at a 3.75 COLA for everyone. He reminded the Board he had also included the money for the new voting machines, the financial software and capital repairs, which are fairly big items. Block grants were not included in the figures. Neuzil said jobs the county performs that isn’t mandated needs to be looked at. Stutsman said this puts a different light on bonding.

Thompson presented a list of things she wasn’t sure were in the budget, including media equipment for the conference rooms. Horne said no, but Sullivan said it could be taken out of this year’s budget. Thompson asked out the Sheriff’s $423,000 dollars for prisoner transfer. Horne said it wasn’t in the budget yet. Thompson asked about the reimbursement for the Sheriff’s department, amounting to about $12,000. Horne said it is in the budget but not as a separate line item. Lehman said it was also a revenue of about $48,000. Thompson asked if the discretionary funding for the Soil and Water Conservation was included. Horne said that was already in because there is were decision packages for that. Thompson said there was a decision package for MH/DD childcare estimated at $135,000 which isn’t needed. She said they also don’t need to budget for the management fee paid to Cheryl Whitney. Thompson asked if Court Service’s revenues were reduced. Horne said no. Thompson said the $109,000 for Courthouse security isn’t in any decision packages. Stutsman asked if Horne included money for the Chamber of Commerce Community Leadership program in the budget. Horne said it was covered in an education line item with money for an arbitrator. Neuzil asked Horne about Conservation funds. Horne said the County was only required to give Conservation expenses minus revenues. He said Conservation will get their REAP money even if the County doesn’t approve any decision packages.

Stutsman asked how the Board wants to do the budget this year. She said the 2 options are to start at the basic tax increase and cut down or to start with what the Board thinks is important, then to figure out how to fund it. Horne said during next week’s session Elder Services, the new Nutrition Program provider would be coming to the Board. Thompson said that Heritage had always told the County that the reason the County must contribute to the Nutrition Program was the salaries the County paid were too high. The reason Heritage gave the contract to Elder Services was they could do it less expensively. Theoretically, Thompson continued, Elder Services shouldn’t need a contribution from the County. She said she was having a hard time understanding why when Heritage went to Elder Services, they weren’t willing to fully fund it. Thompson said they needed to at least hear what Elder Services has to say.

Neuzil said if the Board has to cut more then 1/2 a million dollars out of the budget. Thompson pointed out that all decision packages add up to another 1.3 million dollars. Neuzil said it was important to get a picture of what is more realistic. Horne asked if he should put the prisoner transfer part of his decision package into the tentative budget. Stutsman asked if there was any other choice. Thompson said nothing she has seen has cut back on the number of prisoners being transferred.

Neuzil said he thought the Board needed to tell the department heads to go through their budgets again and decrease them. Stutsman said they needed a starting point of what they can fund and then tell the department heads to make cuts. Stutsman said there are certain things the County must fund. Lehman suggested going to the departments and telling them they’re getting 4% less and letting the department heads figure out how to do it.

Neuzil asked for an explanation of Ag land, Ag building, and Ag dwellings and who is effected most. Horne and Stutsman said the Ag land is farmland, Ag buildings are the barns and Ag dwellings are farmhouses. There is also rural residential, various cities residential, industrial, and utilities, but industrial doesn’t generate a lot of dollars. Thompson said concerning the Secondary Roads transfer last year they increased the General fund transfer and decreased the rural transfer, because the Board thought that if equalization kicked in this year, they could reverse it to minimize the effect on the rural. She said it would help the other Cities if they reversed it this year.

Stutsman asked if they were going to go through each department or if they were going to talk about some of the things they would have flexibility in. Stutsman said she didn’t want her decision on bonding to be based on making the budget. She considered it another tool. Lehman said he was thinking in terms of what could be delayed. Horne said if they were going to take the approach of departments cutting, then he would have to compile all new numbers. Stutsman said the Board has policy decisions to make. Neuzil asked the Board if the goal was to have similar tax increases to last year. Thompson suggested to take out the $150,000 from the software and to reduce Capital projects to $950,000. Horne asked if the Board wanted to decide what tax level to tax at then decide how to get to that number. Neuzil said that was how he was approaching it. Horne said he would run an analysis to get to last year’s tax increase. Neuzil said was looking to end up with costs equal to last year plus whatever the County’s costs to transport prisoners. Neuzil said that departments that will have less revenue this year should also have less expenses. Neuzil said he thought it was realistic to go to departments to ask for a 5% decrease. Stutsman said they should have another session before they decided to do that. Thompson said the financial software package could be reduced. Stutsman asked if the County could bond for the software. Thompson said if they took $150,000 out of the software money, they could still get a respectable product.

Horne asked about voting equipment. He said it was listed as an essential county purpose. Thompson recommended that Horne to take it out of the budget. Neuzil said the Board is still raising taxes if they bond for it. Thompson said she was thinking either bond for it or not do it this year. Neuzil said the County already has money saved. Neuzil said the County shouldn’t look at bonding until they are almost done with the budget process. Stutsman said the Board needs to convey to department heads what their priorities are. The Board decided to discuss an across the board cut at a future meeting.

Adjourned at 4:40 p.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary