Chairperson Thompson called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:15 a.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

The group began by discussing the 4% budget cut to the Board of Supervisors departmental budget. Budget Coordinator Jeff Horne said he cut a little more than 4% from the Board’s budget. He reduced a number of line items, and said he tried to leave just enough room to pay for expenses. Stutsman asked if they could cut down on the phone usage, and Horne said yes, based on this year’s usage. Stutsman also asked about equipment, and Horne said he deleted $1,000 for office equipment purchase. Lehman asked about the minor equipment line item, which was $1,700, and wanted to know if they have been using it? Horne said yes, sometimes; he said he has bought materials from this line item. Thompson asked how Horne could cut out repair and maintenance; wasn’t this their service contract? Horne replied that they did not spend the full amount of this line item the previous year. Horne said he would find out if there is a service contract included in this line item and if so, leave enough to pay for it. Thompson asked about the individual line items for Supervisors’ expenses; line items for past Supervisors still existed. The group agreed that there are enough notaries in the County’s Administration Building to eliminate the need to pay for notarization. Horne and Neuzil said they are notaries.

Thompson asked if they had enough money for stationary and forms? Later, Stutsman suggested adding some money to this line item. Thompson said that Secretary Jo Hogarty could stock up on these supplies at the end of this year. Stutsman said they could make a better effort to double-side everything, and the group discussed using electronic communications as a substitute for paper. With these measures, and the addition of $1,000, the group thought they could stay within budget on stationary and forms.

The group agreed to cancel the Wall Street Journal and discussed sharing either the Press-Citizen and Gazette with another office. There was some discussion about the archiving of newspaper articles, as both the Board of Supervisors’ office and the Auditor’s Office currently archive articles about the County. The Supervisors agreed that the Board office needs both the Press Citizen and the Gazette; they only need to add $20-$30 to this line item to make this possible.

The group discussed that as of the new fiscal year, there will be no more out-of-state travel, unless the Supervisors wish to pay for the travel themselves. Horne said he removed the money for the conference he usually attends, and left only enough money for a trip to ISAC. Horne said there is no money in the budget for overnight stays at ISAC, but only enough for mileage and parking to go there and back. Stutsman suggested that the Supervisors could share rides as a cost saver. They noted that this practice, according to the County Attorney, would be in violation of the State’s Open Meeting law.

Lehman said the current cuts are 4.4%; Sullivan noted that the Supervisors could put back $1,686 to make it a 4% cut. Neuzil said because of the Board office reorganization, and the hiring of Sullivan as the new Executive Assistant, the Board’s budget will show a 7% increase from FY 02 to FY 03. Neuzil wondered about carrying over some travel money from this year and applying it to a conference trip for next year, but others reminded him that at the end of the year the funds revert to the General Fund.

The Board discussed the salary line item of their budget, clarifying the COLA increases, which was $30,000 in the Board office, because of the 6.5% recommendation made to the Supervisors by the Compensation Board. Horne noted that Sullivan’s salary was $10,000 higher than Carol Peters, whom he replaced, and Horne and the Board’s Secretary also received small adjustments.

Horne began discussing the tax askings for this fiscal year, and explained they are under the maximum levy amount of $17,236,152. Horne showed that the tax askings amount is the General Basic amount of $12,891,467 plus a transfer from the General Supplemental, which comes to a total $17,011,673, about $200,000 under the maximum allowable. Horne recommended against putting the budget amount right up against the cap. Horne explained that he had lowered the estimates of the revenue expense adjustment, and noted that this increased the transfer from General Supplemental. Stutsman asked if they can still tax for the $200,000, to have some money in case of an emergency? Horne said this would put them right up against the cap, and recommended not going closer to the cap than $100,000. Horne emphasized that the Board should leave a buffer between their tax askings and the maximum allowable tax asking. Horne said he also re-estimated this year’s budget to reflect the 4th-quarter 1% cut the Board was going to request, and this was also going to affect the ending balance. Horne said the adjustment for this year is responsible for getting the FY 03 budget under the cap. The group agreed that there is some flexibility to possibly fund some additional items, as they have about $200,000 of room between the maximum allowable levy rate and the current budget.

Thompson said she was worried about the trend demonstrated in Horne’s chart, which showed that the County has gradually been shifting all obviously allowable expenses from the General Basic Fund to the General Supplemental Fund. She said that the County’s tax is now capped on both sides, and this will be difficult next year, when nothing else can be shifted from Basic to Supplemental. Thompson said they should look for other things that could be moved into Supplemental, such as the MECCA budget. Horne said White had told him that this could not be done. Thompson thought if MECCA was fulfilling a central planner or gatekeeper role for alcoholism treatment, then their budget could be in Supplemental. Horne said this would save them a few hundred thousand, but the health insurance will swallow whatever savings this would create. Thompson said she understood that, but thought they will need the money. Answering a question from Stutsman, Horne and Thompson clarified that there really isn’t a cap on the Supplemental budget, as there is for General Basic, the latter of which is capped at $3.50 per $1,000 of property valuations. Horne noted that the County’s FICA and IPERS expenses should decrease next year, since the 4% cut does affect some personnel.

Horne pointed out that health insurance is having a dramatic effect on the budget. Thompson agreed, noting that health insurance costs have more than doubled since 1999. Neuzil said that as all union contracts are on the table for next year, this issue has to be on the table. Thompson said that Human Resources Administrator Lora Shramek has already started to visit with union representatives to alert employees to this problem. Neuzil said there are going to have to be some changes, because the County cannot afford the rising costs. Lehman said there either has to be a co-pay added to the insurance, or there would be no pay increases. Neuzil thought it could be both. Stutsman said that Shramek told her recently that the cost of pharmaceuticals has tripled. The group discussed a combination of factors that are likely responsible for this fact; Thompson said part of it was that Johnson County doctors are bigger prescribers than other doctors in the State. Stutsman noted that everyone is being affected by the rising costs of health insurance, and said it is particularly hard on small business owners. Stutsman wondered why health insurance has increased so much, if managed care was supposed to control costs? Sullivan said that managed care hasn’t affected Iowa to the extent that it has in surrounding states.

Neuzil asked Horne to complete a list of reasons for this tight budget year. He said the public needs to know about these things when the Board explains its budget, and the Supervisors are going to be asked about it.

Neuzil asked if finalizing the salary numbers was part of today’s meeting? Other Supervisors thought they had already done this, but Horne reminded them that those numbers are not yet official. Neuzil reviewed the COLAs they had agreed upon in an earlier meeting: 3% for non-bargaining employees, 3.04% for the Sheriff’s Department, 3% for the County Attorney and County Auditor, 3.6% for the Sheriff, Recorder, and Treasurer, and 6% for the Supervisors. These figures are 60% of the Compensation Board’s recommendations. Horne said that every 1% increase in COLA for the elected officials resulted in a $13,000 cost. The Supervisors agreed that it wasn’t so much the money as the principle. Horne said that the 3.04% in the Sheriff’s Department matched the COLA negotiated in the Sheriff’s bargaining unit. Horne noted that the only employees in the Sheriff’s Department that are covered by the Compensation Board’s recommendation are Sheriff Bob Carpenter and Deputy Duane Lewis.

Horne said the Auditor’s Office informed him of a change yesterday, when the State of Iowa asked them to revise their valuations slightly. Horne said it is already factored into the numbers the Board has in their budget today.

The group discussed the numbers on Horne’s most current budget worksheet. Horne showed a column called tentative budget, which is the department’s basic budget (without decision packages), minus the 4% cut requested by the Board. Horne noted that the numbers he gets back from the departments will be slightly different than those currently on the worksheet. Thompson asked if the Department of Public Health accommodated enough for their grant, and Horne said he hopes so. Stutsman said it is premature to start talking about individual departments, until the Board sees what they come up with themselves.

Horne said he could talk about a few of the reduced budgets that he has already received back from the departments. He said the Treasurer’s Office cut dollars out of personnel, and the Auditor’s Office cut all the temporary hours out of the budget. He said Information Services Director Jean Schultz took some technology items out of her 2 budgets. Horne said Shramek has told him what her cuts will be, but hasn’t given it to him yet. Thompson said the ones that are having trouble will be coming in later. Horne said that he told the departments that have not yet turned in the reduced budgets that he had to have them by Monday, or else the Board and Horne would begin working on the reductions themselves. Neuzil asked if Veteran’s Affairs and General Assistance are separate departments, and the group answered no, they are separate. Horne said that rental assistance is one of the only places that the Veteran’s Affairs budget could be cut. Lehman noted that they are asking for a $2,000 cut in the Veteran’s Affairs budget, Department 50.

Horne said the Conservation Department can’t tax, but are a General Fund Department. Horne said that their levy is not a true levy; it’s based on the amount they use for REAP funding, which has served as a guide. Neuzil asked if Horne took 4% out of theirs, and Horne said no, the Board had instructed him to give Conservation the same amount minus payroll increases. Neuzil said the Conservation Department got an increase of 8% over last year, and others in the group agreed. Horne pointed out that the operational budgets were frozen, though. Thompson said the increase is a combination of raising the levy from .22 to .23 and the valuations going up. Horne clarified that the Conservation is actually above the .23 levy, because they did not include the higher projected revenues in their budget calculations.

Thompson asked about the Information Services budget; their requested budget was $701,000, but the tentative budget shows $720,000. Horne said this is because of the large employee salary increases when some employees were reclassified. Horne said that Information Services had a $53,000 payroll adjustment, and Schultz cut $30,000, the 4% cut requested by the Board.

Stutsman said she has been getting a lot of email about the Children’s Museum in Coralville, and said she is assuming they are not going to fund that? The other Supervisors agreed, saying they didn’t think they could fund it. Stutsman said she wanted this decision on the public record, and said she would start to answer the emails. She and Neuzil noted that if the County is cutting essential services, it is not possible to fund anything like the Children’s Museum.

Neuzil noted that the County’s revenues had gone down a lot; others in the group agreed, although Thompson said some of the decrease was due to the lost Nutrition Program funding. Stutsman said that loss of interest, due to the lower interest rates, also was a large factor in lower revenues.

Thompson asked if Horne had increased projected revenues for the Medical Examiner? She said he would, presumably, get reimbursed for some of the increased autopsies. Horne said he could bump the revenues up a little bit, and asked Sullivan what he thought? Sullivan said they could talk to Medical Examiner Administrative Assistant Jeff Gaulthier but said the increased estimate would not be very large. Sullivan said it is hard to estimate because it is a new department.

Stutsman asked if the Board was still funding scholarships for the Community Leadership Program? Horne said yes; this funding was in Central Services, and he has not changed anything in this department. Stutsman wondered if they should take that out? Later, she added that if they were cutting everyone else’s dollars, then this program should perhaps be eliminated; Neuzil agreed. Lehman asked how many dollars this involved, and Harney answered $350. Horne said he was going to work with Deputy Auditor Joe Elder on this budget, as the Auditor’s Office helps in handling this budget. There was some discussion as to whether or not this budget could be cut 4%, as all the other budgets. The group agreed that are some things that can be cut out of this department. Horne noted that in this budget there are items for both the Board of Supervisors and the Auditor’s Office, as well as some contracts. Horne noted that the contracts, such as animal control, are fixed amounts, and cannot be reduced. Horne said he would talk to Elder about this budget today, and show the Supervisors the numbers in a meeting in the near future.

Stutsman said that the Communications Committee produces an external newsletter at a cost of $2,400 per year. Neuzil wondered about doing 3 newsletters, instead of 4. Horne noted that Shramek had cut the internal, employee newsletter. Stutsman said the Communications Committee had been discussing the production of an end-of-year report; Neuzil said it could be done cheaply, if necessary. Neuzil and Stutsman noted that the display case was still in this year’s budget.

Thompson asked Horne to fix the Sheriff’s budget so he has the $12,000 to pay the match on his federal reimbursement? She said that the Sheriff’s budget needs a line item for this cost, for future years. She thought they had made a transfer into his budget last year, and they shouldn’t have to do this every year. Later, she noted that transfers do cost the County money. Horne said he had talked to the Sheriff today, and he said he had cut the prisoner transport line item to meet the Board’s request of a 4% cut. Horne reported the Sheriff was working on a letter to the Board. The Supervisors discussed the possibility that Carpenter might come back to them later for additional money for transport. Horne clarified that a 4% cut in the Sheriff’s budget was $240,000.

Neuzil asked what will happen if, at the end of the current budget year, some departments are over budget and under revenues? Horne replied that this would mean the fund balances would be lower than what they wanted. Neuzil noted that Horne had identified Court Services and the Medical Examiner as potential problems in this year’s budget, and asked how they could deal with these issues? Horne said they are holding back 1% of the 4th-quarter appropriation, and said he can’t assume all of the revenue-expense adjustment, instead figuring in a third of it. Neuzil noted that they still have $150,000 in the Jail Capital Projects fund that could go to Carpenter’s prisoner transports. Thompson said he had estimated $325,000 for this year; Neuzil said they’ve already given him $250,000, so he will need $75,000. Thus, Neuzil said, they will still have $75,000 in the Jail Capital Projects fund.

Neuzil asked Horne for some clarification on the valuation numbers. Horne confirmed that the taxes for ag land/rural are going up by 4.9%. Horne explained that the rural ag land that is worth $100,000 this year was worth $100,056 last year. Thus, Horne said, the tax bill went up 4.9%. Neuzil said that $100,000 worth of ag land last year incurred taxes $841.89; this year the taxes will be $882.85. Thompson noted that on average, these numbers cannot be applied to an individual taxpayer, because their individual revaluation could be up or down. Stutsman also reminded the group that these numbers are the County’s share of an individual’s tax bill; it does not include other taxes, such as the school tax. Thompson said the current numbers are good numbers; Neuzil agreed, saying they are a lot better than what they were. Now, the tax increases are only single digits. Stutsman said the increases in taxes are due more to the increases in valuations than the County raising its budget. Horne agreed, especially among residences, where valuations increased quite dramatically. The group briefly discussed a $10 million change in valuation in some land near Tiffin, which the State required the Auditor’s Office to change, after they reclassified some land. Stutsman said she is concerned about a taxpayer who looks at the numbers and claims the County is spending so much more. Neuzil said the anticipated tax askings for this year is $17,011,683, and asked what this number was for last year? Horne said last year the tax askings were $15,505,179. Stutsman explained that this number was lower last year because the County had more revenues. Horne agreed, but added that lower expenses and a rollback, resulting in lower valuations, also contributed. Horne said that the County’s decreased revenues have a much larger impact on the County’s budget woes than slightly lower valuations.

Neuzil said he had a hunch that all departments are going to spend nearly all of their budgets this year, to help cushion the tough budget year coming; he wondered how this will impact the County? Horne said this is why he is discounting the revenue-expense adjustment by $800,000. Thompson said they should be prepared for a series of negative reactions which people start to do when the Board begins cutting. Lehman said the Board should also communicate to the departments that they probably will not get their full, 4th-quarter appropriation; Horne said they know that. Lehman said they should keep reminding them, and others in the group agreed. Thompson asked if Horne is taking 1% of the 4th quarter, or 1% of the whole year? Horne answered it was 1% off the whole year, but for the purposes of the ending balance, he discounted it by two-thirds.

At the next meeting, Horne said, he would have details regarding each department’s 4% cuts. The Board agreed that if there were departments who, at that time, still did not have their 4% cuts turned in to Horne, the Supervisors would do the cutting themselves. Sullivan and Neuzil agreed that they have faith in the departments; the cuts will be done. There was discussion about how many of the remaining, scheduled meetings the Board needed to complete the FY 03 budget. The group agreed to skip their scheduled Monday meeting and meet from 8 a.m.-1:30 p.m. on Tuesday February 5, 2002. If needed, they could also meet from 3:30 to 5:30 on Wednesday February 6, 2002.

Thompson said they have not yet addressed the issue of Courthouse security, as addressed in a letter to the Board from a judge. She suggested that they respond by writing a letter stating that the Board of Supervisors is considering the issue very seriously, and stress that they will institute all of the measures that do not cost money. The letter can also state that, unfortunately, the Board does not have the money to post an armed guard in the Courthouse. Other Supervisors agreed with this plan of action.

Horne said that Slockett told him that he will not be participating in the Board’s budget hearing on Tuesday, March 4, 2002; it will be Horne and the Supervisors.

Thompson asked about the revenue adjustment for Elections (Department 33), to reflect the City election. Horne said he had talked to Elections Deputy Julie Bartholomew, who told him it was all right.

The group further discussed the problem of the rising costs of health insurance. Stutsman thought they should develop a plan to deal with the problem of health insurance.

Harney said he did not think the Board did a very good job of reviewing this budget. He said there were some areas that the Supervisors did not even look at, including some employees in Human Services and in the Conservation Department that are on the Johnson County payroll. In other counties, Harney continued, these types of employees are not County employees. Neuzil said the discussion of this issue could occur on Tuesday, when the Supervisors find out what departments are cutting. Harney said the County is cutting some essential services and yet still funding some other areas that are neither required nor mandated. Harney said the County should be taking care of business at home first. Harney said he didn’t know how many people there are like this employed by the County; he knows of people in the Soil and Water Conservation District, and DHS, but didn’t know if there are others. Neuzil asked if the Board gave the Soil and Water Conservation District what they asked for, and Thompson said they gave them the employee subsidized by the County, but not all of their budget request. Horne said the Board funds one position. Neuzil and Stutsman said they are happy with where the budget is right now, but acknowledged that everything is still on the table, until Tuesday, when the Board finds out how the departments distribute their 4% cuts. Stutsman agreed with Thompson’s earlier point that if the Board was going to quit funding these positions, the departments and employees involved needed plenty of warning. Stutsman thought that with DHS, it means redoing the 28E Agreement. Sullivan said part of the difficulty was the differing budget schedules of various cities and entities, making it hard to coordinate everything.

Harney noted that Iowa County is reducing their taxation to Iowa County residents. He acknowledged that they do not provide all of the services that Johnson County does, but said they have a glut of extra money. Stutsman countered that they have also have the local option sales tax, which greatly helps their budget, because of Tanger Mall. The group discussed other counties that have the local option sales tax, and the impact such a tax could have on Johnson County’s budget. Neuzil noted that the local School Board has changed its funding philosophy recently; whereas before they were considering bonding as a source to build new schools, they now are advocating a local option sales tax. Horne said if the County were bonding, there would be concern about the debt carried by the County’s 2 large cities. Stutsman said if the schools pass the 1% tax, there would be no chance for anyone else to get an additional amount. Neuzil wondered if all of the entities could work together in identifying the needs of the schools, Coralville, Iowa City, and the County, and share that one cent. Thompson asked why the schools would agree to this, and Neuzil said they might if they knew that everyone involved would vote for it. Thompson said it would take a lot longer to pay for a new school. Stutsman noted that there are 15 school districts in Johnson County. Neuzil said they could ask Tony Roetlin about the sales tax issue when he comes before the Board to discuss bonding. Lehman noted that Cedar County used a sales tax to build their jail. Neuzil said that many counties in the area have a local option sales tax, including Washington, Iowa, Linn, and Cedar.

Thompson said that a local option sales tax would provide income from the Coralville mall, and a good percentage of this money would be from outside Johnson County. Neuzil said University students would also provide some income to the County; he argued that students still use County services, such as streets. Neuzil noted that the main objection to the local option sales tax the last time it was proposed was from Coralville, who did not want to compete against the Cedar Rapids malls. Now that Linn County has the local option sales tax, Neuzil said, this argument is no longer valid. Neuzil said that Coralville is now very open-minded to the idea; Horne and Sullivan agreed. Stutsman said Coralville’s prior opposition had been primarily caused by the fact that they didn’t want to share their mall revenues with everybody. Thompson said they wouldn’t be sharing; it would be additional revenue. Stutsman said Coralville felt that it was contributing the main asset to contribute revenues, but was not going to get a proportionate amount of money back. Stutsman said she has no problems with a local option sales tax with an expiration date (a "sunset" tax). Horne reminded the Supervisors that the schools have a State surtax on the County; they will pay to have a local option sales tax.

Harney asked if they have added the $100,000 that was discussed earlier back into the budget. Horne suggested they wait and see where the departmental budgets are after the 4% cut, and then they could consider further action. Horne noted that the actual 4% cuts will not be identical to the estimated numbers that he put into the current budget. Thompson said they still have the $200,000 for voting machines; Horne concurred.

Lehman noted that the County has always been efficient, but is now going beyond efficiency. Neuzil agreed, saying that the County is now cutting services. Horne said if the cuts get much worse, the County should start looking at functions. Neuzil said this makes the Board of Supervisors’ Strategic Plan very important. The group discussed other possible areas to cuts or change County services, including the education programs and mowing at the Conservation Department, employees at DHS, a restructuring of the Ambulance Department into a Metropolitan Authority, and rural transportation service. The Supervisors said they did not want to cut any of these services, but admitted they might have no choice if further cuts become necessary. Neuzil said he is worried about what is going to happen to budgets statewide next year. The group also discussed the possibility of Medicaid cuts. Thompson asked Horne if he could make an assessment of what non-mandated functions are performed in each department? He said he could do this. Horne and Sullivan agreed that the Board has a lot of discretion in areas outside the core functions in the elected departments, roads, and mental health.

Harney asked where the money for public defenders came from, and Thompson answered from the State. Thompson said the County does pay indigent defense for some juveniles, and a small amount of money in the County Attorney’s budget that is used for this, as well. Thompson said in a bad budget year, the State sometimes returns the costs of juvenile indigent defense to the counties. She said this happened, one year, in the past. Stutsman said the indigent defense is required; someone has to pay for it. She said if the State tells the County to fund it, they will have to do so.

Thompson said she did have a 3.25% COLA for the non-bargaining, Auditor, and Attorney, and asked if they are changing it? Stutsman said she’s comfortable changing it, and wants to keep it at 3%. Neuzil agreed with Thompson, and said he was sure they had decided to keep it at 3%. Thompson asked how much more the .25% would cost? Horne said it would cost $15,000. Neuzil said they should keep it at 3%. The Board discussed the fact that any changes to the Compensation Board’s recommendations have to be in equal percentages for all elected officials. The group summarized that the Sheriff, Recorder, and Treasurer are getting a 3.6% COLA, and the Auditor is getting 3%. Horne said there is no doubt that the bargaining units’ raises are outpacing the management’s COLA raises. Horne said this is the 2nd year this has occurred.

Harney said the County needs to reevaluate its stand on longevity and merit pay next year. Stutsman said the longevity bonus was put in place initially because there was no pay scale; now, they have a pay scale but the longevity is still existent. Horne said the County could try and bargain longevity out, but they will have to give something to get this done. Thompson noted that they also need to work on the health insurance during the bargaining process next year. Horne guessed that the departments will reply that the County is sitting on enough money that health insurance will not be a problem. Horne said it would be easier to get the bargaining units on the same schedule; Stutsman added that the separate schedules take a lot of extra time for everyone. Thompson said she would send out a list of the things they have discussed, and send it out to the departments as "talking points."

Adjourned at 10:53 a.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary