Chairperson Thompson called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:05 a.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

Budget Coordinator Jeff Horne said the budget was almost completed; the latest version incorporates the changes in the Recorder’s Office budget, as the Supervisors discussed in a previous meeting. He said he is still working on incorporating the extensive amendments regarding the Health Department’s budget, involving the 4% cut requested by the Supervisors. Horne said he would have a finished copy of the budget by the next budget meeting on Wednesday, February 13.

Lehman spoke of the possibility of additional State cuts, and wondered if any expenses would be shifted back to the County. Thompson said if the State cuts Medicaid, more people would request assistance from the County’s General Assistance Department. Stutsman noted that the State had agreed to provide Medicaid for the medically needy, a population about whom she was most concerned. Lehman wondered about the impacts of the State cutting MH/DD funding; Thompson said that, fortunately, this department is currently under budget. Stutsman cautioned that MH/DD Director Elaine Sweet had worked on her budget numbers of the weekend, and was worried that things did not look good. Lehman said the MH/DD fund balance will be gone in the next year, and maybe even more quickly than that. Overall, Lehman said, there is no room for budget amendments.

Horne said he would feel better if they could take another $500,000 out of the budget, for cash reserves. He said he is worried about next year; he would rather cut now than in the middle of next year. Harney asked how State cuts could affect the current numbers, and Horne said he did not know. Neuzil asked where the State’s 4.3% cut affected the budget; Horne and Stutsman answered it hit hard in Secondary Roads, MH/DD, the Health Department, and the Court system. Neuzil wondered what non-mandated services could be taken out of the budget if the cuts do happen. Stutsman said it is important for the Supervisors to visit with State legislators about how budget cuts at the State level impact the counties.

Neuzil asked Horne about the Sheriff’s budget numbers. Horne said through January, the first 7 months of the budget year, the Sheriff's Department has spent $202,000 on prisoner transport. Stutsman said she is worried about the County’s budget concerning wage increases, increased costs of health insurance, and the costs of the County Jail. Harney said he was told over the weekend that the County Attorney’s office gave raises to his employees to compensate for the increased workload that was going to result from the budget cuts. Harney didn’t think this was responsible. Stutsman noted that the County Attorney is an elected official, and could do as he wished with his budget. Lehman expressed concern about the possibility of an elected official spending line items intended for mandated services on other purposes, and then coming to the Board and asking for more funds.

Stutsman reported that she met with people from Pathways, who are upset that the Board has cut all of its support to their organization. Stutsman said this cut will impact Johnson County’s frail elderly community, probably forcing more people into nursing homes. Stutsman said Pathways has requested to come in to the Supervisors and discuss going to a fee-for-service setup, despite her explanation that the budget was pretty much done, and there was little hope of their funding being restored. Harney said he sympathized with Pathways, because keeping seniors in their homes, via home health care, was the direction they wanted to go. Neuzil wondered if this was the role of County government? Harney said it is. Stutsman said it is important to define the roles; should County government just issue license tags? Thompson thought that it was the County’s role to care for the poor and needy, but she hasn’t been convinced that the people Pathways serves are in this category. Stutsman said that Pathways believed there are people in this category who will no longer be served.

Stutsman also reported that Conservation Director Harry Graves would like the $6,700 restored to his budget, allowing him to enter into a lease agreement for a new piece of equipment. Harney wondered if the sale of the house and 2 buildings on the Tomash property could be used by the Conservation Department? Horne said the proceeds would go back to the General Fund, and he will be able to budget for this amount of revenue in next year’s budget. Harney wondered why this money would go into the General Fund; why would it not go to Conservation? Horne said it will go back to the Conservation Department; Thompson said this is how County finance works. Stutsman said that the Conservation Department has been very frugal over the years, and said it has caught up with them. Thompson said this is why they didn’t ask the Conservation Department to make the 4% cut like all of the other County departments.

Stutsman asked Horne if he was actually serious about cutting another $500,000 out of this year’s budget? She noted this would be another 3% cut. Horne said he understands the situation, but the additional cut would make him feel better about next year’s budget situation. He said if there are additional future State cuts, and revenues are under projections, the County might have to adjust in the middle of the year. Horne noted that the current budget only allows for $200,000 of cap room.

Harney reported that Facilities Manager Mark Bulechek reported to him in a recent conversation that his budget is currently $26,000 over. Harney noted that these numbers were set before Bulechek took his current position.

Thompson reported that she too heard from Pathways and the Conservation Department, and also from someone concerned that a classroom of Head Start was going to be cut. Neuzil said he too heard about this; Head Start was reducing class sizes for young toddlers from 18 to 12. Stutsman said the question, again, was who was the County here to serve? She said they need to address this issue in their upcoming Strategic Planning; if their mission is to serve the indigent, this means people with zero income and no resources. Stutsman said this will also impact their Veteran’s Affairs budget. Thompson thought that poor and needy also included low-income, not just zero income. Thompson said there is nothing in the Code that specifies indigent. Harney thought they could also consider moving the Veteran’s Affairs Department from its rented space at the Post Office to the Administration Building. Harney said they could also possibly house Veteran’s Affairs in the newly-acquired Ambulance building.

Neuzil hoped that Strategic Planning would include a plan to phase out some employees, utilizing retirements before layoffs. Thompson said that Human Resources Administrator Shramek reported that the union contracts contain a plan for employee layoffs. Horne pointed out that if there is a 7% increase in valuations next year, that will create an additional $800,000, but also noted that they started this year with over $1 million in expenses. Stutsman said that health care is a large part of the budget problem. Horne agreed, and said even if there is a good valuation year next year, the budget will still be tight. Harney said that employee longevity bonuses and additional vacation time add up over time. Stutsman agreed, and didn’t think the Supervisors could now afford to extend benefits earned by one bargaining unit to non-bargaining employees. She said the Board would like to be fair and consistent, but could not afford to do so this year. Thompson thought they should give the benefits that don’t cost immediate dollars, but not longevity or the additional sick leave payout. Stutsman said this sends a message to the unions that the Board cannot afford to give significant increases in benefits and wages. Administrative Secretary Casie Parkins gave the costs of the longevity increases. Stutsman asked about the sick leave payout, and Parkins said 24 employees are currently eligible. A total-cost projection based on $50,000 annual salaries and paying the maximum allowed 30 days of sick time was $138,470. Stutsman noted that they were not going to grandfather in any employees who have already retired; the new policy would begin with the new budget year. Stutsman wondered if there would be any benefit in talking about an early retirement plan. Horne said Shramek was going to join the Supervisors to give some information about the costs of additional employee benefits. Thompson favored the addition of a 5th week of vacation for County employees, since there would be no direct cost to the County. Harney said this will cost the County a lot in the long run; the Supervisors agreed this will have the most impact in the Secondary Roads Department. Parkins added that Shramek had told the Supervisors in an earlier meeting that the departments who would be most impacted by the addition of a 5th week of vacation, such as Secondary Roads, already had the benefit.

County Sheriff Bob Carpenter said he wanted to explain his reaction to the Board’s request for a 4% budget cut. He reminded the Board that department heads were already asked to lower their budgets from last year’s estimates, so overall he has been asked to cut 7% from his budget. Carpenter said he didn’t know what he said in a recent memo that would have led the Supervisors to say to the media that they thought he was being unreasonable. He acknowledged that the budget is a problem this year, and said in the 13 years he has prepared budgets for the Board of Supervisors, he has always kept the best interests of the County in mind. He said that for his department, he does not have all of the facts in hand at the beginning of the budget process, 18 months ahead of time. He said he does not have any idea how many drownings, homicides, or calls for service his department will have in the coming year. Carpenter said the only sure thing is that the numbers of these things will not decrease. Carpenter said that approximately 85% of his budget is salaries and personnel-related expenses, which leaves him about $800,000-$1 million to operate his department, a department which provides necessary emergency services and does not allow for equipment breakdown or facility failures.

Carpenter said he did not intend his memo to be hard in any way, but wanted to point out to the Board that he has a dilemma, and he does not know where to cut that is not going to affect a lot of services. He said a lot of things that he could cut are necessary for his department to run. Carpenter defended his $150,000 expenditure for vehicles, and saying that just as the Administration Building added some new offices this year, his squad cars are offices for his employees. Thompson interjected that the Supervisors had not asked Carpenter to cut his squad cars; they had asked for a 4% cut, and left the details up to him. Carpenter said the bottom line is that the only thing he has to cut is to take away the 4 deputies that the Board began funding last year, and that still won’t provide the $220,000-$240,000 that the Board has asked him to cut. Carpenter said if the Supervisors think that he has fat in the budget, he is willing to listen, but he wrote the memo because he doesn’t know where to cut. Carpenter said there are not a lot of extra programs that he finances in his department, so there is nowhere for him to cut. Carpenter said in past years when he has skipped a year of car replacement, the results have been disastrous, and it has taken several years for him to catch back up. Carpenter said it costs extra money to avoid replacing a car because the cars become very expensive to maintain. Carpenter said that the cars, radios, and weapons used by his department are all necessary equipment for his department, and should be in good condition. He said his employees depend on these items for safety reasons, and could be the difference between living and dying. Thompson said the Supervisors discussed these issues at length and agreed with Carpenter.

Neuzil said if Carpenter continues to have the Jail Alternatives as a part of his budget, he will not have a Sheriff’s Department in 3-4 years. Neuzil thought the Jail Alternatives needs to be a separate entity, apart from Carpenter’s budget. Carpenter said he is out of money for this budget year’s Jail Alternatives, and said he needs to come back to the Board in the next week for an amendment. Carpenter said if he cannot guarantee payment to Linn County for the prisoners they are housing from Johnson County, he will pull them back to the Johnson County Jail, and then deal with what action the State Jail Inspector would take. Carpenter said that the bill for prisoner transport for last month was $24,000-$25,000. He said this amount is lower than earlier months, as they are currently keeping only about 10 prisoners at the Linn County facility. Carpenter said he is simply trying to run an operation that has been very difficult to run in the past couple of years, and it is getting more difficult every year. He said he wanted his department to be treated fairly when compared to other departments in the County. Carpenter said he wanted the Supervisors to tell him what they wanted him to do at this point in time, and added he would rather they discuss it with him rather than putting it in the newspaper. Carpenter said he did not write the memo to be a smartass, or to make light of the budget problems. Carpenter said he would be glad to do what the Board wanted him to do, if they would tell him what that was.

Stutsman said that the Board is concerned that every other department has gone into their budget, and cut line items, making difficult decisions. She noted that some cuts have affected staff, and staff training and development. Stutsman said it seemed to her that Carpenter cut Jail Alternatives in order to avoid the 4% requested cut, because he knows that the Jail Alternatives cannot be cut. Stutsman thought there is surely something in the Sheriff’s Department’s budget that can be cut? She asked if staff members are being fed, in addition to prisoners? Carpenter replied that the only staff members that eat there, by contract, are those who cannot leave the building, which is jail staff. Carpenter noted that in the area of training, there are not too many other departments whose employees are mandated to have training each year, as his are. Stutsman said they understood the mandated training, but wondered if there is money for non-mandated training that could be cut? He said he didn’t see any training money that could be cut, and said the only place he could see would be to cut staff. Carpenter said he didn’t know what expenses could be reduced, and Stutsman said she didn’t know either. The Sheriff said Dick Myers told him that Carpenter was pretty damn frugal, and Carpenter said he took Myers’ comment as a compliment. Carpenter asked Captain Duane Lewis if Lewis agreed with Carpenter’s assessment, and Lewis said that he did in general. Lewis acknowledged that they could possibly take $5,000-$10,000 out of the fuel budget, and if gas prices decreased, there would not be a problem. Lewis added, though, that if gas prices did not decrease, they would have to come to the Board of Supervisors for a budget amendment. Stutsman wondered if the Sheriff’s department needs to do as the highway patrolmen; sit by the side of the road, thus conserving fuel costs. She said these were the kinds of decisions that needed to be made. Carpenter replied that the highway patrol doesn’t have to do anything, but if his department doesn’t answer a call, that creates a big problem. Stutsman said there are in such a dilemma with this budget because they cannot raise taxes. Lehman said that the Supervisors are just as frustrated as Carpenter is; Carpenter replied he is more frustrated when he reads the Supervisors’ quotes in the paper. He said he is not working against the Board; he is trying to work with them and the comments in the paper upsets him. Lehman said the Supervisors do not want to micromanage Carpenter’s budget.

Neuzil said if the Jail Alternatives remain in Carpenter’s budget, they are going to have an extremely difficult time with the Sheriff’s Department budget. He hoped they could have a separate fund that would be used for Jail Alternatives, so Carpenter would come up with a 4% cut that did not include any money for prisoner transport. Horne noted that if they created a line item in the Central Services budget to pay for prisoner transport, the funds would still come from the General Fund. Stutsman asked who would manage the money, in this scenario? She said they had put the money in the Sheriff’s Department’s budget so the Sheriff would manage it. Stutsman said she saw Neuzil’s suggestion as a numbers game, something like what the Health Department had done, trying to get as much money as possible out of the Sheriff’s Department, so cuts would not feel so drastic. Carpenter said it was his understanding that money for Jail Alternatives was not money he could play with, but the money was to be used specifically for that area, and none other. Neuzil asked Horne what the Sheriff’s Department’s budget cut would be without the Jail Alternative line? Horne said they would still be asking for a cut of about $200,000. Lehman said this solves Carpenter’s problem, but doesn’t solve the problem the Board has. Neuzil agreed with this, but said the choice is whether they deal with the problem now or 3 months after July 1st, when Carpenter has to come to the Board for a budget amendment when he runs out of funds to pay for prisoner transport. Neuzil said moving the funds out of the Sheriff’s Department’s budget means that they are asking the Sheriff to cut $225,000 out of his budget this year, and $350,000 or $400,000 next year. Horne asked if Neuzil meant that the prisoner transport would just crowd out the other spending, and he said yes. Stutsman said that health care is crowding out everything else in the County’s budget. Lehman asked what the Board is going to do if they tell the Sheriff that he does not have to cut 4%? Where are they going to come up with that $225,000? Thompson agreed, saying that they would have to come up with the money. Horne said if the Supervisors simply took it out of Carpenter’s budget, cutting 4% from the sum of last year’s budget and his payroll increases, Carpenter would have to come up with $215,000. Lewis noted that this amount if half of the department’s operating budget, which they have not increased in the last several years, excluding some extra gas money last year because of the higher fuel costs.

Carpenter said the 4 deputies are the only place he can cut, aside from Jail Alternatives; there is no fat in his budget. Lewis said they realize that there is still going to be a problem in the overall County budget, but said they are hoping to have better and more legitimate numbers next year, to try to work with the Board and figure out what to do about the situation. Neuzil said there could not be an amendment later in the year, because they have no reserve. Harney said if Carpenter cuts the personnel, there will again be safety issues in the Jail. Carpenter agreed. Stutsman asked about cutting 2 deputies, instead of 4. Lewis said 2 deputies don’t total $200,000. Stutsman thought that there needs to be some cuts in this budget, just for the principle of it. She said she didn’t think it was fair to cut other departments by 4%, and not the Sheriff. Stutsman continued that she didn’t know where the cuts could come from, and said she wasn’t going to manage Carpenter’s department. Thompson said the Supervisors had expected that Carpenter would keep the money for his vehicles and for prisoner transport, and the $215,000 would be taken from other line items in his budget, instead of the whole amount out of one line item. She mentioned the possibility of reducing overtime costs in the department, since Carpenter got 4 new deputies last year. Carpenter said he did not have the most current overtime numbers with him, but said they have had hundreds of hours of overtime in the last week. Carpenter said judges are requesting that deputies sit in on trials, for security reasons. Stutsman asked if this is court-ordered; does Carpenter have to provide this service? Thompson wondered what it would cost to hire a guard, or personnel from a security firm?

Lewis said even with small budget reductions to items such as overtime and fuel, the department will still need to take a large amount from the Jail Alternatives line item, which means they will run out of money for prisoner transport in the middle of the budget year. Then, Lewis said, they will have to come to the Board of Supervisors for a budget amendment. Neuzil said there can be no amendment, because there is no money, and asked where can they go from here? Stutsman suggested that they tax for the remaining $200,000 under the allowable cap. Stutsman asked about the Jail Alternatives budget for this budget year, and Lewis said they have assumed that this year’s budget is going to be addressed separately. Stutsman said that the only way this situation is going to change is if the Iowa Legislature changes the mandatory sentencing requirement, and said many states across the nation are facing similar problems with jail overcrowding.

Thompson said that Carpenter had recently been quoted in the paper as saying that he didn’t think his department recouped the whole expense of serving the small communities. She wondered about raising the fees to the cities in order to generate additional revenue. Carpenter said he could do this, or eliminate some of the hours. Stutsman asked whether or not North Liberty is still using the County’s Sheriff’s Department? Carpenter said they contract the department at a higher rate than some of the other municipalities. Neuzil mentioned booking fees, and Thompson reminded him that the Supervisors had voted against this proposal. Neuzil said unless they get a jail in Johnson County in the next couple of years, the difficult budget situation will remain. Neuzil said he wanted to solve this problem now, rather than waiting 3 months into the budget year. He wondered about taking the Auditor’s Office’s savings for election equipment, and thus committing to bonding for this equipment. Harney asked about the costs of transporting prisoners back and forth. Carpenter said they make enough trips to Cedar Rapids to the juvenile detention center, and to Independence with psychiatric cases, that they do not have to travel separately to Cedar Rapids very often. Carpenter also noted that the State Jail Inspector has recently said that the Jail does not have enough light in its day rooms, creating another problem with compliance.

Neuzil asked for a summary of what they have been talking about. Carpenter had projected $413,000 for Jail Alternatives for the FY 03 budget; did $170,000 remain now? Horne and Lewis confirmed this. Thompson said that they have committed $350,000 to Jail Alternatives for this year; Carpenter and Lewis said they will be better able to estimate what they need as the end of the budget year draws near. Harney thought they should be getting a pretty good idea now, 7 months into the budget year. Lewis said they were housing between 15-25 prisoners in Cedar Rapids, but right now the number is down to only 10. Stutsman said the Supervisors had received a letter from Lee County detention, an offer to house juveniles for $200 a day, an amount that includes transportation. She asked if this could save them any money? Horne and Thompson clarified that Juvenile Detention Officer Brandon Beaudry’s budget for juvenile detention was running over, not the Sheriff’s Department’s.

Neuzil said the Supervisors should either find $243,000 now, or try to find it in January or February of 2003. Lewis said the advantage to waiting is that it is a year away, and they will have better data, and will know what the economic climate is then. Thompson asked what the State would do if they disobeyed the rules of the State Jail Inspector. Lewis said he had no idea, but if they shut the jail down completely, Johnson County will have to find places for 90-100 prisoners. He said that is what happened to Washington County, because of a building issue. Carpenter didn’t think the jail would be completely shut down, but said the State would make sure that Johnson County was in compliance. Carpenter said there have been over 700 new beds added to county jails in the State of Iowa during the last year, and there are 9 counties in the process of constructing or expanding a jail. Lewis said they are not in as bad a shape as they could be, because of the availability and proximity of room in the Linn County Jail; Carpenter agreed. Harney noted that Hope House is only funded until July, and if it closes down, it could have a drastic effect on the jail population.

Harney asked if the 4 new deputies are going to relieve some of the overtime costs in the Sheriff’s Department. Carpenter replied no, because of the additional security they are providing at the Courthouse. Lewis noted that some of the requests for security at the courthouse were warranted; some of the situations required 2-3 officers to provide sufficient security. Carpenter said there are some pretty mean people in jail, who are there for a reason; not all prisoners are drunks.

Neuzil returned to the budget issue, saying that even if the Board comes up with $200,000, they are still asking the Sheriff’s Department to come up with $43,000 in savings. Thompson asked about raising the revenue projections, which she thought could be a bit low. Lewis replied that they haven’t done this because revenues are a moving target, and is dependent on the State. He said they would rather be conservative than giving the Supervisors a number they cannot reach.

Harney asked how much revenue a processing fee would bring in, if the fee were set at $50 per person? How many people go in and out of the jail? Thompson said she had those numbers. Carpenter said that Black Hawk County has instituted a booking fee that is paid by the prisoners, and is basically breaking even on their costs. Carpenter said that Thompson has a better handle on these types of numbers. Thompson thought if they charged $50, the fee might pay for itself, but if they charged $15 or $20, it might be problematic. Carpenter said if they are going to charge the cities, they should charge everyone, including themselves. He said they could not charge the State, according to the Code of Iowa. Harney noted that the prisoners should be the one paying the fee; Neuzil said the cities could collect from the prisoners, if they wished. Lehman said the Supervisors told the cities they would not implement a booking fee this year; others agreed, but Neuzil thought they could reexamine this discussion for next year’s budget discussion. Neuzil said the only remaining alternative is to cut deputies until the Sheriff’s Department no longer exists, and all the department does is house prisoners.

Neuzil asked how much room they have to tax, and Horne replied a little over $200,000. He said he would be pretty uncomfortable going up to that level, and said there should be a margin. Stutsman and Lehman asked why, and Horne said the projections are based on anticipated revenues. If revenues don’t come in as expected, and there is no room left, then they have problems. Horne said if next year’s revenues are $200,000 over projected levels, then they will have to cut $200,000 out of next year’s budget, during the year. Thompson said if they haven’t taxed for it, they won’t have it at all. Horne said if they do tax to the capped amount, they will have to watch revenues very carefully. Stutsman said during the next year, they will have to prepare for more cuts. Neuzil said this would mean layoffs. Neuzil repeated that they are still asking the Sheriff to cut $43,000. Horne confirmed this, saying they can’t tax the full $240,000. Lehman wondered about cutting the line item for uniforms; Carpenter disagreed, saying that the officers need to have uniforms. Lewis said they could cut $3,000-$4,000 from this item. The group further discussed what to do with Carpenter’s budget, and Horne reminded the Supervisors that the 4% cut would mean taking $240,000 out of the Sheriff’s Department’s budget. The Supervisors said they would tax the remaining $200,000 under the cap, and put it in the Sheriff’s budget. Neuzil said he hoped they could find some of the shortfall in increased revenues; Carpenter said he doubted this. The group noted that after the remaining prisoner transport costs were paid for this year, there would be no more money left in the Capital Projects fund, which was previously to be used to help build a new jail.

Stutsman said she didn’t understand why taxing to the Board’s full authority was so perilous, and asked Horne why he was so concerned? She said her only concern is how it will reflect on a person’s tax bill. Stutsman said another possible future choice would be to take some of the Sheriff’s budget and move it to the Rural Fund. Harney thought that this has been done in other parts of the State, but then challenged in court. Stutsman disagreed, saying that she thought they were working legislatively to allow this practice. Thompson thought they could consider this next year; Stutsman agreed. Thompson summarized the possible options for next year: move the patrol services into the Rural Fund, implement a jail intake fee, and possibly raise the fees for the small cities. Neuzil said they should add a new jail to this list, and Thompson replied they are 2 years away from a new jail if they dug the hole today. Stutsman said they still have to fund a new jail. Carpenter asked how they can fund a new jail if they can’t pay for the prisoners they are transporting now? Stutsman wondered if their philosophy should simply be to fund prisoner transport, and not worry about a new jail. Harney noted that there would be a problem with this strategy if the Linn County facility filled up. Carpenter said a new jail would not start to pay for itself until about the 20th year of its operation. He said all of the new facilities going up around the state included extra beds, to generate additional revenue. The Supervisors summarized to Carpenter that the Sheriff’s Department needs to cut about $43,000, and they will contributed the other $200,000 by taxing to their full authority. Neuzil repeated that there will be no money for future amendments.

Recessed at 10:25 a.m.; reconvened at 10:35 a.m.

Thompson said that when she asked if the Supervisors had agreement to give Carpenter the $200,000 that came from taxing to their limit, no one had replied. She said she had assumed that they had wanted to do this, and that she would have been the only one not in favor of doing it. Lehman said he is torn to give Carpenter that much. Stutsman said that the jail is mandated, and the Supervisors are going to have to pay for it. She thought they should tax for it, or they would have to cut somebody else’s budget. Stutsman said Carpenter left here thinking he had the commitment for the $200,000; if the Supervisors are going to change their mind, they should have him come back. Neuzil said he hasn’t changed his mind. Harney thought they should put the $200,000 into the Sheriff’s Department’s budget, but wondered if they should tax for it? He said he considers Horne’s concern a valid one, because Horne is the Board’s financial advisor. Stutsman said she didn’t understand the problem, and Harney said he didn’t either. The Supervisors further discussed and asked questions about Horne’s concerns with taxing to their full authority. The long-term problem, Horne and Stutsman explained, is that increases in the County’s expenses continue to outpace the increases in revenues and valuations, the County’s main sources of income. Neuzil proposed finding a middle ground for funding the Sheriff’s $200,000, taxing an additional $100,000 and finding $100,000 of cuts. Harney said they are going to have to look at cutting staff. Harney said if they aren’t going to cut staffing this year, they will have to next year. Stutsman said some staff members Harney is talking about have been employed by the County for over 20 years. Thompson said if those people are in a union contract, they would keep their jobs and someone with less experience would be laid off. Harney said he has a problem when Johnson County is paying an employee to do another entity’s business.

Lehman said he was disappointed that the Sheriff did not appear willing to cut in areas suggested by the Supervisors. Neuzil said that Carpenter is going to have to come up with $43,000 in cuts. Neuzil said he believes they are better off with the current course of action rather than trying to deal with this issue in July, if Carpenter came to the Board for a budget amendment. Thompson noted that every time Carpenter comes in for an amendment, there is a newspaper article about Johnson County’s jail problem, which isn’t all bad. Stutsman said that since all of the other departments had to make some tough, tough choices, the Sheriff’s Department should have to do the same. Neuzil agreed. Stutsman said she didn’t want to have to second-guess department heads and elected officials who claimed they are frugal. Harney thought there are line items that could be cut, and said that not all of the department’s training is mandated. Neuzil said what they are doing now is easy compared to how the process is going to be next year, when they are going to have to think about real layoffs and changes.

Conservation Director Harry Graves noted that the Supervisors have been talking about large sums of money regarding the Sheriff’s Office, and said he wanted to talk about lesser amounts, but money that was still crucial. He said he understood from Horne that all departments were not to receive any of their decision packages, but would receive their 2002 budgets with increases for step-and-grade increases, merit pay, and COLA increases. He said the total budget amount, for his department, was $851,739. He said last Wednesday’s newspaper indicated that his department would be receiving this amount, but this changed when he received an email informing him of a cut in the amount of $6,817. He said that although this doesn’t look like a lot of money county-wide, to the Conservation Department, it is a lot of money. He said this money represents the first payment on a lease-purchase agreement for a tractor; he said they have a tractor that absolutely has to be replaced. He appealed to the Board to allow his department to keep the $6,817, in order to make a small starting effort to replace their aging equipment. He said the tractor is critical. Graves said he has told Horne that he can take this cut out of something, but likened the situation to having to choose between losing one of your arms, and getting to choose whether you’d like to keep the right or the left.

Lehman asked about money generated from the sale of buildings on the Tomash property, recently acquired by the Conservation Department, and wondered if that could provide some funds he hadn’t anticipated. Graves said that money will be used to partially restore the Conservation Trust Fund, the department’s savings account for significant purchases. Graves cautioned against using savings for everyday expenses, though he admitted that this may have to be done. Lehman asked about the tractor lease, and Graves said it was a 3-year lease. Lehman noted that once they commit to the first year, this will become an annual expense, and Graves acknowledged this fact.

The group discussed the calculated Conservation levy. Thompson clarified that the Supervisors had agreed to give the department $0.23 per $1,000 valuation, providing Graves with his budget of $844,922. She continued by saying that $0.22 would have given the department a budget around $808,000. Stutsman and Thompson noted that the department has been given the $0.22 amount for the past several years. After the $0.23 calculation, the Supervisors added about $7,000, the difference to get to Graves’ requested base budget amount of $851,739. Thompson noted that if they had requested Graves to make a 4% cut, as they did the other departments, this amount would have been $35,0000. Graves countered that the Conservation Department has been under-budgeted in the past years. Graves said in the current year, he thought their levy was $0.22444, showing that the Supervisors could levy an odd number, and did not have to work in terms of even pennies. Thompson said since the Supervisors held the Conservation Department harmless from the 4% cut, and gave him the $0.23 levy instead of the $0.22 level, she thought the requested $6,817 cut was reasonable. Graves said if his department had not operated on such a draconian basis in past years, he probably wouldn’t be before the Supervisors today. Thompson again countered that this is why the Supervisors gave him the $0.23 levy and excused him from the 4% cut. Graves said that $6,800 would make a significant difference in his operation, but would not affect the taxpayers of Johnson County very much, once it was spread out across the County.

Neuzil asked how the taxing for the Conservation Department worked, and asked if his formula was the same as in the General Fund. Thompson agreed, and said they would have to take the $6,800 from the $200,000 they were generating for the Sheriff. Lehman and Horne agreed, saying it would have to come out of someone else’s programs. Stutsman said she was supportive of restoring Graves’ funding. There was some discussion about taking money from the ICAD block grant. Neuzil noted that the ICAD block grant was one of the only places that had not yet been cut. Thompson asked Graves if he could raise revenues to get an extra $1,000, or cut something else, if the Supervisors gave him $5,000 from ICAD money? He said they have raised all of their fees, and noted that those fees go into the Conservation Trust Fund. Graves said his department needs the $6,800 to make the first payment on the tractor. He said the old tractor is almost 20 years old. Harney asked about using money from the Conservation Trust Fund to pay for part of the tractor. Graves said it could be done, but noted it would deplete their savings. Horne explained that all of the Conservation Department’s revenues came into the General Fund, and then the Supervisors transferred that amount back to the Conservation Trust Fund. Horne said if they wanted to retain some of that money in the General Fund, they would simply lessen the amount of the transfer. Stutsman said she was stunned by old equipment in use in the Conservation Department, and said it was a safety issue. Harney agreed, but wondered where the money would come from? Stutsman thought that taking the money from the ICAD block grant was a good idea.

Lehman said he was concerned that the Conservation Department had enough money to buy some property, but now is coming in to ask for more money to take care of it. Lehman said he understood the property was right next door to the park, and was a logical acquisition. Graves said he appreciates those concerns, and said the department is going to be renting the farm ground for at least 3 years, creating a revenue source for the department to re-seed the property in native grasses, and create a wetlands area and a pond. He said the cost of the wetlands work could be shared by the Fish and Wildlife Service and the Soil Conservation Service. Lehman said he was concerned with weighing other important human services cuts in relation to the small cut proposed to Graves’ department. Graves said as economic times get tougher, the use of park and recreation areas increases. Stutsman agreed. Neuzil asked Graves if the Conservation Department has considered building cabins out at the park? Graves answered that he wants to look at this possibility in the development of a long-range plan. Harney asked if the Conservation Department bought more property than just the 42 acres? Graves said no, the Heritage Foundation that purchased the property for the department bought both tracts of land, and the Conservation Department purchased only the property on the east side. He continued that this brought Kent Park up to Echo Avenue, and also assured that there would be no development in this area. Graves said this had been a one-time opportunity; if they hadn’t purchased the property when they did, they might have never had another chance. Harney said he supported restoring Graves’ $6,800, moving money from block grants to his department. Thompson asked which ones; Harney answered ICAD for the first $5,000, and spread the rest out evenly among the others. Neuzil pointed out that there were a few block grants that did not get any cuts; he said even a 1% cut in those areas could generate the additional $1,800.

Thompson and Stutsman agreed that if the Board gives Graves $5,000 from ICAD, he could find $1,800 from his other line items, and still get the tractor. Graves said he could do that, but said he felt as if his department has compromised in advance. He acknowledged that the Supervisors have a difficult job. Graves said his department has so many needs that haven’t been addressed, and wondered if the block grants that haven’t been cut could share the pain. He said that his concern is the budget situation for next year. Harney agreed, and noted that the new tractor has budget implications for the next 2 years. The Supervisors said they understood that there are some things that Graves is not going to be able to do; the grass may be longer, and there may be fewer part-time employees. Thompson asked if there was consensus to give Graves $5,000, and the group agreed there was. Harney repeated his desire to take the money from several places, not only from ICAD.

Graves said he emailed some information to the Supervisors about REAP funding. He said a bill has been introduced to the Legislature that would allow the Legislature to circumvent the REAP formula and manipulate the funding. He said this will open the door and allow REAP funding to be gutted. Graves said that Johnson County Conservation receives $30,000 a year from REAP funding, and also makes Johnson County eligible for the grant program. Graves said he nearly received grant money to acquire the Tomash property, but narrowly missed out. Graves said that REAP needs to be defended, and said he was going to introduce this at his caucus tonight, and hopefully get the issue included on the County platform. He said they should oppose any changes in the REAP formula, and fund REAP to the fullest extent possible. Graves said it was supposed to be $30 million a year for 10 years; in 1998, the sunset was lifted, and it was supposed to funded $20 million a year for 20 years. Graves said it is currently funded $10.5 million, and the governor has proposed $11.5 million. He said unless they were proactive, REAP might be altogether eliminated. Lehman asked Graves to further explain the grant program. Graves said there were $5.5 million of applications this year, and they had $870,000 to distribute. He said the first 3 projects took all of the money except $88,000. Graves said if REAP were being funded at its proper level, this situation would have been different. He continued by reminding the group that REAP was supposed to be funded from the profits from gambling, so it would never have involved money from the General Fund. He said REAP was passed in 1989, but in 1990 and 1991, the system began to drown in red ink, so all of the gambling and lottery profits were channeled into the General Fund, instead of REAP. Graves noted there is an upcoming REAP assembly, which he will attend; Executive Assistant Mike Sullivan added that he too is planning on attending.

Human Resources Director Lora Shramek joined the Board to help the Supervisors make some decisions about employee benefits. Stutsman said they need to make a decision about longevity benefits, possibly adding a 5th week of vacation, and a payout for sick leave upon retirement. Neuzil asked Horne if those benefits are included in the current budget numbers; Horne replied no. The Supervisors noted that they will have to take the money from somewhere else in order to award any or all of these benefits. Stutsman asked Shramek about the psychology of this issue, considering that the Board is interested in bargaining out some of these benefits. She said the budget is very tight this year, though she admitted it would only cost $4,500, and said the Board has always had a policy of being fair and consistent with all employees. Shramek said that her first choice would be for the Board to be fair and consistent; she would hate to see the non-bargaining employees get the short end of the stick. Shramek said if the Supervisors go ahead with the 3% COLA for the non-bargaining employees, they should really consider adopting the 5th week of vacation and increased longevity schedule. Shramek said the unions received those benefits a year ago in July; the non-bargaining employees are already a year behind. Shramek said several non-bargaining employees have already asked about those benefits. Shramek said that since every 1% COLA cost the County about $60,000, and these benefits would only cost $4,500, she recommended giving these benefits. Shramek said she would not like to see the non-bargaining employees get less than the bargaining units in both compensation and benefits.

Thompson repeated Stutsman’s earlier point, wondering if not awarding these benefits would put the Board in a better position next year to go to the unions and try to bargain the benefits out? Shramek said absolutely not; the unions don’t care what non-bargaining receives. She said a particular union does not even care what other unions have received; they are there to get the best deal for their union members. Harney said he agreed, but noted that once a benefit has been given, it is very hard to take it back. Shramek agreed, saying it is extremely hard. Harney wondered about giving the benefit in the first place, if they were just going to take it back out? Lehman wondered if they were going to be able to bargain the benefits out of the union contracts; Stutsman said they have to do this. Shramek thought the County has up to a 50% chance of getting that benefit out, because half of the counties in Johnson County’s comparability group/area have the benefit, and half do not. Stutsman said that the $68,000 cost for the longevity benefit equals one or even 2 staff positions. Harney said they were also going to have to look at the merit benefit. Thompson asked if they have consensus to do the longevity benefit? Harney thought they should set it aside until they renegotiate the union contracts next year. Lehman, Thompson, and Stutsman agreed.

Shramek noted that the next possible benefit, the 5th week of vacation, would affect 17 individuals. She said there isn’t really a dollar cost, but there is some lost productivity. She said there could be some overtime costs as a result of the workers being on vacation. Lehman said they saw this impact in Secondary Roads and the Sheriff’s Department; they had such a large personnel group that they had to hire more personnel to cover the off time. He didn’t think this would be as large a factor in some other areas. Shramek confirmed that the impact would not be as large, because the 17 employees who are eligible for the benefit are scattered through various departments. Neuzil wondered about the possibility of bargaining this benefit out of the union contracts; Shramek said that 0% of other counties are successfully bargaining this benefit out, because all 5 counties in Johnson County’s comparability group have the benefit. Thompson said she would be in favor of putting this benefit in; Stutsman and Neuzil said yes. Shramek said she does not believe in a 5th week of vacation, nor does she believe in longevity bonuses, but said they are a reality. Stutsman said longevity bonuses were added at a time when County salaries were very low; the benefit was the Board’s attempt to keep people employed, and reward those who stayed with the County. Now that there is also merit pay and a pay scale, and salaries have increased, she didn’t think there is as much justification for the benefit. Shramek said that more than salaries, the County’s health care coverage has become an extremely valuable benefit.

Stutsman said she is not in favor of sick leave payout, and Thompson agreed with her. Shramek said of the 3 benefits, the sick leave payout would be her lowest priority. Thompson asked Horne if a $10,000 increase in merit pay was included in the current budget numbers? Horne said yes. Thompson summarized that the decisions made were no on the longevity benefit, yes on the 5th week of vacation, no on the sick leave payout, and yes on Shramek’s $10,000 increase in merit pay. Harney said he has a problem with the political aspect of who gets merit pay. Stutsman said there is an evaluation process for employees, including reviews by Shramek; Stutsman and Thompson said they felt the process was a valid one. Shramek said she sees all the merit increases, and is very proud of the County’s department heads and the job they do. Shramek said there are no individuals that indiscriminately give out 5s on employee evaluations. Shramek reminded the Supervisors that it is not just 100% merit, but rather a combination of step and merit. She said the merit portion is fairly minor. Harney answered some of the department heads rate particular employees very highly, and he thought there are other employees in those departments that are doing nearly or equally as well. Stutsman said the same argument could be made for the bonus; she thought the bonus was even more arbitrary than the evaluation and the merit aspects. Neuzil said the bonus next year will be that employees will get to keep their jobs. Others agreed. Lehman asked Shramek if she has ever disagreed with a department head regarding their evaluation of staff? She said yes, one time. Stutsman asked if Shramek conducted some training for department heads as to how to evaluate employees; Shramek replied yes. Neuzil asked if the Supervisors ever get bonuses; others replied no.

Horne asked if a department head could cut a salary line item, but then make some of this up by handing out more money for merit? Shramek said it may be possible, but noted that not all County employees are eligible for merit. Horne wondered if this is a loophole? Thompson thought that Shramek would run out of money if this occurred, and she concurred. Shramek said that merit pay is currently in Central Services so that if there is a department with outstanding performers, and another department with less than meritorious employees, everyone would have equal chance at the monies. Shramek said they could go to a system where each department gets a set amount of merit to distribute among their employees. Horne said he is a little concerned about the possibility of department heads abusing the system to make up budget shortfalls during these tough budget times. He said he hopes this does not happen.

After a reminder from Horne, Thompson asked Shramek about the possibility of using early retirement incentives as related to employee layoffs. Thompson acknowledged that most of the bargaining contracts have a layoff provision included. She asked what would happen if the 3 social workers on the DHS side of Social Services were eliminated, and then bumped into Sweet’s MH/DD unit, where they might not have the required credentials? Shramek said they didn’t know, exactly, what would happen. Stutsman wondered if this could be resolved by getting out of the 28E Agreement; Thompson said no, they are in the bargaining unit, and have the same job titles as the workers they would be replacing. Shramek agreed. Thompson said the Supervisors would like to know what little pitfalls, such as this one, are present in all the County’s union contracts. Shramek said another issue was in the administrative unit, because there are Clerk IIs in almost every department; there would be a lot of bumping. Harney thought the bumping would have to occur according to qualifications. Shramek said it was difficult because the job descriptions are all the same. Thompson thought they should make a separate classification for MH/DD case managers. Shramek agreed, and said she needed to learn more about the credential requirements.

Stutsman said the Supervisors are anticipating another tight budget year next year, and wondering if they should be offering early retirement, instead of layoffs? She and Neuzil asked Shramek to investigate this issue, or at least keep in the back of her mind. Neuzil thought this issue would come up in the Board’s Strategic Planning session tomorrow. Shramek said this issue is certainly something the County should explore, but reminded the group that with an early retirement plan, there has to be some kind of an incentive, usually health care, which is part of the budget problem in Johnson County. Thompson said retired employees are already kept in the County’s health care coverage, at their own expense. Shramek said the County is required, under 509A with the State, to continue an employee’s health care coverage until they turn 65. Shramek explained that in 1994 or 1995, the Board adopted a retiree plan to allow employees over the age of 65 to remain in the County’s health care plan, something not required. Shramek noted that since Medicare is the primary insurer of those people, the County’s plan is used for pharmaceuticals and anything else not covered by Medicare. Shramek said those costs have continued to rise. Shramek said this benefit is not required, so if the future looks grim, this is a possible area for negotiation. Thompson noted that some savings for early retirement occurs by replacing long-time employees with other employees that start at the beginning of the pay scale. Shramek said she is not wholly convinced this is a good idea. She noted that since Johnson County’s pay scale is not very high, the difference between the high and low ends of the pay scale is not very great, especially considering all the knowledge that is lost, and training that is necessary to acclimate the new employee to their position. Shramek said she preferred voluntary severance programs to early retirements, and possibly a voluntary reduction in hours. Shramek said she knows that employees would be interested in reducing hours if health care would continue to be offered. Harney said since health care is the County’s big expenses, this solution doesn’t gain a lot of dollars. Thompson wondered about increasing the premiums of the health insurance, so it covered the whole cost of the plan? Shramek said the Supervisors could adjust the rates they charge for employees beyond age 65, but noted that the premium amounts for employees under age 65 are set by Wellmark, and are equal to the actual costs. Shramek said that the cost of pharmaceuticals were up considerably last year, and up tremendously this year. Shramek said that Johnson County is using 3 times the State average in pharmaceuticals; this is not due to the group using more drugs, but because of the County’s coverage: a $100 deductible, and after that 90% of the cost. Shramek noted there is no incentive to use generic drugs, and said the Supervisors really need to look at plan design. Stutsman asked if the Supervisors can adjust the plan design outside of union contracts, or is it an issue that needs to be addressed in the bargaining process? Shramek said the Board can educate and research the issue, but any changes are subject to the bargaining process. Shramek reminded the Board that it is good to keep one, or maybe 2, plans; she cautioned against every bargaining unit having a different health care plan. Shramek also reminded the current payroll system cannot handle any more deductions, so even if they were to offer 3 or 4 different plans, the current system could not accommodate them.

Lehman asked if the Supervisors have heard anything about their decisions regarding salaries for the elected officials and their deputies? Thompson said she has heard from Compensation Board members, complaining that the Supervisors always mess with their recommendations. Thompson asked if any Supervisors got any feedback last year? Stutsman said no, but noted that last year the recommendation for the increase in Supervisors’ salaries was small. Thompson agreed, saying that last year’s raise was 4.5%, but noted this was more than what other elected officials received, so she thought there might have been some complaints. The Supervisors discussed that because of the way the formula is set up, in order to maintain an increase to deputies’ salaries approximately equal to that of other employees, the Supervisors had to take a 6% increase. Stutsman thought the Supervisors will hear about the issue when it hits the paper; currently, the information has not been widely publicized. Lehman noted that the Supervisors’ raises are also criticized in a good year. Stutsman said she has also heard the recommendation that Johnson County move to a system of 3 Supervisors, instead of 5. Thompson noted that this would take a referendum.

Horne summarized that he has direction to decrease ICAD’s funding by $5,000, and move it to the Conservation budget, and increase the Sheriff’s budget by $200,000. Thompson said that the Sheriff’s increase should happen if there was enough room to tax for this amount. Harney asked what effect the cut will have on ICAD? Thompson said the $5,000 cut puts them back to what they had last year, $15,000. Lehman said ICAD cannot show the County a direct line showing they spent a certain number of hours on County issues. Lehman thought he has seen more work on projects in the County this year, but admitted that nothing has really come of the work. Stutsman said the Supervisors came down on Pathways because they couldn’t tell the Supervisors how the money is used and she still doesn’t know what the County gets for its contribution to ICAD. Neuzil said he didn’t know what the County gets for any of the block grants. Stutsman thought they were going to get more of ICAD’s time, in helping the County develop an Economic Development Plan. Thompson said the County is allowed to ask for a serious commitment from ICAD, and then see what they get.

Harney wondered if the Supervisors are slighting Pathways; should they have left Pathways with some funding, and reduced the amounts to some other block grants? Stutsman acknowledged that the Board doesn’t have a good process for making decisions about block grants, and said they should work on this through this year, so the decisions are not made arbitrarily. Lehman noted that it is impossible to make 100% of the people happy. Regarding Pathways, Horne noted that if Pathways increase their fee for service a little bit, they could make up what the County previously has given them. Horne said that Pathways’ major source of funding is their fee for service. Thompson wondered if Medicaid would reimburse a higher fee for service charge; maybe they are already at the maximum reimbursement? Horne said he didn’t know. Stutsman thought that Pathways had said increasing their fee for service would hurt their most vulnerable clients, and they would no longer be able to afford to use Pathways. Horne thought it would still be cheaper than a nursing home. Thompson said the most vulnerable people probably cannot afford Pathways anyway, and if they go into a nursing home, Medicaid will pay.

Stutsman asked if Harney wanted to make some adjustments in the block grant allocations, and he said he didn’t know, but said he wants to treat everyone fairly. Stutsman thought they are too late in the process to make any adjustments now. Lehman asked about the Soil Conservation block grant; Horne said they set this funding at $30,000, though they had asked for $50,000. Lehman pointed out that their funding last year was also $30,000. Neuzil asked Horne about Expendable Trusts, $19,000 budgeted to the Nutrition Trust. Horne said he would have to look at this in more detail. Thompson said this year’s expenditure was spending some accrued interest, so the interest for next year probably won’t be $19,000. Thompson said the Supervisors had talked about giving the interest from the previous year to Elder Services, since they now handled the Nutrition Program. Horne noted that this won’t make any difference in the General Fund. Thompson said that by the end of the process, Horne should have gone over every number, even those that don’t make a difference to the taxing. He said he feels confident in this.

Thompson reviewed some of the possible issues that could come up with a reporter. She said the Supervisors publicized that departments were asked for a 4% decrease, so reporters want to know why the numbers on the budget sheet are not exactly 4% less. She said the answer to this question is that the tentative budget goes back to the certified budget from this year, and the certified budget does not include pay raises, while the tentative budget does. Thompson noted that the Sheriff is going to get an amendment this year, over their certified budget, and a further increase next year. Another question she got from a reporter was: Is it really true that your budget, which was $44 million last year, is $43 million this year? Are you taxing for less? Thompson said they are not; they are taxing for more, but are getting less revenue from other sources. She noted that the total County budget goes down this year, which is almost unheard of in government. Neuzil asked what they taxed last year, from local taxes? Last year, Horne pointed out, total County tax revenues totaled $22,410,000. For this year, he said, the amount was $24,347,960, only of which $200,000 is new growth. Neuzil and Thompson noted that they are increasing taxes as much, or more, than they usually do, but are to the point where the County has no ability to further raise revenues.

Thompson asked Horne if Johnson County will still be OK on its ending fund balance? Horne said it is going to be pretty tight this year, and next year they are raising it back up where they want it to stay. Horne said the fund balance from this year is $1,664,208, but he would like this number to be $2.4 million. He said he has talked to the Auditor's Office, and they can work with the lower number, and get by for the first 2 months. Horne noted that this number was $2.1 million last year. Horne reported that Slockett didn’t think Horne has discounted the revenue/expense adjustment enough; if this is correct, Horne said, there will have to be further cuts. Thompson said she is worried about the revenue/expense adjustment in the Secondary Roads Department. Horne said they have reduced this greatly this year, and can take it all away next year; he didn’t think it will be that big of a factor. Harney asked how taxing revenue can go down, and Horne responded that this is due to the rollback factor, a large 8% decrease in assessed value. Horne noted that in the 1980s, the rollback had been at 80%. Thompson noted the County’s overall taxing will go up to about 8.5%, after the addition of the Sheriff’s additional $200,000.

Thompson noted that Pathways had not shown up for this budget meeting. Stutsman said Pathways is on the agenda to talk to the Board of Supervisors at an upcoming Thursday meeting, to discuss the possibility of moving to a fee-for-service plan.

Adjourned at 11:47 a.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary