Horne said that this discussion should center on the budget and the 5-Year Road Plan. He said that the numbers are updated and added that there is another $4 million in TIFs in Coralville that has been added to the summaries. He said that in the future the Board should consider future budgets when planning the 5-Year Road Plan. He said that he thought they should try it this year and see how it goes. He said he knows that the Board has different meetings about the Plan, but they don’t usually include the minimum and maximum funds. Lehman said that in the later meetings they would be discussing the design and actual location.

Horne said that Secondary Roads’ budget doesn’t have any changes in terms of personnel or equipment. County Engineer Mike Gardner said the budget Horne gave the Board reflects the 2 bridge projects, one on Rohret Road and one on 230th. Horne presented a worksheet that lays out what the funds might be. He said that he had weaned Gardner off the Revenue/Expense adjustment. Horne explained that by Code the County has minimums and maximums that must be followed. He said Secondary Roads makes up the greatest portion of the rural valuation. He said that the valuation on the summary goes back to ’94 and shows how the total valuation has gone up. He added that the rural valuation has also increased, because the equalization order impacts the rural valuations. He said the majority of Secondary Roads funding comes from the rural side. He added that even though the County looses more and more of the rural tax base to the cities the valuations are still going up, but the County is losing more of the actual properties. Neuzil said that based on percentages the rural area isn’t growing as fast as the others. Thompson said that is because the County is losing the areas to the cities. Stutsman said it’s amazing the growth is holding as well as it has considering all the annexations that have taken place.

Horne said that equalization orders that take place every other year drive up the rural valuations. Neuzil asked if the rural valuations are counted in the total valuations. Horne replied that they are and the total valuation is what they base the General Fund on. He said if they added in the TIF areas, the total valuation would be $4.2 billion. He explained that in previous years the Board had always done the maximum General and the minimum Rural transfer, but they switched that the previous year because of the General Fund crunch. Thompson said they could go somewhere in between but not exceed the maximum. He explained that per thousand dollars of the total valuation, the Board could charge 16 and 7/8 cents. Neuzil clarified that the money comes out of the General Basic Fund. Horne added that it’s the transfer and based on the formula it comes out to $636,111. He said the allowable minimum is 75% of that, which is $477,083. Thompson clarified that they use the current year’s valuation, which is the ’03 number. Horne replied that it uses the ’04 numbers. Neuzil asked if the Board chose to take the maximum amount out of the Rural Fund, what that amount would be. Horne replied that it would be $2.869 million or $2.152 million for the minimum from the Rural Fund. Neuzil said that a lot of farmers would be mad at transferring the maximum. Thompson clarified that the Board could transfer the maximum from both, the minimum from both or one or the other from each. Gardner added that they could transfer any percentage in between. Thompson said the Board had thought that would help if the County had a bad equalization year this yet, but they didn’t. Horne said that last year due to the General Fund crunch, they transferred the minimum from the General Fund and offset that amount from the Rural Fund.

Neuzil said that out of the General Basic, they take the $3.769 billion times the $1.6875 divided by 1,000 to get $636,111. He asked what that number is. Horne replied that it’s the maximum amount the Board can transfer from General Basic to the Roads Fund. Neuzil said that at a minimum $477,083 can come out of that into the Roads Fund. Thompson asked what amount of money they are trying to arrive at. Horne replied that is a Board policy decision. Thompson asked what the budget is that they’re trying to arrive at. Horne said the request includes the projects that Gardner included, but there’s no decision package per se because they’re following the 5 Year Road Plan. Harney asked what the total dollars the Board is trying to reach to cover Gardner's requests. Horne said that Gardner already has the fund balance in the fund to do the projects. Thompson said it should be $7,075,739, and asked if it includes the money left in the fund. Horne said their worksheets assume that Gardner spent his entire fund down, so it will probably not be that low. Neuzil clarified that at least $477,000 has to be transferred from the General Fund into Secondary Roads. Horne said yes. Neuzil asked if this is part of the General Fund cap. Horne said yes. Neuzil asked if the Board chose to transfer the maximum from the Rural Fund into Secondary Roads, is that the cap on the Rural Fund. Horne said that wouldn’t take the Board to the cap on the Rural Fund. Neuzil said that they would still have room for libraries and other things. Horne said yes. Thompson asked what number the Board is trying to arrive at since Gardner's budget is $7 million and he shows revenues of $3.5 million. She asked if they subtract the revenues and the ending balance so that the difference is what the Board has to come up with. Horne said they could also figure out what amount they want to transfer to include the projects. Thompson asked if the projects amount to $2.2 million. Neuzil said that by law the Board has to give at least $477,000 plus $2.152 million to the department. Thompson said that if the Board needs to transfer about $2.2 million, they could transfer the maximum from the General and the minimum from the Rural. Neuzil said that his requests don’t equal that amount. Thompson said that it’s close.

Neuzil said that if they take the minimums from both funds they arrive at $2,629,167. He asked how much money they are requesting for 2004. Horne said the revenues are added to the minimum transfers from both funds, then subtract the expenditures, they end with a fund balance at the end of the year of $221,432. Gardner replied that they need a fund balance close to $1 million. Neuzil said they have to come up with an extra $800,000. Horne said that the $884,829 number is a little lower than what it will be. He said that assumes Gardner spends his whole budget. Administrative Assistant Diane Kaster said that Secondary Roads has a lot of high dollar expenditures in July and August of each year. Neuzil said for Gardner to get everything he needs in his budget it would be $2 million plus an additional $800,000. He said to be able to get there, the Board will have to raise the percentage to almost the maximum. Horne said that he is assuming that Gardner will spend everything possible in this year’s budget. He said the $884,829 is a conservative estimate. Neuzil asked Gardner if he will expend his entire budget. Gardner said they won't if the winter stays the way it has been. He said the construction budget will be near the total this year, which is an area in the past where they haven’t spent the total budget. Neuzil said that he would have a carryover balance then, which means they wouldn’t need to put in a full $800,000 to get to the million mark. Horne said that he thinks that is realistic and they don’t want to go much beyond $500 or $600,000.

Neuzil said it comes down to whether or not the Board wants to take off projects or increase the transfer above 75%. Gardner said to keep in mind that the State is discussing giving the County 26 miles in roads which would take affect July 1st of this year. Gardner said another of the recommendations to the legislature is to increase the 75% minimum to 85% over the next 5 years at 2% per year. He said it forces counties to help themselves. Neuzil said that he is hopeful that the transfer of roads won’t happen this year, but if it does, will they give counties extra money to compensate. Gardner said that part of the recommendation is to set monies aside for this transfer. Stutsman said she heard that Des Moines County took over a road from the State and was getting stuck with huge expenses.

Horne said that if the Board did the maximum transfers, the fund balance would be $1,097,821, using a conservative beginning balance. Neuzil said that is too much. Thompson suggested taking 90% of the maximum on the Rural transfer. Lehman asked what they would gain or loose by taking it all out of one and not the other. He said they would be better off taking it out of the General Basic. Thompson said that it’s the farmer that the Board always feels sorry for in the end, so she was taking it out of that side. Horne said that it’s been the Board’s policy in the past to minimize the Rural Fund taxes as much as possible. Thompson said that as Neuzil pointed out, that when they do that, they also minimize the taxes on the million dollar houses in the North Corridor. She added that the neediest and the most affluent in the County are in the same tax group. Harney said that he would support adding enough dollars per year to Secondary Roads to do more bridges than what they've been doing in the past. Thompson asked if he’d favor the maximum on both sides. Harney said he didn’t know if it needed to be at the maximum, but enough to cover a couple of bridge projects in the rural areas. Harney said if the Board could say that the money is designated for bridges, then at least rural residents are getting some benefits.

Stutsman said she’d like to know what impact it would have to do the maximum on both funds. Horne replied that it would be significant on the rural side because of the small base. Stutsman asked what significant would be. Horne replied that an additional $500,000 could be a 10% increase in taxes. Neuzil said the newspapers like percentages because it makes it more dramatic. Stutsman said she wishes there were a way to pull farmers out of the same group as the new residential homes. Neuzil said that a new tax structure is what is needed. Horne said that there is only a small group of County’s like Johnson County in this respect. Stutsman said that she feels that the majority of those home owners would be happy to have more taxes in exchange for better roads, but for farmers the impact is too great because they have acres of land that’s being taxed in comparison to a 1-acre house. Neuzil said it comes back to the first question because it’s hard to make any decisions until they know how bad the headlines are going to look. Lehman said that his farm taxes went up 5%, but it amounted only to $1.32 per acre, which is minimal but the percentage seems high.

Thompson asked if when Horne made the summary he used the actual beginning balance from July, and budgeted revenues, transfers and expenditures. Horne said yes. Thompson said that if at the end December, they were only at 47% of their budget, which would mean they might have as much as half a million dollars left over in addition to the $884,000. Horne agreed. Thompson asked Gardner if they had trouble paying the bills in August this last year. Gardner said it was the year before. Stutsman added that the problem came from taking the carry-over below a million. Horne said that with the resubmitted budget it would still be pretty tight if the Board funded at the maximums. Thompson asked if the Board did the maximum from General Basic and subtracted $100,000 from the maximum from Rural Basic giving them $2.769 million. She said that would project an ending balance of $998,000. She said there would also be whatever is left over not in the calculations from this year. Harney asked what the percentage increase would be to rural residents then. Neuzil said unfortunately a lot of this depends on how much ending balance Secondary Roads will have at the end of this year. Thompson asked what amount was transferred from the Rural Fund for the current year. Horne replied that the maximum rural last year would have been $2,806,379 and the minimum rural would have been $2,104,784. He added that last year the minimum General Basic would have been $464,937. Neuzil said that it would only go up $13,000.

Stutsman asked if the Board needs to make a decision today. Horne said if the Board goes ahead with the projects that Gardner's presented in the Road Plan it will put a tight strain on the Rural budget. Neuzil said it’s about justification more than anything, because if they choose to raise taxes then they have to justify why. Lehman asked how much money the 3 projects total. Gardner said they would cost $320,000. Neuzil said they might have to do one this year and one the following year since they were extra projects. Gardner said the Board also can take money out of the interest from the Reservoir Roads Trust Fund. Horne said that the interest will be smaller this year because rates plummeted. Gardner said that the Board is well above the principal though. Horne said it has about $2.8 million in excess of the principal. Gardner said the principal on the fund is $1.8 million. Horne said that they’ve always made enough interest to support projects, so this would be the first time where they’d actually decrease it. Stutsman said this is a policy decision by the Board regarding how much money should keep accumulating. She added that they get hit with end of the year balances because there’s so much money in that fund. She said she isn’t advocating going into principal. Horne said the Board could earmark that money for roads in the Reservoir area. Stutsman clarified that none of the bridges are up in that area though. Thompson commented that it was really only the principal that was earmarked for that area and the interest they can use for anything. Horne said the Board can use the whole fund for anything with roads really.

Gardner said there’s enough work that Secondary Roads does in the Reservoir area to say that is where that money is going. Lehman said he could use $300,000 out of the Reservoir Fund for projects in the North Corridor and the $300,000 that was originally there could be moved to the bridges. Thompson asked if the transfer number includes what they are taking from the Reservoir Fund. Horne replied that it includes the $100,000. Stutsman asked how much Gardner would suggest taking out. Gardner said he would suggest taking enough to do what they have listed in the projects. Stutsman asked if he means $300,000 for the 2 bridges. Gardner said that it will be a one time deal like 5 years ago when they saw the big balance and started funding Secondary Rods operations out of it, but quit when they didn’t have the money. Stutsman said she feels OK with that. Horne said that if the Board wants to continue with the policy, then they’d keep the fund as an escrow for Secondary Roads. Stutsman said she’s interested in keeping the fund and spending the interest, but she’s not interested in building a huge balance. She said $1 million over is too much. Thompson said they wouldn’t want to take the whole million out in the same year. Harney said that the other side of the argument is that there are roads up there that need work that they could use the interest on in the long run. Stutsman said that one million dollars isn’t going to do anything. Harney said that a few million goes a lot further.

Gardner said that Mehaffey Bridge will need work at some point and that will cost a lot of money. He said the Board had instructed him to hire consultants to come up with an estimate of what it’s going to cost, which they are in the process of taking care of. He added that he’s guessing the cost will be in the range of $2 million. Thompson said that by the time Secondary Roads gets to do it, it might cost $3 or $4 million. Neuzil said there goes the Reservoir Roads Trust Fund. Harney asked if instead of taking the $300,000 out of the Reservoir trust fund they could raise taxes by a small amount of the Rural side to make up the difference. Stutsman asked if they are going to raise the taxes of rural taxpayers when they are sitting on over a million dollars in a trust fund. Thompson said the rural taxpayers are ones that always come in and tell the Board that the fund is sacred and shouldn’t be touched. Stutsman said the principal is sacred, but she doesn’t see any point in continuing to build that fund unless they say that they are saving to build Mehaffey Bridge. Horne said the trust loses money in inflation all the time so that the real value of the fund is going down. Neuzil said if the Board makes a decision to spend down the fund by a half a million over 5 years, it still leaves Secondary Roads the opportunity to buy the gravel needed. He said it also leaves a buffer of about $400 or $500,000 for at least 5 or 6 years until Mehaffey Bridge is on that list, then the Board could pay for the bridge with that money and be done with it. Lehman commented that the Federal Government will help more if the County has less money set aside. Stutsman said she isn’t interested in making this a policy, but review it year to year and this time rather than raising taxes on the rural side, taking out the $300,000. She added that she would like to do the 2 bridges. Harney said that he agrees that the bridges need to be done, but a minimal increase on the Rural side will not hurt anyone. Stutsman said that then again she needs to know the impact on the Rural side. She added that she thinks it will be a bigger impact than the Board thinks. Horne added that a $100,000 increase on the Rural side will have a much bigger impact than the same increase in the General Fund.

Gardner said if there is any interest in funding one project and not the other, he should tell the Board that the estimate for the Rohret bridge project is $195,320 and the 340th Street is $125,000. Stutsman said it’s still on the table. Horne clarified that the Board wants to leave the 2 projects in for now. The Board agreed. Neuzil said that in the end the Board might take some money out of the Reservoir Roads Trust. Thompson said if the Board takes the maximum out of the General Fund, $300,000 out of the Reservoir Fund and with estimating $1 million carry-over, the difference would then be taken out of the Rural. Harney asked how much money the Board took out of the Reservoir Roads Trust to pay off Mall Drive. Horne replied that they haven’t yet. Lehman said that money will be restored to the Trust. Horne said that the Board had the money in Capital Projects, so until they needed the money in Capital Projects he didn’t want to create another transfer. He said they shouldn’t need it because he’s assuming the Board will finish the deal with the school board in this Fiscal Year. Thompson said they would come to the Board in March to discuss the purchase. Neuzil said that even if the bond doesn’t pass, they school board will still need a place for their alternative school and business offices. Horne reiterated that he hasn’t transferred any money out of the Reservoir Trust because they have the money in Capital Projects and they won’t need to unless a Capital Project comes up before next year.

Thompson asked if the Board ever found out if they are allowed to have restricted funds that won’t count against the Board. Horne said that the Board can restrict the usage through resolution. Thompson asked if that will keep the unions and other people using that money against the Board. Stutsman said she thought it wouldn’t help because they just look at the bottom line fund balance. Horne said he’s not sure how much it would help. Stutsman commented that in negotiations Human Resources Administrator Lora Shramek has the trust roads designation, but they say sorry. Horne said that the unions look at what the money was originally given to the County for and that there were no stipulations placed on it by the Army Corps of Engineers. Horne said it would be purely a County designation. Harney asked which projects are added into the budget. Gardner replied that it’s 11 and 12, but there were some other projects added that were funded out of other funds so there would be no impact on the budget. Harney clarified that the projects would actually be done in FY 04 if approved.

Horne said there isn’t any large changes to the Secondary Roads operational budget or any equipment requests. Gardner said that the bottom line is up $25,000 total, which was a matter of seeing how much Secondary Roads spent on different line items and averaging those out. He pointed out the calcium chloride line item, was increased by $40,000 to get to the point where they were paying for what they have averaged over the last 3 years. He said that last year’s price increase was 17%. He added that it doesn’t take into account the new road counts that will increase the amount of calcium needed. Lehman clarified that he brought the calcium line item up to what it should be. Gardner said yes. Neuzil asked if the County will have the new traffic count numbers before July. Gardner said it should be sometime this summer. Neuzil asked Gardner if he isn’t putting enough in that line item because there’s no doubt that those numbers will increase. He added that if the Board keeps the same policies, which people seem pretty happy with, it will mean a lot more calcium chloride. Gardner said he was pointing out that what he has in there isn’t increased.

Horne asked if there is any chance that the Federal Government will give funding to the County to fix the road leading to the Muslim Youth Camp. Stutsman said that there isn’t. Lehman said that is something that’s ever been discussed, but they might be willing to. Horne said the County would obviously move that road up on the list. Stutsman said it’s not in the 5-Year Road Plan, it’s on the future projects list. Horne asked if the County acquires 923, if they will get stuck fixing the bridge on it. Neuzil said that if the legislature gave the roads to the counties they will fix them first. Stutsman said that is what they said, but that isn’t what they will do.

Gardner said that Secondary Roads has a feasibility study scheduled for March 4th or 5th and then they were going to discuss the 5-Year Road Plan in an informal Board meeting a week or so after, then 2 weeks after that, put it on the formal. Lehman asked if Gardner has any snow projects lined up now. Gardner said that they are telling everybody that it depends on the budget. Stutsman asked if that is in the regular maintenance budget. Gardner said last year when they reduced their budget that was one of the areas that was cut. Lehman said Secondary Roads is saving money from not doing normal winter work. Gardner said that right now they are cutting back a lot of brush, which they wouldn’t have been able to do. Lehman said the County will see an advantage in visibility on those roads. Stutsman added that they are also savings in overtime, salt, etceteras. Gardner said the downside is that Secondary Roads is hauling their own rock because they’re not hiring as much out, which also burns up fuel and tires. Lehman asked if the reason the department put less rock on last year, was due to the mild winter. Gardner replied that rock was an area they cut back so they wouldn't have the problem of no carry-over balance going into the next fiscal year. Lehman asked if what he budgeted for rock this year was about what he budgeted last year. He said he didn’t hear very many people complaining although there were a few roads where they had to put more rock on later. Gardner said they would hopefully be all right. Lehman said he hasn’t heard many complaints indicating that the rock is gone on their road. Gardner replied that part of the reason is because they aren’t plowing a lot of it into the ditch due to snow, but this winter isn’t over yet.

Harney asked if Gardner has looked into using a shredder instead of burning brush. Gardner replied that they have a chipper and are doing that with a lot of brush. Stutsman asked what they do with it then. Gardner replied that they dump it into the ditch or give it to somebody who wants it. Harney said that it is a good idea. Gardner said a lot of the stuff that’s chipped disappears because people use it for burning.

Neuzil asked if Horne has numbers for COLAs. Horne said that Shramek is close to giving him numbers for health insurance, but she wants to see how the negotiations go. Neuzil asked about the break down of raises at different percentages. Horne said they have some of that and they will also review the elected officials and non-bargaining salaries. Stutsman said the Compensation Board recommended 5%.

Horne said he isn’t happy with the local newspapers about not publishing his budget amendments. Harney asked if he had spoken to the papers. Horne replied that he hasn’t and that they could talk about it when they get into the Central Services portion of the budget. Harney said that it might be worthwhile to give them a call to say that if they want to be an official publication paper, then they must print official publications. Thompson said the Board could have the Gazette as an official paper. Horne asked if the paper told anyone they weren't going to run the publication the next week. Stutsman said they didn’t tell her, and she hand delivered a publication. She said she just assumed it would be taken care of. Horne said the papers didn't run the publication until 2 weeks later, which messed up the Board’s schedule. Horne said that because of this, the Board must rescind the budget amendment and redo it. Stutsman said she would be willing to cancel their contract. Parkins commented that there are Code requirements as to who can be the official publication and why based on circulation, so they would have to look into that before they make any decisions. Horne said the County should bring this up next time at their local legislature meeting because when the law was made there was no Internet, which could save taxpayers a lot of money. Stutsman said that not everyone has access to the Internet. Horne replied that everyone doesn’t read a newspaper either. Neuzil said that the paper needs to know the seriousness of it not being published on time. Stutsman said that she did what she was supposed to do. Horne said he feels the same way, but he’ll take the blame for not checking on it. Harney said that the paper won’t know unless someone talks to them, so instead of sitting and stewing someone needs to talk to them about it. Thompson asked if the Board wants to look into changing papers. Stutsman said that the Code says it must be put into newspapers with certain circulations, but there is no reason they have to do it with every small paper. She said they could do it with the Gazette and Press-Citizen. Thompson asked what paper they had the problem with. Horne replied that it was Lone Tree and North Liberty. Horne said the basic problem is that with a budget amendment or a budget itself, the Board has to publish a notice at least 10 days, but not more than 20, so since those papers are only published once a week it makes it more difficult. Parkins said she publishes in them weekly and there was only one time when they missed an election’s publication but when she told them the seriousness of it, they assured her it wouldn’t happen again. Horne said that he didn’t think they should charge the County and Stutsman agreed while adding that he should document the cost. Horne said they just shouldn’t charge them for the next amendment that they’re going to have to publish due to their mistake. Neuzil said the legislature isn't interested in changing that law because they agree that it’s important to have open government as much as possible and the newspaper lobby is really strong.

Adjourned at 2:25 p.m.

/s/Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary