Chairperson Harney called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 1:10 p.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

Budget Coordinator Jeff Horne said that he presented the Board with 3 different items, including a $.23 scenario for Conservation expenditures. Neuzil asked if Conservation Director Harry Graves requests $900,000, can the Board decide to give him the $.23 instead, which would equal $870,000. Horne said that he only needs $.22 to receive REAP funds. Neuzil said that there isn’t any REAP funds. Stutsman replied that there’s money in the Governor’s budget for the REAP funds. Thompson said that the Board has to set Grave’s budget at $.22 plus revenues in order to receive the REAP funds. Stutsman said that they need to get this clarified. Neuzil said that last year the Board’s mistake was to assume the revenues as part of the $.22. Horne said that it was his understanding that the Board just couldn’t do that in order to qualify for the revenues. Horne said that if Grave’s budget is kept as is he’d be at $969,334 with the one person. Thompson said that $.22 plus revenues is only $893,500. Neuzil said that he’s requesting $960,000. Horne said that the $960,000 includes his COLAs, the additional staff person and the equipment the Board had talked about. Stutsman said that the Board could give him less to receive the REAP funds though. Horne said that it would be less than that at $.22, but the Board would have to reset the amount through a resolution. Thompson said that last year they gave Conservation $.23 and no revenues, and this year they’re talking about giving him $.23 plus revenues. Neuzil said that even if the Board gives him $.23 plus his revenues, he still can’t cover what he’s asked for in his current budget. Horne said that he wouldn’t have what he requested, but he would be eligible for the REAP funds. Thompson said that in order for Graves to be eligible for REAP, the Board might need to give him the $893,500, but he’s asking for more than that. Stutsman said that before the Board decides on this, they need to see how the budget shapes up.

Horne said that the second item he’s presenting to the Board is the Cost of Living Adjustments, or COLAs, which he broke down 1% increases. Thompson asked if the number the Board has to reduce is the total of the things they’ve already cut out. Horne said that it includes the cuts through the day before. Stutsman asked if it included all the personnel cuts and things left on the table. Horne replied that it's only the items the Board has directed him to take out of the budget. Stutsman said that the Board hasn’t directed him to remove too much from the budget yet. Neuzil said that they’d cut about $200,000 from employee requests. Horne said that the cups have overflowed with the current budget. Horne said that all the FinCore and real estate software requests are still in the Technology Budget.

Horne reported that bonding won't save the County as much money this year. Harney said that if what they bond for is taxable it will only amount to .8%. He said that the only issue with the IRS is if whether or not these things are taxable. Thompson said that the County doesn’t have to pay taxes, it’s the bondholders that would have to pay taxes. Horne explained that it makes a difference on the interest rate that they offer because the County pays a higher premium. Thompson said that they wouldn’t be able to sell new bonds at the old rate. Horne said that the rates would be more competitive. Harney said that Kriz suggested still bonding for the items they can. Neuzil said that even if they’re only bonding at 4.5%, they can still draw from the entire TIF revenue. Horne said that bonding this year will only have half the impact of the previous year, but added that last year they bonded for 2 years worth of items instead of one. He said that the County also doesn’t have the large capital expenses to bond for. Neuzil said that as far as he’s concerned, one more dollar is one more dollar. Horne said that they could bond for things, but they haven’t begun the process. Thompson said they should start. Horne replied that it’s on the amendment and once that’s approved he’ll take it to the banks that day.

Neuzil asked what the savings they’re talking about will be. Horne replied that it will depend on the rate so it’s only speculation. Thompson asked what amount is that they can bond for. Horne replied that they could bond for $4 million in expenditures. Thompson said that it’s worth it then. Horne said that the biggest part of the bonding expenditures is health insurance, which comes from Supplemental. Neuzil said that Horne had balked at the idea because of timing. Horne said that they can do it, but he needs to know today because he’ll need the Auditor's Office help. Thompson said that the real purpose of this bonding is to spread more of the tax base over the TIF because most of what they bond for doesn’t affect the General Fund very much. Neuzil said that when the Board made the bonding decision last year, they didn’t do it until the very end. He said that the Board set their priorities and the bonding just lowered the amount they had to tax for in the end. He asked if that’s the strategy again this year. Harney said that that is the way he sees it. Horne said that he doesn't see bonding as saving the Board from having to reduce the budget. Thompson said that they should try to decide first if they want to do the general bonding that is paid back in one year. Stutsman said that as long as interest rates are low, they should bond. Lehman agreed with Neuzil in that a dollar is a dollar. Thompson agreed. Neuzil said that it’s the only way the Board has been able to get some of the TIF money back. Thompson said then they need to give Horne that direction. Stutsman asked if the Board needs to decide between taxable and non-taxable. Horne said that right now the Board has to proceed like they’re all taxable because the IRS hasn’t said they can be untaxed. He said that taxable bonds are the only way they can bond until they hear from the IRS. Harney said that if the IRS says that it is allowable, then next year the Board can use untaxed bonds.

Thompson said that the next issue the Board should decide is the real estate software, financial software and voting equipment, which they can bond for and pay over a number of years. Stutsman said that she thought that was what they were going to bond for. Horne said that the same year bonding includes operations like health insurance, property and casualty insurance and things they did last year. He said that the Board can also decide to proceed with bonding for the real estate software, the financial software and the voting equipment. He added that they don’t have to decide to bond for those items during the budget process. Stutsman said that they don’t need to discuss it then. Horne replied that in a sense they do, because if the Board decides they want to bond for those things down the road, then they can lower the Technology transfer by freeing up the funds that are saved. He said that would make a difference in the General Fund.

Neuzil asked how much money the Board has saved for the real estate software. Horne replied none. Neuzil asked how much money they’ve saved for the financial software. Horne replied that they’ve saved $300,000. Neuzil asked how much they’ve saved for voting equipment. Horne replied that they’ve saved $150,000. Thompson said that the voting equipment money is saved in the Supplemental Fund. Horne replied that they’ve been saving it in Technology. Stutsman said she has no problem considering the financial software for bonding because the Board is committed to buying that. Horne said that the Board can bond for up to $800,000 for each the financial software and the real estate software. Thompson asked if Stutsman wants to include it in the same year bonding and pay it next year out of the budget or pay for it over the next 4 to 5 years. Horne said that it would save the County money to bond for it at this point because they pay it once, so they wouldn’t pay to company an interest rate. Stutsman said that interest rates are so low. Thompson asked if they want to pay it in the first year or pay it over time. Horne said that the Board would want to pay for it as soon as possible. He said that the bonds are not large, but if they were they would want to spread it out.

Lehman asked if they’re talking about $300,000 for software and $150,000 for voting equipment so that they can reduce the General Fund by $450,000. Horne said that the Board can reduce the Technology transfer, but once they’ve done that, then they’re committing to bonding for those items. Neuzil said that this is a large policy decision because this County doesn’t bond. Thompson asked if the Board pays for it in the first year, how they would get the money. Horne said that they would pay for it right away once they get the bond. Thompson asked how they would pay back the bonds in the first year. Horne said that they’d pay it though the Debt Service Levy. Stutsman added that the Board levies the TIF. Lehman said that there’d been an increase in taxes. Horne said that taxes come into the Debt Service Levy only to pay the bondholder. Thompson said that their taxes would be astronomical if they pay it all in the same year. Horne said that they wouldn’t be because they can structure it so that it’s not a large shock. He added that if they paid it within the same year, the increase would be large, but it would cost less in total. He said that the Board could avoid the shock in one year, but the cost is greater to the County by spreading it out. He said that it’s the same issue they had with the Mall Drive property. Lehman said it's a finance charge.

Neuzil asked if the Board is prepared to start bonding for certain types of equipment because if the Board chose to bond for all 3 items, it would free up $450,000 that they have saved. He asked if the Board would apply the saved money towards the bond or put the money back into the budget and bond for the items separately. Horne said that the Board could apply it towards the software and bond for the remainder. He added that the voting equipment would be more expensive. Neuzil suggested the Board make a decision on what their biggest priority is right now in County Government. He asked if it is the financial system or the voting machines and can they do on now over 2 or 3 years and then address the other one. Thompson said that she’d prefer to do that. Horne asked if they’d prefer to just bond for the financial software this year. Harney said that he would. Neuzil said that there’s no question that the County needs voting equipment, but there’s still unanswered questions about the potential for block grants and he doesn’t know if a system has actually been decided on yet. Horne replied that the Auditor's Office hasn’t decided on a system yet. Thompson said that there would be increases in the technology over the next couple of years. Lehman said that there also may be new companies in the market, which may lower prices. Horne said that the way the County has been approaching it isn’t very efficient because they’ll never catch up to the cost of the equipment. He said that the Board could save a nice down payment by saving, but they couldn’t catch up to the total cost. Thompson said that the costs could go down like the financial software did. Stutsman asked if Horne is saying that when the Board decides to buy the voting equipment they should just bond for it outright and stop putting money away for it. Horne said that if the Board wants to put money away for a down payment, that’s fine, but only saving $50,000 per year won’t ever give them enough to actually buy it because of inflation.

Neuzil asked if the Board wants to consider taking the money that they have saved to free up money. Horne said that once that money is removed, the Board is committing to bonding for it. Stutsman said that they would be committing other Boards to bond or at least purchase it. She said that they’re making a decision today that they’re going to bond for it next year or the following year if they get the other things ironed out. Neuzil said that he has no doubt that the equipment for the financial and real estate software is a higher priority than the voting equipment. Lehman said that the software is used every day. Stutsman said that she agrees but is also very interested in getting new voting equipment. Horne said that the Board could deal with the voting equipment outside the budget at any time. Neuzil asked if the Board wants to take out the $150,000 they have saved. Stutsman and Lehman said no. Neuzil asked if they want to put in an additional $75,000. Harney said that if the Board is going to keep saving for it, then he would like to keep saving. Stutsman said that she would like to leave the $150,000 in the account, but not save the $75,000 since the Board has pretty much committed themselves to bonding for it. Harney asked if by bonding the Board is talking about paying the items back over 2 or 3 years. Neuzil said they were. Harney said that he isn’t in favor of that because they could be bonding for the jail as well. Horne said that the jail would be a $20 million bond, but this bond would be between $1 to 2 million. Harney said that the jail would be for the voters. Neuzil asked what the estimated cost of the financial software is. Horne said that it will be between $450,000 and $600,000. Thompson said they have $300,000 saved. Neuzil asked if the Board wants to put $300,000 towards that and bond for the rest or pull the $300,000 and bond for the total. Horne said that that second option would create some room in the budget. Thompson said that it would only if they were going to pay for the software over several years.

Stutsman suggested going through the budget to see what can’t be eliminated to see if they need the $300,000. Neuzil asked if Horne’s recommendation, if numbers don’t change, is to reduce the ’03 budget and cut $1.2 million. Horne said that the Board needs to cut $1.2 million if they don’t do any bonding. He said that the bonding will give them some savings, but not the full $1.2 million because they're bonding for items that are Supplemental already. Thompson asked if Horne is sure that the elections equipment isn’t Supplemental. Horne replied that the Elections Department is. Thompson asked if the equipment isn’t. Horne said that under the General Obligation Bond, the equipment is defined as an essential county purpose without limit in the debt service levy. He said that things like FinCore or real estate software or building projects are limited to $800,000 each in the debt service levy. Neuzil said that the other option is to take the $300,000 that’s saved and add to it the $150,000 and put it toward the financial software and then bond for the voting equipment. Horne said that that would pay for almost all the financial software. Stutsman said that that’s an option. Neuzil added that if the Board wanted to buy all 3 items, then they could take the savings from both accounts, apply it towards the financial software and then bond for the voting equipment over a number of years. Harney asked if the $300,000 includes real estate software. Horne replied that the $300,000 is only for FinCore. He said that real estate software is $258,000 and Lehman added that the Board doesn’t have anything set aside for it. Lehman said that if the Board decides to bond for the software there’s $300,000 that stays in the carry over, which reduces the tax asking or can be used for something else that’s on the table here. Horne suggested bonding for the real estate software, since there’s nothing saved for it.

Harney said that he’d like to see the Board set $300,000 aside to pay back the bonding. Thompson said that it wouldn’t help with the General Fund problem. Harney said that he understands that, but by bonding for these items over a period of time they’re digging themselves a hole. Neuzil said that there’s no doubt that, but everyone sometimes for large projects has to borrow money. Horne said that a lot of governments use debt, meaning use a debt service levy. Thompson said that the Board would have the equipment and be able to use it while they’re paying. She added that if they paid for it over too long of a time period, they’d need new before the end of it. Neuzil said that the question is not getting out control, but they’re only talking about $500,000 paid over 4 to 5 years out of a $45 million budget. Thompson said that she’d like to see something in policy regarding how the Board will limit debt. She added that she noticed the City had a statement in their budget stating their debt limit. Horne said that cities are very different about debt because they issue a lot of bonds for things like sewers and they issue revenue bonds for water plants. Lehman said that the County doesn’t have infrastructure. Thompson said that she’d like to have something in writing stating how much they’ll bond for and when that’s paid off their bond again. Horne suggested tying the limit to a percentage instead. Thompson replied that that is fine as long as it’s written down. Horne said that they can add it in the financial policies. Neuzil said that the election equipment might have to be on hold until the software is paid off. Thompson said that since it’s new, she’d feel comfortable bonding and Neuzil agreed.

Horne said that Elections isn’t that far because they don’t have any proposals yet with hard numbers. He said that they’re not close to being done. Lehman said that Neuzil had mentioned possible grants as well. Neuzil said that the Board might be a little premature on that. Thompson suggested moving ahead with the real estate and financial software and then next year seeing how it works. She said that interest rates won't skyrocket anytime soon. Neuzil summarized that the proposal they’re asking Horne to research is to bond for the financial software minus the $300,000 they will put towards it. Stutsman clarified that he’s talking about bonding for the entire cost of the financial software, approximately $450,000. Neuzil replied that he’s suggesting the $450,000 minus the $300,000. Horne said that it would be another $200 to $300,000 in bonding. He said that the Board doesn't know what the total will be yet. Horne said that that is why he almost wants to handle those 2 items separately from the budget because the Board doesn’t have final numbers as to the cost. Thompson asked if the Board could just leave the $300,000 in the budget, don’t save any this year and when it’s time to buy, they just buy. She said that it operates outside the budget. Horne replied that it does, but that they could use the savings to lower the tax asking. He said it’s an option he wanted to present to the Board. Lehman said that if the Board doesn’t use the $300,000, it’s a way to try to meet their shortage. Stutsman said that they’d bond for the whole financial package then.

Neuzil asked Horne to explain how the Board would pay it back if they bond for the whole total. Horne said he'll assume they go through local lenders like last year. Neuzil said that if in May the Board decides to bond $600,000, then how is it paid back. Horne replied that the Board has a debt service levy. He explained that the County has a General Fund Levy, a Supplemental Levy and a Rural Levy. He added that this is just another levy. Neuzil asked if the money to pay that back comes out of the General Fund. Horne replied that it comes out of the Debt Service Levy because it’s a direct levy. Lehman compared it to the MH/DD Fund or the Assessor’s Levy. Stutsman said that the advantage of it is that the County can access the TIF on that levy while they can’t in others. Thompson said that the difference is that last year the County got the bond revenue, used it to pay off those debts and then paid off the bonds within the same year. She said that the question now is whether or not the Board wants to have bonds that they don’t pay off in the same year. She said that the only barrier is that the Board has never done it. She said that it’s not that it’s not good business. Neuzil said that the research the Board wants Horne to do is to find out how much the Board would pay if they chose to bond for $600,000 over a 3 year period. Thompson asked how much the interest rate will be. Horne replied that it will be high.

Horne explained that there’s 2 issues in bonding; one being the operations issues, which he has already looked at and this issue, which is a separate issue. Harney said that when they pay it back they will still raise the taxes, so he wants to know by how much. Neuzil asked if it’s going to cost $150,000 to borrow for 3 years. Thompson said that $600,000 at 1.5% is $9,000 a year. Stutsman said that the increase would be spread over more taxpayers. Neuzil said that the Board has to understand that it’s $200,000 plus $9,000 that it’s going to have to pay in that first year, which means that even though they have more room in the General Fund, there’s still a $200,000 more in taxes. Lehman said that the Board doesn’t know what the budget situation will be next year or the year after, so they may be painting themselves in a corner by bonding over multiple years. He said if it’s in the same budget year, then it’s done. Thompson said that if they bond over one year, then they need to have the money to buy the stuff. Harney said that they may be able to if they cut other places in the budget. Lehman asked what happens if the bill for the software comes in, but the tax revenues have not. Horne said that once the Board makes the decision to bond, irrespective of the budget process, they would get bidders and settle on a bid. He said that they’d get the proceeds fairly quickly after that and they would then pay the software company. He said that then they would amend that into the Debt Service Levy and start taxing. Lehman said that if they bond, as taxes are paid in September and April there will be enough money from the special levies to pay it. Horne said that they would set up a schedule for the bondholder. Thompson said that they’d have to tax for it. Lehman replied that it is an increase. Thompson said that it would have the same affect on a $100,000 house as if it was in the General Fund minus the TIF advantage. Lehman said that they have to pay for it somewhere, so they either increase taxes or decrease services.

Neuzil asked if the Board can budget for this in this cycle or is it something they can do later. Horne said that it would be like an amendment outside of the budget process. Neuzil asked how the Board will pay it back. Horne said that the Board would be levying outside their normal levies, so they’d have to go through an amendment. Lehman said that the tax bills have already been mailed, so it would be the year following year. Horne said that the next time there is a tax statement, it would be on there, although he’s not sure of the timing. Stutsman asked if they can change the tax statements after the budget is certified. Horne said that the Board has never changed taxation in their amendments before, but they can. Neuzil said that if the school bond passes, then in September they’ll start to see the effects. Horne said that the School Board’s budget isn’t due for another month, so they may be able to include it in their budget. He said that when it takes effect depends on the schedule drawn up with the people who carry the note. Lehman said that he doesn't want to have a situation where people pay their first half of the year taxes, but then they get a notice with the second half seeing this effect. Horne said that the Board can implement the increase in the following year to lessen the impact. Thompson said that there’s an expense in sending out new notices, so they should minimize that. Horne said that they wouldn’t have to send out a new notice, only add it to the next notice.

Neuzil asked if the Board is talking about bonding for 2 out of 3 items on this list: both the real estate and financial software. Thompson said that she’d like to bond for them the same way they’ve bonded for other items. She said that the question the Board hasn’t thoroughly discussed is whether or not they’ll pay the bond back in the first year. Stutsman said that she’d need to see what’s on the table and what has to be taken off the table before making that decision. Horne asked if the wants to discuss bonding for operational aspects like health insurance, property and casualty insurance. He said that they can bond for things listed as essential county purposes. Thompson said that they can bond for capital projects. Stutsman asked Horne to prepare a list of what can be bonded for and what can’t.

Neuzil asked if the Board has put on the table potentially bonding for both the financial and real estate software. He said that then the next question is whether or not the Board wants to release the $300,000 they’ve currently saved or put it towards the bond. Harney said that it would make more sense to leave it in the fund to go towards repayment in the first year. Thompson agreed. Horne said that some of the things they’re talking about, they don’t have an exact cost for and won’t know before setting the budget. His question is whether or not the Board wants to go forward with it outside of the budget. Horne asked County Treasurer Tom Kriz how bonding midyear would effect the tax statements. Stutsman asked when they start paying the bonds back. Kriz said that interest is 6 months after the bond comes out and the principal and interest is one year. Thompson said that if the Board is going to pay for the equipment over a few years, they could use the $300,000 to pay the first year. Horne explained that they can’t transfer money in from the General Fund to the Debt Service Levy. Neuzil said that the Board would have to ask for less. He said that they could bond for $600,000 minus the $300,000 that’s applied to it. Horne said that it’s his understanding they can’t keep a balance in the Debt Service Levy. Kriz said that the County can issue different bonds at any time, but the ideal time is to package it. Horne said that the Board might look at packaging the financial and real estate software and then the voting equipment down the road.

Harney said that he’s concerned with strapping themselves if issues arise in the future instead of paying it off within a year. Stutsman added that it might be a problem if they keep adding to the debt. Horne said that the County isn’t even close to what the limit would be. Harney said that he understands that, but that the Board still has to raise taxes to pay it back. Thompson said that that is the reason why she wants a financial policy stating what the limit will be. Stutsman said that it’s a policy decision by future Boards, if they feel it’s important enough to bond more and raise taxes, then it’s their decision. She said she doesn’t feel that this Board can speculate for future Boards. She said that this Board needs to decide what they need to do today. Horne said that right now in this interest rate environment it will be cheaper to bond for things like the software. Kriz said that he agreed with Stutsman that not only will different Board be different, but also different interest rates. He said that right now there are huge advantages to bonding and accomplishing things. He said that when the economy starts to turn around and they start paying double the interest rates now, then they have to look at it again to see whether or not it’s cost effective to bond.

Neuzil asked if the Board decides to bond for all these things and releases the savings into the current budget, then bond for $1.3 million total across the different categories and then pay it over 3 to 5 years, what interest rates would be available. He asked if it would be a set interest rate. Kriz replied that it would be, but it would depend on the duration of the term of the bond. He added that a 5 year bond he would hesitate to give a number, but in the 3 year bracket the interest rate would be about 3.75% depending on whether they’re taxable or non-taxable bonds. He said that one-year bonding could be under 2%. He said the longer the bond the more uncertainty and the higher the rate. He said that the ideal thing about the one-year bonding is that they know it won’t change quickly. Neuzil said that they’d also pull the taxes from the entire tax base, which is also a big advantage. Horne said that they’d be able to access a $376 million increment. Harney agreed, but added that in a year or 2 they still have a budget to meet. He said that if they spend the savings this year, then they’ll have to make it up in the budget next year and pay for the bonding. Horne said that they wouldn’t have the software in the transfer for next year. Stutsman said that Harney’s thinking that they’d continue to add to it, but they’re not. Kriz said that they wouldn’t add on, they’d only have fixed payments. Lehman said that they might have new items to consider though. Neuzil said that taxpayers still have to pay the $1.3 million plus interest back. Harney said that that’s what he’s saying, plus the money they’ve taken to make the budget work this year. He said that they would still have to make that up in the budget next year as well. Horne said that they wouldn’t ask for any transfer next year for those items.

Thompson asked what the tax rate this year is. Kriz replied that taxable bonds are 2.85% and tax exempt bonds are 2.15%. Neuzil said that those are on one-year bonds. Kriz said that longer bonds would be a higher rate. Stutsman asked if someone would bid on these bonds. Kriz replied that they would and Horne added that it’s a safe investment. Stutsman asked what the Board is still trying to decide. She said that they’ve decided to bond for real estate and financial software. Horne said that the question is whether or not they want to take the savings and lower the transfer. Thompson replied that she does. Neuzil agreed. Stutsman said that she wants to see what they’ll have to cut from the budget first. Neuzil said that everything’s on the table. Horne asked for consensus to go ahead with the operational bonding, which he received.

Kriz said that he’d spoken to Springstead and Associates Representative Tony Roetlin, who said that Bonding Attorney Bob Josten was speaking with the IRS over the taxable/non-taxable bond issue. Horne asked if the County went ahead assuming that it would be all taxable bonds if it would still be beneficial. Kriz said that right now it would, but added that he’d caution the Board that they must look at it one year at a time because of the interest rate sensitivity. Stutsman asked if Kriz is recommending one-year bonds then. Kriz replied that he is for the operations bonding, but for longer-term bonds, it depends on the size of the bond. Neuzil asked if the IRS could come back with the decision that they can be non-taxable and then can the Board get a better rate or not. Kriz replied that once it’s bonded it’s done, so they have to go one route and then if it’s ruled that it’s non-taxable the Board has to make up the difference. Harney asked if the ruling comes back that last year’s bonds are taxable, how much of the difference is the Board going to be responsible for. Kriz said that the worst case scenario is that the County would be responsible for the difference of 2.15% and 2.85%. Harney asked what that would amount to. Thompson asked if the bank would call in the notes and the Board would just payoff the bonds, which they intended to do anyway. Kriz said that it’s possible that the IRS would just say that taxes need to be paid, switch the interest rate and recalculate. He said that since the bondholders bid on non-taxable bonds, which was the basis for their bids, if the game changes then the County must make up the difference. He added that he’d have to figure out what the .8% difference would be. Lehman asked from where the .8% would be funded. Stutsman replied that they’d have to pay it from the General Fund. Horne said that he’s not sure they can pay back a bond from the General Fund. He said that the Board would have to amend the Debt Service Levy. Stutsman asked why they didn’t know this beforehand. Kriz said that the question has been raised in talking to Roetlin. He said that Josten is probably the best bonding attorney in the Midwest and they think that the reason the IRS is looking at it is really a non-issue. Neuzil asked if that is the case, why the County wouldn’t proceed in bonding at the non-taxable rate this year. Stutsman said that they’ll have to wait for this decision. Thompson said that they could calculate similar to last year, but using taxable bonds. Kriz said that in the worst case scenario the County will have to make up the difference. Horne said that staff doesn’t think that will happen because they think the IRS is looking at it because it hasn’t been done before.

Horne said that the Board will have to wait until after the budget to bond for the software, because they don’t know the exact cost. He asked if the Board wants to commit to doing it in order to lower the tax asking now. Neuzil said that the question is whether or not they want to apply the $300,000 towards it or not. Stutsman reiterated that she wants to wait until they go through the budget. Kriz said that bonding for operating costs only makes sense when interest rates are at historical lows. Stutsman suggested putting that in the County’s financial policy. Horne said that if the Board gets used to bonding, eventually it won’t be cost effective.

Thompson asked what the line item is that says less 4% of projected unexpected budget. Horne replied that it’s the revenue expense adjustment for the General Supplemental Fund. Lehman said that it has to do with the historical carryover. Thompson asked why the Board would think that there’s going to be an adjustment in those particular items. Horne said that salary, FICA and IPERS are sometimes included, so that if someone leaves, then they’re not paying those items for them. Thompson said that the sheet says that the maximum transfer is 4.75%, but the transfer line says 5.4%. Horne replied that right now in this budget sheet, the 5.4% is what they’d require as it stands now. Neuzil said that to get under the cap the Board has to reduce $989,000. Horne said that they have to go beyond that to leave room.

Stutsman asked Horne for recommendations. Horne replied that they could take all the new employees off the table. Stutsman said that this isn’t even talking about raising taxes, it’s only to get under the levy limit. Horne said that currently the taxes would be a 7.3% increase in an Iowa City home and 3.8% in a rural home, but it doesn't matter because they’re not allowed to stay above their levy limit. Stutsman said that if they took the $300,000 out of savings it would lower the number by 1/3. Horne said that if they took out the real estate software funds, it would be another $258,000 bringing the total to $558,000. Neuzil asked if they had that money saved. Horne replied that it’s in the transfer for next year. Stutsman asked how hard or easy the Board wants to make these cuts. Horne said that it will be harder if they don’t consider technology items.

Stutsman said that she’d like a list of items with costs attached, so it’s easier to evaluate how important they are. Harney said that’s what they had asked for yesterday. Thompson said that the Board had agreed to pay for the real estate software over 2 years. Horne said that $258,000 is still in the budget, which he thought was the whole cost. Neuzil said that she’d start that project next January then. Neuzil said that if they pulled out the $300,000 and the $258,000 then they’re almost halfway there. Horne said that the voting equipment would be another $100,000. Neuzil replied that the Board doesn’t want to play with that. He said that they still have $650,000 to cut. Stutsman asked if they were all in agreement up to this point. Harney said that he isn’t completely, but he’d consider it at this point. Thompson asked if the second $300,000 for FinCore is still in the budget. Neuzil replied that the Board didn’t put in an extra $300,000. Horne replied that they had because there is $300,000 saved, which would lower the transfer, and removing the $300,000 and $258,000 requests, it makes the total $858,000 by removing out those 3 items.

Stutsman asked how much is left and Neuzil replied that they have another $400,000. Horne said that doing the operations bonding will decrease the total as well. Neuzil said that he didn’t want to factor that in because it’s a nice surprise to see how much they’re going to charge in taxes and have it actually be a little less. Horne said that they need to go below the cap, not stop at the cap. Harney asked if the Board wants to consider the increases they decided on for block grants. Thompson said that she’d give them the increases for now and Stutsman agreed. Stutsman added that she’d like to look at personnel issues first. Lehman added that they should look at vehicles as well. Horne explained that the Sheriff’s vehicles are the largest expense at $150,000. He added that the Board put in additional monies for new ambulances. Stutsman said that if the Board didn’t approve the building inspector, there was an additional inspector and a vehicle right there. Horne replied that Planning & Zoning wants the vehicle regardless because they’re short a vehicle now. He said that the idea is that someone would stay in the office. Thompson said that they’ve be getting along without it and if they want someone in the office, then they won’t need a vehicle. Stutsman said that they can also use their own vehicles and charge mileage. Thompson said that they didn’t charge much mileage. Stutsman added that there’s also the County van. Harney said that he’s not ready to cut the additional inspector because he’s heard from contractors where they’re not meeting deadlines and the contractors are being held up.

Horne said that he has the maximum transfer to Roads from the General Fund, which would save about another $180,000 by doing the minimum transfer. Stutsman asked what they would be giving up. Horne said that they could offset the cost in the Rural Fund. He explained that historically the Board has started with the highest General Fund possible and the lowest Rural Fund possible, but that can be changed. Thompson asked if an additional $13,000 to the Rural Fund would make a visible difference. Horne replied that it will make some difference, but it’s figured in this sheet. Thompson said that the Board hasn’t discussed funding the Soil and Water Conservation staff person. Neuzil said that something missing from the budget process is the question of what is the essential role of County Government. He asked what priorities have been laid out and if they're to the point in the budget where that’s something they have to look at.

Horne asked if the Board wants to lower the General Fund Roads transfer and increase the Rural Fund transfer. Thompson asked what levels they taxed at last year in each. Horne said that they budgeted for the minimum from the General Fund and the offsetting amount from the Rural Fund. Thompson asked how much the offset would be. Horne replied that it’s about $180,000. Harney asked how much that will increase rural taxes. Thompson said that it will even it out. Stutsman said that it would give the Board more taxing authority. Thompson said that she wants to do the same thing this year as they did last year. Stutsman said that she doesn't want to reduce Secondary Roads ending balance. Horne said that the Board took out their revenue expense adjustment, so their balance is low. Thompson said that everyone gets a revenue expense adjustment other than Secondary Roads and MH/DD. Neuzil said that they wouldn’t have to take the entire amount from the General Fund. Horne agreed. Neuzil said that it was more than $180,000 last year as well. Horne said that last year the Board transferred the minimum, which was $466,165. He said that this year the transfer would be $638,447 at the maximum, but the minimum would be greater than the $466,000 because the valuation went up. Thompson said that she would like to do what they did last year. Horne said that $480,000 would be the minimum in the General Fund this year, offsetting $158,000. He added that it’s would be an increase of $14,000 in the Rural Fund from last year. Thompson and Stutsman agreed with that method. Harney asked if they’re taxing rural residents more then. Neuzil said that they did the same thing last year.

Thompson asked about the Soil and Water Conservation position. She added that if the Board is going to cut positions she’d rather cut a position that’s not County. Stutsman said that the position provides a service to the urban and rural community. She said that she’s been impressed with the new person in that position. Thompson asked what he’s done. Horne said that they work with Planning & Zoning regarding erosion control and other things the County might have to do inhouse. He added that the County is only funding $30,000 of the cost of the position. Stutsman said that it is a good partnership between governmental entities.

Lehman asked if the $13,000 for rural residents’ Senior Center fees are coming out of the Rural Fund. Horne replied that it is, and it's already included in the budget. Harney said that it’s an additional $27,000 then. Horne said that adding the $158,000 from the offset in Roads brings the total up a million. Thompson asked if he wanted to cut $1.3 million. Horne replied that he wants to cut $1.2 million, so they need to cut another $150,000. Neuzil asked where the Board wants to make the rest of the cuts from, from employees, from maintenance, from block grants or something else. He said that it again comes back to what the essential County purposes are. Stutsman said that employees are an ongoing expense. She said that a department head should request a new employee for 2 or 3 years before making the case that it’s really needed. She asked how many new positions haven’t been brought to the Board before. Horne said that the Recorder's position hasn’t been before the Board and Stutsman added the building inspector. Lehman said that the 2 paramedics and the ambulance hadn’t been requested before. Horne said that the Ambulance Department is only requesting .8 of a person. Stutsman said that he’s made the case that he will save money by adding those positions. She asked about the Auditor’s position. Horne replied that this is the 2nd year the Auditor has asked for the deputy, but the other position is new. He added that those aren’t in the summary. Thompson said that they gave the Auditor's Office $10,000 for 20 hours in mapping. Horne said that those requests are already factored into the budget.

Stutsman asked about the budget intern for the Board of Supervisors for $2,000. Stutsman asked about Conservation’s request. Horne replied that Graves has made that request before. Stutsman said that she’d be willing to leave Conservation in and Harney agreed. He added that he’s not sure though that just because a department hasn’t asked before or proven that it’s a good cause that the Board shouldn’t consider the request. Stutsman said that the Board could wait another year with the building inspector to see how the department is being run. She added that it’s almost a knee-jerk reaction. Lehman said that if the Board doesn’t grant a request, then sometime the department makes adjustments and doesn’t ask again. Stutsman said that the reason she made the comment is because that’s how the University works. She said that they have to ask several times because receiving a new employee or reclassification. She said that it validates that they really need another person. She said that the Board gave Secondary Roads another engineer and then after that cut down on projects. She said that they should have waited to see if they consistently needed another engineer.

Recessed at 2:20 p.m.; reconvened at 2:35 p.m.

Harney asked if the funds the State is reinstituting is going to affect the County’s budget. Horne said that he couldn’t think of anything substantial that would affect the General Fund. Harney asked about property tax credits. Horne said that it wouldn’t affect the County, only the taxpayers. Stutsman said that the Legislature reinstated them. Neuzil said that they hadn’t done it yet because the Governor hasn’t signed anything.

Horne asked if so far the Board has cut the $300,000 in savings and the $300,000 in the actual budget for FinCore and $258,000 for software. Neuzil asked where the $258,000 is in the budget. Horne corrected himself and said that it’s actually $280,000. Thompson said that they also decreased the General Fund Secondary Roads transfer by $158,000. Neuzil said that the Board wants to see what that will do to the Rural Fund, but added that it wouldn’t change it much from last year. Thompson said that they’re up to $1,038,000 then. Horne said that if they add in the bonding they’d be close to $1.2 million. Thompson asked how much the bonding is. Horne said he didn’t know, but they would get some savings from it. Neuzil said that they’re already below the cap, but now they’re padding the gap. Horne said that the Board must leave themselves some room. Stutsman asked if they don’t need to cut anything else then. Thompson thought they should cut $150,000 more. Neuzil said that the Board must remember that they’ll be taxing for an additional $800,000, it just won’t be coming out of this budget. He said that they might want to reduce the budget even more and Stutsman agreed.

Thompson asked if they’ve decided on personnel. Lehman said that they didn’t have a dollar amount for those positions. Thompson said that the Recorder’s deputy is $15,000. Stutsman said that she’d take that off the table because once it’s approved it will always be there because the Board can’t lay off a deputy. Horne replied that they can defund the position, otherwise the elected official has to come to the Board and ask to remove the position. Thompson asked who is in favor of taking off that position. Harney said that he isn’t at this point. Stutsman said she is. Neuzil said that this isn’t adding a position. Stutsman said that it would cost $15,000 more. Neuzil asked if the Board chooses to say that they’ll give the Recorder a deputy, there’s still 2 extra positions in the department. Thompson said that if the Board only gives her $15,000 then she has to use to it hire a deputy. Neuzil said that she could hire the deputy and keep the other position open. Harney said that that was what she said she would do. Horne said that he thought she would eliminate the other position. Stutsman said that there’s no guarantees, which is what Neuzil is saying. Thompson said that she doesn’t have enough money for both positions. Horne said that the Board can choose to eliminate the open position. Thompson asked if the Board needs to approve job descriptions for deputies. Harney said that the Recorder’s plan would utilize existing staff in a new configuration rather than higher additional staff. Horne said that the position would be eliminated. Neuzil said that his understanding of the situation is that the vacant position would be rehired and an internal position would be upgraded. Harney said that either way they’re not adding a position and they’re removing one. He said that the Recorder has listed one first deputy for real estate, one second deputy for vital records and 6 bargaining unit clerks. Horne said that right now she has 7 positions. Thompson asked who wants to fund the position. Harney, Lehman and Thompson agreed to.

Thompson asked about the Planning & Zoning building inspector position and their vehicle. Horne explained that Planning & Zoning is requesting the vehicle regardless of whether or not they receive the inspector. Neuzil said that he still feels that they should remove the position. Stutsman agreed. Lehman wanted to keep it and Harney and Thompson agreed.

Thompson asked about the 2 paramedic positions. Lehman said that they would save on overtime. Thompson asked about the County Attorney’s legal assistant. Thompson and Stutsman said that they could cut that. Thompson said that County Attorney J. Patrick White wasn’t accounting for the fact that the Board has taken duties away from him, which should free up some time. Neuzil asked if White’s request is included in this budget. Horne explained that the restoration of the cut is not, but the employee is. Neuzil said that the Board originally said he could have one or the other, but by taking that employee out, then he doesn’t get either. He said that then his department would get less than everybody else. Horne said that he wouldn’t necessarily hire an assistant either. Thompson said that the position would cost $47,027 and Stutsman added that this is his first request. Thompson said he asked for a half time person last year. Horne said that he asked for another attorney last year. Neuzil said that if the Board takes this out then he gets nothing. Stutsman said that she’d rather reinstate the 4% then. Neuzil said that it’s a wash. Horne said that whatever the Board designates it for, it’s at White’s discretion as to what to use it for. Lehman said that if the Board gives him money for an employee, which he hires, he might come to Board saying he can’t make his payroll. Thompson asked if the Board wants to give him $47,000 more or not. Lehman said that it goes back to hiring another person. Neuzil asked if they should just restore the funds to his budget and not allow for an additional employee.

Thompson said that the Board has already cut one park worker, but she would like to keep the second one. Neuzil said that even with Conservation’s additional employee at $.23, the Board doesn’t have enough in that budget. Horne replied that they do. Stutsman said that they just don’t have as much as Grave would like. Administrative Secretary Casie Parkins said she checked the October 9, 2002 site visit minutes and last year Conservation wouldn’t have qualified for REAP funding because they need the $.22 plus revenues. She added that Graves would like $.27. Horne explained that $.23 is $870,000 plus his revenues, which are $69,060, he'd receive $930,000 but with the additional park worker he's requesting $969,000. Neuzil said than he is $30,000 short in his budget compared to what he's requesting. Stutsman replied that Graves might not get everything he's requesting so the Board can fund him at $.22 and he can decide what to do with it. Neuzil and Thompson said that they were both willing to fund him at $.23. Stutsman asked what items can be paid from the Conservation Trust because she doesn't think the County should be paying for equipment when there is more and more money being added to the Trust to buy more land. Thompson said that by decreasing him to the $.23 plus his revenues they still cut an additional $38,195. Horne said that they must allow for his revenues to be higher in order to obtain REAP funding. Stutsman asked Horne to clarify REAP rules before making a decision. Stutsman asked Horne to find out if the money from the Conservation Trust can be spent on equipment. Horne replied that the Conservation Trust is not a codified fund. Thompson said that they probably have bylaws that set out how it can be spent. Stutsman asked why the Board taxes when they can use those dollars to buy equipment. Neuzil asked if the Board can conservatively cut $25,000 from the $969,000. Thompson said that it will be at least $25,000 less.

Horne commented that another option is reducing the $430,000 from jail transportation because it doesn’t look like County Sheriff Bob Carpenter will spend what he has budgeted this year and he asked for an additional $130,000 for next year. He said Carpenter budgeted $360,000 for this year and he’s asking for $490,000. Thompson suggested just giving $400,000. Neuzil said they should budget for what he’s going to spend this year. Horne replied that Carpenter doesn’t know. Lehman said that they’re trying to save money for a carry-over balance, but Carpenter could come in to ask for a amendment if this item goes over. He asked if the Board would give him less in the budget, but still tax for it in case he needs an amendment. Neuzil suggested lowering it to $450,000. Harney agreed. Stutsman asked if the Board thought the lowering of the alcohol limit will have an impact on jail crowding. Harney replied that it absolutely will. Thompson replied that it won’t effect who needs to be transferred because they don’t take those people to Linn County. Harney said it will have an effect in the court system and the County Attorney’s Office as well.

Stutsman asked if there are any vehicles they haven’t revisited. Horne replied that the Sheriff Department and Public Health both asked for more vehicles. Thompson said that the Board cut those items from the budget last year. Thompson asked if Horne had calculated the projected carry-over balance yet. Horne replied that it’s in the worksheet. Harney asked if they could bond for any more items out of the Technology Budget. Horne replied that they could possibly bond for the Sheriff’s system because it would be similar to the financial software.

Stutsman suggested cutting projects from the Physical Plant’s budget and extending replacement vehicles by another year. Thompson asked if the Sheriff and Ambulance would be exempt. Neuzil suggested letting Ambulance Director Steve Spenler buy a new ambulance every year because it would be cheaper than several at one time. Lehman said that he has 6 vehicles on a 7-year replacement schedule. Horne suggested adding a policy on vehicle and vehicle replacement. Stutsman asked what’s wrong with replacing vehicles every 10 years for departments like Physical Plant and Planning & Zoning. She said that the County has so many vehicles and they’re programmed to change every 6 years regardless of mileage. Neuzil said that they could argue the same thing for computers. Stutsman said that part of it is keeping up with technology though. Horne replied that the Board lengthened the replacement schedule of computers the previous year. Thompson said they have a 9% carry-over balance in the General Fund for this budget. She added that last year they had about $500,000 more than expected and this year it could be even more.

Stutsman suggested taking $100,000 out of land acquisition. Harney said he isn’t ready to do that yet. He said that $1 million was the minimum the Board budgeted for in order to accomplish their needs. Thompson said that the Board could always borrow from another fund. Stutsman said that the Board needs to prioritize. She asked what the prioritizes are: personnel, vehicles, or land acquisition. Neuzil suggested non-discretionary monies. Stutsman suggested taking $25,000 from all the funds they mentioned. Horne asked what vehicle wouldn’t be replaced then. Stutsman commented that they could extend the replacement schedule. Lehman said that it would solve the short-term problem, but they’d be back asking again in the future. Stutsman suggested taking $25,000 from discretionary funds, $25,000 from personnel. Thompson said that they have to remove a person from personnel and the Board hasn’t been able to agree on a person. Horne asked about block grants and commented that Iowa City froze their block grants this year. Neuzil said that they’ve raised block grants by $28,101. Harney pointed out that that includes the grants to the Englert and North Liberty. Thompson said that she’d be comfortable taking $100,000 from the debt service. Horne said that they would get reductions from the debt service, but he didn’t know to what extent. He said that they’re close to the goal, so they might not have to make any more cuts if they’re going to proceed with the debt service.

Neuzil said there’s still $880,000 that’s going to be bonded for that will still be taxed, just not out of the General Fund. Stutsman said that no one is willing to put anything on the table to cut. She said that she’s offered various suggestions. Harney said that he needs more time to go through and see where they can make little cuts that won’t have as much impact. Horne replied that the Board has to have final decisions at Monday’s meeting. Thompson asked if he’d have final tax numbers after running the debt service by then. Horne affirmed that he would and the numbers would be better than what the sheet shows right now. Stutsman said that the Board is talking about not raising taxes, but it’s willing to make cuts to the budget because bonding only allows for a bigger tax base. Neuzil said that there’s a tax portion to the bonding, but it’s not ongoing like personnel. Thompson said that if the Board doesn’t pay for it in the first year, they’ll have to pay over a number of years. Lehman said in 2 years they could be contemplating a jail bond. Horne replied that a jail bond would be a true bond issue. Lehman said that unlike the School Board, which is replacing an old bond with a new bond, the Board would be adding onto the tax bill if they bond for more than one year. Thompson commented that the Board easily made the decision to bond again this year because it’s very captivating. Stutsman said that the argument is there now because of the low interest rates. Horne replied that they need a new financial system because it’s a critical unit of government.

Neuzil asked if the Board has met their essential County purpose goals in the budget. He said he didn’t think that they made cuts to those services yet. Stutsman agreed. Neuzil asked if there is $100,000 left in the budget to cut. Thompson said that she couldn’t think of anything in the General Fund. Horne asked if they want to look at the maintenance projects. Harney said that he thinks they might need to just say no additional staff period. Thompson said that that would save $300,000 more than the $100,000. Harney said that he’s talking about a hiring freeze. Neuzil said that there’s certain positions that just make more sense, like the Ambulance personnel in particular because they’re paying more than a new position in overtime. Neuzil said that they're not adding a lot of new staff. Stutsman replied that they are adding a building inspector, a Recorder upgrade, one Conservation, a .8 in Ambulance and a position for the County Attorney. Horne said they gave the Auditor's Office hours for part-time mapping and part-time raises. Harney responded that those need to be on the table now. Thompson said that once Horne gets the figures for bonding, it will come out. She said that the tax increases, which were heavily skewed towards an increase to urban, but shifting Roads funds to the Rural Fund will even that out. Neuzil said that the taxation on these sheets will go down, but there’s now 2 sets of books in essence because they’re also taxing for bonds.

Thompson asked how cash flow works with bonding and whether or not they pay anything back in the first year. Horne replied that they get all the money at once. For example, they took revenues for this year all at once the previous year and are now using those revenues. He added that they taxed a year early in a sense. Thompson asked if they’re going to spread the FinCore payments over a couple of years then since they won’t have enough money in this budget to pay it. Horne commented that they don’t have a final cost for FinCore, so they don’t know what the bonding will be.

Neuzil asked about the $150,000 the Board has saved for the election equipment. He asked if the Board is committed to bonding for it eventually and if so, why are they saving for it. Stutsman said eliminating the Recorder’s upgrade, the inspector and the Planning & Zoning vehicle, would total $63,000. Thompson said she’d rather release the elections equipment savings. Harney said that last year, they Board saved the money and was able to make a large payment in the first year. Horne said that by bonding they’re still reducing taxation in a sense because they’re using a bigger tax base. Neuzil said that he’d argue the same thing for bonding versus saving large amounts of money for land acquisition. Horne commented that the Board can only bond for $800,000 at a time. Harney said that it’s prudent to save money and put down a down payment.

Stutsman asked what the balance is in the Conservation Trust. Horne replied that it’s about $120,000. Harney said that there are some issues that might arise this next year too. He said that the jail inspector cited the lack of exercise space in the jail as a problem, but didn’t give the County a deadline to do anything about it yet.

Stutsman said the Board is adding 3 new positions and upgrading one position in a time when many counties are instituting a hiring freeze. Thompson said that other counties have different financial situations than Johnson County. Horne replied that they also use different revenue streams than Johnson County, like sales tax, which is notoriously variable. Stutsman said that these are the questions that they'll have to answer to the taxpayers. Neuzil commented that the Board is technically taxing $880,000 above the capped levies. Thompson asked if the Board will pay back any of the non-operational bonding in this budget. Horne replied that they wouldn't. Thompson asked if the Board pays for this over the next 3 years, if in those years they must build in $800,000 in debt that they didn't have before. Neuzil said that the number will look better once Horne makes the changes, but the reality is that there's going to be $880,000 in debt. Lehman asked for the impact of the $880,000 in bonding. Neuzil asked if the Board wants to reduce that impact more than they currently are by making more cuts in the budget. Horne said that they'd be taxing for FinCore one way or another. Thompson said if they paid the bonds over 3 years, it would be $310,000 per year.

Neuzil said that the Board can go through the budget and find more ways to reduce it. Stutsman said the Board has been trying in this meeting, but no one's willing to consider anything. Neuzil suggested across the board cuts of decisions they had already made instead of each department. He added that the Board hasn't compared the current budget to their list of essential County services. Thompson replied that she ran through the list and they've pretty much done what they could. She added that they didn't increase Planning & Zoning's fees, which is something they were going to review along with the Health Department. Neuzil that the Board isn't taking steps to reduce the essential County services. Stutsman said that contributing to the Senior Center is not an essential County service, but the Boardroom filled when they discussed it. She added that the Board can talk about reducing service, but until they have the political will to do it, it's just talk.

Reverend Bob Welsh said he's hearing that the Board is not yet ready to commit to voting machines. He added that secondly when they do commit, the Board will bond rather than budget. He asked about reducing the $150,000 from the voting machines savings now to lower the tax asking. Thompson explained that they have $150,000 saved and $75,000 for additional savings in the budget. Horne replied that he didn't include it in the budget. Neuzil said that it comes back to a commitment from the Board to bond. Stutsman said that they can't commit future Boards to these decisions. Horne replied that the Auditor's Office needs to look for grants for some of the voting equipment. Thompson said that they've been very successful in saving, but they can take a different approach by bonding. Stutsman said that she isn't ready to make that change.

Thompson suggested taking the difference of the savings from bonding and the total they need out of the election's savings. Neuzil said that he'd like to sleep on it and asked if the Board should be reducing the asking a lot more. Thompson asked for a summary of the impact of the $880,000 in debt. Neuzil said that it would be at least next March before the taxpayers are actually taxed. Lehman said that taxpayers wouldn't see the impact this year, but the Board has to keep in mind that they've already committed to it for the following year. Harney said that the only thing the Board is accomplishing by bonding is really spreading it out over a larger tax base. Neuzil said that by spreading it over the extra $300 million TIF dollars, it makes up the cost and gives additional savings to the County since the interest rate is so low. He said that he thinks there's no doubt about that.

Thompson asked if the Board is committed to bonding over a 3 or 5 year period. Harney replied that 3 years should be the maximum. Neuzil said that if elections is the next item on the list to be bonded, this item should be paid for over 2 to 3 years. Horne commented that if the Board wants to bond for election equipment, they'll have to begin that process in the next few years, because interest rates will undoubtedly increase. He said that the Federal Government's massive debts will start to push interest rates up. Thompson said that the Board is foolish if they think that using debt to finance projects won't sneak up on them and they'll end up like Coralville or Iowa City. Horne commented that those entities are bonding for $20 and $30 million dollar projects, unlike the Board. Harney commented that if the Jail Task Force recommends either a new jail or alternative programs, it will require more staff to accomplish those things. He said that the Board is going to have to pay it even if they bond. Thompson said that alternative program facilities can be paid for out of the Supplemental Fund. Harney said that it will still take more staff. Neuzil said that it comes back to the essential County services. Thompson said that there's no question that a jail is an essential function. Horne listed the essential functions by department as the Auditor, Treasurer, Recorder, Sheriff, County Attorney, Board of Supervisors and Secondary Roads. He added that the Health Department isn't essential, but a lot of what they do is mandated in the Code. Stutsman said that the Board can fund just the mandated items, but they have a community that expects a certain level of services. She said that if the Board cuts services like the Ambulance Department, Health Department or Planning & Zoning the community will respond. Thompson said that the hard part is being able to afford some non-essential services, but not all of them. Horne commented that if the Ambulance Department raised it's fees and made some other changes, they could be considered an Enterprise Fund.

Neuzil asked if it's legal to pay Senior Center fees for rural residents. Horne replied that the Code is very vague, but states that it's for services that benefit rural residents. Neuzil said that the County can be sued, so the County Attorney must be involved in the decision. Neuzil said that Senior Center Commission Member Jay Honohan is talking about charging city residents more even though since the Board is taking the $75,000 out of the General Fund, they're being taxed the same as a rural person. Harney suggested raising the Senior Center funding back to $100,000, but added that it gives no incentive to the other municipalities to commit funds. Welsh commented that there's a lot of partnerships that need to be formed. He added that the Board will take a political beating. Neuzil said that Welsh is suggesting they just pay the $100,000 out of the General Fund with the contingency of no fees. Thompson said that the plan the Board has is a good one and Stutsman agreed. Neuzil replied that he doesn't like it because they've opened the door to something they don't want to open. Thompson said that the Board has created a huge suburb in the North Corridor and they will want those amenities. Neuzil asked if the central role of County government is providing those services. Horne said that it's unfortunate the Code doesn't allow the County to distinguish between rural ag and rural properties. Stutsman said that the Rural Fund was set up for farmers, but that's not the case in Johnson County anymore. Stutsman suggested incorporating the North Corridor so that it wouldn't be rural anymore. Thompson said that North Corridor residents would have to want to do that.

Harney said that the Board needs to look at Horne positions and the financial end of the County structure. He said that the financial end is getting more and more complicated all the time, so they should move the financial areas of the County together. He said that the Board needs better control over the way it's done right now because it can be much more efficient. Neuzil said that it needs to be on the table to discuss it through their strategic planning process. He asked how the County as a whole can be more efficient. Harney commented that they can even do it without adding staff. He said that if they're going to make changes they should have them in place before the financial software is implemented. He added that the Board needs to address this with the Treasurer, the Auditor and the County's Financial Committee to get them working as a team. Neuzil said that it would be a major change so it's not something they can decide today. He said that talking shifting responsibilities from one elected official to another is a major change. Horne said that he's not saying they should totally take away because the Auditor has codified responsibilities, but this department could put all the information in a package and present it to the Auditor for approval. Neuzil said that it's still something they have to bring everybody to the table to talk about and it can't be done over night. Harney said people might drag their feet, but it needs to be done.

Neuzil asked the Board to look at the amount of increases they're giving to each department. He commented that the Recorder is receiving 18% this year and Stutsman added that they were good to the Recorder last year too. He asked the Board to look at the essential County service and ask if they're moving in the right direction for future years in case they're in the same boat. He said the Board is getting lucky that there are items to bond for this year. Stutsman said that the percentages overall look good. Neuzil said that trimming some services now is easier than cutting them completely next year. Stutsman commented that she didn't want to overreact either.

Adjourned at 3:55 p.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary