Chairperson Harney called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 1:30 p.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

Budget Coordinator Jeff Horne said that this is a practice meeting for the formal budget public hearing. Lehman said that in the past they have each discussed a section of the budget. He said that he wants people to know that this is the Board’s budget, they worked on it, know what went into it and that they made the decision. Thompson said she liked the way they did the budget presentation last year because it was short. Stutsman agreed. Harney asked Horne how he expects the budget meeting to proceed. Horne went through the proposed Fiscal Year 2004 budget presentation. He said the 2nd page describes the process.

Horne said he will open up the budget presentation and do a summary of the County finances, along with expenditures and revenues and their impact on taxpayers. Horne said he will also list the factors that went into the budget. Horne said there was a 12% increase in the valuation of the Tax Increment Financing (TIF) areas and a 5% increase in the increment Countywide, making it 9.5%. Lehman said the Board knows what this means, but the audience might not, so during the budget presentation he might need to explain TIF's further. Neuzil asked Horne to give the TIF impact dollar amount. Horne said it is $358 million. Neuzil asked him how much that would mean if Johnson County could tax into that. Horne said he could do that for the presentation. Neuzil said maybe not necessarily written down, but at least to show that the impact of TIF’s is huge on the budget. Thompson suggested Horne point out that their growth and valuation wasn’t $1 million like it has been in past years. Horne said it wasn’t too bad. Stutsman said the argument that people use on the TIF is that they aren’t getting that tax revenue but they are generating so much more revenue because they have a TIF district. Horne said a factor could be used. Thompson suggested they say that it results in a loss of taxes to the County and everyone else has to make that up. Horne said other factors are the continued decrease in revenues from low interest rates. He said that there was $100,000 less in the General Fund from Fiscal Year 03, and it has decreased in several of the smaller funds.

Horne said there is a 10% increase, or $270,000 increase, in the cost of health insurance and it goes across all of the funds and departments. He said the spending levels of the General Fund are near the maximum levels, so they are basically at their cap for the spending levels of the General Fund. He said he will also give a summary of the fund balances in relation to what the budget is. He said the General Fund is 13%. Since they are doing the bonding, the money will be received before the end of the Fiscal Year, which would artificially inflate the General Fund carry over to 6 million.

Horne asked if there is anything for the priorities. Thompson said a priority should be to keep tax increases at a minimum level. Neuzil asked if this is about the same as last year. Horne said that last year they had more priorities and there were more priorities regarding the jail.

Horne said the next item is the breakdown of the budget and how it looks this year broken down into the service areas. Horne said Health and Human Services is 33% of the budget, Public Safety and Courts is 24%, Roads and Environments is 17%, Inner-Governmental Programs is 13%, Debt Services is 8% and Capital Projects is 5%. Neuzil said this is one that is deceiving to a lot of people. He said when they give presentations and say that 33% of the budget went to Health and Human Services, it’s really not that when it comes to County taxation, most of the money actually goes to Public Safety. Lehman said that maybe they should have another column that says tax dollars spent. Neuzil said he was thinking of having another one saying where the actual County taxes raised goes. Thompson said the chart would be made then just using the tax asking amounts. Lehman said the public does need to know that.

Horne said the expenditure summary is next. Lehman said he would present Health and Human Services. Horne said there is a slide on the MH/DD budget covering the 4 areas of MH/DD, which are mental illness, chronic mental illness, mental retardation and developmental disabilities. He said there are also slides for Social Services, General Assistance, Veteran’s Affairs, Children and Family Services, Services to other Adults and SEATS. Horne said Physical Health and Education used to be a service area and Physical Health is now with other Human Services, whereas things like the libraries have been moved by the State into the same Service Areas as Conservation. Thompson asked if they should have a bullet for Public Health under budget highlights. Neuzil suggested that Lehman read the mission statements of each Health and Human Service area.

Harney said he would present Capital Projects. Horne said the first slide is the 5-Year Road Construction Plan. Horne said there is also County Space Needs, which includes the budget for next year and development of the campus concept. Harney asked if they are going to be able to set aside money for land acquisition if the bill is passed regarding carryover limits. Horne said the County’s carryover is still well within limits and the bill is for undesignated funds. Horne said section, Capital Expenditures, covers the Sheriff’s patrol cars, Ambulance, other vehicles, copiers and heavy equipment such as riding mowers. He said Secondary Roads equipment is separate. Horne said Technology is last and it includes financial software, the new real estate system, GIS, networking, computer and printer replacement and document management. Stutsman suggested they mention what they budgeted for the financial software, the real estate system and GIS.

The Board decided that Stutsman would go over Inner Program Services via telephone. Horne said the first part is the State and local government services, which are the Recorder, Treasurer and Elections. He said the 2nd part is Inner Program Services, which is the Attorney, Auditor, Board of Supervisors, Human Resources, Information Services, Physical Plant and property and casualty insurance. Horne highlighted the recent increases in the cost of property casualty insurance.

Thompson said she would present Roads and Transportation. Roads and Transportation includes road maintenance, snow removal, road clearing, engineering and Secondary Roads' equipment, Horne said.

Horne the County Environment and Education service area includes the libraries, the County Fair, historic preservation grants, Planning and Zoning and Conservation. Horne highlighted the expansion of the Building Inspection function. He said there is also a new park worker for the County parks and continued support of the area libraries, well above the mandated level.

Horne said the Public Safety service area includes Ambulance, EMS, County Attorney, Medical Examiner, Sheriff and Block Grants such as the Juvenile Crime Prevention Grant. He said the highlights would be to note the additional $30,000 for the prisoner transport and the increased cost of the youth shelter which is $127,000. Thompson suggested they mention that the youth shelter cost is an unfunded mandate.

Horne said he would present revenues which are net current property taxes, interest charges, licenses and permits, and the federal, state and local governments. He said the breakdown is shown. Harney asked if Horne could elaborate to the public what inner-governmental means. Horne said it means any grants, and any payments they receive from another government. Horne said there are about 46,000 parcels of property in Johnson County which 56% of County revenue, or $25 million. Stutsman asked Horne to put the assessed value on that property. Horne said he also mentioned some of the debt service levy in the report. Thompson asked him to add that they are paying it back in the same year. Horne said he would. He said they do the debt service levy because it allows taxation into the TIF districts. He said they still have low interest rates and it creates a greater saving per taxpayer for the items within that. He said the saving to the taxpayers is $3.14 on a $100,000 home. Horne said another source of revenues is interest charges, licenses and permits.

Horne said he would also talk about the impact on taxpayers and where the taxes come from. He said there is a breakdown of the total valuation and assessed value and what different classes comprise this. He said residential property makes up 58% and commercial 32%. Industrial and utilities make up 5%, as does Ag land. He said there is $2.1 billion in residential property value in this County and $1.17 billion in commercial property. Thompson asked if the commercial includes the TIF areas. Horne said that this is not including TIF’s. Lehman suggested including that. Horne said he would also discuss the tax bill analysis. He said there was a 1.7% increase in rural residential and cuts in rural Ag land and Ag dwelling. He said Iowa City residents only had tax increases of $1.50. Stutsman said that this needs to be stressed. Thompson asked how Ag lands and Ag buildings decreased when rural property increased. Stutsman said it has to do with how the Assessor determines the use. Horne said there were some changes in assessments. Harney said he has only had complaints on the commercial aspect. Stutsman said that is the structure of the property tax system, commercial always takes the biggest hit on taxes. Horne said the way Johnson County has developed was not envisioned when the Tax Code for property taxes was drawn.

Neuzil said that in the Fiscal Year 2004 budget factors they should mention what they anticipate the salaries to be because this going to be a question everyone is going to be asking. Stutsman said they are still being negotiated. Neuzil said that they are being budgeted though. Harney said that it isn’t an issue because they don’t know what it is going to be yet. Thompson said they should wait until negotiations are over. Stutsman said they aren’t going to talk about the negotiations until after they are done. Neuzil said he means talking about what they budget for regarding the salaries. Thompson said she doesn’t think it is wise. Thompson suggested they keep their presentation to less than half an hour. Sullivan said they would have to keep in mind not to entertain any discussion or questions until they open the public hearing.

Neuzil asked if Human Resources priorities are mentioned in the budget presentation. He said there are over 450 full-time employees whose needs they are trying to meet. Horne said they might want to put in something about technology, that it is going to create efficiencies that the public would reap. Harney said they might want to mention possible changes to the Township Trustee setup. Stutsman said the same thing goes for funding for volunteer fire departments. Harney said in the proposed changes, the Trustees would only be doing the cemeteries and fence agreements and all else would come back to the Board of Supervisors. Thompson asked which trustees run the fire departments. Stutsman said that none of them do, they levy for it. Sullivan said that is why they are so competitive with their districts when they redistrict. Thompson asked if the trustees would just give them a separate levy. Stutsman said the County would. Sullivan said the Board of Supervisors is responsible for setting the levy. Stutsman said there has to be an ultimate authority that says how it is going to be.

Stutsman asked Neuzil what he plans to bring up at the public hearing. Neuzil said he plans to mention some amendments, and will try to get the Senior Center funding back, along with the Tiffin Library funding. Horne said that any funding would have to come from somewhere else. Neuzil said he hasn’t thought it all out yet.

Adjourned at 2:47 p.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary