Bolkcom: We're going to move to item number 4 on the agenda this morning. Business from the County Auditor. A. Discussion regarding the fiscal year 1999 budget amendment. I believe everybody has a packet on this from our... We talked about this last Tuesday and a few questions arose and we thought it would be good to put this on again today. Good morning Rosemary.

Deputy Auditor Rosemary Stratton: Good morning.

Lacina: I apologize for not making myself clearer but I realize the amendment will have an effect on the balance. But what I was looking for was whether or not we had taxed for it. Well let me talk to you later on about it.

Stratton: OK. This morning you have 2 new spreadsheets. The first one is the effect of the amendment on the fund balance. You see each fund listed separately and then on the far right there is a net effect on each of those fund balances. Expenditures are also split from those that were budgeted for Fiscal Year '98 versus those that are new requests for Fiscal Year '99. So hopefully that makes that a little clearer. The next spreadsheet lists the budget amendments by department. The first one is the salary survey that effects many departments, 3 different funds. The net effect is zero. The next 2 are the dental insurance premium and the life insurance premium. Again effects many departments and you can see the net effects on the far right at 13,371 and 2,597. The next one is the Ambulance department. The explanation which you should have in the memo is for third ambulance on duty. The net effect there is 37,348. Sheriff is the next 2. One of them is a new request for new positions over time with the (inaudible) that's for 201,913. There's a smaller one for 5,717 which is the difference between the 300 for the 3.25 and the 3% estimate for the negotiations on the salaries. Recorder is the next one for wages telephone record storage 22,840. SEATS for the GPS and van maintenance, net increase of 58,880. Let's see here, Central Services, Housing Needs Assessment Grant net effect of 2,750. Capital expenditures. Those are from Fiscal Year '98 for the postage machine and computers. A net effect of 25,304. Social Services. That's 2 listed there, one is from Fiscal Year '98 for unexpended Fiscal Year '98 projects for 104,714. They also have a new grant to be expended which is a net effect of zero. Veterans Affairs that's for director's hours increased, a rent reallocation, a net effect of 2,876. Nutrition for the Heritage Contract Settlement, a net effect of 9,530. Juvenile Crime Prevention, that was for the County match for fiscal year '98 and '99, $8,000. Nutrition Trust Memorial that's 2 budget lines to expend donations received for 3,500. And Recorder's Records Management for records conversion and computers a net effect of $20,000.

Bolkcom: All right questions from the Board on any of this.

Jordahl: The Recorder has 2 different times in here. I assume that difference is because some of that is from the Recorder's own funds and some of that is from the general fund. Is that correct?

Bolkcom: I had a question about the Social Service. It looks like we're carrying over some grants. Cheryl could you explain that.

Department of Human Services Area Administrator Cheryl Whitney: Yes. There are 4 grants where we have them carry over money. That one there is no county money, it is all state and federal money. The nature of those grants is that sometimes the Fiscal Year is the Federal Fiscal Year, so we would then always have it carry over in those situations. We have some where it's not the case. I can go into the particulars, Children at Home is a state grant. Last year we were able to receive a supplemental amount because one of the projects didn't pan out and so we were able to get a portion of that money so we can apply that to this sheet. That one we hope will be an annual amount (inaudible). So that's all services to kids. The Outcomes Grant in the (inaudible). What happened is about 10% of the total is being carried over. We didn't spend about 10%. With the funds to carry (inaudible) that part had to do with salaries. We got that grant in about the end of November. We were trying to hire a part time coordinator right over the holidays and we just didn't get anybody on board until after the first of January. The Outcomes Grant, while we're able to do it at $3,500 is to do some training for some of the agencies we work with that on. How to track outcomes using software to do that. So we're happy to have this. We think it'll be good for the whole community. There's kind of a variety of reasons. For some, it was just intended to be that; for others it ended up being about 10%. I don't believe that at the end of the year, you just spend money on a foster care reunification when we could have spent that money on training materials, a number of things we had encumbered. We knew we had the chance to carry over; our budget for that is less this year than it was last year. It seemed wiser to carry forward so we'd have more resources this year.

Bolkcom: Thank you.

Duffy: What was that last statement?

Whitney: I was talking about the Care Reunification Grant. With that one in particular, at the end of the year, we knew we were going to have some money left. We could have bought training materials, and we did buy some training materials, but it seemed that it was a more prudent use of our money to carry some of that forward. The State allowed us to do that. We knew that last year we had a grant of about $37,000 for a (inaudible) period of time. This year, we have a grant of about $27,000 for a 12 month period. That carryover in that particular area will be helpful. Another thing that happened with that particular agreement is that we had money budgeted for a foster parent recognition picnic at the end of June that got rained out. City Park was flooded and nobody could get there. So a fair expenditure we just couldn't do until July.

Duffy: You answered my question right at the start, that the State allowed you to do that.

Whitney: Yes, absolutely. We had to check with them, sometimes they won't allow you to do that.

Jordahl: Cheryl, on your memo when you're explaining the Healthy Homes grant, that's the largest amount on here. Can you run over that for me, please?

Whitney: Yes. That's one where it falls under the federal fiscal year. With that one also there's a little bit more background. One is that first of all, we got a $20,000 grant 7 years ago for a (inaudible) grant, and the second grant we had, which was about a $100,000, this was a 4 year process with the Family Preservation (inaudible). We had some things to put in place before we could design an RFP for this service. We took some time to do some pretty careful planning, went through an RFP process, which probably added a couple of months to the whole thing. This is an area where we've talked to the state officials who manage this grant about the fact that we have a plan. But it doesn't mean that we're going to spend the money by the end of each federal fiscal year. Some counties, like last year Linn County was going to spend that. We didn't know until about the end of November how much we were getting even for the period for the October to September 30th. There were some areas that didn't have cash flow with paid staff. We were fortunate in many ways that we didn't have... There were lots of different factors that went into it. But with this one, the main thing has been that we really need to have a planning process. There's a lot a month. We don't get the $100,000 a year. We wanted to spend (inaudible). Actually, some other things that have come into play is that budget is about 90% staff dollars. When the agency, they've had some turnover with their coordinator, and when that happens, they don't expend the money. We don't pay them except for what they have expended. So there's all those factors come in with what we consider to try to be careful (inaudible).

Bolkcom: All right. Other questions?

Lacina: Does anybody have any concern on the global positioning?

Bolkcom: I was going to ask Burnell to give us an update on the GPS.

Jordahl: I think part of that is the 38,000 we lost is the contract loss, the revenue loss, it's not the... the 38,000 is not for GPS, it just happens to be accumulated here on this line because it's all SEATS.

Stratton: Uh-huh. That's correct.

Bolkcom: Burnell, do you want to give us an update on the global positioning stuff, for the grant money plus what our local match would be?

Interim SEATS Director Burnell Chadek: The grant itself was 6 years together from IDOT by ECICOG. It was approved for a maximum of $90,000 to purchase global positioning system equipment. A better term for that kind of equipment (inaudible) terminal with an interface key for dispatching software. It does incorporate a GPS system to let our dispatchers know where the vehicles are in real time. Collected data will allow us to do better surveys of time based on actual data rather than estimates which are (inaudible). It would allow us to move towards a real time dispatching situation, which would be much more useful much more accurately than we could otherwise. Feedback from other sites around the nation who have similar equipment is that it paid for itself in the first year. I don't know if that isn't bit hyperbole. People really like what they've perceived with the equipment. Because the total possible contract amount is $90,000, our local match would be a maximum of $18,000 to secure the equipment. It would be put out for bid through ECICOG. Presently, the situation is, or until very recently was that an extension of this money would be allowed until the end of this calendar year, rather than the end of the previous fiscal year. We did secure the money for FY 1998. Obviously, ECICOG did not secure any equipment. It was in limbo for various reasons, so we wrote a grant extension until the end of this calendar year. Most recently, with Rockwell getting out of the business, everything is in a state of flux for all the sites around the state which had this money earmarked as far as the purchase of that sort of equipment. Rockwell's decided it doesn't fit their overall mission, so they're trying to find a buyer for that division. The state DOT had a preference for the homegrown Rockwell equipment. With that situation changing, they're having various reasons it's up for bid for that equipment. The current status is really up in the air. ECICOG would like us, if we want to pursue the equipment, to let them secure the maximum local match and hold on to it for as long as it takes. It might not be until the end of the calendar year when they put it up for bid. It might be sometime next calendar year, but we're going in this fiscal year. We don't when or if the RFP process will actually start. Some other regions get good responses with their RFP's, we may be able to piggyback onto those, in which case we'd need access to those forms almost immediately in order to increase the size of that contract, have ECICOG piggyback onto a different contract, perhaps getting a better bid price for a value purchase. So that's a brief update on the status. I just found out recently that we're not under the gun as far as making a decision. I'm (inaudible) pretty difficult. The DOT's willing to allow ECICOG to have access to that money for as long as it takes.

Lacina: And Burnell, the drop in revenues because of adjustments in contracts.

Chadek: Yes. On the revenue side of the budget it then requests (inaudible) in contract negotiations...

Lacina: I appreciate that.

Chadek: ...versus what we had budgeted, what we had potentially agreed upon with our contracts.

Lacina: Then on the first page, the new 99 expenditures of 394 in the next budget session, we'll need to increase the tax asking by 394 in order to replenish the reserves. Is that correct?

Stratton: I believe we have enough in carryover to cover that. I can double check that.

Lacina: OK but assuming that we came in on budget for everything else, in theory this is the new dollars spent that we need to allocate for next year.

Stratton: Uh-huh.

Lacina: OK. Thank you.

Jordahl: That really brings us to my question, and I think it's a question we all need to be asking. I think to a large extent, it's been answered, as Steve phrased it earlier or maybe Joe did, why couldn't these things have been accounted for in terms of this budget year during the last budgeting process. I hear some of it is because we didn't manage to spend the money this year, in 98, but in terms of the GPS for example, hasn't ECICOG had that grant for a while? I'm wondering why this wasn't budgeted for 99 during the last budget cycle.

Chadek: We were in a position (inaudible) and I believe the decision was made not to pursue that, but turn that over to some other provider. Now that we've got a 5-year contract, we have received the extensions from the DOT to pursue that though the grant was for 98. Just a bit of history on this particular project; we had received ISTEA funding for this and secured (inaudible) the Board of Supervisors 2 years for FY97 for local match for that purchase. We didn't secure that until FY98 through other funding sources. We're in a position now where we've been allowed to keep it for all of FY99 in essence, so that's why I'm asking for it now. I think in this state of flux, it might be best to allow (inaudible) to spend that money.

Jordahl: Sounds like the DOT really wants us to have it.

Chadek: The DOT wants to have a statewide standard. They see a real value in having various transit providers using the same equipment, not only because it'd be easier to help each other out, but it would be easier to interface with the statewide GPS system.

Jordahl: Thank you.

Bolkcom: Thank you. Any other questions by the Board?

Stutsman: In the Sheriff's Office, did we decide that those promotions were going to come out of an amendment versus what we had allocated for the salary survey?

Bolkcom: I don't think we have.

Stutsman: We've kind of gone back and forth on that, so if we approve this amendment, we're saying that it comes out of the general fund versus...

Bolkcom: Versus that amount we've already taxed for. I think we'd be wise to apply this amount for the promotions to the salary survey, which we have a little bit of headroom in still. It's kind of a shell game in the sense that it's all out of the general fund. In the case of the salary survey, we've taxed for it. In the case of some of these amendments, we haven't taxed for it. It's going to affect our general fund ending balance. I think we can... we have to amend the budget in either case for that amount. I guess the Board needs to decide how it wants to pay for the amendment. I think your point about taking it out of the salary survey's a reasonable one. Or out of that pool that we set aside for the salary survey, because we have a little bit of room there. Regarding the amendment, we need to do the amendment to allow the money to be spent. All right. Anything else? I'd like to thank the department heads and elected officials that came in this morning to help us through this amendment and make those explanations. We will proceed to publish.

Lacina: I apologize I cut you off... But you were starting to say that the anticipated revenues, the carryover from last year will meet or exceed this number?

Stratton: I can go check on that for you.

Lacina: That's fine. That's good.

Jordahl: That is a very important piece of this. What of these moneys is new? It says on the front page 99, and in some sense it's not new for 99 in that we don't have to take the money... we wouldn't have to reduce our ending balance by this amount.

Stratton: Right. This just means a new request.

Jordahl: It's a new request, and I'd really like to see what has been- there's this question of a year-end carryover. That needs to be delineated for us to make a distinction between what is a new expense and what is money we already have and just haven't spent yet.

Bolkcom: I think the new is just basically walking into our ending balance and if we want to maintain the same ending balance, this amount needs to be on top of any budget request we look at next year. Because theoretically, if you don't want to change the ending balance, we need to go out and find this approximate $400,000 at the beginning of next year before new expenditures begin.

Lacina: With the exception of non-reoccurring expenses. If there's a copy machine in there and it's a one time...

Stratton: May I ask a question here to clarify it for myself? Is what you're asking, Jonathan, which ones are going to require an ongoing tax amount in order to support them and which ones aren't? Because carryover is relative depending on what revenues and what taxes you receive. It could be higher or lower than estimated. You don't really want to know what's going to leave the carryover at the same level, because what if unanticipated funds came in, for example. I think is, which ones are going to cause taxpayers to cough up the money to support them in the future.

Jordahl: No, it's which ones are... I realize there are variables. You could take a factual, this moment, true to the case balance of our funds and say this is the balance we have. My real focus is, and I think Steve made the point quite well is that Cheryl's received some grant money last year, money's still in the budget, hasn't been spent yet, not a real big deal to go ahead and spend it. On the other hand, if we get a request from say the Recorder's Office for spending $20,000 of new money for new staff, new equipment, stuff that wasn't budgeted or asked for, then that money's coming out of our ending balance.

Stratton: But more importantly, it's going to be tax askings in the future. Isn't that really the focus of...

Jordahl: Well, no. Because the future tax asking for a computer, you're not necessarily going to buy the same computer next year, you've already got it. But the personnel, you have to keep paying. It's not the issue of a recurring expense so much as it is what have we already got money for from somewhere and what haven't we gotten money for somewhere?

Bolkcom: All right. Anything else? Thank you. We have another item from the Auditor. That would be B, Postage Machine and Mailing Services. Thanks again to the department heads and elected officials for coming in.

Stratton: We have some handouts this morning. Thank you.

Lacina: This was a good packet. Thank you.

Stratton: First we'd like to talk about postage machines, which is on the legal spreadsheet you have there. Highlighted in green is the type of machine that we looked at. The column highlighted in blue is the vendor Copy Systems, the pink highlights are Pitney Bowes, a vendor. We'd just like to go down the left column and talk about each of these factors that we talked about with them. The representative for Copy Systems was Eric Stark, he's a mailing systems specialist. Not only does he sell the machine, but he actually sets it up and trains us on it. Pitney Bowes' representative was Burdett Ellsbery. He sells us the machine, but another person will come in and set up the machine and train us. Copy Systems is a local vendor from Coralville. Pitney Bowes is from Peoria, Illinois. The Copy Systems machine is similar to our current machine. It would handle any future needs. It's a medium to heavy volume. The Paragon would be an upgrade of our current machine, it would be a heavy volume machine. All of the new machines that we looked at had 1/10 cent capability. As far as service, parts availability, and supplies, with Copy Systems being a local vendor, they have a goal of 4 hour response time. They stock most parts. Pitney Bowes, they're dispatched out of their home and their goal is next day service. Any parts are shipped out of their home office to us and we call them again to set up service when the parts arrive. Of the 3 new machines we looked at, we'd be able to track cost by department or project. Meter rental would be zero for the first year on the Copy Systems machine and $49 per month after that if taken to the Post Office. The Pitney Bowes are quarterly fees and they're roughly double the price on the meter rental. The maintenance contract on the Copy Systems machine is flat throughout the life of the machine assuming no lapse in contract; we couldn't pick and choose when we want it. We'd have to have it throughout the entire life. That's $645 per year.

Lacina: Projected over how many years?

Stratton: About 10 years. The Pitney Bowes machines are estimated to increase 5% each year based on inflation and the age of the machine. The first year maintenance contract would be $1,169 on the Paragon. There's no skill maintenance fee on the Copy Systems machine. It's $142 per year on the Paragon machine. As postal rate changes occur, each of these machines would require a new upgrade chip. For the Paragon, it's $200 per each upgrade. For the Copy Systems machine, it's $100. Training again would be done by the mailing systems specialist on a Copy Systems machine, and we would have someone else other than the salesperson for the Pitney Bowes machine who would train us and deliver. References, we did go on site to look at the different machines. Diane went to Hawkeye Medical, Hawkeye Food Systems, and Seabury and Smith to look at the Ascom Asler sold by Copy Systems. Diane, did you want to talk about that at all?

Payroll Clerk Diane Kaster: Did you?

Bolkcom: How were they?

Kaster: I went to Hawkeye Foods and I feel that they probably have the same mailing needs that we have. They had just purchased their machine in May. The reason they went with Copy Systems is that they kind of had a big falling out with Pitney Bowes. They had a 6100, which is what we currently have, it broke down, and they sat for like a week waiting for Pitney Bowes to get it fixed.

Stutsman: Oh dear. Diane, what do you do in that week? Do you just hand stamp mail?

Kaster: Yes. So that's kind of I guess what made them look to Copy Systems. They bought one from them. They like the machine; one thing they commented on was the ease of operation. It's very easy to learn how to use it. Also, the fact that Eric lives here in Iowa City, that he stops by once a week when they got started to check up on them when they got started. Any time they have a problem they can call him. He's usually right there, too. He gets them trained. I also went to Seabury and Smith, which their volume is a lot more than ours. I'd say probably 2 or 3 times what we do. But they've actually had their postage machine since ‘87. The woman that actually runs the machine said they've had no major maintenance problems with it in that 10 years. She also stated the ease of operation, just the fact that it's held up. It's kind of a smaller machine. It looks smaller than the Pitney Bowes. But if something jams, she says it's very easy just to take the parts off the machine and get your jam out and put the parts back on. Pitney Bowes, the Paragon, I have brochures here, but with the Paragon there's this large duct here that it runs through and if it jams you kind of have to work your hand in and try to get the mailing back out. But Both of those companies really liked their Ascom and said they probably would not go back to Pitney Bowes.

Bolkcom: OK.

Stratton: Regarding the Paragon, Diane and I last week went to the University's facility which is across from Colonial Lanes. They had a Paragon. Something I skipped on the spread sheet is weigh on the way, a feature which the Paragon offers but no other machine offers. What that means, you have a stack of mail of different weights and sizes. You put it in the feeder, and it automatically weighs it and posts it on the way.

Bolkcom: Wow. Sounds expensive.

Stutsman: Yes. Is that something that, a lot of things have woofers and tweeters on them, I call them. Would you use it that much?

Stratton: No, I don't think we would. As you can see at the bottom, the cost to purchase and the 10 year is very dramatic between the Copy Systems and the Paragon. And that is primarily because of that weigh on the way feature.

Bolkcom: So another 20 grand for that.

Stratton: Exactly.

Kaster: I think most of what we do is 32 cents.

Stutsman: I was going to say, you'd have a lot of cents to add up to $20,000 to make that cost effective.

Slockett: Either that or like the Treasurer knows how much what it is they're mailing weighs, and it's one amount.

Bolkcom: Do you have a recommendation for us?

Stratton: Yes. We'd like to recommend the Ascom Asler. If you'd like a demo, that representative would be very glad to arrange that for you.

Bolkcom: OK. Is the Board interested in a demo?

Lacina: Rosemary, the purchase price for the 6100, that's what we have now?

Rosemary: Yes. That was purchased a long time ago. That would be a historical cost you're looking at there.

Lacina: That's what trying to give us, is a baseline of comparison.

Stratton: Right.

Lacina: So what you're saying is that by going with the machine that you've recommended, while the existing machine cost over 10 years is $34,000, we could actually come up with a savings of operation, because it's only going to cost $21,000.

Stratton: Correct.

Stutsman: Well, you have certainly done your research. This is wonderful. Thanks for going to all that work. I don't know that I need a demonstration. It'd be fun to see it work once we have it in place.

Lacina: Is it in your budget?

Slockett: It's in your budget, actually.

Lacina: In Central Services 18? All right.

Duffy: Certainly have my vote. Just by looking at the figures is enough for me.

Lacina: Carol, what's your sense on this?

Peters: My sense is whatever they recommend. You're the experts.

Bolkcom: When would this happen?

Stratton: We need to make a decision soon, because our meter's decertified in December.

Bolkcom: OK. So in the next couple of months.

Stratton: Yes. The salesman doesn't want us to wait until the last minute, for fear that he might not have many machines left because a lot of people are in the same situation.

Bolkcom: We've been budgeting for this in capital expenditures. Do we have the resources we need there at this point?

Stratton: Yes. We have over $18,000 budgeted toward for purchasing a new machine.

Bolkcom: Very good. Jonathan?

Jordahl: I want to underline that research has been done here and that's great that we have that. Your case is very convincing that we should go with this machine. My concern is what about other departments in the County? We have a Central Services budget that's going to cover this one and we've got our mailings handled here in this building, but I'm wondering how this may pertain to mailings in other buildings. Has this question occurred to you?

Stratton: Yes it has. We have kind of- in the next spreadsheet, the comparative of mailing services. We might touch on that a little bit, because I'm not totally familiar with what each building does as far as mailing services. I don't know if each building has their own postage machine or if they use stamps or how they do it.

Jordahl: I think there are some separate machines out there.

Stutsman: We brought this up one time during the budget process. A lot of the budgets have postage listed in there. I think it's time that we do a survey and just find out what is going on with these different buildings and different departments and see if there might be a case to be made for centralizing it or kind of just coordinating a bit more.

Bolkcom: We gathered all that information, actually. The Auditor's Office had a spreadsheet. We're spending about $150,000 a year on postage, is my recollection. But one of the issues was that you've got a volume at the courthouse, or DHS, here at the County Administration Building, and...

Slockett: You've got to weigh against the cost of hiring someone...

Bolkcom: Hiring somebody to be the mailman for the County.

Jordahl: Well exactly.

Stutsman: Well, the convenience too.

Bolkcom: Exactly.

Lacina: Well in fact on the $150,000, we actually generate revenue based upon the mailings from the Treasurer's Office and Motor Vehicle because that's reimbursed. So it isn't necessarily...

Stutsman: And DHS too. The County portion of what goes out of DHS is probably pretty small versus in considering all the mail that goes out of there.

Lacina: We can bring it up at the department head meeting and see what they want.

Stutsman: Do we need to make a decision on this first? Do we recommend that we go with the Ascom and put it on?

Kaster: I was going to say new mailing machine. I think one thing that's a plus with going with a new mailing machine is accountability. Currently with our machine now, people come in and they just run their mail through. We have no idea who's using it, how many pieces they're mailing, anything like that. We just know so much money was spent in a certain amount of time. With the new mail machine, with the electronic meters, we'd be able to have each department have a code or a project have a code or whatever. Whenever they come in to do their mail, they put in their code, run it through, and then either daily, weekly, monthly, whatever, we could print out reports and they'd tell us exactly how much Motor Vehicle spent, how much the Auditor's Office spent. I think that then would give us an idea. First we need to know what we're mailing and how much we're spending before we can look at ways to save.

Bolkcom: Good point.

Stutsman: Good point.

Jordahl: The point that I wanted to make here was that this research ought to be shared with other departments that have postage machines so that people don't have to go do what you've already done. If they want to possibly save money, it looks like in terms of your 10 year cost, as Steve pointed out, people might want to change even in midstream, just to save money.

Bolkcom: Good point.

Lacina: I think you have a consensus from us, unless you need more Tom. It sounds like you did your homework and you've got some good information.

Slockett: (Inaudible) we'll just go ahead and if you'll approve the claim...

Bolkcom: Go on ahead.

Lacina: Good job. Thank you.

Bolkcom: Mailing services. Is there something else to say about this, Rosemary?

Stratton: Yes, there is. It's an entirely different subject. There's 2 vendors out there we interviewed, Cedar Rapids Presort and PSI Group, and they're both located in Cedar Rapids. What the Presort attempts to do is it attempts to give you savings based on getting everybody out there in the community to pool their standard mail. For instance, what we do is on a standard piece of mail on Cedar Rapids Presort, we'd meter it for 23.8, they'd bill us for the difference between 30 and 23.8 so essentially we'd be saving 2 cents a piece. Now, PSI Group would handle it a little differently. They handle it such that we would meter it at 29.5, and you'd never get a bill from them, so we'd be saving two and a half cents a piece there.

Stutsman: Rosemary, how many pieces of mail do we...

Stratton: That's hard to determine, because all we know is the dollar amount we spend. But based on that and estimated 32 cents a piece, if you look under savings where I have rough estimate? I've estimated 650 pieces a day, 5 days a week times 52 weeks a year, at 2 cents a piece. In our building alone, we'd save about $3,280 on the Cedar Rapids Presort, and for PSI we'd save roughly $4,225. Again, that's a real rough estimate because we don't know.

Bolkcom: How does this work? We have a day's worth of mail that they would pick up or we would send to them and then they would sort it and we'd get the discount because they sorted it?

Stratton: No, we actually meter it at .238 or .295, put it in a tray, they come get it, put it with all the other clients they have, and that's how they get their volume discount.

Stutsman: The savings. How much additional work is this going to mean?

Stratton: There wouldn't be any additional work. Other than metering your mail at .32 you'd meter it at .238 or .295.

Stutsman: But you don't have to do the presort or that kind of thing.

Kaster: You don't have to sort it by zip code or anything like that.

Stutsman: OK. Because I was going to say, if it's going to mean a lot of work...

Kaster: We just put it in a bin. They come and pick up the bin and then they take it to their place in Cedar Rapids. They have these mail machines in their business that sorts it all. When they take it to the Post Office, it's already bundled. After they process it and take it to the Post Office, it doesn't even go into the Post Office. They just put it directly on the trucks.

Bolkcom: I see. That's where they're getting the discount.

Kaster: So they're doing the post office work for them.

Slockett: Basically, they're taking all the ZIP codes that aren't in enough volume to qualify for bulk discount and combining them with other businesses and getting the bulk discount and sharing the savings together.

Stutsman: Coordination. I love it.

Bolkcom: So our mail's getting out the same day.

Slockett: Yes.

Jordahl: Yes. There is a question, I think, about hand addressed things. I think that people would have to be probably instructed about... If we had random pieces rather than a mailing, that would be presumably printed, they'd have to be instructed on how to address these things in order to take advantage of this service. That'd seem to be the one aspect of more work that would probably occur.

Stratton: There'd be some up-front training. But we could start department by department with our own department being first and then kind of phase the other departments in the building in.

Bolkcom: Let's do it.

Stutsman: So this is just for this building.

Stratton: Yes.

Stutsman: OK.

Jordahl: In terms of allocating those costs to departments...

?: (Inaudible).

Stratton: Oh, yes I did. If you look under additional pickup points, it depends on the volume or location. For instance, at our other buildings, if we didn't have enough in pieces but they were stopping right next door, let's say the University, they'd be glad to pick up our pieces. But, they won't go out of their way to stop somewhere at a remote location if there's not big volume.

Stutsman: Would it work at all to have those people bring their postage here?

Stratton: It depends.

Stutsman: Is that something the Board would...

Lacina: No. In rainy weather, if you drop a tray, if you've got... I think we need to go to the departments and see if the numbers are there... We just have to be careful that we're not paying somebody thirty eight, forty thousand dollars to carry mail if it's not meaningful.

Jordahl: To save $4,000.

Lacina: But you could recommend to us if you thought there's an area we should to look at.

Stutsman: There's an idea.

Slockett: Did you ask about the courthouse?

Stratton: I gave them the locations and they have not got back to me yet.

Bolkcom: Good work.

Jordahl: I'm wondering about cost allocations to individual departments. Bar-coding is a possibility. Would there be some requirement as people are putting mail in that they'd be segregated by code numbers as you were suggesting with their own postage meter machine?

Stratton: That's where the new machine would fit in very nicely, because you'd have the department accountability and they would key in their code and put on the new meter rate and it'd be right there.

Jordahl: Oh, it'd already be metered. I keep forgetting that.

Kaster: Cletus used Cedar Rapids Presort this year to send out the tax bills. I don't know if Cletus mentioned that to you or not.

Stratton: He was happy with it, he had no complaints. And he saved a penny a piece. The reason he didn't save more than that was that Cedar Rapids Presort actually did the metering on it. They picked it up and did the whole work for him.

Kaster: 40,000 pieces of mail.

Bolkcom: Probably worth it.

Jordahl: And still cheaper than metering it yourself.

Kaster:: That's what Cletus said about having someone stand there for, I don't know, days.

Bolkcom: I like that.

Lacina: They use banks as references, so obviously the banks are secure with it.

Stratton: The only negative to PSI Group, under rejects, if you look down there, Cedar Rapids Presort works with us to identify and correct any rejects, whereas PSI, they absorb the cost and don't tell us about the problem so what that could mean is that could delay our mail. It might be worth it to go with the 2 cents rather than the 2 and a half cents to avoid that problem.

Stutsman: I'd say the 2 cents would be worth it, especially when you get into tax bills and whatever. If there was a delay because something wasn't labeled right, that would...

Bolkcom: We want those tax bills to get out there.

Stutsman: Well, we just hear it when someone doesn't get their tax bill and then gets a penalty or whatever.

Bolkcom: I agree, Sally, I agree.

Lacina: Now why wouldn't they try and take the time to correct that error? Why would they ignore an outgoing... I wonder if that's ever been addressed to them to see if they would make that change.

Stratton: We were baffled by it too and we asked them and they said, we don't want to take the time to work with you on that, we just want to...

Slockett: Probably because it's more cost-effective for them...

Stutsman: Exactly.

Lacina: They must just ignore them.

Stutsman: Efficiency study probably. It's your problem.

Kaster: Once it's rejected, they have someone who I guess just takes that piece of mail and starts keying the address into a computer and tries to come up with the right address, so...

Jordahl: I'm a little bit at a loss here. If we're already metering it, the idea here is to save the money, not the efficiency, so we could take this to the post office ourselves, but they're picking it up here so why do we worry about it? Did you get a cost for having them do the metering.

Stratton: For our small volume at 650 pieces a day, they said it would cost 33 cents rather than 32.

Jordahl: Oh, OK.

Stratton: So it's only in the high volumes that you achieve savings without doing the whole thing.

Jordahl: All right thank you.

Stratton: But they do have additional services available.

Lacina: So we'll try C.R. Presort?

Stratton: That would be our recommendation. At least with our department, start phasing the other departments...

Bolkcom: That would be great. I think it'd be helpful to have both of you make a brief presentation at our next department head meeting about what you're doing here and get some other people thinking about what would be involved.

Stutsman: Yes, I think that's a great idea. Not at our next department head meeting, though, with the budget.

Bolkcom: Yes. Our next regular department head meeting, whenever that is. Diane, Rosemary, thanks. Tom, thanks. Good work.

Stutsman: Yes.

(Continued in part 3)