SPECIAL COUNCIL MEETING
A Special Council Meeting was held on May 14, 2008 at 6:01 p.m. with Council President Hogan presiding. Council members present were Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mrs. Williams, Mr. Salters, and Mr. Ruane.
Council staff members present were Mr. DePrima, Mrs. Mitchell, and Mrs. McDowell. Mayor Carey was also present.
Members of Council Committees present were Mr. Shevock, Mr. Snaman, and Dr. Jones.
AGENDA ADDITIONS/DELETIONS
Mr. Ruane moved to defer the budget hearing scheduled for Friday, May 16, 2008, to Wednesday, May 21, 2008. The motion was seconded by Mr. McGlumphy and carried with Mr. Salters voting no.
Mr. Leary moved for approval of the agenda, as amended, seconded by Mr. Slavin and unanimously carried.
2008/2009 BUDGET OVERVIEW
Council President Hogan advised members that an introduction and presentation of the budget would be provided and requested members to hold all questions and comments until the end of the presentation.
Introduction and Presentation
Mr. DePrima provided a brief introduction and presentation of the 2008/2009 Draft Budget (Exhibit #1).
Referring to the Credit Card Processor, Mr. Ruane requested that staff provide additional information during the review of the Customer Service Department Budget, such as details regarding the charges resulting from the State of Delaware and a more thorough analysis of these charges.
Revenue
Mr. DePrima reviewed a presentation of the Projected Revenues for fiscal year 2008/2009 (Exhibit #2).
Responding to Mr. Ruane, Mr. DePrima stated that staff did not include any new revenue sources in the proposed budget. He explained that members of Council did not encourage staff to move forward with any of the alternative revenue sources when they were previously presented to members. Mr. Ruane encouraged the budget team to investigate alternative revenue sources utilized by other jurisdictions.
P.F.P. Salary Calculations (Non-Bargaining Employees) and Personnel Changes
Mr. DePrima provided a presentation of the Pay for Performance and Staff Changes for fiscal year 2008/2009 (Exhibit #3).
There being no objections, Council President Hogan declared a brief recess.
Meeting Recessed at 7:41 P.M. and Reconvened at 7:55 P.M.
Review of 2008/2009 Draft Budget - Water/Wastewater Fund
Mr. DePrima provided a presentation of the Water/Wastewater Fund for fiscal year 2008/2009 (Exhibit #4-A, Pages 1-6). He introduced Mr. Ron Lunt, Public Utilities Director, Mrs. Sharon Duca, Water/Wastewater Operations Manager, and Mrs. Lisa Gardner, Electric Budget Coordinator, who reviewed and explained details regarding this section of the proposed budget.
Mr. DePrima advised members that due to the astronomical costs involved, it is not feasible to replace the three (3) miles of pipe to address the brown water issues, as previously suggested. He advised members that next fiscal year will provide an understanding of the full effect of the new contact chambers since it will have been installed for one year. He stated that these results will reflect how much improvement has been realized as a result of the City’s brown water solutions.
Mr. Lunt further explained that pipe replacement costs approximately $1M per mile, depending on the location (State maintained streets versus City maintained streets). Although the pipe replacement is not a critical issue at this time, he stated that, from an infrastructure point of view, in the year 2040 to 2045 the pipe will be beyond its life expectancy. He explained that the need for its replacement is not an issue because of brown water or water quality, but because it is related directly to the maintenance and replacement of infrastructure. Although this may not be the time, Mr. Lunt indicated that there will be a need for the City to provide substantial funding to address this issue in the near future.
Responding to Mr. McGlumphy, Mr. Lunt stated that since the Water/Wastewater Fund is an enterprise fund, any expenses should be provided through its own revenue sources; therefore, a tax increase should not be considered for funding expenses involving the maintenance and/or replacement of infrastructure. Clarifying, Mrs. Mitchell explained that City Council has the ability to provide for a General Fund appropriation to the Water/Wastewater Fund by increasing taxes to pay for such expenses.
Mr. Slavin moved to recess until Thursday, May 15, 2008 at 6:00 p.m. The motion was seconded by Mr. McGlumphy and unanimously carried.
Meeting Recessed at 8:24 P.M.
THURSDAY, MAY 15, 2008 - 6:00 P.M. - 9:00 P.M.
Mr. Slavin moved to reconvene the Special Council Meeting, seconded by Mrs. Russell and unanimously carried.
The Special Council Meeting reconvened on Thursday, May 15, 2008 at 6:00 p.m. with Council President Hogan presiding. Council members present were Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mrs. Williams, Mr. Salters, and Mr. Ruane. Council staff members present were Mr. DePrima, Mrs. Mitchell, Mrs. McDowell, and Mayor Carey.
Members of Council Committees present were Mr. Shevock and Mr. Snaman.
Mr. DePrima distributed a table reflecting the costs for fiscal year 2008/2009 for positions added (Exhibit #5) and a spreadsheet, in response to the request of Mr. Ruane, regarding the Credit Card Processor (Exhibit #6).
Review of 2008/2009 Draft Budget - General Fund
Mr. DePrima provided a presentation of the General Fund for fiscal year 2008/2009 (See Exhibit #4-A, Pages 7-20). Staff provided members with updated draft budget pages (See Exhibit#4-B, Pages 3-5), as follows: Page 172 - Central Services; Page 173 - Facilities Management; and Page 174 - Fleet Management. City Clerk’s Office Note: Exhibit #4-A does not reflect the updated draft budget pages, it is reflective of the original draft budget submitted.
Referring to Exhibit #6, Mr. Ruane explained that Council was previously provided a memo dated March 14, 2008 (Exhibit #7), and noted that there have been discussions regarding the portion of the charges that are actual day-to-day customers as opposed to what proportion is a result of the State of Delaware. It was his feeling that having this information would assist Council in determining whether to support the concept of charging approximately $5 for all customers when the majority of the fees are generated by the State.
Responding, Mr. DePrima reviewed the spreadsheet and explained that even if the State was excluded, there would be an expense of approximately $100,000 per year for providing a small minority of the City’s customers a convenience. He advised members that it is becoming a standard in the utility industry to institute convenience charges. Although he felt that the change would be a step backwards in customer service, he felt that it would be a step forward in economic and fiscal efficiency.
Clarifying, Mrs. Tieman explained that each customer would be charged a $5.95 convenience fee for every $500 paid. It is anticipated that these fees for the State will be so large that they will not choose to pay by credit card; however, they would still have that option.
In response to Mr. Snaman regarding the possibility of discontinuing this service, Mrs. Tieman explained that Dover is a transient area, considering the many colleges and the Dover Air Force Base are located in Dover. She stated that this service is sometimes necessary, explaining that the parents, who reside in another state, may be paying the City for utility service for their child who attends college in Dover. This similar situation may be the same for military personnel who are on TDY. For these reasons, staff felt that this payment option should remain available; however, they also felt that those that are utilizing this convenience should pay for the service.
Responding to Mrs. Williams, Ms. Divver estimated that 75% of those that utilize credit cards for payment of their bill do so out of necessity.
There being no objections, Council President Hogan declared a brief recess.
Meeting Recessed at 7:08 P.M. and Reconvened at 7:23 P.M.
Mr. DePrima provided a presentation of the General Fund for fiscal year 2008/2009 (See Exhibit #4-A, Pages 21-35). City Clerk’s Office Note: As a result of a typographic error (totals on detailed pages were incorrect and did not match the summary page or the draft budget pages), pages 27 and 35 have been corrected and are provided herewith.
Staff provided members with updated draft budget pages (See Exhibit #4-B, Pages 6-10), as follows: Page 199 - Grounds; Page 200 - Sanitation; Page 201 - Streets; Page 203 - Planning; and Page 207 - Community Development. City Clerk’s Office Note: Exhibit #4-A does not reflect the updated draft budget pages, it is reflective of the original draft budget submitted.
Responding to Mr. Ruane regarding the Life Safety Division of the Planning and Inspections Department, Mr. DePrima indicated that the strategic goals and objectives would be provided to members. Mr. Koenig anticipated the Emergency Preparedness Coordinator position to be filled within 30 days and that the re-writing of the City’s Emergency Preparedness Plan will be the first task for the individual. His expectation is that a draft would be completed in 6 months and that during the following year, staff will go through several iterations of the plan in order to finalize components of the plan for various responses.
Mrs. Townshend reviewed a presentation of the Economic Development Division (Exhibit #8), noting that it is a newly created Division of the Planning and Inspections Department.
Mr. McGlumphy moved to recess until Wednesday, May 21, 2008 at 6:00 p.m. The motion was seconded by Mr. Salters and unanimously carried.
Meeting Recessed at 9:11 P.M.
WEDNESDAY, MAY 21, 2008 - 6:00 P.M. - 9:00 P.M.
There being no objections, Council President Hogan reconvened the Special Council Meeting.
The Special Council Meeting reconvened on Wednesday, May 21, 2008 at 6:00 p.m. with Council President Hogan presiding. Council members present were Mr. Leary (arrived at 6:25 p.m.), Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mrs. Williams, Mr. Salters, and Mr. Ruane. Council staff members present were Mr. DePrima, Mrs. Mitchell, Mrs. McDowell, and Mayor Carey (departed at 7:18 p.m.).
Council Committee member Shevock was present.
Review of 2008/2009 Draft Budget - Electric Fund
Mr. DePrima provided a presentation of the Electric Fund for fiscal year 2008/2009 (See Exhibit #4-A, Pages 36-42). Staff provided members with updated draft budget pages (See Exhibit #4-B, Page 13), as follows: Page 217 - Power Supply. City Clerk’s Office Note: Exhibit #4-A does not reflect the updated draft budget pages, it is reflective of the original draft budget submitted.
As a result of further review of the proposed budget and comments by members during the budget hearings, Mrs. Tieman reviewed a presentation of Draft Budget Changes to the General Fund as of May 21, 2008 (Exhibit #9).
Mr. McGlumphy suggested that a comparable of other municipality tax rates would be beneficial. He also requested an update of the fee and rate increases instituted by the City.
Review of 2008/2009 Draft Budget - General Fund - Fire
Mr. DePrima provided a presentation of the Fire Department (General Fund) for fiscal year 2008/2009 (See Exhibit #4-A, Page 43).
Discussion - COLA Increase for Retirees
Mr. DePrima reminded members that during their Regular Meeting of April 14, 2008, City Council considered a recommendation of the Civilian Pension Board (from their meeting of February 29, 2008) that City Council fund a $100,000 one-time stipend to retirees to be provided based on the age of the retiree, to be distributed July 15th and November 15th. Although there was a motion to approve a stipend for current retirees, including those that retired from the Deferred Compensation Plan, with funding to be provided from the excess carry forward balance in the Worker’s Compensation Fund, members tabled the matter to allow for its consideration by City Council during the Budget Hearings.
Noting that there is no adjustment to the pension benefits being recommended, Mr. Hogan reiterated that although there is reference to a COLA, the recommendation is to provide for a one-time stipend to retirees. For informational purposes, Council President Hogan advised members that on July 7th, there will be a workshop meeting held on the pension and COLA issues.
Responding to Mr. Leary, Mrs. Mitchell stated that $100,000 has been included in the draft budget for fiscal year 2008/2009 to provide the stipend to retirees.
There being no objections, Council President Hogan declared a brief recess.
Meeting Recessed at 7:19 P.M. and Reconvened at 7:30 P.M.
Other Requests
Council President Hogan referred to a request received from Mayor Carey regarding additional budget requests (Exhibit #10), as follows: 1) radio paging system for schools - 6 pagers at a cost of $3,086; and 2) surveillance cameras (State and Loockerman Streets and State and North Streets) - 3 cameras at a cost of $63,000.
Council President Hogan referred to information distributed regarding the MPO (Exhibit #11), which was reviewed by Mr. DePrima.
Final Discussion/Action and Wrap-Up
Council President Hogan requested that members provide staff with their input regarding the draft budget as presented.
Mr. Slavin relayed concerns regarding various assumptions the budget team has made in their preparation of the draft budget. He noted that staff utilized last year’s State revenues in preparing the budget and suggested that staff address receipt of much less in State revenues since they are uncertain at this time. He noted that there are a series of one-time deferments in the draft budget, such as delayed maintenance, replacement cycles, etc., which will help for the upcoming year; however, staff is anticipating that the revenues will return and the increase will resolve the delays. He also noted that if members approve the proposed budget as presented, members would be agreeing to allow certain services to erode in the City. It was Mr. Slavin’s opinion that it is very difficult to “play catch up” on delaying these types of issues. He suggested that when reviewing the budget, members should consider the effect on the following year. If approved as presented, he felt that there would be a need for a mid-year tax increase or the possibility of utilizing reserve funds.
Mr. Leary relayed concerns regarding the capital asset reserve fund, explaining that the City’s policy requires that it be funded. If the policy requires this funding, it should be accomplished, otherwise, he suggested that the policy be amended. He also relayed concern regarding the interest rate assumptions. Considering the current economic situation for all, he relayed concern with instituting any business license fee increases in this environment.
Mr. McGlumphy indicated his desire to have specific information regarding the revenues provided by the State prior to the adoption of the budget. He relayed concern with the proposed salary increases for 20 positions. He too felt that the City should address the infrastructure needs and that they not be delayed. He relayed grave concern with negotiating “out of contract” for reclassification of union positions. Mr. McGlumphy felt that additional reductions should be considered and suggested that the budget team review departmental over-time, subscriptions and dues, training/food, consulting fees, contractual services, legal expenses, and community relations.
Mr. Salters also indicated concern with the economic situation; however, he explained that the cost of doing business has increased and, as a result, he suggested consideration of tax and rate increases.
Mr. Ruane stated that he could support the proposed increases if the budget team provided the correlation to economic development. He expressed his disappointment with members not being provided with the departmental objectives and goals, which he felt would provide necessary information for members to understand the need for any increases.
Mrs. Williams stated that she could not consider any rate or tax increase without 8% to 10% of the budget being reduced. It was her feeling that the budget needs to be pared prior to instituting a tax increase. Referring to the reallocation of certain position, she suggested that the Quality of Life Officers be redirected towards crime units and security of property rather than chasing registered and non-registered sex offenders, feeling that it may not be the best use of money for the police force.
Although he indicated no major concerns, Mr. McGiffin concurred that it may be necessary to adjust the budget upon knowledge of the State’s revenues. He also indicated a desire to deter any tax increase.
Considering the current economic situation, Mrs. Russell stated her objections to providing pay increases for certain positions. She explained that if a tax increase is instituted, the residents will interpret that as being required to pay for salary increases.
Council President Hogan reiterated his appreciation to the budget team for their work on the preparation of the budget. He requested that members of Council review the information that has been provided and to be prepared to give guidance and make decisions to allow the budget team to prepare the final budget.
Mr. Slavin moved to recess until Thursday, May 22, 2008 at 6:00 p.m. The motion was seconded by Mr. Leary and unanimously carried.
Meeting Recessed at 8:20 P.M.
THURSDAY, MAY 22, 2008 - 6:00 P.M. - 9:00 P.M.
Mr. Salters moved to reconvene the Special Council Meeting, seconded by Mr. Slavin and unanimously carried.
The Special Council Meeting reconvened on Thursday, May 22, 2008 at 6:15 p.m. with Council President Hogan presiding. Council members present were Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mrs. Williams (departed at 6:45 p.m.), Mr. Salters, and Mr. Ruane. Council staff members present were Mr. DePrima, Mrs. Mitchell, and Mrs. McDowell.
Council Committee member Shevock was present.
Council Budget Markup Work Sessions
Staff provided members with information in response to previous requests and e-mail requests received from members, as follows:
A) Non-Bargaining Employees Performance Scores (Exhibit #12-A)
B) Summary of Requested Accounts as of May 22, 2008 (Exhibit #12-B)
C) Municipal Tax Rates (Exhibit #12-C)
D) Non-Bargaining Contingency by Fund (Exhibit #12-D)
E) Contractual Services by Department (Exhibit #12-E)
F) History Rate and Fee Increases (Exhibit #12-F)
G) GASB 45 (Exhibit #12-G)
There being no objections, Council President Hogan declared a brief recess.
Meeting Recessed at 7:35 P.M. and Reconvened at 7:52 P.M.
Council Budget Markup Work Sessions
Mr. McGlumphy distributed details regarding the proposed paygrade and position changes (Exhibit #13) and expressed his concern with the amount of salary increases that have been provided during the past years as a result of the Pay-for-Performance Plan.
It was noted that a study of the Pay-for-Performance Plan has been authorized by City Council and is currently underway.
Mr. Ruane reminded members that a market review was to be accomplished every two (2) years. It was his opinion that the purpose of the plan was to reward quality employees based on their performance rather than providing an automatic salary increase. He indicated his disappointment that the plan has not been adopted by the unions. Mr. Ruane also stated that the City has very good employee benefits that should also be considered. Although the plan is a good system, he concurred with Mr. McGlumphy that there could be improvements.
Mr. Salters reminded members that several years ago there was a concern regarding the lack of arts and cultural activities in the City of Dover. Since then, he stated that several organizations have come to fruition and that the Inner-City Cultural League has developed into a first class arts organization. He noted that there has been approximately $10,000 removed from the proposed budget for the Dover Art League and Inner-City Cultural League. Since this is a small amount of money, Mr. Salters requested that members consider restoring these to the proposed budget.
Mr. Slavin moved to recess until Monday, June 2, 2008 at 6:30 p.m. The motion was seconded by Mr. McGiffin and unanimously carried.
Meeting Recessed at 8:21 P.M.
MONDAY, JUNE 2, 2008 - 6:30 P.M. - 9:00 P.M.
Mr. Slavin moved to reconvene the Special Council Meeting, seconded by Mr. Salters and unanimously carried.
The Special Council Meeting reconvened on Monday, June 2, 2008 at 6:30 p.m. with Council President Hogan presiding. Council members present were Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mr. Salters, and Mr. Ruane. Mrs. Williams was absent. Council staff members present were Mr. DePrima, Mrs. Mitchell, and Mrs. McDowell.
Council Committee member Mr. Lewis was present.
Council Budget Markup Work Sessions
Based on the previous work sessions, Council President Hogan presented a list of items to be further discussed, as follows:
Utility Rate Transfers
Mr. McGlumphy relayed concern regarding an article that appeared in the News Journal on Sunday, June 1, 2008 and requested clarification regarding transferring monies from the Electric Fund to the General Fund. Responding, Mr. DePrima stated that the 6.5% benchmark has been changed to 8%, explaining that 8% of the gross revenue is transferred from the Electric Fund to the General Fund. Referring to Page 3 of the Revenue Presentation (See Exhibit #2), Mr. McGlumphy explained that his concern is in relation to the dollar amount rather than the percentage utilized.
Studies to be Deferred or Delayed
Mr. McGlumphy suggested that the budget team review the various studies that have been included in the proposed budget for possible deferment. He also suggested that consideration be given to deleting some of the studies.
Noting that the budget team has submitted their recommendations, Mr. Slavin suggested that, rather than referring matters back to staff for further review, members of Council begin the process of eliminating or including items in an effort to finalize the budget.
Responding to Mr. Ruane, Mrs. Mitchell suggested that the Water/Wastewater Study could be reduced; however, she did not feel that it could be eliminated. Mr. DePrima felt that the Water/Wastewater Study could be delayed. Responding, Mrs. Mitchell reiterated her feeling that funds should be allotted to allow for Burns & McDonnell to review the model prepared by staff. She also requested that there should be a study or analysis conducted on the wholesale rate, although she did not feel it would need to be a major study as conducted for the electric rates. Mr. DePrima suggested that $25,000 remain budgeted ($12,500 in the Water Fund and $12,500 in the Wastewater Fund).
Mr. DePrima assured members that staff will take the action desired by Council to reduce the amount budgeted for the study to $25,000 and that a motion is not necessary regarding this matter.
MPO Funding
Mr. DePrima reminded members that the MPO requested funding in the amount of $6,175 to assist with employee benefits. Noting that this same request was made to Kent County Levy Court, he suggested that the City match the contribution made by them.
Responding to Mr. Slavin, Mr. DePrima stated that the MPO is funded through the Federal and State governments and that in previous years, the City’s contribution has been made by way of in-kind services.
Mr. Slavin suggested that it would be difficult for the City to pay for benefits for employees of another agency, particularly when a determination has not been made as to the benefit package that will be provided to City’s employees.
Mr. Slavin moved to table the MPO Request for Funding, seconded by Mrs. Russell.
In response to Mr. McGiffin, Mr. Slavin indicated that his motion would require the elimination of staff’s recommendation from the budget.
The motion to table the MPO Request for Funding was unanimously carried.
Third Parties Credit Card Processor
Mr. DePrima reminded members that the City could eliminate $214,000 in cost to the City by eliminating direct acceptance of credit card payments and to allow for such payments to be processed through a third-party processor, which would charge a convenience fee.
Mr. Leary advised members that he has received information that he will forward to staff that may provide an alternative regarding this issue.
Mr. McGiffin moved to authorize staff to implement the use of a third-party credit card processor that would result in a convenience fee for the use of credit cards, seconded by Mr. Salters and unanimously carried.
Electric Rate Analysis
Mr. DePrima requested guidance regarding whether Council agrees with the overall 7% revenue increase, which would result in the rate proposal to roll forward. He explained that this guidance would be used for discussion at the public hearing.
Mr. Ruane requested staff to provide the most up-to-date information regarding rates during the Council Meeting. Mr. McGlumphy suggested that staff review the information provided on the Website for the City of Newark regarding rates for possible inclusion on the City’s Website.
Financial Policy Reserve Funds - Full Compliance
Mr. Leary questioned if the proposed budget reflects full compliance with any reserve fund requirements, policies, bond covenants, GASB, etc. Mrs. Mitchell stated that the proposed budget is in full compliance except the Capital Asset Reserve. She explained that the Financial Policy requires the City to attempt to maintain a minimum balance of $500,000 and if it is less, then $200,000 per annum would be set aside until the minimum is replenished. She advised members that there currently is $30,693 in the reserve account.
Responding to Mr. Slavin, Mrs. Mitchell stated that there would be $200,000 required to fully fund the reserve account in accordance with the City’s policies.
Mr. McGiffin moved to direct the Budget Team to fund the Capital Asset Reserve in the amount of $200,000, seconded by Mr. Leary.
Mr. Ruane questioned the funding source that would be utilized for providing this funding. Responding, Mr. DePrima felt that once all comments and direction is provided by members regarding the budget, staff would have the ability to provide the funding source.
Mr. Slavin explained that during this period of the budget review, Council will give staff direction regarding various items. Once this review is completed, exact amounts will be known and staff will present a recommendation regarding funding sources and/or Council will be required to make difficult decisions regarding funding sources.
The motion to direct the Budget Team to fund the Capital Asset Reserve in the amount of $200,000 was unanimously carried.
There being no objections, Council President Hogan declared a brief recess.
Meeting Recessed at 7:42 P.M. and Reconvened at 7:54 P.M.
Union Staffing Changes
Referring to the IUE Staffing Changes proposed by staff, Mr. McGlumphy explained his opposition to such a change occurring outside of the contract negotiations.
Mr. McGlumphy moved not to fund the reclassification and regrading of the various positions as listed on pages 164 of the draft budget, seconded by Mr. Leary.
Responding to Mrs. Russell, Mr. DePrima explained that the union contract expires in three (3) years. He further explained that the reclassification and regrading of positions is not an issue negotiated in a contract. Due to the diversity of the IUE Union, he stated that it is difficult to include reclassifications as a contract issue.
Mr. McGlumphy explained that his opposition is not necessarily regarding the positions deserving the reclassification, but rather with the process.
Concurring with Mr. DePrima, Major Taraila relayed his support of the current system which allows for management to make recommendations for reclassifications and regrading of positions rather than them being negotiated. It was his feeling that management should be responsible for making such determinations rather than the unions.
Responding to Mr. Ruane, Mr. DePrima stated that the unions did not elect to adopt the PAS Study/PFP System. Mr. Ruane explained that the unions chose not to adopt the PAS Study, which included reclassifications and regradings of the Police Department; therefore, it was his feeling that they should not be allowed to use a system that they did not adopt. Mr. DePrima advised members that the City’s Employees Handbook allows for the City to change grades and titles for positions.
Mr. Slavin stated his opinion that there is a legitimate need for the union staffing changes that have been presented by staff and his understanding of these requests being made by management rather than them being considered during union negotiations.
Concurring, Mr. McGiffin felt that the recommendations presented is an example of management exercising their responsibility and that there has not been any evidence to prove that consideration of the requests would be contrary to any union contract. It was his opinion that the requests were well thought out and justified.
Relinquishing Chair to Mr. Salters, Council President Hogan noted that the request involves 17 positions at a cost of $50,037, resulting in an average increase in the amount of $2,943. He also advised members that it has been his experience that individual increases are not normally negotiated during contract negotiations. Council President Hogan resumed the Chair.
On a call for the question by Mr. McGlumphy, the motion not to fund the reclassification and regrading of the various positions as listed on pages 164 of the draft budget failed by a roll call vote of six (6) no, two (2) yes (Mr. McGlumphy and Mr. Ruane) and one (1) absent (Mrs. Williams).
Economic Development
Mr. DePrima advised members that in previous years, $16,000 has been budgeted for Central Delaware Economic Development. He noted that it was eliminated from the draft budget for this next fiscal year due to the City making a new commitment to creating an Economic Development Department, and that this department in itself becomes a contribution to economic development to Kent County; therefore, staff felt that a separate contribution to a different organization would not be necessary. Mr. DePrima indicated that the Mayor has requested that the $16,000 be included in the budget. If approved, he stated that the money would be earmarked for a membership or participation in Central Delaware Economic Development. If Council wishes for these funds to be put in the budget, he suggested that it be included in the Economic Development Department.
Mr. Ruane moved that the Economic Development Program, in the amount of $315,000, be funded by increasing the business license and permit fees, seconded by Mr. Salters.
Due to the current economy, Mr. Leary indicated his opposition to instituting any increases for small businesses.
Although he supports the City’s economic development initiative, Mr. Slavin indicated his opposition to funding it through increased business license and permit fees. He questioned how the City would attract more businesses by making it more expensive for businesses to operate.
Mr. Ruane noted that the beneficiary of the City’s economic development initiative is small business and explained his opinion that beneficiaries of an expense should be responsible for its support. He felt that these fees would provide for a fair linkage between it’s costs and revenues.
Responding to questions of Council President Hogan, Mr. Ruane clarified that it was not his intent to suggest that there be a special account for the funds but rather to use $315,000 for the fees to “free up” funds in the General Fund.
On a call for the question by Mr. Ruane, the motion that the Economic Development Program (page 205), in the amount of $315,000, be funded by increasing the business license and permit fees failed by a roll call vote of six (6) no, two (2) yes (Mr. Salters and Mr. Ruane), and one (1) absent (Mrs. Williams).
Mr. Slavin moved to add $16,000 to the public services economic development budget as a contribution to Central Delaware Economic Development Council, seconded by Mrs. Russell.
Mr. Ruane suggested that the funding be based on a contingency that there be a reform and/or work plan for the organization, explaining that there are no specific or measurable objectives provided by this organization.
On a call for the question by Mr. Slavin, the motion to add $16,000 to the public services economic development budget as a contribution to Central Delaware Economic Development Council was carried by a roll call vote of six (6) yes, two (2) no (Mr. McGlumphy and Mr. Ruane), and one (1) absent (Mrs. Williams).
Mr. Leary moved to recess until Tuesday, June 10, 2008 at 6:30 p.m. The motion was seconded by Mr. Salters and unanimously carried.
Meeting Recessed at 8:59 P.M.
TUESDAY, JUNE 10, 2008 - 6:30 P.M. - 9:00 P.M.
Mr. McGiffin moved to reconvene the Special Council Meeting, seconded by Mr. Salters and unanimously carried.
The Special Council Meeting reconvened on Tuesday, June 10, 2008 at 6:32 p.m. with Council President Hogan presiding. Council members present were Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mrs. Williams, Mr. Salters, and Mr. Ruane. Council staff members present were Mr. DePrima, Mrs. Mitchell, and Mrs. McDowell.
Members of Council Committees present were Mr. Shevock.
Council Budget Markup Work Sessions
Members continued to review a list of items presented during the previous session, to be further discussed, as follows:
Business License/Permit Fees
Mr. DePrima reviewed a Revised Summary of the Revenue Projection Presentation (Exhibit #14) and explained the need to create sustaining revenues. He suggested that members consider the business license fees separately from the permit fees.
Mr. McGlumphy moved to deny the City Manager’s recommendation to increase revenue through tax increases, permit fees, business licenses, and excess balances as outlined in Exhibit #14, seconded by Mrs. Williams.
For clarification, Mr. McGlumphy confirmed that the motion is a rejection of adding revenue sources. If Council has requested additional items to be included in the budget, the City Manager would be required to obtain the necessary funds through current revenue streams rather than the use of the proposed additional revenue sources.
Mrs. Williams explained that many of the requests of Council have been bundled to a tax increase, which should not be occurring. The motion would unbundle the whole process. If items are requested by Council, she felt that they should not be attached to a tax increase.
Mr. DePrima reminded members that they are reviewing a balanced budget; therefore, any items added to the budget would require another item to be removed if there are no fee increases. As an example, he stated that in order to add the $200,000 back into the Capital Asset Reserve and $16,000 for the Economic Development, he would recommend removing the Silver Lake Management Study ($50,000), the Schutte Park Master Plan ($25,000), steam roller for streets ($23,300), leaf vacuum ($37,000), playground improvement program ($30,000), and an additional $51,000 from streets.
Mr. Slavin felt that the bundling was an issue since it seemed to tie expenses to revenue sources. He suggested that members make a determination regarding the expenses that should be included in the budget and, once this has been accomplished, a determination could be made as to the amount of revenue that would be necessary. If the desired expenses require additional revenue, he stated that members would need to decide whether they felt that additional revenue should be included or review the budget again to eliminate expenses. It was his feeling that there has not been support for business license or permit fee increases; however, there has not been any discussion regarding a tax increase.
On a call for the question, the motion to deny the City Manager’s recommendation to increase revenue through tax increases, permit fees, business licenses, and excess balances, as outlined in Exhibit #14, was carried by a roll call vote of six (6) yes and three (3) no (Mr. Slavin, Mr. McGiffin, and Mr. Hogan).
Stipend for Retirees
Council President Hogan reminded members that the budget proposes to fund a $100,000 one-time stipend to retirees to be provided based on the age of the retiree, to be distributed July 15th and November 15th. Although there was a motion to approve a stipend for current retirees, including those that retired from the Deferred Compensation Plan, with funding to be provided from the excess carry forward balance in the Worker’s Compensation Fund, members tabled the matter to allow for its consideration by City Council during the Budget Hearings.
Responding to Mr. Ruane, Mrs. Mitchell stated that the recommendation of the Civilian Pension Board did not include those that retired from the Deferred Compensation Plan.
Mr. Ruane moved to accept the recommendation of the Pension Board to use the Workman’s Compensation residual amount of $100,000 for the purpose of providing a stipend to the retirees of the Defined Benefit Plan, seconded by Mr. McGlumphy.
Noting that it is the City’s desire to encourage employees to join the Deferred Compensation Plan rather than the Defined Benefit Plan, Mr. McGiffin stated that the action to exclude the employees of the Deferred Compensation Plan from the Stipend (or COLA) would effectively discourage employees from joining the Deferred Compensation Plan.
Council President Hogan reminded members that on July 7th, there will be a Workshop to consider pension and COLA issues.
Since there are only two (2) retirees of the Deferred Compensation Plan and it is the City’s intent to better clarify the COLA issue for retirees, Mr. Salters felt that these retirees should also be provided the stipend.
Mr. Ruane withdrew his motion, as did the seconder.
Mr. McGiffin moved to approve the recommendation to provide a one-time stipend to current retirees of both the Defined Benefit Plan and the Deferred Compensation Plan, to be provided based on the age of the retiree, to be distributed July 15th and November 15th, with funding to be provided from the excess carry forward balance in the Worker's Compensation Fund, seconded by Mr. Salters.
Responding to Mr. Leary, Mrs. Mitchell felt assured that providing the stipend to retirees of the Defined Pension Plan is legal since the necessary funds are being paid from the General Fund and not the Pension Fund. Although he understands that there is a fairness issue to be considered, Mr. Leary reiterated his objection to including retirees of the Deferred Compensation Plan, noting that such action is unprecedented and, to his knowledge, has not been done in the private sector.
On a call for the question by Mr. Salters, the motion to approve the recommendation to provide a one-time stipend to current retirees of both the Defined Benefit Plan and the Deferred Compensation Plan, to be provided based on the age of the retiree, to be distributed July 15th and November 15th, with funding to be provided from the excess carry forward balance in the Worker's Compensation Fund was carried by a roll call vote of five (5) yes and four (4) no (Mr. Leary, Mrs. Russell, Mr. McGlumphy, and Mrs. Williams).
Pay Plan Range Increases
Council President Hogan referred to pages 159 and 160 of the draft budget and noted that the proposed pay plan range includes a 3.25% increase.
Mr. McGlumphy noted that paygrade 137 was inadvertently omitted from the proposed table and requested that staff make the necessary correction. Mrs. Tieman advised members that the range for paygrade 137 is as follows: Below Market - $92,760; At Market - $110,446; Above Market - $128,133.
Mr. Ruane moved to retain the current pay plan range scale, seconded by Mr. McGlumphy and carried by a roll call vote of eight (8) yes, and one (1) no (Mr. McGiffin).
2.7% Increase for Below Market Employees
Council President Hogan referred to page 161 and noted that there is a proposal to consider providing 2.7% additional “below the market” increase for those employees that are coded “below market”.
Mr. DePrima reviewed a revised PFP Employee Annual Increase Chart (Exhibit #15).
Several members relayed concern regarding how confusing and complicated the PFP System has become, as well as the need for constant changes.
Mr. Slavin noted that members of Council have recently authorized a review of the PFP System and update of the PAS Study. He suggested that rather than taking action regarding the PFP System, non-bargaining employees be provided a flat percentage increase equal to that of the bargaining unions until after the completion of the PFP System Review and Update of the PAS Study.
There being no objections, Council President Hogan declared a brief recess.
Meeting Recessed at 7:46 P.M. and Reconvened at 7:59 P.M.
With regards to the PFP System, Mr. McGlumphy felt that the PFP Plan has become too expensive for the citizens of Dover and the City, particularly considering the current economy.
Mr. Slavin moved that the City provide a flat, across-the-board 3.25% increase to all non-bargaining employees of the City of Dover, seconded by Mr. Ruane.
Mr. DePrima relayed grave concern regarding the motion, explaining that a 3.25% across-the-board salary increase is entirely contrary to the foundation of the PFP Program, which is to award employees who meet more goals and competency than others. If members have an issue with the revised proposed “below market” percentages, he suggested that members consider the original recommendation since it would preserve the concept of the program.
Mr. Slavin explained that his intention is to delay action for one (1) year regarding the PFP Program, feeling that providing a 3.25% salary increase is a good compromise. He also reminded members that the largest employer in the State of Delaware is not providing any employee salary increases this coming year.
Responding to Mr. Ruane, Mr. DePrima stated that the scale could be adjusted to accommodate a maximum salary increase of 3.25%.
There being no objections, Council President Hogan provided Police Chief Horvath the opportunity to address members regarding this issue.
Chief Horvath noted that the motion was to provide a 3.25% across-the-board salary increase equal to that of the bargaining units; however, he advised members that employees who report to him will be provided a 4% salary increase. Although he is ultimately responsible for all of the actions taken by these employees, he would receive less of a salary increase. It was his feeling that such action is an insult for him as well as the other managerial employees, explaining that the other union employees will be receiving a 3.5% salary increase. Chief Horvath suggested that members delay making any changes to the PFP Program until next year or, at the least, provide the management personnel with the same percentage increase provided to the employees for whom they are responsible.
Mr. Slavin requested to amend his motion to indicate that non-bargaining employees be provided a raise commensurate to the bargaining unit for which they supervise, and that non-bargaining employees who do not supervise employees be provided an average of what the bargaining units will be receiving. The seconder, Mr. Ruane, agreed to the amendment.
Responding to Mr. Ruane, Mr. DePrima indicated that employees of the bargaining units will be provided a salary increase, as follows: IUE - 3.5%; FOP - 4%; and IBEW - 3.5%.
On a call for the question by Mr. Ruane, the motion that the City provide a flat, across-the-board increase to all non-bargaining employees of the City of Dover, commensurate to the bargaining unit for which they supervise, and that non-bargaining employees who do not supervise employees be provided an average of what the bargaining units will be receiving was carried by a roll call vote of seven (7) yes, and two (2) no (Mr. Salters and Mr. Hogan)
Tax Increase
Council President Hogan noted that due to previous discussions, unless a member wishes otherwise, there will be no further discussion regarding the consideration of a tax increase.
Other Budget Related Issues
Mr. Ruane referred to a memorandum received from the Controller/Treasurer, Mrs. Mitchell, dated May 21, 2008, alerting members to her concerns regarding the transfer tax receipts and that the forecast utilized for the preparation of the draft budget may be too high.
Mrs. Mitchell advised members that staff projected an amount of approximately $213,000-$214,000 per month for transfer tax receipts. She stated that for both April and May, transfer tax receipts totaled approximately $100,000; however, she stated that as of June 6, 2008, a total of $159,000 has been received for transfer tax receipts. She felt that the shortfall may be covered, depending on the amount of transfer tax receipts, other revenues received for the remainder of the month, and if the City’s expenses are less than expected.
Mr. Ruane suggested that members would be prudent to reduce the amount projected for the transfer tax receipts and suggested that any anomaly amounts be excluded from the total amount received the previous year for estimating the next year’s receivables.
Mr. Slavin stated his concern is not necessarily regarding the aggregate amount that has been utilized in developing the estimate, but the declining trend.
For clarification, Mr. DePrima felt that Council’s action during these sessions has been, in essence, a recommendation to adopt the original budget with no changes or add-ons, with the exception of the $200,000 for the Capital Asset Reserve, $16,000 for Economic Development, and the changes which will result from the management employees pay increases. He reminded members that in order to balance the budget, he would recommend removing the Silver Lake Management Study ($50,000), the Schutte Park Master Plan ($25,000), steam roller for streets ($23,300), leaf vacuum ($37,000), playground improvement program ($30,000), and an additional $51,000 from streets.
Mr. McGlumphy reminded members that in addition to the $90,000 set aside for the Contingency Fund, additional contingency funds from the water and electric funds has resulted in a total amount of $148,769.
Mr. McGlumphy moved that the contingency funds set aside be applied to the rate stabilization fund to help mitigate the electric rate increases, seconded by Mrs. Williams.
Responding to Mr. Slavin, Mrs. Mitchell confirmed that the bond rating agencies have indicated that the City must charge the rate payers for the true cost of electricity.
After much discussion, Mr. McGlumphy withdrew his motion, as did the seconder, Mrs. Williams.
Mr. Slavin suggested that final budget session be scheduled to allow staff the opportunity to provide details regarding the action that has been taken, including what has been voted on for inclusion, what has been voted on for exclusion, what the impact is on the budget as proposed, and what the open issues are to date. He also suggested that each member of Council develop a list of items they wish to have acted upon during the final budget session.
Concurring with Mr. Leary, Mrs. Williams requested that the material be provided to members a minimum of three (3) days in advance of the meeting to allow ample time for its review.
Mr. Leary moved to recess until Thursday, June 19, 2008 at 6:30 p.m. The motion was seconded by Mr. Salters and unanimously carried.
Meeting Recessed at 8:51 P.M.
THURSDAY, JUNE 19, 2008 - 6:30 P.M.
Mr. McGiffin moved to reconvene the Special Council Meeting, seconded by Mr. Salters and unanimously carried.
The Special Council Meeting reconvened on Thursday, June 19, 2008 at 6:32 p.m. with Council President Hogan presiding. Council members present were Mr. Leary, Mrs. Russell (arrived at 6:36 p.m.), Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mrs. Williams, Mr. Salters, and Mr. Ruane. Council staff members present were Mrs. Tieman, Mrs. Mitchell, and Mrs. McDowell.
Council Committee member Mr. Lewis was present.
Mrs. Tieman reviewed details regarding the action that has been taken by members of Council during these budget hearings (to date), as well as corrections made by staff (Exhibit #16).
Mr. McGlumphy distributed information for members consideration, explaining that he and other members developed alternatives to fund the total package, as listed, which totals $525,650 (Exhibit #17). He stated that the second page describes the revenue sources, noting that the savings totals $549,533; however, he stated that staff indicated that there would be no reduction in the budget resulting from the 2.7% increase for below market employees ($12,000), which was eliminated. In preparing the savings, he stated that this amount was included and that eliminating this amount would result in a total of $537,533.
Mr. Slavin moved to fund Fire Safety Equipment at $9,500, the Arts Council at $3,805, GPS System at $0, Library I at $0, African American Festival at $7,500, and the Police Vehicles at $80,000 for a total amount of $100,805. The motion was seconded by Mr. Leary and carried by a unanimous roll call vote.
Mrs. Williams moved to accept the budget additions and reductions as presented by the Budget Team (Exhibit #16), seconded by Mr. McGiffin and carried by a unanimous roll call vote.
Referring to a previous motion approved by Council for the City to provide a flat, across-the-board increase to all non-bargaining employees of the City of Dover, Mr. Slavin reminded members that the City Manager had relayed grave concern that employees who rated poorly in their performance would receive the same salary increase as those rated exceptional.
Concurring, Mrs. Tieman referred to a memorandum dated June 16, 2008, submitted by the City Manager (Exhibit #18), which included a revised PFP Table, and noted that there would be minimum additional costs compared with the original interpretation of the previous motion regarding salary increases for non-bargaining employees.
Responding to Mr. Salters, Mrs. Tieman noted that the total cost of the original motion for providing non-bargaining employees salary increases is estimated at $155,023. She stated that the total cost of the request submitted by the City Manager for utilizing a Pay for Performance Table for providing non-bargaining employee salary increases is estimated at $156,447, which is a difference of $1,424.
After much discussion, Mr. Slavin felt that they were attempting to repair a system that appears to be faulty. He reminded members that Council approved a study of the Pay for Performance Program and that his previous motion was to provide the non-bargaining employees with a salary increase pending the outcome of the study. Although he realizes that there would be no differential between those employees who may have rated poorly in their performance than those that may be rated as exceptional, they will be provided a salary increase and questioned if there were very many employees of the City that are rated poorly in their performance.
Mr. Salters reiterated his feeling that the non-bargaining employees expect a certain manner in which their salary is adjusted and indicated his support for the City Manager’s request.
Mr. Ruane moved to approve the recommendation submitted by the City Manager to utilize the revised PFP Table (See Page 2 of Exhibit #18) for providing salary increases to non-bargaining employees, seconded by Mr. McGiffin. The motion failed by a roll call vote of four (4) yes, and five (5) no (Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, and Mrs. Williams).
Mr. Slavin moved to adopt the non-bargaining upgrades as listed on page 163 of the draft budget report, seconded by Mr. McGiffin and carried by a roll call vote of eight (8) yes and one (1) no (Mr. McGlumphy).
Mr. Slavin moved to table the Water/Wastewater Plan Review Fees, seconded by Mrs. Williams and carried by a roll call vote of eight (8) yes and one (1) no (Mr. Ruane).
Mr. Slavin moved for adjournment, seconded by Mrs. Williams and unanimously carried.
Meeting Adjourned at 8:09 P.M.
TRACI A. MCDOWELL
CITY CLERK
All orders, ordinances, and resolutions adopted by City Council during their Special Meeting of May 14, 2008 (continued May 15, 21, and 22, and June 2, 10, and 19, 2008), are hereby approved.
CARLETON E. CAREY, SR.
MAYOR
TM/jg
S:ClerksOfficeAgendas&MinutesCouncil-Minutes20082008 Budget Hearings.wpd
Exhibits Attached to Original Minutes and File Copy
Exhibit #1 - Introduction and Presentation of the 2008/2009 Draft Budget
Exhibit #2 - Presentation of Projected Revenue for FY 2008/2009
Exhibit #3 - Presentation of Pay for Performance and Staff Changes
Exhibit #4-A - Presentation of Division Budget Review for FY 2008/2009
Exhibit #4-B - Updated Draft Budget Pages
Exhibit #5 - Table of Costs for Positions Added
Exhibit #6 - Spreadsheet - Credit Card Processor
Exhibit #7 - Memorandum Dated March 14, 2008 - Credit Card Fees
Exhibit #8 - Presentation of the Economic Development Division
Exhibit #9 - Presentation of Changes to General Fund as of May 21, 2008
Exhibit #10 - E-Mail Request of Mayor Carey - Additional Budget Requests
Exhibit #11 - Information - MPO Funding Request
Exhibit #12-A - Non-Bargaining Employees Performance Scores
Exhibit #12-B - Summary of Requested Accounts as of May 22, 2008
Exhibit #12-C - Municipal Tax Rates
Exhibit #12-D - Non-Bargaining Contingency by Fund
Exhibit #12-E - Contractual Services by Department
Exhibit #12-F - History Rate and Fee Increases
Exhibit #12-G - GASB 45
Exhibit #13 - Details Submitted by Councilman McGlumphy - Proposed Paygrade and Position Changes
Exhibit #14 - Presentation of Revised Summary of Revenue Projections
Exhibit #15 - Revised PFP Employee Annual Increase Chart
Exhibit #16 - Summary of Changes due to Council Action and Staff Corrections
Exhibit #17 - Alternatives Submitted by Councilman McGlumphy
Exhibit #18 - Memorandum Dated June 16, 2008 - Non-Bargaining Employee Salary Increases (PFP Table)