Present: P. Penniman, L. McBean, D. Booth, T. Todd, M. Robertson (arrived at 2:03 p.m.)

Board Members: T. Joseph, D. Kiefer
Staff: I. Stein, P. Meskill, A. Deluca, S. Whicher, D. Squires, K. Smithers, W. Skinner, J. Beach, J. Yoder, A. Fitzpatrick, S. Cook, K. Leinthall, G. Dentes, M. Dolan, J. Franklin, E. Marx

Called to Order
Mr. Penniman called the meeting to order at 2 p.m.

Changes to the Agenda

There were no changes made to the agenda.

Report from the Finance Director
Mr. Squires reported the County audit began yesterday. He distributed a Contingent Fund report and a document entitled 2001 Year-end Budget Adjustments and noted there were fewer adjustments made in 2001 than his past years. There was $300,000 worth of adjustments made to balance accounts that had an impact on the General Fund Unallocated Revenue. He said Buildings and Grounds Utilities came in higher at year-end than had been budgeted for and cost the General Fund approximately $95,000. Other accounts that came in higher were Worker's Compensation and Debt Service. He said other accounts were offset by revenues from within budgets.

Mr. Squires also distributed a General Fund history from 1992 to 2001. He noted the General Fund balance went down by $2.5 million, which was no surprise. He said when you spend more than you book as revenue and the County has relied on its Fund Balance to support expenditures, it is logical to have a Fund Balance that has declined. He said the Airport Fund Balance remains stable, which he didn't expect due to a decline in revenues during the fourth quarter. The Solid Waste Fund Balance remained stable. Debt service went down due to a number of factors, including some of the revenue estimates in the debt service fund were realized. He reported the Worker's Compensation fund had to be subsidized above what was collected through the fringe pool by use of the Blue Cross Blue Shield rebate.

There was a discussion about Medicaid overruns. Mr. Squires said the County has not been very generous with the Medicaid allocation over the last three years, and stated this is the first time in three years that the amount has exceeded the Medicaid allocation by $359,433.

Report from the Deputy County Administrator

Mrs. Smithers distributed a list of departmental fees for information purposes. There was no discussion or action on the content of this document.

Discussion - 2003 Tompkins County Budget

Ms. Smithers began with a brief explanation of items that are contributing to the enormous shortfall in the County's 2003 budget. She said after taking several factors into consideration, including debt service, and very small amount of money being available in the Fund Balance to offset a property tax increase, the Board would need to reduce the County's budget by approximately $6 million to bring it to an acceptable level.

Mr. Penniman spoke of ongoing operations, and said in order for the County to meet its target it is looking at a substantial property tax increase. This is because of impacts on current operations, such as increasing shortfalls in anticipated State and Federal Aid, caseload increases in mandated services, and a significant reduction in available surplus funds. He said to implement salary increases it would cost the County approximately $1 million. To continue non-target programs such as the alternative to incarceration initiatives it would also cost $ 1 million. To implement items contained in the Capital Program it would cost approximately $1-2 million. Mr. Penniman said he would like Board members and department heads to discuss ways to keep the budget in line for 2002 and how to approach the budget process for 2003.

At this time Mr. Whicher distributed and explained two versions of a resolution that addressed the County's fiscal situation. Those resolutions follow on pages 5 and 6. He said a list of actions that could be taken right now by the Board was developed and placed in resolution form. He said although the content is the same in each of the resolutions, one is an advisory format and the other more rigid.

Mr. Whicher said he does not recommend that the Committee take any action on the resolutions that have been presented, but that discussion take place and departments be allowed to provide input and take part in that discussion.

Mr. Joseph addressed the resolutions and said in addition to discussing how to handle the 2003 budget process, the Board needs to take immediate emergency measures to take control of spending in the current year's budget. He said in a discussion with Administration two approaches were suggested. One approach was sending a dictatorial message to department heads telling them no one can do anything without permission, and the other approach was to let everyone know a crisis exists and ask them to pitch in and help. Mr. Joseph said this is the main difference between the two resolutions and the Board needs to decide which approach is necessary.

Mr. Penniman agreed that it is up to the Board to set guidelines. He feels the Board needs to examine each guideline and be informed of the benefits as well as fiscal consequences of each action it takes.

Ms. Stein referred to item (D) Certified available surplus funds will be used to phase in future permanent reductions in staffing and services, and asked for an explanation. Mr. Whicher said this is basically what departments did last year. In other words, you are allowed to roll money forward and use it so that you are managing your money the best way possible as opposed to saving it from year to year.

Mr. Joseph said his interpretation of (D) means a department cannot use rollover funds to keep going and that it must designate an area that is being cut but for some reason it needs to keep going for one more year.

Ms. Dolan said it has been an ongoing challenge to this process to respond to target that is not fixed and not clear. She asked that the Board provide clarity in its direction to department heads.

At this time there was discussion about a process to include department heads in the budget process. Mr. Penniman said it would be appropriate to set aside a substantial amount of time at the next Budget and Capital Committee meeting to hear feedback from department heads after they have had more time to review the documents that have been presented.

Sheriff Meskill said if department heads, administration, and the Board has a different understanding of terms, no one can accomplish what needs to be done. He felt it would be beneficial to make sure everyone understands who is giving direction, what that direction is, and what the terms contained in the draft resolutions mean.

Mr. Joseph said Tompkins County is in a crisis situation and emergency measures need to be taken to cut spending out of the current budget. He said he wants to know from department heads what they feel would be emergency measures that would cut spending.

Mr. Penniman said there is approximately $50 million in local share in the budget, and a $5 million deficit is about a ten percent reduction in spending. He stated that even with a double-digit property tax increase the County would still be looking at substantial cuts. Mrs. Smithers clarified that while the local share spending in the budget is in the $50 million range, that amount includes mandated items, contingent funds, self-insurance reserve, TC3, TCAT, and things the County may not be able to subject to a ten percent reduction. She said $30 million is a more accurate figure of what could be subject to an across-the-board cut.

Ms. Stein said the resolution could be written in the form of "suggested guidelines". She feels the Board could do more harm than good by instituting a lot of procedures that require more scrutiny. She said if departments had a rough estimate of their target, they would have to figure out how to reach it and in the best manner that is possible for each department. Ms. Dolan agreed with Ms. Stein and said departments need to know as soon as possible how much cash is needed from administrative operating expenses to make the problems in 2003 less serious. She said this is going to be a very difficult job for all department heads; however, the sooner they are informed of what is needed the better things will be in the long-term. Ms. Stein said there is no need for the Board to impose emergency procedures on departments. She feels departments are aware of the severity of the situation and are already taking these actions in their departments.

Mr. Meskill questioned the status of rollover monies and what portion, if any, department heads will be allowed to use. Mr. Whicher said there is approximately $2.5 million in rollover funds from last year. He stated the Board needs to decide whether it is going to allow departments to use those funds or whether it will suspend the rollover policy that is currently in place. Mr. Penniman said due to the gravity of the budget situation, the Board is looking at the use of rollover funds and possible restraints on the way it can be used. Mr. Meskill stressed that he has worked very hard to generate rollover and manage his department through the budget crisis in the most efficient way possible. He urged the Committee to keep the current budgeting procedures and policy in place during the upcoming budget process.

Mr. Deluca said if the Board expects the actions contained in the proposed resolution to save a significant amount of money, the County has a very bad 2002 budget. He said departments routinely follow the guidelines within the funds that are budgeted to them. Mr. Deluca said the Board's job is going to be more difficult as it will have to examine a loss in service at a significant level to save the amount of money that is being discussed. He said the document presented here is a management tool and the Board is going to have to look at more of a leadership role than a management one. Ms. Leinthall said she feels there are some departments that could work together and bridge gaps where programs or services are going to be cut.

Mr. Joseph said there seems to be a conflict of people not understanding each other's perspective. He said department heads repeatedly ask the Board to tell them how much they want cut and they will do it. He said if Board members did that, they would be making cuts blindly. He said in order for Board members to make cuts, they need to know what the consequences of their actions will be. They also need a method that lets them have choices and allows them to chose between one priority and another. He said he wants to hear the implications of all budget cuts and make decisions based on that information. Mr. Joseph said he agrees with the comments made by Mr. Deluca, but the Board cannot get to where it needs to go without seeing the implications.

Ms. Robertson spoke of the recent Board retreat and said the Board is planning to work together with department heads for the 2003 budget rather than have a fiscal target imposed on them. She said the Board is trying to make this a more collaborative process than it has been in the past.

Mr. Booth said he feels the Board needs to reach a $7 million savings rather than $6 million. He said it is important that department heads present the Board with several scenarios that can be responded to. He said Board members cannot make capable choices without those options. He suggested that the County Administrator lay out three scenarios and ask department heads to respond to them.

At this time the Committee reviewed the list of guidelines contained in the resolution.

Mr. Penniman commented on (d) (certified available surplus) and suggested the following wording: "available surplus funds will be used in the context of a department's overall spending plan."

Ms. Robertson said she would like to find out how enforcement would be done, and how much any of the actions contained in this resolution would actually save.

Mr. Booth spoke of (b) (fee schedules) and said this is essential for next year's budget. Mr. Joseph said the Board is very restricted in this area.

RESOLUTION NO. ADMINISTRATIVE GUIDELINES TO REDUCE SPENDING IN THE CURRENT AND SUBSEQUENT YEAR’S BUDGETS FOR THE OPTIMIZATION OF SURPLUS FUNDS IN ORDER TO MINIMIZE OR ABATE FUTURE TAX RATE INCREASES

WHEREAS, Tompkins County is experiencing increasing shortfalls in anticipated State and Federal Aid, caseload increases in mandated services and a significant reduction in available surplus funds, and

WHEREAS, it is evident that without procedures for an immediate reduction in spending in the current and subsequent year’s budgets the County will face a rise in property tax rates to an unprecedented level, and

WHEREAS, Department and Agency Heads are expected to anticipate the impending fiscal situation and take whatever steps they can to assist in recommendations related to their specific program areas, now therefore be it

RESOLVED, on recommendation of the Budget and Capital Program Committee, That effective immediately, the following administrative guidelines be implemented

• Vacancies will be filled only when absolutely vital to the continuation of essential services
• Reclassifications will be avoided unless absolutely vital to the continuation of essential services
• Purchases and contractual agreements will be minimized to the greatest extent possible
• Certified available surplus funds will be used to phase in future permanent reductions in staffing and services
• Transfers from personnel and/or fringe accounts shall be avoided unless absolutely necessary for the continuation of essential services
• Overtime pay or compensatory overtime for all non-emergency services employees shall be avoided unless absolutely necessary for the continuation of essential services
• Fee schedules will be reviewed and recommended increases brought forward to the appropriate program committee for consideration
• Replacements for those out on long-term disability or other forms of leave be avoided to the greatest extent possible

RESOLUTION NO. IMPLEMENTATION OF BUDGET RESTRICTIONS, ADMINISTRATIVE GUIDELINES, AND SUSPENSION OF SPECIFIED SECTIONS OF THE FISCAL POLICY

WHEREAS, Tompkins County is experiencing increasing shortfalls in anticipated State and Federal Aid, caseload increases in mandated services and a significant reduction in available surplus funds, and

WHEREAS, it is evident that without procedures for an immediate reduction in spending in the current and subsequent year’s budgets the County will face a rise in property tax rates to an unprecedented level, and

WHEREAS, Department and Agency Heads are expected to anticipate the impending fiscal situation and take whatever steps they can to assist in recommendations related to their specific program areas, now therefore be it

RESOLVED, on recommendation of the Budget and Capital Program Committee, That effective immediately, Board authorization is required in order to fill vacancies or reclassify positions, and

RESOLVED, further, That all purchases and contractual agreements in excess of $5,000 must be authorized by the Director of Finance and the County Administrator, and

RESOLVED, further, That the procedure for use of certified available surplus funds continue to be subject to review and approval by the County Administrator, program committee, Budget Committee, and Board of Representatives, and

RESOLVED, further, That transfers to and from Personnel lines shall be subject to review and approval by both the Director of Finance and the County Administrator, and

RESOLVED, further, That authorization for overtime pay or compensatory overtime for all non-emergency services employees must be pre-authorized, in writing, by the County Administrator, and

RESOLVED, further, That an early retirement incentive plan may be developed by the County Administrator and Board of Representatives in the event that the State of New York does not approve the same Early Retirement Incentive Program as has been offered in years past, and

RESOLVED, further, That fee schedules will be reviewed and updated where advisable, pursuant to program committee, Budget Committee, and Board action, and

RESOLVED, further, That the 2003 budget review process shall be modified to commence immediately and continue throughout the next several months with a dialogue of all program components by and between the program committees, the County Administrator and each department and agency, and

RESOLVED, further, That 2003 budget requests will be due in September, 2002, in a format prescribed by the County Administrator and shall be considered by the Budget and Capital Program Committee throughout September and October, 2002, and

RESOLVED, further, That the following sections of the Fiscal Policy be suspended for an indefinite period:

Section 3.02 Fiscal Targets (D) Target Reviews. The Board of Representatives shall review targets and make any changes for the upcoming annual budget review process by June 30.

Section 3.04 Over-target requests (D) Proposals. Over-target requests must be submitted on proposal forms separate from and in addition to the basic budget request. The budgeting unit or designated program must provide a thorough justification of the need for the funds, the means by which the success of the spending may be measured, and any impact on the objectives, services, and budget of the budgeting unit or designated program.

Section 5.03 Appropriations from the Contingent Fund or a Fund Balance (B) Departmental Entitlements. These are reimbursements for expended funds that the Board will ordinarily pay for and that department heads should be able to plan for. If there are circumstances under which the Board elects not to reimburse these expenses notice should be provided to any affected department head(s) by Board Resolution.

Section 5.06 Re-appropriation (Carryover or Rollover) of Unspent Funds from Previous Years County department heads are authorized to request re-appropriation of unspent funds from the previous year provided that they are certified by the Director of Finance to be available and provided that this re-appropriation is authorized by the established appropriation procedures of the Board of Representatives.

Normally, the Board intends to approve requests to re-appropriate unspent funds in order to (1) provide department heads with the flexibility to use funds wisely, regardless of arbitrary boundaries between budget years, (2) reward efficiency, and (3) not create incentives for "use it or lose it" spending

There are three ways funds can be re-appropriated: a) by changing the current and the following year budget; b) by using previous year’s surplus funds in the subsequent year’s budget; and c) by re-appropriating previous year’s surplus funds into the current year’s budget after the County Board has voted to adopt the following year’s budget.

1. Use of Anticipated Current Years Surplus Funds in the Subsequent year’s Budget,
2. Use of Previous year’s Surplus Funds in the Subsequent Year’s Budget, and
3. Re-appropriation

County Administrator's Report

Mr. Whicher suggested the Board make a decision on budget targets for 2003 as soon as possible.

Approval of the Minutes of March 12, 2002

It was MOVED by Ms. Robertson, seconded by Mr. Todd, and unanimously adopted by voice vote, to approve the minutes of March 12, 2002 as submitted. MINUTES APPROVED.

Adjournment

The meeting adjourned at 3:57 p.m.