Present:  P. Penniman, Chair; T. Todd; D. Booth; L. McBean; M. Robertson
Staff:      K. Smither, Deputy County Administrator; D. Squires, Finance Director; J. Hughes, Assigned Counsel; W. Skinner, Public Information; B. DeLuca, Mental Health; S. Whicher, County Administrator; B. Crosby, Public Health Administrator; A. Cole, Public Health Director; I. Stein, Elections Commissioner; M. Dolan, Social Services Commissioner; N. Zahler, Youth Bureau Director
Guests:   T. Joseph, Chair of the Board; N. Schuler, Board Member; D. Winch, Board Member; D. Kiefer, Board Member
Press:     D. Higgins, The Ithaca Journal

Called to Order

 The meeting was called to order at 2:00 p.m.

Changes to Agenda

 Ms. Robertson asked for a discussion on the relationship between the Fiscal Management Committee and this Committee.

Approval of Minutes

 It was MOVED by Mr. Booth, seconded by Ms. McBean, and unanimously adopted by voice vote, to approve the minutes of the April 9 and April 16, 2002 meetings as submitted.

Public Information - Budget Process

 Informing the Public
 Ms. Skinner said she has been having discussions with Representative Penniman, Chair Joseph and Administration staff about inviting more public participation into the budget process this year.  She feels it is important to hear what the public values.  The model that has been used before and worked well was a study group for the tobacco settlement money.  Approximately 30 people attended the six-hour event.  The session began with resource people educating the attendees about the issue, time allowed for questions, and then broke into groups to discuss and/or debate the subject.  Facilitators were on-hand if needed.  Report outs followed which were then formatted into a report and presented to the Board of Representatives.  Understanding the budget issue is much bigger than the tobacco settlement, she suggested using the same format but develop specific question(s).  A subgroup of the Public Information Advisory Board considered the following question:  How much property tax can be tolerated vis-a-vis cuts in services and what are their key values?
 
Other considerations were specific topic questions such as alternatives to incarceration, jail expansion, and/or capital program.  Another question that could be presented is asking the attendees what their priorities are.

 Ms. Skinner said the thought with a study group was to start with one.  If 100 people respond two more could be set up.  If only a few respond then one session could be held.

 Mr. Penniman agreed that who attends and what is discussed is critical.

 Ms. Robertson commented that she attended the tobacco settlement forum and initially had a strong point of view, but based on the forum her opinion changed.

 Discussion followed with regard to whether the public session should be held in June.  Mr. Penniman feels June may be too early as issues will not have been identified by that time.  Ms. Skinner said there is definite information available such as departments submitting 20% budget reductions and feels people are already interested in the budget.  Mr. Todd commented that there has been enough public comment that the public is aware the County is facing a difficult budget.  He supports having the forum early, but would like to keep it simple so the public understands.  Ms. Robertson feels June seems too soon, but people will understand that all the information will not be available.

 Ms. Skinner said there is a possibility of partnering with the Ithaca Journal to advertise it and help out with the publishing the report outs.   At this time, Ms. Skinner handed out a document concerning study circles.

 There was agreement that the success of the forum depends on how well-framed questions are, such as finding out people's tolerances for tax increases.  Mr. Joseph commented on the tobacco settlement forum and said that it provided education to the people involved, not just feedback and guidance to the Board.  Ms. McBean said what is important is what comes out of these sessions and what is done with it.  She does not feel June is too soon and said even if only 15 people come to the first session, then a second session could be held with another 15.  Mr. Booth spoke of his skepticism of a self-selective group.  Mr. Penniman said it is important to brainstorm issues and ideas that should be reported to the public through Ms. Skinner and the media.

 It was the consensus of the Committee that a public forum be held mid June, one later in the summer, and one in September.  Ms. Skinner said it was suggested that Board members attend the forum and not participate, but that no one who works for or is on boards of funded agencies should attend.  The Committee agreed to be involved in the process for developing the format of the forum and will review a draft of questions at the next meeting.

 Ms. Skinner reported the citizens-friendly budget will be available soon from the printers and will be doing a radio announcement in May concerning it.

Report from the Committee Chair

 Mr. Penniman reported on a number of ongoing discussions that have taken place with staff and Department Heads concerning the budget.

Report from the Finance Director

 Mr. Squires shared a publication that is now available that illustrates the properties that will auctioned on May 11th.  The auction includes both City of Ithaca and Tompkins County properties.

 He reported on a meeting he attended in Syracuse yesterday and heard a presentation from the Department of Taxation and Finance on sales tax.  He distributed information pertaining to the County's sales tax and briefly explained it.  He said the information can easily be misconstrued.  It shows the County realizing a $1 million increase in sales tax over the first quarter which translates to 21% more than last year.  The State Department is saying that September 11, 2001 has had a detrimental effect on a lot of sales tax receipts in New York State.  They are projecting a decline in 2002 sales tax.  One reason the County's sales tax is so vigorous this year is because in the comparison quarter there was a $400,000 negative adjustment in 2001.  The second reason is the first quarter of 2002 there was a $500,000 positive adjustment.  New York State's lock box with sales tax returns was located in the World Trade Center area resulting in returns not being processed for the third quarter and subsequently moved to the fourth quarter and some of the income in the fourth quarter was moved into the first quarter of 2002.  This unit in the World Trade Center area was the center of New York State's tax compliance for sales tax and responsible for following up on missing returns.

Mr. Squires commented on the reports of the State's current overall fiscal condition.  He said the thinking now in terms of bonding is the more reliance on sales tax to finance government is a negative factor and the less dependent a County is, is viewed as a positive factor.

 He reported on tobacco settlement revenues and how close they were in their projections.  More revenue for securitized bonds came in than what was projected.

 At this time, he referred to the document handed out analyzing the General Fund.    The County's audit was concluded last week.  The General Fund balance decreased by approximately $740,000 since the last report.  The reason is adjustments were made relating to Mental Health programs ($349,000) and Social Services programs ($391,000).  The State has asked that advanced money not be reflected on the books.  He also commented that one delinquent tax property cost the County $285,000.

Report from the County Administrator

 Mr. Whicher reported on the Department Head meeting held April 17th and discussed some of the budget issues being discussed now.  Departments have submitted the two scenarios requested.  There was discussion at the meeting about current year budget and the possibility of the Board appropriating rollover.  There is a strong sensitivity about rollover; Department Heads feel the Board should be following the same path as in the past, supporting them and allowing them to work through the difficulties.  They would like clear direction on which way they should be heading.  He spoke about some of the discussions on the current year budget and said if adjustments were to be made, some could not do it resulting in a deficit.  He prepared a scenario from what departments submitted and felt $750,000 could be possible reductions for this year.  Another possibility suggested was to have the Board not authorize three percent of the current local target.  He has not received any responses to that, but has heard comments about not reducing this year's budget and concentrating on the 2003 budget.

 It was noted that if adjustments are not made in 2002, it does make 2003 more difficult.

Report from the Deputy County Administrator

 Ms. Smithers said she did not have a report.

2003 Budget Scenario - Capital and Operating

 Ms. Smithers distributed copies of a scenario she prepared illustrating estimates for the 2003 budget including projections through 2005 and the assumptions used.  The scenario also shows projections through 2005.   Copies of the rollover summary were also distributed.  At this time, Ms. Smithers explained the assumptions made in creating the scenarios.  The implication for 2003 includes a 20 percent fiscal target reduction with $2.5 million in approved OTRs.  The 10.2 percent tax rate increase would also be sustained with an 11.7 percent target reduction with no approved OTRs.

 Mr. Whicher expressed his concern with making statements that "the real number for departments is 10+ percent.  There will be some departments that adjustments cannot be made and others that will have to reduce more.  He feels the 20 percent will allow the flexibility needed to make the necessary decisions.

 Ms. Robertson spoke about the funding for capital projects and feels that decisions need to be made on the payment schedule.  Mr. Whicher said this is a policy decision the Board needs to make.  In this scenario it is a policy shift in deciding to budget in the year a commitment is made to do a project.  The result is shifting the money from one year to the next.  Ms. Smithers explained that the scenario begins to stabilize the tax rate increases related to capital projects.

 Mr. Penniman said information on capital projects is still being collected and issues are developing.  Ms. Robertson said she would like to have capital projects approved in the past reevaluated.  Mr. Whicher said that is being done.

 Mr. Joseph reiterated Mr. Whicher's comments and said the scenario illustrates payments being postponed.  He stated options such as this need to be reviewed.

2003 Budget Process

 Ms. Smithers briefly reviewed the current calendar for the 2003 budget process and said the Board will be setting fiscal targets at their first meeting in June.  The Committee discussed changing the schedule to accommodate the severity of cuts and the need to work with departments on setting priorities possibly before budget submission.  It was Mr. Penniman's view to change the calendar to allow departments time to work with their program committee before budgets are due.

 Mr. Joseph said earlier in the year he contemplated changing the budget process, but after hearing feedback from other people, he feels leaving the current process in place and focussing on the substance of the proposals makes more sense.  He supports departments going to program committees to explain what a 20 percent reduction would mean and feels there will be enough information to make decisions.  He also agrees with Department Heads that the focus should be on the 2003 budget.

 Ms. Kiefer asked if there would be an opportunity for feedback from program committees before the Budget Committee sets targets in May.

 Ms. Robertson asked if the Committee could discuss the direction and/or position the Committee is going to take on the 2002 budget.

 Mr. Whicher commended departments on the proposed reductions that have been submitted.  He feels the realistic amount of savings in 2002 was $705,366.  One suggestion he mentioned in addressing the 2002 budget was a three percent cut in the local share which would generate approximately $1 million.  He agrees with Mr. Joseph that the Board needs to focus on the 2003 budget.  If action is going to be taken on the 2002 budget, he recommends across the board cuts not be made on a department by department basis.

 Mr. Penniman suggested the Committee make a decision or statement if it wishes to give guidance on the 2002 budget.  Mr. Booth disagreed stating there is not enough information available.  At this time, he feels that any tampering with the 2002 budget will consume too much time.  He agrees with Mr. Whicher that there needs to be a certain amount of money saved this year but feels there should be some mechanism in place.

 Ms. McBean requested that appropriate staff and Board members develop a plan if there needs to be one for 2002 so that time can be focused on the 2003 budget.

 Further discussion followed and Mr. Booth stated that there needs to be proposals submitted on the mechanism to use for 2002 for the Committee to consider.

 Mr. Joseph challenged the notion that the County needs to save money this year.  He does not feel that is necessary.  However, he feels it would be wise to save money in various ways and suggested there are tools already in place such as the hiring freeze to ensure that happens.  He does not recommend stating an amount that needs to be saved.

 There was discussion on how to provide direction to program committees and departments for 2002 and 2003.   Mr. Whicher said the Committee is attempting to send a clear message to departments that the Board is not looking at reductions in 2002 and the focus should be reviewing 2003 scenarios.  Ms. Robertson also added there be encouragement or incentives for departments to save in 2002 with a statement that we intend to retain the rollover policy.

 Mr. Booth expressed his concern with trying to write a resolution at this meeting.  He feels the message that can be sent is the Board will focus primarily on the 2003 budget, there will be some mechanism as to how money will be saved in the 2002 budget.  He suggested that instead of writing the resolution now that the Committee meet prior to the Board meeting and approve one.

 Mr. Joseph proposed the following resolution for the Committee to consider:

RESOLUTION OF DIRECTION TO DEPARTMENTS AND PROGRAM COMMITTEES

 RESOLVED, That the Budget and Capital Committee strongly encourages departments to reduce spending in 2002 which will result in eligible rollover,
 RESOLVED, further, That the Budget and Capital Committee does not recommend cuts to the 2002 Budget,
 RESOLVED, further, That Program Committees are requested to focus on discussions with their departments concerning the 2003 Budget.

 Discussion followed and it was MOVED by Ms. Robertson, seconded by Mr. Todd, to approve the above resolution.  Mr. Booth does not feel the message is strong enough and would like further debate.  A voice vote resulted as follows:  Ayes - 4 (Todd, McBean, Robertson, and Penniman); Noes - 1 (Booth).  COMMITTEE ONLY RESOLUTION APPROVED.

Other Business

 Fiscal Management Committee

 Ms. Robertson questioned the relationship with Fiscal Management Committee and asked if reports could be provided to the Budget and Capital Committee.  Mr. Joseph said as Chair of the Fiscal Management Committee, he would provide reports.  The purpose of the Committee is to approve requests by departments to fill vacancies.  The first meeting is May 1st at noon.

Putnam County Resolution

 The Committee agreed to defer action on this resolution.  Mr. Penniman said if there is interest in this that a resolution be written for the next meeting.  Mr. Penniman, Ms. Kiefer, and Mrs. Schuler agreed to prepare a resolution for consideration.

Adjournment

 The meeting adjourned at 4:09 p.m.