Budget and Capital Committee
June 25, 2002
2 p.m.
Scott Heyman Conference Room

Present:     P. Penniman, L. McBean, T. Todd, M. Robertson
Excused:   R. Booth
Other Board Members present:  D. Kiefer, J. Joseph
Staff:          S. Whicher, K. Smithers, D. Squires, B. DeLuca, W. Skinner, G. Potter, N. Jayne

Called to Order

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

Changes to the Agenda

 The resolution entitled Amendment to the 2002-2004 County Infrastructure Capital Program, Information Technology Services Department was added to the agenda.

 The following resolution(s) were withdrawn from the agenda:

 Authorization for Public Hearing - Tompkins Cortland Community College
 Modification of the 2001-2002 Operating Budget - Tompkins Cortland Community College
 Adoption of 2002-2003 Operating Budget - Tompkins Cortland Community College

Approval of Minutes of June 4 and June 11, 2002

 It was MOVED by Ms. Robertson, seconded by Mr. Todd, and unanimously adopted by voice vote by members, present, to approve the minutes of June 4 and June 11, 2002.  MINUTES APPROVED.

Chair's Report

 Mr. Penniman said at the last meeting the Committee discussed the Gasbe 34 compliance issue, and the new requirement for governments to either depreciate assets or certify that assets are being maintained at a certain point.   He called attention to an article in a recent issue of the City and County magazine about this issue and said he would place a copy on file in the Board Office if anyone is interested in reviewing it.  Mr. Todd asked why it is good for Tompkins County to do this inventory; Mr. Squires said it gives a good overview of assets vs. Debt.

County Administrator's Report

 Mr. Whicher reported he recently attended a NYSAC meeting of County Administrators.  He distributed two documents:  "Summary and Highlights of the Enacted SFY 2002-03 New York State Budget" and a summary providing a brief description of how other counties are dealing with their budget shortfalls.  At that meeting, Robert Gregory, NYSAC Executive Director, said he predicted that next year's budget situation will be even worse.  Mr. Whicher said it appears the State will probably be in a deficit situation and will not have any reserves to fall back on because they don't have as much money as they had budgeted for.  He said Tompkins County will need to rely as heavily as possible on its local economy.

 Mr. Whicher also reported on Medicaid costs and said over the past few years there has been an overall increase of 12-13 percent and that total increase can be expected for next year alone.  He said Tompkins County will have a $1.5 million shortfall in Medicaid (12-13%) for 2002.  Mr. Whicher said the perception at the State level is that counties can absorb these increases because of tobacco settlement revenues.  NYSAC is trying to change that perception and are considering passing on only one or two resolutions to the State legislature rather than the usual packet of multiple resolutions.  It was felt that by sending only one or two that strongly urges the State not to increase local spending it would be more effective than sending a large packet.

Deputy County Administrator's Report

 Mrs. Smithers reported on the charge to the County Administrator to find savings of $1 million from the 2002 budget and said that is still being worked on.  At the present time it looks like there is $1.3 of which 700,000 is from County Departments.  Half of that amount is from the Department of Social Services in revenues that came in higher than what they anticipated in non-mandated expenditures.  She noted that she still needs to verify that those figures are accurate.   She said there were also larger-than-expected  increases in revenues from tobacco, sales tax, and in the sale of real property from the auction.

Finance Director's Report

 Mr. Squires distributed a Contingent Fund report dated June 25, 2002.  He said at the beginning of the year, the Board adopted a resolution that authorized $6 million in revenue anticipation notes.  The Triphammer Road project that will begin on July 21 will basically be paid for initially with all County dollars.  He said the County has to pay for 95 percent of the construction costs; however, we will receive 95 percent reimbursement from the State.   Mr. Squires said he does not feel comfortable depleting the County's cash position at this time of the year by 20 percent to fund one project.  He requested permission to use revenue anticipation note to finance the State's share of that project.    He said he expects to receive an interest rate of approximately 1.6 percent, and the cost of borrowing $2.7 million will be about $10,000.   There was no objection by the Committee to Mr. Squires moving forward with this.

 Mr. Squires reported on sales tax receipts and said the County is currently $1.4 million ahead of the amount that was received at this time last year.   Mr. Todd requested that Board members receive monthly sales tax reports.  Mr. Squires said he will do this.

RESOLUTION NO.        - BUDGETING UNIT RECONFIGURATION AND FISCAL TARGET ADJUSTMENT – CRIMINAL JUSTICE  AGENCIES – MENTAL HEALTH AND HUMAN SERVICES COALITION

 MOVED by Ms. Robertson, seconded by Mr. Todd.  Ms. Robertson expressed concern that there may be additional work required by some of the agencies because they will have to come to two committees for various things.  She was told that committee chairs are aware of this and will be discussing the best way to handle this.   A voice vote resulted as follows:  Ayes - 4, Noes - 0, Excused - 1 (Booth). MOTION CARRIED.

 WHEREAS, the Criminal Justice agencies have been previously reviewed within the Department of Administration, and
WHEREAS, the Criminal Justice component of Administration has been eliminated, and
WHEREAS, the Human Services Coalition will include the Offender Aid and Restoration and Community Dispute Resolution Center agencies in their regular annual review process for not-for-profit agencies, and
WHEREAS, the Mental Health Department will include Alcohol & Drug Council in their regular annual budget process, now therefore be it
RESOLVED, on recommendation of the Public Safety, Health and Human Services, and Budget and Capital Committees, That effective with the 2003 budget, the following Budgeting Units will be re-assigned to the Mental Health Department and to the Basic Subsistence Program with a commensurate re-distribution of fiscal targets (subject to the 20 percent Target Reduction pursuant to Resolution No. 105 of June 4, 2002), as follows:
 FROM:
Public Safety:
Offender Aid & Restoration (OAR) – BU#6315 - $76,578
Offender Aid & Restoration (OAR) – Bail Fund – BU#6316 - $62,232
Community Dispute Resolution Center (CDRC) – BU#6313 - $46,166
Alcohol & Drug Council – BU#4502 - $31,086
TO:
 Health & Human Services:
 Basic Subsistence & Income Security – BU#6305 - $184,976
 Mental Health Department - $31,086
SEQR ACTION:  TYPE II-20
Explanation:  These programs were part of the Human Services Coalition review process.  Under the guidance of Bill Benjamin, Deputy County Administrator for Criminal Justice (now retired), these programs were removed from the Coalition review and placed under the review process of the Criminal Justice Program.  In the absence of an in-house Criminal Justice Program, the Coalition has agreed to return OAR and CDRC to their agency review process as before.  County contracts for mental hygiene
services, including the Alcohol and Drug Council, should, by regulation, appear in the Mental Health Department budget.

___________________

RESOLUTION NO.    - APPROPRIATION FROM CONTINGENT FUND FOR RENOVATIONS – COUNTY MENTAL HEALTH DEPARTMENT

 MOVED by Ms. Robertson, seconded by Ms. McBean.   Mr. Penniman asked if there were any savings in the Mental Health Department's budget that could pay for this, given the fact the Board has been asking departments to give back money.  It was suggested to wait until the end of the year to pay this; that way it would be known whether there was savings in the Department's budget.   Ms. Robertson questioned why the Committee was having a lengthy debate over this item when there was no objection to the Finance Director's request to pay $10,000 to borrow money earlier in the meeting.

 Mr. Whicher said there is a matter of principle involved in this request.  Departments have been instructed not to ask Facilities to perform any work unless there is money to reimburse them.  Mrs. Smithers reminded the Committee that this expense was adopted in the 2001 budget as an over-target request but the work was not completed until 2002.

 Mr. Deluca said there is a possibility this expense could be claimed to the State.   He could not say definitively whether it would be an allowable expense, and said it could take a couple of years to find out its effect on County dollars. Mr. Penniman expressed reluctance to appropriate money from the Contingent Fund at this time.

 Mr. Joseph said if the Board were to approve a Contingent Fund request, the County would be without that much money.  However, he is hearing that if the Board does not appropriate it from the Contingent Fund, that the County may not be out of any money.  He asked Mr. Deluca what would happen if the Board did not appropriate the money and State Mental Health does not approve it, when would a request come back to the Board for this money?    It was stated that it would be unlikely the Mental Health Department would come back to request any funds from the County.  Mr. Penniman said he is satisfied the bill can be paid without approving this resolution and that it will not affect services because there is a chance it will be considered an allowable Mental Health expense.

 It was MOVED by Ms. McBean, seconded by Mr. Todd, to refer this back to the Health and Human Services Committee with the recommendation that they reconsider it and not approve it based on the information that has been exchanged at this meeting.

 WHEREAS, in the 2001 budget $8,974 was placed in the Contingent Fund for remodeling expenses for the Mental Health Clinic, and
 WHEREAS, remodeling is complete, and all invoices are in hand, now therefore be it
 RESOLVED, on recommendation of the Health and Human Services and Budget and Capital Committees, That the Director of Finance is hereby authorized and directed to make the following budget appropriation:
 FROM:  A1990.54400  Contingent Fund  $8,898
 TO:  A4310.54470  Building Repairs  $8,898
SEQR ACTION:  TYPE II-20

* * * * * * * * * *

RESOLUTION NO.  - AMENDMENT TO THE 2002-2004 COUNTY INFRASTRUCTURE   CAPITAL PROGRAM, INFORMATION TECHNOLOGY SERVICES DEPARTMENT

 MOVED by Ms. McBean, seconded by Mr. Todd.

 Mr. Potter said this capital project was submitted by his predecessor and the description of the project as it was presented then is different from his interpretation of what it should be.   He said for that reason he brought the project before the Information Technology Services Committee last week.  He said there are two major changes.  The project has been redefined and made more specific and there is also a need to upgrade or replace the Pentamation system which is the County's financial software system.   The version of the software that is currently maintained and supported by the vendor will no longer be supported after a two-year period.  The company has re-written the program in a drastically different way and have provided the County with information on costs and how to go through that migration effort with that software.   A demonstration will be given next month with an opportunity for County users to evaluate that application.

 There was a discrepancy over the total amount of the capital project approved in the budget.  Mrs. Smithers will follow-up on this and see that the correct figures are used.

 WHEREAS, the Director of Information Technology Services (ITS) has recommended an amendment to the 2002-2004 County Infrastructure Capital Program which alters the project narrative for the purpose of providing a more accurate project focus and the incorporation of an additional project task to replace and/or upgrade the County’s current financial systems application, and
 WHEREAS, the amendment will not alter the total cost, annual appropriations, or the anticipated start and completion of the Capital Program, as approved on the 2002 budget, and
 RESOLVED, on recommendation of the Information Technology Services Policy, and the Budget and Capital Committees, That the 2002 Capital Program be amended to reflect the project description and narrative change as submitted and reviewed on June 26, 2002.
SEQR ACTION: TYPE II- 2

* * * * * * * * * *

Capital Program

 Mrs. Smithers placed an overview of the capital program on an overhead projector so that the Committee would be allowed to see changes as they were entered into the spreadsheet.   The Committee spent time discussing various projects and observed changes in the tax rate based on suggestions to trim project costs and adjust the timing of payments.

Since 2003 budget requests for capital programs are not due for submittal until July 5th, the Committee's discussion was purely speculative. It was felt by some members that it was unlikely that there would be any new construction for the Public Safety Building in 2003. Public Safety renovations for the administration side was deferred to 2004; Public Safety Building Jail expansion was put off until 2004, with $200,000 in 2003 for planning and design. One scenario brought forward was to increase the Public Safety Communications System line estimated local share from $4 million to $7,390,000; increase in debt service from $451,250 to $840,000. Overall, putting these costs off until 2004 resulted in a reduction in the property tax rate increase by 6.5%.

 There was also discussion about the policy decision by the Board to begin paying for projects the year they were approved.  Mr. Penniman said there is another argument that the taxpayers who benefit from the project are the ones who should pay for it.  If it were looked at this way, the bulk of the payment
should be made after the project is functional.   Mr. Whicher said another budgeting philosophy is if the Board were looking at a short-term hardship, to make changes in fiscal policy makes sense because it would mean making a short-term adjustment to a short-term problem.  However, if the Board's interpretation of the events in New York State are that the State is going to continue to shift the burden to local governments, it would be compounding the problem to change the fiscal policy at this point.  He said it is his opinion that this year and next year are going to be the two worst years; however, there is no way to know that at this time.

 The Committee will continue discussion of capital projects at upcoming meetings.

Adjournment

 The meeting adjourned at 4:05 p.m.

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