Budget and Capital Committee
August 27, 2002
2 p.m.
Scott Heyman Conference Room

Present: P. Penniman, M. Robertson, D. Booth, L. McBean, T. Todd
Staff: S. Whicher, W. Skinner, G. Potter, K. Smithers, I. Stein, A. Cole, K. Hackett, E. Marx, D. Squires
Board Members: D. Winch, T. Joseph, K. Herrera
Guests: D. Higgins, Ithaca Journal; E. Mulvihill, WHCU

Called to Order
 Mr. Penniman called the meeting to order at 2:02 p.m.

Approval of Minutes of August 13, 2002
 It was MOVED by Ms. Robertson, seconded by Mr. Booth, and unanimously adopted by voice vote to approve the minutes of August 13, 2002 as submitted. MINUTES APPROVED.

Changes to the Agenda
 Discussion concerning the retirement reserve was added to the agenda.

Chair's Report
 Mr. Penniman said the Chamber of Commerce budget session has been scheduled for October 8th at 7:30 a.m. He also reported meetings will be held with the media this week to provide information on the 2003 Tompkins County budget. He said last year a packet was prepared on budget information and asked Ms. Skinner if this could be distributed to Committee members again so that anyone with comments or suggestions could make them prior to it being distributed this year. Ms. Skinner said she would do this.

 Mr. Penniman reported the County has received an invitation from the New York State Association of Counties asking if there is any interest in securitizing the remaining half of tobacco proceeds that was not initially securitized. He said if any Committee member is interested in discussing this they should contact him.

County Administrator's Report
 Mr. Whicher distributed the following documents during his report:

Overview of the Tompkins County Administrator's Recommended 2003 Budget (Summary)
Anticipated Savings/Surpluses for 2002
Over Target Requests Recommended by the County Administrator on the 2003 Budget
Information packet dated August 27, 2002

 Mr. Whicher stated as of this date his recommendation on the 2003 Tompkins County Budget stands at a 21.8 percent property tax rate increase. His recommendation will impact approximately 20 positions and there are numerous changes of target funding to one-time funding. There were other subtle changes, such as the Human Rights Department, where the Director will be pursuing funding from the Federal government.

 Mrs. Smithers discussed the Fund Balance and said for the first time since the County has been using the practice of making one-time appropriations and using the Fund Balance to support them, those one-time appropriation requests now exceed the available fund balance. She said this means that even if things were shifted from being a target to one-time, the property tax would still need to be increased because the fund balance is exhausted.

 Mr. Joseph said what Mrs. Smithers stated about the fund balance is correct; however, it should not come as a surprise. He said the notion of paying one-time expenses out of the surplus was the result of asking the question "how do we use surplus when it exists". He said when the Board debated this it was never felt that the surplus should cover all of the one-time expenses, however, it happened that way for the last seven years. Mr. Joseph noted the County Administrator's recommendation includes a deferred tax rate of zero percent.

 Mrs. Smithers stated the available fund balance is $651,336. The total of non-target increases amounts to $1,334,331. This amount is normally appropriated from the Fund Balance to support one-time expenses.

 Mr. Penniman pointed out that the impact of the County Administrator's recommendation has no impact on the actual County budget, and that everything is still on the table for the Board to consider. He said it is clear that the Board has had more options in the past. It has generally included the County Administrator's recommendations with some surplus funds to use towards lowering the tax rate.  Mr. Penniman noted unlike previous years, there are no surplus funds available beyond the County Administrator's recommendation in the 2003 budget.
 

 In the County Administrator's recommendation, appropriations increase from $2,782,988 of which $722,750 are revenues and $2,060,238 is the local share. The increase in mandates from 2002 to 2003 is $4,439,483, of which $1,627,815 is budgeted for revenue and $2,811,668 is the local share (this amount is in addition to salaries).

 At this time the document entitled "Anticipated Savings/Surpluses for 2002" was distributed. Mrs. Smithers highlighted the figure of $3,025,381, which is the total amount of anticipated savings in 2002.

 Mr. Squires was asked how much cash the County should have on hand at all times. He responded the County should have enough funds to finance expenses for sixty days ($6 million). There is no State requirement for a specific amount. Generally, bond raters care whether you are planning well, and Tompkins County has a good reputation in that respect.

 Mr. Whicher said the Department of Social Services is preparing additional information and an analysis on that Department's budget.

 Mr. Joseph noted that in past years, the deferred tax increase is the item that has been causing the County budgeting problems. He called attention to line 27 – Deferred Tax Increase, in the County Administrator’s recommended budget and said the amount is at zero.

Report from the Finance Director

 Mr. Squires reported on sales tax and stated at the present time the County is $1.4 million ahead of projections for this year. He said he does not expect this type of increase to continue because he feels it is related to a shift in monies or one-time adjustments. He said he concurs with the County Administrator’s recommendation for the 2003 budget because it is realistic and is based on the best information that is available at this time. Mr. Squires distributed copies of the final 2002 Tax Rates.

Capital Program
 Information Technology Services

 Mr. Potter said the concept of a Countywide network has been around for a number of years and this Capital Project continues to be redefined over the course of the year. He said he has been involved in this over the last two to three years and has participated in the Time Warner franchise negotiations only on the level of reviewing and analyzing replacement of what currently is the Inet. This is the coaxial cable network connecting various public facilities in the downtown Ithaca location exclusively. Through the franchise process those participating jurisdictions have expressed interest in upgrading that coax system into a more modern fiber network. Mr. Potter said he has served in the capacity of representing County government in the review of that project. As more details emerged in the negotiations, it became apparent for the network to just be used to connect County facilities and replace the current lease arrangements for fiber and connections from Verizon, the costs of the Time Warner project were prohibitive. He said the implementation and ongoing costs of that project were too high. He said he made a recommendation to the ITS Policy Committee that it was not worthwhile for the County to contribute funds for that level of activity for any County government site.

 Mr. Potter said in addition to the redefined project, which has been discussed by the Information Technology Services Committee, the applications most critical for municipalities were also identified. Important County sites would include the ITS Office downtown which is the hub of the County’s network, the Safety Building, and the proposed new dispatch center. The County would continue with its network as it currently has with any of its chosen means to upgrade or change over time. Mr. Potter said if this project moves forward it would be to connect those locations in the towns and villages, as well as particular County sites. Mr. Penniman asked Mr. Potter to check with the towns and villages to see if they still want and need this project. The Committee will be updated as this project progresses and more information becomes available.

Aquifer Study
 Mr. Marx said the County has contracted with U.S.G.S. to perform a study of the aquifers in Tompkins County and the needs assessment that was prepared represents that agreement. He said the Water Resources Council is taking up this item and expects to present information in October to the County. He expects the Council will present information on costs and prioritization.

 Mr. Marx said he recommends the County maintain an active relationship with the U.S.G.S. He said there have been a wide range of dollar figures put forward and it may be an issue of continuing whatever effort that can be afforded for the purpose of the 2003 budget. He referred to the U.S.G.S. and its thirty percent funding match and stated they would like to see the County progress in this area. Ms. Robertson expressed concern over this match and said she does not want to see the County lose this. Ms. Winch said the U.S.G.S. match used to be 65 percent. He believes it is in the County’s best interest to maintain a relationship at some level with them and said the U.S.G.S. is usually flexible and willing to work with municipalities. Mr. Whicher said that perhaps the least expensive way to maintain the match would be to help Caroline and Dryden with their aquifer studies.

Retirement Reserve
 Mr. Penniman said it appears the retirement reserve is being used as a contingency fund for the Fringe Pool, which is a different purpose compared to past years. Mr. Squires said at the end of 2001 the reserve balance was $650,000; however, at one time it was $1 million. He noted it has also been used to supplement the payments the County has made to the New York State Retirement System. Mr. Squires said the State does not require the County to have retirement reserve and does not identify it as a reserve on our financial statements. Mr. Joseph said the Board has previously discussed the subject of whether there should be various reserve accounts to cover many things or whether there should be just one reserve account to cover all expenses.
 No action was taken on this subject.

 Mr. Squires distributed a list of agencies that receive partial funding from the County.

Adjournment
 The meeting adjourned at 3:59 p.m.

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