HomeMy WebLinkAbout07-13-09 Personnel & Finance Committee,~,
1____ PERSONNEL & FINANCE COMMITTEE
Vice-Chairperson Karen White called the July 13, 2009 meeting of the Personnel and
Finance Committee to order at 4:00 p.m.
The following Committee Members were present:
Oliver Davis; Ann Puzzello
Other Councilmember's Present: Derek Dieter; David Varner; Henry Davis; Timothy A.
Rouse; Al "Buddy" Kirsits
Other's Present: Mayor Luecke; Gary Gilot; Rita Kopala; Jeff Parrot; Kathleen
Cekanski-Farrand
Agenda: Bill No. 09-49 -Property Tax Relief LOIT .5%
Bill No. 09-50 -Public Safety LOIT .25%
Bill No. 09-51-CEDIT .2%
In Chairman LaFountain's absence, Vice-Chair Karen White outlined procedures for the
Committee hearing as well as those for the public hearing during the 7:00 p.m. meeting.
First, Chairperson White asked for a motion that for purposes of discussion all three bills
be discussed jointly at both meetings. Secondly, she asked the committee to accept a
motion to send the bills to Council without recommendation. Motions to that affect were
made by Councilmember Oliver Davis, and seconded by Councilmember Varner. All
were in agreement. Procedures for Public Hearing (see attached) Chairperson White
turned to the Mayor for a financial state of affairs picture. Noting this financial crisis
resulting from the passage of HEA 1001-08, leaves the city with $22 million less in
property tax revenue in 2010, possibly more in 2011. While everyone agrees property tax
relief is a good thing the consequence of underfunded local government services needs to
be addressed. The Association of Cities and Towns crafted a financial "home rule"
response, but the state legislature rejected the concept. The state left only one remedy,
the (LOIT) Local Option Income Tax. Recognizing its responsibility to streamline, the
city cut 121 FTE's since 2001. 26 of those in 2009. Other efficiencies include reducing
the number of take home cars, consolidating mowing, cutting a $500 city contribution to
employee flex plans, 5% pay cuts, and 80/20 employee insurance restrictions among
others. In as much as these don't come close to making up for the $22 million loss, the
LOIT's and CEDIT tax increases are advocated. Together, they would provide $16
million, leaving a loss of $6 million to be made up. Council President Derek Dieter
asked how much the cuts already proposed represented in dollars. The Mayor said they
were hard to quantify.
Councilmember White referenced the $3-$4 million in cuts outlined in a handout form
the Controller dated May 6, 2009. Councilmember Rouse said the good work done since
200 needs to be promoted. They Mayor then advocated support for the three tax
increases to address the shortfall. Council President Dieter asked when the taxes would
go into effect. The Mayor said that if adopted by the income tax council by July 31, the
tax would be levied beginning October 1, 2009 with distribution starting January 1, 2010.
Further emphasizing the search for efficiencies the Mayor has solicited expertise from
Memorial and Notre Dame Managemerit teams. Gary Gilot interjected the city was
looking for innovative solutions not just cuts. Henry Davis questioned what tangible was
being done and could TIF and "Rainy Day" funds be used. The Mayor recounted the
already used TIF funds for bonding of the police and fire headquarters. Further, the
Mayor defended the need for keeping a "rainy day" fund balance. This would help cash
flow, the bond rating, and readiness in case of emergencies. Councilmember Varner
while acknowledging the shortfall suggested a better response would be an appeal to the
State Distressed Property Tax Board. This would allow more gradual property tax over
the next 5-10 years. Job creation would stimulate revenues from taxes already levied in a
recovering economy. Tim Rouse disputed the validity of the approach claiming the city's
credit rating needed to be protected. Councilmember Henry Davis questioned whether
the city was asleep at the switch, wondering if efforts to fill the shortfall should have
started years earlier. Councilmember Rouse coming to the Mayor's defense, reminded
Councilmember Henry Davis of the Mayor's advocacy for Hometown Maters.
Councilmember White wondered if the Council should consider an accompanying
resolution that stated the Council would revisit the tax in the future. Councilmember
Kirsits felt as through another resolution would "muddy" the water for tonight's hearing.
HE suggested the advisability of a resolution could be considered at a later date.
Councilmember Oliver Davis wondered if privatizing has been considered. The Mayor
said it had.
There being no further business to come before the committee, Vice-Chairperson White
adjourned the meeting at 4:00 p.m.
Respectfully Submitted,
Karen L. White, Vice-Chairperson
Personnel & Finance Committee