LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE

The Legislative, Finance, and Administration Committee meeting was held on January 24, 2011 at 6:01 p.m. with Chairman Leary presiding. Members present were Mr. McGiffin, Mr. Salters, and Dr. Jones. Mr. Shevock was absent. Members of Council present were Mr. Bonar, Dr. McGlumphy, Council President Hogan, Mrs. Williams, and Mr. Ruane. Mayor Carey was also present.

AGENDA ADDITIONS/DELETIONS

Mr. McGiffin moved for approval of the agenda, seconded by Dr. Jones and unanimously carried.

Review and Recommendation - Filling of Critical Positions

During their meeting of February 23, 2009, members recommended approval of a Hiring Freeze for Fiscal Year 2008-2009, but to allow the hiring of critical positions through the review and approval of the Legislative, Finance, and Administration Committee and City Council. It was suggested that there be a “standing” agenda item to consider the filling of critical positions and, if there were no positions to consider, the item could be removed.

Mr. Leary noted that there were no critical positions to be considered; therefore, no further action was required.

Review of Council Memberships (Tabled by Committee on 12/13/2010)

During their meeting of December 13, 2010, members reviewed Council Memberships. After much discussion, members tabled the matter to allow the opportunity for the Central Delaware Chamber of Commerce and other organizations to address members regarding this issue.

Mr. McGiffin moved to remove the matter from the table, seconded by Mr. Salters and unanimously carried.

Mr. McGiffin reiterated his concerns regarding utilizing tax dollars for membership dues to organizations that engage in overtly political activity. He reminded members that, during the budget and election seasons, he received communications that were clearly political in nature. As a result, Mr. McGiffin felt that members should be thoughtful and deliberative in determining which organizations the City should become involved with as a “dues paying member.” He indicated he believed that the relationships between the City of Dover and the local and State Chambers of Commerce are positive. However, he stated he was not convinced that these relationships require the City to be a dues paying member and restated his concerns regarding paying dues to organizations that engage in overtly political activity.

Mr. Bonar stated that, although he understood some of the concerns relayed by Mr. McGiffin, he felt confident that the benefits of being a dues paying member of these organizations far outweigh the inconvenience of receiving political notifications. As mentioned during the previous meeting, Mr. Bonar reminded members that the City receives far more benefits from being a member of these organizations than the cost of the membership dues. As an example, he stated that the membership dues, in the amount of $875 per year for the Central Delaware Chamber of Commerce, are minimal compared to the untold thousands of tax dollars and revenues that the businesses associated with this organization have contributed to the community over past years. It was his recollection that the late Mayor Crawford Carroll initiated the City’s membership with the support of previous Councils. It was Mr. Bonar’s hope that the organizations would consider the concerns relayed by Mr. McGiffin, should the City continue its memberships, and limit Council’s involvement and/or exposure to any type of political efforts in the future.

Mr. Ruane noted the receipt of information from the Chamber of Commerce outlining the efforts made by the Chamber that correspond and coincide with the City’s purposes. He advised members of his participation with the Chamber as a member of its Transportation Committee and the benefits that this has provided to the City of Dover, as well as to other municipalities. Mr. Ruane relayed support for the City continuing its memberships.

Dr. McGlumphy indicated his opposition to discussing this matter; however, since the issue was presented, he suggested that there be a review of all memberships throughout the City, including all 35 City departments, to determine if they were political in nature. He noted that the memberships being considered are only those included in the City Council’s budget. Dr. McGlumphy stated that he preferred overt political activity to covert political activity and indicated his support for continuing the memberships.

Mrs. Williams indicated she shared the concerns and dismay of Dr. McGlumphy and suggested that members of Council should receive such political information and viewpoints.

Council President Hogan stated that the concerns expressed are not related to the amount of dues. He relayed concern with utilizing taxpayer money for issues that involve political campaigning. He stated he wished the City to continue with the Chamber membership; however, he requested that the Chamber distance the City from political issues.

Mr. Charles “Chuck” James, 1212 Fawn Road, Wilmington, Representative of the State Chamber of Commerce, advised members that the Chamber is an organization of community businesses throughout the State whose primary purpose is to represent and promote businesses. Mr. James assured members that the Chamber values the opportunity to connect the City with businesses statewide and noted that there are 88 businesses located in Kent County, which employ approximately 9,000 individuals. Mr. James reviewed the various functions, events, and meetings held by the Chamber. He explained that the Chamber represents the interests of diverse businesses that vary in their political affiliations, and it was his opinion that there is very little overtly political communication from the State Chamber; however, he stated that there is communication advocating for business.

Ms. Judy Diogo, Central Delaware Chamber of Commerce, 435 N. DuPont Highway, explained that the common goals of all the organizations are to develop and maintain a healthy environment, to help businesses grow, and develop new businesses. She also felt that another shared goal is to assure good employment for the residents of Kent County. Mrs. Diogo reviewed several joint projects shared by the Chamber and the City. In regards to political messages, she stated that those who do not wish to receive broadcast e-mails can simply “click” on the small button located on the bottom of the screen to unsubscribe.

Mr. James Hutchison, 15 Gleneagles Court, felt that memberships in the Central Delaware Chamber of Commerce and State Chamber of Commerce were some of the most important affiliations of the City. He explained their important role in assisting the City in making major decisions regarding businesses. Mr. Hutchison noted that the Central Delaware Chamber of Commerce plays an important role in maintaining the relationship between the City and the Dover Air Force Base. He urged members to continue memberships with these organizations.

At the request of Mr. Bonar, Mayor George Wright, 31 Locust Street, Smyrna, Representative of the Delaware League of Local Governments, explained the benefits of membership with the League of Local Governments. He noted that the League serves as an advocate for legislation submitted to State legislators and assisting municipalities with Community Development Block Grant (CDBG) funding, the Community Oriented Policing Service (COPS) program, etc. Mayor Wright stated that much of the League’s work is “behind the scenes,” noting that the League has a full-time lobbyist. Responding to Mr. Bonar, Mayor Wright stated that if the City were to engage a full-time lobbyist, the cost would be approximately $20,000.

Mayor Carey relayed his support for memberships in all the organizations, explaining the importance of communication between the City and its customers, such as businesses, to keep costs at a minimum, to offer services, and to promote the expansion of jobs and businesses. He noted that the memberships under discussion are of great value in assisting the City with these endeavors.

Mr. Bonar stated that a veteran legislator once confided to him that, whether one wishes to admit it or not, all actions taken at Legislative Hall and in Council Chambers throughout the State, are political.

Mr. McGiffin indicated that he did not intend to offend other members and assured them that he had no secret motives for raising this issue. He noted he was not disturbed by the receipt of emails with which he did not necessarily agree; however, he was concerned that the City belongs to organizations engaging in overtly partisan political activity, which he felt was wrong. Noting that a majority of Council supports these organizations, Mr. McGiffin stated that he would not suggest the elimination of the membership dues from Council’s budget.

Dr. Jones moved to recommend that the City Clerk be authorized to include membership dues in City Council’s budget, as follows: 1) League of Local Governments - Annual Membership Renewal - $ 6,000; 2) National League of Cities - Annual Membership Renewal - $3,258; 3) Delaware State Chamber of Commerce - $856; 4) Central Delaware Chamber of Commerce $875; and 5) Miscellaneous (magazine subscriptions, etc.) - $200, totaling $11,198. The motion was seconded by Mr. Salters and carried unanimously.

Statistics on Residency of City of Dover Employees

During their meeting of October 25, 2010, members felt that it was critical to obtain statistics relating to the residency of current employees and requested that staff provide this information at a future meeting. Mr. Anthony DePrima, City Manager, provided members with the residency statistics for City of Dover employees and noted that 88 employees (24%) reside within City limits and 284 employees (76%) live outside City limits.

Responding to Mr. Salters, Mr. DePrima stated that the main consideration with regards to employees who reside outside of the City limits would be the difficulty of getting to work during a large storm; however, this has never impeded the City in providing services. To his knowledge, the only municipality in Delaware that requires residency is Wilmington, where employees are required to move within City limits within seven (7) years of employment.

Mr. Ruane stated that this is a “hot” topic and very controversial on a national level. He indicated that, in researching this matter, he discovered a recent trend to reverse residency requirements for those municipalities that have them; however, noted that the requirements continue to prevail in many jurisdictions. Mr. Ruane stated that there are arguments for the continuation of residency requirements. He explained it has been suggested that if an employee serves as an administrator or inspector who imposes regulations, the employee should be subject to the regulations which they enforce. In addition, Mr. Ruane advised members that resident employees might have a better understanding of neighborhood problems. He stated that off-duty police officers living within City limits would be better able to confront crime and provide neighborhood security, although he noted that, nationally, police organizations are opposed to this requirement.

Mr. Ruane indicated that, although he did not propose any action at this time, he was surprised by the number of City employees who reside outside City limits and requested that they consider the benefits of living in the City.

Mrs. Williams stated that, although she concurred with many of the comments made by Mr. Ruane, one of the benefits of living outside City limits is avoiding double taxation (paying both City and County property taxes).

Mr. McGiffin moved to recommend acceptance of the Statistics on Residency of City of Dover Employees Report, as presented. The motion was seconded by Mr. Salters and unanimously carried.

Review of City Reserves and Policy Requirements

Mrs. Donna Mitchell, Controller/Treasurer, reviewed the schedule of City Reserve Account Balances as of December 31, 2010. She noted that the schedule reflects budget balances, as included in the most recent budget amendment, for the operating and capital project funds. Mrs. Mitchell advised members that some of the estimated budget balances for the utility capital project funds are higher than the policy requirement; however, in most instances, this is a result of having a five (5) year Capital Investment Plan (CIP) and multiple year projects. Therefore, she stated, the funds may be planned for use next year for a multi-year project.

Mrs. Mitchell relayed concern regarding the calculation of the budget balance requirement for the Electric Revenue Fund. She reminded members that the policy requires the budget balance to equal at least 8% and no greater than 12% of operating revenues. Mrs. Mitchell stated that since the City is now utilizing the Power Cost Adjustment to increase/decrease the base revenue, the increase or reduction will be included in the budget balance calculation, which would have the potential to create substantial increases or decreases in the budget balance requirement from year to year. She indicated that staff prefers to keep the City’s cash flow balances levelized for paying vendors. Mrs. Mitchell stated that this would also assist the City in managing funds in years in which the power cost adjustment (PCA) may not match the year in which the power supply cost was incurred. For example, she stated that if last year’s power supply came in lower than budgeted and those funds were put in the reserve for the following year’s PCA, yet the following year, the power supply was higher than the prior year, City’s cash flow requirements might be impacted.

Staff recommended acceptance of the reserve analysis.

Responding to Mr. Bonar regarding reimbursement from the Federal Government for the snowstorm that occurred in February 2010, Mr. Scott Koenig, Public Services Manager/Director of Public Works, indicated that the second reimbursement request, in the amount of $196,000, was signed last week. He stated that the City has signed its portion of the agreement, which then will go through the accounting system with the Delaware Emergency Management Agency (DEMA) for issuance of the disbursement. He advised members that there are a total of four (4) to five (5) disbursements, totaling $250,000 and that the City has received approximately $1,400 to date.

In response to Mr. Ruane, Mrs. Mitchell explained that if a budget balance exceeds the maximum amount according to City policy, the excess is to be used at the discretion of Council. She concurred that the use of excess funds must be approved by Council; however, she noted that there have been emergency situations involving City operations when the use of funds has been accomplished and then submitted to Council as a budget amendment.

Mr. McGiffin moved to recommend acceptance of the reserve analysis, as presented by staff, and that with respect to the Electric Revenue Fund, the reserve calculation, based upon electric revenue, be done irrespective of the Power Cost Adjustment (PCA). The motion was seconded by Mr. Salters and unanimously carried.

By unanimous consent, the meeting adjourned at 6:54 p.m.

Respectfully submitted,

Thomas J. Leary

Chairman

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