LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE

The Legislative, Finance, and Administration Committee meeting was held on January 10, 2011 at 6:01 p.m. with Chairman Leary presiding. Members present were Mr. McGiffin, Mr. Salters, Dr. Jones, and Mr. Shevock. Members of Council present were Mr. Bonar (arrived at 6:20 p.m.), Mr. Hogan (departed at 6:11 p.m.; returned at 6:17 p.m.), 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.

Local Area Network (LAN) Analyst - Information Technologies (IT) Department

Mr. Anthony DePrima, City Manager, reviewed a request to recruit for a Local Area Network (LAN) Analyst for the Information Technologies (IT) Department. He noted that Mr. Andy Siegel has assumed the position of Acting IT Director; however, Mr. Siegel continues to serve as a LAN Analyst. Mr. DePrima explained that the department currently has one (1) additional employee serving in this capacity.

Responding to Mr. McGiffin, Mr. DePrima stated that it was decided to postpone filling the IT Director position until FY 12 in an effort to conserve funds. He stated that if someone other than Mr. Siegel is ultimately selected to fill the position of IT Director, there will be a total of three (3) LAN Analyst positions.

In response to Mr. Shevock, Mr. DePrima stated that the Request to Recruit Form should have included budgetary details and assured members that funds are available in the budget for the position.

Mr. McGiffin moved to recommend approval of the request to recruit for a Local Area Network (LAN) Analyst for the Information Technologies Department, as recommended by staff. The motion was seconded by Mr. Shevock and unanimously carried.

Presentation - Public Financial Management - Final Results of 2010 Electric Revenue Bond Refunding (Geoffrey Stewart)

Mrs. Donna Mitchell, Controller/Treasurer, introduced Mr. Geoffrey Stewart, Senior Managing Consultant, Public Financial Management (PFM). She stated that Mr. Stewart serves as the City’s financial advisor and assists with all of the City’s bond financing.

Mr. Stewart reviewed a Financial Advisory Memorandum, which provided information regarding the very successful November 2010 refinancing of the City’s outstanding electric revenue bond debt. He reminded members that the City had approximately $11.4M of outstanding bonds that were issued to build assets in the electric system. The average interest rate on the outstanding loan was 5%. Mr. Stewart stated that new bonds were issued to pay off the old bonds at a substantial savings, noting that the true interest cost is 1.23%. In terms of dollars and cents, he stated that, in gross, over the life of the remaining loan, which extends until 2016, the City will realize over $3M less interest in debt service savings and the net present value savings for the City will be over $1M.

Responding to Mr. Ruane, Mr. Stewart stated that the electric utility is rated Aa2 by Moody’s and A+ by Fitch. He stated that he could provide members with details regarding the metrics that are reviewed and how the City’s utility performance compares to its peer groups. He suggested that the City exercise caution by maintaining healthy reserve levels and noted that the transfer of funds to the General Fund is a metric that is considered when ratings are established.

Mr. Salters moved to recommend acceptance of the Report on the Final Results of the 2010 Electric Revenue Bond Refunding submitted by Public Financial Management. The motion was seconded by Mr. Shevock and unanimously carried.

Authorization to Purchase - Vehicle Computers/In-Car Camera Systems

Police Chief James Hosfelt submitted a request to purchase vehicle computers/in-car camera systems as an allowable Sole Source Procurement. He indicated that a different configuration of computers, in-car camera equipment, and associated parts/accessories is required in order to fit within the smaller space constraints of new and future police vehicles. Chief Hosfelt explained that the new equipment will minimize the negative impact of vehicle space constraints on officer safety and reduce operational and maintenance costs for the City in the long term.

Police Chief Hosfelt explained that a combination of budget and grant funds will be utilized for this purchase. He noted that budgeted funds programmed for annual recurring mobile data computer (MDC) replacements ($23,400.00), as well as funds for vehicle equipment replacement ($11,400.00), will be combined with available Justice Assistance Grant funding ($37,616.10) to complete this purchase (total of $72,416.10). In addition, he stated that the Department would like to continue to purchase these systems in future years to replace the current configuration of equipment in vehicles through the normal vehicle replacement cycle. Chief Hosfelt noted that, as the process continues, savings in maintenance costs will be realized, as the number of vendors needed to provide maintenance will be minimized.

Staff recommended approval of the request from the Police Department to purchase the new configuration of computers and in-car cameras for its vehicles, as well as the continued purchase of these items in future years as part of the normal, recurring replacement cycle.

Mr. Salters moved to recommend approval of staff’s recommendation for the expenditure of $72,416.10 to purchase the vehicle computers/in-car camera systems, seconded by Mr. Shevock and unanimously carried.

Accounting Procedures for Federal Forfeiture Funds

During their meeting of August 23, 2010, members were provided a briefing regarding the Police Department’s Criminal Investigation Fund, which was being maintained by the Police Department without being accounted for in the City’s records. Members were assured that the Police Department would work with the Finance Department to transfer all records and documentation to bring the Fund under the control of the Finance Department. Members accepted the Criminal Investigation Fund Report, as delivered by the Police Chief, and anticipated an update when the administrative adjustments were completed. City Council approved this action during their Regular Meeting of September 13, 2010.

Mrs. Donna Mitchell, Controller/Treasurer, reported that Chief Hosfelt and the Police Department staff worked cooperatively with the Finance Department to close out the separate bank account and deposit the cash balance into a City account, which is currently used for Law Enforcement Grants. She explained that all activity is now being processed through the City’s accounting system in compliance with all policies and procedures. Mrs. Mitchell noted that the previous bank account was being reconciled, financial reports were being prepared by the Police Department, and controls were in place to prohibit unauthorized spending per the Department’s internal policies; however, these activities were not shared with anyone outside of the Police Department. She advised members that Chief Hosfelt agreed to a compliance review conducted by the City auditor, Faw, Casson &  Company.

Mrs. Mitchell stated that staff recommended that annual budgets be established for Police Grants and all other Criminal Investigation Funds and that all estimated receipts and planned disbursements be adopted through the budget process and accounted for in the same manner as all other funds to insure transparency and accountability. She explained that there was a general understanding that, through the use of the City’s budgeting and financial systems, all policies and procedures would be adhered to. Mrs. Mitchell noted that, until such time as a budget can be established, the Finance Department will issue a summary of activity for these funds in conjunction with the Finance Department’s monthly report.

Dr. Jones moved to recommend acceptance of the accounting procedures for the Federal Forfeiture Funds, as recommended by staff. The motion was seconded by Mr. Salters and unanimously carried.

Proposed Ordinance #2010-01 - Chapter 102 - Taxation, Article I - In General, Section 102-1 - Annual Valuation and Assessment and Proposed Companion Ordinance #2011-02 - Chapter 102 - Taxation, Article IV - Abatement of Real Estate Taxes, (New) Section 102-117 - Construction of New Facility

Ms. Cheryl Russell, Tax Assessor, reviewed proposed Ordinance #2010-01, amending Chapter 102 - Taxation, Article I - In General, Section 102-1 - Annual Valuation and Assessment of the Dover Code, and proposed companion Ordinance #2011-02, amending Chapter 102 - Taxation, Article IV - Abatement of Real Estate Taxes, (New) Section 102-117 - Construction of New Facility.

During their meeting of January 11, 2010, members were provided Proposed Ordinance #2010-01, which would revert the ordinance to its original intent and strike out Mayor Carey’s amendments, which were approved by City Council on December 14, 2009. The purpose of the amendment was to follow the recommendations resulting from a June 2008 audit performed by Mr. Frederick Chmura and Mr. William Ford of the International Association of Assessing Officers (IAAO). The Committee recommended that the City Assessor’s Office, the City Manager’s Office, and the real estate community meet to attain a workable solution within 90 days. This recommendation was approved by City Council during their Regular Meeting of January 25, 2010.

Ms. Russell advised members that, after several meetings with the real estate community, a consensus was reached regarding the recommendation for approval of Proposed Ordinance #2010-01, with the stipulation that a companion Ordinance, #2011-02, be adopted. She explained that Proposed Ordinance #2011-02 would allow for an application for abatement of real estate taxes.

Staff recommended adoption of Proposed Ordinances #2010-01 and #2011-02.

In response to Mr. Ruane, Ms. Russell estimated that there are currently four (4) or five (5) commercial projects that would be eligible for the abatement; however, she anticipated their completion prior to July 1, 2011.

Responding to Dr. Jones, Ms. Russell stated that an abatement would apply only to new construction on the property.

Mr. McGiffin moved to recommend adoption of Proposed Ordinances #2010-01 (Attachment #1) and #2011-02 (Attachment #2). The motion was seconded by Mr. Shevock and unanimously carried.

By unanimous consent, the meeting adjourned at 6:35 p.m.

Respectfully submitted,

Thomas J. Leary

Chairman

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Attachments

Attachment #1 -   Proposed Ordinance #2010-01 - Chapter 102 - Taxation, Article I - In General, Section 102-1 - Annual Valuation and Assessment

Attachment #2 -   Proposed Ordinance #2011-02 - Chapter 102 - Taxation, Article IV - Abatement of Real Estate Taxes, (New) Section 102-117 - Construction of New Facility