COUNCIL WORKSHOP
A Council Workshop was held on January 7, 2008 at 7:00 p.m. with Council President Williams presiding. Council members present were Mr. Leary, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mr. Hogan, Mr. Salters, and Mr. Ruane.
Council staff members present were Mrs. Mitchell, Mr. DePrima, Mrs. McDowell, and Mayor Carey.
AGENDA ADDITIONS/DELETIONS
Mr. Hogan moved for approval of the agenda, seconded by Mr. McGlumphy and unanimously carried.
REVENUE MANUAL REVIEW AND NEW REVENUE SOURCES
Mr. DePrima, City Manager, stated that the purpose of the workshop is to review the City’s Revenue Manual and new revenue sources, explaining that this is the first part of the budget process. Members were provided the draft FY2008 Revenue Manual as well as proposed new revenue sources.
Mrs. Tieman, Senior City Administrator, advised members that the purpose of the Revenue Manual is to assist City Council, staff, and the public with understanding and tracking all of the various revenue sources for the City. She reviewed the manual, noting the inclusion of the following: 1) a list of top revenue sources over the past five (5) years; 2) guidelines as to how often the manual should be updated and when different revenues should be reviewed; 3) an inventory of all revenue sources with detailed information on rates, dates established, last reviewed, projection method, collection method, and benchmarks; and 4) a list of potential new revenue sources that staff has collected from various sources (seven (7) of the revenue sources are detailed and will be presented to Council for their review in the near future). Mrs. Tieman indicated that the entire inventory of revenue sources was reviewed by departments and, as a result, there are 16 suggested increases. These will also need to be presented to Council for their review in the near future for possible inclusion in the FY2009 Budget.
Referring to the list of top revenue sources (page 2), Mr. Hogan relayed his concern with those items that are listed as revenue for the General Fund that are actually revenue for another fund which are then transferred to the General Fund. He explained his desire for these types of revenues (revenues for other funds that are transferred) to be distinguished separately.
Responding to Mr. Ruane regarding the revenue generated from the sale of Bonds, Mrs. Mitchell, Finance Director/Treasurer, stated that the sale of Bonds would be reflected as a debt, not revenue. Mr. Ruane expressed his opinion that in an effort to provide fairness to the public and Council, there should be an indication of capital revenue sources for the purpose of capital projects, such as the sale of bonds, grants, etc. He indicated a desire for there to be a distinction between operating revenue and capital revenue. Responding, Mrs. Mitchell stated that money obtained for capital projects from reserves or bond proceeds is not considered revenue. She explained that such money is a cash transfer from some other financing source and is not reoccurring earned income, and that revenue is income that is earned by providing a service. Understanding, Mr. Ruane suggested that the manual include an explanation that would allow the public to know that the City could not operate without these other monetary resources.
In response to Mr. McGlumphy regarding the increase in Electric Fund revenues throughout the years, as depicted on the top revenue resources listing, Mrs. Tieman reminded members that in FY2006, there was a 55% increase in wholesale power, forcing the City to increase the electric rates, which caused electric revenue to increase.
Mr. Ruane noted that there is no indication that the State PILOT Fund Revenue, eliminated from the revenue indicators for Safety Expenses as noted on page 3 (section 4, paragraph b), has been assigned to the Library Reserve. Referring to page 4, which provides estimated amounts of revenue indicators for FY2008, Mrs. Tieman assured members that the State PILOT Fund Revenue has been assigned to the Library Reserve and suggested that paragraph “f” be added to section 4 (page 3) to indicate this assignment. Mr. DePrima explained that the revenue indicators are provided as a guide for the City Manager in the preparation of the budget and are based on historical averages. Mr. Ruane suggested that there are certain services provided by the City that should be fully funded by the users, such as Planning and Inspections, adult recreation, etc.
Mr. Ruane suggested that staff include a history of property tax rates.
Mrs. Tieman advised members that on page 21, Rental Dwelling Units, the proposed rate of $180 for Apartment Buildings should be $108 and that members will be provided a corrected page.
In reviewing the Future Potential Revenue Sources, Mrs. Tieman explained that they have been provided in an effort for staff to obtain the desires of Council. She stated that most of these sources would require additional research. Mr. Ruane noted that in previous years, there were descriptions for the proposed revenue sources and suggested that staff provide a brief explanation of these sources. Also, referring to the survey results dated February 10, 2003, Mr. Ruane questioned why some sources have been eliminated, such as slot revenue. Council President Williams suggested that Mr. Ruane meet with staff to review the survey results.
Beginning with page 95, Mrs. Tieman reviewed seven (7) new proposed revenue sources and reminded members that three (3) of the new revenue sources have already been considered by Council. She advised members that the proposed rates have been or will be developed to recover costs associated with providing the service.
Mr. Ruane requested information from other municipalities with regards to casino revenue.
In reference to the Concession Permits, Mr. Hogan suggested that the same consideration be given to one-day permits for non-profits as seasonal permits. Referring to the Water/Wastewater Plan Reviews, he questioned the logistics for charging only “$0.03 x length” for storm sewer lines greater than 5,000 feet, which, at 5,000 feet, would total only $150, when 1,000 to 5,000 feet would total $450. Responding, Mr. Koenig, Public Services Director, stated that the rates are incremental, explaining that $150 would be charged for the first 1,000 feet, an additional $450 for 1,000 to 5,000 feet, and then $0.03 x length for the line greater than 5,000 feet.
Mr. Koenig reviewed and explained the fee increases proposed for licenses, inspections, permits, and applications (beginning on page 11). He provided members with four (4) new business categories for inclusion in the business license list, as follows: 1) ATM Machines (off bank premises) - $49; 2) Fitness Trainer - $67; 3) Home Day Care - $25; and 4) Real Estate Development Corp. - $333. He advised members that these are businesses known to be currently operating in the City limits that do not specifically fall into a current category. Mr. Koenig noted that on page 17, Pubic Occupancy Permit, the date of last fee change should be 11/22/1993 and the last date reviewed should be 11/14/2007.
Mr. Slavin relayed concern with the inability to consider any new revenue resources without details regarding the revenue forecast, which is to be provided at the end of January, to determine where the traditional revenue streams are and how they are doing. He suggested that staff prepare an analysis with different scenarios that would provide examples of the cost of the proposed increases to the average business or a new business coming to the City. He relayed his concern that people are beginning to feel that there are too many fees and suggested that the City create a balance by determining if property taxes should be used to offset costs in order to make costs more predictable. With regards to comments that user-based services should pay for themselves, Mr. Slavin stated that there are certain services where this is clear and valid; however, it was his opinion that this would not be practical for other services.
Mr. Ruane questioned the declining revenue associated with Municipal Street Aid and if staff has contacted the League of Local Governments. Responding, Mr. DePrima stated that a few years ago there was a cut in the revenue distributed for Municipal Street Aid. He explained that a formula is used for distributing this money to municipalities based on total street mileage and population. He stated that some communities have grown faster than Dover and, as a result, these communities have received an increase in Municipal Street Aid, which results in a decrease for other communities such as Dover.
Mr. Ruane reiterated the need for the City to work with the League of Local Governments on obtaining state revenue sharing.
Referring to Taxi Licenses, page 46, Mr. Hogan noted that there is a conflict between Sections 118-54 and 26-35 of the Dover Code and suggested that staff submit an ordinance amendment to correct this matter.
Mr. Hogan moved for adjournment, seconded by Mr. McGiffin and unanimously carried.
Meeting Adjourned at 8:33 P.M.
TRACI A. McDOWELL
CITY CLERK
All orders, ordinances, and resolutions adopted by City Council during their Workshop Meeting of January 7, 2008, are hereby approved.
CARLETON E. CAREY, SR.
MAYOR
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