LEGISLATIVE, FINANCE AND ADMINISTRATION COMMITTEE
The Legislative, Finance, and Administration Committee meeting was held on April 23, 2007, at 6:00 p.m. with Chairman Salters presiding. Members present were Mr. Hogan, Mr. Slavin, Mrs. Jones, and Mr. Shevock. Members of Council present were Mr. Carey, Mrs. Russell (arrived at 6:19 p.m.), Mr. McGlumphy, Mr. McGiffin, Mr. Ruane, and Council President Williams.
AGENDA ADDITIONS/DELETIONS
Mr. Slavin moved for approval of the agenda, seconded by Mr. Shevock and unanimously carried.
Purchase of Tasers - Sole Source Vendor
The Police Department submitted a request to purchase 94 Tasers™ and associated equipment for police officers. Captain Sammons, Administrative Division Commander, advised members that the purchase would provide officers with an additional, less lethal, tool to be used during the apprehension of violent, noncompliant and/or resisting offenders. The Tasers™ will add an additional step currently available to the officers prior to utilizing/deploying deadly force. The use of the Tasers™ has statistically reduced the number of injuries officers and offenders alike receive during violent confrontations.
Captain Sammons stated that the Police Department has acquired grant funding to pay for these Tasers™ and the associated equipment. The funding which has been approved will pay for the Tasers™, holsters, training probes, regular probes and also the extended four (4) year warranty for a total of five (5) years of warranty. He indicated that Lawmen Police Supply (1484 East Lebanon Road, Dover, DE 19901) is the only distributor in the State of Delaware who is an authorized sales representative of this project.
Staff recommended approval of the sole source contract with Lawmen Police Supply for Tasers™ in the amount of $104,540.85 to be paid through SLEAF, SALLE/EDIE, and grant funds.
Mr. Hogan moved to recommend approval of staff’s recommendation, seconded by Mrs. Jones and unanimously carried.
Proposed Resolution in Support of the Delaware Civic Center
During a Special Joint Meeting of the City Council and the Legislative, Finance, and Administration, Parks, Recreation, and Community Enhancement, Safety Advisory and Transportation, and Utility Committees held on April 12, 2007, Ms. Carolyn Courtney, Delaware Civic Center Administrator, and Mr. D. Wayne Holden, Vice President of the Delaware Civic Center Corporation, presented a promotional video of the proposed Delaware Civic Center Multi-Purpose Arena. As a result, the City Clerk prepared a Resolution for support of the Delaware Civic Center, similar to the one adopted by Kent County, for the committee’s consideration.
Mr. Hogan requested confirmation that the proposed Resolution serves as a statement of support and in no way commits funding of the City.
Responding, Mr. Slavin stated that although it appears that there is an uncoupling of the issue of support for the Civic Center and support for a separate Business Improvement District Tax, both of these issues were presented simultaneously. He felt it would be difficult to disentangle the two (2) issues, since the manner in which it was presented was how it would be accomplished and how it would be financed. He also felt that members would be placing themselves on “slippery footing” if they begin selecting the easier issues for supporting projects such as this, while turning a blind eye towards the more difficult issues, such as financing.
Concurring, Mr. Ruane stated that it is evident that there is linkage between support for the Civic Center and providing financial support. He noted that the perception is that the City would be contributing funding support for the Civic Center and that the purpose of the Resolution is to approach the General Assembly for additional funding. As a result, he is reluctant to move forward with the adoption of the proposed Resolution. Mr. Ruane also felt that it does not provide the opportunity to acknowledge what the City has already done in support of the Civic Center and relayed his disappointment for it not being included. He advised members that according to the City Assessor, the value of the land that was donated by the City (approximately 43 acres in May 2001) is estimated at $33M. He relayed concern with the City providing support that is not specific.
With regard to the value of the property donated by the City, Mr. DePrima explained that the City Assessor was not aware that the property was once a landfill and is unbuildable land, with restrictions; however, it can be capped for parking. In addition, he stated that the majority of the property (3/4) consists of wetlands and that the City Assessor based his previous estimate on only 20% of the property consisting of wetlands. Mr. DePrima reiterated that the estimate provided to Mr. Ruane by the City Assessor was based on not understanding that the property was once a landfill and not buildable, and that the majority of the property is in wetlands.
Responding to Mr. Slavin, Mr. DePrima stated that the Civic Center is proposed to be built on approximately 7-8 acres of land that the Delaware Civic Center Corporation purchased from the Sheraton Dover. The property that was donated by the City will be used for parking.
Ms. Linda Graham-Parkowski, General Manager of the Sheraton Dover, spoke on behalf of the businesses along the Route 13 corridor. She stressed that no business is opposed to the Civic Center; however, before the Civic Center Resolution is passed, they requested that an updated Pro-Forma for the Civic Center be presented to the City, that a special committee be created comprised of Route 13 business owners or their representative and members of Council, so that there can be realistic discussion about the impacts of the Civic Center on the businesses and/or alternative solutions to funding. She requested that members not endorse the proposed Resolution until these two (2) requests are met, stating that although the business owners support the Civic Center, they want to assure that the Civic Center can fund itself without imposing taxes on the business community.
Mr. Scott Kidner, Delaware Hotel Lodging Association, stated that there truly is a perception that the support of the Resolution does in fact, by defacto, make an endorsement for a new business improvement district tax along the Route 13 corridor. The Delaware Tourism Alliances, an umbrella organization made up of many of the restaurants, hotels, tourist related industries in the State of Delaware, along with the Hotel Lodging Association, have both taken the position of “caution”. He stated that neither of the organizations have relayed opposition to the Civic Center, just a concern regarding the new business improvement district.
Mr. Phil McGinnis, Kent County Association of Realtors, stated that although the organization has not met to form an opinion, the Realtors would be opposed to any tax increase in the form of a business improvement district for an issue such as this. It is hoped that some type of task force would be created to study the issue for revenue enhancement for the Civic Center and that the Realtors would be included in the membership.
Mr. McGlumphy reminded members that the previous Mayor, James Hutchison, was the initial supporter of this project, representing the City. Members of Council were informed that the City’s contribution was the land. He relayed concern that now there is an additional request for funding from the City. It was his recollection that the estimated value of the property was $24M when it was donated by the City to the Delaware Civic Center Corporation.
Mr. Slavin noted that during the last three (3) years, the City of Dover property rate increased as well as the electric rate, the Capital School District has instituted two (2) increases, and that there is another expected rate increase. There will be seven (7) recent increases that we have requested the business community to absorb, as well as the residential community. It was his opinion that requesting businesses and residents to absorb another increase for a special project would not be doing service if the issue were not studied, as has been recommended.
Mr. Slavin moved to recommend that the Council President appoint a Special Committee to study the issue of the City’s support of the Delaware Civic Center and that this committee be charged with looking at a complete financial analysis of the capital operational debt service issues related to the Civic Center. The motion was seconded by Mr. Hogan and unanimously carried.
Mr. Slavin moved to table consideration of the proposed Resolution, seconded by Mr. Hogan and unanimously carried.
Proposed Ordinance Amendment - Appendix C - Downtown Redevelopment, Article IV - Development Incentives, Section 2 - Multiple Story New Construction Projects
Mrs. Townshend, City Planner, presented an amendment to Appendix C - Downtown Redevelopment, Article IV - Development Incentives, Section 2 - Multiple Story New Construction Projects of the Dover Code. She reminded members that during a recent Council Retreat, downtown redevelopment was noted as a priority. As a result, staff reviewed what could be improved upon and determined that the City currently allows for a partial impact fee waiver for multiple story new construction projects in the downtown defined area.
Mrs. Townsend stated that the current ordinance does not necessarily help with the preservation of historic buildings located in the Historic District and in need of extreme repairs. She explained that these types of repairs are very costly. Therefore, staff felt that it would be beneficial to include as an eligible project renovations of existing buildings, in addition to the multi-story new construction projects. This will keep it mixed use to allow for a combination of residential, office, retail, and commercial. Additionally, Mrs. Townshend stated that rather than waiving ½ of the impact fee, the entire City impact fee would be waived. It was staff’s feeling that this waiver would reduce the costs for bringing people downtown, allowing them to put these savings into the buildings necessary for renovations.
Mrs. Townshend advised members that staff will be submitting additional ordinance amendments with regards to downtown redevelopment in the near future.
Responding to Mr. Ruane, Mrs. Townshend stated that the amendment would apply to any structure owner who has not yet paid the impact fees for their renovations. She stated that staff is anticipating renovations on a number of buildings currently being sold. Cost projection estimates related to the proposed ordinance amendment have not been prepared. Responding, Mr. DePrima stated that, as an example, for the Collegian project, there would be an estimated savings in the amount of $12,000. In the scope of the impact fees overall, City-wide, it would not be a large amount. He reminded members that during the Retreat, members of Council indicated a desire for more incentives for downtown redevelopment.
Mr. Hogan moved to recommend adoption of the proposed ordinance amending Appendix C - Downtown Redevelopment, Article IV - Development Incentives, Section 2 - Multiple Story New Construction Projects of the Dover Code (Attachment #1). The motion was seconded by Mr. Shevock and unanimously carried.
Audit Request - Robbins Hose Company
As a result of the Executive Session held by City Council on March 12, 2007, Mrs. Mitchell, Treasurer/Finance Director, obtained a price estimate in the range of $15,000-$20,000 for an independent audit to be conducted of the Robbins Hose Company’s account for fiscal years ended 2004, 2005, and 2006 . The cost for the audit will be paid through the City’s Fire Department budget. The audit will include obtaining reasonable assurance of compliance requirements with the policy and procedures of the Company and the City of Dover, provide written recommendations for establishing and maintaining effective internal controls, disclosing control weaknesses, segregation of duties, and the application of the City appropriations to the respective loans and capital expenses.
Mr. Hogan moved to recommend approval of the audit of the Robbins Hose Company for fiscal years ended 2004, 2005, and 2006, as recommended by the Treasurer/Finance Director. The motion was seconded by Mr. Shevock and unanimously carried.
Presentation - Other Post Employment Benefits (OPEB)
Mrs. Mitchell, Treasurer/Finance Director, reminded members that the Government Accounting Standards Board has issued a new accounting standard (GASB 45) that the City needs to implement on July 1, 2008. In anticipation of the new standards, she stated that the City’s Actuary was requested to update Other Post-Employment Benefit (OPEB) liability. She provided members a summary of the full report and reviewed the results with members.
Mrs. Mitchell explained that the City’s current benefit obligations consist of providing pension benefits upon retirement, and medical benefits for employees while active and also upon retirement. GASB 45 requires the City to recognize expense for actual costs plus to spread the retirement benefits over the employee’s years of service. There is also the requirement of matching principle, thereby requiring the City to match when the services are rendered to the period when the expense is recorded.
Mrs. Mitchell advised members that when the analysis of the OPEB was accomplished in 2005, the City’s liability for future benefits was over $50M and that the new analysis indicates the liability being at $33M. Part of the reason for the decrease is that by setting up the account in an irrevocable trust, a 7.5% interest rate can be used. The other reason is due to the decrease in the medical trend on the Medicare Part B, since the City reimburses the retiree for this expense. There has been a decrease in the Pre-65 medical claims and there has been a change in the method in which the liability is amortized (from a level dollar method to a percentage of payroll method).
Mrs. Mitchell stated that the budget impact is estimated at $1.9M, as follows: General Fund - $1.5M; Water & Wastewater Fund - $152,000; and Electric Fund - $285,000.
Concurring with Mr. Slavin, Mrs. Mitchell stated that, as a result of the decrease in the liability, the City would not be required to put as much money towards the unfunded liability. Mr. Slavin questioned if the City were to maintain the current discipline and continue to fund at the current levels to close the gap, what it would do to accelerate the buy-down of the liability. Responding, Mrs. Mitchell stated that she could not provide specific amounts; however, she stated that it would accelerate the buy-down. Mr. Slavin requested that Mrs. Mitchell give this issue consideration and what the benefits would be to the City if the liability were to be closed. He requested that staff determine if it would be beneficial to buy-down the liability sooner or “lock in” on the current calendar, maintain discipline, and when the City is able to make such adjustments, provide funds for other items or if this matter should continue to be a high priority and the discipline be maintained in order to remove the liability from the City’s books.
Mr. Slavin moved to recommend acceptance of the GASB 45 Other Post-Employment Benefits as of July 1, 2006 Report, as presented. The motion was seconded by Mr. Shevock and unanimously carried.
Update - Strategic Evaluation and Work Plan - Tax Assessor’s Office
During the committee meeting of March 12, 2007, members reviewed a Strategic Evaluation and Work Plan 2007-2011 Report of the Tax Assessment Office. Members were advised that the City Charter requires an assessment every three (3) years, the Dover Code establishes the requirement for the independent reassessment and staff’s valuation and assessment, and sets forth the 2010 deadline. Responding to Mr. Ruane, Mr. Capuano, Tax Assessor, suggested that before a Charter amendment is requested, there be a plan developed. Acting Chairman Slavin requested that staff provide an update on the plan during the second committee meeting in April. It was also requested that the plan include consideration of delinquent taxpayers and the provisions that were previously adopted by Council and that the plan include the long-term costs for salaries, benefits, etc. for hiring additional staff personnel for the Tax Assessment Office.
Mr. Capuano advised members that the Cole Layer and Trumble (CLT) Software issue is on-going; there has been a “band-aid” approach for its repair. He stated that this cannot be evaluated until such time as it has been repaired so that an evaluation can be accomplished. Staff is currently seeking replacement or repair of the CLT software. The repair could cost between $15,000-$20,000, which is to occur in May. He indicated that there has been much progress on the realty transfer tax procedures in the office. There are now 27 basic steps, which can be audited. There is also a new Administrative Assistant in the Tax Assessment Office.
Mr. Capuano stated that a series of ordinances are being discussed to close some of the loop holes, such as the omitted assessment. The City currently has no basis to go back and charge companies that have not paid taxes in the past three (3) to five (5) years. Once the ordinances have been developed, they will be brought to the committee for their review and recommendation to Council.
Mr. Capuano stated that April has been a very busy month, with the senior citizens filing their tax exemption. He advised members that there are 600 applicants this year as compared to 359 last year.
Mr. Slavin moved for adjournment, seconded by Mr. Shevock and unanimously carried.
Meeting Adjourned at 7:01 P.M.
Respectfully submitted,
Reuben Salters
Chairman
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Attachments
Attachment #1 - Proposed Ordinance Amending Appendix C - Downtown Redevelopment, Article IV - Development Incentives, Section 2 - Multiple Story New Construction Projects