LEGISLATIVE, FINANCE AND ADMINISTRATION COMMITTEE
The Legislative, Finance, and Administration Committee Meeting was held on March 14, 2005, at 4:00 p.m. with Chairman Salters presiding. Members present were Mr. Hogan, Mr. Slavin, Mr. Shevock, and Mr. Shelton (arrived at 4:10 p.m.). Members of Council present were Mr. Carey, Mr. Pitts (arrived at 4:14 p.m.), Mr. Sadusky, Mr. Ritter (arrived at 6:00 p.m.), Mr. Ruane, and Council President Williams. Mayor Speed was also present.
AGENDA ADDITIONS/DELETIONS
Mr. Hogan moved for approval of the agenda, seconded by Mr. Slavin and unanimously carried.
Charter Review of the Reincorporation and Conflict with State Law and/or City Policies and Procedures - Adoption of Resolution Requesting General Assembly to Amend City Charter (Amendment to Section 52 of City Charter - Alderman; and Section 53 of City Charter - Police)
During their Regular Meeting of March 7, 2005 (rescheduled from February 28, 2005), City Council reviewed the committee’s recommendation for approval of the proposed Charter changes for the Reincorporation of the City Charter with the stipulation that Section 52, Alderman, remain intact. After much discussion regarding Section 52, Alderman, of the City Charter, members of Council referred the matter back to the committee and requested that Deputy City Solicitor Pepper attend the meeting to allow for due diligence in understanding this issue.
Deputy City Solicitor Pepper referred to his letter, dated February 1, 2005, that was previously submitted providing an explanation of his position on the elimination of the Alderman’s Court. Although it was his opinion that the Alderman’s Court should be retained and made active, in light of the recent legislation, he indicated that Section 52 would require an amendment to provide for the appointment of the Alderman to be accomplished by the Governor and confirmed by the Senate rather than City Council.
Responding to Mr. Salters, Mr. Pepper advised members that there have been at least three (3) cases over the last 10 years when it was difficult for the City to received just results from the Justice of the Peace Court. He felt that the City should retain the Alderman’s Court if, for no other reason, than to provide an enforcement mechanism that will be just, efficient, and speedy for resolving the City’s building code and property maintenance code problems. Mr. Pepper explained that the Justice of the Peace Courts have many other matters that come before them to consider without having the responsibility of learning the intricacies of the City’s building and property maintenance codes.
Mr. Hogan noted that no one has been able to determine when the Alderman Court for the City of Dover was last utilized. Mr. Pepper indicated that there was a decision in 1961 that refers to the Dover Alderman. It was Mr. Hogan opinion that the few cases that have been cited when the Justice of the Peace Court did not support the City of Dover would not warrant the need to resurrect the Alderman Court; therefore, he suggested that Section 52 of the Charter be eliminated.
Concurring with Mr. Hogan, Mr. Ruane also noted the additional expenses that would be incurred by the City if the Alderman Court was re-activated. He alluded to copies of Alderman Court Task Force Reports that he provided to members and explained that it is evident that the majority of the Alderman Courts that are active are not self-supporting. Mr. Ruane reiterated the grave concern and interest of Representative Wagner regarding the constitutionality and legitimacy of the Alderman Courts and reminded members that Representative Wagner has offered to convene a meeting with the Assistant Chief Magistrate and in the future to assure an understanding of each jurisdiction. She even suggested the possibility of the Magistrates participating in training sessions and conversations with the City Solicitor’s Office as well as the City’s Inspectors so that the City can be assured of an effective, fair, just, and swift justice from the J.P. Courts. Mr. Ruane urged members to consider this as an alternative in lieu of re-establishing the Alderman Court.
In response to Mr. Hogan, Mr. Pepper stated that during his 15 years as Deputy City Solicitor, he is only aware of one (1) occasion when the Alderman for the City of Dover considered a case, which involved an election matter - a ruling on the candidacy of T. Magoo Dorcy. He suggested that a decision be made as to whether the City would use an Alderman Court or not and if not, he suggested that Section 52, Alderman, be eliminated. Noting that there would be expenses involved in setting up the Court and its maintenance, although enforcement of the code would be streamlined, he questioned how much the City would gain. It was his opinion that members should not maintain Section 52 “just in case the City needs to use it in 20 years”. If the City is going to spend the political capital trying to maintain the Court, then Mr. Pepper suggested that the City should activate the Alderman Court.
Mr. Slavin stated that although he felt assured that with the communications and training, the City would be well represented by the J.P. Courts, he questioned if the City would be losing more of its ability to govern itself by eliminating the Alderman and relayed concern that it would set a precedent of future matters being taken from the City to be managed by the State.
Responding, Mr. Pepper felt that such a concern is legitimate and that the trend is present. As an example, he reminded members of the recent land decisions that have traditionally been delegated to the local jurisdictions that have been assumed by the State. He stated that it is apparent that some of the sovereignty that was granted to local jurisdictions has been gradually diminishing.
Mr. Hogan moved to recommend that Section 52 be deleted, seconded by Mr. Salters.
In response to Mr. Salters, Mrs. Green stated that there would be no change in her position or current responsibilities if she were no longer appointed to serve as Alderman, explaining that areas of the Charter which refer to the Alderman would be changed to City Clerk.
Mr. Slavin suggested that the motion include a request that the Council President consult with the bodies affected, such as J.P. Court representatives and Representative Wagner, prior to the committee’s recommendation being presented to Council for final action.
Mr. Hogan agreed to modify his motion to request that the Council President meet with those local representatives she feels necessary to discuss this issue. The seconder, Mr. Salters, concurred.
The motion recommending that Section 52, Alderman, of the City Charter be deleted and that the Council President meet with local representatives to discuss this issue prior to the Regular Council Meeting scheduled for March 28, 2005, was unanimously carried.
Members also considered a proposal submitted by Police Chief Horvath to amend Section 53, Police, of the City Charter. The proposed amendments would address conflicts with State Law and/or City policies and procedures.
Referring to the first sentence of Section 53, Mayor Speed explained that by adding “and mayor” recognizes the Mayor’s authority to veto Council action and that by eliminating “but they shall be chosen and appointed by the Mayor”, recognizes that although the Mayor appoints the Chief of Police, the police officers are the responsibility of the Chief.
It was Mr. Ruane’s opinion that by adding the mayor to the salary determination for the police, in effect, Council would be providing the Mayor with the opportunity to control the budget for the Police Department. He also cautioned members that any changes should be in concert with the Dover Code, which Section 18-1(b) relates to the salary for police officers.
Mr. Hogan moved to recommend that the changes proposed in the first sentence of Section 53 (lines 962 and 963) not be made, and approval of the changes proposed in the remainder of Section 53 (lines 964 through 976). The motion was seconded by Mr. Slavin and unanimously carried.
Mr. Hogan moved to recommend adoption of the Resolution requesting the General Assembly to Amend the City Charter as presented and amended (Attachment #1). The motion was seconded by Mr. Slavin and unanimously carried.
Mr. Hogan moved to recess, seconded by Mr. Shelton and unanimously carried. Meeting recessed at 4:50 p.m. and reconvened at 6:00 p.m.
Revised Revenue Manual
Members reviewed the City of Dover 2005-2006 Revenue Manual, which included the top revenue sources, revenue guidelines, inventory of revenue sources, and future potential revenue sources.
Mrs. Tieman, Administrative Services Director, explained that the Revenue Manual is an inventory of all the City’s revenues to assist Council, staff, and the public an understanding and ability to track all of the various revenue sources to the City. The manual includes: 1) a list of the top revenue sources over the past three (3) years; 2) guidelines for how often the manual should be updated and different revenues should be reviewed; 3) an inventory of all revenue sources with detailed information on rates, dates established and last reviewed, projection method, collection method, and benchmarks; 4) a list of potential new revenue sources; and 5) indexes for the revenue sources. Based on the established guidelines, she stated that staff has been requested to review certain revenues for updating, as follows:
Penalties Water & Sewer Public Occupancy Permit
Boat Licenses Grass Cutting
Electric New Service Fees Taxi License
Internet Service Bicycle Licenses
Misc. Library Revenue Police Extra Duty
Mobile Home Licenses Water Customer Installation
If a department wishes to change any of these fees, Mrs. Tieman assured members that they will be presented to Council in advance and then incorporated into the 2006 budget.
Referring to the future potential revenue sources, Mrs. Tieman noted that Engineering Plan Review Fee for Public Works Department will be reviewed and added. She welcomed any other ideas that members may have regarding potential revenue sources.
Mr. Ruane referred to the list of Top Revenue Sources by Fund, and suggested that staff be requested to provide benchmarks. He noted that property taxes, as a percentage of all revenues, has actually decreased over the years rather than increasing. He explained his interest in determining which revenue sources, to what extent, the City of Dover is more dependent on as compared to other municipalities (i.e. permits and other licenses as opposed to property taxes). Mr. Ruane advised members that one of the major criticism being relayed to him by our citizens is that the City is becoming increasingly dependent on fees as opposed to property taxes. He explained that a property tax increase would provide many residents a deduction on their income taxes; however, the fees for services cannot be a tax deduction. Therefore, he would appreciate staff providing an understanding of the City’s comparison with other municipalities in terms of percentage of revenue expectations from the various categories.
Mr. Hogan moved to recommend acceptance of the Revised Revenue Manual for 2005-2006, seconded by Mr. Slavin and unanimously carried.
State of the City Budget - Mid-Year Review and Proposed Budget Revision Ordinances
Staff presented the State of the City Budget - Mid-Year Review of the 2004/2005 Budget (as on file in the Office of the City Clerk), and proposed budget revision ordinances for the committee’s review. The purpose of the report is to give Council a mid-year depiction of the City’s operating expenses and revenues for all City budgets.
Mrs. Tieman, Director of Administrative Services, advised members that it is projected that the General Fund Budget balance will decrease by $11,403 to $2,192,963. This is due to lower than projected revenues in the beginning balance, permits and other licenses, and civil traffic penalties. She assured members that the 8% fund balance requirement will be met. The Water/Wastewater Fund Budget balance is projected to decrease by $853,823 to $1,276,972, which is primarily due to revenue estimates being revised downward to reflect actual results. The Electric Fund Budget balance will decrease by $55,200 to $3,466,290, which is the result of increased costs associated with the need to install infrastructure due to new construction in the City. In reviewing the revised budgets this year, Mrs. Tieman stated that it has been necessary to increase gasoline expenses budgets to reflect actual expenses throughout the City’s department budgets, totaling an additional $71,463. Because of the lower than anticipated revenues in the General Fund and the Water/Wastewater Fund, staff did not recommend the sweeping of the salary accounts into the post-retirement benefits reserve at this time. If additional revenues are realized or expenses are reduced in the remainder of the year, the sweeping of the salary accounts would occur at that time.
Mrs. Mitchell, Finance Director/Treasurer, submitted proposed budget revision ordinances that would incorporate the recommended adjustments to the budget balances into the fiscal year 2005 Budget. She noted that the ordinances only reflects changes to affected budgets and does not include all budgets. Staff recommended adoption of the proposed budget revision ordinances as presented.
Mr. Hogan moved to recommend adoption of the budget revision ordinances as recommended by staff (Attachment #2). The motion was seconded by Mr. Slavin and unanimously carried.
Revised Hospitality Policy
Mrs. Mitchell, Finance Director/Treasurer, submitted a revised Hospitality and Civic Function Policy for the committee’s review. She explained that the revisions simplify the policy, eliminate ambiguity, and will help resolve interpretation issues.
Mr. Slavin moved to recommend adoption of the Revised Hospital Policy (Attachment #3), seconded by Mr. Hogan and unanimously carried.
Proposed Resolution - Investment Post-Retirement Medical Benefits
Mrs. Mitchell, Finance Director/Treasurer, indicated that the City currently has appropriated $2.3 million for post-retirement medical benefits in preparation for the upcoming required accounting requirement (GASB 43). These funds are currently invested in the City’s fixed income investment portfolio with Wilmington Trust Company with a current average annual yield of 3.3%.
Mrs. Mitchell advised members that the State of Delaware created an investment pool for local governments (DELRIP) and that the State Public Employment Retirement System (PERS) annualized total returns for FY2004 was 15.9%. Relative to other public pension funds, the ranking of the System’s performance is above the median for the latest fiscal year, in the top 25% over the last five (5) years, and in the top 10% over the last ten (10) years. In order to attain a more favorable return and growth of the fund, Mrs. Mitchell recommended transferring the invested assets and adoption of a Resolution authorizing the investment of the City’s Post-Retirement Medical funds in the State of Delaware Local Government Retirement Investment Pool.
Mr. Slavin moved to recommend adoption of the Resolution (Attachment #4) as recommended by staff, seconded by Mr. Hogan and unanimously carried.
Mr. Hogan moved for adjournment, seconded by Mr. Shelton and unanimously carried.
Meeting Adjourned at 6:35 P.M.
Respectfully submitted,
Reuben Salters
Chairman
RS/jg
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Attachments
Attachment #1 - Resolution Requesting the General Assembly to Amend City Charter (Reincorporation)
Attachment #2 - Proposed Budget Revision Ordinances
Attachment #3 - Revised Hospitality Policy
Attachment #4 - Resolution Authorizing Investment of Post-Retirement Benefit Funds with State