COUNCIL BUDGET HEARINGS

Members of Council met in budget hearings on May 14, 15, and 16, 2002 at 9:00 a.m. Members of Council present were Council President Carey, Mr. Ritter, Mr. Pitts, Mrs. Williams, Mr. Truitt, Mr. McGlumphy, Mr. Speed, Mr. Salters, and Mr. Ruane.

Staff members present were Mr. DePrima, Mrs. Mitchell, Mrs. Tieman (Administrative Services Director), and Mrs. McDowell.

Mr. DePrima provided members with a corrected Capital Improvements Summary Sheet which included items discussed after the initial CIP meeting. He briefed members on the Fiscal Year 2002/2003 City of Dover’s Operating Budget, stating that it includes total expenditures in the amount of $96.9 million. The Budget also includes estimates for fiscal years 2004 and 2005 to provide a long-term view of trends in the City’s revenues and expenditures. The Fiscal Year 2002/2003 Budget includes no increase in workforce, no added debt, no reduction in programs or services, no new fees, no deferment of needed capital projects, and significant progress toward new working capital carry forward balances. The property tax rate will remain the same and be applied to the re-evaluation values, a power cost adjustment will be added to the electric rate, a water/wastewater rate increase is proposed, and an increase in allowable fund transfers is proposed. The City’s basic municipal services are provided through the General Fund, Electric Revenue Fund, and Water/Wastewater Fund.

The General Fund includes public services such as police, fire, library, parks, beautification, recreation, street cleaning, leaf collection, snow removal, trash pick-up and disposal, planning and zoning, and certain development projects. Administrative and support services are provided to this fund by departments of the Intergovernmental Fund with proportional expenses included in this budget. The total expenditures for the 2002/2003 General Fund are $21.5 million.

The Water/Wastewater Fund was established to provide production and distribution of potable water and the transmission and treatment of wastewater. Administrative and support services are provided to this fund by departments of the Intergovernmental Fund with proportional expenses included in this budget. The proposed 2002/2003 Operating Budget totals $11.6 million. Since 1998/1999, the Water/Wastewater Fund has been treated as three separate funds: Water, Wastewater, and Kent County Sewer Adjustment related items. This change assisted the City in accounting for expenses associated with each utility. Since then, the City has automated its accounting methods and the representation of three separate funds is no longer required. Beginning in July 2002, the utilities have been represented as one fund. Rate increases of 45 cents per thousand gallons of water and 24 cents per thousand gallons of wastewater are projected in Fiscal Year 2003 for this fund. The last rate increase in water fees was in Fiscal Year 1996. The last wastewater increase was in April 1999.

The Electric Fund provides financing for electric energy to the greater Dover community. Administrative and support services are provided to this fund by departments of the Intergovernmental Fund with proportional expenses included in this budget. The proposed Operating Budget totals $56.8 million projecting a 3.9 percent increase from fiscal year 2002, of which $36.6 million is the expected expense for the purchase of power.

It is the City’s mission to provide customers highly efficient and superior quality service through City operations. Staff is vigilant about the changes in public service functions, and confronts the challenges that are presented by these changes. It was felt that the 2002/2003 Budget accomplishes these goals.

After a lengthy discussion on the budget, Mr. Ruane stated that it would be prudent to begin the session tomorrow with a vote on whether or not to approve rate increases and fund transfers, along with setting the property tax rate, in order to provide direction to the City Manager in the amount of revenues he will have to work with.

Meeting Recessed at 11:58 A.M. - May 14, 2002

Meeting Reconvened at 9:00 A.M. - May 15, 2002

Mr. Ruane noted that it would be necessary to set the tax rate in order to determine the revenue that would be generated from property taxes. Mr. McGlumphy asked what the revenue amount would be if the current tax rate was maintained and applied to the re-assessed values. Mr. DePrima responded that the total revenue raised by applying the current tax rate of $.685 per $100 to the estimated re-evaluation figures is $6,982,470. He indicated that the revenue generated by using a roll-back tax rate would be $6,255,255; a difference of $727,215.

Mr. Ruane moved to keep the current property tax rate at $.685 (sixty eight and one half cents) per hundred of assessed value, seconded by Mr. Salters and carried by a roll all vote of eight (8) yes, one (1) no (Mr. Speed). Note: In accordance with Delaware State Law: 22 Delaware Code Section 1005(b), whenever the tax rate exceeds the rolled-back rate, an ordinance establishing a property tax rate upon total reassessment must be adopted (Attachment #1).

Mr. Ruane moved to increase the water rate per 1,000 gallons from the existing rate of $1.90 to $2.35, beginning with the July 1, 2002 billings; for a revenue gain of $756,000, seconded by Mr. Pitts.

Responding to Mrs. Williams, Mr. DePrima stated that the increase would represent a 23% increase for residential users. He noted that the rate may be a higher percent of the total for commercial users because they pay a lower rate.

Mr. DePrima requested clarification on the motion to determine whether or not the entire table on page 13 of the budget was being adopted. Mr. Ruane indicated that his intention was to adopt the table and rephrased his motion, as agreed to by the seconder, as follows:

Mr. Ruane moved to increase the current water rates in accordance with the proposed rate structure found on page 13 of the Budget Summary (see below), for a projected increase in revenue of $756,000, seconded by Mr. Pitts and carried by a roll call vote of seven (7) yes, two (2) no (Mr. Ritter and Mr. Speed).

Mr. Ruane moved to increase the current wastewater rates in accordance with the proposed rate structure found on page 13 of the Budget Summary (see below), for a projected increase in revenue of $379,008, seconded by Mr. Salters and carried by a roll call vote of seven (7) yes, two (2) no (Mr. Ritter and Mr. Speed).

Mr. DePrima noted that he would make water/wastewater rate adjustments based on whatever savings Council finds during their review of the budget.

Mr. Ruane moved to initiate a purchased power adjustment rate in the amount of .00139 per kwh of electric usage, beginning with July 1, 2002 billings, for a projected increase in revenue of $1,028,816, seconded by Mr. McGlumphy.

Mr. Ritter, referring to the elimination of the fuel adjustment cost last year, emphasized that this is the second rate increase within one (1) year. Mr. McGlumphy noted that electric costs have increased by 16.5% since 1995 and the City has not passed those increases on to the consumer. It was his feeling that the City cannot continue to absorb those costs and remain financially stable.

On a call for the question by Council President Carey and request for a roll call vote, the motion to initiate a purchased power adjustment rate in the amount of .00139 per kwh of electric usage, beginning with July 1, 2002 billings, for a projected increase in revenue of $1,028,816 was carried by a roll call vote of seven (7) yes, two (2) no (Mr. Ritter and Mr. Speed).

Mr. Ruane noted that the electric rate increase, based on 7,000 kwh amounts to $1.39 monthly or $16.68 annually. The water/wastewater increase, based on 1,000 gallons, amounts to $4.83 per month or $58.00 annually. Estimating the property tax increase for the average citizen at $80.00, together with the electric, water, and wastewater increases, the total increase annually is $155.00 or $.42 cents per day - less than a bottle of water.

Mr. Ruane moved that the fine for illegal parking be changed from $10 to $15, beginning July 1, 2002, for a projected increase in revenue of $40,000, seconded by Mr. Pitts.

Mr. Speed stated that the purpose of the fine is not to generate revenue, it should be used to change behavior and keep people from parking illegally. It was his feeling that a $10 parking fine would not change anyone’s behavior and suggested that it be increased from $10 to more than $15.

Mr. Speed moved to amend the motion to change the fine for illegal parking from $10 to $25, seconded by Mr. McGlumphy.

Mr. Ruane withdrew his motion.

Mr. Speed moved that the fine for illegal parking be changed from $10 to $25, seconded by Mr. McGlumphy.

Mr. Ritter objected to raising the parking fine due to the inadequate parking situation in the area around Legislative Mall. It was Mr. Truitt’s feeling that, with a shortage of parking, they would not want people to linger more than necessary and the fine would discourage over-parking.

On a call for the question by Council President Carey and request for a roll call vote, the motion to change the fine for illegal parking from $10 to $25 was carried by a roll call vote of six (6) yes, three (3) no (Mr. Ritter, Mr. Salters, and Mr. Ruane) (Attachment #2).

Mr. Ruane noted that it has been proposed to pay for half of the playground upgrade at Silver Lake with $30,000 from the Parkland Reserve Fund.

Mr. Ruane moved for approval of the transfer of $30,000 from the Parkland Reserve Fund to the General Fund, seconded by Mr. Speed.

Mr. Pitts stated that there is no source of revenue for the Parkland Reserve Fund and it was his feeling that if Council starts removing funds it will become a habit and they will peck away at the fund until it is gone. Mr. DePrima noted that the additional revenue generated by the increase in parking fines would cover the $30,000 for the playground upgrade. Mr. Speed cautioned Mr. DePrima that the substantial increase in fines could cause a decrease in violations. Mr. DePrima noted that, even with a 30% increase in compliance, the revenue would cover the playground upgrade. Mr. McGlumphy cautioned against tapping into the reserves because it sets a dangerous precedent.

Mr. Ruane withdrew his motion to transfer $30,000 from the Parkland Reserve Fund.

Mr. Ruane noted that the budget is premised on an assumption of the General Fund receiving $250,826 from the over-funded General Contingency Fund. He indicted that the fund is over-funded in the sense that item #5 of the Reserve Policy of the City of Dover Financial Policies specifies that “The City will maintain a minimum reserve, in a contingency account, of at least 2% of the current year operating revenues for the General Fund. The City may only use monies in the contingency accounts in times of unforeseen emergency expenditures.” It was Mr. Ruane’s feeling that, in order to consider any transfer for any purpose other than an unforeseen emergency, it would be necessary to amend the policy.

Mr. Ruane moved to amend #5 of the City’s Financial Reserve Policy, which requires a minimum reserve in the General Fund Contingency account of at least 2% of the current operating revenues for the General Fund, by adding “If existing reserves in this account exceed the required level, such funds may be used to provide for non-reoccurring expenditures.” The motion failed for the lack of a second.

Several members expressed concern with amending a policy which was adopted in session with full Council. Mr. DePrima and Mrs. Mitchell assured Mr. Ruane that they would prepare the appropriate amendment for the transfer for presentation to Council before the actual transfer is made.

Mr. Ruane moved to approve the transfer of $250,826 from the over-funded General Continency Fund for purposes of putting together the budget, contingent upon an amendment to the City’s Financial Reserve Policy to allow such a transfer, seconded by Mr. Speed.

It was Mr. Carey’s feeling that a motion waiving the requirement for a one-time budget transfer would be all that was necessary. If Mr. Ruane wanted to submit an amendment to the policy, that could be done. Mr. Ruane did not want to set a precedent of transferring money and felt that it would be appropriate at this time because the fund is over-funded.

It was the opinion of Mrs. Janice Green, City Clerk, that Council has the authority to waive the policy requirement of an “unforeseen emergency” and allow the transfer then, if Council desired, an amendment to the policy could be presented for consideration by Council at a later date.

On a call for the question by Mr. Ruane the motion failed by a roll call vote of eight (8) no, one (1) yes (Mr. Ruane).

Mr. Salters moved to approve the transfer of $250,826 from the General Continency Fund to the General Fund, with staff submitting an amendment to the Financial Reserve Policy at a later date to allow such a transfer, seconded by Mr. McGlumphy and carried by a roll call vote of six (6) yes, three (3) no (Mr. Ritter, Mr. Speed, and Mr. Ruane).

Mr. Ruane moved to approve an increase in the annual allocation from the Electric Fund to the General Fund in the amount of $550,000, bringing the total to $4.5 million, seconded by Mr. Salters and carried by a roll call vote of seven (7) yes, two (2) no (Mr. Ritter and Mr. Speed).

Mr. Ruane moved to increase the amount allocated from the Water/Wastewater Fund to the General Fund by $225,000, bringing the total to $450,000, seconded by Mr. Salters and carried by a roll call vote of seven (7) yes, (2) no (Mr. Ritter and Mr. Speed).

Mr. Ruane moved to transfer $400,000 from the Electric Revenue Fund to start the establishment of an Electric Revenue Contingency account to be used in times of unforeseen emergency, in accordance with the City of Dover Financial Reserve Policy #7. The motion was seconded by Mr. Speed and carried by a unanimous roll call vote.

Mr. Speed clarified that it is implicit in the motion that the money not be transferred from the Depreciation Reserve and Mr. Ruane concurred.

Mr. Speed, referring to the City of Dover Financial Policies - Reserve Policy, indicated that the first sentence of item #1 states “The City will strive to maintain a minimum reserve, in the Budget Balance, of at least 8% of the current year operating revenues for the General Fund, excluding the carry forward balance.” He also noted that item #4 states “At no time should the City’s budget balances fall below their specified percentages.” He stated that it appears that they are meeting or exceeding the 8%. It was his feeling that they would be violating the policy if they allowed the carry-forward balance to be at 8% or greater and then budget for less than 8% the following year.

Mr. Speed moved that the carry-forward budget balances that meet the requirements of the policy for this year not be permitted to go below those amounts in the upcoming budget. The motion was seconded by Mr. Ruane.

Mr. Ruane clarified that the main focus would be on the policy requirement for the General Fund carry-forward balance and, if they accept the budget as presented, it would represent 6% instead of 8%, leaving necessary budget cuts in the General Fund of $383,000. He noted that several funds would not be affected by the motion. Mr. Speed indicated that the requirement would only pertain to funds that have already met the minimum balances.

Mr. DePrima noted that item #4 of the Reserve Policy states “At no time should the City’s budget balances fall below their specified percentages. In such a case the City will budget for the shortfall over a period not to exceed three years.” He stated that he has considered this to be a shortfall and he thought that the criteria was to be at the 8% in the next three (3) years, which will be accomplished. Mr. DePrima noted that the only reason the General Fund meets the requirement is because of the $300,000 Worker’s Compensation transfer.

It was Mr. McGlumphy’s feeling that the policies state that the City will “strive” to maintain minimum reserves to give the City Manager latitude. He suggested that the Finance Director, City Manager, and Administrative Services Director work in concert to develop the particular goals and guidelines within the spending policy. Mr. Ruane noted that, looking at the out-years of 2004-05, the striving is not there. The only way it is intended to be achieved is by increasing property taxes and raising rates again. Unless the City Manager can show that the shortfall would cause extreme burden on the taxpayer he should be directed to carry forward 8% this year.

On a call for the question by Council President Carey and request for a roll call vote, the motion that the carry-forward budget balances that meet the requirements of the policy for this year not be permitted to go below those amounts in the upcoming budget was carried by a roll call vote of eight (8) yes, one (1) no (Mr. McGlumphy).

Mr. Speed, noting that they have discussed and voted for a number of increases in taxes and fees and have not discussed reducing or eliminating anything, moved to eliminate the trash fee, seconded by Mr. Ritter.

Mr. Truitt noted that Kent County recently increased their trash fee to $14.00 per month and suggested that the City’s rate of $5.00 per month may be too low.

On a call for the question by Council President Carey and request for a roll call vote, the motion to eliminate the trash fee failed by a roll call vote of seven (7) no, two (2) yes (Mr. Ritter and Mr. Speed).

Mr. DePrima recommended that they break for the day and resume tomorrow. He noted that department heads have indicated where they believe they can make further cuts and he would like to discuss those cuts with the department heads.

Mr. Salters moved to recess, seconded by Mr. Speed and unanimously carried.

Meeting Recessed at 11:24 A.M. - May 15, 2002

Meeting Reconvened at 9:00 A.M. - May 16, 2002

Mr. DePrima informed members they found enough cuts to meet the 8% requirement for the General Fund; however, they had to include two (2) adjustments to projected revenues. He consulted with the Police Department and they indicated that increasing the parking fine from $15.00 to $25.00, taking into account a 15% increase in compliance with the parking regulations, would add approximately $67,000 to the revenue projections, bringing total Police Revenue to $675,520. The other revenue adjustment was an increase of $13,000 in the Transfer Tax to match the actual 2001 figure. Mr. DePrima noted that the General Fund cuts amount to $339,611. He also stated that they did not touch the Parkland Reserve Fund, as requested.

Mr. McGlumphy summarized that the increase in revenues so far is as follows: property revaluation - $727,215; water rate increase - $756,000; wastewater rate increase - $379,008; increase in fines - $107,500; adjustment to transfer tax - $13,000; and electric rate increase - $1,028,816. The total projected increases equal $2,998,539.

Mr. DePrima requested that they discuss proposed cuts for each department individually.

Mr. DePrima stated that funding for Administrative Services is as follows: General Fund - 5%, Electric Fund - 83%, and Water/Wastewater - 12%. He noted that this budget contains a $12,200 Capital Project - Drive up Window System.

Responding to Mr. McGlumphy, Mr. DePrima noted that the Remittance Processing System ($67,000) had been cut from the budget. It is their feeling that the Drive up Window System is necessary due to increased usage and the age of the current system. It is becoming more difficult to obtain replacement parts for the extension tray and window. Noting that elimination of this project would provide only $600 ($12,200 x 5%) for the General Fund, Mr. DePrima stated that they have found the necessary cuts in the General Fund departments and it is not incumbent on Council to make additional cuts. Mr. Salters suggested that they review the proposed additional cuts first, rather than discussing department by department.

Those cuts are as follows:

Planning Department (pg. 116)

Other Expenses - Eliminate two (2) Planning Commission Quarterly Workshops. . . . . . . . . . . . . $1,800

Public Inspections (pg. 121)

Educational Assistance - No educational assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000

Furniture/Fixtures - No new furniture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470

Program Expenses - No towing program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5,000

Small Tools - No small tool purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

Office Equip/Repairs - No front office floor area changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

Total Public Inspections Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$8,270

Mr. DePrima explained that the towing program is new and, initially, there was a budget of $10,000, which was reduced to $5,000. At this time, he is recommending that the $5,000 be cut and private towing companies will be utilized for the towing program. It is also possible that all of the funds in the demolition account won’t be used and could, therefore, be used for towing.

Responding to Mr. McGlumphy, Mr. DePrima explained that Program Expenses/Supplies was increased to accommodate the salary for the Community Development Director. He noted that 20% of the Community Development Block Grant covers all of the administrative costs. Mr. Petit de Mange also noted that the grant for this year has decreased from $302,000 to $300,011. Mrs. Tieman explained that this is not a new expense; it has been moved to the appropriate line item to comply with GASB 34. Mrs. Mitchell indicated that there are many line item changes due to moving them from the General Fund summary to their appropriate line items.

Mr. Ruane noted that, during their workshop, Council requested a Financial Impact Analysis of Growth on Revenues and Expenses and he questioned where it was in the budget. Mr. Petit de Mange responded that it was included in the $20,000 budgeted for contractual services as part of the Annexation and Growth Boundary Master Plan in the Planning budget. Mr. Ruane requested that the narrative be amended to reflect that a cost benefit analysis would be completed.

Sanitation (pg. 152)

Contractual Services - Reduced costs at landfill based on current tonnage and differential disposal fee

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,392

Mr. DePrima explained that the new dry waste fee has resulted in reduced costs. Two (2) large waste vehicles have been retained in the budget as Capital Projects.

Streets (pg. 157)

Salaries and Benefits - Lay off half MEO I position and benefits. . . . . . . . . . . . . . . . . . . . . . . . . $20,000

Mr. DePrima explained that this position became available last week when the employee resigned. Mr. Koenig, Public Works Director, has suggested that this position could remain vacant for six (6) months. Mr. DePrima noted that there are two (2) vehicles in the streets department proposal; a leaf vacuum and a one-ton roller.

Assessor (pg. 85)

Educational Assistance - Eliminate Educational Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,000

Parks and Recreation (pg. 99)

Salaries and Benefits - Reduce playground staff for one playground location. Due to Capital School District not renting space this summer, this playground site will not be operating. . . . . . . . . . . . $18,572

Mr. DePrima noted that the Playground Equipment Replacement for Silver Lake Park ($30,000) was retained as a Capital Project.

Library (pg. 104)

Books - Reduction in purchasing of fiction, non-fiction, and children’s books, resulting in a reduction in materials for library users.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,000

Security System - Will not be able to install security system. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4,470

Total Library Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,470

Mrs. Tieman noted that the Overtime line item should be $5,500 instead of zero (0) and the Security/Safety Materials line item should be $252 instead of $800 due to an error in preparation of the budget.

Mr. Ruane and Mr. Speed, noting a 40% cut in the line item for books, indicated that they would prefer to find the money somewhere else. Mr. DePrima stated that the Library recently received the Reynolds Grant that could be used to purchase books. Ms. Sheila Anderson, Library Director, stated that they receive a Federal Reference grant which, in the past, has been $48,000; however, she noted that federal funds are questionable at present and they are hoping to receive $35,000. The library also receives $160,000 per year in state aid and, of that, $100,000 is used for books. Ms. Anderson noted that state aid is also being cut this year due to budget issues. Responding to Mr. Ruane, Ms. Anderson stated that they would prefer not to spend all of the Reynolds Grant at one time.

Mr. Salters questioned how much of the proposed $11,000 cut would have been used to purchase children’s books. Ms. Anderson estimated approximately 40% would have been used for children’s books.

Mr. Ruane moved to eliminate the reduction of $11,000 from the Library budget, seconded by Mr. Speed. The motion failed by a roll call vote of six (6) no, three (3) yes (Mr. Ritter, Mr. Speed, and Mr. Ruane).

Mr. Salters moved that $4,400 of the $11,000 proposed cut from the Library budget be retained in order to purchase children’s books, seconded by Mr. Truitt.

Responding to Mr. Ruane, Ms. Anderson stated that any reduction in the Library’s budget will result in a decrease in the State funding.

Mr. Pitts stated that he is a frequent user of the Library and is not in favor of taking any money from their budget.

On a call for the question by Council President Carey and request for a roll call vote, the motion to retain $4,400 of the $11,000 proposed cut from the Library budget in order to purchase children’s books was carried by a roll call vote of seven (7) yes, two (2) no (Mr. Ritter and Mr. Pitts).

Police (pg. 136)

Auto Purchase - Reduction of four (4) police package vehicles will result in short term, one-year cost savings. The multi-year impact on police package vehicle purchase will result in out-year cost increase to insure fleet rotation in this category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$84,412

Temporary Help - Eliminate request for a LAN intern and the Cadet program. There is a reduction of revenue at $1,500. The elimination of these programs will result in additional non-police duties reassigned to on-duty police personnel, such as transporting vehicles to and from. . . . . . . . . . . . . . . . . . . . .$55,895

Salaries and Benefits - The reduction of this dollar amount could be accomplished due to at least one officer eligible for retirement not doing so during this fiscal year. Even though personnel salary issues such as overtime are unpredictable as an absolute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000

Total Police Department Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,307

Responding to Mrs. Williams, Mr. DePrima stated that the total police request for this fiscal year was $9,143,000, an increase of approximately $600,000 over last year.

Responding to Mr. Ruane’s concern with the overtime amounts budgeted, Police Chief Horvath stated that they have always worked to keep their overtime cost down. The Community Policing and the motorcycle units no longer work holidays unless it is absolutely necessary; the department is short staffed by three (3) people and will soon be short staffed by six (6) people causing an increase in overtime. Chief Horvath indicated that the largest portion of the overtime is holiday pay since they are a 24-hour department. He also noted that a large portion of overtime is due to court overtime, which they have no control over. In 2000, there was a 33% increase in drug arrests and all of those officers are paid to go to court to testify about those arrests. When the Judge is ready to go to trial, he wants the officers there and ready to testify. If the officer is not available, the case is dismissed, therefore, paying the two (2) hour minimum is unavoidable. Chief Horvath noted that it is a violation of federal law to schedule employees to avoid paying overtime. Mr. Ruane suggested having annual meetings with the Judges to keep them aware of the situation. He also noted for the record that the property tax revenue of $6.9M does not even support the police budget of $9M.

Responding to Mr. Ritter, Chief Horvath explained that his staff is down due to two (2) vacant positions, one (1) officer being out on a disability pension, one (1) officer has retired and another will retire in July, one (1) officer is away on military duty for at least six (6) months and another officer has filed for a disability for a knee injury, and another officer is actively seeking employment with the intention of retiring from the force.

Mr. Speed, noting that an officer is being recalled to the Reserves, asked for a consensus of members regarding consideration of compensating those Reservists for the difference in lost wages. Mr. DePrima indicated that there were six (6) employees who would be affected, one which has been out since October. It was his understanding that there is a proposal being developed to fund the difference between their City salary and their Reserve salary. He noted that research was underway to determine the impact such a policy would have on the budget.

Fire (pg. 129)

Trucks - Purchase - Command vehicle would be deferred. This would adversely affect firefighter safety due to the new accountability and command systems which are to be initiated in the near future. This vehicle also provides staff officers of the Fire Department the ability to go off-road to an incident and provides the ability to respond in adverse weather conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . .$35,000

Mr. DePrima noted that an S.U.V was scheduled to replace the Fire Department’s Crown Victoria, which would then be transferred to the Inspection’s Department since it has been evaluated and determined to be in good working order. If this vehicle is eliminated, another vehicle will be necessary for the Inspections Department.

Mr. Ruane pointed out that the replacement of engine #3 ($88,000) remains in the budget and the City continues to provide an annual contribution to the Robbins Hose Company in the amount of $165,000.

Fire Chief Bashista explained that the current command vehicle is nine (9) years old and is not an ideal vehicle for responding to emergency calls. Mr. Ruane noted that the line item for Program Expenses/Supplies had increased from $14,530 to $42,100 and suggested that they could possibly take a cut there instead of deferring the command vehicle. Chief Bashista responded that the increase is due to moving an expense to its appropriate line item in accordance with GASB 34. Mr. DePrima stated that the largest amount is for MSA air packs and related supplies ($14,000) and that several items that had been previously deferred were included in this year’s budget.

Chief Bashista offered to eliminate $2,000 from Educational Assistance. It was his feeling that nothing else should be cut. It was Mr. Ritter’s feeling that they should allow the command vehicle ($35,000) to remain in the budget.

Responding to Mrs. Williams, Chief Bashista stated that the command vehicle would be similar to a mini office space which would serve as a forward command post on the scene of a major incident. The purchase of the command vehicle would provide the space necessary to install new equipment, which would be purchased from Robbins Hose Company’s budget, that would aid them in tracking firefighters inside of burning buildings.

Mr. McGlumphy felt that a dual message was being sent by saying the Fire Department could give up the command vehicle because the current vehicle will last another year and an $84,000 cut for replacing police vehicles that receive more wear and tear each year was approved. It was his feeling that they should give the $84,000 back to the Police Department to afford them the same opportunity to respond to emergencies.

Mr. McGlumphy expressed concern that the Fire Department requests were received after the CIP meeting. Chief Bashista stated that Chief Bates sent a letter to the City in October 2001which indicated what they planned to purchase. He also noted that a Robbins Hose Company CIP which indicated how apparatus was to be replaced was sent to the City 10 years ago.

Mr. Truitt reminded members that the firefighters are all volunteer and if they were not, the City would be paying thousands of dollars in employee wages. It was his feeling that the Fire Department needs top of the line response vehicles. Mr. Pitts indicated that Council has stated that every department is suffering and no department is getting any more or any less than anyone else. He suggested that they need to look at how the public wants to fund the public safety services they expect.

Mr. Petit de Mange, Planning and Inspections Director, noted that the vehicle replacement plan for their department was related to the command vehicle purchase in the Fire Department. His original draft budget had one (1) vehicle for this year and two (2) vehicles for next year, since they currently have a number of aging vehicles with significant problems. He agreed to have those purchases taken out of this years budget, with the understanding that they would receive the Fire Department’s Crown Victoria. Additionally, they did not budget for the repairs which will be necessary if they do not receive the vehicle from the Fire Department.

Mr. Ritter moved to keep the Robbins Hose Company command vehicle ($35,000) in the budget, seconded by Mr. Truitt and carried by a roll call vote of six (6) yes, three (3) no (Mr. Pitts, Mr. McGlumphy, and Mr. Ruane).

Transportation Enhancement Grants (pg. 198)

Contractual Services - Schutte Park Underpass Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,800

Mr. DePrima indicated that this grant involves the study of an underpass at Schutte Park. The study is $114,000 and the City’s portion of the matching grant would be 20% or $22,800. Mr. DePrima requested that the study be delayed for one (1) year, to be reconsidered once the Eden Hill study is complete.

Mr. Truitt moved to postpone the Schutte Park Underpass Study, seconded by Mr. Speed and unanimously carried.

Mr. DePrima, noting that they had reached the end of the proposed cuts, reviewed the revenues as follows:

                                    Police Fines and Revenues. . . . . . . . . . . . . . $67,500

                                    Parkland Reserve Transfer. . . . . . . . . . . . . .-$30,000

                                    Increase Transfer Tax. . . . . . . . . . . . . . . . . . $13,000

                                    Total Net Revenues. . . . . . . . . . . . . . . . . . .$50,500

                                    Net Gains to Fund Balance. . . . . . . . . . . . .$390,111

He noted that, including cuts in the amount of $39,400 that were deleted by Council, the Net Gains to Fund Balance is $350,711.

Mr. Ritter moved to reduce the Mayor’s salary from $45,000 to $22,562. The motion failed for lack of a second.

Mr. Ritter moved to reduce the salaries for Council members by 50%, seconded by Mr. Truitt. The motion failed by a roll call vote of seven (7) no, two (2) yes (Mr. Ritter and Mr. Truitt).

Mr. DePrima noted that they have reached 7.8% of their goal of an 8% carry forward balance. It was his feeling that the department heads could probably carry forward more than they originally budgeted. He requested that, if the carry forward balance ends up higher than 8%, they reconsider some of the capital expenses that were deferred, such as the police vehicles.

Mr. McGlumphy moved that if the carry forward balances or any additional money comes in over the 8%, that they return to the “Contingency Cuts and Consequences” list and restore the items that have been cut, seconded by Mrs. Williams.

Mr. Ruane objected, noting that a budget amendment would be required, which they were trying to avoid. It was his recollection that, when asked if there was any way that the anticipated carry forward out of the current year budget would be different from that which was used to calculate this budget, Mr. DePrima indicated that the budget had been cut as far as possible.

Mr. DePrima responded that department heads were requested to make cuts where possible and to reevaluate this years’ budget to find additional funds, which resulted in a higher carry forward for this year. He noted that they are estimates contingent upon the events of the remainder of the fiscal year.

On a call for the question by Mrs. Williams, the motion to return to the “Contingency Cuts and Consequences” list and restore the items that have been cut if the carry forward balances or any additional money comes in over the 8% was carried by a roll call vote of seven (7) yes, two (2) no (Mr. Speed and Mr. Ruane).

Mr. Speed moved that line item 10-13 - Temporary Help in City Council’s budget be reduced from $70,019 to $66,000, which is equivalent to the Council President receiving $8,400 and each other Council member receiving $7,200 and, noting the resulting reductions in FICA Taxes and Workers Compensation, that the money be put toward the purchase of books for the Library, seconded by Mr. Ruane.

Responding to Mr. Truitt, Mr. Speed stated that there was an increase last year of $1,980 and an additional increase this year of $2,139. He suggested that the salary be rolled back to the base amount of $66,000, with a savings of $4,019 plus the difference in FICA and Workers Comp. It was his understanding that an ordinance amendment would be required to eliminate the annualized 3% increase. Mr. Ruane, as seconder of the motion, requested that the motion be rephrased to say that the Council is waiving that requirement of the ordinance to have a COLA increase for itself this year.

Mr. Truitt moved to table the motion in order to obtain a ruling on whether the COLA could be waived or if an amendment was necessary, seconded by Mr. McGlumphy and was carried by a roll call vote of five (5) yes, three (3) no (Mr. Ritter, Mr. Speed, and Mr. Ruane) and one (1) abstention (Mr. Pitts).

Mrs. Williams moved to recess at noon and reconvene at 1:30 p.m., seconded by Mr. Speed and carried by a roll call vote of seven (7) yes, two (2) no (Mr. Ritter and Mr. McGlumphy).

Meeting Recessed at 12:00 - May 16, 2002

Meeting Reconvened at 1:30 P.M. - May 16, 2002 (Mr. McGlumphy absent)

Council President Carey informed members that the City Solicitor’s opinion regarding waiving the COLA increase was that it would require an ordinance amendment and it would not be possible to hold a first and second reading on the amendment in time to adopt the budget by July 1, 2002. It was Mr. Speed’s feeling that the necessity of an amendment would not prohibit them from budgeting for the decrease at this time. He noted that, if the same Council were voting on the change to the budget, they would understand that the change would require the ordinance amendment and would support it. If it failed in the budget, the ordinance would also fail.

Mr. DePrima proposed that they review the remaining Inter-Governmental Service Funds and then, at the end of the day, if there is still a gap between the required 8% working capital they would like to deliver a budget amendment on June 10, 2002 that would revise this year’s revised budget, causing the carry forward balance to be higher to make up the difference.

Responding to Mr. Ritter, Mr. DePrima explained that this proposal was different from the previous motion in that the proposal is to balance to the 8% with revisions to this year’s carry forward balance.

Mrs. Mitchell noted that the line items for LID in all department will be higher to adjust for a calculation error.

With reference to the City Clerk’s budget, Mr. Ruane requested that the narrative (pg. 45) be revised to note that realignment of the Council Districts has been deferred to become effective for the April 2004 Municipal Election.

With reference to the City Manager’s budget, Mr. Ruane questioned what was included in line item 30-32 - Legal Expenses. Mr. DePrima indicated that all of the City Solicitor’s expenses are billed through the City Manager’s Office and that line item includes the retainer and other expenses associated with the services of the City Solicitor. Mr. Ruane suggested, for the record, that the services of the City Solicitor should not be excused from the bid process. It was a consensus of members that this matter be reviewed at a later date.

With reference to the Information Technology budget, Mr. DePrima noted that a Programmer’s position, which was eliminated two (2) years ago, was included in this budget. The focus of this position would be to work on the web program and move forward in achieving Council’s priority of developing e-government. Mr. Ruane requested that City Council’s priority to “support web site development with additional resources and upgrading site to include interactive services such as payments, registrations, etc.” should be reflected in the narrative (pg. 52). It was his feeling that those requirements should be considered in the hiring for this position.

With reference to the Human Resources budget, Mr. Ruane requested that the narrative be revised to reflect the fact that the City reviewed its personnel evaluation system and provided training and implemented improvements and that it should be carried over as a primary goal for 2002-03. Additionally, Mr. Ruane suggested that the narrative reflect the need for a complete updating of the employee handbook to avoid liability issues related to outdated handbooks.

Mr. Ritter requested that a note should indicate that the salaries reflect an additional employee for 6 months of the year to account for Mrs. Rigby’s terminal leave.

With reference to the Mayor’s budget, Mr. DePrima indicated that $32,000 is included for economic development advertising, programming, and marketing specific to the Garrison Tract, which was a Council priority, and he indicated that the Mayor has offered to cut that amount in order to balance the budget. Mr. DePrima recommended keeping the amount in order to attract a large company and associated taxes. He noted that 50% or $16,000 of that amount is attributed to the General Fund.

Responding to Mrs. Williams, Mr. DePrima stated that, without the development funds, the Garrison Tract is being marketed by the Central Delaware Economic Development Office. He noted that $32,000 of the budgeted $48,500 is allocated for the Garrison Tract/City of Dover Economic Development. The $16,500 that is left in the out years is money that was previously in a line item called Development Funds which is allocated as follows: Kent County Tourism - $10,000; Main Street Payment in Lieu of Taxes - $6,000; Delaware Agricultural Museum - $500. Mr. DePrima also noted t