City of Dover, Delaware - Special City Council Meeting

Special City Council Meeting

iCal

Jun 18, 1991 at 12:00 AM

SPECIAL COUNCIL MEETING

A Special Council Meeting was held on June 18, 1991 at 7:30 p.m. with Council President Christiansen presiding. Members present were Councilmen Hare, Daisey, Levitt, Pitts, Salters, Lynn, Weyandt and VanSant.

Council staff members present were Chief Hutchison, Mr. Lucas, Mr. Worley, Mr. Cregar and Mrs. Boaman.

The invocation was given by Councilman VanSant, followed by the Pledge of Allegiance.

AGENDA ADDITIONS/DELETIONS

Council President Christiansen requested the addition of agenda item #7-E - Executive Session - Personnel Matters. By request of the City Treasurer, Mr. Worley requested that agenda items #5-D (Arts Fund, Cash Receipts and Budget) and #5-K (Downtown Development Fund, Cash Receipts and Budget) be deleted from the agenda.

Mr. Weyandt moved for approval of the agenda as amended, seconded by Mr. Daisey and unanimously carried.

PUBLIC HEARING - ELECTRIC REVENUE FUND BUDGET

A public hearing on the Electric Revenue Fund budget is required for compliance with Section 505 of the 1985 Electric Revenue (Refunding) Bonds Resolution (as amended by 1990 Bond Resolution). Section 505 of the resolution requires that the City will hold a public hearing prior to adoption of the budget. An appropriate notice of the public hearing was published in the Delaware State News.

Council President Christiansen declared the hearing open.

There was no one present wishing to speak during the public hearing.

Council President Christiansen declared the hearing closed.

BUDGET WORKSHOPS REPORT

The Legislative and Finance Committee held budget workshops on May 20, 21 and 22, 1991 with Chairman Weyandt presiding.

Planning Applications - Revised Fee Schedule

The committee recommended approval of a revised fee schedule for planning applications. Mr. Weyandt moved for approval of the committee's recommendation, seconded by Mr. Hare and unanimously carried. (It is noted that the fee schedules require adoption by ordinance with said action occurring during the latter part of the meeting.)

Increase in Library Fees

The committee recommended a proposed increase of library fees for non-city residents from $35 to $40. Mr. Weyandt moved for approval of the committee's recommendation, seconded by Mr. Lynn and unanimously carried.

Water/Wastewater Fees

It is noted that the committee proposed the following water/wastewater fees which are already incorported in the proposed budget:

Water Rates Per 1000 Gallons

Water - In City 1.30

Water - Out of City 1.95

Wastewater Rates Per 1000 Gallons

Wastewater - In City .96

Wastewater - Out of City 1.73

Sewer Adjustment Rate 1.25

The sewer adjustment rate is to be set on an annual levelized basis and periodically reviewed for necessary adjustments during the budget year. The sewer adjustment rate is to include total costs from Kent County.

Position Amendments

The committee recommended approval of a request to upgrade the position of Clerk Typist in the Community Services Department from part-time to full-time provided there are no increases in salaries throughout the Department. The committee also recommended that staff be authorized to fill the new position of Meter Reader I prior to July 1, 1991.

Mr. Weyandt moved for approval of the committee's recommendations, seconded by Mr. Lynn and unanimously carried.

Budget Review - General Funds

Mr. Weyandt explained the amendments proposed by the committee in the General Funds.

Mr. Weyandt moved to approve the mathematical and/or computer errors and the proposed cuts as outlined in the Budget Workshops, seconded by Mr. Hare.

Mr. Lynn moved to amend the motion to deduct $10,000 from the Arts Council budget, leaving a beginning balance of $18,000, with the $10,000 cut to be transferred to the Public Inspections - Demolition Account. The motion was seconded by Mr. Daisey and unanimously carried.

Mr. Weyandt moved to amend the motion to eliminate $5,000 from the Electric Budget which was designated for Forward Central Delaware. The motion was seconded by Mr. Hare and carried with Mr. Lynn, Mr. Levitt and Mr. Christiansen voting no.

The motion to accept the budget workshop minutes of May 20, 21, and 22, 1991, as amended, was unanimously carried.

Budget Review - May 29, 1991

During final review of the budget on May 29, 1991, the committee recommended that there be no tax increase and that the necessary funds be transferred from the Electric Fund to the General Fund in order to balance the budget.

Mr. Weyandt moved for approval of the committee's recommendation, seconded by Mr. Lynn.

Referring to the transfer from the Electric Fund to the General Fund, Mr. VanSant stated that $2,000,000 was being transferred approximately five years ago and this amount has now increased to approximately $3,000,000. Prudent management of these funds has assured low electric rates for the citizens of Dover. By setting aside contingency funds, the Electric Department has been able to grow in a very orderly and fiscally responsible manner. If the City continues to utilize electric fund dollars to keep real estate taxes low, it will negatively effect the electric utility. Mr. VanSant explained that real estate taxes are tax deductible but that electric bill fees are not.

Mr. VanSant proposed that the City increase the tax rate by 2.5 cents, for a total of 65.5 cents per $100 of assessed value, which will result in an additional amount of $170,000; take the $155,914 from the total that was being transferred from the Electric Fund, leaving approximately $14,086. Of this amount add $6,000 to the Library Department budget to make up the difference of a grant that was $6,000 short this year, and add the remaining funds ($8,086) to the Police Department's extra duty account that was originally cut from the budget but is very much needed. This proposal would result in an increase of $1.16 per month for a home appraised at $100,000.

Mr. VanSant urged members of Council to approve a small tax rate increase to eliminate the probability of a massive increase next year. He reiterated his feeling that the City's Electric Department has done a magnificent job of helping to offset property taxes, but reminded members of Council that they also have a fiscal responsibility to offer electric power at the lowest possible rates.

Reviewing the history of the Power Plant, Mr. Weyandt stated that the City supported its own Power Plant so that they could produce inexpensive electric for its citizens and to assist in offsetting property taxes. Mr. Weyandt reminded members of Council that portions of the funds proposed for transfer from the Electric Fund were funds that were proposed for use by the Electric Department but were cut by the committee. It is his feeling that since these funds were proposed for use anyway, there would be no problem with transferring them for use in the General Fund.

Agreeing with Mr. Weyandt, Mr. Daisey reiterated that the funds were proposed for use and he could not see where it mattered if the funds were used by the General Fund rather than by the Electric Fund. He agrees that Council must be careful how they utilize the funds from the Electric Department, but stated that Council is utilizing these funds carefully. He stated that the current level of services offered to our citizens will not be diminished and the use of electric funds will help to maintain our current tax rate during the economy slump.

Mr. Levitt reminded Council that all levels of government are struggling to balance their budgets due to the decrease in projected revenues and the reduction of available sources of grants and other types of revenues. He cautioned Council against utilizing funds from other sources (inter-fund borrowing) that may be needed in the very near future. He reiterated that the City must make sure that our citizens receive the services they need, while also making sure that, as our City continues to grow, other services will be funded so that we can meet those needs in the future. He voiced concern with the probable need for a considerable tax increase next year if steps are not taken now to look to the future.

Mr. Lynn stated that the funds proposed for transfer were funds that were proposed to be expended anyway and relaying his feeling that one of the reasons for generating and distributing our own electric was to help the people of Dover to maintain a low tax rate. It is his feeling that taxes should not be increased during a recession, but rather that the funds should be left with the people so that it can be spent to expand the economy.

Feeling that Council must attempt to keep costs down as much as possible, Mr. Salters stated that he also believes that citizens understand that the City needs to grow and they understand the costs associated with this growth. The services and programs offered to our citizens are of the highest quality and he firmly believes that the citizens support continued growth in this manner. The tax rate proposed by Mr. VanSant is small enough that it should not create a financial hardship for the taxpayers and may decrease the possibility of massive increases next year. Concurring, Mr. Pitts stated his feeling that citizens can better understand and deal with gradual increases versus no increase one year and a large increase the next year. He referred to programs that he hoped to institute last year but was unable to do so because of a lack of funds. This year's budget has even less funds available for these types of programs.

Mr. Hare objected to the proposal for a tax rate increase. He stated that all current services would be maintained without a tax rate increase. He also objected to the concept that the funds could be spent for Electric Department needs but not for General Fund needs. Members of Council cannot predict revenues or expenditures for next year and he suggested that the decision be based upon the financial information available for this fiscal year.

Mr. Weyandt called for the question on the motion that there be no tax increase and that the necessary funds be transferred from the Electric Fund to the General Fund in order to balance the budget. The motion failed by a roll call vote of four (4) yes (Mr. Hare, Mr. Daisey, Mr. Lynn and Mr. Weyandt) and five (5) no (Mr. Levitt, Mr. Pitts, Mr. Salters, Mr. VanSant and Mr. Christiansen).

SETTING OF PROPERTY TAX RATE

Mr. VanSant moved that the property tax rate for the 1991/92 fiscal year be set at 65.5 cents per $100 of assessed valuation (which is an increase of 2.5 cents over the current rate of 63 cents per $100 of assessed valuation). The motion was seconded by Mr. Salters and carried by a roll call vote of five (5) yes (Mr. Levitt, Mr. Pitts, Mr. Salters, Mr. VanSant and Mr. Christiansen) and four (4) no (Mr. Hare, Mr. Daisey, Mr. Lynn and Mr. Weyandt).

Prior to next year's budget review, Mr. Lynn suggested procedural changes that would assist Council and staff in understanding and acting upon the proposed budget. He suggested additional time for review and more detailed review with individual departments to ensure that everyone's needs are being met and that there is a true understanding of the proposed needs. Some other members of Council agreed that it is difficult to fully understand the issues based upon the information contained in the budget proposal.

FIRST READING - PROPOSED ORDINANCES

Mr. Weyandt moved to waive the reading of the proposed ordinances before Council, seconded by Mr. Hare and unanimously carried. Council President Christiansen reminded the public that copies of the proposed ordinances are available at the entrance of the Council Chambers or can be obtained from the City Clerk's Office. Final action by Council on the proposed ordinances will take place during the Council Meeting of June 24, 1991.

Responding to questions of Mr. VanSant, Mrs. Boaman relayed that the City Solicitor has stated that the first reading of the proposed budget ordinances can take place, with approved revisions to be made to the ordinances prior to their final reading.

Mr. Lynn moved for acknowledgement of the first reading, by title only, of the following proposed ordinances as revised by above actions, seconded by Mr. Salters and unanimously carried:

General Fund, Cash Receipts and Budget

Contingency Fund (for General Fund), Cash Receipts and Budget

Community Development Fund, Cash Receipts and Budget

Police Grants Fund, Cash Receipts and Budget

Drug Fund, Revenue and Budget

Library Grants Fund, Cash Receipts and Budget

Library Endowment Fund, Cash Receipts and Budget

Municipal Street Aid Fund, Cash Receipts and Budget

Park Fund, Cash Receipts and Budget

Health Insurance Fund, Cash Receipts and Budget

Worker's Compensation Fund, Cash Receipts and Budget

Intergovernmental Service Fund, Revenue and Budget

Water/Wastewater Fund, Revenue and Budget

Water/Wastewater Contingency Fund, Cash Receipts and Budget

Water Improvement & Extension Fund, Cash Receipts and Budget

Wastewater Improvement & Extension Fund, Cash Receipts and Budget

Electric Revenue Fund, Revenue and Budget,