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Minutes from the special called Finance Committee meeting on December 6, 2005.
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Finance & Administration Committee Minutes
Tuesday, December 6, 2005
3:30 p.m. - City Council Conference Room - Huntington Building
Special called meeting
Members Present were: John Street, Jim Hargis, Harold Perrin, Ann Williams and Darrel Dover. Other present were: Mayor Formon, City Clerk Donna Jackson, staff and media. Councilman Alec Farmer was unable to attend.
ENGINEERING DEPARTMENT
Discussion was held concerning what the 209 Expenses account is used for. Mr. Claude Martin informed the committee that Mr. Harry Hardwick receives half of the money in the account for his car and phone expense. It was decided to decrease the 209 Expenses account to $10,500.
Since the overtime expense for 2005 was low, it was decided to lower the 211 Overtime account to $1,000 for 2006.
Questions were raised regarding the 213 Telephone Expense. It was asked how the Finance Department charges for the telephones. Mr. Larry Flowers explained the telephone expense is a pro-rated charge to each department.
Discussion was then held regarding the 217 Professional Services account and what was spent. Mr. Martin informed the committee that part of that account is used to pay Mr. Hardwick’s salary. He added that this year, the traffic study was paid for using that account. Questions were raised as to why that account was used to pay for the traffic study. It was explained the grant money did not cover the traffic study and no other department had budgeted for the traffic study. Mr. Martin was unsure why that particular account was charged for the study. It was also noted that Councilman Alec Farmer may know more about what account should be charged since he’s more familiar with the study. It was asked for the Finance Department to check into the traffic study to see what the balance is that is left to be paid in 2006. It was asked where the traffic study should be billed. Mr. Flowers stated he did not agree that Engineering or Planning should be billed for it because it would create a deficit and he thought the Capital Improvements fund was better suited to be billed for the traffic study. It was decided to lower the 217 Professional Services account to $30,000 and decide what to do with the traffic study at the wrap-up meeting to be scheduled.
Mr. Martin explained he would need to advertise in state-wide newspapers to fulfill requirements for grants. It was decided to increase the 220 Advertising account to $2,000.
Since Mr. Martin has not used very much out of his current outside maintenance account, it was decided to decrease the 222 Outside Maintenance account to $1,500.
It was also decided to make the following changes:
• lower the 223 Repair Parts account to $1,500
• decrease the 224 Supplies account to $4,500
• increase the 225 Fuel account to $10,500 since he has already spent most of his budgeted amount this year
• decrease the 226 Grease & Oil account to $600
• lower the 228 Dues and Subscriptions account to $1,000
• decrease the 231 Miscellaneous account to $500
• decrease the 233 Rentals account to $250
• lower the 318 Maintenance Contracts account to zero because he has not been charged for anything this year
Mr. Martin explained two extended cab pickup trucks in his fixed assets will be used to replace two 1997 vehicles that he currently has. It was asked what would be done with the vehicles that are being replaced. It was suggested to auction the vehicles. It was decided to leave the two pickup trucks in the budget.
Mr. Martin was informed that the laptop he had asked for that was in Mr. Alan Young’s budget was removed. It was asked what he was going to use the laptop for. Mr. Martin explained he was going to use the laptop in the field after the GPS system was in place for drainage areas.
OTHER
Mayor Formon informed the committee that he received an e-mail from the Police Department stating it would take 51 tasers for each person in the department to have one. It had been asked at the Monday, December 5, meeting for the total number needed to be brought to the committee. 32 tasers are currently in the budget, so the department will need 19 more. It was decided to wait until the next budget to purchase more tasers.
It was also questioned if the Police Chief Michael Yates said the vehicles were going to come in with everything, stripes included, but will not have the laptop or the radio. It was explained that the vehicles would come in with everything except the radio, but the vehicle would be wired for the radio. The laptop would be included in the vehicle. It was asked if someone could bring to the committee what Chief Yates is getting his information from.
STREET DEPARTMENT
Questions were raised regarding the 207 Uniforms account. Mr. Teddy Hooton informed the committee he received new bids for the uniforms and is not sure if the amount in the budget reflects the new bid amount. It was decided to lower the 207 Uniforms account to $15,000.
Since Mr. Hooton has not spent what was budgeted for the Expenses account this year, it was decided to lower the 209 Expenses account to $5,000.
It was asked why the 210 Part-Time Salaries account was increasing. Mr. Hooton explained that he has to hire part-time workers to perform work that had in the past been done through work release. It was asked for Mr. Larry Flowers to bring to the committee a breakdown of the work release program to show which departments got money and how much they received at the next meeting. It was questioned what the crews do and how well trained they are for the job. Mr. Hooton stated the part time workers performed general labor. It was also questioned if it would be better to hire full time employees as opposed to part time employees. Mayor Formon stated the budget was made with the idea that each worker would stay the full year, when in reality most of the workers do not stay very long. It was decided to decrease the 210 Part-Time Salaries account to $120,000. It was also suggested that the committee get a better understanding of what part time work means because some of the part time workers are working full time hours and receiving no benefits.
Questions were then raised concerning the 211 Overtime account. Mr. Hooton explained the crews are working three nights a week at the new mall, as well as other duties that require overtime. Discussion was held regarding whether the crews need to work five days a week or change shifts to better manage the workers time. It was also questioned whether Mr. Hooton would be better off hiring full time employees to take care of the worked performed by the part time workers. Mayor Formon added that some overtime is required because the workers are not experienced in everything that is done, so only certain people can be asked to pour concrete, for example. It was decided to increase the 211 Overtime account to $87,000. It was also suggested Mr. Hooton look closely at his part time workers and overtime work to better manage the workers’ time.
It was decided to:
• decrease the 217 Professional Services account to $25,000
• lower the 218 Office Expenses account to $2,000
• decrease the 219 Printing account to $500
• lower the 220 Advertising account to $1,000
• decrease the 222 Outside Maintenance account to $7,000
Discussion was held as to what needed repairs that would be covered by the 223 Repair Parts account. Mr. Hooton explained he has older equipment that often needs new parts. It was suggested he take a look at his equipment to see if the repairs are needed by all of the equipment or just a few pieces, so they could better tell if it would be better to just replace a few pieces of equipment as opposed to repairing them. It was decided to increase the 223 Repair Parts account to $300,000.
It was also decided to:
• decrease the 224 Supplies account to $120,000
• increase the 225 Fuel account to $200,000 based on the current figures of what Mr. Hooton has purchased so far this year
• decrease the 226 Grease account to $10,000
• lower the 227 Tires account to $50,000
• lower the 231 Miscellaneous account to $1,000
• decrease the 233 Rentals account to $40,000
• lower the 239 Street Signalization to $20,000
It was also decided to purchase one more ¾ extended cab pickup truck and one more one ton diesel pickup in addition to what was already listed in the fixed assets for a total of two 3/4 extended cab pickup trucks and 3 one ton diesel pickups. Mr. Hooton added that City Attorney Phillip Crego has reviewed and approved the buy back guarantees for the dump trucks. It was suggested that Mr. Hooton also look into purchasing some of the items instead of leasing them because they may be cheaper to purchase than lease due to the higher interest rates.
Discussion was held regarding the excavator the department currently owns. Mr. Hooton stated he needed a new one because of the decreasing state it’s in. It was asked whether the City should look into hiring someone to clean out the ditches, as the City had done previously, but to look at cleaning out the ditches on yearly basis. It was decided to take out the large excavator and check on prices to privatize the ditch cleaning.
SANITATION DEPARTMENT
Administration
It was decided to:
• lower the 211 Overtime account to $15,000
• increase the 214 Heat account to $2,000
• increase the 218 Office Expenses account to $1,500
• decrease the 228 Dues and Subscriptions account to $1,000
• lower the 231 Miscellaneous account to $1,300
It was questioned whether next year the administration and residential areas of the Sanitation budget could be put together to make things simple. But, commercial has fees that need to be kept separate from the rest of the areas. It was noted that in 2006 the Finance committee should look into putting the administration and residential areas together.
Landfill
Mr. Royce Leonard informed the committee that FTN had sent a contract to him for $62,300. He stated he was unsure whether the contract was just for engineering or whether it also included materials. He explained the money would need to be added to the Professional Services account. Mayor Formon questioned whether the it could be paid with capital improvement money because the contract is related to the landfill closure. It was decided to lower the 217 Professional Services account to zero since all the professional services received should be related to the landfill closure. He added that the City has another engineer, Northstar Engineering, which is making the closure plan.
It was decided to lower the 220 Advertising account to $1,000 and increase the 225 Fuel account to $50,000.
It was decided to transfer the $23,750 currently budgeted for the 235 Landfill Street Materials to the 236 Street Contracts account. The 235 Landfill Street Materials account was decreased to zero and the 236 Street Contracts account was increased to $23,750.
Mr. Leonard also presented the committee with estimates on the closure. Northstar Engineering is estimating the cost of the closure will increase because some of the items needed to close the landfill were increased due to fuel costs. The new total is now $1.69 million. It was explained that realistically the closure may not start until late-2006 and prices might be different. He added that in the FTN contract states the air permit may take up to 18 months.
He also informed the committee that the City needs to start taking the yard waste to the Craighead County Solid Waste Authority and pay $26 per ton or permit the compost site and relocate it. Mr. Leonard estimated at 4,000 to 6,000 tons of yard waste a year, the cost will be approximately $104,000 to $156,000 tipping fee. If the residents take the waste to the SWA, the City will not have to pay for gas, but will still have to pay the fee.
Residential
Questions were raised concerning the 210 Part-Time Salaries account. Mr. Leonard added he needed the part time workers and even depended on work release workers as well to get the work done. It was asked if he had looked into privatizing the residential sanitation services. It was decided to decrease the 210 Part-Time Salaries account to $185,000.
It was decided to:
• decrease the 211 Overtime account to $40,000
• lower the 215 Insurance account to $27,000
• decrease the 220 Advertising account to $500
Mr. Leonard informed the committee that in residential fixed assets, it should be $64,000 for two 2-ton yd K-Boom leased trucks. He added that Mr. Crego reviewed and approved the lease. It was also decided to lower the Misc. Tools in fixed assets to $4,000.
Commercial
It was decided to:
• decrease the 211 Overtime account to $6,000
• decrease the 223 Repairs account to $45,000
• lower the 225 Fuel account to $18,000
• lower the 226 Grease account to $3,500
• increase the 227 Tires account to $12,000
• decrease the 231 Miscellaneous account to $900
• decrease the 290 Tipping Fees account to $320,000
Discussion was held concerning whether the City should stay in the commercial sanitation business. It was suggested to look at cutting some services or generating more revenue. Mr. Leonard added the fees will increase by 8% in commercial fees, which would put the City lower than but close to private haulers. Mr. Leonard explained it would be hard to estimate what private haulers cost since private haulers also go out in the county, whereas the City doesn’t. It was questioned why the City would want to be lower than private haulers instead of the same price as private haulers.
It was also decided to cut all of the commercial sanitation fixed assets from the budget because of the concerns as to whether or not the City should be in the commercial sanitation business.
ADJOURNMENT
With no further business, the meeting was adjourned.