LEGISLATIVE, FINANCE AND ADMINISTRATION COMMITTEE

The Legislative, Finance, and Administration Committee meeting was held on January 22, 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 6:36 p.m.), Mr. Ruane, and Council President Williams. Mayor Speed was also present.

AGENDA ADDITIONS/DELETIONS

Mr. Slavin moved for approval of the agenda, seconded by Mr. Shevock and unanimously carried.

Expansion of Voluntary Curbside Recycling Supported by Dover

During their meeting of January 8, 2007, members reviewed a proposal to expand voluntary curbside recycling and tabled action to allow further review.

Mr. Hogan moved to remove the matter from the table, seconded by Mr. Slavin and unanimously carried.

Mrs. Tieman, Senior City Administrator, reminded members that the proposed expansion would allow any citizen who wished to participate in the recycling program the opportunity to do so at no cost. The Delaware Solid Waste Authority (DSWA) would provide curbside pickup two (2) times per month and charge the City $1 for each pickup ($2 per month, per participating resident). The annual expenditure would be approximately $36,000 for 1,500 participants. However, she stated that the program would mainly be subsidized by landfill savings resulting from the tonnage of trash that is diverted from the landfill by recycling, which is estimated at $26,110. In addition, she stated that there would be other savings such as reduced expenses associated with gasoline and maintenance, estimated at $1,236, and manpower, estimated at $1,604. Therefore, utilizing an estimated 1,500 participants, the actual cost to the City would be approximately $7,000 per year for a City supported recycling program.

Responding to Mr. Salters, Mrs. Tieman stated that although there would be additional costs to the City with more participants, there would also be corresponding savings realized.

Mr. Rich Von Stetten, Senior Manager - Recycling for DSWA, stated that there are several different programs throughout the State of Delaware utilizing bags, bins, or carts on wheels. The DSWA would accommodate the preference of the participant, realizing that there may be individuals that would have difficulty carrying bags or bins and would need to use the carts.

Staff recommended that the City Manager be authorized to sign a contract with the Delaware Solid Waste Authority (DSWA) to provide the City of Dover supported voluntary curbside recycling at a cost of $24 per year per participating resident for every other week pickup.

With reference to the contract, if approved, Mr. Hogan urged staff to assure that the program is voluntary for the residents of Dover. He reminded members that there have recently been financial issues presented to the City and relayed concern with the timing for expanding this program. He relayed concern that the City is having difficulty obtaining the necessary funds to cover electric and other expenses and, although there are savings, there will not be enough to cover the costs; therefore, approval to expand this program will be a commitment to add an expenditure for the City. He suggested that the expansion be delayed until July 1, 2007 when a new budget year begins.

Concurring, Mr. Carey noted that participants are currently charged $4 per month and questioned if it would be beneficial for both the City and the participants if the fee was reduced to $2, which would offset costs to the City. Once there are enough participants that would reduce the expense to the City, then consideration could be given to providing the service at no cost.

Responding, Mrs. Tieman stated that there would always be costs associated to recycling. She explained that one of the main reasons staff would like to subsidize this program is because there are many residents that cannot afford to participate and it would also encourage more residents to participate. She also noted that the City recently lost three (3) voluntary recycle sites due to a change in ownership, which makes this program more convenient.

Mr. DePrima advised members that the contract for the proposed expansion has been offered by the DSWA. He is not sure if they would be in agreement with instituting a charge to each participant rather than the fee being paid by the City.

Mr. Slavin explained that staff’s $7,000 estimate is for a full year cost, with an estimated 1,500 participants. There are only five (5) months remaining in the fiscal year for implementing the expanded program and he felt sure that it would take time before there are 1,500 participants. Taking this into consideration, it was his opinion that there would only be a third of the costs required from the City if the expanded program were implemented at this time. Mr. Slavin also stressed his opinion that if the City could extend this service city-wide to anyone who wished to participate, it would be a great incentive and felt that the City should do so.

Concurring, Mr. Ruane reminded members that instituting a trash fee was one of the most controversial issues that has ever come before the City. He also stated that several participants feel that because they recycle, they should be refunded in some way and suggested that the proposed expanded program would provide them a return for their efforts.

Mayor Speed also relayed his support for the expanded program as presented. It was his opinion that regardless of the amount of the fee charged, it is the idea of having to pay for the service that prevents people from participating. By reducing the fee to $2, he estimated that there would be an additional 200 participants, which would not allow the City to reach the goal of having 1,500 participants. Mayor Speed advised members that the only way to have this accomplished would be to have the service provided at no charge to participants.

Mr. Hogan moved to recommend that the City Manager be authorized to sign a contract with the Delaware Solid Waste Authority (DSWA) to provide the City of Dover supported voluntary curbside recycling at a cost of $24 per year per participating resident for every other week pickup, with the understanding that the contract will state very clearly that it is a voluntary program with assistance. The motion was seconded by Mr. Slavin and unanimously carried.

Discussion - Moratorium on Hiring

During their Regular Meeting of December 11, 2006, City Council approved a recommendation of the Joint Legislative, Finance, and Administration and Utility Committees, when considering the need for electric rate increases, that the Budget Team be directed to prepare a list of positions that are currently vacant and a hiring plan for the remainder of the fiscal year for presentation to the Legislative, Finance, and Administration Committee for consideration.

As directed, Mr. DePrima provided a current list of positions that are vacant as well as a hiring plan for the remainder of the fiscal year. He noted that since December 11^th, there have been ten (10) positions added, explaining that in an organization as large as the City, the list is always changing. Mr. DePrima stated his opposition to a hiring freeze, feeling that it is not a good budget management tool due to the chance nature of vacancies. The randomness of vacancies gives no assurance of any savings; therefore, its value to the bond rating agency is questionable. He stated that there is no evidence of advice being received from the bond rating agencies or financial advisors that a hiring freeze would help satisfy their concerns.

In addition, Mr. DePrima stated that the randomness of vacancies could impact operations and services, particularly for small departments, and critical positions, such as the Library Director. He presented the following hiring plan for the remaining fiscal year:

       1.    Continue using the Hiring Justification Outline (provided to members in their packet) as a tool to determine the level of need for filling a position. I will categorize new vacancies as follows: 1) Critical; 2) Hold until off the Moody’s watch list; and 3) Permanent hold while reevaluating the position.

       2.    Consider the following positions critical and continue hiring process: 1) Assistant City Clerk; 2) Payroll Specialist; 3) Library Director; and 4) Administrative Assistant - Tax Office.

       3.    Continue filling the following positions because they have been vacant for some time, and we have completed the process and are ready to offer the position or have already offered the position: 1) MEO II – Construction; and 2) T&D Engineering Coordinator.

       4.    Hold on hiring the following positions until the City is off of the Moody’s watch list: 1) Groundworker; 2) Inspector I; 3) MEO I – Streets; 4) Account Clerk I; and 5) MEO I –Water/Wastewater.

       5.    The following positions have been in a virtual freeze due to our inability to fill the positions; therefore, I want to continue advertising to ensure that good candidates surface: 1) Electrical Engineer; 2) Civil Engineer; and 4) Programmer Analyst. While these positions are vacant, we are fulfilling the critical needs of the departments through consultants.

       6.    I may, from time to time, move positions from a category depending on the duration, season, or other circumstances.

Mr. Hogan moved to recommend acceptance of the City Manager’s plan for the remainder of the fiscal year and recommend that this process be continued in the future, seconded by Mr. Slavin and unanimously carried.

Debt Management Policy Review

Mrs. Mitchell, Treasurer/Finance Director, presented members with a draft Debt Management Policy for their review. She explained that the policy was developed to provide City officials with a set of guidelines to follow for planning and execution of the Capital Investment Plan (CIP) along with guidance for managing the City’s current debt. In summary, the policy provides debt management objectives, permitted types of debt, guidance for refinancing current debt, debt planning and oversight.

Mrs. Mitchell advised members that one of the key concepts is for the development of a financial model in conjunction with the budget and CIP process in order to determine debt affordability prior to presenting the budget to Council for approval. She stated that the model will include a five (5) year forecast, which will provide Council with a better understanding of the impact of new debt on future years. Although this process would include an additional step to the current budget process, the effort is justified as it will assist in providing members with an understanding of current and future costs of service. Mrs. Mitchell assured members that the policy takes into consideration State law and Charter restrictions.

Referring to Section V, Restrictions on Debt Issuance, Mrs. Mitchell explained that since these are recommendations being considered by the Charter Review Committee and have not been approved by Council, they will be eliminated from the policy at this time (page 4 of 14) . This information was provided for informational purposes only. Also, she advised members that the amounts provided in the Debt Service Limitations, debt service payments (principal and interest) not to exceed 8% of recurring General Fund revenues for all general obligation bonds, and the General Obligation direct debt not to exceed $700 per capita, are based on research of other municipalities and GFOA recommended practices. Currently, the City’s rate per capita is approximately $100, which is well below the recommended $700 per capita. She stated that the debt service payments not to exceed 8% would currently equate to approximately $2.5M.

Mr. Slavin reminded members of previous discussions regarding overlapping debt, involving the per capita debt from state, county, as well as the City and questioned if the $700 per capita is based on an aggregate amount or if it would be representative of the City’s debt only. Responding, Mrs. Mitchell stated that she would look into this matter further and be sure to clarify it in the policy. Mr. Slavin requested that she also provide information regarding the amounts of the capita per debt for a citizen of Dover from the State, County, and School Districts.

For clarification, Mr. DePrima suggested that the policy indicate a specific means of acquiring the population and recommended that the Delaware Population Consortium be utilized when determining populations.

Mr. Ruane requested that staff also review the possibility of the policy being more restrictive than the current Charter and report back the findings.

Responding to Mayor Speed’s concern of obligating future Council members, Mrs. Mitchell stated that the current practice is 20 years for G.O. Bonds. She stated that she would consult with the City’s financial advisor regarding this matter and report back to members.

Responding to Mr. Ruane, Mrs. Mitchell stated that guidance for achieving and maintaining a certain rating is not included in any City policies; however, when an agency reviews the City for rating, they take into consideration that the City has a formalized policy on debt management. Therefore, she explained that having a debt management policy will help with the City’s rating.

As a suggestion, Mr. Hogan felt that another bullet could be added under Section II, Debt Management Objectives, that would indicate that the City’s goal is to maintain or improve its current financial rating. Responding to Mr. Hogan’s question regarding Section IV, B, Short-Term Debt, Mrs. Mitchell stated that this Section addresses situations when there is a need to get quick cash to run operations. As an example, she stated that if there was a hurricane or some other disaster that had taken its toll on the City, this Section would permit the City to quickly obtain the necessary funds to continue to run operations.

Mr. Slavin moved to table the matter to allow staff the opportunity to obtain the additional information requested and that the matter be brought back to the committee in two (2) weeks. The motion was seconded by Mr. Hogan and unanimously carried.

Evalution of Bids - Purchase of ArcGIS Server

Members considered a request for the purchase of ArcGIS Server software, a Dell PowerEdge 1950 server, and installation services from ESRI. Mrs. Townshend, Director of Planning and Inspections, explained that the software/server bundle is essential for the City to advance in GIS technology and infrastructure. The ArcGIS Server can be leveraged to produce custom GIS applications and Web viewers to allow GIS data (interactive maps) to be available to more viewers, provide information lookup, and basic analysis.

Mrs. Townshend stated that there has been $50,000 budgeted in the CIP for GIS implementation. The ArcGIS server purchase is one component of this CIP item. She explained that, in accordance with Section 3.16 of the Purchasing Policy, staff is recommending approval of the ArcGIS Server purchase through ESRI, a sole vendor for the bundle, at a cost of $38,450.

Mr. Slavin moved to recommend approval of the ArcGIS Server purchase through ESRI at a cost of $38,450. The motion was seconded by Mr. Shevock and unanimously carried.

Mr. Slavin moved for adjournment, seconded by Mr. Hogan and unanimously carried.

Meeting Adjourned at 6:53 P.M.

                                                                                    Respectfully submitted,

                                                                                    Reuben Salters

                                                                                    Chairman

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