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HomeMy WebLinkAboutMeeting Notes 5-27-2015 1 BUDGET COMMITTEE Meeting Notes - May 27, 2015 Committee present: Eric Levine - Chairman, Pat Leary Staff present: Mike Solvig Others present: Bill Goodman Meeting was called to order at: 12:04 p.m. AGENDA ITEMS: • Review and approve meeting notes from April 22, 2015. Mr. Solvig distributed a revised Page 3 from the draft notes to the Committee. The previous notes did not include the information on the government efficiency plan being prepared by Tompkins County for the 2016 tax cap/tax freeze program. Committee members reviewed and approved the revised meeting notes from April 22, 2015. • Continue Review of Long-Term Debt and Debt Service Projections from April 22. Mr. Solvig asked the Committee members if they had any additional questions or comments regarding the Long-Term Debt and Debt Service Projection schedules reviewed at the April meeting. There being no questions, Mr. Solvig stated that there would be some revisions to the schedules based on Public Works’ recently updated capital plan before the schedules are presented to the full Town Board. Committee members discussed future funding of highway projects. The Town currently relies on bonding as the major source of funds for annual highway capital projects, as the Town’s current budget structure does not include funds for this purpose. While bonding does provide the needed funds, it also carries the additional expense of the annual interest payments. The Town will pay $83,000 in interest expense on existing highway debt in 2016. This expense will continue to increase as future highway debt is issued, and interest rates increase from the historic lows of the past four years. The Committee has discussed replacing the use of bond proceeds by increasing the annual tax levy in the Highway Fund. Mr. Solvig said he would like to have an additional $500,000 annually to use for highway capital projects. The Town would need to make either 1) an extraordinary large increase in the Highway Fund tax levy in one year, or 2) a series of smaller increases in the Highway Fund tax levy over two to five years. With regards to the tax cap, the large increase in one year would be better. Increase in the tax levy for one year would be roughly between 9% - 10%. While the Town would not meet the tax cap in this year, it would be able to the next year and following years. A series of smaller increases, say $100,000 a year over five years, would result in an annual tax levy increase of at least 3.5%. This would still put the Town over the tax cap limit, and would do so for the next five years. From a bonding perspective, the large increase in one year would also be better. By having the $500,000 immediately available, the Town would be able to stop bonding, or at least significantly reduce bonding, for Highway Fund capital projects. This will require increased coordination with the Public Works Committee in adjusting the Capital Improvement Program to match the available 2 funds. With a series of smaller annual increases, the Town may have to continue some bonding at reduced levels for a few years, or restrict the work done to match available funding. If the Town were to continue with some bonding, part of the annual increase in the tax levy would be taken by additional interest payments. This might require the Town to continue increasing the annual tax levy an additional year or two to produce the desired revenue for capital projects. • Discuss 2015 Bond Issue. The Town is scheduled to issue new long-term debt this year to finance several projects included in the 2015 Capital Improvement Program. We anticipate issuing $2,950,000 in new debt as detailed on the following schedule: Amount Amount Issuance Budgeted Bonded Costs Coddington Road Water Main - Ph.2 760,000$ 650,000$ 8,700$ Sapsucker Woods Water Tank 1,650,000 1,500,000 20,200 2015 Road Improvement Program 800,000 800,000 10,700 Total - 2015 Capital Projects 3,210,000$ 2,950,000$ 39,600$ 2015 Bonded Capital Projects The estimated bonded amount for the Sapsucker Woods Water Tank has increased $100,000 from the information presented last month. The April estimate did not include the pressure regulating valve & station, which is not part of the contract for the new water tank. This work will be contracting for separately, and is estimated to cost between $50,000 and $100,000. The estimated issuance costs of $39,600 represent 1.3% of the expected bond proceeds. • Discuss Resolutions and Local Law for Tax Cap Override for 2016. The Committee reviewed the resolutions and local law for tax cap override for 2016. The resolution to set the public hearing will be on the June 8 Town Board agenda, setting the public hearing for July 17. Consideration of adoption of the local law will be also be scheduled for the July 17 Town Board meeting. • Property Tax Cap and Property Tax Freeze Programs. The Committee discussed the status of this year’s tax cap legislation. The governor’s “circuit breaker” proposals were not passed as part of the State’s budget. On-going discussions between the Democrats and Republicans still has them far apart on their versions, with the Democrats wanting property tax relief to take the form of a credit on income tax, and Republicans wanting rebate checks sent to qualifying property owners. This item will remain on the Committee’s monthly agenda and will be discussed on an on-going basis as further information becomes available. • Other Items. - Status of Audit of 2014 Financial Statements: The auditors were on-site the week of May 4 for field work. At this time they are working on the draft financial statements. There were no conditions found by the auditors, to the best of our knowledge, that would be reportable in the management letter. Also this year, the total for Other Post-Employment Benefits (OPEB) was required to be recalculated. The total OPEB is expected to increase from prior years. The court audit has been scheduled for June 2 & 3, and is included in the cost of the annual audit. The deferred compensation audit is scheduled for June 15, and the $2,400 cost for this piece is not included in the annual total. 3 - Status of Application for the Sapsucker Woods Water Tank Replacement: The application for the Sapsucker Woods Water Tank Replacement is still under review at the Office of the State Comptroller. Town staff has responded to the OSC’s questions and is expecting approval of the application very soon. In anticipation of receiving this approval, consideration of adoption of the Bond Resolution by the Town Board has been scheduled for the June 8 meeting. After adoption of the Bond Resolution, we will be ready to proceed with the bond sale. - Status of 2015 Sales Tax Collections - First Quarter: Mr. Solvig reported that he had hoped to present the Committee with the sales tax collections for the 1st Quarter of 2015, but the Town has not yet received the March collections from the County. Sales tax collections for the first two months of 2015 were very good, with January and February total collections at 8.3% over collections for the same period in 2014. The 1st Quarter report will be presented at the June meeting. - Status of Reimbursements for Sustainability Planner expenses: 1) The Town received $20,730.57 from the Town of Dryden as reimbursement of expenses paid by the Town of Ithaca while we shared the Sustainability Planner position from 2010 through 2013. This reimbursement has been outstanding for approx. 15 months. The first invoice was sent to the Town of Dryden Supervisor on January 15, 2014. This revenue was accrued to and recognized in Fiscal Year 2014. 2) The Town received $14,341.78 from the City of Ithaca as reimbursement of expenses paid by the Town of Ithaca for the shared Sustainability Planner position under the current Town/City agreement. This reimbursement was for the period from April 1, 2014 to March 30, 2015, the first year of a two-year agreement. - Status of Reimbursement for Gateway Trail expenses: The Town received $12,675.67 from the NYS Department of Transportation as reimbursement of expenses paid by the Town of Ithaca in 2014 for design services for the Gateway Trail. Under a locally administered Federal grant, the Town is reimbursed for 80% of eligible expenses incurred in the construction of the Gateway Trail. - Status of Refunding of the Public Improvement (Serial) Bonds, Series 2004-B: All outstanding bonds were paid on May 15. A total of $1,021,812.50 was paid; $1,000,000 for principal, and $21,812.50 for interest. $102,125.00 was paid directly by the Town, and $919,687.50 was paid by the Bank of New York - Mellon, the refunding trustee, out of the proceeds from the sale of the Public Improvement Refunding (Serial) Bonds, Series 2014-A, issued in December 2014. (See attached schedule of May 15, 2015 bond payments.) - June and July Town Board Study Sessions: The Committee members discussed the 2016 budget process. At the June Town Board study session, we will discuss the following items: 1) Reserve funds and maximum limits, discussed at the February meeting. 2) Outstanding Long-Term Debt and Debt Service Payments. 3) Five-Year Financial Projections for Fiscal Years 2016 through 2020. At the July study session we will discuss the Five-Year Capital Improvement Program. - Contributions to Community Organizations: Bill Goodman asked the Committee members if they have any further thoughts on the contributions to community organizations. He stated that he would rather see the funds we donate to the City each year for Cass and Stewart Parks be used to maintain and develop the Town’s trail system. Looking forward, the Town is soon to begin construction of the first phase of the Gateway Trail, and he would like to see development of trails in the Inlet Valley and a connection to the Black Diamond Trail. 4 In addition to trail development, the Town also has a number of future park development projects in the Capital Improvement Program, all without any identified funding sources. Mr. Goodman commented that in past years the Town had an ad-hoc committee on trails, and that this may be something that the Town Board should again form. Mr. Levine stated that he would be interested in serving on this committee. The meeting was adjourned at 1:03 p.m. Next Meeting: Wednesday, June 24, 2015 at 12:00 pm, Town Hall - Aurora Room