HomeMy WebLinkAboutMeeting Minutes 2-25-19
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BUDGET COMMITTEE
Meeting Minutes - February 25, 2019
Committee present: Eric Levine - Chairman, Pat Leary, Pamela Bleiwas
Staff present: Mike Solvig, Judy Drake
Others present: None
Meeting was called to order at: 12:05 p.m.
AGENDA ITEMS:
• Review and approve January 16, 2019 meeting minutes.
Moved: Pamela Bleiwas Second: Pat Leary Motion Passed
• Set 2019 Budget Committee meeting dates.
Budget Committee meetings in 2019 will be held the fourth Monday of each month. Meetings will
begin at 12:00 noon, and will be held at Town Hall in the Aurora Room. Mr. Solvig will revise the
Committee’s meeting schedule for 2019 and send it out with the draft minutes of today’s meeting.
• Preliminary Financial Report for the Year Ended December 31, 2018.
The Committee reviewed the Preliminary Financial Report for the Year Ended December 31, 2018.
The financial results for Fiscal Year 2018 were generally positive, with fund balances increasing in
most funds. Fund balances decreased in the Sewer Fund, Risk Retention Fund and Debt Service
Fund. For all funds, combined revenues and other sources of $26,405,276 exceeded combined
expenditures and other uses of $22,865,368.
2018 also saw revenue from sales tax collections increase 6.4% over collections for the prior year.
Total collections of $3,388,799 in 2018 set a new historical high for sales tax revenues, surpassing
the previous historical high total of $3,184,969 received in 2017.
For the major funds, results of 2018 operations were as follows:
- GENERAL TOWNWIDE FUND - Fund balance increased by $324,261, with revenues of $4,630,210 exceeding
expenditures of $4,305,949. Ending fund balance totaled $4,321,263, which includes reserves of
$832,626 for the Parks, Recreation and Open Space Plan account, $165,628 for the General Benefit
Reserve, $40,173 for the Preserve Maintenance account, $9,752 for the Land Stewardship account, and
$4,425 for the Inlet Valley Cemetery. The unreserved fund balance of $3,268,659 represents 74.7% of
2019 budgeted appropriations.
- GENERAL PART-TOWN FUND - With revenues of $1,688,666 exceeding expenditures of $1,522,055, fund
equity increased by $166,611. Revenues exceeded budget due largely to increased receipts from sales
tax collections and temporary certificates of occupancy issued for the Maplewood Apartments .
Expenses were significantly under budget for contractual services. Year-end fund balance of $1,239,379
includes $69,468 for the General Benefit Reserve. The unreserved fund ba lance of $1,169,911
represents 61.8% of 2019 budgeted appropriations.
- HIGHWAY TOWNWIDE FUND – This fund was established with the 2018 Ithaca Town Budget to account for
those highway activities to be funded on a town-wide basis. With revenues of $974,306 exceeding
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expenditures of $731,182, year-end fund balance totaled $243,124, all of which is unreserved. The
unreserved fund balance represents 34.0% of 2019 budgeted appropriations.
- HIGHWAY PART-TOWN FUND - With revenues of $3,411,795 exceeding expenditures of $2,975,457, year-
end fund balance increased by $436,338. Revenues were higher than expected, helped by increased
receipts from sales tax collections, the sale of surplus equipment and state aid (CHIPS). Ending fund
balance of $2,703,849 includes $283,905 for the Highway Equipment account and $79,412 for the
General Benefit Reserve. Unreserved fund balance totals $2,703,849 or 68.0% of 2019 budgeted
appropriations
- WATER FUND - Fund equity increased by $236,884 as revenues of $4,154,514 exceeded expenditures
totaling $3,917,629. Revenues from metered water sales were under budget, as were expenditures for
purchasing water from Bolton Point. The ending fund equity of $3,057,300 includes $23,836 for the
General Benefit Reserve. The unreserved fund equity of $3,033,462 represents 67.5% of 2019
budgeted appropriations.
- SEWER FUND - With expenditures of $3,009,783 exceeding revenues of $2,771,517, fund equity
decreased by $238,266. The ending fund equity of $2,524,990 includes $12,046 for the General Benefit
Reserve and $1,275,376 for the SJC Projects account. The unreserved fund equity of $1,237,568
represents 43.0% of 2019 budgeted appropriations.
- FIRE PROTECTION DISTRICT FUND - With revenues of $3,280,530 exceeding estimated expenditures of
$3,187,771, fund balance will increased by $92,758 to total $2,171,585 at year-end 2018. The year-end
fund balance represents 63.6% of 2019 budgeted appropriations.
The reserve funds and accounts are in very good shape as of year-end, and were reviewed by the
Budget Committee at the January meeting.
• Report on Sales Tax and Mortgage Tax Collections for 2018.
- Sales Tax Collections: The Committee reviewed the Sales Tax Collections Report for the Year
Ended December 31, 2018. Collections in 2018 totaled $3,388,799, an increase of $203,830 or
6.0% over the 2017 total of $3,184,969. 2018 also sets a new historical high for sales tax
collections, surpassing the previous historical high total of $3,184,969 received in 2017. Sales
tax revenues are distributed between the General Townwide Fund, General Part-Town Fund
and Highway Part-Town Fund.
Sales Tax - Budget 2,750,000$ 2,825,000$ 2,885,000$ 3,000,000$ 3,050,000$ 3,050,000$
Sales Tax - Actual 2,990,863 3,135,084 3,067,336 3,003,943 3,184,969 3,388,799
Actual Over (Under) Budget 240,863$ 310,084$ 182,336$ 3,943$ 134,969$ 338,799$
Actual as % of Prior Year Actual 106.46%104.82%97.84%97.93%106.03%106.40%
SALES TAX COLLECTIONS 2013 2014 2015 2016 2017 2018
- Mortgage Tax Collections: Mr. Solvig reported that mortgage taxes increased 7.2%, from
collections totaling $279,791 in 2017 to $299,934 in 2018. Mortgage tax revenues are assigned to the
General Townwide Fund.
Mortgage Tax - Budget 220,000$ 250,000$ 350,000$ 300,000$ 250,000$ 250,000$
Mortgage Tax - Actual 313,999 329,274 429,760 286,227 279,791 299,934
Actual Over (Under) Budget 93,999$ 79,274$ 79,760$ (13,773)$ 29,791$ 49,934$
Actual as % of Prior Year Actual 112.32%104.86%130.52%66.60%97.75%107.20%
2013 2014 2015 2016 2017 2018MORTGAGE TAX COLLECTIONS
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• Report on the 2018 Bond Issue.
In December 2018, the Town of Ithaca issued $4,150,000 in new long-term general obligation debt.
The Public Improvement (Serial) Bonds, Series 2018, was issued to finance the Town’s 2016, 2017 and
2018 water infrastructure improvement capital projects. These projects included the following:
Amount Amount Amount
Budgeted Authorized Bonded
Trumansburg Road Water Tank 900,000$ 900,000$ 711,000$
Park Lane Water Mains 500,000 500,000 500,000
Sapsucker Woods Water Mains 550,000 579,598 468,000
Christopher Circle Water Mains 450,000 422,319 371,000
Ellis Hollow Water Tank / Water Main 2,750,000 2,750,000 2,100,000
Total - 2018 Bond Issue 5,150,000$ 5,151,917$ 4,150,000$
2018 Public Improvement Bonds
On November 8, 2018, Moody’s Investors Service assigned an Aa1 rating to the 2018 Bond Issue. The
Aa1 rating reflects the Town’s “moderately-sized tax base supported by above-average resident
wealth and income and higher education anchors Cornell University and Ithaca College. The town
further benefits from a strong financial position and ample reserves, as well as manageable debt and
pension burdens.” Moody’s report also noted that “Financial management is strong as evidenced by
consistently healthy reserves.” Moody’s complete report is available upon request.
The bonds were sold on November 20, 2018. Five (5) bids were received, with effective interest rates
ranging from 2.990% to 3.219%, with award made to JPMorgan Chase Bank at a net interest rate of
2.990% over the 15 year life of the bonds. Total interest to be paid over the life of the bonds will be
$1,061,969. Issuance costs were $36,748, as detailed on the schedule shown below. Bond issuance
costs are 0.89% of the par value of the bonds. Net proceeds of the bonds totaled $4,113,252.
Bond Proceeds - Par Value 4,150,000.00$
Bond Proceeds - Premium -
Bond Proceeds - received on 12/06/2018:4,150,000.00$
Deposit made to TTC - General Fund account.
Bond Issuance Costs:
- Bond Attorney - Orrick, Herrington & Sutcliffe 14,063.00$
- Bond Advisor - Fiscal Advisors and Marketing 8,400.00
- Bond Rating - Moody's Investors Services 12,000.00
- Printing Services - Premier Printing 2,120.00
- Mailing Services - FedEx 164.79
Total - Bond Issuance Costs:36,747.79$
Net Bond Proceeds - Series 2018 4,113,252.21$
TOWN OF ITHACA
Public Improvement (Serial) Bonds - 2018
Rated Aa1 by Moody's Investors Service
The interest rate for this issue is 2.990% over the 15 year life of the bonds.
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• Initial Discussion of 2019 Bond Issue.
The Town is scheduled to issue $2,800,000 in new long-term debt this year; $600,000 to finance
the Public Works Facility Office Expansion project, and $2,200,000 for three (3) Water Main
Replacement projects from the 2019 Capital Improvement Program.
Amount Amount Issuance
Budgeted Authorized Costs
Public Works Facility Office Exp. 600,000$ 600,000$ 8,350$
Winthrop Drive Water Main Replmnt.625,000 625,000 8,700
Muriel Street Water Main Replmnt.700,000 700,000 9,750
Winston - Salem Water Main Replmnts 875,000 875,000 12,200
Total - 2019 Bond Issue 2,800,000$ 2,800,000$ 39,000$
2019 Public Improvement Bonds
The estimated issuance costs of $39,000 represent 1.39% of the expected bond proceeds.
Amount
Bond Attorney - Orrick, Herrington & Sutcliffe 15,000.00$
Bond Advisors - Fiscal Advisors & Marketing, Inc.9,000.00
Bond Rating - Moody's Investors Services 12,500.00
Printing & Mailing - Premier Printing Services 2,500.00
Total Estimated Bond Issuance Costs:39,000.00$
Estimated Bond Issuance Costs
We anticipate these bonds will be issued for a 15 year term.
• Discuss NYS FY-2020 Budget – Proposed Cuts to Aid and Incentives for Municipalities.
Under the proposed New York State FY-2020 budget, towns and villages scheduled to receive Aid
and Incentives to Municipalities (AIM) payments that are less than two percent of their total local
fiscal year 2017 expenditures, as reported to the State Comptroller, will be removed from the
program. All towns and villages in Tompkins County receive AIM payments in amounts less than
two percent of their total 2017 expenditures, and will see their AIM payments eliminated. For the
Town of Ithaca, this will result in the loss of $87,654 in revenue to the General Part-Town Fund.
On February 15, the Governor released his 30-Day proposed budget amendments which now
include a proposal to utilize approx. $59 million in additional sales tax revenue to help towns and
villages which would be impacted by the proposed cut in AIM payments. The proposal would use
additional sales tax revenue from the elimination of the internet tax advantage to keep towns and
villages whole. There is no information available at this time on how or when these funds will be
distributed.
• Continue discussion on Investment of Town Funds.
Long-Term Investments: The Committee reviewed a spreadsheet showing the current balances in
the Town’s various bank accounts as well as projections of 2019 year-end balances, identifying
approx. $6,700,000 from various accounts which could be invested “long-term” in a 14-month
Certificate of Deposit at Tompkins Trust Company (TTC). The current interest rate is 2.23% (2.25%
APY), generating approx. $175,000 in interest income over the 14-month term of the CD.
Mr. Solvig explained that he would like to place this investment with TTC at this time as 1) TTC is
the Town’s only approved depository of funds at this time, and 2) the value of the investments will
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be covered under the current collateral agreement between the Town and TTC. Mr. Solvig would
like to establish investment relationships with other banks in the future, but this will take some
time yet.
It was the consensus of the Committee to move ahead with investing the identified $6,700,000 in
a Certificate of Deposit at Tompkins Trust Company with a 14-month maturity and current interest
rate is 2.23% (2.25% APY). [Subsequent to this meeting, three (3) Certificates of Deposit for a
combined total of $6,700,000 were opened with Tompkins Trust Company on 3/15/19.]
Short-Term Investments: Options regarding short-term investments were also discussed by the
Committee. Mr. Solvig informed the members that the Town currently receives interest between
0.200% and 1.500%, depending on account balance, on funds deposited at TCC per the following
schedule:
INTEREST
RATE
Under $500,000.00 0.200%0.200%
$500,000.00 to $999,999.99 0.300%0.300%
$1,000,000.00 to $4,999,999.99 0.400%0.400%
$5,000,000.00 to $9,999,999.99 0.995%1.000%
$10,000,000.00 and Over 1.490%1.500%
ACCOUNT BALANCE APY %
As shown on the spreadsheet reviewed earlier, only two (2) Town accounts at TTC had current
balances in excess of $5 million, six (6) accounts had balances between $1 million and $5 million,
and another four (4) accounts between $500,000 and $1 million. The Town’s twenty-three (23)
remaining savings accounts have a current combined total of $1,520,600, ranging from a high of
$360,927 to a low of $102, with an average of $66,100. In 2018, the Town earned a total of
$33,070 in interest income from funds on deposit at TTC.
Mr. Solvig reported that he has begun looking at NY-CLASS (New York Cooperative Liquid Assets
Security System), a short-term investment program designed for public-sector funds, as an option
for the Town’s short-term investment needs. Participation in NY-CLASS is open to any municipal
corporation or special-purpose district empowered under New York State statute. As of 6/30/18,
there were over 400 active participants with investments totaling over $1.2 billion. There are no
minimum amounts or time requirements for investments. Current interest rate is 2.06%
• Other Items.
- Audit of 2018 Financial Statements: Auditors from Sciarabba Walker & Co. will be here on
March 26 & 27 for preliminary field work. Field work is scheduled for the first week of May.
(April 29 – May 3) No schedule has been set yet for the Court audit.
The meeting was adjourned at 1:16 p.m.
Next Meeting: Monday, March 25, 2019 at 12:00 pm, Town Hall - Aurora Room