Committee of the Whole Summary 11/01/21
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COUNCIL MEMBERS PRESENT:
S. Marmarou (in-person), D. Reed, M. Goodman-Hinnershitz, J. Cepeda-Freytiz, J. Waltman (all electronically)
L. Kelleher (in person), S. Smith, J. Kelly, F. Lachat, R. Tornielli, C. Crespo, W. Stoudt, F. Denbowski, A. Amoros, M. Rodriguez, J. Long, M. Oppenheimer, G. Mann, A. Anyu (all electronically)
The meeting was called to order at approximately 5:20 pm by Mr. Waltman, who announced that Ms. Sihelnik and Ms. Ventura are excused from the meeting. Due to COVID-19, the public is prohibited from physically attending the meeting. People can observe the hybrid meeting through the virtual link or phone number on the posted agenda, or watch Facebook Live. Citizens without internet access or dial-in capability can view the meeting in the Penn Room.
I. Council Solicitor
Mr. Waltman noted the need to finalize the salary with the attorney selected.
Ms. Kelleher explained that her salary estimate of $50,000 is based on a $35K salary for having the Council Solicitor cover 24 Regular Meetings at approximately 72 hours, covering approximately 4 Special Meetings per year at approximately 6 hours, conducting legal research, etc. The estimate also covers the need for this attorney to handle quasi-judicial functions including, but not limited to, conditional use hearings, HARB appeal heal hearings, tax exoneration hearings, liquor license hearings and personnel hearings or litigation or Charter complaint representation she suggests an hourly rate of $200 per hour.
Mr. Lachat agreed with the estimate prepared by Ms. Kelleher.
Council agreed that the estimate is reasonable. Mr. Waltman asked Ms. Kelleher and Mr. Lachat to call him tomorrow to discuss contacting the attorney selected.
II. PFM Review of 2022 Budget
Mr. Mann stated that the draft budget meets the Exit Plan requirements and there are no concerns with the projected expenditures and revenues. He noted that Reading remains poised to exit Act 47 in 2022.
Mr. Waltman reminded Mr. Amoros and Mr. Kelly about Council’s collective desire to retain the services of PFM after Act 47 to ensure that the City remains financially stable. Mr. Mann stated that those arrangements can be made.
Mr. Mann stated that although the 2022 budget again requires use of $2.8M from the reserve, it is in compliance with the City’s reserve requirements. He noted that use of the reserve was also budgeted in the last five (5) years; however, due to the City’s ability to curb expenditures cancelled the need to tap into the reserve.
Mr. Waltman requested that PFM prepare a five (5) year projection prior to the enactment of the budget.
Mr. Moran connected with the meeting.
Ms. Anyu stated that the projected revenues and expenditures are in compliance with the Exit Plan, noting that the majority of revenue line items show a gain. She noted that the Real Estate Tax is projected to grow by 4.4%, based on the $2M increase received in 2021.
Mr. Mann added that commercial properties that were previously in a tax abatement period are beginning to come back on the tax rolls, such as the DoubleTree.
Mr. Mann noted that the EIT revenue is projected to decline due to the elimination of the commuter tax during the summer of 2022. He noted that City residents’ income fell by approximately 6% due to the pandemic and commuters’ income was only reduced by 2%.
He noted that the EIT is one of the City’s largest revenue sources.
Mr. Mann noted the flux in revenues caused by the pandemic. EIT revenues were down 10% during the first quarter of COVID; then down 3% during the second quarter; and then were 14% higher than pre-pandemic levels during the third quarter. Unfortunately, that progress did not hold – revenues were down 11% again by the end of July, which is a little worse than when the pandemic first hit. He added that the EIT has not recovered quickly as some individuals have not yet rejoined the workforce for various reasons.
Ms. Anyu stated that the Licenses and Permit Fees revenue is projected to increase by 8.9% based on the construction activity that occurred in 2019.
Mr. Mann stated that the largest driver on the expense side is employee related costs – salary, longevity, premium holiday pay and fringe benefits. Mr. Kelly noted that overall the health care costs did not increase as much as expected and the broker negotiated a reduced cost for prescription drug coverage.
In response to a question about curtailing expenses post Act 47, Mr. Mann noted the importance of considering the impact of purchases, salary increases and staff additions over an extended period of time, and not just in the moment.
Ms. Goodman-Hinnershitz agreed noting that the salary caps in the Exit Plan assisted the City financially. Mr. Mann agreed noting the need to continue to manage costs in the future.
Mr. Moran thanked PFM for their assistance and professionalism.
Mr. Waltman reminded Mr. Mann of the need of a five year projection by the beginning of December.
In response to a question, Mr. Mann suggested placing restrictions on the reserve amount that exceeds $22M for OPEB, pension, housing strategy implementation, etc.
III. Police Budget
Mr. Kelly and Chief Tornielli reviewed the Police Budget.
The increase in Criminal Investigation Rentals and Leases line item is caused by the need for cell phones for investigators that are out of the City’s system due to the need for confidentiality. The Part-time wages covers the confidential secretary and the Contracted Wages covers the Court Liaison.
In Special Services the full-time and part-time civilian positions are located in the VSU, dispatch and records. Chief Tornielli noted that there are no part-time police officers. The reduction in Contracted Services is caused by the payoff of the County radio system. The General Plant Supplies line item covers various certifications, ammunition, etc. The Special Police Academy line item covers academy costs outside of that specific budget area.
Overall the OPEB costs throughout the Police budget covers the collective bargaining healthcare costs for those retirees who have not become re-employed. Mr. Kelly noted that if a police retiree who is re-employed goes back into retirement, that retiree is eligible to return to the City’s healthcare program until eligible for Medicare.
The bulk of Police salaries and personnel costs is located within the Patrol budget area.
Chief Tornielli explained that the cost of health insurance for working dogs is exorbitant and he noted that the department uses veterinarians who charge a discounted rate for the City’s canines.
In the Administrative area the Consulting Fees covers psychological exams. The Junior Police Academy is funded at $25K. The Chief explained that the new academy is in partnership with Olivet. He expressed the belief that $25K is sufficient for the academy as the Berks County Community Foundation also provides grant funding for the program.
Mr. Kelly stated that the CIP contains the 2nd phase of the data/CAD project for the department.
In response to a question regarding the need to add patrol officers, the Chief explained that prior to Act 47 the City had over 200 officers. Act 47 required the size of the force to reduce to 168 officers. While this appears to be dramatic, this reduction was achieved mainly through the civilianization of positions and a realignment of personnel with minimal impact on patrol services.
The Chief explained the department’s difficulty in attracting new police officers.
The meeting adjourned at approximately 6:12 pm.
Respectfully Submitted by
Linda A. Kelleher, CMC, City Clerk