Committee of the Whole Summary & Budget Review 10/12/21
October 12, 2021
COUNCIL MEMBERS PRESENT:
D. Reed, M. Goodman-Hinnershitz, J. Cepeda-Freytiz, L. Sihelnik, M. Ventura (all electronically), S. Marmarou (in person)
L. Kelleher (in person), M. Rodriguez, F. Lachat, S. Smith, J. Long, C. Crespo, A. Amoros, W. Stoudt, J. Kelly, A. Acevedo, E. Moran, F. Denbowski, S. Rugis (all electronically)
The meeting was called to order at approximately 5:03 pm by Ms. Goodman-Hinnershitz. Due to COVID-19, the public is prohibited from physically attending the meeting. People can observe the virtual meeting through the virtual link or phone number on the posted agenda, or watching Facebook Live. Citizens without internet access or dial-in capability can view the meeting in the Penn Room.
Ms. Goodman-Hinnershitz noted her hope that the budget review meeting will progress with the great team work that occurred last year. She inquired if Council prefers to work from electronic spreadsheets or the budget binders. The majority expressed the desire to work from the electronic spreadsheet.
Mr. Kelly stated that the updates to the electronic spreadsheets can only be sent every other week due to the time it takes to hide employee proprietary information. He asked Council not to release the spreadsheets publicly and to treat them as confidential information. He stated that the public copy is on the City’s website.
- Budget Overview
Mr. Kelly referred to the budget overview memo distributed this afternoon highlighting the revenue and expenditure drivers and the position ordinance additions.
Mr. Kelly stated that 27% of the budgetary revenue is obtained from property taxes; a $1.1M increase is projected. A slight increase is also projected for Prior Year EIT. He noted that EIT is flat due to the reluctance of some to return to the workforce. The Real Estate Transfer Tax is projected to increase by $500K to $5.2M due to the brisk real estate market. He stated that the Interest and Rentals line item includes revenue from the three (3) year agreement with the Parking Authority.
Mr. Kelly explained that $252K is being drawn from the fund balance to close the deficit. He explained that while some past budgets closed the deficit with fund balance, the transfers were not required due to unfilled positions and reduced expenditures.
On the expenditure side $1.4M will be used to cover salary increases – 4.5% for Police, 4% for AFSCME 3799 and 2763, 3.5% for Fire and 3.5% for Management. He noted that the amount projected for Health Insurance in the fringe benefits line items requires a modification, as the estimated cost was recently received – an increase of $157K.
-> Fringe Benefit cost increase modification required
Mr. Kelly stated that overall operating expenses are reduced by $268K. He stated that the new positions in CD, two (2) positions in Property Maintenance for lead abatement and four (4) under HUD for health literacy are covered by two (2) 2-year grants. There is no requirement to retain the positions after the grant period ends. He noted that the CD Deputy Director position was also added to help.
Ms. Cepeda-Freytiz noted the decre
ase in fringe benefit costs, when adding new positions should increase those expenses. Mr. Kelly noted that as he previously stated the health care cost estimates were just obtained and the fringe benefit allocations require modification.
Ms. Goodman-Hinnershitz noted that there is no standard amount for fringe benefits as employees can choose what level of coverage they desire which affects the costs.
Ms. Sihelnik inquired about the administration’s strategy to rein in personnel expenses but consider some new positions on the other side of Act 47, as overall the City has been operating at a greatly reduced capacity for over 10 years.
Mr. Kelly stated that there is no overall strategy and that the need to expand positions in various offices to improve or expand services must first consider the City’s ability to cover those costs annually.
- Mayor, Council/City Clerk, Managing Director, Auditor Budgets
Mr. Kelly highlighted the Mayor’s budget and noted a slight decrease in overall expenses and the Council budget showing some expense decreases and an increase in legal expenses due to the need to retain a Council Solicitor.
Ms. Reed noted the need for the Council budget to include a PT consultant to assist and coordinate the City’s 275th Anniversary. She stated that this need was discussed with the mayor and his staff and they agree with the need for this position to fall under the Council budget. She stated that a job description for the position is being developed.
-> Add funding for a PT consultant to the Council budget for the 275th Anniversary
Ms. Cepeda-Freytiz inquired why the Council Solicitor is not included in the Position Ordinance and if this position is full or part-time. Mr. Kelly explained that the retainer is covered under legal expenses. Mr. Waltman stated that this position is considered part-time. He stated that this issue will be discussed at the October 18th COW.
Ms. Cepeda-Freytiz inquired how the City will sustain 3.5% increases for employees and she inquired why these increases are planned outside of employee performance evaluations. She also inquired why some directors are excluded from the budget cover sheet.
Mr. Kelly apologized for the error on the cover page. He explained that salary increases were scarce for all employee groups since the City entered the Act 47 program in 2010 which makes it difficult to retain employees. He stated that salary increases can be covered in a variety of ways, including tax increases. He stated that in the 2021 budget the 2% employee increases were covered by a small property tax increase and a draw from the reserve; however, due to unfilled positions and reduced expenditures the draw from the reserve was unneeded. He noted that the 2020 draft external audit predicts a surplus of approximately $2.2M.
Ms. Sihelnik questioned if the Council budget contains any increased costs for technology due to the meeting changes required by the pandemic.
Ms. Kelleher and Mr. Kelly explained that IT covers the Zoom expenses and the technology improvements for Council Chambers are being covered by IT out of the 2021 budget. The proposed 2022 Council budget includes subscription costs for a new streaming service.
Ms. Cepeda-Freytiz and Ms. Goodman-Hinnershitz questioned the reduction in translator expenses. Ms. Kelleher stated that a reduction is suggested as translation services were only requested for one meeting – a BPRC hearing. Ms. Kelleher noted that based on past in-person attendance by the public it does not appear that amount of funding will be needed. She added that the closed captioning applied to the Facebook stream covers that translation need.
Ms. Cepeda-Freytiz noted the need to purchase translation equipment similar to that used by the Hispanic Center so it is available for those who require it. Mr. Moran agreed, noting that he expects an increase in in-person attendance at meetings due to an increase in public engagement.
Ms. Rodriguez highlighted the minor adjustments in the Auditor’s budget including an increase in training and legal services. She added that the Audit Coordinator salary requires an increase, as was approved at the October 11th Council meeting. She also requested that the legal services allocation be increased by $5,000 to a total of $10,000.
-> Increase the Audit Coordinator’s salary by $3,600
-> Increase the Audit Legal Services by $5,000 to $10,000
Mr. Kelly highlighted the Managing Director’s budget. He stated that a part-time employee was added to assist the Communications Coordinator at a cost of $19,500.
Ms. Goodman-Hinnershitz noted the need for the Communications Coordinator to assist the Council office.
Ms. Reed added the need for the Communications Coordinator to cover city-wide and District issues such as covering Zoning hearing, Planning meetings and events or issues that impact District residents such as street closures or other projects.
- Public Works – Operations, Engineering, Liquid Fuels
Ms. Cepeda-Freytiz inquired why budget review is not sequential in the same order as the budget binder, which would make it easier. Ms. Goodman-Hinnershitz explained that the budget schedule is developed based on the time available at the meeting. For example due to the complexities of the Public Works budget, two review sessions are required and the need to cover complex budgets on evenings that do not include regular meetings.
Mr. Kelly reviewed the Public Works budget areas noting the minor changes for 2022. He explained that some positions like the Utilities Division Manager and the Public Works Deputy Director/Projects manager are located in one division but funded an another division. For example the Deputy Director/Projects Manager is listed under Administration area and funded from Capital. Another example is the Project Accountant which is listed under Accounting but funded by the WWTP.
Mr. Marmarou left the meeting.
Ms. Goodman-Hinnershitz noted the need for the Pagoda Foundation to understand the total costs involved with the Pagoda – operational, maintenance and capital. Ms. Cepeda-Freytiz agreed and she suggested looking at these costs for all City owned properties.
Mr. Rugis stated that City owned properties are a mix of land and buildings. He stated that he is unsure of the total number of each type. He stated that there are some that are owned by the City but operated by another organization such as the Rec Commission and the Library. He offered to bring a report to a future meeting.
-> List of City owned properties, land and buildings, identifying those used by other organizations and the operational costs for each
Mr. Rugis explained the various uses allowed with the State Liquid Fuels funding and some of the caveats outside of winter maintenance and paving.
Ms. Cepeda-Freytiz inquired when the updated budget would be electronically distributed. Mr. Kelly reiterated that the budget will be emailed to everyone every other week due to the need to hide some proprietary information and the amount of time that takes.
Ms. Goodman-Hinnershitz stated that next week’s sessions are as follows:
Mon Oct 18th 5-7 pm – Public Hearing GF Budget, Budget Review Immediately following
- Public Works re Sewers and Sewers Fund Retail, Solid Waste, Shade Tree
Tues Oct 19th 5-7 pm
- Public Hearing Capital Budget
- Conditional Use Hearing – 5 pm – Council
- 730 McKnight - Group Home
- Budget Review immediately following –& Capital Budget and Finance Dept
Respectfully Submitted by
Linda A. Kelleher, CMC, City Clerk