Budget and Finance Committee Meeting

October 14, 2004 – 7:30 a.m.

DRAFT Minutes

Members present: Kurt Behrenfeld, Chairman; Dr. Paul DiGiovanni Marilyn Brown; Kay Breed; Danny Ross; Newell Willcox; Carol Tytler; Scott Steve, Chairman of the Legislature

Others present: Ann Homer, Scott Schrader, Dave Wern, John Carroll, Merwin Armstrong, Eric Mulvihill, Don Ferris, Jane Goldner, Mike Sweeney, Brian Liberatore

Chairman Behrenfeld called the meeting to order 7:31 a.m.

Mr. Willcox moved adoption of the minutes of September 9, 2004; seconded by Mrs. Brown. All members voting in favor, none opposed; minutes approved as printed.

1. Authorize Lease Agreements, Cortland County (Cortland County BDC/IDA, Cortland County Chamber of Commerce and Cortland County Convention & Visitors Bureau) – Mrs. Brown moved adoption; seconded by Mrs. Tytler. Mrs. Tytler asked about the cost of the CVB lease and she also asked if the dollar amounts are the same. Mr. Schrader indicated that BDC/IDA dollar amounts are exactly the same as they were previously paying; the same is true of the Chamber of Commerce. The question was asked on how long the previous leases were? Mr. Schrader indicated the terms are the same. Mrs. Tytler asked if the lease payments would go toward paying the bond and would the payments cover the bond payments fully? Mr. Schrader indicated that the payments would go toward the bond payments and the payments would be close to covering the bond payments. Mrs. Brown asked if the CVB dollar amounts would be available prior to the Legislative Session. Mr. Schrader indicated that he would try to get the information before Session. Chairman. Steve indicated that CVB will be moving in November 1. Chairman Steve indicated that the dollar amount for CVB will be available before session. Mr. Schrader indicated that the Planning Department rent was previously $4,500 per month. All members voting in favor; none opposed; resolution adopted.

Mrs. Brown indicated that there are other people in management positions who work overtime without additional compensation.. It is not right to pay one person and not compensate the others.

Chairman Steve asked Mr. Ferris how he knew what hours Mrs. Kennedy worked. Was he here when she came in and when she left?

Mr. Ferris indicated that Mrs. Kennedy has worked more than 40 hours. He is compensating her for 40 hours to complete the AUD.

Chairman Steve asked where the money was going to and where it is coming from. Is it tied in to the Open and Honest Government group that has been formed? Is money financing that?

Mr. Ferris indicated that it is going to Chairman Steve’s re-election campaign.

Mr. Behrenfeld indicated that it bothers him that management staff are not subject overtime and additional compensation unless something is brought forth. One could make the argument that if there are other shortcomings in the office that created this need, the person who created the shortcomings should contribute to the person doing the overtime. We shouldn’t compensate the shortcomings of a staff member.

Mr. Schrader indicated that FLSA is clear in that salaried positions are not entitled to additional compensation. What should have happened is that the staff member should be granted discretionary time equal to the extra time worked.

Chairman Steve asked Mr. Ferris what gave him the authority to pay Mrs. Kennedy without authorization from the Legislature.

Mr. Ferris indicated that "this group" wanted the AUD done. To give Mrs. Kennedy additional time would defeat the purpose. She is maxed out on vacation, losing vacation time, and to give her additional time would defeat the purpose.

Chairman Steve asked if Mrs. Kennedy being compensated the day before her testimony was coincidental.

Mr. Ferris responded that it was.

Mrs. Breed indicated that in her private sector employment, as the head of a finance department, she worked 50 to 60 hours per week; she stayed when she needed to get the reports done. If all this extra time is being put in, you need to look at what needs to be done to streamline functions.

Mr. Behrenfeld asked Mr. Ferris if he had told Mrs. Kennedy that she would be compensated for this time or if that came about after the fact.

Mr. Ferris indicated that it was not explicit. However, he has indicated earlier this year to this committee and to the Chairman that he would need additional time allocated to complete the AUD. This has been indicated in previous correspondence.

Chairman Steve indicated that on July 23, 2004, there was a meeting with Mr. Ferris, Chairman Steve, and other Legislators, and there was no request for this.

Dr. DiGiovanni stated that in the July 14, 2004, corrective action plan submitted by Mr. Ferris, he indicated that 40 hours would be needed to complete the AUD. That corrective action plan was rejected. The new corrective action plan did not include any request for overtime or additional pay.

Chairman Steve asked Mr. Schrader how long it would take to get payroll out of the Treasurer’s office. Mr. Schrader indicated that he could answer that question better at the end of October.

Chairman Steve indicated that we have two problems – we have this resolution. I believe in taking care of people. However, we have nearly $500 that was paid out illegally. We can’t go and take it back from the person. Mr. Schrader indicated that we could but he doesn’t believe it is in the best interest of the County.

Mr. Behrenfeld said that we cannot continue to accept "it was an oversight" from the Treasurer. He has been here 4+ years; he knows the procedure. Why do you keep coming to us after the fact? He knows that Mrs. Kennedy will most likely be disappointed, since there was an implicit promise. Do we need to adopt a resolution to have someone assume most of Mr. Ferris’ duties?

Mr. Ferris indicated that this committee does not understand his job responsibilities. It is not just being an accountant.

Mr. Behrenfeld stated that he feels that Mr. Ferris should be jumping in and doing what is necessary to get the job done.

Mr. Ferris finds it very disconcerting that of all the Board members, very few have taken the time to see the detail work that needs to be done in the department. To make assumptions without knowing the details is inappropriate.

Chairman Steve indicated that he has spent hours in the Treasurer’s Office.

Mrs. Breed indicated that she and Mr. Willcox have been to the Treasurer’s Office and spent a great deal of time and had a lengthy conversation with Mrs. Kennedy. That is how they found out the depth of the problem. She does, from her private sector employment which included working with the municipalities, know the detail of the work required. Everybody needs to pull their own weight. She does not believe it is a fair statement.

Mr. Ferris indicated that it is a fair statement, because Mrs. Breed only looked at the accounting functions. She did not look at, or understand, the other functions.

Mr. Willcox indicated that if something happens at his business, whether his fault or an employee’s fault, "the buck stops with him." He would expect Mr. Ferris to accept responsibility at some time.

Mr. Behrenfeld reiterated the laws and procedures that exist so we go about business in an appropriate manner. One of those controls has been bypassed by Mr. Ferris and he is in charge of many of the controls in the system. If the person with the controls is bypassing the controls, that is a major issue. We don’t know if there are other areas that controls have been bypassed. This raises more questions than it does provides answers. It is short-circuiting the process. I am going to recommend voting against this. I don’t know what to do about the 24 hours; it was paid without authorization.

Mr. Willcox asked if he voted yes, would he be breaking the law. The response was "yes."

Dr. DiGiovanni indicated that he does not want the committee’s action to be misrepresented as denying something that Mr. Ferris appropriately requested. We are denying something that is illegal. A vote to deny this motion is not a reflection on Carolyn Kennedy, but a reflection on Mr. Ferris and how he manages his department. I appreciate Carolyn Kennedy’s work and she should be rewarded but she should not be rewarded illegally.

Mrs. Brown stated that as far as the second WHEREAS is "now to be approved" which is not correct. This has been paid and is written wrong.

Dr. DiGiovanni indicated that Mrs. Brown is correct. This appears that the intent is now, when it has already been paid.

Mrs. Tytler stated if in Mrs. Kennedy’s situation, she has excess vacation time and will lose it at the end of the year. Can she carry it over and can the County buy back time.

Mr. Schrader indicated that in the past exceptions have been made for those items. But requests need to be appropriately made. The thing that is most disconcerting to him is that the system has been bypassed. Pink sheets were not done; this is the only way to change someone’s pay is through pink sheets. A pink sheet was not done; how was the pay changed?

Mr. Behrenfeld indicated that the process was not followed; we are getting this after the fact.

Chairman Steve indicated that he needs some accountability for this. What do we do with the payment already made?

Chairman Steve indicated that this is the oversight committee for the Treasurer’s office. He wants to make people accountable and is called a dictator for it. This is his tax money as well. What recourse do we have on this illegal action? It will all be skewed as politics. I try to create oversight and everything is sent back to me as creating a dictatorship. I like Mr. Ferris; I do not like these actions.

Mr. Behrenfeld indicated that there are processes in place; we are following those. I would like to continue going through the resolutions; and then at the end we’ll deal with what we do about the payment. It’s important that we get through the committee resolutions.

No members voting in favor; all opposed; resolution defeated.

The members asked for the following items to be pulled from the consent agenda and considered separately: 3, 13, 19, 20, 21, 25, 33, 34.

Dr. DiGiovanni moved to approve consent agenda minus 3, 13, 19, 20, 21, 25, 33, 34; seconded by Mr. Ross. All members voting in favor; none opposed; consent agenda adopted.

3. Amend Resolution 410-01, Building and Grounds Department (Budget: Expense – P 35) – Mrs. Tytler moved adoption; seconded by Mrs. Brown. Mrs. Tytler asked if we are just changing the title. The response was correct. The position will be filled as a Building Maintenance Mechanic. Mr. Schrader indicated that the position will be deemed vacant by mid-November and will be filled as a Building Maintenance Mechanic. All members voting in favor; none opposed; resolution adopted.

4. Authorize Agreement, Health Department/Administration (Cortland Memorial Hospital Transfer Agreement)

5. Authorize Agreement, Health Department/ Hospice (Contractual Services)

6. Authorize Agreement, Health Department/ Hospice (Program Services)

7 Authorize Agreement, Health Department/ Hospice (Transfers/Referrals)

8. Authorize Agreement/Accept Funds, Health Department/Administration (Healthy Heart Program)

9. Authorize Agreement/ Accept Funds, Health Department/Administration (Tobacco Enforcement Program) (Budget: Revenue – P 81)

10. Authorize Agreement/ Accept Funds, Health Department/ Administration (Central NY Regional Immunization Information System)

11. Authorize Agreement/ Accept Funds, Health Department/ Administration (Eat Well Play Hard Grant)

12. Authorize Agreements, Health Department/ Nursing (Contracted Services)

13. Authorize Agreements, Health Department/ Administration (Educational Institutions) – Dr. DiGiovanni moved adoption; seconded by Mrs. Brown. Mrs. Brown asked if there is cost to the County. Mr. Schrader indicated that we basically provide "student teaching". This assists our nurses and helps us recruit new nurses. The only cost is in-kind service supervising/training the students. Mrs. Tytler asked if we get remitted tuition from SU when we have an intern? Mr. Schrader indicated that in some cases we do. Mrs. Tytler asked how they are handled. Mr. Schrader indicated that they are received in DSS and administered in DSS. All members voting in favor, none opposed, resolution adopted.

14. Amend 2004 Budget, Health Department/ Jacobus Center for Reproductive Health (Anna Hilton Estate Donation) (Budget: Expense – P 96)

15. Amend 2004 Budget, Health Department/ Jacobus Center for Reproductive Health (Wilkins Foundation Donation) (Budget: Expense – P 96)

16. Resolution Urging Rescission of Regional Transportation Ceilings Under Section 4410 of the State Education Law

17. Authorize Agreements, Mental Health Department (Several Agencies, Department, Etc.)

18. Amend 2004 Budget/ Transfer Funds, Highway Department/Solid Waste (Budget: Expense – P 234 Revenue – P 233)

19. Right-of-Way Policy/ Highway Department – Dr. DiGiovanni moved adoption; seconded by Mrs. Brown. Mrs. Tytler asked why snow and ice removal were in these categories. Mr. Schrader was uncertain. Mr. Schrader believes it is because the Highway Department is lending equipment and it is being booked under this line. All members voting in favor; none opposed; resolution adopted.

20. Approve Contract, Highway Department/Recycling – Dr. DiGiovanni moved adoption; seconded by Mrs. Brown. Mrs. Brown asked what the previous amount was; did we have a fixed amount. Mr. Schrader indicated that we had nothing written; it was an unspoken amount of $250. Mrs. Brown asked why we are raising it. Mr. Schrader indicated that the $250 was unrealistic. Dr. DiGiovanni asked if we are setting a minimum, why is it being set higher? Mr. Schrader indicated that based on the experience with South Main Street, we did not pay $250 for any parcel on South Main. This is more realistic and gives the consultant room to negotiate with property owners. Mrs. Tytler asked if there are other properties where we have paid less than $250. Mr. Ross and Mr. Behrenfeld voting in favor; all others opposed; resolution defeated. Dr. DiGiovanni moved to reconsider; seconded by Mr. Willcox. By unanimous consent, the motion was reconsidered. Mrs. Tytler moved to strike $500 and insert $250; seconded by Dr. DiGiovanni. All members voting in favor of the amended resolution except Mr. Ross opposed; resolution adopted.

21. Authorize Agreement, Probation Department (New York State Division of Probation and Correctional Alternatives-DPCA) All members voting in favor; none opposed; resolution adopted.

22. Authorize Agreement/ Accept Funds, Probation Department New York State Division of Probation and Correctional Alternatives (DPCA) (Budget: Revenue - A31403.43310 – P 59)

23. Adjust Salary of Assistant Public Defender (Full-time) (Budget: Expense – P 7)

24. Create Dispatchers – Three (3), Sheriff’s Department

25. Authorize Agreement, Area Agency on Aging (Cortland Housing Assistance Council, Inc.) (Budget: P 182) – Mrs. Brown moved adoption; seconded by Mr. Ross. Mr. Schrader voiced his objection to this resolution being considered as it is did not follow the proper process for placement on the JPS agenda, and the department head was not present at the JPS meeting when it was added. Dr. DiGiovanni supported Mr. Schrader’s objection. Chairman Steve indicated that Sheriff Price, Mr. Wern, and he have been having on-going conversations about this situation. He does not believe the positions being requested are necessary. Chairman Steve believes that the system needs to be streamlined; dispatch is handling the administrative calls for the jail; this is not a function that dispatch should be handling. There is a person during the day who is specifically assigned to this function.

Mr. Behrenfeld was at the JPS meeting and Mrs. Brown was also there. Mr. Behrenfeld feels that the process was followed in JPS in voting on the resolution. Do we have the right to not consider it?

Chairman Steve indicated that this committee can send it back to JPS. Also, the Sheriff is not aware of this situation.

Mrs. Brown asked who is aware that Mr. Schrader, Chairman Steve, and the Sheriff are working on this. Is Mr. Wern aware of that?

Mr. Schrader replied that he believe that Mr. Wern is aware of that.

Mr. Wern indicated that this discussion started in JPS last spring and we were told then that they were working on the situation and they wanted us to wait. How the discussion came up in this week’s meeting was that we were reviewing the budget and looking at the figures being used for overtime, which is a large figure. Mr. Behrenfeld indicated that the numbers showed that they were funding three shifts with overtime. They were presented a budget showing that the money was being spent at an overtime rate and burning out the staff who are there. Mr. Behrenfeld indicated that the committee was not aware that this discussion was taking place outside the committee. Mr. Schrader indicated that that is his objection to it being considered; he didn’t have time to look at it. Mrs. Brown indicated that Mr. Schrader should have been at the committee meeting; at least then he would have known it was taking place. Chairman Steve indicated that the County Administrator has been buried; he left because the department heads were discussing the budget that had already been presented to him. Mrs. Brown feels it is important that the County Administrator be there when budgets are being discussed. Mrs. Breed asked why we haven’t been looking at the staffing levels in regard to the information they had so that staff was being overtaxed and burnt out.

Mr. Behrenfeld asked Mr. Wern if he would consider reconsidering this resolution at this time.

Dr. DiGiovanni moved to refer back to the JPS committee; seconded by Mrs. Brown. All members voting in favor; none opposed; resolution referred back to the JPS Committee.

Mr. Sweeney clarified that he is presenting three (3) new positions; one for each shift. He is not trying to circumvent any process and procedure.

26. Amend Budget, Department of Social Services (Community Solutions Grant) (Budget: P 163)

27. Authorize Agreement, Department of Employment and Training (New York State Department of Labor)

28. Amend Budget, Department of Employment and Training (Title V – Senior Community Services Employment Program)

29. Authorize Agreement, Department of Employment and Training Grant Administration (Date Processing)

30. Adopt Local Law # 3 for the Year 2004: A Local Law Adopting a Defense and Indemnification and Official Undertaking Law

31. Authorize Agreement, NTS Data Services, LIC (Board of Elections) (Budget: Expense - A14505.54015 – P 32)

32. Authorize the Early Call and Payment of the Retirement Bond

33. Resolution Authorizing and Directing the County Treasurer to Redeem the $916,000 Bond Anticipation Note Issued for the Payment of an Early Retirement Incentive.

Mrs. Tytler moved adoption; seconded by Mrs. Brown. Chairman Steve indicated that this bond was taken out to pay for an early retirement incentive. Knowing it was out there and doing estimates of where we are in the cash world, we should consider paying off our indebtedness. How this was done was that I asked for a cash flow projection from now until year end and an estimated fund balance. We met with the separate bond counsel; I feel it is in the best interest of Cortland County to pay off our debt and not to pay interest in this. I caution you that I was given numbers from the Treasurer’s office, but in sworn testimony, the Treasurer indicated that he needed more time to provide accurate numbers. The Treasurer indicated that what he provided to the Chairman were "accurate enough" for what he needed. He would caution you on that issue. Mr. Behrenfeld asked Mr. Ferris if there was any reason we should not do this. Mr. Ferris said that we should do this; it is good business sense. Mr. Ferris indicated that he does not see the need for a resolution to pay the bond. Mr. Schrader indicated that this resolution is needed to authorize and direct the Treasurer to pay the bill when it comes due on December 10^th as opposed to rolling it over and issuing a bond or extending the BAN.

Mrs. Tytler asked what the interest costs have been. Mr. Schrader indicated that we have been paying 1.75%, but it is estimated that on a new issue it would be approximately 2.5% which is more than we would earn on investments.

Dr. DiGiovanni moved to amend the resolution to reflect the appropriate titles and accounts numbers; seconded by Mrs. Brown. All members voting in favor; none opposed; amendment adopted.

Dr. DiGiovanni asked why we bonded for this. If we don’t have the money to fund an early retirement incentive, why did we bond for it?

All members voting in favor; none opposed; resolution adopted.

34. Establishing A Policy to Maintain a Fund Balance of Ten percent (10%) of County Budget - Moved by Mrs. Tytler; seconded by Mrs. Breed. Chairman Steve indicated that this is a policy issue. He explained the intent of the resolution. If we adopt this policy, our financial status, bond rating, insurance rates, etc. will improve.

Dr. DiGiovanni asked what "approximately" means and what happens if we don’t meet our goal. Chairman Steve indicated that he does not like not meeting goals. What happens in future years?

Chairman Steve indicated that a resolution will have to be adopted to undo this. We are making fiscally sound decisions and doing good things; this will improve that standing.

Dr. DiGiovanni feels that there should be discussion about possibly amending this to state if this is not going to be done, the resolution come before November 1. That way, voters will know it is being done and can vote accordingly.

Chairman Steve indicated that the bottom line of this resolution will put us in a better financial standing in the end.

Mr. Willcox asked if we could leave the money and invest on it. Chairman Steve indicated that it could be done, but it might not be in the best interest to do that.

Mrs. Tytler asked if we have any history to show what we have done in the past. The response was that it was in the $4 and $5 million dollar range. Dr. DiGiovanni indicated that as recently as 2000, it was over $4 million.

Chairman Steve indicated that the implication is that we have money in the bank and the taxpayers and unions will think that we should spend it as opposed to developing a long-term plan. You have to establish a real bottom, not a false bottom, and move on.

Mr. Behrenfeld added that 10% is somewhat of an arbitrary number; is this based on monthly, quarterly, end of year amount? What is the base for it? I know this year it sounds like we are going to end up with a surplus, which will help. But what could happen…if we had a $5 million fund balance and we are $2 million short of attaining this resolution…then what do we do? Do we have to borrow for it, do we have to excessively raise taxes, what happens? Mrs. Brown indicated that she agrees with Kurt. Mrs. Breed indicated that we are reaching our constitutional limit on taxes; somehow we have to get a fund balance; it does affect the bond ratings and future taxes. We want our future taxes to not spike in any particular year. Mr. Behrenfeld indicated that what is implicit in this is that we can do this under any circumstances; that may not be the case and it may be counterproductive; we may have to raise taxes a lot. This is a mandate because we can’t dip in to the fund balance. Chairman Steve indicated that a resolution could be adopted explaining why we are dipping in to the fund balance.

Chairman Steve asked how much we pay in short-term borrowing interest. Mr. Schrader indicated that this year we have spent $15,000. Mr. Ferris indicated that we have Bond Anticipation Notes out there for cars, computers, road construction – we borrowed the money because we didn’t have money in the fund balance to pay for this.

It was clarified that this is an annual fund balance number.

Mr. Schrader indicated that this will allow him to know whether or not he can rely on fund balance to balance the budget. It also gives notice to the B & F Committee that they cannot utilize fund balance to balance the budget. We’ll have a pretty good idea during the budget process what the fund balance will be.

Mrs. Breed indicated that people don’t want tax increases; then the only way to not have a tax increase is to cut services. People don’t want services cut, but they also don’t want a tax increase. How you make cuts is extremely difficult.

Mrs. Brown indicated that you can’t cut mandated services. Mr. Willcox asked about contractual services. Mrs. Breed indicated that you can cut contractual services moving forward.

Mr. Behrenfeld said that there is still a safety valve; we do have a way out.

Chairman Steve indicated that the $7 million reserve created will be one time money. We won’t be able to create this again. We need to publicize this as a savings account. We can’t become self-insured if we don’t have a reserve. If we maintain the 10% our issues can be dealt with in a more efficient and effective manner.

Mr. Willcox asked if there is any down side. Chairman Steve does not feel there is any down side.

Mr. Behrenfeld asked Mr. Ferris if he felt there is any down side. Mr. Ferris does not feel there is any down side. The Legislature will have to make overt motions to reduce the fund balance. Mr. Ferris endorses this action.

Mrs. Breed indicated that this money would be there when the unfunded mandates increase. You would use it that year to cover those unfunded mandate.

Mrs. Brown asked how you then get it up to 10% again after you have spent it.

Dr. DiGiovanni indicated that having the reserve helps us in many ways to run the County more effectively and efficiently.