Chairman Steve called the meeting to order and led the Salute to the Flag.

The Clerk called the roll and all members were recorded as present.

On motion of Mr. Cornell, seconded by Mr. Ross and adopted by all members present voting aye, the October 21, 2004 minutes as corrected were approved.

On motion of Mr. Cornell, seconded by Mr. Ross and adopted by all members present voting aye, the October 27, 2004 minutes as corrected were approved.

On the motion of Mr. Behrenfeld, seconded by Mr. Cornell and adopted by all members present voting aye except Mrs. Breed, Mrs. Brown, Dr. DiGiovanni, Mr. Tagliente and Mr. Willcox voting nay, the County of Cortland – Financial Statements and Management Letter – December 31, 2003, by Mr. McNeilly was ordered received and filed. Dr. DiGiovanni stated when Mr. McNeilly presented the draft Management letter he had asked for changes to be made adding detail within the management letter regarding the corrections that had taken place in response to prior years findings and the circumstances surrounding those corrective actions. Chairman Steve stated they were addressed within this letter. Dr. DiGiovanni stated it is a poor example of maintaining historical records to have on file prior management letters that speak to specific failings which are of a very serious nature and just to try and dismiss them in a single sentence that states "shortcomings that were identified previously have been corrected." Dr. DiGiovanni stated that for the sake of historical records, we are all owed the explanation as to what the shortcomings were, that they were corrected and how they were corrected. He thinks this is an important element of maintaining historical records. The APAT committee in their report cited one on the major failings of the previous Legislature was that of not taking seriously the concept of maintaining historical records. Dr. DiGiovanni said he knows it takes time and effort in the beginning, but the alternative is to take twice the time and twice the effort after the fact to restore records, therefore it needs to be done correctly in the beginning. He stated elements of the management letter he would have a hard time accepting is that it is not made clear as to what changes were made and how they were made. Chairman Steve stated he would like all Legislators to preview the letter and then discuss it at a later time noting what needs to be addressed and perhaps attach that to the file. He stated in the future there needs to be a scope of services specific to what will be required to eliminate this concern. Mrs. Brown stated when they were in the meeting with Mr. McNeilly, it was made very clear what Dr. DiGiovanni had referred to should be included in the final Management letter before it was presented to the full Legislature. Chairman Steve stated it was addressed but not to the detail that we should have. Mrs. Brown said it was not suggested it was requested. Chairman Steve stated that he does not know what can be done without a specific scope of services the auditor can present what he wants. Mr. Behrenfeld suggested that if more detail can be provided by Mr. McNeilly, it can be passed along to all Legislators and then attached for the record.

On motion of Mr. Cornell, seconded by Mrs. Brown and adopted by all members present voting aye, the Order of Authority, County Attorney’s Office, by John L. Bardsley, Esq., was ordered received and filed.

On motion of Mrs. Breed, seconded by Mr. Cornell and adopted by all members present voting aye, the 2004 Third Quarter Sales Tax Distribution, Treasurer’s Office, was ordered received and filed.

On motion of Mr. Cornell, seconded by Mr. Armstrong and adopted by all members present voting aye, the 2005 Budget Officer’s Tentative Budget presented by Mr. Schrader, County Administrator was ordered received and filed.

Mr. Schrader gave an overview of the Tentative Budget stating preparing the budget was a difficult process and noting this is a different document and includes many new items. He stated the overall tax rate increase is 6.2% countywide but because of apportionment different municipalities will see varying increase rates. The 6.2% increase generates a tax levy that is above the Constitutional taxing ability of the County. The County Legislature has the ability to request being able to tax above the limit. The tax rate would be up 94 cents per $1000. The tax levy for the Tentative Budget is $23.5 million with the appropriations set at $84.3 million. The Fund balance is estimated at $8.4 million and will accommodate the 10% fund balance resolution that was past by this Legislature. He is not recommending that any of the fund balance be used to reduce the proposed tax levy because there are some projects to be done next year that may change the proposed fund balance and fund balance should not be used for reoccurring costs. Mr. Schrader stated that it is shown on Table 2 that 75% of the real property tax levy is dedicated to state and federally mandated programs while only 25% of the levy is applied to local costs. He said it is not rhetoric when it is stated that mandates are killing the counties. Mr. Schrader said that Table 5 shows a comparison of fund balances and how they were appropriated in previous years for reoccurring costs. He said the only two funding sources are sales tax and property tax and that State Aid and Federal Aid are not helping.

He stated that for the County Workforce Table 3 he only had a three-year history. He said the Tentative Budget calls for the creation of 5 new full time positions; 2 custodians in Buildings and Grounds, 1 accountant in the Treasurer’s Office, 1 probation Officer to start in July, and 1 Sergeant in the Sheriff’s Department: and for 3 new part-time sorter positions for the Recycling Center. Mr. Schrader said the Treasurer had not requested a new position, however, he deems it necessary to create an accountant position to bolster that department and provide support to the Treasurer and the current staff. The Probation Officer position is being created to work with the Drug Courts program that will be set up in July. The Sergeant Position in the Sheriff’s Department will be funded by Social Services and is intended to save money through Medicaid Fraud services. The three sorter positions for the Recycling Center are being created as a result of part-time positions being eliminated.

Mr. Schrader stated that Table 7 shows new construction within the County. He said several projects proposed to happen within Cortland County have been stopped at the local level and it is difficult for him to understand how localities expect to expand the tax base by turning down growth. Mr. Schrader stated the only way to mitigate tax increases is by allowing new construction. He suggested the County as a whole needs to make a concerted effort to encourage new business to settle here.

Mr. Schrader noted that Sales Tax continues to grow. He stated the DWI program is a significant concern and will need to be evaluated. The expenditures are exceeding the revenue and reserves will most likely be depleted by the 2004 budget. The program is working which means the revenues are declining and therefore there will be less to use to keep the program working. Mr. Schrader stated Occupancy Tax is doing well and is exceeding what was budgeted. He stated Worker’s Compensation needs to be addressed and is being worked on already. The Retirement payment schedule has changed from December until February and his recommendation is to reserve the payment from the 2004 budget to make the 2005 payment.

Mr. Schrader stated he wants to start building the Insurance Reserve fund that would allow the County to be prepared to absorb costs of settlements. Establishing a healthy reserve will reduce costs of premiums.

Mr. Schrader referred to Appendix C of Outstanding Debt stating the Retirement Bond does not show up because of resolution authorizing it to be paid. Dr. DiGiovanni asked about interest rates on these and does the County have any flexibility of either paying off some sooner or restructuring at lower interest rates. Mr. Schrader stated as the County has and continues to position itself in better financial condition, the possibility of a better bond rating grows. He is in hopes that very soon the County will be upgraded allowing flexibility to restructure and save money.

Mr. Steve said Mr. Behrenfeld and the Budget and Finance Committee have their work cut out for them. He would like to see the tax rate increase tied to the cost of living cut and does not support increasing the Constitutional tax limit. He encourages the Legislature to do what is necessary in their work on the budget to reduce the levy.

Mrs. Tytler asked if the budget includes payroll increases for CSEA and management positions? Mr. Schrader said it does not and that any increases granted to either group would need to be accommodated from Contingency of Fund Balance. Mrs. Tytler asked where we are with the MSD study? Mr. Schrader said it will be done by the end of the year and will need to be addressed at that time.

Mr. Behrenfeld asked what amount was in the Contingency line? Mr. Schrader said it had $850,000 budgeted for 2005 noting most of the department budgets are tight therefore there is a need for a healthy contingency. Mr. Behrenfeld asked would this budget allow for any liquidation of debt? Mr. Schrader said as it stands it does not liquidate any further debt.

Mr. Behrenfeld stated if he understands the summary it shows revenue up 4 million dollars, expenditures up 6 million dollars and fund balance up to 8 million dollars and doesn’t understand how the current projected fund balance for this year of 6 million dollars can grow when the growth in expenditures exceeds the growth in revenue in the Tentative budget. Mr. Schrader stated there were several areas of change that affected one time savings helping to create the Fund Balance and also to reduce expenditure lines within the 2005 Budget.

Mr. Behrenfeld asked if it was possible for Legislators to be given a balance sheet? Mr. Schrader said he would work with the Treasurer’s Office to prepare one.

Mr. Schrader said his work has not ended, there is still much more to do. He will be working with the Budget and Finance Committee and also on his own to continue to rework the budget to get the levy even lower.

On motion of Mr. Cornell, seconded by Dr. DiGiovanni an executive session to discuss possible litigation was called at 11:05 am.

On motion of Mrs. Brown, seconded by Mr. Cornell the executive session ended at 11:15 am.

Mr. Wern announced the J & P Committee will be meeting on November 10 at 8:30 am.

Dr. DiGiovanni reminded everyone the next Health Committee meeting will be held at the Horizon House on Grant Street.

Mr. Allen stated the GEC committee scheduled for the 16^th has been changed to November 23 at 7:00 pm.

Chairman Steve recessed the meeting until November 18, 2004 at 6:00 pm.

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