City Council

JOURNAL OF THE COUNCIL OF THE CITY OF NORWICH JUNE 14, 2010 A regular meeting of the Council of the City of Norwich was held June 14, 2010 at 7:30 PM in Council Chambers. Present: Aldermen Desaulniers, Nash, Braddock, Hinchey, Popovich, Caron and Mayor Nystrom. City Manager Bergren and Corporation Counsel Michael Driscoll were also in attendance. Mayor Nystrom presided. Mayor Nystrom Read the opening prayer and Ald. Braddock led the members in the Pledge of Allegiance. City Manager Bergren gave his report as follows: DATE: June 14, 2010 TO: Mayor Peter A. Nystrom & Council Members FROM: Alan H. Bergren, City Manager SUBJECT: City Manager’s Report Fund Balance Explanation The City maintains an 8% fund balance as a matter of prudent fiscal policy based on the recommendations of our bond counsel and the City’s financial advisors. The maintenance of a fund balance protects the City from running out of funds to pay expenditures at any point during a given fiscal year. 1. 8% is roughly equal to one month of expenditures (1/12 = 8.33%). 2. The City’s cash collections have high months and low months. There are several months in which we spend more money than we take in. If the City doesn’t maintain an adequate fund balance “reserve,” we could run into a situation where, in a month of little cash collections, the City might not have enough cash in the bank to pay ordinary expenses like payroll, utilities, etc. 3. The City has some expenditures that are very expensive and very hard to predict. One of them is special education charges. If the Board of Education’s special education costs exceed the amount that they budget for such costs, they can offset these costs with Special Education Excess Cost Grant funds. Because the estimated Special Education Excess Cost Grant funds are included in the City’s budgeted revenues, these offsets are direct reductions of the City’s undesignated fund balance. 4. The City has some large projects which will need to be bonded in the near future such as the Kelly Middle School renovations and the Road Improvement Program. The bond rating agencies look at a city’s Fund Balance as one of the factors in determining what rating should be assigned to a city. Lowering your Fund Balance while you are looking to sell bonds would be like looking to get a mortgage knowing you have a terrible credit rating. If you find a bank that’s willing to give you a mortgage, you are going to pay much more in interest than someone with a good credit rating. Using the information from a June 10, 2010 report from UBS, in the current market, the City would pay 0.66% higher on 10‐year bonds if its’ bond rating were lowered from AA to A. On $5 million of bonds, this would mean an extra $185,000 of interest expense over the life of the bonds, plus the cost of insurance. 5. If the City runs down its Fund Balance and we are hit with an unanticipated/unforseen natural disaster such as a hurricane or blizzard and need to provide immediate relief to prevent the loss of life, undertake costly repairs and mitigate property damage, the City would not have the resources to address these needs. 6. The City earns interest income by having “money in the bank.” This interest income is used to help pay for operations and helps offset taxes. 1 JOURNAL OF THE COUNCIL OF THE CITY OF NORWICH JUNE 14, 2010 7. Municipalities that have failed to maintain adequate fund balances have failed and gone into State receivership (i.e. Bridgeport, Waterbury) whereby the State has set up an outside panel to run the finances of the City, set the tax rate and cut expenditures. 8. In general, it is a bad idea to plug holes created by structural deficits by raiding fund balance, using one‐time revenue sources, or issuing debt to pay for operations. In the last few years, that is exactly what the State of Connecticut and other states have done. 9. Budget Process To Date EXPLANATION OF CHANGES MADE TO THE 2010‐11 BUDGET DURING THE ADOPTION PROCESS During the 2010‐11 budget adoption process, some actions were taken after I presented my budget on April 5, 2010. Here is a chronological summary of the legislative items that affected the 2010‐11 budget: April 19, 2010 – Norwich City Council adopted Ordinance 1632 which repealed Ordinance 1577 regarding the transfer of a portion of Conveyance Tax revenue from the General Fund. May 3, 2010 – Norwich City Council adopted a resolution to increase the direct hauler fees by $1 per ton from $65/ton to $66/ton. May 3, 2010 – Norwich City Council tentatively adopted the City Manager’s proposed budget with no amendments. June 7, 2010 – Norwich City Council amended its tentatively adopted budget as follows: Exhibit A ‐ To reallocate funds in the Economic Development budget to fund the membership fees with SECTER and to add rent revenue from CDBG and add back the portion of the Human Services Supervisor’s salary and benefits that were anticipated to be paid from CDBG. No change in taxes to be levied. Exhibit B ‐ To accept the concessions from five of the City’s bargaining units. The $310,700 of savings from concessions, along with anticipated savings from recycling and vacancies during the recruitment process in the Human Resources, Police and Public Works departments were used to add back the following positions with no change in taxes to be levied: 2  JOURNAL OF THE COUNCIL OF THE CITY OF NORWICH JUNE 14, 2010 Positions Eliminated in Proposed budget and Restored by Council on Positions Reduced in Proposed Budget and Restored by Council on June 7, 2010 June 7, 2010 Name of Position Department FTE Name of Position Department FTE Human Resources Assistant Human Resources 1.00 Collector of Delinquent Taxes Finance 0.40 Fire Code Clerk Fire 0.60 Assistant Assessor Assessor 0.40 Outreach Administrator Senior Center 0.60 Assistant City Clerk City Clerk 0.40 Van Driver Senior Center 1.00 Facilities Maintainer II Recreation 0.25 YFS Therapist Youth & Family Services 1.00 Facilities Maintainer I Recreation 0.25 Code Enforcement Official Planning & Development 1.00 Caseworker Human Services 0.40 Administrative Secretary Planning & Development 1.00 Program Administrator Senior Center 0.40 Office Coordinator Senior Center 0.40 Receptionist Senior Center 0.40 Clinical Coordinator Youth & Family Services 0.40 Mayor Nystrom called for citizen comment. David Crabb, 47 Prospect St., had general comments on the Board of Ed news he heard on the radio. The good news is about the teachers furlough days. NPU’s graph reflects a dip at the beginning of this decade and the ten year average is 5 ½ percent. Sheila Hayes, 8 Pin Oak Terrace, spoke on behalf of the NAACP, she was disappointed that after attending all the meetings and public hearings the board of ed is still looking at a 0 percent increase. They have looked at all aspects and much hard work has been done. Keith Ripley, Meadow Lane, mentioned that at the last meeting the council adjusted the budget due to concessions and now it is time to adjust the Board of Ed due to their concessions. It is time to respond to our children. Andy Depta, 105 Vergason Ave., told the council that tonight you will do what you were elected to do. You will either pass the budget or further amend it. He is in supports any concessions made. Again he recommends the council start immediately on next years budget. Rodney Bowie, 62 Roosevelt Ave., thanked the council for all the time they have put into the budget. Schools had large classes years ago and the teachers dealt with it. 3 JOURNAL OF THE COUNCIL OF THE CITY OF NORWICH JUNE 14, 2010 Susan Misenheimer, 57 Sholes Ave., commended the council and the Mayor for being equal with everyone. Everyone has done admirably well. There being no further speakers, Mayor Nystrom declare citizen comment period closed. Upon motion of Ald. Braddock, seconded by Ald. Nash, it was unanimously voted that the members of the Norwich City Council go into Executive Session for the purpose of discussing strategy or negotiations with respect to collective bargaining. City Manager Alan H. Bergren, Director of Human Resources, Brigid Marks, Comptroller Joseph Ruffo, Deputy Comptroller Josh Pothier, Superintendent of Schools Abby Dolliver, Vice Chairman of the Board of Ed John LeVangie and Corporation Counsel Michael Driscoll shall be asked to participate during all or portions of this Executive Session at the request of the City Council. The council was in Executive Session from 7:55 PM until 8:40 PM, at which time Mayor Nystrom stated not votes were taken. Ald. Desaulniers made a motion, seconded by Ald. Hinchey, to amend the following resolution to increase the Board of Education line in the amount of $372,405: RESOLVED, that the budget of the City of Norwich and the City Consolidated District for the Fiscal Year 2010-11 as submitted by the City Manager on April 5, 2010, and as amended by the Council of the City of Norwich on June 7, 2010 be, and the same hereby is, adopted. The motion to amend the above resolution passed 6-1 with Ald. Popovich voting in opposition. On a roll call vote, the above resolution as amended, passed 7-0. Ald. Desaulniers made a motion, seconded by Ald. Braddock, to adopt the following resolution introduced by Mayor Nystrom, Ald. Desaulniers and Caron: RESOLVED, that the appropriations ordinance of the City of Norwich and the City Consolidated District for the Fiscal Year 2010-2011 submitted by the City Manager on April 5, 2010, as amended by the Council of the City of Norwich on June 7, 2010, be and hereby is, adopted. AN ORDINANCE RELATIVE TO THE APPROPRIATIONS FOR THE CITY OF NORWICH AND THE CITY CONSOLIDATED DISTRICT OF SAID CITY FOR THE FISCAL YEAR 2010-11. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF NORWICH, the following appropriations hereby are made to meet the expense of the City of Norwich and City Consolidated District of the City of Norwich for the fiscal year beginning July 1, 2010 and ending June 30, 2011 to wit: 4 JOURNAL OF THE COUNCIL OF THE CITY OF NORWICH JUNE 14, 2010 2010-11 MANAGER'S 2010-11 2008-09 REVISED 2009-10 REVISED PROPOSED ADOPTED BUDGET BUDGET BUDGET BUDGET City Manager 373,098 316,275 261,956 258,446 Finance 1,434,055 1,249,469 1,236,569 1,234,042 City Treasurer 200,482 195,497 210,049 203,777 Assessment 487,362 356,981 343,848 358,342 Human Resources 440,554 357,549 377,221 386,779 Law 420,000 420,000 420,000 420,000 City Clerk 455,658 375,451 369,291 380,322 City Council 205,566 136,887 111,276 111,276 Police 10,319,660 10,030,593 10,569,673 10,432,927 Fire - Central 1,728,166 1,600,206 1,695,903 1,704,377 Fire - East Great Plain 142,675 123,721 111,349 111,349 Fire - Laurel Hill 71,930 55,786 50,207 50,207 Fire - Occum 75,447 75,702 68,132 68,132 Fire - Taftville 151,690 125,537 112,983 112,983 Fire - Yantic 182,762 126,744 114,070 114,070 Recreation 839,107 700,581 528,728 557,215 Human Services 1,666,650 1,407,633 958,056 1,228,338 Public Works 7,938,597 9,169,596 9,280,489 9,147,985 Election 165,059 113,529 116,750 116,740 Planning & Development 1,202,336 1,047,670 917,721 1,020,464 Economic Development 338,235 272,641 243,000 243,000 Debt Service - Principal 3,235,000 3,530,000 3,475,000 3,475,000 Debt Service - Interest 1,198,896 1,007,782 1,100,240 1,100,240 Miscellaneous 6,630,251 6,940,622 6,950,347 6,805,347 Emergency Management 66,632 57,678 52,499 52,499 Education 67,191,000 62,580,561 62,580,561 62,952,966 Fire - Special Service 5,003,272 5,641,586 5,817,401 5,817,401 Landfill & Refuse Fund 2,491,309 - - - Volunteer Fire Relief Fund 476,162 503,833 519,498 519,498 TOTALS 115,131,611 108,520,110 108,592,817 108,983,722 General Operations 33,709,907 32,928,468 32,742,051 32,760,551 Debt Service 4,433,896 4,537,782 4,575,240 4,575,240 Capital Improvements 1,826,065 2,327,880 2,358,066 2,358,066 Education 67,191,000 62,580,561 62,580,561 62,952,966 Fire - Special Service 5,003,272 5,641,586 5,817,401 5,817,401 Landfill & Refuse Fund 2,491,309 - - - Volunteer Fire Relief Fund 476,162 503,833 519,498 519,498 TOTALS 115,131,611 108,520,110 108,592,817 108,983,722 The above resolution passed on a roll call vote of 7-0. 5 JOURNAL OF THE COUNCIL OF THE CITY OF NORWICH JUNE 14, 2010 Ald. Desaulniers made a motion, seconded by Ald. Caron to adopt the following resolution introduced by Mayor Nystrom and Ald. Desaulniers and Caron: RESOLVED, that the tax levy ordinance of the City of Norwich for the Fiscal Year 2010-2011 as submitted by the City Manager on April 5, 2010, setting the tax rate at ____ mills be, and the same hereby is, adopted. Upon motion of Ald. Hinchey, seconded by Ald. Popovich, it was unanimously voted to amend the above resolution to insert 24.04. On a roll call vote, the above resolution as amended, was passed 7-0. Ald. Popovich made a motion, seconded by Ald. Braddock, to adopt the following resolution introduced by Mayor Nystrom and Ald. Desaulniers and Caron: RESOLVED, that the tax levy ordinance of the City of Norwich for the Fiscal Year 2010-2011, as submitted by the City Manager on April 5, 2010 setting the tax rate at ___ mills for fire services upon the ratable estate within the City Consolidated District of the inhabitants of said District and of all others in said District liable to pay taxes therein, AND FURTHERMORE, setting the tax rate at ___ mills for fire services upon the ratable estate within the Town Consolidated District of the inhabitants of said District and of all others in said District liable to pay taxes therein be, and the same hereby is, adopted. Upon motion of Ald. Braddock, seconded by Ald. Hinchey, it was unanimously voted to amend the above resolution by inserting 3.98 mills in the first paragraph and .36 mills in the second paragraph. On a roll call vote, it was unanimously voted to adopt the above resolution, as amended, 7-0. Upon motion of Ald. Hinchey, seconded by Ald. Desaulniers, it was unanimously voted to adjourn at 8:56 PM. CITY CLERK 6