City Council Workshop Meeting

City of Trotwood 3035 Olive Road Trotwood, Ohio 45426 937-837-7771 www.trotwood.org Meeting Minutes - Final Monday, November 16, 2015 6:30 PM T-M Schools Board of Education Meeting Chambers 3594 N. Snyder Road Trotwood, OH 45426 City Council Workshop Meeting Mayor Joyce Sutton Cameron Vice Mayor Barbara Staggs Councilmember Bruce Kettelle Councilmember Bettye Gales Councilmember Rap Hankins Councilmember Ron Vaughn Councilmember Mary McDonald Sandra L. Riege, CMC Clerk of Council City Council Workshop Meeting Meeting Minutes - Final November 16, 2015 I. Call to order - Mayor Joyce s. Cameron II. Pledge of Allegiance & Moment of Silence III. Roll Call: Clerk of Council Present: 7 - Mayor Joyce Sutton Cameron, Vice Mayor Barbara Staggs , Councilmember Bruce Kettelle, Vice Mayor Bettye L. Gales, Councilmember Rap Hankins, Councilmember Charles Ron Vaughn and Councilmember Mary A. McDonald Staff members present: Quincy E. Pope, Sr., Interim City Manager/Public Safety Director, Law Director Stephen McHugh, Fire Chief Steve Milliken, Finance Director Chris Peeples, Assistant to Interim City Manager Brenda Blauser, Human Resource Manager Stephanie Kellum, Income Tax Administrator Donna Sue Bowman, Planning and Zoning Administrator Jeannie Peyton, and Clerk of Council Sandy Riege. Visitors present: Dave Norvell, James Williams, Mattie Clay, Barbara Higgins, Nancy Marino, Dawn Wojuk, John Fecke, Jill Robinson, Sr. Mary Ellen Andrisin, Barbara Grant, Lucille Cosby, Jay Young, Barbara Glasper, Janice Chinn, Mike Burns and Edward Livesay. IV. Motion to Approve Workshop Agenda Mayor Cameron requested a motion to approve the workshop agenda. A motion was made by Mrs. Glaes and seconded by Mrs. McDonald. Roll call resulted in the following vote: Aye: 7- Mayor Cameron, Vice Mayor Staggs, Councilmember Kettelle, Vice Mayor Gales, Councilmember Hankins, Councilmember Vaughn and Councilmember McDonald V. Presentations - Interim City Manager Quincy E. Pope, Sr. City of Trotwood Page 1 City Council Workshop Meeting Meeting Minutes - Final November 16, 2015 VI. PR058-15 Credit/Bond Rating Presentation by Michael Burns of Robert W. Baird & Company. Interim City Manager Quincy E. Pope, Sr. stated, the city has to re-structure our bond debts & short term notes since the federal government might be raising the interest rates. Mr. Mike Burns, Director from Robert W. Baird & Company, Columbus, Ohio is making a recommendation to refinance and consolidate the 2007 series of various purpose bonds along with the 2015 BAN'S to save the city over $100,000.00 in interest costs. The plan is to lock in the interest rate while the rates are low. The Series 2007 Various Purpose bonds were issued to retire the $3,560,000 fire station improvement BAN's, Series 2006 - $500,000 Fire Station Improvement BAN's, and $695,000 Real Property Improvement BAN's - optional call date of December 2017 to pay the bonds with no penalty with a final maturity date of December 2032. The Various Purpose Water Project & Town Center Redevelopment BAN's, Series 2015 were issued in March 2015; final maturity date in March 2016 or every year. Benefits to amortize the Series 2015 Bond Anticipation Notes will lock in the low long term fixed interest rate and fully amortize BAN's, combine 2007 refinancing & cost savings on total debt, and provide a better ability to budget the debt service schedules. Amortizing the BAN's for 17 year estimated average annual debt service of $157,546 is due to mature on December 1, 2032. It's important to initiate a direct placement of the multi-purpose bonds, because our credit rating has been downgraded from Aa2 (highest) to A2 (good) in fiscal year 2014. As a result of this the 5-year dollar change in fund balances, the percent of revenues we risk of being downgraded to Baa2 (below average credit rating) which is junk bond status if the city chooses a public option. Therefore, issuance of private placement of multi-purpose bonds is recommended. Our bond rating now is at A3 which is still good. The reason for this change is based on some trends due to income tax collection, economic development trends, economic/tax base and some of the trends we cannot control. Our historical management of the funds are doing well and are increasing. Interest rates are averaging about 4.22% with an estimated true interest costs on the bonds at 3.10%. Refunding the 2007 bonds total cash savings to the city would be $144,327 with a percentage savings of 3.73% due to mature on December 1, 2032. It's recommended City Council adopt the legislation to proceed with issuing the debt and execute their engagement letter by January 1, 2016. BAN'S legislation become effective on Thursday, February 6, 2016, with the final payoff of outstanding bond anticipation notes on Friday, March 4, 2016. Closing on the fund bonds would take place on Tuesday, February 16, 2016. Council agrees to proceed forward with the next steps to prepare & circulate the bond documents for execution. City of Trotwood Page 2 City Council Workshop Meeting Meeting Minutes - Final November 16, 2015 VII. PR056-15 2016 Financial Forecast, presented by Edward Livesay of Mosaic Strategic Partners Interim City Manager Quincy E. Pope, Sr. introduced Mr. Edward Livesay representating Mosaic Strategic Partners. His financial projections and main focus are on our General, Fire, EMS and street fund's, updated income and property tax assumptions (including the county auditor insights), summary of sources & uses vs. detail, and assumed flat expense budgets with the exception of health care increases estimates. Key variables are numerous - House Bill 5 is the biggest hitter right has decreased impacting our funds. Every three years there's a property tax update throughout the county with the projected the tax base still could remain flat and down as much as 2.5% in 2018, and 1% in other years. The red light camera revenue is also down along with the delinquencies collected. Special assessment delinquencies has double since 2012. Health care expenses are expected to increase 8%/yr. Economic Development and inflation levels also impact the funds. EMS financial forecast and Fire Protection fund renewal sustains this fund over the next 5 years with the passing of the fire levy. Miscellaneous Street funds, such as, construction maintenance and repairs, state highway funds, motor vehicles and permissive use, and curb & gutters/sidewalks with funds balances being maintained as projected. Income tax revenue trend for twelve months is been fairly steady since the late 2012 even with the loss of Syncreon in 2015 ($100K) appears to be offset by other growth. House Bill 5 for tax compliance impacts our business estimated tax revenue and residential taxes collected. Changes within this HB 5 has four different areas that will change. The net operating loss impact does not go into effect the same year. The new operating loss rule goes into effect in 2018 with - 50% and in 2023 - 100% estimated for potential schedule C for businesses to estimate their taxes. General Fund - Property taxes, Incomes taxes, Intergovernmental and miscellaneous sources in 2016 forecast will increase with the approval of a 5.75 mill levy generating $1.24M end with the 2016 collections. Some potential risks are unknown - House Bill 5 impact, decreased of property tax, and red light funds all effect the general fund. Looking at the projections in the funds for the future - House Bill 5 could be better than expected, delinquent collections could be up, economy/property values could increase, economic development circumstances may chance in the future with more jobs being brought to the city. Mr. Pope said very It's important we increase our tax base and create more jobs for our city to bring up the projections. VIII. Motion to Close the Workshop Mayor Cameron requested a motion to close the workshop meeting. A motion was made by Vice mayor Staggs and seconded by Mr. Hankins to adjourn the meeting at 7:45 p.m. Aye: 7- Mayor Cameron, Vice Mayor Staggs, Councilmember Kettelle, Vice Mayor Gales, Councilmember Hankins, Councilmember Vaughn and Councilmember McDonald City of Trotwood Page 3