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HomeMy WebLinkAboutMinutes - City Council - 04/25/2011SPECIAL CITY COUNCIL 25 APRIL 2011 DRAFT The South Burlington City Council held a special meeting on Monday, 25 April 2011, at 7:00 p.m., in the Conference Room, City Hall, 575 Dorset Street. Councilors Present: S Dooley, Chair; M. Emery, J. Knapp, P. Engels, R Greco Also Present: S Miller, City Manager; R. Rusten, Assistant City Manager; D. Kinville, City Clerk; P. Conner, Director of Planning & Zoning; K. Murphy, City Manager’s Staff; J. Rabidoux, Public Works Director; P. Taylor, P. Benner, P. Nowak, B. Cimonetti, Board of Civil Authority; G. Yandow, Bookkeeper; R. Smith, Auditor; A. Clift, S. Dopp, D. Konahue, S Deacon, T. McCabe, B. Babcock, J. Kochman, D. Fleming, G. Malavenda, E. Ciemniewski, J. Kearns, S. Deacon, E. Spooner 1. Agenda Review: Mr. Knapp moved to add a review of the City Manager’s contract to Item #7. Ms. Emery seconded. Motion passed unanimously. 2. Comments & Questions from the Audience, not related to agenda items: Mr. Donahue spoke to the need of a registration fee for bicycles, at least on main thoroughfares. He felt bikes should be insured and riders required to wear a helmet. Mr. Miller said he wasn’t sure licensing bikes was within municipal power. He said he would look into it. 3. Announcements & City Manager’s Report: Ms. Dooley: Attended the MPO meeting on Wednesday which included approval for public hearing of the unified work plan. Mr. Miller: The City is still dealing with the EPA regarding a waiver request to allow the city to keep the 2 turbo blowers. A meeting was held with the Conservation Law Foundation. They are satisfied that the emission of phosphorus is below recommended levels. 4. Presentation of FY10 Audit: Mr. Smith noted that it is not a statutory requirement in Vermont for a municipality to have an independent audit, but South Burlington is required by City Charter to have one, and federal law requires an audit if the municipality spends more than $500,000 of federal money. Mr. Smith stressed that there has been no abuse of federal money by the City of South Burlington. Mr. Smith then reviewed the balance sheet with comparisons to 2009. In 2009, there were $6.4MM in assets, and in 2010 there were $9.3MM. However, because of the combining of cash assets, much of that money belonged to various entities and was obligated. There was in reality only $1,842,959 undesignated fund equity (in 2009 there had been $2,300,000). To deal with this situation, the city used some surplus to get through 2010.. Mr. Malavenda asked which departments went over their budgets. Mr. Smith said it was not the departments. The problems arose from things that were not budgeted for (e.g., matches for grants, etc.). The general fund was fronting money for projects, so that on 30 June 2011, the city could not pay all of its obligations. Mr. Smith said there is a list of every fund, grant, etc., that owes money to the general fund. Mr. Smith said he would like to see a budget reserve of $2,200,000. Mr. Smith stressed that it is very important for South Burlington to identify where all the money is. He felt that the problem is very fixable but not overnight. It will take several years, and there has to be a plan. One of the problems noted was that there were a number of projects for which there was no revenue stream. Mr. Smith said there was $452,000 more that was spent than taken in. A member of the audience asked how much of that can the city recover. Mr. Smith said it is not a question of how much but when. The city has the ability to combat the poor cash position via grants, raising fees, etc. Mr. Smith then addressed Special Revenue Funds (grants, special purpose funds). He noted that in 2009, management said there was $5.2MM in cash for those funds; however the audit did not see that money because it was put into the general fund. There is $4.8MM due to the general fund from other funds; however if everyone paid what they owe to the general fund, the fund would still be $676,000 in the hole. Mr. Smith stressed that money taken in for special purposes should be earmarked and not co-mingled in the general fund. With regard to capital projects, Mr. Smith said city money has been used to front grants ($1,300,000) in the hope of getting paid back. He stressed that short term money should never be used for long term needs. The city should get a cash anticipation note instead. He felt the city has not done a good job of protecting its cash assets, and there are capital project funds that have been overrun. Mr. Smith then addressed Enterprise Funds. He said these funds are supposed to be self-sufficient with fees adequate to cover expenditures. He noted that the Ambulance Fund has never been self-sufficient, and that about $150,000 is funded through the general fund annually. The total deficit is $500,000. Mr. Donahue said he felt the city was better off paying St. Michaels for ambulance service than providing it for itself. The Recreation Fund is one of the most profitable funds and clearly pays for itself. It is a very positive point for the city. Mr. Smith cited the fiscal agreement between the city and Champlain Water District to provide services and run the city’s Water Department. There is an account with $1,100,000. This should be $3.2MM, but it is all in fixed assets, and there is not a lot of operating capital. The city spent $100,000 more than it took in, but most of that was in depreciation. Without depreciation, there would be a positive number between $100,000 and $200,000. The Waste Water system shows $6,100,000 in assets which includes mostly infrastructure. This account owes the general fund $765,000 as general fund money has been used to pay waste water bills. Mr. Smith said fees are not enough to cover the Waste Water operations. Mr. Rusten noted that the city has increased fees effective with the April billing. Mr. Smith said that should start the deficit going down. The Ambulance Service showed $327,000 in unbilled receivables (uncollectable) in 2009. Most of that money won’t be collectable. There is an operational deficit of approximately $500,000. Mr. Smith noted that this department has now been rolled into the general fund, which is where it belongs. He anticipated that the deficit will go up to $600,000 by 30 June 2011. Ms. Yandow advised that the former auditor had said to set it up as an enterprise fund. Mr. Donahue asked what the city does to collect some of this money. Mr. Rusten said there is a system where they are trying to be more assertive. Ms. Nowak noted that a lot of this has to be billed through medical agencies. Mr. Miller said the city will be looking at what is feasible to collect. With regard to Stormwater, Mr. Smith said there is not a lot of concern here as the obligations are minor. Mr. Smith again stressed that all of the problems he has detailed are fixable as long as the city pays attention to detail. It will take time, but he is confident that in 3 years this will be a “positive conversation.” It is important to stop the bleeding, and he said he was confident the city has done that in the past few months. Ms. Dooley thanked Mr. Miller and Mr. Rusten and those who helped the auditors do this work. She asked Mr. Smith to comment on the “unqualified opinion” and the list of deficits. Mr. Smith said the numbers are what they are. There have been no “doctored” numbers. There are concerns about how the city does business, and those concerns are noted in the management letter. He did note that this is one of the worst reports from a government entity he has seen in 25 years of doing this work. Mr. Engels asked Mr. Smith to review the management letter. Mr. Smith outlined the concerns enumerated there including: communication as far as understanding numbers, misunderstanding of practices by the previous management, misapplication of practice by the previous management, and charter requirements that were not part of the budgeting process. Mr. Engels asked if this would qualify as “willful mismanagement.” Mr. Smith would not comment. Mr. Smith was asked about money loaned by the city to people who were purchasing a home. Mr. Smith said this is not a practice he would continue. Mr. Smith felt the city has a good plan for dealing with the pension deficit. This is saving the city about $100,000 a year. Ms. Emery questioned whether staffing levels can address the auditor’s recommendations. Mr. Miller said he felt the city now has adequate staff to maintain controls. Some services are going to be contracted out. He added that if more help is needed, people will be hired. Mr. Smith expressed concerns for safety with the public access to the City Clerk’s office. Mr. Rusten noted the difficult circumstances under which the previous bookkeeper had to operate. Mr. Smith said it was a pleasure to work with Gloria. Her 38 years of knowledge was very valuable. Mr. Miller also thanked Gloria for her help in the past 10 months. Mr. Spooner asked whether the shortfalls should have been identified by any auditor. Mr. Smith said he wouldn’t comment because he didn’t know what the previous auditors were asked to do. Ms. Dooley asked Mr. Miller and Mr. Rusten to comment on some of what has been done to address concerns. Mr. Miller said they will be looking at what can be written off as there is not enough cash to go around. He anticipated some deficits in 2011. To address these concerns the health insurance programs have been changed with the cooperation of unions, some staff positions have been reduced as have some benefits to management. Spending has been reduced. He estimated that the city is $700,000-$900,000 better off than if nothing had been done. Mr. Rusten added that a number of policies have also been addressed. Mr. Miller said that one thing that is needed is a comprehensive purchase order system. He noted that even the previous auditor had identified that deficiency. Mr. Engels expressed concern that it is the taxpayers who have to foot the bill for all of this. 5. Sign Disbursement Orders: Disbursement orders were signed. 6. Liquor Control Board: Ms. Emery moved that the Council adjourn and reconvene as Liquor Control Board. Ms. Greco seconded. Motion passed unanimously. Mr. Miller presented applications for Liquor and Tobacco licenses from Pizza Putt, Pulcinella’s and Champlain Farms (801 Williston Rd.). Mr. Knapp said he would have to abstain from voting on the Champlain Farms application. Ms. Emery moved to approve the Liquor and Tobacco License applications of Pizza Putt and Pulcinella’s as presented. Ms. Greco seconded. Motion passed unanimously. Ms. Emery moved to approve the Liquor and Tobacco License Application for Champlain Farms (801 Williston Rd.). Ms. Greco seconded. Motion passed 4-0 with Mr. Knapp abstaining. 7. Other Business: Ms. Dooley noted that in February the City Council engaged in an evaluation of the City Manager. There is a high level of satisfaction and an acknowledgment that the job has become much different from what the city had offered. Because of this, the Council decided to look at modifying the City Manager’s contract. The Contract included but not limited to: 1. A $2500.00 increase as of 1 July 2011. 2. No comp time. The City Manager can take a day off from time to time with notification to the Council Chair and Vice Chair. 3. Increase in vacation time from 4 to 5 weeks and 2 days. 4. A correction of the contract with regard to duration of term to comply with the City Charter. It was noted that there is a proposed limit of 75 days of accumulated sick leave. This is being discussed with bargaining units. Ms. Dooley personally thanked Mr. Miller for helping the city find its way through all of this. Mr. Engels moved to approve the City Manager’s contract as presented. Ms. Greco seconded. Motion passed unanimously. Mr. Miller said the position has been a challenge and sometimes a pleasure. He looked forward to continuing to work with the City Council, city staff and the community. 8. Executive Session: Mr. Knapp moved that the Council meet in executive session to discuss contracts and real property transaction, the premature disclosure of which would be disadvantageous to the city, and to resume regular session only for the purpose of adjournment. Ms. Emery seconded. Motion passed unanimously. 9. Regular Session: Council returned to regular session. As there was no further business Mr. Knapp moved for Council adjournment. Ms. Dooley seconded. Motion passed unanimously. Council adjourned. _______________________ Clerk Published by ClerkBase ©2019 by Clerkbase. No Claim to Original Government Works.