LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE
The Legislative, Finance, and Administration Committee meeting was held on April 27, 2009 at 6:00 p.m. with Councilman Salters presiding in the absence of Chairman Slavin. Members present were Mr. McGlumphy, Dr. Jones, and Mr. Shevock. Other members of Council present were Mrs. Williams, Mr. Leary, Ms. Russell (arrived at 6:13 p.m.), Council President Hogan, and Mayor Carey.
AGENDA ADDITIONS/DELETIONS
Mr. Salters requested the deletion of agenda item #1, Review and Recommendations - Filling Critical Positions and agenda item #2, Recommendations - Phase II of the MAG Study (to be considered during the committee meeting of May 26, 2009).
Mr. Shevock moved for approval of the agenda, as amended, seconded by Mr. McGlumphy and unanimously carried.
Proposed Ordinance #2009-05 - Chapter 102 - Taxation
Ms. Russell, City Assessor, advised members that the proposed amendments to Chapter 102 -Taxation were based on an audit of the City of Dover Assessor’s Office performed by Mr. Frederick Chmura, CCMA, AAS and Mr. William Ford IAO, AAS of IAAO (International Association of Assessing Officers) dated June 2008, as well as the recommendations of the Tax Appeals Committee and the City Assessor.
Ms. Russell reviewed the proposed amendments and explained that the amendments would require that all owners of income producing property complete and file annual reports of income and expenses, establish filing deadlines for appeals, provide language that an individuals’ right to appeal is lost if any designated appeal date is missed, and establish that appeals or refunds would not be heard for prior years.
Mr. Salters expressed concern regarding penalizing an individual with a “denial of appeal”. It was his feeling that if the Income and Expense form is not returned, the penalty should be acted on at that time instead of denying an appeal, which would take place one (1) year later. For clarification, Mr. Salters requested that a legal opinion be obtained from the City Solicitor.
Ms. Russell noted that a confidentiality notice will be placed on the Income and Expense Report and it would remain confidential.
Mr. McGlumphy moved to table the proposed ordinance amending Chapter 102 - Taxation until a legal opinion is obtained from the City Solicitor. The motion was seconded by Dr. Jones and carried unanimously.
Referring to Section 102-77 on the Committee Action Form, Mr. Salters requested that the wording be revised to state “amendment to update the language”.
Proposed Ordinance #2009-09 - Consolidation of Fees - Appendix F
Members were provided a proposed ordinance (#2009-09) that would consolidate all City fees and charges into one appendix in the City of Dover Code of Ordinances. Mrs. Terry Tieman, Senior City Administrator, explained that, currently, revisions of fees require that amendments be made in several areas of the City of Dover Code, and that consolidating the comprehensive fee schedule would be more efficient.
In response to Mr. Salters and Mrs. Williams, Mrs. Tieman assured members that the fees listed are existing fees and that there were no additions or deletions under the new structure of Appendix F.
Mr. McGlumphy moved to recommend adoption of the proposed ordinance, Consolidation of Fees - Appendix F. The motion was seconded by Mr. Shevock and unanimously carried.
Scope of Work and Cost Estimate Analysis of Re-opening the Defined Benefit Plan
During their meeting of March 13, 2009, members of the Civilian Pension Board recommended that the Controller/Treasurer be authorized to spend $4,000, using five (5) employees, to conduct an analysis of re-opening the Defined Benefit Plan.
In response to Mr. McGlumphy, Mr. DePrima explained that during the Civilian Pension Board meeting of November 21, 2008, members were provided a petition from several employees requesting that the City re-open the Defined Benefit Pension Plan. He stated that many employees feel that they were provided inaccurate information at the time they elected to join the 401(a). He further indicated that it was the belief of some employees that they are early enough in their employment that they could leave the City and obtain employment elsewhere that would provide for a pension plan, or that they could leave the City only to return and opt to become a member of the Defined Benefit Pension Plan.
Mr. David Carden stated that he elected the Deferred Pension Plan since, at that time, he was under the impression that it was the better plan. Due to the recent decline in the stock market, he now realizes the selection was a mistake. He indicated that employees would like the opportunity to buy back into the Defined Benefit Pension plan or have the option of joining a new pension plan.
In response to Mrs. Mitchell, Mr. DePrima felt that the cost of the analysis could be paid for through various budgets and that the funds would be presented to Council.
Responding to Mr. Salters, Mrs. Mitchell stated that the analysis does not effect current members of the Defined Benefit Pension Plan; therefore, members of the Civilian Pension Board were not in favor of using pension funds to pay for the analysis.
Responding to Mr. McGlumphy, Mr. Carden stated he opted into the 401(a) Plan in 1994 and he is willing to contribute the money necessary to join the Defined Pension Benefit Plan.
Mr. DePrima explained that the actuary will calculate the amount of buy back and the actuarial liability for the selected employees and that the information could then be used to determine the cost implications for re-opening the Defined Benefit Pension Plan. He also indicated the cost to perform the analysis would be $2,000, plus an additional $400.00 for each employee reviewed.
In response to Mr. McGlumphy, Mr. DePrima stated there would not be an impact on the Defined Pension Benefit Plan and that it would be designed to be cost neutral. He also noted that Mrs. Mitchell had suggested the possibility of opening a new pension plan as a viable alternative.
In response to Mr. Shevock, Mrs. Mitchell stated that Council would need to take action as to whether or not the 401(a) Pension Plan would be eliminated.
Responding to Mrs. Williams, Mrs. Mitchell indicated that approximately 100 (one hundred) employees would be eligible to join the Defined Pension Benefit Plan and that the 401(a) Pension Plan began in 1993.
Mr. Salters questioned what the advantages were in proceeding with the study. Responding, it was Mr. DePrima’s opinion that it is an employee satisfaction issue and the impact will not be known until the results of the study have been received.
Concurring with Mr. DePrima, Mr. McGiffin felt that there is high level of discontent amongst employees, and before Council makes a decision as to whether or not to pursue re-opening the Defined Benefit Pension Plan, they should await the results of the study.
In response to Ms. Russell, Mr. DePrima stated that his request to join the Defined Pension Plan would be treated separately.
Mr. Salters moved to authorize the Controller/Treasurer to spend $4,000 to conduct an analysis using a sample of five (5) employees to transfer from the 401(a) plan to the Defined Benefit Pension Plan. The motion was seconded by Mr. Shevock and carried with Mr. McGlumphy voting no.
Recommendation of Civilian Pension Pension Board - Cost of Living Adjustment (COLA)
During the Civilian Pension Board Meeting of January 27, 2000, members directed the City Clerk to maintain a permanent pending agenda item to review a Cost of Living Adjustment (COLA) for City of Dover retirees prior to the third week in February each year.
Mrs. Mitchell, Controller/Treasurer, explained that during the Civilian Pension Board Meeting of March 13, 2009, members recommended forgoing a Cost of Living Adjustment (COLA) this year due to the funding level of the Defined Benefit Plan, the current CPI, market losses, and poor budget conditions.
In response to Dr. Jones, Mrs. Mitchell stated that an analysis was not completed to determine the cost of a COLA; however, an increase would impact the City’s unfunded liability.
Mr. Shevock moved to approve the Committee’s recommendation to forgo a Cost of Living Adjustment (COLA) for FY 2010. The motion was seconded by Dr. Jones and carried with Mr. McGlumphy voting no.
Mr. Shevock moved for adjournment, seconded by Dr. Jones and unanimously carried
Meeting Adjourned at 6:39 P.M.
Respectfully submitted,
Reuben Salters
Acting Chairman
TAS/AC
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