LEGISLATIVE AND FINANCE COMMITTEE
The Legislative and Finance Committee met on November 13, 1991, at 7:00 p.m.. with Chairman Weyandt presiding. Mr. Leary was present and in the absence of Councilmen Hare and Lyiin, Councilmen Daisey and Levitt were deputized to serve as members. Other members of Council present were Mr. Pitts, Mr. Lambert, Council President Christianseti aiid Mayor Rictiter.
AGENDA ADDITIONS/DELETIONS
Council President Christiansen requested the addition of an executive session to discuss legal and personnel matters. He also requested that Mrs. Marian Harris be permitted to make an announcement.
Mr. Levitt moved to accept the agenda as amended, seconded by Mr. Daisey and unanimously carried.
MRS. MARIAN HARRIS - GREATER DOVER UNITY COALITION
Mrs. Marian Harris advised Members of Council that she has been designated spokesperson for a newly formed group The Greater Dover Utility Coalition. She announced that the group has planned a "Solidarity Day" on Saturday, November 16. 1991, and requested Council's support. Mrs. Harris stated that the group will gather at the Dover Post Office Parking Lot at 12:00 noon and quietly walk down Loockerman Street to generate a message showing unity and deliver a statement to depress bigotry and racism of any kind. She also informed members that the group will have a more extensive meeting on Sunday, November 24, 1991 at 2:30 p.m.
Mr. Levitt moved to recess into executive session to discuss personnel and legal matters, seconded by Mr. Daisey and unanimously carried.
Meeting Recessed at 7:07 P.M. and Reconvened at 7:12 P.M.
AERIAL LADDER TRUCK - ROBBINS HOSE COMPANY
Mr. Mike Karia Finance Director, submitted a financing plan for the purchase of an aerial lad@er truck for the Robbins Hose Company, at an estimated cost of $600,000. It was noted that the plan removes the purchase of the ladder truck from the bond referendum. Since the financing plan utilized in 1987 for the purchase of two pieces of equipment was a success, Mr. Karia felt that a similar plan should be utilized in purchasing the ladder truck.
According to the proposed plan, Mr. Karia explained that the City will continue to appropriate $70,000 through the Fire Department budget for an additional eight (8) years with the ninth year appropriation being only $21,000. He stated that this cost is already absorbed in the City's budget and has become a part of the "baseline". The Fire Department will provide $25,000 toward this plan each year for eight (8) years and will also appropriate $21,000 in the ninth year.
Mr. Levitt moved to recommend that staff be authorized to proceed with the purchase arrangement for the aerial ladder truck as presented by the Finance Director. The motion was seconded by Mr. Leary and unanimously carried.
BOND ISSUE RELATED PROPERTY TAX REPORT
During a workshop held on November 5, 1991, Council discussed the projects and costs for the bond issue and its effect on property taxes. Mr. Mike Karia, Finance Director, submitted a report on the bond issue related property taxes. He explained that the debt service for the first fiscal year (7/1/92 to 6/30/93) includes interest only. During this year, the interest is paid for eight (8)
2
months, which is paid off from the interest earnings on the unused amounts for the projects. The debt service for the second fiscal year (7/1/93 to 6/3/94) includes the principal aiid interest for the full 12 months. The interest earnings on the unused amounts are reduced as a majority of the projects will be completed and paid for; therefore, the funds needed from the property taxes are larger as compared with the first fiscal year. Mr. Karia presented members with two plans related to property taxes for their review.
Mr. Karia explained that Plan A presents the property tax increases for the capital projects and the operating costs as they occur. He stated that this plan has good size variations in the tax rate because the interest earnings applied to debt service are higher in the first year and lower in the second and third year. Mr. Karia stated that Plan B presents the property tax increases for the capital projects and related operating costs on a more liveliest basis. He presented a table showing a comparison of Plan A and Plan B on property taxes, as follows:
PLAN APLAN B
Tax IncreaseTotal IncreaseTotal Increase
Effective DateIn CentsIn Cents
7/1/920.35c5.41c
7/1/9311.045.70
7/1/94-3.073.07
Total Tax Increase
in Three Year Period14.46c14.18c
Mr. Karia stated that Plan A repi-esents the maximum tax increase that can occur and that with Plan B there is a smaller tax increase since the money obtained 7/1/92 will be kept in debt service funds to earn interest. Mr. Karia recommended that Council adopt Plan B.
Mr. Daisey moved to recommend acceptance of Plan B, as presented by the Finance Director, seconded by Mr. Levitt and unanimously carried,
Mr. Weyandt relayed his concern with the effect that the bond issue(t will have on businesses located within the City of Dover. Although "businesses" are nor eligible to vote at the referendum, he advised members that they are the ones hardest hit with a tax increase as a result of the referendum.
Mr. Levitt moved for adjournment, seconded by Mr. Leary and unanimously carried.
Meeting Adjourned at 7:35 P.M.
Respectfully submitted,
Francis R. Weyandt
Chairman
FRW/DJB/jg