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HomeMy WebLinkAboutMinutes - 2012.07.12 - 36643TOM MIDDLETON Chairperson SHELLEY TAUB Vice Chairperson DAVID WOODWARD Minority Vice Chairperson July 12, 2012 Chairperson Middleton called the meeting of the Finance Com mittee to order at 9:05 a.m. in the Board of Commissioners' Auditorium of the Commissioners' Auditorium Wing, County Service Center in Pontiac, Michigan. COMMITTEE MEMBERS PRESENT Tom Middleton, Shelley Taub, David Woodward, Christine Long, Jim Runestad , Kathy Crawford, Bill Dwyer, Helaine Zack COMMITTEE MEMBERS ABSENT WITHOUT NOTICE: Nancy Quarles OTHERS PRESENT CENTRAL SERVICES J. David VanderVeen, Director AVIATION Karl Randall, Manager CORPORATION COUNSEL David Asmar, Assistant Counsel FACILITIES MANAGEMENT Art Holdsworth, Director Ed Joss, Manager HEALTH & HUMAN SERVICES George Miller, Director HUMAN RESOURCES Nancy Scarlet, Director Jennifer Hain, Manager Karen Jones, Manager MANAGEMENT & BUDGET Laurie Van Pelt, Director FISCAL SERVICES Tim Soave, Manager Lynn Sonkiss, Chief LaVerne Smith, Supervisor Prentiss Malone, Analyst Holly Conforti, Chief Kimberly Elgrably, Analyst Laura Huyghe, Accountant PARKS AND RECREATION C OMMISSION Phil Castonia, Business Development Rep. PROSECUTING ATTORNEY Terri Meiers, Supervisor SHERIFF Michael McCabe, Undersheriff Dale Cunningham, Business Manager Robert Smith, Chief of Staff CITY OF PONTIAC Leo Jukowski, Mayor Mary Pietila, Council Member OTHERS Brian True, Citizen of Pontiac BOARD OF COMMISSIONERS Angela River, District 11 Jim Ver Ploeg, Administrative Director OAKLAND COUNTY BOARD OF COMMISSIONERS 1200 N. TELEGRAPH ROAD, PONTIAC, MI 48341-0475 Telephone (248) 858 -0100 FAX (248) 858-1572 FINANCE COMMITTEE Christine Long David Potts Jim Runestad Kathy Crawford Bill Dwyer Helaine Zack Nancy Quarles FINANCE COMMITTEE Page 2 July 18, 2012 Harvey Wedell, Sr. Analyst Julia Ruffin, BOC Liaison Helen Hanger, Sr. Committee Coordinator PLEDGE OF ALLEGIANCE Chairperson Middleton led the Pledge of Allegiance. APPROVAL OF THE PREVIOUS MINUTES Dwyer moved approval of the previous minutes o f June 14, 2012 as printed. Supported by Woodward . Motion carried on a voice vote. AGENDA The agenda stands as printed. PUBLIC COMMENT Mr. Miller spoke in support of Item 7 to repave the Children’s Village J Building Courtyard. He explained that this is the only paved outdoor recreation area and it has become unsafe due to age. Mr. True indicated that the agreement requires both senior center towers to have access to the parking lot and asked that the committee table Item 1 to review the agreement as to liability . Ms. Pietila spoke on behalf of the Pontiac Ci ty Council indicating that performances had been scheduled long before they had been made aware of the need for repairs. T hey do not wish to see the Phoenix Center taken down and asked that the Council be given the opportunity to address the matter. Mr. Jukowski explained that the Phoenix Center has never made money and the City cannot afford to subsidize the Center because of the upside down status of the tax increment financing authority in which the Center resides. A subsidy would have to come out of the ge neral fund. The Agreement provides for easements and abandonment. Mr. Schimmel explained that his team had spent much time on review of this matter and in looking at the reality of the situation realized that the Phoenix Center is a huge drain on the Cit y. FY 2012 CONTINGENCY REPORT The Fiscal Year (FY) 2012 Contingency Fund balance of $319,745 will remain unchanged by today’s actions. Taub moved to receive and file the FY 2012 Contingency Report dated July 3, 2012. Supported by Zack. Motion carried on a voice vote. REGULAR AGENDA 1. RESOLUTION AUTHORIZING THE CITY OF PONTIAC TO DEMOLISH THE PHOENIX CENTER PARKING STRUCTURE FINANCE COMMITTEE Page 3 July 18, 2012 The resolution would authorize demolition of the Phoenix Center parking structure. The existing Sublease between the County and the City of Pontiac permits the City to demolish the structure so long as the County approves the demolition and the City pays for it. The City continues to be respon sible for all related debt payments under the sublease to the County. There is no financial impact to the County. Taub moved to receive and file Order S-221 dated July 5, 2012 from City of Pontiac Emergency Manager Louis Schimmel to demolish the Phoenix Center. Supported by Crawford. Motion carried on a voice vote. Mr. Daddow reviewed the events which have occurred since 2005 -2006 when the City of Pontiac was in deficit, running out of cash and could not make payroll and the county stepped in to assist through bonding. The Building Authority issued the debt and purchased the Phoen ix Center from the City. The County leased it from the Building Authority (debt service payments) and in turn subleased it to the City of Pontiac . The City pays the debt service to the county, the county pays the Building Authority and the Building Authority pays the bond holders. There is no markup on the debt service. (This action is similar to what was done with the City of Rochester for its Sheriff’s Substation and the City of Keego Harbor for its City Hall and DPW.) Everything worked fine until the property tax implosion and the City’s #2 Tax Increment Financing Authority in which the Phoenix Center resides became insolvent. In 2008 when the Arts Beats and Eats show was still in Pontiac, the DDA was paying the difference of $37,000 between the $28 ,000 of revenue that came in and the cost for entertainment. The City guaranteed the debt so it would now have to be paid from the City’s General Fund, which has gone from $54 million in revenue in 2008 to $29 million in 2013. The City has lost almost 50% of its revenue. Its General Fund is barely able to cover its obligation to provide core services and is unable to pay its full Retirement Health Care claims. Additionally, the City’s property taxes are anticipated to decline further than projected for the county as a whole, making Pontiac the driver of much of the distressed property problem in Oakland County . Mr. Daddow explained that it became necessary to determine the best course of action to address the Phoenix Center. An engineering study was performed. Four courses of action were considered, including retain and repair, mothballing the north section with no repairs and keeping the south section open with few repairs as possible, selling the center or demolishing it and using the vacant land a s a parking lot. All four scenarios are outlined in the talking points document dated June 28, 2012 as placed on file with the resolution. The City is currently paying $100,000 in insurance and $60,000 in utility bills. The First three scenarios would place additional cost burdens on the City ’s General Fund with no way to raise the City’s bond rating. The Center and the land are collateral against the two County - issued bonds and that amount would need to be factored into any purchase price. If the resolution does not go forward the County would immediately send a letter of demand to the City to provide 24/7 security and lighting. Of 2,500 parking spaces only 200 are used. There are safety issues for those 200 seniors who use the spaces. County staff toured the Center and saw where the homeless wer e living. There have also been problems with addicts. Mr. Daddow indicated that if the City could not make its payments he would have the authority to seize the City’s Delinquent Tax Revolving Fund distribution in the spring. If it became necessary for the County to send the aforementioned Demand Letter to the City and the City did not provide the services requested, the County would do so and these additional costs would be passed on to the City f or reimbursement. Ms. Schimmel advised that a Request for Proposal had been released and the selection process is being finalized. Negotiations will begin shortly with a potential vendor. The County will still hold title to the vacant land until 2027 when the bonds are paid in full and the property transfers to the City for $1. Commissioners Potts indicated that there were people in support of the center in attendance Tuesday at the Planning and Building Committee (P&B) meeting as well who asked that this matter be given more time but offered no solutions . Commissioner Hatchett was also present and participated in the discussion and asked for a 1-2 week delay. FINANCE COMMITTEE Page 4 July 18, 2012 Commissioner Crawford, also a member of P&B, stated that there are clearly obvious fiscal and exposure concerns if the Center remains standing but more importantly concerns that the County’s most vulnerable citizens are being put at risk. Commissioner Runestad, also a P&B member, indicated that the Center was a campaign issue for the mayor and council members so they were well aware of efforts to address the Center. If the resolution is delayed and the Emergency Manager law is changed, this effort could disappear. He also felt there were significant safety and health issues. Commissioner River was recognized and she noted that she had talked to concern citizens and while the Sheriff’s deputies could check on the Center from time to time they could not include it in their patrol. She felt it was a hard decision but the right one. Commissione r Taub stated that this was a difficult decision but choices must be made . Do you need police and fire or to put on concerts that cannot cover facility costs. Commissioner Woodward stated that as a business case he agreed with Mr. Daddow but that their colleague Commissioner Hatchett had asked fo r two more weeks and there is still time while the selection process was proceeding. Potts moved approval of the attached suggested Fiscal Note. Supported by Runestad. Woodward moved to postpone. Supported by Zack. Roll Call: Ayes: Woodward, Zack Nays: Taub, Long, Potts, Runestad, Crawford, Dwyer, Middleton Absent: Quarles Motion to postpone failed. Main motion carried on a roll call vote with Woodward and Zack voting no and Quarles absent. 2. MR #12176 – SHERIFF’S OFFICE – CREATION OF PTNE DEPUTY POSITIONS TO PROVIDE ADDITIONAL HOURS OF LAW ENFORCEMENT FOR 2012 PARKS & RECREATION COMMISSION CONTRACT The Sheriff is requesting authorization to add 2,000 additional hours to its FY 2012 contract to future contracts for law enforcement services with the Oakland County Parks and Recreation Commission. T wo General Fund/General Purpose (GF/GP) Part -Time Non-Eligible (PTNE) 500 Hours/Year Park Deputy II positions and two GF/GP PTNE 500 Hours/Year Park Deput y I positions will be created in the Parks Unit of the Sheriff’s Patrol Services Division. A Budget Amendment is recommended for t he FY 2012 Budget and the County Executive Recommended Budget for FY 2013 -2015. Dwyer moved approval of the attached suggested Fiscal Note. Supported by Long. Motion carried unanimously on a roll call vote with Quarles absent. 3. MR #12173 – HUMAN RESOURCES DEPARTMENT / BENEFIT ADMINISTRATION DIVISION – INCREASE IN PRESCRIPTION CO -PAYS AND EMERGENCY ROOM CO -PAYS FOR COUNTY MEDICAL PLANS Human Resources is requesting authorization to increase the prescription drug co -pay levels from $5/$10/$25 to $5/$20/$40 and to establish an emergency room (ER) visit co-pay of $100 for non- FINANCE COMMITTEE Page 5 July 18, 2012 emergency conditions. These proposed changes app ly to all non-represented employees, represented employees whose bargaining agreements provide for these changes and to all retirees, effective January 1, 2013. Annual cost savings are estimated at $850,000, with $250,000 in savings in emergency room visits and approximately $600,000 in savings for changes to the prescription drug co -pay. No budget amendment is recommended at this time as the county is self -insured for health care and actual health care savings cannot be determined until the program is fully implemented. Future medical plan rates will be adjusted to reflect the actual cost related to these co -pay changes. Ms. Hain reported that co-pays have not changed since 2003. The private sector has slightly higher co- pays. There is about a 60% use of generics. In order to obtain 70% usage the differential between prices would need to be greater. In the last several years there has been an increase in the number of employees using the ER. Blue Cross has reported that 69 people have gone to the ER over 600 times for issues that primarily include sore throats, sinus infections, ear aches. etc. These are issues that can be handled by your physician or at an urgent care facility. There currently is no co -pay for using the ER but there is a co- pay for doctor’s visits. Blue Cross will determine whether the ER visit is justified and may waive the c o-pay. If you are not admitted to the hospital, however, it will be difficult to have the co -pay waived. Ms. Hain explained that employees would be educated during the open enrollment process for next year. Blue Cross has a list of urgent care centers available on line they have authorized. Employees can save money on their prescription co-p ay by using the County’s mail order program through its vendor or through the pharmacies both of which offer 3-month prescriptions for one co -pay. Commissioner Woodward asked HR to consider dropping the physician’s office visit co-pay since an ER co- pay is being established. Ms. Scarlet explained that under changes to the health care law the County will lose its grandfather status and a lot more well care visits will be covered. Zack moved approval of the attached suggested Fiscal Note . Supported by Potts. Motion carried on a roll call vote with Woodward voting no and Quarles absent. 4. DEPARTMENT OF CENTRAL SERVICES – OAKLAND/TROY AIRPORT – 2012 GRANT PROGRAM ACCEPTANCE – REHABILITATE RUNWAY 9/27, TAXIWAY (HANGAR TAXILANES), TERMINAL PARKING LOT AND SERVICE DRIVE INCLUDING DRAINAGE IMPROVEMENTS The Oakland/Troy Airport is requesting authorization to accept a Michigan Department of Transportation Grant Contract for Federal funds of $791,931 and State funds of $34,034 , with a required local match of $34,035, totaling $860,000, for a project consisting of the rehabilitation of Runway 9/27, taxiway (hangar taxi lanes), terminal parking lot and service drive, including drainage improvements. The Airport Committee is recommending acceptance of the grant. MDOT will act as agent on behalf of the County to administ er the project. Match funding is available within the Airport Fund. No General Fund appropriation is required. Taub moved approval of the attached suggested Fiscal Note. Supported by Long. Motion carried unanimously on a roll call vote with Quarles absent. 5. MR #12174 – DEPARTMENT OF FACILITIES MANAGEMENT – REQUEST FOR APPROVAL OF LEASE AGREEMENT EXTENSION WITH ROAD COMMISSION FOR OAKLAND COUNTY, TRAFFIC OPERATION CENTER, BUILDING 49 WEST Facilities Management (FM) is requesting authorization to enter into a two-year lease agreement extension with the Road Commission for Oakland County (RCOC) for 6,540 square feet of space in the lower level of the Information Technology Building for use by the RCOC as a Traffic Operation Center. The current le ase, FINANCE COMMITTEE Page 6 July 18, 2012 effective until July 31, 2013, will be extended to July 31, 2015. Lease charges will be based on a rate of $14.49 per square foot in FY 2012 with an annual rate adjustments for FY 13 – FY 15 based on expected operation and maintenance costs for the b uilding. The County will make additional space available to the RCOC if it becomes available based on the County’s existing and future requirements. The additional space would accommodate the RCOC’s TIMS computer equipment, SCATS central management syste m computer, SCATS regional computer and peripheral computer and equipment and permit RCOC to co - locate receivers/transmitters on the County’s tower and access OakNet. There will be no further lease extensions. Lease revenue will be receip ted in FM Operations - External Agencies revenue account. The majority of different between the lease payments for use of 6,540 net sq. footage in the lease agreement and gross sq. footage of 11,583 is included in the FY 2013 Recommended Budget. Mr. Holdsworth reported that both parties believe they should vacate at a particular point in time but the RCOC felt they did not have enough time to complete this process so have asked for a final two -year extension. Dwyer moved approval of the attached suggested Fiscal Note. Supported by Zack. Motion carried unanimously on a roll call vote with Quarles absent . 6. MR #12175 – DEPARTMENT OF FACILITIES MANAGEMENT – REQUEST FOR APPROVAL OF PARCEL EXCHANGE WITH THE CITY OF WALLED LAKE, MICHIGAN FOR OAKNET FIBER HUB RELOCATION Facilities Management is requesting authorization to exchange parcel #17 -26-307-035 with the City of Walled Lake in exchange for a portion of the City’s Lot 119 of parcel #17 -34-401-003 which is along an OakNet fiber run. This exchange will allow for futur e relocation of the County’s OakNet fiber optic hub serving Walled Lake and the surrounding communities. The FM FY 2012 budget contains sufficient funds to cover the minimal charge for recording the property exchange. No budget amendment is required. Long moved approval of the attached suggested Fiscal Note. Supported by Woodward. Motion carried unanimously on a roll call vote with Quarles absent . 7. FACILITIES MANAGEMENT/FACILITIES PLANNING & ENGINEERING – CHILDREN’S VILLAGE J BUILDING COURTYARD REPAVING Facilities Management is requesting authorization to transfer funding of $107,143 from the Capital Improvement Program/Building Fund to the Project W ork Order Fund to proceed with the FY 12 Capital Improvement Program project of repaving the Chi ldren’s Village J Building Courtyard. Seven bids were received for this project. Following review of the bids, the lowest responsible bidder, Nagle Paving Co. of Novi, Michigan was awarded a contract for $89,286. The project also includes contingency of $17,857. A budget amendment will be made as outlined in the resolution. Crawford moved approval of the attached suggested Resolution. Supported by Taub. Motion carried unanimously on a roll call vote with Quarles absent . 8. FACILITIES MANAGEMENT/FACILITIES PLANNING & ENGINEERING – WATER MAIN REPLACEMENT PROJECT Facilities Management is requesting authorization to transfer funding of $300,000 from the Capital Improvement Program/Building Fund to the Project Work Order Fund to proceed with the FY 12 Capital Improvement Program project of replacing 1,400 feet of 51 year old six inch water main pipe . Three bids were received for this project. Following review of the b ids, the lowest responsible bidder, DVM FINANCE COMMITTEE Page 7 July 18, 2012 Utilities of Sterling Heights, Michigan will be awarded a contract for $217,000. The total project cost of $300,000 includes engineering of $20,000, permits of $10,000 and contingency of $53,000. A budget amendment will be made as outlined in the resolution. Taub moved approval of the attach ed suggested Resolution. Supported by Woodward. Motion carried unanimously on a roll call vote with Quarles absent. 9. DEPARTMENT OF MANAGEMENT AND BUDGET – FISCAL YEAR 2012 SECOND QUARTER FINANCIAL FORECAST AND BUDGET AMENDMENTS The Fiscal Year 2012 Second Quarter Forecast and budget amendments resolution and documentation were distributed at the previous meeting for review and carried forward for action to today’s meeting . The Transmittal Letter of June 14, 2012 from Management and Budget foreca sts that the County will complete FY 2012 with an overall favorable variance of $11,464,527 in General Fund/General Operations compared to the amended budget. This overall favorability is split between receiving $3,358,091 less revenue than anticipated and a projected favorability in expenditures of $14,822,618. Detailed schedule s are included with the resolution. Commissioner Taub asked several questions regarding the detail. Commission Potts asked if the cash flow had increased. Ms. Van Pelt explained that efforts resulting from budget tasks have allowed the County to retain cash but there is no increased incoming cash flow. Taub moved approval of the attached suggested Resolution. Supported by Runestad. Motion carried unanimously on a roll call vote with Woodward and Quarles absent. COMMUNICATIONS A. Department of Management and Budget – Single Audit - Federal Awards Supplemental Information as of September 30, 2011 B. Sheriff’s Office/Prosecuting Attorney – FY 2013 Narcotics Enforcemen t Team (N.E.T.) Grant Application C. Sheriff’s Office – FY 2012 State Criminal Alien Assistance Program (SCAAP) Grant Application D. Parks & Recreation Commission – Michigan Economic Development Corporation Urban Farmers Market Grant with Oakland County Parks and Recreation - Grant Application E. McCartney & Co., P.C. – Annual Accounting for Oakland County 9 -1-1 Service District F. Notice of Hearing from the City of Madison Heights Requesting Revocation of Real an d/or Personal Property Components of Industrial Facilities Exemption Certificates for : - #2006-26 – Detroit Newspaper Partnership, LP – 1523 East Whitcomb Ave. - #2005-563 – CITG Promotions, LLC – 800 Tech Row G. Notice of Hearing for an Industrial Development District for Magna Electronics, Inc. – 2050 Auburn Rd., Auburn Hills, MI 48326 H. Notice of Hearing for a Transfer and Extension of Industrial Facility Exemption Certificate #2004-593 for LXR Biotech, LLC – 4225 N. Atlantic Blvd., Auburn Hills, MI 48326 I. Special Assessment Rolls for the Maintenance of the Following Drains: Roth Drain, Owens Relief Drain, Lynn D. Allen Drain, Law Drain, Fredericks Drain, Barnard Drain, and Ballard Drain Taub moved to receive and file the communications. Supported by Dwyer. Motion carried on a voice vote. FINANCE COMMITTEE Page 8 July 18, 2012 OTHER BUSINESS/ADJOURNMENT Mr. Soave recognized LaVerne Smith for her work with the Finance Committee. Ms. Smith is leaving to talk a job in Dallas Texas. There being no other business to come before the committe e, the meeting was adjou rned at 10:47 a.m. ________________________ _______________________________ Helen A. Hanger Jim Ver Ploeg Senior Committee Coordinator Administrator Director NOTE: The foregoing minutes are subject to Committee approval.