COMMON COUNCIL MINUTES

AUGUST 3, 1998

(Approved at September 8, 1998 Meeting)

The Common Council of the City of West Lafayette, Indiana met in the Council Chambers at City Hall on August 3, 1998 at the hour of 7:30 PM.

Mayor Margerum, who presided, called the meeting to order. Clerk-Treasurer Rhodes called the roll:

PRESENT: BOSSUNG, BRAILE, KEEN, PALMER, PARKER, SPARBY, WINDLER

ALSO PRESENT: Attorney Larry Cuculic, Police Chief Dan Marvin, Fire Chief Ron Ford, WWTU Director Mike Darter, Street Commissioner David Downey, City Engineer Scott Snyder, Assistant Director of Development Allen Grady, and Parks and Recreation Superintendent Joe Payne.

Mayor Margerum welcomed Brad Windler to his first Council meeting. He was sworn in at the Pre-Council meeting representing the 1st District. We are pleased to have him. He has a lot of catching up to do but has also informed himself. She is sure he will represent the 1st District very well.

The Pledge of Allegiance was repeated.

MINUTES

Councilor Sparby moved to approve the minutes of the July 2, 1998 Pre-Council Meeting and the July 6, 1998 Common Council Meeting as corrected. Motion was seconded by Councilor Parker and passed viva-voce.

COMMITTEE STANDING REPORTS

Street and Sanitation: Councilor Braile presented this report.

Planning and Zoning: Councilor Parker presented this report.

Public Safety: Councilor Keen presented this report.

Purdue Relations: Councilor Windler indicated that he had no report at this time.

Parks and Recreation: Councilor Palmer presented this report. The next Park Board meeting will be August 19, 1998 at 4:30 p.m. in the City Hall Courtroom. Global Fest will be on September 4 and 5 at the Morton Community Center.

Department of Development: Councilor Parker presented this report. The next Redevelopment Commission meeting will be August 20. The time and location will be announced at a later date.

Personnel: Councilor Bossung presented this report.

Budget and Finance: Councilor Sparby presented this report.

Wastewater Treatment Utility: Councilor Sparby presented this report.

REPORT OF THE APC REPRESENTATIVE

Councilor Palmer presented the following report from the Area Plan Commission Meeting on July 15, 1998.

Outdoor Advertising Signs (West Lafayette)

Changes in Section 3.2 to permit outdoor advertising signs, in West Lafayette, in the I2 and I3 zones only. Vote: 3-yes, 5-no. Continuance to August 19. Only 8 of 15 Plan Commissioners were present at the meeting. According to Plan Commission bylaws a majority of the Commission must vote either AYE or NAY on a piece of business in order for it to be passed on with the recommendation to any of the voting constituencies. Even if there is a majority vote on it, it will come back to the Council in the month of September either with a recommendation or with no recommendation. Councilor Palmer stated that he did vote "no" as he did at the Common Council meeting in terms of this ordinance.

There was also a resolution to make a policy change in the policies for the consideration of the New Zoning Map Changes under the NUZO that was voted into effect on January 1. This notification procedure was adopted by the Area Plan Commission. This is a result of three months of discussions with the public and amongst the Ordinance Committee of the Area Plan Commission on a way to go beyond the legal notification that Area Plan has always used to notify landowners of a potential zoning change. It was decided to go well beyond this and do mailing notifications and send maps to involve landowners as well. With this policy change out of the way, we can now proceed to go about the zoning map changes which have been put on hold until the notification issue was resolved. We're looking in the next couple of months to come into West Lafayette and trying to bring the West Lafayette zoning map into concordance with the New Unified Zoning Ordinance.

The next Area Plan Commission meeting is on Wednesday, August 19 at 7:00 p.m. in the County Government Office Building.

REPORT OF SPECIAL COMMITTEES: There were no reports of Special Committees.

FINANCIAL REPORT

Councilor Sparby moved to accept the July financial report as distributed. Motion was seconded by Councilor Parker and passed viva-voce.

UNFINISHED BUSINESS:

Ordinance No. 14-98 (Amended) An Ordinance to Amend the West Lafayette City Code Concerning Certificates for Rental Real Estate and Related Provisions. (Submitted by the Department of Development) Councilor Bossung read the ordinance by title only and moved that Ordinance No. 14-98 (Amended) be passed on first reading and that the vote be by roll call. Motion was seconded by Councilor Sparby.

Councilor Sparby said that she would like to point out that in Ordinance No. 14-98 (Amended) there was an amendment that was passed at the July Pre-Council meeting that is not reflected in the written copy. On page 2 under Item I, it had been amended to strike the words "but not for cooking".

Mayor Margerum said that the ordinance needs to be amended by substitution and then we'll deal with that.

Councilor Sparby asked if that was true even though it has been amended and voted on.

Mayor Margerum said yes.

Clerk-Treasurer Rhodes said that the ordinance is in order as Ordinance No. 14-98 (Amended) with the item that was just referred to on page 2, Section I, at the end of the second line, "but not for cooking" being stricken out at the July 2 Pre-Council. That was the ordinance that was taken off the table and is in order tonight. There needs to be another motion to amend by substitution the ordinance provided by the City Attorney's office tonight.

Councilor Sparby moved to amend Ordinance No. 14-98 to review the wording "but not for cooking". Motion was seconded by Councilor Parker and the vote was AYE.

Clerk-Treasurer Rhodes said that it has already been done. The item that needs to be done next is a motion to amend by substitution.

Councilor Bossung moved to amend Ordinance No. 14-98 (Amended) by substitution.

Clerk-Treasurer Rhodes said that it needs to be with the change previously noted.

Councilor Bossung said that it is so stated.

Motion was seconded by Councilor Palmer and the vote was AYE.

Mayor Margerum asked Assistant Director Grady to summarize what has transpired since the original tabling of the ordinance.

Assistant Director Grady said that at the last Council meeting there was a request by Councilor Sparby that they meet with some of the landlords to discuss or propose an amendment to the inspection fees. He did hold a meeting with approximately ten landlords on July 22. Councilors Parker and Palmer were present at that meeting. After discussion on many aspects of the inspection program, they did propose the amendment to the fee structure as it is reflected in the amended ordinance tonight. That was the $75 per structure plus $1 per unit fee. They also recommended that the change in the status reinspection fee should be increased because it reflects a number of property owners or managers that do not readily comply with the codes. They felt that if costs were going to be incurred for us to return to the property for additional reinspections, then that cost should be increased to help defray that. They did recommend that it should be increased to $150 for the first status reinspection fee. Also, they recommended an increase in the no-show fee, which is right along with the problems incurred with the status reinspection. They recommended that if we make appointments and clog up our schedule with appointments and then we have people who do not contact us or make other arrangements and we send an inspector out to the property and sit there for 15 minutes without gaining entry into the property, then that should be reflected also. They recommended that it should be increased to $100. Those were basically the changes that were discussed and recommended by those property owners in attendance at that meeting on July 22.

Councilor Sparby apologized for not being able to be at the meeting due to a conflict. She said that she has been approached with some questions that she was not able to answer and would like to get some clarification. She asked Assistant Director Grady if she was a rental property owner and was going through this the first time, if there is a guideline that would give information as to what is expected of her property prior to inspection. Assistant Director Grady said that they have always had copies of the Code available free to the property owners. The Code is about 32 pages long. It is a little bit vague in areas, like most code writings, so they do provide a four page summary which lists what items the Code covers. They have never really developed a check list for the owners to utilize. That was suggested at the meeting on July 22, and he will be working on that.

Councilor Sparby said that one of the things she was surprised at was that this landlord told her that one of the things for failing inspection could be not having debris removed from the gutters. Assistant Director Grady said that usually those things are suggestions or recommendations. If there are a number of problems that are cited on the property and the gutters are clogged and inoperable, we will usually include that and ask it to be taken care of. If that is the only thing we see, they will usually just ask them to clean it out. Obviously, there can be water problems away from the foundation. That is why they do that. There are some judgment calls like that where they will try to provide information about what needs to be done.

Councilor Sparby asked what would constitute a reinspection fee. Assistant Director Grady asked for clarification.

Councilor Sparby said that if a recommendation is made about gutters, that is fine, because it doesn't involve a reinspection. Is there a certain number of items that have to be in violation or a seriousness that would cause for the rental unit to be reinspected? Assistant Director Grady said that the first reinspection is included in the normal inspection process. Everybody who gets a violation notice gets one reinspection included in the fee. The status reinspections are those items that either they chose not to correct or they absolutely correct none at all and fail to do anything. The usual situation would be that if we see something on a reinspection that maybe does not meet the standards, something that causes a problem in the way that it was interpreted what they said was wrong with it, or if there has been any proper work done by a crafts person or a trade person, that is usually a judgment call on our part. We'll maybe go back and check that or give them a freebie because that sometimes occurs and we don't want to penalize them when the intent of complying with the Code was there. The status reinspection comes into play on a number of properties that routinely fail to maintain, have a history of problems with compliance issues or absolutely fails to do it at all.

Councilor Sparby asked approximately how many status reinspection fees they do a year. Assistant Director Grady said that they are gaining new landlords all the time. A lot of it is a learning curve. When some people come in they don't really understand the program, which goes back to the other issue about what we tried to do over the past couple of years. Since we increased the position two or three years ago, one of the things that we really wanted to do with that position was increase the public awareness of what is required. We did write up a lot of guides for new property owners and routinely send those out to new property owners explaining what the certification process is and some of the definitions. The definition of a rental gets to be a little hard to understand sometimes, at least the old one did. The new proposal is now a little bit clearer on the new one. We try to increase that communication and let them know a little bit more what we expect. The one thing that we did not talk about was that we did not do a check list, and we will try to start developing one.

Councilor Parker said that in the month of July, there was a report of 44 reinspections. Assistant Director Grady said that some of those do include status reinspections. Those are not really separated out because the way that the old computer program was set up, they didn't really keep track of those that way. They could get that information, it will just have to be tracked a little differently. They do have a database that keeps track of when those fees come in. The main program wasn't really set up to take into account status reinspection fees.

Councilor Parker said that there is a category for reinspections. Assistant Director Grady said there could be three or four reinspections of one property on that.

Councilor Windler said that he had a question posed to him by a student as to how to file a complaint against a landlord who she feels is wrongly charging her in her deposit. She moved in and saw a problem area. She photographed it and wrote it down. She sent a notarized letter to her landlord and he was still charging her on her deposit when she moved out. How does she go about going to the City.

Assistant Director Grady said that it is a contractual problem when it comes to deposits or what has been withheld or charged to them. It is outside what the City will do because it is not really a Code issue per se. We get a lot of calls and a lot of questions regarding that. It is a big problem for some when it comes to deposits. Our standard line when someone calls in and says that they need to complain about a landlord, and probably a good percent of a time it does involve these issues, is do a check-in procedure with the landlord when they go in. Go through the property, understand what the lease says, and what is expected of you. Don't take possession of the property. If you do take possession of the property and find problems there upon entering the property, write them down and try to get that attached to the back of the lease, so they can be addressed or taken care of. Once again, it is a contractual thing between the landlord and tenant and it is something that the City stays away from.

Councilor Windler asked if in this instance his friend would need to seek private legal assistance, but the City won't come in and do an inspection on this landlord or certain property.

Assistant Director Grady said that with 7,000 some odd units, if they want to put a complaint in writing concerning code violations or problems in the property that they have discussed with their landlord and can't get resolved, they can file a complaint with the office and they will make it part of the biennial type of inspection of the property. All they will look at are the problems involving what they state to them as apparent Code violations.

Vijay Bhatia (800 Ashland Street) said that he owns a number of single-family residential properties that are around the campus and some that are not on the campus. He thinks that no increase in fees is required at the present time because he hears that a compromise was reached with the landlords. He spoke at this meeting last time, he was not informed of the meeting with the landlords. He was not invited and was not present. When he looks at the results of the meeting, it favors the larger landlords and those that are seen in the Basham Rentals and Williamsburg. They were to pay $2 per unit and now they will pay $1 per unit. He pays $75 for one house and a guy who has 40 units in one building ends up paying $115 because it's $75 plus another $40. Does that sound fair? As far as allocation of costs is concerned, how far are you going to carry this? First of all, the $150 or $100 figure is very subjective. Where does it come from? Maybe the single-family residential guy costs a little more, so does the person who goes and visits the library, so we should charge only the people who borrow books from the library to pay for the library. Those who borrow more books should pay more. Those people who send their children to school are the only ones who should pay for the school. The criminals are the only ones who should pay for the Police Department. The whole premise on this thing is totally wrong, to single out these guys and say that since they are costing the City more, they should pay more. This is an involuntary program that was imposed on us. It is not something that we subscribe to and say "City come and inspect us". The City comes and inspects us and charges us a nominal charge. If you don't want to fund it through the General Fund, then we'll pay for it, but not to have 100% increase or $37 to $75. If for some reason he cannot appear, and he always appears for his meetings, he is going to be fined $150. Suddenly there is a new cost for status reinspection. Ordinance No. 14-98 just talks about reinspection. He understood it to believe that at first it gives you a punch list and the next time you come up to check the punch list, if you had anything wrong with it he would be charged $150. That is apparently not what is being said now, but if you read the ordinance, there is nothing in there about status reinspection free of charge after the first initial inspection. If you people think about it, the bigger landlords come to the meeting and get their fees reduced. The smaller landlords are not invited and they are saying that a compromise has been reached between the landlords and the City. He was not informed of it. He was a party that spoke about it and attended the last Council meeting. No one asked him to come and give his thoughts on the subject. He believes that this is very discriminatory and he is being punished. This is totally punitive. It is not at all trying to fund just a few dollars here and there. It is punitive for no reason and the large landlords are getting away scot-free. Basham and Williamsburg rentals have 300 and 400 units. They pay $75 plus $1 per unit and we will pay $75 for each unit. We have a hard time competing against them as it is. We have a hard time competing against them because people want modern units and we have older houses. Now we will be impacted with an additional fee. This ordinance should just be thrown out.

Linda Chase, President of the Tippecanoe Apartment Association, said that she wanted to thank everyone for taking the time to let the landlords speak. She was at the meeting on July 22. She was also at a meeting on July 21 with single-family home owners. They scheduled a meeting on their own that the City did not know about. She attended both meetings and it was unanimous then and it's unanimous now that they agree that the fees need to be raised and the City can't go without it. For a long time, the single-family homes have been under and should have been up where they are now. We agreed that everything should be straight across the board. We have felt that all of this is fair and we think that the City is doing a good job. She would like to thank the City for letting them have their input. The Tippecanoe Apartment Association represents over 3,000 apartment homes in the West Lafayette area alone. We feel that this is a good compromise on this ordinance.

Councilor Keen said that he would like to clarify that Item J on the ordinance does specify what they are talking about as far as reinspection. It doesn't classify that as having a fine associated with it. It does show in Item B on page 3, the fee for the status reinspection, but does not show a fee for the reinspection. He just wanted to clarify that what Mr. Bhatia was speaking about is actually in the ordinance.

Mr. Bhatia said that it says reinspection means an inspection of rental property to determine the landlord's correction of Code deficiencies cited during the initial inspection. Then there is a fee for reinspection that is $150.

Councilor Keen said that there is a status reinspection and then a reinspection. They are two different things.

Mr. Bhatia said that they are saying that but morally it is not within the Code. The next guy might interpret it differently.

Councilor Sparby said that it is in the Code. Under item K it says that status reinspection fee is any additional reinspection of a rental property that occurs after the initial inspection and reinspection.

Councilor Parker said that they were discussing the price of $75 initially and then $1 per unit. That is also $75 per structure. If you take a place like Williamsburg that has a number of units, it is $75 on each building then $1 per unit down the line. It is still certainly a raise but some of the larger apartment complexes with a number of buildings, even though they are clustered together, are still $75 per unit and $1 per structure.

Mr. Bhatia said that there are units on the campus that have 14 units under one roof. They are billed $115, and we pay $75 for one unit.

Mayor Margerum asked if there were any other comments. There was no response.

Ordinance No. 14-98 (Amended) passed on first reading, 6 AYE with 1 abstention.

The Roll Call Vote:

AYE

Bossung

Braile

Keen

Palmer

Sparby

Windler

ABSTENTION

Parker

NEW BUSINESS:

Ordinance No. 16-98 (Amended) Additional Appropriation. (Mayor, Fire Department, City Services) (Prepared by the Clerk-Treasurer) Councilor Bossung read the ordinance and moved that Ordinance No. 16-98 (Amended) be passed on first reading and the vote be by roll call. Motion was seconded by Councilor Sparby and the vote was AYE.

Mayor Margerum said that there is material given for the reasons for the additional appropriation. There is an appropriation for additional work by the part-time receptionist in the Mayor's office. The Fire Department appropriation is to appropriate a $500 gift from Eli-Lilly, $60 from Wal-Mart, and $20 from TRW for educational materials, and City Services appropriation for additional utility expenses as a result of additional street lights, hydrants, and the impact of the water rate increase.

Councilor Bossung moved to amend by substitution, the account number under the General Fund heading of the Mayor that it should be Account No. 1-1-120 for Part-Time Salaries. Motion was seconded by Councilor Sparby and passed viva-voce.

Councilor Parker said that he wanted to point out that the Mayor misstated that the gift from TRW was $20, it should have been $200.

Mayor Margerum said that she said it was $200, at least that is what it says in front of her.

Councilor Sparby said that as she understands the additional utility expense, not including the water rate increase, is due to the changes made in planned developments that the City took responsibility for.

Clerk-Treasurer Rhodes said that it is partially the rate as well as the addition of more street lights in the City being impacted by the rate increase that occurred at the end of last year.

Ordinance No. 16-98 (Amended) passed on first reading, 7-0.

Ordinance No. 17-98 An Ordinance Appropriating Monies for the Purpose of Defraying the Expenses of the City of West Lafayette, Indiana for the Fiscal Year Beginning January 1, 1999, and Ending December 31, 1999, Including all Outstanding Claims and Obligations, and Fixing A Time When the Same Shall Take Effect. (Submitted by the Mayor)

Mayor Margerum said that she will refer to the graphs as Councilor Bossung reads the ordinance.

Section 2 General Fund

Mayor: $125,010

Clerk-Treasurer: $1,055,690

City Court: $32,930

Common Council: $25,280

Engineering Department: $207,220

City Hall: $147,130

Police Department: $2,633,950

Fire Department: $1,735,840

Sanitation Department: $603,700

City Services: $266,200

Legal: $62,380

Department of Development: $277,030

Total General Fund: $7,172,360

Mayor Margerum said that the General Fund incorporates all of the major expenditures of the City. Public Safety is 61% of the General Fund budget. It gives a good feeling about the distribution of the funds.

The next budgets will include all of the property tax related ones.


SECTION 3:

Parks and Recreation Fund: $ 892,680

SECTION 4:

Police Pension Fund: $601,620

SECTION 5:

Fire Pension Fund: $505,520

SECTION 6:

Cumulative Firefighting Building and Equipment Fund: $290,000

SECTION 7:

Cumulative Capital Development Fund: $2,200,000

SECTION 8:

Motor Vehicle Highway Funds: $1,065,750

SECTION 9:

Firefighting Fund: $20,000

SECTION 10:

Local Road and Street: $365,000

SECTION 11:

Economic Development Income Tax Fund: $1,236,490

SECTION 12:

Total Law Enforcement Continuing Education Fund: $15,000

SECTION 13:

Cumulative Capital Improvement Fund: $200,000

SECTION 14:

Total Parks Nonreverting Capital Pool Fund: $101,000

SECTION 15:

Total Parks Nonreverting Capital Land Fund: $1,371

Grand Total of Budget: $14,666,791

Councilor Bossung moved that Ordinance No. 17-98 be passed on first reading and that the vote be by roll call. Motion was seconded by Councilor Sparby.

Mayor Margerum said that the General Fund is the major expenditure. Last year our General Fund was $6,915,000. It has gone up 2%. There was a 4% increase passed in the salaries. We have taken two salaried positions out of the General Fund. There has been some tightening of the belt in terms of the General Fund.

Clerk-Treasurer Rhodes said that it is actually 3.7%.

Mayor Margerum said that the property tax related funds include the Police and Fire Pension Funds and Parks and Recreation Fund. If you just take those funds and don't include the Cumulative Capital Development Fund and Cumulative Fire Building Fund, that represents this area. We have two major capital expenditures. That is Cumulative Capital Development at $2,200,000 that we will be using for the Hwy. 231 relocation and Brown Street improvements. The other is the Cumulative Capital Fire which is $290,000 for a new fire pumper. Those are two expenditures that we plan to spend this year. That represents a savings that we have had over the years. We have been saving that money, so that doesn't cause an increase in the tax rate but it is an increase in spending. Those two funds are ones that have been set aside for those purposes. This year those will be expended. If you subtract the $2,490,000 that those two one-time expenditures, although they will be expended over a several year period, we are just about at the same spot that we were last year with a total of $12,345,000. If you subtract those two major cumulative capital funds, it will be just about the same as it was last year. The spending is up, but the total of the regular operating funds and the Fire Pension funds all together is very close to last year. We will be working through these numbers.

There will be some slight changes, but we feel this is a very adequate budget. It is a tight budget. The department heads have done an excellent job. She would like to thank the Council and Personnel Committee who have worked very hard. She especially would like to thank Clerk-Treasurer Judy Rhodes who has prepared a great deal of material. We have come together with a good budget. This is the first reading. This is the budget we need to publish. Then if there are some discussions about reductions those can come later. She asked the Council to pass this on first reading.

However, there are two things that she would like to do. She asked Clerk-Treasurer Rhodes to pass out an amended budget ordinance that has been prepared. At the Pre-Council meeting there was discussion about reductions in the General Fund. Looking over all our costs, we decided to move several of the items. We would like to move $19,000 from the Fire Department Fund for Buildings and Structures into the Firefighting Fund. That is a fund for the properties that are protected outside of City. They pay a fee to the City. There is about $60,000 in that Fund. The Chief is agreeable to taking any repairs to the buildings and structures out of that Firefighting Fund. That would essentially remove $19,000 from the General Fund. We would like to increase the EDIT budget by $10,000 in order to take $10,000 out of the Engineering Fund in the General Fund and then put that into EDIT. This sounds kind of like a round about way to do it, but this requires an amended budget that is really an increase over what was shown before. She has also listed the cuts that are expected to be made as well as the changes to the 1998 appropriations. She wanted the Council to see all of the changes they are proposing, but at this time in order to incorporate those, they will need to increase the Firefighting Fund by $19,000 and EDIT by $10,000. The other reductions she has shown on this sheet of paper. She would like to ask the Council to amend by substitution. This would be the budget that is advertised. She will then come back with the changes and the 1998 appropriations in the General Fund Consulting for Engineering and Fire Pension Fund. Those will be part of the final budget on final reading.

Under the General Fund, where it says that it requires an amendment to the budget ordinance on the final reading, there are a total of $58,000 of reductions in the General Fund. There was a discussion about the operating balance in the Police and Fire Departments. We have looked at this very carefully to make sure that we do have an adequate operating fund. The total of the 1998 and 1999 budget cuts is $130,000. The operating balance in the General Fund will be about $975,000 at the end of 1999 which is down 10% from the $1,083,000 balance expected at the end of 1998. In our discussion on Thursday, a majority of the Council had agreed that a 10% amount in the operating balance was something that we didn't want to go below. We have tried to incorporate that. The operating balance in the Police Pension Fund is expected to be about $172,000. That is up 33% from the $129,000 that is expected at the end of this year. The operating balance for the Fire Pension Fund is expected to be about $181,000. That is down 16% from the $217,000 balance. You will see that we will be asking for a reduction in the Fire Pension Fund of $66,400. That still leaves a very healthy operating balance. I think we have incorporated the thoughts that the Council had. Her suggestion would be to pass the higher budget, which includes the Firefighting and EDIT. Then we will prepare an ordinance to change the 1998 appropriations and to reduce the General Fund items.

Mayor Margerum asked if there were any questions. This is what was asked to be done at the Pre-Council meeting to have a list and look at some of these changes. These other reductions do not have to be acted on tonight. All that needs to be done tonight is to increase the Firefighting Fund and the EDIT. The rest would be as it was just presented. The operating balances, which were of a major concern in the Police and Fire Pensions have maintained adequate balances.

Councilor Bossung asked if once this has been passed as amended it can still be amended prior to the second and final reading with reductions only. There can not be increases but there can be reductions. If we so desire we can make any additional deductions, but there can not be additions if they are not done by substitution this evening.

Clerk-Treasurer Rhodes said that is correct. Note that we are limited by the total. You may within the major categories make adjustments as well by decreasing one and increasing another. The limitation is as published.

Councilor Sparby said that the only thing that we cannot change or increase would be any particular tax levy rate once that is published, which is in the next ordinance. Clerk-Treasurer Rhodes said that in the ordinance that will be considered, we will need to set a tax rate beyond which we cannot go in the final reading.

Mayor Margerum said that what was presented is what is in the ordinance. All she is asking them to do today is increase the Firefighting Fund and the EDIT Fund. She gave these cuts so that we could see where they were going to come from so that the Council would understand that the intent would be to make those cuts and this is how it would fit together.

Councilor Sparby said that as she stated at Pre-Council, she would still like to have a meeting where the Council can sit down and go over this before the next Council meeting. She realizes that there has been a lot of time spent on this and appreciates the work that has been done.

Councilor Sparby moved that Ordinance No. 17-98 be amended as presented by substitution. Motion was seconded by Councilor Palmer and the vote was AYE.

Councilor Bossung moved that Ordinance No. 17-98 (Amended) be passed on first reading and that the vote be by roll call. Motion was seconded by Councilor Sparby.

Ordinance No. 17-98 (Amended) passed on first reading, 7-0.

Clerk-Treasurer Rhodes said that she is providing the Council with a revised Form 4-B which shows the adjustments in the budget items. Please add these to your budget books.

Ordinance No. 18-98 An Ordinance Setting the Tax Levy on Property and Tax Rate for the 1999 City Budget. (Prepared by the Clerk-Treasurer) Councilor Bossung read the ordinance by title only and moved that Ordinance No. 18-98 be passed on first reading and that the vote be by roll call. Motion was seconded by Councilor Sparby and the vote was AYE.

Mayor Margerum asked Councilor Bossung to summarize the tax rate and levy with an explanation.

Councilor Bossung moved to amend Ordinance No. 18-98 by substitution, as passed out by the Clerk-Treasurer, with the new tax rate posted on it. Motion was seconded by Councilor Sparby and the vote was AYE.

Clerk-Treasurer Rhodes said that this is the first year that we have had the tax levy and tax rate in a separate ordinance. The tax levy represents the maximum property tax that could be collected. It has been amended tonight to take into account the recent information certified by the County Auditor on our net assessed valuation. That will allow us to lower, a bit, the advertised tax rate. As you recollect, we will use a slightly lower assessed valuation than we expect to have at the beginning of 1999 in order to guarantee that we are able to collect the tax rate needed to fund the City's operations. The amounts noted here are taken from the Form 4-B's which are in the budget books. That represents both the amount needed to fund the budget for next year as well as an operating balance. As you are aware, in General, Parks and Pension Funds we add an additional operating balance to assist us in making the needed adjustments at the budget hearing. Once again, this tax rate is higher than we expect the final rate to be. The Council has also received, in the budget book, as well as another copy today, the expected tax rate for 1999. As she discussed at Pre-Council, this ordinance is a means by which the Council may set the maximum operating balance in the property tax funds. As explained at Pre-Council, this is the last opportunity before publication for the Council to adjust the operating balances any different from those that were set as targets when the budget is filed. We need to take care of that tonight if there are going to be any changes so that the budget can be published next week.

Mayor Margerum said that she is glad to see that there was a 2.8% increase on the assessed valuation.

Clerk-Treasurer Rhodes said that it was about a 1.8% increase which is very good for the City, if you look back at the past three years. We will be almost at $197,000,000 and that is certainly going to limit the increase on the tax rate.

Councilor Sparby said that as she understands from what they have received tonight, the Police Pension and Fire Pension levies are based on leaving at the end of 1998 $50,000 in the Police Pension Fund and $0 in the Fire Pension Fund. When they met at Pre-Council the discussion was that if $0 was left in both Pensions we're looking at possibly doing temporary loans during the year next year to meet obligations of around $150,000.

Clerk-Treasurer Rhodes said that those who have their budget books can refer to page VI-1. There is a summary there. The levies as advertised here will have $50,000 operating balance in each Pension Fund at the budget hearing. However, the intent was to cut those to zero unless there was another proposal. Tonight the Mayor has made a proposal that $50,000 would be left at the budget hearing in the Police Pension Fund. She wanted to emphasize that there is a difference between the operating balance left at the budget hearing and the actual operating balance in terms of cash on hand. Those numbers are noted and are on the summary sheet. In regards to this ordinance, if you do nothing there can be a minimum of $50,000 left in the operating balance line at the budget hearing. Leaving that amount in the Police Pension Fund will not eliminate the need for temporary loans. The need in that fund is $150,000. There will most likely be no need for temporary loans in the Fire Pension Fund next year. The amount that you cut, however, in the budget will affect the need for temporary loans in subsequent years. Focusing on 1999, the ordinance as presented would allow you to have a maximum left of $50,000 at that budget hearing in each of the pension funds.

Mayor Margerum said that at the present time, although we're still above the amount, that would be an increase of 7.5 cents.

Clerk-Treasurer Rhodes said that that information was handed out with the other material. She asked Mayor Margerum to read the estimated tax rate.

Mayor Margerum said the 1998 tax rate is $2.59, so this would be 7.58 cents increase at this time. That is a 2.9% increase. This could go down somewhat.

Councilor Parker asked if there was a way that we could leave more of a balance in both of the Pension Funds. Mayor Margerum said that there is a substantial balance. As the Clerk-Treasurer suggested, there is an adequate balance that there is no need to keep a larger balance than that. It is a prudent one that is certainly adequate.

Clerk-Treasurer Rhodes said that the issue of what operating balance to leave in the Pension Fund is really a decision about the extent to which you want to use temporary loans to fund pension payroll in the Police Pension Fund in 1999. The decision about how much to leave in the Fire Pension Fund will raise the same issue about temporary loans in the year 2000.

Councilor Parker asked what the advertising date is for what will be left in the Pension Funds. Will it happen before the next meeting? Clerk-Treasurer Rhodes said yes it will. The anticipated first advertising is on August 14.

Councilor Parker said that if they do not change the Pension Fund balance that is left in there, it is his understanding that it cannot be raised. Clerk-Treasurer Rhodes said that is correct. There will be an insufficient levy for there to be any adjustments made subsequently in the operating balance in the pension funds. She clarified for those who weren't present at the Pre-Council, this discussion is about cash flow needs in the pension funds. There is sufficient levy to meet the budget obligations in the pension funds. There is not sufficient cash in the Police Pension Fund. However, the need to make temporary loans is an indication that you are going to be using progressively more of the property tax levy to meet those obligations and an indication that you will be using a great deal of reserves in the next few years to meet those obligations.

Councilor Parker said that at Pre-Council they discussed temporary funds and temporary loans. He understands that we have used them quite a bit. Councilor Palmer asked if he was against that and he had to think about it for a while. What he sees with the Pension Funds is that this is kind of a watershed mark. This will not be the last time. In fact, we will just begin on an ongoing temporary fund exchange. He asked if it is right to indicate that.

Clerk-Treasurer Rhodes said that the Police Pension Fund is going to begin to behave like the other property tax funds, the Parks Fund and the General Fund, that cannot operate without interfund temporary loans throughout the year. We have not had this situation before and the Fire Pension Fund will be joining within a year or so with the same situation. All of your property tax funds will have the same cash flow problems.

Mayor Margerum said that there is sufficient money in the funds. This is because of the way the tax dollars are received. This has been a practice that has been utilized for many years on a regular basis. Not only here, but in all the other funds. All the cities in the State utilize this because of the way property tax draw comes in December and May as well as some other revenues that come in at different times of the year. It is really a matter of managing the funds. You can tie up so much in just a reserve that you're not able to fund your needs on a monthly basis. It is a problem that should be thought about, but it does not mean that there are insufficient funds in those Pension Funds right now.

Councilor Parker said that as this is the last time the Council meets as a group before it is published, he won't make a motion at this time, but are there other Councilors who are concerned about this or is it just him that is worried about the balance and raising the balance on this.

Councilor Sparby said that she has been fairly vocal at Pre-Councils over the last couple of years and at Council meetings with concern about these pension liabilities. She is glad to see a movement to at least leave something in them this year which has been contrary to what we have done in the past. She is wondering if there is a way to advertise the tax levy to reflect leaving $75,000 in each one and then giving a chance to readdress the issue between now and the final reading of this tax levy rate.

Mayor Margerum said that at the Pre-Council meeting it was expressed that 10% was what the goal was for the balance in the General Fund. $50,000 seemed to be what you are talking about with the Police and Fire. Now, you are talking about upping that. If you would look at the operating balance of the Police Pension Fund, it is $172,000. That is up from $129,000 balance at the end of 1998. The operating balance in the Fire Pension Fund is $181,000 which is down from $217,000. In her opinion, that balance is sufficient to advertise this budget the way it is. There do not need to be further adjustments.

Councilor Sparby said that when they were discussing it at Pre-Council, they were looking at total cuts of $180,000. The cuts that were proposed this evening are $130,000, so there is a $50,000 discrepancy.

Mayor Margerum said that $80,000 was what was talked about, so she has added some more to that seeing as it was a concern.

Councilor Sparby said that they were looking at $100,000 for the pensions, so it would have been a total for the $180,000.

Councilor Palmer said that the discussions they had in Pre-Council involved the necessity of tying up that money that could be used for City services or other kinds of things in funding the budget in a large unnecessary surplus in the Pension Funds. Systematically, according to State law you have to budget for every pension that might be collected in that year but the department heads have a good sense of how many of those pensions are actually going to be placed on an active status in each year. Therefore, we have an excellent idea of how much funds are going to be needed. They are characteristically substantially lower than the budgeted form. Therefore, the next year those are reduced because they haven't been spent. It is like a number of other funds over the course of the year within this budget which are reduced and carried over to the next year. It has never really been a problem in the past. The temporary loan situation is again more an accounting problem in terms of cash flow than it is in terms of being a real budgetary problem.

Councilor Sparby said that it is more of the precedent that we have never had to borrow even a temporary loan to cover pension liabilities. Never in the history of the City have we had to do that.

Mayor Margerum said that in terms of the Police Pension you know what costs will be from now on. There is only one person who is going to be retiring, so that is not an unknown that we're dealing with. As Councilor Palmer mentioned, in the Fire Pension, there are 8 or 10 and those people are not going to retire next year.

Councilor Palmer said that if anything it is over-funded.

Councilor Sparby said that she didn't think that was the case this year with the Police. There were more retirements than were planned.

Mayor Margerum said that there was enough money in the budget to cover it.

Clerk-Treasurer Rhodes said that she also wanted to go over the point that was discussed at Pre-Council. Since 1995, we have been checking the under-expenditure in our property tax funds. The reason why a reserve was built up in the General Fund and an operating balance added to the Parks Fund was the practice of cutting unexpended funds in the Pension Funds. What has happened is that there are not sufficient funds in the Pension Funds remaining to operate them without temporary loans. The reserves that have been moved primarily to the General Fund have generated interest for the General Fund in a significant amount. Every dollar of interest earned there is one less tax dollar that is needed to support the General Fund. However, we have had nine employees retire in the old pension fund since 1995. Six were in the Police Pension Fund. The Police Pension Fund will no longer be a source of reserves for the General and Parks and Recreation Fund. To some extent, Fire Pension will continue. However, you will be faced with a different circumstance in that you will not be able to count on those under-expenditures to generate reserves into the General Fund and Parks and Recreation. The strategy that was used before would only be successful to the point that there are not many retirements. Now that the retirements have changed, that strategy won't work the same for you.

Councilor Braile said that Councilor Sparby mentioned this would be the first time that we have made temporary loans to fund the pension fund, but she asked Clerk-Treasurer Rhodes if this is not without precedents in other cities, Lafayette for example.

Clerk-Treasurer Rhodes said that there are a variety of financial situations in other cities in terms of funding their pension funds. Some have allowed their funds to build up for the greater number of retirements. Others have not. Clearly those that have not need to deal with cash needs. That is a separate issue from getting to the point where you can't fund the budget. We're not there yet. However, she does not believe borrowing from the Sewage Fund has been done for almost a decade here. It is really necessitated by the large capital projects that are occurring with the Cumulative Capital Development Fund leaving insufficient cash for us to make interfund loans to the General Fund in the coming year as well as the Police Pension Fund.

Mayor Margerum said that in the MVH and LRS, Clerk-Treasurer Rhodes has been able to utilize that for interfund loans and still will be able to do that.

Clerk-Treasurer Rhodes said that we will rely on MVH and LRS to some extent next year for interfund loans for the General Fund, but it is possible that the resources will be insufficient to meet the needs and to take care of the Police Pension Fund. It is in fact a cash management function. To emphasize, that is separate from the issue about whether we have enough levy to fund the pensions. We can meet our pension obligations. However, it is a sign that the reserves that were built up by under expenditures in the Pension Funds are not going to continue to be maintained.

Mayor Margerum said that she would like to emphasize what these operating balances are. They are more than $50,000. They are $172,000 and $181,000. The $50,000 in each of those funds is what is going to be added in addition to that.

Councilor Sparby asked Clerk-Treasurer Rhodes if they borrow temporary loans from the Wastewater Utility that would then, she assumes, lower the amount of interest income that they will see. Potentially it could affect increases in their rates down the road.

Mayor Margerum said that this is only going to be one or two months of $150,000. We're not talking about huge amounts and it is certainly preferable to getting bank loans which can be done too. Tax anticipation notes, which are done quite frequently in other cities, we have never done. That is a technique that has been used in many other cities. It is a legitimate one but we've never done that because we didn't think it was necessary, but she doesn't think this is a large amount.

Clerk-Treasurer Rhodes said that the impact will not be significant this coming year given the amount of funds that are invested in the Sewage Utility. You do have the option, if the Council passes the ordinance, to allow the temporary loans from the Wastewater Utility of requiring that interest is being paid. She has to let the Council know they have that option, not suggesting it. It is just compounding the problem. Neither she nor the State Board of Accounts could recommend that route, but you could exercise that option.

Councilor Palmer said that has never been done in the past. To remind you of one thing that did go on in the last ordinance, the adjustment that the Mayor made after discussions at the Pre-Council, would make those pension funds invested to the point where we would not have to make temporary loans this year. It is this year's budget.

Clerk-Treasurer Rhodes asked if he was talking about the 1999 budget. Councilor Palmer said yes.

Clerk-Treasurer Rhodes said that the addition of the $50,000 line item at the budget hearing for the Police Pension will not take care of the problem next year because it is a $150,000 problem. It will reduce the need by one-third.

Councilor Keen said that he would like to say that he shares Councilor Parker and Councilor Sparby's concerns. What we're doing is obviously borrowing or putting ourselves in a situation where we would possibly have to borrow from ourselves. If your intent is to earn money doing that, then he can not see a problem with that, but that is not what is happening here. He sees a concern. He thinks having to borrow from yourself is a symptom of a greater concern that we really need to be addressing now instead of when it comes back and presents a much greater problem.

Mayor Margerum said that one might call it money management rather than having lots of little pots of money that you keep on hand instead of utilizing all of your dollars in a more creative fashion.

Councilor Bossung said that one other thing he would like to point out in Ordinance No. 18-98 (Amended) is that the Police Pension and Fire Pension Fund have $50,000 additional monies in there with each of these. Once it is advertised it can be lowered if we find that is an acceptable thing. There was some discussion of taking one of them down to $0. That does not have to occur if we do not desire it to. The $50,000 as advertised in here would give additional monies that would be beneficial as far as this program is concerned. If there are no amendments in addition to this, he asks that they call the roll.

Ordinance No. 18-98 passed on first reading, 6-1.

The Roll Call Vote:

AYE
Bossung

Braile

Keen

Palmer

Sparby

Windler

NAY

Parker

Resolution No. 22-98 A Resolution Confirming the Designation of an Economic Revitalization Area for Property Tax Abatement for Bioanalytical Systems, Inc. (Prepared by the City Attorney) Councilor Bossung read the resolution and moved that Resolution No. 22-98 be passed on first and only reading and that the vote be by roll call.

Mayor Margerum said that this does require a public hearing. She asked Mike Brooks to present this request.

Mr. Brooks said that Bioanalytical Systems is interested in expanding their ability to perform services to pharmaceutical industry through the acquisition of additional mass spectrometers. We have talked before about the challenges that we have at the State and convincing our State of the importance of providing incentives for the attraction of high-technology laboratory kinds of jobs. It is extremely important to us in West Lafayette so that we can continue to follow the strategic plan that West Lafayette has set up to achieve through the attraction of these kinds of jobs. This kind of an incentive is extremely important to us at the local level. It is also important as we try to promote at the State level the importance of these same kinds of jobs with the retention of our college graduates in the area, etc. We appreciate the Council's support with the preliminary resolution and certainly encourage support with this resolution.

Mayor Margerum opened the public hearing and asked if there was anyone in the audience who would like to speak.

Councilor Bossung asked if there would now be two abatements on the books for BAS. This will be the third that they have had in a ten year period. Mr. Brooks said that this will only be the second one on the books. The first abatement request for manufacturing equipment was denied at the State. So the only abatement that, technically, is on the books for BAS is for the expansion to the building that they just completed.

Councilor Bossung asked if BAS had a profit last year. Mr. Brooks said that he doesn't know the answer to that.

Councilor Bossung said that we don't then know how much profit there would be in that organization.

Hearing no further comment, Mayor Margerum closed the public hearing.

Resolution No. 22-98 passed on first and only reading, 4-3.

The Roll Call Vote:

AYE

Braile

Palmer

Sparby

Windler

NAY

Bossung

Keen

Parker

Resolution No. 23-98 (Amended) Transfer of Funds. (Mayor, Clerk-Treasurer, Police Department, Local Road and Street) (Submitted by the Clerk-Treasurer) Councilor Bossung read the resolution and moved that Resolution No. 23-98 (Amended) be passed on first and only reading and that the vote be by roll call. Motion was seconded by Councilor Sparby.

Mayor Margerum said that the request in her department is for the printing and mailing of the City newsletter. The Clerk-Treasurer's transfer is to prepare the Comprehensive Annual Financial Report. The Police Department transfer is to advertise for a patrol dispatcher position. In the Street Department the transfer is for curb replacement and chemicals for mosquito control.

Resolution No. 23-98 (Amended) passed on first and only reading, 7-0.

Resolution No. 24-98 A Resolution Appropriating Code Enforcement Revolving Fund on Hand Resulting From Payment of Inspection Fees from the West Lafayette Target Area. (Submitted by the Department of Development) Councilor Bossung read the resolution and moved that Resolution No. 24-98 be passed on first and only reading and that the vote be by roll call. Motion was seconded by Councilor Sparby.

Resolution No. 24-98 passed on first and only reading, 7-0.

Resolution No. 25-98 (Amended) A Resolution Appropriating Housing Rehabilitation Revolving Loan Funds on Hand Resulting from Repayments of Loans Previously Made by the West Lafayette Housing Authority. (Submitted by the Department of Development) Councilor Bossung read the resolution and moved that Resolution No. 25-98 (Amended) be passed on first and only reading and that the vote be by roll call. Motion was seconded by Councilor Sparby.

Resolution No. 25-98 (Amended) passed on first and only reading, 7-0.

OTHER BUSINESS:

Councilor Sparby said that for anyone who is interested, the Clerk-Treasurer's office has prepared copies of the 1998 budget book if anyone would like one. As Chairman of the Budget and Finance Committee, she would like to take this opportunity to publicly thank Attorney Larry Cuculic for his participation and cooperation with the talks that were held with employees most of the summer regarding the 1999 and 2000 salary ordinances.

ADJOURNMENT:

There being no further business at this time, Councilor Sparby moved for adjournment. Motion was seconded by Councilor Bossung and passed viva-voce. The time being 9:05 P.M.

Office of the Clerk-TreasurerJudy Rhodes

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