|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
The Pledge of Allegiance was repeated.
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 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
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
Councilor Sparby moved to accept the July financial report as
distributed. Motion was seconded by Councilor Parker and passed viva-voce.
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 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
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
Clerk-Treasurer Rhodes said that it needs to be with the change
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
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
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
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
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
Ordinance No. 14-98 (Amended) passed on first reading, 6 AYE with 1
The Roll Call Vote:
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
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
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
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
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.
Parks and Recreation Fund: $ 892,680
Police Pension Fund: $601,620
Fire Pension Fund: $505,520
Cumulative Firefighting Building and Equipment Fund: $290,000
Cumulative Capital Development Fund: $2,200,000
Motor Vehicle Highway Funds: $1,065,750
Firefighting Fund: $20,000
Local Road and Street: $365,000
Economic Development Income Tax Fund: $1,236,490
Total Law Enforcement Continuing Education Fund: $15,000
Cumulative Capital Improvement Fund: $200,000
Total Parks Nonreverting Capital Pool Fund: $101,000
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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:
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
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
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:
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.
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
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