Source: http://ongov.net/legislature/minutes/meetmins/MAY2011.html
Timestamp: 2017-12-12 12:27:42
Document Index: 402389231

Matched Legal Cases: ['art 135', 'art 91', 'art 135', 'art 91', 'art 91', 'art 135', 'art 135']

FISCAL WAYS AND MEANS COMMITTEE MINUTES – MAY 6, 2011
MEMBERS PRESENT: Mr. Stanczyk, Mr. Holmquist, Mr. Warner, *Mr. Kilmartin
MEMBERS ABSENT: Mr. Lesniak, Mr. Buckel, Mr. Kinne, Mr. Corbett
Chairman Jordan called the meeting to order at 8:35 a.m.
1. COMPTROLLER:
Acknowledged James Maturo, Deputy County Comptroller- Accounting; Phil Britt, Deputy County Comptroller, Auditing; Tony Calogero, Chief Government Accountant
CAFR is an audit; approximately 2,000 of staff time throughout the entire year making sure internal controls are in order, documents are prepared, and testing
Received “unqualified opinion”, a clean opinion – financial statements as presented are in all material aspects accurate and forthright
CAFR is report card to taxpayers – where county government was on Dec. 31, 2010
Used by bonding agencies, taxpayers, regulatory agencies, federal and state government, to make sure their programs are being carried forth in the manner that they should be
Pages 1 - 4 government wide financial statements – idea of overall governments
Page 5 – 17 – fund financial statements
Page 42 - required supplementary statements – it is budget to actual. Helpful during budget review – ability to drill into what the operational funds needed by a department are
Mr. Stanczyk referred to page 42, noting that the big variance is in sales tax – came in at $302 million; budgeted $287 million. In answer to Mr. Stanczyk, Mr. Antonacci said that another main figure is fund balance – had programmed use of fund balance of approximately $8 million. Not only did the County not use the $8 million, it got an additional $9 million; a $17 million swing; $14 million attributable to the sales tax increase. Mr. Stanczyk said that when the 10% policy was put it in place, it was supposed to be that once government accrued more than 10% of fund balance, the monies would be redistributed to the taxpayers by paying off bonds, reducing tax rates, etc. It has morphed by some members into saying that at least 10% of fund balance is always needed. Fund balance parameters need to be set a little more broadly so there is maneuverability – important to keep fund balance between 6% - 10% to maintain liquidity that is needed. Once above 11%+ it stands in stark comparison when this government is sitting on a lot of money and other governments are laying off people. Mr. Antonacci noted that surplus terminology brought taxpayers attention to the issue; County is sitting on a bunch of money. “Fund balance” is a term accepted by generally accepted accounting principles; legislature has a “fund balance” policy – it is all taxpayers’ money. The County is sitting on $117 million of unreserved fund balance, which is available for appropriation by the Legislature.
In answer to Mr. Stanczyk, Mr. Maturo said that as of Dec. 31st in the general fund there is $76 million unreserved fund balance; $35 million in WEP unreserved fund balance (page 5). Mr. Stanczyk noted that the county needs to have a fund balance to run government well and take care of contingencies, but not one that is almost obscene in difficult times when other governments are going through hell. Mr. Antonacci said that the money is available for appropriation as the legislature sees fit. There is a policy in place, the legislature’s policy, which has been followed, which lends a tremendous amount of credibility as to why Onondaga County’s bond rating is as good as it is. Mr. Stanczyk said that if there is parameter of 6%–10%, and it is met, then the County meets its goal. A goal has been set up that put the County in a position that is lawful, but too inflexible because it didn’t give the maneuverability that is needed. The existing policy is not only inflexible, but can put the County in danger if it goes through another difficult period.
Mr. Antonacci said that the date is that there is approximately $13 million over the 10% goal. Management has designated the ERI payment to be paid early. Regarding the 10%, he noted that every 1% is about $7 million of taxpayer money. Mr. Fisher said that when thinking about fund balance, start thinking about is as multi-year budget timeframe. If, i.e. $8 million is taken and put into a budget to reduce property tax levy, it is a commitment to use it again and again, unless there is another way to get the $8 million.
Mr. Warner asked if an excess fund balance was projected at budget last time; there was a veto and some people sustained that veto and now are complaining there is a little too much fund balance. There were people here who knew there would be a fund balance and sustained the veto resulting in tremendous tax increases in the suburbs.
Mr. Warner asked what kind of financial footing OCRRA is on. Mr. Antonacci said that has recently had some question about OCRRA, but is not prepared to talk about it today. Mr. Warner said that he has a special interest in it, as it relates to his district and would like to know their financial footing as soon as possible, as well as future impacts if OCRRA starts to go downhill. Mr. Antonacci said that he will provide their financial statement.
Mr. Kilmartin referred to the $76 million general fund balance as of 12/31/10, and asked what the 10% number would be. Mr. Maturo said that it is approximately $61 million. He noted that $2 million of the $76 million has already been appropriated into the 2011 budget, bringing the unreserved to $74 million. Mr. Fisher said that the County Executive has designated $5.5 million for the ERI. It would be up to the legislature to appropriate fund balance. Mr. Maturo said to clarify the designation of fund balance - it is management’s intention to spend, but prior to that ever becoming reality; it has to be adopted by the legislature. Designations by management are a piece of the unreserved fund balance. Mr. Kilmartin said that he has heard different numbers, $76 million, $85 million; asked if the $76 million is on a cash or accounting basis. Mr. Maturo said that it is on an accrual basis. The $85 million is total fund balance; there are fund balances in reserve for encumbrances and prepaid of about $7.7 million. Encumbrances are contracts or purchase ordered that at the end of the year there is legal commitment for, but haven’t received the goods or services. They roll over to the next year with a piece of the prior year dedicated budget. The bigger piece of the reserved fund balance is the reserved for prepaid, due in large part to retirement. The normal retirement bill is paid in December to get a $250k discount. The bill related to the period of April 1st – March 31st of the following year. Three months are recognized as a prepaid. Even though it has already been appropriated, and it is available in the prior year budget, in the snapshot on 12/31 GAP makes them say that piece of the fund balance is already earmarked to be paid out, so they have to reserve.
Mr. Kilmartin asked Mr. Antonacci if his office knows how the economy is trending this year and how it might impact the budget. Mr. Antonacci said that the main economic indicator that they chart is sales tax; it is 2.5%–3% above this time last year. In answer to Mr. Kilmartin, Mr. Maturo indicated that if the trend continued it bring total sales tax up to over $300 million.
In answer to Mr. Kilmartin, Mr. Seitz said that the estimated ERI payment general fund local share is approximately $6.6 million – there is $1.6 million in the budget, other funds have money appropriated for it also. Mr. Maturo said that approximately $5.5 million designated from fund balance. The last date to pay is Feb. 1, 2012; will pay in December to get a discount of north of $300,000.
Mr. Stanczyk referred to the 10% fund balance policy and asked Mr. Antonacci if it makes sense to have a more flexible or more standard policy. Mr. Antonacci said that he likes a benchmark; 6%-10% may be too much of a range; would debate if 10% is the right number. Having a litmus test that is clear and cut is a good thing. Mr. Kilmartin clarified that the resolution provides for approximately 10%; it doesn’t say it has to be 10%. It designates intent of what is to be done with the funds in excess of 10%. Mr. Stanczyk said that government should be giving the government flexibility that it needs. Mr. Antonacci said that Westchester has the highest bond rating because they do not hold harmless their towns; Onondaga County does. Mr. Stanczyk said that instead of a county department being involved in selling tax delinquent property, an agency should be set up to sell tax delinquent property and stop making whole the tax delinquent towns and villages. It could be given to another entity and reverse the whole process. Mr. Warner suggested that be held off on, as some towns and villages were hit hard since sales tax. Mr. Antonacci said that it is a nice policy; it does help our towns and villages and he is not advocating it – just saying that it is an indication that separates Westchester from Onondaga County. Mr. Stanczyk said that the County has operational costs to do to this. When people are delinquent on their property taxes they pay a dunning penalty for being late and a 12% interest rate. In concept, if of the opinion that our property is valuable, this should be an operation that would run smoothly and should not up anybody anything as long as making the right assumptions going forward. The delinquent property tax estimates for the suburbs are fairly low. Mr. Antonacci said that .25% is what gets written off as absolutely uncollectible.
Mr. Holmquist said that last year at the budget process a lot of disturbing things happened. The legislature put hundreds or hours into the budget and at the end of the day there was a complete disdain for the legislature. At the last minute there were vetoes that created giant surpluses or fund balance. There was a gag order on department heads; they weren’t allowed to work with the legislature; they weren’t allowed to talk freely. They weren’t allowed to negotiate with the legislature, which has been the case throughout history. He thanked the Comptroller and his staff, as the Legislature gets straight talk, collaboration, and communication. Last year was embarrassing, a real disgrace. He learned that this legislature has to pass a veto proof budget. If not, it will get shoved down throats by the minority elected officials of this county. That is not good government. The Comptroller and majority of the legislature are providing good government and the Executive Department is not.
Mr. Fisher said that he will not dignify with a response the libelous comments against the Executive Department.
Mr. Antonacci noted that the budget process was extremely difficult; it came off a sales tax agreement that was contentious. Everybody made the judgments that they made in good faith. The legislature should be proud of the sales tax agreement; it was a good agreement – it passed 19-0 for good reason. It will bring transparency to County government. The angst came during the budget process when there were spikes in certain areas with regard to sales tax. The judgments made by the executive side were based on data that they used in good faith; the judgments the legislature made was based on data available to them from his office or others. It is a difficult process – have 15 days to review a billion budget. Maybe the legislature should decide what the purse is going to be and the Executive executes that purse. There is a tendency by the legislature to get into the details. Maybe there should be a tendency that “X” is the amount of money the legislature is willing to tax for and the executive department executes on those wishes.
Mr. Holmquist reiterated the 100s of hours the legislature put into the review; he was at every hearing, and worked every night. At the end of the day the property tax increase that District 10 was going to incur was 7%, and despite the rhetoric about the levy going down, and a shared balance sheet, etc., at the end of the district was looking at a 25% tax increase. It was through a minority vote, at the last minute, after the fact. It was jammed down our throats. Sadly the Town of Manlius, who has suffered with at 25% tax increase is one of the lower ones. With the vetoes, and sustaining vetoes, and millions stuffed in savings accounts, we are relegated to waiting for a few months away. There is no other option than to pass a veto proof budget.
Mr. Stanczyk said that the legislature worked very hard to get to a point in terms of the sales tax that it was going to be different going forward. There was an agreement made for a much better, and stronger position for County government in terms of the entire community, and an increased responsibility to County government for the entire community, because it will be taking the majority of these taxes. When the budget was set, a number of things were reduced in terms of expenditure, but a lot of them were not structural reductions that would go forward on a structural basis to continue to reduce the budget. There were a lot of one-shot fixes. Because if that nature, the County Executive made a strong case to him and members of his caucus that there was insufficient revenues to run the budget and government effectively, and that they needed more money. Approximately half (in dollar amount) of the vetoes were sustained. The vetoes being sustained did not mean that the minority controls the government; it means that there was not a super majority of the legislature to reinforce the budget. There is still a lot of tension and bad blood about what happened. This government has been very conservatively run for a number of years; it has been very prudently run. There was no male intent; doesn’t think there is going forward; there were disagreements. If he were the budget director, he would estimate very conservatively too. The budget director’s estimates made him sick because they were wrong, and anticipates he will have the same type of mindset going forward and the legislature will manage for that. He is glad we are that the point of having a $76 million surplus, rather than a $36 million surplus. A lot of things happened that could have happened better; are moving forward and maybe will make them better.
Mr. Kilmartin referred to calendar year 2011; if all other factors of the budget remain constant; if the sales tax is up 2%–4% at end of calendar year, where do those fund go. Mr. Antonacci said if revenue comes in right on the dime and expenditures go out right on the dime, there will be about a $74 million fund balance, plus any excess revenue that there is going into next year. Mr. Kilmartin asked if there are any extraordinary issues that are foreseen during the remainder of 2011 that could increase or decrease fund balance. Mr. Fisher said that they are a little fearful that there will be a shortfall in the real property tax collections because the economy is still tough; it may fall a couple million dollars short by the end of the year. They are also continuing to see that prior year collections are coming in a little light; it may because of the tough economy. Regarding sales tax, it does look like it will come in above estimate. The estimate that is baked into the 2011 budget is actually a little higher than the 2010 actual. Mr. Kilmartin asked if there are any revenue spikes foreseen from State or Federal government. Mr. Rowley said “not in this calendar year”.
Mr. Kilmartin referred to permanent cuts to the budget. There were some real challenges last year trying to figuring out some of the big complex departments, especially with the Health Department. There have been discussions about finding a better way to get hands around the mechanics of these different budgets. It would be helpful to have a breakout for each department by title of which titles are state grant funds, which are federal grant funded, which are paid with local dollars--to be provided to the legislature well in advance of the budget. Mr. Fisher agreed and said that it is in line with what Mr. Rowley and Mr. Seitz are looking at. Right now there is no way to track program profiles, can’t track variances from month to month for a particular program. The budget department is looking at how to track them; it will be built into PeopleSoft – will provide performance month to month with budget vs. actual. Regarding Mr. Kilmartin’s list request, Mr. Rowley said that there is an effort underway where each department is being asked to update their organizational chart. There will be titles mapped to programs and grants. It is an extreme exercise, very complicated, and underway. Mr. Kilmartin asked if it will be available prior to budget. Mr. Rowley said that they are working on it right now; will be submitted as part of the budget package. Mr. Kilmartin said that it would be extremely helpful to have it as a line item as part of the budget. Chairman Jordan suggested that he and Mr. Rowley review it prior to the budget process starting, which may help the budget process go more smoothly. Mr. Fisher said that there have been discussions about it being helpful to bring in each department over prior to the budget to do an informational; talk about things that may be changing in a big way. It would be to replace the budget process. Mr. Kilmartin asked to be provided with the list of titles and funding sources for each department by September 1st. Mr. Antonacci said that it is very difficult to ascertain in program profiles how allocations happen, what is being allocated to local share, what is allocated to the grant, what can be reimbursed for. The Comptroller’s office is willing to help, as it is complicated.
Mr. Holmquist said that last year the legislature didn’t have any of that information. In the past legislators were able to sit down with the departments in the evening and work with department heads to get to a number and they would help us navigate, because there are a lot of complications. One frustration is that it is virtually impossible to get the information. He agrees with Mr. Kilmartin’s request. It might be better to have the departments come in advance; legislators get information and be able to make value added budget decisions at the Legislature. It is the Legislature’s job, and it should be allowed to do its job. Chairman Jordan agreed with increased communications so that all can make informed decisions.
Mr. Stanczyk also agreed and noted that going through the formal budget sessions, it is 99% dog and pony show. Most of it is incredibly wasted time and effort; the more important thing is to bring in a department head, where he or she is not being recorded, where questions can be asked, where we can get blunt responses; and hopefully some business can be done. It is important to set up a process where the doors can be closed, stop recording, and ask questions. Mr. Fisher said his department is totally opposed to that – believe the budgeting should be open and understandable. If it is wasting legislators time and the public’s time, that process should be changed. More discussion is not needed behind closed doors; more discussion is needed in the Chamber in the open. Mr. Stanczyk said that this is government and a lot of things get done because there are discussions that are often important that are blunt. He believes that Onondaga County is in a fairly unique position because there is extreme pressure on a lot of state governments throughout the country. Because the county shares services that are generally state services in other areas, the federal government comes in to bail out state governments to give them money, the County participated in that. A lug of federal money was received twice because things were difficult. He maintained during the last budget that sales tax revenues are good; a reflection of the economy. As long as the keep moving forward, the County is in good shape. If they pull back, there will be pressures on the federal government to support the State because it will affect everyone, and the County will get a lug of money. Because the County is not in a position where it is sinking right now – have good fund balance right now – bad things and good things will have money coming in. Good things from sales tax; bad things from federal government.
Chairman Jordan noted WEP appropriated approximately $4.4 million in prior years fund balance into 2010 operation; expenditures finishing $4.8 million under budget; helped offset approx. $2.4 million of appropriated fund balance and asked for explanation. Mr. Maturo referred to page 44; going into the budget WEP was programmed to have a deficit of $4.3 million. When looking at what actually came in; WEP only used $2.4 million of appropriated fund balance. The expenditures came in $4.7 million under the budgeted amount. Because they pulled back on some of the expenditures, they ended the year without using all of the fund balances appropriated. Charges for services on the revenue side came in under budget also.
Chairman Rhinehart referred to county assets, pg. xiv and asked about GASB 51. Mr. Maturo said that GASB 51 was implemented this year where they had to account for intangible assets. The big intangible asset is the agreement with the City of Oswego to draw water. The agreement is to pay $29,750,000 over a 20 year period. In answer to Chairman Rhinehart, Mr. Maturo said that roads are considered infrastructure assets and the County had to account for them under GASB 34 several years ago. Chairman Rhinehart asked if county assets now include everything, i.e., sidewalks, light poles, properties, Lake Ontario water, etc. Mr. Maturo said “yes”. In answer to Chairman Rhinehart, Mr. Maturo said that the other post employment benefits (OPEB) is approximately $155 million (pg. 33); it will continue to climb every year. Mr. Antonacci said that GASB and good government don’t necessarily go hand in hand; are making some good efforts; a check will not be written for $155 million anytime soon. It does bring forth discussion about our policies. The post employment benefit accounted for is the health insurance for retirees. Mr. Kilmartin asked if County retirees’ health benefits and cost of health benefits is exclusive control of the County or State. Mr. Antonacci said it is by collective bargaining units and past practices. In trying to change it, a letter from the unions was submitted which basically prohibited the renegotiation of that benefit. He explained that there wasn’t a claim to change the current retirees; it was to change the current employees. OPEB should minimize a little bit because of the 10 year vesting period, but unless the policy is changed, OPEB will continue to rise. Mr. Stanczyk said that the majority of the expense is from ages 55 – 65; when contracts are renegotiated, we should pay attention to this whole thing. Mr. Antonacci said that there are a lot of ways to affect the ratio, i.e. retirement age, increase premiums based on level of service, which was the County Executive’s idea, etc. Mr. Maturo referred to the expense in ages 55 – 65, and noted that is the normal retiree, but pointed out that there are Sheriff and Corrections officers that go out in 20 years and 25 years, which can mean more costs from ages 45 – 65.
Chairman Rhinehart referred to page xxii, Governor’s budget including $2.3 billion reduction in state share of Medicaid program anticipating federal reduction of $2.3 billion Medicaid reimbursement. He asked how it affected estimates this year for the situation at Van Duyn, recognizing that most of the fund balance was used in keeping Van Duyn in the black. Mr. Antonacci said that this is management’s discussion and analysis, a document part of the CAFR, prepared by Mr. Rowley. He noted that IGT helped keep Van Duyn solvent. There is no IGT money now. Van Duyn is a great community asset; he is shocked that Upstate will be profitable the day Van Duyn closes, because they can rebase and the County can’t. The State doesn’t want counties in the nursing home business, but we are not getting out of the nursing home business, it is moving from one governmental entity to another that will be profitable. Mr. Maturo added that all of the fund balance was appropriated in 2010, $5.7 million; have about $1.9 out there for this year.
Chairman Jordan referred to pg. vii and asked for clarification regarding the NYS Retirement contribution – seems to be a contradiction. Mr. Maturo said that it refers the employees in between 1976 and 2010.
2. MANAGEMENT AND BUDGET:
a. First Quarter Report - James Rowley, CFO (see attachment # 1)
Mr. Fisher asked members to think a couple of years ahead while Mr. Rowley is discussing this year and gave a scenario. Keep in mind the multi-year use of fund balance; where the County might be at the end of 2012, 2013, 2014 before getting too excited about all the money that can somehow be spent.
A lot of discussion about fund balance and what the target should be – Government Finance Officers Association recommend fund balance to be two months worth of expenditures for municipal governments. When applied to Onondaga Co., the fund balance should be about 16%.
Sales tax – over $14 million to the good. Components: not only was rate up year over year, but also received a boost from old sales tax sharing agreement – the County kept anything over 2% growth on the 3% part; also new sales tax sharing agreement – first 3 payments of 2011 accrued in 2010 at a much higher rate
Revenues came in lower relative to budget--uncontrollable, difficult to forecast; missed forecast on sales tax perspective to the good. Estimate for 2010 was good based on historical averages; much better than estimate for 2009 where it was widely over optimistic
Property tax was down
Mr. Warner referred to statement that 16% is an appropriate fund balance, and asked how many counties have 16% fund balance. Mr. Rowley did not know. Mr. Warner said with the amount that Onondaga County has at 10% and being rated very highly in the bond markets, he would like to see how many counties have 16%. Mr. Rowley referred to Nassau County, where they have widely optimistic revenue projects, use of fund balance, and are in big trouble. There is a reason why professionals make recommendation of 2 months worth of expenditures, or county legislatures imposing a policy of 10% of net revenues; it is to stay out of trouble like Nassau County.
Report format changing – more thorough, multi-year budgeting
Sales tax - net review increase mostly attributable to sales tax; estimating ending year at 2% over 2010 actual in sales tax; 2.53% ahead through May 6th payment
Current & uncollectable taxes – slightly lower as collection rates and base amount of levy changed
Prior taxes down – 1st quarter collection are under last year’s prior year first quarter collections; incorporated this trend into the forecast
Shift in State and Federal aid:
State aid down because of State budget shifting cost from Safety Net to localities – aid reduction went from 50% to 29%; eliminated Article VI Optional Health fund – about a $400,000 hit to the County – shows up in Center for Forensic Sciences
Federal aid up – State budget shifted all Family Assistance federal dollars – no longer State or local portion; caseloads driving Federal aid up
Expenses: net flat – variances in different programs:
Mandated programs up because Safety Net is up, Family Assistance is up
Administration, Point of Sale are under budget because of spending in employment programs and mandated preventive programs are lower than budget
Health – savings in 101 because of higher than expected turnover and ERI related vacancies
All Other savings reflect administrative departments
Mr. Rowley said that they will continue to work on the report; helpful to put in a variance column. At this point in time they are projecting a $2.9 million surplus, primarily related to sales tax revenue.
Mr. Warner asked to be provided with a NYS Medicaid cost and what is being paid for programs which are not mandated at the federal level and if there is any control over the Cadillac version of Medicaid that can be altered on the County level.
Mr. Stanczyk said that one thing that has worked in our favor for years is the increase in the valuation of property. County Executives have always pointed to the tax rate being down. It is down against a bigger property valuation base. He questioned what the lag time is and when the State sets it in place. Mr. Seitz said it is probably mid-summer, after grievance day. The Real Property Division doesn’t finalize the tax base until October. Mr. Stanczyk said that in terms of assessment he has maintained that the process would be better if there was one assessment bureau; everyone taxed fairly.
Mr. Kilmartin asked if the transaction with Van Duyn might close this year and what the impact on the budget might be this year. Mr. Rowley said that it his hopeful that the transaction occur this year. If it does, it will be a negative impact on the budget because there will be stranded cost involved. For example: retiree health insurance – that fund pays the health insurance fund for Van Duyn’s retiree health cost. The County still has to pay those premiums and cover those expenses, which would come into the general fund. Mr. Rowley said that it is now in a separate fund in the Van Duyn budget. In theory, Van Duyn should be a self sustaining operation, but because of cut backs in Medicaid and other funding streams, periodically it has to be funded either through IGT or direct contributions from the general fund. Regarding positive budget impacts, the theory would be that because they are running at a deficit and using up fund balance, those costs would be more than the stranded costs incurred by closing it and bringing some of those costs into the general fund.
In answer to Mr. Kilmartin, Mr. Seitz said the cost of gasoline in the 2011 budget was $2.47 in the adopted budget; it is now up to $3.11 for county vehicles. Mr. Kilmartin asked about the estimation for gasoline sales tax revenue. Mr. Rowley said that they don’t segregate it; they can’t get accurate timely data from the State.
In answer to Mr. Kilmartin, Mr. Rowley said that relative to general fund debt service it will be flat going from 2011 to 2012; as new debt comes on, the debt service will rise. At this moment, there is no contemplation of capital projects that would give rise to a big spike in debt service.
Mr. Warner said that he was on the committee that interviewed and chose Upstate to negotiate with Van Dun, but is not on the Finance Committee that is reviewing it. He said that if it is successful with Upstate, some of the costs have to go away – all of the employees; costs would shift to Upstate. Mr. Rowley said that all of the ongoing cost would shift. They are using significant amounts of their fund balance to keep their budget in balance; when the fund balance goes away, it has to be made up from transfers from the general budget. Mr. Warner asked if the deal is finalized this year, what future costs go away for Onondaga County. Mr. Rowley said “all employee costs.” Mr. Kilmartin said that if there is a sale this year, then in 2012 there will be 500 fewer employees, 101, overtime, fringe, maintenance. Mr. Rowley agreed that all of that goes away. The stranded costs remain for Van Duyn retirees; small piece of debt service. Eventually significant dollars from the general fund will have to be utilized to keep them afloat. There will still be stranded costs after it is sold.
Mr. Stanczyk asked for a written explanation of the actual budget impact of moving Van Duyn to Upstate. Mr. Seitz said that there are also spread indirect costs, i.e. IT, Personnel Dept. Mr. Stanczyk asked that it is all included in the explanation.
Mr. Warner asked Mr. Fisher to include him in the next meeting of the Finance Committee.
Chairman Jordan questioned the State report; Mr. Maturo explained that the report is the State’s format and prefers to look at the CAFR. The pages in question are the budget compared to actual results of operations.
PUBLIC SAFETY COMMITTEE MINUTES - MAY 10, 2011
MEMBERS ABSENT: Ms. Williams, Mr. Meyer
ALSO PRESENT: Mr. Rhinehart, see attached list
Chairman Kilmartin called the meeting to order at 9:03 a.m.
1. SHERIFF: Chief John Balloni; Captain Mike Pellizzari; Robert Antonacci II, CPA
a. Informational - Air One
Fixed number can be reached by multiplying the variable cost by the number of hours flying; cut down to 200 hrs
Currently up to 50 hrs for 2011; trying to save hours for summer – more business, more calls
Variable cost known by what comes from the budget; mechanic position eliminated, lower cost now - done by hours
Approx $10,000 into the first 50 hrs of maintenance
Chairman Kilmartin stated there were resolutions considered in the amount of $350,000, and asked if the annual cost would be easily multiplying this number by 2. Chief Balloni agreed; about $700,000. Cpt. Pellizzari clarified for Mr. Dougherty that the $10,000 for 50 hours was actually for 100 hours, and was a carryover from last year; money was expended in 2011 but the hours accumulated in 2010.
Armorer – person who takes care of pistols, rifles, shot guns; sent to special training; test fire new guns; fix guns; yearly thorough cleaning of the guns; used to have a full time position on staff but not any more
Forfeited assets: $350,000 in the County Budget; overhaul in December 2011; projecting to be at 3500 hrs
Highest number of hours in a year was 1,000 after 9/11; this year at 200 hrs for calls and homeland security checks
Chief Balloni agreed with Chairman Kilmartin who stated the $350,000 is showing as a revenue item in the Sheriff’s budget and is earmarked for the overhaul. Mr. Seitz clarified it is a separate line item in the budget with appropriations supported by it. Mr. Rhinehart asked if the Sheriff’s office can use the forfeited assets for anything not supplanted in the budget and must come to the Legislature for approval. Mr. Seitz responded it came to committee (near budget) and then was approved through the budget process. Mr. Rhinehart requested to see this in writing. The Sheriffs had requested $500,000 for new patrol cars which were then taken out of the budget, and the intent was to use forfeited assets instead of raising property taxes. Chief Balloni disagreed. The federal definition of supplanting is taking an item that was always included in budget and then is not, therefore it is paid for using forfeited assets. This would concern the Sheriff’s Department with losing those revenues. Mr. Masterpole was under the impression this was done in 2010 to purchase the cars but Chief Balloni clarified it was a grant.
Reference attachment no. 1, page 2
Part 135 does allow for billing for medivac related, public safety related; no restrictions to billing found thus far
Met with MultiMed, do billing for air medical and ambulance services
Could charge $8,500 for a base flight medical plus mileage with a collection average of 50% of gross totaling $4,500/flight; avg of $1,500 for medical personnel with a net of $3,000
Based on number of flights currently taken - $84,000 in net receipts
Interfacility transports – between hospitals outside the County; mileage added, collection rate high; regional ie: Buffalo
Not currently doing these transports but if FAA approval comes through, they will be done; used to do neonatals
Interfacility transports are planned, no interference with Police or Fire and have set direction
Neonatals are normally one way, Mercy Flight not currently doing them, looking at the County to handle – using hospital medical teams on the flight – cleaner money for the County; possible to be 50% collection as well
50% collection is what is charged not dollars spent (ie: insurance companies will negotiate the rate down)
Highest proposal $400,000, lowest $66,000 – not acceptable based on other counties at under $10,000; 2 responses
Cpt. Pellizzari replied to Mr. Rhinehart that the bids were from companies out of state in California and Virginia. Chief Balloni offered to give copies of the proposals. Copies of the RFP and who the RFP was sent to are on file. Chief Balloni agreed with Mr. Rhinehart that the private sector, Mercy Flight, would go through the same process for 135. There have been discussions with Chautaqua County who has gone through this process. Mr. Rhinehart stated for the record that the Legislature has been discussing this for the past 7 years he has been in office. Cpt. Pellizzari responded that the Sheriff’s have a low budget person helping get through the process and the company currently has a single pilot 135 certification; very familiar with the aspects.
Cpt. Pellizzari handed out documents with information on what has been submitted thus far (on file with Clerk).
First document: proof to FAA that the Sheriff’s Department has insurance; FAA has received and this portion is set
Second document: was indication there may be an increase in insurance but able to argue doing the same job
Insurance policy solely for Air One, close to $60,000/year; for liability and hauling; above and beyond coverage
Mr. Masterpole stated it is a good price for coverage of $300,000 per person for a $20 million each occurrence.
Cpt. Pellizzari continued:
Handing out receipts of delivery for documents
Next document – letter and packet are final steps in phase 1 certification; filed on April 22, 2010; completed phase 1
Resumes sent to the FAA – Cpt. Pellizzari’s, the owner of the operation; Sgt. Paul Brennan, the chief pilot
Document – planned schedule of events, when expected to hit each milestone; delivered to FAA on April 22, 2010
Waiting to hear from FAA to set up a meeting; will reach out to the FAA in the next 2 days to see what’s going on
Huge learning curve to understand federal regulations, reading up on everything because can’t afford a consultant
Hired a local 135 certified pilot at a reasonable fee to help with the process
FAA breaks process into 4 phases: phase 1 is complete and just waiting on FAA, phase 2 paperwork is being completed and waiting to be sent in after FAA approves phase 1
FAA presented complete list of documents that need to be submitted; currently working on all to be ready
Document hand out: letter of compliance and operations manual – both are drafted for review for phase 2
Need to get through all 4 phases to receive certification as a carrier then can start to charge; Single Pilot 135 Light
Documentation for random drug testing for a single person – Flightline Drug Testing recommended; consortium
$250/year to join consortium – covers all testing, random draws, provides instructional videos, posters for FAA reg.
2 hand outs – application to FAA for the drug testing program; application to Flightline for membership into consortium
Hazmat FAA regulations – goes back to passenger plane transporting oxygen supplies that exploded over Everglades; have to develop a document of what could possibly be transported if anything at all
3 Handouts – delivery confirmation for documents sent; the initial submission; pre-application
February 10th – initial meeting with FAA; submitted pre-application on February 15th
Mr. Rhinehart questioned why the budget passed in October and the initial meeting was not until February. Chief Balloni responded a consultant was needed to help in the process which was started in November 2010. There were continuous meetings about how to go about this process and the consultant pricing came in too high in February 2011. Within the same week the consultant pricing came in high and the decision was made not to choose one, the meeting with the FAA was scheduled.
Handout – 3rd page discusses HEMES (Hospital Emergency Medical Evacuation Services) operations – document rejected because the proper classification is HEMS (Helicopter Emergency Medical Service); resubmitted in March
Handouts – acknowledgement of receipt of pre-application letter; FAA assignment of certification team, Rochester
Cover police and fire in Onondaga County under Part 91, covers those same services under Part 135 out of County
Once ship is 135 certified, must use regulations at all times under 135 but will fly Part 91 for basic missions in County
Medivac – Part 91 or 135, will use 91 if more than 1 pilot onboard; will maximize billing under 135 whether inside or outside the County – ie: private with no insurance and not covered, may not be worth pursuing a charge
Objective – supplement program as life saving source for the County and cut costs for local tax payers
Cpt. Pellizzari:
Compliance Statement hand out page 4 – weights and balances is figuring out the load of ship, who weighs what, equipment weight – need to adjust per flight
Weather can affect what can be lifted, fuel calculations have to be done; same regulations as small planes
Been doing everything listed but now it needs to be documented
Projected to have all 4 phases for Part 135 completed by August 31st 2011 – will be able to bill when all is complete
No pilot on staff is 135 regulated – need 3 years experience – can hire commercial part-time pilot with 135 to be head pilot and then go to full Part 135
Cpt. Pellizzari responded to Mr. Dougherty that the program would only be in jeopardy if the County were at 135 Full and there was not a 135 certified pilot on staff with 3 years experience. At the 135 light, the program is not in jeopardy.
Highlight in red is not a guarantee – estimating low numbers initially; Sheriff Gerace sending all information on funding
Mercy Flight gets 1/3 of operational cost from their foundation – website has spot for donation, etc
Chautaqua County – large donors, i.e. Golisano Children’s Hospital; 6 figure donations
Incorporation information within attachment no. 1; Mr. Antonacci has been helping with the process
Keep billing of medical services through the County and do the foundation as a fund-raising operation
Extensive experience in this field; went through IRS checklist and sent to Law
Incorporation did not have be done immediately – not as extensive as FAA – waited to have something everyone comfortable with; additional cost of $850 but application ready to be mailed
Any charitable contributions received will be deemed retroactive to the incorporation of the entity
501-C3 will accept charitable contributions, have membership drives, pancake breakfast, etc
Intent for foundation to accept charitable donations, turn over funds to the County Government – defray costs of upgrades to helicopter or direct donation to the County; medical billing to go directly to County not through foundation
Chief Balloni stated the medical billing will have to be outsourced. An RFP will have to be drawn up and it will be brought to the Legislature prior to August 31st. Spoke with MultiMed to let them know the Sheriff’s Department appreciates the free advice but that does not guarantee they will be doing the billing. The RFP will be sent out to all local vendors, including Rural Metro, and Van Duyn only has experience in billing Medicare, not the emergency end of this.
Mr. Antonacci stated the provision they are applying for is lessening the burden of government.
Get foundation up and running; have meetings; vote members; committing to no paid staff or board members
Handout – Air One Foundation Poker Run (on file with Clerk); explanation available on internet
Donors are committed – Law Firm, advertising at Kinney Drugs, AirOneFoundation.org website
Encouraged on the foundation end – great potential for significant help to the County
Mr. Rhinehart stated there was a discussion with Mr. Lesniak and Chief Balloni last year into reference contacting different agencies, etc because the cost cannot keep being put on the taxpayers. He thinks Chief Balloni will be surprised at how much the private sector will contribute and how successful it will be. Chief Balloni responded that he wanted to show that the Sheriff’s Department is pursuing this. He responded to Mr. Rhinehart that the Sheriff’s Department is still looking for the contingency funds set aside for the second half of this year because they were working with Government agencies and not sure if within six months the process would be up and running. Not counted as part of the $75 million, it is budgeted already. Mr. Rhinehart reminded Chief Balloni that the Legislature will decide and the contingency money for the Symphony had requirements as do these funds. Mr. Masterpole added he had a conversation with Chief Balloni who said they would look for the money because they don’t see the process coming through within six months, and replied if the money is not put into contingency, then there is no incentive to do it. Mr. Masterpole directed his question to Mr. Rhinehart asking what you would like them to do more than this. Mr. Rhinehart responded there is more investigation to do with numbers and there are more questions.
Chief Balloni responded to Mr. Masterpole’s question that homeland security checks are not mandated or reimbursed. It is a common sense thing and it is easier to use then ground in some cases.
Not a lot of homeland security checks; generally part of patrol; i.e. Skaneateles Lake – check and patrol
More directed if there is a specific threat at i.e. SU; most significant after 9/11 – launch missile on passenger planes
Surveying airport quickly is much faster than a ground patrol – checking in wooded areas, water towers, etc
Routine patrols – depends on hours available; not a lot of patrols
Currently micromanaging the patrols to maximize hours used; i.e. 2010 usage was 400hrs, 2011 usage to be 200hrs
Chief Balloni stated they are in house training the pilots and need to give them a certain amount of hours or else a commercial pilot would have to be hired. More cost effective this way. Mr. Rhinehart was under the impression the training was done at Bell after the incident in 2007. Cpt. Pellizzari responded the 2007 incident was a specific type of training the Sheriff’s do not do and did not endorse. That particular type of emergency training is done at Bell on their ships. He agreed with Mr. Rhinehart that the County budgets $20,000-$25,000 for the training.
To become a pilot in command, need to accumulate 350 flight hours; requirements: cross country, solo, etc.
Patrol flights allow the pilots to accumulate the hours needed; one pilot in suspended training, not enough hours to do
Chief Balloni responded to Mr. Rhinehart there have not been discussions with ambulance companies or fire departments reference splitting the cost of the helicopter; only discussions reference fund raising. He does not think they have the money set aside in their budgets for the County’s helicopter. Mr. Rhinehart said at budget the mission statement was said to be outdated, and asked if there has been any updating to it. Chief Balloni responded it has not been looked at because the 135 process is taking the manpower that would work on the statement. Mr. Rhinehart stated at budget he asked for the number of maintenance man-hours per flight hour and would like to know if he can get it as it was not received. Cpt. Pellizzari nodded. Mr. Rhinehart said there was a resolution last fall that was pulled regarding the blades for the helicopter for approximately $35,000-$40,000, and asked if they could be sanded down. Cpt. Pellizzari does not recall this. He believes they are no longer a replacement item, and an item like this would come up in a 2,500 hour overhaul or 5,000 hour overhaul. Mr. Rhinehart will find the resolution for Chief Balloni.
Every overhaul is different: airframe overhaul (coming up in 2011) vs. engine overhaul
Difference in what gets changed at what level of hours; looking at 7,500 hours this year
Mr. Rhinehart stated in 2006 when there was an overhaul on the helicopter, it cost $680,000. Cpt. Pellizzari does not believe that was the correct amount spent for a 5,000 hour overhaul. The incident in 2007 Cpt. Pellizzari believed was $125,000 which Mr. Rhinehart did not agree with and said it was $700,000. Mr. Rhinehart is requesting on paper the maintenance schedule for the length of the ship with the amount of money for each maintenance level for Ways and Means. Cpt. Pellizzari said they would do it by today’s dollars and it does depend on how much the helicopter is in flight. Chairman Kilmartin is suggesting a 1,2, and 3 year analysis on the cost of operating Air One and try to hit on all aspects including: insurance, training, personnel, regular maintenance, substantial maintenance, and any capital investments. Also include on the bottom an estimate for the foundation money and any reimbursements; projections.
Chairman Kilmartin asked how long ago Chautaqua received their 135 certification. Chief Balloni said about a month ago and they do service outside their county. Chautaqua has agreed to send the Sheriffs everything they have.
Cpt. Pellizzari responded to Mr. Masterpole that the helicopter will be down approximately 6 – 8 weeks for the overhaul, and the department works with the State Police to time these services so the County’s helicopter and the State’s helicopter are not down at the same time. There are times the State Police is down and the County will back them up.
Mr. Rhinehart asked about the heliport and the capital improvement plan for $2 million to repair or replace. Chief Balloni responded that the capital plan was changed and it is incorrectly named as a heliport; special enforcement facility. There is a need for a facility with or without the helicopter, and did look into grants for it; will work on this more when the 135 certification process is complete. Mr. Dougherty asked why the County would not build all over possibly somewhere else. Chief Balloni responded there have been talks reference the current building not being the right size. May behoove County government to have the private sector build a building and then have the County lease it. There has never been a better time to bond projects. Chairman Kilmartin asked if there have been talks with Facilities regarding other vacant facilities or soon to be vacant facilities that could be used to house some or all equipment. Chief Balloni responded that he has spoken to Facilities, and also he’s spoken with the City regarding needing a facility and leasing one together instead of two separate leases to save money. Cpt. Pellizzari responded there were three options presented 5 years ago: a refurb of the building, a complete rebuild or either of the first two plus a 5,000 square foot addition. Mr. Dougherty stated the current facility is remote and may need to be relocated to something closer to a property the Sheriff’s has currently. Cpt. Pellizzari replied it is outside the Class 1 Airspace. During capital project, property on Hancock Airport was looked at. Chief Balloni stated the goal is to lessen the tax burden as instructed. Mr. Rhinehart stated the Sheriff’s budget went from $38 million to the mid $60’s and if it continues to rise it will take up the entire property tax levy in Onondaga County. Chief Balloni responded he hopes they have shown they are committed and put tremendous efforts towards the program. Mr. Kilmartin replied the focus is to reduce the cost to the tax payers, and to not have local tax payers paying the full bill for other counties to have a free helicopter program. All documentation will be very helpful for Ways and Means.
ENVIRONMENTAL PROTECTION COMMITTEE MINUTES – MAY 11, 2011
Vice Chair Rapp called the meeting to order at 10:00 a.m. Motions were made by Mrs. Ervin, seconded by Mrs. Tassone to waive the reading and approve the minutes of proceedings from the previous committee meeting. MOTION CARRIED.
Mrs. Rapp stated she would be taking the agenda out of order.
2. SOIL AND WATER CONSERVATION DISTRICT BOARD:
a. Confirming Appointment to the Onondaga County Soil & Water Conservation District (T. Brendan Whelan)
Mrs. Tassone stated she would like to cosponsor the resolution.
Seconded by Mrs. Ervin. Passed unanimously; MOTION CARRIED.
a. Confirming Appointment to the Onondaga County Resource Recovery Agency (Frank Forte)
A motion was made by Mrs. Ervin and seconded by Mrs. Rapp to approve this item. Passed unanimously; MOTION CARRIED.
4. OFFICE OF ENVIRONMENT: David Coburn, Director; Luis Mendez, Senior Deputy County Attorney
a. Amending the 2011 County Budget to Provide Funds to Address Honeywell Remediation Issues ($100,000)
Request to release $100,000 from Honeywell Contingency Fund
Fund was created in 2003 for $500,000, started drawing down on it in 2008
Current balance of $260,000; approval of this request would leave $160,000
Lower Ley Creek issue was presented to the committee in December
Mr. Coburn stated that back in December he informed the committee that no founds were available for cleanup of this site. However, due to the case built up by the Law Department and outside counsel, there is the possibility of funds from an additional $70 million set aside specifically for Ley Creek. These funds will only be available if the Justice Department and Motor Liquidation come to an understanding and determine that GM was responsible for the contamination of the creek. The total cost of the cleanup and the amount that would be GM’s share will need to be determined.
In answer to Mrs. Rapp, Mr. Mendez stated that they contend GM should be 100 percent responsible for the cleanup of lower Ley Creek. They are currently in discussions with the Department of Justice to determine who is responsible for the contamination and to what percentage. If an agreement is reached designating GM responsible for the lower Ley Creek contamination, then the Justice Department and Motor Liquidation will work out the cost of the cleanup and an allocation from the $70 million will be paid for cleanup cost. The goal is to have GM or Motor Liquidation pay for the majority if not all of the cleanup.
In answer to Mrs. Rapp, Mr. Mendez listed Onondaga County, Town of Salina, Niagara Mohawk, Lockheed Martin and Cooper Industries/Crouse-Hinds as other parties being held liable for the cleanup.
Mr. Coburn stated this was an important outcome. It keeps the County’s case alive and represents recognition by Motor Liquidators that there is responsibility to Ley Creek.
Mr. Buckel questioned if these funds came about as a result of our initial negotiations. Mr. Coburn stated that our legal defense team put together a substantial enough argument that the Justice Department and Motor Liquidators could not ignore.
Mr. Mendez confirmed that this is a judicially acknowledged arrangement; put on record at the bankruptcy confirmation hearing.
In answer to Mrs. Rapp, Mr. Coburn stated the gross upper estimate for the cleanup is $50,000,000. They do not have all the information from the EPA.
Funds will be used for legal expenses
$50,000 remains in outside counsel contract; Wladis Law Firm, Kevin Murphy is outside consultant
Breakdown sent to Ways and Means members back in December
Includes technical work going forward, establishing responsibility for contamination and cleanup
Cost $70,000 - $75,000 to obtain the $70,000,000 set aside
Still working on $12.5 million total lake cleanup recovery with the EPA, Wastebeds 1-6, Murphy property, and Geddes Brook Nine Mile Creek
Mr. Coburn stated all these items tie in. He does not want to give the impression that once lower Ley Creek is resolved we are all set. This will go on for some time. When Honeywell begins the lake remediation, it will be important to stay on top of the monitoring. We want to be sure if there is still a contamination issue; the County is not tied to any ongoing problems.
In answer to Mrs. Rapp, Mr. Coburn stated that they do not know what the total cost will be for all these items. $50,000,000 was set aside for these items, knowing that we would have to draw from it. These funds also send a message; we are not going to “lay down” for anyone.
A motion was made by Mrs. Ervin, seconded by Mrs. Tassone to approve this item. Passed unanimously; MOTION CARRIED.
1. LAKE IMPROVEMENT: Michael Lannon, Acting Deputy Commissioner (WEP); Matt Millea, Deputy County Executive/Physical Services
Mr. Millea asked to speak about the Save the Rain resolution. Vice Chair Rapp stated this could be part of the ACJ update. Mr. Rhinehart stated the item was not on the agenda.
Construction of a 60,000 sq. ft. green roof will begin on Monday, May 16th at the Oncenter
Mrs. Rapp questioned if there was ever any consideration as to putting a hotel on top of the Oncenter. Mr. Millea stated he was not aware of it; to his knowledge it has always been in the parking lot space. Mrs. Rapp stated that she thought this would greatly reduce the cost as the infrastructure is already in place. It would be convenient and the green roof could be on top of the hotel. Mr. Millea stated he would ask.
Tree planting contract being awarded to the lowest bidder, installing 600 trees for 2011
Erie Canal Museum green roof project will be bid this week and the Hazard Branch Library
Townsend Street parking lot reopened
Green Improvement Fund (GIFT) is progressing, 36 applications received to date
Onondaga County 1 of 10 communities recognized for green infrastructure by the EPA
Will partner with the EPA on some green initiatives
$712,000 grant received from NYS for the War Memorial Rain Reuse Project, design is continuing
8500 trees to be planted in the City of Syracuse as part of the Save the Rain Campaign
Harbor Brook Interceptor Replacement Project 85% complete, some additional restoration in the next few weeks
Majority of the Midland CSO 44 Abatement pipe has been delivered on site; slight delay due to heavy rains last week; sheet piling for soilstabilization will begin this week
Final specifications for Harbor Brook sent to NYSDEC on 4/29/11, 60 days for review, comments will be incorporated into the bid shortly thereafter; must be completed by 12/31/2013
Clinton CSO Abatement Project 6 week advertising window to begin May 12, 2011, construction to start early August, must be completed by 12/31/2013
Aggressive monitoring continues
Working with NYSDEC on a modified enhanced AMP plan to gage the success of the green and grey programs
Contract awarded to J & B Installations for Oncenter green roof
No amendments or change orders to report at this time
Mr. Lannon provided a sample of the new format for the monthly report. The format will be a consistent one page sheet, aligning with the budgets approved for Clinton, Midland and Harbor Brook. The changes will be coming forth soon. Mrs. Rapp added the new format is much better. (See attachment #2)
Mr. Lannon displayed architectural renderings of the lower Harbor Brook CSO storage facility. (On file with the Clerk)
Plans submitted to DEC, 60 day review window
Trees and landscaping were left off of rendering for ease of clarity
2 towers in the back are a robust odor control system, do not anticipate any odors, used for assurance
Towers will not be as pronounced once the landscaping is complete
Quiet system, no noise complaints
Architectural fence around the property
Construction to be completed by 12/31/2013
In answer to Mr. Rhinehart, Mr. Lannon stated the $712,000 grant will be used to for the War Memorial Rain Reuse Project.
Rain water captured, sent through pretreatment center, treated water used to make ice for the War Memorial
Grant funds were specific to water reuse, cannot use the funds for infrastructure repairs
Mrs. Rapp added we are using sewer tax money. Mr. Lannon clarified it was funded by WEP. Mr. Rhinehart questioned what would happen if the building were to close. Mr. Millea stated that if the building were to close they would continue to collect the rain water and Facilities would make use of the water for irrigation and other things around the facility. He added that they do not intend to close the building.
In answer to Mr. Rhinehart, Mr. Lannon stated an RFP was issued for this project. Seven or eight bids were received; contract was awarded to the lowest bidder. Mr. Millea added that the bids were very competitive; all within 5%.
Mr. Rhinehart questioned the $4.1 million dollar land acquisition charges as listed on revised monthly report provided. (See attachment #2) Mr. Lannon responded that they were for trolley lot easements associated with the Clinton CSO project. Some has been expensed for conveyances and the rest is easements. Mr. Millea added that this item was presented as an example. In answer to Mr. Rhinehart, Mr. Lannon stated he would provide full detail on the land acquisition funds at the next meeting.
Mr. Millea stated the trolley lot is owned by both the City and County. In order to manage the site going forward, the Department of Management and Budget believes that we should purchase the City’s share of the trolley lot. It will be beneficial for us to control the whole site going forward.
In answer to Mr. Rhinehart, Mr. Lannon will provide details on the $4.8 million IMA funds at the next committee meeting.
Mr. Millea added the revised monthly reports will put before you the budgets as approved and the revenue tracking based on expenditures. The report is based on invoices so it may not be a “real time” monthly update; quarterly at minimum. The report will be more transparent and will list what has been approved, expensed and the remaining balance.
b. Save the Rain
Mr. Millea stated he had spoken to Chairman Corbett and Vice Chair Rapp in regards to the Save the Rain legislation pulled from the last session. Mrs. Rapp confirmed that the item was not voted on.
Mr. Millea has briefed the County Executive and she has authorized him to move forward with a different approach. He needs to work with Law for the creation of this item. It is the committee’s choice as to how this should proceed. He can move quickly to get something together for Ways and Means or he could wait until next month to bring the item through committee.
Per his discussions with Mr. Corbett and Mrs. Rapp he understands that the request is to look at the budget that has been approved for the ACJ compliance and consider the grant funds received as an opportunity to free up the cash that would have been spent from local dollars on the civic strip and dedicate these funds to suburban save the rain projects.
Mrs. Rapp stated that we are not raising additional taxes. We will be using the same money and making it go further. Mr. Millea added that we are not necessarily going to reduce the authorization in the City because the grant programs state reimbursing; the spending authorization is still required. However, the $3 million dollars in the ACJ compliance program won’t hit the rate base. It will hit the rate base when the money is expensed in the suburbs, in lieu of the grant.
Mr. Buckel stated that he doesn’t care where the money is spent. He is looking for scientific data that will support the quantity of capture. He wants to be sure we are getting the most capture for our dollars and not just appeasing those who feel slighted.
Mr. Millea, Mr. Lannon and Supervisor Falcone meet last week regarding Bronson Road. He met earlier this week with the Regional Planning Board. Bronson Road is heavily impacted by both storm and wastewater. Planning has already started doing some preliminary green infrastructure work. This is a spot where we can and actually are required to show that this as sewer mitigation.
Mrs. Rapp asked Mr. Millea to prepare the resolution.
Mr. Rhinehart stated that the core of this issue is not the city against the suburbs, though at times it does sound like that. There are people that pay taxes into the sewershed that are not located in the city. He agrees that projects should be done based on merit. We have been told that most of the problems are in the city. However, there are problems inside the sewershed for those living outside of the city. This was the concern that a number of suburban legislators had. $70 million is being bonded for work in the sewershed; they are questioning why there isn’t one project outside of the city. How many times has he asked for just one project in the suburbs?
Mr. Rhinehart stated he is glad they are looking at this again. He thinks he agrees with it. The question is, are we talking about amending the bond resolution and if not where is the money going to come from. Mr. Millea answered that articulation needs to be determined for the resolution. We are not there yet. Management and Budget will be involved in how we budget for this, could be part of the Capital Improvement Plan or it could be cash from reserves in the interim and then into the rate base going forward. It doesn’t need to be part of the bond because the bonds are targeted for specific areas.
In answer to Mr. Rhinehart, Mr. Millea stated the bond could be amended but he doesn’t know that we need to. This is something that needs to be worked on with Law and Budget. Mr. Rhinehart stated that he believes the full legislature is willing to compromise on this. The majority of us do not want to raise taxes for projects in addition to what we have already bonded for. He believes the intent was to have some work outside of the city and 99% in the city.
Mr. Millea stated he wanted to articulate that we are not increasing taxes; we are benefiting from the grant. Mr. Rhinehart added they were reorganizing. Mr. Millea stated that if it is better to put this information into the bond resolution, and show that we are spreading the funds farther and wider, and it doesn’t create a complexity with financing, then that is the approach we will take.
In response to Mr. Buckel, Mr. Millea stated that there is a calculated capture for each project. Mr. Buckel stated that this would be useful data for the legislators to look at. He wants to be sure that we are not cherry picking one project. He wants to get the greatest capture for the dollars spent. To make informed decisions, this needs to be about process. Mr. Millea stated that when they come back to request the funding, the methodology will be provided. This will include the project, what they hope to mitigate and the cost per gallon of capture or the benefit to the sanitary system by removing the number of gallons of water.
Mr. Millea stated that Bronson Road is the perfect place to start. Bronson Road is located in Westvale and is part of the Town of Geddes. Part of the most serious flooding from last week’s storm was Bronson Road.
In answer to Mr. Rhinehart, Mr. Millea confirmed this is not new. This something that we thought was being addressed by other means. A number of home owners were flooded. This is a reportable violation of the clean water act. This is not just an inconvenience when a storm happens, it is a violation.
Mrs. Rapp stated that several years ago the sewer lids actually popped in the Franklin Park area. In answer to Mr. Millea, she confirmed Franklin Park was located in the Town of Dewitt. He stated he believes they will be discussing this soon. Mrs. Rapp added that the Regional Planning Board studied this in the Jamesville area and the town is prepared to move forward.
Mr. Millea stated he believes he could come back in a month with a resolution for the $3 million and get it through the system. The Regional Planning Board has done a great deal of preliminary work in identifying hot spots were GI applications could be effective for mitigation. This could move along very quickly, getting the dollars out the door once approved. He believes the Bronson Road project could be up and going in less than a year, if this is deemed to be an effective solution.
Mrs. Rapp stated she hoped to continue this practice as green grant money continues to come in. Mr. Millea stated he was all for it. To date we have received close to $4 million in grants just for the civic strip. The EPA designation is very positive news. Getting people from the outside excited about what we are doing here and putting money behind it is a good thing.
COUNTY FACILITIES COMMITTEE MINUTES - MAY 12, 2011
MEMBERS PRESENT: Mr. Masterpole, Mr. Lesniak, Mr. Dougherty, Mrs. Tassone, Mr. Kinne
Chair Rapp called the meeting to order at 9:02 a.m. A motion was made by Mr. Masterpole, seconded by Mrs. Tassone to waive the reading and approve the minutes of the proceedings of the previous committee meeting; MOTION CARRIED.
1. OCPL: Elizabeth Dailey, Executive Director
a. Amending the 2011 County Budget to Accept CNY Library Resources Council Funds for the Onondaga County Public Library ($10,000)
Looking at doing a kiosk at Great Northern Mall
Grant for the State’s effort to preserve heritage; administered by the 3Rs Council (system for all libraries)
Competitive grant awarded because the local history department has unique materials
Need an expert to come catalog for public access; money will be used for part time payroll as needed
Project that is stretched through time – received grant in 2008 and began work; good amount to be able to supervise
A motion was made by Mr. Masterpole, seconded by Mr. Dougherty to approve this item.
Experts are defined as a librarian with cataloging training and expertise in local history
Retired OCPL librarian knows collection and skilled; part time SU librarian who does this work for academic libraries
Staffed for the temporary help needed for the grant
a. Amending the 2011 County Budget to Enable the Establishment of a Project Account for Tourism Promotions ($68,900)
Looking for release of contingency dollars; used to promote tourism – same amount for past several years
Helps with web page, brochures including: on Thruway, rack cards in hotels, Discovery Guide (costing about $22,000)
Brought 3,000,000 people into parks last year
RT Tags – can scan using a smart phone and gives information; ie: the Zoo – scan tag to get the Zoo Keeper on the phone and give an interactive presentation of the animal/exhibit
Can be used in Salt Museum for walking tour, Beaver Lake for maps of the Lake electronically instead of print; Discovery Guide – item for event, can be scanned and get to events page for Parks
Total investment $90 for unlimited tags
Mr. Lesniak asked why the website design portion was $16,200. Mr. Lansley replied the website had a five year old design. It has been updated this year to keep things fresh. Design is relatively inexpensive but there is a cost to maintain the website and use the company’s servers to host the website. In answer to Mr. Lesniak, Mr. Lansley responded that The Hotel Visitor Guide has advertising within it the County pays for, and it is published by the CVB. Chair Rapp stated it is done in conjunction with the Newspaper (similar to the Discovery Guide) and the cost is shared. The CVB used to do it themselves and then Syracuse newspaper put together the What’s Going On in Syracuse Guide so they merged them for a better product at half the cost. Mr. Kinne agreed with Mr. Lesniak that money is being shuffled from Parks to the CVB. Years ago the County would give the CVB whatever was needed and they would put the money aside for Parks. Now it has been changed to see what goes where. Mr. Lesniak inquired about the major events support. Mr. Lansley responded that a softball tournament was brought in so if there was any field repairs needed or equipment, it would be under the major events support.
Chair Rapp commented on Onondaga Lake Park that it has improved tremendously from a week ago. Mr. Lansley said they’ve cleaned up the park to about a quarter mile past the marina and filled six 40 yard dumpsters so far. One crew to pile up the trash, another crew to take the pile and put it in a dumpster, and a third crew to take out the small items from the grass. Mrs. Tassone asked if there was any damage to the Marina. Mr. Lansley replied there was a walkway on the left side with a tarvia top and crushed stone underneath. The wave action took out the stone underneath and collapsed it so it has to be rebuilt. In the process of assessing the A wall (heavy rock wall) that appears to be tilted more than before. Chair Rapp asked if there was a cost assessment done. Mr. Lansley said there is not an assessment but he put out an estimate of $50,000; $30,000 - $40,000 for the dumpsters of material and fees to dispose; $10,000 for the walkway at the Marina.
FEMA will be at the Park tomorrow to look at the damages and debris
Lost 15’ of park behind the Salt Museum; trees on shoreline now 10-15’ out; trash washed up over 2 miles of shore
Showing video of lake on phone - 24” carps in flooded area of Park; will try to net them to put them back in Lake
Staff from Highland Forest helping; between ski season and hiking season
The meeting was adjourned at 9:19 a.m.
PLANNING & ECONOMIC DEVELOPMENT COMMITTEE MINUTES – MAY 12, 2011
MEMBERS PRESENT: Ms. Williams, Mr. Dougherty, *Mr. Stanczyk, **Mr. Cox
ALSO PRESENT: Mr. Rhinehart, Mr. Lesniak and see attached list
Chair Rapp called the meeting to order at 10:06 a.m. A motion was made by Ms. Williams, seconded by Mr. Dougherty to waive the reading and approve the minutes of the proceedings of the previous committee meeting. MOTION CARRIED.
Chair Rapp stated she would be taking the agenda out of order.
2. PLANNING: Don Jordan, Director
Each January property owners can request to have their property included in an agricultural district
Farmland Protection Board has reviewed and approved all applications
1. ONCENTER: David Holder, President CVB; Steve Cambareri, Chairman Board of Directors; Jack Cushman, Board of Director; Mike Kauffman, Board of Director; Wendy Bodnar, Board of Director; Terri Toennies, President and CEO
a1. USBC Women’s Bowling Tournament Update
Mr. Holder provided the following information:
Appreciated the signage, makes them feel welcomed
Enjoyed our restaurants and attractions
Carousel sales up extensively for April, Erie Canal saw unprecedented numbers
Surveys are being collected from those entering the Oncenter, pulling a lot of data
Mr. Holder added that the information collected from the survey has been almost an exact match to what the USBC had anticipated; including travel spending, who the bowlers are, age demographics, etc.
In answer to Chair Rapp, Mr. Holder stated the room nights are still moving forward and are on target for what we are projecting. Many of them are booking outside of the hotels provided through the USBC. This is still a room night for our community; just makes it harder for the USBC to gauge future events. This is one of the reasons for doing different surveys. They need to know where the bowlers are staying. They are collecting cards at registration; asking bowlers to fill out where they are staying and how many people are in the room.
In answer to Mr. Dougherty, Mr. Holder stated that at this point they have analyzed the first level of visitor profile surveys. These are surveys collected as they come into the Oncenter. Hotel surveys are collected during registration. He will pull all the detailed information together and follow up at the end of the event.
Top 3 likes are attractions, food and friendliness of the community
Top 3 dislikes are transportation, weather and pot holes
Mr. Holder stated they are working on the transportation issue and are continuing conversations with the USBC. Transportation is a big issue; need to be able to get the bowlers around to where they want to go.
b. Amending the 2011 County Budget to Provide Funding for the Oncenter Complex and Providing for Repayment of Fund
Chair Rapp stated the quarterly report would be first. Mr. Cambareri requested they start with item b.
Mr. Cambareri provided the following information:
Here to request additional funding
Important to understand the obligations of the Oncenter and the County
The enabling legislation for the Oncenter and contracts obligate the County to provide sufficient funding to run the operations
Management Corporation obligated to accurately relay operations costs
$575,000 subsidy provided in 2009; under the previous management difficult getting sufficient information to make accurate financial decisions, Ms. Toennies and Mr. Casper were new, not a good time to provide an accurate reflection of where the Oncenter stood, $575,000 was not sufficient
Believes they now have accurate fiscal information
End of 2009 outside consultant was hired, former acting CFO for the Turning Stone Casino
Evaluated the internal financial controls of the Oncenter Complex
Findings were consistent with some of the auditor’s remarks
Report outlined a number of changes that were necessary
Over the past 18 months the board has or is in the process of implanting all of the changes
Operation runs more efficiently, able to provide sold financial information upon which to make decisions
After 2009 invited the County Comptroller’s office to be part of the implementation of recommended financial changes and to assist in evaluating the finance and accounting operations
Mr. Antonacci attends almost each and every board meeting
Mr. Cambareri thanked Mr. Antonacci and his staff. He appreciates all their hard work and efforts.
Board worked diligently with Ms. Toennies to obtain best management team to assist in running the Oncenter operation
Ms. Toennies has the unanimous support of the board
In 2 years Ms. Toennies has changed the management team and the focus of the operation
2012-2015 will see a different operation at the Oncenter, much more profitable
Mr. Cambareri stated that he realized the makeup of the board needed to change in 2009. He needed people with a business, finance and accounting background. He thanked the County Executive’s office, and the legislature for their approval of the board member changes. The new members have not only been able to assist management in evaluating where it is that we are, but were able to chart out a plan for where the Oncenter will be 1- 5 years from now.
Mr. Cambareri introduced the finance committee members. Jack Cushman, Vice President of Nice and Easy Grocery Shops. He has a Ph.D. in hotel, restaurant and institutional management. Michael Kauffman not only has NBA but is a CPA. He is the outside consultant and former acting CFO for the Turning Stone Casino. He was hired to do an assessment of our internal controls. After a lot of lobbing we convinced him to do for our board for free, what we had originally paid him to do for us in 2009. Wendy Bodnar is a CPA and Vice President of Seneca Federal Savings and Loan.
Mr. Cambareri stated he was turning the presentation over to Mr. Cushman who will discuss the request, and how we got here.
Mr. Cushman stated that they are trying to give clear, objective information to the committee so that they can make decisions. All the numbers provided today are very sound. There are really two very different pieces. The first piece is the cash crunch we are in. Mr. Kauffman will speak first in regards to this matter. Handouts were distributed to the committee (See Exhibits A, B & C).
Mr. Kauffman stated that he has spent 40 years of his career looking at financial statements and thought this would be the best to place to start. This presentation is based on actual audited financial statements of the Oncenter for the last few years; except for 2011, which is based on projections.
Mr. Dougherty stated that it looks like 2008 was the year that the revenues and subsidy became disconnected from the expenses. He questioned how bills were being paid up until now. Mr. Kaufmann responded that they were using their vendors as a financing tool. He added that the County gave a subsidy of $575,000 in 2009, which helped.
Mr. Dougherty pointed out that this shortfall is not new; he still questions how they are paying the bills. Mr. Kaufmann stated that the last three years have been a problem. If you look at the list of payables you will see they have been using the vendors to pay the bills for the operation. (See exhibit A) He added that Mr. Cushman will get into the actual cash.
Mr. Cushman stated that accounts payable are currently at $800,000. Mr. Kauffman added that he is trying to provide a high level review of the financials, so that everyone can understand. Chair Rapp added there are a lot of people waiting for their money.
In answer to Chair Rapp, Mr. Cambareri stated that the bowlers displacing the convention center had an effect on revenue, as well as the economy, and the Syracuse Symphony.
Mr. Dougherty stated that 2008-2010 still shows a trend of decreasing revenue. Mr. Cambareri stated that in 2008 there was a movie premier that brought substantial revenue to the Oncenter complex, plus there were Syracuse Crunch playoffs. Without these events 2008 would have been just like 2009 and 2010. Ms. Toennies added that the events brought in about three quarters of a million dollars.
Ms. Toennies stated that the numbers for the social local groups were significantly down for 2009. They also saw fewer conventions, with reduced numbers because of the economy. The forecast for 2009 was submitted in July of 2008. Due to the change in management there was no one to explain how these numbers were determined. The forecast for 2010 was submitted in July of 2009. She had only been with the Oncenter for 3 months and Mr. Casper had just started. The only option they had for projecting was to look at historic records; which was a mistake.
Mr. Cambareri continued:
For 2010–2011 the Syracuse Crunch have to be figured in
Very expensive to operate the War Memorial
Operating the building for 60-65 events per year and 40 of these are for the Crunch
2010-2011 season for the Crunch saw one of the poorest attended seasons
Performance of a major building tenant is imperative
Trying to increase the number of events at the War Memorial
Ms. Toennies single handedly put the War Memorial back on the map for concerts
One reason Ms. Toennies was hired was because of her House of Blues background
People are now considering our venue for concerts
These events actually make money
Some issues with security and the Syracuse Police Department, working on this, promoters are requiring festival seating as part of their shows, we are the only arena in upstate New York that does not allow festival seating, it cost us shows
In answer to Mr. Stanczyk, Mr. Cambareri stated that festival seating has no seats on the floor and you sit wherever you like. With general admission you actually have a seat.
Mr. Cambareri stated that these are the challenges this management team has picked up. We have been working through them over the course of the past two years. When you factor these challenges in with a difficult economy and issues with tenants like the Syracuse Symphony and Crunch, it has made for some very difficult years. We discussed the cash crush each year when the financial report was received. We needed to know why we were in this position. Per his request, non political persons serving on this board have evaluated the finances. It is impossible to make sound decisions without knowing what it cost to operate these facilities.
Mr. Stanczyk stated that he is more interested in knowing the forecast for 2012. He questioned if they were going to make progress in terms of increasing revenues and decreasing expenses. In order to receive some type of rescue now, he has to know that they have 2012 figured out. Mr. Cambareri stated that this leads into Mr. Cushman’s presentation of the Finance Committee’s recommendations.
Mr. Dougherty asked for a moment before going into the presentation. He stated that expenses increased greatly for 2007-2009. Mr. Cushman stated that there were a lot of labor expenses, from salaries down to hourly labor. They have done a lot of house cleaning; cleaned out the wrong people and brought in the right people. They are now lean and mean.
Mr. Dougherty stated the expenses are now pushed back to 2006 levels. Mrs. Rapp added that some of the people were taken off the Oncenter payroll and added to Facilities.
Mr. Kauffman responded that the key is to look at the operating expenses. Personnel and related benefits are the majority of the expenses.
Increased Unemployment and Worker’s Compensation claims were a large factor
2006 Workers Comp claims were $82,000-$100,000, currently pushing $300,000
Experience rating goes three years into the future, currently paying for things from 2007
Current management staff was not in place at that time
Experience rating is coming down, takes time to get off the books
In answer to Mr. Stanczyk, Mr. Casper stated the rate of pay and benefits has been compared to the industry but not to Onondaga County employees. Mr. Stanczyk asked that the rate of pay and benefit for the Oncenter employees be compared to Onondaga County Employees.
Mr. Stanczyk added that the Workers Compensation claims would not reflect as badly in a larger pool. There had to be some type of management issue to produce all these claims. Mr. Casper responded that they had looked into pooling their Workers Compensation, Unemployment and business insurance with the County. They worked with Legal and were unable to pool the Workers Compensation and Unemployment Insurance. Mr. Stanczyk stated they could not be pooled because they are two separate operations. The operations are only separate because we choose to do so; they do not have to be. Separation allowed the complex to have its own board.
Mr. Dougherty asked if the expense reduction trend was going to continue. Mr. Casper replied that they are down 22 employees, including the 8 that were transferred to Facilities. The benefit plan has been modified. The health insurance plan has been reduced from an 80/20 split to a 78/22 split. The health insurance split will continue to increase gradually. In the past there was a profit sharing plan of 3%. The guaranteed match was eliminated in 2009-2010. They now have a true profit sharing plan. If they make a profit and have something to share then they will, but it is no longer a guarantee. Mr. Stanczyk stated that you can’t call it a profit sharing plan when there is never any profit. Mr. Casper responded that these are things that they have changed over the past two years; they were expenses in the past.
In answer to Mr. Stanczyk, Mr. Casper stated they provide health insurance coverage from Blue Cross Blue Shield. They are not self funded, it is a community pool. Mr. Stanczyk asked that they compare health insurance costs to those of Onondaga County.
Mr. Cushman presented the following:
In answer to Chair Rapp, Mr. Cushman confirmed the current subsidy is at $1.2 million.
In answer to Chair Rapp, Mr. Cambareri stated that all fixed costs are listed on the right side of Exhibit C. Mr. Cushman confirmed that labor is a fixed costs; other than part-time employees. Part-time labor costs have been separated.
Mr. Stanczyk asked that they review the utilities. He added that some of these expenses were picked up by Facilities. Mr. Casper responded that $629,000 was absorbed for chilled water and steam. They still pay for electric, natural gas and water. The natural gas is used for appliances. Ms. Toennies stated that electric is used to run the theatre, operate bowling alleys, lights and for any event requesting power.
In answer to Chair Rapp, Mr. Casper stated the taxes are part of downtown.
Mr. Stanczyk questioned the item listed as City of Syracuse Parking. Mr. Casper responded that this refers to the portion of the parking fees that are paid to the City for the parking lot agreement. The income ranges from $900,000 to $1.2 million and is not shared with anyone else.
Mr. Stanczyk asked if an assessment of utilities costs had been completed. Mr. Casper responded that operations had looked into the benefit plans offered by National Grid, he can’t speak from their prospective. Ms. Toennies stated that she believes a study was done with Faculties about 30 months ago. She will provide the figures. Mr. Casper added that lights were changed in the parking garage. Mr. Stanczyk stated that lights should be changed in the convention center as well.
Mr. Rhinehart questioned if the percentage cost for beverages was correct. Ms. Toennies responded that she was unsure. Mr. Rhinehart stated that he hopes the figure is incorrect. Ms. Toennies added the problem is that this figure combines concession and banquet sales, it is not split the way that it should be. This is the next step that they are taking in their inventory. It is not currently split out from building to building. In answer to Mr. Rhinehart, Mr. Casper confirmed that the figure does not include sales tax.
Mr. Cushman stated beverage cost and things of this nature are what the committee is going to be looking at throughout the course of the year. They want to be sure that they are hitting the bench marks, and measuring them accurately. There is a huge swing just by controlling cost. They would love to get things down to a 52% - 54% variable. However, it takes time to understand the numbers and get good practices in place. They are just beginning that process.
In answer to Mr. Rhinehart, Mr. Cushman stated $11.5 million in revenue is necessary to breakeven. They have never reached this level. Determining the breakeven point was the first thing he did when he started this process. He believes that $10 million was the highest revenue total received to date.
Mr. Cambareri added the projected $1.4 million needed for 2012 is based on the assumption that the $1.8 million they are requesting is actually given, and no additional costs are associated with these funds.
In answer to Mr. Stanczyk, Mr. Cambareri confirmed they were looking for an additional $1.8 million this year. Chair Rapp stated that they are looking for a total of $3 million in round numbers. Mr. Kaufman added that the funds are needed this year, but have been accumulating from previous years. This is rolling debt from many years.
In answer to Mr. Stanczyk, Mr. Cushman stated that when the steam and chilled water expenses were transferred to Facilities the amount of ROT was decreased correspondingly. The fixed costs were unchanged and this doesn’t correct the problem. Mr. Stanczyk added that may be the case for this that year but the subsidy has crept up higher. Look at the subsidy from 2001- 2008; the subsidy started growing when revenues dropped. The expenditures were steeply rising. Mr. Cushman responded that historically they had some control issues. Mr. Kauffman added that there has been a complete turnover of management. It was not a program to run an efficient and effective organization, there is no denying that this was part of the issue. You need to look at 2009 through today.
Mr. Dougherty stated that the fact that we are giving more money each year is only part of the story. The other half is that you have changed the way you are doing things, and this is encouraging. He is still concerned that this won’t stop. We will know next year. Mr. Cambareri stated that they will know not only next year, but in 2013 as well. The next slide talks about what we foresee as the future.
Ms. Toennies provided the following information:
Washington DC sales rep has four major RFP’s out for 2013 and 2014
Convention center business is 3 and 4 years out
Local sales team partnering with the CVB, never been done before, meeting once month to discuss how to bring in business
Ms. Toennies provided the following example of how the CVB and Oncenter team work together to bring in business: menu pricing is increased if additional funds are needed to provide shuttle transportation, in the past the CVB had nothing to play with.
Prices were increased for the first time in 5 years, caused local sales team working with the social local events to struggle, can’t make money when the margins are different than they were 5 years ago
According to all standards and trend magazines convention business is on an upswing, had been stalled for the last 3 years
Washington DC sales person is required to make 35 cold calls per week, consists of someone that has never been to Syracuse or has not been here in 10 years
Top 3 things sales rep hears, did not know that Syracuse had a CVB, did not know that Syracuse had a convention center, send them theinformation and they will see what they can do
Important to go after the market that fits us, people can drive and commute easily all up and down the east coast, no since in competing for business looking to go to Florida or Vegas
Discovered a couple markets that are relevant to snow, a snow removal convention issuing and RFP this summer for 2014, and a snowball throwing association
Mr. Dougherty questioned why these groups had never been here. Mr. Cambareri responded that there was no one out scouting for this business until Ms. Toennies insisted that we somehow find a way to do this. Ms. Toennies stated that she did not want to blame past management. From a sales point of view, you need experienced professional people to find these groups. You have to go and build a management team that knows how to go after and secure the sales.
In answer to Ms. Williams, Ms. Toennies stated that she absolutely sees business coming forward in the next five years with the sales team she currently has. She added that they have to stay competitive. Going forward there will be capital improvement issues. There are spaces and things that are over twenty years old. They can’t compete with a brand new convention center when they have carpet with rips and tears covered with tape.
Ms. Williams asked if they foresee being in the black for 2012, if the funds requested are received. Ms. Toennies responded that they would still need the normal subsidy projected at $1.4 million. When the actual numbers come in, we need to look at our numbers and verify that they are realistic. She can commit that this year’s subsidy request will be much more realistic. She and Mr. Casper have been in place for two years and have analyzed the numbers with all the support they have. Mr. Cambareri added that it is very early to forecast the subsidy number of $1.4 million. This number can still change; it is a number that can fluctuate if more demands are added.
Ms. Toennies stated that this is not a good thing, but it allows them to get rid of the entire negative and move forward in a positive manner. The message that she wants to bring to the table is that they have great things going on, fantastic people and great opportunities. However, they can’t keep living with $800,000 in accounts payable every month. She added that this was also hurting the community, and was not fair to the people that support them all year long.
In answer to Mr. Stanczyk, Mr. Seitz stated the current unappropriated ROT balance is a little over $300.000. The ROT budget for 2011 is $5.5. Chair Rapp asked if this included the boost anticipated from the bowlers. Mr. Seitz responded that they do not typically take forecasted revenues and appropriate them. They are only one month into the event and don’t really have a lot of numbers. Chair Rapp asked if the $5.5 figure was normal. Mr. Seitz replied that ROT has gradually increased each year. Mr. Stanczyk added that we have under budgeted each year. The revenue has always exceeded the expectations. Mr. Seitz stated that it varies from year to year. Mr. Rowley added that the 2011 first quarter results are under 2010’s first quarter results. Mr. Seitz stated the bowlers did not start until the second quarter and those receipts are not due until July 20th.
Mr. Stanczyk questioned what the County Executive’s recommendation was. Mr. Rhinehart stated that Mr. Fisher was not here due to his mother’s passing last evening. He knows that Mr. Fisher wanted to be here to speak on this matter. He stated that Mr. Fisher has met with both Chair Rapp and himself. He could not speak on behalf of the County Executive, but he could speak on behalf of Mr. Fisher. Mr. Fisher supports this proposal and he believes that he helped to craft it. Mr. Cambareri agreed.
Mr. Cambareri stated that the proposal calls for part of the funds to be paid back via a loan. This expense has not been factored into the preliminary numbers for 2012.
In answer to Chair Rapp, Mr. Antonacci explained that $850,000 of the $1.8 million would be a loan from the County to the Oncenter and will not affect fund balance. The remainder will come out of a combination of ROT funds and our general fund balance.
Mr. Dougherty questioned how a loan would help this situation. Mr. Cambareri stated that the loan was an executive and legislative decision; it doesn’t help the corporation.
Mr. Cambareri stated that the numbers for 2012 were being provided very early. The $1.4 million projection assumes that we start out at zero. If the resolution passes as is, we now have an additional expense obligation to repay the County of Onondaga.
Chair Rapp stated that Mr. Fisher explained to her that the Oncenter has never been funded by taxpayer dollars. It has always been funded by ROT funds. By creating a loan we use our funds and eventually it all gets paid back via room tax, not property tax. The burden is not put on the taxpayer.
Mr. Stanczyk stated that the Oncenter was constructed using taxpayer dollars. The construction was bonded. The subsidy has always been ROT funds. Mr. Seitz stated the Oncenter was built with $40 million in UVC funds. The additional $30 million bond Mr. Stanczyk is referring to was used to build our share of the parking garage, renovated the War Memorial, purchased the land and did some other things. The bonding was paid for out of property tax.
Chair Rapp stated that basically this is all operational cost. By creating the loan we are taking the funds out of ROT money instead of property tax dollars.
Mr. Stanczyk questioned how they get to $1.8 million, the resolution states the loan total as $850,000. Mr. Cambareri stated that there are other numbers listed in the resolution. He added that he did not have the resolution in front of him, but he believes that there are three different numbers listed.
Mr. Dougherty stated that he is concerned that the loan doesn’t really fix anything; it simply changes the creditor. Mr. Cushman stated that it increases their fixed costs. Chair Rapp added that she does not believe that the Oncenter is advocating for this.
Mr. Cambareri stated that he believes the thought process was to provide an incentive to make sure that the Oncenter is held accountable. In reality if the sales numbers are higher than projected for 2012, the loan repayment is an easier process. If the sales do not hit the projected numbers, know that in 2012 we are back in the negative. Chair Rapp stated that instead of looking for a $1.4 million subsidy they may come in looking for a $1.6 million subsidy. Mr. Cambareri cautioned that these are very early numbers, this is still May.
Chair Rapp asked if they would have a good idea of the 2012 numbers by July since convention business is two and three years out. Ms. Toennies replied that they would have an idea of what the base is. Your social local, trade shows, and concerts cannot be booked, according to our management agreement, prior to eighteen months out. These events generate a higher profit margin than conventions.
Mr. Antonacci stated this problem did not happen overnight. He likes the idea of a loan, rather than a subsidy. While we may have to actually subsidize them, we can allocate the subsidy to future ROT and get the money back. It is our money, any way slice it.
In answer to Chair Rapp, Mr. Antonacci stated that we would be using future ROT funds to pay the County back for appropriations advanced for past problems.
Mr. Stanczyk asked for an explanation of the $614,870. Mr. Casper stated this figure is the 3rd and 4th quarter ROT payments that were advanced in March and April. They were used to fund working capital. Mr. Stanczyk questioned why these funds needed to be replaced. Mr. Cambareri stated that funds are still needed to support operations. Mr. Stanczyk stated that the funds were asked for on bad terms. The money was advanced to clean things up
Mr. Antonacci stated that the funds were not advanced to clean things up; they were advanced to keep things solid. Without these funds, there was increased risk of causing an interruption to the facility while the bowling conference was here. The bottom line is that they need $1.8 million. This is just an effort to try to explain how the debt came about.
Chair Rapp stated going forward we would have a debt service charged to ROT funds. Mr. Antonacci added there was a risk of binding future legislators to the loan repayment. He stated that you can’t reduce the appropriations to the Oncenter two years down the road. You have to understand that this is going to be a built in debt service to that appropriation. This could be a problem down the road. As long as we understand that we are subsidizing that debt service, we are ok.
Mr. Maturo explained the reason for splitting the two amounts. Currently the Oncenter is projecting a shortfall in operations; however this is a two part problem. Part one, is to make sure we fund them at the level required for this year. That is the amounts that you are seeing appropriated. Part two, is a cash flow problem and that is where the loan comes in. We would not give them an additional $850,000 to go to their bottom line, and in essence create a surplus. He believes that the way the resolution has been drawn up deals with both problems for 2011.
Mr. Dougherty stated it’s good to clear everything up and the loan holds everyone’s feet to the fire, but he is not sure that this solves the real problem. He is worried that we are just replacing the creditor. Mr. Antonacci replied that in his personal opinion this is an effort to clean up the past issues and get the Oncenter Corporation on firm footing while holding the management and board accountable for the future. Mr. Dougherty asked if this really cleared things up. Mr. Antonacci stated that he thought so. No matter what the reasons for the short fall were, this cleans everything up and holds them accountable going forward. How we get our money back is semantics. It is either a loan or an actual out right appropriation. It’s going to be our money that helps clean this up; there is no place else to go. Mr. Dougherty stated he understands and that’s the ugly part of this.
Mr. Kauffman stated that no matter how you look at this, year after year it will need a subsidy to survive. As a financial professional, he will tell anyone that will listen to him that the County needs a strategic plan. We are the management company subject to the rules and regulations of the management agreement. Our job is to operate in the most effective and efficient way possible. At the same time the County needs to look at its plan regarding the Oncenter and the other facilities in this county, and question if there is a better way to operate. There are all sorts of creative things out there and every convention center operates differently. Some of them out source certain things. Some of them are part of a sale lease back agreement. The County needs a plan that covers what we are doing and how. This is not going to get any easier. You have Turning Stone to the east and the community has an expanded Landmark Theatre and a 6,000 seat arena at OCC. Mr. Cambareri responded that these are really bigger picture items. Even if there is some other option, for now the bottom line is that this problem needs to be taken care of. Otherwise, no one is going to be interested in looking at other options for managing and operating the facilities. At this point no one has looked at all the facilities in that much depth. He thinks that going forward they have a great management team to manage the facilities as they are. The expanded Landmark Theatre will be an issue relative to the Civic Theatres which actually make money. How OCC will market its arena against a War Memorial that is difficult to mark to begin with, is still yet to be seen. Regardless, you are never getting to any of those questions until this is cleaned up.
Mr. Stanczyk stated that he wanted to clean up the situation and put them on good footing going forward, but he wants to do it in a way that does not affect our accounts. He thinks that we should structure it so that we use the $300,000 currently in ROT and $1.5 million as a loan against future ROT funds. He added that this was not going to be worked out during this committee. He would like to continue to work on this between now and Ways and Mean, hopefully getting something together for session. Chair Rapp agreed.
Mr. Cambareri stated that there was some urgency to the cash issue. Chair Rapp stated that they would put together a resolution in time for a vote at session. As long as the item has been discussed, it can move forward to Ways and Means.
Chair Rapp asked if Ms. Toennies saw any opportunity for the War Memorial to become profitable or breakeven; or should they consider mothballing the building. Ms. Toennies stated that she believes the building will always need subsidizing, especially with the new OCC arena. You are at the mercy of the promoters and what type of building they want to go in. They would need to generate an additional 15 profitable concerts per year to get closer to the breakeven point. The reality is that we lose a lot of our concerts to the Turning Stone as they can pay the dollars. We will now have to compete with OCC as well. Mr. Cambareri added that our expenses are higher. The stage is insufficient to handle the events coming in. A portable stage has to be constructed for every show and labor costs are associated with this.
Chair Rapp stated that perhaps the conversation needs to continue with County Facilities to determine if this is the most profitable use of the building or if this is just an albatross around your neck. Mr. Cambareri added that the Rochester War Memorial was refurbished 10 years ago. It was made into a fantastic facility, yet it is still significantly subsidized. He did not have the exact figure but believes it to be about $4 million.
Mr. Kauffman stated they are just starting to take a look at the business numbers by all the different segments. They have never able to do this before. These numbers will be very telling as to what is actually happening.
Chair Rapp stated that the item has been discussed and will move onto Ways and Means. The committee will consider how they are going to pay for this and put together a resolution.
Chair Rapp asked Ms. Toennies to report back to the committee quarterly. This will allow some of the questions talked about today to be answered. It will also provide the committee with accurate information so that they may be supportive in the future.
Chair Rapp thanked the board for all their hard work.
WAYS AND MEANS COMMITTEE MINUTES – MAY 24, 2011
MEMBERS PRESENT: Mr. Lesniak, Mr. Warner, Mr. Buckel, 2Mr. Stanczyk, Mr. Kilmartin, 1,3Mr. Kinne
MEMBERS ABSENT: Mr. Holmquist, Mr. Corbett
ALSO PRESENT: Chairman Rhinehart, Mr. Meyer, Mr. Masterpole, Mrs. Rapp, Mrs. Tassone, see also attached list
A motion was made by Mr. Lesniak, seconded by Mr. Warner, to waive the reading and approve the minutes of the previous committee meeting. MOTION CARRIED.
1. OFFICE OF THE ENVIRONMENT:
Mr. Buckel asked for brief explanation of item 3a. Mr. Lansley said it funding for brochures, website, and Discovery Guide. Mr. Buckel asked how it is unique to something that the CVB does not do. Mr. Lansley explained that CVB supplements some of the Parks; puts Discovery Guides in areas that Parks doesn’t typically do.
A motion was made by Mr. Lesniak, seconded by Mr. Warner to approve the consent agenda items. Passed unanimously; MOTION CARRIED.
1. COUNTY CLERK: Jackie Norfolk, Principal Deputy County Clerk
Small increase from last six month and from last year
2. FINANCE, DIV. OF REAL PROPERTY TAX SERVICES: Peter Seitz, Deputy Director
a. Approving and Directing the Correction of Certain Errors on Tax Services
Property in Manlius split into residential/commercial - Special districts were not removed after split and there was an erroneous tax bill
A motion was made by Mr. Kilmartin, seconded by Mr. Lesniak to approve this item. Passed unanimously; MOTION CARRIED.
3. COMMUNITY SERVICES ADVISORY BOARD:
a. Confirming Appointment to the Community Services Advisory Board (Joy M. King)
A motion was made by Mr. Warner, seconded by Mr. Lesniak, to approve this item. Passed unanimously; MOTION CARRIED.
4. ONCENTER: Terri Toennies, CEO/President; Gary Lavine, Vice Chair of Board; Jack Cushman, Board Member; Mike Kaufman, Board Member
a. Amending the 2011 County Budget to Provide Funding for the Oncenter Complex and Providing for Repayment of Funds
Mr. Lavine gave introductions and reviewed his professional background. He noted the following:
Board has demonstration a diligence and acuity in making changes in management; effectuating changes in internal control regime of administration and management of Oncenter – accomplished in adverse economic circumstances
1992 joined board – there were high concepts relied upon for formatting the organization of Oncenter governance and management. Some ideas stood test of time; some haven’t.
Two transcendent points in 1992 – 1) never anticipated that Oncenter would be able to operate at profit as conventionally defined; 2) overriding strategic problem is a lack of an adjacent hotel
Board is sensitive to strategic issues; Board is very cognizant of its fundamental role of providing oversight to the operation and assuring accountability by management
Board acknowledges the oversight role of legislature; appreciates support; Board wants to be accountable
Board is volunteers; committed to proposition that the theaters, War Memorial and convention center are important amenities in community and hopefully will contribute meaningfully and enhance economic vitality in Central New York
Today’s presentation is ongoing dialogue with the Legislature and discharging responsibility to be accountable
Board will exert every possible energy to ensure Oncenter’s viability, need legislature’s help; they have had it and appreciates receptivity
Mr. Cushman, Chair, Finance Committee:
2009 – Change in leadership to Terri Toennies, CEO; Peter Casper, CFO
Two years is not a lot of time to make serious changes
2010 Director level changed; Ms. Toennies cleaned house and got the right people in the right places
Two concerns: 1: Cash flow due to underfunding in past - $1.85 million critical to get Oncenter back on its feet; 2: Future – subsidy $1.4 million needed; something to predict, accountable and able to measure each month – make sure metrics put in place are met so at end of year there are no surprises
Reviewed graph in presentation – bar represents gross margin generated from Oncenter operation; darker bar is subsidy from County
From 2011 – 2008 subsidy and gross margin pretty much cover operating expenses; not the case in 2009; it was in 2010, another projected shortfall based on approved ROT for 2011
2001 – 2008 County subsidy covered operating deficiency; 2009 covered 64%; 2010 103% covered; 2011 covered 65%. From financial standpoint it doesn’t work.
Need to run the most effective, efficient operation possible--control expenses, maximize revenue
Need subsidy from County to cover operations; historically it has always been the case
Deficiency in net assets: 2008 $333k; 2009 $1.6 million; 2010 $1.2 million
Projected operating net loss 2011 $1.9 million; 2011 ROT $1.2 million; projected shortage $670k
Can’t keep going with subsidy at level that it is
Financial issues in late 2008, 2009, 2010, which are starting to be corrected in 2011
Average operating expense as percent of revenue in 2011 is 104%
Goal of Board is to get the numbers back down
Most increases were in payroll and benefits – runs approx. 65-68% of revenue; in 2009/2010 it was up to 76% - management was in flux; operation out of control
Chairman Jordan questioned why payroll increased so precipitously; were there higher paid employees. Mr. Kaufman said that the revenue was decreasing and payroll was staying the same. Mr. Casper said that the change in payroll was a $328,000, increase in NYS unemployment and workers compensation. Noting: Workers Comp cost is based on prior years; 2011 premium is based on 2007-2009 claims; $13,0000; an increase in unemployment $100,000 - $150,000; other increases were in labor rates for union contract; types of events on what can be charged back to operation labor vs. what cannot be charged back.
Mr. Cushman said that the staff has been reduced tremendously; Ms. Toennies said that 22 positions have been cut. Workers Comp takes three years of history; about 24 months away from seeing it come back to normal.
Average operating expenses – target is to come down 104% projected for 2011; average deficiency from operations as a percent of revenue = projected to be 26% in 2011; coming down in the right direction
Funding needed now because of 3 yr. ROT subsidy shortfall and related cumulative projected deficiency in assets created by the shortfall; bowling displaced 2011 revenue; current overall revenue for 2011 is back to actual 2004 level – due to recession, bowling and other things; net result severe cash deficiency
Mr. Cushman:
Cash needs: accts. payable 5/6/11 $828,788; advance deposits $311,607 – a fund that shouldn’t be used but because of the cash crunch, it was used – needs to be replenished; ROT qtr 3 and qtr 4 have already been taken $614,870 – need operating capital to continue; Symphony Account Receivable balance $95k; total cash $1.85
Moving forward – subsidy for 2012 – accurate sales force, total variable cost by percentage, and establish fixed cost; subsidy determined by how much gross margin is generated from sales and compared to fixed costs—this was lacking in the past – should have been looking more at margin
Variable Costs: 56.01% of sales; Fixed Costs: $4,956,682 (salaries are fixed cost – do not vary by revenue stream; an event where part time employees are hired are variable costs)
Revenue Projection for 2012 is $7.8 million – not a goal; believe they will hit it; hope to do better; variable cost is 56% - management says they can keep it at 56%; fixed cost are $4.9 million; 2012 ROT subsidy estimate is $1.4 million. If they go below $1.4 million then the whole thing starts all over again; if they do better than the subsidy, it won’t need to be as high.
Going forward: have to pay accounts payable. If accounts payable are cleared, they can send out RFPs – can’t now because not current in account; no one will take them seriously; hired someone in DC to help generate more business; sales staff here has been turned over; senior management and director staff can focus on costs/sales; management will be accountable for benchmarks (sales, variable cost percentage, fixed costs)
Mr. Kaufman noted that they have started to implement profitability by event and by venue – started to get numbers that they never had before.
Purpose of the Oncenter was to generate tourism dollars; people come into community, spend their money and go home. They don’t get all of the services that the County provides to its citizens. It is an extremely lucrative way to generate capital; extremely lucrative way to generate an economy. If there is too much focus on the cost, then will miss out on things like the bowlers. Important going forward, as contracts come up, that people are in the loop -- knowing that there is an opportunity - i.e. to bring in $50 million to the community, but it will not generate any margin so will need to look to the legislature to supplement the lack of margin that it will create.
In answer to Mr. Kilmartin, Ms. Toennies explained:
She started in April 2009; there was no CFO in place – they had gone through 5 controllers in over a year
Stability of financial statements were basically nonexistent; didn’t see one until June of 2009
Steve Cambareri, Chairman of Board and Gary Levine identified that more structure needed to be put into the board to support where them management team had to go
2010 - Mike Kaufman did an audit of internal controls; identified a number of issues that he felt pertinent to look at to move forward; 85% of it is in place now
Mike Kaufman jointed the board – from Syracuse, started in Big 8 Accounting; 25 years as CFO of Anoplate Corp., Syr.; 3 years at Turning Stone as consultant and interim CFO
Jack Cushman joined board 6 mos. ago – doctorate in hotel/restaurant institutional management; taught strategic planning at Kansas State for 2 years; been in hospitality industry for 35 years; taught management and hospitality classed at SU and Ithaca college; current Executive VP at Nice and Easy Grocery Shops – Food Service Division; speak all over the country at various event on board of various organizations in the industry
Terri Toennies – 30 years in hospitality business with Hyatt Hotel Corp; House of Blues, City Block – special event venue in San Antonio
Realized that the Oncenter didn’t have the right management staff in place; did not have people with experience
Working closely with CVB
Have put a position on in Washington who is driving convention center business – started March 1st and has received 4 very solid RFPs of groups of 850 – 1800 guests on 3 - 4 day business for years 2012, 13, 14; is looking at some things for 2016
Internal convention center sales staff can only sell 18 mos. out
Mr. Kilmartin noted that what the subsidy shows year in and year out is what the county taxpayers have to contribute to support the Oncenter. He asked what kind of economic activity has been generated to either meet or overcome that subsidy; is the return on investment overcoming and overwhelming the subsidy tax dollars. Mr. Kaufman explained that if this was a for profit business; they would look at internal operation and be able to answer it directly. However, this is a community benefit organization – not only is there the internal profitability loss, but also the external. He does not have an answer it a pure for profit world. Mr. Cushman said that if you want to turn it into something for the local citizens where the margins are better, obviously with the bowlers there is no margin – they are there to generate and stimulate the economy, which is the model. To not fund the Oncenter with the subsidy, with what ROT was intended to do, to not give it doesn’t meet the purpose for why it was built. If asking what the economic formula is to determine how much revenue is generated, to look at the bigger picture to see if it is better for the County, they don’t have that data. The CVB would determine those things; it is an economic model. Mr. Kilmartin said that there could be a model where the Oncenter is operated as a local facility, very high end catering facility; it might reduce subsidy to the taxpayers to the facility, and would probably get closer to profitability, but would also be losing out substantially on the dollars that can be generated from bowlers, conventions, ROT monies that come in, from economic activity. It is tough to calculate, but the question is do we want to be penny wise and dollar foolish. Ms. Toennies referred to the $40 million figure generated from the bowlers noting that $1.2 million is anticipated to be turned back to the County in taxes, $450,000 in ROT.
Mr. Antonacci said that the Oncenter was built with the model to go out and get visitors to come to Syracuse, leave their money and go back home. They are generated ROT and sales tax. The Oncenter was built with a subsidy in mind to go out and attract visitors to come to Syracuse.
Mr. Kaufman said that there are two issues: operating and strategic. The County needs to look at the strategic issue – is there a better way to do this in 2011 as opposed to 1990 – a lot of things can be looked at. Under the management agreement, the board is not charged with that – they are charged with operating an efficient, effective operation, but there is a major strategic issue that all stakeholders in the county need to take a look at. Now there is more competition...Turning Stone, Landmark, arena at OCC.
Mr. Lavine noted that one high concept in 1992 was that there would be synergistic effect of having a multi-venue operation; that it is time tested proposition. The versatility that the Oncenter offers is a competitive advantage. The strategic competitive disadvantage is the failure to achieve construction of an adjacent hotel. Regarding Mr. Kilmartin’s question, it is difficult to get to an empirically authoritative number, but the techniques and tools for doing that are becoming more sophisticated. If we don’t have the amenity to offer, we are not going to get the visitors.
Mr. Warner said the legislature asked the Comptroller for an audit of the Oncenter operation several months ago and thanked Mr. Antonacci for his good work. He asked if the Oncenter gets is fair share of ROT compared to all of the other venues and events around central New York that have nothing to do with the Oncenter. Mr. Cushman indicated that they don’t have the answer. Mr. Warner asked if there is any type of a study that shows exactly what goes on at the Oncenter. Mr. Stanczyk said that analysis hasn’t been done and should be. Ms. Toennies stated that she has reports showing conventions from 2007 – 2016 anticipated – room nights, the sales tax return and ROT return – they range from $600k - $900k return back to the County for conventions held in the Oncenter.
Mr. Kilmartin asked what percentage of ROT does the Oncenter subsidy represents. Mr. Antonacci said that the ROT was raised in 1991 from 3% to 5%. His opinion is that ROT was raised as a funding stream for the Oncenter. Two percent is 40% of the current ROT, well over $2 million. The idea is that they should be going out and getting overnight guests to come to Syracuse; does not believe that it will ever represent $5 million. Cleary there is a baseline drop; without any question if the Oncenter were to close, room nights will still be generated in Syracuse. It is part of the whole economic development picture. If the $2 million was allocated to a funding stream for the Oncenter; doesn’t think they have ever seen a $2 million subsidy as a request. Mr. Stanczyk said that they have never been able to prove that the generation is anywhere near $2 million; Mr. Antonacci agreed.
Mr. Antonacci pointed out:
Look back prior to Oncenter being built – War Memorial was funded with property tax revenue and net was well over $700k in 1990
1992 - Oncenter was built, ROT rate was raised and Oncenter as a unit (War Memorial, Oncenter, theaters) receive $1.8 million
2011 request was $1.2 million – to look at rate of inflation; it is not even close
Mr. Warner asked if someone needs a convention, but not necessarily the size of Syracuse, what advantage does Turning Stone have over Oncenter and what has the impact been. Mr. Kaufman said that there is a totally different business plan and formula when there is a casino attached. With a casino, they are looking at people who will come in for a convention, but will also gamble. There are some conventions where people come in and no one hits the gaming floor – that is not attractive, because the casino makes money by people gambling. Mr. Warner asked if it is known what the impact is on the Oncenter. Mr. Holder said that some convention business has been lost to the Turning Stone. NYS Fire Chiefs’ Association, for example, used to be a solid piece of business for Syracuse – it moved to Lake George and then to Turning Stone. The attraction at the Turning Stone is that it has space; it has rooms that they can give away because they make up the proceeds through gambling. The Turning Stone is part of the whole competitiveness that exists – Syracuse, Rochester, Buffalo, Rochester, Albany, Saratoga – there are a lot of choices out there. Turning Stone is one of the pieces that they are up against.
Mr. Warner asked what happens if the legislature does not approve the $1.85 million. Mr. Lavine said that the administration would have to make certain strategic decisions, particularly given the multi-venue nature of the operation. They will have to determine what happens with the theaters, War Memorial, convention center and the parking garage. Mr. Warner asked what is still out there that needs to be paid. Mr. Casper said $1.2 million at the bare minimum.
Mr. Stanczyk said that the business activity generates sales tax and ROT. Somehow have to figure out what we are getting from the operation and have an understanding. As a government, the County subsidizes many things, i.e. parks and libraries. Need to find out what the common good is; is thankful for the expertise which is now on the board. The legislature should insist that the proper metrics is applied so there is an understanding of how much business activity, i.e.- sales tax, ROT, is generated by the Oncenter. The Committee is told that there will be $7.8 million in revenues in 2012 – need to get effective reporting back on it so it can be tracked.
Mr. Stanczyk referred to the hotel and insisted that the County could and should be responsible for owning a hotel and putting that piece of the puzzle in place. It should only be done after the matrix is done to understand the business. More money has to be put into this operation now; want to get it back to status quo; is confident that the management, oversight from the board, will keep it on track. If it gets off-track, they will at least provide notification. Maybe we can finally do the right thing, which is to get a hotel to compliment it, so that it works better going forward.
Mr. Buckel said that he is very troubled by a couple of things. He referred to 2009 and an inference that this is really a question of underfunding. In 2009 the County Legislature not only gave an emergency appropriation, but the subsidy was the largest ever. It was done in the face of findings that showed that there were extraordinary gaps, errors, possibly even fraud detection. Financial controls were completely amiss. Also, there was comment made that two years wasn’t really long enough. In two years, we saved the American automobile domestic manufacturing industry and the financial industry. Not only were they saved; but most of the money was paid back. He is troubled by this “Field of Dreams” notion. He has never seen hard and fast economic data that shows what we are generating for the community. This is not true wealth generating, economic development. It is dollars that are better to have than not, but in the scheme of things, when having to decide - do we subsidize manufacturing businesses in a tight economy; do we subsidize this; what are the choices that we have to make. Without the data, the legislature is being asked to blindly accept the importance of it without a realistic sense of what is going on. Regarding the bowling convention, enormous sums of money have been spent; it is not just what limited to what has been discussed this year. It is 5 years worth of expenses is promotion and tourism and subsidies. Even based on what has been talked about today, it has generated about $1.6 million in tax revenue; which is still less than the subsidy being asked for today on top of what has already been appropriated.
Mr. Buckel said that if Oncenter were to go to a bank or institution and suggest what they needed, there is no way anybody would give money based on this — no plan, no proforma, no projections. It would be legislative malpractice to throw the money away without the kind of hard, detailed, documented, data driven work out plan, which would be required if they had to go to a private sector bank. It might be that the Oncenter is better off filing for bankruptcy and reorganizing. This budget item is not the taxpayer’s fault. Every year the budget is developed by information brought to the legislature by the Oncenter, working with the County Executive’s office and the Budget office. The sense that the County did not somehow give enough is mistaken.
Mr. Buckel said that the underlying legislation calls to subsidize, to a certain extent, but also to minimize the subsidy. This is a non-for-profit corporation, and is asking the legislature for another subsidy and an increased subsidy in the future, and there is no a plan. Without it, he can’t support this. Mr. Lavine said that he is confident that a diligent and highly competent transformation of the management and internal control regime of the Oncenter has been effectuated. The work is not completed; haven’t made a pretense that it has been. Fully acknowledge the internal control deficiency; will always be forthright. The whole operation is light years ahead of where it was two years ago – by dint of the caliber of additional board members, new management, different management culture, which has permeated the entire organization. There is more work to do in terms of the turn around, but it is a very successful turnaround in a context of very adverse market conditions.
Mr. Lavine referred to the comment regarding consideration of bankruptcy. Even if it were to be considered, it would inadvertently and unfairly call in the question of solidity to the County of Onondaga. Mr. Buckel said that he disagrees with that fully and completely. He does want to have people mislead that this is somehow a reflection on the County. It is a reflection on the type of business; the convention business. The Oncenter wants another $1.8 million; they say things have been turned around, but there is not the kind of data to plan and get arms around it. Regarding the alarmist comment that there will be doom and gloom--as a legislator he has to push back on it, as he disagrees so fundamentally. This reflects on the convention center business; it doesn’t reflect on the County, which is in the strongest financially health.
Mr. Lavine said that one result of the substantial enhancement of the internal control regime in the operation has been that there is actually an insight and are gleaning a greater clarity about where do they make money, where to they lose money in terms of lines of business, venue, expenses and controlling expenses, understanding how to proceed with business model and whether or not it needs to be changed. The inference that Mr. Buckel has left is that somehow they are wallowing around today the way they were then without acuity of their business strategy. It is not true. Mr. Buckel said that he does not doubt that; but the Oncenter brought the legislature a budget, worked with the County Executive’s office just months ago. That budget in the face of difficult times in the face of a bitter dispute among portions of the legislature about how money should be appropriated. Despite all the improvements, which he acknowledges, and the tremendous work being done, suddenly months later we are looking at another $1.2 million – something was amiss. He is not suggesting that it is the same lack of controls, but is searching for the reason. Rather than looking at what has passed, how is the legislature able to make a decision today or tomorrow without the kind of comprehensive work out plan, proformas, etc., which are required in the private sector to make this kind of decision. His fundamental concern is not to criticize, but to say he does not have enough information. Being asked to do something on blind faith; he is troubled because the amounts are staggering.
Mr. Lavine said that for the big picture one has to look at the continuum of events. There was an abject deficiency in the internal control regime of the enterprise. Such that it wasn’t known if they were making money or losing money; they could not present to the legislature and County Executive a realistic, accurate portrayal of their situation. What has occurred in the last two years – changes in management, board, procedures, overall enhancement of internal control regime, to insure insight, accountability, follow up – has put them in a position where they can be much more confident in presenting the numbers and directions they are going. It would be ludicrous to say that they have finished their work, but are committed to staying on this trajectory and seeing it through. They acknowledge, not grudgingly, that they have to be accountable to the County Executive, Comptroller and Legislature; committed to being forthright and receptive to input as to how they should make further changes. It doesn’t change the fundamental immutable fact – there are 3 important facilities that are owned by the County; have a responsibility to address their long term viable – which is what is being proposed. Mr. Buckel said that regarding working on the long-term viability, he does not have the information for today going forward that is required. It would not fly in the private sector, and it wouldn’t be responsible to let it fly in the private sector.
Mr. Lesniak said that these are all county owned buildings – if there is a filing for bankruptcy, it will affect the County. Any affect on county bond rating will triple what is being discussed here in dollars. Let’s not think or discuss bankruptcy; it is not an option. The County is not going to be in a position to have bankrupt convention center. To do business in the future, we don’t even want that type of discussion. If we close the doors today, the county is stuck with $1.2 million; talking about another $600k. The difference in this proposal from what has been seen in the past is that this is tax payer dollars vs. ROT dollars. If it was ROT and not taxpayer dollars to fund this, this discussion would not be happening. It is known that the economy is bad, the convention business is bad everywhere. The War Memorial alone in Monroe County is subsidized yearly up to $4 million. Onondaga County subsidized $1.4 million for its entire complex. The other option of closing it—we are not going to do that. Realistically, the plan that is before the committee is probably the only option at this point. There is not enough ROT to cover the subsidy that is needed. He suggested the Legislature move ahead. He sees a plan – a $7.8 million revenue generation next year; a new strategy and team concept; formulas for margins. Next year, he will hold the Oncenter to the $1.4 million – not to come back – find a way to cut the costs. He also agreed with Mr. Lavine’s comments that there has to be a hotel.
A motion was made by Mr. Lesniak to approve the resolution.
Mr. Stanczyk does not want to contemplate a bankruptcy, but agrees with Mr. Buckel -- noting the majority of members won’t be here next year. If he were not going to be here, he would be very concerned about what the work out is. He noted that resolution states that the repayment of the $850k will come from excess revenues from the Corporation. The Corporation loses money all of the time and lives on the will of the County giving them subsidies. Also, in the resolution there is money coming from fund balance, taxpayers’ dollars. The whole concept of this was that it was going to be sustained by ROT; the taxpayers would not be holding the bag. When talking about putting money in from fund balance, it is nicking the taxpayers – it is less money that can be used to provide some type of tax relief this fall and years going forward.
Mr. Kinne asked why only 85% of the internal controls are done. Ms. Toennies said that what are remaining are things that cost them money. The things that didn’t cost money – only time, effort, paperwork – are all done.
Mr. Kinne said that there is no way that the War Memorial is up to date. Like everything else the County has done with major projects, they have been on a shoestring and short sighted. The hotel should have been built – it needs to be built today and questions why it isn’t being built. Many people in the community say that government needs to be run like a business; this discussion is exactly why government can’t be run like a business. This is not a business; they are trying to bring money in. This County has failed; this Legislature has failed – the Oncenter has not been funded properly with ROT all along. It is partly because every county administration and every county legislature has always tried to take ROT and use it for other things. He referenced an example of using ROT money a few years ago to be used for chalk machines to line the fields at Hopkins Field – does not believe that had anything to do with ROT. ROT should be used to fund things like the Convention Center, Civic Center theater and War Memorial. He has trouble supporting the resolution because Oncenter has to pay it back. He doesn’t see how they will be able to pay it back. Several times there have been arguments about deals that were cut many years ago and it didn’t work out the way they wanted to; last month there was something with Hancock Filed. He can see it happening with this deal. He wants to support this. We have a convention center that should be supported. A major mistake was made by not building the hotel. To compete with other facilities, Turning Stone, something has to be done with the War Memorial.
Mr. Buckel said the word “bankruptcy” is scary – call it “a reorganization” or “work out plan”. This is a separate, not-for-profit entity that has its own liabilities, except that the County is responsibility for maintenance. The bonding agency may be more concerned about the additional subsidy being poured in without the actual plan, than it would be if a decision were made to stop right now. Life is not governed by bonding agencies; it is governed by needs of our community. He wants to support Oncenter; wants to give the $1.8 million; admires what they have done; just doesn’t have enough information to do it as a representative of the community.
Chairman Jordan said that part of the presentation references that the bowlers displaced 2011 revenue. The convention didn’t spring up in the course of a month or two – has been planned for 5 years. He is concerned that this is even an issue; that it wasn’t factored into the original budget that were presented last year and approved. If additional monies were allocated in 2009 because there were expenses that got brought forward from the original administration, why is Oncenter back again asking for additional money based upon the same carry forward from expenses from previous administration. Certainly those issues should have been accounted for and addressed when the request for subsidy was made in the 2011 budget. Mr. Lavine said that when he went back on the board, there was one nasty surprise after another. It is an unacceptable situation in any enterprise. The board has to insure an internal control regime such that it can monitor what is actually going on and make informed financial decisions. Mr. Cambareri asserted leadership to ensure a fundamental transformation of the internal control regime. An outside expert was brought in, Mike Kaufman, who put together a punch list of what was needed to be done. There is no question that prior to management and board changes, there was a situation that they did not understand what was going on; did not have an insight such that they could make informed decisions. That has been changed. He is very confident that they are in a position to make informed decisions based upon the financial data that they have generated. It is not optimized, but credo is “continuous improvement. The Finance Committee, Audit Committee and Board in total are going to continuously hold the management accountable and themselves accountable to insure that they have a financial control regime such that they can make informed decisions and avoid surprises for themselves, Executive branch and Legislature. To take a snapshot of today without taking into account the changes made from before would leave an inaccurate picture of what has transpired. The situation of today is different than the one a year ago and two years ago.
Chairman Jordan said that there were institutional problems in the past; questioned what has been done to ensure that these problems won’t be occurring in the future. Mr. Cushman said that they presented the metrics and the fixed cost dollars; will look at them month by month to make sure they are on track.
Chairman Jordan said that the resolution calls for $500,000 coming from fund balance. There is $150k owed to the City, County, different municipalities that are partners in all of this and benefitting from the operations at the Oncenter. Those accounts receivables should be waived by the City and County. It makes no sense to use taxpayer money to give it to the Oncenter and then turn around and pay a bill owed to the County or City. It makes sense to have the County and City waive those accounts receivable and reduce the amount that has to be dipped into fund balance for.
Chairman Jordan referred to 3rd and 4th quarter ROT amounts. Mr. Cushman said that they have already taken the 3rd and 4th quarter ROT.
Mr. Kilmartin asked for specification of the monies that Mr. Jordan desires the County and City to waive. Chairman Jordan said there is money owed to the County for parking $44k; City parking $80,000; Syracuse DPW $2,100; SPD $2,200; Center State CEO $5,600; Bureau of Water $12,500. The City is primarily benefitting from the economic activity – in hotels, restaurants, bars, shopping center. It is in line for the City to say that they are benefitting enormously by the economic activity generated by the Oncenter and waive $81k in parking. Mr. Kilmartin asked if the monies owed are pertinent to an agreement of some kind. Mr. Casper said that they are, per an agreement with the City of Syracuse. Mr. Kilmartin said that if there are agreements that we are bound by, there is probably an obligation to pay pursuant to them.
Mr. Kilmartin said that we can’t underestimate how poor the prior management of the Oncenter was; can’t underestimate the number of changes the current administration board has made. The composition of the board members now – they are independent, third party, A-political, professionals with a great deal of experience in this field of expertise. They have presented verbally and in writing to him all of the changes that they have made. He is certain they can impress the committee by line iteming every change they have made in terms of auditing, accounting controls, management, and employees.
Mr. Kilmartin said that the challenge for the board going forward is to demonstrate, as best as they can in showing a return on investment; what is the return on investment for the subsidy provided by the County for the Oncenter. If the return on investment is two, three, five or ten times the investment made by the County, it is a very well worth enterprise. If it is one to one or less, then there are some very hard choices to make. If the return on the investment is $1.6 million in tax revenue from the bowling conference alone, then with that single event this year, it is an awful good start for return on investment. That doesn’t take into account the economic activity generated with the bars, restaurants, businesses, shopping. The return on investment is two ways: tax revenue and economic activity.
Mr. Lesniak said that he will sponsor the resolution for $1.85 million.
A vote was taken on the motion. AYES: 2 (Kilmartin, Lesniak); NOES: 2 (Jordan, Buckel); ABSTENTIONS: 3 (Stanczyk, Kinne, Warner). MOTION DEFEATED.
5. LEGISLATURE: Chairman Rhinehart
a. Calling for a Public Hearing on the Tentative 2011-2012 Budget of the OCC
b. Amending the 2011 County Budget to Pay for the Costs of Providing Security in the County Court House (Sponsored by Mr. Rhinehart)
Move $10,00 from county general to 408 line
May not use it all – have made efforts to reduce costs - moved sessions up an hour and a half
The Clerk has a good rapport with NYS Court House Security; has developed a process on how this will take place
Have had meetings with Court Administration, Judge Tormey’s office, and Court House Security
Will be receiving a letter from Judge Pfau that states the elimination of court security overtime
Mr. Stanczyk asked if this means that if sessions go to 4;00 p.m. and are not finished that they it has to close down. Chairman Rhinehart said “no” and explained that Mrs. Maturo has a procedure in place with Court House security and will let them know by 3:00 p.m. if they will be needed after the court house closes.
Mr. Warner asked if any of this expense is reimbursable through grants form Homeland Security. Chairman Rhinehart said that he will look into it.
A motion was made by Mr. Lesniak, seconded by Mr. Warner to approve this item. Passed unanimously; MOTION CARRIED.
RFP issued for logging at Highland Forest - part of original plan that FORCON had submitted to the County in late 2008/early 2009; then logging was put on hold
Most proposals came in the $50k range, one is $75k range
Company is qualified to come in and do the cut in a sustainable fashion; RFP Committee recommend the high bidder (Gutchess Lumber)
Mr. Warner asked if the RFP was put out in 2009. Mr. Carroll said “no”; there was a lapse in FORCON’s contract that had to be dealt with. In early 2009 they finished initial review of which trees to cut. Mr. Warner said that the market has changed a lot in the last two years and questioned when Dutchess agreed to this amount of money. Mr. Carroll said that the cut will be done this summer – completed by end of season. The money will be provided to the County at the end of the cut; $5,000 will go to FORCON for managing the cut. In answer to Mr. Warner, Mr. Carroll said that the RFP went out in late February.
Mr. Lesniak asked if this was projected money in the budget; Mr. Carroll said “no”; it was a previous cut, which had been scheduled before the discussion of $100k. Mr. Lesniak said that the $100k was vetoed out of the budget - this is $75k additional that was not projected in the budget. Mr. Carroll said it is to go to pay for Highland lodge. Mr. Lesniak reiterated that the $75k is brand new and not projected in the budget; Mr. Carroll said “yes”.
In answer to Mr. Kilmartin, Mr. Carroll indicated that the entire cut is out of Highland Forest. Mr. Kilmartin asked if there has been any review of looking at all County properties. Mr. Carroll said that an RFP went out at about the same time that the logging contract went out; it solicited request for a county-wide long-term forestry management plan. There was one response; the contract should be awarded shortly. The RFP includes sustainable management; where to cut to maintain a healthy forest; how is it appropriate to cut trees to not create additional water runoff; what to do if the ash borer become problem in the County, etc. Mr. Kilmartin said that it will be an expense to have the review undertaken and then from there the County will make assessment on what to forest and when to forest. Mr. Carroll agreed. He noted that the RFP process is completed and estimated that the cost was between $10k - $15k for the largest park assessment; there were some other specifics; the whole plan cost was between $40k - $50k. It will be completed, as they decide which section to pay for – don’t necessarily have to do every facility at once.
b. Amending the 2011 County Budget to Transfer Funds for Consolidation of Purchasing Services
c. Create R.P. 01 107500 1735, Buyer I, Grade 09 @$43,016 - $47,581 effective July 2, 2011;
Create R.P. 01 107500 1746, Buyer I, Grade 09 @$43,016 - $47,581 effective July 2, 2011
Mr. Fisher explained:
In 2011 budget message, Co. Exec. proposed a consolidation of purchasing function – County Purchasing to purchase on County’s behalf, as well as any of the other 35 municipalities in the county
19 towns, 15 villages, City – eligible to enter into IMA with County
The Legislature gave authority for Co. Exec. to enter into IMA with City, but did not provide funding or roster positions to implement it.
In Dec. the Legislature approved some money and some positions – plan was that the City would continue to employ one full time and 2 part time employees on their payroll and those individuals would report to County purchasing director
At the time, were told to come back in June and ask for 2 Buyer 1 positions to be created; would also ask for funding for the 2nd six months to come from contingency acct.
In Dec., targeting a Feb or March start date. When they went to talk to the City about doing this, they were in the throes of their school budget –and school board needed to approve the consolidation of their purchasing – school district purchasing has always been done by the City of Syracuse
City School Board delayed vote – approved it in early March
County purchase director met with number of towns and villages; met with Comptroller’s office
In addition to the legislature asking Comptroller to study costs and benefits of the program, Co. Exec. office also asked Comptroller to look at costs and benefits to towns and villages
Finding that towns/villages are excited about it – savings and expertise in County avoids expenses in hiring lawyers and engineers to do bid specs
Have not started the program; have not hired anyone from City – therefore don’t have savings and cost of program to report on
Asking for creation of 2 Buyer I positions – there were 5 city employees – County was going to hire 4 of them; City was going to keep 1 full time, 2 part time on their payroll
Now want to hire 3 – have a Buyer II position in existence on roster with funding, would like to create 2 additional Buyer I’s and put two city employees into them effective July 1st.
Asking for funding to be transferred out of contingency to pay for the 2 positions
Mr. Lesniak said at budget time the legislature gave authorization to hire 2 positions, they were to come back and justify the 2 positions after they have been on the books for 6 months – show savings – and then the legislature would consider authorizing funding the other 2 positions. The positions haven’t been filled, there is no data, so why not just fill the two positions and proceed for the next 6 months from those 2 positions. Mr. Fisher said that it wasn’t approved in October as requested; Mr. Carroll said that half of them were – there was a structural problem offering half a job to the employees in the City. The job titles were approved; funding approved through end of June. They had trouble getting the City personnel to accept jobs in the County. Mr. Fisher said that there will be an opportunity in the fall to review actual data of what has happened between now and October when the 2012 budget is adopted. To get data, need to start the program; to start the program the Buyer I positions need to be created. Mr. Lesniak noted that last fall Mr. Fisher said that they would be able to start the program with two positions. He questioned why they can’t continue on that process. Mr. Fisher said that the time table isn’t what it was when they proposed it; didn’t have authorization until December. Mr. Lesniak said that even if it were started in February; there would have been some data for the last 5 months. Mr. Fisher said that they were going to start up with the City only; now going to start up with a number of towns and villages. Mr. Lesniak said that there is no concept that this will even work – taking on additional bodies, are being told the County will save money by buying in larger quantity. The towns and villages can already buy off of County contract. Mr. Fisher said that if that were enough, they wouldn’t be so interested; the County has expertise. Mr. Lesniak said that they are interested because the County will offer those engineering services and other services that are outside of buying off the County contract. Mr. Fisher said that they are interested because they will reduce their costs. The County Executive has made it clear that she sees property tax as a whole across the 35 municipalities. If we can reduce costs for towns and villages at minimal cost to ourselves; it is good public policy. Mr. Lesniak said that if the towns and villages are saving dollars, he agrees with the concept, but there is nothing to justify it. The County will pick up all city contracts, buy school buses, school supplies and everything that it doesn’t buy now and are being told it will save money – he can’t see how that will work. The discussion was held in September and October – start it for 6 months and see what kind of money it is saving before we jump in with both feet. Mr. Fisher said it is a Catch 22 – can’t start the program without the buyers; if the buyers aren’t authorized, can’t start the program. Mr. Lesniak asked why the buyers at the City can’t work in conjunction with the County buyers to do the same job on the City payroll vs. putting on them on the County payroll to show the savings. Mr. Fisher said that if it were passed in October, they would have been able to show that.
Mr. Kilmartin asked for clarification for the funding authorizing in December. Mr. Fisher said that the legislature authorized enough money to hire two people from the City as of January 1st – because there wasn’t an IMA, we didn’t hire anyone. In answer to Mr. Kilmartin, Mr. Fisher indicated that the IMA is not in place; the County Executive won’t sign an IMA without the funding to carry out the contract. If they don’t have the buyers, they can’t carry out the work that the contract requires. Mr. Kilmartin asked if the IMA is ready to be signed. Mr. Fisher said that there are some technical details having to do with the IT work that the County is requiring the City to spend money when they interface their financial system to County Purchasing. The Towns and Villages would have their own IMA’s with the County. Mr. Carroll said that the IMA should be scheduled to go before the Common Council in the next week or so; the start date was supposed to able July 2nd. Over the course of the next month the IMA will be in place before people are hired.
Mr. Kilmartin suggested that there are some salary savings from January 1st – June 30th. Mr. Fisher said that there are some, but also have lost some savings. Money was taken out of departmental budgets because they anticipated savings when they bought things – matched the cost reductions from the savings to the expenditures in the roster positions. Not ahead in terms of salary savings, because departments haven’t realized any savings.
Mr. Kilmartin referred to the work plan; is there an analysis about products/commodities that are thought to produce savings; are there examples, percentage of savings or dollars. Mr. Carroll said that an initial set of commodities has been targeted for instant savings; there are a lot of IMA negotiations going on. Mr. Fisher said that when they met in February with the Comptroller, he had already done a lot of thinking on how to measure it. Mr. Kilmartin asked if the initial analysis came out to be $360k embedded in this year’s budget for potential savings; Mr. Carroll said “yes”. Mr. Carroll explained that they are absolutely confidant in this being zero cost to the County. Some savings are expected.
Mr. Kilmartin asked for an org chart analysis. Mr. Carroll said that right now there are 16 people in Purchasing and adding 3 from City. There is staff that does contracts; staff that does buying that doesn’t require contracts. Inside of that they are divided by commodity. There is 1.5 spec writers now; will have two under the current plan. Employees from the City come over – some of their needs are specific, i.e. fire equipment. Some commodities will be moved over from the city employees, and their time will be freed up to focus on some other added value services. In answer to Mr. Kilmartin, Mr. Carroll said that jobs were offered to all 5 City employees; the 2 part time employees have retired and have turned down the County offer.
Mr. Warner said that the purchasing has been addressed for 20 years; in this particular case, the benefits will far outweigh the risks. If the risks prove to be true down the road, it can be modified.
Mr. Warner said that he will sponsor items 6b and 6c. Mr. Warner made a motion to approve items 6b and 6c, seconded by Mr. Kinne.
Chairman Jordan noted that he is not supporting the two resolutions. When this proposal was originally presented, essentially the County was not charging any type of administrative fee because of the volume discount being realized. He reviewed the agreement, and felt that it went beyond what was presented. It included purchasing items that the County doesn’t purchase; no volume savings would be realized because we don’t buy those items in the first place. It included a service to municipalities of disposing surplus property. It provides for the County indemnifying participating municipalities. He suggested changes; they weren’t taken into consideration. He feels there should be some type of administrative fee for municipalities.
Mr. Warner asked when the legislature can expect answers to concerns; Mr. Carroll said that he expects to have numbers for the budget presentation.
Mr. Lesniak questioned why these people would come to the City under the same 6-month concept. Mr. Carroll said that they have agreed to it; the last time there was a process where the County was talking about doing the operation in piecemeal – having to come back in front of the legislature at various points. There was a real concern that it wouldn’t get far enough. Now because the next time he asks for money it will be during the budget presentation, there is a sense of a holistic view. Mr. Lesniak said should this pass, we are talking about looking at 3 or 4 months of performance. If after the 3 or 4 months performance, a significant amount of savings can’t be shown, and the legislature decided to cut those positions, what happens to those people – do they go back to the City. Mr. Fisher said they would be laid off; City would decide how to do their purchasing. Mr. Carroll said that the City would contract with the County for purchasing services. The City is getting out of the business of doing it. The contract is more than one year; has a 30 day out. Mr. Lesniak said that if he were one of the 3 employees, he would have the same concern as before. Mr. Fisher said that they don’t have jobs at the City any more. Chairman Jordan said that there was more assurance at the beginning of the year because at least money would have been allocated and set aside for the remaining 6 months. With this, they could be in there for 6 months; if it is not approved in the budget, then they are done.
Mr. Lesniak said to avoid the risk, why can’t the IMA say that we will consolidate the purchasing without taking over these positions for the next 6 months with the City. They stay city employees but work in conjunction with County Purchasing to do all the purchasing and then prove the savings to the Legislature. He doesn’t know why they can’t be done vs. putting the employees at risk – doesn’t know why the agreement can’t be done without moving the bodies from the City to the County. Mr. Carroll said that this project has been tried a number of times. If the County or City decides the terms or conditions are not OK, then it fails. The reason why it has to be done together, is that the proper service cannot be provided without the staff. If the staff is in two locations; it is not going to work. If they stay City employees, they have superiors at the City that they answer to – that is not consolidation. He referenced the fire department as an example – the only ways he gets the entirety of the knowledge base to provide services to towns and villages is to get experts in. In answer to Mr. Lesniak, Mr. Carroll said that buying for the City School District has to go through the City. The City employees coming over will already have expertise in the school district purchasing. Mr. Lesniak said that the County doesn’t buy school supplies now; Mr. Fisher said that the County buys paper, supplies, and a lot of things that office workers buy. Specialty items, i.e. buses, text books, would be addressed by the increased staff. Mr. Fisher said that in January they were going to just buy for the City; the plan now is that whoever wants in can come in. Mr. Carroll said that in every town or village, that they have talked to, is asking for the County to set the stage and start dealing with IMAs – have had nothing but positive feedback. Has a concern about charging them a fee; the County’s investment will be covered by savings. To charge the towns/villages a fee is profiting off of the County services. Mr. Glacier said that he has talked to towns/villages at length; there is an extreme amount of interest. Creating barriers for town and village involvement via fees or circumstances to take into consideration would be a mistake – it would cause more problems than it would benefit.
Mr. Kilmartin asked if the IMA can be drafted such that the terms and conditions provide for how the County and City will work together; how they will share savings; how they will execute on bids, RFP, and all details involved with Purchasing; locate the employees at a common location - Civic Center. Everything would remain as contemplated before, with the sole exception that those 3 people remain as City employees. Mr. Fisher said that the plan presented to the City after the budget was that the one full time employee and 2 part-time employees would stay on City payroll through June 30th. The City agreed to that. He believes their budget for next year doesn’t include funding for those individuals.
Mr. Buckel does not want to discourage the innovation trying to be done here. However, Purchasing set a bench mark for the Legislature, $360,000; have described how it will happen, what is needed. He does not want to play games with anyone’s livelihood; it has to work and wants to encourage it. He is willing to hold Mr. Carroll accountable to success as well as failure.
Mr. Carroll said that there is no question in his mind that this is cost neutral. Beyond that he can’t guarantee a percentage of savings, but would not come back and ask for additional titles if he wasn’t confident.
A vote was taken on the motion. AYES: 3 (Warner, Buckel, Kinne); NOES: 2 (Jordan, Lesniak); ABSTENTIONS: 1 (Kilmartin). MOTION CARRIED.
a. Air One Informational – Chief John Balloni
Distributed copies of letters (on file with Clerk); read from portion of Dr. Fullager’s letter, University Hospital; sited portions of a letter from Frank Fowler, Chief of Police, SPD
Recent negative publicity indicates duplication of services – believes Air One provides unique services unduplicated in the County
Facts provided by data from IT department; not Sheriff’s Dept. Data: 2009 County took 587 calls, State took 32; in 2010 County substantially reduced number of hours of flying and took 396 calls, State took 27; 2011 to date County took 94 calls, State took 6
State Police are facing a worse budget crunch than Onondaga County – to think they will pick up some slack for Onondaga County is sorely mistaken
State will do what they can for us; as they always have; they are a good unit
Provided a lot of information – have put in 100’s of hours into saving this program; some legislators have indicated that it is not enough. It is important part of their job – losing sleep thinking they will lose this lifesaving resource
Have made an earnest attempt to do everything this legislature has asked of them
Projected numbers, hard to project major renovation at 5,000 hr overall, $664,000, currently flying 200 hrs/year – to get to the 5,000 hr overhaul it will be another 8 or 9 years
Major overhauls being paid for out of asset forfeiture
3 assigned personnel (had 4 – 1 brought back to patrol, as he was a pilot in training and not flying enough hours to train anymore)
The resolutions have no sponsor; if a legislator can’t sponsor the positions, then create them in the budget. Just had opportunity to file a COPS grant for 4 positions for this program. With Senator Schumer’s support that there is reasonable hope of getting the grant and eliminate cost to the County for those positions. In the interim, have money in the budget, based on not filling positions to carry the program through the end of the year.
35 years ago the legislature started funding the Air One program – at that time SPD had an air program – one of the earliest consolidations – City ended their program and went with Air One; added fire and EMS components by adding size and compatibilities of the ship as it progressed forward. It is one service for over 100 service agencies in Onondaga County
There is discussion about undoing an area of county consolidation that has tremendous success.
Project Lifesaver – 70+ people in Onon. Co. has the bracelets and Air One has capability to find lost Alzheimer’s patients, autistic children, people with dementia. It can be done on the ground, but not as effectively and quickly.
Not professional fundraisers – had no concept of building a foundation – job is saving lives
Looking for support from the legislature on top of 35 years of support.
Asked to do things during budget process; made every earnest attempt to do them. A number of legislators said that if they do them, they will fund the second half.
Not asking for money out of surplus; asking for money that the Legislature budgeted, that is in contingency
Mr. Buckel noted that he supported the helicopter in the fall; wants to support it. On a pace to do 200 calls this year; compared to almost 600 calls 2 years ago; asked what is being done different. Chief Balloni said that they were flying more hours then; being in the area and being more available is different than having a ship that has to be called into a service. Doing the same types of calls; doing less of them. Captain Pellizzari said that if there is a limited amount of hours available, more diligent triage has to be done. If a call comes in for a burglary alarm and all circumstances considered, they might have to decline that call and conserve hours for a more critical call. Also, as not being airborne as often, not going to be able to make a difference in a call by the time they launch and get up. Chief Balloni said that they intentionally held back some hours of flight for the summer – activity in city goes up significantly in the summer; fly more for City Police in summer months. Mr. Buckel said that the first 5 months may not be reflective of the whole year; Chief Balloni agreed.
Mr. Kilmartin asked if within the range of the cut back, can any particular instance be pointed to where a crime, apprehension, or trauma victim was not serviced in another way of responding. Al Kalfass, WAVES, said that 6 years ago the aircraft was staffed 7:00 a.m. – 2:00 a.m. – that hasn’t happened in the last two years. Data is just being put together on the key times of the medical issues. It is now known that medical call volume for air medical transfer peeks out between 2:00 p.m. and midnight. From it not being available during the day, 7:00 a.m. – 4:00 p.m., medevacs are being missed. Chief Balloni said air medical is the smallest part of their mission; can do if for times they are available and it saves lives.
Mr. Buckel asked if there is any demonstrated failure to serve the community in crime, traffic, trauma or medical response because the hours have been limited. Of the 94 calls, is there anything that couldn’t be done by other means if forced to; is Air One the unique sole service provider for these calls. Chief Balloni said that there are other ways to provide the service – go by ground when can’t go by air; some people will die. They can search for suspects using people on the ground and K-9; can do all these functions – can’t point to a specific case – can’t measure these things in that kind of data way.
Chief Bottsford said that the police and deputies in Onondaga County respond to crimes in progress routinely. The mere fact that Air One is not in the air means that police officers and deputies on the streets do not make a request for Air One. It is hard to quantify what they don’t do because they are not there for the assist. The flight hours have been reduced so much, that they just aren’t there as often as they need them.
Mr. Lesniak asked of the 94 calls, are any out of county. Chief Balloni said that a report is submitted monthly to the legislature. Captain Pellizzari said that it depends on the data dump – they did do some out of county calls during that time. Chief Balloni said that out of county flights were not included in this data dump; the 94 calls were in county. In answer to Mr. Lesniak, Captain Pellizzari said that generally speaking out of county flights are about 10%.
Mr. Lesniak said that State police numbers are also down; Chief Balloni said that they are flying with one pilot most of the time, strictly day time.
Mr. Lesniak referred to major overhauls, projected $350,000; the last major overhaul was $600k+ – why such a drop from 2005 to 2012. Chief Balloni explained that they are different overhauls – a 3,500 hr. overhaul vs. a 5,000 hr. overhaul. Each overhaul is a different part of the ship, which basically gets checked over and re-built, which is why these ships last a long time. Safety, combined with longevity, is the reason for the overhauls. It is difficult to project when overhauls will be done, as it is based on the amount of use.
Mr. Lesniak said that at budget time last Sept./Oct., the Sheriff’s Dept. said that they would form a foundation; he asked when the paperwork was filed for the foundation.. Chief Balloni said March 31st. The first thought was that they didn’t have a clue what they were doing in any of the areas – should hire consultant. Went through RFP process; received costs, and decided there was no funding for it. They re-evaluated and decided they had to move on it because of the concern with the legislature; they received help from Mr. Antonacci and they got it filed. They are waiting to file the IRS tax information; it is prepared and ready to go; there is another $850 check that goes with it. They can start fund raising now. Mr. Lesniak said that the legislature said “show us significant movement” and in essence March 31st is when the department started. Chief Balloni said that he respectfully disagreed. Mr. Lesniak questioned if the call should have been made to Mr. Antonacci’s office to begin with. Regarding fundraising; every fire department is a fund raiser. There are letters from Upstate; would the Upstate Foundation put some money into this to keep it moving; were they asked for money. They have been a strong supporter of the program. Chief Balloni said that Sheriff’s Dept. devoted much time and effort for all of things the legislature asked them to do; they did not cover every base. He believes people will die; asks that the Legislature give them a chance to go ask and finish the job they have started and have worked very hard at.
Mr. Lesniak said there is no resolution, as no one was willing to sponsor one. He asked how much is being asked for now. Chief Balloni said that they can get by without approximately $150,000 in personnel cost – allow enough time to get the program running – the program has proven value. Mr. Lesniak said that he understands that the medevac certification on being able to bill is a process. He asked, with Sen. Schumer’s support, when it can get done. Chief Balloni said that in Public Safety Committee he reported August 31st. With Sen. Schumer’s support, they might be able to hear sooner. Mr. Lesniak said that by the time any budget presentation would be made, the Foundation would be all done and the medevac would be all done. Chief Balloni said that they will make a reasonable attempt to get them all done; will give the facts as they exist at that time. There is no reason that the Foundation wouldn’t be done at that time. Mr. Lesniak noted that Chatauqua County has gotten very good at it – approx. $120k in their foundation. Chief Balloni said that Chautauqua was using the hospital’s foundation with the hospital’s support also – paying $360k towards their helicopter program. They have gotten good at it and are working with Onondaga County.
Chief Balloni said that they have made some projection. Mr. Lesniak said that one is using asset seizure funds for the overhaul. Chief Balloni said they have deemed it an appropriate law enforcement use.
Mr. Kilmartin asked what is being asked for now and asked about the grant process. Chief Balloni said it will get filed tomorrow and expect to hear on it in October. Chief Balloni explained that they have number of vacant positions, which have not been filled; have salary savings in existing budget to fund these positions and continue function to the end of the year. In answer to Mr. Kilmartin, Mr. Schuster reported that there are 7 vacant funded positions currently. The items that they are asking to be funded are for maintenance, operational support and training – $198,206. Mr. Lesniak asked for the balances in those accounts associated with maintenance, fuel for the helicopter at this point. Chief Balloni said that they will look at it.
Mr. Kilmartin referred to the number of calls this year – categorize the calls by response from Air One program from emergency calls, training and non-emergency calls. Captain Pellizzari said that training would not be included in the numbers. In terms of prioritizing, they are going to be somewhat of high priority calls: traffic pursuits, shootings, etc. – to a mid level priority call: i.e. burglary alarm on a large building needs a roof check. Mr. Kilmartin said that the 94 calls for 2011 – are they the emergency calls, serious public safety issues; does it include discretionary flights, similar to Homeland Security Captain Pellizzari said that they would not be included in that number. Chief Balloni said that they would be logged, but not included in the number. Capt. Pellizzari said river checks, water ways, flooding – would not be included. The data sheet only provides dispatched calls. Mr. Kilmartin asked for the total number of flights; Capt. Pellizzari said they can provide the number – there could be two or 3 calls during one flight. Mr. Kilmartin said that he is trying to get a sense of how many times the helicopter is in the air for what could be described as discretionary. There was discussion at Public Safety Committee about Homeland Security checks – he is sure there is an importance of them. He questioned if the discretionary calls can be suppressed to leave more time and more dollars to make certain the helicopter is going out as frequently as possible for emergencies. Capt. Pellizzari said that is exactly what they have done – right now the number of hours that are planned for this year is about as lean as it can get and still do the job. The discretionary flights are way down. Training is way down; can’t train a new pilot at this point. Envisions that going forward will have to rethink what is done for pilots – probably will not be able to develop our own pilots any more.
Mr. Kilmartin asked if there is any more information on the foundation, fundraising, plans, execution. Chief Balloni indicated that they don’t have any more information. Mr. Kilmartin said that it looks like a lot of progress had been made on the FAA application. In terms of the foundation, some legislators might have a concern that there has been an 8-month block of time – looking for calls to hospitals, sit downs with hospitals, potential pledges, sit downs with fire department and other counties, letter of intent with respect to other counties for a contribution. It would give everybody a little higher level of comfort. Chief Balloni said that they need an executive director – arranging for meetings. He has spoken to someone who will basically volunteer 40 hours a week until they can afford to hire someone to do it. To be successful, it has to be done almost full time. Air One is very important to the Sheriff’s Dept., but it is a tiny fraction of what they do in a day – custody, police services, and other things. He spoke to the Sheriff of Madison County and indicated that they will be asking them for financial support.
Mr. Lesniak asked if the flight school for pilots has to be done in the 6 month period; Chief Balloni said “yes“.
Capt. Rinella said that he is involved in a capital campaign for not-for-profits and they have professional fundraisers. One of the things they have to have it something to contribute to. Unless the legislature funds Air One for the next 6 months, they can’t go to any organizations, fire service or EMS as ask for funding. They have made a lot of progress in 7 months. They have dealt with the FAA, IRS, have Senator Schumer on board; are fast tracking this as much as they can, but it is a process. Air One has been around for 35 years; he would hate to see for the efforts that they have made, not to fund it. Give them a chance to have the process fulfilled and do what they can to minimize the cost to taxpayers of the County. It is a vital public safety tool; one of the primary responsibilities of government is public safety. If people aren’t safe, then none of the other things that we spend money on matter.
Mr. Warner asked for a list of all the supporters of this program.
Mr. Warner said that coming from a police background, he is inclined to support this for the next 6 months. There is not a resolution here today. The guidelines have been given. If the Sheriff’s Dept. gets to the Legislature at budget time, and does not have these things in place, he would guess that the helicopter will be gone. He feels that the department deserves a chance, and will support the resolution.
a. A Local Law Establishing a Grant Fund for Towns, Villages, And Fire Districts Located Within Onondaga County to Explore Opportunities for Shared Services (Sponsored by Mrs. Tassone)
b. Amending the 2011 County Budget to Provide Funding for Towns, Villages and Fire Districts Located Within Onondaga County to Explore Opportunities for Shared Services (Sponsored by Mrs. Tassone, Mr. Lesniak, Mr. Meyer)
Mrs. Tassone said that this is a program that will establish grant funds for towns, villages and fire districts that want to do it to explore studies for shared opportunities. Municipalities want to lower their taxes and want to do it while maintaining a quality of service to their constituents. The grant is for up to $5,000 per study, not to exceed 50% of the cost of the study. Applications will go through the County Executive’s office.
A motion was made by Mr. Kilmartin, seconded by Mr. Lesniak to approve item 8b.
Mr. Buckel asked to find a way for the State to fund this – have the town assign its right to reimbursement for the grant or somehow run it through the State. Mr. Lesniak said that some of the programs for grant funding from the State don’t qualify for the study portion. They qualify for consolidation but not the shared service.
Chairman Jordan said that the local law doesn’t say that the funds are limited to $25,000. Mrs. Tarolli explained that the local law is subject to appropriations.
A motion was made by Mr. Lesniak to discuss pending litigation matters as follows: 1. Ridley Electric Co. Inc. V. the County of Onondaga; 2. Janice E. Burke V. Cicero Police Dept.; Deputy K. Kruger, Deputy for Cicero Police Dept.; Deputy Bollinger, Deputy For Cicero Police Dept.; Deputy Wafer, Deputy for Cicero Police Dept.; Gillette Road Middle School; and Audrey Gangloff, Principal of Gillette Road Middle School; 3 John C. Penny V. the County of Onondaga, seconded by Mr. Warner. Passed unanimously. MOTION CARRIED.
A motion was made by Mr. Lesniak, seconded by Mr. Buckel to exit executive session and enter regular session.
Authorizing the Settlement of the Action Filed with the United States District Court, Northern District of New York, of Janice E. Burke v. Cicero Police Department; Deputy K. Kruger, Deputy for Cicero Police Department; Deputy Bollinger, Deputy for Cicero Police Department; Deputy Wafer, Deputy for Cicero Police Department; Gillette Road Middle School; and Audrey Gangloff, Principal of Gillette Road Middle School
Authorizing the Settlement of the Supreme Court Action of John C. Penny v. the County of Onondaga
Authorizing the Settlement of the Supreme Court Action of Ridley Electric Co., Inc. v. the County of Onondaga
A motion was made by Mr. Lesniak, seconded by Mr. Warner to approve all three items. Passed unanimously. MOTION CARRIED.