FINANCE & PHYSICAL RESOURCES COMMITTEE MINUTES. Tuesday, July 15, :30 a.m. Board Room - County Administration Building
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1 FINANCE & PHYSICAL RESOURCES COMMITTEE MINUTES - 8:30 a.m. Board Room - County Administration Building MEMBERS PRESENT: Chair Richard VanderMolen; Commissioners Jack Boelema, Dick Bulkowski, Gary Rolls, Harold Voorhees, James Vaughn, Art Tanis, and Fritz Wahlfield. MEMBERS ABSENT: Commissioner Harold Mast (excused). ALSO PRESENT: Administrator/Controller Daryl Delabbio; Assistant Administrators Wayman Britt and Mary Swanson; Assistant Corporate Counsel Linda Howell; Management Analysts Matthew VanZetten, Jennifer DeHaan, and Deb Kauffman; Purchasing Manager Jon Denhof; Fiscal Services Director Bob White; Deputy Director of Fiscal Services Stephen Duarte; Budget Coordinator Marvin VanNortwick; Facilities Management Director Bob Mihos; Human Resources Director Donald Clack; Human Resources Manager Marilyn Beemer; Sr. Human Resources Specialist Jim O Connell; Labor Relations Attorney Tom Drenth; Director of Parks Department Roger Sabine; Business Manager for the Parks Department Bob Papp; District Manager for Dept. of Human Services (DHS) Savator Selden-Johnson; Administrative Services Manager for DHS Carol Jensen; Children s Protective Services Mgr. for DHS Sandy Harmon; and Mary Schoen of DHS; Prosecutor William Forsyth; Attorney with Prosecutor s Family Law Division Jack Imhoff; Director of Information Technology Craig Paull; County Clerk Mary Hollinrake; Undersheriff Jon Hess; Director of Community Development and Housing Commission Linda Likely; Citizen running for County Commissioner Jim Talen; Representatives from BDO Seidman Larry Oberst and John LaFramboise; and Senior Administrative Specialist Sandra Winchester. NEWS MEDIA: Rick Wilson, Grand Rapids Press; and David Czurak, Grand Rapids Business Journal. Mr. VanderMolen called the meeting to order at 8:30 a.m. I. PUBLIC COMMENT None. II CONSENT AGENDA a) Approval of the Minutes of June 17, 2008 b) Auditing of Checks and Purchase Order Activity See Attachment A Road - $1,308, Warrants # #52945 for period ending June 25, 2008 Road - $2,201, Warrants # #53152 for period ending July 9, 2008 c) Community Development Report on Contracts Awarded May 2008 d) Prosecutor s Accept FY 2009 Title IV-D Cooperative Reimbursement Grant Bd. 7/24 e) Sheriff Accept 2008 Superfund Amendment and Reauthorization Act (SARA) Title III Grant and Budget Amendment Bd. 7/24 f) Various - Bid Awards
2 Page 2 g) Various CIP Expenditures Mr. VanderMolen indicated that item IIe is pulled from the agenda. presented. Mr. Wahlfield moved to approve the remaining items on the Consent Agenda as Supported by Mr. Tanis. III. BDO SEIDMAN 2007 AUDIT REPORT Mr. Delabbio stated that each year an audit is conducted of the County s financial statements. Representatives from BDO Seidman are present today to discuss the financial report for the year ending December 31, He introduced Mr. Larry Oberst, partner with BDO, to discuss the report. Mr. Oberst began by stating that he has been involved with the County s audit for the past 15 or16 years. He stated that there have been significant changes in what is required to be communicated to the Board based on Statement on Auditing Standards (SAS) 114 The Auditors Communication With Those Charged With Governance. The Finance Committee has been determined to be the auditing oversight Board for the County. Mr. Oberst then reviewed the Annual Management Representation letter, which is now required to be shared with the Committee. He indicated there is nothing to be concerned about in this letter. Mr. VanderMolen noted the section on Independence and questioned how they ascertain independence. (Mr. Bulkowski arrived at this time). Mr. Oberst explained that nationally, the professionals in the firm have to go through a thorough, independent check. In the Grand Rapids office, an independent database is reviewed. The audit team must sign documents indicating they are independent to Kent County. Mr. Oberst then turned the presentation over to Mr. John LaFramboise, Audit Manager with BDO. Mr. LaFramboise explained Kent County once again received a clean opinion, which has been the case for a few years now. He went on to review the financial statements with the Committee. He noted that in 2007, the County implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pensions. The County currently provides postretirement healthcare benefits and previously reported them on the pay-as-you-go method. However, Statement No. 45 now requires the County to report Other Post Employment Benefits on the accrual basis.
3 Page 3 Mr. Oberst referred the Committee to the Management Letter dated June 16, 2008, addressed to the Board of Commissioners. He indicated there are no material weaknesses in the County s internal controls; the system in place at the County is sufficient. However, a couple of recommendations were made and they were discussed with management. Mr. Delabbio stated staff always takes the recommendations seriously. He added the recommendations this year are minimal compared to previous years and also compared to other units of government. Mr. Oberst agreed. He added that the Fiscal Services Department staff is great to work with and they are very cooperative in making adjustments to their procedures if needed. He thanked them for their assistance in completing the audit process. Mr. Tanis moved to receive and file the 2007 audit as presented and to recommend approval to the Board of Commissioners. Supported by Mr. Boelema. IV. HUMAN RESOURCES LABOR AGREEMENT ASSISTANT PROSECUTING ATTORNEY ASSOCIATION Mr. Delabbio stated approval is requested to recommend to the Board of Commissioners a three-year labor agreement for the period January 1, 2008, through December 31, 2010, between the County of Kent and the Assistant Prosecuting Attorney Association (APA). This item is proposed to go to the Board on July 24, A summary of the request follows. The Negotiating Committee recommends approval of a three-year labor contract with the Assistant Prosecuting Attorney Association, representing the Assistant Prosecuting Attorney I, Assistant Prosecuting Attorney II, Assistant Prosecuting Attorney III, and Senior Attorney. Wages will increase 2.0% effective January 1, 2008, 1.0% effective July 1, 2008, 2.0% effective January 1, 2009, 1.0% effective July 1, 2009, and 2.25% effective January 1, The total addition to base salary costs over the life of the contract is $554,845. The total addition to wage-based benefit costs is $74,978. The total base wage with the scheduled increases is approximately $3,390,000. The total three-year increase to salary and benefit costs is $644,879. The agreement includes that the same health insurance, prescription drug plan, and premium contributions will be in effect for members of the UAW bargaining unit.
4 Page 4 The proposed contract has been ratified by the membership, which includes approximately 37 full-time employees. Funds are available in the 2008 adopted budget to provide for 2008 retroactive current year costs. Additional monies to provide for future contract increases will be included in the 2009 and 2010 recommended budgets. Mr. Wahlfield moved to recommend to the Board of Commissioners approval of a three-year labor agreement for the period January 1, 2008, through December 31, 2010, between the County of Kent and the Assistant Prosecuting Attorney Association (APA). Supported by Mr. Rolls. Mr. Voorhees asked if this group is contributing to their health insurance. Mr. Delabbio answered yes, they are. Mr. Don Clack, Director of Human Resources, stated that health insurance is one of the biggest issues in negotiations. As of today, all full time employees are contributing 10% to their health plan. The County is trying to come up with a plan for all of the employees, and this group has agreed to the same as what the UAW bargaining group will get. V. HUMAN SERVICES/FISCAL SERVICES DEPARTMENT OF HUMAN SERVICES CHILD CARE BUDGET AMENDMENT Mr. Delabbio stated approval is requested to recommend to the Board of Commissioners to appropriate an additional $1,483,893 to the Department of Human Services (DHS) Child Care Fund. This item is proposed to go to the Board on July 24, A summary of the request follows. The DHS Child Care Fund operates on a fiscal year beginning October 1 and ending on September 30. The FY 2008 budget was adopted by the County Board of Commissioners on September 27, During FY 2007, DHS Child Care expended slightly less than $9.8 million. For FY 2008, the department requested funding of $11.8 million, which represented an increase of 20% over prior year actual. The County Administrator/Controller recommended, and the Board adopted, a budget of $10.1 million. This represented an increase of 3.5% over FY 2007; by comparison the County FY 2008 General Fund appropriation increased 0.7% over FY At the end of the FY 2008 second quarter, the DHS Child Care Fund s, expenditures were up 23.9% over the same period in FY 2007, while the budget provides for an annual spending
5 Page 5 increase of 3.5% over prior year actual. DHS has since provided an updated forecast of expenditures, for FY 2008, in the amount of $11.6 million. This represents an increase of 18.6%, or $1.8 million, over FY 2007; and an increase of 14.9%, or $1.5 million, over the FY 2008 adopted budget. DHS is requesting an additional $1,483,893 be appropriated to the FY 2008 DHS Child Care Fund. The County Administrator/Controller recommends $241,947 from the County s Unreserved/Undesignated General Fund balance, $500,000 from the Circuit Court Child Care Fund, and the remaining $741,946 from the State of Michigan. Because Circuit Court officials have taken significant steps to continue to provide the same level of service while working diligently to restrain spending, it is able to reduce its total budget by $900,000 to make $500,000 in General Fund support available to DHS Child Care. The cost is $1,483,893 and the funding recommendation is as follows: Transfer $500,000 from the FY 2008 Circuit Court Child Care Fund budget; transfer $241,947 from the FY 2008 Unreserved/Undesignated General Fund balance; and accept $741,946 from the State of Michigan. The current Unreserved/Undesignated General Fund balance is $12,715,421. Mr. Vaughn moved to recommend to the Board of Commissioners approval to appropriate an additional $1,483,893 to the DHS Child Care Fund. Supported by Mr. Wahlfield. Mr. Rolls applauded Circuit Court s persistence to restrain their spending. Mr. Bulkowski referred to a memo from Andy Zylstra explaining the reasons behind the request for additional funds. One of the items noted are changes in Children s Protective Services law and accompanying policy. He asked for additional information on the change. Ms. Savator Selden-Johnson, District Manager for Dept. of Human Services, explained the change was State-wide. She stated that the focus is much more on child safety and also on younger children. The policy changes have increased the incidences of going out to investigate. Another change made by DHS is in the foster care policy, which stipulates that youth will be eligible for continued funding for foster care until the age of 20. Funding for cost of care ages 18-20, are funded with County Child Care funds. Ms. Selden-Johnson continued by explaining that they found that 18-year olds exiting the system do not have positive results. They hope to invest more in their lives with the goal of having them finish high school and possibly start college. dollars. Mr. Bulkowski noted it seems the shift is more to the local level in terms of Ms. Selden-Johnson stated they are in partnership with the County and letters to the State office may be helpful.
6 Page 6 Mr. Wahlfield asked what happens if the $742,000 is not paid by the State. Mr. Delabbio replied this is a cost-sharing venture with the State of Michigan and they are required to pay their share. Mr. VanderMolen questioned what is happening that is causing the increases. Ms. Selden-Johnson explained that in 2007 they saw a slight decrease in referrals for investigations. Presently, however, she turns to the state of the economy where more and more families are struggling with poverty. This contributes to neglect and abuse of children, an increase in mental health issues and alcohol abuse, which brings more families to their doors. Mr. Selden-Johnson also noted that the State staff meets with the County partners on a regular basis and recommendations are made to the State offices. Mr. Delabbio indicated that there had been a lawsuit pending against the State regarding its handling of child welfare cases. The case has apparently settled, and there is an agreement that the State entered into. Apparently Kent County will be one of five counties whose child welfare activities will be managed by a person who will be hired by and report directly to the State DHS, rather than the local office and the local director. Staff is in the process of reading the agreement and will be meeting to discuss its impact on Kent County and he will report back to the Board when staff has a better handle on the matter. VI. PARKS CIP REQUEST MILLENNIUM PARK MEIJER TRAIL NETWORK Mr. Delabbio stated approval is requested to recommend to the Board of Commissioners to establish the Fred Meijer Millennium Park Trail Network Capital Improvement Program project, and to appropriate $5,470,200 from private sources for the purpose of developing the trail network at Millennium Park. This item is proposed to go to the Board on July 24, A summary of the request follows. The Millennium Park Master Plan approved by the Board in November 2006 included an extensive trail network within park borders when public land holdings could support the necessary trail connections and funding could be secured. On December 13, 2007, the Board approved a purchase agreement for approximately 111 acres at the center of Millennium Park that connects the park s recreation core to extensive county holdings in the eastern half of the park, allowing for development of the trail system. Private gifts and grants totaling $5,470,200 have been committed to the Kent County Parks Foundation for the project from various sources to cover the entire estimated cost of developing and improving more than 16 miles of trails within the park.
7 Page 7 Construction is planned to take place over three years. The cost is $5,470,200 and the funding recommendation is to accept funds from the Kent County Parks Foundation. Mr. Voorhees moved to recommend to the Board of Commissioners to establish the Fred Meijer Millennium Park Trail Network Capital Improvement Program project, and to appropriate $5,470,200 from private sources for the purpose of developing the trail network at Millennium Park. Supported by Mr. Vaughn. these trails. Mr. Rolls asked if there is a formula or method for repair and maintenance of Mr. Sabine replied that their experience with Kent Trails has shown the cost for repair and maintenance has been relatively minor. However, this type of cost would come out of the Parks Operation and Maintenance fund. Mr. Tanis said he had one comment it s about time! VII. UPDATED GENERAL FUND FINANCIAL FORECAST JAIL PER DIEM FEE Mr. Delabbio provided the Committee members with a memo and spreadsheet with updated general fund financial information. A copy of this information can be seen as Attachment B to these minutes. Fiscal Services Director Bob White reviewed the details of the memo with the Committee. He noted that any reductions in the current fee setting methodology regarding the housing of inmates (jail per diem) will require additional reductions in existing County services, increased appropriations, or a combination of both. (Mr. Wahlfield left the meeting at this time for another commitment). August. Mr. Vaughn asked when the millage would take effect if the millage passes in Mr. White said it would take effect in Mr. Delabbio noted that Chair Roger Morgan s proposal to the cities regarding jail per diem would take effect only if the millage passes.
8 Page 8 increase. Mr. Tanis stated it is important to point out that the millage is a renewal; not an Mr. Bulkowski asked if the millage vote could be brought back for a vote in 2009 if it does not pass in August. Mr. White answered yes. However, there would have to be a special election, which costs money. County Clerk Mary Hollinrake added the cost of such an election could be as high as $250,000 depending upon the date. Mr. Vaughn asked if Commissioners can campaign for the millage. Assistant Corporate Counsel Linda Howell answered yes, individual Commissioners can campaign. However, as a Board, they cannot. Mr. Vaughn said he will be out campaigning for a positive millage renewal. VIII. MISCELLANEOUS (A) Gas at the Landfill Mr. Tanis reported there is gas at the South Kent Landfill, and they are confident it will be good, quality gas. VIII. ADJOURNMENT There being no other business for discussion, Mr. VanderMolen declared the meeting adjourned at 9:31 a.m. ADMINISTRATIVE APPROVAL FOR DISTRIBUTION slw
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