COMMITTEE ON BUDGET AND APPROPRIATIONS

MINUTES

NOVEMBER 18, 1996

ATTENDANCE:

B & A MEMBERS: Wishnie, Darcy, Delfino, Abinanti, LaMotte

OTHERS: C.E.’s Office: Gina Angiulo; Budget: Joe Phelan, Tom Coleman; Law Dept: Denise D’Ambrosio; CBAC: George Hosey, Barbara Strauss, Fran MacEachron; LWVW: Anne Nelson, Esther Shay; NY Times (West. Section): Susan Ball; Bennett Kielson: Les Storch; DOT: Comm. Petrocelli; BOL: Legislator Carsky, Legislator Bronz, Legislator Spreckman, Legislator Albanese, Legislator Stewart-Cousins, Pat Gorski, George Gretsas, Robert J. Boland, Glenn Guzi, Tina Seckerson

Co-Chair Wishnie called the meeting to order at 9:45 a.m.

DISCUSSION: There is a cassette tape on file for more detailed information.

PENDING LITIGATION: Proposed Act authorizing the County to settle the lawsuit of Joanne Ciallella, as Administratix of the Estate of John G. Ciallella and Joanne Ciallella, individually v. County of Westchester, Westchester County Department of Public Works.

Ms. D’Ambrosio was present to update the Committee on this matter.

On motion of Legislator Darcy, seconded by Legislator Delfino, the motion to go into Executive Session at 9:46 a.m. to discuss pending litigation was carried by a vote of 3-0. (Legislator Abinanti out for vote)

On motion of Legislator Darcy, seconded by Legislator Delfino, the motion to go out of Executive Session at 9:58 a.m. was carried by a vote of 3-0. (Legislator Abinanti out for vote)

On motion of Legislator Darcy, seconded by Legislator Delfino, the motion to approve this item was carried by a vote of 3-0. (Legislator Abinanti out for vote). Mr. Darcy stated that he believes it is essential for the County to do a survey of these dangerous road situations as part of the Capital Program. Mrs. Carsky stated that speaking in relation to this case, she drives the Bronx River Parkway daily and firmly believes that the accidents on the Parkway are due to speed. She strongly suggested that a speed monitor should be put in place on the Parkway.

COMMITTEE ON BUDGET & APPROPRIATIONS

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OTHER BUSINESS:

Mr. Wishnie stated that a memo will be sent to Commissioner Glass requesting the number of Veterans serviced by DSS and whether or not they are informed/required to apply for these services through any Veterans’ agencies. Mr. Delfino stated that in the past the County’s Office of Veterans’ Affairs has handled this function very successfully and in so doing has saved the County money. Due to downsizing, that responsibility has been removed from the Veterans’ Affairs Office and shifted to DSS. He suggested the County consider giving that responsibility back to the Office of Veterans’ Affairs.

 

Mr. Abinanti requested the names of the attorneys on the Ciallella case.

 

ISSC: Mr. Wishnie stated that the possibility of adding $3.2 million back to the budget by December 2nd in order to have adequate amount of time to decide whether or not to go ahead with the ISSC contract. He further stated that employees of IS have come up with their own proposal which includes $2 million in savings.

 

 

3RD QUARTER PROJECTIONS: (Handouts on File):

Mr. Phelan stated that they are projecting a net surplus of $7 million for 1996 which could go as high as $10 million. (There is a $3.5 million restriction)

Shortfall in revenues for 1995: $9 million

1995: Took in (actual): $965 million

Planned to take in: $981 million

Spent: $946 million

Budget to spend: $981

Mr. Abinanti asked for the 1995 surplus. Mr. Phelan responded that it was $10 million after all the books were closed and audited, which can be seen in the County’s financial statement. In 1993 the County had a $19 million surplus, since then it has been closer to $10 million. Before 1990 there were occasions of surplus upwards of $20 million.

Mr. Wishnie pointed out that surplus has diminished from $28 million to $10 million chiefly because revenues have continued to drop because of the 0% tax levy budgets in the last six years.

Mr. Darcy stated that also have to recognize that the decrease in state and federal reimbursement schedules has had an equal impact on the reduction of surplus. Simply raising taxes would not necessarily solve the problem.

Mr. Phelan stated that historically surplus from prior years is put into the next year’s budget as a revenue. According to the Budget Director the County starts the year with a zero fund balance, there is no surplus.

Mr. Wishnie pointed out that the $7 million net surplus projected for 1996 has not been that low since 1982.

 

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Mr. Phelan reminded the Committee that the forecast is used as a management tool. Fixing and solving problems throughout the year could change the numbers significantly.

Mr. Darcy asked if any departments are currently overbudgeted. Mr. Phelan responded there are some, such as the Department of Health (due to Education and Transportation Program reimbursement)

Currently projected a projected shortfall at RTI due to a revenue shortfall of $500,000 to $1,000,000

GS: combination of revenue shortfall because of rent situation at 19 Bradhurst due to BOL’s refusal to authorize budget transfer.

Mr. Wishnie requested a breakdown of the $3 million potential shortfall in General Services

Vacancies: Fully vacant 1996 positions: Total General Fund: 256

Total County: 548

Mr. Phelan informed the Committee that the projections show a salary surplus of $6.9 million which is due to the reduction of 256 vacant lines which had been funded in the 1996 budget. Not all lines have been vacant for the entire year.

OPS: Increase primarily due to OT at Department of Correction Mr. Wishnie questioned whether historically vacant positions (such as corrections officers) should be kept vacant or filled. Mr. Abinanti asked if an analysis has been done as to filling vacancies with full-time employees vs. overtime expenses. Mr. Phelan responded that in many instances paying overtime is less expensive. Mr. Wishnie reiterated that this situation needs to be looked at carefully with regard to the Department of Correction -- current trend vs. overtime vs. hiring full time employees.

DSS: According to Mr. Phelan where we have control over costs there is some savings due to cutting costs. Mr. Wishnie stated that there appears to be a huge amount of savings to be found in DSS but the danger lies in funding coming in.

Mr. Boland stated that the following areas will require further information and explanation: (some to be discussed with Miscellaneous Budget): $6 million expenditure shortfall (which according to Mr. Phelan is due to Education & Transportation Program); $1.4 million (due to RTI); $3.6 million (Employee Health Insurance); and the 6N and 6J Funds.

Mr. Boland stated that according to the figures on page 3 of the hand-out, there are over-expenditures in several departments (i.e. GS, Dept. of Health, Airport) which will require budget transfers. Mr. Boland further stated that this is where the focus should be as this is where the potential problems seem to be.

Mr. Phelan stated that they are currently working with PRC on a potential revenue problem.

Miscellaneous Budget: Revenues: up by $6.5 million; Expenses: up by $4.5 million

Mr. Coleman stated that the total number (-$4.3 million) includes the tax levy. Mr. Boland questioned whether tax levy belongs in the Miscellaneous Budget. Mr. Coleman responded that for purposes

of this report it does.

On motion of Legislator Darcy, seconded by Legislator Delfino, the motion to go into Executive Session at 11:30 to discuss negotiations with the state on matters of reimbursement was carried by a vote of 4-0.

On motion of Legislator Abinanti, seconded by Legislator Darcy, the motion to go out of Executive Session at 12:00 p.m. was carried by a vote of 4-0.

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Mr. Wishnie stated that due to a lack of time today, discussion of the 1997 Capital Projects Budget will be postponed until after December 2nd.

Sales Tax: $6 million over in collections

Hotel Tax: Increased slightly. Mr. Delfino stressed his concern given the trend of increasing occupancy.

Mr. Boland questioned the arrears on the Austin Avenue rent. Mr. Phelan responded that they are behind 1 year in payments which are being pursued by the Finance Department. Mr. Boland asked if there is anything in writing. Mr. Phelan will check with Finance.

Mr. Abinanti requested a list of operating accounts showing bank balances

Mr. Hosey questioned the projection of $6 million for Interest and Earnings. As of 8/96 received $3.6 million; currently have $5.6 million. Mr. Hosey questioned the jump from August until now. Mr. Abinanti requested a breakdown of same.

Ms. Strauss asked how far back the State owes the County (in any account). Mr. Phelan stated that we just received $700,000 of a State $3.8 million debt for DSS for 1994, so they still owe us $3.1 million. He further stated that as of 12/31/95 the State owed the County $9 million for Education & Transportation.

Debt Service: Mr. Abinanti questioned the projection that at the end of this year the County will have spent $1.8 million less in debt service than was budgeted for yet the 1997 budget debt service proposal is projected at $3 million more than projected to be spent. Mr. Phelan referenced page C399 of the Budget. Mr. Abinanti pointed out that in 1997 the projection is that the County’s cost of borrowing will go up $9 million and he asked why. Mr. Phelan responded that it is because of our known outstanding debt service. The debt service is projected to increase 9% in one year. Mr. Phelan stated that he never stated that debt service was not going up.

Mr. Darcy asked if the Capital Budget affects debt service. Mr. Phelan responded that very little of the Capital Budget for 1997 affects debt service for 1997. He continued that what affects 1997 debt service is the sale of bonds, which was held last week in the amount of $52 million (down from the $72 million borrowed in the Fall of 1995). Mr. Darcy inquired as to the rates. Mr. Phelan responded that the rates were extraordinarily good -- we beat every Triple A issuer by a huge amount -- we got 4.6 - 4.7%. He stated that professionals in the field called the Commissioner of Finance to congratulate him as to what a fine job he had done with that. Mr. Abinanti inquired as to how much of that was General Fund. Mr. Phelan responded that it was about $51 million.

Mr. Abinanti asked how we got an increase if we bonded $20 million less than last year. Mr. Phelan responded that it is due to existing debt.

Mr. Phelan stated that debt service for the Medical Center is going up $1.5 million and the sponsor contribution is going up by $6 million.

 

 

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IAS HOLDINGS LEASE:

Commissioner Petrocelli explained that International Aviation leases hangars A, C-1, C-2 and G at the Airport which lease expires in 2006. It has generally been the practice by the County when investments are made at the hangars to provide more time as opposed to reducing county revenue (rents). The amendment is part of an airport-wide effort to strengthen the Airport’s tenant community. International Aviation has replaced all the doors (valued at approximately $900,000). The lease amendment would extend IAS’s lease for 5 years. The extension term would commence with a market evaluation to determine the rental and a CPI adjustment at the beginning of the 4th year.

Mr. Abinanti asked what the useful life of the doors is. Commissioner Petrocelli stated that it is approximately 20 years.

Mrs. LaMotte questioned the fact that International Aviation made major improvements to the County’s property without the County’s permission.

Mr. Abinanti questioned whether an analysis has been done with regard to paying the $900,000 for the doors as opposed to the benefits of the lease extension.

Mr. Boland distributed a copy of a letter sent to Legislator Carsky in August of 1995 (on file) with regard to this issue. Mrs. LaMotte stated her dislike of unsigned letters. Ms. Angiulo stated that there was a response to Mrs. Carsky with regard to this letter which she will provide.

Mr. Abinanti stated that there doesn’t seem to be an urgency for this currently therefore he suggested that it be held until after December 2nd. He requested that at that time the Committee have a presentation which would include an analysis of comparison of rents of the various tenants at the Airport as well as a comparison of rents at our Airport vs. other Airports (i.e. Danbury).

Mrs. LaMotte questioned the benefit of a capital improvement when its useful life is as long as the lease. Commissioner Petrocelli stated that you have to look the fact that these capital improvements help in maintaining our facility and keeping its value.

 

 

 

 

There being no further items for discussion, on motion of Legislator Delfino, seconded by Legislator Darcy, the meeting was adjourned at 1:01 p.m.