01/06/2009 Meeting Minutes - Laserfiche WebLink

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Council Minutes of 1/6/2009 2) The November financial summaries have been distributed, and the detail reports were sent to Council and the Mayor today. The Finance Dept. is busy closing 2008 accounts and starting up 2009 with the budgeting process. 3) Due to the abysmal interest rates that we are earning on our overnight sweep accounts, the cost now appears to outweigh the benefit. Additionally, recent changes in the FDIC insurance now has all monies in bank accounts that are government owned insured to the balance versus the prior $100,000 of insurance. So the risk is less by having funds in bank accounts because the accounts are insured by the federal government versus the sweep accounts that were collateralized and insured by individual banks that were holding those sweep accounts. Interest rates dramatically changed this last quarter, and the interest rates will be adjusted in the 2009 budget for these changes in both the expense for bank fees attributable to the sweep accounts and also the interest income that won't be coming in. Councilman Gareau, chairperson of the Finance Committee: 1) The Finance Committee met on December 23, 2008. In attendance were Council President Kennedy; committee members Barker, Kearney and chairperson Gareau; Council Members Jones, and Orlowski; Finance Director Copfer, Service Director Limpert, Safety Director Thomas, H. R. Director Farver, and the Mayor. Ordinance Nos. 2008-162 and 2008-164 were discussed, and Ordinance 2008-162 was reported out at the special Council meeting of December 30, 2008. • Ordinance No. 2008-164 amends Section 1501.1901 of the city Taxation Code in order to temporarily reduce the tax credit for residents of the city who earn income in another municipality from one hundred percent (100%) to fifty percent (SO%), and declaring an emergency. The Finance Director explained this was a measure to address what has been projected as a $483,000 shortfall or deficit in the budget for 2009. The $483,000 deficit arose from both a reduction in revenue or taxes and an increase in costs. We have had a number of significant cost increases ever the past several years, most notably would be fuel costs. Income tax receipts from 2007 to 2008 fell from $13,039,380 to $12,789,034. The prediction that was put forward previously by the Finance Director is that they would fall further to $12,046,847. In a span from 2007 to 2009, it is on the order of a million dollars. The fifty percent tax credit would cost a resident of the city of North Olmsted who lives in this community and works elsewhere and earns $50,000, $S00 per year in additional taxation. Currently, if you live in the city of North Olmsted and work elsewhere, you are given a full credit up to 2% far taxes paid in the community where you work. During the first year, the General Fund would receive additional revenue of $762,000 while the Permanent Improvement Street & Storm Fund would receive an additional $163,000 as would the Solid Waste and Recycling Fund. In the second year, the General Fund would see an increase on the order of $2,745,000, while the Permanent Improvement Street & Storm Fund would receive an increase of $588,000 as would the Solid Waste and Recycling Fund. The Solid Waste and Recycling Fund is most commonly known as the fund by which we pay for our trash hauling, garbage recycling, and leaf pick-up. Avery significant number of people who came forward to speak were S