Hillsboro finance committee proposes $40,000 cut to economic development fund
Lead Summary
By
Caitlin Forsha-crforsha@gmail.com
Finance committee chairman Pete Pence said that money needs to be saved and cuts need to be made wherever possible to "lessen the severity of what happens next year, and it will be severe," during the Tuesday, Aug. 7 meeting of the Hillsboro City Council finance committee at the Hillsboro Fire House Meeting Room.
"There's going to major changes in a lot of areas," Pence said. "I'm not trying to be all doom and gloom, but that's the financial reality of it."
The meeting was called to discuss revising the 2012 budget and the hiring of a labor attorney.
All three finance committee members, including Pence, Dave Shoemaker and Bill Alexander, were in attendance, as were Hillsboro City Council members Brian Waller and Bonnie Parr and Hillsboro City Auditor Gary Lewis.
Hillsboro Mayor Drew Hastings and Safety and Service Director Rick Giroux were unable to attend the meeting.
Pence said Hillsboro City Council members received a letter from Hillsboro Law Director Fred Beery stating that it was necessary to hire or retain the services of a labor attorney in dealing with the Hillsboro Professional Firefighters IAFF Local 2972's concessions.
As previously reported in The Highland County Press, at the request of the city's labor attorney, Hillsboro Professional Firefighters IAFF Local 2972 presented a "concessions package," which proposes a $100,000 cut in salaries and benefits to Hillsboro Fire and Rescue staff members. However, in order for the firefighters to make those concessions, the union stated that the city would have to work out agreements with local townships, and maintain the fire department.
Lewis said that additionally, Beery referenced the need for a labor attorney for the city's other public unions, the AFSCME (American Federation of State, County and Municipal Employees) and the police union, not just in dealing with the fire department's contract.
Blaugrund, Herbert, Kessler, Miller, Myers and Postalakis is currently representing the city of Hillsboro in labor negotiations.
Pence told the finance committee they were faced with keeping the Blaugrund firm, at a savings, or hiring a different attorney, which would cost the city additional money since the Blaugrund firm is already familiar with the situation in Hillsboro.
Finance committee member Bill Alexander stated that he was in favor of continuing an agreement with the Blaugrund firm.
"I think that if we are going to try to expedite negotiations, a firm that is already familiar with what the negotiations consist of would make the most sense," Alexander said.
Finance committee member Dave Shoemaker voiced his disapproval of remaining with the Blaugrund firm.
"My concern is paying $10,000-$15,000 more to hire another labor attorney when we have somebody who's been working on it," Pence said.
Shoemaker said it would "be worth $10,000" to hire an attorney who isn't "tainted in their opinion" of the situation.
"The labor attorney is not being hired to represent the mayor's view or the safety and service director's view," Pence said. "He's being hired to represent the best interest of the city as a whole."
Shoemaker asked, "And during negotiations, who does he answer to?"
Pence said that the labor attorney would have to answer to council. Shoemaker disagreed, stating that the attorney would go through the mayor and the safety and service director first.
Lewis pointed out that no matter which labor attorney is hired, the lawyer will still be "reporting directly to the mayor and the safety and service director, who are the negotiators," not council.
"That is true, and I understand that," Shoemaker said. "However, Blaugrund was hired in the back door, and that upsets me."
Waller asked why the city needed to hire a labor attorney to negotiate when the IAFF already offered to cut their salaries and benefits.
Pence said that he believed there had not been concessions, just proposed concessions.
"I don't know why our law director would want us to hire a labor attorney if he felt that the department had followed through with what they had proposed," Pence said.
Parr said that she did not recall hiring a labor attorney in the past for contract issues. Lewis reminded Parr that Hillsboro attorney and former city Deputy Law Director Kathryn Hapner was used in labor negotiations last year.
"I think that Mr. Beery is very concerned that some decision that he would make might work adversely to the city in a difficult situation," Alexander said.
"If that's what you want to do is hire a labor attorney to look at the concessions and handle the two other union contracts as they come up, I don't have a problem with that, as long as it's not Blaugrund," Shoemaker said.
Alexander asked Pence if council was able to approve the hiring of a labor attorney in general, and not a specific attorney.
"I think if we're not willing to name a specific attorney at this moment in time, then we probably need to revisit this after some consultation with our law director," Pence said.
"Would it be appropriate for us to leave the choice of labor attorney to Mr. Beery as a law director?" Alexander asked.
"He's probably going to stay with the firm we have now because of the actual expenditure," Pence said.
Shoemaker suggested that council ask Beery to come up with one or two options for a labor attorney, and council can research the attorneys as well as determine the costs involved.
"I don't want to buy a pig in a poke here," Shoemaker said.
The finance committee next considered revisions to the city's 2012 budget. Pence said that at the committee's previous meeting, a proposed $164,000 in budget cuts were made. Pence asked Shoemaker, who was absent from the prior meeting due to illness, if he wanted to discuss the issue.
"How much was the bottom line we had to cut to make sure that we would be all right for the end of this year?" Shoemaker asked.
"Right now the projected ending balance would be approximately – and it is 'approximately' because we just don't know everything that's going to happen on a daily basis – $235,000," Lewis said. "The issue with that is that looking into 2013 and the $670,000 deficit that would occur at the end of 2013, if nothing else was done – but we know something is going to be done, I want to make that perfectly clear – that starting point that I had to achieve that $670,000 deficit was at $440,000.
"So we have that gap, $235,000 to $440,000. Now how do you cover that, to get to where we can start at least at that point? We came up there, at that previous meeting, with $164,000 in cuts. So that brings you up to $375,000, so you still have a certain amount of gap there."
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"About 71,000," Shoemaker said.
Lewis said that with unpredictable leftover amounts on line items, council is facing an approximate $60,000 gap.
"It's important to note that our carryover will be more important this coming year because we've always had payments from the townships for services that were provided that will not be there in 2013," Pence said. "Our carryover's going to have to be a little bit higher than what it has been the last couple years."
Shoemaker asked where the figures from the committee's phase one cuts came from. Lewis said that Pence had asked him to look at the budget for the fire department to see how much could be taken out of the budget for the department to remain "viable" or "at least functional."
"I had $47,000," Lewis said. "Mr. Giroux suggested that perhaps $12,000 should be put back into that department for the overtime, thereby reducing that to $35,000.
"As of the first of October, they're going to be losing Liberty and New Market, so I'm not sure they really have much overtime that would necessitate an additional $12,000."
Waller suggested that the overtime could be reduced if the volunteer firefighters were brought back to the department. Lewis said that that may be true, but that the city would not pay volunteer firefighters as much, and that the IAFF's contract "specifically states that part-timers and volunteers get laid off first."
"I was just asking if it would cover the overtime costs," Waller said.
"Certainly, I would agree with you, but again, if anyone gets laid off and you brought those back, it'd be an issue," Lewis said.
Shoemaker asked Lewis if the city needed council to find another $71,000 in budget cuts for phase one.
"It would certainly help," Lewis said.
Pence said that it is hard to predict what the end of 2012 will bring, citing Paint Township as an example.
"Paint [Township]'s been out for several months now, and of course the billing's delayed," Pence said.
Lewis said that Paint Township was one of the department's larger customers, and the city saw about a $15,000 decrease in revenue for July 2012 compared to July 2011.
"One of the areas – and we talked about this at the last meeting but didn't follow through with it, and I think tonight we need to go ahead and do it, is there's about $40,000 left in the economic development fund that had a beginning balance of $50,000," Pence said.
Pence proposed that the $40,000 in the economic development fund be cut as well as the $12,000 in proposed cuts from the fire department. Shoemaker disagreed with cutting the fire department's funds.
"Since we need $71,000, I suggest pulling $35,000 from the administrative budget," Shoemaker said. "Administration has almost $64,000 right now in unencumbered [funds]. That would be $75,000, which is over the $71,000 you need, and we should be comfortable for the rest of this year."
"Well, with the administration, that would be a considerable hit on one of the bare-bones departments that you have," Lewis said.
"By the time it's all over with, we're going to have a lot of bare-bones departments that are going to get hit," Shoemaker said. "We might as well start at the top and work our way down and work through it, and everyone shares a piece of the pie."
Pence asked Alexander for his opinion on the matter. Alexander said that he would prefer to wait until the next meeting to discuss cutting the $35,000 from the administration, as council will have to find funds to pay the current labor counsel.
"My preference would be to draw that from the administrative budget, rather than pull $35,000 just right now," Alexander said.
Shoemaker said that he read that in her resignation letter, former Hillsboro Deputy Law Director Laura Curliss stated her remaining salary should go toward paying for labor attorneys.
"My suggestion is that they pay the $5,000 out of her salary to pay Blaugrund off for services that have already been given and go on from there," Shoemaker said.
Alexander asked Lewis for an idea of "how much [Curliss'] salary would've been for the reminder of the year." Lewis estimated her remaining salary at $5,500 to $6,000.
"Enough to pay off Blaugrund," Shoemaker said.
Alexander said he agreed with making the $40,000 in proposed cuts to the economic development fund but would prefer to consult Giroux before making cuts to administration.
"I would like to hear from Rick concerning what the impact of $35,000 would be, and also his impression of the $12,000 in the overtime for the fire department," Alexander said.
"Did we ask Steve Pence if it was all right to take money from his budget before we did it? Did we ask the police chief? Did we ask the assistant fire chief if it was all right to take money? Why is there a difference here?" Shoemaker asked.
"Because Rick is the supervisor of those departments," Alexander said. "My feeling is he was their representative when we were meeting. Right now, I'd like to have somebody give us an insight into what effect our action would be."
"And you think he's going to give approval to take $35,000 from his budget?" Shoemaker asked.
"I'm not asking for approval," Alexander said. "I want to know what the impact is going to be."
"Do you think there will be a positive, that he'll give you a positive effect?" Shoemaker asked.
"I'm not asking for a positive effect, either," Alexander said. "I want to know what the effect is going to be. I fully expect that he's going to feel it's not a good way to balance a budget, but I just want to know how it's going to be affecting his department and the operations of the city."
Pence made a motion to cut the $40,000 from the economic development fund, which was unanimously accepted.
The labor attorney issue, as well as Shoemaker's suggestion to cut $35,000 from administration, will be discussed at the next meeting.
"There's going to major changes in a lot of areas," Pence said. "I'm not trying to be all doom and gloom, but that's the financial reality of it."
The meeting was called to discuss revising the 2012 budget and the hiring of a labor attorney.
All three finance committee members, including Pence, Dave Shoemaker and Bill Alexander, were in attendance, as were Hillsboro City Council members Brian Waller and Bonnie Parr and Hillsboro City Auditor Gary Lewis.
Hillsboro Mayor Drew Hastings and Safety and Service Director Rick Giroux were unable to attend the meeting.
Pence said Hillsboro City Council members received a letter from Hillsboro Law Director Fred Beery stating that it was necessary to hire or retain the services of a labor attorney in dealing with the Hillsboro Professional Firefighters IAFF Local 2972's concessions.
As previously reported in The Highland County Press, at the request of the city's labor attorney, Hillsboro Professional Firefighters IAFF Local 2972 presented a "concessions package," which proposes a $100,000 cut in salaries and benefits to Hillsboro Fire and Rescue staff members. However, in order for the firefighters to make those concessions, the union stated that the city would have to work out agreements with local townships, and maintain the fire department.
Lewis said that additionally, Beery referenced the need for a labor attorney for the city's other public unions, the AFSCME (American Federation of State, County and Municipal Employees) and the police union, not just in dealing with the fire department's contract.
Blaugrund, Herbert, Kessler, Miller, Myers and Postalakis is currently representing the city of Hillsboro in labor negotiations.
Pence told the finance committee they were faced with keeping the Blaugrund firm, at a savings, or hiring a different attorney, which would cost the city additional money since the Blaugrund firm is already familiar with the situation in Hillsboro.
Finance committee member Bill Alexander stated that he was in favor of continuing an agreement with the Blaugrund firm.
"I think that if we are going to try to expedite negotiations, a firm that is already familiar with what the negotiations consist of would make the most sense," Alexander said.
Finance committee member Dave Shoemaker voiced his disapproval of remaining with the Blaugrund firm.
"My concern is paying $10,000-$15,000 more to hire another labor attorney when we have somebody who's been working on it," Pence said.
Shoemaker said it would "be worth $10,000" to hire an attorney who isn't "tainted in their opinion" of the situation.
"The labor attorney is not being hired to represent the mayor's view or the safety and service director's view," Pence said. "He's being hired to represent the best interest of the city as a whole."
Shoemaker asked, "And during negotiations, who does he answer to?"
Pence said that the labor attorney would have to answer to council. Shoemaker disagreed, stating that the attorney would go through the mayor and the safety and service director first.
Lewis pointed out that no matter which labor attorney is hired, the lawyer will still be "reporting directly to the mayor and the safety and service director, who are the negotiators," not council.
"That is true, and I understand that," Shoemaker said. "However, Blaugrund was hired in the back door, and that upsets me."
Waller asked why the city needed to hire a labor attorney to negotiate when the IAFF already offered to cut their salaries and benefits.
Pence said that he believed there had not been concessions, just proposed concessions.
"I don't know why our law director would want us to hire a labor attorney if he felt that the department had followed through with what they had proposed," Pence said.
Parr said that she did not recall hiring a labor attorney in the past for contract issues. Lewis reminded Parr that Hillsboro attorney and former city Deputy Law Director Kathryn Hapner was used in labor negotiations last year.
"I think that Mr. Beery is very concerned that some decision that he would make might work adversely to the city in a difficult situation," Alexander said.
"If that's what you want to do is hire a labor attorney to look at the concessions and handle the two other union contracts as they come up, I don't have a problem with that, as long as it's not Blaugrund," Shoemaker said.
Alexander asked Pence if council was able to approve the hiring of a labor attorney in general, and not a specific attorney.
"I think if we're not willing to name a specific attorney at this moment in time, then we probably need to revisit this after some consultation with our law director," Pence said.
"Would it be appropriate for us to leave the choice of labor attorney to Mr. Beery as a law director?" Alexander asked.
"He's probably going to stay with the firm we have now because of the actual expenditure," Pence said.
Shoemaker suggested that council ask Beery to come up with one or two options for a labor attorney, and council can research the attorneys as well as determine the costs involved.
"I don't want to buy a pig in a poke here," Shoemaker said.
The finance committee next considered revisions to the city's 2012 budget. Pence said that at the committee's previous meeting, a proposed $164,000 in budget cuts were made. Pence asked Shoemaker, who was absent from the prior meeting due to illness, if he wanted to discuss the issue.
"How much was the bottom line we had to cut to make sure that we would be all right for the end of this year?" Shoemaker asked.
"Right now the projected ending balance would be approximately – and it is 'approximately' because we just don't know everything that's going to happen on a daily basis – $235,000," Lewis said. "The issue with that is that looking into 2013 and the $670,000 deficit that would occur at the end of 2013, if nothing else was done – but we know something is going to be done, I want to make that perfectly clear – that starting point that I had to achieve that $670,000 deficit was at $440,000.
"So we have that gap, $235,000 to $440,000. Now how do you cover that, to get to where we can start at least at that point? We came up there, at that previous meeting, with $164,000 in cuts. So that brings you up to $375,000, so you still have a certain amount of gap there."
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"About 71,000," Shoemaker said.
Lewis said that with unpredictable leftover amounts on line items, council is facing an approximate $60,000 gap.
"It's important to note that our carryover will be more important this coming year because we've always had payments from the townships for services that were provided that will not be there in 2013," Pence said. "Our carryover's going to have to be a little bit higher than what it has been the last couple years."
Shoemaker asked where the figures from the committee's phase one cuts came from. Lewis said that Pence had asked him to look at the budget for the fire department to see how much could be taken out of the budget for the department to remain "viable" or "at least functional."
"I had $47,000," Lewis said. "Mr. Giroux suggested that perhaps $12,000 should be put back into that department for the overtime, thereby reducing that to $35,000.
"As of the first of October, they're going to be losing Liberty and New Market, so I'm not sure they really have much overtime that would necessitate an additional $12,000."
Waller suggested that the overtime could be reduced if the volunteer firefighters were brought back to the department. Lewis said that that may be true, but that the city would not pay volunteer firefighters as much, and that the IAFF's contract "specifically states that part-timers and volunteers get laid off first."
"I was just asking if it would cover the overtime costs," Waller said.
"Certainly, I would agree with you, but again, if anyone gets laid off and you brought those back, it'd be an issue," Lewis said.
Shoemaker asked Lewis if the city needed council to find another $71,000 in budget cuts for phase one.
"It would certainly help," Lewis said.
Pence said that it is hard to predict what the end of 2012 will bring, citing Paint Township as an example.
"Paint [Township]'s been out for several months now, and of course the billing's delayed," Pence said.
Lewis said that Paint Township was one of the department's larger customers, and the city saw about a $15,000 decrease in revenue for July 2012 compared to July 2011.
"One of the areas – and we talked about this at the last meeting but didn't follow through with it, and I think tonight we need to go ahead and do it, is there's about $40,000 left in the economic development fund that had a beginning balance of $50,000," Pence said.
Pence proposed that the $40,000 in the economic development fund be cut as well as the $12,000 in proposed cuts from the fire department. Shoemaker disagreed with cutting the fire department's funds.
"Since we need $71,000, I suggest pulling $35,000 from the administrative budget," Shoemaker said. "Administration has almost $64,000 right now in unencumbered [funds]. That would be $75,000, which is over the $71,000 you need, and we should be comfortable for the rest of this year."
"Well, with the administration, that would be a considerable hit on one of the bare-bones departments that you have," Lewis said.
"By the time it's all over with, we're going to have a lot of bare-bones departments that are going to get hit," Shoemaker said. "We might as well start at the top and work our way down and work through it, and everyone shares a piece of the pie."
Pence asked Alexander for his opinion on the matter. Alexander said that he would prefer to wait until the next meeting to discuss cutting the $35,000 from the administration, as council will have to find funds to pay the current labor counsel.
"My preference would be to draw that from the administrative budget, rather than pull $35,000 just right now," Alexander said.
Shoemaker said that he read that in her resignation letter, former Hillsboro Deputy Law Director Laura Curliss stated her remaining salary should go toward paying for labor attorneys.
"My suggestion is that they pay the $5,000 out of her salary to pay Blaugrund off for services that have already been given and go on from there," Shoemaker said.
Alexander asked Lewis for an idea of "how much [Curliss'] salary would've been for the reminder of the year." Lewis estimated her remaining salary at $5,500 to $6,000.
"Enough to pay off Blaugrund," Shoemaker said.
Alexander said he agreed with making the $40,000 in proposed cuts to the economic development fund but would prefer to consult Giroux before making cuts to administration.
"I would like to hear from Rick concerning what the impact of $35,000 would be, and also his impression of the $12,000 in the overtime for the fire department," Alexander said.
"Did we ask Steve Pence if it was all right to take money from his budget before we did it? Did we ask the police chief? Did we ask the assistant fire chief if it was all right to take money? Why is there a difference here?" Shoemaker asked.
"Because Rick is the supervisor of those departments," Alexander said. "My feeling is he was their representative when we were meeting. Right now, I'd like to have somebody give us an insight into what effect our action would be."
"And you think he's going to give approval to take $35,000 from his budget?" Shoemaker asked.
"I'm not asking for approval," Alexander said. "I want to know what the impact is going to be."
"Do you think there will be a positive, that he'll give you a positive effect?" Shoemaker asked.
"I'm not asking for a positive effect, either," Alexander said. "I want to know what the effect is going to be. I fully expect that he's going to feel it's not a good way to balance a budget, but I just want to know how it's going to be affecting his department and the operations of the city."
Pence made a motion to cut the $40,000 from the economic development fund, which was unanimously accepted.
The labor attorney issue, as well as Shoemaker's suggestion to cut $35,000 from administration, will be discussed at the next meeting.