2014-1-16 Work Session Minutes


Council met for a work session on Thursday, January 16, 2014 in Council Chambers. The meeting began at 6:15 p.m. The purpose of the work session was to discuss the budget.

In attendance were Council President Jack Mundie, Council Vice President Jean Mope, and Council Members Keith Bast, Jeff Cusat, and David Sosar. Also in attendance were Mayor Joe Yannuzzi, Acting City Administrator Steve Hahn, City Clerk Lisa Shema, Attorney Chris Slusser (City Solicitor), Attorney Charles DeCosmo (Council’s Legal Advisor), Fire Chief Donald Leshko, City Engineer Dominic Yannuzzi,, Transit Director Ralph Sharp, and Streets Foreman Frank Vito.

Mayor Yannuzzi stated he tried giving Council an amended budget, but DeCosmo told him he could not do that. He further stated that he probably will not be signing the Budget Ordinance, or perhaps may even veto it. He said Optional Plan B of the Third Class City Code states he can submit an amended budget to Council. Slusser said the Mayor is allowed to submit an amended budget to Council as per the Third Class City Code, Optional Plan B. Mayor Yannuzzi showed Mope, Mundie and DeCosmo this section of the Code. Hahn said this is an amended budget, not a new budget. Mayor Yannuzzi then presented Council with the amended budget. Council used the amended budget for this work session.

Mundie asked what the changes were to the budget, and Mayor Yannuzzi said there is slightly more expenses than last year because of acquiring the Parking Authority, contractual raises, etc. He said the stormwater fee for this year was not approved, and it was not his idea. Mayor Yannuzzi said he is not in favor of the stormwater management fee. He was asked to prepare it, but it is too complicated and too costly to implement. Also the collection process is too expensive. He said he does not know what amount this fee will bring in. Mayor Yannuzzi said he went over the expenses with all of the department heads. He stated there will be no increase in taxes, but there will be an increase in the millage because he eliminated the stormwater management fee. He said the City was in the black at the end of the year. Mayor Yannuzzi stated he “polished it up with minor changes,” but the budget is essentially the same as last year.

Mayor Yannuzzi stated the commercial sewer transmission fee was not billed by Don Wilkinson in 2012 or 2013, and some of the earned income tax was not billed either. Mope pointed out that she discovered the $400,000 commercial sewer transmission fees that were not billed by Don Wilkinson. Mayor Yannuzzi stated that Don Wilkinson just gave us the same amount every year because they were not doing their job. Berkheimer Associates is doing a much better job, and they also give an explanation of what they are doing. Don Wilkinson was not giving us all the money we were owed. Mundie said he sent an email to the old Administration about Don Wilkinson, but it never went anywhere. Mayor Yannuzzi said he did not want Don Wilkinson to become the county tax collector.

Hahn stated the general fund was more than $8.5 million in October. This budget states there is $9,022,520 in the general fund revenue and expenses. He said he had discussions with the department heads about this. Mundie asked if discussions were made on how each department can make cuts. Mayor Yannuzzi responded that their wish lists and possible cuts were discussed with each department head. Mundie said overtime is a big problem. Hahn said some of the numbers in the past were “unrealistic.” The old Administration used to “net things out,’ which was wrong. Mundie was concerned about how a budget can be prepared without the 2012 audit. Mayor Yannuzzi said the audit is Council’s audit, Council hired them, and Council should contact the auditor about it. Mope said she is in constant contact with Dennis Moore, the auditor, and he complained to her that the lack of transfers is a big reason why the audit is still not completed. Hahn commented that taking $10,000 out of the fuel for police cars is unrealistic. Mayor Yannuzzi clarified that the 2011 budget was not his; it was Mayor Barletta’s budget. Hahn said the 2011 budget was not correct because $2 million in expenses was not in there. Sosar asked about the seizure account. He said if it is not all spent, then some of these things need to be reimbursed by that account. Reimbursement should be made before any of the seizure account funds are used for anything else. Mayor Yannuzzi stated the seizure account cannot be used to supplement the general fund. Hahn said this paid for two police officers and one fireman. He added that the 2013 budget was much closer than the 2012 budget. Mope said there was $1.9 million in the bank account, but at the end of the year there is only $900,000. She wanted to know why it dropped so much. Hahn said checks were written for payroll, insurance, pay bills, etc. Mope said we need to have more accountability for this money.

Mundie asked about the new hires, and asked if they are part-time or full-time. Hahn said both, and they are coming from the Parking Authority, which is in the process of being eliminated. Mayor Yannuzzi said the takeover of the Parking Authority has not been completed yet. It is currently in the hands of the Parking Authority because there were some problems. There are two leases with the Norfolk Southern, the railroad company, that need to be transferred over to the City. He said the new date set is April 1, 2014. Mundie asked if the Parking Authority lost money over the last few years. Ralph Sharp said it lost money the past two years in the amounts of $8,000 and $12,000. Mayor Yannuzzi assured Council the Parking Authority will make money once the City takes it over. He said he is in negotiations for a lease of parking spaces, which will add revenue. It is very close to being completed. Mundie said Council should be kept abreast of what is going on with this. Mope said they only knew about this because they reviewed Slusser’s invoices. Sosar suggested the Mayor having a weekly meeting with Mundie, so that he could be informed of what is going on. Mayor Yannuzzi said he will try to be more informative. Mundie stated that Council needs to be informed of things such as this. Bast said we are supposed to be talking about the budget. He stated that Council does not belong in the executive branch because it is legislative. Bast said Council is also not responsible for negotiating contracts. Mundie said anything that brings money into the City is part of the budget. Bast said we should be making decisions on known items only. Mope said we do not get the information that we need to make these important decisions.

Hahn said that the Broad Street Corridor Project shut down portions of Broad Street for quite a while, and some revenue was lost from the meters. The 2014 budget proposes revenue of $180,000.

Mope asked if we will lose money on the parking garage while it is being repaired. Dominic Yannuzzi said it will be done in stages. He added that the garage is not full now. He stated that space in other parking lots will be made available to those using the garage.

Hahn said he recommends keeping debt service at 1.3 mills. Mope asked what the $450,000 commercial sewer transmission fees will be used for. Mayor Yannuzzi said they are still looking into it. They want to use these funds to ease debt for the City. Hahn said the money is not being used. It is still in the bank account until we can see what to do with it. Hahn said with this amended budget, the tax rates may have to be changed. Mayor Yannuzzi felt the original budget was flawed. Mope asked if we have to leave 10 or 20 days for public inspection, and Mayor Yannuzzi said 10 days.

Mundie asked if the Parking Authority employees will be getting raises, and Mayor Yannuzzi said they will be receiving the same pay they had at the Parking Authority. Vito said Deb Metz will be a part-time employee at 30 hours per week. There will also be a man coming to the Streets Department, who will collect meters, plow snow on sidewalks, etc. Mope asked about the total cost of the renovations of the parking garage, and if the amount moved there will be enough to cover the repairs. Mayor Yannuzzi said the specs will be going out soon, and we will wait for the bids to come in. If it is too high, we will not do it. Dominic Yannuzzi felt $1.6 million was more than sufficient to repair the parking garage. Mayor Yannuzzi said if the garage is not repaired, the spaces will not be leased. Mundie asked about the $200,000 for timbering and the $100,000 in parking. Bast stated the Parking Authority was not dissolved at the end of 2013, as was originally planned. Vito said the City will be collecting 100% of the meter revenue. Mope asked if there is a time limit required for use of this money as per the LSA. Mayor Yannuzzi said it was approved to be moved for this purpose, but it is not there yet. They gave us permission to use it for the parking garage. There is a new law whereby they no longer give you multiple years. We have $3 million and will get $1 million in February.

Cusat felt that some of these items were still not realistic. He felt the mercantile tax was overstated. Hahn said $450,000 was brought in last year in mercantile tax. This year it decreased to $440,000. Hahn said he spoke to someone about bringing in more of this tax. Mundie asked if Bill Rinaldi is paying mercantile tax. Cusat said he has no office in Hazleton. Mundie said that does not matter. A contractor comes in and works in Hazleton, and still pays mercantile tax. Mope asked if they are on the property tax rolls, and Mayor Yannuzzi said they should be this year. Hahn said there is a problem with some companies not paying the mercantile tax. Mayor Yannuzzi stated we need to bring someone in to collect this tax. Mundie said he know Joyce is renting a lot to a contract, and he should be paying mercantile tax. Hahn said the delinquencies were budgeted at $18,000 last year.

Cusat questioned line item #321-3788. He asked if all licenses are lumped up into one line item. Hahn said the bills were sent out in November and are not due until the end of January. Cusat asked about the rental inspections. Hahn said there is a charge of $25.00 per unit, and there are about 1,500 units in the City. Some people pay more. Property inspections are done once every four years. He said there is currently the threat of possible litigation with regard to this matter. Hahn stated this amount simply covers the costs involved and it not a money maker. Cusat believes we will lose money on this in the long run. Hahn said there are situations such as an overload on the electrical system because there are too many people living in one unit. He added that these inspections will be starting very soon. Mundie was concerned that we may receive an injunction, and Hahn said he has not received any such thing yet.

Cusat asked about the miscellaneous revenue with regard to vector control. Hahn said the City has a vector control officer, and we sell that service to other municipalities. Cusat asked if we pay Hazle Township for the plow truck. He added that they said we owe them for vector control. Vito said that is incorrect. We do not owe them for vector. He added that they paid us $18,000. Hahn said that amount should probably be increased. He added that they are one of the municipalities that pay us for vector control services. Mope asked if the plow truck is paid off and Vito said yes. Mope asked what is owed on the other truck, but Vito did not know. Mayor Yannuzzi said a little over one year’s worth of payments is owed on it.

Mundie questioned the $19,000 that was budgeted for overtime. Leshko said the contract requires a certain number of men on each shift. Mundie said the Fire Department contract will be coming up soon, and he would like to hire a professional negotiator for that. Mayor Yannuzzi said he uses an advisor when negotiating contracts. Mundie felt Mayor Yannuzzi was unqualified to negotiate contracts. Mope stated that the Law Firm of Campbell and Durante gave legal advice with regard to the police contract negotiations.

Hahn said he felt the Fire Department’s overtime figure was too low, and was not realistic. Leshko agreed. Hahn said he increased the $7,000 for overtime to $20,000. Leshko said he applied for a federal grant. If awarded, they will be able to hire two more firemen for two years. They are not required to keep them after that time period. Leshko said he applied for grants every year for such things as fire apparatus, firemen, etc. He added that the Fire Department has received $9 million in grant money over the years. They currently have been awarded a $13,000 grant, and are waiting for the okay to spend it. Vito said there are no grants out there specifically for public works. Mope said other grants can be sought to be utilized for the Streets Department. Hahn said the Fire Department has a lot of grant opportunities available to them. Sosar said that through his research, Hazleton is eligible for neighborhood improvement grants. He said we should be getting these grants. He added that we desperately need these types of grants. Hahn stated that the funding period for that is already finished. Sosar said we need to do a lot more grant writing. Mundie said that we need someone who specifically works on grants. Hahn said that he had meetings with people to enroll in various grant programs. Mayor Yannuzzi said part of the problem is that our Comprehensive Plan is obsolete. Mope said the Streets Department is in desperate need of grant money. Leshko said that through the LSA grant, he was able to get a bucket truck for the Streets Department. Hahn said the City will be receiving $51,000 more in liquid fuels because of the state’s new gas tax. The legislature put pressure on them to do this. Mayor Yannuzzi said we are always applying for grants such as the LSA. The problem is they are opened so wide, and the competition is much greater. Hahn said Vito recently found a truck in good condition for the Streets Department for $18,000. These trucks usually cost about $150,000. Sosar asked if the new gas tax is going to be used for the streets, and Hahn said yes. Hahn said that is where the extra $51,000 in liquid fuels is coming from. This will pay for the electricity for the streetlights. He added that we will be saving $30,000 on electricity. This frees up more money to use for paving the roads. Vito said it costs approximately $13,000 to pave one block (1½ʺ). Hahn stated that PennDOT requires new curbing, handicapped ramps, etc., if over 1½ʺ. Mope said the Streets Department Garage desperately needs a new rubber roof. Vito said he applied for an LSA grant. If that does not come through, he will contact Leshko’s contractor about the roof.

Cusat asked about the fifth police car that was supposed to come from Public Transit. Hahn said it was budgeted for five police cars. This will provide services to the police for maintenance and plowing, as per the agreement. Sharp said that this would include plowing bus lanes, plowing the Can-Do parking lot, rights-of-way, etc.

Cusat questioned the incentive pay. Hahn said there should be a line item for incentives, and it should be incorporated into wages. Mundie asked that Hahn put the 2012 actual figures in this budget instead of the budgeted amount. Hahn said he will correct it.

Mope asked why there are engineering costs in the sewer transmission fund expenses. Hahn said that is a mistake and it should not be there. That was a payment for the loader. Hahn stated that $300,000 in sewer transmission fees is still out there to be collected. He said that some of this might be bad debt, but we are actively trying to collect it. Mundie said we should have sued the Don Wilkinson Agency over this. They had a bond and we should have tried to collect on that bond. Mundie said we would be considered a creditor, and creditors should get something even though they filed for bankruptcy. Hahn said he spoke with Modern Recovery and the water can be shut off if the sewer transmission fee is not paid. Hahn said we are still owed sewer transmission fees for 2011 and 2012. Some of this money will be used to make a payment on the loader for about $29,000. Mope said this should be listed as a capital purchase.

She commented on the incentive for not using sick time. She was concerned that FICA and Medicare may not yet be accounted for. Sosar questioned longevity. He felt that some employees are not meeting the criteria for longevity. He asked if longevity has anything to do with sick and vacation time. Mayor Yannuzzi replied that longevity has nothing to do with sick and vacation time. Hahn said longevity is when an employee is paid for their years of experience. He added that the Fire and Police Departments are different because someone always has to be on call. This is not the case with office personnel.

Mundie asked if the insurance rates went up. Hahn stated workers compensation went up $80,000, but some things did go down. The total renewal for everything is $770,000. He looked into other companies. Hahn suggested a request for proposals be put out for insurance in September. He said he talked to three local insurance companies, Eastern, Dryfoos, and Joyce, but only Eastern provided a quote. Hahn stated that a broker of record blocks everyone else from offering insurance coverage. Sosar said that we should renew our membership to be a part of the Pennsylvania League of Cities. They may be able to provide us with consortiums for insurance with other cities. He suggested Hahn look into this and talk to some other municipalities. Ha said he will look into it. Mundie agreed with Sosar, and said they give very helpful seminars and conventions.

Mayor Yannuzzi said that Hahn worked very hard on this budget. He asked that Council place this on its next agenda for first reading. He said he feels it is a “sound” budget. Hahn said he added some comments to some of the line items for Council’s review.

Sosar asked if the wages for any city workers are included in the Airport. Mayor Yannuzzi said it is included. Mundie asked how many man hours were spent at the Airport. Vito said he will compile a report and give it to Hahn. Mayor Yannuzzi said the Airport is “now carrying its own.” He added that the Federal Aviation Administration gave the Airport very good comments. It is becoming more and more profitable.

Sosar thanked everyone for coming, and said this is the best work session in years. He felt Council and the Administration did a good job going through the budget.

The work session was concluded at 8:15 p.m.

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