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HomeMy WebLinkAbout01-09-1996 Meeting I I I FINANCE & APPROPRIATIONS COMMITTEE COMMITTEE ROOM - January 9, 1996 4:00 P. M. PRESENT: Hons. Larry E. Sconyers, Mayor; J. Brigham, Chairman; Handy, Vice-Chairman; Bridges and Beard, members; Jim Wall, Interim Attorney; A. B. McKie, Jr., Controller; David Collins and Marcus Lewis of the Finance Department; Linda Beazley, Interim Suburban Services Administrator; Charles Dillard, Interim Urban Services Administrator; Lena Bonner, Clerk of Commission-Council and Nancy Morawski, Deputy Clerk of Commission-Council. Also Present: Sylvia Cooper of the Augusta Chronicle, Qther members of the news media and Hons. H. Brigham, Zetterberg, Mays, Kuhlke and Todd, Commissioners. The Committee first discussed the matter of central banking for the Consolidated Government. Mr. Collins: We would like to set up a consolidated bank account where all your deposits would go into one master funded account, one checking account, but no checks actually clear from that account. The master account would be broken up between the urban tax district account and the suburban tax district account so you have money flowing from the main deposit account going into those two sub-accounts. Each of those two sub- accounts would then have checks that were being funded for either the vendor run, which would be all checks other than payroll, or your payroll checks. So money would be flowing down from the master account to the sub-accounts for the two tax districts and then those tax district accounts would then fund the checks that clear in both those bank accounts. At about 2:00 each day any amount that was in excess in all of these accounts would work its way back up to the master account which then would be swept out each night to either a repo rate or treasury rate, some amount that would earn interest each night. So you would have zero cash sitting around each day after 2:00. I think it is a very efficient way of organizing the government for reconciliation. We have gotten some bids in from the various banks for this mechanism and I would like your permission to open them up and evaluate them and see if we can come back at the next Commission meeting and let you know how much this would cost versus how much interest would be earned so we can compare dollars associated with it. Mr. Bridges: Are you saying the master account would be placed in one bank? Mr. Collins: All this will be in one bank. Mr. Bridges: For what length of time? Mr. Collins: Two to three years. I would prefer a two- year contract with a one-year renewable clause so after two years you can get out or roll it to three if you want to. Mr. Bridges: I wouldn't want to see one bank account getting all the deposits from the County and become a political power within itself as a result of that. I Mr. Beard: Two years or less would be adequate and all of the institutions here should be given an opportunity to bid. Mr. Collins: I would like to if possible have the bank actually charge us for the services so we can figure out what the dollar cost is and then they would actually pay us interest each day to offset the charges and we would have dollars to compare the costs of your banking services with. Mr. Bridges: Why do you propose two years instead of one year? Mr. Collins: It's just an arbitrary number. It takes a lot of work to set one of these up and you have a transition period where the first two months it's kind of shaky and after about a year, you start really getting cranked up so it would be a matter of efficiency more than anything else. Mr. Bridges: Would the other accounts be in the same bank? Mr. Collins: Yes, sir. They would be a zero deposit I account, basically. They would facilitate the transfer of money coming down the path and then at the end of each day coming back up. Mr. Chairman: So all of our checking would be at one bank? Mr. Collins: Yes, sir, for payroll and vendor except for those accounts which we have to legally separate and probably the water and sewer account and any kind of insurance benefit account. We normally keep those separate. Mr. Beard: Do you have a proposal for the Community Development monies? Mr. Collins: No, sir, I don't. Mr. Handy: What banks have already applied to do this? Mr. Collins: The four large banks, First Union, Trust Company, NationsBank and Wachovia. We had done this in preparation of consolidation. You can decide to do it or not. Mr. McKie: The proposals haven't been opened. Mr. Bridges: We don't even have to accept the proposals. How many banks are in the County? I I I I ~ Mr. Collins: There are six. In the past we had a first tier and a second tier account for collateral reasons. We used Georgia Bank and Trust and Allied as a second tier bank, which are smaller banks, and the bigger ones, we normally go with the big four. Mr. McKie: These four are the only ones that have sufficient capital and can pledge the collateral that we would like to have. Mr. Beard: I move that we accept the recommendation coming from the Finance Department for the purpose of receiving bids from the banks for review and bringing them back to us for our consideration. Mr. Chairman: I'll second it. I think we're trying to find out if this is most cost efficient for the new government. I don't think this is open armed extension if we're going to change our banking accounts. I think we need to vote to open these proposals and study this method to see if this is something we would even consider doing. Mr. Beard: The intent of my motion is that we need to review all possibilities so they could bring something back to us and say what can be done. Mr. Bridges: Do we have funds in all of the banks in the County now? Mr. Collins: Yes, sir. And unfortunately, the more funds you have out there, the less interest you can earn. Mr. Bridges: Were all the banks given an opportunity to participate in the bid process? Mr. Collins: Just the large four. We did not send a request out to Allied or Georgia Bank and Trust. Mr. Bridges: Why not? Mr. Collins: Typically they don't have the capital or the collateral to do it. All deposits have to be collateralized by the U. S. Treasury and agencies 102%. Mr. Bridges: My only concern is that I don't want to appear as shutting anybody out since we used them in the past. Maybe we should give them the opportunity to say if they can't do it and don't have the collateral. Mr. McKie: We've spoken with them verbally and they understand they don't have the collateral to do this but that doesn't preclude them from doing other banking business with Augusta. Mr. Handy: I have two questions. One is we are going by the new banking agreement we just passed. Mr. Chairman: That's what I'm hearing. I Mr. Handy: Are we going to stay with the past procedures for the new government or are we going to redo a procedure for this government? Mr. Chairman: We are trying to put the accounts with one bank and get the best rate of return possible on the collective balance. Mr. Handy: By putting the Urban and Surburban together, that makes it larger than the small banks could participate, but if you kept them separate, then maybe someone else could participate. Mr. Chairman: No, they weren't able to bid on the previous accounts because the balance was already over the capital limits. Mr. Handy: Where is that in writing? I don't see anything written down saying they cannot handle what we want them to handle. It would be best to get a proposal from them saying that they cannot handle it then we'll know in case someone comes up and says they were excluded from the bid process and let it be in writing. Mr. Chairman: Let's have an amendment. I Mr. Beard: I'll amend that to include all the banks. Mr. Handy: We just passed this for the County only and now you're using it for the new government. Mr. Chairman: That's fine. The motion on the floor as I understand it is that after we receive the other two proposals, we're going to open the proposals, review them and see if this is something that we may want to do. Motion adopted unanimously. The Committee next considered a proposal for an ATM machine in the Municipal Building. Mr. Lewis: Initially this proposal was set up as a revenue source for Richmond County; however, after talking to several banking institutions, nobody had such a program. Butch decided he wanted to go ahead with the project and propose it to you. r talked to Mr. Massingale who is President of Wachovia here in Augusta and he proposed setting it up near the water fountains or the front entrance on the right wall. No details have been I worked out. I I I }3 Mr. Chairman: Have we requests in writing from others? Mr. Lewis: No. Mr. Chairman: I think we need to receive proposals from all the banks. I think we need to accept this as information. Mr. Handy: I so move. Mr. Bridges: Second. Motion adopted unanimously. Communication from the Controller submitting a Capital Project Budget for replacement of certain capital items in the JLEC. This equipment is original to the building and badly in need of replacement. Since we have recaptured funds from the COP financing, we can provide funding without interference with any ongoing projects. 3 - hand held metal detectors 1 - Genie left Model#PL 30 P. 3 - Unitary Food Carts Model#824C (48 tray) 1 - Huebsch 150 gas dryer, 150 lb. tumbler 1 - CRS 66A dishwasher (203 racks per hour) (Hobart) 1 - Hot proof cabinet w/solid door- holds 34-18x26 pans removable bottom mounted heat unit $ 800.00 $ 3,000.00 $25,500.00 $ 9,500.00 $16,157.00 $ 1,744.00 Mr. McKie: This equipment requested by the Sheriff's Department is original and is badly in need of replacement. We felt that with the refunding of the COPS issue we did last year, we had some recaptured funds in the Sales Tax, that it would be appropriate to use that as a source. Mr. Handy: I so move. Mr. Beard: Second. Mr. Bridges: Explain the recaputured funds from the COPS financing. Is that savings in the interest rate? Mr. McKie: Yes, sir. It's savings in the debt service reserve. We paid those off early and subsequently got some money back or are in the process of getting some money back from the bondholders and the trustees. We got back about $1.7 million this year. Next year it will be about $1.5 million. It would not compete with any existing projects. Mr. Wall: Are we going to need the approval of the trustees? Mr. McKie: No. What is being replaced was put in there with the construction of the Jail back in the early '80s. Mr. Chairman: What is our minimum capital requirement for an asset? I Mr. McKie: $500.00. Mr. Chairman: All of this will be paid through Sales Tax? Mr. McKie: Yes, sir. Motion adopted unanimously. The Committee next discussed the Maintenance Proposal. Mr. McKie: We have a maintenance contract with MLS for the operation of our County Shop. We would propose that we amend that existing contract to include the City vehicles. Ryder has made a proposal to that end. Financially it would be beneficial to us in terms of our budget. It would be an amendment to an existing contract. Mr. Handy: I move that we put it on the floor. Mr. Mayor: What kind of savings do you project? I Mr. Bridges: Second. Mr. McKie: It's in the neighborhood of $250,000 to $300,000. Mr. Handy: My concern is the existing contract runs out in March and we haven't decided whether we're going to renew it or not. Mr. Bridges: Are you proposing to extend it until March? Mr. McKie: I would propose we extend it until the end of the year. I would like to add the City to this for that minimum length of time and then beyond. Mr. Bridges: Are we still looking at the savings just if we decide to discontinue it at the end of March? Mr. McKie: It would depend on who bid at that time and what the winning bid was. Mr. Handy: It was a concern with past Commissioners that this go out for bid and the reason why we didn't go out for bid the other time, we got information from ACCG and others that this is the only company that was around at the particular time. Now we have time to go out for bids from others to see if there is anyone else that is capable of doing the same thing I If' Ryder is doing. I Mr. Beard: What is the City under now? The Clerk: have own employees staff We our on now. Mr. Beard: What will happen in the interim of the two months? Mr. Chairman: That's up to us and what we want to do. What I'm hearing is that we may want to extend the coverage of the Ryder contract to the former City vehicles until March and at that point we would want to at least get proposals and review them to see if we want to extend the contract or possibly change contractors or just completely rebid it. What I want to decide right now is are we going to add the City vehicles to the Ryder contract or not for the two months and then we'll talk about the Ryder contract? Butch, do they hire the former City employees? Mr. McKie: Yes, sir. I Mr. Todd: We went under the Ryder contract in somewhat of an emergency situation in the sense that we were in an embarrassing situation as far as the Shops go. I think that we went under it with the understanding that we were doing a sole source which is not true. Ryder, at the same time they were talking to us, was also in Columbus, Georgia bidding on Muscogee County's fleet management along with other entities. I just want to give everyone a fair chance and have fair play here. Mr. Chairman: The way I understand the motion is to add the City vehicles for the next two months to the Ryder contract and that the employees would be assumed by Ryder like it was when the County took over the Shops. Motion tied with Mr. Handy and Mr. Beard voting "No". Mr. Chairman: We'll refer that to the Commission. Mr. Mayor: We may need to hear from Mr. Avery as to whether they would take it for two months. At this time Mr. Avery of the Ryder Company appeared before the Committee and stated that there would be some cost difficulties with them taking over the City vehicles for a short period of time. The Committee next discussed the status of "Contract" Employees. I Mr. McKie: The government does have several employees in its Public Works Department which we regard as contract employees but upon further investigation do not fill the tax criteria as independent contractors. By the nature of the work, by the amount of supervision we give them, they are indeed employees. Their compensation has been such that they were paid additional salary to make up for the benefits and so forth. We have been advised that we are at risk from a taxation standpoint and I would recommend that we ask Human Resources and Mr. Wall to look at those contracts, renegotiate the compensation, the benefits and change their status to employees. I Mr. Bridges: So move. Mr. Handy: Second. Mr. Bridges: What kind of work do they do? Mr. McKie: They are Sales Tax people~ I believe they are Inspectors and some administrative people. Mrs. Beazley: Right-of-way acquisition. Mr. McKie: Right. Mr. Bridges: Are they being paid strictly out of the Sales Tax Fund? Mr. McKie: Yes, sir. I Mr. Bridges: After the Sales Tax money runs out, those employees' jobs would be terminated as well and they would be gone, is that right? Mr. McKie: Right. That was the understanding when employees were moved to that fund originally back in '88 or '89. Mr. Wall: The rules were much laxer then from an IRS perspective and they were hired for a shorter period of time. Mr. Bridges: I just want to make sure that if they're under the 1% Sales money they remain there and then when that runs out, that they don't become regular County employees. Mr. McKie: Sales Tax funds. Their status would continue to be funded within That wouldn't change anything. Mr. Chairman: How many people are involved? Mr. McKie: I believe it's six or seven. There aren't that many. Motion adopted unanimously. I Communication from the Design Engineer stating the Trees I I I ~ & Parks Department recently solicited bids for "Elm Trees - Zelkova-Green Vase" for placement in the new tree wells in the 500 block of Reynolds street, as follows: Supplier Price/Tree Charlies Creek $ 118.65 MIDGA Nursery 119.62 Bold Spring Nursey 123.46 Buck Jones Farm 165.00 Select Trees 180.00 The Engineering Department has reviewed the bids and recommends that Augusta-Richmond County purchase twenty-six (26) trees from the low bidder for $3,084.90 with installation by Trees & Parks Personnel. If approved by the Commission-Council, we recommend that funds from the Special Purpose Sales Tax be utilizied, was read. Mr. Dillard: This is an existing, ongoing project and we did the same thing in the other blocks. Mr. Handy: I move that we accept the recommendation to get it on the floor. Mr. Bridges: Second. Mr. Handy: Is this justified under 1% money? Mr. McKie: Yes, sir, I would say these are capital items. Mr. Dillard: These are included in the budget at the beginning of the year. Mr. Todd: I would caution you to look for other funding sources such as Community Block Grant money. Mr. Wall: Part of the definition specifically addresses landscaping as being part of it and I think you are well protected. Mr. Bridges: Where is the wording? Mr. Wall: It's not in the referendum itself. I'm trying to recall whether it's in the Sales Tax provisions or in the highway code section that deals with what is a capital improvement and I'd have to look. Motion adopted unanimously. Mr. Chairman: Mr. Wall has asked us to add four items to the agenda if you will unanimously agree to this. Mr. Handy: I move we add these to the agenda. Mr. Beard: Second. Motion adopted unanimously. Communication from the Interim Attorney submitting a request I from Southern Aggregates for a waiver of a penalty in the amount of $1,257.15 and interest in the amount of $232.58 for the late payment of a property tax bill for the Augusta Sand Plant, was read. Mr. Chairman: We have usually rebated the penalty for this type request and not the interest. Mr. Handy: So move. Mr. Beard: Second. Motion adopted unanimously. Communication from the Interim Attorney submitting a request from IMIC Hotels for a waiver of the penalty for late payment of property tax bills for the Sheraton Augusta Hotel, was read. Mr. Wall: Basically what happened they received a corrected tax bill on one of the accounts and when it was printed out, it showed a delinquent date of January 3 and that was gem clipped to the other and it was set aside on the person's desk that was responsible for paying it. When he realized that he had made an error, and it was an induced error from the standpoint I that it was printed out showing a January 3, 1996 due date, it was a mistake on their part. You're talking about a 15% penalty so you're looking at total taxes there of about $100,000 and roughly a $15,000 penalty. Mr. Handy: What do you recommend? Mr. Wall: You have waived the penalty in situations like this in the past. It was our fault in printing out a tax bill with the January 6 due date on it but that was only a $6,000 bill and not on the others. That was their fault. The Proctor and Gambill situation last year was similar to this. Mr. Beard: I move we abate the penalty and not the interest. Mr. Handy: Second. Motion adopted unanimously. Communication from the Interim Attorney stating pursuant to instructions from the Commission-Council, I secured an additional 60 days binder of the General Liability, Automobile Liability and Law Enforcement Liability coverages with an umbrella policy. As indicated on the attached confirmation, the cost of this binder for 60 days was $102,565, was read. I I I I Mr. Bridges: I so move. Mr. Handy: Second. Motion adopted unanimously. Mr. Chairman: This is the money to do the preliminary engineering, to pick a tract, to do the soil samples and those things that are necessary to corne up with a site location for the new Health Department that was approved in the 1% Sales Tax. They will pay this money back to their budget. It's corning now from our general fund. Mr. McKie: We advance them a month or two of their operational budget which they would use for this and at the end of the year we would simply not pay them the last two months and they use their sales tax money to operate on. Mr. Bridges: I so move. Mr. Handy: I second for discussion. Mr. Beard: I would rather see this received as information and taken before the full Commission. Motion tied with Mr. Handy and Mr. Beard voting "No". ADJOURNMENT: There being no further business, the meeting was adjourned. Lena J. Bonner Clerk of Commission-Council NWM Q