COMMITTEE OF THE WHOLE

DECEMBER 3, 2008

APPROVED

Members Present: Chairman C. Crandall, G. Benson, D. Burdick, W. Dibble, W. Hall, T. Hopkins, K. Kruger, M. McCormick, T. O’Grady, D. Pullen, B. Reynolds, D. Russo, N. Ungermann; (Absent: D. Fanton, R. Truax)

Others Present: A. Finnemore, J. Margeson, T. Miner, Municipal Solutions Representatives D. Allardice and M. Chapel, B. Riehle, T. Ross; Guests: Approximately 22 Department Heads and Staff; 12 Town Supervisors, Village Mayors, and Councilmen; and 10 Members of the Public; Media: B. Quinn, Wellsville Daily Reporter; R. Mangels, WJQZ

Call to Order: The meeting was called to order at 7:10 p.m. by Chairman Curtis W. Crandall followed by the Pledge of Allegiance to the Flag. Invocation was given by Legislator Pullen.

Chairman Crandall’s Opening Remarks:

“I would like to welcome our Town Supervisors and Village Mayors, their representatives, and our County Department Heads. Thank you for responding to our invitation. I would also like to welcome and thank the interested citizens that are attending tonight's meeting. The meeting was designed to present information, not only to the legislators and those who have been invited, but hopefully the information will find its way to every citizen and taxpayer of Allegany County. This presentation is not a platform for debate but an up-to-the-minute picture of the options our legislators face regarding the Allegany County Court Facilities Capital Plan.

As I’m sure you’re aware, the Allegany County Legislature is attempting to address deficiencies in our County court facilities as they relate to the Court Facilities Act of 1987, along with other departmental space needs. In a few minutes, you will hear a brief history of that legislation and what it means to you and me, today in Allegany County. You will hear what studies and actions were taken in the past by other County legislators, and you will hear what the financial impact of addressing our court facility needs will have on each of us.

This group of legislators took our oath of office and began serving our current term on January 1, 2006. By June of that year, we were told that Allegany County’s time had come as far as addressing the deficiencies of our court facilities. The Office of Court Administration would no longer tolerate delays by this legislative body as our predecessors before had done. They even sent a representative from their Manhattan offices to deliver the message personally.

What would give the Office of Court Administration such power to say they will no longer tolerate Allegany County delaying work on a Capital Plan? Let me quote from the most recent correspondence from New York State Unified Court System Chief Administrative Judge Ann Pfau. I quote, ‘Pursuant to Section 1680-c of the New York State Public Authorities Law, I am prepared to approve the County’s Capital Plan as soon as I receive an updated schedule of milestones and confirmation that the County Legislature has authorized the financing necessary to advance this plan.’ The letter goes on to say, ‘Any further delay in completing this Plan and advancing it in accordance with its terms will result in the initiation of the process set forth in the Judiciary Law leading to the imposition of financial sanctions against the County.’ End of quote.

In layman’s terms, this means that we need to make provisions to finance the Capital Plan or the Office of Court Administration will shut off state funds to Allegany County. These funds include all state aid, state grant funding, and member item funding. Our budgeted amount for 2009 equals $14,815,596 from these sources. Some have said this will never happen, that New York State is bluffing, and that myself and others will use this as a scare tactic to bolster support for a court project. I assure you that the information provided tonight has been compiled from facts and scenarios calculated to the best of our ability. Several municipalities have attempted to call the state’s so-called bluff in regards to the Court Facilities Act, and soon reversed those attempts. I believe you will feel as I do after looking at the facts that this legislature has no other choice but to respond to Judge Pfau’s letter in a responsible manner and assume she has clearly stated her intentions.

What gives the Courts the power to say they will no longer tolerate Allegany County’s lack of action is State Law, the same State Law that each elected official in this room tonight took an oath of office and swore to uphold.

Thus began a long, hard journey for this Board of Legislators from June of 2006 to now. A journey filled with many meetings, volumes of notes and technical data, rolls of blueprints, and tens of thousands of dollars spent in engineering, legal, and administrative expenses to come up with an acceptable Capital Plan. Acceptable is the key word in that sentence – not a plan that is acceptable to you and me, but a plan that is acceptable to the Office of Court Administration according to State Law.

As this Board began looking at our options to address this issue, efforts were spent on several plans or approaches. We looked at the possibility of moving the courts to a new facility on County property next to the Jail south of Belmont, and a new facility in front of this property where our Child Support Enforcement building is located. We saw the Griffith Plan, the Ungermann Plan, the Parker Plan, and the Parker Plan with the Pullen Atrium. We discussed hybrid plans of each of them and other ideas that were never named, even unofficially such as these. We are grateful for the time and effort that individuals spent on coming up with and pursuing these plans and thoughts, many of which have been incorporated into the final Capital Plan that has been submitted for review.

A couple of months ago, the Board voted and approved a plan to be sent to Manhattan for review and ultimately the approval of the Office of Court Administration, a plan which the Office of Court Administration worked closely with the County on, to assure that it would meet the minimum standards as set forth in state law. That Plan is Allegany County’s Capital Plan for our court facilities.

During the presentation, you will hear a repeat of much of what I just said. I believe it’s worth repeating, as some of the points just made need to be heard more than once for their true impact to fully register.

I would like to thank David Pullen, Chairman of the Court Facilities and Space Needs Committee, and the committee members for the work that has been done so far, along with Bill Hall, Chairman of the original ad hoc committee that worked hard to head us in the right direction.”

Power Point Presentation, County Administrator John Margeson:

Allegany County has been living with this court facilities deficiency situation for many years. The information presented may be old ground for some, but fortunately there were a number of invited guests who may not have been as familiar with the steps taken to date. Mr. Margeson noted that the presentation would cover the Court Facilities Capital Plan Act itself, the attempts made by the past and present Legislatures so far to comply, and the financial impacts of moving forward or not moving forward. Mary Chapel and David Allardice, from Municipal Solutions (formerly Allardice and Associates), financial consultants for the County, were introduced. Text from the Power Point presentation and comments are included below. (A copy, including photos and spreadsheets, is attached to the original minutes.)

Court Facilities Capital Plan Act

· Adopted by NYS legislature in 1987 and signed into law by former Governor Cuomo.

· Purpose was to require city and county governments to identify and rectify deficient conditions in facilities dedicated to judicial operations.

· The law makes provision to sanction (penalize) cities and or counties who fail to comply.

· The penalty takes the form of a withholding of State Aid from the county in an amount “equal to the value of services” the county is failing to provide as determined by the Chief Administrative Judge of the State of New York.

Initial Assessment of County Court Facilities

· A written assessment of the adequacy of our court facilities was performed in 1989.

· The following major deficiencies were identified.

- Non-compliance with Americans with Disabilities Act.

- Lack of sufficient attorney/client conferencing space.

- Lack of sufficient records storage space.

- Building floor plan does not allow for proper deployment of security personnel.

- Judicial officers and staff are not segregated from public areas while in route from chambers to main courtroom.

- Court security equipment is located at top of stairway resulting in unacceptable/dangerous queuing on building stairs.

- Neither Chief Clerk has private office.

- Office chamber for visiting Judge is inadequate.

· As a result of these identified deficiencies, the County is required to submit a plan approved by the local Board of Legislators, which sets forth how and when the deficiencies will be corrected.

Actions Taken by County since 1991 to Address the Problem

· 1991 – The Habiterra study, recommendations, and outcome. (Included assessment of facilities and recommendations to correct the most acute space deficiencies in the courts, as well as in the rest of the County facilities. At that time, they recommended construction of a new County jail to house 72 inmates, renovation of former jail for office space, and construction of a 38,000 square-foot facility dedicated to the courts, at a total cost of $14.34 million. The Legislature chose to take no action, and there was no submission of any capital plan to OCA.)

· 1993 – The MRB Group study, recommendations, and outcome. (Included assessment of County needs for courts, jail, and entire County government. After a very exhaustive 15-month study, they recommended construction of a jail and public safety facility to house 72 inmates, construction of a new office building to house DSS, Health, and Employment and Training, renovation of the former jail for office space, the entire Courthouse would be dedicated to the courts, and construction of a 7,200 square-foot addition at the back of the Courthouse to provide for record storage and a three-floor elevator, at a total cost of $21.3 million. The Legislature chose to take no action, and there was no submission of any capital plan to OCA.)

· 1996 – The Sear-Brown Group study, recommendations, and outcome. (Focused solely on addressing court needs. They recommended dedicating all three floors of the Courthouse to the courts, along with the addition of a three-floor elevator at the rear. There was a submission of information for a capital plan to OCA, which was considered by OCA’s architect. The architect rejected the plan, and said he would not recommend it for approval because it did not provide for security for staff or judicial officers and did not address ways in which the County intended to provide office space for the departments being vacated from the Courthouse [County Clerk, Treasurer, Probation, Board of Elections, Real Property Tax Service].) (The ten-year lull in activity between 1996 and 2006 was the result of a couple of things. A number of OCA staff, including both architects and the executive assistant for the regional judge, retired or resigned. Also, OCA concentrated their efforts on other municipalities, and many other counties and cities came into compliance.)

· June 2006 – William J. Clark, Counsel for Capital Planning, NYS OCA, addresses the Board of Legislators. (This visit was to reinforce the message received by Chairman Crandall in a letter sent by Ronald Younkins, Chief of Operations, dated June 14, setting forth four points: the County is required to take immediate action on submission of a capital plan, failure to act will result in a recommendation from the Chief Administrative Judge to the State Comptroller that the County be sanctioned by withholding of state aid, the Chief Administrative Judge would determine the amount and report that amount to the Comptroller, and the Comptroller would begin to withhold state aid equal to that amount.)

· July 2006 – Chairman Crandall establishes an Ad Hoc Committee to consider the following options:

- Fail to act and face sanctioning.

- Turn entire Courthouse over for court operations.

- Acquire an existing vacant structure and renovate.

- Dedicate and renovate floor space in County Office Building.

- Construct an addition to existing Courthouse.

- Consider new Courthouse off site.

· August 2008 – Committee comes forth with recommended plan which is adopted by the Board of Legislators.

The Plan

· Renovation of 9,600 square feet within existing Courthouse – estimated cost $1,852,000.

· The construction of a 42,000 square-foot addition to the rear of the existing Courthouse – estimated cost $11,935,000.

· Though not a part of the Court Facilities Plan, the Ad Hoc Committee recommended renovating the fourth floor of the County Office Building, which formerly housed the County Jail, into office space – estimated cost $4,897,000. (LaBella worked with the County on the plans, and cost estimates were provided by LP Ciminelli.)

Site Plan (An aerial rendition was provided by LaBella illustrating the three-story addition at the rear of the existing Courthouse. Court functions would occupy the second and third levels of the addition, and the Treasurer would be moved to the ground floor, with the remaining ground floor area left vacant and available for storage by maintenance and possibly storage of new voting machines.)

Financial Impact of Bond Resolution Passage Based on Anticipated Expenditure of $13.78 Million

· 25-year amortization schedule with annual debt service.

· Interest aid subsidy. (Available through the Court Facilities Capital Plan Act. If the County has to borrow funds to comply, OCA will reimburse a portion of the interest expense, ranging between 25 and 33 percent.)

Proposed $13,787,000 25-Year Maturity Schedule Consolidated (Table was shown.)

Prepared for: Allegany County

Prepared by: Municipal Solutions, Inc.

Project: Courthouse Renovations & Addition

David Allardice addressed the process for the actual borrowing of funds. The County can’t move forward on financing a project without a financing resolution, which would be adopted for an estimated maximum cost. Once the resolution is approved, it does not mean borrowing funds the next day. A plan would be developed based on costs and a schedule. We have to have a plan in place to determine how we borrow. The Federal Treasury Department does not allow borrowing all the money at once. For us, it would be $5 million in one year. You have to be careful when and how. The schedule provided assumes that construction begins in June 2009. Initial borrowing would be based on cash flow requirements in May, and a second issue would follow.

Mr. Margeson explained that the maturity schedule calls for an initial borrowing of $10.1 million in April 2009 and the second issue of $3.477 million in April 2010. The first payment would be due in 2009, and would be interest only at an estimated amount of $249,975. The County is eligible for the OCA interest subsidy, estimated at 25 percent, which brings the County’s share of that first year’s payment down to $187,481. In year two (2010), the second borrowing would take place. Total debt service for the year would be $704,753, minus the OCA aidable share of the interest, leaving the County share of principal and interest at $581,064. By year three, we reach full payment at $848,130. These calculations are based on $13.8 million borrowing. The Court Facilities and County Space Needs Committee recommended that the County enter into a novel type of construction agreement, a Project Labor Agreement (PLA), where we would enter into agreements with local trade unions. This could reduce costs by about ten percent, resulting in $1.3 million in savings. The provided chart was not based on those savings.

· Impact to Average County Tax Rate Based on 2009 County Budget

- Year 1 – 0.74% increase.

- Year 2 – 2.29% increase.

- Year 3 and forward – 3.39% increase.

Financial Impact of Defeating the Bond Resolution

· A defeat of the Bond Resolution assumes the NYS Comptroller will proceed to withhold up to $13.78 million in state aid. (This would take place over a period of one year.)

· How do we fill a $13.78 million hole in the 2009 Budget?

· Mandated versus non-mandated agencies. (The 2009 Budget currently contains over $14 million in state revenues. Mr. Margeson would suggest that the Legislature would have to look at cutting agencies and programs that are discretionary, or not required by law.)

Tables were shown identifying all major budget cost centers for all programs in County government.

The first list included programs that are not mandated by law and not aided by state or federal aid; they would be the most threatened in the event the County loses state aid. Agencies and programs listed were:

County Treasurer Terri Ross presented information on how long County government could survive without state aid, based on current fund balances. We ended 2007 with a $2.9 million fund balance, which could be appropriated to spend in any way necessary. Ms. Ross looked at cash flow figures for the past four years and the amount of state aid received, and arrived at an average of $1.1 million in state aid received monthly. If everything remained constant, with no increases in expenses caused by inflation, and no decreases in our other funding sources, we would be looking at a $1.1 million shortfall per month. That $2.9 million fund balance would last about two and one-half months.

Financial Consultant David Allardice addressed whether or not bankruptcy could be considered as an option for solving the problem. One point to remember is that if the County did, or was able to, declare bankruptcy and have a finance control board take over, it would diminish the quality of life in our County. Control board members are not from the County. Their only goal would be to get finances back in shape. County residents elect County representatives to govern for them, and can discuss with them how they will be governed. If a control board takes over, we would have no say. The County isn’t even in a position where we can file for bankruptcy. The judge would have the County prepare financial documentation showing they could not meet financial obligations, but the County can meet its obligations by: 1) cut expenses, 2) use money set aside, 3) increase fees, and 4) increase taxes. The County is in good financial shape. Our constitutional taxing limit is presently at 79 percent, so there is a margin there. Bankruptcy is not really a viable option right now.

· How towns could be adversely affected. (Mr. Margeson pointed out that it is important to inform town supervisors on the ramifications if the bond resolution fails and the County is sanctioned. For many years, County government has picked up several services that are actually town costs.)

- 85/15 Bridge program. (Towns are assisted with bridge repair and replacement based on need. Town share is 15 percent, and the County picks up 85 percent. Potentially, that program could be in jeopardy.)

- Chargeback Board of Elections cost. (Most counties do not charge that cost back. The 2009 budgeted expense to run Board of Elections is $333,000. That is an expense that could be charged back to towns.)

- Community college costs. (A spreadsheet was displayed showing 2007 costs for each town. The budgeted amount for 2009 is $840,000. For many years, the County has assumed the towns’ cost of sending students to community colleges. In New York State, community college expenses are split three ways: the state, the student, and the County each pay one-third. That local expense is actually a town cost by law.)

Mr. Margeson stated that the scenarios used in his presentation were only examples, but he went on to point out that if the state sanctions the County for failure to comply with the Court Facilities Act, we will be in for a very rough time.

Chairman Crandall thanked all those involved in the presentation. A lot of effort went into outlining the County’s financial position and the dilemma faced by the Legislature. It is a serious situation with great implications. Copies of informational brochures, compiled by the Court Facilities Committee and also available on the County’s website, were distributed. Chairman Crandall encouraged use of the website as a place to submit questions for an official response or update. Contact information was included in the handouts.

Adjournment: The meeting was adjourned at 8:40 p.m. following a motion made by Legislator Reynolds, seconded by Legislator Hall and carried.

Respectfully submitted,

Adele Finnemore, Journal Clerk