ALLEGANY COUNTY BOARD OF LEGISLATORS
COMMITTEE OF THE WHOLE
February 16, 2010

** APPROVED**

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Legislators Present

G. Benson, D. Burdick, D. Cady, C. Crandall, D. Fanton, M. Healy, T. Hopkins, K. LaForge, T. O’Grady, D. Pullen, F. Sinclair (Absent: P. Curran, A. McGraw, D. Russo, N. Ungermann)

Others Present

J. Foels, J. Margeson, B. Riehle, T. Ross

Media Present

D. Roorbach – Olean Times Herald

Chairman Curtis W. Crandall called the meeting to order at 6:40 p.m. and led the group in the Pledge of Allegiance. Chairman Crandall provided a brief summary of the items discussed at the previous Committee of the Whole meeting held on January 19.

Support Letters

Chairman Crandall stated that the Board receives numerous requests throughout the year for letters of support, the majority of which are from ACCORD, and we have standard letters that we send from the entire Board. Chairman Crandall requested Legislators to sign a signature page that will be attached to these letters. It was noted that the signature page will not be used on any controversial issues.

NYSAC Conference

Eight Legislators attended the NYSAC Conference from February 8-10, and the resolutions that were considered at that conference are on file in the Clerk of the Board’s Office. Chairman Crandall mentioned one resolution that was considered at the NYSAC Conference -- Resolution Calling Upon the Governor and the Legislature to Undertake a Major Commitment to Rebuild our Economy by Reducing the Cost of Doing Business in New York State. Chairman Crandall stated that he thought the resolution was weakly written. Chairman Crandall stated that NYSAC is a collective voice representing all of the counties in New York State; however, we may see some things differently than others living in different parts of the state. Chairman Crandall also talked about a comment regarding fund balances for school districts that he thought was disturbing because of the impact it could also have on counties, and that was the mentality that the state will provide less funding because if an entity has a fund balance they can absorb it. Chairman Crandall stated that NYSAC is a first-class organization that represents the counties well. On a smaller scale is the Inter-County Association of Western New York which represents 19 counties. Allegany County’s delegates on Inter-County are Glenn Benson, Kevin LaForge and Brenda Rigby Riehle.

Legislator David Pullen talked about the NYSAC Standing Committees and encouraged other Legislators to get involved on these committees. Legislator Pullen asserted that we can’t count on other counties to present our views, and we should have representation on many of the committees. Legislator Pullen indicated that he plans to serve on the Medicaid committee. Legislator Dwight Fanton mentioned that Medicaid costs for New York State are estimated at $31 billion annually.

Marcellus Shale

Legislator Cady stated that he read the Governor’s proposal regarding Marcellus Shale. They have a staff of 29 people already, and they plan to add six more positions, and this staff will oversee the drilling of the Marcellus Shale. Legislator Kevin LaForge stated that he felt like the whole Marcellus Shale process has been hijacked by Tompkins County people, and that it will take a lot of pushing from this direction to make it happen. Legislator Fanton commented that Tompkins County doesn’t have that much shale, but they have people that seem to be fighting it quite hard. Legislator Pullen stated that someone commented that we need to be more cautious and we need to do a study to determine what questions we should be asking. Legislator Pullen mentioned that some of the environmental groups have put out form letters against the drilling. Legislator LaForge stated that we just want some regulations from the DEC so that the drilling industry can decide whether or not to drill.

Online Booking Services

Legislator Theodore Hopkins stated that County Treasurer Terri Ross brought this up before the NYSAC Conference, but another issue discussed was the practice of an internet company reserving many rooms for a certain price, and then reselling them for more. (They may buy them for $100, and then resell them for $150.) The state ends up losing the additional sales tax that could have been generated on the higher price, and they are estimating that they are losing possibly $7 million in annual revenue because of these online booking services. Ms. Ross indicated that they are looking at a federal resolution, and we should be hearing more about this in the near future.

Medicaid

Legislator Pullen talked about hidden implications under some of the new Medicaid compliance regulations. There are three separate agencies in Albany that have their own separate and distinct Medicaid compliance requirements, and many times they need similar information that takes time and manpower to process. Legislator Pullen stated that if they discover we haven’t been operating our system correctly, they can bring charges or assess penalties. Everything has become very intense, adversarial and partisan. It was noted that County Administrator John Margeson is Allegany County’s Medicaid Compliance Officer.

Legislator Fanton mentioned that 40 percent of our Medicare recipients are also eligible for Medicaid, and Medicaid actually ends up picking up many of the costs that should be assigned to Medicare. Legislator Pullen stated that by law, Medicaid should be the “payer of last resort.”

IDA Fees

Chairman Crandall said that one of the hot issues at NYSAC was the tax imposed on local Industrial Development Agencies by New York State as a means to help close the state’s budget deficit. The NYS Department of Taxation sent bills to every IDA in the state for 4.7 percent of the gross revenue received by each IDA in 2008, and the bills are due March 31, 2010. Chairman Crandall stated that this action was part of some legislation tucked into the budget bill. Development Director/IDA Executive Director John Foels stated that the measure was included in legislation that was enacted a few years ago that would allow the state, if it so desired, to impose a fee on public authorities. They ended up working the percentages until they arrived at a figure that would help them recover $5 million. The tax is on all gross receipts including pass through funds and loans that many IDAs manage. Mr. Foels stated that Allegany County’s bill is $15,000, and we will not be able to put as much money back on the street. Mr. Margeson asked if there are any sanctions built into the law if an IDA refuses to pay the bill, and Mr. Foels stated that there is the assumption that if an IDA reaches a certain point of delinquency, it would inhibit their ability to do certain things. Many IDAs will now take measures to reduce their gross revenues. Those present talked about possible options, noting that any pilot program payments would have to be renegotiated. Mr. Foels briefly talked about how the IDA is completely transparent. The possibility of sending a letter or resolution against these new charges was briefly discussed. Legislator Hopkins stated that the Allegany County IDA has to adhere to the same requirements as the port authority, and he believes that there should be less stringent requirements for smaller IDAs.

Economic Development

Legislator Fred Sinclair stated that he attended some interesting sessions on economic development issues at the NYSAC Conference. One session was called Building an Agenda for Economic Development, and the other one was called Creating Economic Hubs. New York State enters a recession one year after the nation does, and it stays in it twice as long. Fortunately the degree of decline appears to be slowing. We have to grow out of the recession – you don’t spend or tax your way out of it. You have to grow out of a recession with development of business and setting an agenda for economic development. Nationally as a state we were ranked quite low on the quality of our workforce, and we are seen as the most highly unionized; however, this is not the case in Western New York. At the same time, nationally we are ranked one and two in innovation and support for emerging business. Our pluses include higher educational institutions, quality of life and lower cost of living so we have a lot of good things going for us. Legislator Sinclair stated that Genesee County is developing 200 acres specifically to market agri-business. In Allegany County, we want to drill for oil and gas, but are we training any of our people to work on those sites? Are we getting ready for that boom? We do not want to rely on others that will be taking the money back out of the community. We have to earn the trust of industry by making good decisions at the Legislative level. We need to make people feel that they can do business here and fight for a change in the economic climate. Legislator Sinclair touched on creating economic hubs which focused on developing strong community hubs. We need to develop the surrounding areas and create hubs of activity and grow out from there.

OPEN DISCUSSION:

Real Property Taxes

Legislator Donald Cady stated that a woman from Scio contacted him regarding a bill that the Governor signed regarding granting tax exemptions for persons with disabilities. Legislator Fanton stated that he believes he spoke with the same woman, and he directed her to Real Property Tax Director Steven Presutti about four or five months ago. Legislator Cady stated that every time an exemption is made, someone else has to pay more.

Legislator Timothy O’Grady asked if the County could do an RFP for a bid price for assessments so that towns can capitalize on a cheaper price for assessments for revaluations. Towns all pay different prices per parcel, and it would be nice to have one standard unit that towns could tap into. Mr. Margeson stated that it seems like that could be done, and it warrants investigation. County Treasurer Terri Ross stated that they have an Assessor’s Association that meets once a month, and Mr. Presutti could also check and see what other counties are doing. It was noted that some towns have already teamed up. Committee members agreed to refer the matter to Real Property Tax Director Steven Presutti. Legislator Pullen stated that there are almost 100 exemptions, and any time you give one exemption, you shift the burden to others. You get to the point where there is not enough money to go around. Ms. Ross noted that all exemptions are listed in the back of the budget. Refer to Real Property Tax Director Steven Presutti

Possible Goals for 2010

Legislator David Pullen distributed a summary of some goals he thought the Legislators might want to discuss as follows: (A copy of Legislator Pullen’s summary along with additional information on each category is attached to the original minutes.)

1. Reduce Real Property Tax Rate.

2. Reduce Sales Tax Rate to 8 percent.

3. Obtain Approval from the State Comptroller’s Office and Other State Agencies for Water and Sewer Districts at the Crossroads Area.

4. Install Street Lights at One or More of the Interstate Exits Serving Allegany County.

5. Settle Open Labor Contracts with at Least Three Labor Unions.

6. Establish a Consistent, Reasonable, and Fair Salary System for our Department Heads and Senior Managers.

7. Long Range Bridge Repair and Replacement Program.

8. Develop Technology Policy that will Assure Residents and Businesses Full Access and Safe Communications Options in Coming Decades.

9. Consider Raising Legislator Salaries.

10. Economic Development Emphasis.

Real Property Tax Rate/Sale Tax Rate

Legislator Pullen stated that if we have a $9 million fund balance, and 2009 results in additional fund balance, we need to look at our property tax and sales tax rates. Those present discussed the idea of reducing the real property tax rate and the sales tax rate. Most indicated that they would rather have a reduction in the real property tax rate than sales tax. Some of the reasons given included that everyone contributes to sales tax whether they live here or not, we have very little business in Allegany County that competes with neighboring counties, and people can make a decision to buy less if they want to reduce their costs. Chairman Crandall cautioned that a previous Board used the fund balance to reduce the property tax for a number of years, and that was how we ended up in the financial position that we were in five years ago. Since that time, we’ve made some very hard decisions which included increasing the sales tax. We’ve had more accurate budgets, and we now have a fund balance. Chairman Crandall stated that he would rather see a way to expand the tax base that would help everyone, and he would be very reluctant to use the fund balance to reduce property taxes or the sales tax rate at this time. Legislator Dwight Fanton stated that he agrees with the Chairman, noting that our retirement bill will be one third higher, we will have bond payments to meet on the addition to the Courthouse, and with the increase in our local jail population we may see less revenue from housing inmates. We need to have enough in fund balance to cover a rainy day. Legislator Pullen said he is in favor of keeping a fund balance, but he would like to find a middle ground that could benefit our citizens. Legislator Pullen noted that if we gave a 2 percent decrease, perhaps we could still experience an increase in our fund balance. Mr. Foels confirmed that he does not have any data or evidence that would support the idea that our sales tax rate may be hurting our local businesses from competing with neighboring counties.

Legislator Frederick Sinclair suggested that a portion of fund balance should be invested, and the best place to invest is in sites that will support industry coming in that ultimately will ease the pain on the tax base. We should invest in permanent ready sites, and Legislator Sinclair noted some of the progress that has been made on County Road 20. We want to become business friendly, and we should continue to invest a small portion on a regular basis. Legislator Sinclair stated that he is a big proponent of developing pots of money that will support economic growth and moving forward in that vain. We need to invest the money wisely and target where we are going. We need to get sites ready for businesses, and get the infrastructure going to Crossroads. We need to also pay more attention to working with communities and supporting downtown revitalization. A good looking community creates security which creates prosperity. We need to invest a portion of our money in growth on a consistent basis.

Legislator Dwight Fanton stated that we have to invest in our infrastructure, and we have County and town bridges that need to be replaced. We are behind schedule with our bridge replacements, and we need to keep our infrastructure up. Legislator Fanton stated that he will plan to have DPW staff give a presentation on the bridges in the near future. Legislator Sinclair stated that he would support 25 cents for every dollar going toward roads and bridges, and taking 3 cents on every dollar and putting it toward the future. Mr. Foels briefly talked about the need to invest a little more in development and infrastructure. We will come out of this recession, and we need to continue to plan and invest in the future.

Legislator Theodore Hopkins stated that we used some of our fund balance (about $500,000) to balance the budget last year, and we also did another bridge with money from fund balance. We need to see how we come out this year. Legislator Pullen stated it is appropriate to have some cushion in the budget, but we also have to grow our way out of the recession, and we need to develop ways to do that. How do we break the gridlock we are in? Is there any law keeping us from using our own money for putting water and sewer in? Mr. Margeson confirmed that if we use our own money, we do not need approval from the Comptroller’s Office. Some areas of the County may not want us to invest all of our money at Crossroads; however, growth is not going to take place in some areas, and we need to develop the areas that have potential for growth.

Chairman Crandall stated that everyone appears to be on the same page. We know we need to improve infrastructure, and a permanent solution is to grow our tax base. We need to continue closely monitoring our budget and stabilize our financial position. We need to control taxes with either a reduction or low increase. We are doing a lot of these things, and we do not want our fund balance to slip through our fingers or disappear from making unwise decisions. We need to develop and firm up some of these things that are being worked on. Legislators briefly discussed what a healthy fund balance should be, and it was noted that 10 percent of appropriations seems to be a good figure. There was a brief discussion on the tobacco money, and how it was going to be placed in a tax stabilization fund.

Lighting at Interstate Exits

Legislator Pullen stated that Highway Law Section 328 authorizes counties to pass resolutions stating that a county will pay for lighting along public highways, noting that many motorists will not get off an exit that is not well lit. Legislator Donald Cady stated that there has to be something to get off for before we need lighting; the lights need to come after the growth.

Moving Forward

Chairman Crandall stated that the idea was to prioritize projects and things that the Legislature wants to work on and accomplish. We need to take this conversation a notch further and formulate it into what we want to do over the next four years. Where will we be 3.5 years from now? The tone of the Board will change 3.5 years from now; election time is a difficult time to work on things. We need to quickly move in a good direction and work together.

Legislator Dwight “Mike” Healy stated that the sooner we get water and sewer to Crossroads, the sooner we will see results. Those results will be a big employer of entry level jobs which will also result in increased sales tax.

Communication and Technology

Legislator Pullen read an excerpt from a law journal wherein AT&T suggested that it was time to transition away from plain old telephone services (POTS). In favor of network based telephone, death of landlines is a matter of when, not if. AT&T is correct in its assertion that people are migrating away from POTS lines, but it’s a lifeline to some. In many rural areas, wireless service is spotty at best. Legislator Pullen referred to some of the work that the Communications and Technology Ad Hoc Committee is doing, noting that we are not just facing an issue of getting service, but retaining what we currently have. Even for communities that will be receiving stimulus funding, implementation could be years away. How many times have we seen different technology services no longer supported? If a major carrier is saying they do not want to do landlines, what are we going to do about that?

Legislator Fanton stated that with the new Phase 3 system, it’s using up the capacity of systems that are available. The more uses they have for I-phones and blackberries, the more air space they are using, and it ties everything up.

Relocation of DPW Administrative Offices

Legislator Timothy O’Grady commented that we need to invest in infrastructure, and that is one of the reasons he voted against Public Works’ proposal to put office space estimated to cost $350,000 out at the Landfill.

Legislator Douglas Burdick stated that he is not opposed to the DPW Administrative Offices moving out of the County Office Building, but he wonders if the Landfill is the best place. Legislator Burdick asked about the facilities in Friendship and Public Works Committee Chairman Dwight Fanton stated that the tour will show the County’s different buildings, and he does not believe that the facilities in Friendship would work out well, noting that the Friendship Shop is over 100 years old. Chairman Crandall asked if there were advantages to locating the offices out by the Landfill as opposed to somewhere else. Legislator Fanton indicated that there will be methane gas from the landfill, and even if we can’t sell it for carbon credits, it’s close enough where we could use the gas for a utility for generating electricity. Once we get the wells in on the cells that will be capped, we will have a better idea of what the flow will be. At one time, Hyland had talked about piping our gas over to them, but they have their facility up for sale now.

Assessments and Department Head Development

Legislator Hopkins stated that we had an outside assessment completed on the Health Department by Altreya, and there are probably other areas where this should be done.

We also need to look at how we can help our Department Heads and Mid-Management to develop and become better managers. We should look at what others are doing and the success they have experienced. Legislator Hopkins mentioned some non-governmental type of training such as Six Sigma, and stated that we need to encourage our Department Heads to get more training to make them better, more efficient and productive managers.

Legislator Hopkins stated that we also need to look at a County-wide sewer and water authority.

Future Meetings

Chairman Crandall asked Legislators how they would like to move forward. The Chairman suggested creating a prioritized approach, noting that he could hold something similar to what was done at Coslos several years ago. Chairman Crandall talked about the need to cultivate a short-term plan, and asked Legislators, to contact him with their thoughts and ideas.

Legislator Pullen stated that the Board needs to be able to anticipate and get a head start on issues so that we are not just reacting to every issue that comes up. The Board needs to make plans to move forward and find solutions to the issues we face.

Legislator Sinclair suggested having the committees spend more time on strategy, and then come back to a Committee of the Whole forum so that different ideas can be discussed.

It was noted that Mr. Margeson is in the process of interviewing for a Planner.

Adjournment

A motion was made by Legislator Sinclair, seconded by Legislator Fanton and carried to adjourn the meeting at 9:05 p.m.

Respectfully submitted,

Brenda Rigby Riehle, Clerk of the Board