COMMITTEE OF THE WHOLE - MINUTES - 9/12/2002
COMMITTEE OF THE WHOLE – CITY OF MUSKEGO Approved
MINUTES OF MEETING HELD SEPTEMBER 12, 2002
Mayor Slocomb called the meeting to order at 7:09 PM. Also present were Ald. Sanders, Salentine,
Petfalski, Demaske, Patterson, Madden, and LeDoux, Finance Director Dawn Gunderson, and those per
the attached list.
All in attendance recited the Pledge of Allegiance.
Mayor Slocomb noted the meeting was noticed in accordance with the Open Meeting Law.
Minutes of the August 22, 2002 and September 5, 2002 Committee of the Whole meetings were not
available for approval.
Unfinished Business – 2003 Capital Budget
Finance Director reviewed with the committee the detail being presented
Mayor
New Maintenance Van – The Mayor asked that this item be deferred and asked staff to prepare
more updated information on a vehicle purchase. The information previously presented was from
last year’s quote. Ald. Salentine asked about the Ford Expedition that the Police Department was
replacing as a possible solution to the need for a larger vehicle by the maintenance staff. Ald.
Salentine moved to defer. Seconded by Ald. Petfalski and carried by all.
New Business – 2003 Operating Budget
The Mayor turned this item over to the Finance Director who reviewed the detail being presented with the
Committee.
Preliminary discussion of 2003 Operating Budget – For the benefit of the new members to the Committee,
Finance Director Gunderson explained the format of the information presented and how to interpret the
data. Director Gunderson explained that the budget as presented represented the department head
requests, which have been reviewed by the Mayor and the Finance Director. The budget was reviewed in
overview. The budget was presented calls for an increase in debt service levy because of the prior years
use of fund balance to keep the levy lower. It has been the City’s intent to move toward a full support of
the debt with tax levy. This will be the last year the sewer debt is included in the City budget with a
revenue from the sewer utility supporting that debt. All the Sewer Utility debt is now financed by Revenue
bonds. A reduction in revenue, due to lower interest and other grant funds, will no longer be available in
the operating budget for 2003. Administration also recommended a reduction in the budgeted use of fund
balance from $600,000 in 2002 to $500,000. Interest rates have been lower and funds may need to be
used in 2002. The expenditure increases were also reviewed. They included $75,000 for the major road
program, $79,705 for property and liability insurance, $230,000 for health insurance, $10,000 for postage,
$43,350 for Tess Corners Volunteer Fire Co., $55,438 for Contracted Services. Administration is
recommending a transfer of $88,864 to the Capital Improvements Fund for purposes of computer
replacements. The past few years, funds have been available in a special revenue fund for replacement
of computers. Those funds will be running out in the next couple of years. One third of each
department’s computer replacement costs has been included in this budget to fund future replacements
on a three-year rotation schedule at a cost of $88,864. Additional discussion about the use of fund
balance was held. The City has budgeted the use of approximately $500,000 fund balance each year.
Due to higher than estimated interest income and lower than projected expenses, fund balance has not
been used and actually added to. Usually at this time it was said that the City would be at a breakeven
point when comparing revenues and expenditures for a given year. At this time it is anticipated that fund
balance will be used for 2002 because of lower interest rates and less interest income than budgeted.
Director Gunderson cautioned the use of a higher fund balance in 2003. Discussion also took place with
regard to the potential of the loss of State Aid in the future and artificially lowering this year’s tax levy for
that reason along with the difference between lower assessed values to equalized. Ald. Salentine
expressed her concern about the need to expand space for business development to assist in the
diversification of the tax base.
Committee of the Whole Page 2
Minutes of Meeting Held 9/12/02
Finance Director Gunderson reported that the budget, as requested by departments, was at $6.92, an
increase of $1.30 and $6.52 with the present administrative recommendations or a $.90 increase. This
represents a 16% increase in rate. The levy would be approximately $1.6 million.
Mayor Slocomb requested a recess at 8:00 PM.
Meeting convened at 8:05 PM
Finance Director Gunderson distributed a report of the tax calculation and explained that the computer
replacement from the state was the final number entered into the budget. The tax rate is calculated and
the rate applied to the computer value and then the levy is lowered by the amount of the computer state
aid.
The Mayor asked the Committee who they would like to appear before them. The Committee asked that
the Judge appear to discuss the Teen Court, and the Muskego Volunteer Fire Company appear to
discuss their capital item with a breakdown of costs.
Discussion resumed regarding the cost of health insurance benefits and what the future would bring for
this category, including the amount that is contributed toward the health insurance program by
employees.
The Committee directed the Mayor and Finance Director to go back and work with the departments to cut
another $250,000 from the budget as presented at this time. The Committee also requested copies of the
proposed reductions that were established in the Spring when it appeared that the State was going to
eliminate State Aid during the year.
Communications and Miscellaneous Business as Authorized by Law - None
Adjournment
Ald. Petfalski moved to adjourn at 10:18 PM. Ald. Salentine and Ald. Madden seconded; motion carried.
Respectfully submitted,
Dawn R. Gunderson, CPFO
Finance Director