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COMMITTEE OF THE WHOLE - MINUTES - 9/11/2003 COMMITTEE OF THE WHOLE – CITY OF MUSKEGO Approved MINUTES OF MEETING HELD SEPTEMBER 11, 2003 Mayor Slocomb called the meeting to order at 6:34 PM. Also present were Ald. Petfalski, Ald. Patterson, Ald. Buckmaster, Ald. Damaske, Ald. Salentine, Ald. Schroeder, Ald. Madden, Finance Director Dawn Gunderson, Building & Engineering Director Sean McMullen, Police Chief John Johnson, Clerk-Treasurer Jean Marenda, Attorney Jonathan Swain, 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. Mayor Slocomb stated the Committee of the Whole budget minutes would be approved at the last Budget Committee of the Whole meeting. Closed Session No. 1 – Mayor Slocomb read the Notice of Closed Session – Please take notice that following the Review of Minutes of Previous Meetings, the Committee of the Whole of The City of Muskego will convene upon passage of the proper motion into closed session pursuant to: 19.85(1)(c) Considering employment, promotion, compensation or performance evaluation data of any public employee over which the governmental body has jurisdiction or exercises responsibility, more specifically to develop strategy for negotiating the labor agreements for the City’s bargaining units. Closed Session No. 2 – Mayor Slocomb read the Notice of Closed Session – Please take notice that following the Interviews of Teen Advisory Board Candidates, The Committee of the Whole of the City of Muskego will convene upon passage of the proper motion into closed session pursuant to: 19.85(1)(e) Deliberating or negotiating the purchasing of public properties, the investing of public funds, or conducting other specified public business, whenever competitive or bargaining reasons require a closed session, more specifically to develop negotiation/renegotiation strategy to be used in reopening/terminating the Refuse and Recycling contract. Convene into Closed Session No. 1 – Ald. Schroeder moved to convene into closed session at 6:35 PM. Seconded by Ald. Buckmaster. Upon roll call vote, motion carried 7 – 0. Convene into Open Session – Ald. Salentine moved to convene into open session at 8:10. Seconded by Ald. Buchmaster. Upon roll call vote, motion carried 7 – 0. Interviews of Teen Advisory Board Candidates – Ald. Schroeder stated there currently is one opening on the Teen Advisory Board. Ald. Schroeder introduced candidate Greg Schlosser. Following interview, Ald. Schroeder moved to appoint Eric Schlosser to the Teen Advisory Board, to be sworn in at the September 18, 2003 Teen Advisory Board Meeting. Seconded by Ald. Petfalski. Motion carried by all. Mayor Slocomb recessed meeting at 8:20 PM. Meeting resumed at 8:30 PM. Convene into Closed Session No. 2 – Ald. Buckmaster moved to convene into closed session at 8:33 PM. Seconded by Ald. Patterson. Upon roll call vote, motion carried 7 – 0. Convene into Open Session – Ald. Damaske moved to convene into open session at 8:53 PM. Seconded by Ald. Petfalski. Upon roll call vote, motion carried 7 – 0. Unfinished Business – 2004 Capital Budget Engineering/Building Director Sean McMullen presented the capital budget requests for Engineering and Stormwater. A. Engineering 1. Muskego Channel Dredging – The channel is the main channel that comes out of Villages at Muskego Lakes Country Club, goes through next to Ryan Road Lift Station, continues down Boxhorn Drive, crosses underneath, goes into channel, and into Big Muskego Lake. The City has been trying since 1997 to fix channel. Physical damage is being caused to properties in the area. The estimated cost is $201,000.00. The City is able to utilize Department of Public Works equipment to keep the cost down from between $350,000.00 to $500,000.00. The City is responsible because they are caretakers of all drainage channels in the City, except those located on private property, Committee of the Whole Page 2 Minutes of Meeting Held September 11, 2003 Unfinished Business – 2004 Capital Budget, A - 1 Muskego Channel Dredging Continued because the channel travels through City ditches. The last work completed on the channel was twenty-five years ago. The damage being caused is flooding to properties and wetlands expanding. Mayor Slocomb added that the channel used to historically dry up in August - September. This is the first year that this has not happened since the sewer project has been completed. Engineer I David Simpson presented the capital budget requests for Stormwater. B. Stormwater 1. North of Kelsey – A stormwater quality pond is being proposed for construction in the southern half of Denoon Park just north of Kelsey. Stormwater runoff currently runs into Denoon Lake. The existing retention pond on Denoon School property is only for Denoon School. The proposed pond is approximately a five to ten-acre area parcel that was part of the Salentine/Loughney CSM that now belongs to the City. The proposed pond is part of the water quality devise to catch agriculture runoff. The cost of the pond would be $225,000.00. Discussion continued on future development and saving by being able to charge back to future development. The Developer has donated land instead of putting in a retention pond in their section. There is no benefit to wait and tie into a future development that is being considered. If the pond is not completed sediment (slit) will end up in Lake Denoon. This is a quality issue to keep silt out of Lake Denoon. 2. Tess Corners Cr. Channel (S. of Woods) – This is a creek dredging issue. The creek runs under Woods Road, stops before Lake Britney, Lake Lore and West Lake area, and then heads east out of the City. There is currently debris and build up in the creek to create places where water is not able to flow through. $236,000.00 ($40,000.00 in 2004 for design and $196,000.00 in 2005 for construction) is being requested for the project. Most of the problem is in the Bay Lawn Subdivision. Bay Lawn Subdivision has underground springs. Water backs up into yards because creek is not able to flow. The last time anything was done to this ditch was in the 1980’s. Two years ago the City applied for a permit from the DNR to do the dredging of the creek. The permits can be automatically renewed as long as the City is continually working on the process. Ald. Schroeder asked Building/Engineer Director McMullen to prioritize the above three projects. Big Muskego Lake Channel would be number 1, Kelsey Drive number 2, and Tess Corners number 3. C. Muskego Town Hall Engineer/Building Director Sean McMullen presented cost breakdown and inventory list for the work to be completed on the Town Hall Building. Originally it was estimated that $116,000.00 was needed. The numbers reflect the costs associated with publicly bidding the remaining work, respective of the work currently being done under Don Pionek’s direction. It would take two to three weeks to complete the bidding documents and obtain the proper approvals. The bid date of early to mid October 2003 is possible. The work would commence into the first quarter of 2004. 1. Roof Replacement a. Removal of three layers of shingles $ 16,500.00 b. Refuse containers 4,000.00 c. Sheathing 12,600.00 d. Roofing with flashing materials, based on three tab 17,500.00 laminated thirty five year shingles e. Allotment for rot/damage 8,000.00 2. Gutter removal and replacement a. Removals 2,000.00 b. Replacement - new strapping 4,000.00 3. Entrance Area a. Removal of existing façade 12,450.00 b. Replacement of existing super structure 7,800.00 c. Replacement of wood areas 6,600.00 d. Sheeting and specialties 13,250.00 e. Exterior finishes 2,500.00 Committee of the Whole Page 3 Minutes of Meeting Held September 11, 2003 Unfinished Business 2004 Capital Budget, Muskego Town Hall Continued 4. Truss System (web bracing) a. Removal of titles (Interior), estimated cost from 7,600.00 Harenda Environmental b. Truss installations 45,000.00 c. Interior finishes 3,500.00 5. Contingencies a. Legal and administration 2,500.00 b. Undesignated 10,000.00 Total $175,800.00 Discussion continued on proposed work, consequence of not fixing leaking roof, possibility of boarding up Town Hall, and cost of new building to be constructed on existing foundation. Muskego Town Hall deferred until Operating and Capital Budgets have been approved. New Business - 2004 Operating Budget Mayor Slocomb turned this item over to Finance Director Dawn Gunderson who reviewed the detail being presented with the Committee. 1. Presentation of Administrative recommended budget For the benefit of the new members to the Committee, Finance Director Gunderson explained that the review would be in two phases, Debt Service and General Operating. After reviewing Debt Service and General Operating Budget, Finance Director Gunderson stated she would come back to Capital to look at Financial Impact of funding parts or all of Five Year Capital Plan and effect it would have on Operating Budget and Debt Service. After that Special Review Funds will be reviewed. The budget as presented represents the department head request, which have been reviewed by Mayor Slocomb and Finance Director Gunderson to try and meet the Committee’s commitment to hold existing tax rate. Finance Director Gunderson explained that even though the City may hold the existing tax rate when citizens receive their tax bills there may be an increase due to other taxes the City does not control: School District, County, Community College, and a small portion of the State. Finance Director Gunderson reviewed Debt Service. This not only has an impact on 2004 budget but also on Operating going out into the future. Debt Service in the past has been supported with TIF revenue and contributions by Utilities to meet their General Obligation Debt. After 2003 Sewer Utility will be supporting it’s own revenue bond debt. Existing debt levy for 2003 is $1,500,000.00. The debt levy as presented for 2004 is now $1,666,729.00. This is an adjusted figure to reflect delaying repayment to Sewer Utility for 3 years and refinancing at a rate of two percent. The 2005 debt levy will go up to $1,900,000.00 and increase each year after that until 2009 before it starts to go down. The committee needs to review these numbers to determine if the City should take a little more of the impact in 2004. Presented was worksheet prepared by Ehlers & Associates on debt payments currently being made. Repayments for sewer and CDA issue are not on schedule. Discussion continued on Debt Service. The next scheduled presented showed how the two different levies are handled. Finance Director Gunderson explained how the value was arrived at for assessing taxes collection. There are the TID Districts that are State issued equalized values and the assessed value (the numbers the assessor represents as the value of the property). This is the number the City taxes against and collects taxes on. Currently the City is at eighty eight percent of the equalized value. The tax levy Aldermen have directed the City to work towards is $10,088,520.00 or a tax rate of $6.28. The tax levy is made up of Debt Service and General Operating. To keep the levy the same as 2003 because Debt Service is going up there will have to be some reductions in General Operating Budget. If Aldermen would allow tax rate to go up to meet the proposed debt service the tax rate would increase by six cents. Next Finance Director Gunderson presented the schedule that showed what the tax levy for General Fund would have to be to keep levy the same as 2003. Review and discussion took place on Department requests for 2004 and what administration is recommending. The City is loosing approximately $184,000.00 in State Share Revenue in 2004 and an estimated seven percent reduction in State Transportation. In 2003 the City committed $500,000.00 in Fund Balance. Fund Balance was used in 2002 for the first time in years. Historically with return of investment the City has made up any budgeted use of Fund Balance. If the City comes in with the 2003 committed amount of $500,000.00 it cannot afford to do the same for 2004. Everything presented is shown not using Fund Balance. The Fund Balance effects the City’s bond rating. The City’s interest income is expected to be down another Committee of the Whole Page 4 Minutes of Meeting Held September 11, 2003 New Business - 2004 Operating Budget Continued $40,000.00. Finance Director Gunderson reviewed administrative cuts to Department requests and also areas of recommended increased revenue sources. Finance Director Gunderson reviewed expenses funded with non-levied dollars. Proposed is funding one time expenses with non-levy dollars. Landfill funds and excess TIF Funds are examples of non-levy funds. Presented and discussed were alternatives to meeting current tax rate for operating expenses. One option is adding hydrant rental to water utility bills. It is too late to do for 2004 because it requires Public Service Commission approval and Public Hearing but could be done for future years. Explained was charging tax for land owed by Sewer Utility and improvements above ground on the land and loss of income for taxation for that property if it could have been used for another purpose. Currently some salaries are charged off to Sewer Utility but there may be others. Also some of the Special Revenue Funds should be charged for salaries of people working with these funds. There may be other programs and space that should be charged off to Sewer Utility. Discussion continued on putting Contingency Funds with Landfill Funds for three years. Other items looked at were volunteer retirement incentives, creation of a Stormwater Utility, health insurance alternatives, higher contribution to health insurance costs, physical shut down of City Hall, elimination of positions, and layoff of positions. Fire Department budgets have not been looked at by line item so there may be some reductions there. Discussion took place on current and old landfill contracts and allocation of money. Finance Director Gunderson presented and reviewed Summary Recap of Revenues, Expenses and Other Financing Sources/Uses; Personnel-Non Personnel Recap; and City Totals. Mayor Slocomb stated the debt retirement for 2003 was $2,250,000.00 and will get to committee information on debt as a percent of levy. Landfill schedule will be sent to all the Aldermen. Communications and Miscellaneous Business as Authorized by Law - None Adjournment Ald. Damaske moved to adjourn at 10:55 PM. Ald. Salentine seconded; motion carried 7 - 0. Respectfully submitted, Dawn R. Gunderson, CPFO Finance Director