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COMMITTEE OF THE WHOLE - MINUTES - 10/7/2004 COMMITTEE OF THE WHOLE – CITY OF MUSKEGO Approved MINUTES OF MEETING HELD OCTOBER 7, 2004 Audio Available Mayor Slocomb called the meeting to order at 7:08 p.m. Committee members present were Ald. Buckmaster, Ald. Borgman, Ald. Madden, Ald. Melcher, Ald. Patterson, Ald. Salentine, Ald. Schroeder. Also present Finance Director Gunderson. All in attendance recited the Pledge of Allegiance. Mayor Slocomb noted the meeting was noticed in accordance with the Open Meeting Law. Ald. Buckmaster moved for approval of minutes of meetings held September 23, 2004. Ald. Salentine seconded. Ald. Schroeder amended the minutes. On page 5, change 4-4-1/2 to 4 to 4-1/2. Upon a voice vote, the motion to approve the amended minutes of September 23, 2004 carried 7-0. Approval of Agenda Mayor Slocomb requested to move New Business forward on the agenda, taking Review 2005 Special Revenue first and then when that’s completed, go to Unfinished Business. Ald. Buckmaster moved to go to New Business and then go back to Unfinished Business. Ald. Schroeder seconded. Upon a voice vote, the motion carried. New Business Review 2005 Special Revenue Finance Director Dawn Gunderson presented the 2005 Special Revenue budgets. She explained that the funds that are actually budgetary funds for the city are the general fund, referred to as the operating budget which includes the debt service fund, the capital projects budget, and then special revenue funds. These latter funds are the type with specific revenue identified and tracked for specific expenses. Finance Director Gunderson reviewed what the fund represents, why we have it, and what the fund’s source is. Park Dedication Fund—Revenue sources are launched fees at the three lakes, the parking fees at Idle Isle and the bulk of the revenue from subdividers fees. There is a large increase in the subdividers fees for 2005 because these fees were raised significantly beginning with January, 2005 and these fees would apply to subdivisions beginning February 1. The subdividers fee information is provided by the Planning Department. They indicate approximately the number of units that would be subdivided and the fees that would be collected. The expenses are reflected in this fund are those projects that will be improvements to various parks within the city, known or projection of acquisition of park land. This fund is reviewed by the Parks and Recreation Board and they make their recommendations to the city. The other financing source is 10% of the proceeds from the landfill and dedicated to this fund. For 2005, the landfill amount is $121,512. The account sheet reflected what the fund balance projects are going into 2005 and based upon where the 2004 balance ends up. At the end of 2005, it is projected the fund will have $290,510 for future projects. Ald. Schroeder asked if the Parks and Recreation Board was still set on the Idle Isle building renovation? Ald. Melcher stated they would like to move on that project but didn’t think they had been advised of the total yet. Ald. Salentine thought they were still investigating having a class from WCTC work on the project. Ald. Schroeder surmised that where they show, estimate that they are going to spend more than what they are bringing in next year, might not be the case. He didn’t think Idle Isle was a very firm project. Ald. Buckmaster indicated that the Board was looking at co-sponsors for the project. Ald. Melcher inquired about the dumping at Park Arthur, and would they be taking care of the grading. Mayor Slocomb stated they will be taking care of the rough grading, the fine grading would not occur until they had enough good material. Finance Director Gunderson said the project expenses for Park Arthur were identified as trails for $10,000, landscaping for $5,000, the pavilion for $85,000, and the parking lot for $15,000. The Committee of the Whole Page 2 Minutes of Meeting Held 10/07/04 Parks and Recreation Director also noted that on Idle Isle Park, there is some projected cost-sharing by the Water Bugs Ski Team, Inc. and he will have more information in October. Special Assessments Fund—The only thing coming into this fund at this time is the special assessment on the Movie Plex property on the corner of Racine and College. This was set up as a payment plan for the grading work that the city handled on that property and assessed the property owner. There is an amount that goes on the tax bill every year for collection. Eventually, the amount will be transferred out of the fund. Ald. Salentine inquired about the interest on the Schubring Bay assessment? Finance Director Gunderson stated that is not the city’s money. The city is just collecting it for the lake district and the city does not collect any interest. It is the lake district that is paying the cost and incurring the interest so that helps defray their cost for the project. Refuse/Recycling Fund—This fund was in previous years just the recycling portion of our program. In 2003, the city transferred the refuse portion out of the general fund into this fund. In 2003, the transfer amount from the general fund was $284,614. The projection in 2005 is maintaining the present rate being collected with just a higher number of customers. Some of the additional revenue is from recycling grant and fees from Metro-Franklin landfill. The expenses reflected are the wages and benefits for leaf collection staff and some administrative staff for billing done by the water utility clerk. The fees that would be paid to BFI are increased with a CPI. This fund is operating in a good situation. Revolving Loan Fund—This fund was established with seed money from the State in the amount of $320,000. The $320,000 does not show on the account sheet even though the city has the cash; it is owed back to the State if this program was closed out completely. Funds available for loan would be in 2005 of $233.412 plus the $320,000. She reported that in May of 2004, the final loan that was outstanding was paid in full; therefore, there is no outstanding loans or funds borrowed from the city for purposes of expansion, property expansion. Recently, notice was received from the State that they were looking into the fact that the fund was sitting rather idle and questioning pulling the funds back. She did talk to the Department of Revenue and explained that the city had transferred responsibility for the fund over to the Community Development Authority, updated the manual, and efforts were being made in the area of economic development in hopes of enticing interest in loans. In Waukesha County, there is a little difficulty because the loan program is under the Federal guidelines of the Community Development Block grant. There are income limitations on the types of jobs that have to be created and the level of income. There has been difficulty in the past in getting businesses to go through the extra paperwork to qualify for the loan. There were two parties that came before the CDA for loans. One was withdrawn and the second one did not meet the collateral requirement to suit the CDA. The State is willing to delay any action but the State is looking for money that they can draw back and redistribute some place else. Ald. Schroeder stated that if the city does have an economic development committee, one of their priorities should be to market this loan program so the city doesn’t lose the money. Of, if the State only wants the $320,000, then he suggested the CDA may be able to create their own loan fund with more desirable requirements. Mayor Slocomb mentioned three reasons why loans are not being requested; those being (1) the extreme degree of personal disclosure that is required on the operation and principals and (2) creation of one job for every $35,000 of loan, and (3) current good commercial interest rates. EPI Standing Committee—This fund receives $10,000 a year from the landfill under the terms of the landfill contract. Mayor Slocomb explained it’s for the committee that monitors the landfill operations. More money may be spent towards the end of the year because they are doing a cell closure. The standing committee and the city is requiring that the consulting engineer be more diligent in monitoring the cell closure to make sure it is done correctly, taking pictures and getting documentation. Committee is made up of members appointed by the affected municipalities. Committee of the Whole Page 3 Minutes of Meeting Held 10/07/04 Priority Lakes Grant Fund—This fund was established a number of years ago when the city received State- funded programs for priority lakes, both non-point grants and local assistance grants. Those funds have ceased to exist and no longer build the fund. It was a decision a couple of years ago that the city would allocate a portion of the project lakes coordinator/conservation staff person from this fund until the funds are no longer available. It will appropriately finance that person until 2005 and not quite fund all of 2006. Ald. Schroeder questioned what would happen to the position in 2006? Mayor Slocomb said you could fund the position from the general fund because of the position’s activities with the lakes or the position could be fully funded out of conservation funds. Conservation funds and the activities were intended to exist as long those funds are coming in from the landfill. When those funds case to exist, the conservation activities on the scale that we now have, could cease to exist. Cable TV Fund—The revenues identified to support this fund are the cable franchise fees, budgeted at the same level of $115,000 for 2004 and for 2005. The expenses from this fund are for administrative costs for maintaining all the records and the auditing costs that are incurred. The transfer to the general fund for capital items for cable out of the fund for 2005, originally, had presented the operating budget with a $77,500 transfer. But in reviewing the special revenue funds, leaving this fund balance at $100,000 was adequate and increased that transfer by just over $39,000. This will cover the shortfall in the projections for transportation aids. Ald. Buckmaster quesitoned if the fund balance amount of $100,000 was a good accurate accounting of what they need? Mayor Slocomb responded they may not need this amount in a normal year. It would take a catastrophic failure of the equipment. This is to make sure that the city can broadcast over the year. It was recognized by committee members that the State or Federal government could take action and franchise fees would no longer be collected. Finance Director Gunderson added that this fund also covered the expenses for negotiating the contract with the cable company. Ald. Buckmaster would like to see the funds also used for the road program in maintaining the right-of-ways as that was one of the intentional uses for the franchise fees. He recommended $50,000-$75,000 be in the fund as he thought $100,000 was too much as revenue is still coming in until it’s cut. Mayor Slocomb cautioned that transferring more than you have left back up in cash reserves in that fund presents a risk in the budget if come December, they no longer receive cable fees. The revenue will stop January 1 and if you budgeted to spend $150,000 out of an account that only has $100,000 reserve, now you have a $50,000 problem. Finance Director Gunderson added that the fund is supporting $116,782 in the budget that they don’t have to get from taxes and if the money was not there, then the city would have to find money and maybe even raise taxes. Landfill Fund—The source for this fund is the landfill host fees. Projected budget for 2004 was about $1.3 million based on 600,000 tons of waste. At this time, the city is at about 90% and lower than a year ago. The actual for 2003 was 567,000 and 90% of that would be rebudgeting 2004 projections at 510,000 tons and taking that projection out to 2005 and raising it 5% a year in the 10-year projection. This, however, substantially lowers revenue projections for 2004 and to accommodate for that reduction, we made some modifications to estimate compared to budget. The fees went from $1.3 million to the new projection of $1.153 million and therefore, the 10% transfer to the park dedication fund and the 10% transfer to conservation fund are down by about $20,000 each. This is driven by the contracted obligation. The city still needs to establish reserve funds for the well protection which was left at $33,000 because the interest earnings for that fund are so much lower and this is to make up for the loss of earning potential. The city budgeted a $201,000 transfer to the storm water fund to support a capital project in 2004. The project (Boxhorn channel dredging) will not happen in 2004 and it will be moved out to 2006. Transfer of $200,000 to compensated absences in 2004. The capital expenditure of $547,689 was to support capital projects in 2004. The ending fund balance for 2003 was lower than the 25 cent per ton cumulative. With the changes recommended for 2004, the city will barely meet the requirement in 2004, but will have it accomplished. Committee of the Whole Page 4 Minutes of Meeting Held 10/07/04 The projections for 2005, the city will meet the million dollars and have funds in excess by $184,698. In 2005, projecting 510,000 tons and there is an escalator so the revenue will be going up. This fund is reliant upon the amount of waste and also a catastrophic situation at the landfill can affect it. The committee recessed from 8:35 p.m.-8:45 p.m. Future Parkland Landfill Committee Fund—This fund will carry for a long time and cover the expenses of the standing committee. The biggest expense will be for consulting engineer. The landfill is inactive at this time. Briggs and Stratton is now using it for a testing center. Well Testing Reserve Fund—This is the fund established by contract obligation for testing of private wells when the landfill closes. It was established with 5 to 5-1/2 cents per ton. The interest rate was suppose to help build it. It is not developing on the basis it needs to be developed due to current interest rates. Land and Open Space Conservation Fund—Revenue includes a grant for the Ewald-Engle property that is projected to come in two phases—half in 2004 and half in 2005. Substantial amount, $600,000 was borrowed and the $400,000 will offset the debt service to $200,000. Landfill funds are transferred on an annual basis to accommodate the debt service. The urban forestry is incorporated into this fund. There are no more grants forthcoming at this time. The expenditures are for the project lakes conservation coordinator position and the conservation tech and miscellaneous supplies and materials. There is a transfer amount from the landfill fund of $121,512 which will bring the fund to $267,276 at the end of the year which could be utilized if other conservation lands become available. Storm Water—The Boxhorn dredging ($201,000) will not be done until 2006. The three projects totaling approximately $335,000 for 2005 will be funded by transfer from the landfill fund. There will be $147,000 then transferred out to debt service. Rescue Fund—This is where the city recognizes payments to the Tess Corners Fire Department for rescue service. The revenue is from billings on a tier base to users of the service. Revenue may fluctuate as some accounts are uncollectible or Title 19 payments. TC has advised that they are not increasing the fees for 2005. Capital Improvement Detail—In 2003, the city transferred the positive distribution of tax increment into this fund and are utilizing a part of the money to pay for one-time expenses in 2004 and 2005 in the operating budget. The remaining part of the fund was set aside with residual TIF dollars and have been using the funds to pay for computer replacements. The $49,000 into the fund is actually supported by the $243,000 going out. That is ¼ of the computer replacement. The fund will support a few more years of computers. Tax Increment District Funds—The account sheet is a summary of the TIDs still on the books. Currently the city has TIDs 2, 3, 4, 5, 6, 7, 8, and 9. The only two that are active are 8 and 9 and are collecting taxes. TIFs 2-7 are no longer collecting taxes but are maintained for obligations that are applicable to the TIF. These are capital charges for sewer utility. The bulk of the fund is transferred into the sewer utility and will continue for the life of the TIFs and they will close in 2005 as their life of 27 years are up at that point. The expenditures are for auditing fee and financial report on the TIFs. Once the TIF is closed, the remaining funds will then be distributed to the taxing districts. This fund balance is not all the city’s. Sewer Utility Fund—commonly referred to as the RCA fund. This is were RCA assessment fees are collected and sewer connection fees on a payment plan or total amount. The administrative charges are to recover costs to have the fund audited, budgeted and maintaining the records. The money goes into the Committee of the Whole Page 5 Minutes of Meeting Held 10/07/04 general fund. The subsidy going out is related to the sewer utility capital charge. These will no longer be available once the TIFs are done. The non-TIF related RCA will ultimately be recorded in the sewer utility but for budgetary purposes they are reflected here. This is again TIF-related and will eventually be distributed to the taxing entities as the relevant TIFs are closed out. Grant Fund Detail—This will always be a zero balance. It was established to get some of the expenses out of the operating budget that were related to grants. Most of the grants are coming in from the police department. The $17,200 is the water patrolmen and comes from the police department. In 2004, the city received a grant related to the Big Muskego Lake project. The money is being brought into this fund and will be paid out from the fund. Urban Forestry—This was a stand-alone fund but was combined with the conservation fund when the urban forestry program wound down. Recreation Tickets—Program previously monitored by the Parks and Recreation Department. It is now under the Clerk-Treasurer. The fund was created to pull the expense out of the general fund. The city receives 50 cents per ticket and roughly $2,000 a year. Community Development Authority—The CDA is solely supported at this time by the general fund. It is budgeted at $46,000 a year. At the end of 2005, it is projected to have $18,000 but there are a lot of unknowns at this point. Appropriate costs are charged to the TIF. The Planning Department staff has estimated about 5%-10% of their time allocated to the CDA. Compensated Absences Reserve Fund—This fund was established from landfill and covers payouts to employees that have retired or left employment. The interest may not support the payouts or support added liability. Amounts into this fund have been limited due to other priorities for the landfill fund. The city is targeting to have the fund balance at $2.2 million. Unfinished Business Continued review of 2005 Capital Budget Finance Director Gunderson updated the committee on the adjustments made to the capital budget. The capital improvements program budget for 2005 is at $2,179.031 for general fund and $335,140 for storm water. The general borrowing for the city would be $1,071,000. She asked for clarification on the amount for the Tess Corners street lighting? Ald. Salentine and Ald. Schroeder concurred that she should allow $320,000 for the project. In communications from Chief Johnson, he has requested that the 9-1-1 hardware request for $120,000 be removed from the capital budget for 2005. Upon further review, he stated the CAD system would not be able to recognize the latitude and longitude in its current configuration and therefore without that, the hardware enhancement has less value at this time. Finance Director Gunderson moved the item to 2006. He requested that the amount for the emergency generator be increased to $41,000. He asked that the $25,000 for the mobile data computing be removed based on correspondence from Waukesha County indicating they were going to ask for a grant from another source that would not require matching funds. Committee members discussed the need for the emergency generator. An option proposed was in emergency situations to use a fire truck equipped with a generator. Committee of the Whole Page 6 Minutes of Meeting Held 10/07/04 Assessor provided more detailed information on the request for capital funds for revaluation. She is proposing interior inspections for 2005-06-07. With values going up 30%-35% on typical properties, the public will closely examine the database and ask the question as to when the last update of data was done. The city may want to go to a 3-year cycle. Mayor Slocomb mentioned that there may be more challenges because the data is not there to support the revaluation. Mayor Slocomb reported that the roof on the barn at the Old Settlement Centre had no leaks at this time. The roof, however, does need to be replaced in 2005. All the quotes have not been received. He should have them by next week. Ald. Schroeder questioned the sign at the Tess Corners Fire Department’s new station on Loomis, was it up yet? Committee members reported it was not. Ald. Schroeder wanted to discuss briefly the vehicle requested by the fire department. He had discussed the issue with Mr. D’Acquisto that (1) last year the vehicle was $354,000 and (2) this year it came in higher. The other answer was comparing the TCFD 5-year capital plan; in 2008, they have estimated $300,000 for a vehicle. How come MFD is requesting a vehicle in 2005 for a higher amount than what TCFD is requesting in 2008? He will contact Mr. D’Acquisto to get some answers before next week. He will also recommend that Mr. D’Acquisto review the audio of this meeting to get an idea of what information the committee is seeking. Committee also discussed the MVD’s request for replacement of their breathing apparatus. Mayor Slocomb said they received grant for $153,000 expenditure and received $140,000 and they needed the remainder by the end of the year. Finance Director Gunderson said the city was only funding the non-grant portion. Continued review on 2005 Operating Budget Ald. Buckmaster asked if they should be looking more closely at the funding for the liaison officer. He would like to unfund the liaison officer and put an officer on the street. Committee members discussed the value of the liaison officer. Ald. Melcher would like to see a job description of the liaison officer, what exactly does the position involved and what are the impacts? It was recognized that the position is joint with the school district so funding would not be affected until after the school year. In regard to the changes in the police department, Finance Director Gunderson reported they promoted a patrol officer to detective and unfunded a detective position for 2005 for a funded patrol officer and the chief is requesting one more patrol officer. Ald. Schroeder asked about the status of the Plan Director position? Mayor Slocomb responded that the position more or less would remain open until the Interim Plan Director acquires the job qualifications for the position which should be within a year. Committee discussed the Economic Development Committee. The membership would be made up of professionals from the area with a strong interest in the community. Hopefully, people from marketing positions in companies to be able, through their networking, to get the word out on this community and where it is going. Ald. Buckmaster commented that it is imperative that the committee take into consideration that they are looking for businesses that compliment those existing in the area not be competitive. Ald. Schroeder pondered the issue of the request for another building inspector. How much money has been spent on outside inspections versus the cost of hiring of an employee? Finance Director Gunderson reported that in 2003, the city spent $17,080 and in 2004 through the last Council, $14,280. The position is Committee of the Whole Page 7 Minutes of Meeting Held 10/07/04 a $70,000 position and it was proposed to fund it for a half year in 2005, plus the city pays workman’s compensation insurance for the employee. Ald. Schroeder would rather bring outside help in for inspections for annually $50,000 or $60,000 and not paying the fringe benefits, etc. Also, since they are planning for retirement, he did not think that hiring another employee was the best fiscal responsible idea. He thought there may be others that would do the work besides the current contractor. Ald. Madden mentioned that considering the current age of the inspectors, they may not be retiring for another five years. Ald. Buckmaster would like the general revenues projected for building inspections. He was under the impression that the added inspections would fund the position. Finance Director Gunderson advised the committee that to bring the police officer on March 1 instead of July 1 would be just over $24,000. She did talk to the chief and he seems to be willing to start both positions March 1. Communications and Miscellaneous Business as Authorized by Law Finance Director Gunderson shared that the Clerk-Treasurer had asked what she should plan on putting in the tax bill? Ald. Salentine would like to see the pie chart in the tax bill and she recommended a narrative be added explaining it. Finance Director Gunderson said they agreed to put the pie chart in, but would not have space for the narrative. Committee members felt it would be nice to have it in or have it published in the newsletter. Ald. Schroeder requested that when Finance Director Gunderson makes all the proposed changes, could she provide where they were at regarding the rate increase. He would like to see that number and then without the inspector, just paying the outside contractor. The next meeting is scheduled for Thursday, October 14, 2004 for finalization of the budget. Adjournment Ald. Salentine moved to adjourn at 11:26 p.m. Seconded by Ald. Buckmaster. Motion carried 7-0 . Stella Dunahee, CPS Recording Secretary Committee of the Whole Page 8 Minutes of Meeting Held 10/07/04