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COMMITTEE OF THE WHOLE - MINUTES - 9/14/2006 COMMITTEE OF THE WHOLE – CITY OF MUSKEGO Approved MINUTES OF MEETING HELD SEPTEMBER 14, 2006 Mayor Charles H. Damaske called the meeting to order at 6:30 PM and led those present in the Pledge of Allegiance. ROLL CALL Present: Mayor Damaske, City Administrator Sheiffer, Ald. Borgman, Ald. Buckmaster, Ald Madden, Ald. Melcher, Ald. Salentine, Ald. Schaefer, and Ald. Snead. Also present were those listed on the attached sheet. STATEMENT OF PUBLIC NOTICE Mayor Damaske stated that the meeting was noticed in accordance with the opening meeting law. APPROVAL OF AGENDA Ald. Salentine moved for approval of the September 14, 2006 agenda. Ald Snead seconded. Motion to approve the agenda carried unanimously. REVIEW MINUTES OF PREVIOUS MEETING Ald. Salentine moved for approval of the July 20, 2006 minutes. Ald. Borgman seconded. Motion to approve the minutes carried unanimously. UNFINISHED BUSINESS None. NEW BUSINESS Discuss timing of hiring a Police Chief considering work being done on the Fire Study (Mayor/City Administrator) City Administrator Sheiffer noted that the President of the Police & Fire Commission, Robert Rammer, is in attendance as well as Police Chief John Johnson. She explained that the point of the discussion this evening is to look at the timing for the hiring process so that both the Police & Fire Commission and the Common Council are both on board. This discussion is in light of the recent fire study authorized by the Common Council and the fact that there is an option of hiring a Public Safety Director who would be responsible for overseeing both Police and Fire Departments. Mr. Rammer thanked the Council for the opportunity for this discussion. He would like to address the option of hiring a Public Safety Director. The Police & Fire Commission’s position is that they believe very strongly that the position of Chief of Police should be filled without delay and as soon as possible. He listed the following voiced by the Police & Fire Commissioners: Low crime rate in Muskego High quality of Life in Muskego Benefits of living in Muskego Committee of the Whole Page 2 September 14, 2006 He stated that the Commissioners felt that too often this is taken for granted. The quality of life in the City of Muskego is the result of conscience decision and forthright thinking. It is related to the Police Department and the proactive approach of policing that has been its focus. The Commissioners believe that not refilling this position would have a negative effect in this Community. The Commissioners also realize that the study on the Fire Department will take approximately 6 months and that the Public Safety Director issue is only one small component of that study. If that position is not recommended, the Chief position could be vacant for at least 8 months and given time for debate and Council determination, might leave the position vacant for one (1) year. There is also consideration of an Interim Chief to cover duties. If that Interim Chief would also be interested in the position, the duration could possibly have a negative impact on that candidate’s potential and that would not be fair. The department is not at full capacity and reassigning duties internally would be a strain on the department. Mr. Rammer went on to say that the Commissioners feel that both the Public Safety Director and the Police Chief position are significantly different and require different knowledge and skills. On page 4 of the study, TriData has stated that about half of their work is fire department management studies and the rest is fire and EMS research and evaluation. Accepting any recommendation from TriData on the Police Department would not be a service to the department. These are two different entities and need to be kept separate. Mr. Rammer also suggested that you ask the present Chief’s counsel to ask what he thinks is best for the department. The Police & Fire Commission hopes that the Common Council will support them in filling the Chief of Police position for the City of Muskego. Ald. Buckmaster thanked Mr. Rammer for his time to give the Police & Fire Commission’s input and to state that after speaking to the Police Chief and other members and communities, he feels that replacing the Chief of Police position is the correct way to proceed. Ald. Melcher also spoke with different communities and feels that his research did not point in the direction of fitting a Public Safety Director into this community. Mayor indicated that the City of Oconomowoc has recently hired a Public Safety Director. Ald. Salentine questioned the process of hiring an Interim Police Chief. Mr. Rammer explained the Commission’s process and reiterated that the Commission will examine the best service with the least amount of disturbance to the community and department. Ald. Buckmaster brought up the issue of the wage scales for the Police Chief and Captain and that the Council will be reviewing the wage scales. Mr. Rammer agrees that the wage scale should be set prior to interviewing. Committee of the Whole Page 3 September 14, 2006 Ald. Madden felt that the City should go ahead and hire a Police Chief, as there is a lot of work to be done on the fire departments. A poll was taken of the aldermen on their consensus Ald. Borgman would like to continue pursuing a Public Safety Director. Ald. Madden, Ald. Melcher, Ald. Snead and Ald. Buckmaster felt we should hire a Chief Ald. Salentine suggested setting a wage for a Police Chief and Interim Police Chief and by that time the fire study may be completed. Ald. Schaefer abstained from making any comment. STUDY SESSION ON PROPOSED 2007 BUDGET General Budget Summary Comments (Mayor/City Administrator) City Administrator Sheiffer discussed the format changes that are listed in Supplemental A (attached). The intent is to give Council good information for decision-making. This is the same format that the City is required to report annual financial activity to the State, following their accounting system. Ald. Melcher questioned payment in lieu of taxes and the Accounting Supervisor explained payments received from different entities. She reviewed the General Fund Revenue Budget and the General Fund Expenditure Budget as well as the new table of contents and supplemental memos at the end of the section. City Administrator Sheiffer referred to the Mayor’ 2007 Proposed Budget Summary Comments. Overview – (1) to Keep the tax levy at zero, (2) to continue all current services and programs for City residents and taxpayers, (3) to provide new Sunday hours at the Muskego Library, and (4) to present a proposed budget that includes no new debt service This proposed budget accomplishes these things (copy attached). The City’s current mill rate is $4.74 (per thousand dollars of assessed value), thus the 2007 budget provides for a decrease of thirteen (13) cents in the City’s mill rate. City Administrator Sheiffer continued to highlight sections talking about significant changes from the 2006 general budget. The Administrative recommendation is that the excess surplus funds from general funds, $390,000, be taken from the general fund and earmarked for the Janesville Road Reconstruction Project-Phase II. November 6, 2006, at 7:00 PM is the anticipated Public Hearing. Mayor noted that staff did an excellent job in preparation of the budget documents. The Committee recessed at 7:45 PM. Committee of the Whole Page 4 September 14, 2006 The Committee reconvened at 8:02 PM City Administrator again reviewed the 2006 surplus being brought into the 2007 budget. Ald. Melcher questioned Development Charges. It was explained that these are engineering charges. City Administrator explained revenue graphs and the changes from 2006 to 2007 budget. City Administrator explained the Expenditure Graphs. She stated that as these are reviewed, the department heads are available to answer questions. Review was made of the following sections of the expenditure fund: GENERAL GOVERNMENT Common Council/Mayor – decrease in staffing. Clerk’s Department – no significant increase. Administrator Assessor & Board of Review – Increase in revalue costs. Assessor Mecha noted that professional services would have to be dealt with in 2008, as it is contractual. Non-Departmental – Cable Club Expenses moved to Special Revenue/Cable Elections Municipal Court Maintenance of City Hall Information Systems Finance Department PUBLIC SAFETY Police Department – Joe Sommers is requesting reconsideration of the maintenance items that were removed by Administration ($5,286). Chief Johnson stated the Department has not increased an officer as requested by the Council four years ago; there are still two vacant positions. Vest Reimbursement was cut, leaving the department short one vest that is required for safety issues. Training - Every ten years we have an opportunity to send someone to the FBI Academy (approximately $10,000) and we are only charged $1,000. Supplies for Conferences and Special Events – Already cut. Buildings & Grounds – Furnace needs to be rebuilt or replaced, mandated hydraulic testing of the elevators. The amount requested is needed. Supplies Administrative Costs for crime prevention program. Personnel Management – Actual costs to fill one vacancy; cannot do with the proposed cut. Mayor suggested purchasing the vests with this year’s surplus monies. City Administrator felt that it is not a problem with spending this year’s money for next year items. Budget amendments and the City’s purchasing policy was discussed related to unbudgeted expenditures. Committee of the Whole Page 5 September 14, 2006 Public Safety – Volunteer Fire Departments – Budget numbers are the same for fire departments as they were last year. The Tess Corners Volunteer Fire Department is requesting the same budget amount for 2007 as 2006, but they have noted this is subject to change with recommendation of purchase of requested truck. Muskego Volunteer Fire Company - There is additional funding for staffing related to their fire inspection activity as this department is not in State compliance for inspections. Ald. Melcher questioned the amount for rescue service. It was explained that this has been taken out of this general account and put into a special revenue fund for payment of rescue runs as well as the expenditures for the rescue runs paid to Tess Corners Volunteer Fire Department. City Administrator apologized as she neglected to call the Tess Corners Volunteer Fire Department to ask for representation at tonight’s meeting. Ald. Buckmaster stated that fees paid to attorneys for the open record requests should not be paid by the taxpayers. Fire Chief Schaefer explained that the fees being paid to attorneys are to correct a situation that the department was put into by the Board of Directors. Building & Plumbing Inspection Health & Human Services That is the end of the public safety with the exception of animal warden. Public Works/Engineering – Pages had been reformatted and were handed out to be replaced in budget book. Culture, Recreation and Education Non-Departmental Ald. Borgman questioned Little Muskego Lake Aquatic figures and Finance Dept. Supervisor Mueller stated she would secure information for him. Library Department – Librarian Sanhuber received clarification that refilling of vacancies being put on hold was for new positions. Parks & Recreation Department – new pages, with additional summary, were distributed. Parks & Recreation Director advised that the maintenance budgeted for 2006 is already at the limit. He also was concerned with the cuts in operation supplies and contracted services related to use of credit cards. Council reviewed new programs. Ald. Buckmaster complimented Director Anderson on the good job that he is doing with Parks & Recreation Programs. Conservation and Development Planning Department & Economic Development - Jeff Muenkel was not in attendance as he had a training commitment. Committee of the Whole Page 6 September 14, 2006 Capital Outlay Police Vehicle Replacement Activity Public Works Department – Road Improvement. It was clarified that this is an increase from 2006. Ald. Buckmaster requested that Engineering/Building Inspection Director Mullen provide the committee with a memo how far behind planned road improvement projects had fallen from the limited funds available for this. Ald. Borgman asked if Hardtke Drive was included in the Urban Rural Drainage amount and Director McMullen stated it is. Zero dollars are included in the Contingency for 2007. Non-Departmental Bank Service Charges Other Financing Uses Unfunded Budget Requests Items cut from 2007 Operating and Capital Budgets that department heads are requesting the Council revisit. City Administrator reviewed the graphics for expenditures, history on mill rates, and tax levies. The Council reviewed the draft of the Resolution to establish the amount of salaries and wages which shall be paid by the City of Muskego to it’s non-union employees, noting that there is a City performance incentive program. Also reviewed was the Position Summary by Department. There is a net decrease of 2.26 positions from the 2006 Budget to proposed 2007. City Administrator stated she felt the budget process was going very well. Any specific concerns were asked to be given to Mayor prior to the next meeting. ADJOURNMENT Ald. Buckmaster moved to adjourn at 9:26 PM. Seconded by Ald. Borgman, motion carried. COMMUNICATIONS AND MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW None Transcribed from Meeting Recording Cathie M. Anderson Committee of the Whole Page 7 September 14, 2006 Memo MAYOR’S 2007 PROPOSED BUDGET SUMMARY COMMENTS OVERVIEW My goals with the 2007 proposed City budget were as follows: (1) to keep the tax levy increase at zero (2) to continue all current services and programs for City residents and taxpayers (3) to provide new Sunday hours at the Muskego Library (4) to present a proposed budget that includes no new debt. The proposed budget I am presenting to the Common Council for consideration accomplishes these goals. The 2007 proposed general fund operations expenditure budget reflects a 3.52% increase in expenditures from the 2006 general fund operations expenditure budget. The proposed 2007 general fund operations revenue budget includes a 3.52% increase in revenues from the 2006 revenue budget but provides 0% increase in the tax levy. The debt service budget is presented separately and includes no new borrowing. Approx. $59,000 more in tax levy is needed over the 2006 debt service tax levy to support existing debt payments for prior obligations. The proposed mill rate for the City based on this proposed operations budget and the levy needed to support existing debt service is estimated and broken down as follows: general fund operating budget = $3.69 debt service budget = $ .92 -------- Total est./proposed mill rate = $4.61 per thousand dollars of assessed value The City’s current mill rate is $4.74 (per thousand dollars of assessed value), thus the proposed 2007 budget provides for a decrease of thirteen (13) cents in the City’s mill rate. Significant Changes from the 2006 to the 2007 General Fund Budget Revenues For 2007 revenue projections, we have looked at three (3) years actual history for each of our revenue line items as well as 2006 year to date information. We have also taken into account information which may affect revenue streams such as the pace of construction in the City. Taxes Committee of the Whole Page 8 September 14, 2006 * As noted above, the tax levy supporting the proposed general fund revenue budget has not increased over 2006’s. Intergovernmental Revenue * The City is no longer eligible for the State’s expenditure restraint program. In order to qualify, the City’s mill rate must be greater than $5.00. The City’s mill rate set last year is $4.74, thus the City does not qualify for the expenditure restraint program and therefore we will not see revenue from that program in 2007. We have decreased revenues in the proposed 2007 budget to reflect those dollars going away. The 2006 budget included $46,102 from the expenditure restraint program. * State shared revenues included at this point in our budget process are an estimate pending notification from the State as to the exact amount the City will receive in 2007. The amount included in the proposed budget is the amount the City received in 2006 minus expenditure restraint program funds. * The amount of State transportation aide included in the revenue budget at this time is an estimate pending notification from the State as to the exact amount the City will receive in 2007. The amount included in the 2007 proposed budget is the amount the City received in 2006. Licenses and Permits * Cable franchise fees show as a direct revenue to the general fund in the 2007 budget. In 2004, 2005, and 2006, cable franchise fees were a revenue to the cable special revenue fund and then were largely transferred to the general fund revenue budget to support general fund operations. Of the $135,000 of cable franchise fee revenue anticipated in 2007, $115,000 will be to support general operations. (The other $20,000 will be transferred out of the expenditure budget to support staffing costs that are assigned to the cable special revenue fund for work related to cable. * Based on three years of history and year to date activity, we have increased revenue from building, electrical and plumbing permits by $145,400. Fines, Forfeits and Penalties * Revenue from court fines and forfeitures is projected by the Police Department to slightly decrease in 2007. This may be due to the Department not being fully staffed in 2006. Public Charges for Services * Miscellaneous reimbursements in this budget category have decreased from $40,000 to $500 because activity related to charges for ag. use reimbursements is expected to be minimal. * We have increased construction review fees by $15,000 to closer reflect the last three years of actual activity. Committee of the Whole Page 9 September 14, 2006 * Revenue from Park and Rec. athletic programs is up while revenue from child care programming is down. 2007 revenue projections have been adjusted for this. * Revenue flow projected for Town Hall programming started later in 2006 than anticipated. Revenue for 2007 has been adjusted to reflect projected activity for 2007. (Director Anderson has prepared a supplemental memo included in Section 11 of your budget notebook to discuss this further for Council and to address how it affects the projected payback to the park dedication fund for improvements to the Town Hall building.) Intergovernmental Charges for Services – No significant changes to note. Miscellaneous Revenues * Earned interest income is higher (an additional $250,000 from the 2006 budget) than it has been the last couple years because interest rates have come up. For the 2007 budget, we have based the interest earnings projection on an average interest rate of 4.5%. Other Financing Sources * In this section of the revenue budget you see funds coming into the revenue budget from other City sources. A total of $405,000 has been brought in to assist with balancing the 2007 budget from the following other City sources: fund balance ($100,000), refuse/recycling fund ($80,000), rescue fund ($25,000), capital improvements-gf – distribution of positive tax increment ($200,000). It should be noted that in 2006, almost $600,000 was used from other sources to balance the budget as opposed to increasing the tax levy or other fees. Interdepartmental Revenue * This revenue consists of payback to the City budget from the Water and Sewer Utilities for liability and property insurance costs related to the utilities. Expenditures General Government Reductions in the Common Council/Mayor’s budget are related to two things. One is a reduction in staffing assigned to the Mayor’s office budget of 1.47 positions. I have made continued efforts to be efficient with the dollars the City spends on staff in an effort to control costs. Also in this budget, as I have previously announced, I have Committee of the Whole Page 10 September 14, 2006 voluntarily cut in half the amount of salary and benefits provided by City ordinance that I will accept as the Mayor. The Assessor’s budget includes an increase of $95,000 for expenses related to revalution work. The general legal budget has increased to reflect actual activity. The 2006 budget amount reflected a desire to decrease legal costs however it should be noted that the City has actually spent in excess of the amount budgeted in 2006 in 2003, 2004, and 2005. Public Safety Pending the completion/results of the Fire Service Study expected in early 2007, I am recommending the budgets for the Fire Department remain the same as 2006. Health and Human Services – No significant changes to note. Public Works - No significant changes to note. Culture, Recreation and Education The library budget now provides for Sunday Library hours for the community. Generally through the school year, the Library will be open on Sundays. I am very pleased to have led the effort to bring this new level of service to the community a reality. Conservation and Development The Conservation Technician and Lakes Project Coordinator positions within the planning department are funded 100% from the conservation fund in 2007. Part of the Planning Secretary and Planning Director salaries which were being charged to the conservation fund have been moved from the conservation fund to the general fund expenditure budget for 2007. Capital Outlay I am supporting an increase of $110,000 in the annual road improvement program budget. Taxpayers expect infrastructure (streets, etc.) to be maintained in good condition and poor roads in our community will be a deterrent to economic development. New businesses want to move to communities that are well maintained because it helps protect their business investment. Other Financing Uses There is no contingency amount included in the 2007 proposed expenditure budget. This is a conservative approach but we have the knowledge that should an unforeseen necessary expenditure arise during the year, the budget could be amended to move money from the City’s undesignated fund balance. Committee of the Whole Page 11 September 14, 2006 General Changes Affecting Various Categories of the General Fund Expenditure Budget We have worked in 2006 to settle new, three (3) year labor contracts with the majority of represented employees of the City. We are hoping to have settled all the labor contracts for three years prior to the adoption of the 2007 budget. The 2007 proposed budget provides for wage changes as contracted or as estimated to be contracted for all union positions. The budget also includes an estimated amount (5%) for wage changes and performance incentive payments in 2007 for non-union employees. The Finance Department Supervisor has recommended that the City budget for 2088 hours for 2007 as opposed to the normal 2080 hours because there is an extra workday in 2007. Pending actual numbers for health insurance, a 15% increase for health insurance premiums is included in the proposed budget. No new positions are provided for in the proposed 2007 budget. As you can see from the full time equivalent position summary chart for all City staff positions (excluding temporary and seasonal employees) there is a reduction of 1.78 funded positions from the approved 2006 budget to the proposed 2007 budget. Again, this is to control costs. Debt Service No new debt is proposed for 2007. The debt service budget includes tax levy support for prior obligations only. Existing debt service payments require an additional $58,656 in tax levy over the 2006 debt service levy. 2006 Surplus Fiscal year 2006 is estimated to end with the City realizing more revenue than budgeted and expending less than budgeted resulting in a net surplus of approx. $390,000. In addition to that, the City will not need to make budgeted transfers into the general fund revenue budget of $597,000. We are estimating spending approx. $500,000 less than budgeted in 2006. This is in large part related to the Police Department and Library not being fully staffed in 2006. Wages were also less than expected for Recreation programs. I am recommending that the surplus funds (approx. $390,000) from the 2006 operating budget be designated formally by Council resolution for the upcoming Janesville Road project. As the Council is aware, the City needs to plan financially for this major project. Mayor Charles Damaske September 8, 2006 Committee of the Whole Page 12 September 14, 2006