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FM20040317 FINANCE COMMITTEE - CITY OF MUSKEGO Approved MINUTES OF MEETING HELD WEDNESDAY, MARCH 17, 2004 The meeting was called to order at 7:07 pm by Mayor Slocomb with Committee Members Petfalski, Salentine and Schroeder present along with Finance Director Dawn Gunderson, City Clerk-Treasurer Jean Marenda and Information Systems Director Joe Sommers. Those present recited the Pledge of Allegiance. Mayor Slocomb stated the meeting was noticed in accordance with the open meeting law. APPROVAL OF MINUTES Ald. Salentine moved to approve minutes of the meeting held March 9, 2004. Ald. Petfalski seconded the motion. Ald. Salentine questioned why the Agreement for Testing Geese at Idle Park was not on the agenda under Unfinished Business. Ald. Schroeder stated the Parks & Recreation Board is looking at other options. Ald. Salentine asked that this item be put on the Tuesday, March 23, 2004, Finance Agenda for an update. The motion to approve the minutes passed unanimously. LICENSE APPROVALS Ald. Salentine moved to recommend approval of Operator’s License for Laurie Myles, Lynda L. Kisting, and Kristopher DeMent subject to receipt of fees, favorable police reports, and verification of schooling. Seconded by Ald. Petfalski, motion carried 3 - 0. Ald. Salentine moved to recommend approval of Operator’s License for Lynda Kristing, subject to favorable police report. Seconded by Ald. Petfalski, motion carried 3-0. Ald. Salentine moved to recommend approval of Operator’s License for Joshua Stewart, subject to 3-6- 9-12 month reviews. Seconded by Ald. Petfalski, motion carried 3-0. Penny Halle appeared before the committee representing the Friends of the Library. Ms. Halle advised that the Library Board, Friends of the Library, and staff are planning a wine and cheese tasting event for Saturday, May 8, 2004, as a fundraiser, and are applying for a “Class B” license to sell wine. Ald. Petfalski moved to approve Temporary “Class B” Retailer’s License for the May 8, 2004 event. Seconded by Ald. Salentine, motion carried 3-0. PERIODIC LICENSE REVIEW - None. UNFINISHED BUSINESS - None NEW BUSINESS Consider US Cellular Agreement (IS) - Information Systems Director Joe Sommers appeared before the committee to advise that the State of Wisconsin has entered into an agreement with US Cellular for wireless services, in which the City of Muskego is eligible. The Department of Administration has touted this as a program that will save the State in excess of $2 million over the next three years. The City of Muskego’s contract with US Cellular ends in November and would be preempted by the State contract, if we chose to join it. The State contract will save us approximately $150.00 per month for the city work phones. Employees will pay an additional $1,384 per month for their phones since employees are not eligible under the new plan. Employees could join a package plan or pay a $150.00 one-time contract break fee per phone. Savings are based on a monthly fee of $4.75 instead of the current $8.00 for the 45 work phones. The additional fees are based on employees with a usage of less than 120 minutes joining a $25.00 plan and employees with a usage over 120 minutes joining a $35.00 plan. Mayor Slocomb stated that he would like to see us continue on with the existing program through October which is when the existing contract expires and then joining the new plan would only affect approximately 30 users. The State contract period is through February, 2007and the City could change to that contract at any time. Mayor suggested that the committee might consider asking the employees if they would be willing to pay approximately $1.00 additional, per month, to cover the amount of money that the City could have saved and stay with the existing plan. Ald. Schroeder requested a list of Finance Committee Minutes Page 2 March 17, 2004 employees, by position, who are using cell phones for City purposes, approximately 30 phones. Ald. Petfalski moved to recommend that, with the employees’ consent to pay an additional monthly amount of approximately $1.00, per phone, the City stay with the existing plan with US Cellular. Seconded by Ald. Schroeder, motion carried 3-0. Approval of 2004 parks service agreements (Parks & Recreation) - The committee reviewed a memorandum from Parks & Recreation Director Craig Anderson advising that the Parks & Recreation Board is recommending the service contract awards to: Service Vendor Amount Budget Mowing F & W. Landscape Specialists $23,900 $28,000 Weed Eradication F & W Landscape Specialists $ 875 $ 1,000 Grounds Maintenance Bluemel’s Maintenance Service $ 6,700 $ 9,500 TOTAL: $31,475 $38,500 Craig Anderson noted that all three service contracts are under budget with a total savings of $7,025. Ald. Schroeder moved to approve. Seconded by Ald. Salentine, motion carried 3-0. Review Job Description and Points - Deputy Treasurer - Jean Marenda appeared before the committee to discuss this request. Jean explained the review process and advised that she worked with the Deputy Treasurer to update her job description to reflect actual job duties. The review resulted in a request to increase Problem Resolution points and Authority & Responsibility points which resulted in an increase of one grade, as follows: Existing: Knowledge: 4IIIp (163); Problem Resolution: 4De (53); Authority/Responsibility: DII4c (70) = 286 Proposed: Knowledge: 4IIIp (163); Problem Resolution: 4De (61); Authority/Responsibility: DII3c (81) = 305 Increase from Grade 14 to Grade 15 Jean brought the committee’s attention to a memorandum that she gave to Mayor De Angelis with the same request for the same point increase. With committee recommendation, this request will then be presented to the Union for their agreement. It was clarified that the classification in the union contract is Senior Fiscal Assistant who has been appointed as Deputy Treasurer. Jean noted that she had reviewed the job description of all employees in her department, but did not feel that any changes were needed except for the Deputy Treasurer position. Ald. Petfalski moved to recommend approval of change to job description, points and grade for the Senior Fiscal Assistant (Deputy Treasurer). Seconded by Ald. Schroeder, motion carried 3-0. The Committee requests that a policy be established whereby between the months of January and June, the Finance Director put on a monthly Finance agenda a specific department to enable each individual department head to appear before the committee with any requested changes in their employee’s job descriptions or write a memo to the committee indicating that there are no changes. Seconded by Ald. Schroeder, motion carried 3-0. Consider Interim Salary for Acting Clerk-Treasurer - Clerk-Treasurer Jean Marenda explained that with her upcoming retirement she would like to appoint Jill Blenski as the Deputy Clerk/Treasurer, effective at 4:30 PM on April 9, 2004. Immediately upon that appointment, Jill would become the Acting Clerk-Treasurer as that is Jean’s last day as Clerk-Treasurer. In order for Jill to make the decision to accept the appointment, the question of interim salary needs to be addressed. With the Charter Ordinance that was introduced at the March th 9 Council meeting pending, the earliest an employment offer can be made to an applicant is June 1, 2004. th The Council could then have the final interview and selection resolution at the June 8 meeting. Assuming the successor conforms to the anticipated timeline, the interim period for the Acting Clerk-Treasurer would be about Finance Committee Minutes Page 3 March 17, 2004 2 1-2 months. The request before the committee is that the Acting Clerk-Treasurer position be considered Exempt during the interim period and compensated at the annualized rate of $58,283.87, for up to a 50-hour workweek. It is also recommended that for any hours worked beyond 50 in any given week, additional compensation be paid at the rate of $28.02 per hour. A spreadsheet was provided to the committee identifying the last four positions having an interim person promoted for that period of time for comparison. Ald. Petfalski moved to approve the interim salary for Acting Clerk-Treasurer noting that additional compensation will be paid at the rate of $28.02 per hour for hours over 50 hours per week, and noting that this rate will be adjusted as a result of any 2004 salary plan adjustment. Seconded by Ald. Schroeder, motion carried 3-0. Ald. Schroeder moved to amend the motion to add that the Finance Committee be provided with information on any overtime paid. Seconded by Ald. Petfalski, motion to amend carried 3-0. Review and Consider Reinstatement of 2002 Fund balance related to Advance from Sewer - Finance Director Dawn Gunderson presented the committee with information regarding a required restatement of the 2002 City of Muskego Financial Statements along with a consideration and recommendation regarding the outstanding Advance from the Sewer utility. The city has no choice in this reporting change. It is the consensus of the City’s financial advisors that the City pays off the loan now. The impact on the fund balance is identical if we would pay the loan off now or not. The transaction to pay the loan off now would reduce the cash in the General and Debt Service funds and remove the liability. It would increase the cash in the Sewer Utility and eliminate the receivable. This option would also eliminate the need to levy taxes in the future for the debt service payment and also save approximately $283,000 in interest over the next 12 years. A scheduled replacement of the fund balances would not be required with the debt service repayment, but a fund balance replacement could take place by way of conscience budget decisions of future councils. The payoff of the loan would provide additional cash into the sewer utility. The sewer utility has bond covenants which require that “(a) Net Operating revenues shall not be less than 1.15 times the amount of principal and interest coming due on all outstanding bonds payable from the income and revenue of the System each year and that (b) Net Revenues shall not be less than 1.25 times the amount of principal and interest coming due on all outstanding bonds payable from the income and revenue of the System each year’. To assist in maintaining these coverage rates, the $1.5 would be looked upon favorably by Moody’s when considering our present bond rating and would also assist in controlling future rate increases due to the bond covenants. Ald. Schroeder suggested that in the future he felt the committee should be made aware of these types of things when they occur. Mayor and Finance Director Gunderson informed the committee that this was firt brought to the City’s attention on February 27, 2004. Ald. Petfalski called for the question. Mayor Slocomb asked if anyone objected to the call for the question. There were no objections. Upon voice vote, the recommendation was approved 3-0. Review of Accounting Change for Sewer RCA Charges - Finance Director Dawn Gunderson presented the committee with information for the request to change accounting procedure for Sewer RCA charges. In prior years the Sewer Utility Special Debt Service Fund (RCA) transactions were accounted for in the Special Revenue Fund. At the time the RCAs were established, the only way for the City to obtain the benefit of these assessments in the state aids formulas was to have these assessments accounted for on the City’s books rather than the Utility. Some of the RCAs are TIF related and some are NONTIF related. To avoid confusion in the record keeping, management elected to account for all assessments in the same manner. A few years ago, Don Vilione and the Finance Director agreed that once the TIF ended on 12/31/05 all the NONTIF assessments would be transferred to the Sewer Utility. No determination was made concerning the TIF RCAs because the belief was that the TIF would be used to satisfy TIF obligations or if excess existed, the funds would essentially represent excess TIF levies and will be made part of the final Distribution of Positive Tax Increments. Having these RCA assessment in the City’s books for a benefit under the state aids formula no longer exists. On 2/27/04 after having the issue discussed by Dave Anderson, Don Vilione, Dawn Gunderson and the Mayor, it was determined to be beneficial to the Sewer Utility from a “revenue coverage” standpoint to have the NONTIF RCAs in the Sewer Utility. We also agreed that the bookkeeping could continue under the present arrangements but that report entries would be developed to account for the RCAs in the Sewer Utility. In order to accomplish this reporting change for 2003, an amendment will be necessary to reflect the change in the revenues of the Special Revenue fund along with the transfer from this fund to the Sewer Utility. Finance Committee Minutes Page 4 March 17, 2004 Finance Director Dawn Gunderson requested approval from the Finance Committee to incorporate this budget adjustment in the final 2003 budget amendment that will be coming back before this committee within the next month. Ald. Salentine moved to approve to incorporate this budget adjustment in the final 2003 budget amendment to be received at an April meeting. Seconded by Ald. Schroeder, motion carried 3-0. MAINTENANCE AGREEMENTS - None RELEASE OF FUNDS - None REDUCTION IN LETTER OF CREDIT - None VOUCHER APPROVAL – None FINANCE DIRECTOR’S REPORT – Finance Director Gunderson verbally updated her report and will email to the committee as well as attach to these minutes. COMMUNICATIONS AND ANY OTHER BUSINESS AS AUTHORIZED BY LAW – None ADJOURNMENT – Being no further business to discuss, Ald. Petfalski moved to adjourn the meeting at 9:27 PM. Seconded by Ald. Salentine. Motion carried 3 - 0. Respectfully Submitted Cathie M. Anderson Transcribing Secretary