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FM20041208 CITY OF MUSKEGO Approved FINANCE COMMITTEE MINUTES Wednesday, December 8, 2004 7:00 PM Muskego City Hall, Aldermen’s Room W182 S8200 Racine Ave. Mayor Slocomb called the meeting to order at 8:27 PM. In attendance were Committee Members Ald. Salentine, Ald. Schroeder, and Ald. Madden, Finance Director Dawn Gunderson, Philip Cosson from Ehlers and Associates Inc., and those per attached sheet. Those present recited the Pledge of Allegiance. The meeting was posted in accordance with the Open Meeting Law on December 3, 2004 with Amended Agenda being posted on December 7, 2004. REVIEW OF MINUTES OF PREVIOUS MEETING The minutes of the November 23, 2004 Finance Committee Meeting were reviewed. Ald. Salentine moved to approve the minutes. Seconded by Ald. Madden. Motion carried 3 - 0. LICENSE APPROVALS Ald. Salentine moved to recommend approval of Operator’s License for Hilarie Wodziak and Mark Sprott subject to receipt of fees, favorable police reports, and verification of schooling. Seconded by Ald. Madden. Motion carried 3 - 0. PERIODIC LICENSE REVIEW - None UNFINISHED BUSINESS Approve Waukesha County 2005 contract for CAMA (Deferred 11/17/07) – Ald. Salentine moved to defer. Seconded by Ald. Madden. Motion carried 3 – 0. NEW BUSINESS Recommend approval of fees for Rescue Service – Finance Director Gunderson presented the rescue fees for 2005 as follows: Basic charge without supplies – resident $308.00 2.7% increase Basic charge without supplies – non-resident $435.00 2.7% increase The following are charges for level of service including supplies: BLS (Basic Life Support) – resident $333.00 ALS1 (Advanced Life Support) – resident $358.00 ALS2 (Advanced Life Support) – resident $408.00 BLS (Basic Life Support) – non-resident $460.00 ALS1 (Advanced Life Support) – non-resident $485.00 ALS2 (Advanced Life Support) – non-resident $535.00 Tess Corner’s Volunteer Fire Department fee for rescue service will be $290.00 for transports and $145.00 for non-transports. With the new requirement that the City must now accept assignment for Medicare/Medicaid, a new billing system was implemented for fees based upon the level of service that was provided. Finance Director Gunderson is recommending the base rate per call without supplies be raised by the CPI of 2.7%. The Special Revenue Fund balance is approximately $120,000.00. If fees do not cover expenses the fund balance is reduced. The fund has to fund itself or otherwise funds collected through taxes. In 2004 funds will not be reduced, may even be added to, but in 2005 funds may be reduced. Finance Director Gunderson stated the fund balance could handle a reduction at this time. In the proposed fee structure “no transports” will be covered for both residents and non-residents. Write-off for non-residents will also be covered but not for residents. Ald. Salentine moved to recommend approval of the 2005 rescue fee as presented above. Seconded by Ald. Madden. Motion carried 3 – 0. Finance Committee Meeting December 8, 2004 - Page 2 Recommend approval of Carriers for City’s 2005 Insurance – Finance Director Gunderson presented carrier for the City’s insurance for 2005 as follows: Est. Annual Premium Property Insurance ($2,500 Deductible) State of Wisconsin $ 31,384.00 Workers’ Comp ($500,000.00 Policy Limit) League of Wisconsin $202,711.00 Municipalities Mutual Ins (LWMMI) General Liability ($6,000,000.00 Policy Limit) LWMMI $ 67,672.00 Police Professional Liability ($6,000,000.00 Policy Limit LWMMI $ 23,239.00 Automobile ($6,000,000.00 Liability) LWMMI $ 15,724.00 $500.00 Deductible – Collision State of Wisconsin $ 20,770.00 $500.00 Deductible-Comprehensive Insurance Fund (est. premium) (No Collision on Older Vehicles & Heavy Trucks) Crime LWMMI $ 2,304.00 Employee Dishonesty ($1,000,000.00 Policy Limit/$10,000.00 Deductible) Money & Security ($25,000.00 Policy Limit/$500.00 Deductible) Forgery ($25,000.00 Policy Limit/$500.00 Deductible) Public Officials Liability LWMMI $ 25,731.00 ($6,000,000.00 Policy Limit) ($2,500.00 Deductible per Occurrence) No-Fault Sewer Backup LWMMI $ 20,259.00 After discussion, it was recommended the City go out for quotes next year for everything except Workers’ Compensation Insurance so a cost comparison could be completed. Ald. Madden moved to recommend approval of the 2005 insurance carriers and coverage. Seconded by Ald. Schroeder. Motion carried 3 – 0. Recommend approval of Rescue Bill Write-Offs – Memorandum was received from Jan Hughes requesting writing off rescue service bills listed with Waukesha County Collection Agency and Medicare and Medicaid recipients along with a detailed list of each. The City must accept assignment for Medicare/Medicaid and therefore there is a higher uncollectible. After discussion, Ald. Salentine moved to recommend approval of writing off $46,532.15 in rescue service bills, that includes $4,511.14 for invoices listed with Waukesha County Collection Division and $42,021.01 for Medicare and Medicaid. Seconded by Ald. Madden. Motion carried 3 – 0. Recommend approval of Audit Service quote for 2005 – Finance Director Gunderson reviewed the letter from Virchow Krause & Company listing their estimate for the audit of 2004 financial statements as follows: Summary of Services and Fees Estimated Services Fees Audit of all funds in the City’s basic financial statements (except Tax Increment Funds) including the preparation of the Annual Report filed with the Dept. of Revenue $50,750.00 Audit of all Tax Increment Funds $33,200.00 Total $88,950.00 Positions and Hourly Rates Position Hourly Rates Partner $ 215.00 Tax Manager $ 177.00 Audit Manager $ 168.00 In-charge Accountant $ 113.00 Associate Accountants $ 102.00 The fees above include an increase of 3.0% over 2004. The fees are based on no significant changes in the scope of the engagement from 2004. Ald. Salentine moved to recommend approval of audit service quote from Virchow, Krause & Company. Seconded by Ald. Madden. Discussion continued on other services performed by Virchow, Krause and when these services are invoiced. It was noted that the new Common Council, after April 2005 elections, might want to go forward with a RFP for a multiple year quote of five years. Motion carried 3 – 0. Finance Committee Meeting December 8, 2004 - Page 3 Recommend approval of Non-represented Personnel Salary Increase for 2005 – The Committee reviewed memorandum from Executive Assistant/Human Resource Coordinator Cathie Anderson in regard to non-represented personnel salary increase for 2005. The memorandum states that according to Mr. Bill Zellmer, Department of Commerce, the Milwaukee Metro Urban CPI over the last twelve months is 2.1%. A survey of non-represented 2004 increases for surrounding communities was reviewed. Discussion took place on the difference in CPI 2.1% presented here and 2.7% presented under “Recommend approval of fees for rescue service”. Non-represented personnel evaluations are normally completed by the middle of February, some may be longer. Pay for performance is then retroactive to the first of the year. Ald. Schroeder requested deferring to see if any of the other Cities presented for the comparison settle and to get a better understanding of the CPI difference. Ald. Schroeder moved to defer to the Wednesday, January 5, 2005 Finance Meeting. Seconded by Ald. Salentine. Motion carried 3 – 0. Review options for Sewer Debt Restructuring – Finance Director Gunderson stated refunding the sewer debt was originally presented to Common Council last February. Several steps have been taken since then to prepare the Sewer Utility for refinancing of debt, paying off $1,500,000.00 debt that the City owed the Sewer Utility and all the Non TIF Funds were moved out of Special Revenue Fund to the Sewer Utility. As the City moved forward on the City’s financing Moody’s requested a review of the Sewer Utility. Once the 2003 Financial Statements and Audit were completed and the preliminary draft done, work began on a Performa on where the Sewer Utility will be in the next five to ten years. The City then received the escalated capital charges from MMSD. The Performa was then restructured with that change in the capital plan. Now that the 2005 Sewer Utility Budget has been adopted Finance Director Gunderson is looking for feedback from the Finance Committee on which direction they want to go for restructuring - fifteen year or twenty year. Philip Cosson, CIPFA, and Vice-Present of Ehlers & Associates Inc., presented the City of Muskego 2004 Sewer Utility Financing Plan. Cosson stated several steps have been taken - the obligations owed to the Sewer Utility have been cleaned up, a rate increase has been undertaken, and now the next step is restructuring the sewer debt to allow the undertaking of projects in the future and retain rating. The schedule of sewer revenue debt outstanding was presented. The plan now is to refinance all of the existing debt. The base case as to where the City is today if nothing were done was presented. A proposed revenue bond issue sizing for fifteen year and twenty year amortization was discussed. The upside and downside of each amortization was presented. The twenty-year amortization would have a net savings of $295,638.00 and a PV Cost of .913% or $79,036.00. The fifteen-year amortization would have a net savings of $932,120.00 and a PV Savings of 0.389% or $33,650.00. The Committee recommended looking at the fifteen-year amortization. The next step will be pre-borrowing resolution and setting the date for the sale of bonds. Approve fee for non-criminal fingerprinting – In memorandum to the Committee Police Chief John Johnson stated that currently the Police Department does non-criminal fingerprinting for anyone requesting it. Recently there has been an increase in non-residents requesting this service. It appears the reason for the increase is that many of the neighboring communities either charge for the service or only provide service to their residents. Therefore, Chief Johnson is requesting a no charge policy for residents and a $10.00 per card charge for non-residents. Ald. Salentine moved to approve a no charge policy for residents and a $10.00 per card charge for non-residents. Seconded by Ald. Schroeder. Discussion continued on the policies of Franklin and Hales Corners and also providing fingerprinting for the school district or people working in the community. Ald. Salentine moved to amend the motion to approve a no charge policy for residents, $5.00 fee for School District, and $10.00 fee for non-residence. Seconded by Ald. Schroeder. Motion carried 3 – 0. Review and possible amendment to Business Credit Card Policy – Mayor Slocomb is requesting a Business Credit Card be issued to maintenance staff employee George Wolwark. Mayor Slocomb explained that in the past the cards were issued to a department and not a name. Now with the Patriot Act and other laws the credit card is assigned to an individual and should not be used by another person. The Committee reviewed the current policy that states that each card will be issued to the Department Head and it will be his or her responsibility to insure the safe keeping of such card and to release the card to their staff with authorization for use. If the committee would like to change the policy Finance Director Gunderson is recommending the policy read - issued to the Department Head or one of their designees and it will be the Department Head’s responsibility to insure the safekeeping of such card. Finance Director Gunderson is suggesting the committee may want to set a lower credit limit on the cards issued to the designee. The Mayor and the Department Head who requested the purchase should have to sign off on the charge. Finance Director Gunderson reviews all credit invoices before they get paid. This item was left open for continued discussion and review of revised policy at the Tuesday, December 14, 2005 Finance Meeting. Finance Director Gunderson recommended that it be added to the policy that before the Department Head can designate someone from their department to receive a card the Mayor would have to authorize. Finance Committee Meeting December 8, 2004 - Page 4 MAINTENANCE AGREEMENTS - None RELEASE OF FUNDS--None REDUCTION IN LETTER OF CREDIT VOUCHER APPROVAL – None FINANCE DIRECTOR’S REPORT - Finance Director Gunderson stated the Sewer and Water Utility Budgets have been posted to the City’s web site. The Operating Budget should be posted sometime the week of December 13, 2004. Ald. Schroeder commented on the Finance Director’s Report, 2005 – 2009 Capital Plan item that stated in January, the Committee of the Whole will begin doing their final review of the 2006 through 2009 capital and hopefully amend the existing capital plan with those changes. Ald. Schroeder feels the Committee of the Whole has to approve the amended 5 Year Capital Plan this year. Finance Director Gunderson stated this was not done last year. COMMUNICATIONS AND ANY OTHER BUSINESS AS AUTHORIZED BY LAW - None ADJOURNMENT – Being no further business to discuss, Ald. Madden moved to adjourn the meeting at 9:49 PM. Seconded by Ald. Salentine. Motion carried 3 - 0. Respectfully Submitted, Carolyn Warhanek Recording Secretary