MINUTES

FINANCE COMMITTEE MEETING

Tuesday, March 14, 2006

City Hall, Room 604

5:30 P.M.

MEMBERS PRESENT: Chairman John VanderLeest, Vice Chairman Tom Weber, Fred Graves, and David Nelson

MEMBERS EXCUSED: None

OTHERS PRESENT: Mayor Schmitt, Doug Daul, Jerry Hanson, Carl Weber, Chad Weininger, Chief VanSchyndle, Linda Dupuis, Recording Secretary Ginny Mamrosh, and others

1. Roll Call.

Chairman VanderLeest called the meeting to order. Roll call was taken; all were present except for Ald. Graves, who arrived shortly thereafter from another meeting.

2. Approval of the Agenda.

A motion was made by Ald. Weber and seconded by Ald. Nelson to approve the agenda. Motion carried.

3. Approval of the minutes of the Finance Committee meeting of February 28, 2006.

A motion was made by Ald. Weber and seconded by Ald. Nelson to approve the minutes of the Finance Committee meeting of February 28, 2006. Motion carried.

4. Request by the Police Dept. for approval to apply for a Law Enforcement grant requiring a City contribution in the amount of $2,833.

Chief VanSchyndle said the $2,833 would not be a City contribution, but would be taken from City Asset Forfeiture funds. Funds in this account come from seizures, drug warrants, etc. The $2,833 supplements a $25,167 grant the City will receive from the U.S. Department of Justice to purchase state-mandated digital and video equipment for interview rooms. The total amount of the JAG grant, $50,333, is split with the Brown County Sheriff’s Department.

A motion was made by Ald. Weber and seconded by Ald. Nelson to approve the request by the Police Dept. for approval to use $2,833 from the City Asset Forfeiture fund as the required contribution for a JAG grant from the Dept. of Justice. The motion carried.

5. Report of the Purchasing Agent:

a) Microfilm services for Police Department from Source Corp for $39,288.

Chief VanSchyndle said Records Department hallways are lined with boxes of old records that must be archived. Several options were considered, including sending it all out to be stored, sending it out and having some of it put on microfiche, and sending it out to be scanned for storage on CDs. Microfiche is still the most widely used medium for this purpose and is much less expensive. To facilitate easier retrieval of information, some of the newer records could be put on CDs. Chief VanSchyndle said $36,400 was budgeted for 2006, and some carryover funds exist from 2005.

Purchasing Agent Linda Dupuis said it was first assumed imaging was the best solution, therefore did not look at using microfilm. It was determined that imaging costs about 40% more than microfilm pricing. Microfilm may be stored for 100 years or more if stored properly, and can be read without equipment, if necessary. The life of CDs is much shorter since they must be reproduced as often as the manufacturer recommends. Ms. Dupuis said microfiche is used by many libraries and companies, and said it makes sense to use imaging if the information must be retrieved often, but for older records, it isn’t necessary. The Police Dept. decided to go with microfilm for anything before 2000 and with imaging after 2000.

A motion was made by Ald. Nelson, seconded by Ald. Weber and carried to approve microfilm services for the Police Department from Source Corp for $39,288.

6. Request by the Finance Director to present the Spring bonding requests.

Finance Director Doug Daul said they had approached the Spring bonding issue with two objectives in mind: to issue less general levy debt than was issued the previous year, and to pay off more general levy debt than assumed this year, in terms of principal. Principal payoff this year will be $8.8 Million, and taxes will not have to be raised for that purpose because it is not levied debt. Transfers in are from the TIF districts, sanitary sewer, and stormwater utilities, which have different funding mechanisms. He said the levy impact in 2006 was $6.9 Million, which will be paid off April 1. The Mayor’s recommendation is for $6,025,000 in new money issue, a reduction of almost $900,000 in general fund principal.

Mr. Daul said the second objective was to bond for less this year than we did last year. Last year’s general fund new money was $6,115,000; this year it is down to $6,025,000, and without inclusion of the $2.5 for Fisk Pool, it would be considerably less. Mayor Schmitt said this was a tough year, but next year will be easier in this regard.

Mr. Daul said an overall comparison shows that $6 Million in bonding will affect the levy, with an impact of $398,000 next year. Interest only – no principal – is collected the first year, and is higher because the bonds are effective May 1, 2006, but no interest is paid until April 1, 2007, when about 17 months’ interest has accumulated. The principal amount the first year is slotted into the existing principal that has been out there for years. Mr. Daul said this is a general idea of what the principal on this $6 Million levy will cost us, and that this amount will rise, over time, to approximately $9.5 Million.

Mr. Daul referred to an information sheet of borrowing requests (by department) showing DPW requests for pavement, storm sewer, and sanitary sewer. He said we bond annually for parking ramp repairs in order to maintain the parking facilities; the rest of the items are specific to the TIFs. TIF supported borrowing – the summation of all the debt that will be picked up by the TIFs – is also shown. He said DPW is requesting $2.5 Million for pavement for general purposes for the City. Another information sheet showing bonding (by purpose) shows that the total pavement cost will be $2.9 Million, therefore another $400,000 will be added to the pavement request for TIF purposes, but that $400,000 will be paid back by the TIF.

Mr. Daul stated that the bulk of Park & Rec funds would go to Fisk Pool. The total Park & Rec request is $3,050,000 million, $2.5 million of which will be for Fisk Pool. $350,000 will complete the final phase of acquiring Grandview Heights for Red Smith Park, which was agreed to last year. $100,000 will go towards the continuation of purchasing properties in the Navarino neighborhood for park develoment. The remaining $100,000 will go towards sports court pavements and ADA accessible walkways.

Mr. Daul next explained the refinancing category. He said the City borrowed short-term for TIF 9, located at Hwy 54/57. This two-year note taken for public purposes is now coming due and must be refinanced this spring with a longer-term bond issue. The $900,000 request will be used to take out that note. He explained that a short-term note is taken, along with the capital interest, when a new TIF having no increment begins; after that, the TIF is allowed to start accumulating increments to pay it off. He said the parking facility will also be refinanced; that was part of this two-year note. The parking ramp will be covered with State Trust Fund borrowing, but that has already been approved and has gone through Council.

Referring to the Economic Development category, Mr. Daul said TIF 7 is for financing the hotel on Mr. Kaczrowski’s Prestige Park project. He said the grant to the hotel is for $1 Million, but the bonding is for $1.2 Million because of capital interest. The entire $1.2 Million repayment has been guaranteed. The items listed under both the Refinancing and Economic Development portions are coming from TIF funding, and both will be paid by TIF. He said the $1.2 Million is a developer grant, which is a taxable purpose requiring a different bond issue, and when this comes to Council on March 28, there will be two bond issues – a Series A and a Series B.

Mr. Daul said the levy would increase $300,000 to $400,000 by tonight’s borrowing of $6 Million for general purposes. This interest-only amount would affect next year’s budget in addition to our current debt service payment schedule, due to borrowing over the last seven to ten years. The current debt service schedule is already fixed and made public, and a certain amount of debt will have to be paid next year regardless of what is done tonight. The Baird Company looks at the debt service schedule and tries to slot the principal payments in over time, unlike a mortgage where a specific amount of principal is paid each year.

Ald. VanderLeest said the issue of Neighborhood Enhancement funds may be brought up on the Council floor. He said he would support efforts that are being made to look for other funding sources to continue the program, but said it should not be added to the tax levy, since only certain districts in certain parts of the City benefit from those funds. He would support efforts to look at having more private sector involvement and asked that a summary page of more detail be provided to the Council, before its next meeting, if possible, so everyone would understand the workings of any changes that may be made.

Mayor Schmitt said we need to take care of blight in the City, and the Neighborhood Enhancement program has been used for seven years. He said the City has purchased more than 70 houses and taken out many of the worst of the worst. He felt that more private sector involvement could improve the program, and said they have worked with the Nuisance Action Team the last couple of years on a more proactive approach. Also, renewal of the Tri-Agency agreement is focusing on bad landlords in an effort to get their properties improved. He said they have also talked to developers. If a developer were to come in and replace a square block with commercial and other enhancements, the City could look at doing a TIF project for that area. As for smaller areas, they are working with banks and developers to consider programs such as low to no interest loans and other ways to upgrade areas. Mayor Schmitt said these neighborhoods are a high priority and the program needs to be upgraded and involve more private sector funds.

Ald. Weber said despite the fact that we may not be acquiring homes in all neighborhoods at the present time, everyone feels the effect of these benefits as taxpayers, because when the property is bought and improved it goes back on the tax roll at a higher assessment. From an investment standpoint, this should more than cover the cost over the long haul. He said all areas have neighborhoods that are starting to decay and that the program shouldn’t be killed because of disagreement over where funds should go. Ald. Weber suggested checking into those changes in assessments to see the true effect on the tax base.

Ald. VanderLeest said this funding generally comes from the Spring bond issue. He asked that, if there may be a change in the process, to provide a one-page summary to Council members before their next meeting on what the City is now going to do for Neighborhood Enhancement, so that any questions they may have can be addressed.

Mayor Schmitt said a lot of money is invested in building the pool this year. He agreed that this is a nice program, but said that sometimes after a house is purchased and demolished, the land just stays vacant -- no new house is built. He said information on options discussed regarding how to address blight will be provided.

A motion was made by Ald. Weber, seconded by Ald. Nelson and carried to approve the Spring bonding requests as presented.

A motion to adjourn was made by Ald. Nelson, seconded by Ald. Weber, and carried. The meeting was adjourned.

2006 CONTINGENCY FUND

$384,405.00