MINUTES

FINANCE COMMITTEE MEETING

Tuesday, March 13, 2007

City Hall, Room 604

5:30 p.m.

MEMBERS PRESENT: *John VanderLeest, Tony Theisen, Tom Weber, and Steven Deneys

MEMBERS EXCUSED: None

OTHERS PRESENT: Jerry Hanson, Dawn Foeller, Linda Dupuis, Mark Delaski, Chief Stauber, Andre Jacques, Recording Secretary Ginny Mamrosh, and others

1. Roll Call.

Vice Chairman Theisen called the meeting to order at 5:40 p.m. Roll call was taken, and all were present except for Ald. VanderLeest who was en route.

2. Approval of the Agenda.

A motion was made by Ald. Weber and seconded by Ald. Deneys to approve the agenda as amended to move Item #4 down to follow Item #8. Motion carried.

3. Approval of the minutes of the Finance Committee meeting of February 13, 2007.

A motion was made by Ald. Weber and seconded by Ald. Deneys to approve the minutes of the Finance Committee meeting of February 13, 2007. Motion carried.

Items 5, 6, 7, and 8 were taken next, followed by:

4. Request by Mike Curtis, President of American Prosthetic Components, Inc., 900 Ontario Road, for forgiveness of the 2006 personal property tax.

Chairman VanderLeest asked City Attorney Jerry Hanson to provide background information on this issue, after which the floor would be opened to allow interested parties to speak.

Atty. Hanson summarized by saying that American Prosthetics, prior to 2007, was not taxed as a manufacturing property. After they submitted a personal property tax form to the City in March, 2006, a Notice of Personal Property Assessment was sent to them in August, 2006. Mr. Curtis did not receive the notice until a day after Board of Review.

It is Atty Hanson’s belief that American Prosthetic was not yet exempt as a manufacturing property because they did not apply to the Department of Revenue (DOR) until late in 2006. There would have been no reason for the Board of Review to exempt them, had they been notified in time to appear before the Board. A letter was received by APC dated 12/1/06 stating the property listed on the letter has now been classified as manufacturing property for tax purposes beginning with the 1/1/07 assessment.

Atty. Hanson stated if the company had not filed the personal property tax form, the City probably would not have known of its existence, and said we used the numbers they supplied to arrive at the assessed amount. When they were approved as a manufacturing property, the machines and equipment became exempt. If we were to reimburse at this point, funds would have to come from the City’s pocket, out of levy dollars, and also cover School District, NWTC, and County portions. He said this has not previously been done unless an error was made by the City.

Atty. Hanson looked at Wis. Statutes relating to chargebacks and found that some items can be charged back to the other taxing municipalities if certain types of mistakes occur, such as clerical error or property was not located in the taxing district. He said Ald. Wiezbiskie was unable to attend tonight’s meeting, but had said he would be in favor of some negotiated settlement, and Ald. Weber agreed he would be in favor of a settlement on the City’s portion if it could be done without reversing the tax. Atty. Hanson said the only way to get this money back would be to charge back to the other municipalities, and that he didn’t think the State DOR would allow this type of error to be charged back to the surrounding communities.

Comptroller Dawn Foeller said all jurisdictions send us the apportionment of their levy that is inside the City of Green Bay. We get only a portion of the Green Bay School District, and other tax jurisdictions levy to place on our tax roll. We turn our chargebacks in to the State and they either allow or do not allow us to charge them back to the taxing jurisdictions. If allowed, we bill the jurisdiction, and if not, the City eats the entire value. Atty. Hanson said we have been paid by the County system for the other portions of this amount, and we own that $11,500 in question. Finance Director Doug Daul is in favor of Atty. Hanson’s determination that the City is not at fault, since Mr. Curtis missed a State of Wisconsin deadline. Forgiving this debt would be setting a precedent.

A motion was made by Ald. Weber and seconded by Ald. Theisen to suspend the rules to allow interested parties to speak. Motion carried.

Mike Curtis, 900 Ontario Rd., said American Prosthetic Components was incorporated in 2002 and had no machines until 2003. He disputed the statement that they never had an M-R form prior to 2007, saying they had the forms for 2004 and 2005. Atty. Hanson said there is nothing on file with the DOR, but if they have other information or verification, to let him know. He did see unsigned forms, but according to the DOR, the first time the company received official manufacturing designation was December, 2006.

CPA Mark Johnson of Spurlock Runyan Miller & Associates said his firm prepared the 2005 M-R form and provided it to American Prosthetics. He could not vouch for whether it was submitted, but could vouch for the fact that it was prepared and that the company did not receive a personal property tax bill for 2002, 2003, 2004, or 2005.

Mr. Curtis stated they were leasing from Dr. Sherwood Vanderwoude, a glove manufacturer, when they first moved into the building in 2003. Dr. Sherwoude was sent a letter in 2005 stating the property was no longer being used for manufacturing purposes as defined in Wis. Stat 70.995, and that the local municipality, rather than the DOR, would be responsible for the assessment of the real estate. This would begin with the Jan. 1, 2005 assessment. Dr. Vanderwoude gave the letter to Mr. Curtis.

Mr. Curtis said when a notice of assessment was sent, he received it on August 15^th, the date the Board of Review met. He was unable to rebut the assessment because of not meeting its requirement of 48 hours’ notice of intent to object. Atty. Hanson said the Assessor’s Office is not required to send out notices for personal property tax because this is a re-certification of the information provided by the taxpayer. Atty. Hanson agreed it would have been better if it had been sent out earlier or not at all. The Personal Property tax forms had already been submitted by APC, however, and even if Mr. Curtis had gone to the Board of Review, he was not yet exempt as a manufacturer because he had been passed back to the City and probably would have been denied due to that fact.

Ald. VanderLeest stated it appears the process was not completed in time for this property to be exempted and that parties involved have a diligence to make sure they are classified correctly. Mr. Johnson said they took over the account mid-stream. They did not get personal property forms to fill out for 2004 or 2005. There was an assumption that because they were not getting the bills, they were exempt, especially since it says “manufacturing” on the tax returns. He asked if manufacturing equipment is exempt because it is manufacturing equipment, or is it exempt because the State calls it manufacturing equipment? Atty. Hanson replied it is because the State calls it manufacturing equipment. After reviewing the personal property tax form submitted by APC, the only description of the equipment in question stated “Equipment” and there was no mention of “Manufacturing” on the form, so the Assessor’s office would have no way of knowing what type of machinery was listed on the form submitted by American Prosthetic. Had they known it was manufacturing equipment, they probably would not have assessed it.

Mr. Johnson said the building was previously used for manufacturing and that the first 2005 report was in the name of the previous owner. They crossed off that name and wrote in “American Prosthetics.” He felt that if they had not sent in the Personal Property report, they would not have received a bill for $11,000.

Page one of the signed Personal Property tax form that was submitted shows a value of $116,000. Two large leases show up on the last page and account for the difference between that $116,000 and $543,000. (The lease values were provided by APC, but APC had not cross-footed the calculation or placed the value on page one of the Personal Property tax form. This was done by the City Assessor’s office.)

Mr. Johnson said if the person signing the form had seen the half-million dollar figure, he may not have signed it. All other tax forms can be amended. He said an exception is allowed for clerical error, and he believed that putting that machinery on there in the first place was a clerical error.

Ald. Weber asked about the clerical error, and Atty. Hanson stated that a value of $460,000 that was reported by APC, had not been reported by anyone else, and thus the lease value was added on to the APC Personal Property tax form. A clerical error would have had to be made in the description of the property or the computation of the tax in order to be used as a reason for authorities to correct mistakes and refund taxes paid. The error must be made on the part of the municipality.

Mr. Curtis said his company won the 2006 Chamber of Commerce Manufactured Growth Award and thought they had filed in 2005 for a 2006 exemption. As soon as notice of a possible issue was received, Mr. Johnson said a letter was sent, stating they disagreed with the assessment. They have been dealing with the issue for nine months and had difficulty getting a meeting set up because the State told them to talk to the City, and vice versa. He said if the City wants manufacturing growth, it is necessary to send out these notices earlier.

Dawn VanNatta of the Assessor’s office explained that her office had received the letter Mr. Johnson referred to. They tried to contact the lessor as to what kind of equipment was involved, but received no response. She called Gary Michalek at the State and was told this company was not a manufacturer for 2006, but they were being considered for 2007. The local assessor is to pick up businesses not on the manufacturers roll for 2006, and that is what was done.

Mr. Johnson said he was sure the tax would have been less than what they were charged if they had not filed the report at all. He felt it contained a clerical error because of manufacturing equipment being reported on a personal property report. It was signed on a page that showed total assessable value as $116,000, not $543,000. Ms. Foeller pointed out that the information was there -- it just was not footed across. They reported the information but didn’t extend the percentage into the value column, and the Assessor’s office just completed the calculation portion based on the numbers provided by American Prosthetic.

Ald. Weber stated he would not approve the City paying back the County, NWTC, and the school district for their tax portions. The mistake was made in filing the personal property tax return. He asked Atty. Hanson if he had asked the State whether this was truly a clerical error, and if there is any way in which we can require the other taxing authorities to refund the taxes paid. Atty. Hanson replied that he had spoken to the DOR in this regard but hadn’t raised the issue of the figures being extended. Ald. Weber suggested referring this back to the City Attorney to have him check with the DOR. If authorized, we could refund and charge back the County and other entities. He would be in favor of that.

A motion to return to the regular order of business was made by Ald. Theisen and seconded by Ald. Deneys. Motion carried.

Ald. Weber made a motion to have the City Attorney check with the Department of Revenue under the chargeback statutes to see if the clerical adjustments made by the Assessor’s office, specifically, or any other grounds, would give us the ability to charge back the additional municipalities for the taxes levied on the manufacturers’ equipment. If so, he would agree to refunding or rescinding the taxes owed by APC. The City’s portion could be refunded, and we would check to see if it could all be refunded. Ald. Deneys seconded the motion.

Ald. Deneys asked what would happen if the State denies the request, and Ald. VanderLeest said it should be brought back to Committee to inform them of the status and to let the case be argued.

A motion was made by Ald. Weber, seconded by Ald. Deneys and carried to open the floor to let interested parties speak.

Mr. Curtis stated the Assemblyperson for the 88^th District in Madison is also looking into this issue, and Atty. Hanson said he would work in conjunction with him to try to get the chargeback approved.

A motion was made by Ald. Deneys, seconded by Ald. Theisen and carried to return to the regular order of business.

Ald. Weber amended his motion to read that if the response from the Dept. of Revenue on behalf of the taxpayer is negative, the City would refund the portion of the taxes that were due the City of Green Bay for the manufacturing equipment, and only that portion. Ald. Deneys agreed with the amendment.

Atty. Hanson asked to verify: the City would refund or rescind our share, regardless of the decision of the DOR, and if we are authorized to chargeback, that will be done.

A vote was taken, and the motion carried.

Items #5, 6, 7, and 8 were taken after Item #3:

5. Request by the Mayor’s Office and Economic Development for a resolution authorizing submission of a Venture Capital Development Conference Grant application to the Wisconsin Dept. of Commerce to acquire funding assistance for the City’s Entrepreneur’s Connection Conference.

Administrative Aide to the Mayor Andre Jacques said this State grant would help offset current operating costs for running the Entrepreneurs Connection Conference, which is in its third year. The organization is looking to expand beyond its two current locations to get a better level of response in dealing with State objectives. He said this is a fine program, with the City’s matching portion being generated through staff costs, and this is an authorization resolution. There is no expenditure by the City, and the net gain would be between $25,000 and $40,000.

A motion was made by Ald. Weber and seconded by Ald. Deneys to approve the request by the Mayor’s Office and Economic Development for a resolution authorizing submission of a Venture Capital Development Conference Grant application to the Wisconsin Dept. of Commerce to acquire funding assistance for the City’s Entrepreneur’s Connection Conference. Motion carried.

6. Request by the IT Director for approval of annual telephone maintenance contract.

IT Director Mark Delaski said this pricing comes off the State contract and covers maintenance on the hardware, servers, software, licensing, etc. AT&T does the service for the City, and funding is part of the telephone line item budget.

A motion was made by Ald. Deneys and seconded by Ald. Weber to approve the request by the IT Director for approval of the annual telephone maintenance contract. Motion carried.

7. Request by IT Director to purchase an Email Archival system.

Mr. Delaski said this project, planned for last year, wasn’t done because of staffing shortages. There is no method at present to recover emails. The server is backed up, but there is no way of restoring individual mailboxes. Requests under the Freedom of Information Act for emails for a particular time period, subject, or those of a particular user are often received by the Law Dept and forwarded to his department. City Attorney Jerry Hanson said some information is open, while other information is kept internally, after State Statutes and case laws are reviewed. He said we must know what we have and need a method to track these messages.

*Ald. VanderLeest arrived and chaired the meeting.

Mr. Delaski said any email that hits our email server is replicated on a separate server and archived. If the user deletes the message, a copy is still kept in the archival system, and users have access to their own archives.

An RFP was sent out, and seven proposals came back. A demo of the lowest proposal showed the equipment did not meet IT requirements. One of the three vendors proposing the same system was brought in for a demo, after which price was considered. Meridian was the lowest of those meeting the requirements.

Mr. Delaski said a request for physical storage will come back as a separate item. This request is for the software and the server to run the software. He said storage is a separate piece that would hold archived voice mail messages as well as emails. Emails that are scattered throughout the network in different archives would be gathered into one location and indexed. Symantec, the recommended system, already does the City’s anti-virus software.

Mr. Delaski recently learned of another package that would handle data files in the same manner as emails, but this package was not part of the original RFP. His recommendation is to purchase the email archival system from Meridian IT. Five servers must be replaced this year, and Mr. Delaski said it is a good time to look at a shared storage device for those servers as well as for the email archive. Ms. Foeller said that over the last several years, we have levied $213,000 for IT projects, because Capital Surplus may not always be available. Funds will come from that IT Project Fund.

A motion was made by Ald. Deneys and seconded by Ald. Weber to approve the request by the IT Director to purchase an Enterprise Vault hardware as proposed by Meridian IT. Motion carried.

8. Report of the Purchasing Agent:

a. Breathing equipment for Fire Dept. From Jefferson Fire and Safety for $11,580.

Ms. Dupuis said this equipment was publicly and competitively quoted with funds to come from the Fire Department Replacement Fund. It is below their budget of $12,000.

A motion was made by Ald. Theisen, seconded by Ald. Deneys and carried to approve a. Breathing equipment for Fire Dept. from Jefferson Fire and Safety for $11,580.

b. Computer equipment to Insight Public Sector for $27,604.

Ms. Dupuis said this is an inventory item for the IT Department to be used by all departments. Insight has a special pricing arrangement, and she recommended them as the low vendor.

A motion was made by Ald. Deneys, seconded by Ald. Theisen and carried to approve b. Computer equipment to Insight Public Sector for $27,604.

c. Lighting fixtures for the Resch Aquatic Center to the low, acceptable vendor (budgeted amount of $9,875).

Ms. Dupuis pulled this item because it came in at less than $10,000. A motion was made by Ald. Theisen and seconded by Ald. Weber to receive and place on file Lighting fixtures for the Resch Aquatic Center to the low, acceptable vendor (budgeted amount of $9,875).

A motion to adjourn was made by Ald. Deneys, seconded by Ald. Theisen, and carried. The meeting was adjourned at 7 p.m.

2007 CONTINGENCY FUND

$300,000.00