MINUTES
FINANCE COMMITTEE
MEMBERS
PRESENT: Chairman John VanderLeest, Tony
Theisen, Tom Weber, and Steven Deneys
MEMBERS EXCUSED: None
OTHERS PRESENT: Doug Daul, Allison Swanson, Chief Stauber,
Rick Jurkanis, Peter Schreiner, Keith Wilhelm, Linda Dupuis, Recording
Secretary Ginny Mamrosh, and Others
1. Roll Call.
Chairman
John VanderLeest called the meeting to order at 6:18 p.m.; all members were
present.
2. Approval of the Agenda.
A motion was made by Ald.
Deneys and seconded by Ald. Weber to approve the Agenda. Motion carried.
3. Approval of the minutes of the Finance
Committee meeting of March 27, 2007.
A motion was made by Ald. Deneys,
seconded by Ald. Theisen and carried to approve the minutes of the Finance
Committee meeting of March 27, 2007.
4. Request by the City Attorney to submit the quarterly
report of the Claims Committee.
A motion
was made by Ald. Theisen and seconded by Ald. Deneys to receive and place on
file the quarterly report of the Claims Committee. Motion carried.
5. Request by the Interim Transit Director to
transfer funds from its operating reserve to its capital reserve for the
purchase of new buses.
Interim
Transit Director Pete Schreiner said this request is for the transfer of
$66,000 from its Operating Reserve to Capital Reserve for the purchase of three
full-size buses, at approximately $330,000 each. Of that total, $132,000 is already in Capital Reserve. $480,000 and $312,000 will come from two
State grants, leaving a shortfall of $66,000.
Ald.
VanderLeest said his preference is in having the City move toward using the
smaller, 30-ft. buses. He cited fuel
costs, environmental impact, wear and tear on streets and maintenance costs as
compelling reasons, and asked if smaller buses could be used in certain
instances. Mr. Schreiner explained that
the larger, 40-ft. buses are required for certain routes during peak times of
the day, and those are the ones they are looking at replacing. There are 26 full size and 13 small buses in
the City’s fleet. Six of those 26 are
35 footers, one is off the road, and three are downtown trolleys. The smaller vehicles are used for routes
with fewer riders, and maximizing routes will be a priority of the new Transit
management.
Ald.
Theisen requested a listing of routes, times of peak travel, and ridership
numbers, saying it should not be a hardship for people to stand in those cases
where the buses are full only during peak times of the day. Mr. Schreiner said one disadvantage of the
smaller buses is that any person using a wheelchair takes up three or four
seats. People are encouraged to use the
fixed-route system rather than Paratransit, and he said he was surprised at how
many wheelchair passengers use the buses.
Ald.
Deneys asked if large buses could be used during peak hours, and smaller ones
the rest of the day, but Mr. Schreiner explained it would be an awkward
transition – one bus would have to be pulled off the route and another one put
on, and fare boxes would have to be emptied.
It is much easier for drivers to stay with the same bus for their whole
shift. Every passenger is registered on
a keypad, either as using a pass, paying with change, a transfer, etc. This data is used by Federal and State
agencies, as well as Brown County Planning in making route adjustments.
The
Federal government estimates that buses on fixed-route systems should last for
about 12 years, but Mr. Schreiner said the buses to be replaced are 1986
models, one of which is already being kept off the road because of its
condition. In addition, 1982 vehicles
that were refurbished in 1995 are still in use. Three new buses were purchased in 2004, and nine in 2003, but
prior to that, none had been purchased since 1995. The older buses, called trippers, are used on afternoon school
routes, and the new ones would be used for peak routes.
Ald.
Theisen asked about biodiesel fuel, and the plan to use it on one bus. Mr. Schreiner said certain properties must
be treated in a different manner, and that biodiesel fuel gels much faster in
cold weather. It is a good idea to try
it first on one bus only. Hybrid buses
could possibly be considered in the future, but the technology is new and
expensive at this point.
Ald.
VanderLeest suggested developing a plan of moving toward smaller buses for the
future, considering the amount that would be saved on fuel. He hesitated to approve this request if
there is any possibility of integrating smaller buses instead of purchasing the
large ones at this time. He asked if
holding this request for two weeks would cause any loss of funding, and was
told it should not do so.
Ald. Weber
felt this large an issue could not be properly addressed in a two-week period,
saying ridership is what dictates the equipment that is needed. A study determining smaller vs larger would
involve routes and ridership and could look at redesigning routes. It may be possible to use all small buses,
but the matter would have to be studied first.
Ald.
Theisen stated he would like more information, not necessarily a full-blown
study, on which routes the large buses are needed, and examples of what time of
day full-size buses are needed.
Ms. Dupuis
said bids would not be issued within the next two weeks; the funding is just
being set up. The size of the vehicle
must be justified based on ridership in order to receive Federal funding, and
she works through the State rather than directly with the Federal
government. Buses must be cycled out
under Federal guidelines.
Finance
Director Doug Daul stated the real request here is for $198,000 rather than
$66,000. The motion would have to be to
purchase three buses at a cost of $198,000, with authorization to use $66,000
from the Operating Reserve.
Ald.
VanderLeest asked that options be developed to bring back to the Committee,
with feedback on whether smaller buses could be incorporated instead of
purchasing three larger models. He
asked for all options, and within those options, whether justification exists
for both. The request would then be
brought back to Committee for a decision.
Ald.
Theisen made a motion to refer to staff to develop options that may exist,
along with justification for each, based on ridership on routes at different
times of the day, as well as determining whether large buses could be justified
for routes that may be developed in the future. The motion was seconded by Ald. Deneys. This issue could be brought back to the first meeting in
May. Mr. Daul said a whole new agenda
item will be brought forward.
A vote was taken, and the motion
carried.
6. Report of the
Purchasing Agent:
a. Police purchase
of 58 rifles from low responsive vendor for an estimated $46,400.
Mr. Daul
asked to clarify, saying this is a capital reserve request, and the Committee
is being asked to approve the low acceptable bid if funding is approved. There is no funding for this purchase at
this time. Purchasing Agent Linda
Dupuis would place the order if and when funding is approved.
Lieut.
Wesley explained that squad cars currently carry a shotgun and a 40 caliber
carbine, and said they have not been replaced in the 17 years he has been
there. The philosophy of the
department is to have one weapon system across the board for patrol officers,
SWAT teams, etc. Too many different
weapons are in use at this time, each requiring different training and repairs,
along with eight different types of ammunition that must be cycled out
regularly when it gets old. Having one
weapon system would streamline the process and result in considerable cost
savings in ammunition alone. Lt. Wesley
stated these 223 caliber semi-automatic weapons would prove superior in
protecting the officers, and that most surrounding municipalities are already
using the equipment. There would be one
shoulder weapon in the squad cars, where there are now two. The old weapons are non-restricted firearms,
and would be put out for bid and sold at a later time.
Ms. Dupuis
said November 2006 numbers were used in getting the quotes and that they came
in 7% higher than estimated because prices have increased significantly since
then. She would place the order if
funding is approved without bringing it back to Committee.
A motion
was made by Ald. Theisen, seconded by Ald. Weber and carried to approve:
a. Police purchase of 58 rifles from low
responsive vendor for $49,761.10, contingent upon funding.
b. Swimming pool chemical treatments to Carrico
Aquatic Resources, Inc. for $32,510.
Ms. Dupuis
explained that individual contracts have been bundled together and the new Resch
pool, as well as the 5 wading pools have been added, resulting in this larger
request being brought forward.
Park
Superintendent Keith Wilhelm said there had been numerous water quality
problems before they were approached by Carrico. They decided to use that vendor for Joannes Pool only in
2005. The company brought in its own
controller and products, and the result was zero problems. They use only pelleted chlorine and an acid
to maintain proper levels of chlorine and pH in the pools. Colburn Pool was added last year, and there
were no problems with water quality at either park. Using these treatments for all pools will help reduce overtime
and provide for consistently correct chemical levels.
A motion
was made by Ald. Deneys, seconded by Ald. Theisen, and carried to approve:
b. Swimming pool chemical treatments to Carrico
Aquatic Resources, Inc. for $32,510.
7. Overtime Report.
a. Police Department
Police
Business Manager Rick Jurkanis stated that having two supervisors out with
medical problems and another six on light duty caused problems with minimum
staffing costs over the first quarter.
One supervisor has returned and a temporary person will fill in on the
other shift, resulting in a significant decrease in overtime in the past week
and a half. Minimum staffing
requirements are contractual and out of the department’s hands, and they are
looking at how to staff shifts and reduce overtime as a whole. Although minimum staffing costs are higher
than they were at this time last year, the hiring process has been staggered,
and salary savings will cover the overage.
Officers are allowed to take off down to the minimum staffing number,
causing one sick call to result in overtime.
Ald. Weber asked that this issue be brought up during negotiations. Ald. Theisen stated the sick time report
they had seen last year showed definite improvement over prior years.
Ald.
VanderLeest asked that Mr. Jurkanis follow up on how departments monitor sick
time. Mr. Daul suggested an update on
overtime be given to the Council monthly and brought to Committee on a
quarterly basis.
A motion
was made by Deneys, seconded by Ald. Theisen, and carried to receive and place
on file:
a. Police Dept. overtime report.
b. Fire Department
Chief Stauber said three categories in his report are totally
reimbursable and should not be considered – special events overtime, fire
investigation - Brown County, and overtime training for Hazmat. The department has been running with eight
persons short and has two people out on long term injury. Mr. Daul said the department has expended
about 14% of its budget.
A motion
was made by Theisen, seconded by Ald. Deneys, and carried to receive and place
on file:
a. Fire Dept. overtime report.
8. Request by On Broadway Inc. for a City
guarantee on a $4 million loan for the purpose of Broadway redevelopment.
Economic Development Director Allison Swanson stated the RDA had met
earlier that afternoon to discuss this issue, and said action was taken to
refer the matter to staff.
A motion was made by Ald. Theisen, seconded by Ald. Deneys, and carried
to suspend the rules to permit interested parties to speak.
Naletta Burr, Director of On Broadway, said she would do a quick
presentation to put the Committee on the same level as the RDA. She introduced Greg Larsen, President of On
Broadway, and Dan Roarty of Dimension IV, who helped with the vision of the
site as a whole.
Mr. Roarty, referring to a display, said that the overall vision is a way
to enhance, expand, and complement the existing Broadway District through mixed
use development of the site. This
community-based development started about two years ago with input from the
community. As the project moves
forward, it will involve additional community input to determine the specifics,
possibly continuing to enhance the idea of a creative community. Broadway is already known as being somewhat
eclectic, and units may be inhabited by artisans and businesses on a more
creative level. This growth will take
place over the next decade.
Mr. Roarty stated that one of the key components is the idea of ownership
– it should be done in a way affordable to a whole group of people. There would be about 130 lots of 2,500 sq.
ft., allowing one entrepreneur to buy just 2,500 sq ft or a larger group to buy
a series of lots together to make a larger parcel. One could have a shop on the street and move into a condo on the
same site.
Mr. Roarty explained that the site’s 930,000 sq ft are split 50% for infrastructure
and 50% for sale. One quarter of the
infrastructure amount is for roadways and right-of-ways, including the drive,
parking, and sidewalks; about 18% toward dedicated parking; 5% toward
stormwater; and 2% for a community park-type plan. It is estimated that 65% of the 465,000 sq ft left for sale would
be covered with buildings, with a 1,500-1,700 sq ft footprint expected on a
2,500 sq ft site. These buildings would
be about 2 ½ stories tall, and using an assessed value of $85-$100 per sq ft would
result in a $65 to $75 Million package.
The expectation is that seven buildings would be for sale, along with
100 commercial parcels and 28 residential parcels.
Ms. Burr said when On Broadway first approached the Council six months
ago, they were looking to utilize RDA bonds.
Since then, they reanalyzed the financials, projected income and
expenses to get a cash flow, and started working with M&I Bank. M&I has come onboard as their financial
partner in this deal, but they are still looking for a loan guarantee from the
City. On Broadway is a nonprofit
organization with no capital behind them to support a $4 Million loan, and they
are asking for a City guarantee on the loan.
The total amount of the loan would be $4 Million, and it consists of two
pieces. One part is a $2 Million
conventional loan for two years at 7% interest. The second piece is another $2 Million loan with New Market Tax
Credits, a 7-year loan at 4% interest.
Both loans are interest-only payments, and the principal would be paid
down through the sale of property. Ms.
Burr said a number of opportunities exist on this site – their intention is to
not develop the land themselves, but to get developers involved in that end. 80% of all sales would go to pay down the
principal. The New Market Tax Credits
loan cannot be paid down for the first seven years, and she suggested
developing an escrow account to set aside the 80% from sales so it can be built
up to repay the $2 Million loan at the end of 7 years.
Cash-flowing the site would come from rental sources. Birds Eye would be the key tenant, taking
the first floor space and picking up other added expenses related to the two
office buildings on the north end.
Frozen Codesbase, a fast-growing business, is the second tenant in place. They are taking 2,000 sq ft initially, but
should need 5,000 by the end of the year.
Ms. Burr stated there are a number of pending sales on the site and three
accepted offers. Expenses total about
$284,000 and the two five-year leases in place total $300,000. Ald. VanderLeest remarked that rent would
equal expenses in the beginning but asked what would happen if the other
buildings did not sell before the Birds Eye 5-year lease was up and the final 2
years of the loan would remain. Ms.
Burr said this is where the City guarantee comes in, but said there is a
significant amount of interest in the property and that they haven’t fully
marketed it yet because they don’t have site control. Potential buyers understand they don’t have site control yet but
anticipate they will, and they have $1.3 Million in pending offers that will
close by the end of this year.
Ald. VanderLeest asked that these offers to purchase be provided to
Council and RDA at some point.
Ms. Burr said that Scenario 2 -- Holding costs with Sales Occurring --
brings the holding costs down to about $208,000 per year. Their intention is to actively market this
property. The property has been
appraised at $6 Million as a whole, and the office itself with leases in place
appraises at $4.2 Million.
Ald. VanderLeest questioned the length of the loan, and Ms. Swanson
explained that one is for two years, interest only, with a balloon payment at
the end of the second year. The other
is seven years, also with the balloon payment at the end. Mr. Daul cautioned that when looking at the
expense-vs-coverage ratio they keep in mind it is an interest-only bank
loan. Ms. Swanson said as properties
are sold, payment would first be applied to the 2-year loan, then put into the
escrow account to save up to pay off the 7-year loan at its end. That loan cannot be paid off before the end
of seven years. Ms. Burr said their
goal is to be debt-free within seven years, although they anticipate
development to occur on the site for 12-15 years.
Ald. VanderLeest asked how any profits would impact the BID district and
the City’s contributions from TIF, saying those discussions must also be part
of what is approved. If another piece
of property is sold after they are debt free and there is extra cash, how does
that get spent? Does it offset the
BID? Ms. Burr said On Broadway is a
nonprofit organization dedicated to the betterment of the district, so their
intentions is to continue to see those funds enhance the district. Growth of businesses in that area as well as
development opportunities help grow the tax base for the City, help businesses
to be strong and residents to have a good place to live. The funds would be allocated in that
context. Ms. Burr stated the full
development – the value of $100 Million – would not be seen in seven years, but
they should be debt-free in seven years.
A motion was made by Ald. Weber, seconded by Ald. Theisen, and carried to
return to the regular order of business.
A motion was made by Ald. Weber to enter into closed session, pursuant to
Sections 19.85(1)(e), Wis. Stats., for purposes of deliberating or negotiating
the sale of public properties, investing of public funds as necessary for
competitive or bargaining reasons. The
Committee may thereafter reconvene in open session pursuant to Section
19.85(2), Wis. Stats., to report the results of the closed session and consider
the balance of the agenda. It was
seconded by Ald. Theisen and carried.
Closed Session followed.
A motion was made by Ald. Theisen, seconded by Ald. Deneys and carried to
return to the regular order of business.
A motion was made by Ald. Deneys and seconded by Ald. Theisen to refer to
staff the request by On Broadway Inc. for a
City guarantee on a $4 million loan for the purpose of Broadway
redevelopment. The motion carried.
9. Accept
transfer of air rights over Washington Street from BayLake Bank and approve
demolition of the overhang and repair of Washington Commons structure to be
handled by River Vision Partners LLC up to $250,000 funding from TIF 5.
Ms. Swanson said this is for the mall overhang connecting Washington
Commons to Younkers. The Younkers deal
approved in 2005 included the overhang, but it was later removed. BayLake Bank is now in ownership, based on
the settlement approved for Washington Commons, and they have agreed to
transfer title to the overhang air rights to the City for $1.00, a savings of
$500,000 to $750,000. The Dept. of
Public Works estimates a repair cost of about $250,000, depending on the façade
used on the Commons once the overhang is down.
They suggested using EIFS – a thick Styrofoam-like product with a stucco
material applied to outside on the upper area.
The bottom area will remain brick.
Ms. Swanson said the City would like to utilize funds on hand from TIF
5, but wants it to be part of the demolition of the Younkers building.
A motion was made by Ald. Deneys, seconded by Ald. Theisen and carried to
approve the transfer of air rights over Washington Street from BayLake Bank and
approve demolition of the overhang and repair of Washington Commons structure
to be handled by River Vision Partners LLC up to $250,000 funding from TIF 5.
10. Finance Director’s Report:
a. Update on Council video equipment.
Mr. Daul
explained that Ald. Zima requested this update because of recent problems with
the scoreboard not displaying and the sound being of poor quality. He has been testing the system and believes
last week’s problems were caused by use of the system between Council meetings
when correct procedures in turning the system and microphones on and off were
not used. The City is trying to avoid a
service call at this time.
A motion was
made by Ald. Theisen, seconded by Ald. Weber, and carried to receive and place
on file the update on Council video equipment.
b. Staff Update.
Mr. Daul
said he and Comptroller Dawn Foeller are continuing to handle Payroll duties
because of that department’s administrator being out on sick leave. Schenck will be in next week to work on the
Financial Audit and will assume an expanded role in preparing the annual
financial report to help alleviate some of the work load of Mrs. Foeller.
A motion
was made by Ald. Deneys, seconded by Ald. Theisen, and carried to receive and
place on file the Staff Update.
A motion
to adjourn was made by Ald. Theisen, seconded by Ald. Weber, and carried. Meeting was adjourned at 8:50 p.m.
2007 CONTINGENCY FUND
$285,000
Any person wishing to
attend who, because of a disability, requires special accommodation should
contact the Mayor’s office at 448-3005 at least 24 hours before the scheduled
meeting time so that arrangements can be made.
Please take notice that it is possible that additional members of the Council may attend this committee meeting, resulting in a majority or quorum of the Common Council. This may constitute a meeting of the Common Council for purposes of discussion and information gathering relative to this agenda.