MINUTES
FINANCE COMMITTEE
MEMBERS
PRESENT: Chairman John VanderLeest,
Tony Theisen, Tom Weber, and Steven Deneys
MEMBERS EXCUSED: None
OTHERS PRESENT: Doug Daul, Carl Weber, Mark Delaski, Chad
Weininger, Bill Landvatter, Chris Pirlot, Linda Dupuis, and Others
1. Roll Call.
Chairman
John VanderLeest called the meeting to order at 5:55 p.m.; all members were present.
2. Approval of the Agenda.
A motion was made by Ald.
Weber and seconded by Ald. Deneys to approve the Agenda. Motion carried.
3. Approval of the minutes of the Finance
Committee meeting of April 10, 2007.
A motion was made by Ald. Deneys, seconded
by Ald. Theisen and carried to approve the minutes of the Finance Committee
meeting of April 10, 2007.
4. Request by the Purchasing Agent and IT
Director for approval of a three-year maintenance contract with AT&T.
IT
Director Mark Delaski said a one-year contract for this service had been
approved at an earlier meeting, but a second proposal was received from
AT&T before the first contract was executed. The new proposal requires an up-front payment for a three-year
contract but would lock in the rate for that period and result in a savings of
$12,578. Maintenance on most of the
network equipment, call processors, and voice mail system is included in the
contract, along with trouble resolution and upgrades to all software. It was brought back tonight for approval to
enter into the three-year contract.
A motion
was made by Ald. Weber and seconded by Ald. Deneys to approve the request by
the Purchasing Agent and IT Director for approval of a three-year maintenance
contract with AT&T. Motion carried.
5. Request of the Department of Public Works
for a transfer of funds from general fund reserves to DPW Operations Division
Building Repairs for emergency repairs to the DPW fuel dispensing system and
salt dome.
Finance
Director Doug Daul said emergency repairs must be made to DPW’s fuel dispensing
system and salt dome and that Director Carl Weber has put in an end-of-year
request for additional funds. Funding
could come from Contingency or the general fund at this time. This expenditure would have to be made up in
the 2008 budget.
Mr. Weber
said the fuel system is antiquated. It
functions only sporadically, and because it can no longer download the
information needed to track usage on a vehicle-by-vehicle basis, they have had
to rely on historical data in spreading their costs among City departments and
other agencies. The same key system is
used to track fuel purchases by the County and car washes used by the school
system.
Mr. Weber
said the leak detection system at the East Side garage has also failed and is
not repairable, and an old tank previously used to hold heating fuel was
discovered at the same garage. This
tank must be removed, filled in, and tested to ensure that nothing has been lost. The cost to resolve these three problems is
$50,000.
Mr. Weber
said salt dome repairs are separate but came up after the budgeting period
ended. The dome is 25 years old and is
manually filled by loaders that must enter the dome. Damage occurs when piles shift or a loader accidentally bumps the
sides, and a recent bump put it past the point where it can be patched. One truss and two or three damaged panels
must be replaced. The company that
builds the structures inspected the dome and gave an estimate for repairs. The department then called in a structural
engineer who confirmed that these repairs must be made. Mr. Weber said the work should be completed
before October, when they begin bringing in salt for the winter, and as part of
this project, they are looking at ways to protect the side panels from being
bumped. Purchasing a conveyor to load
the dome would be ideal, but is cost-prohibitive. The cost of these repairs is $45,000.
Ald.
Deneys asked if there would be additional charges related to cleaning up any
fuel that may have leaked from the tank, and Mr. Weber responded that enough
money was included to remove the tank and perform initial monitoring. The tank has been buried for 30 years, and
still contained a quantity of fuel, so chances were very good that it could be
capped and not likely require an expensive cleanup.
Ald. Weber
asked if any funds from PECFA or any other agency remain that could help defray
costs and asked that this option be pursued.
A motion was
made by Ald. Theisen to approve the request by the Department of Public Works
for a transfer of $95,000 from the Contingency Fund to DPW Operations Division
Building Repairs for emergency repairs to the DPW fuel dispensing system and
salt dome, subject to applying for any other funding sources that may be
available. It was seconded by Ald.
Weber, and carried.
6. Report of the
Purchasing Agent:
Purchasing
Agent Linda Dupuis asked that item b. be addressed before a.
a. Request to
transfer funds within the Finance Department up to $1,000 for a cooperative
purchase of web-based purchasing software.
Ms. Dupuis
gave a presentation showing what is going on in the Purchasing world at
present. She said the overall goal of
cooperative purchasing is to leverage government buying power through web-based
buying and selling, and that this $1,000 transfer of funds would start the ball
rolling toward that end. There are many
city-wide contracts, and all departments buy together when possible, but an
effort is being made to accomplish this state-wide. Ms. Dupuis is President of the Wisconsin Association of Public
Purchasers (WAPP), and the goal of this organization is to educate, network,
share purchases, and bring the best ideas back to the City. Obstacles to the cooperative purchasing approach
exist, such as the idea that individuals are giving up control over their
purchases, or may prefer to use a local vendor. Providing a website for municipal purchasing should help
eliminate these obstacles by consolidating separate bids and sharing
information.
Ms. Dupuis
said this software package, Novusolutions, costs $19,500, but each agency would
spend no more than $1,000 per year if bought as a group through the WAPP. Although this is a simple package that would
not interface with our financial system, it would allow on-line vendor
registration, bid posting, electronic bid notification, and will provide a
Wisconsin-based specifications library.
They hope to implement it with 10-20 Charter members in the summer and
fall and then offer to all WAPP members in December. They have checked the references, and this is an established
company.
Ms. Dupuis
said if cities, counties, schools, and technical colleges become a cohesive
unit, there is long-term potential for more efficient local purchasing
units. Ald. Theisen remarked that
purchasing was handled by individual departments in the past and asked if Park
Dept. items such as soda and food for concessions is quoted. Mr. Landvatter responded that everything is quoted
out through Purchasing, and Ms. Dupuis explained that soda is one item that is
not cooperative, and is bid out alone. Her department strives to prioritize
cooperative purchases and get the best value for the money. She said the Committee’s continuing support
is important in accomplishing the co-op purchasing goals. Ald. VanderLeest said he wants the best deal
for the taxpayer and thanked Ms. Dupuis for saving the taxpayers money. He said she has turned Purchasing around.
Ald.
VanderLeest asked that Brown County be encouraged to be part of the original
group, but Ms. Dupuis said they had met and were told they would link in once
that the ERP system they are implementing is established. They are not going to be a charter member,
but may join in 2008. He asked that she
follow up in this manner so the County can utilize these savings as well.
A motion
was made by Ald. Weber, seconded by Ald. Deneys and carried to approve:
a. Transfer of funds within the Finance
Department up to $1,000 for a cooperative purchase of web-based purchasing
software.
b. Provide updated information regarding buying
new versus used vehicles.
Purchasing
Agent Linda Dupuis explained that the Committee had asked her earlier in the year
to look at purchasing used rather than new cars and pickup trucks. After she and Operations Director Chris
Pirlot contacted industry sources, such as trade magazine companies, fleet
management companies, and local companies such as WPS and Schneider National,
as well as municipalities; they arrived at three recommendations.
For the
first recommendation, Ms. Dupuis said they researched purchases of large
equipment as well as cars and pickup trucks.
They will routinely request demo and new units for skid steers, street
sweepers, and leaf loaders, etc. Used
equipment will also be requested and evaluated on a case by case basis. She asked that the purchasing procedure
approved last year authorizing her to buy used equipment on the spot after
public quoting it be expanded to include this type of equipment. She then reports back after the fact. She asked to insert the word “equipment” to
allow her to buy demo or used equipment, as long as it is within budget.
The second
recommendation was to continue buying new rather than used automobiles, pickup
trucks, and vans. WPS did a cost
analysis of its 1000-unit fleet and found that with discounts similar to the
State of Wisconsin, it is more cost-effective to buy new. There are many manufacturers discounts and
incentives through the State, as well as a full warranty, and in these cases,
used cars are an unknown quantity. She
presented three examples of State contract prices vs retail vs used vehicles in
this area.
As for the
last recommendation, Ms. Dupuis said companies owning large fleets recommended
not keeping vehicles for 10 to 12 years, saying the best total return comes
from keeping them no more than five years, although WPS uses theirs for 10 to
12 years. The City, however, does not
have an automated way to determine life cycle costs at this time and retains
cars for 10-12 years. Ald. VanderLeest
asked if tax implications exist, since most companies can write off many
purchases, while City government probably could not. Ms. Dupuis agreed and said there are also maintenance issues
since maintenance costs would be lower while a vehicle is under warranty.
Mr. Pirlot
said fleet maintenance tracking software was approved in the 2007 budget. The department presently keeps track, on
paper, of maintenance records on all vehicles, and this software will simplify
gathering the data necessary to determine such things as life cycle costs.
Alds.
VanderLeest and Theisen agreed that purchasing new vehicles every five to six
years would, in most cases, be too expensive for City taxpayers. Ald.
Weber suggested keeping an open mind as to length of life analysis, since at a
certain point it may cost more to keep up the old than it would have to
purchase new. Ms. Dupuis said her
recommendation was to stay with the present system while DPW gathers data for
future analysis of life cycle costs.
Ald. VanderLeest asked that any good deals on newer used vehicles not be
overlooked, however.
A motion
was made by Ald. Weber to approve the request by the Purchasing Agent to update
the purchasing process to allow purchase of demo or used equipment when
warranted. It was seconded by Ald.
Deneys and carried.
Ald.
VanderLeest asked Ms. Dupuis and Mr. Pirlot to follow up with this issue and
bring an update to Committee in January.
7. Request by Mayor Schmitt to approve the 2007
bond issue.
Mr. Daul
said his role was to put the numbers together for this annual spring bond
issue, while Assistant to the Mayor Chad Weininger did the legwork supporting
those numbers. Mayor Schmitt’s intent
was to reduce the amount of debt the City owes.
Mr. Daul
referred to the second page of the 2007 Bonding Requests handout, an analysis
of Mayor Schmitt’s administration since 2003.
This report shows the level of debt payoff this year to be $8.4
Million. Mayor Schmitt is bringing $6
Million in borrowing requests forward this year, for a reduction in outstanding
principal of $2.4 Million.
All of the
Fire Department request for funds was for repairs to the fire stations, and
walk-throughs were conducted to itemize those amounts.
Mr. Weber
worked to lower the amount of the annual DPW request for pavement.
Under “Technology”
requests, Mr. Daul explained that the City, County, and School District had
planned on jointly laying fiber optic lines throughout the City, but when the
school referendum failed, school district funds were not available. The County is going ahead with the project
in spite of this, and the Technology request is for $115,000 for the
engineering aspect for the City to lay fiber side by side with the County in
the same trench. A cost analysis is
included, using an anticipated 25-year life of the fiber. This would update the City tremendously, and
should result in considerable savings.
Mr. Daul
said the $160,000 request from Economic Development is a TIF request for
developer incentive to Paul Kaczrowski for Prestige Park. Debt service will be reimbursed by the TIF
itself.
Under
Capital Improvements – the “X” next to projects on DPW pages 2 and 3 denotes
projects that have been deleted, while the “X” on the Park & Recreation
pages denotes projects that are included.
Ald.
VanderLeest noted that the Neighborhood Enhancement Funding property
acquisition request usually becomes a sticking point each year and cautioned
against approving too large an amount to ensure there are funds available
should unexpected liabilities arise later in the year. He suggested looking to grants, such as the
Community Block Grant funding program, for some support.
Ald.
VanderLeest stated there is a dollar amount in the budget for debt payment, and
said this bonding will impact next year’s budget. Mr. Daul agreed, saying there is no money in the budget to pay
the interest on the bonds to be borrowed this May. We must begin to pay in 2008 for whatever is borrowed tonight –
it will impact the budget. Mr.
Weininger noted that the City is at the point where services would have to be
cut if further cuts are necessary.
Ald. Weber
remarked that the value of debt changes based on the cost of that debt and that
inflation over time attacks value. He
suggested putting debt on the decline, and maintaining that trend. Mr. Daul said every dollar that can be freed
up in debt service will allow us a dollar on the levy, because debt is included
in the levy limit.
A motion
was made by Weber, seconded by Ald. Theisen, and carried to approve the 2007
bond issue requested by Mayor Schmitt.
A motion
to adjourn was made by Ald. Theisen, seconded by Ald. Deneys, and carried. Meeting was adjourned at 7:20 p.m.
2007 CONTINGENCY FUND
$190,000
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.