MINUTES

FINANCE COMMITTEE

Tuesday, April 14, 2009

City Hall, Room 604

Immediately following Personnel which begins at 5:30 p.m.

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

OTHERS PRESENT: Dawn Foeller, Chad Weininger

1. Roll Call

Roll call was taken and all were present.

2. Approval of the Agenda.

A motion was made by Ald. Deneys, seconded by Ald. Weber, and carried to approve the agenda.

3. Approval of the minutes of the Finance Committee meeting of March 24, 2009.

A motion was made by Ald. Theisen, seconded by Ald. Deneys, and carried to approve the minutes of the Finance Committee meeting of March 24, 2009.

Request by Ald. Theisen, seconded by Ald. Weber, to take item 6 out of order.

4. Request by the City Clerk to approve the use of $5,000 from the State of Wisconsin Government Accountability Board for official election-related expenses.

City Clerk Chad Weininger explained that the City was awarded a check for $5,000 from the State of Wisconsin Government Accountability Board for filling out the GAB 190 forms appropriately, which are used to determine the number of voters at each polling location. Mr. Weininger requested the money be put in a separate fund specifically for voting equipment maintenance since the City is self-insured, as opposed to paying $14,000 per year to maintain a contract with ES&S Services for parts, labor, and on-site inspection of the machines. Specifically, the AutoMARK machines used to assist the disabled in voting have been breaking down and require repair by the City. The $5,000 was a one-time reward to the City.

A motion was made by Ald. Deneys, seconded by Ald. Theisen, and carried to approve the request by the City Clerk to put $5,000 from the State of Wisconsin Government Accountability Board into a separate fund for election equipment maintenance.

5. Request by Alderman Theisen that projected State-mandated increases in future City payments to the Wisconsin Retirement System, because of investment losses, be reviewed, along with the financial impact on corresponding City budgets.

Ald. Theisen handed out supporting materials documenting what percent of salary is paid in by the general employee to the Wisconsin Retirement System (WRS). Our current contribution rate in 2009 is 10.4%, with Police and Fire being a higher percentage. Finance Director Dawn Foeller clarified the handout describing Employee Trust Funds Pension Contribution Rates and its corresponding categories. “General” employees refers to Administrative Staff, such as a Clerk Typist, Finance Director, etc.; “Elected Officials” include the Mayor, the Aldermen, Judges, etc; “Protective with Social Security” are police officers, while “Protective without Social Security” are firefighters. Ald. Theisen pointed out in the “General” category that the rate has fluctuated from 1987 to current, with the highest being in 1986 at 12.8%. He had read in the paper back in November that, based on huge investment losses, the WRS contributions are going to be increased to cover those losses. He started checking into it a bit more, and he became aware that the public does not know that the City is required by State law to make up for all investment losses. We have a system where money is being invested, and the people in the retirement system benefit from investment increases, but if there are any losses, apparently the taxpayer has to make up for them. Ald. Weber said that is his understanding as well. Ald. Theisen said increases from 2009 to 2014 are based on the 2008 losses. If there were investment losses halfway through the five year period, the number required to cover such losses would be doubled.

Ald. Theisen would like to know the City’s requirements over a five year period to make up such losses. Ms. Foeller said current annuitants took a reduction in their pension benefit, but the lowest they can go is the value at which they started. Ald. Theisen said current annuitant losses is a separate issue. The City is required to pay regardless of whether retiree monthly payments go up or down. The City needs to be concerned about what it needs to budget for, what is on the back of the taxpayer. The contribution rates are only for current employees, not retirees. Ms. Foeller believes they do segregate the funds for active employees versus annuitants. Ald. Theisen reiterated the main point is to assess what the City is on the hook for and what the impact will be. Also, a wage increase will lead to an increase in contributions.

Ald. Theisen wants to know the exact dollars the City needs to account for. He is also curious about other state requirements to make up investment losses, if there are any. He saw on the news a couple days ago that South Carolina may get federal stimulus money to take care of their investment losses. Ms. Foeller thinks that a request for federal dollars is done at the State level. What Wisconsin has is a defined benefit program that is formula driven, which is why the City has to contribute the dollars to be able to fund that when an employee retires. Ald. Theisen thinks South Carolina was able to get them because they don’t have a subsidized system. The total deficit in public pensions is approaching $2 trillion of unfunded public pension liability in the United States. Some states are lowering what they are paying, but Wisconsin cannot lower the contribution.

Ald. Theisen wants a column showing what increases the City would be seeing if it had an average wage increase, but Ms. Foeller says to go with a 0% increase every year because she does not want to speculate on future increases. She said the WRS rates are solidified mid-June and used for the budget. She thinks a five year projection was raised at a budget meeting.

Ald. VanderLeest suggests referring this item to staff and drafting a resolution. Ms. Foeller says Wisconsin has one of the highest funded pension plans. Ald. VanderLeest wonders what the appropriate level would be to push back to the community. He is concerned we have all the facts before proceeding. Ald. Theisen wants clarifications on the rate contributions as reported by Secretary of Wisconsin Department of Employee Trust Funds David Stella. Ms. Foeller says there are a lot of variables involved in the calculations of unfunded pension liability. Ald. Weber said the other things that affect this are contracts, wage increases, etc.

In reference to the last page of the handout submitted by Ald. Theisen, the County Executive Committee adopted this resolution, but omitted “Whereas” number two because it sounded too much like an opinion, as well as the last “Whereas.”

Ms. Foeller suggests coming back with all information before adopting a resolution, but Ald. Theisen suggests doing it all at once. Ald. Theisen wants the second and last “Whereas” deleted from the resolution and referred to the Attorney’s Office for drafting. Ms. Foeller will be calculating the values in dollars of what the increases would be for 2011, 2012, 2013, 2014. Also, she is to investigate the City’s responsibility in making up the market loss, and if the City is allowed to apply for federal stimulus money to recover losses. Ald. Weber pointed out that the way stimulus money seems to flow is to those who do a poor job, as opposed to a state that seems to protect its worker through legislation, thereby disqualifying for a stimulus package.

A motion was made by Ald. Theisen, seconded by Ald. Weber, and carried to refer the request by Ald. Theisen to staff to determine the impact of investment losses on future City payments to the Wisconsin Retirement System and corresponding City budgets and to bring this item back to the next Finance Committee along with a draft resolution to the State of Wisconsin stating those concerns.

6. Request by the United Steelworkers to adopt a “Buy American” Resolution.

Finance Director Dawn Foeller spoke through a series of talking points given to her by Purchasing Clerk Julie Van Oss, who was in attendance at the Improvement and Services Committee. She explained reasons the City may hesitate to approve such a resolution. The City values quality and competitiveness in procuring its goods and services; citizens have open access to information about competitive opportunities and procurement decisions, and vendors have a right to be treated fairly in the award of government business and their obligations to deliver value. The City of Green Bay would continue to optimize public tax dollars through the use of competitive purchasing processes, and local, national, and global vendors would have the opportunity to quote out the product the City is interested in getting. Additionally, Ms. Foeller stated the City Attorney Allison Swanson brought up the point about how difficult it can be to determine how much “American” is in the product a vendor is trying to sell. Ald. VanderLeest pointed out that there were not any members from the United Steelworkers present at the meeting. Alds. Theisen and Weber explained the importance of a global and competitive marketplace in the overall economy.

A motion was made by Ald. Theisen, seconded by Ald. Weber, to receive and place on file the request by the United Steelworkers to adopt a “Buy American” Resolution.

7. Request by the Finance Director to add additional depository banks for the City of Green Bay.

Finance Director Dawn Foeller explained that she changed Bank One to JP Morgan Chase. She added First Business Bank to the list of depositories. First Business Bank recently moved into the Green Bay market, and she has done investigative work on them, and they have offices in Milwaukee and Madison and are making their way north.

A motion was made to by Ald. Deneys, seconded by Ald. Theisen, and carried to approve the request to add additional depository banks for the City of Green Bay.

8. Report of the Purchasing Agent:

a. Request for approval to award one front mount riding lawn mower to Service Motor Company for the amount of $13,200.

Finance Director Dawn Foeller explained that this is a local bid and in the budget. It replaces a 1996 John Deer. Eight bidders responded to this quote, and it was awarded to Service Motor Company.

A motion was made by Ald. Deneys, seconded by Ald. Theisen, and carried to approve the request to award one front mount riding lawn mower to Service Motor Company for the amount of $13,200.

9. Overtime Report.

Finance Director Dawn Foeller handed out an updated copy of the Overtime Report to include another budget line item for the Police Department, which has now put them in an under budget status. Ald. Weber asked for clarification on the “Time on the Books” line item. Ms. Foeller explained this line item is where the Police Department can elect to accumulate up to 100 hours on the books that can be paid out at the time of retirement at the current rate of pay at time and a half. Ald. Weber asked if this money has been segregated and invested for the City. Ms. Foeller replied that the money is invested as a whole, not in a segregated account.

A motion was made by Ald. Deneys, seconded by Ald. Weber, and carried to receive and place on file the Overtime Report.

10. Budget Status Report.

Finance Director Dawn Foeller explained we are over budget on our overtime for some of the larger departments. The City finished out the year with revenues over expenditures of $142,000. There was also some planned specific spending in the amount of $942,000, mostly for capital equipment replacement, so the net effect on the budget was a reduction in fund balance of $772,000.

Ald. VanderLeest suggested putting together a Budget Task Force. Dawn Foeller said she would look into it and bring it back to the next meeting.

Ald. VanderLeest inquired about an LED light required at Aspiro. He thinks it was approved, but the financing needs to be defined.

A motion was made by Ald. Theisen, seconded by Ald. Deneys, and carried to receive and place on file the Report of the Finance Director on the Budget Status Report.

A motion was made by Ald. Theisen, seconded by Ald. Deneys, and carried to adjourn. The meeting adjourned at 7:54 p.m.

2009 Contingency Fund

$109,930.00

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.

RECORDING SECRETARY: Andrea Canadeo