MINUTES

FINANCE COMMITTEE

Tuesday, April 28, 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; Julie Van Oss; Bill Landvatter; Dan VandenBush, United Steelworkers; Megan McKeefry, the Alliance for American Manufacturing; Scott Matejov,and Keith Wilhelm

1. Roll Call

Roll call was taken and all were present.

2. Approval of the Agenda.

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

3. Approval of the minutes of the Finance Committee meeting of April 14, 2009.

A motion was made by Ald. Deneys, seconded by Ald. Weber, and carried to approve the minutes of the Finance Committee meeting of April 14, 2009.

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

A motion was made to suspend the rules to hear from the public by Ald. Theisen, seconded by Ald. Deneys, and carried. Dan VandenBush of the United Steelworkers and Megan McKeefry of the Alliance for American Manufacturing addressed the committee to explain the resolution.

Ms. McKeefry stated that the resolution passed at the federal level, and they are now seeking adoption of the resolution at the municipal level in hopes of getting passage at the state level.

Ald. VanderLeest explained that the City’s purchasing process does not include making a distinction between what is American and non-American. Finance Director Dawn Foeller added that the City’s bid process is guided by State statute - the City will award the bid to the vendor that meets all requirements at the lowest price.

Mr. VandenBush explained the importance of manufacturing to the City of Green Bay, and that, by adhering to such a resolution, will help put more Americans to work. Ms. McKeefry explained that there is a waiver available for the purchase of foreign goods at a cheaper price (25% less than the American competitor) that would need to be available to the public to explain why such an award did not adhere to the “Buy American” provisions.

Ald. Theisen asked for clarification on what is exactly “American.” Ms. McKeefry explained that they consider a “Honda built in Ohio” more American than a “Ford built in Mexico” because manufacturing in America produces more jobs for Americans. She stressed the importance of keeping money in the American economy by purchasing American goods, thereby maximizing job creation, and leading to greater revenues for municipalities.

Ald. VanderLeest explained that such a resolution should be handled at the State level first because the City is bound by State statute to purchase from the lowest qualified bid, regardless of whether or not the product is American. Furthermore, the City is bound by budget constraints, and purchasing above the lowest qualified bid to adhere to such a resolution would not fit in the City’s budget.

Ald. Theisen mentioned that the City is getting federal stimulus money and is not required to use the money solely on American goods. The City always tries to buy locally whenever possible, but overall, the federal government cannot dictate how the City will spend its money. Again, it comes down to State statute and the Budget.

Ald. Weber asked for clarification on why foreign competition is deemed unfair, and Ms. McKeefry reiterated that it causes job loss in America. Ald. Weber explained that border issues, exports and imports, are a federal issue. It is not a municipality’s responsibility to institute protectionism.

Ms. McKeefry closed by reiterating that the main concern of the United Steelworkers and the Alliance for American Manufacturing was job loss in the community. Ald. VanderLeest advised them to first take it up with State officials.

A motion was made by Ald. Deneys, seconded by Ald. Theisen, to return to normal session and carried.

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

5. Request by Parks, Recreation & Forestry Director to use Fund 203 to pay remaining balance of $15,380 on an aerial lift truck for the Forestry Division.

Finance Director Dawn Foeller explained the $120,000 they had approved in the 2009 Budget did not cover the full amount. They have available funds in Fund 203 to make up the remaining balance of $15,380.

A motion was made by Ald. Theisen, seconded by Ald. Deneys, and carried to approve the request by Parks, Recreation & Forestry Director to use Fund 203 to pay remaining balance of $15,3$0 on an aerial lift truck for the Forestry Division.

6. Report of the Purchasing Agent:

a. Request approval to award the order for computer hardware using the state contract to Paragon Development Systems, Inc., for 20 HP Computers, additional memory, and 10 HP Minitowers for the amount of $14,250.

b. Request for pre-approval for the remaining 2009 budgeted and planned PC replacements through the state contract with Paragon Development Systems.

c. Request to update and summarize the purchase of 2009 vehicles bought from the V.A.L.U.E. cooperative purchasing program.

d. Upon approval of funds, request approval to award one aerial lift truck for the Forestry Division to Dueco for the amount of $135,380.

In reference to items 8a and 8b, Finance Director Dawn Foeller stated the City does budget for both these upgrades and that PC replacements are essential to the overall efficiency of City staff.

Purchasing Agent Julie Van Oss asked that she get pre-approval to purchase the balance of the 2009 budgeted PCs this one time so that she may order a few PC’s at a time. She will come back to the committee to present a summary of such purchases to Committee thereafter.

In reference to item 3c, Ms. Van Oss explained all 16 vehicles purchased from the V.A.L.U.E. cooperative purchasing program from vendor Ewald were pre-approved in the 2009 city budget, with an amount totaling $350,143.

In reference to item 5d, Ms. Van Oss explained the decision to award the bid to Dueco to purchase a 2009 Ford aerial lift truck, as opposed to a 2010 International, was the result of the trade-in allowance.

A motion was made by Ald. Deneys, seconded by Ald. Theisen, and carried to approve items 8a through 8d.

7. Request by the Director of Public Works for an additional $10,000 for traffic signal upgrades to be taken from contingency.

Ald. VanderLeest explained there was a request through Transit and Aspiro to have the traffic signals upgraded because there were some safety issues. This was approved at the Traffic Commission.

A motion was made by Ald. Deneys, seconded by Ald. Weber, and carried to approve the request by the Director of Public Works for an additional $10,000 for traffic signal upgrades to be taken from contingency.

8. Request by Alderman Theisen to determine the impact of investment losses on future City payments to the Wisconsin Retirement System and corresponding City budgets and to approve a draft resolution stating those concerns.

Finance Director Dawn Foeller handed out documentation explaining the Wisconsin Retirement System (WRS) and the impact investment losses will have in the upcoming years. She explained that the WRS is a contributory plan where the employee and employer share the burden of funding the plan unless the employer chooses to pay the employee share as a fringe benefit. City contracts state that the City will pay the employee part.

There is a mandatory employee portion and a matching employer portion, which can be offset by interest earnings, and is expressed as a mandatory employer portion. Contributions to the fund are actuarially calculated each year separately around June and new rates are given to participating governments mid-June to complete their new year’s budget. They are predicting a .8% increase for next year, so the 2008 downturn in the market will start affecting us.

The WRS incurred a $22.1 billion loss in 2008, but this loss will be smoothed out over a five year period to lessen the volatility of such a loss. That being said, a $7.9 billion gain from 2007 is also smoothed out over a five year period, so this $22.1 billion dollar loss will be offset by previous year gains, so you are not feeling the full impact of what actually happened in 2008.

Ald. Theisen wants the resolution sent to the State legislature stating the City’s concerns about investment losses and the corresponding impact on tax payers to make up for such losses. Ms. Foeller explained that it was the City’s choice to pay the employee’s portion.

Ald. VanderLeest suggests adding an additional “Whereas” to the resolution explaining the projected amount the City will have to levy in its upcoming budget, which appears to be .8%, or an approximate $350,000 increase in property taxes. A motion is made by Ald. Theisen, seconded by Ald. Weber, to add that as a final “Whereas” to the resolution.

Ald. Theisen feels the State should put a ceiling on what the taxpayer is liable for. Ms. Foeller explained that the WRS is a defined benefit program and the benefits are formula based. Part of the losses would be recovered by the market rebounding and with some of the recovery also coming from increases in the contribution rate which in turn increases the burden on the taxpayer.

A motion was made by Theisen, seconded by Ald. Weber, and carried to approve the resolution to protect the property tax payers of Wisconsin from investment losses in the Wisconsin Retirement System by requesting that a reasonable maximum rate be established to reduce taxpayer exposure to WRS investment losses.

9. Request by Mayor Schmitt to approve the 2009 Bond Issue.

Finance Director Dawn Foeller handed out the 2009 Bonding Request and explained a few of the items. The purchase of two fire trucks requested in December 2008 is now being bonded for in 2009.

The Department of Public Works will see a reduction in their original bonding request due to a reduction in the price of asphalt. Additionally, there is a significant amount being bonded for the purchase of right-of-way for the Velp project (2011), which is also being funded by the Department of Transportation, so it is imperative that all of the right-of-way is purchased and ready to go by that time.

Ms. Foeller recommends using the General Fund Reserve for the Fritsch Ballfield Lighting.

The Ft. Howard Park/School project was removed from the 2009 Bonding Request because Director of Park and Recreation Bill Landvatter will put that in his 2010 Community Development Block Grant request.

The Chappell Park/School is a school playground where the school usually pays 50% and the City pays 50%. The Park Committee has tabled that item, and the City is asking for 50% from the school, so Ald. VanderLeest questions whether or not to bond for that project if that 50% is uncertain at this point. Mr. Landvatter says the playground is due to be replaced. If the school district decides not to pay their share of this school playground, the money will be used for another City playground.

City Hall is due for an elevator major overhaul, this would involve switching out electronics and cables, thereby replacing those things that are causing all the problems. These repairs should last about 15-20 years. Ald. VanderLeest suggests using the General Fund Reserve to fund the project, and Ms. Foeller agrees.

Ms. Foeller explains that the City bonded in 2008 for a railroad property purchase, but that project is still pending, so she suggests putting those dollars towards some other programs to reduce the bond issue, thereby reducing the amount of interest expense. He would earmark the general fund designation to show good faith towards that $875,000 stewardship grant so that the State does not pull that back from the City.

Ald. VanderLeest stated he wants to see the City pay off more debt than it takes on. Ms. Foeller pointed out that the City paid off $10.2 million in 2009 in principal. The 2009 levy supported borrowing would be $7,805,740, which follows the Mayor’s vision. With the current debt service schedule, the City would begin seeing a reduction in its debt service payments in 2011 and 2012.

Ald. VanderLeest wants clarification on the Hobart Drive and Bellwood Lande Land Acquisition, and Ms. Foeller explains that it is the purchase of right-of-way to install storm sewer.

A motion was made by Ald. Deneys, seconded by Ald. Theisen, and carried to approve the 2009 Bond Issue.

10. Request by Mayor Schmitt for approval of Carryover Requests and year-end designations.

Finance Director Dawn Foeller reviewed the 2008 Carryover Request and year-end designations.

A motion was made by Ald. Thiesen , seconded by Ald. Deneys , and carried to approve the Carryover Requests and year-end designations.

11. Request by the Comptroller to review the 2008 year-end accounting.

A motion was made by Ald. Thiesen, seconded by Ald. Deneys, to receive and place on file the 2008 year-end accounting.

A motion was made by Ald. Thiesen, seconded by Ald. Deneys, and carried to adjourn. The meeting adjourned at 8:55 p.m.