MINUTES
FINANCE COMMITTEE
MEMBERS: Tony Theisen, Steven Deneys, Guy Zima, and
Patrick Buckley
OTHERS PRESENT: Dawn Foeller, Angie Dart, Bill Landvatter,
Chief Jim Arts, Ald. De Wane, Ald. Wery, Allison Swanson and others
1. Roll Call.
Roll
call was taken and all members were present.
2. Approval
of the Agenda.
A motion to move item #7 after item #3 was
made by Ald. Deneys, seconded by Ald. Zima, and carried.
3. Approval of the minutes of the Finance
Committee meeting of April 27, 2010.
A
motion was made by Ald. Zima, seconded by Ald. Deneys, and carried to approve
the minutes of the Finance Committee meeting of April 27, 2010.
7. Request approval to award the tables and
chairs for the police training room remodel to KI for the amount of
$44,312.55. Purchase was competitively bid through the State of WI Bureau
of Procurement. Funding is from the 101 General Fund.
Finance
Director Dawn Foeller talked through the “City of Green Bay Quotation Summary”
report that was handed out to all members detailing the proposal from KI. This was competitively bid through the State
of WI Bureau of Procurement. Budget
carryover funds would be used to fund the $44,312.55. KI is willing to give the City of Green Bay a
3-5% additional discount over that of the State Contract discount. Additionally, the delivery charge was reduced
from 4% to no charge and the pricing included installation.
Ald.
Zima asked why they were not given the other bid sheets from the other vendors.
Chief Arts explained that Badger State Industries (BSI) is the other vendor off
the State Contract and their percent off list was listed on the quote summary
sheet before them.
Ald.
Zima’s was disappointed that the bid sheet did not clearly lay out the vendors
pricing but instead just had their discounting percent off list. Ms. Foeller stated that when we use the
State Procurement Office for bidding, we have been bringing forward the low
bidder for the product we are procuring. Ms. Foeller also stated that furniture
companies typically quote out as a percent off the list price.
Ald.
Deneys asked that the bid sheet from BSI be given to all Common Council members
for the next City Council meeting.
Ms.
Foeller calculated what BSI’s quoted value would be when taking the list price
and multiplying it times the quantity and the percent off list. The calculated value was stated to be $52,746.20
(52% of list price) however the correct value should have been $48,688.80 (48%
of list price since the document stated 52% from list price instead of
list price). BSI would include an additional
4% for the delivery charge.
Ald.
Theisen asked if the City was strictly looking at a total lowest bid or if it
is possible the other vendors offered lower bids on one or more of the items.
Ms.
Foeller said that KI came in at the lowest value on each item when factoring in
the waiver of the 4% delivery charge and including set up of the product.
Ald.
Buckley asked if the City had ever contacted BSI about their bid, Ms. Foeller
explained that the City did not directly contact BSI since the bidding process
went through the State’s department of procurement and BSI had given their
pricing through that avenue.
Ald.
Deneys made a motion to approve the award and asked that the BSI bid sheet be
distributed to each Council member’s mailbox in preparation for the next Common
Council meeting.
Ms.
Foeller said she will be sure to present the committee with the list of vendors
under the State Contract at future meetings.
Ald.
Zima expressed his concern over the bidding process and wants to ensure bidding
is handled in a competitive and standard manner.
Ald.
Theisen clarified that this was not handled by our Purchasing Department, but
rather a value bid through the State.
Ms. Foeller added that the City will use the State’s bidding process
because it is usually at the lowest cost due to the volume the vendors
anticipate. In addition, the City
belongs to other Purchasing Consortiums whereby neighboring municipalities
piggyback off one another’s contracts and work together to get the best value
by pooling our volumes together to get better pricing.
Ald.
Theisen stated that even though the process is different from the way we bid
through the City’s Purchasing Department, this is a valid bidding process and
is the lowest cost to the taxpayer.
Ald.
Buckley asked if the training room remodeling was in the 2010 Budget. Chief Arts explained that it was not. A majority of the renovations are coming from
federal appropriations, but we are unable to purchase furniture using federal
money. There was a carryover request put
in for this purchase.
Ald.
De Wane also expressed his disapproval over this bidding process and views it
as unfair.
Ald.
Theisen raised two points to determine the legitimacy of the process. Number one, is it legal? Attorney Allison Swanson stated that it is. Number two, can the City get a better bid if
we bid it differently? Chief Arts was
involved in the process and stated that they contacted several vendors and thought
this was the best value and price. BSI
did not have a comparable chair that met specifications, so they would have to
solicit out to a separate vendor, which would be an additional cost to the
City.
Ald.
De Wane reiterated the need to see the documentation from the other bidders at
committee, so that Council does not have to deliberate over the work that
should be done at the committee level.
Ald.
Theisen asked if the City could bid out the project separately and explore
other pricing options and then compare them to this bid and deny or approve
accordingly.
Chief
Arts stated that the State bid is always available online and remains
accessible until 2011.
Ald.
Zima made a motion to bid the project.
Ald. Buckley seconded. Motion
carried to refer to staff.
A
motion was made by Ald. Deneys to open the floor to hear from the public,
seconded by Ald. Buckley, and carried.
William
Evers, 704 N. Irwin, asked to speak on an item that was not under discussion at
this committee.
A
motion was made by Ald. Zima, seconded by Ald. Deneys, and carried to return to
the regular order of business.
Ald.
Theisen stated that he would like to know how long the bidding process will
take in time for the Tuesday, May 18 Council meeting. Ms. Foeller said she will work on getting
that information to the Council members.
(Update since meeting: This item
will be brought back before the committee on June 8, 2010 to allow time to send
out the purchasing specifications, field vendor questions and receive bids
back).
Motion
carried to refer to staff the request to award the tables and chairs for the
police training room remodel. Purchase
was competitively bid through the State of WI Bureau of Procurement and KI was
the low bidder at $44,312.55. The committee requests that the purchasing
department competitively bid this project directly to determine if it can be
purchased at a lower cost.
4. Report of the Purchasing Agent:
a. Report the Green Bay Press Gazette will serve
as the official newspaper for legal notices.
Ms.
Foeller explained it is State mandated the City choose an official newspaper to
publish its public notices specifically for council minutes, ordinance
violations, construction notifications and the like. Currently, the Press Gazette is charging 100%
of the allowable rate. Pricing is locked
in for 2010 and 2011, and there will not be an increase in pricing. In 2008/2009, the City placed 315 ads in the
paper for a cost of $39,389. In 2009/2010,
the City placed 331 ads in for a cost of $41,863. The fiscal year for this
contract runs from June through May of each year.
Ald.
Deneys asked if there was another way to publish notices, and Ms. Foeller
replied that it is written in State statute that we must handle certain
business through a newspaper and must reach a majority of the people within the
municipality.
Concern
was expressed about the number of people that actually receive and/or read the
paper.
Ald.
Theisen explained that there should be another means for publishing notices
because this process is outdated.
Ald.
Deneys explained that our hands are tied due to State statute. Ald. De Wane agreed and mentioned that people
currently rely on it.
City
Clerk, Chad Weininger explained the details of the statute to the committee.
Ald.
Zima proposed choosing the Press Gazette for one year as opposed to two. The pricing is locked in for 2010 and 2011,
but the City is not obligated to two years.
He also requested that we look at alternative ways to publish our
notices using publications such as the Sun or other shoppers guide.
A
motion was made by Ald. Zima, seconded by Ald. Buckley, and carried to approve
the request to have the Green Bay Press Gazette serve as the official newspaper
for legal notices for June 2010 through May 2011.
5. Request by Ald. DeWane to review replacing
the Weights and Measures truck in the Inspection Department.
Ald.
DeWane provided the committee with additional information regarding the status
of the truck. He explained that this was
a problem truck at least four years ago.
There have been repairs done over several years to rehab the vehicle.
Dan
Kryzanek, the City Sealer, explained an incident during an inspection on April
29. He started receiving numerous and
very powerful static discharges that required immediate attention. He took the truck to Petroleum Equipment to have
the vehicle tested. Upon completion of
testing, Petroleum Equipment expressed concern over the continued use of the
truck in a hazardous environment.
Ald.
Theisen asked why this request was not placed in the budget for 2010. Mr. Kryzanek stated he has tried to get it
into the budget for the past four years, but it has been denied.
Ald.
Theisen asked to hear from the department head.
Ald. Deneys explained he spoke to the Planning Director, Rob Strong,
prior to the meeting and Mr. Strong requested the item be referred back to
staff so that more research can done to determine if it is reparable or needs
to be replaced.
Ald.
DeWane stated that this has been brought to Mr. Strong’s attention to do this
testing over the past four years but nothing has been done.
Ald.
Theisen wants the department head to report on this type of item.
Ald.
Zima asked for specifics about the truck.
Mr. Kryzanek stated the truck is 14 years old with 64,000 miles on
it. When this truck was built, it was
designed to run in an explosive atmosphere.
The vehicle was discharging static electric shocks, so it is failing to
do what it is designed to do. It has
been rehabbed twice but now poses a threat to the driver.
A
motion was made by Ald. Zima, seconded by Ald. Buckley, and carried to refer to
the Planning Director for a full report.
6. Request by Ald. Deneys for an update from
the City Clerk regarding City voter fraud for possible action.
City
Clerk, Chad Weininger explained there were three cases of voter fraud in the
City of Green Bay prior to the April election that were referred to the
District Attorney’s office.
In
the April 6, 2010 spring election, there were two
cases of intentional voter fraud.
Districts 5 and 6 both had an individual come in and vote under someone
else’s name. There was an aggressive investigation
by the police, but they were unable to catch the individuals.
Mr.
Weininger talked about three options council members had talked to him about.
The first was to determine the extent of voter fraud in Green Bay by sending
out a reply card to all voters in sample wards. The second was to draft a
resolution urging the state legislature to fix the voter fraud issues. The
third, which the City Clerk strongly advised against, was to pass an elections
ordinance, which according to Government Accountability Board legal staff would
be illegal.
Ald.
Zima asked if the poll workers can ask for identification of the voter. Mr. Weininger explained that they are
absolutely not allowed to ask for ID because that would be against GAB rules.
Ald.
Zima does not feel that the City is facing a widespread threat of voter fraud
with five cases total to date.
Ald.
Zima made a motion to receive and place on file the update from the City Clerk
regarding City voter fraud and asked that the City Clerk draft a resolution
requesting that the State pass a law requiring voters to show identification
when voting at the polls. Ald. Deneys seconded the motion.
Motion carried.
8. Request by Ald. Zima that the Finance
Committee review the operating budget of the proposed new roller coaster ride
at Bay Beach Park.
Ms.
Foeller distributed a spreadsheet she created of the Bay Beach projected budget
from 2010-2020 without the Zippin Pippin and with the Zippin Pippin. She explained that she used historical
revenues and expenses going back 16 years as a basis for calculating the projected
increase in revenues (4.6%) and increase in expenses (3.3%). If we did not do anything to change Bay
Beach, the park would continue to make money year after year.
Ald.
Zima interrupted and asked Chairman Theisen for a point of order. He did not request an historical analysis of
Bay Beach. Though he appreciates the
data, his main request is to have a breakdown of the operating budget for the
park with the addition of the Zippin Pippin’s operating budget.
Ald.
Zima also questioned Park Director, Bill Landvatter’s, operating budget of
$38,000 a year and where he came up with that figure.
Ald.
Theisen asked Ms. Foeller if she had the operating budget for the Zippin Pippin
since that would need to be factored into the overall revenues and expenses for
the park.
Ald.
Zima wants to see a detailed history of profits on Bay Beach as we know it
today. Following that, he would like to
know the estimated operating expenses for the park with the addition of the
Zippin Pippin. These expenses are to include,
but are not limited to, labor, maintenance, fencing, security, parking, etc. He wants to make sure that the City charges
the appropriate amount for this ride so that the cost of the ride does not dip
into additional profits generated by the park as it currently operates without
the Zippin Pippin.
Ald.
Zima also requests an estimate on any additional attendance that will be
generated as a result of the addition of the Zippin Pippin. That figure is crucial in determining the
cost of additional parking and related costs to accommodate this increase in
attendance.
Ald.
Zima also asked about estimated insurance expense. Ms. Foeller stated she talked with the City’s
Risk Manager, Colleen Hinz, and the City currently spends $8,500 on insurance
per year. With the addition of the
Zippin Pippin, the rate increases to $9,500 per year. Ald. Zima thinks that figure seems too low
but could be wrong.
Ald.
Zima asked about the bonding issue for the Zippin Pippin. Ms. Foeller explained that the annual debt service
was included on the bottom of the hand out and will be approximately $270,000
but varies year-to-year over the 10 year period of the bond. She derived this figure based on the actual
debt schedule with a true interest cost of 2.66% net of the build America subsidy. Ald. Zima pointed out that the bonding is
greater than the estimated revenue from the Zippin Pippin, so the rollercoaster
will not be paying for itself in ten years as has been advertised.
Ald.
Zima also pointed out that the addition of this roller coaster is a big
departure from the current Bay Beach target market of kids and teenagers. The Zippin Pippin will appeal to 20-30 year
olds, which could very well have security implications that need to be factored
into the budget. The addition of another
demographic could also drive away its current target demographic.
Ald.
Buckley asked Ms. Foeller if she had a breakdown of the profits and
losses. She grouped the revenues
together and the document she presented summarizes that data. In compiling her data, she spoke to nine
other amusement parks throughout the country to help her determine the
projected increases in revenue, including concessions and ride revenues. Upon consulting with the Parks Director, she
came up with a projected 8% increase in revenues beginning 2011 when the roller
coaster ride is up and running.
Historically, the ride revenues have increased 4.6% from 1993 through
2009.
Ms.
Foeller also wanted to validate if the roller coaster could expect 200,000
riders each year. In order to do that
she determined the number of days the park would be open (114 days), the number
of hours per day and then the total number of hours the park is open for the
season (1,137 hours or 68,220 minutes).
Using the number of minutes the park is open and the cycle time for the
ride of 4 minutes, she determined the maximum number of cycles the ride could
run (17,055 cycles) and multiplied that by the number of 30 riders it could
hold per cycle. Based on the use of one car, the total number of
riders per year is 511,650. Ms Foeller
stated the track will run two cars but the additional capacity was not included
in the projected 511,650 riders since it is unclear how much capacity the
additional train will add. In speaking
with an amusement park in Rochester NY, the owner of that park stated you may
only see a 25% increase in capacity with the additional train.
Once
the maximum number of riders was calculated, Ms. Foeller completed this same
calculation for six other rides at the park including the Merry Go Round, Yo
Yo, Ferris Wheel, Scat, Tilt a Whirl, and the Scrambler. She compared their maximum number of riders
to the actual rides given in 2009. On
average, the park’s ridership was at 51.1% capacity. When using this information against the
511,650 maximum number of riders for the roller coaster, she would expect
261,453 riders which validates the 200,000 riders that has been previously
discussed.
Ald.
Theisen asked Mr. Landvatter for the number of people at the park on an average
day. Mr. Landvatter responded he did not
have that information but did have the average ticket sales per day which is
33,900 tickets.
Ald.
Theisen went back to an important comment made earlier by Ald. Zima, which is
to account for a decreased ridership for other rides when taking into
consideration the ridership for the Zippin Pippin.
Ald.
Buckley brought up the need for increased security due to a different makeup of
the park once the roller coaster is completed.
Ms. Foeller stated that the City intends to install security cameras
which will be fed into the Police Department.
Ald. Buckley thinks there should also be security guards on the premises
as well, and this number should be determined by the estimated number of people
at the park at a given time.
Ald.
DeWane asked Mr. Landvatter why the committee has not been presented a
breakdown of the maintenance expenses for the Zippin Pippin. Mr. Landvatter stated that the Parks
Department does not have the time or capability to assess the time spent on
maintenance of the park rides. The Parks
Department does not intend to increase their full-time maintenance staff from
what they currently have once the roller coaster is in operation.
Ald.
Theisen said the City will not truly know the actual cost of the Zippin Pippin
until next summer. The budget that will
be put together and submitted in November will be an estimate, the Parks
Department will get its money, and then the following year is when the
department will know where adjustments need to be made.
Ald.
Deneys made a motion to open the floor to allow the public, seconded by Ald.
Buckley, and carried.
William
Evers, 704 N. Irwin, expressed his concern over how the City is spending its
taxpayers’ money. He believes spending
on the Zippin Pippin is a waste of money.
He would like to see the operating budget Ald. Zima is requesting
because he, as a taxpayer, is the one who is paying for it.
Ald.
Zima made a motion to return to the regular order of business, seconded by Ald.
Deneys, and carried.
Ald.
De Wane said he keeps in contact with a guy from Tennessee, and when they ran
the roller coaster, they had two full-time people overseeing that ride at all
times. Ms. Foeller stated that the City
plans on having three full-time operators at all times.
Ald.
Wery wanted to bring up the point that increased attendance due to the Zippin
Pippin will also increase ridership of the other rides at the park.
Ald.
Theisen asked if there will be a height requirement to ride the
rollercoaster. The height requirement
will be the same as the other rides that require a maximum height.
Ald.
Wery also pointed out that the agenda item reading should be changed from
“proposed” new roller coaster to “approved” new roller coaster.
Ald.
Buckley asked Ms. Foeller about the additional expense of $20,000 for a park
employee to inspect the roller coaster and asked if that figure should be added
to the $38,000 operating expense. She
said that it should which brings the total cost to $58,000. They anticipate two current employees working
three hours a day to inspect the track, and that cost was figured into the
analysis and can be found under Direct Expense line item in the document handed
out. These employees are already
budgeted for under the Parks Department.
Ald.
Zima requested to see the income and expense reports for Bay Beach over the
last ten years. At this time, Ms.
Foeller handed out a chart that had been previously distributed to the Park
Committee showing Bay Beach revenues and expenses since 1992.
Ald.
Zima reiterated his request to see the income and expense reports for Bay Beach
over the last ten years and then to see that report after Zippin Pippin’s first
year of operations.
Ald
Zima also wants to see a breakdown of the cost for the Zippin Pippin to include
security, maintenance, parking, fencing, lighting, etc. Once that is determined, the City should make
sure it charges enough for the ride so that it does not cost the taxpayer
additional money. The revenue generated
should cover the operating expenses and bond issue, and maybe even generate a
profit.
Ald.
Deneys made a motion to refer to staff, seconded by Ald. Buckley.
Ald.
Theisen believes the ticket price should still be an attractive price in order
to be sure they get the desired ridership.
If you charge too much, it may decrease the amount of riders. Therefore, a $1 ticket price is a good price
to start at to make sure they fill the ride.
Ald.
Zima said that the roller coaster was promoted as a moneymaker, and a $1 ticket
price will not cover the cost of the roller coaster as is projected.
Motion
carried to refer to staff the request by Ald. Zima that the Finance Committee
review the operating budget of the new roller coaster ride at Bay Beach Park.
2010 Contingency Fund
$51,300.08