MINUTES
FINANCE COMMITTEE
MEMBERS: Chairman Tony Theisen,
Steven Deneys, Guy Zima and and Patrick Buckley
1. Roll Call.
Roll
call was taken and all were present.
2. Approval
of the Agenda.
Chairman
Theisen suggested the committee take up items 9 and
10 first, following item 3, and all agreed.
A
motion was made by Ald. Deneys, seconded by Ald.
Buckley, and carried to approve the agenda as amended.
3. Approval of the minutes of the Finance
Committee meeting of July 6, 2010.
A
motion was made by Ald. Deneys, seconded by Ald.
Buckley, and carried to approve the minutes of the Finance Committee meeting of
July 6, 2010.
9. Request by the Finance Committee to discuss
and potentially approve waiving some of the fees the City incurred for the LZ Lambeau event held on May 21-23, 2010.
Ald.
Theisen asked that comments be limited to new
information regarding the topic. Ald.
Zima objected because committee is supposed to be an open forum for discussion.
Ald.
Deneys asked if there is any new information on the
item since the last committee meeting.
The
Mayor addressed the committee. He
explained a proposal the City is considering regarding the outstanding LZ Lambeau fees the City incurred. The proposal he supports is to have the Green
Bay Area Chamber of Commerce cover $4,000, Brown County cover $4,370, the Green
Bay Packers cover $30,000, and the City of Green Bay
cover $10,000 to be taken from contingency.
Ald.
Deneys made a motion to approve the Mayor’s proposal
and have the City of Green Bay waive $10,000 in fees to be taken from contingency.
Ald.
Buckley asked if the Stadium District was approached about this deal. The Mayor said it was not. He believes they may participate in a credit
of $5,500.
Ald.
DeWane stated the Stadium District had already given
$10,000 and are considering an additional $7,500 on their upcoming agenda.
Ald.
Buckley seconded the motion.
Ald.
Deneys asked if the $7,500 would go towards this
proposal, or if it would be in addition to the proposal. Ald. Theisen stated
he believes it would be in addition to the proposal.
Finance
Director, Dawn Foeller, stated the final balance in City fees is $547.86 if the
proposal is approved.
Ald.
Zima expressed his opposition to contributing money to the LZ Lambeau event. He
strongly feels the sponsorship should come from those that profited from high
concession prices. LZ Lambeau made the decision to move forward with the event,
and Ald. Zima does not believe in forced contributions from City taxpayers.
A
vote was taken, and the motion carried to approve waiving $10,000 of the fees
the City incurred for the LZ Lambeau event held on
May 21-23, 2010 by using the contingency account. The motion carried 3-1 with Ald. Zima voting
no.
10. Request
by the Finance Committee to review the operating budget for the roller coaster
ride at Bay Beach.
Finance
Director, Dawn Foeller, revised the historical information to include six
month’s worth of administrative staff and two park staff members for
maintenance. The revised Zippin Pippin operating budget now includes the two
managers as well as a police officer in place of a security guard.
Given
the changes, Ald. Theisen asked if the ride is still
on track to pay for itself. Ms. Foeller
explained that the addition of a police officer pushes the budget into a
negative status. She ran different scenarios
using both a police officer and security guard to account for different hours
of operation.
Ald.
Theisen explained that City Council does not
typically micromanage security for Bay Beach.
Such a decision is that of the Police Chief, so he expects Chief of
Police, Jim Arts, to manage the type and amount of security for the park. Chief Arts explained he will submit a budget
that includes coverage for the entire City, including the Zippin
Pippin.
Ald.
DeWane commented on the inability to really know what
the environment will be like once the Zippin Pippin
is operating. All the City can do is
rely on conservative projections and then wait and see the accuracy of those
projections.
Ald.
Buckley stated he prefers to see the police officer included in the budget so
the City is not caught shorthanded.
Ald.
Theisen reiterated the Police Department will provide
a budget based on its needs. Ald.
Buckley said he thinks it should come out of the Parks Department budget.
Chief
Arts said Bay Beach currently has two community police officers and a response
team that is sent to the park as needed.
He does not want to allocate a set number of hours for his staff at Bay
Beach. He would rather have the
flexibility in his use of staff at Bay Beach.
Any increase in problems at the park will be addressed by the Police
Department when the roller coaster opens up.
Ald.
Theisen brought up the increase in incidents at Bay
Beach during Teen Night and asked the Chief if he sees any comparison between
the Teen Night demographic and the anticipated increase in the teenage
demographic with the installation of the roller coaster. Chief Arts said there will be groups of
families in addition to teenagers, so it is a very different dynamic from Teen
Night.
Ald.
Buckley is concerned about one bad incident happening and the effect it could
have on revenue. He thinks there should
be a police presence once the roller coaster opens.
Ald.
Zima believes security at Bay Beach is a paramount concern because the
demographic will change with the roller coaster. Most people agree the roller coaster will
draw more teenagers that traditionally require more security.
Ald.
Zima would also like the City to establish an enterprise fund to follow a more
cost accounting approach to ensure enough revenue is generated to cover
expenses. This requires setting a
realistic budget that accounts for all staff needed to operate the park. The Zippin Pippin
is an attraction meant to draw people to Green Bay, so security is essential.
Ald.
Deneys asked Chief Arts about the current number of
calls at Bay Beach. The Chief said it is
very minimal, maybe one or two calls. He
would like to see a budgeted figure for security and let the Chief determine
the protection needed. Any police calls
that go over budget would be charged to the Parks Department.
Ald.
Theisen wanted to clarify that the Bay Beach budget
is meant to determine what the pay back is for the roller coaster. The number of officers decided for this
budget will not impact the Chief’s budget.
His budget will include so many officers, and he will have the
discretion to assign them to various locations as he sees fit.
Ald.
DeWane does not agree with charging the Parks
Department for policing. All this budget
is meant to do is give a realistic idea as to the cost of the Zippin Pippin.
Ald.
Zima wants to make sure this budget shows true revenues and expenses related to
the roller coaster and Bay Beach. The
City needs to adjust its rates to cover its costs. This is an acceptable budget that he is
willing to adopt as a benchmark.
A
motion was made by Ald. Zima, seconded by Ald. Buckley. Motion went under discussion.
Mayor
Schmitt does not believe this is a realistic budget because it is not the way
the City does its accounting. He feels
Ald. Zima is doing everything he can to discredit the ride. No one is recommending a security officer
but Ald. Zima.
Ald.
DeWane drew attention to Ald. Buckley also agreeing
with security.
Ald.
Buckley stated he wants to see the roller coaster succeed and part of that is
getting a realistic accounting picture.
Mayor
Schmitt believes Ald. Zima is changing the accounting principles the City has
accepted for many years because of the Zippin Pippin.
Ald.
Zima believes they are inaccurate.
Ald.
Theisen stated Ald. Zima never disagreed when he was
on the Parks Committee.
Ald.
Theisen asked what the purpose of adopting this
budget would be.
Ald.
Zima stated the purpose is to get a cost accounting basis to determine the
costs and the profits of Bay Beach.
Ald.
Theisen said that is the purpose of the Parks budget.
The
motion carried to receive and place on file the operating budget for the roller
coaster ride at Bay Beach. The members
accept the budget proposed as the forecast for the Zippin
Pippin and the City will continue to do the cost accounting of Bay Beach throughout
2011.
5. Request
by the Finance Director, on behalf of the City Assessor, to cancel certain real
and personal property taxes.
City
Assessor, Russ Schwandt, appeared before the
committee to talk them through the cancellation requests. The City sends out a statement of personal
property to the business owner every year asking them to declare the value of
their personal property. If the City
does not receive the statement back, the Assessor will set the value based on
what he thinks the value is and/or based on the previous year’s
assessment. The Assessor will follow up
with another letter to the nonresponsive business owners explaining the value
assigned to their personal property.
Once Brown County sends out the tax bill, the City usually hears back
from a representative of the business explaining they were no longer in
business.
A
motion was made by Ald. Zima, seconded by Ald. Deneys,
and carried to approve the cancellation of certain real and personal property
taxes.
6. Request by the Finance Director, on behalf of
the City Assessor, to review 2010 Board of Review and completion of the
commercial revaluation.
Mr. Schwandt
explained that this year’s Board of Review consisted of 13 cases with only 2 of
those cases having a reduction in value.
One was a sale and the other presented information the Assessor’s office
agreed with. Overall, there was a
reduction of $300,000.
The City also conducted a commercial review
and raised approximately $13 million and devalued approximately $9 million,
resulting in an increase of $4.5 million.
Last year the Department of Revenue said the
City was at approximately 89% of market value for commercial property. Now, the City is close to 100% compliance for
both residential and commercial property.
Ald. Theisen asked
Mr. Schwandt if there is a reduction in the assessed
value if a property owner is unable to sell for a certain price. He had heard that that serves as proof the
property is worth less than its assessment.
Mr. Schwandt explained the City does see that
as more people are refinancing. They do
reviews based on that scenario, but they try to maintain uniformity and
fairness in assessments among similar neighboring properties. They also take into consideration the
percentage of sales within market value.
If 20% of sales are below the assessed value, that would mean 80% are
selling close to the assessed value, in which case the value of those 20% would
not be lowered. The assessor’s office
will review those properties’ sales that come in significantly below the
assessed value.
A
motion was made by Ald. Zima, seconded by Ald. Buckley, and carried to receive
and place on file.
8. Report of the Purchasing Agent:
a)
Award Bond Counsel
Services to the low vendor, Foley & Lardner LLP for an annual average
amount of $10,000. Services purchased as needed.
A Request for Proposal (RFP) was issued by
the Purchasing Department. Nine vendors
were issued the RFP and two responded - Foley & Lardner LLP and Quarles
& Brady. Foley & Lardner LLP
was the lowest bidder and has been bond counsel for the City for almost 18
years.
A
motion was made by Ald. Zima, seconded by Ald. Deneys,
and carried to approve.
b)
Award Computer
Replacement Equipment to the low bidder, Core BTS or PDS for the estimated
amount of $18,829.
There are two competitive bids off the State
Contract, Core BTS and Paragon Development Systems (PDS). There is a huge fluctuation in pricing for
these items and prices are verified prior to each order. Purchasing asks for flexibility in awarding
the contract considering the two vendors are similar in pricing. The award will go to the lowest bidder at the
time of order.
Ald. Zima asks that Purchasing report back to
committee the final award and cost comparison.
A
motion was made by Ald. Zima, seconded by Ald. Buckley, and carried to
approve. The Purchasing Department is to
report back to committee.
c)
Request approval to
order twelve, 2011 squad vehicles from the low bidder Ewald
Ford, for the amount of $262,056.
The Police Department replaces one third of
the Squad Car fleet every year. The 2011
units would typically be ordered in January, but Ford Motor Company is offering
a $500 incentive per unit for orders booked by September 7, 2010. Therefore, the Police Department asks that
the committee approve the purchase in order to utilize the early order
incentive for a total savings of $6,000.
The money is to be taken from the 2010 general fund reserve, which is to
be restored to the 2011 budget.
A
motion was made by Ald. Zima, seconded by Ald. Buckley, and carried to approve.
4. Request
by the Comptroller to present the City’s 2009 Annual Financial Report and the
Management Letter.
Tom
Karman, a partner of Schenck, appeared before the
committee to answer any questions the members may have. He explained the City received a clean
opinion on the financial statements.
He
drew attention to a new accounting standard that will apply to the City for
2011. The Governmental Accounting
Standards Board is trying to better define how governmental entities report
their fund balance. There will be five
different classifications for fund balances to make them more easily
understandable to financial statement users.
Mr.
Karman referenced the City’s Special Revenue Funds. As of right now, those funds are tax levied
monies or user fees with no outside restrictions requiring those monies be used
for those purposes. This standard will
require formal Council action to designate that those revenues be maintained in
those operations. If that action does not
happen, then those funds should go away and the money be maintained in the General
Fund. The drawback with having those
funds in the General Fund is losing out on the $2 million the City receives in
expenditure restraint from the State.
Ms.
Foeller asked if this also applies to Capital Project Funds. Mr. Karman said most of that money is either
bond proceeds or special assessment collections from capital projects, so those
are essentially segregated out for those purposes. Ms. Foeller said she is concerned about the
capital replacement funds. Mr. Karman
recommended formal action to maintain those funds as well if the money going
into those funds is tax money.
If
the City wants to keep its accounting the way it is, then formal Council action
will be required to maintain those funds and meet the requirements of those
standards. Action to commit these funds
needs to be done before the end of the 2011 fiscal year.
Ms.
Foeller suggested bringing this action before Council with the adoption of the
2012 budget.
A
motion was made by Ald. Zima and seconded by Ald. Buckley. Motion went under discussion.
Ald.
Zima asked Mr. Karman his opinion about the establishment of an enterprise fund
for Bay Beach. Mr. Karman said he
typically does not make those recommendations.
The biggest thing to consider when setting up an enterprise fund is if
we truly want to compare the revenues of that operation with the cost of the
operation.
Ms.
Foeller suggested a special revenue fund as an option.
Ald.
Zima sees an advantage to an enterprise fund to make sure the revenues are
supporting the expenses. Mr. Karman said
he sees Bay Beach as a place where enterprise accounting would work. It has not been done in the past because Bay
Beach is a supporter of the General Fund.
Any profit generated by Bay Beach is transferred to the General Fund to
support other City services.
Motion
to receive and place on file carried.
Ms.
Foeller asked if the establishment of an enterprise fund for Bay Beach could
have a designation that any net profit generated be
allocated back to the general fund.
Mr.
Karman said opening an enterprise fund is like a separate business where all
assets, debt, etc. is reported on that fund’s balance sheet.
Ald.
Zima wants to make sure the City is charging the appropriate price per ride, so
he wants to ensure that all revenues are matched to expenses.
Ms.
Foeller suggested she come back to committee at a later date with the pros and
cons to establishing an enterprise fund for Bay Beach.
7. Request by the Planning Director to present to
the committee the recommendation to retain the chassis of the weights and
measures truck but replace the body of that truck. The cost to repair the truck is $3,500 and the
purchase and installation of a new body for the truck is $20,500. Source of funds requested will be a utilizing
the equipment replacement of $6,000 and a transfer from salaries and fringes
for $18,000 to cover the cost of this purchase.
Planning Director, Rob Strong, reviewed the
problems with the weights and measures truck that had been addressed at the
committee meeting held back in June. He
reviewed the various options to ascertain the most cost effective means to
assure the City retains a weights and measures truck suitable for serving the
community. He requested Purchasing
obtain quotes for a replacement truck, a new body with tanks and a trailer
mounted unit.
Upon reviewing all information and consulting
with Purchasing, Risk Management, and the City garage superintendent, Mr. Strong
concluded the best option is to retain the chassis but replace the body of the
truck. The truck has used only half of
its 9,000 hour life and repairs to the truck are minimal (removing surface
rust, rear brakes, and tires).
Installing a new body and tanks is a feasible alternative. The intention of purchasing a 1-ton diesel
truck was to last long enough for two bodies.
He requests that the Finance Committee
approve the option of repairing the existing truck for an amount of $3,500 and
purchasing and installing a new body and tanks in the amount of $20,500. He also requests that $18,000 of Regular
Salaries be transferred to the Equipment Replacement account to cover such
costs.
Dan Kryzanek wants
to see the City completely replace the truck.
It is 14 years old and in poor rusting condition. Additionally, it is a safety hazard because
of its electrical discharges. Though it
has been fixed, he feels it is only a temporary fix, and the electrical problems
will arise in the future. Given the
money the City paid for the truck and the additional expenses it is considering
for repairs, Mr. Kryzanek believes it is in the
City’s best interest to completely replace the truck. Otherwise, he envisions revisiting the
problem in a couple years.
Ald. DeWane suggested
selling advertising space on the vehicle as a means of reducing the cost. He has been involved with the weights and
measures truck for a few years and believes taking a piecemeal approach at
repairing the truck is not cost efficient when the condition continues to erode
and the problems are revisited.
Dan Kryzanek
explained he has been approached by various companies interested in
advertising. He has a relationship with
all the gas stations in the City, and selling them advertising space would help
bring the cost of a new vehicle down.
Ald. Buckley is concerned about a conflict of
interest from advertising one company and not another. Dan Kryzanek does
not see a conflict if all companies are interested.
Mr. Strong does not feel a new truck is
necessary and would prefer to do the necessary repairs to save money. He has consulted with the City garage superintendent
who has inspected the truck, and repairing the vehicle is a viable option to
fix the problems. The truck has only
used about half of its life.
Ald. Zima feels it is more cost effective to
purchase a new truck. There comes a
certain time when one should stop putting money into a vehicle.
Ald. Theisen would
like the current truck to be used by another department in the City if they are
going to purchase a new one.
Ald. Deneys made a
motion to hold the item until the next Finance meeting to see if other
departments will have a use for the current weights and measures truck. Ald. Zima seconded. Motion carried.
A
motion was made by Ald. Deneys, seconded by Ald. Theisen, and carried to adjourn. The meeting adjourned at 9:07 p.m.
2010 Contingency Fund
$51,300.08