 All right. Good afternoon everybody. It is 6 o'clock and I'll call the 17th regular Common Council meeting to order will the clerk Please state the code of the evening. If you change the way you look at things the things you look at change Right. Well the clerk, please call the roll Older person acle here Decker, you know Feldy, yeah, I like a penonski excused Hi, DeMond, Mitchell, Pirella, Ramey, Brust, Salazar, Alderperson Ramey. She'll be excused until she joins us Alderperson Ramey. She appears to be online, so we'll proceed Do you hear me? There we go. Now we can. Thanks, Angela Okay, my camera isn't working, but I can hear you. All right, if you're able, can you please stand for the Pledge of Allegiance? All right, Alder Feldy is their motion to approve the minutes from our previous meeting. Yes. Thank you, Mayor I've moved to approve the minutes from 16th regular council meeting held on November 21st, 2022 Motion second All those in favor of approving the minutes, please state aye. Aye. Any objection? Minutes are approved All right, next we have Appointments, city attorney. Thank you The mayor hereby submits the following appointments for your confirmation to be considered for appointment To the business improvement district board of directors for the 2023-2024 term Paul Rudnick from Rudnick Jewelers, Eileen Simmons from Salon SSA, Stephanie Rankin from Mini Mocha Cafe, Greg Van Demark from local press, Tim Bartz from Parker Johns and Derek Mink from Shoreline Metro All right, and those appointments will lay over. Next is confirmation of appointments Alder Feldy. I move to confirm. Second. Been a motion and second. Any discussion? Before you do that I'll just read them So the mayor submits the following appointments for your confirmation Sherrill's own to be considered for appointment to the sustainability task force and Cleo Messner to be considered for appointment to the redevelopment authority. All right, and there's been a motion and second for Confirmation and this is a roll call vote. So please refer to your Muni codes All right, that's approved anyone for public forum There is no one this evening. All right All right Number seven we have the 2021 audit by Baker-Tilly and we have a Wendy here as well Well, good evening everyone. My name is Wendy Unger. I am a partner with Baker-Tilly and the individual responsible for the audit For 2021 of the city of Sheboygan In front of you today and within your packets. You should have had Hand out which I will use to go through the the documents that were issued as part of the audit process You should have also received your audited financial statements a reporting and insights document and a report on federal and state awards And again I will use the handout that you have in front of you to address some high level items out of all of those documents I do just want to mention before I get started that this is a little bit delayed compared to where I'm sure you've had this Presentation in the past as you can imagine a first-year audit is very labor-intensive a lot of things to to work through and To address so we're a little bit delayed But we will get back on track with your normal schedule in the next year So very quickly we'll be beginning 2022 is audit So starting with the presentation the very first item noted there The objective of the audit was to run your own opinion on the financial statements of the city We've done that and included in your audited statements as a clean Unmodified opinion that is the highest level of assurance that you can obtain from us as your auditors And that clean unmodified opinion means that the financial information included within your audited statements is believed to be Materially accurate all disclosures that are required to be included under our standards have been included We followed generally accepted accounting principles and accounting principles have been consistently applied from year to year So there were no new governmental accounting standards or Gaspys and we'll talk about those in a moment But Gaspys effective for the city for 2021 so a very normal year from new standards standpoint Before I switch to some financial information Just want to quickly touch on the other documents you are required under federal guidelines to have what's referred to as a Uniform guidance audit. That's an audit of your federal programs Because you expend over 750 thousand dollars in federal funds. You're roughly about four million During 2021 because you expend over 750 you are required to have a compliance audit programs are Evaluated annually based on dollars in risk and programs are tested The programs that were tested for compliance with the federal requirements for 2021 where your CDBG? Program and your CARES funding that you received Both of them no findings of from a compliance standpoint. So a very positive result For those we also because we live in Wisconsin. We need to have a state compliance audit So we are required to look at various programs again looking at dollars in risk And we audited the transit aid for 2021 that's included within your 1.5 million of State aid that you receive again no compliance finding so a very positive result within your federal and state compliance work The reporting and insights document again. That's a document we use to accomplish a couple different purposes That document we use to communicate any comments or recommendations that may come up as part of the audit process We use that to share any material weaknesses or significant efficiencies We use that to communicate any best practice type items So just a couple items. I want to highlight out of that report Included in there. There are material weaknesses. So a material weakness is when there's a internal control Deficiency that could be caused a material misstatement in the information that you are provided throughout the year During the audit process one we become part of your internal control structure for a short period of time because we prepare your audited statements So we as your auditors become part of the process. We also prepare the schedule of federal and state awards Also during the audit process, there were some reconciliation type items That were noted from the standpoint of making sure your subsidiary records were in line with your balance sheet account So looking at receivables and the various balance sheet transactions that you had and again We've included those in that report as material weaknesses These items that we've noted Are not unusual or un-customary for organizations such as the city But we have included in in the letter and management has already began to work at addressing those that they can from a cost-benefit standpoint Also included in that letter are some other comments or recommendations more From an IT best practice standpoint being a first-year audit. We always do a really In-depth review of the information technology system that's associated with any accounting transactions So your financial reporting Evaluating again for any type of control issues and there's some best practice type recommendations But nothing that raised to a level of a material weakness There's a portion of that report that is very standard and customary communications that we need to have with you again Nothing unusual in there But we do reference an appendix to that report that highlights the material journal entries that were done as part of the audit process So I encourage you to to take a look at that that's towards the back of that report And then there's other communication as I mentioned we use that to communicate any new standards or best practices There is a new governmental accounting standard or a GASB that will be effective for the city for 2022 It's GASB 87. Hopefully it's not the first time you're hearing about it It will take a lot of work It's changing the way the city accounts for leases both on the lessy and the less our side And I know that management has obtained some software to help them accumulate that data So stay tuned on that will not change how you manage your organization But we'll add some additional footnotes and some additional information on your topside statements Switching gears then for just a few minutes just going through some very high-level financial information on the second page of the handout I presented a budget to actual comparison Schedule for your general fund your day-to-day operating fund just a couple items to note there That very first column is your final budget column. So this is after any type of amendments the second column is your actual So that is what your actual results were and the very final column is the variance between your final budget and actual I will note that on page 8 of your audited statements. This information is in much more detail So if you're someone that likes to look at that, I will give you a few page references as we go through Couple again highlights your revenues as you can see in that very top row very close to budget You are thirty nine thousand dollars under budget Very positive situation when you think about your investment income investment income you budgeted roughly 250,000 of income you actually had a loss of eighty eight thousand just based on market Situations during the year something to keep in mind as you're moving in or through your budget process for the year your expenditures Came in three point six six million under budget So very favorable variance within your expenditure categories a couple different reasons for that you had roughly Five hundred and fifty six thousand dollars of contingencies that you budget for did not have to use that during 2021 so that falls into a positive scenario also had some lease Principle and interest payments included in your general fund of roughly one point two million didn't have Didn't enter into that least during year So you had no actual and then your had various salary categories both within public works and finance that were in under budget Just to due to positions that were not filled so again very favorable variance there So when you look at that total column in the middle the actual you actually added Three hundred and fifty thousand to your fund balance in your general fund when you budgeted to use in your final budget Almost three point two million so a very positive result a positive swing of roughly three point five million When you look at the next page, I've included that at a very high-level summary But then the important part to look here is in that second Portion of that table at the top is your fund balance So you added three hundred and fifty thousand to fund balance you ended the year at twenty three point almost twenty three point two million of Fund balance within your general fund not all of that is available for spending a couple different pieces of that 125,000 is what's referred to as non-spendable. Those are monies that have been spent on Inventory type items and prepaid so those sit on your balance sheet. They'll get recognized as expenses in 2022 when they're used You had three hundred and fifty thousand dollars that's committed for development 1.7 million is a sign. That's what you utilized originally in your 2022 budget to balance it So we set those monies aside because those are not available for spending the remaining portion 20.9 million is your unassigned. This is your working capital your can again contingency money Going forward you do have a policy to maintain 25% of your subsequent your operating budget that equates to roughly 10 10.4 million so you have sufficient reserves within your unassigned category to cover your policy But also to have some additional monies available as needed. I Presented seven additional funds here again. Just gonna hit a couple points on a few of them The second column there just want to quickly that's your ARPA funding if you remember you got two tranches of roughly 10 Point some million as of the end of 2021 you had spent some of that roughly 410,000 you'll see the revenue that's recognized as only 283,000 and that fund is showing a deficit important part to keep in mind there is the the aid that you got is Recognized in an equal amount to the expenses however that fund also shared in the investment loss So you have a hundred and twenty seven thousand dollars of investment loss in that fund because you had a lot of cash in there But again that shows as a net effect until you recoup those monies through Transferring the revenue so again, that's a deficit, but it's a deficit because those are the investment earnings slash loss that were Recognized you still have 10.4 million at the end of 2021 that is sitting in your balance sheet is unrecognized revenue for spending You also then received your second tranche of funding in 2022 of a relatively similar amount The next three columns are your capital projects funds. The only thing I'll note there you can see the various activity That's included from a revenue and expenditure standpoint on your tip districts 2.8 million of revenue keep in mind you borrowed roughly a little bit over 8 million during the year 870,000 went into that fund that fund had a deficit as of the end of the year of 839,000 but that was an improvement in that deficit from 2.2 million in the previous year so that The tip districts from a capital standpoint are moving in a positive direction and then likewise in the bonded capital projects 4.8 million of revenue 4.2 is borrowed money. So most of that is coming through in the form of funding sources At the bottom you'll see the two debt service funds These are the funds that paid debt service just on-city debt. This does not include any utility related debt 8.6 million of revenue in your geo debt fund keep in mind you refunded debt during the year So you borrowed 3.6 million and you paid off 3.6 million through an advanced refunding So came in went out that fund added 411,000 to fund balance and at 7.5 million as of the end of the year all which is restricted for debt service purposes And then likewise in your tiffs 5.3 million of revenue mostly tax increment. They paid Their debt of 4.4 million added almost a million to fund balance again 5.6 of restricted fund balance all restricted for tip purposes that very last column there This is a summary of all the remaining governmental funds of the city These are found on page 72 or beginning on page 72 of your audited statements And these include like your cemetery perpetual care fund your special assessment fund your ambulance fund your CDBG You're revolving loans. Those are some of the bigger ones you municipal court the marinas included in that Section also those are all combined into that one column I will just highlight that as you can see under the fund balance section 2.2 million of deficit That is mainly the marina with a small portion being the municipal court as of the end of the year On the next page these are the various enterprise funds. So these are the business type activities of the city I've included the sewer water and transit you can see when you look at the change in that position That's what you want to look at that is whether that is a positive or negative all three of those saw positive additions to net position that fish net position is similar to fund balance Fund balance is more a representation of cash where net position is all your assets less your out liability Typically you see that as a positive number because if you think about it, you're capital intensive. So all of those Entities have very large fixed assets lots of equipment lots of infrastructure. So that number is typically a very big number Just a couple items to note both water and sewer saw a positive increase in customer revenue So positive results within the revenue section operating expenses on the sewer side were Up roughly nine hundred thousand during the year But there was some significant road projects that required relining of the sewer system. So that increased your cost So sewer added roughly a million to net position ended the year at 26 million of which 14 million roughly is Your investment in capital assets. So that is a number That's reflective of your capital assets. Let's any associated debt water utility did very well 1.6 million increase in that position compared to roughly a $420,000 increase last year the main contributing factor to that was the revenue Million-dollar increase in customer revenue transit commission Essentially a break-even year added a little bit to net net position. That's down from $999,000 increase last year During the year you saw a decrease in your intergovernmental revenue also a decrease in your capital contributions and then Likewise though your expenses also decreased within transit. So again ended the year at 6.3 million of net position The non-major enterprise funds. These are the remaining funds. So this is your parking your boat You're recycling those are found on page 97 of your audited statements again very consistent with previous year results 2.6 million of net position of which 1.9 million is infert are is Invested in capital assets roughly a half a million of cash The last column there is your internal service funds. So these are the funds that help service the various Departments of the city those are found on page 101 of your audited statements And again, nothing I need to draw to your attention there of the 19 million in net position those funds in total have over 12.8 million of Cash, but those are where your insurance reserves are. So there's additional money there for future Needs there. I will just note. I haven't included in the presentation But on page 12 of your audited statements are all the cash flow statement So that's a shows the cash activity of all those enterprise funds overall very positive results within the the various Funds on the very last page of the handout I've just highlighted the long-term obligations of the city the governmental activity column. That's the city The business type are the enterprise funds so water sewer transit the funds I mentioned previously just a couple items to note related to those Your city funds as I mentioned previously 8.7 million of new debt you paid down roughly 8.8 million So essentially a break even Within your debt category The business type activity saw no new borrowings during the year So no new utility debt and they paid down roughly 1.7 million of their associated borrowings The important item to note on this page in my opinion is that statutory debt limit The city can borrow 5% of its equalized value that equates to roughly 171 million dollars you had 60.4 million of debt outstanding you only look at your general obligation debt So it doesn't factor in the revenue bonds of the utility So again when you take that 60 million from the 171 you have a borrowing capacity of roughly a hundred and ten million So a very good portion of your capacity exists for the needs the city may have in the future Just two other items gonna mention including your footnotes. There's two extensive footnotes ones related to the pension activity That's on page 47. So that's your participation in WRS The last is related to your other post-employment benefits. Those are on page 55 and 57 The city has a small single employer plan that is a OPEB and then you also participate in the local retirement life insurance fund through the state so again, that is also a Footnote that's included in there. So I encourage you to take a look at those all based on actuarial information That's provided to us as part of the audit process Lastly, I've included my email my phone number go through this very quickly and at a very high level happy to talk with any of you about the process our Audit what we look at how we look at it if you have any concerns or things that you want to bring to our attention Please reach out to me. Happy to have a conversation with any of you regarding anything audit or Finance related at this point though, I'd be happy to answer any questions that anyone may have currently All right. Thank you. Wendy any older 70 questions older problem Thank you. Thank you, mr. Mayor and thank you so much Wendy as you said was very fast And I appreciate that you are available in case that we have any questions, right? I was wondering about the actual audit I Don't find it in the packet will we receive it later? It is on the city website and I would I am available to send it to via email if you would like it That's fine. If I know if I can find it there. Thank you so much additional questions All right Sounds good. Well, thank you. Have a great night. Yeah, appreciate it All right moving on to Mayor's announcements Just a few quick notes for for folks Obviously, December has started so that means alternate side parking is in full effect for tomorrow for the winter season Just a rule of thumb is remember to park for tomorrow Rotating between odd and even sides of the street as well Always a lot of festive things going on throughout the community during the Christmas season as well Our friends at shoreline metro have the jingle bus Which is a magical ride through the on the trolley through making spirits bright And through the downtown and looking at light light displays throughout the community So join the jingle bus for holiday cheer and some holiday curing as well Folks are asked to bring a non-perishable food item to be donated Through making spirits bright for the shaboin county food bank as well So there's a lot of great information on visit shaboin's website for that And I also mentioned making spirits bright this year They're looking for folks to graciously contribute For some non-perishable food items as well The food bank and making spirits bright are looking for folks To help donate during this holiday season as well So feel free to check out making spirits bright for more information as well so Also just one quick fun fact For my last announcements So it's been reported in the press At the most recent state dinner at the white house For the french president macron, president biden served cheese That was made in shaboin at the state dinner So I thought that was a fun fact that To share as well So it was cheddar cheese from deer creek cheese right here in shaboin so Just a fun fact for that All right, we'll be moving on to the consent agenda items 10 through 13 Alderfellas their motion Thank you, mayor. I move and by I move To receive and file all our rows receive all our C's and adopt all resolutions and ordinances Second it's been a motion second any items for discussion on the consent agenda All right, see none. This is a roll call vote. Please refer to your immune code All right, those items are approved All right items 14 and 15 will be referred to the finance committee Next we have item number 16 resolution number 96 22 23 by elder persons michel and flicky paneski Authorizing retaining outside legal counsel to represent the city In the matter of walmart real estate business trust versus city of shaboin again authorizing payments of said services elder michel Thank you, mayor. I move to suspend the rolls any objection Seeing none, please proceed. I move to adapt the resolution It's been a motion. Is there a second Motion second any discussion on this item? Alderdecker, I just want to make a quick comment. This is something we've been gone. We've gone through Year after year we're going, you know, we always have to go back and This is something that I think people need to Contact the legislatures about this is something that that that that could be handled and taken care through through the legislation And we wouldn't have to be going through this every year. We're spending money. We're wasting money to do this And uh, so that's all I can say is is people have to contact our legislatures about this All right, thank elder decker additional comments on this item Seeing none. This is a roll call vote There are nine eyes. All right That item is approved items 17 through 30 will be referred to their respective committees Next is items 31 report of committee item number 131 22 23 by the finance and personnel committee To whom was referred resolution number 92 22 23 by elder persons michel and fliki paneski Authorizing submitting the substantial amendment to us department of housing and urban development community development block grant Housing program for the 2022 program year for the revolving loan fund for water and sewer improvements alder michel Thank you, mayor. I move to adapt the resolution second motion second just any discussion Alder parella Yes, I have a question about the I have to ask a question about this Because while I was reading it again, it's not clear to me. I'm a little confused. So The cdbg the 700 thousand dollars are from the cdbg program Correct. Yes So is that is that a grant it is a grant Well, the city operates what's called a revolving loan fund and that revolving loan fund is either for housing rehab or business Development so as we make loans To people to either fix up their houses or start a business and they pay the loans back We capture that revenue of principal and interest payments in a separate fund And then that gets receded in the cdbg program because it wants federal always federal So if we use federal dollars to Establish the program and always it stays as federal dollars. So what we're looking to do um Katelyn's team after a number of years has reconciled the revolving loan fund program And determined that we have a Significant amount of fund balance in that fund So we're looking to reprogram the funds from being used for another loan process Into a public infrastructure project to get them out on the street so that the federal government doesn't recapture the funds Does that mean that we received money from HUD With a cdbg program Which we did not use all of it Yes and no so we received money back in 1987 and probably for 10 years when the city used cdbg dollars to establish the fund So we used our yearly entitlement allocation that we get to build enough money into the fund So we had money to dole to give to people as far as part of the loan process The program is self-sufficient now So there's enough revolving back in from the payback of the loans that we don't have to put any new Entitlement money into the program For entitled money entitlement money you mean more money direct money from HUD correct Okay, so My question is why we've We have not been Basically, we have access funds Why have not we be able to use those funds? For what the HUD cdbg program is originally intended for Well, those funds were originally intended for Revolving loan funds to give loans to people we have still significant Balance in there. So once we give out once we reprogram this 700,000 We still have roughly 600,000 of fund balance in that fund and we revolve in about three to 400,000 a year So there will be still funding available to be able to give loans for low-income people Low and moderate-income people to make improvements to their whole or for businesses that are expanding So there'll be significant funding there. It's just that we don't have a Enough of a demand in the local community and we don't have the staffing to get 1.3 million out onto the streets in a timely fashion that's going to meet the requirements of HUD And so then that is a follow-up question if I may Is what is that timeline? Well, it's supposed to be January 31st of 2023 And so we are Not going to meet I'm not going to get into the I don't want to get into the specifics in the weeds But we there's a timeliness calculation that HUD does at the end of January Where we're supposed to have spent one and a half times the amount of money that we have in our fund balance And we're going to exceed that this year now We're hoping that by approving this funding we'll be able to tell them that we're reprogramming it and we're going to get it on the street next year mid-summer But otherwise other than that they have the opportunity that we could pay these funds back to the federal government All right, so again my own Older probably the council rules say you can only ask the questions. I love you go over so Thank you very much agree Thank you. Additional questions on this item Seeing none. This is a roll call vote. Please refer to your municode There are nine eyes. All right that item is approved Next item rc number 132 22 23 by the finance and personnel committee to whom was referred Resolution number 90 22 23 by elder persons mitchell and flitkin eski authorizing retaining outside legal counsel to represent the city regarding grievance number 22-1 Filed by the international association of firefighters local 483 in authorizing payments for said services alder mitchell Thank you, mayor. I move to receive the rc and adopt the resolution Motion second any discussion Seeing no discussion all those in favor. Please vote on your municode All right that item is approved Next is item 32 rc number 136 22 23 by the finance and personnel committee to whom was referred resolution number 87 22 23 By the director of planning and development regarding the purchase of 12 14 south 11th street for moving The residential home of another city-owned site in reconstruction of the failing city-owned retaining law alder mitchell Thank you, mayor. I move to receive the rc file the arrow and authorize staff to issue a letter of intent Motion second any discussion alder decker So where is this house going to be moved to do we have what what lot are we moving it to? to director Pelschek The city owns a lot on indiana avenue kind of across from the bourbon street pub It's a vacant lot there. So we're we would move it to that location and then put it back on the market and sell it to Somebody to occupy. Okay. Good follow up Alder preller Just curious. This is not a manufactured home, right? No. No Thank you Any other discussion? alder felli Um, we'll look will the city have to put in a foundation first before they move that house Yes, that it there would have to be a foundation and then a furnace and a water heater that would be then plumbed into the house That would be all provided as part of that and per the resolution that would be we would use federal Community development block grants to fund that improvement and then reimburse the program after we sell the property Okay, thank you There's some questions. All right seeing none. Please refer to meaning code to vote There are nine eyes. All right item 33 is approved. We've exhausted the agenda Alder felli is there a motion to adjourn? Absolutely. I move to adjourn Okay, all those in favor of adjourning Please stay die. I the objections were adjourned at 6 36. Thanks everybody