 would you call the roll please Bowman, Berg, Bonet, Serda, Graf, Manny, Montemayor, Perez, Peterson, Rindflesh, Sagalli, Steffen, Van Akron, Van Der Wiel, Wangeman, Warner, Fourteen Present. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible with liberty and justice for all. The first thing on our agenda, we'll have a presentation by department heads. We do not have a public forum this evening, but if there are questions by any alderman for any department head, please feel free to ask. After Mike makes the presentation, yes. Can't you hear? Close the, shut the air off. Fans, turn the fans down. Is that better? Okay. There is no public forum this evening. Mike Hutz will make a presentation for department heads, but if any alderman has a question of an individual department head, please ask that department head to come up to the microphone and give you your answer. So with that, Rich first, Rich first, excuse me, Rich is going to start off and then Mike. Thank you, your honor. On August 16th, resolution 5804-05 was approved. That document requested the mayor to submit a 2005 budget recommendation that maintains the general fund departmental budgets at the same level of appropriations as a 2004 budget that is adjusted by the increase for the 2005 general fund revenue estimates. The revenues from the state and the tax levy are 85% of the general fund revenues. We know that will not have any growth in our state revenues. The question is, what is the council's policy on the tax levy for the 2005 budget? The council's guidance on the tax levy increase is needed at this time in order to clarify what level of 2005 expenditure increases will be funded from revenue increases and what amount of 2005 expenditure requests need to be reduced in order to balance the budget. The document before you this evening includes a 5.5% tax levy increase. This would fund additional revenue of 251,000 for the debt service fund and 776,000 for the general fund and no increase for the library or transit funds. With a tax levy increase of 7.7%, the council could appropriate additional 400,000 for the general fund and still remain within the expenditure restrain program. Even with this level of support, the departments will have to reduce the request for appropriations by over $3 million, which will have a major impact on services. Adding 92,000 to the transit tax levy and 238,000 to the library tax levy to maintain their current reduced level of service would require an increase in the tax levy of 9.4%. At this time, we'll review the handout that I've given to the council for some background information and comparison on the tax levy decisions. Please indicate to the mayor if you have any questions while I cover this material. Otherwise, I'll continue with the review. The first page is a glossary of terms. First term is assessed values, which is the value of each taxable property that is established by the city assessor. And this is the value that is used for each tax bill. The assessment level is the ratio of assessed value to the market value of all taxable property within the municipality or district. Equalized values is the current market value of all taxable property within the municipality or taxing district that is established by the state of Wisconsin. The equalized values are used to distribute the tax levy of larger districts, such as the county or a school district, to the municipalities, such as the cities, villages and towns that are required to include the levies on the tax bill. The assessed tax rate is calculated by the tax levy of municipality or taxing district that is divided by the total assessed valuation and expressed as dollars per thousand of assessed value. This is the tax rate that is on the tax bill. Equalized tax rate, the tax levy of a taxing district that is divided by the equalized valuation and is expressed as a rate per thousand of equalized values. The equalized tax rate has no official use and does not appear on this on the tax bill. Expenditure restraint program, the state program that limits the expenditures for the general fund to a percentage increase that is calculated based on the consumer price index and the amount of new construction growth in the community. The city of Sheboygan's limit was 3% for 2004 and is estimated to be 3.5% for 2005. The state appropriates a fixed amount of funding for the program that is distributed based on the number of municipalities that qualify for the appropriations under the limit. The city of Sheboygan will receive one million eight thousand dollars in 2004 from the expenditure restraint program. In addition, this is some of the outline of terminology that is for the 2005 budget process that we'll get into in some of the later spreadsheets. The base budget being defined as the 2004 budget approved on November 24th. Allocation percent, the departmental's budgets percentage of the total general fund budget. The allocation percent is to be used to distribute the additional appropriations for increases in general fund revenues and to distribute decreases in appropriations for the cost of the salary trust contingency, then employment compensation and the severance pay. The adjusted base budget, the base budget that has been adjusted for the increases in general fund revenues or the decreases in appropriations for the cost of the salary trust contingency, then employment comp and the severance pay that has been distributed based on the allocation percent. They'll make more sense when we go through the other sheets later on. After that, there is a graph that is titled general fund budget increases compared to state expenditure restraint limit. The lower red line shows what the city's general fund actual budget was at the level and the green line shows what the state would have allowed the general fund budget to be if we were to the max each year. The city on an average has stayed one and a quarter percent below the expenditure restraint limit. Because of that, we were at 32 million in 2004 if we had stayed at the expenditure restraint limit throughout the years, the O4 budget would have been 36 and a half million. So the city has focused not only on meeting this program, which is voluntary, but we have stayed below that limit. And the question is, I guess it's a weighing there of this as a resource. We can't go back and pick up that additional allocation. It's only towards the future. But it is a question here as we go through this of what the policy is for this year. Obviously in the past, the policy was to keep it below the expenditure restraints on an average. After that, you have a fold out graph that I'd like to extend my thanks to the engineering department for their assistance. And this does show, and there's a chart on the wall that repeats the same. This is the 2003 property taxes that were collected in 2004. It is a pie chart showing all the different entities that make up the tax bill for each parcel within the city. And the amounts are related to an average residential value of 88,000. And you can see the city of Sheboygan is about one third of the tax bill. And for a parcel of 88,000, they would be paying $74.33 a month in taxes for the city's services. For all the police and fire services, the public works and all the other departments' services to the community. So in a sense, this is somewhat comparable to some of the utility bills that people receive for all the other services that is provided to them. So I said, if you have any questions, just please indicate. The next graph is on the assessed and equalized tax rate. From 93 to 2004, shows there how the upper line is the assessed tax rate and there was an increase going through 93 to 99. Then you see it drops and that refers to the revaluation that it comes in line again with the equalized tax rate. Then slowly starts separating again. But a lot of the, you know, we always express our tax rate in terms of the assessed because as we've said earlier in the terms, that's what appears on the tax bill. A lot of the other governmental entities will express it in terms of the equalized tax rate, which is really an unofficial rate, but it does indicate here in the lower line that our equalized tax rate has declined or has remained very stable through the years that used to be above $10 per thousand and now it's down to $9 per thousand and the decline in this last budget year. So I think it's good to have a focus on that when you hear about the other rates. The next sheet is, start off there with a comparison of the old four budgets of the previous five years. And I think it takes, you need to take a little bit of time to see some of the historical significance here and how 2004 was a pivotal year for the budget and how we're still going through some of those changes. The tax levy and the governmental revenues from the state had an average increase of 772,000 per year in the 98 to 2003 budgets. The tax levy and governmental revenues in the 2004 budget decreased 816,000. So if you take those two accounts that are normal trend is an increase of 772, but old four we had a decrease of 816. It means it's really an impact of more than one and a half million dollars. The appropriations for expenditures had an average increase of about 750,000 per year in the 98 to 2003 budgets. The appropriations for expenditures for the old four budget increased 173,000. The main issue in the 2005 budget centers on the revenue growth in the general fund that will not be sufficient to fund the 2005 costs increases and the 2004 concessions that'll end on January 1st, 2005. Since the general fund budgets are A5 to 90% of wages and benefits it is inevitable reductions and staffing levels will be required and that the budget will require appropriations for the cost of unemployment compensation and severance pay. We have established through the council some policies already on the 2005 budget. They include the 2005 requests will be reduced to the 2004 budget level adjusted by revenue estimates and that was under the previous resolution referred to. The general fund cap outlay appropriations will be limited to 300,000 for 2005. The tax levy for library and transit will remain at the 2004 level. Now that is still a question before you on tonight's document because it does also have the library and transit levies on there so that can be addressed by tonight's council meeting also. Assumptions that were made and we developed the request to send the councils that the state revenues will remain stable. The revenue estimates include a tax levy increase of 5.5% which is related to the proposed resolution tonight and the SELA trust contingency is to be included in the budget with funding from adjustments to all departmental appropriations. Under the expenditure restraint program gave out this section at the last council meeting but I know it was a short time we had to review it so I'm kind of going over it again because it's important for everyone to understand. The general fund is under the expenditure restraint program that limits the increases in appropriations. That limit is estimated to be 3.5% for 2005. The difference between a 2.3% budget increase and a 3.5 budget increase is approximately 400,000 and again the growth in the revenues right now that we have would fund a 2.3% budget increase of the revenues that were submitted to you in the earlier council meeting but the difference between that and the expenditure restraint would be 400,000. If the council were to grant a tax-level increase of 7.7% instead of 5.5 that would allow funding for additional 400,000 of general fund appropriations. The 400,000 increase in revenue would save approximately 165,000 in unemployment compensation and severance pay. This would also save approximately 11 jobs and the services that they can provide to the community and again I guess we'll look at in the next page what the overall impact of that will be. The next page has a summary of the requests. They were about $36.6 million in requests for 2005 compared to 32 million for all fours so it increases about four and a half million. The revenue estimates were 32 million seven for all five compared to 32 million for all fours so it's about 700,000 increase. So the difference between the appropriation requests and the revenues is 3.8 million. Within the requests were $672,000 of general fund capital outlay. We are earmarking the cable fund contribution of 300,000 for that and it was also one of the limits the council set in a previous resolution that the capital outlay be limited 300,000. So through our process we will reduce those requests by 372,000 so if we adjust that 3 million eight by that 372 it leaves us with 3 million 475,000 still to be addressed and that's with a 5.5% tax levy increase and again as we said going to 7.7 would allow additional funding of 400,000 and then the net appropriation requests would still be over $3 million in excess of the revenue estimates. The next page that you have and this goes back to some of the other terminology that we had in the first page. This is the process that we went through that addressing the resolution 58 of starting with the 2004 budget for each one of the cost centers and calculating an allocation percent on that is that portion of the total budget for each one of the cost centers and departments and then we allocated the revenue increase to each one of those cost centers based on that allocation percent and also deducted for the anticipated salary trust unemployment comp and severance pay and then to the first column, first bold column you see there are 2005 adjusted base budget that is the 04 budget plus the adjustment for the revenues minus the adjustment for the salary trust and unemployment comp. Next to that we have the 2005 budget requests we remove the capital outlays we're putting that in a separate process and you see the 05 budget requests with all capital outlay also a bold column. We compare those two that are involved the 05 adjusted base budget and the 05 budget requests without capital outlay that difference is what the departments would have to address to reduce their budget requests at this point and that again is with the 5.5% tax levy increase. The 7.7 would take about 11% off those reductions to give you a general view of that but as you can see there's major reductions throughout all the departments and of course it's proportional even though the smaller departments have smaller amounts obviously to them it's also a major impact. So a lot of departments will have one, two, three more, no places is looking probably around close to 20 people. And my cuts will be addressing you after I complete my presentation on each one of those. But this would be the reductions for the 3.5 million at this point and as you see it's a draft after the council's decision tonight we will revise this tomorrow and give the calculations to the departments of what they have to submit to the mayor by Thursday as their reduction plan. The page after that is the, as proposed 2005 tax levy increase I guess there's three pages of calculations and the final page in the handout if you turn to that as proposed 2005 tax levy increase and it has a by first as the tax levy increase of 5.5% and it shows the increase in the debt service fund, the 251,000 and the general fund increase is 776,000. To the right you can see that it has an estimated tax rate of 2.57 and estimated tax rate increase of 0.43 with the estimated tax rate percent increase of 4.2. We have estimated all these because we do not have our assessed values at this time. We've worked with Marie and she has been very good about giving me information. I think we're very close on this. We have some information on the TIF districts but basically what we would have here is our growth in the assessed values away from the TIF districts would take off about 1.25% off the tax levy increase is a general formula. On the right-hand side, I also put an example of an increased tax levy for an $88,000 parcel again our average note parcel value for residential would be about $37 per year, about $3 per month and that's at a 5.5% adding additional 400,000 to go to the 7.7% and in the middle section, you'd be looking at a estimated tax rate of 10.78 estimated tax rate increase of 64 cents and a percent increase of about 6.3%. On the average parcel, we increase about $56 per year or about $5 per month. The lower section includes adding 92,000 for the transit tax levy and 238,000 to the library tax levy. That would put the increase up to 9.4%. The estimated tax rate would be 10.96. The estimated tax rate increase would be 82 cents or 8.1% and on the sample parcel, average parcel would be $72 per year or $6 a month. I'm going to draw. Make sure that those are for a parcel that's worth $88,000. Correct, that's an average. Unfortunately, if it was worth $176,000, it would be double that and so forth. Correct. Thank you. Yeah, that's an average residential parcel. Any other questions? Alderman, Steffen. I have one of those questions that I'm not sure I want to hear the answer for. From what I've been told, my understanding was, the 7.7 was as high as we could go and stay within the expenditure restraint. Otherwise we'd start losing the money we get from the federal government. Correct, or estate. If I'm correct on that, okay, go back to your graph where you had the equalized rate and what I'm missing, I'm sure you'll explain it to me, is there's a $4 million gap there between what's allowed when you're not talking percentages. The general fund budget increase is compared to the state expenditure limit. There's a $4 million gap last year and now we're looking for $3 million and we can't get the whole $3 million and I'm wondering, I don't know that we'd want to do that but if we wanted to. You can't go back. This is what's by a percent every year you're saying kind of. Yeah, it's 1% each year. Okay, that's my question. Well, over 2004 was 3% increase was allowed. Our increase was one half of 1%. Okay, I just, but when the totals are here I thought it was a total, but you're saying it's a total but it's also so much every year. Your shows would have been if we had gone up to the limit each year. Okay, thank you. Any other questions? But I didn't understand why there was a $4 million gap here. Okay, thank you, Rich. Mike. Thank you, Rich and Mayor. I hope I can give you a little information which we've garnered from department heads on what the effect of this will be. So I've got a couple introductory remarks and I'll go into individual departments. Then I'll have some concluding remarks and if you'd hold your questions till I'm all finished and then we can call up individual department heads if you so desire. There have been many questions from Alderman and the public as to what effect our budget crisis will have on city services. The department heads have asked me to represent them to review the service reductions which still would be necessary with an appropriation increase of three and a half percent which equates to a levy increase of 7.7% in the city portion of our taxes. This level was chosen because at this level we would still qualify for $1 million in state expenditure restraint payments. Initially, I must briefly review the extent of Sheboygan's budget review process. One of my duties has been to review each request on every budget and recommend reductions wherever possible. Historical usage, trends, price increases and anticipated usage were all considered in my reviews with department heads. I think the figures Rich presented are evidence of our success in maintaining tax increases which were far below those which were allowed under the state expenditure program. Naturally over the years we've had some battles over budget reductions which many department heads can attest to but I can assure you that departmental requests have been substantially reduced each year to stabilize the tax rate in spite of escalating costs. Last year Sheboygan was the only community in Wisconsin where employees in department heads voluntarily returned or reduced pay increases to balance operational budgets. This action helped hold a city portion of our tax increase to one penny per thousand. City staffing levels have declined from 378 in 2002 to 361 in 2004. These staff reductions are occurring at a time when the demand for services continues to grow because of additional development, housing, added street miles and expansion of city boundaries. Keep in mind that the demand for city services does not decrease during challenging economic times. It actually increases. Usually by this time my budget reviews with department heads will have led to compromises and reductions which have balanced our budget. However, this year I have not reviewed individual budgets and budget lines in the general fund because all that can be cut from the departmental operating budgets to eliminate millions in city cost is a very personnel who provide the services our citizens demand. That is your decision and that is why we're coming you tonight at this special meeting. With that thought in mind, I'd like to review the handout which was distributed, which I believe was delivered to your homes this afternoon. Does everyone have their copy? If not, Sue has additional copies. Does everyone have one? Everyone have one. That handout will summarize the budget cuts and decreased services which department heads foresee even with a city portion tax levy increase of 7.7%. What I did is there's no magical formula to the order. I just put them in alphabetical order. And for comparison purposes, when you see a figure, a dollar figure of a cut, we usually use a figure of around $50,000 salary and benefits equating to one position just for your information. First one is the assessor's office which with a 7% tax levy increase would still have to reduce her budget by $63,000. To do so, Marie said she would have to, now I won't read these in their entirety but I'll try and highlight the high points. Marie said she would have to reduce customer service. Service at the window right behind me would be available in the mornings but not afternoons they would close the window. The city is scheduled for re-evaluation to be completed in 2006. This cutback would require that re-evaluation being delayed two years, at least two years to 2008. What that has as an effect is a potential loss of revenue to us due to delayed field work, outdated property information and greater inequities lower which cause problems with some people not paying their fair share in taxes. On the bottom of that page, the last paragraph, you will see what would happen. If we do wait, in 2006, the city would get a letter of non-compliance from the state. In 2007, they would mandate special training for our city staff. In 2008, they would have to attend that training. In 2009, the re-evaluation must be completed and if it's not done in 2010, the state will complete it and bill all costs to the city. Next department, city attorney's office. Steve had indicated, even again, even with a 7.7 levy increase, he would be required to reduce his budget by $34,400, which is approximately 9% of his annual budget. That would require him to take one of his clerical staff, people reduce her from full to part-time and the other clerical position would be reduced from 40 to 38 hours. Of course, that'll delay information and providing legal services to all city department heads and to the council and there would be delays in ordinance and traffic prosecution. Third department you have is the city clerk's office where there would be $22,000 in additional cuts. For those of you who were here prior to April, you may remember that the clerk's office was reorganized earlier this year and one position was eliminated at that time. This $22,000 cut would require, we had listed here another position but it's actually half a position. One half more position would have to be deleted to accommodate the $22,000. That would equate over two years to a 30% reduction in staffing in that department. Sue had indicated if that were to occur, they're counter downstairs and telephones would be unmanned much of the time. Council documents would be late for completion, licenses would be delayed and probably most important, there might be problems with elections. Fourth department you have is finance department which includes Rich's department purchasing and information systems. Rich would be required to reduce his departments by $103,313 which is the equivalent of a little over two positions. Rich had just indicated for now he said I'd just be forced to close their cashier encounter by up to 15 hours per week. He hadn't gotten into the additional reductions which would be necessary. Next department is the fire department which would require almost $661,000 in cuts which equates to an elimination of 11 firefighters and that would result in the parking of one engine pumper and 100 foot rescue ladder. There would also be some changes in policy in the fire department. In the case of a house fire, all stations would respond and there would be no backups available if there were additional calls. That obviously jeopardizes community safety and the safety of the individual firefighter because we wouldn't have intervention teams available in case there was a trapped firefighter. Response times will be delayed. The state has a reimbursement policy for fire inspections. Our fire department does commercial and business inspections and is reimbursed for their time. The revenue generated from that is turned over to the general fund and amounts to about $100,000 a year. That would be jeopardized. It's unknown. All of us have homeowners insurance and a factor in that is an ISO rating in which they use many factors which includes firemen and station locations and so forth. It's not known what effect that decrease would have on those ratings. The public education program which the fire department puts on it to schools would be decreased. And for those of you who might be interested down the road in pursuing fire ambulance service of the 11 firefighters who would be laid off, eight of them are paramedics. So that would hurt us in that vein down the road. Next department is HR human resources. The cuts would come to a five person department. Two people in employee safety, the cutbacks would come in the area of employee safety to the tune of a little over $58,000. The danger there is we're mandated, required by the department of commerce to have a wide variety of training. We have programs such as commercial drivers license, drug and alcohol testing, hearing conservation testing, bloodborne pathogen testing and vaccinations, confined space and trench rescue operations training, pulmonary function testing. All of that, we'd have no one to handle that. They cited a memo written to Alderman Schultz back in 2001 who was chairman of risk management committee at that time. And that memo was written by me, coincidentally. At that time, Alderman Schultz wanted to know how effective our self-insured workers compensation program has been and our safety program. He was questioning if we needed people in safety at that time wanted to prove their worth. And what I found is that in 1987 was the last year in which we had fully insured workers compensation insurance and we paid $278,000 in premiums and had 130 workers compensation claims. 14 years later, 2001, despite higher wages and as we all know, a lot higher medical costs. We had 64 claims and workers compensation costs of only $150,000. So obviously the training and the emphasis upon safety and liability is paying off both in the workers cop area and in our liability coverage. Next department is the mayor's office where even with a 7% tax-level increase we'd have to cut an additional $22,000. Since the mayor's salary is set by council and can't be changed and our budget is 97% salaries, that entire $22,000 reduction would have to come from either the administrative assistance position or mine. The problems, our worries is that would jeopardize our self-insured claim investigation process. All court related subrogation for your information is I will frequently go to court, frequently in court attempting to recover costs for city equipment that has been damaged, vandalized or in the case of third party, for instance, a police officer makes an arrest and is injured in the course of that arrest that's covered by our workers' compensation but I don't think it's fair for the taxpayer to be paying that when the injury is caused by a third party. So I'll go to court and try and recover those costs for those injuries. It would also require the hiring of an outside consultant to handle our cable TV re-franchising process which we have just started. Our cable TV contract expires in 2006 and we have a three-year window of negotiations which has just started. In addition to that, the mayor's office would probably no longer be involved with special community events like the Summer Twilight series, the International Committee and July 4th events. Next department is planning and development which includes our senior center and building inspection are under Paulette's authority. Their cuts would amount to $124,000 which is about two and a half positions. Paulette had indicated that last year, you may recall, there was one full-time employee in building inspection and one in the plan department who were reduced to half-time and the senior center, which formerly was open half days on Fridays, was closed all day on Fridays. So there were cuts already for 2004. With this level of cuts, another 124,000 cuts, she had cited reduced economic development because of inability to keep up with proper planning and zoning, reduced inspection and enforcement by our building inspection department, further closures at the senior center, growing number of housing and public nuisance complaints and it might jeopardize $2 million in federal funding which we receive each year due to not enough people to handle our housing rehab and let abatement programs. Next department is the Sheboygan Police Department where the cutbacks would amount, even with a 7.7% tax levy increase, they would be required to reduce their budget by a million $42,984 that equates to 17 positions in the police department. Of that million $42, the chief had indicated he could cut about $39,000 in commodities which left a little over a million dollars to be cut in personnel. What he had foreseen was a reduction in abandoned vehicle processing which would be reduced by about 50%. 13 police officers to be laid off which would, the end result of that would be a cut in the number of complaints that they could handle. They would respond only to felonies, violence, life-threatening and higher priority cases and they wouldn't handle nonreportable accidents, minor thefts and vandalism and they wouldn't get into mediating neighborhood problems. In addition to the 13 officers, the community policing efforts would be either reduced or stopped because those officers would be returned to the street and a record specialist, two part-time telecommunicators and a court services secretary would also be cut. Of course that would put a major dent in the front desk downstairs and their records management and the proposed municipal court. Excuse me, public works. Even with a 7.7% tax levy increase, their total cuts would be $965,000. That's in addition to the $600,000 which they cut this year. If you recall they made changes in their drop-off sites, substantial changes and in their maintenance crew assignments. Of that $965,000, $396,000 would be in the parks division. They are considering not cleaning bathrooms on weekends or picking up trash on weekends. The quarry in the water slide might have to be closed. Glass trim, glass, pardon me, grass crews and tree trimming would be reduced and Wildwood Cemetery would not have any part-time people to help maintain the grounds. Streets and sanitation department would be cut by $457,500. Street sweeping schedules may be reduced or eliminated and the fall leaf collection may have to be eliminated with residents having to collect and deliver their leaves to the drop-off site. City buildings would be reduced by a little over $111,000 with the armory being closed and the city janitorial staff being cut. What it relates to in public works is they had projected nine part-time employees eliminated, 20 summer seasonal employees eliminated and five full-time employees eliminated which is in addition to the 21 positions right now which are not filled. The last two departments I have are Mead Library and Shiboye Entrance, at both of which gave presentations last week but had asked to be included in this presentation. At Mead Library, to return the service to what it was, to return the service in 2005 to what it is right now would require $238,000 in additional funds. If you wanted to return it to the service which had existed prior to 2004, it would require $429,582 in funds. The library working off that $238,000 figure had recommended applying all of their fund equity which is $100,000 to that amount. That leaves them with nothing in reserve. They were planning on cutting $111,000 in library service materials which is equivalent to about one-third of the funds available for the purchase of new materials. They would also eliminate their automated equipment replacement fund which from, or I should say eliminate it, which currently they had been funding and at $27,500 a year that would be cut to zero. That would, that's how they would cover their shortfall of $238,000. Last one is Shiboye Entrance, which over the last three years as you all know has been cut quite, quite severely. In the last three years, 10 of 23 tripper routes have been eliminated. Late night bus service has been eliminated. Sunday service eliminated. Saturday service has been cut in half and weekday bus service was reduced. This has led to 16 positions now being vacant and one supervisory position being eliminated. If the city funding is maintained at the $545,000 figure which was included in the document rich discussed, it would probably equate to evening bus service being eliminated and five additional positions being eliminated. And this assumes that $42,000 of our community development block grant money would again be awarded to Shiboye Entranced. Shiboye Entranced Board had recommended $92,000 more in funding to a level of $637,074 to keep the level of service as it is right now. Now just for a couple concluding comments before we get into questions. Even though what I've just reviewed is disturbing at the very best, it's important for each of you to realize that the financial problem we are facing is not unique to Shiboye Entranced Board. At the Alliance of Cities meeting which was held in Shiboye Entranced Board last Friday, each mayor reported that they are facing deficits which amount to about 10% of their general fund which is similar to what we face. I personally feel that regional government will help eliminate some of the problems we face but that's a solution down the road. During your current budget deliberations to solve the crisis and prioritize services, I urge you to remember that city departments are interwoven. Each department is dependent upon the services of others to effectively discharge their duties. When one department is weakened, it will negatively affect the operation of another. Your solution to the budget dilemma is not only imperative for 2005 but will also chart a course for Shiboye Entranced Board in the future since the state appears to be planning to solve its financial woes by continuing to reduce its payments to Wisconsin communities. So with that, open it up to questions of me or all the department heads here. Alderman Warner. Thank you, Your Honor. I guess my question would be, Rich could probably answer this, are expenditure restraints transit and the library fund don't fall underneath those constraints that we would have under expenditure restraints, is that correct? That is correct, the expenditure restraining program is just a limit on the general fund expenditures only and there is no limit that the state has set at this time on the tax levy so there's no limit on the transit or the library tax levy. So we could fund those as we saw fit with all. You still have local control over some of those areas yet? Alderman Steffish. I'm not sure if you know this, I think Paulette would, but are we limited? We give allocated $42,000 to the transit the last few years. Are we limited, could we give them, let's say the $92,000, could we give them $136,000 if that's what it was? I know obviously they certainly qualify under, it's got to be for low income and different things, but I don't know if there's a, maybe Pete could address that too, I don't know if you would. I may pass to Pete, I think it would be cool certainly. I just think it's so important because that's one area where when we spend $1, the federal government gets us three so it's good use of our money obviously. The transit budget comes out of the public service cap and block grant, which is a 15% cap last year that was about $160,000. We typically get over $500,000 or $600,000 worth of requests so what you'd be talking about is reductions in Boys and Girls Clubs, Salvation Army and a number of other nonprofit groups. Right, that answers the question, okay. Alderman Cigali. I'm just wondering Mike, are there gonna be any retirements this year and are you gonna be making those up or are people gonna be hiring if there are retirements? If you're asking are retirees going to be replaced, I guess that's a departmental choice and they'll make a request of salary and grievance. I know Rich and his figures has included quite a substantial amount for unemployment compensation in the anticipation of layoffs and the severance pay that would be necessary to pay off the people who were laid off their accrued vacation and so forth but as for are the retirees going to be replaced, the department head would make the request and salary and grievance and you would make that decision, so. Okay, could I ask one more question? Sure. It would be of Chief Sayer, please. In your department, since you were saying that you would be losing like a truck and things like that instead of having a 24-hour shifts, could your department go to three shifts like the police department has and then have shifts that are in between those that they would have the coverage but not the 24-hour coverage you'd have the day, evenings, and nights? To go to the same, the hourly schedules that police officer, we'd have to hire about one-third more firefighters. Presidentally, under contracts, firefighters can work 56 hours a week with no overtime included in those 56 hours to go to a eight-hour shift across the nation's been looked into, it would take one-third more firefighters. So of our 70 firefighters, we'd be looking at hiring almost 23 more to cover the shifts because they're presently working 56 hours. If you compare the firefighters to the police officers, they're about 20 hours a week of firefighters putting in for about the same amount of pay as a police officer and if you multiply 20 hours a week times 52 weeks, that's 1,040 hours. 1,040 hours divided by a 40-hour work schedule is about a half a year. So a firefighter right now already is giving a year and a half. If you reduce the firefighters' hours and put them on an eight-hour day, you're not gonna reduce those costs. Those costs are the same as in New York and Boston and everywhere else. It's not gonna be reduce the cost. It's gonna be the same hourly rate and you're actually increase your cost by one-third. Okay. A little graph, do you have a question or a comment there? Well, I was gonna make a motion on the reporter committee. Okay. So that we can get that on the floor and start talking about that because this reporter committee, I would move that we accept and adopt and report a committee and pass the resolution. And then under discussion, the reporter committee and this resolution authorize the 5.5% increase. So at this particular time, if the Alderman are in support of going to 7.7, I think is the maximum motion like that would be in order to make that happen. And I would so move that we go to the 7.7. We have a motion and a second before us. Under discussion. Hearing under discussion. All in progress. Thank you, Your Honor. I guess I'm a little concerned with the 7.7. I will support it. But that doesn't, even at a 7.7, we're still looking at a $3 million shortfall. I guess I'd like to ask Mike Hotz, has he had any discussions with the department has as to what they propose to do or what they recommend that we do above and beyond the 7.7? I mean, we're looking at catastrophic consequences here, regardless of whether we do a 7.7, which I'm in favor of doing at this point. But any recommendations, Mike? We've got $3 million shortfall. Nonetheless, police is gonna get hit hard, firefighters are gonna get it hard, public works has already been hit too hard, they're gonna hit hard again. Where are we going? I haven't, as I said, I haven't reviewed the individual line items and we always have a battle over commodities and departments and we'll be able to reduce something there. But again, that amount is very, very small in proportion to the $3 million problem which we're going to have. I think there'll be savings in some other areas. I'm gonna get into your garbage. Tipping fees, tipping fees, for instance, we are anticipating hopefully up to a half a million dollar savings in that area with a new contract. I think the mayor has had some ideas also which he wanted to, at some time, discuss in the very near future. But as for eliminating the entire $3 million problem, Alderman Perez, I don't know how, as if yet, taking bits and pieces of what you heard today, I guess, from the departments. Alderman Groff? I just wanted to say, that's why I'm, last week when Richard given us his original memo on what situation we were in, I mentioned that we have to look to the future and plan and do some decision making. And one of those things is to possibly re-review some of the suggestions that have been made in the past on how we can either consolidate services or change the way we're doing things. And even if it means bringing up some things that we've decided or took some action on before, we may have to reconsider them and look at them. And I know for myself, this morning I received several facts is that we're suggestions as to what we should do or what we could possibly do with the tax exempt properties that we have. I believe the mayor got that same email or whatever. So I will be bringing some documents in that constituents are still sending to me or calling me about and hopefully everybody else will be bringing something in so that this is just the start and we'll give the department head some idea of what revenue they'll have to play with as far as is that. And it's up to us to work with them and closely with all of them. And they with us to bring back suggestions as to what we need to do in order to survive the next five years basically. I would guess it's going to be. Okay. Alderman Brinkley. Thank you, Your Honor. I just want to make it clear to those listening at home that even by a large tax increase of 7.7%, we're still facing a huge problem right now this year. And it's something that you'll see your taxes go up next year and services you will notice will go down as something that I'm appalled on. I've committed myself to bringing the departments up to what I feel is the appropriate staffing level over time. Public Works has definitely taken a hit. Police, you know, we've already talked about the community policing, which more comments like anything that I get from people about which they see the face of Shmoygan is the community policing department right now. And it would be a shame to cut that back. But that's this year we're going to see that. And next year I think we're going to see it again. But I think it does take us to commit ourselves with the department heads to get back to that staffing that I think it does require a long-term plan that we all have to help out together. I'm not in favor of taxing people overly and above but people let people understand this is not a tax increase that we're all happy about. It's one that's absolutely necessary and even this is not enough. Well, and I also think that the state also has to work closer with the suddenness and show us where we're going to get shared revenue or if we're going to have a shared revenue plan for the next five years. And that right now they are not doing. So if they're not going to give us a shared revenue equal to what we send into the state, we're going to be fighting this battle for a long time. Can I follow up on that? Sure. One thing I meant not only the city and the department heads, but all the taxing from the county that we're working with that we can do a long-range planning for what services can we share? What can we save down the road to the state? We can plan five years out if we know we're going to get five years out. We don't know we're going to get this year. So it does go from top down. We'll have to work together to get through this. Alderman Cigali. I just, do we have to vote on this this evening? Yes. Okay, I just feel very uncomfortable since I just, we just received this information. I realized that this was coming, but to see it in black and white just kind of threw me for a loop. We can't afford to lose any more police officers in this city. We've got too many problems here. We've got gang problems. We've got drug problems. You can't take those policing things away from the people in the city. They want that. Those are their basic services. We can't take away things from public works. They're down the way it is and people want those services. That's what they're paying their taxes for. If need be, I will vote for the 7.7 increase. I just feel that some of these services can't be downgraded any more than what they already are. Thank you. And the transit system. That can't be, also. I shouldn't say you have to vote on it tonight. We shouldn't say you have to vote on it tonight, but if you want the budget process to move ahead, we have to keep on track. Okay. Oh my God. If I may add, we're setting a revenue at this 7.7 hour and giving the department some, but during the next month, while the mayor does his review and he can add and subtract anything he wants, but each department will be working, each department and their standing committees will be working together, hopefully coming up with some ideas and some suggestions as to how we can get by this and possibly not lose as many people as we are losing. So we all have to work together. And I know there's a lot of information here, but it still would be best to keep everything on track and move ahead with at least setting this revenue number and that we know we can do without jeopardizing any other funding that we have. Alderman Satter. Thank you, Your Honor. I understand there's a, currently there's a motion on the floor. If I'd like to make an amendment to the document concerning something else, do I have to wait until this has been taken care of? So. Okay. No. Great, we have to vote on that first. And then I can make the amendment. Okay, thank you. Alderman Warner on amendment. On amendment, on the amendment, Your Honor. Yes, I will support the 7.7 increase also. I think it's necessary. We've been through a long road in the last year. We tried to do everything right last year and I think we made the right choices. However, that million dollars the state took away from us really is what fueled all of this. It fueled the tax revolt in the city of people who think that a city can continue to operate at the same levels of services with less and less money each year when we have to pay more for fuel costs, more for healthcare, just like every business does, more for everything. You just can't keep doing that. We've been squeezing city department budgets for paper that they buy, pencils, everything that they use. We've been squeezing people out of them, consolidating, cutting things in half. And this is really important. I think we have to move this forward. I do agree it's not a real pleasant thing to do when you have to raise taxes at a time like this, but it also is a responsible thing to do. We can't allow our city to fall apart. We can't allow the maintenance of our city and its emergency services and its parks and streets to fall into disrepair or we're gonna pay more. We have a fire station that's needed in the new roof for the five years I've been on the council and we still haven't replaced it. This year it looks like it's gonna get replaced finally. We have needs for a new police station that's out in the future. That is probably 40 years old. If people would have made the right choices in the past, perhaps we wouldn't be at this, but everyone on the council tries to do their best. You try to make the best choice you can. You try to keep any tax increases to a minimum and I think we should all support the 7.7 increase and at least give the department some direction so they can formulate their budgets, put their heads together, see where they can trim and cut, see if there's any other places we can save and I know the next month or two we're gonna be very busy looking at that from every aspect and strategic fiscal plan will be meeting I'm sure on a lot of these issues and some of the ideas as Alderman Groff mentioned are still coming forward so. Alderman Peterson. Yeah, thanks mayor. I agree with all the comments made tonight but if you read these documents, even if you go to 7.7, it's massive cuts in personnel and services but we have no choice. We can't go about the 7.7 or re-departize our extra state aid so I support the amendment. Thank you. Was that, Sue, would you call the roll? This is on the amendment to change it from 5.5 to 7.7. Burke. Aye. Bonaire. Aye. Serta. Aye. Groff. Aye. Perez. Aye. Peterson. Aye. Rindflush. Aye. Sadali. Aye. Stefan. Aye. Van Ackren. Aye. Van Der Wiel. Aye. Wongerman. Aye. Werner. Aye. Bowman. Aye. 14 ayes. Motion carried. Alderman Serta. To amend resolution number 850405 on the second-last paragraph to the document which refers to transit which has limited the budget to 545,000 and I'm making a motion to reconfig those numbers to the 637,074 in order just to keep the service at status quo. Who's seconded? I'm sorry. We have a motion to second before us under discussion Alderman Serta. Sorry. Thank you, Your Honor. I think it's important just as Mr. McDonald had given a presentation last week concerning transits and the constraints that they have been in for some time including my cuts tonight to explain that they have taken their fair share of budget cuts and constraints and I think the public needs to know how this constraint will be translated. If we limit their service by reducing their evening service it's only a matter of time in the near future that they will have to close their doors and that's how it's going to be translated. We can't, and this again, I'm just asking for the status quo to move that. Thank you. Thank you. Alderman Steffi? I guess this kind of addresses some of our Alderman Segali's issues earlier. I'll support this because I think obviously transit needs to be supported but I want to, you know, anything we do we can change before the budget's finalized and I guess I would encourage us to look hard at, you know, taking this money and getting it from community blocker it's not a fun thing to do. You're going to take it out of, you know, Mr. Fullerton said, you know, from nonprofits but any more money we can get into our budget, you know, what's worse for nonprofits than losing police officers or losing transit? That's just more problems for those nonprofits. They see more people who don't have jobs more people who, you know, it's a rolling ball that goes downhill and never stops. You know, so it affects the community policing. I think we have to look at things that maybe we didn't want to do it but yeah, it's better to cut the nonprofits and say, look, you got to find your own 10,000 and 15,000 for those 20 groups, if we can put 300,000 back in our budget somehow we're 150 or whatever the case might be. You know, we've got to look at that because that's the kind of things that, you know, what do you want to do? Not give this out or lose, you know, three police officers, a firefighter and four transit workers. I mean, that's what we've got to look at. So, you know, as we look through this, I'll support this but I would encourage us to, you know, if we can get that funding in another spot to do that. Okay, thank you. Alderman Orner? Thank you, Your Honor. As a member of the Transit Commission, it is true that when we had our last meeting regarding the budget, it was clearly stated that if transit continues at the same level that probably a year from now, now they're gonna have to shut the doors because they're rather short. I mean 206. In 206. And we just can't, we cut them every year. We kept them at 545, gave them 42,000. They kept cutting, cutting, cutting. Pretty soon, you end up with no riders because what ends up happening is the people find other ways or I'll stop using it completely. And as soon as you take away riders, you lose more federal dollars and it just continues to go like that. We raise the fares, ridership dropped off because people couldn't afford to pay the extra quarter. Ridership drops off, you get less federal dollars. It's just one of those issues that the most needy people in our society need and use this. You'll hear people say all the time that I see the buses go by and they're not full. Well, there's plenty of times when they go by and they are full. You have over a half a million people a year get on our buses in the city. We're a city of 50,000. That tells me something. Maybe not every person in the city is getting on that bus but there's enough of them that are using it multiple times per week and it's one of the services, of course, the city has to provide and I will support this. Thank you. Alderman Cigali. I just think that the transit system is so important. There are so many people in this town that cannot afford what most of us have and that's cars. That's the only way they can get around is on the bus service. I can remember years ago when my buggy used to get stuck in the snow and I had my grab my little one and put it back in the apartment and go take a bus because that was the only way I could get back and forth to work or to a babysitter. And these people need it. They need it desperately. We can't take that away from them. Thank you. Thank you. If there's another discussion would you call the roll on amendment? Bonnet. Aye. Serta. Aye. Graf. Aye. Perez. Aye. Peterson. Aye. Rinfesh. Aye. Cigali. Aye. Wanderman. Aye. Morner. Aye. Bauman. Aye. Anberg. Aye. 14 ayes. Motion carried. Alderman. Is there any other amendments? Alderman Bonney. Yes, your honor. Thank you. I'd like to amend the next line. Actually the line item prior to that to for the library fund to 2,793,515 which addresses the change for the 2005 budget. We have motion to second before us. Is there any discussion? Hearing none would you call the roll please? I will. Yeah, in any other discussion? On the amendment. Alderman Graf. This is for Rich. Rich, if we do this amendment to increase the library to that funding then we really exceed the maintenance of effort number that we've normally raised them every year which we've already, with what they have right now they are above the maintenance of effort, correct? Correct. Okay, where does it, you had said before that this money doesn't affect taxes and things like that but where does this money come from then? We are raising the tax levy to provide them additional funding to bring them up to their current level of service. So it's still adding that to the tax levy? Yes, that's what the motion on the floor would be. Okay. Thank you. Alderman, right question? Is that a question for Rich or? Yes, I had a question as well. We received some numbers with the 7.7% in the increase in the city rate, what that does to the average taxpayer including the transit and the new public library. Can you tell me what that's gonna do with the two amendments that we've just put on the floor? How much more per month that would be? Those are, not my numbers but I can try to get Well, these and there's some others too that he was showing that what per month it's gonna go to? I guess I can refer you to the last page of my handout in the bottom section and you can see, I guess on the right hand column, my sample average parcel of $88,000 that would be $72 per year or $6 per month. And follow up, just point out then for those who do not have this document in front of them that what is the accurate number they can look at for? We're looking at an estimated tax rate. Yeah, what percentage increase is it gonna go up with these additions? About 8.1% on the rate or about 82 cents per thousand. Again, these are estimates. So we're not going up too much more from 7.7 to the 8.1. It's about less than 2% on the rate increase. Would you call the roll on the amendment please? Serta, Graf, Perez, Peterson, Winfresh, Sigali, Stefan, Van Akron, Van Der Wiel, Broncomen, Warner, Balmond, Berg, Boney, 12 eyes, two nose. Motion carried. Alderman Graf. Yeah, and as amended, I move that the resolution be put upon its passage. Moved to the second act, the resolution be put upon its passage under discussion. Hearing none, would you call the roll? Graf, Perez, Peterson, Winfresh, Sigali, Stefan, Van Akron, Van Der Wiel, Broncomen, Warner, Balmond, Berg, Boney, and Serta, 14 eyes. Motion carried. We have a motion and a second before us under discussion. Hearing none, all in favor? Aye. Opposed?