 It's five o'clock, so I'll call this meeting to order first up is roll call the person Pirella Hackely Felde Fula keep an esky here All right, we're all present and we all please join me in standing and reciting the pledge of allegiance 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 and Barring any objections. I think we can skip through the introductions this time around So we are on to 2.1 approval of the minutes We have any motion or discussion. All right, we have a motion and a second any other discussion Seeing none all those in favor, please indicate by saying aye all those Chair votes aye motion passes On to item 3.1, which is resolution 23-21-22 a resolution updating the policy for applying the Undesignated fund balance for the general funds ensuing budget budget here. Thank you chair Basically, if you look at the IFC you'll notice that part of part of our strategic plan in our stairs core values is Is basically moving forward and having better stewardship when it comes to our our borrowing If you remember back when we gave the state of the city and later in a financial review We basically looked at our borrowing and where should we be with our fund with our With our finances the way they are today and I presented that we really wanted to stick around the two million dollar borrowing and That our undesignated fund balance has significantly grown over the years as an example When the city borrowed five million dollars from the Undesignated fund balance for the city hall remodel and that was just five million of of fund balance and six and a half five and a half million of Borrowing we paid that back in less than two years now again What what goes into the general fund is pretty much the overflow from from budget year to budget year and as we tighten things up and With revenues reducing and costs continuing to go up the the overflow of fun going into fund balance Fluctuates from time to time what we are asking the council and the committee to approve is Through this proposal is that we would actually be able to use The the basically the amount that's overflowing from year to year from so like in 2020 we had a million two of Nondesignated money from the prior budget overflow into the General fund so we would like to actually be able to use that versus using Versus it going into the general fund We would actually be able to use that to reduce the amount of debt that we would actually be borrowing the year after So I guess if there's any questions I can explain it a little bit better But we do have 53 percent according to our gas be 54 We we were trying to figure out where we came up with the 25 percent. We're at 52 percent, I believe and Our policy says that we only need to have 25 percent in talking with Ailers We found out that we we the city went from 18 percent to 25 percent, which is still very generous in the municipal world We want to keep it at the 25 percent But any allotted amount above the 25 percent we would like to be able to with council approval and project approval We would like to be able to use that for projects and that's really what that money is for is we call it rainy day but it really At at the level that we're at we we're in a desert because we've never used the money other than for City Hall, so Right now with economics the way they are we need to be looking at our our general general The money in our general fund also for either debt reduction or for capital improvements projects But again, we don't want to go below 25 percent Ailers told me that basically municipalities look at the general fund as a rainy day and We should have several months worth of operating costs We have years worth of operating costs from that perspective, so I'm asking the council to approve Resolution 3.1 Any money that is actually used for Projects would have to come forward any borrowing would have to come forward to the council and to finance and personnel committee So either way this policy allows us to use it Assuming that the finance and personnel committee and the council approve that spend Any questions? I've got some questions Go ahead How much money is in the The fund currently the general fund I would have to look I don't have that in front of me It's in our it's in our budget in brief And then if you wanted to add 1.2 million to that and I apologize I didn't bring it Katelyn Can you look that up? If you are we talking Okay, if you hold on just a second. We'll have that number for you That'd be good. Wow. Wow. She's looking for it What's the rule of thumb with other municipalities that For percentage of fund balance Aillers said 25% is that is that typical for larger municipalities? Is that Of course that the base that the state tells us we have to have No, there was a confusion with a gas B 54 We thought that gas B 54 originally was the identifier on what the percentage is in talking with Aillers There isn't an actual percentage as I had said they basically recommend that you have several months of Operating cost as a buffer as an example where Where Katelyn came from anything over 10% they would spend and We are presently at right here 35 Yeah, the fund balance right now is 18 over 18 million and that's for general fund and again We only need to have nine million and some change in there. So we're over over double If that answers your question it does and then typically our budgets range four million dollars a year our capital improvements budget For for many many many years over a decade. We're at we're capped at three million and I believe it was three or four years ago We in capital improvements. We had questioned that amount and in calculations for for construction cost and cost of living and things like that it was it was It was increased. I believe that we could go up to about four point seven million The question that I had is we can we can always increase it but we have to be able to afford the spend the payments and The city has spent a lot of money in the last four to five years So our our debt payment is around four point seven a year just in debt And that's in that's principal and interest of course So the the concept that I'm bringing to the table is that we need to Reduce our our continued borrowing and use some of the money is what I call in the in the mattress Because of the fact that we shouldn't be in my opinion We shouldn't be borrowing money when we have money in the mattress as I call it Because it's it's to me. It's bad stewardship. We want to have money for a rainy day, but 52% or 53% Versus the the needed 25% per our ordinance is still to me not a very good a good place to be we have Capital improvements projects that we all know as alders that have been kicked down the road for many years and Every time we kick these projects down the road it costs us more later when we have to go and review them and fix them I'm not asking to spend all of the money I'm just asking that we have a policy so that when I talk with Moody's I Can reference the policy and that this is our our practice if if it's if there's money in there above the 25% that the council has the ability in our policy To basically allow it to go towards capital improvement projects. That's what what I'm asking for I have some more questions If anybody else doesn't Sure shoot This general fund Historically has only been used for capital improvements. Is that accurate? general fund can only be used for capital improvements and It's basically our rainy day money It cannot be used for operations unless something went south if you know what I mean Yeah, okay pay I can't I can't both get me on my computer and the document, but it was page two of the document that outlined the Different sections it was in a little table the different sections of Encumbered unencumbered designated undesignated Yep, can Can you in a thumbnail? Go through that and perhaps give an example of if we have currently an Undesignated or a designated dollar amount in that general fund. I'm trying to get my hands around The size of the fund what's been encumbered or promised what's left over and And good stewardship So I believe on page two of that document that it does explain Okay So for uncommitted where we are around for 2021 We're at 15 735 For committed we have 2.4 million. So it equals the actual 18 plus million For 2021 what which is what was adopted? If we look at the 2020 estimated for uncommitted, we were at 17.7 and some change and committed We were at 2.4 for a total of 20 million 175,000 and some change and again, please remember that we only need 9 million and some change So let's just round it off to 10 So then if we look at on page two it does talk about restricted fund balance spendable fund balance overview We have what the fund balance is and the difference between the assets and liabilities some of the monies Obviously can't if they're committed those are funds that we have to carry because it's liability that is That could come due to the city as an example The uncommitted and I was go ahead. I was I was Understanding that a great percentage of this general fund goes to pay the debt Is that accurate? To pay the debt wait, please it please explain There was there was a four-point something million again. I don't have the document in front of me. I apologize Can you tell me the document that you're referencing? It's the it's the one that We got attached and I I can ask a question later when I can get the document printed Carry what document are you talking about? The one attached to the minutes The one attached to the agenda. Are you talking the IFC Roberta? Yes, okay. I have I have the IFC in front of me and I'm I apologize. I don't see Numbers that you're you're referencing It's I should who should apologize because I don't have it in front of me No, but I am trying to follow along so We try to give as much information as possible the spirit of the of the policy that we are asking for is to Is to allow the council has the ability to use the general fund For capital improvement projects, but we don't have any reference to that in in our in our ordinance in our in our document, so when we when we talked about The fact that the gas be 54 in our ordinance it references gas be 54 when we went from 18 percent to 25 percent and And we thought well originally we thought well, let's just follow the gas be 54 Well that gas be 54 just talks about the limits and what's recommended and things like that in talking with Aillers Don Gundersen basically her and I in conversation. She basically said that Moody's looks at 30% or better as favorable for a municipality so my my thought was That's one reason why we get favorable AA to Recommendations because we are significantly above the 30% the issue is that we've increased our debt Also over the years so one of the things that Don Gundersen and I talked about is getting it into our policy so that we can actually Document and I can reference the actual Policy to Moody's Because otherwise, it's it doesn't seem like we are following any any practice or process So what we're asking here is that the committee and the council approve this Any any budgeting any funding any spending still has to go through finance and personnel and the council We're just basically saying this is our process any unrestricted Funds can be used for projects above the 25 percent If Moody's if Moody's looks favorably upon 30% Would it be wise of us to be at 30%? no, I I did ask the the exact same questions for Bertha and Don from I alers basically said you don't want to do that because if the day ever came and We ended up going below the 25% then Moody's could look at that as a negative versus a positive. I Didn't understand that if we have a if we have a baseline of 30% if we if We have more than 30% we're at 52% Correct, we're basically saying in our ordinance. We have it it changed from 18% to 25% If we move that 25 to 30 if We ever end up needing to go below 30 then Moody's will look at that as a negative So I'm understanding that we have a policy Written that says 25% is that accurate? Yes Okay Don't want to change that. I don't want to change that Thank you You're welcome So Okay, we can circle back, but go ahead all the Paralla. Thank you So the the policy exists already correct. Yes. Okay good I hear is that the policy you're referring to yeah Kerry did we put the we attached the policy? Yeah, you yeah the committee should have had The the resolution 23 21 dash 22 Yes, I got it. So the the ones that I has all the definitions correct. Yes. Okay, perfect So I understand that the concept and understanding I would just wanted to have a confirmation one that so you said or better it looks like that the The reserve would be used only for capital improvements, right? Council approved capital improvements. Yes. All right. It cannot be used for operational and could that be Could that be used for? Emergency situations just as it would be used if left as a reserve of the geofunds Yes, if the city of Sheboygan were to have a catastrophic situation and Monies were needed. We could use that Perfect. Thank you. And finally, I was a little confused about the definitions pre gasp and post gasp So would definitions also be changed is That also an ask today the definitions are changed adjusted In addition to the content the substance of what is asked do the definitions also change No, the definitions do not change So when when in the policy it says that the statement Substantially changes how fund balances are categorized. What does that mean? The first paragraph under So the statement is statement substantially changes how fund balances are categorized and clarifies modifies How some of the governmental funds are presented and classified does that mean that? These descriptions are going to be changed because then I was a little confused about What is the core and definition and what the key definition is going to be and it's not just a matter of semantic I was actually wondering if then What was what and if the part that we are going to in fact free in quotes from the reserve is only the assigned And undesignated funds And which one that is in this table as what I'm asking I guess My understanding is with the background of it is the fact that our original policy referenced And it's not really a policy as Chuck would correct me on it's our resolution references the gas be 54 Because of how gas be 54 has is written Because it's a government fund and government fund type definitions. We do go according to the fund type definitions by gas be 54 The way it was written we we assumed that gas be 54 actually Called out the 25% and in review by the attorney's office My office and and others that gas be 54 does not call out the actual 25% We're still going to go by the definitions that gas be 54 calls out But we are adding in that the ability for this city council to allow non-designated general fund Dollars to be used for upon approval by the council to be used for capital improvements To reduce the amount of borrowing that we that we have been doing. I apologize. I don't want to take Too much space. So if someone else has a question, otherwise, I have a follow-up question Just to reject with a really quick question when it came to Using fund balance for City Hall. Is that What we did there basically exactly what this policy just as a written version saying we can do in the future that is correct I guess it what I don't understand is if there is no amount set in the policy Why does the policy itself need to be changed? I mean I understand the change of views of the geo funds And I actually agree with that I just don't understand what is that in the policy has to be changed if there are no numbers and percentage Well, we're not changing the numbers Grazia. What we are looking to do is add the point that the city council can approve For capital improvements projects the undesignated funds above the 25% So the 25% is a number that the council defined years ago when we went from 18 to 25 To build a better cushion But we've continued to add into our general fund year over year and we're not using it We can use it. We did use five million dollars for the city hall project but when I go to The Moody's for our audit review and our our geo borrowing review to keep our AA2 We don't have it in our in our ordinance that the council Has the that it's part of our policy that anything above 25% can Be used for capital and capital projects. So it for them. We're not following a process If it's not in our we can still do it But if it's in our system if it's in the ordinance, then they understand it's something that we can do and that we were a view Perfect. Thank you very much for explaining it for further explaining it. So basically there's an addition specifying yet It's an addition. Perfect. And so no definition also will be changed. Correct. Perfect. Thank you so much Thank you Any other discussion from committee members? Roberta, I think we might have cut you off before are you good? I'm I'm fine. Thank you Okay In that case we are looking for a motion to recommend approval I make a motion to recommend approval I'll second. All right. We have a motion and a second seeing no further discussion all those in favor Please indicate by saying aye. Aye All Aye All opposed Chair votes aye and the motion passes Next up is item 3.2, which is direct referral resolution 26 21 22 A resolution authorizing the payment of umire invoices for administrative fees transplant plant and stop loss coverage We like that one Go for it Good afternoon We are adopting new policies based on past practices that weren't necessarily in alignment with what We needed to do both in the human resources department and in the finance department So this is our first Opportunity to actually implement a process that would whenever there's an invoice that is over the threshold of what administrator wolf is authorized to To pay that it would go through to finance and personnel We are working on an aspect of a policy so that we would be able to Because these are typical monthly invoices based on our self insurance program That these would be something that you would be able to see and approve The authorization for administrator wolf to go forward and authorize payments on a monthly basis At this point we are asking for the particular invoice that's attached to be paid Based on the fact that this is something that has been a regular occurrence through through our operations and through Our self funded insurance plan So this is the first time that you'll be seeing this. Um, this isn't an unusual invoice It it's just one that we're bringing forward to you because this is the the initiation of a process that we want to Be more in compliance For you and for the council Are there any questions? Otherwise, I'd like to add a few few words. I have a question Go ahead So Monthly we will be seeing these The the goal is that you will be seeing These on a monthly basis until the the new policy is adopted so that you will have Either a monthly financial report or a quarterly report Or the policy that will allow for the payment of this on that On a month we pay that on a monthly basis, but you will have that annual agreement To be able to allow administer the wolf to actually process these Actually your experience In your experience does the monthly dollar amount Very widely It can based on the claims that are that have Occurred the timing of the payment of those claims this this invoice is through umr Which is our health benefit provider or vendor And so the it it truly can vary anywhere I don't want to venture a guess right now, but they're generally over $50,000 up to Can be up as much as $100,000 depending on what has happened in the course of The employees claims Right I would like I'd like to I'd like to make a couple comments the the whole concept of this is that We were again for transparency Of vicki and I are bringing forward areas that we feel need to have Approval processes So that we're we've got our eye on the ball per se We these these These have been approved month over month For many many years and have not been brought forward I would Recommend that we we would be bringing forward quarterly the review because of the fact that does go it does ebb and flow And to look at it in a month snapshot Really doesn't help everybody we should be as a as a committee Looking at these at these on a quarterly fashion so that quarter to quarter you understand how the actual Health insurance is being utilized by our by our team Looking at it monthly to me is more busy work quarterly again. We can't change it The spend is the spend if our employees go or have a have situations happen Or have emergencies happen That spend is going to fluctuate and please understand that the spend that we're actually approving Has a time a time lapse in it also The other point to it is the fact that if we don't Take our recommendation and the council wants to look at it monthly Before it's approved we will actually incur fines Because you we will be holding up the actual payment process Again the concept of this Is that is the fact that i'm just approving the the financial The the cost the spend of the medical piece so that we don't incur fines And that somebody the group the team is actually looking at the numbers Month over month and in quarterly we would bring those numbers to you to to talk about what what the activity has been Any questions Just one brief question So in the the policy will include that we will look at it Unfortunately basis then quarterly quarterly we would be reviewing it as a finance department But please understand that the payment would already be approved by the city administrator. Thank you. I have a question We're going to go with all their feldi first but These are these are we're going to catch up and these are the back Payments we old this is the july invoice not at all. This is the july invoice Okay Do we have a comparison to Last year at all and you know, is there a way when you bring these to us every month? Is there a way to Maybe compare them to Yes, we we can do a comparison for you. We can provide that information Um 2020 was an unusual year because of covet that we did not have as many claims as was typical We did see a spike in the beginning of 2021 as people were going back to their Physicians, but we would have opportunity to share information from 2019 2020 and 2021 what our what our trend has been we can do that great. Thank you Right. Oh, they're flaky panoski Actually, that was part of my question and all their feldi did it Perfect great to great mind any other questions Perfect Seeing none, then I believe we are looking for a motion to recommend approval I recommend approval All right I'm seeing no further discussion. We have a motion and a second. So all those in favor, please educate by saying aye Aye Aye I'll post Chair votes aye and the motion passes Our next meeting is july 12th, and we are now at the end of our agenda. I'm looking for a motion to adjourn Motion to adjourn so moved We have a motion by elder parella. Do we have a second second motion and a second all those in favor Please indicate by saying aye Aye Aye I'll post Chair votes aye motion passes and we are adjourned Thank you. Those were weak eyes. Didn't nobody want to go home