 Okay, we're going to call this meeting to order. It is five o'clock. This is an informational meeting of the Labor Management Committee. As customary, we will begin with 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. Do we have the minutes from the previous meeting, Sue? Did we ever dig them up? Okay. We don't have the minutes from the previous meeting, so we'll skip number two. Introduction to committee members. What we have here is I am Mayor Bob Ryan. If we can go around, please use the microphones. My name is Angela Payne. I am the HR and Labor Relations Director. Terry Hansen, Finance Director. I'm Alderman Corey Balkam, the Chairman of the Seller and Grievance Committee. If you guys can stand up so they can see. Hi, I'm Joanne Decker. I am President of Local 1564. Scott Nevis, ATU 998. Steve Cobb, I'm President of the Schwoigen Police Supervisors Association. Chase Longmiller, Schwoigen Fire Department. Tom Pitch, President of DPW. Jack Vanderwill, President of the Professionals Union. Okay, thank you everybody. We will now have the election of the Chairman and the Vice-Chairman of the Committee. Move to nominee Mayor Ryan. Second. We have a nomination of myself for Chairman. Do we have a nomination for Chairman? Nomination for Matt Walsh in a second. Do we do this by ballot or do we do this by a show of hands? So we have four myself. All in favor, say I by raising your hands. It looks like we have four. For Matt Walsh. All in favor, say I by raising your hands. Congratulations Matt. Where is Matt? Oh, so you're going to let me be the Vice-Chairman and run to me? Okay, Matt Walsh is the Chairman and he's not present. Good job, guys. Now we will have the election of the Vice-Chairman of the Committee. Do we have any nominations? We have a nomination in a second for myself. Are there any other nominations? No, yeah. Move to approve by unanimous, yeah. Under unanimous consent, congratulations Mr. Mayor. Thank you. So I guess I get to run the meeting after all. Good job, guys. All right, thank you. That's called give and take or something like that, isn't it? All right. Good job. Opening comments. First of all, we'll read the agenda for this evening. We do have a fairly tight agenda. It is intentionally done so because we figured this could be a crowded event, which has come true. Thank you Alderman Gisha. And we want to keep everything under control. This is not meant to be a contentious meeting. This is not meant to be a finger pointing and name calling meeting. This is a meeting that we will gather information. The agenda is as follows from here on out. After my comments, we will have a financial overview for the city by Terry, finance director with input from Dave Lutzky, our city assessor. They will tell you the financial outlook for the city as is today. We will then have a public input session for people that have signed up. We have a two minute limit on that. Angela Payne, our HR director will be keeping track of time. She will at 15 seconds notify the speaker that there's 15 seconds and then at times up. And please, when time is up, please do refrain from speaking any longer. We then have comments and input by older persons and department heads, anybody who would like to speak, that they can stand up and give their input as to this situation that we have in the future that faces us. Then we will have comments by everybody on the committee up here that everybody can stand up and speak and say their piece. I will then have my closing comments and the meeting will adjourn. Like I said, this is not meant to be contentious. This is meant for information gathering. This is meant for public input. This is meant basically to gather information, to gather sentiment that will then be brought to the negotiating table. This is not a negotiation here this night. Negotiations, labor negotiations happen in closed session. They do not happen in a public forum. If they did ever, we were ever forced to negotiate in a public forum, absolutely nothing would be accomplished, obviously. So this is not a negotiated, this is not a negotiation tonight. There will be no decisions made tonight. This is an information gathering session once again. The reason for this is to ensure transparency and let everybody have their say. We want to know the sentiment out there on both sides of the issue, whether it is labor or whether it is from the city side or the taxpayer side. Also, when people speak, like I said, we don't want viciousness in the chamber. If people step out of line and they cross that line, any member of the group up here will be allowed to call point of order so that things do not get out of hand. At that, we will begin with a financial overview by Terry Hansen and Dave Lutsky. Good evening, everyone. I apologize for those on the back wall. You have a very tough time seeing that. Better? All right. Basically, what this is, is to summarize what we're looking at for the 2010 budget for the general fund. And to start off, is always to remember that the city is just one piece of the pie when it comes to your property taxes. Sheboygan public schools comprise 39%. The county of Sheboygan comprises 20. The Lake Shore Technical College is six. And then you have the Sheboygan Recreation Department and then also the state of Wisconsin that are at 1% each. And finally, the city of Sheboygan is only 33% of your property taxes. So no matter what the city does on your property taxes, it's impacting a third of it. There's still two-thirds out there that if people are so inclined, there's other entities that are also playing impact on your total property taxes. The challenges that we're looking at for 2010, the impacts. In the revenue side, we're looking at levy limitations. We're looking at a limited tax-based growth. We're looking at shared revenue cuts, elimination of one-time revenues that we utilized last year, or this year in 2009, and the overall taxpayer ability to pay. On the expenditure side, we're looking at salary increases, the Wisconsin Retirement Fund increases that are mandated by a state statute, health insurance costs increases, inflationary factors, tipping fee increases mandated by the state, and the expenditure restraint program that the state has in place. On the general fund revenue side, if we start with the 2009 budgeted revenues for the general fund, we have $36.2 million budgeted. We have one-time revenues in 2009 related to stormwater fees, or residual stormwater revenues that were transferred into the general fund of $615,000. Those will not be available in 2010. We have a state aid reduction, the most recent estimate as of yesterday. It's $231,381 cut in state-shared revenues. So our 2010 anticipated revenues, not factoring decreases in service fees due to down time in the economy, or reduced interest. This is just large, large-scope pictures here. We're looking at $35.4 million in approximate revenues. Looking at the expenditures, we have started off with the 2009 budget. We have the Wisconsin Retirement Fund proposed state increase of approximately $195,000. Then we have the tipping fee proposed state increase of about $100,000. Our salaries, which average approximately 4.5% when you factor in step increases for the union agreements, and the standard cost of living adjustment that is typically provided, we're looking at about $910,000 increase. We're looking at the Wisconsin Retirement and the FICA taxes that are associated with that salary of about $177,000. Our insurance costs, we're looking at about $387,000. It says 5% up there, but that number actually reflects 6%. Then our other operating costs that are non-salary and benefits, we're looking at about a 3% increase, which equates to $167,000. So our 2010 anticipated expenditures total $38.2 million. When we compare that with the revenues, we can see that we're going to have a shortfall of approximately $2.8 million that we're looking at for 2010 on just the big ticket items. Looking at the expenditure restraint impact, the city receives about $1.1 million in expenditure restraint aid. What that is, is it's aid provided by the state for the city to comply in an expenditure restraint program. Last year, the expenditure restraints were at about 5.7%. This year, as it's proposed, because it ties with inflationary factors, we're looking at zero. If we want to still participate in the expenditure restraint program, we would have allowable expenditures of $36.2 million. However, our anticipated expenditures are the $38.2 million, so we're about $2 million short in that. So even if we had an unlimited stream of revenue in order to receive that additional aid from the state, we would have to cut nearly $2 million to receive that $1.1 million in aid. Looking at the 2010 budget challenges, the short of it all and the summary of it all is our anticipated expenditures will exceed our revenues by nearly $2.8 million, and our anticipated expenditures could exceed the expenditure restraint program allowed amount by nearly $1.9 million. Looking at the tax base, I'll hand this over to the city assessor, David Lutsky, and he can address what he's seeing as far as the assessed value in the city. As you know, property taxes is a significant generator of income for the city, and over the years property taxes, you know, there's been an element of increase in property taxes, but outside of revaluation, you know, property taxes stays relatively flat, particularly if we hold the tax rate within the city flat, and we have been doing that. So you might ask, well, how does property taxes then influence our revenue stream? Well, it's actually through new construction. When companies build plants in town or there's expansion of retail space, that adds really to our base in terms of income, and over the years our average change in assessed value, for example, for the previous eight years, was $32 million. And that $32 million translates roughly into somewhere between a quarter of a million and $300,000 each year, and that's kind of like new money, and then the reason it's important is that money, of course, helps offset inflationary costs, increases in wages, that type of thing. In 2009, our anticipated change in assessed value is $11 million, and then in 2010, the estimated change in assessed value is a negative $2 million. So that additional revenue that the city used to bring in as a result of these new improvements really is not there as it has been in the past. And I haven't gone back, you know, real far, but I would imagine that this has not happened very often. It may be the first time in the history of Sheboygan that the number has actually been negative. Now, with all this said, I want to make certain that everyone in this room understands that the assessor's office doesn't make predictions of the future. We're really just a reflection of the future, you know, we have to do an estimate. And this is one of the cases in which we need to do that. So I really was asked to come here to just let folks know that, you know, the tax rate being held constant, and it has been actually going down for many, many years, the increases in revenue that offsets some of these annual expenses as a result of new construction, not revaluation. And we do do revaluations, but that's really not a part of it. Revaluation is more about uniformity in assessment, not in equity of assessment. Sorry, I didn't have my mic on. I'll repeat that there is a two-minute limit. Please, let's everybody keep it civil. If you step over the line and any one of the committee members here feels you have, they will call point of order. And once point of order is called, your time speaking will have ended. So if we can have the list, and we can begin, where is the list over on the, okay, first, well, that's not the list, the list is over. Are you speaking first, Scott? I believe it's on Taylor. First up, speaking, we have Dulcy Johnson. And Dulcy, if we can have your name and address, please. Yes, Dulcy Johnson, 1306 North 3rd Street, Sheboygan. Thank you. As we've heard, the city is dealing with a $2 million shortfall for next year's budget, and we know that wages and benefits make up 85% of that budget. Many city residents have lost their jobs, many live on fixed incomes, some have lost their homes, many have lost a lot of their savings in the economic downturn. Excuse me? I don't think that was, there was probably 15 seconds. Thank you. Thank you. Thank you. Mike's on. Is the mic on? Okay. Pardon? Can't hear. Do I start over? Do you want to begin again? Thank you. As we've heard, the city is dealing with a $2 million shortfall for next year's budget, and we know that we're dealing with a $5% of that budget. Many city residents have lost their jobs, many live on fixed incomes, some have lost their homes, many have lost a lot of their savings in the economic downturn. Half of the city employees do not live in the city, so do not contribute to the high cost of their wages and benefits. Let us consider the memorandum of agreement with the fire department paramedics. Up to 24 paramedics received premium pay of 3% on January 1st and another 3% increase for all firemen on January 1st and a 1.5% increase for all firemen on July 1st. That's a total of 10.5% increase for up to 24 paramedic firemen and a 4.5% increase for all firemen. I'm having a hard time understanding how the council could approve this even in good economic times. Mayor Ryan ran on a platformer running the city like a business. My son works in the Chicago area for a national company headquartered in Chicago. For 2009, they received no pay increases, no bonuses, no contributions to their 401ks. They pay half the cost of their health insurance premiums, a $10 copay for visits to a general physician and $15 for a visit to a specialist. This is just one example, I am sure of many of what's happening in the real world and an example of what needs to happen in this city. Union leaders and employees need to get real and city employees need to live in the city and help pay the price of their high wages and benefits. Thank you. Thank you, Dulcy. Next up we will have Lee Montemayor. Thank you. 1015, Logan. Thank you. Thank you, Mayor. Let me start out that I'm totally against some of the way this thing has been done. I'm not going to go straight through the media or the newspaper radios, blah, blah, blah. What I want to do is do it legally. There's got to be a process followed when we negotiate contract, especially when you're going to reopen the contract from 2009. You're supposed to be working on 2010. All you have to do is look at the Code 2, sections 2-901 that gives you a process of how it's going to be done. The second thing is there is a document out there that was done in 4809 where they took the 125,000 water abatement program away from the 2000 of it and it didn't pass. It needs two-thirds council approval and they only received 10. That document needs to be redone so it's legal. Here again, I have state. I'm all for saving money but I want it done legally. I asked Terry to look at the and you can find it in the analysis of the budget that we turn into the state every year on the 1231 of each year. So Terry is going to look at it soon. Thank you. Thank you, Mr. Montzmaier. Just commenting this is not an open negotiation here. We're not negotiating here tonight. If we are going to reopen any contracts, the contract for 2009 be a letter of intent to convene negotiations regarding any thing in the 2009 contract. It will be done legally. That has not been done at this point and this is not a negotiation. Next up, we have Rich Jordan 1616 black walnut. All right. This will be very short. I just want to remind you during the negotiations I think that an important priority consideration should be careful shopping for deductibles and co-pays. I suggest cutting the government contribution from 90% to 75% would be a good start in that manner. And just remember that if Sheboygan doesn't have any money left for operational expenses, then there isn't any need for our employees. And I hope we can keep all of them. Thank you, Rich. Next up, we have Richard Hartman. My address is 423 North 23rd Street. Thank you for allowing me to speak this evening. What I have to say is going to be slightly different than what you've heard. And it consists of this. Alderman Gisha invites everyone to this meeting because by his words, there is a way every citizen can help. I don't know what the average how the average citizen can help unless it's to support the proposals that have been talked about recently. And I certainly do support that. If a citizen is here to simply become informed, that may be a step in the right direction. But no matter how well informed one may be, no matter how informed one may be, unless that new found knowledge is put to work, nothing is contributed to the solving of the problem. Without a doubt, there are bigger fry than the seemingly petty idea I come to suggest. But it too is a step in the right direction. And if adhered to, will contribute to correcting the problem. I might also add that its institution creates no unpleasantries to any parties involved. It is simply printing documents using both sides of a sheet of paper. And on both sides of a sheet of paper is nothing new. Look at your newspaper, magazine or your favorite novel for everyday reminders of how widely it is accepted. I have printed copies of my presentation this evening to be given as handouts. And on the reverse side of each copy you will find a print you will find print from a multi-page document generated by either the city of Shaboygan area school district or the county of Shaboygan that was left blank only to be continued on the next sheet of paper which was also left blank. Thank you. Thank you Mr. Urban. And last on the list is Ernest Mike Kepler 2533 Lakeshore Drive, Shaboygan Thank you. I do not have prepared remarks tonight but I would like to say the following. First of all, I would like to thank the city leadership and the labor management people for getting together and sincerely wanting to discuss these issues. Our costs have risen the last decade or two tremendously. And we need to address this. I would hope that we look at it in a very positive way and reduce costs. I would suggest that since 85% of the city's costs are salaries and wages and benefits that these be approached and that these, the attitude be taken that it should mirror what is happening in the private sector. An example for myself if and I are both retired our health insurance costs per year out of pocket are $8,200. That includes Medicare supplemental and everything. And I'm also paying for the public employees, both state, local and we can do more with the local because we're here tonight and that's what we can address. So I, thank you. I wish the committee good luck and good will and please be sincere and honest in your efforts and be positive in your approach. Thank you. All right. Mr. Capitello has also requested to speak. 1619 North 38th Street. That's town of Sheboygan. I also believe that the collective bargaining units and the city know the situation that we're in and I have full confidence that we have very qualified individuals in both areas and I think they'll do a good job and I think they'll do the best for the taxpayer for the city of Sheboygan. Besides that, I think also what you have to look at is I know that you reduced a lot of the capital improvement projects because of the budget situation the way it is right now. Anybody in the city can tell you that the roads are deteriorating storm and sewer water. My suggestion to the council is I know you want to work with the county and this is an avenue and the county just did it in this last election they added a half of a percent sales tax for some of the things that they were looking that they needed to do within their budget. I would suggest that to be able to do more of the capital improvements to look at a possible half of a percent increase in the sales tax with the county which you would have to do because the county would have to be able to collect that and do that. I would suggest that because right now the property owners are pretty much at their point that they cannot afford any more taxes at all and if you're looking at having everybody pay for the use of the roads for example, if you're looking if you have people coming to Blue Harbour they're going to pay for part of the roads part of the improvements because they're paying part of that sales tax and it would be better for the property only because now you're reducing that from their expense where they would not have to pay the enormous amount that they would have to put when you do improvements within their areas. So I would suggest that the city either do it by committee or directly Mayor Ryan with Adam Payne to get together to look and do some analysis of how much money could be generated for that and to do that and that's not going to be a tax increase for property taxes. Thank you very much. Thank you Mr. Capicello. That is all for our public input session. I thank everybody for speaking and thank you very much for conducting yourselves in the most professional manner. We now have comments by any older persons or department heads who may want to have any input on this issue. Do we have any input? Okay. We have comments by committee members. Any members of the committee that would like to speak on this issue? Well, thank you. As the chairman of souring grievance, I just want everybody to know our friends from the bargaining units as well. This is the book I'm going to use as my playbook as I help lead these negotiations. It's a negotiations classic. It's called Getting the Yes and it's by some guys named Fisher and Uri. You can google it in Amazon for five or six bucks. So if our friends in the bargaining unit are looking for what kind of tactics we're going to use and what our secret plans are, they're all right here. They're all about finding ways that you focus on the interests and not positions. Because if we focus on positions, that's not a healthy way to negotiate. What is it you need? What is it you want? And what are your interests? And then find a way to negotiate in good faith in the interests of the taxpayers of Sheboygan and in the interests of the employees. So I just wanted to put that out there in case anybody wants to study it before we get behind those secret closed doors. Okay. Okay. This is a nice meeting. Now it's called the Mayor's Closing Comments. I am very confident that we can come to agreements between the city and our labor organizations. I believe that we can go to the table with everybody's interests in mind. We all know the numbers. The numbers are out there today for a reason. Also this presentation will be put out on the city website at this PowerPoint. If anybody would like to check it out there. Terry Hansen and Dave Lutsky stand behind their numbers and they will be willing to answer any questions on how they derive with these numbers. We know what we're looking at. It's not a pretty picture, but it's not insurmountable. We have been working diligently trying to rework our insurance package. We have hired an insurance consultant to represent the city. It is very knowledgeable in insurance and that does not have an interest in selling us an inflated package so he can make more money. He's getting consulting fees. So he will hopefully come up with the best package for us and with several different options and we will discuss those in the open with our partners in labor. Introduce before we go into negotiations that everybody is knowledgeable of them. We can have some agreements in principle before we ever get into negotiations before we ever get behind closed doors. I've always believed myself and I kind of think out loud I operate in the open and anything that we can accomplish before we go behind closed doors when we can do it in anybody's office or in my office it will make the entire process much more manageable and the outcome probably better. I'm confident we can do it. I appreciate everybody coming this evening. We have a challenge ahead of us but we also have a bright future ahead of us. If we can get through the next two years in this city then it's we're going into growth mode from there on out but we have to get from here to there and I appreciate everybody being here tonight. Thank you. We are adjourned.