 Lauren here, Decker here, Donahue here, Hammond here, Edmund here, Toth here, Assard here, Lindowsky excused although he may be arriving later, Maddachek here, Racer here, Van Akron here, Vanderweel here, Bersie, Quorum is present now we'll do the Pledge of Allegiance please. Next we have the approval of the minutes from July 23rd 2012. Motion to approve. Second. We have a motion and a second to approve the minutes from July 23rd. Any discussion? All in favor? Aye. Opposed? Chair votes aye. Next we have the public forum on agenda items. Does anybody wish to be heard on any of the agenda items tonight? For the record, Dulcy could just state your full name and address please. Dulcy Johnson 1306 North 3rd Street, Sheboyton. Thank you. Excuse me Alderman Maddachek could you turn that one air conditioner off please? Thank you. You'll have three minutes. Thanks. Please pull the mic down a little further. Thank you. One of the items on your agenda tonight is the garbage fee. On November 9th 2011 at a committee the whole meeting Alderman Reisler seconded by Alderman Carlson moved to recommend privatizing the service. That passed seven to five and at that time Mr. Amodio the chief administrative officer said financially it makes sense to privatize. We wouldn't have to lay off people wouldn't have to spend 1.6 million dollars to buy new garbage trucks etc. Public Works director Bittner noted that the majority of Wisconsin communities have privatized their garbage collection. But at the council meeting on the 28th of November when the budget was finalized it was decided to institute the fee and that motion was made by Alderman Hammond and seconded by Alderman Decker. Some Alderman expressed concern about losing control if the service was privatized. I would just share with you a couple of personal experiences. My son lives in Belvedere Illinois which is about five miles from Rockford Illinois it's a town of about 25,000. The city does not provide garbage pickup and everybody is on their own for getting their garbage service contracted which is a poor way of doing it because you've got three and four garbage trucks driving down the same street. He has lived there for about three years, has had the same service very good service they pick up all recycling all household garbage, lawn waste and he pays $9 a month. The fee has been the same for the three years that he has had the service. My husband owns a home in Satellite Beach, Florida. It's unincorporated and the county contracts for the garbage pickup so it's part of the property tax bill. They pick up garbage three times a week household garbage twice a week all recycling and all yard waste. I'm not recommending that for Sheboygan but the cost per month for that is $10.50 and then they pay a $4.50 and everybody in the county pays $4.50 a month to maintain the land fill so that's $15 a month but they have very good service excellent service the fee has remained the same over 10 or 12 years so for those of you who are concerned about losing control my experience would not bear that out. I don't want to see anybody lose their jobs and I don't have any problem with the present system but I believe that there are some services that government must provide and I think that government should not do what the private sector can do and I would support privatizing the garbage service. Thank you. David could you Alderman Vanakker could you turn the fans down just a little bit. It's really noisy up here. I think that'll help. Thank you. Does anybody else wish to be heard in the public forum? Does anybody else wish to be heard? Does anybody wish to be heard? Next we'll move on to item number six chairman's comments. I do have a few tonight and these are mainly I these are mainly addressed to the to the public and that is kind of the budget realities the city of Sheboygan is facing along with the rest of the state. The 2013 budget directive coming down from the state of Wisconsin is that municipalities in Wisconsin are not going to be able to raise property taxes and the second thing is that we're probably not going to see an increase in shared revenue which I believe is about according to director Ramonio is about 10.8 million dollars a year. Really we haven't seen an increase in our shared revenue for the last few years in fact I think we even seen a decrease. Then as we look into what's going to be happening in 14 and 15 on the state level now that the recall election is over and Governor Walker is going to be the governor for the next couple of years the state legislature will be working on the biennial budget for 2014 and 15 and because of redistricting even though that the Democrats still have the state Senate because of redistricting everything that I've heard coming out of Madison is that there's a great chance that after the November elections that the Republicans will be getting back the state Senate and if they do with the way the finances have been for with the state of Wisconsin the last few years it's highly unlikely that the governor is going to allow us to raise taxes not only the governor but the state legislature is going to allow us to raise property taxes in 14 or 15 and also unless the state economy greatly improves in that next biennial budget or before it's highly unlikely that we will be getting any more insured revenue. So where that leaves us is probably a directive from our state government that the local governments are going to have to make very difficult choices and in some cases probably very unpleasant choices in order to balance our budget for 14 and 15. So that's what I wanted to kind of pass out to the to the public that's watching tonight is kind of the framework of what we're dealing with for not only 13 but in that next biennial budget for 14 and 15. We'll move on now I'm going to juggle the agenda slightly tonight I'm going to go down to item number 13 first and that's council document number 3.7 from July 2nd of 2012 our own number 77-12-13 mayor requesting strategic fiscal planning to meet and include on the agenda various items. Mayor if you'd like to step up and we'll be hearing your presentation on the budget. I'm not used to sitting over here. It'll take me a second to get up the files or we're going to talk about if you'd so please have I want to thank you Mr. Chairman for putting this on the agenda. The first thing that everybody got was the outline of what I'm going to talk about tonight establishing goals for the 2013 budget. Mayor's recommendation the recommendations I want you to consider for the 2013 budget review a undesignated balance undesignated fund balance resolution and then talk about fund commitments in the future along with 2014 and 2015 budget goals. So far we're still waiting for technology. Is this one the emails are in your accelerates here. Did you want to look I'll start talking a little bit about the I don't know if we're going to be able to get in. I'll do without it. I start talking a little bit about the goals in the objectives of what the 2013 budget are and I'm really not sure what that what that is. You as a council if you look at the second list have set a guidelines of of a of a date calendar of when you want things to happen. But if you look at the second third page which is this one it says that the goals and objectives of the are from the common council committees are supposed to be established each year prior to the starting of the the budget process. That's the number one thing that's in there. You know all of them and born and I believe was all of them and versi back in February or March brought forward a resolution that said they would like to see a budget. I believe it was all of them and born minus 2 in in in personnel and minus 1 in all other areas something like that. It could be a yeah and that was voted on by this by this body and it was turned down and that's your decision. But since that time you haven't come up with a goal of did you want a zero budget? Did you want a 5% increase budget? Did you want a 1% increase budget? I haven't seen that goal of what it is and I think that's one thing that's important before we started is what what is that goal and what was approved by the council to go forward on again do you want a zero budget? Do we want to increase from that point? In the past and and the goals and guidelines I think are pretty set or are pretty self-explanatory. The guidelines are the the two pieces that I handed you in the next section these two the goals and guidelines these are under your under the municipal codes set up by the council on how the budget should be moved forward and what things what things you wanted in what order it should happen. So it's pretty pretty precise here that a preliminary budget should be moved forwarded and let's go back to your timeline a little bit and we'll use that as an example because it kind of follows the guideline that's set forward in your the guideline that I have here. In March the chief administrator established a budget guideline again I think that guideline should be passed by the council and should be your guys decision. The council established the guidelines that's why I have that in red because that's what our municipal code calls for. Then the department budget reviews in which we have the chief administrator or the or the financial treasurer or finance director sits down with all the department heads and decides if the budgets that departments bring forward their department requests are given to you and then he looks at those and looks and sees if they fit in the guidelines that you've set. That's that's the way our ordinance is put forward. Then the preliminary budget is supposed to be prepared according to the to our municipal code is supposed to be prepared and then given to the mayor. The mayor at that time sits down with the department heads and the finance director and the chairman of the committee is at his discretion and goes through all the budgets and after that such recommendations that are submitted to the appropriate standing committees. I'm on the June 5th the red one. Such recommendations are then submitted to the appropriate committees for their review but we kind of skipped that. We didn't have the mayor had an opportunity to put forward a budget or go through and put forward a budget before this happened. So now the let's move on and and preliminary job budgets have been submitted but I I think their preliminary budgets not executive budgets were submitted and on June 2nd you okayed the timeline for what this is which is a good idea because that's what you were supposed to do according to the municipal code but you were supposed to do it back in March. You know you don't you don't go back in and set a schedule that already started way back in March and then adopted according to the June in just July 2nd. So that's where we are in in the current budget review on it and why I feel it necessary that I have to then bring forward some recommendations in public budget changes like I did here everybody got this sheet now was that was that the one mayor that you passed out a month or so ago no it should be a second one that should be with this group there's some extras down there does anybody have it it got stuck while you're doing that I'll sign into this hopefully this one won't work that's why I feel I felt necessary was to give my input on the budget on things that I would look at changes what's that just click okay there we go is everybody having this now I'll go I'll go through this and is that up there enough okay better all right I'll go through some of these and if we want to go through everyone tonight you know I'm willing to sit here and do that let's look at the first one which is city hall overtime we have the luxury of computerization here if it works city hall and go into the expenses no Nancy probably could do this faster than I could so I'll just struggle on here and as as we see here it gives me it gives us a four-year comparison in 2010 2011 and 2012 and in 2010 you'll see the actual usage was three thousand one hundred and seventy eight dollars in 2011 the actual usage was one thousand three hundred and twenty one and in 2012 so far we've used five hundred and forty seven dollars everybody following that so my question would be why are we then budgeting five thousand dollars and actually we budgeted five thousand one hundred because we have a one percent roll up on every thing and or two percent roll up so why would we budget five thousand dollars again when in the past three years the most we've ever used was three thousand dollars so that's the way I came to these my suggestions when it says a change in 2003 would be to subtract I should have put that on here to subtract from overtime account instead of five thousand dollars make that thirty nine hundred dollars that's still more than we've used ever in the last three years including and projected for this year so that's how I've done these things let's move on to the next one that's on this one is custodial and it went right by it custodial services again let's let's look at 2010 the far right says that we budgeted two thousand the most we used was one thousand one hundred and fifty six in 2011 we we budgeted two thousand the most we used was six hundred seventy five in 2012 we budgeted two thousand again for this amount and so far this year we've used a hundred and seventy five we're halfway through the year and we've used a hundred seventy five so again I question why would we budget two thousand dollars in the upcoming budget if the most we've ever used in the past three years is one hundred a one thousand one hundred and fifty so my suggestion would be to take a thousand dollars off of this so this is how I came to all these conclusions and I can go through the whole thing one by one if we like tonight but I'd like to back up if I can Mr. Chairman and before we go through this budget stuff is there any questions about the first stuff that I handed out or anything like to talk about about the first things being the budget guidelines and objectives any questions from the council proceed okay I just wanted to make sure then you know because we went through that and if somebody had a question we we could go back to that so again these are these are the budget requests that I put it in and you see the the the reason that I'm doing it and the use is that I'm let's let's go down a couple more and and see what what I'm doing and why let's go to city buildings next being a municipal service building again you'll have to bear with me because this isn't my real cup of tea here but the first thing I got on municipal service building is uh gas for heating the and did I go past it already four two fifty one four two no there it is let's look at this one 2010 we budgeted 65,000 we used 40,000 2011 we budgeted 65,000 we used 26,000 2012 we budgeted 50,000 and we've used about 18,000 again about half the year so looking at that we're on we're on track to I would say go to maybe 35 40,000 dollars and we've budgeted 50 now I know we had a a light winter last year so rather than taking the entire five thousand or ten thousand dollars compared to what we used in the past I thought we should leave another five thousand in there making it instead of fifty thousand let's lower that to 45,000 that's higher than we've ever used it would be in case we have a bad winter and and it's there but still more than we've used in the last three years so my my suggestion is to take five thousand five hundred dollars now where I got the five hundred dollars is again during our budget process on your original budgets things like this one up five percent so I mean sorry went up one percent so if it was budgeted five thousand in 2012 it automatically went up five hundred dollars in 2013's budget according to the thing that we were handed so that's why I got five thousand five hundred because I don't see spending more money when in the past we haven't spent more than forty thousand but yet we're automatically increasing that budget line by five hundred dollars so that's where I got that number from again Mr Chairman I can go through all of these if you want but they're all based on the exact same type of of formula and I would hope that the council either as a as a committee of the whole or back at their committees or somewhere would take the time to do just this to go through line by line and I'm not saying I know exactly what these things are and maybe there's a reason why some of this should be and that discussion should be with the department heads on whether they feel comfortable that this you know the municipal service building is there some reason we think the gas is going up that discussion should be had but yet we haven't had it we haven't looked at and you haven't had the opportunity like I have to have this program and to be able to look back and see what was spent in 2010 what was spent in 2011 what was spent in 2012 or or half of 2012 you guys haven't been given that opportunity to to do this all we've been you've been given is a budget compared to 2012 and comparing it to what we would want the budget in 2013 with no actual usages for you to compare to to make these kind of decisions so that's where I'm at Mr Chairman it's up to you if you want me to continue on you may have you may have some of these that are old you know that I've changed I can tell you this is fluid this is moving every day that I I'm here and and looking at things Mr Motio and I had some discussion on on the assessor's office this afternoon and there's going to have to be some changes in that which I'm sure he'll explain later so some of the changes I might have made in the assessor's office might not be correct because of new news but that's one of the reasons I I hope that and I'm I'm very happy with the fact that we started this budget process early and that during this budget process starting early would give us more time to go through and do it right so going through and doing it right doesn't mean we have to live up to a schedule that says the mayor has to present a budget by August 1st when the final budget doesn't have to be there till November so I would hope that you would consider as a group to look through these budgets and go through them line by line with the information on what the actual usages were in the past three years and take a look at what I'm recommending next thing we we're going to talk about is designated fund balances could could we have a couple questions are there any questions so far for the mayor I have one mayor in this initial it's initial report that you went through I believe it was at the public works meeting a month or so ago yep at that time you had mayor's cuts of 402 thousand dollars and your total cuts now are 279 624 did you go over some of your original numbers yeah like I said this is fluid you know from the last one I handed out to the one I'm handing out tomorrow and if you ask me a week from now it'll probably be different because we're going through I'm going through and looking at all the budgets uh individually so yes that has changed some of it was the changes in DPW where you are aware of some of the the information that I had about DPW's positions were from wastewater so I had removed and changed some of that stuff so that's why you see some of the changes and the the number that I'm recommending today again is something I did luckily you had a six o'clock meeting because I was in there at till five to six doing some of this right up to the last minute and again this is going to change you know up until the final budget is passed I guess my follow-up question and then older man haderman has one let's say for example at the end of the day your savings would be 300 thousand dollars how would you to do away with the garbage fee then where would you propose coming up with the additional six hundred and sixty nine thousand dollars if the garbage fee for next year is going to be approximately eight hundred and sixty nine thousand and that original document you had given some information in addition to your cuts there was a shortfall and then some additional revenue and then two hundred and ninety two thousand dollars for savings what what are you projecting to do in addition to you let's say hypothetically your three hundred thousand dollar cuts to get rid of the garbage fee I think Alderman born that will be handled in the next one I think there's a the last page am I correct can I have one of the last pages there you go because I redid that too based on these um the garbage fees so I guess Alderman born if you'd let me continue on with the next thing because that kind of ties into this very good all right thank you that's why I handed it out at this time I'm sorry there's other questions about the budget yes I'm sorry Alderman Heidemann as you're scrolling through there I saw some red that's probably where we are over budget or we didn't have enough money budgeted what did you do in those areas what do I what did you say what did you do in those areas I mean you found the areas that we could cut from what about the areas we didn't have enough money put aside for it like I just put one up see the red that's back in 2010 okay um there were some changes that here's one that's five dollars over from 2012 you know if if for that short I'll throw in a five bucks okay again that's a good question and if I'm trying to go through and see if you can find another one quick as you see most of them are in 2011 and 12 if there were changes where there was major overruns mr. Motio and the finance committee last year increased or changed those things to to offset some of that so those are already put in I believe so any other questions any other questions continue mayor thank you okay the next thing that I wanted to talk to you about was the undesignated fund balance first thing we have and I sorry I can't put this up on the board because I can't get to my documents but the first thing we have is the first thing we have is is is the ordinance that we have currently this was back in I believe 19 2004 yeah 2004 where it established a fund balance of not not to be less than 18 percent of the this year's budget so what it was saying is we had to have a fund balance of at least 18 percent of the current budget back in 2004 you just switch to the next page where it says undesignated fund balances here are some recommendations I would make to you to consider the general fund balance undesignated fund balance shall not go go below 30 percent as reported by the gasp 54 fund balance reporting definitions let me give you a quick brief thing about that is in 2000 and I believe it was 2010 or 2011 the state said 2011 it was required the state said here's new ways that you have to set up how you're going to report fund balances and since that time we've reported our some fund balances by our audits in 2010 and 11 and all kind of get to get everybody comparing apples to apples in fun the way you're reporting your fund balances so you'll see changes in different people's fund balances from 2010 to 2011 because some of them would include like we have a four million dollar cash reserve what we use that cash reserve for is while we're waiting for taxes to be collected and things we need to pay our bills so we have money on hand to pay our bills as the tax collection comes up and then we have a fund balance of unreserved fund balance back in 2010 besides that on 2011 they said you're supposed to include all of that when you talk about your fund balances so my recommendation is that we would say and I'm taking a number of 30 percent of our fund balances which would include our our capital money and any reserves because that's the way it's being reported that's the way that our that our um that the people that do our audits report it back to us each year and that's the way that we can compare to every other city without wondering do they include their cash balances do they have other things they're all reporting it the same way and it's apples to apples so that's why I would say we should do it that way the 30 percent where did I get that number 30 percent well I didn't just pull it out of the air if you flip to the next page there's a graft and on that graft between my office and between the league municipalities and contacts I went to you know when we compare we want to compare other cities for things we have a group of cities that we use as our comparables whether we're comparing job descriptions whether we're doing comparing um how our government works whatever we have a set of comparables that we usually work use that are comparable in size comparable in population and things like that so I asked our human resources person who are those comparables we use because I didn't want to just go out and pick out cherry pick the top ones so that I can give them to you I asked her what are the comparables that we always use when we're talking about what is the police chief salary we go look at our comparables these are comparables they gave me so I want to let you know this is just a not a random but it's the ones we always use as comparables so if you look you know as I said in 2010 if you look in the columns of 2010 look at like Fond du Lac Fond du Lac had 3,700,000 I'm just going to say 3.7 round things off 3.7 million dollars in reserve and he had I mean I'm sorry they had 10 million I'm sorry again let's let's go to Eau Claire I'm looking one above Eau Claire had 10 million dollars in reserves and 3.7 million dollars in cash reserves now if you go to 11 mysteriously all of a sudden they have 13 million in reserves well it doesn't take a whole you know rocket scientists to figure out they took their 10 million plus their 3 million of cash reserve and that's why they're now after 11 like everybody is supposed to is reporting that as their fund reserves having the cash so everybody after 2011 is pretty much doing that so that's why I wanted to point that out that everybody now is reporting their cash reserves prior to that some of them were using that cash reserve and adding it some of them weren't so you wouldn't didn't really know what their numbers were but after 2011 and for 2012 all of them did did include their cash reserves you look at the table far to the right it'll give you a percentage of what other communities have put aside as their reserve funds based on what their budgets are Appletons put it has 25 percent Beloit has 28 percent Eau Claire has 23 percent Fond du Lac has 24 percent Manitouac I wasn't able to get those numbers from them but I want to note if you look in 2011 and in 2012 I did get off of their mayor's report for their 2011 and 2012 budget then in 2011 they transferred $1,048,000 from their reserve into their general fund to help cover taxes and in 2012 they transferred $1,000,000 from their I'm in 2010 they did in 2011 they transferred $1,000,000 from their reserves into their tax fund I'm not suggesting we do that I don't think we should we should be dipping into our cash reserve fund and have a downward spiral effect on our budget process so I'm not suggesting that but if you look at final x 24.8 Oshkosh is about 20 percent and the Sheboygan county is at about 23 percent now look at at us in 2012 this year's budget using last year's numbers from the from the audit is 2011 would be we'll have a unreserved fund of and this is from the auditor 11,545,000 it's about 11.5 million which means again is about 32 percent of our budget that compares to what those other counties said so that's why I chose the number 30 is because it's it's higher than what most of our comparables are it's something that we've strived for and did have done a good job I give the council credit for the last few years of doing that if you look at the unreserved balance in 2009 at the bottom of that sheet it was only seven million you look at the balance in 2010 it was nine million so we added 1.8 million dollars in that year to the reserve fund and in 2011 at the end of 2011 the start of 2012 we have 11 million dollars we've added another 1.6 million dollars into that fund now if we were continue to socket away as some alderman thinks a good idea to just continue to socket away in 2012 at the end of this year because there's an estimated that we will have about a 1.2 million dollar surplus at the end of this year we would have 14 million 14.7 million about 42 percent of our total budget in unreserved fund well I think that's too much I think we've done a good job in 2009 and 2010 and at the end of 2011 we've had 11.5 million so that means in the last two years we put away 3.4 million dollars into our unreserved fund from surpluses we had in those years well this year we have a surplus again of estimated again we're not going to know that number until the end of the year exactly but it's estimated to be at 1.2 million and that might be conservative based on we've had higher than that the last two years and numbers haven't changed much so my suggestion is rather than just putting that surplus into of this year now I'm not touching the unreserved fund let me repeat that because in the paper and other things I keep seeing that I want to pull from the unreserved fund to pay for this that's not what I'm talking about the unreserved fund is at 11.5 million dollars right now and it should stay there and that's why if you look on my my proposal on the on the next page it says the general fund under designated fund balance shouldn't go below 30 percent the second line says if the general undesignated fund is below 30 percent that the common council automatically has to put any funds that are surplus from the year before must go into that designated fund to keep you at least above 30 percent what that is going to do is stop the downward spiral that people are worried about that we're going to keep the unreserved fund at the level that we are and in matter of fact at the end of this year when you have 1.2 million dollars estimated you can decide whether to put more money into that fund or less money into that fund but it's your decision to do that it will be your decision to do that at the end of the year that's why I say that if it would suggest to you that if it gets below these are my suggestions if the balance gets below that it automatically then that balance has to go to the reserve fund because it's below your standard that you want to keep it at the undesignated fund balance shouldn't be used let me repeat again should not be used for the next year's budgets meaning taking from the 11.5 unless there's a three-quarters vote of the council so I'm for protecting that fund too I don't want to see this spiral down effect that's that's we're worried about but I'm saying if we're gonna if you're gonna take it and why I do that is because maybe there's an emergency that comes up maybe there's some good reason to do that but then you guys will all agree that yes we should take some money out of that reserve fund for a few years and then build it back up but that should be a three-quarters module you know a extreme majority vote to break your own rules and I'm in favor of that next it says the common council should direct the finance director to estimate the year surplus at the end of each year and report to the finance committee meeting by November 1st the finance committee must send a recommendation to the council on fund balances committed to by a resolution no later than the first council meeting in December now why did I say that because that's what our if you turn to the final page these are observations from our auditor and the bottom paragraph says gas fee statement 54 requires that the council take action prior to the fiscal year in to establish any desire fund balance commitments so that's what I'm asking you to do is when we have a better hold or a better idea you know right now we're estimating about a 1.2 million dollar surplus we'll have a better idea come November because all those you know we'll be further in the year with only a month left to go and we'll have a better idea of what that number really is and then you as a council should decide out of that 1.5 1.2 million 1.51 million whatever it is should by resolution say yeah let's put a half a million more into the reserve fund but let's put a half a million more into roads or let's put a half a million into this or that which brings me to my next recommendation let's put a half a million dollars into getting rid of the garbage fee that's what i'm proposing here is based on the cuts that would be made in in the 2013 budget would leave us about a five hundred eighty nine thousand dollar budget if we would transfer at the end of the year which we're required to do is have is uh to have transfer resolutions from this year surplus that would be five hundred eighty nine dollars at this time now let's remember this is a fluid number we could keep moving that down we can we keep moving that up let's hope that we can work together together and find enough cuts in 2013 that we take none of that money and do it but at this point that's where i'm at estimated surplus is 2.5 million we take away the five hundred thirty nine that relieves six hundred and ten thousand dollars that you guys would have to decide outside of my recommendation of the garbage fee six hundred ten thousand dollars you guys would have to decide what you want to do with now i've seen in the in i think it's public works came up with a hundred and thirty thousand dollars more for roads i think that's a good idea that's one of the things our constituents are talking about is we need to fix our roads now we've done a good job in i believe the budget in 2012 was fifty thousand dollars that was up to a hundred thousand dollars i believe if i'm not correct Dave to a hundred thousand dollars and thirteen which is good but we're saying you know we're behind and this is a reasonable dollar amount with talking with the department head this is a reasonable dollar amount to buy more material that if we have a full crew because this is the first time for a while we've had a full crew dpw that this is the amount of work they could get done next year is it so putting in an extra hundred and thirty thousand as we as the public works committed i think that's a good idea so i would recommend doing that but that still leaves you with four hundred and eighty thousand dollars of this budget surplus now let's keep saying surplus this isn't this isn't budget reserve until you decide to move it this is surplus of budgeted money from 2012 now if you decide to take a quarter of a million or you decide to put four hundred and eighty thousand into the surplus then you'll have over twelve million dollars of surplus of budget reserves i'm sorry of budget reserves but that's your decision and that's where i'm getting these numbers to to do that as i said i'd like to have the finance committee report to you so you can make that decision at the end of the year now the gas be 54 rules which are long and please don't all read them but i but i have and and knew what they were talking about from my years in the state um one of the things they say is you don't have to you don't have to give an exact budget amount for the next coming year you've got to say before the end of the year you got to say we want to transfer budget dollars from 2012's budget into 2000 and i'll use the garbage fee because that's what i'm recommending you can say we want to transfer five hundred and eighty nine dollars or whatever it was five hundred and eighty nine thousand dollars into 2013's budget but you don't have to say that you can say we want to transfer from this into this fund and later when the when it comes through and we know the exact number you can fill in those numbers but you need to have a resolution saying it's your intention to move that money from the past budget into the future's budget and you can determine those numbers later the exact numbers you know you're going to have the numbers from 11 months in an estimate but you can move the exact numbers at a later date that's the way that the rules are set up i also have on there that if the general the last thing if the general fund balance ever exceeds 45 percent in one year of the common councils let me start again if the general fund undesignated fund balance ever exceeds 45 percent of in one year of your next budget i would recommend just like i did earlier that all that money has to go back to the fund if we're below 30 if for over 45 i think you should set up a way that over the next three years you give someone to that money back to the taxpayers in budget appropriations for the next three years now why would i do that it's their money we're collecting money based on our budgets and we've done it for 2010 2011 and 2012 we've collected the garbage fee we've collected their taxes we've collected money based on what we figured our budgets would be but over the last three years we've been over budgeted by about a one and i'm just going to round off you've got the figures in front of you but we've been over budgeting by about a million and a half years a million and a half dollars a year at some point i think we've got to look at that and say it's their money and we're continuing to over budget their money and if we get to a point where we have 45 percent of their money we should then give tax relief back to the people who we collected it from it's not ours it's not ours as a city it's the taxpayers money i feel confident that the goal of a 1.2 million dollars of excess funds surplus as i want to call them their surplus funds is going to be true because it's been true for the last two years so i think that's happened now let's talk about long-term goals for 2014 and 15 you know we're going to have some tough budget times in 2014 and 15 if we don't start making some budget cuts or making some long-term budget changes nothing's going to change under my proposal and it's only a starting point of again it's fluid of the recommendations we'd be cutting 200 and what did it say 2080 thousand something like that now out of that would carry on to cuts in 2014 and would carry on to cuts into 2015 we need to continue to do that we can't just continue to take our current budget move it on to the next year add two percent on to it for employee benefits and wages add one percent for everything and think at the end of 14 we're going to be in better shape at the end of 15 it's correct we're going to have a budget problem but we've got built in six percent increases in wages built into the expectations of 2006 15 we've got built in three percent increases in budget built into the 2014 13 14 and 15 we have to do do a better job of doing what I did in a starting point of actually cutting our expenses and finding ways to either cut expenses or increase our tax base none of us want to raise taxes and second of all the under the state has all them and born was reporting we're under under the state's revenues we can't raise taxes only to a point of new new there's a formula and it's all confusing and new construction times point five times the amount of tiff times point five times point two something or other anyways it's a minimal amount that we're able to raise taxes that's not going to be the answer the answer is going to be and and my budget starts to address it is we're going to have to make some cuts we're going to have to make some decisions for 13 and 14 the budget is proposed prior to this just chugs along and really doesn't address what to do in 14 or 15 so any questions on that any questions for the mayor none right now I believe thank you very much thank you I'm going to hold on the I'm going to hold on the action on this document until after we hear the report from director emotio so let's keep 13 on hold and then after we hear mr. emotio's presentation we're going to move down to number 14 after that but next on the agenda we have item number seven which is a 2012 2013 powerpoint presentation budget presentation as presented to the strategic fiscal planning committee on June 5th 2012 there may be some revisions from June 5th and our chief administrator officer James emotio will do that presentation floor is yours sir thank you received this afternoon a copy of the presentation if not I believe we can follow along I also sent you a copy of the Moody's report on the city when we borrowed funds earlier this year the 4.7 million dollars to express some of their concerns about the city the strengths and the weaknesses but to summarize again Moody's looked at the city and said okay we've got a double a2 rating to us to improve would be great because our cost of borrowing excuse me Jim could you move the microphone up a little bit I'm sorry thank you our cost of borrowing money would be cheaper so it's oh we always strive to increase our rating or make it better at worst case we try to maintain it so the cost of borrowing doesn't cost us any more in interest expense what would change the ratings up substantial expansion of the city its tax base and or strengthening of its demographic profile and I'll get into that in a minute because that's really a driving factor in a lot of these decisions sustained restoration or structural balance to the city's general fund you have to remember between Moody's standard and pours and pitches they rate every city municipality private sector company in the United States perception is 90 percent of the law in this case 99 percent because they control destiny for public and private companies when they're looking to finance or borrow money whether it's to fund working capital or to expand their business so whatever they perceive your business to be is what the investment community relies on relies on it on face value and then determines whether they're going to make an investment in your entity or not and if those rates that they're investing at are worth the risk for the return they would get what could change the ratings down weakening of the city's tax base and or demographic profile and further deterioration of the city's fund balances and or liquidity significant unfavorable variances between audited and unaudited fiscal 2011 when we spoke with them we didn't have the final audit for 11 but we told them what the unaudited numbers were and they said if it varies a lot from that on the downside that could impact the city in an adverse way but when you look at some of the key statistics that they rely on especially when it's looking at rating government entities our population is decreased by 3 percent over the last 10 years the full market valuation is a 2.6 billion and i'll get to that a little bit later but that's been declining at half a 1 percent on average per year in fact the last three years we've seen four to five percent decrease in market valuation per capita income is 78 percent of the u.s average median family income is 88 percent the unemployment rate is higher than the state or the or the u.s federal fund balances the mayor alluded to is 33.9 percent general fund net cash is 11.1 million or 32 percent debt burden is 3.6 percent and 2 percent direct they look at that ratio because in our tax rate our full mill rate there are other taxing entities and there's overlapping debt based on the percent that we share with them so for example we pick up some of the debt from the school system from the county LTC and those kinds of things even so our direct debt is really the debt the city has over its excuse me total tax base whereas we have to pick up in the overlapping debt all of the other taxing entities that are in our tax rate so that's why it's higher at 3.6 percent our principal amortization in 10 years is actually favorable most of our debt expires 84 and a half percent of it in fact expires within 10 years which is a good thing for the city if you go to the second page what i try to lay out here is assessed values in the city you can see that from 2007 through 2013 our assessed values have been pretty flat our tax levy has been pretty flat our mill rate's been flat ergo we haven't had any increases in taxes in six or seven years if you flip to the next page this is where some of the trends start to stick out this compares assessed value to the state calculated equalized value i won't pretend to know that i understand everything the state does and coming up with their equalized value it's also called full value which is supposed to fairly represent market conditions as of today so it says for example if you look at 2009 and nine where we've got an equalized value that's greater than the assessed value it says that people's homes are undervalued conversely if you skip to 2012 where you've got a an equalized value that's lower than assessed value it says you've actually got homes overpriced in your region or your city and you can see the trend here the trend from 2008 at its highest to 2012 we've lost over 14 percent in equalized value and our assessed value for the last several years has remained flat so it says from a state perspective once that aggregate gap between assessed value an equalized value is 10 percent or greater then that entity needs to go through a full tax reevaluation for assessed values right now in talking with the assessor we've got about an 11 spread on residential and about a seven and a half percent spread roughly on commercial manufacturing is pretty the state actually does manufacturing so that doesn't count in the equation so we're roughly at eight to eight and a half percent assessed value greater than equalized value so it says that in the next several years the city will have to look at a full reevaluation now all things being equal it says that if everybody's homes were overvalued by 10 percent if everybody's values dropped by 10 percent everybody's taxes would relatively stay the same the only thing that would happen would be the mill rate would actually increase but because the assessed value went down in theory it would stay the same but there are pockets in the city that have some assessments that are over a hundred percent and some that are lower so that when we go through and do that reassessment there will be people that will be adversely affected by these changes conversely there'll be some that will benefit because in fact maybe they're paying too much tax as it stands today based on their assessed value the last time we did a reevaluation was in 2005 we talked about this at budget time and thought that you know if values held from an equalized standpoint that we could probably look at assessing or doing a real valuation in two to three years our equalized value this year based on preliminary estimates that were released late yesterday showed the city dropped about a hundred and nine million dollars in equalized value in 12 over 11 so it puts that spread closer to 10 percent which says there may be something we might have to do in the near term the last time we did an assessment in 2005 as I mentioned we had six people in the assessor's office and we spent 60 to 70 thousand dollars in outside services for a lot of the modeling that needed to be done in our different districts today we have four people in the assessor's office and when we looked at this last year to get some kind of price estimate from a third party to support the four people we have in the assessor's office would be closer to 200 thousand dollar range to have a full assessment done with outside consulting help for the city not sure we're 13 is going to end up with the trend is certainly there the overall decrease in equalized values was six percent for the city the normal decrease in the county was four but because we're heavily populated with condominiums which have taken extreme hits in the last several years we were at the six percent level due to that I believe that it will continue at least in 13 we'll probably see another drop closer to the hundred million dollar level and that will trigger an event with the state that will have to do when it triggers the event the state notifies the city the city has two years to comply so it says if in fact it was triggered in 13 we'd have to 15 to comply but again we'd have to look at budgeting those funds to get that assessment done I'm not recommending that we do it but when we do it there will be an impact and if we wanted to start for example to have 14 as our baseline to bring the assessed value more in line with the equalized value we'd probably have to start in the fall of 2013 so that we could have those new assessments on the books by january of 2014 just for information the next one is a breakdown of the city tax living and as you know we have 21 million 184 thousand dollars that we dare you out between really four entities one is the general fund second is the library the third is the debt service for the money that the city borrows and the fourth is transit and you can see how the percentages have tweaked a little over the years from 2008 through 2012 one of the other key things i'll point out here one of the things that we have to do in order to keep the general fund where it's at because that's really we have the funding problems excuse me is the percentage of debt service so we look at that every year and look forward three or four years to look at the debt service that's going to be retired and or paid down and that's what gives the city the flexibility flexibility to borrow new money so as we can keep the debt service payments to about 13.6 or seven percent every year it doesn't impact the general fund because if we were to go out and borrow more money that debt service percentage would have to go up and it either means we give less money to the general fund the library or transit and those are really policy decisions that the council would have to make so when i get a little further into the presentation talk about money we have to borrow and look at our ability to borrow money that's what i'm basing it on keeping that levy to support a debt service payment of 13.7 percent let's talk about fund balances for a minute and this just goes and looks at 2007 through 2011 and where some of the fund balances have changed we'll talk about this a little bit later but you can see the motor vehicle fund has dropped from a little over 8 million and in 2011 it's just around 2.2 million so we've had a depletion of funds there for a number of reasons health insurance fund was in a lot of trouble but it's come back and we're at a position now we're probably through this year will be at a proper reserve balance in that in the health insurance fund for claims workers compensation we've gotten worse due to some claims we had some bad loss years we really didn't charge back departments for the real cost of claims we started that in 2012 and it jumped from about a hundred thousand dollars which is really the cost of the premiums to about 384 thousand dollars and you'll see in 13 that we actually increased it by another 130 thousand dollars based on claims that are in the pipeline and based on what our workers comp people tell us that we need to have reserve for claim payouts in 2013 and you can see the general fund balance was around 12 million dollars and seven and currently it's at 11.5 million took a look at headcount that's always an issue on what the city has done we went back to 2000 and looked at headcount in administration which is primarily city hall police fire and public works and you can see that since 2000 we've roughly taken 20 percent of employees out of the city since 2006 we've reduced it by almost 12 percent since 2005 almost five percent in between 12 and 13 we've taken further reductions of about two percent in headcount when we look at the general fund and look at the balances in the general fund and the sources and uses that we've used money you can see between 2005 and 2011 the actual excess revenues over expenses for those years and you can see in five and six that we're slightly positive seven eight nine ten and 11 it was budgeted to use general fund surplus to fund the expense budget without the help of other financing sources now when you're taking into consideration other financing sources it brings in revenues you can see in those amounts for those years so when you add those two together it says that we've actually been favorable in 2005 and six to general fund by 1.4 million and 1.2 million in 2007 we actually used two two million dollars of general fund reserves 2.8 we used 3.3 2.9 we used 1.4 just about broke even in 10 and added a million dollar surplus in 11 and when Moody's talks about the general fund deficits that we need to recover from they see these numbers and they've seen the use of general fund reserves and they believe with the debt structure we have and the demographics that we have that it's important that that trend be reversed and that we start building general fund reserve surpluses to offset the general fund demographic or the city's demographics so in total we've actually used 2.76 three million dollars of general fund reserves from 2005 through 2011 these are right out of the audit financial statements in case anybody would like to look at them expenses in the general fund if you look at and pretty tough to tell here but when you look at 12 and 13 it says general government is slightly down police department is slightly up and it's slightly up as we talked about the other night in ppns is that we made a conscious decision in 12 not to put money in for squad cars to try to extend the life but we need to put those back in so that was roughly 160 thousand dollars that we added to the expense budget in 13 to start back replace from the squad cars in the police department fire department is actually slightly under in 13 to 12 in public works is slightly over now these these figures have not been changed based on where we currently stand based on documents that were submitted and passed in the finance meeting but based on the original budget submission and if anything they might change slightly downward with the exception of public works where we added roughly another 130 thousand dollars for materials to do infrastructure repairs i won't take a lot of time uh in 12 and 13 but the key statistic here is in 12 and 13 if you look at what is called the operating costs that represents that represents 20 percent of the city's budget those are all the non payroll related costs so when you look at salary and fringes for all of our employees they're roughly 80 percent of the city's budget so if we really need to make systemic changes in the city we need to further reduce headcount that's the only way we can do it just as an aside when we put together the guidelines for the 2012 budget based on what the council had recommended was to have a 13 budget that was no greater than the 12 basically a zero base budget so that's what we went off and tried to accomplish and when we looked at the 13's budget and going back to 12 2012's budget was 35.6 million dollars it's not up on that slide i'm just speaking from some other numbers that i have written down the 2012 budget when i adjusted them for events one-time events that were either positive or negative and even with a two and a half percent wage increase at the time we're negotiating contracts with the unions for the employees that would still be represented we came down to 35 million 180 thousand dollars which would be the number that we would try to hit in the 13 budget when the 13 budget was originally submitted we had 34.8 million dollars so we met that and after we've gone through the finance committee recommendations and all all of what the subcommittees have recommended we're currently at 35 million 181 thousand dollars so i believe we met that opportunity and really offset a large substantial cost for escalation in the city's budget primarily driven by salary increases and related fringe benefits jim if i could ask a quick question your fringe benefits for 2012 for 26.76 do you recall before before the act 10 what we were in 11 for fringes it was it was probably about 700 thousand dollars higher jim just off the top that's what that's what i thought we didn't have the benefit yet percentage wise we're we up around 30 on fringes but now right for 13 we're going to be down at about 25 almost 26 percent correct okay thank you and you can see i guess on the second page on fringes for 13 there's an early retirement incentive that we won't have to pay any longer there's retiree health insurance that will expire and then there's the workers the retirement of 222 thousand dollars wisconsin retirement offsetting that as i spoke earlier we had to increase workers comp insurance by 130 thousand dollars so that's the fringe roll-up between 12 and 13 if you go to the next page this is a summary we talked about this last night in finance but this is where we've ended up in the 13 budget so far we started out with 38.8 million or 34.8 million dollars as a budget we made some changes in the city attorney for 95 dollars uh municipal court uh we made some adjustments public works we we spoke about adding materials pps which met the other night we took their recommendations there's actually an increase in revenue and a deep an increase in expenses net net and that was a swap between the ambulance fund which actually dropped expenses and increased the expenses in the fire department but based on the contribution the ambulance fund would make they would be pretty much net zero uh we estimated tid three which was new to the budget and the benefit of about 200 thousand dollars in revenue and we estimated um the anticipated changes for wrs percentages and they ranged between 180 and 240 thousand and we picked a middle of the road at 210 to say that might be the impact so when we roll those numbers up it said we ended up having a shortfall of 147 thousand dollars to the budget um and chat and talking with don we we decided to present a balanced budget tonight the recommendations that we used is and i'll go through the mayor's list in a minute just some of the highlights um but uh the total mayoral list of 280 thousand dollars we came up with and this is after talking to all department heads about 46 thousand dollars worth of savings uh somewhere picked up in ppns the balance would be the 25 000 in ambulance revenue less the 14 000 in expense offset and in the 2013 budget as you recall we had to pay a 250 000 fee for dredging this year we had a hundred thousand dollars budgeted in 2012 and we came to the council to say we'll take it out of general fund reserves put it back in the budget for 13 to make up those general fund reserves so it's it's our opinion at least myself and don's that uh we ought to not budget refunding the reserve balance for 108 thousand dollars to balance the budget in 2013 so that would be a savings on the cost side so that puts our budget at 35 million 058 616 trying to roll forward just to at a 20 000 foot level look at 14 and 15 under the current law we're able to increase our levy by one half of one percent um or net new construction and we still have to figure out what net new construction was for 11 to see what that might be but if we just do half a one percent of our current levy that means that we can increase it by 105 000 dollars so i've put that on the revenue side offsetting that on the expense side is an estimate of one and a half percent on total costs in the general fund so let's back up for a minute what's that one and a half percent mean currently we've negotiated contracts with two of our unions which represent half of the general fund employees for two and a half percent a year over the next three years we've actually put in this proposal an estimated two percent increase for the other half of the population in the general fund so when you put those two together it says we probably got a 2.25 percent increase in the general fund for raises half contractual half not and then based on the fringe benefits we'd have to add on that assuming no additional cost for wrs we'd be roughly at the two and a half percent mark all in on wages and fringes so by budgeting one and a half percent overall it means that we would have to in that budget cycle take one percent out of the 20 percent of non payroll related costs so that's the assumption that's in this budget by assuming a one and a half percent increase baked in as two and a half percent for wages and fringes and a negative one percent for non payroll related costs so that's not an easy push so that says that with the garbage fee in the revenue for 2014 we'd have a $420,000 problem if we just assume we roll that to 15 and we add in another half of one percent we take out the garbage fee because it sunsets and we add another one and a half percent the same as we did in 14 it says the problem we would face in 15 would be $1.7 million of a shortfall in the general fund expenses over revenue so as you can see this compounds as we have to increase the cost of doing business we have to provide wages contractually and actually provide wage increases for the other population of the city and the associated fringes it adds roughly two to two and a half percent a year so we would need to look at alternative sources or increasing the revenue base by at least that much to maintain a level position going into each year I believe alderman van Akron has a question thank you mr chairman I guess just a question on the escalation side of things um as you stated a lot of that comes from the contractual one and a half percent and then the non-contractual two percent raises so if i'm reading you right we're talking about six percent in contractual and non-contractual escalation over the next three years okay so almost seven percent in raise increases over the next three years right i guess i struggle with the the policy making side of that because i don't think that's something that this council or this body certainly has endorsed or i believe they've endorsed the contractual side well i i would agree with the the one and a half percent that i would know they got two and a half percent on an annualized basis okay police and fire then we have transit up for negotiation this year right so it says if you can give police and fire two and a half percent what do you do for the other 180 people in the general fund and i guess zero that's my question is is when we build those escalations in there i quickly see how we get to the the shortfall side and i guess that's part of my concern is is obviously as we go down that road if we don't make the systemic changes whether it be cuts personnel wise or do that 20 percent material wise that that's the road we're going to go down and i agree it's going to be a hard decision but those are the decisions that have to be made i don't think we can just continually roll in those changes for illustration purposes that's what's in front of us so it's very difficult for me to sit here and look down at 13 and say let's patch the problem when 14 and 15 are even greater thank you all of them have been accurate all our person donahoe um and jim uh i think it was slide seven uh the general fund budget versus actual the middle column was actual other funding or financing sources that were positive from 2009 through 2011 can you just what are all our person donahoe what page are you on seven it's slide seven thank you i've got a sheet somewhere in this folder but a lot of it first of all the biggest payment is a payment in lieu of tax from the water utility it was probably six or seven hundred thousand back in 2005 2011 it was 940,000 of that 2.6 million there are some sales of land that are in there depending on what land we sell that we take in and other sources and uses and i've got a full list that i can actually go through or send you if you would like and in 14 and 15 would those sources likely appear again yes okay yes Nancy i don't know if you've got more that you can add to that but interfund transfers that we use where general funds owed some money from other funds and when the other funds other special revenue funds have the money it gets transferred to the general fund so it gets picked up that way okay um and then i i did kind of lose you um a little bit in the discussion in the the slide that that is up now that i don't think is in our pet or at least was not in my packet um what are non-payable related costs that's actually right slide that was a slide from the first presentation oh okay i can be happy to go through it with you what was the question i'm sorry well i was interested in what a non-payable related cost was and what impact that had on your projected deficits non-payable related costs i just wrote it down as non-payable related costs right that's actually following you quite a pretty well up to about that point you know 80 percent of the department's budgets are people and benefits the rest is like in public works all the materials and supplies they need tipping fees and those kinds of things uh when you look in other people's department budgets it could be for maintenance contracts you know outside services as an example that we would use and have used in the city so those are non payroll related costs i didn't bring my budget book up just moving on um and i appreciate very much the look at 14 and 15 um would you characterize this as a worst-case scenario um you know middle high low um well depending what the services we presently have today in the contracts we have today that are set in place that's pretty close okay very close okay thanks thank you all our prison donnie you any any other questions the next side is the capital requirements i don't know if you took a look at that in the handout or not the handout but the uh information i sent you today and that showed um capital requirements for 13 14 and 15 i'll go through them briefly when i look at general capital that we borrow or normally borrow two million dollars a year for which includes sidewalk repair mini storm sewers playground renovations and there's other things in there like radio upgrades uh south business drive upgrades that we're going to have to provide next year because we've got the county doing part of south business drive and city has to contribute some of that work um there's riverfront docks uh and those kinds of things we spend two million dollars a year on and as you remember we borrowed two million dollars this year for those things had a capital committee meeting we decided to spend 1.35 million of that hold the rest for other projects even though they were lined up to see if we could extend that the use of that money um next year the 2.7 million we borrowed is off horizoner avenue so there is no general fund money to do stuff but we've got stuff to do next year for sidewalks mini storms playgrounds south business drive maybe riverfront docks to the tune of 765 thousand when we look at 14 it's about 1.1 million the big change there is really we've got a radio upgrade we keep talking about combined dispatch and the city's portion of those radios for police and fire as we estimate it today is about 450 thousand dollars and then in 2015 it's pretty sketchy only because we don't go out that far really but we've got sidewalk repair mini storms and playgrounds for about 265 thousand so for normal stuff we need to borrow 2 million 143 over the next three years and the key in there is that there are no road resurfacing programs that's bare bones borrowing okay when you look at the fire department's needs and in years past what we used to do is budget 100 to 200 thousand dollars a year in their budgets accumulate that over three or four years and when they needed to buy fire apparatus the money was there we stopped that when 2008 I believe when budgets got tight in the general fund so we stripped out that capital if you will so we haven't provided any capital in reserve to buy or to buy fire equipment and the chief's actually pushed out a year longer than he probably should but he's got a need in 14 for a pumper truck and a command vehicle and in 15 he's got a need for a ladder truck if that's what we have to do you can't come up with maybe a shared service kind of deal on ladder trucks within the county that's 900 thousand dollars let's talk about the motor vehicle fund for a minute we've talked about that you saw how the funds got depleted it's gone from roughly 8 million dollars to 2.2 million dollars this year we've got scheduled to buy two tandem axle dumps that are roughly 400 thousand dollars out of a fleet of six days that we bought all six in what 1995 so they're high mileage one-owner beauties that need to to be replaced that's what we do with all of our road work those trucks support that and we bought the leafsucking equipment for roughly 900 thousand dollars assuming that the that the expense and revenue in that fund would stay equal this year because of a light winter and light usage and repairs have been pretty good that would be a depletion of 500 thousand dollars this year on 2.2 million so we would start 2013 with 1.7 million now that general that motor vehicle fund gets funded in the past to buy vehicles from the general fund the general fund would rent or pay rental to the motor vehicle fund for the use of those vehicles and it would be twice the replacement cost plus an estimate for repairs and maintenance and fuel consumption and that revenue was charged to the general fund and it also covered the gasoline the repairs and six mechanics so that fund over time built up money because of the charges to the general fund with the pressures on the general fund those charges have been curtailed to the point where in 2010 11 and 12 the general fund can only support six 1.7 million dollars of charges and the current motor vehicle fund to run it with the employees the mechanics the estimated repairs and the gas is 2 million dollars so that fund has been using its fund equity just to fund the maintenance and gas for the trucks because again the general fund can't afford anymore to pay two times that like it used to in the past so it says that looking forward there will not only be a drain on that 1.7 million dollars that's left for vehicle purchases but also a drain for that cost to maintain versus the rental that the general fund can provide so in my in my estimate based on several revisions with david and his guys we need to spend roughly $950,000 for new equipment in 2013 of which half a million dollars roughly roughly is for two new garbage trucks and i'm estimating that we'll use fund equity to support the operations of $200,000 so that will leave us a balance in that fund at the end of 13 550,000 david's requirements for 14 are $1.5 million for equipment and of that again there's two more garbage trucks in there for a half a million bucks $200,000 of equity applied we would be in the whole $1.2 million in 14 so at the end of 14 you'd have to question whether you continue to keep the motive vehicle fund in existence and rather just fold it into the general fund like it used to be a long time ago his requirements in 2015 are $1.3 million another $200,000 of usage so we would be negative to the tune of a million and a half dollars uh in 2015 we have a land acquisition in 2014 we have to pay for which is the shukr property that's $2 million so when you look at 13 14 and 15 it says the city needs to borrow $8.3 million based on what i just explained it's got the capacity to borrow $4 million $2 million in 14 and $2 million in 15 as i pointed out earlier to keep the levy percentage the same for debt so it didn't impact the general fund which would be an additional burden so we have in front of us now an issue that if we need to fund trucks or equipment we're going to have to borrow it out of go debt no longer will we have in 14 or 15 motor vehicle fund revenue to pay for that debt so that has to be incorporated in our borrowing and we really have to decide on how we're going to spend the money but the key thing in this and i can't say it enough is we know that our infrastructure needs a lot of work and in those three years and 8.3 million dollars a capital there's no roads there's only the roads that can be repaired that david has in his budget the last thing that's uh excuse me jim uh alderman kath thank you chairman on the two million two million dollars for the shukr property do we also have to pay back the down payment there was a down payment on that land yeah that came out of the industrial park fund the intent would be to pay that back i mean depending on what we wanted to do you know the the intent there was to set up a tid get infrastructure in there take the purchase of the land get it in have the tid based on increments pay for that over time i've got one jim he said we're going to have to have the discussion whether we continue the motor vehicle fund or just take that out of the general fund i guess i see the advantage of continuing the motor vehicle fund and maybe having to make some adjustments to the formula which we talked about last time at the public works meeting but i guess the advantage of keeping the motor vehicle fund is you're putting money in there out of the general fund on a consistent basis so that when we have a year where we've got a lot of expenses as in the past the money it got up there to 8 million dollars now it's it's way down there but i guess the advantage to keeping that over just going to the general fund without the motor vehicle fund is that on a year when you've got three or four million dollars of capital improvements or vehicle purchases you've got a choice of either raising the levy or borrowing the money is that what it comes down to correct i guess i would have a concern with possibly doing away with the motor motor vehicle fund for that reason because it kind of smooths it out over the years if you have a respectable balance in there rather than having to either borrow money or take a big hit on the hit on the general fund one year well it wouldn't be a big hit jim because the general fund pays 1.7 million dollars today the cost to run the motor vehicle fund is 1.9 million without purchase of new vehicles so regardless of whether we rolled it into the general fund or kept it separate somebody would have to fund the differential of the two hundred thousand dollars on a go forward basis so by folding it back into the general fund you have the same impact of two hundred thousand dollars okay alderman hamlin thank you i think one of the things that you know just as a point of clarification i guess you know when we talk about that debt levy that 13.7 and the impact on the general fund of that that's interest cost you know when we go above that 13.7 for example we start instead of bonding two million a year we bond four million a year that extra interest cost comes out of the general fund which means it has to be replaced with something something has to give in order to compensate for that additional interest cost so what jim was alluding to there is if we go to 16 percent of debt something's going to have to give to cover the interest cost that we're going to accrue because of that or the additional interest costs that we're going to accrue because of that and so that's why we're trying to maintain that debt level at about 13.7 additionally if we increase the debt level again i hate to keep pounding on this moody's thing but you know it's fairly significant and important if we go above that 13.7 now again our debt ratios start to look a little bit less positive i don't want to say negative but they don't look as good and that could impact our rating as we go forward as well because keep in mind 2014 you know we're going to go through this moody's thing again and as we go out to bond for 14 because we've bonded already for 12 and 13 yeah one of the keys there because we ask tailors because they do a lot of this fundraising for municipalities across the state and when when you look at ratings whether ratings go up or down it normally cost you 15 to 20 basis points in cost of money so for example if we borrowed money at 2% and our bond rating dropped to AA3 we would be looking at 2.4% cost of money rather than 2% and that's significant on the amount of money we borrow as a city so it's you know a 15 to 20% increase in the interest expense this last slide is just an example of what demographics do and i used a pretty dumb example last night i believe are a pretty good one but if you look at the city of middleton middleton's got a AA1 rating it's got a population of 17 000 people which is a third of what we have it's got an equalized value of 2.7 million dollars and ours is at 2.6 so for a third of the population they have more an equalized value than the city does if you look at their per capita income as compared to the state there are 154% of the state if you look at what their general fund reserve balance is it's 1.2% 1.2 what's that tell you what it tells you is because their demographics are so strong the general fund reserve balance doesn't enter into the rating by Moody's because the city is so strong it generates a ton of revenue so when we look at ours as an example we're at 80% of the state on a per capita basis and we talked about the demographics which are dropping whether it's population unemployment or equalized value so what Moody's looks at is the stability of the general fund and the general fund reserves because you don't have the other demographics that offset that and that's why it's so important that our general fund reserve balance be as large as we can sustain to help that and in addition at least in my opinion is that if we do have excess funds we use them to improve infrastructure and not fund deficits in the budget because that's a death spiral once we start funding normal operating costs from general fund reserves and if any of you've had any experience in the private sector i've had 40 years there comes a point very soon down the road where you shut the lights and walk away but because you can't sustain that so the important factor here is to understand that we've got capital spending that we have issues with because we can't fully fund it if we do it will affect the general fund we've got contractual deficits out in 14 and 15 and with the sunset of the garbage fee creates a very large hole in 15 that we have to deal with starting today going forward to come up with some plan of vision as it was called to say strategically where we're going to go because we need to deal with this problem first hand the only other comments i'll make and and again i'm not going to go through any line item detail i applaud the mayor for going through all of the infinite detail he did one comment would be that he did it kind of in a vacuum didn't sit with department heads the second go around i did sit with department heads and we talked about all of these reductions i think of the 200 and at least the list i had from the last strategic fiscal planning meeting which was 282 thousand dollars we came up with roughly 46 000 of recommended cuts off that list some of the bigger ones and again not knowing the full impacts of the financial systems or how funds work in between each other let's look at a big one which is vehicle rental vehicle rental in the parks department it's 50 000 as a recommended cut i think i just got through talking about motor vehicle fund gets its revenue from the general fund and if we cut this 50 000 dollars we would actually bring a closer end to the motor vehicle fund than we currently have projected that goes to fund the motor vehicle tipping fees a 25 000 reduction and basically we've got a three percent price increase in 13 as well as its index to diesel fuel which has been on the increase again related to commodities and commodity pricing and what the weather provides contractual services and public works one of the things there is the garbage fee that we're being charged by the water utility as it turns out we budgeted 40 we had 60 000 dollars charged through june i can't recommend cutting 20 20 or 15 000 out of that budget when i know i'm 20 grand over already so that's the problem a couple of the other ones were there were some recommendations i believe in the fire department or the police department to cut overtime in 2011 with a higher budget for the entire department on 425 000 i believe we overran overtime by 20 000 dollars in 2012 we cut the budget by 20 000 dollars in trying to manage it but based on what we see year to date through june we're going to be over about another 20 000 dollars in total the biggest part of the not problem but the overtime usage is in patrol other were recommended cuts in every department other than patrol and patrol was left out but that's been the department that's overrun it so the recommendation of committee the other night was to leave the budget intact so it's very difficult to make cuts in departments without looking at the entire police department and that's made up of five or six departments so there are some things that again on the surface look good but as you peel the onion don't appear to be we've got other things and i won't go through all of them where they're timing events where you know we had people that weren't there last year but are going to be there this year so travel training other related expenses will come up i know one was contracted services that we had in this building city hall this is the first year we've gone to outside cleaning services in the past we had a full-time person and part-time people and when it came to waxing floors shampooing rugs part-time people filled in and we kind of got it done mainly not through overtime or contracted services this year we're going to have to contract that that's not part of our set contract for cleaning but we're going to have to contract that out so that we have the carpet shampooed and or the floors waxed or scrubbed so that's a piece that we would have to spend probably towards the end of the year rather than now but it appears based on cost to date we're underrunning true statement but not knowing what's coming up it's difficult to say we should take those as cuts so that's just an overview of some of those but again we've gone through these with all the departments so if there are any questions or the mayor has any questions we can certainly go through any other questions i just i just want to make a couple comments i guess we're going to have to talk about this sooner or later the reason why we have the garbage fee in the first place is that when we were doing the 2012 budget we had a number of things on the table outsourcing garbage doing some things with the with the fire department doing some things with the library and i don't remember if we had any we were talking about anything with the police department combined dispatch the reason why we have the garbage fee is that last year's council was not willing to take on the elephants in the room the big ticket items and i really appreciate all of the work that the mayor has done to come up with two hundred and seventy nine thousand six hundred and twenty four dollars but that doesn't come close to over eight hundred thousand dollars that the garbage fee is providing and in my opinion of listening to the mayor's presentation and now uh mr. Amodio's presentation is that we're not willing to do to take on the elephants in the room as far as the budget the big ticket items again for 2013 and i wonder if the council we're not willing apparently we're not willing to do anything with the fire department the library the police department or we know all that we know all of the the elephants in the room that are causing the problem and we're going to pass this budget we may to continue the garbage fee and i just wonder if next year's council is going to have the courage to take on those same elephants in the room and we all know what they are to try to do away with the garbage fee and it's going to sunset after fourteen what is the council going to do then are we going to extend the garbage fee are we going to raise taxes if we can i think you know before we finish up this 2013 budget i think we also have to have the discussion are we going to have the courage to take on the big ticket items for 13 and i haven't seen any indication either a strategic fiscal planning or finance or any of these two presentations tonight that we're willing to take on those big ticket items and if we don't do that then the garbage fee and is is just going to continue so i i wonder if anybody else has any comments on on possibly we have to take a look at some of the big ticket items alderman hammond thank you all comment on that as many of you know also as part of the garbage fee and the reason it was set to sunset in 2014 was to give us a period of time again keeping in mind last year we were right up against the 11th hour we started the budget process early this year the idea was put the budget to bed and start working on putting an action plan together this fall and spring so it could be executed next year and into 2014 so that by 2015 we'd have the things in place to not have to necessarily worry about it now whether it's the fire department the library the police department getting rid of garbage you know all of those things need to be thought out a little bit longer than two weeks before the county says we have to have a budget there so yes the garbage fee was set to sunset and the idea is that we should be looking forward right now not rehashing the same arguments that we did last november and as i talked to alderman born on the phone earlier today you know my goal would be as soon as the budget's put together to call a strategic fiscal planning meeting and hopefully those that aren't on the committee would be part of the process not leave it up to just the five of us and start working through that plan and have something concrete by next spring so that it can start to be executed in 2013 and 2014 whether that you know for example closing a fire station and building a new one all those things take time so if we're going to do those things we need to get working on them now so you know from my standpoint we need to be starting working on that stuff today or as soon as we can put this to bed knowing that we're not going to be able to do anything drastic in 2013 thank you next we're going to move on to item number 14 we'll hold off any any vote on number seven we'll go to number 14 and that is council document number 6.10 from july 16th of 2012 resolution number 4312-13 a resolution repealing resolution number 128-11-12 relating to ratifying and implementing a special charge for garbage and refuse disposal services provided by the city and i believe the author of that document was alderman decker did you want to make any comments on your document alderman decker sure yeah just briefly um i brought this forward very general so that we could basically use it as a stepping stone um i talked to a lot of different all the persons there's been a lot of different ideas um trying to think uh i think uh what we need to do is use this as a guideline move us forward we could then uh you have to come back to me please okay uh alderman matticek you were a co-sponsor of that document did you have any suggestions on how to repeal the garbage fee i think the mayor laid out a pretty great framework for ideas on ways to cut and fulfill the gap that would be caused by the repeal anything else alderman decker alderman van akron thank you i believe we talked to a strategic fiscal um and alderman decker laid out at that point that part of the uh at least he claimed part of his intentions were to that uh because on our books now we have a garbage fee that has to be there if there is going to be any idea to eliminate the garbage fee there would have to be a resolution to start that process um he did indicate at that meeting that that was what the resolution was for is that that conversation could be had thank you alderman van akron uh alderman raceler you're next thank you mr chair uh as i spoke last night at finance i i guess i'm not for handcuffing the the next committee um no matter who that may be here the next council and to not having the garbage fee i don't want the garbage fee anymore than anybody else does but again i don't want to handcuff the next council i guess one of the other things that came to mind um in the mayor's presentation and also mr modios is we have the ability after we hopefully pass a budget um to look at um the excess revenue in november that is available and decide where it's going to go at that time so i guess even by not um supporting this i i'm still hopeful that we will have some better financial numbers in november saying how much money is is projected in excess for 2012 and from there we can decide if 130 goes to public works or if we want to put some of the money towards the garbage fee and reduce it down somewhat um or if we want to continue with it but i think we have that i don't want to say second kick at the cat then but we can always look at doing some with that at that point in time and that's for our decision and we'll know better financial how we are at the end of the year thank you thank you alderman raceler uh alderman carlsson you're next thank you chairman i guess just to touch on a few things um in regards to alderman van akker and said this um this discussion on what we're going to do budget um budget why it started a few months ago this resolution in effect ends the garbage fee no questions asked it ends it the word repeal is in there the discussion about how we're going to fix our budget problem started months ago this would just cause even more problems uh after listening to the mayor's proposals um the chief uh chief administrator's proposals and the the second budget review i i guess you could say in terms of the savings or lack of savings that that are present and after hearing alderman hamman here and the lack of answers from the two authors of this resolution i make a motion to file second we have a motion and a second to file uh agenda item number 14 uh is there any further discussion i do have a light here alderman bellinger did you want to speak to that or something else um i'll speak to that okay go ahead thank you chairman um the first first of all i'd like to thank the mayor for the due diligence and the work that he put through he obviously went through a lot of time and effort and a lot of what the information was was very uh enlightening and good um and he painted a uh a pretty nice picture but uh when uh administrator modio gave his presentation things didn't look as bright when you look at the future expenditures that uh that the city is faced with and based on that and uh even if um the mayor's suggestion of 270 280 thousand dollars of savings that he came up with and he said it is a fluid number um even if those do hold true and it's not 40 or 50 thousand like mr modio says um we're still 500 600 thousand dollars short and he wants to take that from a surplus and when we've got all these other future um expenditures coming up and use that the following year that surplus doesn't automatically carry over there's no guarantee that there's going to be a surplus year after year after year um i wish there was uh you know and we could fund all our projects through our surpluses but nobody can forecast that and for that reason i cannot support using that surplus money to get rid of the garbage fee and i as a taxpayer and when i ran for alderman i ran against the garbage fee i can't stand the garbage fee but in light of what's going on with our fiscal situation i can't in good conscience support taking the surplus and and using it in that fashion i like what um alderman hammond had to say about looking at some of the bigger ticket issues um my only disagreement is i would like to look at some of them sooner than what you would like to look at them i realize that um closing a fire station building a new one can't be done you know in three months but there are some other issues we had a citizen speak to us earlier about possibly looking at um privatizing the garbage situation again that's something i think that merits some looking at that could be done in this calendar year you know so things like that i want to see us get you know that money or get that get us in a situation where we sound fiscally we get our bond rating up and we're on you know better footing where we could you know do some of these things in the future but right now i can't support using that surplus thank you thank you alderman bellinger alder person donahue thank you um if you remember from a high school reading a tale of two cities um she's actually kind of a fun novel we have a tale of two cities tonight um i just want to thank both mayor van Akron and mr. amodio for really thoughtful detailed presentations i think the two city problem comes from the fact that um budget numbers budgets are just planning documents we know that they don't predict precisely what's going to happen we can go over we can go under there can be other sources of income some of the areas that the mayor has looked at show a fair discrepancy between what was what was budgeted and what was actually spent it paints a rosy picture of surpluses returning money to taxpayers and i think that overall as we look at the the whole picture that's unrealistic and it's not going to happen we have some structural issues that we really need to address chairman borne called it elephants from my perspective it's the heart and soul of the city you know what's important to us what do we what do we want our city to look like in two to four five years what do we need to do with our police with the fire department how do we address the library's needs um public works a constituent actually one of alderman racelors constituents call me tonight and chew on me about the department of public works um where do we want to go and with all of those things and we haven't had a tax increase in this city we need to remember i think since 2005 i mean that's remarkable when you think about it as costs continue to go up as expectations of services continue to go up the city has done a fine job for the most part of addressing those issues but it gets more and more complex as as time goes on i will vote to file this resolution regarding the garbage fee because i think it is um it was it was a tiny tax increase that we that we had this past year that will go on for a year or two but it's a it's it appears to be pretty critical to the way that we want to continue to do business at least through the time at sunset so i think at this point it's unrealistic to get rid of that fee um but we should look and think and dream about what we want the city to become and how we get there thanks thank you all our person donnie you alderman matti check your next thank you um i'm reminded by uh one of Einstein's quotes that insanity is doing the same thing over and over and expecting different uh results i already stated that the mayor laid out a very well put together plan for a way to get rid of this the other thing is we sit here and call the tax increase but we it's a fee it's not tax i can't write it off on the uh taxes they can't they can't it's a fee if we want to increase the taxes we should go ahead with a referendum and increase the taxes i've heard from numerous constituents that that is what they want if we're going to accept call it a tax don't hide behind a term fee and sit here and not call it what it is thank you alderman matti check uh alderman carlsson thank you chairman i i don't think anyone here is really trying to hide what it is i mean it's a fee it's a tax well it doesn't matter what you call it it was an increased citizens have to pay more money for the service they're they're getting um it's been touched on a few times tonight and i i know we're we're not going to rehash things tonight but one of the things i i think we can seriously look at is the fact that in terms of the capital spending the garbage trucks are still in there we haven't spent that money i i i supported privatizing garbage back then i still do now and before i could spend any surplus from this year to get rid of the garbage fee to make a one quick fix for one year i i think we would make better use of that money improving roads in this city on maryland donnie who hinted on the quality of life here in shiboy and yes the library is important police fire safety but we also need roads and our roads are literally crumbling underneath us i mean i i don't know how many of you were in the fourth of july parade when the fire truck ran over a sinkhole i mean that's just not okay so that's one of the many reasons why i couldn't support this repealing the garbage fee right now and using that surplus just to get rid of the fee when we could use that to repay roads in this town thank you alderman carlson alderman benachron you're next thank you chairman and i'm going to agree with some of what alderman carlson had to say and in fact last year we sat in a meeting about this time of year and talked about the elephants in the room and finding ways to make the long-term changes the systemic changes that everybody agrees we need to make but somehow it never seems to get done alderman carlson and i actually agreed at that time that we literally should have a whiteboard here discussing the services that the city provides and discussing how to prioritize those and go down the line and discuss where we're going to spend that money i do appreciate alderman donahue's comments in reference to budgeting really just being future plans and uses of our money but when we go back and look at our surpluses over the last few years i i guess i found it quite surprising going back to last year having those discussions in this room discussing how are we going to get ourselves out of this hole and then you know looking at a a budget surplus from 2009 going from 7.8 million to 2011 going to 11.5 million in the undesignated fund balance we we increased that by 3.6 million dollars in budget surplus money that we overcharged the people here in shabuagan it was their money we overcharged them and rather than giving it back to them we put it in our savings account the goods bads the merits of that however you want to discuss it that that's what happened again we can talk about the future plans going forward where that goes from there whether we continue with those surpluses but unless we change how we are budgeting our money make the actual cuts that we need to make make the systemic changes we need to make prioritize what services the city is going to provide what services the people are willing to pay for we need we need to have those discussions and unfortunately we're not seeming to get around to those discussions i agree with you chairman as you said before it seems like we're in the same spot as we were last year however there seems to be a surplus and i will echo what the alderman heidemann said in strategic fiscal i believe last week when this presentations were given you know he was he was quite surprised in the comment i believe was well how can we have a budget surplus when we needed to charge a garbage fee to make our budget work i guess i asked that same question and i bet the people of shabuagan would ask that same question too is how can we have a budget surplus but yet we increased a a fee on everyone because we had to thank you alderman vernachron next we have alderman versi i call the question we have a motion to call the question all in favor of calling the question but we have to get a second on the closing is there a second to call the question all in favor of closing the calling the question signified by saying i i opposed the question is called we have a motion and a second on the floor to file document number 6.10 which is number 14 on the agenda would you call the roll please bellinger i boran i carlson votes i decker no donahue i hamond i heidemann i i lasard i leandowski no maticek no racer i vernachron no banner wheel i versi i longman 12 eyes motion carries now we're going to go back to item number 13 on the agenda and find it amongst my papers here now we did 14 okay we just we we talked about but we only voted on one yeah we're going to take a vote on number 13 and that was council document number 3.7 from july 2nd 12 ro number 77-12-13 mayor mayor requesting strategic fiscal planning committee to meet and include on their agenda various items i'll entertain a motion on on number 13 second we have a motion and a second to file document number 13 is there any further discussion all of them just just under discussion we did talk about many of these things in strategic fiscal for those that were there and you'll see some things coming through the mayor's entered some things so the points he made were julie noted and they're being worked on thank you any other discussion please call the roll on document on agenda item number 13 to file bellinger i boran i carlson votes i decker no donahue hi hamond hi hi dimmond hi hi assard hi lindowski hi matticek no racer hi ben akron hi banderwheel hi versi hi longman hi 14 i student motion carries the file now we're going to go back and entertain a motion on uh item number seven on the agenda which is was the 2012 2013 powerpoint budget presentation as presented to the strategic fiscal planning committee on June 5th 2012 i'll entertain a motion on on number seven alderman ben akron i believe it would just be the presentation itself so i would make a motion just to accept in file in file yeah accept in file is there a second second we have a motion to an accept in file number seven any discussion would you call the roll alderman carlson bellinger hi boran hi carlson hi decker hi donahue hi hamond hi hi dimmond hi hi assard hi lindowski hi matticek hi racer hi ben akron hi banderwheel hi versi hi longman hi 16 i motion carries to accept in file next i want to skip down to items number eventually i think we're going to be able to take a lot of these as a group but something that i also want to have discussion on tonight are items number 11 and then also 12 on the agenda and item number 11 on the agenda is council document number 11.4 from july 16th 2012 communication number 5-12-13 submitting a communication from alderperson hamond requesting that resolution number 234-3-4-4 by alderperson's graf wenninger bonnet Doyle and stefan establishing a policy for applying the undesignated fund balance for the general funds ensuing year's budget and to draft a resolution to establish a fund balance policy in accordance with gasb number 54 alderman hamond do you want to sure the discussion on this please thank you i just wanted to make a couple points of clarification the fund balance reserve when we looked at as alderman ben akron mentioned good from 7.6 to 11 0.5 was a was completely a function of gas b 54 in the way that they wanted to us wanted us to report um general fund balances and essentially what that does is it takes our working capital which as the mayor mentioned earlier is that four million dollars that we use to pay salaries and expenses while we're waiting for the two tax payments that we have coming in in the spring and in september and so although i appreciate um the mayor's um resolution or or recommendation i should say to us i think we need to look at that a little bit differently you know other municipalities may have lower um undesignated fund balances but they also have other things going for them that we do not unfortunately um my recommendation um and which was passed in finance last night is to have a reserve undesignated reserve fund balance minus working capital of 25 which would mean that our reserve fund balance would go somewhere up into the about roughly 8.5 million range if we look at what's happened and again we can always look at things in one year but if we look at the over the last uh since 2005 we've dipped into our reserve funds about 2.7 million let's just assume for a second that you know we needed in 2015 to dip into our reserve fund balance again um and we left things we're at again we have to bond in 2014 and if we're facing a 1.7 million dollar deficit that could adversely impact that i'd like to see a stronger reserve fund balance so that when we do have our ratings and also again if we need to dip into it for whatever the reason it's a substantial fund balance so my recommendation and what was passed in finance yesterday would be to have an undesignated fund balance of 25 minus working capital because those are funds that we use throughout the year until we get revenue coming in so that's my recommendation uh to the council what was approved in finance last night how would you like to make that a motion Alderman Hammond sure what i just said all right we have a we have a motion in a second you have all of that down now daryl for the for the for the minutes right it's the same motion i made yesterday okay good under discussion under discussion um thank you mr chair under discussion i know people say well if we look at what other municipalities are doing you know if we look at the audit it it's very easy to figure out it's also very easy to figure out if we look at our audit financial statements because it's very easy to work out or back out our working capital out of that number and that number there is our true undesignated reserve balance you know working capital part of that reserve balance is also basically payments that we owe for work that was done in prior years so again if we back out those numbers and say our true cash on hand needs to be 25 percent of our our reserve requirement needs to be 25 percent i think we're going to be in a very very good position going forward so thank you any further discussion okay uh alderman van akron thank you mr chairman i guess i brought up some of these points at strategic fiscal and it's one of the reasons i won't be supporting this document can you can you explain alderman hamman why we wouldn't use the ga excuse me gasp 54 um their way of documenting for comparative purposes i know i had brought it up and i'd asked uh direct uh chief administrator emotio in reference to that for comparative purposes and trying to decide you know whether we should be a 25 percent as you're indicating here or 30 percent or 27 percent you know for comparative purposes we're if we use the state's system we can compare as to what you know everyone is using their working capital and their undesignated fund where if we use your system it's just the specifically undesignated stuff not the working capital but there isn't really a way to then compare that to the other municipalities at least there wasn't last week when i asked the question i wasn't able to get any information as to you know how does that compare to other municipalities in reference to just their undesignated fund not just the working capital so i guess i would question why we don't use the state system as it's laid out and then my other um concern is let me answer that one first because i'm not smart enough to remember multiple questions at a time first off again if you look at it audited financial statements it's very easy to back that out if if for some reason we need to continue to compare ourselves and municipalities um you know throughout the state so it's very easy to back out their working capital and say this is what their actual cash on hand is secondly um again i go back to for shabuigan's purposes again we're not appleton we're not greenfield we're not west alice yes we'd like to compare ourselves in benchmark but at the end of the day they have a different set of circumstances than we do so if we wanted to look at it and say okay we want to use exactly as gas be um 54 indicates then we'd need to be instead of 30 percent we probably need to be at 37 or 38 percent if we want to include working capital and those types of things so it's just in how you frame the number you certainly frame it that way if you want i think it's cleaner to look at what we actually truly have for cash on hand for emergencies and opportunities versus diluting it with working capital prior your payments those types of things so that's the reason i chose to back it out like that in my resolution okay and just to follow up on that do you have any of the information from comparables as to where that 25 percent would fall into um again just for i realize it's not the only factor in fact it's one of many factors that we're talking about in reference to our bonding and our ratings um but again i'd rather not reinvent the wheel there's a lot of other communities that have the same type of undesignated funds does that 25 percent compare is it high is it low i guess i don't know because we don't have that information and i guess i i if i may respond go ahead i guess i'm not as concerned what other municipalities are doing if this is what fits for shabuigan and this is what helps us reserve our our bond rating and this is what helps us continue to move forward if it makes sense why would we care what other municipalities are doing maybe and just maybe we're going to be a leader in this and then my other concern is the the final paragraph at the bottom annually any and any increases and again i know i brought this up as strategic fiscal any increases will be divided out as you have laid out there between that's the next document is it yep i'll wait for that one yet thank you all alderman benachron any other uh discussion alderman hamlin uh before we vote we just run the motion by us again so we we are clear as glass of what we're voting on again my my motion would be to set our reserve requirement at 25 percent of undesignated subtracting out working capital so that is a true cost or our true cash on hand going forward thank you we have a we have a motion and a second on that under discussion alderman benachron i'm sorry just a review then we're currently at what level and how much would we need to increase our undesignated fund level going forward to get to your 25 percent right now we're at 7.7 i think we'd have to go to about go ahead jim we're 21 we're at 21 percent now we'd have to go to about four percent thank you alderman benachron we have a motion and a second uh alderman carlson would you please call the roll bellinger hi boren hi hi decker hi donahue hi hamond hi adamant hi kath hi sarth hi mendosky hi adechek hi racer hi benachron no van der wheel hi versi hi longman hi 15 eyes motion carries now we're going could we take a short break sure why why don't we why don't we take a uh why don't we uh reconvene at 25 to okay uh let's go to number 12 on the agenda which is uh council document number 11.3 from july 16th 2012 resolution number 44-12-13 a resolution committing fund balances in accordance with g a sb number 54 alderman hamond do you want to take that one for me too please sure um and this one is um and i think this is the one that alderman benachron was starting to sit sit we're starting to elaborate to or allude to um in our last conversation and this is what to do with any surpluses if we have them going forward um and again this one you know very much open to discussion on um going forward because it's not a perfect document um by any way shape or form but first off when we look at what i proposed was first off 50 of the surplus would go towards our undesignated or basically our reserve fund the remaining 50 would be divided equally between technology it motor vehicle and equipment replacement public works and infrastructure and economic development and just touch on each of those a little bit first off obviously we just had the conversation about the reserve fund and one thing that this doesn't address and i think is where alderman benachron is going to mention is what happens if we're over that 25 percent i think we we need to discuss that does that go back into the other areas what do we do with that i think it's a valid concern and we need to address that um but the other areas are areas that when we look at the city in general we are very very in big need of improvement technology um you know thanks to Dave Augustin we've been able to get probably to 1995 and there's a lot of improvements that continue need to continue to happen a lot of our systems still don't talk to each other they need to talk to each other there's a lot of uh upgrades and things that we need to look at motor vehicle fund i think we've hit that conversation but again just to reiterate we're looking at um you know over the course of the next several years roughly four million dollars of of equipment upgrades that need to happen public works i think and i think we've mentioned that several times but that part of that going to infrastructure improvements and then again economic development i think everyone can agree that one of the ways that we can continue to grow and hopefully alleviate some of this problem is to attract new businesses attract new jobs and build that tax base um so that you know maybe we can enhance the revenue side versus cutting the expense side um so that was the thought process behind that um again the one thing that you know wasn't addressed as you know and i think this is where alderman van Ackerman the question he was going to ask was what happens if we get over that um 25 percent in our undesignated or our reserve fund what happens to that 50 percent that would normally be allocated there and that's a fair question um that i think you know we should take up as a group um my thoughts would be that that portion goes back into these four or leaves it as a council undesignated to determine what the greatest need in that particular year is and go from there um but i think if we look at these these areas i don't see a time where we would not have areas in especially infrastructure where we couldn't designate a significant amount of money to infrastructure and probably not even put a dent in it so that was the thought process behind that um and uh worked with uh nancy and jim um and and formulating this but again this was kind of the the rough draft of what to start to do with any surpluses if we have i'm going to keep in mind again this is if we have a surplus um you know in in a given year so um that's uh alderman carlson thank you chairman i i know another question that was posed during strategic fiscal planning was that at i'll just answer the question at some point it'll be nice when this city is essentially up to par in terms of infrastructure roads our parks are not um violating federal codes once we get to that point once once we are at the place where we want to be any surplus could go back to the taxpayers but i i think we're a far away away from that so at this point we need to designate where that money is going to go thank you alderman carlson alderman versi your next name is chairman i think me personally one of the most important parts of this is that money is not going towards salary and benefits this is going to build our city and make our city better that's the most important part i think of this is that extra money if we have that surplus is directly going back into the city where it needs to be so that's why this i'm in full support of the doing this just for that reason alone thank you thank you alderman versi any other discussion alderman vernacrum since everybody's waiting for the question i'll ask it um part of my concern with this document there's there i have several but part of the concern is again how the the money is going to be distributed after there is a surplus and again that that's obviously granting that there is going to be a surplus or possibly a surplus you know based on this year's projection we could be looking in the million dollar range million two um this document would say half of that would go towards the undesignated fund balance the other half would then be divided up into the areas that you see there um with no remedy to send that back to the taxpayers who it's money it is again we've overcharged them again this is a surplus scenario we've overcharged them for our services and there is no cause or way to give them that money back and that's a concern for me i i think there should be the first priority should be to give that money back and then have some of these be the secondary options with a supermajority vote to say this is a no brain project we need to do this let's spend the money here i'd be a lot more comfortable with that's how it read unfortunately it doesn't like i said it gives no avenue to give the people their money back that we've overcharged them that's really my main concern with this uh alderman hammond you can respond sure thank you and i and i appreciate that concern and i would have i would agree with you if we were raising the levy every year year over year but at the end of the day what this means if we have a surplus it means that our department heads did a nice job of managing their budgets and gives us an opportunity to take those um savings and put them to things that our taxpayers and constituents um have challenges with and infrastructure i don't think there's anybody in this room that probably hasn't gotten a phone call in the last two months regarding infrastructure um so what we're going to say is hey we're going to take that away while and give it back to you which again if if nothing all else being equal and everything was great i would completely agree with you we've got a laundry list of issues that our constituents have told us and our taxpayers have told us our concerns that we're going to say we're just going to ignore those um because it feels good to give it back believe me i would like to have it back um i know how much i pay in property taxes um and again i would like it back too but i also understand that if we have a surplus there's probably a better need or a stronger need for that money and one of them is you know again making our infrastructure stronger if we can make city home more efficient through technology there may be cost savings further down the road yeah i i can understand what you're saying um but i think in practicality we need to address those things that our citizens are saying need to be addressed and if we are lucky enough to have surpluses that's an opportunity to do it thank you all of them and all our person donnie who are you next um i would go along with alderman van akron's remarks if there was a process for when we undercharge that we get more money from people because i think if you're going to do one you should do the other i don't think that's practical my son michael van akron called me and said ma i need a new computer and i checked my savings account and i have seven hundred eighty six dollars at my savings account he's 26 i started to weep you have a savings account this is terribly exciting why would i tell michael don't bother with the savings account don't bother saving up for a computer that you might need take that money and spend it now or give it back to your mom and dad to whom you owe lots of money there's nothing wrong with savings we the concept of giving money back i remember tommy thompson remember tommy thompson as governor we had a budget surplus all of that money was returned to the taxpayers hundreds of millions of dollars we got two or three hundred dollars nobody remembered at the end of the year that they got a refund but the next year there was a terrible deficit so this is not a sensible approach trying to if in fact we are so flooded with money and we have done such a terrible job at budgeting and there is such excessive funding the streets are repaired and there's peace in the kingdom then we might take a look at it but i think at this point we're doing what is what we tell our children to do which is save up save some money and you'll have it for a rainy day thank you all our person donnie who alderman carlsson you're next okay uh alderman vernachron thank you this will be my last one on this one i and i'm going to answer some of both of those um i would agree with uh alderman hammond we do have a laundry list of things that do need to get done and again this is only in the case if we have a surplus and we're getting to that 25 percent and what do we do with after we've gotten to those levels that you know we we've decided is the appropriate level or people have decided is the appropriate level for our savings account again we're doing all those things and then we're deciding where to spend the people's extra money rather than there being an option to give it back and there isn't um there's there's just a blanket protocol as to where we're going to spend it no specific projects no specifics as to where it's just going to go we're just going to blanketly say well find a way to spend it here and i guess i'm not comfortable with that i'd be much more comfortable saying you know again even if it was a specific project which i realize isn't you know a possibility right now but as you go forward to have a specific project in mind to say this is what we're going to put it for is is one thing but just to lay out a blanket policy is we're going to put it in these departments whether they need it or not we're going to give it to them and let them find a way to spend the excess money we've charged people i am not okay with that at all thank you all of them van Akron alderman heidemann you're next go ahead okay the one question i like getting that money back to but one of the things that i don't know how i could include this in a motion but if we have additional reserves and we're going to put money away we can no longer have a fee at the same time i mean we had a reserve we had excess money and we charged people a fee is there any way i can tie in a motion to say to make sure that that our citizens are never feed for services and while we still have when we have an excess amount of money so we can maybe just eliminate the possibility of ever having a fee again go ahead thank you again i understand where you're coming from on that the challenge is again let's say the surplus is a hundred thousand dollars and you know a fee let's just use the garbage fees generating eight hundred and seventy thousand so we're going to get rid of eight hundred and seventy thousand of revenue because we were able to save a hundred thousand dollars of surplus now if or create a hundred thousand dollars of surplus now again again as i indicated this is if we're at 25 percent and we want to look at saying once we're at 25 percent that half goes back to the taxpayers i'd be happy to entertain that but again i think one of the things we need to look at is where a lot of our needs are and again one of the partitions is motor vehicle funds and four million dollars in the next three years this isn't going to solve that so my thought process and as we were discussing this was having that money go into those reserve funds will start help to build those reserve funds for when we need to use them and i agree i understand where you're coming from conceptually it's just hard because we don't know what that surplus is going to be and to say every fee that we have is going to go away because one year we might have a surplus you know i'm not sure is practical i gave it a shot you did yeah the idea is i don't like to fee any more than anybody else in here or i think one of the end but to have a 1.2 million dollars an additional and that we're going to be able to spend or we had around and have a fee at the same time i kind of it kind of gets gets me a little bit so in the future when we have those accesses nobody's talking about well you need actually need a little bit more so we have the access and then we're going to put a fee with it to get to a certain amount i guess i just don't like that that type of taxation and i hope we can't see it again thank you alderman heidemann alderman racer you're next thank you mr i hate to agree with alderman heidemann and it pains me you know but um i'm wondering if we can put some terminology in there that um it is recommended that 50 percent would go back to the undesignated fund and the other 50 percent would be divided up amongst the the different entities unless the council decides otherwise i mean so we have some leeway after a while when it comes to the fact that we have a million-dollar excess and let's just say we get to the 25 percent and we have some fee out there such as the garbage and the council wants to say yes we have that ability to do that i don't know if we can word it that way or if it is i'd make that in the form of the motion for it so that the terminology does give us the ability to take that money and not be be bound by putting it here is that a motion is that yes i just want a clarification on that so if we're at if we're at 25 percent then that 50 percent would be kind of at the discretion of the council is that what you're indicating once we've hit sure 25 percent reserve correct i would leave it the exact same way you have it but putting the clause in at the end that the council may look at adjusting these numbers you know we can go to the two-thirds vote or vote if we wanted to you know if it was something such as this if we're at 25 percent correct okay alderman carlsson and by the way before we before i call on you alderman carlsson we have a motion was there's no don't we have to act on the original resolution first point of order amended yeah yeah so i move to send the resolution to the council with a positive recommendation second just a point of order we have a motion on the floor alderman raceler is his proposition i think as worded would be an amendment to the motion that is on the floor if that amendment has a second then we vote on the amendment and then as amended we vote on the motion any other motion unless it's point of of privilege would be would be out of order i think if you consider that to be a friendly amendment sure and i and i think it is in your second alderman height of and so i believe we could we could vote on the we could vote on the the amendment first and then that passes then we'll move up vote on the document as amended uh do we does anybody need an explanation of what we're what we're the motion that i can i can so if i understand the most your amendment would be that if we're at 25 percent that 50 percent that would normally go to the undesignated fund or the reserve fund would be at the council's discretion yes take your time and think about that no i mean i'm i'm looking at i i don't know if i go 50 i go with 100 percent for that matter okay the the the excess fund balance is recommended that 50 percent go to the undesignated fund 50 percent be divided equally amongst the the agencies you spoke of period the common council has the ability to override this percentages um to designate the money towards other fees or um what it what it's so deemed necessary there may be something that that we need 100 percent of this to go to all of it to infrastructure we may have a a project coming up like isner avenue where we need you know let's just pick another street is going to be done and we we need this million dollars to go to that that we have the ability to to designate what we want to do with this money if something else is is differs from what it is if not it goes back to all right uh alderman racel i heard you say something earlier about a possible uh two-thirds majority of the council or do you want a simple majority if that's something that everybody would be more comfortable with i gladly include that it that has to be a two-thirds vote to change where it's going from in this original is that alright is that alright with the second sorry with me okay we hold it i got uh some lights on here alderman van akron here first then we have next in line here with the lights flashing is alderperson daniel well just from a parliamentary procedure perspective i think it would be very important that we nail down your language just so that we all understand it and it should it should probably not be a moving target right i know we went from 50 percent to 100 but we're talking about the whole the whole amount as far as going to different departments sometimes when these things get very complicated what we could do is move on to another item of business and uh alderman raceler could work on some sometimes when you write it down work on that wording doesn't really help come back miracles could happen um but but i just because i think it's a very important to issue and um i think things have gotten a little fuzzy around the edges so that would be my suggestion as we move on then come back with a written amendment that we all understand one i i guess the final amendment can be can be completed when we go to council i guess i'm looking for the recommendation if we're even interested in doing this um and we can clean the language up and and debate it then if it's if it's not what everyone wants i guess i'm just looking at getting the if everybody says no we don't want to do this we get to move on to the original one and we're done the only problem is at this point i have no idea what the amendment is right and it's it's vague but it's it's a recommendation to the council it's not necessarily we're taking action at this at this time is it 50 percent is it 100 percent right 100 percent or is it simple majority three quarters seven eights that's the only problem no i understand i i guess i'm going with two thirds and if that's your reason for not doing it and someone wants to amend it friendly amendment something else that's fine too but i i guess that we can clean the language up before it goes to the council i'm just looking at the see if it's something we want to recommend that or not and so your amendment or your amendment is with two thirds vote if we're at 25 percent in our reserve and we've met our standard then at the council's discretion with two thirds vote a hundred percent of the surplus could be designated elsewhere correct doesn't have to be it can go right back to where it was but we may right if there's two thirds yeah if there's not two third vote so alderman bellinger you're next so the fallback would be then if there's a stand thank you chairman the fallback would be then if there's not a two-thirds vote if that fails then does it automatically revert back to the 50 percent and then the you know the other 50 percent going into the designated accounts correct that's my understanding correct uh first of all i got alderman vernacorn and then we'll have mayor vernacorn thank you um i guess i that that certainly helps with some of the language because it does allow for the ability once we get to that 25 percent for the council's at a two-thirds vote to decide again not that it goes to these four areas again as alderman wristler brought up and i certainly as much as he likes to not disagree with the alderman heidemann i certainly try to not agree with alderman wristler um it does make sense because if there's a road project that would require all of the surplus that year we could do that rather than splitting it up into quarters like this or again if if we actually would decide to give the people their money back that could be an option as well i would think it in that discussion so i would certainly be a lot more comfortable with that amendment thank you uh alderman vernacorn mayor did you have some comments you wanted to make i just had a question you got a gym right here um what we've got now is it motor vehicles vehicles and equipment i should say building improvements in infrastructure and economic development sorry no motor vehicles and equipment replacement could be economic development okay we've got that we've got a friendly motion on document agenda item number 12 we've got an um friendly amendment in a second uh do you want to call the roll alderman carlsson on the amendment only bellinger no barren hi carlsson both side decker hi donny you hi hamond hi hi hi head of the sard hi lindosky hi madachek hi racer hi van akron hi van erweal hi versi hi longman hi 14 i's okay the uh now we'll vote on the document as amended we already had a motion on a second on that one yeah okay uh we want to call the roll on the document as amended please bellinger hi barren hi hi decker hi donny you hi hamond hi hi demin hi pal hi sard hi lindosky hi madachek hi racer hi van akron no van erweal hi versi hi longman hi 15 i's motion carries as amended okay let's go back to the uh agenda items we have not covered and i may need a little help on this but i believe we could vote on it as a group on uh item number eight number nine number ten item number 15 item number 16 item number 17 through 21 i think we can vote on those as a package uh alderman hamond that's basically what you did last night at finance correct that's the uh pretty much the budget with all the recommendations from the various um committees law and licensing salaries and grievances ppns um included in those um budgets and that would and that would mirror the presentation that director emotio gave then you have those in there jim and that would also yes okay so i'll entertain a motion to take those documents that i just mentioned uh eight nine 10 15 16 and 17 through 21 i'll entertain a motion on those documents motion to approve second we have a motion and a second to approve those documents is there any discussion hearing none please call the roll bellinger hi boren no hi decker no donahue hi hamond hi adamant hi kath hi lasard hi lindoski all right matticek no racer hi van akron no van der wheel hi bercy hi fangman all eyes motion carries next thing on the agenda is the meeting next meeting date that'll to be determined depending on referrals to the committee of the whole on entertain a motion uh before i entertain a motion to adjourn i would like to thank everybody i think we had a lively discussion tonight i'll entertain a motion to adjourn so moved second we have a motion and a second to adjourn all in favor aye post chair votes aye we are adjourned thank you everyone