Loading...
HomeMy WebLinkAboutFinance 04-10-03 ST. CROIX COUNTY NOTICE OF COMMITTEE MEETING TO: Chairman Buck Malick St. Croix County Board FROM: Ralph Swenson, Chair COMMITTEE TITLE: Finance DATE: Thursday, April 10, 2003 8:30 A.M. LOCATION: Room 1281, Government Center, Hudson CALL TO ORDER ROLL CALL ADOPTION OF AGENDA DATE OF NEXT MEETING: May 8, 2003 8:30 A.M. ACTION ON PREVIOUS MINUTES: March 13, 2003 UNFINISHED BUSINESS: NEW BUSINESS: 1. Review of Vouchers 2. Maintenance Department Report 3. Computer Services Department Report 4. Risk Management Report 5. Corporation Counsel Report 6. Treasurer's Report a. New Computer Request 7. County Clerk Report 8. Review of Courts' Committee Assignment Options 9. Finance Department Report a. Review of Position Vacancy Status 10. Administrative Coordinator Report a. County Funds Investment Policies b. Follow-up on Job Descriptions and Administrative Coordinator Responsibilities c. Huber Project Proforma d. Review of Verbeicher Project Status e. Review of County Unfunded Wisconsin Retirement System Liability - Springsted f. Review of Borrowing Options and Issuance Fees - Springsted g. Update on State Budget 11. Fair Board line item transfer for fund raising planning CORRESPONDENCE: WCA Memorandum re: 2003-05 State Budget Biennial Budget Analysis ADJOURNMENT (Agenda not necessarily presented in this order) COPIES TO: County Board Office News Media/Notice Board County Clerk County Board County Departments **ADDITIONS/CHANGES/CORRECTIONS Last Updated. 41312003-3:26 PM FINANCE MEETING Regular Meeting April 10, 2003 Meeting called to order by Chair Swenson at 8:30 a.m. Present: Ralph Swenson, Stan Krueger, Clarence Malick, Esther Wentz and Daryl Standafer. Staff present: Administrative Coordinator Chuck Whiting, County Treasurer Cheryl Slind, County Clerk Cindy Campbell. Others present: Judy Wiff, media. Motion by Krueger, 2nd by Standafer to adopt the agenda. Carried. Motion by Wentz, 2nd by Krueger to approve the minutes of March 13, 2003 with the following changes: Page 1, paragraph 2, add "Carried" after first motion. Page 6, paragraph 13 change guaranty to guarantee in item 3.; Page 6, paragraph 14 delete "This matter was tabled." Add "No action taken on this matter." Carried. 1. Vouchers. April vouchers were reviewed by Wentz on April 15th. Motion to approve by Wentz, 2nd by Malick. Carried. Krueger will review vouchers next month on May 9t . Bills will be paid on the 9th subject to approval by Krueger's review then formal approval will be done by the Finance Committee at its June meeting. 2. Maintenance Department Report. David Best, Service Technician, reported on behalf of the Maintenance Department. Best handed out a Maintenance Personnel Request (2004) which indicated the new Huber addition will require an additional two hours a day to a custodian and from one to two hours a day to a maintenance mechanic. Malick suggested the Maintenance Department look into outside contracting for yard work and possibly other services. Swenson thanked the Maintenance Department for bringing this forward at an early date so this can be factored into the Huber plans. 3. Computer Services Department Report. Whiting indicated they are still working on purchasing IDI components for SAGE. Malick noted Public Protection had discussed concerns about the Visions program. LaCrosse County is not moving as rapidly as hoped to create something that is satisfactory to LaCrosse County. St. Croix County is not moving aggressively to make Visions work in the Sheriff's Department. Krueger recommends the Sheriff review this matter when he puts his budget together. 4. Risk Management Report. No report. Whiting indicated Risk Manager Dawn Budrow, Corporation Counsel Greg Timmerman and himself will be attending the annual WMMIC meeting May 1 st and 2nd 5. Corporation Counsel Report. No report. 6. Treasurer's Report. County Treasurer Cheryl Slind reported tax deed searches have been completed. 2000 delinquent taxes are being advertised this week and next. Treasurer's reconciliation is being completed. Receipt processing will be put online on May l't. SAGE will be put on all computers in her office. Finance Committee April 10, 2003 Page 2 of 8 Slind requested funds for a new computer. Her request is $622.00. Malick suggested to handle the same as other requests and look for offsetting savings and not tap into the Contingency Fund just yet. Her existing computer will be used elsewhere in her office. Motion by Standafer, 2nd Krueger to go ahead with the purchase of a new computer but it will not be formally funded by the Contingency Fund and if it cannot be funded with other line items under spent per budget the committee will deal with it in September. Carried unanimously. Malick announced a new business item to be possibly discussed at the May Finance meeting. Public Protection brought up the possibility of locating an ATM machine in the Government Center. By locating an ATM machine here, it could be productive, by improving the collection of delinquent fines by people who do not have checking accounts, but do have a credit and/or debit card. Options include renting, renting with option to buy or buying an ATM outright. Standafer suggested the County not get involved in operating an ATM machine. He recommends hiring a company to do this. 7. County Clerk Report. County Clerk Cindy Campbell reported the April 1, 2003 election went well. The village of North Hudson had a high turnout and it was necessary to print additional ballots in the Clerk's office the day of the election. The County Clerk's staff indicated title transfers have increased from an average of 10-12 per day to 15-20 per day. There are more out-of-state title transfers being done. Campbell indicated she is in the process of getting the Official Directory information gathered and assembling the County Board Proceedings book. It was the consensus of the Finance Committee to discontinue preparing County Board Proceeding books. Minutes, resolutions and ordinances are available in the County Clerk's office if requested. Malick presented a new business matter with respect to annual dog vaccinations to prevent rabies, distemper and other life-threatening diseases. He indicated a veterinarian at the UW-Madison has determined that it's probably not good for dogs to get rabies shots every year or two years. When paying property taxes it comes through the cities, villages and towns that dog owners need to re-license their dogs and provide a rabies certificate. Malick asked the committee for their permission to work with Corporation Counsel Timmerman and Campbell on requirements from the State statutes or county ordinance. Can we lessen the burden for our citizens by changing the requirement to every three years to maintain public safety. 8. Review of Courts' Committee Assignment Options. Supr. Speer, Judge Lundell, Judge Vlack and Judge Needham were in attendance. Malick indicated the Finance Committee has discussed the option of changing committee assignments to the Public Protection Committee to oversee the judicial function as well as the Clerk of Courts rather than have Finance Committee do this function. Reasons being for better coordination of like-topics of related and similar services and secondly, space allocations coordination would be better. Judge Lundell pointed out why the Judges felt this was a conflict of interest. Judge Lundell passed around Public Protection minutes of August 7, 2002 referring to a deferred prosecution agreement. The Judges disagree with the agreement and want to avoid implied or indirect pressure from Public Protection. Judge Needham indicated the District Attorney's office and Sheriff's Department are part of the executive branch of government. The judicial branch is a third and independent Finance Committee April 10, 2003 Page 3 of 8 branch of government; separate from the executive and legislative. Judges have to independently look at topics. Judge Vlack noted they had attended meetings regarding means of collections and policy setting for collections. He indicated the Judges cannot get involved with that. Judges have to separate themselves from this. Supr. Speer indicated the Judges would not be in competition with other departmens as far as budgets are concerned. Public Protection deals with seven separate budgets. Swenson asked if the Judges had any reaction of Clerk of Courts being moved to Public Protection. Judge Needham indicated they are an extension of the judicial branch. Request for input on policies could cause problems. Vlack requested an organizational chart indicating who reports to whom. Whiting noted this issue of coordination came up when the space issue between the Clerk of Court and District Attorney was being discussed and room across the hall was considered. Standafer noted on Needham's comments regarding budgets and allocation of resources and three branches of government. We are reporting relationships countywide. Standafer felt it makes sense to try it. Lundell asked where it is more efficient. Judge Lundell noted they have ongoing disputes with the Sheriff's Department and District Attorney's office about varying degrees of priorities. Swenson asked where committee would like to go from here. If change committee assignments both committees have to be involved. Speer indicated Public Protection has no objections either way. Malick noted changes to committee assignment also changes rules and bylaws. Motion by Malick, 2nd by Standafer to recommend to County Board the changing of assignments so that the Clerk of Courts and Judges will the responsibility of the Public Protection rather than the Finance Committee. Wentz feels uncomfortable with this change because it appears the Judges are comfortable with reporting to Finance. It has not been proved that efficiency would improve with the change. Krueger agrees with points made by Judges. Motion defeated 3 - 2. Motion by Malick, 2nd by Standafer to move only the Clerk of Court to Public Protection. Standafer noted he's uncomfortable with making policy decisions on an objective basis and has some uncertainty with the rightness of the main motion on the floor with denying the move of the reporting relationship to Public Protection. The Judges articulated that in their view they should remain together (Judges and Clerk of Court). If the majority of this committee is deferring to their collective argument then we will not hear all of that argument and leave the status quo in place. Malick and Standafer withdraw the motion. Finance Committee April 10, 2003 Page 4 of 8 9. Finance Department Report. a. Review of Position Vacancy Status. Motion by Malick, 2nd by Wentz to ratify the selection of Michelle Pietrick as Finance Director. Whiting indicated Pietrick's background includes a Bachelor of Science degree in accounting from St. Cloud State University, a Masters Degree in Public Administration from Hamlin, employed at the Minneapolis Community Development Agency since 1994, prior to that work at the Minnesota State Auditor's office. She is a CPA. She will begin her employment on April 28, 2003. Roll call to ratify the selection: Yes: Malick, Wentz, Swenson, Krueger, Standafer. Carried unanimously. 10. Administrative Coordinator Report. a. County Funds Investment Policies. Whiting presented a revised draft of the County Investment Policy. Committee members will review it for the next meeting. This item is to be placed on May's agenda for approval. Standafer indicated he thought it was still too long. b. Follow-up on Job Descriptions and Administrative Coordinator Responsibilities. Whiting presented a proposed ordinance regarding supervisory responsibilities of the Administrative Coordinator Position. Discussion why this is an ordinance rather than a resolution. Corporation Counsel indicated this is changing the management structure of the County. The County Board needs to approve changes to the management structure that it has created. Timmerman indicated an ordinance creates a more permanent record - form over substance. Malick suggested making it a resolution. Timmerman indicated the proposed ordinance needs additional language including statutes and an explanation as why it is being done. Revisions need to go through Administration Committee. Standafer discussed this issue with the Administration Committee and they indicated the document should come from the Finance Committee. Swenson, Malick and Whiting will revise the proposed ordinance and bring it back to the Finance Committee in May. C. Huber Project Proforma. Whiting revised the proforma pursuant to the suggestions made at the March Finance Committee meeting. Whiting indicated this proforma is still a draft. He worked off the last two audit reports and attempted to understand how the Jail Assessment Fund cash flowed. The Jail Assessment Fund is paying back the General Fund for $310,000 used for partitions back in 1998 and 1999 at essentially $50,000 per year. What Whiting discovered in reviewing the audit reports, when moneys are coming in, they do not show up-as revenue in-the Jail Assessment Fund. They immediately go into the General Fund. This essentially means, from a cash flow standpoint, there is about $50,000 more a year coming into the Jail Assessment Fund. Whiting still needs to estimate future revenues. He added $49,525 of revenue to the General Fund to repay the debt on the partitions. In 2002 the Jail Assessment Fund paid $82,000. Whiting has estimated the revenue to be $175,000, but the revenue depends on how many tickets are being written. Standafer noted he is concerned about the operating costs of the Huber facility. Swenson noted it was important to realize the Jail Assessment Fund is solely for capital items attached to Finance Committee April 10, 2003 Page 5 of 8 the real estate. Malick asked for help from Public Protection showing the Capital Outlay Plan for future years. Swenson noted the proforma is based on the worse case scenario and asked if there would be merit to run something higher? Malick requested the new Finance Director work on this and improve estimating on $175,000 and maintenance costs. Swenson asked if we would need a resolution prepared for the May 8th meeting defining the Huber borrowing. Whiting indicated the May 8th meeting is a joint meeting with Public Protection to reach a consensus between the two committees on how to use the Jail Assessment Fund for debt retirement. Swenson noted the committee had to think about what extent the County wants to formalize, if at all, the amount of funding to come out of the Jail Assessment Fund if we underwrite the debt service on the loan. Swenson thanked Whiting and Mary Martell for work done on preparing the proforma. d. Review of Verbeicher Project Status. Whiting reported Dave Fodroczi will report on the Verbeicher report to the County Board on April 15, 2003. The report is complete and the Verbeicher charged $2,600. There are scenarios presented in the report that will allow the County Board to understand what constraints and opportunities the County Farm property presents. What does the County want to do next and how will the County go about doing this? Malick suggested we get feedback from County Board members. Wentz indicated the year 2006 has come up in many meetings because the DOT has indicated its need for some property for the Highway 64 project. Malick said the time is right with the highway development and the growth of New Richmond with respect to infrastructure needs. Malick felt we should do nothing with the excess County owned land in Hudson until we show we can deal with the New Richmond site. Standafer asked what is planned for county owned property. Swenson suggested the County look at the other options rather than just selling the land. The report to the County Board will be an informational update. e. Review of County Unfunded Wisconsin Retirement System Liability - Springsted Incorporated. Mike Hoheisel of Springsted Incorporated referred to Page 7 of his handout providing Summary of Unfunded Accrued Actuarial Liability (UAAL). The estimated payments the County sends to the Wisconsin Retirement System (WRS) for its unfunded liability are shown in column 3 and total $9,540,799 through 2024. In 1980 WRS combined its two best retirement packages. In 1988 WRS discovered the benefits they were going to pay do not equal the money they are getting in based on what is collected from the employees. In 1988 WRS went to every municipality which was a member of WRS and amortized that difference over forty years. WRS assessed a liability onto each local unit of government. We are currently at a rate of 8% (state mandate percentage-fixed rate). To take it over the County would sell a tax- exempt note for that payment and use the dollars to payoff the WRS liability and change it over to a promissory note for ten years. Hoheisel indicated the County is not exempt from future liability if WRS does a new actual analysis. This is a taxable transaction and fiduciary responsibility, but can the County continue to let this liability grow? Column 4 of the analysis shows the principal and interest it would take if the County wanted a level debt payment for ten years in the amount of approximately $540,000 per year for the next ten years. The savings is in the long-term. Estimated present value savings would be $1,327,957. Swenson confirmed the Finance Committee April 10, 2003 Page 6 of 8 employees will not see a change in the level of benefits from WRS and that this is only a financial decision. This refinance moves it to debt service levy not an operating levy. f. Review of Borrowing Options and Issuance Fees - Springsted Incorporated. Hoheisel provided a handout showing St. Croix County Sources of Funds and Uses of Funds. Based on the proforma provided to Springsted by Whiting, Springsted estimated the Huber Facility Expansion in the amount of $1,135,000; Communications Systems at $1,230,000 and Park Buildings at $40,000. The Huber Facility Expansion and Communications Systems amounts are based on utilizing $735,000 from the Building Fund. There has been no decision at this time on whether the $735,000 will be used. Without the use of the $735,000, the amounts would be $1.5 for the Huber Facility Expansion and $1.6 for the Communications System. These are construction costs, not operational costs. Second series of bonds would be refinancing the Government Center building in the amount of $6,775,000. Costs of Issuance totaling $60,000 are costs involving attorneys' fees, agency fees, registrar fees, OS printing fees and Springsted fees. Debt Service Schedule - (Page 2 of handout). Rate is currently at 3.05%. Springsted compares when bonds are bid on a basis of a true interest cost, which is interest, plus the discount brought back in terms of today's dollars. Part of this bond issue was refinanced once to lower the rate. This is a current refunding, similar to a homeowner refinancing their house. In an advanced refunding, money is set aside in an escrow account to refinance debt. The procedure for this refinancing is money set aside to sell the bonds, call the old bonds in and the old bonds no longer exist. Hoheisel indicated this is the cleanest and most efficient type of refinancing and most cost efficient for the County. According to tax code, an issue can only be advanced once. Current refund can be done as many times as we want, as long as it makes financial sense to do. The County will have to sell $6,775,000 worth of bonds to refinance outstanding debt. This can be done 90 days before the bonds first become "callable" in October. Prior Original Debt Service (Page 6 of handout) shows the existing debt. From October 1, 2004 to October 1, 2009 the rate increases from 4.750% to 5.125%. The average coupon will go from 5.03% to 2.57%. Debt Service Comparison (Page 5 of handout) shows future dollar savings in the amount of $464,000 during the next six years. Debt Service Schedule (Page 9 of handout) provides coupon rates of 2.4% to 5.1%. This is all competitive bids; Springsted does not negotiate. This is sent on the national market to over four hundred underwriters. True Interest Cost is 4.6%. This is a taxable transaction; therefore the rates are different from the refunding bonds. Goal date is approximately the second week in June. Summary of Unfunded Accrued Actuarial Liability (UAAL) Analysis (Page 10 of handout). This is a scenario at a rate of 4.5% with cash payment of $1.7 million. If the County maintains its stream of payments the County would need to contribute $1.7 by July to keep the same Finance Committee April 10, 2003 Page 7 of 8 payments. The present value savings here is $1,322,000, which indicates there is not much difference using cash, then putting it out. Hoheisel noted page 11 provides a fee schedule for each type of transaction. Springsted fee schedule based on Issue Size for Wisconsin Clients. Springsted fee for 0 to 1,000,000 is $7,5000; 1,000,001 to 5,000,000 is $7,500 + $2/1,000 above $1,000,000; 5,000,001 plus is $15,500 + $1/1,000 above $5,000,000. Based on this schedule, Springsted's fees, for each of the issues, totals $41,855. Hoheisel noted the independent consultants will charge similar fees. Competitors are more than likely underwriters and will negotiate their fees. The current discount Springsted is offering is $11.00 a bond for the Promissory Notes, $11.00 a bond for Refunding Bonds, and $9.00 per bond for the Taxable Promissory Notes. Hoheisel indicated if the market were to move ten basis points the Total Interest Costs would be 3.5% for the Promissory Notes, 2.960% for Refunding Bonds, and 4.7% for Taxable Promissory Notes. If the market moves up or down ten basis points, the County could expect to pay $15,000 more or less. Whiting reported he had emailed administrators around the state on other investors used. Ehlers is comparable to Springsted. Hoheisel expects the decision be made by the May 8th Finance Committee meeting with the full County Board taking action at its May 20th meeting. Springsted will provide a set of schedules to the County Board, called a Recommendation Packet, which lays out the terms of each transaction. If approved by resolution, the debt would be sold on June 16th at 1:00 p.m. then take action to award the sale on June 17th. The County would get the money after July 1St for the three projects. Bids for Huber Building will be in on May 6th then will be opened at the May 8th meeting. Swenson asked if it would be possible to get a one page summary of two different scenarios; one using the $735,000 to buy it down and one without. Then also compare what would be the difference in the levy requirements, less the savings from General Obligations Bonds for the Government Center and include the operational savings. This would be used as a handout to the County Board members. Hoheisel stated cash is best and obviously the County would want to enter the market at a low point in time. The County needs to examine if it wants to use cash. He also indicated the rates reviewed today are lower than the trust fund. Standafer suggests keeping the $735,000 based on today's market conditions. Wentz suggested having an explanation prepared with respect to the WRS issue. Nick from Springsted will attend May 8th meeting. Hoheisel indicated he would provide the requested options to Whiting within two weeks and to provide Hoheisel with feedback on the information he provides. g. Update on State Budget. Whiting has noticed apparent change in the Doyle administration regarding the application for IGT funds at the state. Finance Committee April 10, 2003 Page 8 of 8 11. Fair Board line item transfer for fund raising planning. No action. Correspondence: WCA Memorandum re: 2003-05 State Budget Biennial Budget Analysis Adjournment. Wentz, 2„d Krueger to adjourn 12:23 p.m. Esther Wentz, Secretary