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HomeMy WebLinkAboutFinance 05-08-03 ST. CROIX COUNTY NOTICE OF COMMITTEE MEETING TO: Chairman Buck Malick St. Croix County Board FROM: Ralph Swenson, Chair COMMITTEE TITLE: Finance DATE: Thursday, May 8, 2003 8:30 A.M. LOCATION: Room 1281, Government Center, Hudson CALL TO ORDER ROLL CALL ADOPTION OF AGENDA DATE OF NEXT MEETING: June12, 2003 8:30 A.M. ACTION ON PREVIOUS MINUTES: April 10, 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. 9:00 a.m. - Joint Meeting with Public Protection Committee and Huber Building Committee a. Review of Huber Building Project Bids b. Review of Project Proforma and Jail Assessment Fund c. Review of Financing Options 7. Review of Options to Address County Unfunded Wisconsin Retirement System (WRS) Liability 8. Resolution(s) for Debt Financing re: Capital Projects, Current Debt Refinancing and WRS Liability 9. Treasurer's Report a. Review of Municipal Tax Collection Contracts b. Capital Outlay Plan - Treasurer's Office to the Agenda 10. County Clerk Report 11. Finance Department Report a. Introduction of New Finance Director - Michelle Pietrick b. Financial Reports 12. HHS Busette Funding Option Request 13. Administrative Coordinator Report a. County Funds Investment Policies b. Resolution re: Administrative Coordinator Responsibilities c. Update on State Budget d. Follow Up on ATM Discussion e. Proposed 2004 Budget and Planning Schedule f. WisDOT Appraisal of County Property re: STH 64 Improvements 14. Performance Evaluations - Closed Session pursuant to Wis. Stats. Sec. 19.85(1) (C) - considering performance evaluation data of County employees under the committee's oversight - Follow Up to January Finance Committee Meeting. CORRESPONDENCE: 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. 51112003-1:31 PM OR L FINANCE MEETING Regular Meeting May 8, 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, Corporation Counsel Greg Timmerman, Finance Director Michelle Pietrick, County Treasurer Cheryl Slind, County Clerk Cindy Campbell. Others present: Supr. Mark Erickson and Judy Wiff, media. Motion by Malick, 2"d by Krueger to adopt the agenda. Malick requested item 14, The Performance Evaluation (closed session), be brought before item 13.b. Resolution re: Administrative Coordinator Responsibilities, because they are related topics. Carried. Motion by Wentz, 2nd by Krueger to approve the minutes of April 10, 2003 with the following changes: Page 5: "Hoheisel indicated the County is not exempt from future liability if WRS does a new aeWal-actuarial analysis." Page 6: "If the County maintains its stream of payments the County would need to contribute $1.7 million by July to keep the same payments." Carried. 1. Vouchers. May vouchers will be reviewed by Krueger on May 9th. 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. Wentz will review vouchers on June 10th Chair Swenson introduced and welcomed Finance Director Michelle Pietrick. 2. Maintenance Department Report. Administrative Coordinator Whiting distributed a report prepared by Facilities Manager Ralph Robole. Robole's report indicated increases in natural gas prices in 2003 and a prediction of a 30% increase in costs for 2004. The number one chiller is not working due to a crack in one of the tubes. He is working on replacing the tube. The chillers were manufactured in Japan for the Trane Company. The County has the only ones like this in the United States. A portion of the floor drain in the main boiler room has collapsed from the heat from the humidity of the boiler's hot water discharges. The drain runs three feet below the concrete and will need to be contracted out. They are in the process of getting quotes for this repair. 3. Computer Services Department Report. No report. 4. Risk Management Report. Risk Manager Dawn Budrow reported twenty-seven workers compensation claims have been filed year-to-date. One claim under General County, four claims under Highway Department, one claim under Human Services, three claims under Law Enforcement and eighteen claims under Nursing Home. Total payments made for workers compensation through May 8, 2003 is $51,780.72. Budrow reported she has had a quote out for at least sixty days through an agency out of Milwaukee for excess coverage for the County. The agency has sent it out to approximately ten different carriers and so far none will provide excess coverage. Many of the agencies exclude nursing homes or indicate the County account is too small or too large. She indicated we may want to consider going through WMMIC. Malick suggested excluding the nursing home with respect to the excess coverage. LGPIF, the County's property carrier, has not provided a quote for builder's risk for the Huber Addition yet. 5. Corporation Counsel Report. No report. 6. Joint Meeting with Public Protection and Huber Building Committees. Huber Building Committee meeting was called to order by Chair Wentz at 9:35 a.m. Present: Wentz, Erickson, Gunderson as well as members of Public Protection (Speer, Raebel, Gunderson, Olson and Mehls) and Finance Committees. a. Review of Huber Building Project Bids. Whiting provided the Bid Tabulation prepared by Brian Larson of Ayres Associates. Tom Tompkins of Ayres Associates was in attendance to answer any questions. Nine bids were received, ranging from a low of $1,811,200 to $2,087,000. The low bidder is Dell Construction of Eau Claire. The low bid is approximately $378,000 over the original estimate of the project. Dell Construction provided a breakdown of major sub-contractors and Ayres provided a comparison of the estimate compared to actual bid as follows: Estimate Bid General Construction $774,774 $1,088,200 (corrected 5/12) Plumbing $167,700 $117,000 Fire Protection $25,155 $26,000 HVAC $215,215 $279,000 Electrical (including electronic security) $250,432 $301,000 Major differences are in the area of HVAC work, electrical and electronic security work and general construction. The significant difference in the general construction cost may be Ayres under estimating masonry work. Ayres indicated the plumbing cost is less than the estimate. There is an existing storm sewer running under the planned addition which will be replaced. The amount was included in the plumbing estimate and the contractor included that in the general construction figure. This amount is approximately $50,000, which partly explains why the plumbing component was lower and the general construction component was higher. Speer indicated she had comparison cost estimates from the March Finance Committee. The project had an increase in size 1,030 square feet, plus additional plumbing fixtures from 20 to 36 and an additional $20,000 for tapping into the existing plumbing service. Malick asked if the brick and stone could be bought directly to avoid sales tax. Erickson indicated he thought it could be done that way. Swenson noted Brian Larson's memo indicated if the County wished to reduce construction costs, Ayres recommends negotiating with Dell to eliminate the finishing and equipping of one of the male dormitories and simply shell in this space. Finishing and equipping this dormitory could be completed at a later date. Erickson indicated construction costs continue to increase plus the need to fill the beds as soon as they are available. 2 Wentz indicated the actual recommendation needs to come from the Huber Building Committee. Motion by Erickson, 2nd by Gunderson to go ahead with the project as bid, subject to the sales tax issue and providing Public Protection and Finance Committees concur, if not, and the County is unable to get the funds then the Huber Building Committee will revisit the issue. Wentz indicate Dell's bid did not include builder's risk (property) insurance. Larson contacted Dell and was told the cost for this alternate is an additional $4,400. Whiting indicated the reason builder's insurance was bid as an alternate is the County has the option to pick up this insurance itself. Budrow indicated she received an amount if the County provided builder's risk insurance. For a $1,800,000 project the cost for insurance would be $288.00. Whiting pointed out the cost of the required $10,000,000 liability insurance is $6,200. The contractor ordinarily carries liability insurance with a limit of $5,000,000, so reducing this limit will save the $6,200. The County liability insurance is currently $5,000,000 per occurrence with a $150,000.00 deductible. Erickson amended his original motion to include the liability insurance coverage be cut back to $5,000,000. Gunderson agreed to amendment. Carried unanimously. Huber Building Committee adjourned at 10:00 a.m. Joint meeting of Public Protection, Finance and Huber Building Committees commenced. b. Review of Project Proforma and Jail Assessment Fund. Whiting distributed copies of draft proforma option 1 and option 2 providing an operational cash flow with startup and equipment replacement costs along with annual purchases for the Huber addition. The proforma also shows revenues from the Jail Assessment Fund. Option 1 refers to borrowing the full amount and Option 2 refers to borrowing a lesser amount by utilizing funds from the Building Fund. The recommendation is to not use the Building Fund for this borrowing because the interest rates are low and to keep the money in the Building Fund for other uses. Whiting presented options and scenarios with respect to keeping an ongoing policy and position of the Jail Assessment Fund. The scenarios include, fully utilizing the Jail Assessment Fund, using $150,000 from the Jail Assessment Fund, using the Jail Assessment Fund but maintaining a minimum fund balance of $50,000 and using the Jail Assessment Fund but maintaining a minimum fund balance of $10,000 and then is to be accumulated from year to year for unplanned needs. Pietrick indicated there is no policy as to what the balance should be in the Jail Assessment Fund. Hillstead clarified the Jail Assessment Fund is used only for building and equipment (fixtures) used in the jail, not personnel or operating expenses. He felt most comfortable with leaving a minimum balance of $50,000 in the Jail Assessment Fund. Speer indicated the Public Protection Committee has not had opportunity to review the options and scenarios thoroughly. She requested time to meet with the Public Protection Committee members to discuss. Malick indicated borrowing the full amount or a lesser amount with the use of the Building Funds would be a Finance Committee decision. Motion by Malick, 2nd by Krueger to choose Option 1 which provides borrowing one hundred percent of the debt with no use of the funds from the Building Fund. Roll call vote: 5 - 0. Carried unanimously. Discussion regarding use of the Jail Assessment Fund to help fund the debt. The committees separated and Speer later indicated Public Protection Committee discussed the four scenarios and 3 a motion was made by Mehls, 2nd by Gunderson to recommend Option 1, Scenario 3 which provides borrowing one hundred percent of the debt with no use of the funds from the Building Fund and the Jail Assessment Fund is tapped for full debt payments until a fund balance of $50,000 is reached. Carried by the Public Protection Committee. Motion by Wentz, 2nd by Krueger to adopt Public Protection Committee's recommendation. Motion by Malick, 2nd by Standafer to amend the motion to keep a fund balance of $25,000 in the Jail Assessment Fund. Malick indicated this would keep a more modest sum in the fund for emergencies. Amendment fails 3 - 2. Vote on original motion to keep a $50,000 balance in the Jail Assessment Fund. Carried. C. Review of Finance Options. Nick Dragasick of Springsted Incorporated discussed financing options. One being one hundred percent financing and the other using $735,000 cash to reduce the debt. Using the $735,000 only provides a $2,000 difference in the sum of payments. Based on the present value basis there would be a $432,250 savings to refund the Series 1994 Government Center Bonds. Dragasick indicated with respect to the Unfunded Liability Choices there is very little difference if the County finances one hundred percent ($4,330,000) or amounts using cash contributions from the County in the amounts of $1,700,000 or $735,000. The present value payments would amount to approximately $4,303,000. He indicated it does not make a lot of sense to use the County's cash. Whiting noted if the County goes with 100% finance, it will need to come up with $538,972 in 2004, opposed to $272,598. This will have an affect on the levy. Total present value savings will be approximately $1,765,000. The Project Choices are: $3,150,000 Series 2003A Huber, Parks and Communications Debt Payment which includes $1,958,820 for the Huber project, $1,100,000 for the Communications project and $40,000 for the Parks project; or $2,410,000 Series 2003A Huber, Parks and Communications Debt Payment which includes $1,488,820 for the Huber project, $835,000 for the Communications project and $40,000 for the Parks project. Whiting indicate there was another number which does not appear on the handout. What was levied for the Building Fund, the Board may have decided to levy for the Park Building in addition to stating that they needed to borrow the funds. There may be $40,000 in the Building Fund. If applied, the numbers may be readjusted. Dragasick indicated the Finance Committee would bring up a separate resolution because it requires a majority for the borrowing of the refunding portion and 3/4 vote for the new money borrowed. The Finance Committee would ask the County Board to pass a sale resolution by simple majority combining the issue bonds into one ten year borrowing. Three resolutions are necessary. The taxable promissory note borrowing would require a separate 3/4 majority vote. Whiting pointed out Emergency Communications Director Gary Kollman has been taking the bids for the Communications project. Kollman has informed Whiting he has two project amounts. One is for the microwave improvements, which was the number provided to 4 Springsted ($1,100,000). Second, a bid was requested for improvement to the Baldwin facility which is to act as a backup to the Communications Center. The Baldwin facility improvement is an additional $300,000 to $400,000. Whiting indicated the Baldwin improvement figures were not included in the $1,100,000 because it has not been a part of the capital outlay plan, the budget discussions or presented to the Finance Committee or County Board. 7. Review of Option to Address County Unfunded Wisconsin Retirement System (WRS) Liability. Motion by Krueger, 2nd by Standafer to proceed with issuing $4,330,000 Taxable Promissory Note to payoff the existing liability to the Employee's Trust Fund. Roll call vote: 5 - 0. Carried unanimously. 8. Resolutions(s) for Debt Finance re: Capital Projects, Current Debt Refinancing and WRS Liability. Motion by Malick, 2nd by Krueger to approve $6,765,000 Series 2003A Current Refunding Debt Payment. Roll call vote: 5 - 0. Carried unanimously. Motion by Krueger, 2nd by Standafer to proceed with $3,150,000 Series 2003A Huber, Parks and Communications debt payment plan. Discussion held regarding if the Baldwin facility improvement was always a part of the communications upgrade. Kollman indicated it was part of an option. He advertised specifications for a one-for-one as a replacement of what the County has, and also on a secondary basis one-for-one with a Baldwin improvement option and three more other options to layout to the Emergency Communications Committee and ultimately the County Board. Motion by Malick, 2„ d by Standafer to amend the motion to change the amount of $3,150,000 to a higher amount to include what is needed for the communications project. Swenson indicated this is a new item which was not included in the Capital Outlay Plan or borrowing plan. Malick reported the Baldwin improvement project was part of the project from the beginning. Standafer commented this is the first time he has heard about this project and now in addition to the tower, there is a request to upgrade the backup facility. Kollman reported with the Baldwin improvement project they are looking at a total of $1,407,616, an additional $307,616. This would increase the borrowing to approximately $3,460,000 because it needs to be in increments of $5,000. Roll call vote on amendment: Wentz - No, Malick - Yes, Swenson - No, Krueger- No, Standafer - No. Amendment to motion fails. Roll call vote on original motion: Malick - No, Swenson - Yes, Krueger - Yes, Standafer - Yes, Wentz - Yes. Carried. Dragasick indicated bond council will prepare the resolutions. 9. Treasurer's Report. County Treasurer Cheryl Slind provided Reconciliation Reports for February and March 2003. Balance as of February 28, 2003 - $773,445.13; balance as of March 31, 2003 - $1,721,039.63. Slind indicated on February 23, 2003 she received four years of delinquent taxes from HAH Enterprises, Inc. which owns part of the dog track property. Total paid was $191,190.35, the County retains $68,536. Croixland Enterprises, Ltd. paid on April 30, 2003 for 1999 delinquency in the amount of $478,157.67, of that $401,682.33 was retained by the County. Krueger asked if the County kept all penalty and interest on delinquent tax payments. Slind replied the County keeps the penalty and interest charges that pertain to the delinquent tax amount. Special assessments and other charges get paid to the municipality with interest allocated to amount delinquent. 5 a. Review of Municipal Tax Collection Contracts. Slind provided a copy of the Tax Collection Agreement with respect to the County collecting first half taxes and full payments of real and personal property tax, special assessments and special charges through January 31 for municipalities in which the County has entered into such an agreement to do so. The current agreement provides the municipality shall pay the County, on or before February 20 of each year, $.55 per parcel listed on the tax roll. This rate has been set at this amount for approximately six years. Slind proposes to increase the amount to $.75 per parcel. Slind surveyed other County Treasurers and found the average rate to be $1.00 per parcel. Slind also proposed to remove, "Additional wire transfers will be available for $25.00 each." from the agreement. She indicated there is no need for this because they receive their money on a weekly basis. Motion by Wentz, 2nd by Standafer to delete the wire transfer language in the agreement and increase the rate municipalities shall pay to the County to $35 per parcel listed on the tax roll. Carried unanimously. b. Capital Outlay Plan. Slind asked the Finance Committee to table the Capital Outlay Plan item on the agenda. She does not have the information necessary at this time. 10. County Clerk's Report. County Clerk Cindy Campbell reported it has been brought to her attention some employees and supervisors are not getting authorization to exceed motel/hotel maximum allowance which was set at a rate of $62.00 per person per night by the Finance Committee in June 2000 and effective January 1, 2001. She will send a reminder with the authorization form to all County Board Supervisors and Department Heads. 11. Finance Department Report. Finance Director Michelle Pietrick reported the total cash and investments as of March 31, 2003 were $21,827,516.83. Pietrick will check the balance in the Contingency Fund. Pietrick reported the County has received for sales tax more than anticipated. Swenson requested future reports to the Finance Committee include an assessment of how the County is doing in revenue and expense showing areas where there is a potential for overrun or under run; also, more reporting on revenues including investment income, grants, sales tax and approved expenditures; details on the 2003 Contingency Fund and a Nursing Home report. Swenson asked Pietrick to bring forth issues in which she does not understand why the Finance Committee does things the way they do and suggestions to improve. The 2002 audit is about to begin and will be completed by August 31. Swenson asked Pietrick to check into why the audit begins late in the year. 12. HHS Bussette Funding Option Request. John Borup and Ron Eichstaedt prepared a memorandum to the Finance Committee indicating in February 2003 the Finance Committee approved an internal loan of $42,560 to purchase a 20-passenger bus for St. Croix Industries to be paid back to the County by St. Croix Industries over four years. At that time a discussion was held regarding purchasing a second vehicle, a 12-passenger van, at a later date. The H&HS Board has leased bussettes in the past but determined purchasing to be more cost effective. On April 11, 2003 the H&HS Board approved the purchase of a bussette for a net cost after trade-in of $18,259. A request was made to repeat the same internal loan process. Full payment will be made on this vehicle at time of delivery / acceptance. Motion by Krueger, 2nd by Wentz to approve the purchase of a 12-passenger bussette with St. Croix Industries to pay back the loan to the County according to the following payment schedule: one-fourth of the loan at time of 6 delivery and one-fourth of the loan for the following three years. The vehicle purchases are in the capital outlay plan and includes money allocated over four years. The cost of this equipment is built into St. Croix Industries hourly rate. This hourly rate is used to bill various funding sources for services provided by their client referrals. Standafer expressed the need to increase client rates to help pay for future bussettes. Carried unanimously. 13. Administrative Coordinator Report. a. County Funds Investment Policies. This policy will enable the Finance Director to develop and implement an investment plan for the County. Motion to adopt by Malick, 2nd by Wentz. Carried unanimously. b. Resolution re: Administrative Coordinator Responsibilities. Corporation Counsel Greg Timmerman indicated the proposed resolution would change the Personnel Manual as indicated in Article 4, Section 5 and Article 12, Section 3 in regard to the various responsibilities for hiring and evaluations. The resolution impacts the County's uniform consistent personnel policy and maybe it should be reviewed by Personnel first. Malick suggested the resolution be edited by deleting the hiring and termination language as it pertains to all four positions. Swenson indicated the Corporation Counsel job description currently reads "under the general direction of the Administrative Coordinator" and the change would be "under direct supervision of the Administrative Coordinator". Swenson indicated the Finance Committee needs to decide on some language, if any, or postpone this matter to a later date. Wentz noted maybe more dialog is necessary between the Administrative Coordinator and the Corporation Counsel before bringing this to the full Board. Motion by Malick, 2°d by Wentz to postpone this matter for three months. Carried 3 - 2. C. Update on State Budget. Whiting reported levy limits are being contemplated. Whiting feels the purpose is to send a message to be concerned about property taxes. Motion by Malick, 2°d by Swenson that St. Croix County go on record as opposed to a freeze on the amounts stated in money that we are permitted to levy in future years, unless the legislature provides meaningful tools, such as mandate relief, to enable us to achieve such a goal. Standafer expressed concern regarding voting in opposition to freezing the amount of taxes St. Croix County can collect and giving a perception which may differ than what our intent is. The perception may be read as the Finance Committee favorable to increasing taxes. Carried 3 - 2. d. Follow Up on ATM Discussion. Whiting indicated the advice he has received is ATM machines can be had, it's finding the right company to install it. Standafer recommends the County not get involved in owning or leasing an ATM machine, let other companies incur the expense. Motion by Krueger, 2°d by Wentz authorizing the Administrative Coordinator and Finance Director to proceed with acquiring an ATM machine without having the County incur any financial lease or ownership interest therein. Carried unanimously. e. Proposed 2004 Budget and Planning Schedule. Whiting distributed copies of the Proposed Time Line for Development of 2004 Operating Budget. The planning portion of the schedule refers to the policy making meetings that are held, specifically the meeting with the committee chairs at the June Finance Committee meeting, reviewing that meeting with the full 7 Board in June, the personnel components of the process and the final meetings in September and October. Whiting indicated WCA meets the middle of September, the same week as the September County Board meeting. Krueger is not available for the September 29th and 30th Finance Committee budget reviews. Whiting suggested moving the two-day Finance Committee review to September 25 and 26th and to consider moving the September County Board meeting to September 23ra Malick suggested changing the language under the July Personnel Committee Meeting from "review and approve new position requests" to "review and analyze new position requests." Whiting indicated another way to state it is to review and disapprove new position requests. This would sort out those that will be given further consideration in the budget. Whiting noted two or three years ago, the positions which were approved in August were included in the budget but not subject to further discussion. In 2000 the Finance Committee realized it was necessary to consider the position relative to everything else in the budget. Swenson added new positions were approved before operating expenses and Capital Outlay was in place. Discussion held regarding budgeting for labor contract settlements. Swenson asked if someone would begin to identify the differences for wages. Whiting indicated the health insurance difference is $245,000 and personnel would need to calculate the amount for the wages. Swenson asked to have someone request this information from the Personnel Department. Motion by Wentz, 2nd by Krueger to approve the proposed time line for development of the 2004 operating budget with the change of the two-day September Finance Committee from September 29th and 30th to September 25th and 26th. Carried unanimously. f. WisDOT Appraisal of County Property re: STH 64 Improvements. Whiting has received Wisconsin DOT's appraisal and offer for the County property in New Richmond adjacent to the Health Center for the State Trunk Highway 64 improvement. The County has the right to have its own appraisal done at WisDOT's expense within a 60 day period. This period expires July 3, 2003. The County's appraisal needs to be completed and to the State by this date. Whiting indicated it would be in the County's interest to have an appraisal done and has collected names of appraisers which the St. Croix County Highway Department uses. There are requirements which need to go into the appraisal. Motion by Malick, 2nd by Standafer to delegate to the Administrative Coordinator to make the choice after he issues an RFP. Carried unanimously. 14. Performance Evaluations - Closed Session pursuant to Wis. Stats. Sec. 19.85(1)(C) - considering performance evaluation data of County employees under the committee's oversight - Follow up to January Finance Committee Meeting. Swenson called for a roll call vote to move into closed session to include Whiting at 12:40 p.m. Swenson - Yes, Krueger - Yes, Standafer - Yes, Wentz - Yes, Malick - Yes. Carried unanimously. Motion by Standafer, 2nd by Wentz to come out of closed session. Carried unanimously. Resumed open session at 1:13 p.m. Motion to adjourn by Wentz, 2nd by Krueger. Meeting adjourned at 1:45 p.m. 8