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City of Oconto

Information Regarding the City of Oconto, WI
 
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 Finance Mts 8/3/2010

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Linda
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Finance Mts 8/3/2010 Empty
PostSubject: Finance Mts 8/3/2010   Finance Mts 8/3/2010 Icon_minitimeWed Aug 04, 2010 3:35 pm

Minutes of the Finance Committee meeting held on Tuesday, August 3rd, 2010 pursuant to notice duly given.

1. Meeting called to order at 5 p.m. by Chairperson Maas.
2. Roll call: Jack Maas, Dick Doeren, Ed Young and Roger Reed. Pete Nelson, Absent.
Also present: Mayor Fulton, Jeff Belongia, Jim Stiloski, Marlene Zahn, Joe Stiloski and Linda Belongia Administrator and as recording secretary.
3. Moved by Doeren seconded by Young to approve of the agenda as presented.
Motion carried upon verbal voice vote. 4 ayes
4. No correspondence or public input.
5. Discussion/recommendation on:
a. Review of the city’s debt limits and possible financing options as recommended by auditors.
Maas stated we’ve heard from our auditors regarding our general fund deficit…we’ve inherited the problem…now need to confront and deal with it…need to replace the general fund, we have borrowing power, stated Jeff Belongia has been the city’s financial consultant for many years;

Jeff Belongia stated the council can hear it from a lot of sources but appreciates the fact that our auditors scolded us for past decisions, what appeared to be the right decision then, we know realize wasn’t; red flags indicate when a community keeps drawing down on the general fund; referenced the Standard & Poor’s Credit for the City of Oconto and comment that the city expected to close 2009 with an ending total gen fund of $771,650 or what S&P considered a strong 19% of expenditures; Belongia provided handout of official statement from 12/22/2009 issue; referenced city’s legal debt limit per statute of $10,427,635 which is 5% of our equalized value; our net gen fund debt as of year end 2009 was $4,400,000; which leaves au unused margin of indebtedness of $6,027,635; Belongia stated in 2010 city will be paying down $679,488 in principal and interest payments; Belongia commended city on the A- rating referenced the S&P report that this reflects the city’s access to additional employment throughout the Green Bay economy; adequate wealth and income indicators and low debt burden, with limited additional capital needs; key factors rating agencies look at is how fast can the total debt be paid off should be within 10 years…city will be there in nine years;

Maas stated the city had a developer who made an offer on the Kelly Pickle Property and we had a six to four vote in favor; we then held a public hearing on what was being proposed on the property and the vote changed to a four to six against which was the idea on replacing the general fund;

Zahn questioned Belongia on whether the city should have borrowed the money for that project?

Jeff Belongia stated we are where we are…now need to take strong steps to correct;

Jim Stiloski questioned handout documents Belongia provided one showed A+ the other A-?

Jeff Belongia stated it is an A-…asked the committee to look at the draft schedule he prepared… if the city would proceed will a $1M borrowing; no principal payment till Oct 2015; interest only till then; paid off in 2020;
Mayor stated his desire is to get the problem fixed…right now…we need to decide to do this;

Jeff Belongia strongly recommended that the Finance committee develop a written credit policy…he will provide some samples of other communities; also should have a debt policy…something we can go on record with as to how we budget and how we borrow and handle debt;

Jim Stiloski questioned the Standard & Poor’s report...stating we must cut the 2011 budget;

Jeff Belongia agreed, monitoring the budget is an important task of Finance;

Jim Stiloski questioned how many times can we go to the pot and borrow money

Jeff Belongia stated ideally you should look at your capital projects for 2 years and issue one borrowing for those expenses;

Jim Stiloski stated having a capital improvement plan is an asset;

Jeff Belongia stated getting the $1M and investing it will allow for the earned interest to be applied to the debt payments for this issue which he estimates will then leave a $.07 impact on the taxpayer for the debt payment;

Moved by Doeren seconded by Reed to recommend to Committee of the Whole $1M which will include the expense for the re-roofing of city hall and that the interest earned on the money will be used to offset debt payments.
Motion carried upon verbal voice vote. 4 ayes

b. Discussion on recommendation from Harbor Commission regarding engineering addendum No. H-4; Reed question cost? Maas stated these expenses are all part of the project that is funded by the grant and some match by the city;
Moved by Doeren seconded by Young to recommend to Com of the Whole to approve of the engineering addendum No. H-4 to Foth for the Harbor Dock Wall project in the amount of $18,500.
Motion carried upon verbal voice vote. 4 ayes

c. Recommendations from Board of Public Works:
1. Invoice from Crack Filing Service, Corp for resealing the city streets per budget in the amt of $14,000; Young stated there are a lot of areas on the south side that need crack filling; Maas stated the BPW does the poorest areas;
Moved by Reed seconded by Doeren to recommend to Com of the Whole approval on the invoice from Crack Filing Service Corp for resealing the city streets per budget in the amount of $14,000.
Motion carried upon verbal voice vote. 4 ayes

2. Moved by Reed seconded by Young to accept recommendation from BPW and approve of the purchase of a 2001 Bucket Truck in the amount of $16,000 which is budgeted.
Motion carried upon verbal voice vote. 4 ayes

d. Discussion on Tax Exempt properties report. Letter from NEWCAP stating they are not interested in paying a payment in lieu of tax for their properties.
Moved by Doeren seconded by Reed to schedule a finance meeting on 8/10 and have a draft letter that could be sent to the exempt property owners on a PILOT.
Motion carried upon verbal voice vote. 4 ayes

e. 2011 budget discussion. Maas stated the last couple of years we’ve had our depts. submit no increase budgets…but yet our operational costs increase; Belongia referenced new statutory provision that prohibits the city from reducing the police and fire budgets; union contracts also mandate the wage increases;
Moved by Doeren seconded by Young to have 2011 budgets on the 8/10 agenda.

Young stated the county is going with a 0% increase in budgets.

Motion carried upon verbal voice vote. 4 ayes

f. Moved by Doeren seconded by Reed to approve of the listing of accounts payables for $418,478.96; payroll for $121,986.56 and financial reports.
Motion carried upon verbal voice vote. 4 ayes

6. Moved by Doeren seconded by Young to adjourn. M/C
Meeting adjourned at 5:55 p.m.



Minutes submitted by
Linda M. Belongia,
Administrator
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