Finance Committee - Regular Meeting

Who's down here? Yeah, right. Mr. Dunbar, are you ready? I see the clock on the wall struck 530. So I will call this month's meeting of the Finance Committee to order. First item on the agenda is call to order, which I think I successfully accomplished. Roll call. We have Eric Stikiewicz. who's the chairperson I'm sitting in for as vice chair is not available, he is out of town. And since he contacted me, I would mark him as excused. I haven't heard anything from Andrew Dunbar other than the other night, I know he knew about this meeting, but I haven't heard anything so I'm assuming we're going to say that he's absent unless he shows up. We are now to public comment. We have anybody from the public either here or on Zoom that would like to comment on any items that are coming before us? Going once. I don't see anybody showing up on Zoom, so twice. and three times I'll call public comment closed. Consent agenda, does anybody see anything on the consent agenda that they would like discussed? Not seeing anything, I'll accept a motion to accept the agenda as presented. There's a motion and second to accept the consent agenda as presented. All those in favor, aye. All right. Against? Unanimous? Then let's see, we go to item 260501, assessor department supervision transferred from community development director to finance director. There's attachments that you hopefully had perused. and it'll open up to who would like to speak on or give us some background verbally.

Sure, I mean the memo on there kind of spelt it out that Adam wrote in collaboration with myself. So ultimately the operational oversight has been historically in the community development department. That was when it was a in-house assessor, a full-time FTE here. And since going to a contracted service, it's just kind of been very minimal, and we started evaluating where does it best land to have that supervision, given the finance director also incorporates the treasurer position, which has a lot of working back and forth with the assessor and a little bit more of the ability to have oversight. it just was felt to to do the official uh move here uh as we explained in the manitowoc municipal uh code it is under finance already uh we just felt operationally this has been being performed since pre-2016 so um wanted to bring it forth and get council finance council's approval on the move of supervisions um i'd like adam or the mayor up if there's anything they want to add to it but I said the memo kind of spells out the background and the rationale for moving forward.

Anything else? Adam, you have, or Mayor? Anybody have any questions, concerns, or comments?

Motion to approve.

There's a motion and a second to approve the transfer of Any other discussion? Seeing none, all those in favor, aye. Aye. Opposed, nay. Unanimous. Looking at the agenda, I forgot I should have perhaps got a motion and a second to approve the minutes from the previous minutes. Automatically.

You did that with consent, sir. Oh, so, okay. You're good.

I stand corrected, and actually, I also sit corrected. You know, when you're old, you gotta be able to sit corrected, too, so. Very good. Moving on to item 26-0502, sanitary sewer master plan. results and authorization for staff to continue negotiations with chosen firm.

All right. So basically, as I tried to outline in the memo, the city has multiple sewer service plan. Some are about one particular lift station. Others are about a potential extension, all of which are older and outdated. So what this does is we have conflicting information. A lot of times when we're looking at, for example, a reconstruction of the street, on whether or not we need to upsize that sewer or leave it as is, that type of thing. So it's time that we look at basically redoing everything, having a brand new comprehensive plan, especially as we begin to try and shift from kind of a status quo type of stance to a pro-growth stance, which is what I'm trying to push towards eventually. So in conversations with engineering, it was time to look at this update. However, this is one of those type of projects that you never quite know what that cost is going to be. So we decided that the RFP process was appropriate to go out and try and get some proposals so that we could have a budgetary impact on it. Our best guess was anywhere from $100,000 to half a million dollars. Just kind of wanted to see what we could get out there. Obviously those have very different budget impacts. So when we did release it and went through the proposals, there were three proposals received. We sent it out to four entities. Greg Minical, Dan Koski, myself, Billy Hutterer, all met to go over the proposals, and it was unanimous that from a qualification standpoint and a best bang for our buck, I guess you could say, it was unanimous that Foth was the best proposal of the three. So our recommendation is to bring this forward to authorize staff to continue moving down this path for negotiation and bringing a contract back to the council. I know there is probably some questions on the budgetary aspect of this. When I initially sat down with Sean to talk about bringing this forward, there was obviously some angst on his part as well because that is not a small amount of money. However, without having a true budget impact, we did decide to move forward with the request for a proposal. When we talked about, and I'm sure Sean will fill in the blanks a little bit more, but depending on where that cost came from, there is, at least in my mind, two potential funding streams for this, although it's not a specifically budgeted item. The first is the city does have the non-lapsing fund that is created for basically industrial park planning and promotion. Basically, whenever we sell property within the industrial park, that cash goes into a non-lapsing account that can then be utilized for various things associated with industrial park. A large driver of this plan is, in fact, our need to continue to plan for future industrial growth. So that revenue source seemed potentially an option. But then the second one is because the sewer system that we operate is operated through fees, we do have the standalone sewer fund that is intended for the planning, the maintenance, and everything else associated with our sewer system. distribution system so that would be the other potential source I guess the final note is this particular proposal ballpark right around $200,000 is the amount if you go through the proposal in some detail this would likely be around a 12 month long process so we would be looking at breaking it up between two fiscal years this year and next year whether or not that would be a perfect 50-50 split that I don't know for sure And as far as timing is concerned, typically the best months to do the monitoring that is part of this program is in the June, July through August, September standpoint because of the types of storms we get. Even though it's sanitary sewer, there is a sizable amount of infiltration that occurs just when rain happens. That's one of the other drivers behind this type of study. from what we have learned from the consultant, this time of year would be a good time to be getting those monitoring flow meters in place. So that is why we are bringing this forward and some of the background on it and happy to answer any questions you have.

Yes, sir.

Just one. The flow meters, I understand the monitoring, no additional cost for that. That's all included in the bid.

I believe in this particular one they are proposing it's either 10 or 12 meters. The city owns four currently, so we would be utilizing our four. But, yes, the cost proposal includes that monitoring. Our city staff would offset that cost by going out and helping set them and then going and gathering the data and then transmitting that data to the consultant so the consultant isn't sending someone out to do that on a routine basis.

Okay.

Thank you.

Well, you said, well, it doesn't have a budget impact. And I probably am not quoting you correctly. But I'm sorry.

I did not say that, hopefully.

Well, Sean, where is the money going to come from? You talked about, well, we've got this, we've got that. And I'm sorry I didn't memorize the exact fund names or whatever. So what is available as to what he is talking about, and how long did it take us to acquire that balance roughly? Is it something, oh, you can replenish that in a year or two, or are we talking about, yeah, I don't remember how long, it's been a long time, so. Sure.

The well, the most logical place to put it outside. I would not know as well. Adam did mention about the non lapse and that we created a sanity sewer is another word for wastewater treatment facility collections, which is fund 6300 our own enterprise fund. So we have on every mpu bill part of that that comes through for the city residents or others there's that portion of wastewater treatment which is then further broken down to facility and collection so this is predominantly going to be used for the collection purpose or the enhancement or really what that service fee is that's charged to the residents so fund 6300 would be the best place to utilize it we have in the last two years our fees have been a little bit higher than what our expenses are which is not uncommon as you are aware from your county experience because we do are putting in uh into the reserves to help with when our main predominant uh expenses of the collection pipes underground or the lift stations there would be um if it was 200 000 ask operationally could we afford it this year without if worst case scenario came through would we be okay we would our service fees because we did a fee increase in 2023 and we did a fee increase in 2024 when we did the mpu transfer for collections. If you remember the geography, we hadn't done one for 10 years, so we did a 5% and a 5%. And those fees are providing positive impact back to the fund balance. I don't have the exact fiscal year 25 ending for you to rattle that off, but they have been showing positive net income on those two. I feel comfortable if the way running it through operationally on there, kind of what the fee is for, that it would be able to sustain it and not impact the fund balance in a negative aspect of the way, especially since the current projects for that fund that were budgeted in 26 are trending to be less than what was budgeted. That is commonly the sewer line maintenance, which is the contractors that come in take the sewer lines and put a film or a foam around it to prevent it so That would that would be my recommendation if this were to go through would be to run it through operationally On that and utilizing those fees as to cover the cost You said one thing that confused me sure and that is Run it through operationally but somewhere in that

speech or statement, you hinted that the fees that we're collecting themselves this year would not be sufficient to handle $200,000.

I apologize, I meant the opposite, if that's how I confused you.

So in one year, basically, we're gonna collect the $200,000? Correct.

Okay.

I misunderstood, I may have, I mean, Like I say, I'm old, my hearing might be gone. So don't agree with that. OK. So in one year, we will make enough to handle that bill. And I understand, I read your thing that says, oh, they gave us an estimate that you were looking at. You're going to negotiate. So it probably will be less. in the ballpark anyway. So go ahead.

Um, the only other thing I wanted to note about the proposal before you is, as Sean was talking about, we did our rate analysis and we did some changes a few years ago. The other part of this study would be that we would be including an up to date rate analysis because what would come out of this plan is a capital plan. So basically over the next five years, the next 20 years that, you know, if we need to improve lift stations, if we need to run new lines, if we have to replace major lines, having estimated costs in that, and then bringing in AILERS to come in and basically do a financial analysis as well so that we are making sure that we're right-sizing that fee going forward as well to try and make sure that operationally we're charging that cost of that distribution system to the correct place versus relying on the general fund.

I like that idea. I mean, personally, I just hope that when they get into that aspect of it, they don't come back and say, well, you know, you increased it 5% there, you increased it another 5 there. Oh, by the way, probably have to do 20% or 25. But a guy's got to know. It's sort of like what I'm going through in two weeks. A guy's got to know. You just got to do it, unfortunately.

Okay, any other questions or comments? Thank you. You just answered my question. Thank you.

I'm sure the mayor doesn't, because he's on top of this. But if you did, mayor, if you got questions or comments.

Nope, okay.

I'll accept a motion to either accept, reject, or whatever.

Motion to approve moving forward with the plan of negotiations.

Okay, there's been a motion and a second to approve moving forward. Any other comments or questions? Seeing none, all those in favor say aye. Aye. Opposed, nay. Passed unanimous. I see item six is adjournment. Motion and second to adjourn. All those say aye. We're adjourned.