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HomeMy WebLinkAbout2010-01-04 Finance Committee Minutes FINANCE COMMITTEE January 4, 2010 Minutes Council: Bronson, Nealley, Wheeler, Blanchette, Palmer, Weston, Stone Staff: Cyr, Arno, Farrar, Heitmann, Wardwell, Little 1. Executive Session – 1 MRSA Section 405 (6) (E) – Workers Compensation Settlement 2. Open Session – Recommendation on Workers Compensation Settlement Bronson noted that Item 1 Executive Session had been completed. A motion was made and seconded to approve staff’s recommendation. The item will appear on the upcoming City Council agenda for final action. 3. Consent Agenda A motion was made and seconded to approve the Consent Agenda items. a. Resolve 10-041, Accepting & Appropriating Grant Funds from HUD – Shelter Plus Care Renewal b. Workout Agreement – Lot 227 Cedar Falls c. Workout Agreement – 99 Pine Street 4. Request to Appropriate Federal Seizure Funds for Police Vehicle Replacement Arno said that the Department’s Detective fleet is currently down three vehicles. According to Motor Pool, two vehicles currently in service will most likely not pass inspection, and one of the unmarked vehicles within the Detective Division was recently totaled. The insurance company will provide approximately $3,500 for that vehicle. The Department is asking Committee approval to use the insurance money along with federal forfeiture money to purchase one vehicle. Dawes estimates the cost to be in the range of $12,000-13,000. A motion was made and seconded to approve staff recommendation. Responding to Wheeler’s question concerning cost of necessary equipment, Arno noted that equipment from other vehicles will be swapped out to the new vehicle. Blanchette asked about restricted uses of forfeiture funds. Arno said that use of the funds needs to be related to drug related investigations. Responding to Bronson, Arno stated that when marked cruisers are rotated out they sometimes are repainted and moved into the unmarked fleet. The average mileage is in the area of 100,000 miles. 5. Resolve to Appropriate General Fund Undesignated Fund Balance to Fund the Costs Associated with the City Manager Position As part of the City Manager’s retirement, Cyr noted that there were certain amounts of final pay to be dispersed to the Manager. The reimbursement has been completed, and the amount that was payable under the employment agreement exceeds the budget available within the City Manager’s division by about $102,000. The City is also in the process of engaging an Executive Search and Recruitment firm in the area of $15,000 to $50,000. Bids were opened last Wednesday and on average the price range is $25,000 plus expenses. Cyr recommended that the Council should appropriate approximately $140,000 from the Undesignated Fund Balance to take care of both items within the current fiscal year. This is a one-time, unforeseen circumstance. The Undesignated Fund Balance did exceed the City’s target balance at the end of FY09 by about $2.4M. Responding to Nealley, Cyr said staff will provide an update as to the first six months of FY10 at the second Council meeting in January. While the Undesignated Fund Balance should not increase, it should not drop significantly based on this year’s budget circumstances. In addition, money was not directly appropriated out of Undesignated Fund Balance this year, as has been done in the past. Nealley talked about the City’s targeted goal for the Undesignated Fund Balance in the area of 8-10%. Cyr said the 8-12% equates to keeping one month’s expenditures in the Fund Balance. Realistically, Cyr said that governments should be looking at north of 10% depending on the amount of reserve fund balance carried. Rating agencies want to see a 20-25% ratio of fund balance when looking at the municipality in total, whether it’s through designated or undesignated. Wheeler referred to a November 2008 Council Order at the second meeting in November 2008 which mandated that 5% of any increased tax revenues should be set aside for rainy day purposes. Cyr said that it is actually called the Credit Reserve which had a balance of approximately 80,000 in FY09. During budget deliberations, the Council decided not to add to that Credit Reserve in the FY10 budget. Cyr said that Fund Balance policy states that it should not be used to fund any portion of the ongoing and routine year to year operating expenditures of the City. Wheeler noted that he would discuss it further at a more appropriate time. A motion was made and seconded to approve staff recommendation to appropriate $140,000 from the Undesignated Fund Balance for the purpose of funding costs associated with the City Manager’s position. An appropriation resolve will be prepared for the upcoming Council meeting for first reading only. Committee adjourned at 5:30 pm.