Finance Committee (Meets 4th Tuesday of each month at 4:30 p.m.)

FINANCE COMMITTEE Meeting Minutes August 10, 2023 Regular Meeting The meeting was called to order by Chair Sweeney at 4:30pm on August 10, 2023, in Government Center Room 204. 1 ROLLCALL PRESENT: Jack Sweeney, Tylor Elm and Mike Herrick VIRTUAL: Jenny Van Sickle, and Sheanne Hediger CITY STAFF PRESENT: Nick Rhinehart, Jim Paine, Renee Hoff, Cameron Vollbrecht and Karie Markon OTHERS PRESENT: Shelley Nelson, Tom Beaudry, John Ramos, and Barb Hoag 2 APPROVAL OF MINUTES 2.1 Finance Committee (Meeting held July 13, 2023) Motion was made by Tylor Elm, seconded by Mike Herrick and carried to approve the July 13, 2023, Finance Committee minutes. Councilor Sweeney proposed to moving item 4.2 and 5.1 to after 3.1 to accommodate those who don’t need to be in attendance for the full meeting. 3 OLD BUSINESS 3.1 Request from Finance Director Nick Rhinehart for approval of Omada Prevention & Health Management Program The Health Insurance Committee (HIC) is recommending contracting with Omada, a virtual chronic care provider which offers diabetes and hypertension management programs. A discussion ensued concerning targeting a specific illness and employer sponsorship. Further questions and concern of double coverage were addressed and a special request to meet with Health Partners was made. Motion was made by Tylor Elm, seconded by Mike Herrick and carried to hold in Committee until the September meeting. 3.2 Barker’s Island Marina – Verizon Cell Tower Sublease Eric Thomas was not present to present the requested additional information as this information was not provided by Verizon to Eric at time of the meeting. Motion was made by Tylor Elm, seconded by Mike Herrick and carried to hold in committee until September meeting.  3.3 Review and Analyze proposal from Douglas County regarding the city’s future as a tenant at the Government Center. Mayor Jim Paine requested a closed session. Closed under Wis. Stat. sec. 19.85(1)(e) for the purposes of deliberating strategies and setting parameters for the continued negotiation of rent and other terms relevant to the county’s proposed Agreement for city office space within the Government Center Motion was made by Mike Herrick and seconded by Tylor Elm to go into closed session at 5:04 pm Motion was made by Mike Herrick and seconded by Tylor Elm to return to open session at 6:00 pm 4. NEW BUSINESS 4.1 2022 City of Superior Audited Financial Statement presented by Baker Tilly. Sheanne Hediger, employee of Baker Tilly, presented the finding of the 2022 City Audit. A question- and-answer period ensued. Motion was made by Tylor Elm, seconded by Mike Herrick and carried to receive the 2022 City Audit final review. 4.2 Referred from Golf Course Committee – Expansion of Golf Cart Fleet Tom Beaudry, General Manager of the Nemadji Golf Course, presented the proposal of increasing the Golf Cart Fleet an addition 50 carts, with data on the supply and demand needed with the carts and possible increased revenue with the addition. Barb Hoag, president of women’s league spoke on behalf of the need for the addition carts. Motion was made by Mike Herrick, seconded by Tylor Elm of statement of support for the golf course to order 50 additional golf carts 5. RECURRING BUSINESS 5.1 Golf Course Report and Financials May and June 2023 Motion was made by Mike Herrick, seconded by Tylor Elm and carried to receive and file the Golf Course Report and Financials. Jack Sweeney proposed if there wasn’t anything necessarily needed to review with 5.2 to 5.4 to hold over to next month. Motion was made by Mike Herrick, seconded by Tylor Elm and carried to hold 5.2, 5.3 and 5.4 in committee until September meeting. 5.2 May and June 2023 Check Registers – 2023 expenditures 5.3 General Fund Financial Statements – 2023 and 2022 Expenditure vs. Budget Analysis as of July 25, 2023 5.4 Insurance Update 5.5 Other Financial Matters 6. ADJOURNMENT The meeting was adjourned at 6:47 p.m. Minutes respectfully submitted by Karie Markon  HANDOUT Presented virtually by Sheanne Hedgier City of Superior 2022 financial highlights Prepared for the August 10, 2023 Finance Committee Meeting Client service team Sheanne Hediger, CPA, Partner sheanne.hediger@bakertilly.com 612.876.4599 Kaite Sam, CPA, Manager Matt Weltzien, CPA, Senior Associate © 2022 Baker Tilly US, LLP  City of Superior General fund results 2021 2022 General fund - fund balance by category $11,243,980 Total $10,442,634 $11,197,223 Unassigned $9,808,073 $46,757 Nonspendable $634,561 $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 Summarized income statement Actual Final budget Variance Revenues and other financing sources $ 28,807,728 $ 29,274,866 $ (467,138) Expenditures and other financing uses 29,609,074 29,274,866 (334,208) Net change in fund balance $ (801,346) $ - $ (801,346) Fund balance category definitions Nonspendable - amounts cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained in tact. Restricted - amounts that can be spent only for the specific purposes stipulated by an external source. Committed - amounts constrained for specific purposes that are internally imposed through formal action of the governing body. Assigned - spendable amounts that are intended to be used for specific purposes that are not considered restricted or committed. Unassigned - residual amounts that have not been classified within other categories above. © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 1  City of Superior General fund - fund balance trends Fund balance policy: Target to maintain a minimum of 32% of the total annual City budget. General Fund Actual Policy minimum Reference - Median Unrestricted general fund - fund balance as a percentage of expenditures 55% 48.8% 50% 43.5% 42.6% 45% 41.8% 40.2% 40% 36.4% 37.6% 41.5% 34.7% 35% 30% 25% 20% 15% 10% 2018 2019 2020 2021 2022 Other reference values GFOA recommends a minimum of no less than 2 months (16.7%) of general fund expenditures. Median reference value generated from 2018 - 2021 Baker Tilly municipal client data for population range of 17,500 - 30,000. © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 2  City of Superior General obligation debt Debt management policy: The City follows Wisconsin Statutes whereas the total general obligation indebtedness of the City may not exceed 5 percent of the equalized value of the taxable property within the City's jurisdiction. Actual percentage of debt limit at 12/31/22: 27% Total G.O. debt outstanding G.O. debt limit General obligation debt capacity $140,000,000 $117,014,775 $120,000,000 $102,693,475 $100,000,000 $93,823,945 $86,569,955 $88,459,410 $80,000,000 $60,000,000 $40,000,000 $40,389,506 $34,805,032 $36,309,975 $20,000,000 $36,436,311 $31,470,479 $‐ 2018 2019 2020 2021 2022 Total debt outstanding by type at 12/31/2022 General obligation Revenue debt Premiums Total City $ 30,922,486 $ - $ 907,615 $ 31,830,101 Enterprise 547,993 8,867,001 - 9,414,994 Total $ 31,470,479 $ 8,867,001 $ 907,615 $ 41,245,095 Comparative metrics available online through the Wisconsin Policy Forum. https://wispolicyforum.org/research/municipal-datatool-examining-and-comparing-wisconsin-cities-and- villages/ Select "Debt" -- options for custom comparisons or comparisons by county General obligation debt per capita as of 12/31/2021 (latest information available) ranks the City of Superior as 264 out of 602 cities and villages in Wisconsin. © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 3  City of Superior Governmental funds - debt service City of Superior Reference - Median Debt service to non-capital expenditures 35.00% 30.00% 29.9% 25.8% 25.00% 24.1% 23.5% 20.00% 15.00% 11.5% 12.5% 12.6% 12.4% 11.0% 10.00% 5.00% 0.00% 2018 2019 2020 2021 2022 Current and prior year data 2022 2021 Principal retirement $ 3,913,101 $ 3,516,325 Interest and fiscal charges 1,032,062 1,082,034 Issuance costs - 159,444 Total $ 4,945,163 $ 4,757,803 Non-capital expenditures $ 39,993,004 $ 37,791,011 Other reference values Median reference value generated from 2018 - 2021 Baker Tilly municipal client data for population range of 17,500 - 30,000. © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 4 City of Superior Other governmental funds 2022 2021 Fund balance - other governmental funds Major Funds: ARPA Grant Special Revenue Fund $ 318,368 $ - Assigned for public health and safety Capital Improvement Program Fund $ 8,904,943 $ 8,881,377 Restricted for capital projects Debt Service $ 1,511,471 $ 3,438,294 Restricted for debt service Nonmajor Funds: Loan Special Revenue Fund $ 323,877 $ 274,718 Library Special Revenue Fund 383,503 363,989 HUD CDBG Special Revenue Fund 428,761 610,382 Affordable Housing Special Revenue Fund 1,344,824 345,106 Economic Development Special Revenue Fund 1,682,568 1,775,909 Tourism Commission Special Revenue Fund 505,160 - Revolving Grant 2020 579,901 421,109 Other Special Revenue Funds 1,559,845 1,709,850 Tax Incremental District No. 9 Capital Projects Fund 326,327 (154,451) Tax Incremental District No. 13 Capital Projects Fund (330,706) (242,687) Tax Incremental District No. 14 Capital Projects Fund (130,934) 344,044 Redevelopment Authority 741,610 632,833 Other Capital Project Funds 229,148 239,326 Total fund balance - nonmajor funds $ 7,643,884 $ 6,320,128 Net position - internal service funds $ 2,747,393 $ 4,330,106 © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 5  City of Superior - Sewerage System Audit Results - December 31, 2022 0 Operating results $8,000,000 7,228,428 7,276,845 7,254,316 7,114,877 6,861,478 $7,000,000 $6,000,000 $6,618,390 $5,000,000 $5,380,963 $5,415,958 $5,138,339 $5,151,768 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $‐ 2018 2019 2020 2021 2022 Operating revenues Operating expenses Unrestricted Reserves 2018 2019 2020 2021 2022 Year end balance $ 4,107,522 $ 4,441,554 $ 5,680,370 $ 6,831,826 $ 6,210,226 Months on hand 6.93 7.77 9.43 11.27 10.27 Debt Coverage 2018 2019 2020 2021 2022 Actual 6.55 3.51 4.00 3.60 2.46 Required 1.10 1.10 1.10 1.10 1.10 Investment in Capital Equity, 77% Debt, 23% © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 6  City of Superior - Stormwater Audit Results - December 31, 2022 0 Operating results $3,000,000 2,463,326 2,470,822 $2,500,000 2,542,789 2,557,295 2,406,007 $2,000,000 $1,434,805 $1,502,000 $1,500,000 $1,726,554 $1,378,957 $1,000,000 $1,286,583 $500,000 $‐ 2018 2019 2020 2021 2022 Operating revenues Operating expenses Unrestricted Reserves 2018 2019 2020 2021 2022 Year end balance $ 2,242,424 $ 1,782,509 $ 2,245,426 $ 2,302,748 $ 2,265,204 Months on hand 10.92 8.89 10.60 10.81 11.00 Debt Coverage 2018 2019 2020 2021 2022 Actual 6.55 4.43 4.00 4.95 2.30 Required 1.10 1.10 1.10 1.10 1.10 Investment in Capital Equity, 89% Debt, 11% © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 7  City of Superior - Landfill Audit Results - December 31, 2022 Operating Revenues $ 1,183,898 $6,800,000 $6,700,000 $6,600,000 2% 2% 1% $6,500,000 $6,400,000 1% $6,300,000 $6,200,000 100% 107% 96% 2% $6,100,000 93% $6,000,000 95% $5,900,000 $5,800,000 2018 2019 2020 2021 2022 Operating revenues Recycling grants Operating Expenses $9,000,000 $8,000,000 $7,000,000 19% $6,000,000 23% 18% 23% $5,000,000 24% $4,000,000 $3,000,000 79% 0 81% 75% 76% $2,000,000 75% $1,000,000 $‐ 2018 2019 2020 2021 2022 Operating and maintenance expenses Depreciation Unrestricted Reserves 2018 2019 2020 2021 2022 Year end balance $ 1,888,405 $ 1,940,219 $ 1,519,923 $ 1,142,082 $ 1,567,499 Months on hand 4.49 3.78 4.20 2.91 3.59 © 2022 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 8