Finance Committee

CITY OF VERONA MINUTES FINANCE COMMITTEE JUNE 22, 2015 VERONA CITY HALL 1. The meeting was called to order by Mac McGilvray at 6:00 p.m. 2 Roll Call: Jack Linder, William “Mac” McGilvray Absent (excused): Elizabeth Doyle. Also present: Bill Burns, City Administrator; Cindy Engelke, Finance Director; Ron Rieder, Director of Public Works, Jon Hochkammer, Mayor; Luke Diaz, Alderperson; Brad Stiner, Alderperson; Evan Touchett, Alderperson; Vicki Hellenbrand, Baker Tilly; Jodi Dobson Baker Tilly; John Rader, Baker Tilly; Vasvi Joshi, Baker Tilly, Dawn Gunderson, Ehlers & Associates. 3. Approval of the 5/26/2015 Finance Committee Minutes: Motion by McGilvray, seconded by Linder, to approve the 5/26/2015 Finance Committee minutes. Motion carried 2-0. 4. Payment of Bills: Motion by Linder, seconded by McGilvray, to approve the payment of bills in the amount of $1,475,205.91. Motion carried 2-0. 5. Presentation of the 2014 City Audited Financial Statement report by Baker Tilly Virchow Krause, LLP: John Rader and Vasvi Joshi presented the 2014 City Audited Financial Statement report. The financial statements include an unmodified or “clean” opinion. Mr. Rader and Ms. Joshi noted that the City is in good financial condition with an unassigned fund balance of 33.72% of expenditures which is within the City’s target policy of 25-35%. It was also reported that the audit went very well this year and that with the addition of another position in the Finance Department, the City has improved its segregation of duties and internal controls. 6. Presentation of the 2014 Utility Audited Financial Statement report by Baker Tilly Virchow Krause, LLP: Jodi Dobson presented the 2014 Utility Audited Financial Statement report. The financial statements include an unmodified or “clean” opinion. Ms. Dobson reported that the rate of return for the City’s water utility has declined to 1.88% compared to an allowable return of 6.5%. This decrease is due to flat water sales with increased operation costs, utility assets, and increases in the Payment in Lieu of Taxes (PILOT). Overall the City’s water, sanitary sewer, and storm water utilities are in good financial shape with strong cash reserves. It is recommended that the City review the rates for each of the utilities. Motion by McGilvray, seconded by Linder, to recommend that the Common Council accept the 2014 City and Utility Audited Financial Statements. Motion carried 2-0. 7. Resolution R-15-028 Authorizing the Issuance and Sale of $4,920,000 General Obligation Promissory Notes, Series 2015A: Ms. Gunderson from Ehlers and Associates presented the sale results for the issuance of General Obligation Promissory Notes. Moody’s Investors Service has affirmed the City’s Aa2 bond rating. Six bids were received for the note sale with the low bid submitted by Piper, Jaffray & Co. with a True Interest Cost (TIC) of  1.8496%. The bid includes a bond premium that was used to reduce the size of the borrowing to $4,865,000. Motion by McGilvray, seconded by Linder, to recommend that the Common Council approve Resolution R-15-028 Authorizing the Issuance and Sale of $4,865,000 General Obligation Promissory Notes, Series 2015A. Motion carried 2-0. 8. Resolution R-15-029 Awarding the Sale of $4,835,000 General Obligation Corporate Purpose Bonds, Series 2015B: Ms. Gunderson from Ehlers and Associates presented the sale results for the issuance of General Obligation Bonds. Five bids were received for the bond sale with the low bid submitted by Baird with a Truce Interest Cost (TIC) of 2.6852%. The bid includes a bond premium that was used to reduce the size of the borrowing to $4,765,000. Motion by McGilvray, seconded by Linder to recommend that the Common Council approve Resolution R-15-029 Awarding the Sale of $4,765,000 General Obligation Corporate Purpose Bonds, Series 2015B. Motion carried 2-0. 9. Adjournment: Motion by McGilvray, seconded by Linder, to adjourn the Finance Committee Meeting at 7:05 p.m. Motion carried 2-0. Respectfully submitted, Bill Burns, City Administrator