Finance, Taxes and Insurance

FINANCE COMMITTEE May 14, 2012 - Official 5:00 p.m. Members Present: Brian Lauer, Ron Kluth, Gil Amborn, Cindy Gauger Also Present: Rebecca Ewald, Lori Peternell, Kelly Krause and Drew Hunn Excused: Rick Albee Lauer called the meeting to order at 5:00 p.m. Motion made by Gauger, seconded by Kluth, to approve the April 9, 2012 Regular Meeting Minutes. Motion carried unanimously. Drew Hunn from Northwestern Mutual was present to discuss the annual review of the pension program and to discuss the new 408(b)(2) Fee Disclosure requirements. Hunn stated that Northwestern Mutual, ING and Pension Consultants need to disclose by July 31, 2012 the fees paid to funds, what services are being provided for the fee and the fiduciary responsibility. The Village will also need to disclose to employees by August 31, 2012 the fees paid to funds, who has control of the plan and any material changes to the plan. NML, ING and Pension Consultants will be working with the Village on fulfilling this requirement. Hunn discussed that two funds, the ING International Value Portfolio and the ING Balanced Portfolio are underperforming in accordance with the Village of Waterford’s investment policy statement and should be replaced. Hunn stated that these will need to be replaced with similar type funds. Further discussion was held about adding funds to represent each asset class and adding funds in investment categories not currently available in the Village of Waterford’s pension plan. Discussion was held that Lauer and Amborn will review the replacement funds and any additional funds to be added to the pension plan and provide a recommendation to the Finance Committee and Village Board in June. Once the replacement funds have been determined, NML will provide the required notification to any employees that are invested in the underperforming funds that are being replaced. Motion made by Gauger, seconded by Amborn to remove the ING International Value Portfolio and the ING Balanced Portfolio that are on the watch list from the pension plan and have Lauer and Amborn review the replacement funds and any additional funds to fill assets classes. Motion carried unanimously. Discussion was held regarding the Department of Agriculture, Trade and Consumer Protection contract for weights and measures services. Peternell stated that under Section 98.04, Wisconsin Statutes, cities and villages having a population of more than 5,000 are required to either establish their own weights and measures program, or contract with the State for weights and measures inspection services. State law doesn’t allow private contractors to perform the inspections. Prior to the Village’s population exceeding 5,000 the State was responsible for the costs associated with the inspections. Municipalities that contract with the State currently pay $400 per inspection day. The number of inspection days is determined based on the number of commercial weighing and measuring devices located in the municipality, and the time necessary for package checking and price verification. Based on the inspections that would be required in the Village of Waterford, the State’s proposal is to provide inspection services for 6 days for a total of $2400. The contract period would be 7-1-12 to 6-30-13; the Village would be billed in April of 2013 and receive the inspection report in late August/early September of 2013. If the Village chooses to have Village staff perform the inspections, estimated costs provided by the State for equipment are in excess of $15,000. Additional costs would be incurred for required training and certification of Village staff by Wisconsin Department of Agriculture, Trade and Consumer Protection. The majority of municipalities who require a weights and measures program contract with the State, only a few of the bigger cities have their own weights and measures program. Peternell researched what other municipalities who contract with the State do to comply with weights and measures requirements. State statute authorizes the municipality to recover the amount of the fees from the business. Of the municipalities contacted, some of them charge a weights and measures license fee; some to all businesses in their community and some to just the businesses subject to weights and measures inspections. For the municipalities that only charge a license fee and include the inspection fee in the municipal budget, it is their way to offset the inspection costs. They charge a flat fee as an administrative cost and then set a fee based on the number of devices inspected. The device fee is based on the annual inspection cost and therefore may change year to year. Some municipalities charge both a license fee and also bill businesses for the inspection fees. There is no requirement from the State to do either; it’s up to the municipality to decide what works best for them. If the Village decides to charge a license fee and/or pass the inspection charges on to the businesses, the Village will need to enact a weights and measures ordinance. The consensus of the Committee was to contract with the State for inspection services and bill the businesses being inspected for the cost of the inspections. The committee was not in favor of charging a weights and measures license fee. Peternell will follow up with the Committee with a proposed ordinance and billing options at a later date. Motion made by Kluth, seconded by Gauger to recommend Village Board approval of the Department of Agriculture, Trade and Consumer Protection contract for weights and measures services. Motion carried unanimously. Motion made by Amborn, seconded by Kluth to have a weights and measures ordinance written to authorize the Village to invoice the businesses being inspected for the inspection fees and not enact a weights and measures license fee. Motion carried unanimously. Discussion was held regarding vehicle insurance. Ewald stated that the Village currently insures it’s vehicles through the League of Wisconsin Municipal Mutual Insurance (LWMMI) and has the choice of insuring vehicles based upon the original cost or agreed upon value. The Village also has the option of insuring the vehicles through the Local Government Property Insurance Fund (LGPIF) that provides replacement of a like vehicle. For the last decade the Village has insured its vehicle based upon an agreed value with LWMMI. Total premium for auto liability is $6,981 and auto physical damage is $9, 481 for our policy year May 1, 2012 – May 1, 2013. Premiums for auto liability are based upon the number of vehicles insured. This topic was referred back to the Finance Committee for review of the auto physical damage for a recommendation on parameters to insure the vehicles, deductible and original cost versus agreed value. Action on vehicle insurance was tabled until the June 11, 2012 meeting. Review and action on No-fault sewer backup insurance was tabled until the June 11, 2012 meeting. Review and action on utilization on general fund balance was tabled until the June 11, 2012 meeting. Peternell distributed the list of items available to be purchased from the Ethan Allen Correctional Institution provided by the Director of Public Works. The proposal is to purchase six items at a total cost of $1310 utilizing funds from the streets small equipment capital fund. No action taken. Motion made by Kluth, seconded by Gauger to recommend to the Village Board approval of Village prepaid invoices in the amount of $32,628.35. Motion carried unanimously. Motion made by Kluth, seconded by Amborn, to recommend to the Village Board approval of Village unpaid invoices in the amount of $445,923.19. Motion carried unanimously. Motion made by Amborn, seconded by Gauger, to recommend to the Village Board approval of Water & Sewer invoices in the amount of $122,292.19. Motion carried unanimously. Upon motion made by Gauger, seconded by Kluth, the meeting adjourned at 6:33 p.m. Submitted by, Lori Peternell Village Treasurer 2