Finance, Taxes and Insurance

FINANCE COMMITTEE March 13, 2017 – Official 5:00 p.m. Members Present: Brian Lauer, Gil Amborn, Andy Ewert and Jim Schneider Excused: Brent Hess Also Present: Rebecca Ewald, Rick Mueller, Tom Nehring, John Duffy – Associated Trust and Andrew Hunn, Northwestern Mutual Lauer called the meeting to order at 5:00p.m. Motion made by Schneider, seconded by Amborn to approve the February 13th Regular Meeting Minutes. Motion carried. Peternell discussed the 2010 Water Revenue bonds that have a call date of May 1, 2017 with 2 years of payments left. At this time, the Village can decide to refinance the remaining principal payments to obtain a lower interest rate. The 2018 principal payment is $115,000 with an interest rate of 3.75% and the 2019 principal payment of $110,000 with an interest rate of 4.00%. If they choose to refinance, it must be done within 30 days of the call date. After discussion with Kevin Mullen from HSE he noted that only the 2018 payment would need to be refinanced because there is a reserve account for the bonds. The bond covenants require the Utility maintain a Reserve account to be used solely for the payment of debt service on the Bonds if ever net revenues of the Water System are insufficient to make a debt service payment. It is common with revenue bonds for the issuer to fund a reserve that is to be used to make debt service payments if revenues of the utility are insufficient. Typically, the reserve is not needed and is used to make the final debt service payment. We will no longer need the reserve if we refund the old bonds. Currently there is $112,757 in the reserve account that could be used to pay the 2019 payment. For the 2018 payment, the Village could either go to a local bank and borrow approximately $113,000 for 1 year or do an internal borrowing from the Sewer Utility for 1 year. Kevin Krysinski from Johnson Block said that the sewer utility would be in a position to cash flow it for a year and recommends doing that versus going to the bank because it would be the quickest and easiest method. The Treasurer contacted Associated Bank, Community State Bank and Equitable Bank to request a quote on borrowing $113,000 to refinance the 2018 payment. Associated Bank offered an interest rate of 2.28%, Community State Bank offered an interest rate of 1.6% and Equitable Bank did not respond to request. If the Board decides to move forward with refinancing the bonds, the only fees involved would be for Quarles & Brady for a call notice to the bond holders, approximately $1,500-$2,000. Motion made by Schneider, seconded by Ewert to do an internal borrowing of $113,000 from the sewer utility at a rate of 1.6% and utilizing the remaining funds of $112,000 in the water debt service reserve account. Motion carried. The Committee reviewed the amendments to the investment policy provided by Schneider. The revisions were sent to the Attorney for review. The attorney expressed concerns that the amended policy went beyond her scope of initial concerns and was completely rewritten and cited mostly obsolete statutes. Motion made by Schneider, seconded by Amborn to table recommendation of the investment policy until April 10th to allow time for the attorney to review and provide recommendations. Motion carried. The Committee reviewed the Associated Trust Investment agreement. At the February meeting the Associated Trust agreement was reviewed by the Committee. Associated Trust was provided with a list of questions/comments regarding the agreement. John Duffy from Associated Trust was present to discuss the revised agreement that was revised to include the comments provided by the Finance Committee. Motion made by Schneider, seconded by Amborn to recommend Village Board approval of the agreement pending review by the Village Attorney. Motion carried. Andrew Hunn from Northwestern Mutual was present to discuss the annual review of Waterford Pension Plan. Discussion was held regarding funding for police services in 2017. The Village began contracting with Waterford Police Services in 2016. Estimated contract costs were $476,713. Actual contract costs were $416,035 an offset by fewer full time officers requiring health insurance and not utilizing the full amount of the HSA reimbursement account. The Village budgeted $436,698 for 2017 police services based upon a recommendation provided by Waterford Police in July of 2016. Costs for 2017 were updated to $481,544 to reflect an additional officer receiving insurance. Motion made by Schneider, seconded by Amborn to leave the 2017 budget amount at $436,698 and let line item go over budget. One nay vote by Ewert, Motion carried. The Committee reviewed the Monthly Budget to Actual reports. Discussion was held regarding development of sale of property policy. A policy will come back to the Committee and Board in April for review and action. Peternell provided an update on audit services; Johnson Block’s contract provides for audit services through 2019. Motion made by Schneider seconded by Ewert, to recommend to the Village Board approval of Village prepaid invoices in the amount of $72,750.49. Motion carried. Motion made by Schneider, seconded by Ewert to recommend to the Village Board approval of Village unpaid invoices in the amount of $146,502.44. Motion carried. The Committee reviewed the monthly donation report. Peternell provided an update on the unanticipated revenue from the DOT for temporary easements for the STH 83-20 project. Upon motion made by Schneider seconded by Amborn, the meeting adjourned at 6:27 p.m. Motion carried. Submitted by, Lori Peternell, CMTW Village Treasurer