Finance

Finance, Audit & Investment Committee
2008 Meeting Minutes

January 29, 2008 Meeting Minutes

Members present: Chairperson Jim Miller, Debby Curry, and Maridee Curry. Others present: Council members Bill May, Michelle Tippie, and Frank Billings. Mayor Angela Kuhn, Finance Director Jordan Daugherty, Police Chief Kaplan, Village Administrator Dennis Recker, Josh Torres, Matt Billings, and Deb Kuck were also in attendance.

Chairperson Jim Miller called the meeting to order at 6:33 P.M. Maridee Curry then made a motion to approve the minutes of December 6, 2007 , Debby Curry seconded the motion. Motion passed 3-0.

In opening discussion, Debby Curry made a comment clarifying that Maridee Curry is the second Chairperson, not Debby Curry as previously understood.

The next item of business was to hear a summary of the 2008 Donation Request and Obligations. Dennis Recker informed the Committee an additional $588.30 of in-kind contributions to the Village Cherry Festival by the Village Maintenance Department should be added to the Summary. The total in-kind contributions projected for 2008 is therefore $3,051.00. Mr. Recker then informed the Committee that the $2,500 annual contribution to AWABSA is a 5-year agreement and that there are two remaining payments in accordance with that agreement. A discussion regarding the use of a $6,000 seed contribution made to the Cherry Festival Inc. by the Village ensued but ultimately was tabled for discussion in an upcoming Parks and Recreation Committee meeting.

In an effort to control cost, it was decided not to contribute any actual dollars to the Whitehouse Chamber of Commerce for the Cherry Festival in 2008. Maridee made the motion to restrict all actual dollar donations to the AWABSA in 2008. Chairperson Jim Miller seconded that motion. Motion passed 3-0

With no other business before the Committee, Chairperson Jim Miller motioned to adjourn at 6:55 PM; it was seconded by Debby Curry. Motion passed 3-0.

August 5, 2008 Meeting Minutes

Members present: Chairman Jim Miller, Debby Curry, and Maridee Curry. Others present: Council members Bill May and Michelle Tippie, Finance Director Jordan Daugherty.

Chairman Jim Miller called the meeting to order at 7:52 P.M. Jim Miller then made a motion to approve the minutes of January 29, 2008, Debby Curry seconded the motion. Motion passed 3-0.

In opening discussion, Mr. Daugherty briefed the Committee on the 2005-2006 audit conducted by the Auditor of State. Of most interest was the dual opinion that the Village of Whitehouse received. Mr. Daugherty explained that this is due to the Village adopting the cash-basis of accounting, a method that differs from the basis used for the audit. Further, the Committee was informed that the method of accounting the Village adopts is permitted and prescribed by the State. Because of these differing issues, the Auditor of State issued a dual opinion. This opinion states that the accounting method does not conform to the basis on which it was audited, but also states that the financial statements are fairly represented in accordance with the cash-basis of accounting. Mr. Daugherty stated that most villages are using the cash-basis method and are subsequently issued a dual opinion by the State. Mr. Daugherty further stated that he is currently researching the cost and benefits of converting to the accrual-basis, the basis on which the audits are conducted. As discussion on the 2005-2006 audit was only informational, no action was requested.

The next item of business was to hear a summary of the mid-year Fund Transfers and Amended Appropriations. The Committee was briefed on the requirement for such action. The Committee was further informed that neither of the actions have a net effect on the 2008 Budget. Maridee Curry made a motion to recommend to Council that the funds be transferred to the suitable funds and that legislation be written to amend the 2008 Appropriations as recommended.

Under other business: " The Committee requested that a representative of the Village's investment firm brief them on the portfolio performance at a September 16, 2008 FAI Committee meeting at 6:30 P.M. " The Committee directed the Finance Director to assemble a list of agenda items for the review of Village personnel benefits

With no other business before the Committee, Chairperson Jim Miller motioned to adjourn at 8:23 P.M.; it was seconded by Debby Curry. Motion passed 3-0.

September 16, 2008 Meeting Minutes

Chairman Jim Miller called the meeting to order at 6:34 P.M. Jim Miller then made a motion to approve the minutes of August 8, 2008. Debby Curry seconded the motion. Motion passed 3-0.

In opening discussion, Mr. Daugherty introduced Kirk Ludwig, Public Funds Director for SJS Investment Consulting, Inc. Mr. Ludwig briefed the Committee on the Village's investment performance with SJS since the investment's inception in August of 2006. He began his presentation by reminding the Committee that the Village's original goal in investing funds with SJS was to surpass StarOhio's investment performance by 75 to 100 basis points (.75-1.0%). Mr. Ludwig stated that since August 2006, that SJS-managed investments have earned a Time Weighted Annual Return of 5.47% verses that of 4.15% with StarOhio.

Mr. Ludwig addressed questions regarding the affect of the current market conditions and the Fanny Mae and Freddy Mac debacle. He stated that the implicit backing by the U.S. Treasury of Fanny Mae and Freddy Mac interest and principal has stabilized pricing. Mr. Ludwig further mentioned that the Village investments are consciously diversified for the very reason of investing safely. Maridee Curry complimented SJS by stating she was very pleased with the investment performance and that the Village decided to go with SJS.

Following the investment performance briefing, Finance Director Jordan Daugherty recommended to the Committee to approve the Finance Director to move up to $500,000 from StarOhio to SJS in order to earn more investment income. He further stated that the requested transfer of funds would only be done when the timing is deemed appropriate and in accordance with the advice of SJS. In response, Maridee Curry stated that due to the current market conditions and her responsibility to the taxpayers, she would rather the Finance Director come back at a different time with a specific recommendation for investment. Debby current stated that she agreed with Maridee Curry.

The last item of business was a request to schedule the next Finance, Audit, and Investment Committee meeting to discuss 2009 personnel benefits. A meeting date and time was decided on Tuesday, September 23, 2008 at 6:30 P.M.

With no other business before the Committee, Chairperson Jim Miller motioned to adjourn at 7:00 P.M.; it was seconded by Maridee Curry. Motion passed 3-0.

September 23, 2008 Meeting Minutes

Members present: Chairman Jim Miller, Debby Curry, and Maridee Curry. Others present: Mayor Angela Kuhn, Council members Bill May, Frank Billings, Michelle Tippie, Administrator Dennis Recker, Public Works Director Steve Pilcher, Police Chief Ed Kaplan, Fire Chief Daryl McNutt, Finance Director Jordan Daugherty, and Barbara Knisely.

Chairman Jim Miller called the meeting to order at 6:30 P.M. Maridee Curry then made a motion to approve the minutes of September 16, 2008. Debby Curry seconded the motion. Motion passed 3-0.

In opening discussion, Mr. Daugherty briefed the Committee on a comparison of the Village's wages to that of the competing market's. Included in that comparison were Industries such as State and local government, construction trades, factory, transportation, and the U.S. Postal Service. The comparison further included average wages for both Northwest Ohio and nationally. Mr. Daugherty noted that all of the competing industries pay higher rates than the Village. Maridee Curry asked how the Village compared to other similar municipalities. Mr. Daugherty responded by stating surveys conducted by the Ohio Municipal League and Clemens Nelson show that, on average, other similar municipalities pay between 11.5 and 15+ percent more in wages. All Committee members requested individual wage comparisons to other local municipalities. Bill May stated that the information presented was meaningless because it only included high-paying industries. Mr. Daugherty responded stating that the industries selected were representative of the local competing market as a whole and that some industries were not deemed viable competing industries. Mr. Daugherty further stated that all industries, including industries dominated by part-time work, were included in the overall Northwest Ohio average wage as presented. Mr. Daugherty then informed the Committee that the Department of Labor reported that the Consumer Price Index (CPI) from January 1, 2007 to July 31, 2008 was 10.05% in our region. With the 3.5% cost of living pay increase issued last year, the net decrease in earnings power is 6.55% since January 2007. Mr. Daugherty concluded this agenda item with a summary of estimated turnover costs. Two studies were cited stating that average dollar costs to replace entry-level, mid-level, and manager-level are 50%, 150%, and 150-400%, respectively, of the employee's annual salary. Mr. Daugherty mentioned that these costs should be considered as we consider the potential of losing Village employees to competing markets.

Considering the second agenda item, Mr. Daugherty recommended to the Committee that due to the amount of work, the number of decisions to be made, and the limited time to accomplish such, that the Committee front-load some of the work and decisions early in the 2009 budget process.

Following discussion of the budget timeline, Mr. Daugherty requested that due to the compressed time to respond to health insurance quotes, the Committee move forward by making preliminary decisions on healthcare benefits based on projected quotes. This would allow the budget process to proceed more efficiently. The projections would be broad enough and tailored to include the actual quote when received in November. All Committee members agreed with the understanding that the formal motion to Council regarding the health insurance benefits will not be made until the actual quote is received.

Other items discussed: 1. Maridee Curry asked for a copy of the Citizens' Tax & Revenue Enhancement Committee recommendations 2. Debby Curry asked for a five-year history of the Village's health insurance premiums and how many Village employees currently opt out of insurance coverage 3. Mayor Angela Kuhn informed all present of the work on a Wellness Program for the Village employees and their families and that this is likely to reduce costs to the Village 4. Debby Curry asked that the Finance Director look into changing the annual health and dental insurance period of coverage 5. Jim Miller mentioned that he would like to revisit the topic of authorizing the Finance Director to transfer funds from StarOhio to a better-performing investment at a later date

With no other business before the Committee, Chairperson Jim Miller motioned to adjourn at 7:20 PM; it was seconded by Debby Curry. Motion passed 3-0.

October 14, 2008 Meeting Minutes

Members present: Chairman Jim Miller, Debby Curry, and Maridee Curry. Others present: Mayor Angela Kuhn, Council members Bill May, Frank Billings, Michelle Tippie, Administrator Dennis Recker, Public Works Director Steve Pilcher, Police Chief Ed Kaplan, Finance Director Jordan Daugherty, Deputy Chief Marty Fuller, Barbara Knisely, James Forrest, Barry Christy, Ron Shellhammer, Randy Launder, Mike Hill, and Brian Dotson.

Chairman Jim Miller called the meeting to order at 6:30 P.M. Chairman Miller then made a motion to approve the minutes of September 23, 2008. Debby Curry seconded the motion. Motion passed 3-0.

In opening discussion, Mr. Daugherty briefed the Committee on Village staff's intent of the prior FAI Committee meeting. He mentioned that the intent of staff was to inform the Committee of relevant factors that affect the Village of Whitehouse and its compensation competitiveness with surrounding municipalities. The intent was not, Mr. Daugherty continued to state, to recommend an increase in pay to match the top-paying municipalities. Nor was the intent to recommend adjusting pay to be commensurate with lower-paying municipalities. "Simply put," Mr. Daugherty concluded, "Village staff asked themselves what are the Village's competing municipalities and whom might the Village lose employees to. The Village staff believes that the Village of Whitehouse should be somewhere around the mid to higher-paying municipalities."

Mr. Daugherty stated that his role in this meeting was to answer any questions based on the information requested by the Committee at the last meeting. Maridee Curry stated that there is significant pressure from Village residents, as indicated by the Citizens' Tax and Revenue Enhancement Committee recommendations, to require some sort of employee participation in healthcare premiums. Debby Curry agreed and reminded the audience that the Village taxpayers essentially pay staff's wages and benefits. Debby Curry continued in stating that the Council worked hard to establish a competitive pay scale years ago and that she thought it was sufficient. Administrator Recker agreed in part by saying the pay scale has caused the Village to be much more competitive in wages compared to times past. In the past, Mr. Recker continued, the Village was terribly uncompetitive and that employee turnover was high. Chairman Miller proposed establishing a cutoff period wherein after a certain date new-hires would be required to participate in healthcare. Therefore, all new-hires know that requirement up front as a condition of employment, current employees reduce diminishing earnings power by not participating in premiums, and the Village gradually saves money by implementing employee participation. All of this, Chairman Miller continued, would be based on whether the Village can afford the proposal. Chairman Miller acknowledged the savings would not be major immediately, however, it would grow with each new-hire. Maridee Curry stated that she does not support the proposal. Debby Curry stated that the proposal is definitely one she would like to review. After reviewing the schedules presented, Chairman Miller mentioned that ultimately, the Committee could not recommend any action until the actual quotes are submitted. Maridee Curry and Debby Curry both concurred. Maridee Curry continued by stating she wants to look at the whole package, including the Flexible Spending Account benefit, after the health and dental quotes are provided and when Administration presents a balanced budget.

Upon tabling discussion on healthcare benefits, Chairman Miller asked Mr. Daugherty if he had a Cost of Living Allowance Adjustment (COLA) recommendation. Mr. Daugherty responded by stating the Village staff recommends a net increase between 3 to 4.5 percent. This would depend on what level, if any, of employee participation in healthcare premiums would be required. Maridee Curry requested that the Finance Director prepare projected 2009 Pay Scales to include a range of COLA increase from 2 to 5%.

Deputy Chief Marty Fuller stated that both Wauseon and Delta contract the EMS services. Mr. Fuller asked Mr. Daugherty whether this information affects the wage comparison as presented. Mr. Daugherty responded by stating due to the fact that EMS employees are usually the higher-paid employees of municipalities and that they are not included in Wauseon and Delta's payroll, it would cause a greater disparity in average wages between the Village of Whitehouse and competing municipalities.

Maridee Curry brought up an issue regarding the Citizens' Tax and Revenue Enhancement Committee recommendation to eliminate the current Merit Service Payments (related to length of service) and to implement a merit raise system that was directly related to performance. Mr. Fuller and Frank Billings each stated that the Village needs to have an appraisal system that is based on measurable criteria. Mr. Recker mentioned that it is a Village goal to develop all of its employees and a good, well-designed appraisal system helps to ensure such development.

With no other business before the Committee, Chairperson Jim Miller motioned to adjourn at 7:29 PM; Maridee Curry seconded it. Motion passed 3-0.

October 21, 2008 Meeting Minutes

Chairman Jim Miller called the meeting to order at 6:31 P.M. Chairman Miller then made a motion to approve the minutes of October 14, 2008. Maridee Curry seconded the motion. Motion passed 3-0.

In opening discussion, Finance Director Jordan Daugherty briefed the Committee on a comparison of the two (2) general liability quotes for the period of 11/1/08 through 10/31/09. Mr. Daugherty informed the Committee that essentially, the Brooks Insurance, Inc. proposal provided greater overall coverage for less cost. Specifically, the Brooks quote was almost 25% less than 2008's policy and 7% less than the competing bid for 2009. Debby Curry noticed that the Whitehouse Historical Society and the Whitehouse Fire Company, Inc. were not covered as additional insured in the Brooks proposal whereas it is covered through Hylant.

After a brief discussion, Maridee Curry made a motion to recommend to Council to accept the Brooks Insurance, Inc. proposal contingent on both the Whitehouse Historical Society and the Whitehouse Fire Company, Inc. being covered through the Village of Whitehouse. Debby Currie seconded the motion. Motion passed 3-0.

Following discussion on general liability insurance, Fire Chief Daryl McNutt briefed the Council on the bid opening for the Whitehouse Fire Station roof. Solicitor Phil Davis then informed the Committee that the low bid was not a valid bid due to non-compliance with the bid specifications. Therefore, the second lowest bid was next in line for consideration. That bid was from Nordmann Roofing Co. in the amount of $41,286.00. Chairman Miller made a motion to recommend to Council to authorize that legislation be drawn up to contract with Nordmann Roofing Co. to replace the Whitehouse Fire Station roof. Debby Curry seconded that motion. The motion passed 3-0.

With no other business before the Committee, Chairperson Jim Miller motioned to adjourn at 6:59 PM; it was seconded by Maridee Curry. Motion passed 3-0.