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03-26-86 Finance Comm MinutesFINANCE COMMITTEE MARCH 26, 1986 3:30 P. M. The Committee met in the Conference Room, present were Mayor Kennedy, Chairman Palmer, Committee Members Nystul and Ruiz, Councilman Saverud, Clerk Halver, City Accountant Amy Robertson, Roger Hopkins, DIL, and Ryan. Hines, Gateway West Mall. BUDGET: Palmer called the meeting to order by opening discussion on proceeding with budget process. He has drafted a letter to the Mayor and if agreeable to him, requests that Clerk Halver supply each department head with last year's figures, without any increases, asks for recommendations for ways to save money, requesting that each department be as conservative as possible. This info will go to Mayor Kennedy, next to committees, then back to Finance Committee. He has also asked for a flow chart from DPW on projected work, etc. for budgeting purposes, as well as a detailed accounting of the Tax Increment, funds pledged, anticipated projects/revenues, cash on hand. C. Palmer will ask that department heads return all information by March 31. Discussion of mall payments, to start in April 187, 3 payments @ $27,000. Halver presented his latest report on Revenue Sharing, -copy attached,. -for a total allocation of $101,153 for FY 1986-87. Starting negotiations around April 1 was also discussed. Mayor Kennedy has made inquiries as to who would be available, costs, etc. for negotiators; • he asked for input from the committee whether it could be done in-house or outside. AFSCME Contract specifies two other defined items, other than wages, such as job upgrades. Brief discussion of initiating inventory of safe contents, such as documents held for safe -keeping, bid bonds, etc. It was felt that keeping a list of such would be helpful. AUDIT: The audit was discussed, C. Palmer asked have we responded, per law, within 30 days of receiving the audit report. This has not been done. C. Ruiz stated that in the past, the Council has met and gone over items agreed or disagreed upon. The City Attorney and Clerk will go over the audit, bring those items not agreed with back to the Council. This will be done post haste; C. Palmer stated that it was an excellent opportunity for us to add our concerns about the delay in receiving the audit report. C. Nystul said that most of the recommendations had been taken care of by City Accountant Robertson. An item disagreed with was in parking meter collection: it is not practical or economical to send two employees to collect such minimal amounts. He feels it would be beneficial for committee to go through report, then discuss in meeting. He suggests that the City Accountant, Attorney and Clerk draft a response -using the same sequence -to the audit. C. Palmer suggested wording such as "do not concur, no reply" where applies. Depreciation was mentioned briefly. , Finance Committee Page 2 March 26, 1986 C. Palmer's concern was having the same problems reappear in a new audit and was assured that this would not happen, differences in subsidiary and general records have been reconciled. Halver stated that he did not feel we were in any danger of getting a bad audit. Discussion of using state or private auditors; general consensus was to go with state. C. Nystul reminded that the audit purpose was for financial and compliance report, we should get the most for dollars spent. An advantage he feels, in soliciting private audit would give experienced benefits. There shouldn't be any difficulty with any group, Amy has things in good order. Difficulty in drafting request for proposals because of time element, said Halver. State vs private cost discussed, total thought to be around $18,000 for last audit. Annual or every two years advantages discussed; also consecutive pattern back and forth state/private. Motion: C. Ruiz moved that recommendation be made to Council that we go with the State Audit, upon the recommendation of the Clerk/Treasurer. C. Nystul abstained, C. Palmer seconded. C. Nystul felt it would be reasonable to anticipate copies for each council member, rather_ than -just the few_copies sent. Regarding progress payments, he feels that the final payment should be held until the report is received. Halver said that he intended to have a written contract detailing the scope of the audit. • GARBAGE SYSTEM LEASE: C. Accountant Robertson referred to the three proposals received on the municipal lease for equipment consisting of an 1985 International Harvester truck and collection containers. She stated that with $129,000 in Registered Warrants, plus approximately $81,000 for the existing cans, the total was set at $211,000.00. The lowest proposal was from Valley Bank at 9%, copies attached. After discussion of the funding of the side arm system, C. Nystul moved that the committee recommend to Council to accept the proposal of Valley Bank. Seconded by C. Ruiz, all members in favor of motion. Robertson ,rill prepare a rP^.an of bids received to show why Valley Bank bid was selected. Brief discussion of gift for retiring years of service, capacity, etc. adjourned at 4:10 P.M. MS 0 Fire Chief Doty, a plaque showing was favorably mentioned. The meeting isdL U'a MINW&H IIURWESTINVESTMENT NORaFW SERVICES ®AFNNZ March 13, 1986 Ms. Amy Robertson City Accountant City of Kalispell P.O. Door 1997 Kalispell, MT 59901 Dear Amy: Norwest Investment Services, Inc. 255 Second Avenue South Mioneapohs, Minnesota 55479-0030 6121372-9619 I am pleased to submit the following lease -purchase proposal fbr your consideration. GOVERNMENTAL LEASE -PURCHASE PROPOSAL Lessor: Lessee: Equipment: Equipment Cost: Lease Term: Payment Options: Norwest Investment Services, Inc. ("Norwest") or its nominee City of Kalispell 1985 International Harvester refuse truck and Collection Containers $211,000.00 Three Years A) Monthly Payment Factor: .03173 (Interest Rate = 9.38%) Monthly Payment: $6,695.03 B) Quarterly Payment Factor:.09436 (Interest Rate = 9.38%) Quarterly Payment: $19,909.96 Purchase Option: At the end of the lease term, lessee may pur- chase all of the equipment from lessor for $1.00. Advance Payment: One only. Net Lease: This is a Net Lease transaction whereby insur- ance, maintenance and any applicable taxes are the responsibility of the lessee. Manufacturer's guarantees and warranty will be passed on to the lessee. co City of Kalispell March 13, 1986 Page 2 Insurance Requirements: Norwest requires personal property damage insurance equal to the cost of the equip- ment and to be named as loss payee. Also, Norwest requires liability insurance of a combined single limit of $500,000 with Nor - west named as an additional insured. Tax Benefits: This lease is based on current tax law and if there are any tax law changes prior to lease commencement, Norwest reserves the right to alter its proposal to reflect any changes that might occur. Proposal Only: This is a proposal only and does not repre- sent a commitment to lease. The proposal is subject to the approval of the credit committee of Norwest and expires, if not otherwise withdrawn, April 15, 1986. Credit Information: If lessee does not have an established general obligation bond rating of BAA or better, our credit committee may require financial statements for the past two years and the current year's operating budget. Lease Rates: The payment factors quoted are effective 30 days from the date of this proposal. After 30 days, the rate may be adjusted according to the prevailing tax-exempt money market conditions. Documentation: Upon receipt of lessee's request to lease, and upon its acceptance of same, lessor will prepare all necessary documentation. In addition to its lease -purchase agreement, Norwest requires an Incumbency Certificate, Delivery and Acceptance Certificate, UCC financing statement, and an attorney's opini- on confirming the city's and this transaction's tax-exempt status. NOTE: Norwest may enter into this lease -purchase transaction as agent for another institutional investor. For the purpose of obtaining credit from another party, the City of Kalispell agrees that Norwest may for- ward any credit and financial information to prospective investors as may be available to Norwest. Furthermore, this lease -purchase proposal is subject to Norwest placing the transaction with an investor, although we would document the lease in the name of Norwest, administer the trans- action, and handle all lessee's servicing needs arising during the lease term. 0 City of Kalispell March 13, 1986 Page 3 Norwest Investment Services looks forward to acquiring this important equipment on your behalf. Thank you for your consideration and interest in Norwest. If you have any questions, please feel free to contact me at any time at (612) 372-7421. If you would like us to proceed with our credit review and are in agreement with the terms of this proposal, please indicate by signing the duplicate copy of this proposal in the space provided below and return directly to me. Sincerely, I MichVel S. Olauson Vice President - Public Finance Please proceed with obtaining credit approval in accordance with the terms stated above•: CITY OF KALISPELL By: MSO:lmb �1117 lsiUK • RICNARD F. MAURER VICE YRESIVENT March 25, 1986 OF KALISPELL Box 48 KALISPELL, MONTANA 59901 Honorable Edward Kennedy Mayor of Kalispell Box 1997 Kalispell, Aff 59901 Dear Mayor Kennedy: PHONE 755-7123 MEMBER F. D. I. C. We are tenderi-ng the following municipal lease proposal. Valley Bank of Kalispell shall be known as the Lessor and the, City;of Kalispell.<hall be known as the Lessee. The equipment shall consist of a 1935 International Harvestor truck with a refuse packer at a cost of $83,207.00 and Heil Roto- mold refuge containers, an exact count to be determined at a later date, at a cost of $127,793,00, for a total acquisition cost of $211,000.00 We are quoting a lease rate of 9% with one monthly payment in advance, resulting in a monthly payment of $6,659.80. This commitment is on a net lease basis. The Lessee is to provide casualty and liability insurance and is resr _si:cl for all applicable taxes. This offer further assumes that this is a tax exempt financing. In the event that this should change, then our rate will increase by to from the date of the effective change. We will require an opinion from the City Attorney's Office certifying that the City of Kalispell can bind themselves to the lease transaction over the proposed three year term. At the end of the lease term, the Lessor shall sell the equipment to the Lessee for a residual value of $1.00. 'Dais offer is good for thirty days from the date of this letter and is subject to the approval of all final documentation. Sincerely yours, Richard P. Maurer Senior Vice President RFA1/ j s •; r 0 CITY OF KALISPELL DON HALVER, CLERK/TREASURER t� TO: Paul Palmer, Chairman Finance and Administration Committee SUBJECT: Current Status, Revenue Sharing DATE: March 24, 1986 The latest information I have from Revenue Sharing is we will be receiving $60,727 on July 5, 1986 and $40,426 on October 5, 1986, for a total Revenue Sharing allocation of $101,153 for our 1986-87 fiscal year. This compares with an allocation of $236,854.00 for our present fiscal year. The total budget for this fiscal year (included cash carried forward) was $293,619. I do not anticipate_any significant,_amount_ of this budget..not being spent and being available next year. Of the amount budgeted this year, two major budget items amounted to $170,500. (Radio System 70,500 and Loader 100,000). • CJ +1- OFFICE OF REVENUE SHARING 2401 E STREET. N.W. COLUMBIA PLAZA HIGHRISE W ASHING T ON. O.C- 20226 Revenue Sharing RECIPIENT ACCOUNT STATEMENT As Of NOVEMBER 26. 1985 KALISPELL CITY CITY CLERK KALISPELL MONTANA 59901 Account Number: 27 2 015 002 SECTION 1 - ENTITLEMENT SUMMARY CUMULATIVE CODE DESCRIPTION AMOUNT BALANCE A EP 1-15 Balance Forward --- 4,787- E EP 15 final Allocation Adjustment 9- 4,796- D EP 16 Interim/1 Allocation 238,879 234,083 F EP 16 Payments Issued 234,092 9- H EP 16 Interim/2 Allocation Adjustment - 488- 497- I EP 16 Eby lance --- 497- J EP 17 Initial Allocation- - 223,104 222,'607 L EP 17 ENTITLEMENT ---------------------- ------------> 222.607 • Your Computed tP 17 i,NTIILtMtNS 1COde L) will be paid in quarterly payments which began in January 1986, provided your government had met all reporting/compliance requirements. The scheduled payments are as follows: QTR1: 60.727 OTR2: 60,727 OTP3: 60,7^7 QTR4: 40,426 SECTION 2 - DATA ELEMENTS USED TO CALCULATE ALLOCATIONS Data Element EP 15 Final EP 16 Interim/2 EP 17 Initial Yrl Number/Amount Yrl Number/Amount Yr Number/Amount Population 80 10.699 82 10.558 84 11,069 Per Capita Income 79 7,214 81 8,160 83 8,797 Adjusted Tares 82 2,349.329 93 1.996.368 84 2.273.611 Intergovt Transfers 182 858.633 83 915.452 84 1.059.013 SECTION 3 - REVENUE Pay Reference No. Pay Date 00110328 01/09/84 . 00112063 04/06/84 00112247 07/09/84 00112326 10/05/84 00111821 01/08/85 00112120 04/05/85 00112259 07/09/65 00"-753 R Amount 72,964 72.964 72.964 72.965 59,346 59,346 57.700 Comments