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FINANCE / CLAIMS
COMMITTEE ACTIONS
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DECEMBER 6, 2002
Approved FJG 06/12/03
ATTENDANCE: Bruce Kimmel, Chairman; Matthew Miklave,
Ken Baker, Douglas Sutton,
Joseph Mann
STAFF: Jack Miller, Finance Director; Frederic Gilden, Comptroller, Lisa Biagarelli, Tax Collector
Mr. Kimmel called the meeting to order at 7:40 p.m.
APPROVE THE MINUTES OF THE FOLLOWING FINANCE COMMITTEE MEETING
NOVEMBER 6, 2002
** MR. BAKER MOVED TO APPROVE THE MINUTES AS SUBMITTED
** MOTION PASSED WITH FOUR VOTES IN FAVOR AND ONE ABSTENTION (MR. KIMMEL)
CLAIMS COMMITTEE: RECEIVE THE MONTHLY CLAIMS REPORT; REVIEW AND APPROVE CLAIMS AS REQUIRED FOR CLAIMS REPORT dated DECEMBER 4, 2002
It was noted that Mr. Miklave would recuse himself from the discussion and vote on this matter.
A special request was reviewed for the CFC (Certificate of Connection) that was needed due to an error in the amount billed; because it was over $5k they required a special request.
** MR. BAKER MOVED TO APPROVE THE SPECIAL REQUEST
** MOTION PASSED UNANIMOUSLY
DELINQUENT TAX REPORT: RECEIVE REPORT AND DISCUSS
Ms. Biagarelli stated the collection figures and narrative were contained in the packets. She stated they are running ahead of last year with the currents and collections. The sewer levy was at 50.25% at the end of November so they are doing well. They still collected $1.5 million but she warned the committee members that they may hear from their constituents regarding the personal property levy due to the Tax Collector's warnings of seizing property for delinquent accounts; she asked for support from the committee members in this regard to allow them to raise revenues for the city. She stated the bills for the second installment are at the printer and expected to go out on December 17.
Mr. Kimmel asked about the 4th Taxing District people and how their bills would be reflected. Ms. Biagarelli's response was that they are rebilling all the banks and they would have a new figure to pay that would reflect the balance of what is owed; she noted residential is all done but they still need to do the commercial.
Mr. Miklave asked the rate of how much revenue should be lost as a result of the appeals. Mr. Miller replied that they are still projecting this, they lost $200k from the housing authority and had other adjustments; the amount under is approximately $450k, which represents an unexpected amount.
Mr. Miklave asked for an explanation on the personal property tax process. Ms. Biagarelli stated personal property involves a tax on business equipment and what they do is publish a notice in the newspaper indicating they are staking a claim on their property. They can execute various measures to seize assets if needed and once the levy is executed, if required, a business could be shut down.
Mr. Miklave asked if this was a common practice. Ms. Biagarelli said yes, its done often but their goal is to get more revenue in.
Ms. Biagarelli referred to the November 30, 2002 report to review the original levy that was at $9.3 million; she noted the corrected levy was $8.8 million that represents a reflection of the adjustments for sewer use.
Mr. Baker asked the reasons businesses have for typically not paying. Ms. Biagarelli replied that some don't respond at all and others claim they have already paid state taxes. Overall, they have a good success rate when a constable goes out but it's a fact that some businesses ignore and are lax in addressing the matter. She reiterated that she hoped the committee members assist in reinforcing collections.
Mr. Kimmel asked if personnel were sufficient in assisting tax collections. Ms. Biagarelli said she recently lost an assistant and is in the process of looking for someone but she is currently doing the work herself.
APPROVE RESOLUTIONS RELATING TO EARLY PAYOFF OF MARITIME AQUARIUM BONDS
Discussion
Mr. Miller stated they reviewed the recommendations from the Mayor that issued bonds at $27.8 million, they may not need as much but they will keep it in the capital fund for other uses as they present themselves, such as, a call feature that consists of taking out the fees to save over $1.3 million in costs by paying it off now; in addition it would provide budgeting relief for this year and next year so it's a good opportunity to do now.
Mr. Miller reviewed the resolutions and the intent of them as indicated. Mr. Kimmel clarified the first two resolutions move the monies for proper authorization and the second resolution authorizes paying it.
Mr. Kimmel requested clarification on the principals and interest. Mr. Miller said there is one principal payment and one interest payment constituting only a portion.
Mr. Miklave asked about new bonds being issued. Mr. Miller replied they would be paid off, there are funds in the capital fund balance earning interest and they are getting rid of these.
Mr. Miklave asked how this opportunity presented itself. Mr.
Miller stated they recognized the opportunity was available; it is an innovative
approach and at the time they didn't need the money but wanted to take advantage
of the opportunity anyway. They looked at various options to decide what was
the best consideration and thought this was a good one for financing. They
also discussed inserting a call-division that they opted not to do due to
the expense.
** MR. KIMMEL MOVED TO RESOLVE, THAT A SUM NOT TO EXCEED $6,444,524.00
BE AND THE SAME IS HEREBY TRANSFERRED FROM EXCESS FUNDS IN THE CAPITAL FUND
TO REVENUES IN DEBT SERVICE REIMBURSEMENT FOR THE MARITIME CENTER AUTHORITY
BONDS IN THE OPERATING FUND TO PAY DEBT SERVICE FOR THE CURRENT FEBRUARY 1,
2003 PAYMENTS PLUS ADVANCE PAYMENT OF FUTURE DEBT PRINCIPAL FOR THE MARITIME
CENTER AUTHORITY OF THE CITY OF NORWALK REFUNDING BONDS 1992 SERIES. ACCOUNT
NO. 01-8030-4824
RESOLVED, THAT A SUM NOT TO EXCEED $6,444,524.00 BE AND THE SAME IS HEREBY TRANSFERRED FROM INCREASED ESTIMATED REVENUES TO DEBT SERVICE - MARITIME CENTER AUTHORITY BONDS. ACCOUNT 01-8030-5521
RESOLVED, AUTHORIZE THE ADVANCE PAYMENT OF MARITIME AQUARIUM
CITY OF NORWALK REFUNDING BONDS 1992 SERIES ON FEBRUARY 1, 2003. THE FUTURE
YEAR'S PRINCIPAL IS $5,485,000.00 AND THE PREMIUM FOR EARLY PAYMENT IS $109,700.00.
ACCOUNT NO. 01-8030-5521
** MOTIONS PASSED UNANIMOUSLY
APPROVE RESOLUTIONS RELATED TO NORWALK PARKING AUTHORITY LEASE REVENUE BONDS
Mr. Miller apologized for the late submittal. He stated they
have been working on this for a long time and
have spent a lot of money; they are trying to get financing in place and the
original plan was to issue
revenue bonds for the garage but there was a deficiency to cover the debt
and operating cost. A couple of options were explored and one was to pull
out of the city's financing to make it self-supporting and the other was to
find a way to finance the garage off the city's books (as debt) to allow undertaking
other projects. They couldn't get anyone to bond the insurance so the underwriters
have come up with proposing to finance as lease bonds. He further explained
this is where the parking authority would issue lease bonds to the city to
lease the parking structure and the city would have an annual appropriation
to pay for the financing. The insurance company for the bonds would provide
bonds for the structure so if the city fails to make the appropriation they
would end up taking the bonds. In the current operating budget there is $2
million in costs and all is covered except $194k, but this is in the city's
budget to back fill the structure and with the anticipated deficiency they
would have to appropriate and would work with the parking authority to develop
the budget; some revenues would come in to be distributed to the parking authority
sans what they need to pay the debt. He stated part of the structure for financing
is to include a 1-year debt service reserve fund and capitalize the interest
for the cost of the facility so there is no debt payment service on this until
the year 2004, thus resulting in almost a year of revenues coming in. He noted
that with the insurance they would trade at the double-A rate and would finance
$7.7 million of the project and issue bonds for $3.7 million and carry $1.3
million with no financing on this portion.
Mr. Miklave asked if they would have permanent finance lease bonds in the amount of $7.7 million. Mr. Miller said yes.
Mr. Miklave asked the percentage rate difference double-A and
triple-A rates. Mr. Miller replied it was 5/10 basis points that is 100th
of 1%. Mr. Kimmel commented there has been some controversy over double and
triple A rates noting it may not be in their best interest to have a triple-A
rating. Mr. Miller said a triple-A rating could also have its advantages.
Mr. Miklave asked about the parking authority taking over the city's garages
and then leasing back to the city. Mr. Miller clarified this situation only
applied to the Maritime Garage; they had a feasibility study on the Maritime
Garage and there are constraints because the aquarium would use a lot of the
spaces but for future facilities there should be more flexibility in setting
the market rate but this won't work for this garage because it won't sustain
itself.
Mr. Miklave questioned the purpose of revenue bonds and stated it appeared they were looking at revenue from this structure. Mr. Miller stated they are still treating it as one entity system wide and lease financing relates to this one structure only in that they wanted everything together to develop so revenues would support financing of municipal garages but this can't be demonstrated with revenues they have now so that's the reason for the lease bond arrangement.
Mr. Miklave asked if there would be more pressure to set rates from one garage to another. Mr. Miller said this wasn't expected because the Maritime situation shouldn't negatively affect other facilities.
Mr. Miklave asked if this was a cutting edge system. Mr. Miller said it was an emerging process used throughout other parts of the country but it's a first for Connecticut; its been tried before in other Connecticut cities but was unsuccessful.
Mr. Miller stated they were looking for approval to have the sale on December 15, 2002. Mr. Miklave asked why so soon. Mr. Miller explained monies have been spent already such as for the pre-cast concrete, so they are looking to lock in the rates.
Mr. Kimmel summed up they need to guarantee this to make it go over. Mr. Miller said they are guaranteeing it as an annual appropriation and its worked out that if they fail to make the appropriation the insurer takes it over.
Mr. Miller stated he would invite the bond counsel representative to attend the Tuesday meeting. Mr. Kimmel agreed this was a good idea.
** MR. KIMMEL MOVED TO APPROVE RESOLUTIONS RELATED TO NORWALK
PARKING
AUTHORITY LEASE REVENUE BONDS
** MOTION PASSED WITH FOUR VOTES IN FAVOR AND ONE ABSTENTION (MR. MIKLAVE)
RECEIVE BOARD OF ESTIMATE and TAXATION SPECIAL APPROPRIATIONS
from
DECEMBER 2, 2002
Mr. Miklave questioned whether or not this was done previously. Mr. Miller stated those items already authorized were exhausted and there is nothing left so they were looking to replace appropriations. Mr. Miklave asked why it was done in two steps. Mr. Miller said he wasn't sure.
Mr. Miller said the Board of Taxation suspended the rules to
add an item to their agenda regarding notification of losing substantial funds
from state grants. The projected budget for interest income came in much lower
resulting in revenue shortfalls so the board asked what they could do to plug
up the holes; one recommendation was to transfer expenditures for road paving
back to the capital budget; historically, it was funded through the capital
budget, this has been done in prior years so based on this recommendation
the Board of Taxation approved $1.3 million expenditures to be funded to the
capital fund balance.
Mr. Kimmel questioned the legality of doing this. Mr. Miller clarified it
was done in the past and is legal as far as he knows.
** MR. KIMMEL MOVED APPROVAL TO RECEIVE BOARD OF ESTIMATE
and TAXATION
SPECIAL APPROPRIATIONS from DECEMBER 2, 2002
** MOTION PASSED UNANIMOUSLY
INFORMATIONAL PURPOSES ITEMS
· Transfer of $1,000.00 for Fiscal Year 2003-2004 Legislative Budget to the City Clerk's Budget for Postage.
Mr. Miklave questioned the transfer of $1,000.00. Mr. Gilden clarified this was on the agenda in error.
Mr. Miklave asked what the legislative budget was. Mr. Miller
said there was $4,500.00 that has not been expended and in the general fund.
Mr. Miklave recalled that when he asked about funds for the CCM conference
he was told there were no funds available. Mr. Miller said that during the
last council body meeting there was a request for funds for laptops and the
amount in the budget was a carry over amount from prior years but the primary
interest was to carry a replacement program for laptops. He further said there
was monies designated for city services purposes although some expenditure
has been applied against it.
Mr. Miklave asked the procedure to tap into the funds available. Mr. Miller
stated they should go through the council president for authorization of the
expenditure and then on to the controller's office. He noted there was a request
for materials to process grant applications. He summed this discussion up
by clarifying the item hasn't happened and shouldn't have been on the agenda.
· Discussion on Tax Collection Services Proposal
** MR. MIKLAVE MOVED TO TABLE
** MOTION PASSED UNANIMOUSLY
Other Discussion
Mr. Kimmel asked if the topic of the senior's tax abatement credit could be on the agenda with a presentation of options based on varied income amounts in line with the applicable credit for the tax abatement. Mr. Miller noted the specific requests.
Mr. Miklave asked about the possibility of a tax abatement for disabled vehicles due to the expense of these types of vehicles. He offered to provide more information and he noted all these items should probably be on the same calendar.
Mr. Kimmel said the next meeting was scheduled for January 1, 2003 but obviously
there wouldn't be a meeting due to the holiday. He pointed out the Finance
Department has to make its recommendation by January 13, 2003 so they need
to come up with a budget capital by the second council meeting in January
and felt there should be a meeting in early January to allow a presentation
of the status of the operating budget. He suggested January 8, 2003 for the
next meeting and at that time schedule the public hearing after January 13
and then schedule the second Finance & Claims meeting for them to come
to some tentative conclusions based on the public hearing. The following dates
were determined:
§ Finance & Claims Committee meeting - January 8, 2003
§ Finance Department meeting - January 13, 2003
§ Public hearing - January 22, 2003
ADJOURNMENT
** MR. MIKLAVE MOVED TO ADJOURN
** MOTION PASSED UNANIMOUSLY
The meeting was adjourned at 9:00 p.m.
Respectfully submitted,
Diane Graham
Telesco Secretarial Services
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