Finance Claims Committee, CITY OF NORWALK, norwalk ct, norwalk city hall

MAY 1, 2002

ATTENDANCE FINANCE COMMITTEE:

Bruce Kimmel; Chairman, Matthew Miklave, Kenneth Baker, Joseph Mann, Douglas Sutton

OTHERS PRESENT: Jack Miller, Finance Director; Robert Barron, Risk Management; Al Polumbo, Tax Collector’s Office

STAFF: Frederic Gilden, Comptroller

Call to Order

The meeting was called to order by Mr. Kimmel at 7:40 p.m.

Approve the Minutes of the following Finance Committee Meetings

Minutes - March 6, 2002

MR. MANN MOVED TO APPROVE THE MINUTES OF MARCH 6, 2002

Mr. Kimmel commented on the matter of brief vs. extensive minutes per his discussion with Telesco Secretarial Services in that according to some of the secretaries they have indicated lengthy minutes are difficult to put into a summary format so this matter will be further discussed to determine the correct format for any future minutes.

MOTION PASSED WITH FOUR VOTES IN FAVOR AND ONE ABSTENTION (MR. MIKLAVE)

Minutes - March 19, 2002 Finance Committee, Public Works & Ordinance Committee

Public Hearing on Water Pollution Control Authority

MR. MANN MOVED TO APPROVE THE MINUTES OF MARCH 19, 2002

MOTION PASSED UNANIMOUSLY

Minutes - April 3, 2002 – Finance Committee & Planning Committee Public Hearing on Capital Budget

Corrections

Page 1; 1^st pargraph delete the entire paragraph

Page 1; 2^nd Speaker #1 paragraph, 1^st line where it reads voter registration carts should read voter registration cards

MR. MANN MOVED TO APPROVE THE MINUTES OF APRIL 3, 2002 AS CORRECTED

MOTION PASSED UNANIMOUSLY

Minutes - April 3, 2002 – Finance Committee & Ordinance Committee Public Hearing on Senior Tax Deferral

Corrections

Page 1; 5^th paragraph, 1^st sentence should read Mr. Miklave asked about Section 103-17f and if raising the income limit to $45k tracks with the tax credit legislation.

Page 1; 8^th paragraph, 1^st sentence where it reads Mr. Miklave asked if census information is researched to obtain an estimate should read Mr. Miklave asked if census information was researched to obtain an estimate.

Page 3; 3rd paragraph, 1^st paragraph where it reads he based this on the Midwest statistics where farms became land poor. should read he based this on the Midwest statistics where farmers become land rich and cash poor.

MR. BAKER MOVED TO APPROVE THE MINUTES OF APRIL 3, 2002 AS CORRECTED

MOTION PASSED UNANIMOUSLY

Minutes - April 3, 2002 – Finance Committee Meeting

MR. SUTTON MOVED TO APPROVE THE MINUTES OF APRIL 3, 2002

MOTION PASSED UNANIMOUSLY

Claims Committee: receive the monthly Claims report; review and approve claims as required for Claims Reports dated April 3, 2002 and May 1, 2002

MR. BAKER MOVED APPROVAL FOR THE APRIL 3, 2002 CLAIM REPORT

MOTION PASSED UNANIMOUSLY

MR. MANN MOVED APPROVAL OF THE MAY 1, 2002 CLAIM REPORT

MOTION PASSED UNANIMOUSLY

Delinquent Tax Report: receive report and discuss

Mr. Miklave asked for guidance from Jack Miller and stated that in looking through the reports the distinguishment between homeowners and businesses is the focus in regard to those with personal property or assessments that remain unpaid such as, real estate taxes not paid and personal tax deficiencies going back ten years; he referred to an account on page 1, #107881 – Hoffrel Instruments Inc. that owes a debt over $300k.

Mr. Polumbo replied they are actively trying to locate these person(s) and the Tax Accessor has been notified so these properties are not expected to stay on the grand list for 2001. He said if one looks back at the tax list these properties were there but they were not filed so the Assessor’s office files for them and they are usually estimated at a high amount. They are trying to track people down but his feeling is that they have not been there for long.

Mr. Miklave asked if the property is vacant. Mr. Polumbo said no there is a company there.

Mr. Miklave asked about an account on page 4, #23177 – Lakewood Association. Mr. Polumbo said they abated this ten years back and the property is mostly water (a pond), years ago there was a requirement for park land and they tried to give the property back to get it off the list.

Mr. Miller said it’s a piece of land one time owned by an association but the association absolved so it became a question of ownership.

Mr. Miklave asked about an account on page 5, #79472 – Bothwell & Sons Excavating Company. Mr. Polumbo said they spoke to him two days ago.

Mr. Miklave stated the items on the list for eight to ten years’ raises a flag and he asked if they should be looking at other tools to assist in efforts to collect delinquent taxes. Mr. Polumbo said the sheriff has been contacted to possibly turn over accounts to them and he explained many of the delinquent accounts are due to bankruptcy, court delays etc.

Mr. Kimmel asked Mr. Polumbo to continue with the discussion on the Bothwell account and Mr. Polumbo said he spoke to Bothwell and told him the matter would be turned over to a sheriff and that he was going to send a copy of the real estate for sale; Bothwell replied that he has plans on paying the debt. Mr. Polumbo stated he would keep on top of this matter. Mr. Miklave asked if they are able to impose liens. Mr. Polumbo said he was not sure if Bothwell owns the property.

Mr. Miklave repeated that perhaps it would be an idea to look at this problem from the standpoint of providing better or more up-to-date tools to track delinquencies.

Mr. Miklave asked about page 8, #20665 – Exel Realty Co Inc. Mr. Polumbo said this is a big piece of land. Mr. Miklave asked if they could possibly acquire the land for open space. Mr. Polumbo said it’s a lot of land located off of Scribner Avenue that is 1.44 acres in the middle of a development and that it is probably a field, rock or a mountain, he wasn’t certain.

Mr. Miklave asked about page 9, #79482 – Hawkeye Press. Mr. Polumbo said they are meeting with the accountant next Wednesday and they already advised him that this bill should not accumulate.

Mr. Kimmel asked if they are able to work out payment plans. Mr. Polumbo said the IRS has authority to do this. Mr. Miller said if a payment plan is worked out they are required to stay up with current taxes and make inroads on the delinquent tax and in this case an arrangement could possibly be made.

Mr. Miklave asked about offering an amnesty plan. Mr. Miler suggested talking to the tax collector regarding this matter and he noted they should exercise caution in doing so.

Mr. Miller noted that the rate of collection is phenomenal, they have good tools and systems in place and they are pursuing the delinquent properties.

Mr. Polumbo mentioned they received Perkin-Elmer LLC today.

Mr. Miller stated there is a moving company that has built up a very large personal property delinquency and he wasn’t able to renew his vehicles so they met with him and he agreed to a sufficient lien on his property to allow him to make inroads on the outstanding debt.

Mr. Kimmel noted no motion was required on this agenda item and the discussion was for informational purposes only.

Authorize the Mayor, Alex A. Knopp, to submit an application to the State of Connecticut for grant funds provided under the State of Connecticut’s Local Capital Improvement Fund for 2001-2002

Mr. Miller said they receive an application from the state for an X-number of dollars and there are restrictions on how to apply for monies and historically they have related road improvement criteria to get full funding.

MR. BAKER MOVED TO REFER THIS ITEM TO THE COMMON COUNCIL

MOTION PASSED UNANIMOUSLY

Update Presentation on the Property and Casualty Process and Historical Cost of Risk.

Mr. Barron, the Risk Manager stated he would like to be on the same page regarding this matter so he presented the following information regarding what is happening in the marketplace and third party claim. He said the insurance program was structured in 1998 when the city had property insurance and not liability and the cost was an issue for many years so it behooved the city to buy liability insurance in 1998 and the structure of the program called for a $50k deductible so they moved the $50k deductible up to $250k in 1999 to keep the price flat and the cost flat; they stayed with this for two years and kept the property insurance with the $50k deductible. The plan also insures all vehicles the city owns as well as bulldozers at a $100k deductible. They are still fully insured when a city vehicle is involved in an accident. He noted that after the "September 11" incident the market changed forever and bought it to a hard market and currently the insurance market is hard and people driving the costs are the reinsurers. The program is structured for $500k self-insured retention. To keep the bids down they researched major carriers and put out a bid document and determined they were okay as is but to keep the premium down they increased it. They haven’t received renewal for insurance yet and he is not sure what it would be; CIRMA ended their contract with St. Paul as of June 30 and they would provide a renewal but the alternative is not finalized but they have all the information on how to price but still need to finalize the reinsurance first. He indicated they would provide pricing at the June meeting that would be effective July 1.

Mr. Barron stated they are taking a look at the structure in relation to the marketplace and they would take on a broader look at enterprise risk management. They should get feedback on many factors concerning advantages to take on structuring the program.

Mr. Kimmel asked the number of municipalities that also have this type of policy. Mr. Barron said there are a few cities that have it that are the same size of Norwalk but they may have a self-insurance arrangement that may be more cost effective.

Mr. Miller commented that all Board of Education insurances are covered under this plan as well.

Mr. Miller also commented that they are looking for a long-term relationship with a carrier.

Mr. Barron reiterated they would have renewal and pricing available at the next meeting.

Mr. Baker asked if it is a yearly renewal. Mr. Barron said yes and it would be a larger increase than expected.

Mr. Miklave asked about the property liability and if they have done an analysis of claims history. Mr. Barron said yes.

Mr. Miklave asked about liability insurance and the $500k deductible and if it includes defense costs. Mr. Barron said yes and noted that the council has more control over this.

Mr. Miklave asked if the fees for outside council are included within the scope of coverage. Mr. Barron said no and he offered that any claim that would be 50% or ramifications thereof such as an head injury or things that could be problematic, the carrier has to be notified; for example: if there was a $250k claim they would work with the Common Council on a carrier and Corporation Council on issues on how to proceed in the respect of mutuality.

Mr. Miklave asked if employment practices are covered. Mr. Barron said yes they would be covered as school leaders under liability.

Mr. Barron concluded and asked the committee to recommend approval on the renewal on third party claim and the 5% increase in view of the relationship with CIRMA.

For further information he noted that workmen’s compensation was doing a good job but that liability was not so good and Corporation Counsel is not completely satisfied.

Mr. Barron said to allow a fair look the claim administrator could be reviewed but they prefer an in-house claim administrator. He stated this could be done by breaking out the fee and pulling in the indemnity portion and have an adjuster in-house that would allow better control; currently all data is with an outside third party claim administrator and should be in-house for better management to allow communication with other departments to control their destiny. He said fees would be cost neutral or more at approximately $50k and an in-house administrator would be of employee status with fringe benefits.

Mr. Miller offered his input and said they are discussing different options and would advise more on this matter at a later date but he feels CIRMA should be renewed for now.

Mr. Miklave stated he appreciates the thorough process and options but he is opposed in principal to expanding the city’s infrastructure, them not being administrators and he would be concerned with ending up with a city service well intentioned but not nearly as efficient.

Mr. Miller basically agreed with this statement and added that there are more facets to the suggestion that would require extensive research.

Approve Renewal Fees with CIRMA for Third Party Administrator Claims Service for Workers’ Compensation and Liability, Auto, and Property Not to Exceed $158,500 for July1, 2002 to June 30, 2003.

MR. MANN MOVED TO APPROVE

MOTION PASSED UNANIMOULSY

Presentation on Bond Issuance Process

MR. MIKLAVE MOVED TO TABLE THIS ITEM UNTIL THE NEXT SCHEDULED MEETING

Mr. Kimmel announced that the original request was made prior to the capital budget and he wondered how valid the item still is. Mr. Miklave replied that he would like some background information but he still felt it should be tabled.

Mr. Miller said they would begin the process of issuing bonds again in June so they are in the process of updating the official statement (he distributed copies of the statement) and he continued to say they are gathering data from departments on cash flow required for existing projects in the next fiscal year and for new projects, so they will look at all material and decide the bond issue but they need to determine the size and structure. He stated they would have a lot to look at that have 20 years and a portion that would have 15 and 5 years, such as a technology plan, he added they are putting together a debt plan structure that should be more interesting than in the past.

MOTION PASSED UNANIMOUSLY

Approve Resolution Authorizing the Issuance of $72,893,000 General Obligation Bonds to meet the Appropriations in the 2002-2003 Capital Budget and the Making of Temporary Borrowings in Anticipation of the Proceeds Thereof

MR. BAKER MOVED FOR APPROVAL

MOTION PASSED UNANIMOUSLY

Mr. Miller asked about the board of estimate taxation meeting scheduled on May 16 and items that should go to the Common Council on May 15, he said he would call and review the agenda items such as:

Registrar’s Office and cards

He noted purchasing was researched and $2,500 should be required for the fireproof cabinets so he would transfer the matter to the board of estimate taxation.

Mr. Kimmel mentioned he would like to review the matter beforehand and suggested a brief caucus before the meeting on May 14, agreed upon by the committee members.

ADJOURN

The meeting was adjourned at 8:50 p.m.

Respectfully submitted,

Diane Graham

Telesco Secretarial Services