The Finance Committee met 08/22/2022. The item that took up the most discussion time was the allocation of the city’s 2021 Excess General Fund Balance. After the annual audit was completed, it was determined that the city had $4.8 million in excess general funds. This was due to the city’s TIF districts repaying loans and the availability of federal Covid-19 relief funds.
Per city policy, 75% of the excess funds ($3.6 million) would be used for deb reduction, either by calling existing debt or reducing the 2023 borrowing package, which left 25% of the funds ($1.2 million) to be designated for other projects.
Mayor Woodford and Finance Director Jeri Ohman met with city staff and put together a list of recommendations for how to use that $1.2 million. The committee ended up voting 5-0 to approve the recommendations.
Mayor Woodford told the committee that the items they wanted to spend the funds on were not terribly exciting, but they were critical to the city.
He noted that, while city policy required 75% of the funds to be used to reduce debt, often times it was difficult for the city to pay debt off early. That was particularly true in regards to the types of municipal bonds that the city uses which often don’t include early call options. That lack of an early call option is what helps keep the city’s borrowing costs relatively low. The bonds were a steady, stable, long-term, reliable investment even if they did not yield huge returns to investors.
Because the city often could not call the bonds early, they often used excess general funds to mitigate debt in the first place by looking at the existing Capital Improvement Plan and figuring out opportunities within it to avoid borrowing.
Their recommendations for the remaining $1.2 million that was not going toward debt reduction were geared toward tackling projects the city would not necessarily be able to do with existing funds but that they knew needed to be done. They also wanted to make sure they set aside some funds to deal with any inflationary impacts that might show up during the remainder of the year. They were particularly concerns about areas in which they don’t control the expenses such as fuel. The city has a modest fuel reserve but, even at wholesale prices, if fuel cost a dollar a gallon more than what they budgeted, they wanted to make sure they had an appropriate cushion.
Mayor Woodford then ran through the recommendations
$20,000 for Aerial Imaging for GIS – One of the basemaps on the city’s online GIS tool was an aerial view of the city. That basemap is not auto populated by something like Google. Rather, they create that image by having a contractor fly a plane over the city and take pictures. There was a cost to that service, part of which had to do with the fact that the city asked for a deeper level of detail. That added detail helped city staff in a number of areas be it the GIS department, stormwater, or the Community and Economic Development team. That aerial imaging had to be updated from time to time especially when the city was going through periods of significant change as Appleton had been.
It had last been updated in 2019 and since then things had changed in terms of construction within the city. They wanted to keep those images current. He noted that they were helpful with conducting stormwater assessment and determining the non-permeable surface on properties.
$130,000 for College Avenue Traffic Safety – He said this was a subject that had come up in numerous committee and Council discussions, community input sessions, and messages to the mayor and alderpersons. College Avenue’s current design and configuration presented some challenges and had some conflicting uses and needs with the way it was currently being used. They felt it was appropriate to designate funds to support the work of a number of city departments, led by the traffic section of the Department of Public Works, to make some traffic safety interventions on College Avenue.
Staff was still working on the details of a proposal that would eventually work its way through the Municipal Services Committee. And there may be some piloting of interventions over the winter and into the spring and summer months of 2023.
They saw a clear need to conduct more work on College Avenue to make it a more multi-modal and functional thoroughfare for the community.
$50,000 for Appleton Redevelopment Authority Business Enhancement Grants – The city had some business enhancement façade grant programs in a couple of the Tax Increment Districts, but there was no city-wide program. This allocation would create a mechanism for the city, through the Redevelopment Authority, to support businesses city-wide instead of just those in Tax Increment Districts.
He said the program was important even before inflation was running at 9%. It was even more important now and could be a critical gap-closer for businesses that were looking to make investments. The funds had often been used by small, local businesses that just needed help closing the gap to beautify their property, shore up the roof, or improve the façade.
$150,000 for Emerald Ash Borer Mitigation – The city had a significant issue with the emerald ash borer in Vosters Park which had many ash trees which would need to be removed and replaced. The bulk of this allocation would go toward the Vosters Park project, but they wanted to allocate above and beyond the needs for just Vosters Park to empower the Parks, Recreation, and Facilities Department or the Forestry Division of the Public Works Department to do more work throughout the city either in parks or elsewhere allowing them to prioritize work based on the condition of trees.
$550,000 for Information Technology Updates and Security – The city was in the process of migrating their Enterprise Resource Planning system off of city owned, operated, and maintained servers to the Tyler Technologies cloud-based system. There were many benefits to making that move both from an IT security standpoint but also from a capital liability standpoint, and they believed it was a good investment but it was going to be a costly project.
There was plenty of IT work to be done, so any money not used up by the migration project would be designated toward IT projects. Mayor Woodford noted that what was being approved by the committee right then was only designations for funds but not specific approvals of projects. Project contracts would still move through the appropriate committees of jurisdiction and the Finance Committee for approval.
$275,000 as a Current Year Operating Reserve – Mayor Woodford had already talked about using these funds as an inflation hedge. He added that if those funds did not end up being used on inflationary costs during the remainder of the fiscal year that they would bring back a set of recommendations to the Finance Committee either asking to use those funds on other projects or continue to hang onto them as to cushion the city’s reserves. He said that the city already had a healthy reserve fund, but using this money would be a way to not have to tap into the city’s reserve fund.
He opened things up for questions.
Alderperson Van Zeeland (District 5) said that she had thought drone technology was used to create the aerial images of the city. She wondered if that was something that was available.
Community and Economic Development Director Karen Harkness noted that, for the first time, Appleton was partnering with Outagamie County on this. Appleton would do everything within the city limits and Outagamie County would do everything outside city limits. Outagamie County had usually used lower quality images that Appleton, but it was important for Appleton to have good quality pictures. The images were used by the forestry division, the Department of Public Works, GIS, the Police Department, and the Fire Department. The city was excited to be partnering with Outagamie County and hoped to expand that to Winnebago and Calumet Counties as well.
They used a plane not a drone. It took a long time to snap all of the photos and then stitch them together. The plane would fly one year and the city would get the pictures the following year.
Alderperson Denise Fenton (District 6) wanted to know if the IT allocation would fund the implementation of the of the last Tyler Munis modules in addition to moving to the cloud.
Mayor Woodford responded that it would not necessarily cover it. It would support the city’s continued work to add modules but the utility billing module at least would be funded in large part if not entirely by Utilities not from the excess general funds.
Alderperson Fenton commented that she was really happy to see the IT allocation. She understood it wasn’t the sexiest use of city funds, but the city couldn’t operate much without it and she had been concerned about some of the gaps.
Alderperson Brad Firkus (District 3) thought moving to the cloud would be beneficial in that the city would not need to be replacing hardware. They would be able to scale up or scale down and just use and pay for what they needed. IT was a great way to be able to keep things even and predictable for the city.
There were no further comments or questions, and the committee voted 5-0 to approve the recommended allocations.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=980107&GUID=F933AB1F-3265-49E9-8B04-50891A61DEA2
Be the first to reply