The Finance Committee met 01/22/2024. One of the items they took up was Resolution 1-R-24 the Resolution for Use of Efficiency and Conservation Block Grant Funds. This resolution calls for $134,180 in Department of Energy Efficiency and Conservation Block Grant funds that the city accepted back in May of 2023 to be directed toward qualifying aspects of the Library Project and for “the offsetting savings to be applied to existing Library Project Expenses.”
While nobody disagreed that the money should be used for the Library Project, there was a lot of discussion about what, practically, was meant by the statement “the offsetting savings to be applied to existing Library Project Expenses” and whether it would allow the overall budget for the library to be increased by $134,180.
On the one hand, Director of Parks, Recreation, and Facilities Dean Gazza told the committee that he did not look at this resolution as adding $134,180 to the Library Project’s budget. Rather, it was still his responsibility to bring the project at the cap that had been set. He said, “What this should do is reduce the amount the taxpayers have to pay, because we’re […]offsetting the amount that ends up getting borrowed by $134,180.” However, later in the meeting he also said that, at the end of the project, if the money the city had already borrowed covered the cost of the project, these grant funds might provide the opportunity to put solar panels on the library roof or electric vehicle charging stations in the parking lot.
Ultimately, the committee declined to make clear that these grant funds could not be used to increase the overall scope of or the set budget for the Library Project, and by a vote of 2-3 voted down an amendment to the resolution that would have rewritten the final line to read “and reduce the taxpayer portion of the overall library project by $134,180.”
They then voted 3-2 to approve the resolution as originally submitted with Alderpersons Brad Firkus (District 3), Katie Van Zeeland (District 5), and Denise Fenton (District 6) voting in favor of the resolution and Alderpersons Sheri Hartzheim (District 13) and Chris Croatt (District 14) voting against it.
I’ve prepared a transcript of the discussion for download:
The authors of the resolution were operating under the belief that the funds had to be designated by the end of January in order for the city to not lose the grant. During the meeting, however, Director Gazza indicated that the deadline had been extended to the end of March. [And it’s a good thing it was because the next Common Council meeting is not until February 7, so had the initial deadline still been in place, the city would either have had to call a special session of the Common Council before the end of the month or lose this grant money.]
When this grant was first accepted back in May of 2023, Alderperson Hartzheim had proposed that the dollars be spent on the library’s new geothermal system and that the cost savings be used to decrease the overall burden on the taxpayers for the project. This proposal was voted down out of concern that there may be better projects that the money could be spent on. However, per Alderperson Van Zeeland, the primary author of the resolution, “[A]t the end of the day, the library is the best use for this and [these grant funds] would help cover the only extra cost for the library, which is of the third move.”
Alderperson Fenton, a cosponsor of the resolution said, “I agree with my co-author that you know, there have been some unforeseen expenses. So, I think it’s always a good idea to have a buffer for that. But my biggest concern on that library is energy efficiency and sustainability. So, I want this money to go […] towards the library to ensure that we’re able to do the geothermal.”
Alderperson Hartzheim was concerned that, as written, the resolution would allow the overall budget for the Library Project to be increased by $134,180. “That to me is the breaking of a promise. We have told the citizens of this city that we will not spend more than $26.4 million on this project. And then we voted for $2 million of ARPA funds, which I said no to as well. And now we’re going to ask for another 130-some-thousand on top of that. This resolution would be acceptable to me if we refunded these funds to the taxpayers of the city. And I understand that that’s not the purpose of the resolution. That’s not why these three authors who voted no against my amendment to do this in the first place, voted or wanted to put this resolution together now. It is just a lie that we’re telling ourselves, and I hope that we can reject it or amended to say that these funds will not increase the budget of the library.”
Alderperson Meltzer, a cosponsor of the resolution disagreed saying, “In my opinion, we are keeping our promise. This is a grant. This is not taxpayer money. We’re not changing the amount of money that we’re asking the taxpayers to pay for the project.”
Alderperson Hartzheim responded, “I think that’s a convenient story that we tell ourselves. ‘It’s grant money, so it’s free.’ But these grant dollars could go to any other project in this city and reduce the tax burden for our taxpayers. It is it is a bald-faced lie to tell ourselves that this is not increasing the budget of this library.”
Director Gazza told the committee it was his job to manage the project’s budget to bring the project in within the amount allocated for it. “When this was proposed, I didn’t look at it as adding $134,180 to the budget. I look at it as I’m still accountable for the amount that—the cap that was set. What this should do is reduce the amount the taxpayers have to pay, because we’re actually reducing the—we’re offsetting the amount that ends up getting borrowed by $134,180 because this will—this is other money that replaces money. That other would have been borrowed.”
Alderperson Hartzheim believed it should be made very clear that putting these grant dollars toward the project would not add to the budget of the library project. She made a motion to amend the resolution to read that the funds would go toward a qualifying initiative within the library project “and reduce the taxpayer portion of the overall library project by $134,180.”
Alderperson Croatt was confused about the intent for the money. It was supposed to be used for energy efficiency and conservation but then he heard some of the alderpersons talking about using it to offset the cost of the second temporary library move. He wanted some language to clarify the offsetting of expenses.
Alderperson Van Zeeland responded, “The only reason for the wording for the offsetting the cost of the move is because we did designate that the funding for the extra move would come out of the current budget for the library. When Alder Hartzheim and I discussed possibly working on this together we just couldn’t find wording that would, I guess, please the both of us and the other authors, and […] with there being a timeframe to get it introduced for us to meet the deadline of the 30th I just thought it best to have this discussion with Director Gazza and then to amend as necessary here as opposed to putting something forth that I was unsure if we would be able to justify that. […] I believe that Director Gazza and I are on the same page as saying offsetting from the library project, and that was something that I did discuss with Alder Hartzheim that this would only be used for the library project.”
Later on Alderperson Van Zeeland said she was somewhat in alignment with the aim of Alderperson Hartzheim’s proposed amendment, “I just, again, want to clarify, it was my understanding that the cost of the move would come out of the current budget, and so when I said in the resolution that it will offset the savings, I—just like Director Gazza, I didn’t see that adding to the budget.”
There was some difficulty in coming up with reasonable wording for the amendment. Alderperson Hartzheim initially proposed that the money be used to “reduce the taxpayer portion of the overall library project budget.”
Director Gazza pointed out, “[T]he budget is still the same. It ain’t reducing the budget because it keeps the budget the same. It’s reducing the amount of money coming from one source versus the other. I mean, because I think you said reducing the budget by $134,000—we’re not reducing the budget. The budget still stays the same, the project budget. It’s that you’re reducing the amount levied for the project.”
Even after she changed the wording of the amendment to read “reduce the taxpayer portion of the overall library project” there was some discussion of how that would actually be accomplished because the city has already borrowed the full $26.4 million it budgeted for the project.
Director Gazza’s goal was for the project to come in under budget, and he said he felt pretty comfortable right now. Anything that was left over would go back to the city.
Finance Director Jeri Ohman said if the project did come in under budget they could shift those savings to other projects and not have to borrow so much for those other projects.
Despite Director Gazza’s desire for the project to come in under budget, unexpected things happened sometimes, and Alderperson Firkus was not comfortable setting up a situation in which the proposed amendment would prevent the city from being able to use these funds to offset an unexpected overrun in costs. “I know, to Alder Hartzheim’s point and the commitments we’re trying to shoot for here, but at the same time, I want to play it a little bit safe. Because I feel like we’re in a much better—it’s a much better place to handle that scenario versus if we go forward with this.”
Director Gazza pointed out that if the language of the resolution was left more vague (as opposed to amending it as Alderperson Hartzheim proposed), “if you got to the end of the project, by leaving it somewhat vague, there are opportunities to put solar on the library, there’s opportunities to do vehicle charging stations at the library, there’s opportunities to do that. So, leaving it—you know, leaving it vague gives us the ability to use the money exactly the way the grant would like it to be used for. If, for example, the money that we already do have borrowed covers the cost of the full geothermal already.”
Alderperson Firkus confirmed that any change of that nature would have to be approved by the Common Council.
Alderperson Chad Doran (District 15) thought Director Gazza’s point was a good reason why the amendment should be approved. “I think to the points that that the chair was making and Director Gazza were making are the reasons that I think this amendment is important, because the grant money can, from what Director Gazza has said, be used for the geothermal project, which is which is a fine use of where this money can go. Could offset some of the borrowing we’ve already done, reducing the taxpayers’ burden here. But if we just accept this and say, ‘Well, the project came in at budget so we have these extra funds available now; we can add on extra things to the library,’ it’s to what Alder Hartzheim’s point was, is that now we’re increasing the commitment that we’ve made to the library.”
Alderperson Kristin Alfheim (District 11) did not think it was necessary to pass Alderperson Hartzheim’s amendment now, saying, “I think to Alder Hartzheim’s point, we are not breaking any promises by accepting this grant. However, to her point, if down the line we’re asking for more, than that is a valid question. My point to this conversation would be: but that’s not where we are. We have [agreement] from staff and from Council that we all are absolutely trying to do exactly what Alder Hartzheim is recommending. And if anything, at any point, something different, which is the increase or overage, is asked for, we then all have that obligation to say ‘That’s not what we promised.’ We all will have to have that conversation and be accountable to it.”
Alderperson Hartzheim responded, “[T]he danger is valid. So, if the danger is valid, let’s take it off the table with this amendment right now and be done with it, then we never have to have that discussion again.
The committee proceeded to vote 2-3 against the amendment with Alderpersons Hartzheim and Croatt voting in favor of it and Alderpersons Firkus, Van Zeeland, and Fenton voting against it.
The committee then voted 3-2 to approve the unamended resolution with Alderpersons Firkus, Van Zeeland, and Fenton voting in favor of it and Alderpersons Hartzheim and Croatt voting against it.
[I didn’t really understand why the mayor, city staff, and the alderpersons waited until the last minute to designate these funds and have this discussion. If the deadline had not been extended until the end of March, they would have missed the January deadline unless they held a special session of the Common Council, so it seems like they were cutting things close.
However, in light of the fact that the deadline to designate the grant dollars has been extended to the end of March, and given that the committee members seemed to struggle with the wording of any amendment, it seems like it would have made sense to hold this item for a couple weeks to give the Finance Department and the Legal Department an opportunity to provide some feedback on ways to designate these grant dollars toward the library project while also making sure the funds weren’t taken as license to expand the budget or scope of the project.]
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1160198&GUID=73EE79E6-FD59-4305-B5BB-EF6B332ABDAB
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