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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Peshtigo Auditor Advises 3% City Water Rate Hike

Issue Date: May 5, 2022

After 19 years as an officer with the Peshtigo Police Department, Lt. Jared Phillips is changing career paths. At its meeting on Tuesday, May 3, Peshtigo City Council unanimously approved hiring him to fill a vacant laborer position with the Department of Public Works.

In her motion asking Council approval for hiring Phillips to fill the Public Works Department vacancy, Alderman Debbie Sievert, who chairs the Personnel Committee, said Phillips will start his new public works job as a 6-month probationary employee at probationary pay, but will retain credit for all his years of service to the city.

"I want to thank him for his dedication and all his years of service to the Peshtigo Police Department. He will be missed there," Sievert declared.

Police Chief Fred Popp said after he meeting that he expected Phillips to give his formal 2-weeks notice as a police officer on Wednesday.

Popp said Phillips is the third long-time Peshtigo Police officer to leave the department in six months. Officer Steve Kessler joined Oconto County Sheriff's Department and Officer Ryan Nemetz is now a Deputy with Marinette County Sheriff's Department.

Officers Adam Hynnek and Josh Lindt were hired in March as full time patrol officers with the Department, and Officers Shawn Veriha and Rebecca Praegitzer were hired for part time positions. Veriha is now working full time, and Praegitzer will probably be doing the same soon, Popp said.

Meanwhile, the City Engineer/Director of Public Works position remains vacant, and Council approved a motion asking the Finance Committee to research and consider hiring a recruiting service to help get it filled, since there has been a shortage of suitable applicants.

Alderman Brigitte Schmidt, who chairs the Parks and Recreation Committee, told the board that Wednesday, May 4, would be the last day of use for the Badger Boardwalk playground. It is being removed to make way for new playground equipment, and the committee had authorized Schmidt and parks and Recreation director Lori Tonn to work with the citizen committee on removing the old equipment and installing the new.

A Street use Permit was approved for Zion Lutheran Church for a car show on Saturday, July 23, was approved without dissent. Alderman Allen England, who abstained from voting, explained the event will be handled basically the same as last year. They will close half of the 200 block of Ellis Ave. from the corner to the end of the church property, so residents can reach their homes. England said they would be asking the Parks and Recreation Department to provide some picnic tables and trash containers for the event.

Also approved without dissent was a request from St. Mary Catholic Church for a beer license for a "Denim & Diamonds" dance on Friday, May 13.

There were no speakers during time for public comment, and there was no monthly report from Tom Smith Inspections. "We've been keeping him pretty busy lately," Mayor Cathi Malke commented.

The Council meeting had begun with a report on the 2021 city audit presented remotely by Scott Sternhagen of the CliftonLarsonAllen LLP (CLA) accounting firm. The audit covered city operations as well as the water and sewer utilities. In view of the slight profit margin of the water utility, Sternhagen recommended that they start the process for a 3 percent increase in water rates, which would have a very slight impact on customers, but significantly help the utility keep up with inflation.

The water utility had pretty much broken even, with a cash increase of $110,000, and $250,000 spent for capital improvements. He said the utility income and outgo have been really consistent for the past five years.

The large increase in sewer rates during the past year resulted in a significant increase in income, from approximately $1 million to $1.5 million, but only a slight positive increase in the bottom line, to a positive $78,000. Sternhagen said a large outstanding bill for a very big customer accounts for the slight difference.

(Sternhagen did not identify the customer, but was almost certainly referring to BPM, Inc. which has been billing the city and/or its utility $72,350 per month for use of the mill property for the city's main sewer line across the Peshtigo River. The utility is protesting that charge, and BPM has declined to pay the sewer bill. BPM Manager Jim Koronkiewicz at the City Council meeting in April presented a bill for a total of $509,418.50 for use of the mill property, and said legal action would follow. BPM has constructed its own on-site wastewater treatment facility, which is now in use.)

The city's total in governmental fund balances had dropped slightly more than $1 million, from $6,104,196 to $5,085,993. This includes a drop in the General Fund balance from $3,647,487 to $3,026,391, which Sternhagen said was mainly due to the $536,000 spent to buy the new fire truck.

The two unusual sets of expenditures for 2021 were purchase of the new fire truck and funding for the Sesquicentennial Celebration.

The debt service fund showed a negative balance of $9,804 at the end of the year, but that will soon be corrected, he said.

The unassigned fund balance, the amount the city can spend, increased slightly, from $1,525,108 to $1,579,167, which represents 63 percent of budgeted general fund expenditures, excluding the capital expenditures, and is well above the amount needed to have a healthy financial situation, Sternhagen said. The auditors recommend that Peshtigo maintain a general fund balance between $539,000 and $674,000 to finance regular expenditures for the year until the state shared revenue payment is received in November. The city also has $1.4 million set aside in non-lapsing funds for specific purposes, "so the city is in good shape," Sternhagen concluded. He said the city had achieved an "unmodified" audit report, which is the highest rating possible.

Sternhagen thanked the city for allowing him to present the report virtually and said it saved him about three hours of travel time. Sternhagen had been in Peshtigo in person in February to do the audit, and he thanked Clerk/Treasurer Tammy Kasal and her staff at City Hall for their cooperation wih the entire audit procedure.

The Council meeting had begun at 7 p.m., and regular business, including the audit report, was completed in slightly over half an hour.

Council then unanimously approved a motion to go into closed executive session for the purpose of "Conferring with legal counsel for the governmental body who is rendering oral or written advice concerning strategy to be adopted by the body with respect to litigation in which it is or is likely to become involved."

In the meeting room for the closed session were City Attorney David Spangenberg, Mayor Cathi Malke, Clerk/Treasurer Tammy Kasal and Aldermen Debbie Sievert, Brigitte Schmidt, Allen Englund, Keith Klimek, Chris Rohde and Katie Berman.

After returning to open session about 40 minutes later, the Council meeting was adjourned with no further action taken.


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