Revised - Committee-of-the-Whole Agenda Packet - 7:00 PM

REVISED City of Oconomowoc Committee-Of-The-Whole Tuesday, August 04, 2026 - 7:00 PM City Hall - Council Chambers 174 E. Wisconsin Ave. Oconomowoc, WI 53066 (Or immediately following Utility Committee) Notice: If a person with a disability requires that the meeting be accessible or that materials at the meeting be in accessible format, call the City Clerk at least 48 hours prior to the meeting to request adequate accommodations. Tel: (262) 569-2186. 1. Call to order and confirmation of appropriate meeting notification 2. Roll Call 3. Committee Business a. Closed Session PLEASE TAKE NOTICE that the Common Council of the City of Oconomowoc will convene, upon passage of the proper motion, into Closed Session with staff, pursuant to §19.85(1)(a), Wis. Stats. The purpose of the meeting is to confer with legal counsel who is rendering written advice concerning strategy to be adopted with respect to litigation in which it is or is likely to become involved in as authorized under §19.85(1)(g), Stats. Specifically, to be discussed is pending litigation concerning the excessive assessment lawsuit between Fleet Farm and the City. b. Consider/recommend Amendments to Reserve Policy 4. Adjourn Gina Kozlik, City Clerk City of Oconomowoc Notice is hereby given that a majority of the Common Council will be present at the above scheduled meeting to gather information about a subject over which they have decision-making responsibility. This constitutes a meeting of the Common Council pursuant to State ex rel. Badke v. Greendale Village Board, 173Wis. 2d 553, 494 N.W. 2d 408 (1993) and must be noticed as such, although the Common Council will not take any formal action at this meeting. 1 1 MEMORANDUM ADMINISTRATION Date: August 4, 2026 To: Mayor and Common Council From: Mark Frye, City Administrator Re: Closed Session Closed Session Exception: PLEASE TAKE NOTICE that the Common Council of the City of Oconomowoc will convene, upon passage of the proper motion, into Closed Session with staff, pursuant to §19.85(1)(a), Wis. Stats. The purpose of the meeting is to confer with legal counsel who is rendering written advice concerning strategy to be adopted with respect to litigation in which it is or is likely to become involved in as authorized under §19.85(1)(g), Stats. Specifically, to be discussed is pending litigation concerning the excessive assessment lawsuit between Fleet Farm and the City. The Council reserves the right to adjourn in closed session. RELATES TO THE STRATEGIC PLAN N/A BACKGROUND Attorney Riffle is working with Fleet Farm to arrive at an agreement regarding their assessment. He will discuss this at our meeting. RECOMMENDATION N/A SUGGESTED MOTION N/A Z:\City Administrator\Assessment Challenge\Fleet Farm 2026\Background Memo for Closed Session 08042026.docx 2 1 MEMORANDUM FINANCE DEPARTMENT Date: August 4, 2026 To: Mayor, Common Council, Committee of the Whole From: Steve Hatton, Finance Director Re: Updates to Reserve Policy RELATES TO THE STRATEGIC PLAN Strategic Goal(s): V. Enhance the Effectiveness of City Government BACKGROUND Common Council adopted a Reserve Policy on June 15, 1982. The Policy was updated on December 11, 2011. The policy contains three elements: 1. Emergency Reserve 2. Contingency Reserve 3. Capital Reserve ADDITIONAL ANALYSIS Adequate reserves are important to the City’s ability to sustain significant interruptions of revenue or significant and unanticipated expenditures. Reserves also provide liquidity to weather seasonality in revenues and expenditures FINANCIAL IMPACT Higher reserves are key factor in credit ratings. Higher credit ratings can minimize borrowing costs. Higher reserve balances can generate interest earnings on deposits. RECOMMENDATION Recommend approval of updates to Reserve Policy as presented. SUGGESTED COUNCIL MOTION Motion to approve revised Reserve Policy as presented. 3 Y:\Policies & Procedures\Reserve Policy - 2025 DRAFT Revision.docx A RESOLUTION ESTABLISHING FINANCIAL POLICY FOR THE CITY OF OCONOMOWOC RESERVE POLICY (Original adoption: June 15, 1982) (Revised: December 20, 2011, August 4, 2026) 1. The City will establish an emergency reserve to pay for needs caused by unforeseen emergencies. This reserve will be established through maintaining the unassigned fund balance of the General Fund at a minimum of thirty-five percent (35%) of the subsequent year’s budgeted general fund total expenditures and capital projects fund expenditures that are funded by tax levy. 2. The City will establish a contingency reserve in each year’s operating budget to provide for unanticipated expenditures of a nonrecurring nature, or to meet unexpected small increases in service delivery costs. This reserve will be maintained at 0.5% of the general operating fund. 3. The City will establish a capital reserve through maintaining the unassigned fund balance of the Capital Projects Fund at a minimum $750,000 value. When utilized for capital needs with approval of the Common Council, appropriate funds will be budgeted in the subsequent year to restore the minimum value. 4 Y:\Policies & Procedures\Reserve Policy - 2025 DRAFT Revision.docx G:\DATA\Sarah\Fund Balance\Reserve Policy - recommended 2011.docx A RESOLUTION ESTABLISHING FINANCIAL POLICY FOR THE CITY OF OCONOMOWOC RESERVE POLICY (Original adoption: June 15, 1982) (Revised: December 20, 2011, August x, 2026) 1. The City will establish an emergency reserve to pay for needs caused by unforeseen emergencies. This reserve will be established maintained through maintaining the unassigned fund balance of the General Fund at a minimum of twenty thirty five percent (2535%) of the subsequent year’s budgeted general operating fund total expenditures and capital projects fund expenditures that are funded by tax levy. 2. The City will establish a contingency reserve in each year’s operating budget to provide for unanticipated expenditures of a nonrecurring nature, or to meet unexpected small increases in service delivery costs. This reserve will be maintained at 0.5% of the general operating fund. 3. The City will establish a capital reserve fund in the capital projects fund through maintaining the unassigned fund balance of the Capital Projects Fund at a minimum $750,000 value. When utilized for capital needs with approval of the Common Council, and will appropriate funds will be budgeted in the subsequent year to restore the minimum valueto it annually to provide for timely replacement of equipment and other capital projects. 5
   
       
   
 
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’ :N Sv1vpD Rah Scsa1vpD DSctpSRth Weight Aaa Aa A Baa Ba B Caa Ca Resident Income (MHI Adjusted for RPP/US MHI)[1] 10% 100% - 120% 80% - 100% 65% - 80% 50% - 65% 35% - 50% 20% - 35% < 20% Full Value per Capita (Full Valuation of the Tax Base / Population)[2] 10% $100,000 - $180,000 $60,000 - $100,000 $40,000 - $60,000 $25,000 - $40,000 $15,000 - $25,000 $9,000 - $15,000 < $9,000 Economic Growth (Difference Between Five-Year Compound Annual Growth in Real GDP and Five-Year CAGR in Real US GDP)[3] 10% (1)% - 0% (2.5)% - (1 )% (4.5)% - (2.5)% (7)% - (4.5)% (10) % - (7)% (15)% - (10)% < (15)% Available Fund Balance Ratio (Available Fund Balance + Net Current Assets/Revenue)[4] 20% 25% - 35% 15% - 25% 5% - 15% 0% - 5% (5)% - 0% (10)% - (5)% < (10)% Liquidity Ratio (Unrestricted Cash/Revenue)[5] 10% 30% - 40% 20% - 30% 12.5% - 20% 5% - 12.5% 0% - 5% (5)% - 0% < (5)% FFactor: Financial Performance (30%) FFactor: Economy (30%) 2 2 4PFp gJg0 snevFR ape6cMcbcRdh w- :vevp' nFM :cPFevp' 10 accMdy' snevFR' wU-U .PubvS lvFnFSp Weight Aaa Aa A Baa Ba B Caa Ca 10% The majority of revenue is not subject to externally imposed caps and the governing body can increase revenue meaningfully without limitation or without approval of voters or other governments. And The ability to meaningfully reduce expenditures is not constrained by externally imposed mandates or restrictions. The majority of revenue is subject to externally imposed caps but the governing body can increase revenue meaningfully without the approval of voters or other governments. Or The ability to meaningfully reduce expenditures is mildly constrained by externally imposed mandates or restrictions. The majority of revenue is subject to externally imposed caps but the governing body can increase revenue moderately without the approval of voters or other governments. Or The ability to meaningfully reduce expenditures is moderately constrained by externally imposed mandates or restrictions. The majority of revenue is subject to externally imposed caps and the governing body can increase revenue only minimally without the approval of voters or other governments. Or The ability to meaningfully reduce expenditures is heavily constrained by externally imposed mandates or restrictions. The majority of revenue is subject to externally imposed caps and the governing body cannot increase revenue without the approval of voters or other governments. Or The ability to meaningfully reduce expenditures is very heavily constrained by externally imposed mandates or restrictions. The majority of revenue is subject to externally imposed caps and the governing body cannot increase revenue. Or The ability to meaningfully reduce expenditures is extremely constrained by externally imposed mandates or restrictions. Not applicable. Not applicable. Long-term Liabilities Ratio ((Debt + ANPL + Adjusted Net OPEB + Other Long-Term Liabilities)/Revenue)[6] 20% 100% - 200% 200% - 350% 350% - 500% 500% - 700% 700% - 900% 900% - 1,100% > 1,100% Fixed-costs Ratio (Adjusted Fixed Costs/Revenue)[7] 10% 10% - 15% 15% - 20% 20% - 25% 25% - 35% 35% - 45% 45% - 55% > 55% FFactor: Institutional Framework (10%) FFactor: Leverage (30%) PPreliminary outcome 3 2 4PFp gJg0 snevFR ape6cMcbcRdh w- :vevp' nFM :cPFevp' 11 accMdy' snevFR' wU-U .PubvS lvFnFSp -1 to +1 notches PPotential for ignificant Change in Leverage -2 to +1.5 notches corecard-indicated outcome NNotching factors AAdditional trength in Local Resources 0 to +2 notches LLimited cale of Operations -1 to 0 notches FFinancial Disclosures -2 to 0 notches PPotential Cost hift to or from the tate 0 2 4PFp gJg0 snevFR ape6cMcbcRdh w- :vevp' nFM :cPFevp' 12