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City Council Minutes 2010-12-28-10 MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, HELD IN THE CITY COUNCIL CHAMBERS, 800 GAME FARM ROAD ON TUESDAY, DECEMBER 28, 2010 Mayor Burd called the meeting to order at 7:00 p.m. and led the Council in the Pledge of Allegiance. ROLL CALL Clerk Milschewski called the roll. Ward I Gilson Present Werderich Present Ward I I Gohnski Present Plocher Present Ward III Munns Present Sutcliff Present Ward IV Teeling Present Spears Present Also present: City Clerk Milschewski, City Treasurer Powell, Attorney Orr, City Administrator/Interim Director of Park and Recreation Olson, Police Chief Hart, Finance Director Fredrickson, City Engineer Wywrot and Community Development Director Barksdale - Noble. QUORUM A quorum was established. INTRODUCTION OF GUESTS Mayor Burd asked the staff and guests to introduce themselves. She welcomed the guests and asked them to enter their names on the attendance sheet provided. AMENDMENTS TO THE AGENDA Alderman Plocher asked if the City Council Report could be moved up on the agenda to before the Mayor's Report. Amendment approved unanim ously by a viva voce vote. Mayor Burd entertained a motion to table # 1 on the Public Works Committee Report — Proposed Revisions /Clarifications to Letter of Credit Policy until the next City Council meeting on January 11, 2011. So moved by Alderman Plocher; seconded by Alderman Munns. Motion approved by a roll call vote. Ayes -8 Nays -0 Teeling -aye, Gilson -aye, Sutcliff -aye, Munns -aye, Spears -aye, Plocher -aye, Werderich -aye, Gohnski -aye COMMITTEE MEETING DATES Public Works Committee Meeting: 6:30 p.m., January 18, 2011 City Hall Conference Room Economic Development Committee: Cancelled Administration Committee Meeting: 6:00 p.m., January 20, 2011 City Hall Conference Room Public Safety Committee Meeting: 6:30 p.m., January 27, 2011 City Hall Conference Room PRESENTATIONS Bike Path Referendum Cory Johnson, Yorkville resident, stated that petitions were circulated asking people if they supported the bike trail and if it should be put on the ballot again for a referendum. Eight hundred signatures were collected in support of a non - binding referendum. He explained that a binding referendum would waste the time needed to take advantage of IDOT's funding offer. He felt that voters did not understand the first referendum. He stated that after he explained the situation to people who were originally against the referendum, they changed their minds. He felt that there was a lack of communication about trail funding. He explained that he is a representative of union Local 149 and took up the cause because union The Minutes of the Regular Meeting of the City Council — December 28, 2010 — Page 2 workers will benefit from the construction of the trails. He discussed the economics of the trail; people having jobs, spending money in Yorkville, etc. He stated that when he was a kid growing up in Yorkville he could ride his bike along the shoulder of the highway to get around town. He felt that kids today can't do this as there is more traffic and it is not safe. The trails will be a unique opportunity to unite the city. He felt that the city should take advantage of the state funding. He noted that surveys indicate walking trails rank 42 on what residents want in a community. He asked the City Council to consider putting the question of a non - binding referendum on the April ballot. PUBLIC HEARINGS None. CITIZEN COMMENTS Lisa Peterson, Adrian Street, agreed that the former City Council might not have realized what would happen in the future when they approved the bonds however the present City Council knew about them too. She expressed her concerns about the lack of cuts needed to avoid the problem, employee layoffs, employee benefit costs, the cost of community events, the cost of Rec Center, the bike trail referendum, increased taxes, etc. She stated that the current City Council had her support but now she cannot support reckless spending. Charlie Martin, Grande Reserve and Local 150, commented on the bike trail referendum. He stated that he can go to Geneva or St. Charles to ride on bike trails. He stated he would rather put his money into a trail in Yorkville than purchase a bike carrier to use other community's paths. He felt that he was already paying taxes so he would like to see what he could get. Tom Gilmore stated he was speaking for 80% of the people in Illinois who are paying the matching funds for the trail. He questioned how the city was going to come up with the 20% to pay their portion. He felt the trails were an asset however the city is living in the day and age of a "glass half empty ". He also felt that it was ill advised to add more debt to the city and that the trails were premature. He noted that the right of ways for the trails won't go away. He wants the best for the city. CONSENT AGENDA 1. Water Department Report for September 2010 (PW 2010 -85) 2. Water Department Report for October 2010 (PW 2010 -86) 3. Resolution 2"010 =32 - Route 47 Widening — Resolution for Right -of -Way Conveyance — authorize Mayor, City Clerk, and City Administrator to execute all documents related to this property conveyance (PW 2010 -87) 4. 2010 Miscellaneous Bituminous Patching — Change Order 41— authorize a decrease in an amount not to exceed $6704.10 and authorize Mayor to execute (PW 2010 -88) 5. Bristol Bay Units 1, 2 & 6 — Warranty Bond Release — authorize the release of International Fidelity Insurance Company Bond No. 0504710 in the amount of $423, 429.53, Bond No. 0504709 in the amount of $218,993.32, and Bond No. 0504708 in the amount of $164, 722.70, subject to verification that the developer has no outstanding debts owed to the city (PW 2010 -89) Mayor Burd entertained a motion to approve the Consent Agenda as presented. So moved by Alderman Plocher; seconded by Alderman Werderich. i Motion approved by a roll call vote. Ayes -8 Nays -0 Werderich -aye, Plocher -aye, Spears -aye, Munns -aye, Sutcliff- aye, Gilson -aye, Teeling -aye, Golinski -aye PLAN COMMISSION /ZONING BOARD OF APPEAL None. MINUTES FOR APPROVAL None. BILLS FOR APPROVAL A motion was made by Alderman Sutcliff to approve the paying of the bills listed on the Detailed Board Report dated December 22, 2010, totaling the following amounts: checks in the amount of $523,088.98 (vendors); $6,565.58 (payroll period ending 11/30/10); $227,350.12 (payroll period ending 12/18/10); for a total of $$757,004.68 (total); seconded by Alderman Munns. The Minutes of the Regular Meeting of the City Council — December 28,2010 — page 3 Motion approved by a roll call vote. Ayes -8 Nays -0 Plocher -aye, Spears -nay, Munns -aye, Sutcliff- -aye, Gilson -aye, Teeling -aye, Golinski -aye, Werderich -aye REPORTS CITY COUNCIL REPORT Resolution 2010 -33 Providing for and Requiring the Submission of a Proposition to Issue $1,000,000 General Obligation Bonds to the Voters of the United City of Yorkville at the General Election to be held on April 5, 2011 (CC 2010 -119) Alderman Teeling stated that she felt it was worth discussing the referendum since 800 signatures were collected on a petition supporting it. Alderman Golinski stated that he supported the first referendum vote however residents said they did not want the trails and the referendum was defeated. He stated he could not support the resolution. Alderman Sutcliff stated that residents voted against the referendum however she noted that it took several times for the School District to get their referendum passed. She stated it was not uncommon to try a referendum again. She stated that it would be the last time to take advantage of the state's offer to fund the trails 80 %. She felt trails increase property values, enhance businesses and increases the quality of life. Alderman Spears noted that there was quite a bit of debate by the City Council in August about the trails. At that time, Mayor Burd stated that by putting the referendum on the ballot, residents would have the opportunity to decide if they wanted them. Residents did decide; they voted against a binding referendum. As to the School District referendums, they waited a few years in between votes. She stated she could not be convinced the public wasn't informed before the vote since there was information available for residents to investigate and then decide. She noted that some people are not happy with the outcome so they are pushing the subject again. She felt that people can't afford another increase to their taxes. She also noted that there is a cost to maintain the paths. She appreciated those who supported the trails however she questioned if all the supporters were residents or just union employees. She also questioned if all the people who signed the petitions were Yorkville residents. Mayor Burd stated that there were enough signatures on the petition for a non - binding referendum however Mr. Johnson asked the City Council to consider a binding referendum. Alderman Werderich stated he supported the referendum as the city will receive $.80 for every $1.00 spent. He felt it was a high value for the tax dollars spent and it was good for the community. Alderman Gilson stated he supported trails however in light of the city's financial situation he could not support a binding referendum. He felt that the city could not afford the trails. Mayor Burd noted that if the referendum passes, the city will get money for the trails from real estate taxes. Alderman Munns stated that he sees kids riding bikes along Route 34 which is dangerous. He noted that with gas prices on the rise, people may be riding bikes more. Alderman Teeling also noted the high school cross - country team runs along Route 47 which is dangerous. Trails would benefit them. Mayor Burd entertained a motion to approve a resolution providing for and requiring the submission of a proposition to issue $1,000,000.00 General Obligation Bonds to the voters of the United City of Yorkville at the general election to be held on April 5, 2011 and authorize the Mayor and City Clerk to execute. So moved by Alderman Plocher; seconded by Alderman Teeling. Motion approved by a roll call vote. Ayes -5 Nays -3 Golinski -nay, Teeling -aye, Gilson -nay, Sutcliff -aye, Munns -aye, Spears -nay, Plocher -aye, Werderich -aye The Minutes of the Regular Meeting of the City Council — December 28, 2010 — page 4 MAYOR'S REPORT Park Naming Request (CC 2010 -104) Mayor Burd entertained a motion to table the Park Naming Request to the January 11, 2011 City Council meeting. So moved by Alderman Plocher; seconded by Alderman Golinski. Motion approved by a roll call vote. Ayes -8 Nays -0 Teeling -aye, Gilson -aye, Sutcliff -aye, Munns -aye, Spears -aye, Plocher -aye, Werderich -aye, Golinski -aye Ordinance Approving a Land Lease Agreement with Verizon Wireless (225 Wheaton Avenue, Wheaton Woods Park) First Reading (CC 2010 -114) Mayor Burd reported that this was the first reading of the ordinance. She explained that Verizon wants to put a tower on city park property near the industrial park. Alderman Golinski had a question about the lease regarding the indemnity clause for the landlord. He asked if this was standard and stated he did not agree with it. Attorney Orr stated that she would check into it and get the information to the City Council before the next meeting. i Alderman Gilson asked if the funds from the lease would be kept in the General Fund or with the Park & Recreation Department funds. Mayor Burd stated that that was up to the City Council to decide. Administrator Olson agreed that this was a City Council decision which did not need to be reflected in the agreement. Alderman Gilson suggested that it should be determined where the funds would go before the agreement was approved. Alderman Golinski suggested that the funds remain with Park & Recreation but not to build a park in the Caledonia subdivision. Administrator Olson stated that the subdivision needed to build out 60% before a park will be built. Alderman Golinski also suggested that the funds be used to offset the Rec Center deficit. Mayor Burd added that the city was entertaining other companies for towers in other areas. Letter of Understanding and Agreement Between Local 150 and City (CC 2010 -115) Mayor Burd entertained a motion to approve the Letter of Understanding and Agreement between Local 150 and the City and authorize the City Administrator to execute. So moved by Alderman Plocher; seconded by Alderman Werderich. Mayor Burd explained that this agreement is between the bargaining unit representing the public works employees. Administrator Olson further explained that the city is currently negotiating a contract with Local 150 however none has been reached yet. The union is suggesting the workers forego overtime in exchange for no layoffs in the department. Alderman Spears noted that the agreement asks for 480 hours of comp time whereas the Police Department gets 120 hours. She stated that in the past the Administration Committee has discussed the comp time policy and the limit was changed to 120 hours after much debate on the amount of hours allowed. She stated that some communities don't allow comp time. She suggested that the amount of hours be lowered to 120 hours. Administrator Olson explained that workers can bank up to 480 the hours instead of getting paid overtime but they cannot cash them out. They can only take it as time off. He added that if the amount is lowered the agreement will be off the table. Alderman Spears asked what would happen if an employee with 480 banked hours left the employ of the city; would they get cash. Administrator Olson stated that they would. Alderman Spears noted that this is why the city cut the amount of comp time hours. Alderman Gilson asked if one employee quit how the city would be saving money. Administrator Olson stated that it depended on when the employee left. He noted that the open position would not be filled. The Minutes of the Regular Meeting of the City Council — December 28, 2010 — page 5 Administrator Olson explained that workers could bank hours when snow plowing and then take time off in the summer. Overtime for plowing costs the city approximately $40,000.00 to $50,000.00. If an employee quits, there will be a cost to pay back the employee for the comp time. This would eat at the city's cost savings however if an employee quits, the position will not be filled. If all the employees quit after runnin up hours there will be no savings to the city. Currently, public works employee's comp time is capped at 120 hours so anything over will be overtime if this is not approved. Alderman Gilson asked if the city was in control of the overtime and Administrator Olson stated it was however snow events or watermain breaks cannot be planned. Alderman Munns noted that the state used to have comp time however the cashing out of time bankrupted them. He felt that this was just pushing something the city still had to pay into the future. The agreement could bring impending debt even when employees retire. He felt employees should be paid now. He also expressed his concern with the lack of plowing in the Fox Hills subdivision. Alderman Plocher felt that voting on the agreement was gambling. Alderman Teeling asked if the comp time would be paid in straight time or overtime rates. Administrator Olson indicated at overtime rates. Alderman Spears felt the same agreement should be offered the Police Department. Alderman Werderich supported paying the employees now. He felt that the City Council was saddled with sticky issues when payments are deferred. Mayor Burd suggested going into Executive Session in order to discuss the pending contract with the union. EXECUTIVE SESSION Mayor Burd entertained a motion to go into Executive Session for the purpose of discussing collective negotiating matters between the public body and its employees or their representatives, or deliberations concerning salary schedules for one or more classes of employees. So moved by Alderman Teeling; seconded by Alderman Golinski. Motion approved by a roll call vote. Ayes -8 Nays -0 Spears -aye, Plocher -aye, Werderich -aye, Golinski -aye, Teeling -aye, Gilson -aye, Sutcliff-aye, Munns -aye The City Council entered into executive session at 8:15 p.m. The City Council returned to regular session at 8:55 p.m. Alderman Werderich stated that due to the ongoing negotiations, he was changing his mind and supporting the agreement. Alderman Munns explained that during the Executive Session it was proposed to amend the agreement however the entire City Council did not support it. He stated because of this he was voting against it. Aldermen Gilson and Spears agreed with Alderman Munns Motion approved by a roll call vote. Ayes -5 Nays -4 Sutcliff -aye, Munns -nay, Spears -nay, Plocher -aye, Werderich -aye, Golinski -nay, Teeling -aye, Gilson -nay, Burd -aye Approval of an Early Retirement Proposal (CC 2010 -116) Mayor Burd entertained a motion to approve an early retirement proposal from Sergeant Barry Groesch. So moved by Alderman Plocher; seconded by Alderman Werderich. Finance Director Fredrickson noted that an adjustment to the amount of the retirement incentive has been changed from $23,175.36 to $22,071.66. The new total is $46,030.25. A motion was made by Alderman Teeling to amend the early retirement proposal to reflect the corrected amounts; seconded by Alderman Plocher. The Minutes of the Regular Meetine of the City Council — December 28, 2010 — page 6 Motion to amend approved by a roll call vote. Ayes -8 Nays -0 Werderich -aye, Golinski -aye, Teeling -aye, Gilson -aye, Sutcliff -aye, Munns -aye, Spears -aye, Plocher -aye Motion approved by a roll call vote. Ayes -8 Nays -0 Munns -aye, Spears -aye, Plocher -aye, Werderich -aye, Gohnski -aye, Teeling -aye, Gilson -aye, Sutcliff -aye Resolution 2010 -34 Approving an Intergovernmental Agreement between the United City of Yorkville, the Village of Oswego, and the City of Plano (CC 2010 -117) Mayor Burd entertained a motion to approve a resolution approving an Intergovernmental Agreement between the United City of Yorkville, the Village of Oswego, and City of Plano and authorize the Mayor and City Clerk to execute. So moved by Alderman Munns; seconded by Alderman Plocher. Mayor Burd reported that she and the other mayors met with the new chairman of the Kendall County Board and things appear to be moving forward. She felt that some agreement would be reached for KenCom. Alderman Gilson stated that the agreement indicates that Yorkville is taking the lead in this matter and that the attorneys will be billing Yorkville and the other communities will be contributing. He asked if Plano and Oswego could be billed directly. Attorney Orr stated that it did not matter to her how it was handled. She noted that Oswego was front funding the initial amount. Alderman Gilson suggested that each municipality be billed separately instead of the city having the burden of dividing the bill. He asked what the anticipated cost was and Mayor Burd indicated an estimate of $50,000.00. Attorney Orr stated that she was hoping it will be substantially less especially if the parties talk without attorneys. Alderman Gilson asked if Attorney Orr was charging an hourly rate and she stated she was. Attorney Orr added that the agreement would have to be amended in order to change the billing. Mayor Burd gave kudos to Yorkville's attorneys because the other municipalities selected them to handle the problem. She hoped the problem with KenCom could be resolved for a minimal amount of money. A motion was made by Alderman Gilson to amend the agreement to indicate the expenses will be billed to each individual municipality; seconded by Alderman Plocher. Alderman Werderich asked Attorney Orr if her firm would bill this way. Attorney Orr stated that the agreement was drawn up this was to accommodate the three communities especially Plano. She indicated that it would be a detriment to bill Plano separately. Alderman Golinski asked if the agreement was amended would it have to go back to Oswego and Plano for their approval. Attorney Orr stated it would. He asked if Attorney Orr had received the check from Oswego and she stated she had not. She noted that Oswego has been very cooperative as they have the most at stake. Motion to amend defeated by a roll call vote. Ayes -2 Nays -6 Golinski -nay, Teeling -nay, Gilson -aye, Sutcliff -nay, Munns -nay, Spears -aye, Plocher -nay, Werderich -nay Motion approved by a roll call vote. Ayes -8 Nays -0 Spears -aye, Plocher -aye, Werderich -aye, Golinski -aye, Teeling -aye, Gilson -aye, Sutcliff -aye, Munns -aye Annual 9 -1 -1 Call Handling Renewal Notice (CC 2010 -118) Mayor Burd entertained a motion to approve an agreement for 9 -1 -1 Emergency Communications and authorize the Chief of Police to execute. So moved by Alderman Plocher; seconded by Alderman Spears. Alderman Gilson asked what the renewal date was and Chief Hart explained there is no renewal date; the notice is signed yearly. Alderman Gilson asked if the renewal would affect services and Chief Hart explained that this allows KenCom to answer 9 -1 -1 calls. This is tied to the 9 -1 -1 surcharge on telephone bills. Attorney Orr clarified the need for the agreement. In the past it was automatically renewed however she recommended that it come before the City Council so they were aware of it. The Minutes of the Regular Meeting of the City Council — December 28, 2010 — Page 7 Motion approved by a roll call vote. Ayes -8 Nays -0 Plocher -aye, Werderich -aye, Gohnski -aye, Teeling -aye, Gilson -aye, Sutcliff -aye, Munns -aye, Spears -aye Tax Abatement Ordinances (CC 2010 -111) Ordinance Abating the Tax Hereto Levied for the Year 2010 to Pay the Principal of and Interest on $3,500,000 General Obligation Bonds (Alternate Revenue Source), Series 2004B (Countryside Interceptor) Ordinance Abating the Tax Hereto Levied for the Year 2010 to Pay the Principal of and Interest on $3,020,000 General Obligation Bonds (Alternate Revenue Source), Series 2007A (Refinance 2003A) Ordinance Abating the Tax Hereto Levied for the Year 2010 to Pay the Principal of and Interest on $11,300,000 General Obligation Bonds (Alternate Revenue Source), Series 2005D (Rob Roy Creek) Ordinance Abating the Tax Hereto Levied for the Year 2010 to Pay the Principal of and Interest on $2,020,000 General Obligation Bonds (Alternate Revenue Source), Series 2008 (Refinance Rob Roy Creek) Ordinance Abating the Tax Hereto Levied for the Year 2010 to Pay the Principal of and Interest on $3,825,000 General Obligation Bonds (Alternate Revenue Source), Series 2005A (In -Town Road Program) Mayor Burd entertained a motion to approve ordinances abating the taxes here to levied for the year 2010 to pay the principal of and interest on General Obligation Bonds (A — E) (Alternate Revenue Source) and authorize the Mayor and City Clerk to execute. So moved by Alderman Sutcliff; seconded by Alderman Munns. i Mayor Burd stated that she was putting a request to increase the sales tax on the January 11, 2011 City Council agenda. If the sales tax is increased, these ordinances can be abated next year. Increasing the sales tax allows people to choose where to shop and collects revenue from people who do not live in the city limits. She explained what things have been done to address finances such as a hiring freeze, layoffs and budget cuts. She felt that quality of life items are important to attracting people to the city so that houses are built on the vacant lots. These houses will pay tap-on fees which are needed to pay the bonds. She stated that people expect a Police Department, water, snow plowing, parks, good schools, trails, etc. She added that the chute at the dam was thinking outside the box and hopefully it will help develop the downtown. She stated that Administrator Olson has laid it out; the only way to pay for the bonds is to get rid of all city employees except the Police Department. She explained the options on the vote; a vote to not abate will increase property taxes. A vote to abate; sewer bills will go up. She felt it would not be responsible to say no and default on the bonds. If the city defaults on the bonds, it will cause litigation which in turn will cost the city even more. Alderman Munns stated that in the December 21, 2010 memo from Administrator Olson about the abatement ordinances and the budget he indicated that the City Council would be meeting with the Yorkville Bristol Sanitary District. In the memo, he suggested it might be beneficial to postpone further discussion until after the meeting. Mayor Burd stated that the YBSD won't give the city any money back. The city signed agreements which say that YBSD has no obligation to pay the city until tap -on fees are paid. They give this fee back to the city in ninety days. The solution is tap-on fees from new homes. Alderman Golinski stated he would not mind waiting to vote until after meetings with the YBSD board. Instead of giving the city money back maybe they are in the position to give the city a loan until the sales tax increase is approved. They have $10 million in their fund balance so maybe they can help the city. He felt he would like to have a dialogue with them before applying taxes to residents. Administrator Olson stated he did not see a financial benefit from meeting with the YBSD. If the sales tax referendum is approved this will only satisfy next year's bonds. A motion was made by Alderman Plocher to table the ordinances until the January 11, 2011 City Council meeting; seconded by Alderman Gilson. The Minutes of the Regular Meeting of the City Council — December 28, 2010 — pa2e 8 Motion approved by a roll call vote. Ayes -8 Nays -0 Teeling -aye, Gilson -aye, Sutcliff -aye, Munns -aye, Spears -aye, Plocher -aye, Werderich -aye, Golinski -aye CITY ATTORNEY'S REPORT No report. CITY CLERK'S REPORT No report. CITY TREASURER'S REPORT No report. CITY ADMINISTATOR'S REPORT Administrator Olson reported that the meeting with the Yorkville Bristol Sanitary District was scheduled for January 11, 2011 at 6:00 p.m. Also, he reported that he would be holding a meeting with the department heads in order to get an early start on the budget. DIRECTOR OF PARKS & RECREATION'S REPORT No report. I FINANCE DIRECTOR'S REPORT No report. CITY ENGINEER'S REPORT City Engineer Wywrot reported that Rush - Copley was half done with the storm sewer project which is needed for the emergency room to be built in 2011. DIRECTOR OF PUBLIC WORKS REPORT Director Dhuse reported on snow plowing operations. He explained that two snowfalls ago, crews plowed at 3:00 a.m. A resident called an alderman complaining about the lack of plowing. He explained that that if it snows through non -peak rush hour time, plow crews wait until the snow ends. The plowing of the city takes eight to ten employees about five hours so it is more efficient and cost effective to wait until the snow event is over. CHIEF OF POLICE'S REPORT No report. COMMUNITY DEVELOPMENT DIRECTOR REPORT No report. COMMUNITY RELATIONS OFFICER'S REPORT No report. COMMUNITY & LIAISON REPORT No report. COMMITTEE REPORTS PUBLIC WORKS COMMITTEE REPORT River Road Bridge Replacement — Revised Intergovernmental Agreement (PW 2010 -69) A motion was made by Alderman Plocher to repeal the motion of November 23, 2010 approving an Intergovernmental Agreement for the replacement of the River Road bridge over Blackberry Creek and, in its stead, approve the revised Intergovernmental Agreement as presented to this meeting and authorize the Mayor and City Clerk to execute the same; seconded by Alderman Sutcliff. Alderman Golinski asked what the total cost was for the project. Mr. Wywrot stated that it was between $50,000.00 and $60,000.00. Alderman Golinski also questioned the indemnity clause in the agreement. Attorney Orr explained that Kendall County requested this and she agreed as the city is in control of most of the project. The Minutes of the Regular Meeting of the City Council — December 28, 2010 — page 9 Motion approved by a roll call vote. Ayes -8 Nays -0 Munns -aye, Spears -aye, Plocher -aye, Werderich -aye, Golinski -aye, Teeling -aye, Gilson -aye, Sutcliff -aye ECONOMIC DEVELOPMENT COMMITTEE REPORT No report. PUBLIC SAFETY COMMITTEE REPORT No report. ADMINISTRATION COMMITTEE REPORT No report. ADDITIONAL BUSINESS Alderman Spears stated that Director Dhuse had given her a copy of the snow plan which she sent to residents. She suggested that the plan be made available to residents. Mayor Burd suggested that it be put on the city's website. Administrator Olson noted that he included in his Administrator's Weekly memo from the previous week. ADJOURNMENT Mayor Burd entertained a motion to adjourn the meeting. So moved by Alderman Plocher; seconded by Alderman Spears. Adjournment of the meeting was unanimously approved by a viva voce vote. Meeting adjourned at 9:45 p.m. Minutes submitted by: Jacquelyn Milschewski, City Clerk City of Yorkville, Illinois I REGULAR CITY COUNCIL MEETING December 28, 2010 PLEASE PRINT NAME: SUBDIVISION OR BUSINESS: 6 >n1/�f1/Ll - J��iQ /C �, �� Q. � i ►� e S �✓LBpQ -�2S l u c1 N �6 ersi T 1-e e°1- H� r6, 1 1A out 'At OU Ml (ROA 01��r -511A u ,-- E s s /iCr TizA y L r IGNIN REGULAR CITY COUNCIL MEETING December 28, 2010 PLEASE PRINT NAME: SUBDIVISION OR BUSINESS: iL .n 1601 / l �oc�4 Li V 1 SIG REGULAR CITY COUNCIL MEETING December 28, 2010 PLEASE PRINT NAME: SUBDIVISION OR BUSINESS: Cl aoQ 6�;CZLIIC 36l E s IWO A140k ST a e Pe s-e� Q.C�K �t��ll I� �� ('� " C� �(� vc) cab A 79 viz Ul 0 7A 6A-)l X2 SIGNIN REGULAR CITY COUNCIL MEETING Public Comment December 28, 2010 PLEASE PRINT NAME: SUBDIVISION OR BUSINESS: SIGNIN Memorandum To: City Council EST. , 1836 From: Bart Olson, City Administrator CC: Date: December 21, 2010 ww"d C­ Subject: Abatement ordinances and the budget SCE These ordinances were last discussed at the December 14` City Council meeting. At that meeting, the City Council approved three abatement ordinances: one for the Countryside TIF bond, one for the Fox Industrial TIF bond, and the final one for 2005A Alt Revenue Sewer and Water Bond. There are five remaining abatement ordinances up for consideration. Two of these ordinances (now listed as "a" and "b" on this agenda) were considered part of the second group of ordinances last meeting; specifically, they were for bonds that were paid out of the sewer fund that the Council directed staff two meetings ago to revert to property taxes (i.e. voting against the abatement ordinance). Two of these ordinances (now listed as "c" and "d ") were in the Rob Roy bonds group; specifically, they were bonds that were paid out of the sewer fund for the Rob Roy sewer project. The final ordinance was (now listed as "e ") was for the in -town road program; specifically, the bond is paid out of the general fund and was a policy decision for the Council. I have spoken with Yorkville Bristol Sanitary District Director Kevin Collman, who has circulated the concept of a joint CitrYBSD board meeting to his board members. His board members are available on Tuesday, January 11" at 6pm. It may be beneficial to postpone further discussion on the abatement ordinances and debt obligations until after that meeting. As a reminder, abatement ordinances do not have to be filed with the County until mid - February. To recap from the last meeting, and summarize the discussion laid out on the following pages of this report: A vote in favor ( "aye ") for the abatement ordinances on the agenda certifies to our bond holders and the County Clerk (who collects property taxes) that we have enough funds to make our debt payments in 2011. - A vote against ( "nay ") the abatement ordinances, or if no action is taken means that we do not have enough funds to make our debt payments in 2011, and the property taxes associated with each bond will be levied. - The City does not currently have the funds to make the 2011 bond payments, which means either: • The abatement ordinances must be defeated, OR • A significant sewer bonding fee must be implemented, OR • Default on debt obligations, resulting in litigation, significant degradation of the City's bond rating, and property tax increases through court order, OR • Catastrophic cuts to City services - The staff recommendation is to vote "nay" on the remaining five abatement ordinances on the agenda, resulting in the 2011 bond payments reverting to property taxes in 2011 o Further, the staff recommendation is currently that item "e" on the agenda relating to the in- town road program bond be abated for this year only. (No action is needed until December 2011 to confirm or oppose this sub - recommendation) Water and Sewer debts — Agenda item A, Countryside Sewer, and Agenda Item B 2007A refunding These bonds fit within the recommendation by City Council during the discussion two meetings ago, where the City Council directed the staff to find as many sewer and water bonds as possible to discuss for non - abatement. Originally, there were three bonds within this first group. The bond that is no longer in this group was item "c" on the last City Council agenda, and the abatement ordinance was approved, meaning the City has certified that we have the money to make these bond payments. The remaining two bonds are alternate revenue bonds, paid out of the sewer fund. I recommend that the City Council vote "nay" or take no action on these bonds, which will revert the bonds to property taxes. Rob Roy Sewer Debts — Agenda Item C, 2005D Rob Roy and Agenda Item D, 2008 Rob Roy These bonds were recommended by the City Council to revert to property taxes (non- abatement) during the discussion two meetings ago. Both are paid out of the sewer fund. Voting against the abatement ordinances or taking no action on the ordinances would result in a minimal sewer bonding fee but higher property taxes. For the reasons discussed during the previous City Council meetings, I recommend the City Council vote "nay" or take no action on these two ordinances and allow the bond payments to revert to property taxes. In -Town Road Program Debt — Agenda Item E 2005A In -town Road Program The City Council has not discussed this bond yet. While it appears that we will be able to make this bond payment out of the general fund next year (it was drawn into the FY 11 -12 budget discussed by City Council last year), it provides us with an option to replenish a portion of our fund balance in one year, with little perceived impact from one - year -to -the next. It is my recommendation that the City Council vote "nay" or take no action on this ordinance and allow this bond payment to revert to property taxes. Consequences of actions In the recap of last meeting on the first page, the third bullet -point summarizes the consequences of different actions. The staff recommendation is to vote against each abatement ordinance on the agenda. The consequences of this action are: 1) That total property taxes paid by a property owner will increase in the range of 5 -6% next year. 2) That property owners will be able to deduct this additional property tax from their gross income a. Rough estimates show that a property owner will be save about 25% of the figure listed above due to a lower adjusted gross income. (i.e. a $250k house that pays $300 will recoup about $70 to $80) 3) A sewer bonding fee in the amount of about $3.75 per month peruser will need to be implemented to satisfy other sewer debt. The second action within that bullet -point is to vote for the abatement ordinances, and then enact a sewer bonding fee to satisfy the sewer debt obligations. The consequences of this action are: 1) The total property taxes paid by a property owner will not be affected. 2) A $31 per month per user sewer bonding fee will need to be implemented to satisfy sewer debts. The third action within that bullet -point is to vote for the abatement, enact no sewer bonding fee, and fail to make debt payments. This is the most catastrophic option, and should not be considered because property taxes will still increase, after litigation from our bond holders (at our cost), and further our credit rating will be ruined. The fourth and final action within that bullet -point is to make other cuts from the City budget to fund sewer debt. I strongly advise against this option, and I have previously explained this option as improper budgetary practice, and have illustrated the catastrophic impact it will have to City services in brief prior memos. If the abatement ordinances are approved (meaning no property taxes are collected for our debt obligations), no sewer bonding is enacted, and the City still attempts to make the debt payments, the following consequences will occur: 1) $2.4 million dollars in salaries or other expenses would have to be cut. This represents about '/ of our total general fund, wherein salaries are the majority expense. a. Previously, some Council members have alluded to an unwillingness to cut public safety or public works employees. In this scenario, every City employee in Admin, Finance, Community Relations, Engineering, Community Development, Building Safety, Streets, and Parks and Recreation could be cut and satisfy the debt obligations. Services related to building permits, subdivision planning, subdivision permitting, bill paying, human resources, payroll, general customer service, record keeping, park maintenance, park construction, and recreation management would be completely eliminated. With those services, that includes department heads being cut as well. Obviously, this scenario is unacceptable, as the City has both obligations under existing agreements and state law related to a variety of these services. Additionally, I think an easy argument can be made that residents expect these services to be provided. b. With this previous scenario being untenable, the other cutting option involves public safety, water, and sewer department employees. I expect this option to be ruled out by a majority of the City Council members, and I do not recommend it. However, to illustrate the level of impact on these departments, I submit the following figures. i. The total police department budget for salaries is just over $2.3 million. That includes every patrolman, sergeant, command staff, and police clerk. ii. The total water department budget for salaries is just over $350,000. iii. The total sewer department budget for salaries is just over $250,000. A final note — cutting elsewhere from the budget to fund existing sewer debt From time -to -time, I hear from people indirectly and directly, that we should be not funding non- essential services. The issue with that statement is the definition of "non- essential ". When hearing this statement, typically the assumption is made that parks and recreation is a non - essential service, and that the City should get out of the Parks and Recreation business. I can say with reasonable certainty, yet without concrete evidence, that the majority of the community expects parks and recreation services to be provided — be it by us, or through a separate park district. The problem with this conversation is that should the City cut all Parks and Recreation services, and a group of residents petition to form a separate park district, that the Park districts net costs are likely to be higher than the current City services. This very brief analysis is predicated only upon the concept of duplication of support staff. A park district must hire or outsource human resource, finance, customer service, and other general support staff, and would have to pay for garbage services, insurance, and other incidental costs currently being paid for by the City. Additionally, the City will still have to retain employees that provide the same services, which results in a higher overall tax burden. Indeed, this same outcome was seen in the discussions on whether to form a library district. Thinking outside (and inside) the box — options for generating revenue and cutting expenses The following is a list of items that should be discussed in February, March, and April during upcoming FY 11/12 budget discussions. Some of these options may allow us to approve abatement ordinances in December 2011 for debt obligations due in 2012, while others may allow us to fund operations or capital improvements in the next few years. I submit these to the City Council as evidence that the staff is thinking outside the box, and a commitment to dedicate our limited time to analyzing these options over the next few months, subject to Council preferences. Some of these may be controversial and unpalatable, but we must give the Council an opportunity to say "no ". 1) Traditional economic development incentives a. Continue to offer developers TIF incentives, sales tax sharing incentives, recapture incentives, and other methods to attract businesses. Of note, waiving recapture costs on a sewer debt would be considered an incentive to a developer. 2) Digital billboards within City limits, and possibly on City property a. Attached is an editorial from a newspaper in Colorado Springs outlining their wish for more digital billboards within their boundaries. Digital billboards would generate revenue through the City through permit fees (if they are on private property) and through ground -lease fees if they are on City property. The City staff has had brief conversations with billboard company representatives, who have indicated a strong interest in a couple sites in the City, should the City Council indicate they are willing to consider them. 3) More cell towers on municipal property a. Cell service is only going to expand in the future, due to the increased demand for data used in smartphones. The Wheaton Woods cell tower lease on this agenda has a revenue stream of $35,000 per year. The visual impact of the cell tower, we feel, is minimized as the cell tower is in the form of a flag pole. 4) 6% telecommunications tax a. The maximum rate allowed by state statutes is 6 %. We are currently at 5 %. 5) Senior garbage subsidy a. Seniors pay $1 per billing cycle for garbage service that costs the City roughly $40 per billing cycle. Over the course of a year, that translates into a $120,000 subsidy. Previous discussions have revolved around implementing a subsidy for seniors who are experiencing financial hardship only. 6) Referendum for sales tax increase a. Previously discussed at City Council and in the newspapers by Mayor Burd. The City could authorize a 1 % increase in the sales tax rate through a referendum. This referendum would have to be approved by the City Council, in the same manner as the bike path referendum was previously authorized. A preliminary estimate of the incremental sales tax, should the referendum be successful, is $2 million per year. Some of this tax would be paid by residents of other communities who shop in Yorkville. Also, this would put our sales tax rate higher than communities to the west of us, but on par with communities to the north and east of us. 7) Interns a. The cost effectiveness of interns is very high. Should we run into a scenario where the City Council does not feel the current service levels are acceptable, interns would provide the best option for getting work done at little cost. 8) Outsourcing with other municipalities and consultants a. I have spoken with staff members in other organizations that are interested in out - sourcing their staff on a limited basis to the City. Specifically, we have needs in the IT and GIS field. This follows a recommendation from the Metropolitan Mayors Caucus report on service consolidation, for which Mayor Burd sat on the committee. Of note, prior to layoffs we had outsourced our GIS staff to other communities, and those communities had paid use an hourly fee. 9) Vehicle stickers a. This was discussed by the Public Works committee briefly during the December meeting. One member of the committee was opposed to it, and the other two members were interested in seeing a brief City analysis of the service during the budget discussions. Vehicle stickers could be used as a way of equitably distributing the cost of a road maintenance program to those residents who use the roads most frequently (vehicle owners), but would have some administrative hurdles. 10) iPads v. paper a. A few years ago, the City discussed purchasing laptops for City Council members instead of printing packets. The laptops would have paid for themselves over the course of one or two years. iPads are starting to be used by boards in place of traditional laptops. Their main benefit is that they are cheaper than traditional laptop, and can be more user friendly. 11) Selling or leasing assets a. Land? While it is not a seller's market, the City does have a moderate amount of land used for non -park purposes. b. Buildings? Again, it is not a seller's market — but the City does have buildings that are currently being underutilized due to staff cuts. City Hall, on the administrative side is at 50% capacity. The old Post Office is currently being used for cold storage and Park Board meetings. The Riverfront Building concession -lease RFP is currently being reviewed by the Park Board, and is expected to generate about $10,000 per year in lease and concession fees. 12) Business registration a. Business licenses are available under state statutes. This could generate an amount multiplied by the number of individual businesses in the City (less than 750), and would result in the staff having an accurate, up -to -date database of contacts at every business in the City. We currently have an incomplete database via utility billing — as some strip malls have one meter for multiple units. 13) Selling other sponsorship opportunities a. Several weeks ago, the City of Naperville briefly brought up the concept of selling adspace on City buildings. The Village of Oswego has also discussed an offer from a local business to have their business name on a water tower. The City of Chicago has participated in a pothole filling program with Kentucky Fried Chicken, wherein KFC pays to have potholes filled in Chicago with a KFC stamp placed on the fill material. 14) More furloughs a. Non -union City staff are taking 5 -days of furloughs this fiscal year. These could be increased, but would fail to impact almost half of the entire City staff (the other half are in unions). Increasing furlough days would impact City services due to the recent staff cuts, and would further hurt morale with employees who are not in unions. 15) Pay cuts a. The conversation applies to pay cuts as it does to implementing furloughs. When almost half of the City employees have a bargaining contract, the impacts are not equitable. The efforts to negotiate pay cuts or furloughs with unions would be partially offset through increased attorney's fees and other concessions the City would have to make. 16) Convince YBSD, if it has the money, to make payments on debt obligations a. This option would need to be discussed with YBSD, potentially at the joint City -YBSD meeting. They have informally said that almost all money they have within their budget and accounts are dedicated to project or specific purpose. 17) Structural change in budgeting a. In FY 10 /11, there are still one -time revenues being used to fund ongoing operational costs. Mayor Burd had argued against this practice in the past and has mandated it be ended in FY 11/12. Continuing to use one -time revenues (building permits, development fees) in the general fund to pay for operational expenses would be irresponsible budgeting. In fact, the direction to change this practice in FY 11/12 was one driving force for the layoffs that occurred this month (naively, we are planning to set aside one -time revenues in FY 11/12 for capital purposes, instead of using them to pay salaries). 18) Enterprise opportunities a. The article about the potential solar power facility in Yorkville or Oswego is a good example. There are going to be many opportunities for the City to venture into enterprise opportunities in the near future, be it for a solar farm or a whitewater recreational facility event.