Administration Minutes 2011 06-16-11
APPROVED W/ CORRETIONS
7/21/11
UNITED CITY OF YORKVILLE
ADMINISTRATION COMMITTEE
Thursday, June 16, 2011
City Hall Conference Room
COMMITTEE MEMBERS PRESENT:
Alderman Spears, Chair
Alderman Colosimo
Alderman Munns (arrived at 6:19pm)
Mayor Golinski (arrived at 6:35pm)
OTHER CITY OFFICIALS PRESENT:
City Administrator Bart Olson
Treasurer Bill Powell
Finance Director Rob Frederickson
CITIZENS:
Tony Scott, The Record
As there was no quorum, discussion began at 6:07pm.
Citizen Comments:
There were no citizen comments.
Minutes for Correction/Approval:
May 19, 2011
Chair Spears had several grammatical and structural corrections that will be forwarded to
staff for correction. The minutes will be presented at the next meeting for approval.
New Business:
1. ADM 2011 – 26 General Fund Income Statement for May 2011
Finance Director Frederickson presented the item, which is a new report
designed to consolidate and highlight the monthly and year to date Revenues
and Expenses. Treasurer Powell noted, in particular, the temporary surplus of
revenue to expenses for the month of May. This is temporary, based upon the
receipt of taxes, and will not likely be repeated. Alderman Colosimo noted
that there were a few expense categories with 50% plus spending and clarified
that this was expected spending and would not be repeated monthly. The
Committee accepted the report.
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2. ADM 2011 – 27 Budget Report for May 2011
Finance Director Frederickson explained this report is an in depth compilation
of the previous Income Statement. As it was the beginning of the fiscal year,
there was nothing unusual to be noted. The Committee accepted the report.
3. ADM 2011 – 28 Treasurer’s Report for May 2011
Treasurer Powell noted that beginning and ending balances will be provided
once the audit has been completed. He reiterated that the surplus in revenues
is due to the manner in which real estate taxes are distributed. Director
Frederickson assured the Committee that the surplus will be placed into the
IMET account, yielding a higher interest rate. As there was not a quorum at
the time of the discussion, the report will have to be approved under
Additional Business.
4. ADM 2011 – 29 Cash Statement for April 2011
Finance Director Frederickson reported that this report provides a picture of
cash balances by account and fund. Concern was expressed regarding the
Land Cash fund; however, Administrator Olson stated this fund is the least
concerning, as it will be reconciled, for example, with grant income. The
Committee accepted the report.
5. ADM 2011 – 30 Prevailing Wage Ordinance
The City is required by state statue, during the month of June, to investigate
and ascertain the prevailing rate of wages as defined in 820 ILCS 130 –
Prevailing Wage Act. To accomplish this, the City annually approves an
ordinance declaring compliance with the Illinois Prevailing Wage Act, the
purpose of which is to ensure wages for laborers, mechanics, and other
workers engaged in public works construction, under the jurisdiction of the
City, are the same as the prevailing rate of wages for construction work in the
Kendall County area. The rate of wages is determined by the Illinois
Department of Labor. After council approval of the Ordinance, a copy will be
publicly posted in the glass case in the lobby, a public notice will be placed
the in the newspaper, and certified copies will be filed with the Secretary of
State and the Illinois Department of Labor. The Committee recommended
this item be forward for Consent Agenda.
6. EDC 2011 – 21 Dormant Zoning Applications/Petitions
Currently, the City does not have a policy explicitly allowing zoning
applications to be dismissed in cases where the applicant has been
unresponsive for an extended period of time. Since the downturn in the
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housing market, there has been a backlog of developer petitions/applications
with little to no activity for more than a year. Most of these applications have
engineering and legal deposits associated with them. In total, there are
approximately 30 development applications and nearly $110,000.00 in
deposits. Staff has determined which applications, and their associated
deposits, that are eligible for refund. It is important to note that the deposits
are not associated with the City’s general fund balance and the release of the
funds will have no budgetary impact. Upon releasing the stagnant application
deposits the City will have satisfied an audit obligation.
A proposed ordinance would allow the Community Development Director to
dismiss any zoning applications or petitions submitted, if:
1)The application is incomplete and the applicant has been notified of
such deficiencies and has not responded or provided a timeline for
completing the application within 90 days from the time of
notification;
2)The applicant has not responded in writing to a request for information
or documentation from the initial Plan Council review within six
months from the date of the request;
3)The applicant has not responded to a request for legal or engineering
deposit replenishment for City incurred costs and fees within ninety
days from the date of request.
Staff is proposing that the applicant be notified in writing by the Community
Development Department of the intent to dismiss the application within thirty
days from the date of the written notice and all remaining legal and
engineering deposits will be refunded at the time of dismissal. Should it be
the consensus of the Committee to have such a policy in place regarding
dormant zoning applications/petitions, staff will prepare draft ordinance
language to present to the EDC at the upcoming meeting for further review.
Administrator Olson affirmed that in the Management letter from the auditors,
the City had collected monies on projects that have not come to fruition. It
was recommended that a policy be instituted to deal with these situations.
Administrator Olson affirmed there would be no budgetary impact for
refunding these monies and would in fact, decrease the City’s liability.
Alderman Colosimo questioned what would happen to the monies if the entity
that originally submitted for a project no longer existed. Administrator Olson
stated the monies would be held in an accountability account for a period of
time then submitted to the state as unclaimed property.
The Committee forwarded the item to the Consent Agenda.
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7. CC 2011 – 48 City Debt Obligations and Options
In the 2011 municipal elections, the citizens authorized the City’s use of a 1%
non-home rule sales tax. This sales tax must still be authorized by ordinance,
and will be implemented on January 1, 2012, if approved by City Council.
Because we do not currently have access to sales tax figures for individual
businesses, it is difficult to pinpoint exactly how much non-home rule sales
tax we expect to receive. However, a study of some other municipalities
shows our range could be anywhere from 50% to 70% of our current sales tax
figures. At a $2.4 million current sales tax figures, this means our non-home
rule sales tax is likely to generate between $1.12 million and $1.8 million per
year. For purposes of illustrating the impact of this new revenue on our
existing debt obligations, I have used a $1.5 million figure to show the
potential immediate reduction in property taxes as a result of the non-home
rule sales tax The calculations on property tax reductions are included.
Financial advisor, Kevin McCanna of Speer Financial, has studied the City’s
debts and concluded that only the Rob Roy bonds (2005D and 2008) make
sense to consider refinancing. A justification is provided in the attached
memo. Additionally, there are four proposed debt service schedules for
potential refinancing bonds of different terms. The refinancing would
significantly reduce our yearly debt burden in the near term. The flexibility
provided by the non-home rule sales tax allows us to almost completely
eliminate the property taxes associated with debt payments for FY 13 and
beyond, which is a major upside to residents who have had trouble making
current property tax payments. The downside to this option is that the total
debt is stretched from about $11.3 million to between $16 million and $17
million due to new interest and bond issuance costs.
The issue to refinance is a policy decision for the City Council to make. The
flexibility provided by the non-home rule sales tax makes the reduction in
property taxes for FY13 and beyond a reality. The question at hand is
whether we want the City property taxes to decrease between 10% and 25%
for the next few years (no refinancing) or if we want property taxes to
decrease between 20% and 35% for the next few years (with refinancing).
Finance Director Frederickson summarized for the Committee that the current
compressed schedule pays off in 4 years while spreading out the payments
would decrease the current payment. There is a present value savings for
refinancing versus paying it off. A rational financial argument could be made
that it would be better off to refinance versus paying it off.
Alderman Colosimo questioned what the quickest, most painless option for
the City would be, enabling us to pay the least amount of interest and get it off
of the tax bills. To get it off the property taxes, the best method would be to
refinance. But in order for the non-home rule sales tax to go away quickly,
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then don’t refinance and pay off the debt in four years. Administrator Olson
stated that the Council has to decide if it wants to endure a short-term intense
pain or long-term dull pain. Either option will be painful. It can be paid off in
four years and its done, or you can refinance, decrease the property taxes, and
thereby obligating the entire sales tax for eleven years.
(At 6:35pm, Mayor Golinski arrived at the meeting).
Alderman Munns asked if all of the money from the sales tax referendum is
used to pay the sewers would there be additional monies available for road
improvements. Administrator Olson stated if we do refinance there still
would not enough monies would be freed for improvements but for patching.
The Committee went on to discuss the possibility of dedicating a percentage
of the sales tax to road improvements in order to decrease the obligation on
the property taxes. The Committee agreed that any solution would need to
reduce the burden on the taxpayers while addressing issues such as road
improvements. Administrator Olson clarified that the Committee wanted staff
to provide information that would abate a portion of the obligation in order to
free money for road improvements. Administrator Olson stated, that if pushed,
his recommendation would be to not refinance this year, work on decreasing
property taxes in other ways, because completely earmarking the non-home
rule sales tax to paying off the bonds does not address, for example, road
improvements. He stated that he would provide the Committee with potential
abatement schedules and levels at the next meeting.
8. ADM 2011-31 Committee Liaisons
Chair Spears confirmed that the only liaison position needing a representative
from the Administrative Committee would be to the Library Board. Alderman
Colosimo volunteered to be the liaison from the Admin Committee. The
Committee unanimously agreed.
Old Business:
There was no Old Business. However, Finance Director stated a correction
to the General Income Statement should reflect $175,846 as the correct
amount for the May surplus.
Additional Business:
As there now was a quorum, the Committee agreed to forward the
Treasurer’s report to the Councils Consent Agenda. Additionally, the
Committee agreed to the proposed amendments to the previous months
minutes presented by Chair Spears.
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Alderman Munn raised the issue of outdated information on the website.
Administrator Olson stated that staff will be working to make the changes.
Additionally, Alderman Munn asked for staff contact regarding the Copley
asphalt work. Administrator Olson stated either Engineering or Public
Works.
Alderman Colosimo raised the issue of a holding a Town Hall type meeting
at River Fest to discuss the issues regarding the Bike Trail. Mayor Golinski
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stated this could be held between 4:30pm and 5:30pm on June 24, as a
means to meet your Alderman, create an opportunity for Council members to
listen to constituents while supporting a Chamber event. Mayor Golinski
requested that, prior to this Town Hall Meeting, Administrator Olson find out
where additional cost savings could be made in the Route 47 project.
Chair Spears clarified the date of the Sprinkle forum, which would include a
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demonstration. Administrator Olson stated it would June 30.
There being no further business, the Committee adjourned at 7:29pm.
Minutes Respectfully Submitted by:
Kristia Leyendecker, Minute Taker
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