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City Council Minutes 2010 04-10-10 special meeting THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10, 2010— PAGE 1 MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE UNITED CITY OF YORKVII.,LE, KENDALL COUNTY, ILLINOIS HELD IN THE CITY COUNCIL CHAMBERS 800 GAME FARM ROAD ON SATURDAY, APRIL 10, 2010 9:00 AM - NOON i Mayor Burd called the meeting to order at 9:00 a.m. Roll Call Mayor Burd — Present City Clerk Milschewski — Absent City Treasurer Powell — Present Alderman Gilson — Present Alderman Werderich — Absent Alderman Golinski — Present (left approx 10:30 a.m.) Alderman Plocher — Present Alderman Munns — Present Alderman Sutcliff — Present Alderman Teeling — Present Alderman Spears — Present Staff members also present were: City Administrator Bart Olson, Finance Director Susan Director Mika, Chief of Police Rich Hart, and Police Lieutenant Don Schwartzkopf. Members of the press who were present: Ryan Morton of WSPY, Steve Lord of the Beacon and Tony Scott were present the entire meeting. Members of the public who were present: Mark Johnson, arrived in the middle of the meeting. I Ouorum A quorum was established Business FY 2010 -2011 Proposed Budget Mayor Burd explained that when Director Susan Mika came on in 2006 it was to balance the difference funds to get ready for the audit. She noted that the audit was done in February 2007 and in the first year there were a lot of getting things into place. She noted that Mika had worked very hard on evaluating the funds. One of the things that Mika found was that all the bond revenues had been put into the revenue fund which made it look inflated and it looked like they had money they did not have. They also discovered that money should have been set aside for permits for Grand Reserve; a certain percentage was supposed to be put aside. Mayor Burd explained they had to make up for over $800,000 and they were going to pay off the money in monthly installment for the next three years through the water fund. The third accounting glitch they found, Mayor Burd noted, was one was discovery of bad debt issues. The money the City had expended and not collected up front that they thought was coming in from a reserve fund never came in. She said Director Mika came up with a bad debt policy that cleared that up. Budget Update and Summary of Changes Bart Olson explained the water fund and went over the general fund spread sheet. He explained what had changed since the last meeting and noted that they had increases such as employee's health insurance. Olson explained they were looking to change the drug card plan and in having a different form of PPO. He said that the premiums over all would still go up 4% to 6 %. He said that they would look at having the employees contribute in paying for some of the health care cost increase; that would be on the April 13th City Council agenda for a vote. He noted the increase would amount to about $13,000 from last year's budget. Olson explained too that because health insurance THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10, 2010— PAGE 2 premiums went up they transferred more money from the water and sewer fund and that resulted in more money for the general fund. On the revenue side, Olson explained that the City established an amusement tax, that the 5% admissions tax authorized by the Raging Waves annexation agreement would be repealed. They since then had changed their assumption, and now conclude that the City would be within its authority to have the existing 5% admissions tax and an additional 5% amusement tax. Because of this change in assumption, the general fund estimate for amusement taxes increased by $112,000. Also, because the line item for "amusement taxes" previously held all revenues associated with the Raging Waves "admissions tax," we have amended the title of that line item to be "admissions tax" and created a new line item for "amusement taxes ". Olson explained they missed their deadline to renew their Utility tax. They would have to renew in early March to and if they pass it would take effect December 1'` however that was a loss in revenue of about $70,000. On the expense side, only three changes were made, said Olson. The first was to increase the amount of the transfer from the general fund to Citywide capital from $100,000 to $125,000. This amount is the annual payment to the Clark family for the Clark property; In the final two years of the contract payments, the annual payment increases to $125,000. The second increase was for health insurance premiums. The third change was a result of the deterioration of the amount expected as budget surplus (which was to be used to replenish the fund balance). Olson said they were now recommending five -day furloughs to be implemented for all nonunion employees. Furloughs would save the City $54,000 and could be implemented on a more flexible schedule. Olson thought they could make it more flexible for hourly employees to choose when they wanted to take their days however salary employees had to take five consecutive days off. I Olson explained that by adding all of these changes together, the budget surplus projected had decreased by $89,000. Instead of replenishing the fund balance by $225,000, they were now recommending the fund balance be replenished with $116,722. Olson explained where they had made cuts. They had layoffs and split salaries between different funds. He pointed out the departments and their funds. He explained the programs and funds that they had cut. They cut out subscriptions, books etc. i He explained the legal fees and some of them that went to bad debt. Building expenses, property expenses and insurance costs had inflated expenses. Water Fund Mayor Burd explained they had not raised their taxes. She felt they had to address the water fund issues without raising taxes. She wanted suggestions, for this enterprise fund that was supposed to be self supporting because the general fund was in no shape to be giving money to anything. Mayor Burd noted that this was an ongoing problem and explained this was not going away without people moving into town and paying tap on fees. She noted that they had not raised fees in thirteen years nor had they raised taxes. Mayor Burd noted their water rate was the lowest in the area and feared they may have to raises taxes or else there would be an ongoing drain and they had to pay their bonds. If they did a surcharge Mayor Burd wanted to only make it a temporary one year thing and once the bonds were paid off the water fund would be self sustaining. Bart Olson made a suggestion of looking at a 5% increase with the water rate this year which would total about $1.00. He noted that the capital side of the water fund was performing poorly due to connection fees dropping off. They were hoping for growth but there had not been any. Olson stated that the average water bill now was $41.24 for an average billing period. A billing THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10. 2010— PAGE 3 i period was equivalent of two months. He suggested they add on a maintenance fee of $12.50 for an estimate of $25 per billing cycle per user. Alderman Gilson questioned why the water fund had been running in the red since 2005 and why some kind of action had not been taken until now. Olson explained that there was a portion of the water bill and the connection fees had been enough to sustain the costs of improving the system. So even though they showed a deficit they took in a bunch of bond money as revenue and they spent it. So it showed a deficit but it was a conscious decision by the City Council to take the capital expense out of other pictures so the bond payments could be made. Alderman Gilson argued that it was not balanced and there was still a deficit. Olson said that if they removed their capital expenses it would be self sustaining. Mayor Burd explained that they had not been building anything and they had received loans at the time because development was coming in. They were also under an obligation to fix the water issue by the federal government laws. She said they incurred loans and when the money came due and they were hoping the tap on fees would cover $164,000. They use to be very high so they were projecting, the way life was in 2006, they did not think they would end up where they were today. Olson said it would be incorrect to say they wanted to add on a fee because they were running a deficit in the prior years. He noted that they were looking to increase the fees because the debt service was now hitting their books. Mayor Burd agreed and said they were looking to be proactive and not to try to take care of what happened in the past. Alderman Gilson suggested that they whittle down the general fund budget perspective on how much they spend and how much they brought in as revenue. Olson said that after looking at the budget with Director Mika for the past month they would have to bring in around $855,000 in yearly annual revenue and that would not happen. Olson said whatever suggestions Alderman Gilson had in cutting funds he highly cautioned cutting the general fund to support the water fund. Alderman Gilson felt that the water rates were inline according to the chart and Mayor Burd j disagreed saying they were not inline and reiterated that they had not raised rates in thirteen years. Alderman Gilson felt they would be at the highest rates among the surrounding communities if they raised rates. Mayor Burd explained how they could not be compared to neighboring communities because they did not have taxes like they did and they were not upcoming communities such as themselves. Mayor Burd wanted some kind of general consensus to at least raise the water rates by for operations by 5 %. Alderman Plocher and Munns and Alderwoman Sutcliff and Teeling were in favor of the 5% increase. Alderwoman Spears and Alderman Gilson were not in favor of the 5% increase. Mayor Burd noted that with a consensus vote of 4 to 2 they would raise the rate 5% and she reiterated that she did not want to raise taxes and they could not cut a million dollars from their budget and they did not want to go bankrupt. She said that this was supposed to be self sustaining and it should not be impacting the police, finance or other funds. She felt this was the best thing for the City. Alderwoman Spears said that in the past she and others objected to not count on fees based on new growth and that their concerns were well documented. However she noted they continued to buy new properties under this assumption. Alderwoman Spears said that she was offended that it was said that the City Council did not know about this and they did object to it. She suggested they write off state funds since they could not count on them as much as they use to. Mayor Burd felt they had to count on state funds. THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10, 2010— PAGE 4 Water Improvements and Operation Fund Alderman Munns expressed his concerns about the highest paid employees were the ones getting over time. Bart Olson explained that these employees were the ones certified to monitor the water mains. Alderman Munns said if there were any employees refusing to work overtime that was unelectable. Mayor Burd said that she wanted to look at what they could do about this. She explained the retrofit fund was for replacing old meters with the new meters that would not have to be read by employees. They agreed to remove the retrofit however if one broke they would have to replace one. Alderman Gilson also suggested not doing the Game Farm water main for a couple of years so that would be a savings of $180,000 between that and the retrofit. Bart Olson explained before there were any recommendations to raise any fees they were at a deficit of 1.89 million dollars and it went down to $900,000 with a recommended 5% rate increase. He questioned if they removed the Game Farm water main fund and the meter retrofit fund would they be taking that money to the bonding fee or would they put that into the deficit reduction. The City Council felt they should be putting that towards reducing their deficit surcharge. Director Mika explained that infrastructure fees were needed for a short period of time and said it should be looked at in six months. Alderman Munns said that if he could be given a reasonable number such as $7 he felt that was better than $12.50 increase. Alderman Plocher and Alderwoman Teeling agreed with Alderman Munns and felt that it should be looked at every six months. Mayor Burd agreed that it should be reevaluated every six months and as soon as they saw more tap on fees they should immediately look at relieving the fees. Garbage Surcharge Bart Olson explained on page two that the $127,000 jump was due to the implementation of eliminating the senior garbage subsidiary. Alderman Munns felt that seniors did not produce as much garbage and he felt it should be based on usage but was not sure how to implement that. Mayor Burd said that their current plan did not encourage people to recycle. Alderman Munns said that they should call Veolia and tell them that they were considering changes within their renewal. Alderwoman Spears said that she agreed that the seniors were not putting out as much trash and knew that some seniors were putting out their garbage container every three weeks. She also felt as far as the county assisting seniors it was iffy if they were even getting their funds as well because they were they were cutting funds also. Alderwoman Spears said they should let it go for now if they were looking at renewing in two years. Mayor Burd said that she knew of other people, who were not seniors, not putting out as much trash every week as well. She noted there were those who were out of work single mothers, singles fathers etc. She felt it was unconstitutional to have a sub set of people who received special benefits. She felt that those who were well off should pay and those who could not they should be sympathetic towards them. Alderwoman Sutcliff wanted to know what the procedure would be to find out who needed assistance. Director Mika said that, currently, one would come to Health and Human Services to apply and then they would look at their driver's license to verify age. The City Council unanimously agreed that they would leave it alone until they had to renew their contract come April 2012. Amusement Tax THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10. 2010 — PAGE 5 Mayor Burd said that they should give Raging Waves and existing businesses a year's notice of the increase. Bart Olson said that they would not be able to defer the amusement tax from one user however you could perhaps amend the annexation agreement to remove the admissions tax but you wouldn't be able to rebate the tax to Raging Waves. He noted with them that was $112,000 right there out of the budget. Mayor Burd said there was no tax on the future businesses coming in. Alderwoman Spears asked if they could grandfather in existing businesses and Mayor Burd said no they could not they would have to carry over as well. Alderwoman Spears asked if they could include restaurants and Olson said they could only if they were entertainment based. Alderman Munns said he would consider raising the rate if they had to. Olson said that they were at .50 per every ten dollars; Raging Waves individual admission was $27 so you would be looking at less than a dollar fifty. Mayor said they could not do a sales tax on everyone. Olson said if they could double it they were looking at 3 million dollars in revenue. Raging Waves current admissions tax is 5% on top of their ticket and they rebate 55% of that 5 %. On this new tax they would not see any rebate on it. Alderman Gilson said he was against any additional taxes on businesses. Alderwoman Sutcliff actually felt that it did not effect the population as a whole and this was actually a good time to do this and was for it. Mayor Burd noted that Raging Waves brought in a revenue stream that came in from outside of the community. She wanted to look at what was coming towards them and what other entities would be coming there. She felt that this would be the only way to get revenue from these places. i Telecommunications Tax Bart Olson explained this was increasing from 5% to 6% per phone and it was already voted down by council last year. It represents $149,000 in revenue per year for this next fiscal year and they estimated it to be only $70,000. Olson said that if they cut any of their proposals their revenue would go down. Mayor Burd said that this increase would come to $1.00 a month. Alderman Munns said that with all these increases residences were looking at paying $40 more per month for everything including trash, water fees, etc. All City Council members voted no on the proposed tax. Other proposed cuts by City Council members Alderman Munns felt that the travel could be cut. Olson said any travel that was being done was done because certifications had to be kept up. Alderman Gilson questioned the library reimbursement, page 3 of 53, and wanted to know how they figured the $35,000. Director Mika said she took how many hours she and her staff worked in the library department. Alderman Munns wanted to know if she added on a profit to that and felt that a profit should be added because they should be paying their benefits. Mayor Burd said that they were requesting this and they were in complete control of their own budget and per state statue they set their own levy. Mayor Burd explained that they were subsidizing them. The City Council was unanimously in favor of bumping up the rate for the library to add the benefits in the hourly wages. Alderman Plocher and Alderwoman Teeling and Spears voted to leave the rates the way they were. Alderman Munns and George and Alderwoman Sutcliff voted to increase it. Alderwoman Sutcliff said it was in their best interest to keep a relationship with THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10, 2010— PAGE 6 them. Mayor Burd asked Director Mika to ask them for the increase due to the unanimous vote by the City Council. Alderwoman Spears questioned their legal fees. She noted they were not all landfill related. She felt that staff should be cautious on contacting attorneys. The City Council unanimously agreed to take out the legislative attorney line item. Alderman Munns questioned why the dues on subscriptions went up, noted on page 4, section E. Bart Olson said that Metro West was the big one. Alderwoman Spears wondered if this time if they really needed to be in all of the listed organizations considering their economic condition. Alderman Gilson agreed and commented that they really did not need to be part of Public Salary.com and questioned why they really needed a subscription to the Beacon News. He felt they did not need a City subscription. Olson said the two biggest subscriptions out of that line item was Metro West for $5,500 and that $5,500 was well worth the regional collaboration of ideas and discussions. Olson said, other than Public Salary.com, the rest were professional services and he recommended not cutting the ICMA & ILCMA. Alderman Gilson asked the council if they wanted to cut some of the organizations they belonged to and recommended they cut Public Salary.com and the Fox River Ecosystem Partnership for a total savings of $250. Olson recommended that they not cut any of them and cautioned saying that cutting any dues for any organization sent a clear message to them that they did not show any value in their organization. Olson said that they pay $50 for the Fox River Ecosystem Partnership and they get attendance at board meetings if they wanted to and they get all the minutes from their meetings and they do environmental studies on the Fox River in different towns. Alderwoman Spears said they should continue with the Chamber and the ICMA & ILCMA. Alderwoman Sutcliff said she did not have a problem with any of them. The City Council unanimously agreed to cut the Fox River Ecosystem Partnership for a total savings of $50 because they felt they could get the information elsewhere. Alderwoman Spears questioned if, on page 5, they had enough money allocated for the contingency fund. Bart Olson explained that if anything came up in the middle of the year it was for emergencies. He said there was and there was not enough in there and noted there should be at least 3% in there. Alderwoman Spears felt there should be more money in there. Alderman Gilson asked because of the economy if there was a need to spend money on a grant writer. Bart Olson explained that the grant writers don't only help with new grant applications they help with existing applications. Alderwoman Teeling, Sutcliff and Alderman Plocher agreed to keep the grant writer. Alderman Munns, Gilson and Alderwoman Spears felt they should take the grant writer out of the budget. Alderwoman Spears asked if they could hire the grant writer on a case by case basis and Olson said he would have to look at that. Olson said the grant writer allowed their administration to be more sufficient and recommended it be left alone. Mayor Burd agreed that they take it out for this year and when things start picking up they would look back into getting one. Alderman Gilson wanted to know about senior services of $5,000, page 4. He felt they should go to the community to help raise those dollars and he said noted that he would personally help raise money. Alderman Plocher requested they leave it in the budget and he would help start a THE MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL —APRIL 10.2010 — PAGE 7 campaign to get the money and they could donate that money back in. The Council unanimously agreed with Alderman Plocher's idea. Alderman Gilson questioned postage on page 5 of 53. He wanted to know if they could cut that down. Bart Olson said they could not without eliminating some kind of mass mailing so the answer was no. Mayor Burd asked the Council to email any more ideas they had to Bart Olson. Adiournment Mayor Burd entertained a motion to adjourn the meeting. So moved by Alderman Plocher; seconded by Alderman Munns. Motion unanimously approved by via voice vote. Meeting adjourned at 12:00 p.m. Minutes re ec Submitted b � � fl y : y Jamie Cheatham i i i I�