HomeMy WebLinkAboutMinutes - 04/12/2010 - City Council REGULAR MEETING
APRIL 12, 2010
Mayor Low called the regularly scheduled April 12, 2010 meeting of the McHenry City
Council to order at 7:30 p.m. In attendance were the following Aldermen: Santi, Glab, Schaefer,
Blake, Wimmer, Peterson, and Condon. Absent: None. Also in attendance were: City
Administrator Maxeiner, Deputy City Clerk Kunzer, Deputy City Administrator Martin, Assistant
City Administrator Hobson, Construction Neighborhood Services Director Schwalenberg, Public
Works Director Schmitt, Finance Director Black, Recreation Superintendent Witt, Police Chief
Brogan.
PUBLIC INPUT SESSION
Mr. Bob Anderson of 5515 E Lake Shore Drive, Wonder Lake, Illinois, addressed Council
regarding the lack of need for township government in the State of Illinois.
CONSENT AGENDA
Motion by Wimmer, seconded by Condon, to approve the Consent Agenda as
presented:
A. Resolution establishing April 30,2010 as Arbor Day in the City of McHenry;
B. City Council Minutes:
March 29,2010 regularly scheduled meeting;
April 5,2010 regularly scheduled meeting;
C. List of Bills:
ADAMS ENTERPRISES INC, R 60.57
ADAMS OUTDOOR POWER EQUI 260.72
ADAMS STEEL SERVICE INC 414.06
AMERICAN RED CROSS OF GR 13.00
AT&T 28.98
BOTTS WELDING & TRUCK SE 23.00
BUSS FORD SALES 532.37
CARQUEST AUTO PARTS STOR 674.54
CELESKI, GREGORY L 585.00
CENTEGRA OCCUPATIONAL ME 188.16
CHEMICAL PUMP SALES & SE 118.00
CHICAGO INTERNATIONAL TR 640.67
CHRISTOPHER, DAVID 112.33
COMCAST CABLE 74.90
COMED 26,944.59
COOPERATIVE PLUS INC 352.00
CRESCENT ELECTRIC SUPPLY 13.50
DICKMAN, ROB 80.24
ED'S AUTOMOTIVE/JIM'S MU 69.00
ED'S RENTAL & SALES INC 24.45
ENVIRONMENTAL RESOURCE A 603.10
FAST EDDIES CAR WASH 223.30
FOXCROFT MEADOWS INC 455.40
G & E GREENHOUSES INC 381.00
HACH COMPANY 463.01
HARRIS, JAMES 172.50
HAWKINS INC 2,157.44
ILLINOIS AUDIO PRODUCTIO 135.00
ILLINOIS STATE POLICE 20.00
INTERSTATE BATTERY SYSTE 157.52
KALE UNIFORMS INC 443.03
KIMBALL MIDWEST 278.53
%=W-' KING, LAURA 1,750.00
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April 12,2010
KTD INC 319.95
LEXISNEXIS 111.50
MCANDREWS PC, THE LAW OF 6,800.00
MCHENRY AREA CHAMBER OF 420.00
MCHENRY COUNTY CHIEFS OF 45.00
MCHENRY COUNTY COLLEGE 60.00
MCHENRY COUNTY COUNCIL 0 70.00
MCHENRY FIRESTONE 1,470.00
MCHENRY NAPA 1,981.78
METROPOLITAN INDUSTRIES 1,500.87
MEYER MATERIAL COMPANY 333.68
MORRIE AND SONS INC 352.00
MURDOCK SUPER SECUR 279.34
MYERS-SCHMITZ, CAROL 348.00
PENZE, JACQUELINE S 288.00
PEPSIAMERICAS 284.80
PETROLIANCE LLC 1,509.36
PETTIBONE & CO, P F 199.99
PORTER LEE CORPORATION 35.00
POTSIE'S SOILS 480.00
REINWALL REPAIRS 1,460.00
ROGERS, PAUL 125.00
SAFE KIDS WORLDWIDE 50.00
SAFETY SUPPLY ILLINOIS 267.30
SCIAME, RYAN 237.50
SECRETARY OF STATE/INDEX 20.00
SHERWIN INDUSTRIES INC 2,226.50
SIUE 10.00
SMALE, GUY 409.74
SPRING ALIGN OF PALATINE 915.58
ST PAULS EPISCOPAL CHURC 608.20
STANS OFFICE TECHNOLOGIE 179.00
STAPLES BUSINESS ADVANTA 138.63
SUNNYSIDE COMPANY 18.34 _
TASER INTERNATIONAL 387.62
TOMARK SPORTS INC 491.39
ULTRA STROBE COMMUNICAIT 75.00
UNITED PARCEL SERVICE 55.14
VACULA, JOHN T 1,050.00
VALLEY VIEW ACRES 85.00
VIKING CHEMICAL COMPANY 1,505.00
WITT, CINDY 8.94
ZAHN, DAN 480.00
GRAND TOTALS 66,143.06
FUND TOTALS
GENERAL FUND 53,687.18
PAGEANT FUND 40.00
WATER/SEWER FUND 10,477.98
MARINA OPERATIONS FUND 1,460.00
INFORMATION TECHNOLOGY FUND 477.90
TOTALS 66,143.06
Voting Aye: Santi, Glab, Schaefer, Blake, Wimmer, Peterson, Condon.
Voting Nay: None.
Absent: None.
Motion carried.
Mayor Low requested Council move to Committee of the Whole format for the
remainder of the meeting.
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April 12,2010
FY 2010/2011 BUDGET DISCUSSION
Finance Director Black initiated the discussion regarding the Fiscal Year 2010/2011
_ General Fund Budget. He noted the preliminary budget presented to Council earlier this year
included a deficit of approximately $700,000. Consequently, Staff is proposing expenditure
reductions including:
• A decrease in debt service expenses of $176,600 realized through the refunding of a
2002 bond issue and using $60,000 from the Annexation Fund to repay bonds for the
public works building;
• The elimination of funding for non-essential community services groups, including the
McHenry Area Youth Commission (MAYC) ($6,000) and Garden Resource Center (GRC)
($8,000);
• The elimination of a vacant dispatch worker position ($60,000);
• A salary freeze for all non-represented employees;
• Limiting mosquito abatement spraying to special events only ($29,800).
Director Black noted Staff went over the General Fund Budget with an eye to even more
extensive reductions than in years past.
Alderman Condon expressed the need to speak up regarding the potential cuts affecting
the MAYC and GRC. She noted she has served on the MAYC board since being elected to office
and she has watched this organization grow and struggle through the years. She expressed
concern about eliminating contributions to this organization and stated she would prefer to see
if there is a way to provide funding even if it is only $1,000. She noted both organizations have
served a great purpose in the community and she found it difficult to eliminate funding for
them.
Director Black stated Staff has prepared a list of possible expense reductions to assist in
bringing the General Fund Budget into balance. The reductions include:
1. Community Service Officer Position responsible for CALEA certification $ 57,100
2. Park Maintenance Worker Position (currently vacant) $ 56,600
3. Administrative Consolidation (Parks/Finance) $ 82,400
4. Sergeant or Patrol Officer Position $ 80,000
5. Training/Travel (Non-Essential) $ 7,000
6. Police Commission examination/testing expenses $ 2,000
7. Police Overtime $ 10,000
8. Police Livescan (delay purchase per IT) $ 6,500
9. Wage Concessions—All Bargaining Units $ 83,000
10. Eliminate clothing allowance for non-represented employees $ 10,400
Total Expense Reductions $395,000
Director Black noted the administrative consolidation of the customer service counters
of Finance and Parks included two anticipated retirements. Regarding the potential concessions
from bargaining units, City Administrator Maxeiner noted all three bargaining units have been
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April 12,2010
notified this matter would be discussed this evening. City Administrator Maxeiner noted he
anticipates discussions occurring with the bargaining units during the next week.
Director Black noted in addition to the stated expense reductions, Staff is suggesting
revenue increases to assist in balancing the General Fund Budget. Revenue increases would
include:
1. Increasing the Hotel/Motel Tax from 2.5%to 5.0% $ 75,000
The increased funds would assist in funding special event costs such as
band concerts, fireworks, holiday lighting, etc.
2. Administrative Towing Fee $160,000
This would apply to those who are ticketed for DUI, driving with a
suspended license, fleeing and eluding, etc.
3. Fingerprint Fee $ 5,000
This fee would be assessed when providing this service for an organi-
zation or business.
Total Additional Revenue $240,000
Director Black stated the total of proposed reductions and revenue increases amounts
to $635,000 which would offset the budget shortfall.
Director Black invited questions of Council regarding the proposed reductions and
revenue increases.
Responding to an inquiry, City Administrator Maxeiner stated Staff has contacted all
three bargaining units and advised they would be asked to consider wage reductions/lack of
wage increases.
City Administrator Maxeiner noted the reduction in Police Commission expenses relates
to the fact that there would be no officer testing occurring during this fiscal year. The $2,000
could be cut as there was no anticipated need for its use. City Administrator Maxeiner also
noted all travel/training expenditures with the exception of necessary police training have been
cut.
Alderman Schaefer inquired if the cut of the Community Service Officer would result in
forfeiting the department's CALEA certification status. City Administrator Maxeiner responded
the certification will be maintained by utilizing the services of existing Staff.
Alderman Peterson inquired about the Administrative Towing Fee and asked if the
anticipated $160,000 revenue was realistic. Police Chief Brogan responded in the affirmative.
He also noted the $500 fee/tow is the same as that charged by other towns in the area.
Alderman Condon, noting that budgeting is not her forte, stated after careful study of
the proposed budget, she has realized the City is already down to "bare bones" status. She l
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applauded Staff for cutting away all extras, but still be able to maintain necessary services for
the community. She raised the following questions for clarification:
1. $20,000 for annual fireworks display — she asked if the Jaycees would still contribute
$10,000 toward the event. Director Black responded there is a $10,000 revenue line
item for the Jaycees contribution.
2. Clothing allowance — she inquired if it has been eliminated for all non-represented
employees. Director Black responded in the affirmative.
3. Treasurer's Training $250 - Could this be eliminated; has it ever been utilized. City
Administrator Maxeiner responded this item was in the budget along with Council
training/expenses. He stated it has never been used. Alderman Condon suggested it be
removed.
4. Emerald Ash Borer — no line item included for treatments this year. City Administrator
Maxeiner stated no cost effective way of treating the Emerald Ash Borer has been
found. The only sure way of eliminating the pest would be to cut down all of the ash
trees in the City.
5. Public Works Administrative Assistant — why is there an increase indicated over last
year's line item. City Administrator Maxeiner stated the Administrative Assistant for
Public Works took early retirement last year. The figure in the line item indicated one
month's pay. This year's budget reflects a full time administrative assistant who is being
utilized by Street Division and Public Works Administration, thereby removing the need
for an assistant for each division.
City Administrator Maxeiner stated he was a strong proponent of instituting and
supporting the Garden Quarter Resource Center. It was felt this would be a way to address the
high incidence of police calls and incidents to this complex. The program was initiated to help
familiarize the residents of the complex with the positive influence of police presence in the
community. The program has served its purpose well. At this time, Staff believes there is no
longer a need and is recommending the financial contribution be eliminated. If in the future
there is again a need, the program can be resurrected.
Alderman Santi stated he sees these two community service programs, MAYC and GRC,
as services the City has helped to develop and noted he would be opposed to eliminating
contributions to these two programs from the budget. Alderman Santi inquired how Staff came
up with a proposed reduction in police overtime of $10,000. Chief Brogan responded his
department will be making every effort to cut unnecessary overtime. However, he pointed out,
this is a matter which is difficult to predict, particularly should an investigation arise which
requires an inordinate amount of time and thereby increases overtime. Director Black also
noted with the addition of three officers on the street, there could easily be a reduction in
police officer overtime. He noted the $10,000 figure attributed to overtime reduction was a
conservative estimate.
Alderman Santi inquired if Staff had considered a furlough program. City Administrator
Maxeiner responded in the affirmative. One day of furlough would result in a savings of only
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April 12,2010
$8,000. Staff concluded their efforts could be better utilized in seeking reductions elsewhere in
order to gain more savings.
Alderman Glab noted the City annually contributes $10,000 to the fireworks display. He
suggested the City's contribution could be reduced if the musical coordination of the display
were eliminated. He noted there could still be a display but a less expensive event.
Alderman Peterson asked for clarification as to the number of police officers which were
approved yet un-hired since the 2008/2009 fiscal year. City Administrator Maxeiner responded
the City has approved four unfilled positions for patrol officers. However, two existing officers
had been utilized as liaison officers at the schools. The schools are no longer utilizing this
service and those two officers are back on the street. The department is actually down two
officers at this time.
Alderman Peterson asked for clarification as to historical reductions occurring in various
departments. City Administrator Maxeiner responded two positions have been unfilled in PW
Streets; one maintenance position has been left unfilled in Parks; two positions have been left
vacant in PW Administration; two positions have remained vacant in Building and Grounds; and
two positions were eliminated in Construction and Neighborhood Services. City Administrator
Maxeiner stated overall there has been a reduction of 20 positions in the last two years.
Alderman Peterson inquired if the City had lost any programs as a result of the cuts. City
Administrator Maxeiner responded there has been no loss of programs to date. Staff has tried
to maintain current programs and services in spite of the reductions. Thus far Staff has been
successful in this regard.
Alderman Blake noted as much as he and his family enjoy the fireworks, he suggested
the annual display could be eliminated. The annual fireworks display is an item that could be
trimmed in order to save the City money to be used to provide essential programs.
Alderman Glab stated he had not suggested the fireworks display be eliminated but that
it be downsized with less frills in order to save the City money.
Alderman Blake stated he concurs with cutting where needed as long as essential
programs and services are maintained.
Director Black provided a slide show outlining the state of the City's contributions to the
Police Pension Fund. Noting the recent decline in returns on investments, he stated the City's
current funding ratio has fallen below 50%. He noted the Pension is funded by 9.1%
contributions by employees, investment dollars, and the remainder to be paid by the City.
Because of the State Property Tax Cap the City was not in a position to increase the Police
Pension Fund portion of the property tax levy sufficiently to keep up with growing annual
contribution requirements. The current shortfall is $518,809. Staff has been seeking ways to
decrease that deficit. Director Black stated the City had been able to maintain a funding ratio of
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April 12,2010
60-70% up until the past few years. Recent economic downturn causing losses in investments,
together with a number of recent retirements, have caused the funding ratio to dramatically
decline.
City Administrator Maxeiner stated the Police Pension Fund is a ticking time bomb. He
noted the Police Pension Plan is mandated by the State of Illinois. It must be fully funded by the
year 2033. He noted that last year and this year the City has not made enough in the Fund
(from the three sources)to match what is paid out to all retirees.
Director Black provided Council with a spreadsheet indicating a three-year projection of
revenues and expenses if no further adjustments are made. Within three years the City will
realize a reserve balance of$0. City Administrator Maxeiner noted if that happens, the City will
be in a position where it will have to borrow just to meet payroll. City Administrator Maxeiner
noted the City has moved from 132.6 full time equivalents in 2007/2008 to a proposed 112.5
full time equivalents in 2010/2011.
Director Black noted additional revenue sources would help to close the gap between
revenue and expenses. At this time the expenses continue to rise and the revenues are rising at
a much slower rate. He noted the City must look at ways to continue to reduce expenses or find
a way to increase revenue.
City Administrator Maxeiner stated the City is at a crossroads. Some pretty significant
decisions must be made. The City is currently in the fourth year of deferring capital
expenditures and there is no end in sight to the economic situation. He noted the City needs
$1.5 million in order to keep up with anticipated expenditures over the next three years.
Additionally, the Governor is indicating there could be significant reductions to municipalities
from the State income tax. There is the threat of a big box store leaving our community. All
discretionary items have been cut from the budget. The magnitude of the need for additional
funding is such that if the City were to close all of its parks and lay off all fulltime and parttime
parks maintenance staff, the City would still have to lay off 13 patrol officers in order to obtain
$1.5 million to ensure that the City does not continue on the downward revenue spiral over the
next three years. Another way to look at this issue would be to cut administration in its entirety
and cut nine street maintenance workers resulting in $1.5 million in savings. The following
spreadsheet was provided to Council for its edification:
General Fund Three Year Projection
FY 09/10 FY 10/11 FY 11/12 FY 12/13
Estimated Actual Budget Projection Projection
Total Revenues $15,489,000 $15,837,000 $16,243,000 $16,689,000
%Revenue Change 2.25% 2.56% 2.75%
Total Expenses $15,849,000 $15,837,000 $17,229,000 $17,946,000
%Expense Change -0.08% 8.79% 4.16%
Excess/(Deficit) ($360,000) $0 ($986,000) ($1,257,000)
Fund Balance $2,241,000 $2,241,000 $1,255,000 ($2,000)
Percent of Expenditures 14.5% 14.2% 7.7% 0.0%
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City Administrator Maxeiner stated Staff is researching ways to further cut while
maintaining essential services.
Finance and Personnel Committee Chairman Alderman Schaefer stated the gravity of
the situation is the very reason the matter is being presented to the entire Council at this time
rather than the usual method of budget discussions at the committee level prior to Council
consideration.
City Administrator Maxeiner stated if the City cannot identify what services can be cut, it
must consider a tax increase of some type. He outlined four areas to consider for a possible
source of revenue:
1. Property Tax Increase:
$.20 per$100 EAV added on to existing rate.
This is a stable tax. It would be highly unpopular and it would impact only city residents
as well as business and industry.
2. Telecommunications Tax Increase:
Current rate 1%; Increase to as much as 6%.
Cost per user approximately $90/year if increased to 6%. This tax would result in
approximately$950,000 in revenue.
3. Local Sales Tax:
The City has not established a local sales tax at this time. Implement a .5% local sales
tax, resulting in approximately$1.5 million annually.
Typical cost to purchaser about $50 annually. Tax would affect all consumers, both City
residents and non-residents alike. For this reason, Staff would lean toward
recommending this option.
4. Utility Tax:
Current rate 0%, increase to 0.5%, resulting in approximately$2.5 million annually.
The tax would be based on units of energy used (i.e. therms, kilowatts, etc). The tax
would impact all City residents, businesses and industry.
City Administrator Maxeiner stated the 2010/2011 Fiscal Year Budget will be presented
to Council for consideration at its annual meeting on April 26, 2010. He suggested Council
discuss the four outlined revenue enhancements with their constituency in anticipation of
action being taken in May or June. This is a big step and requires input from City residents and
discussion at the Council level prior to action being taken.
Alderman Condon requested copies of the PowerPoint presentation be provided for use
by Council in discussions with their constituents. Director Black provided Council with copies of
his presentation.
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April 12,2010
City Administrator Maxeiner stated the .5% local sales tax, if implemented, would not
result in an expansion of operations but only replace lost/declining income to maintain existing
operations, services and programs.
Mayor Low stated the City's primary obligation is to provide the services to its residents
that they have come to expect. The City employees have already been operating at a "bare
bones" minimum level. Mayor Low noted she is constantly complimented on City employees
and the work they do. She opined the City has been forced to make cuts, but remaining
employees have risen to the challenge. They are pulling together to maintain all services and
programs in spite of Staff and operation reductions. Mayor Low concluded stating the City
needs to do whatever is necessary to keep its people working to provide these services to the
community.
Alderman Blake suggested Council consider having two Council meetings per month as
opposed to the current three meetings in an effort to cut expenses. City Administrator
Maxeiner responded this issue has been discussed in the past. The elected officials' salary/pay
cannot be modified mid-term, ruling out this option.
Alderman Glab inquired if the .5% local sales tax were implemented, would it be
included in gasoline costs. If so, this could be a good thing to look into as it would impact not
only City residents but all who pass through the community. City Administrator Maxeiner
responded gasoline would be taxed at the new rate.
Alderman Peterson inquired how much the Police Pension Fund has decreased due to
investment losses. Director Black responded that the fund's investment return was -30% during
2008/2009.
Alderman Schaefer inquired as to the status of video poker/gaming. City Administrator
Maxeiner responded it is still being discussed in Springfield. The issue cannot move forward at
the local level until resolved by the State of Illinois.
Alderman Schaefer inquired if the local sales tax were implemented, would that help in
bringing the Police Pension Fund into balance. City Administrator Maxeiner stated it might
come reasonably close. He stated two years ago the City was funding it at 63-64%. There has
been a significant drop in the past couple of years.
City Administrator Maxeiner encouraged Council to obtain feedback from its
constituents. Inquire if residents would prefer to share increased revenue burdens with non-
residents via the local sales tax or utilize that in combination with another alternative. He
encouraged Council to call Director Black or himself at any time with questions, clarifications,
feedback, etc.
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April 12,2010
City Administrator Maxeiner reiterated the Fiscal Year 2010/2011 Budget will be ^�
presented for Council consideration at the Annual Meeting.
ADJOURNMENT
Motion by Condon, seconded by Blake, to adjourn the meeting at 8:57 p.m.
Voting Aye: Santi, Glab, Schaefer, Blake, Wimmer, Peterson, Condon.
Voting Nay: None.
Absent: None.
Motion carried.
The meeting was adjourned at 8:57 p.m.
Mayor Deputy Oy Clerk