HomeMy WebLinkAboutMinutes - 01/05/2000 - Committee of the Whole COMMITTEE OF THE WHOLE MEETING
JANUARY 5, 2000
A Committee of the Whole Meeting of the McHenry City Council was called to
order by Mayor Cuda at 8:20 P.M. on Wednesday, January 5, 2000 in the Council
Chambers of the Municipal Center. At roll call the following Aldermen were present:
Bolger, Glab, McClatchey, Murgatroyd, Baird. Absent: None. City Staff in attendance
were: City Administrator Lobaito, City Clerk Althoff, City Attorney McArdle, Chief of
Police Kostecki, Director of Public Works Batt, Director of Parks and Recreation Merkel,
Director of Community Development Napolitano, Assistant Administrator Maxeiner;
Athletic Supervisor Michael Perkins; Recreation Supervisor Cynthia Jerden. Absent:
None.
Mayor Cuda stated the purpose of this evening's Committee of the Whole
Meeting is to consider and discuss the possibility of presenting a referendum question
on the funding of a community recreational center to the voters of McHenry, as well
as, to consider and evaluate funding mechanisms. Staff explained, if Council elects to
place the recreational center referendum question on the March primary ballot, formal
action is required prior to January 18, 2000.
Council has been considering the plausibility of constructing and operating a
recreational facility for several years. A site located on the west side of the existing
municipal building property has been selected. An architectural firm, Sente and Rubel,
was selected to prepare preliminary plans for the recreational facility. These plans were
presented to Council in Spring 1999, and feature a two-story facility of approximately
62,577 square feet. Staff, as per Council direction, has analyzed and developed both
construction and operational costs. Architectural consultant Sente and Rubel estimate
construction costs totaling $9.17 million. Building construction is estimated at $6.47
million while site work and contingencies add approximately $2.7 million. These
estimates do not include any type of water facilities. Conservative estimates for the
first year's operating budget are $722,600. Personnel costs are estimated at
-- approximately $336,000 and incorporate one full time fitness center manager, fitness
center aides, attendants, and one full time custodial position. Future program revenues
were based on current City information.
In total, program revenues are estimated to increase by approximately $75,000.
Assistant Administrator Maxeiner estimates the City of McHenry's operating budget
would require at a maximum an additional $345,000 in revenue annually. Council has
unanimously expressed reluctance to raise property taxes to fund a recreational
facility. Staff therefore is suggesting the initiation of a 5% telecommunications tax.
Municipalities are allowed to institute a tax of up to 5% on the gross receipts for all
telecommunication companies operating within the municipality. Currently the City of
McHenry has implemented the Telecommunications Infrastructure Maintenance Fee
Act assessing a 1 % tax on gross receipts collected on all local and long distance
telephone services. This fee is generating approximately $170,000 annually. Utilizing
these figures, Staff is estimating the creation of a 5% tax on telecommunication
companies which would generate approximately $850,000 annually.
City Administrator Lobaito stated as per Council direction, Staff attempted
unsuccessfully to locate a consultant to assist the City in developing and promoting a
recreational center referendum proposal. Elementary School District 15 representative,
when contacted by Staff members to obtain a consultant referral, obtained a
recommendation not to hire a consultant. Council also opined if a referendum question
were to be placed on the March ballot, public input must be sought. City Administrator
Lobaito suggested Council consider placing an advisory referendum question regarding
the creation of a 5% telecommunications tax with proceeds earmarked for the
construction and operation of a recreational facility on the March ballot. City
Administrator Lobaito noted architectural consultants Sente and Rubel have provided
substantiating information supporting their contention the entire recreational facility
process from concept plan to groundbreaking will take approximately one year.
Community input could be obtained during this period of time.
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Comm of Whole
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Alderman Bolger, noting the significant cost, opined the City was not ready to
proceed with the construction of a recreational facility. In response to Alderman
Bolger's inquiry, Staff noted the Cunat Brothers offer to construct a recreational
facility on their property might yet be a viable option for Council consideration.
Alderman McClatchey opined the community supported the development of a
recreational facility. He suggested Council move forward.
Alderman Baird also supported the development of a recreational facility.
However, he did not support placing the development and/or funding of a recreational
facility as an advisory referendum question on the March ballot. Alderman Baird also
stated his support of initiating a telecommunications tax as a recreational facility
funding option.
Assistant Administrator Maxeiner noted the need to estimate future revenues in
order to determine any potential deficit. He noted program revenues are estimated to
increase by approximately $75,000 and fitness center memberships are expected to
produce a minimum revenue of $303,500. It is assumed, therefore, the City's
operating budget would require an additional $345,000 in annual revenues. Some
discussion followed regarding the proposed custodial staff and recreational center
maintenance requirements.
In response to Alderman Glab's inquiry, Staff noted the $2/square foot
maintenance and repair line item cited in Table 2 by architectural consultants Sente
and Rubel does not include basic building maintenance. It refers more specifically to
equipment service maintenance. City Administrator Lobaito stated both the operational -1
costs as well as the anticipated revenues are conservative estimates.
Alderman Bolger suggested any recreational facility proposal include facilities
and space for the performing arts. Some discussion followed regarding funding
options.
Alderman Murgatroyd reminded Council of the numerous and varied capital
projects requiring consideration, prioritization, and funding. City Administrator noted
Council should determine whether a telecommunications tax is to be created and, if
created, should all revenues be earmarked for the development and construction of a
recreational center. Alderman Murgatroyd suggested Council also consider establishing
a sunset clause for the telecommunications tax once the recreational facility was self-
sufficient. It was the consensus of Council to state their intent to discontinue the
telecommunications tax once the recreational facility was self-sufficient; however,
Council also stated their reluctance to bind future Councils by this action.
Mayor Cuda also noted financial consultant Harold Warren informed Staff the
City is obligated to abate pledged taxes if the appropriate revenue source satisfies the
need for monies otherwise secured by the pledged taxes. He did however note the
1993 Water Sewer Alternate Revenue General Obligation Bonds will be retired in _
2004, and the 1990 General Obligation Bonds will be retired in 2006, freeing up
additional monies. City Administrator Lobaito also noted several area residents have
expressed interest in donating sizeable monies for the construction of a recreational
facility. Some discussion followed.
It was the consensus of Council to proceed with the creation of a 5%
telecommunications tax earmarking revenues for the development and construction of
a recreational facility. Council also chose not to pursue a recreational facility advisory
referendum question on the March ballot.
Mayor opened the floor to audience comment.
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McHenry resident Bob Diedrich of 3904 Prestwick Street addressed Council. Mr.
Diedrich expressed trepidation with the proposed creation of an $8.8 million
recreational facility. Although he opined a recreational facility is necessary, he
expressed opposition to an increase in both property taxes and the creation of a
telecommunications tax. He suggested Council consider contacting private self-
supporting fitness entities such as Life-Time Fitness Centers or Bally's. He also
suggested health care entities such as Centegra Health Systems or a YMCA might be
an acceptable solution.
Mayor Cuda responded noting in order to attract private fitness entities, the City
must consider providing the desired demographics, meaning approving additional single
family residential construction. Council has previously expressed their reluctance to
approve high-density development.
Some discussion followed regarding the impact of a 5% telecommunications tax
on local businesses.
Council directed Staff to contact financial consultant Harold Warren and proceed
with the creation of a 5% telecommunications tax for the City of McHenry. Once
developed, this information should be presented to Council for further consideration
and formal action.
ADJOURNMENT
Motion by McClatchey, seconded by Glab, to adjourn the meeting at 9:48 p.m.
Voting Aye: Bolger, Glab, McClatchey, Murgatroyd, Baird.
Voting Nay: None.
Absent: None.
Motion carried.
The meeting was adjourned at 9:48 p.m.
R CITY IERK