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City of McHenry, Illinois
F (2O23/2O24 Annual Budget
Table of Contents
Letter of Transmittal
Introduction....................................................................................................................... 1
Elected Officials, Department Directors and Primary Administrators... all see none 2
History and Demographic Snapshot of McHenry...... Mom Sol sea mammas NEE Sam mammas son man message 3
City of McHenry Strategic Plan Summary.......................................................... 5
Budget Document Guide......... sea losses Iva not Env Eno *am moo new him son @at INS @sages 001 moo Ron Nam moo was Ego beeline 10
Basis of Accounting and Budgeting...... Mae MENNEN moo man seaman man Is@ Become Nam END moo Engage sea oil age 110 Bee 11
Budget Process Summary...... now mob Nam smalls @@Blow won MEG moo Owasso mammas assets gnomon IBM MEN Mae NOREEN age has IRS 12
Budget Process Timeliness. mammas man MOORES 14
City of McHenry Organizational Chart...... summon moo Sol Dan moo motels NEE sea sea omegas 000 min ERE mammas loss 15
PersonnelSummary...... MENNEN Now driver son assets mammas MEN Now MEN agrees mammas Rotor* Noe Pon Mae MENNEN moo Eno massissaff 16
Fund Structure Overview...... oil Bog top moo Mon Mon sun mom smasse esteems@@ mammas BEE GEE GEE mom Nam mammas @so ago goo mom 17
Chart of Accounts Overview. . a 1 0 a 0 0 2 a 0 5 1 1 Igoe Ism mom man MEN mom mom mammas &IN Imasawago Ism Dan son mom mom mom mob Smile 20
Summary of Revenues &Expenditures -All Funds ....................................................... 32
Summary of Proposed Revenues - All Funds... Not now stools mammas low run GEE MENNEN mom mom Norman Real 33
Comparison of Budget vs. Proposed Revenues - All Funds... all Sao Freese mom Monson mammas 34
Summary of Revenues and Other Financing Sources - All Funds .................... 35
Summary of Proposed Expenditures - All Funds... mammas see Neff all III @so goo ME* NOONAN mammas Rome 36
Comparison of Budget vs. Proposed Expenditures - All Funds... mom Kos min tam Ism Damage 37
Expenditures by Function - All Funds............................................................... 38
General Fund Revenues, Expenditures &Fund Balance Summary ............................... 39
General Fund Overview...... son sea IBM Dow BEE mom not Roger* ago mammas naffaff4wom MEE mom ammanwast mom met ago Wagner 40
General Fund Revenues, Expenditures and Fund Balance Summary...... Baltimore 40
General Fund Revenues - Budgeted, Estimated, Proposed......... Dallas Ism egg mammas Iowa 41
General Fund Expenditures - Budgeted, Estimated, Proposed......... Beazer mammas same 45
General Fund - Fund Balance............ gamine mmamoff mom ON& Nam III Eno III gap Egg Dan MEMNON Not mammal EBB Iva III Boom 48
General Fund Operating Budgets...................................................................................... 52
General Fund Operating Budgets Overview ........................... met masons sea all mom mom Ron NONE 53
General Administration...... nor mom son sea son mom MEN mom MONROE 8*2 Boo omegas mammas WEE MENNEN Eno masses Nam sea @Be @so BONN 56
ElectedOfficials... got MENNEN mosses ff Eno a a a a R 0 a a 0 a 0 0 0 ff 0 0 0 ff a ff a 9 a w moo 0 an RES 0 a 0 a 0 0 a 0 2 a 0 ff 0 0 0 in 0 sea 0 a a a a 0 all a I a a 5 a 0 a a a a I a a 0 63
CommunityDevelopment...... Sam obsess see INN Sam MEN mom mom onglassom IBM III @Islas mom MEMNON mammon gas RON Beeson sees 67
Finance... MEMNON oil villas gee ERE mom MENNEN season a a I a I I a 6 4 0 a a 0 a a a a a a a a a a mass sea as loop I a a a 0 0 a 1 0 a a 0 a a a 0 0 0 0 0 U a U a a a ff all a 0 a as I a 0 0 a 75
HumanResources... mammas mammas now mom masserses agrees MEN MEN MEN Mon now min EBB all Sal Egg owl are MENNEN mom Env ON* @as ERE mass 83
Economic Development...... too Warren alp affammm roffamm mom *00111 a 0 a a a I I a a a 0 1 0 0 0 a 0 0 a 0 0 0 a ff 0 0 0 to 2 a U a a a ff I I ff 0 0 a 0 1 1 a R 0 a 90
PoliceCommission...... amalmomom Mao Mon a 0 a 0 a a I I 1 0 us 4 1 a a I a a a a a a a a 0 0 on a a as a so see age Igo sea a 4 a 0 0 0 0 0 0 ff a 0 0 0 0 a a 0 in 0 mom oil 99
Police...................................................................................................................... 102
Public Works - Administration...... was goo mom Mon moo mammas all season@@@ Beg RED NOREEN man mammas Nam gnomon sea logo 129
PublicWorks - Streets................ 0 0 0 on 0 0 0 0 in a a a a go 1 0 4 0 0 a a a 4 ME no on 0 on a a 0 *66 mom sea a a a mom son 0 a 5 0 6 0 a a a ME a a I a a 0 a 139
Parksand Recreation......... mom Env MEN Nam goo ISO I a 1 0 0 0 a 0 a 0 0 0 0 0 0 0 0 b 1 0 a 0 0 8 0 0 1 a a I I I I a 0 0 a 0 0 a a a ff 0 0 a a a 0 a a 0 0 0 06*011000121 147
Special Revenue Funds........................................................................................................ 160
Tourism................................................................................................................... 161
Pageant...... on@ mosimalls sea mom BERNE mammon his @me III mom Mon mom mom mom goals@ Nam mammas see mammas MEN MENNEN mammas be@ Goo NMI sea PRE game 164
Band......................................................................................................................... 167
CivilDefense... Sol now Sam arm Env EMBOSS III arm won MENNEN MENNEN season RES sea age seaman MODERN mom @no mom season mammas egg MEN OWN Emmons 170
AlarmBoard...... NOR Ism Mae Dan mommas all all One Ism Sam MEN Eno mammas oil Boo oil Nagger Ron MENNEN MAN ova MENNEN man sea MR@ VON MEN mmammia 173
Audit........................................................................................................................ 176
Annexation............................................................................................................... 179
MotorFuel Tax...... Now soulas mosses use woussffeas offsomm BROOMS 000055 mosses mossom mannesees emems 182
Developer Donation............ was BOB oil van Ban gag BDREMM emems6mossin gooses masons assmon 186
Tax Increment Finance......... son NNW MEN MEN MEN BAR sonswagoomme Bstoom moommmialass causal museums 189
Capital Projects & Debt Service Funds. . 0 1 5 6 0 5 5 6 1 6 5 5 5 a a 1 0 a a a a a a 0 a I I a 19 a 0 0 0 2 1 ff a a a a I I a a a 2 2 0 a a a I t I V 5 5 1 a 6 5 5 5 5 6 1 a I 1 6 a a a 9 0 0 192
DebtService Fund................................................................................................... 193
Recreation Center Fund.......................................................................................... 196
Special Service Area#4.......................................................................................... 204
Capital Improvements Fund...... Sam Noumea somasomme seammmsEPAO 209
CapitalEquipment Fund......................................................................................... 212
Capital Asset Maintenance & Replacement Fund (New FY23/24)..................... 215
Capital Asset New Projects Fund (New FY23/24)................................................ 250
EnterpriseFunds................................................................................................................. 252
Water& Sewer Fund............ onemns OEM gag a 0 a 0 a a a a a 0 0 a a 2 4 a a 1 9 0 a 2 a a 5 5 5 8 9 a 6 5 5 a 0 0 a a a 0 0 0 a a 9 a a 0 0 253
PublicWorks —Water............................................................................................ 256
Public Works - Wastewater................................................................................... 261
PublicWorks — Utility............................................................................................ 266
Capital Development.................. NOREEN beemmm 279
Utility Improvements............ see mosses Oswego sonwag EnEssammm allovolsouse 282
MarinaOperations...... owsommooff mesons Bosoms mosman mommme mmmmstess III III sommAm allows nommem monseeme 312
Internal Service Funds....................................................................................................... 315
Employee Insurance.................. sea mom NOREEN Memnon smemooffillouNnown 316
RiskManagement...................., mosses nommon monamn SEE mom moo mom won now mom mom mom mom Mon mom MENNEN NNEM20994*68 MENEM 319
FiduciaryFunds................................................................................................................... 322
Employee Flexible Spending............... mom *IT MEMNON mom MENEEMENSEEMENE man nommommannow 119141 assislonoxonooffm 323
Development Escrow............ nommon omegas MOORES sag mom via mom mmmmmmmmmmxzmmmzmm 326
Retained Personnel. . a 0 a a a * 0 a 0 0 * 10 0 a a a 9 a 0 5 4 5 5 5 6 5 5 0 5 0 6 a 6 5 5 6 a a 8 5 a a 4 a a a 0 a I I a I I 1 0 a a mosolowswoon malmmmssannn MENNEN nommoon 329
RevolvingLoan............ onsomm mommem moommm offiffisom Bannon mom MEN Emmannaammmmomm Montag 006*40666 MENNEN MEMO 332
PolicePension............ sommon sommom moommm emommm SUN MENNEN MEN MENNEN Evennnomm Monson Moslem 044 Dobson MENNEN 335
Supplemental Information.................................................................................................. 338
Financial Policies Overview................................................................................... 339
Fund Balance and Reserve Policy.......................................................................... 341
Community Investment Program Financial Policies............ MR&MES1260so mom ZEN mom onsomm mesa 350
InvestmentPolicy................................................................................................... 351
Purchasing Policy and Procedures......... onammusla EBB III Ramada his mom mammon BONN 358
Glossaryof Terms................................................................................................... 360
Derik Morefield, City Administrator
McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2100
Fax: (815) 363-2119
dmorefield@cityofmchenry.org
LETTER OF BUDGET TRANSMITTAL
April 17, 2023
Honorable Mayor and City Council and Residents of McHenry:
On behalf of the Department Directors and all employees of the City of McHenry, I am pleased
to be able to submit for your consideration the Fiscal Year 2022/2023 Budget. The purpose
of this Letter of Budget Transmittal is to provide a broad overview of the budget information
contained in the detailed budget document that follows. As always, it is the goal of the City
Administration to provide the City Council and general public with a budget document that
is transparent and provides an accounting for all of the funds that the City receives and
expends.
BACKGROUND:
The City's annual fiscal year budget covers the period beginning May 1st and ending April
30th. The budget document itself, upon completion, contains information relative to
estimated revenues and planned operational and capital expenditures for the various funds
of the municipality for the identified fiscal year.
Although the budget is not formally adopted by the City Council until April of each year, the
budget development process officially begins each October with the preparation of the
annual tax levy, which is used to fund many of the current programs and services, along with
the development/update of the Community Investment Plan. The budget preparation
process provides the various divisions and departments of the City with the opportunity to
review accomplishments, set goals and objectives, and identify the means for accomplishing
these goals and objectives.
Every employee of the municipality plays a role in the budgeting process - be it formulation,
preparation, implementation, administration, or evaluation. Ultimately, Department
Directors, through the Finance Director and City Administrator, are accountable to the City
Council and to the residents of McHenry for the performance of departments in meeting the
goals and objectives of a full -service municipality, and for the diligent fiscal management of
funds, as set forth in the budget document.
Department Directors, with input from their respective managers, superintendents and
departmental staff, analyze historical data, review existing operational needs, and project
anticipated operational needs in order develop line -item budget requests that allow them to
1
maintain or enhance the level of programs and services within their departments. These
detailed requests submitted to the City Administrator and Finance Director, and meetings
are held with Department Directors to review and adjust requests based on identified need
and anticipated revenues, keeping in mind the overall services that the municipality must
provide to residents. As always, it is the goal of the City Administration to present
Council with a balanced operating budget. This goal is able to be achieved in the
attached budget information.
The discussion that follows includes analyses and recommendations based on the best
available information that staff has at the time of budget development and reflects a
commitment to meeting or exceeding budgetary guidelines as established by the National
Advisory Council on State and Local Budgeting and the Government Finance Officers
Association best practices on budgeting.
ANALYSIS -GENERAL FUND:
The General Fund represents the core revenue and expense fund for municipal functions.
General Fund Revenues are comprised of Intergovernmental sources such as Property Tax,
State Sales Tax, Local Sales Tax, State Income Tax, State Replacement Tax, State Pull Tabs,
Inter Track Wagering, State Communications Tax, and State Grants; Local Sources such as
Franchise Fees, Licenses and Permits, Fines and Forfeitures, Charges for Services, and
Interest Income; and Miscellaneous sources such as Donations and Reimbursements for
Services.
General Fund Expenses include personnel, contractual, supplies and other operating
expenses related to the following operating budgets - Administration (100.01), Elected
Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources
(100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22),
Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets
(100.33), Parks and Recreation (100.41), and Parks Maintenance (100.45).
Please reference the attached spreadsheet titled "General Fund - Revenues,
Expenditures and Fund Balance Summary"for the following discussion.
General Fund Revenue. Expenditure and Fund Balance Summary
In summary, FY23/24 proposed General Fund Revenues and Expenditures reflect total
revenues of $29,575,254 (an increase of $3,060,255 or 11.54% from the FY22/23 Budget
amount - Rows 26 Column U), and total operating expenditures of $29,327,699 (an increase
of $2,963,126 or 11.24%, less capital, from the FY22/23 Budget amount - Row 37, Column
U). This reflects a net difference (revenues over expenditures) of $247,555.
Importantly, this means that the proposed General Fund Operating Budget, as
presented, is BALANCED.
While COVID49 has made many revenues volatile over the last few years, the City has been
fortunate to see recovery in many revenue sources. While specifics will be detailed in the
discussion that follows, the primary reasons for increases in revenues relate to projections
for State Sales Taxes (an increase of $248,402 or 2.7% - Row 10, Column V), Local Sales Taxes
an increase of $588,508 or 17.95% - Row 11, Column V), State Income Taxes Can increase
of $626,818 or 17.46% - Row 12, Column V), State Replacement Taxes (an increase of
$120,000 or 150% - Row 13, Column V) and Reimbursements (an increase of $1,028,477 or
52.20% - Row 22, Column V). These are offset by a decrease to Property Taxes (a decrease
of $10,000 or 0.2% - Row 9, Column V) and a decrease to Licenses and Permits (a decrease
of $12,500 or 4.07% - Row 19, Column V).
Regarding General Fund Expenditures, Personnel costs are proposed to increase by
$1,792,644, or 10.51% (Row 29, Column V) due to Union Contract increases, CPI-U increases
for non -bargaining unit employees, the addition of 3 police officers, and 2 dispatchers, and
higher insurance costs. It should be noted that a portion of the Police Dispatch Center costs
and the School Resource Officers that are in the Middle and High schools are offset by General
Fund Revenue increases in the form of reimbursements (reflected in Row 22, Column U)
from dispatch partner agencies, customers, and the school districts. Most notably, FY23/24
General Fund Expenditures, as proposed, reflect increased Contractual costs of $631,616 or
19.61% (Row 30, Column U) and Supply costs reflect an increase of $105,875 or 10.04%
(Row 31, Column U). Reasons for these increases are discussed in detail on page 10 of this
memorandum.
Finally, the FY23/24 General Fund Expenditures, as identified in this attachment, do not
include any transfers for Capital Improvement or Capital Equipment. The Fund Balance
Policy defines the process for transferring excess funds to the Capital Improvement and
Capital Equipment Funds. In FY22/23 and FY23/24 capital projects have been budgeted in
the General Fund using Fund balance which has canceled the Fund Balance transfer that
would have occurred during the audit process. Also, with the creation of the ComEd and
Nicor Utility Taxes, capital projects will be budgeted using these funds going forward. The
Fund Balance and Reserve Policy may need to be addressed in the years ahead if the General
Fund Balance continues to grow.
Carrying the General Fund Revenue and Expenditure estimates through the end of the fiscal
year (April 30th), it is projected that the total General Fund Balance will be $16,967,344 at
the end of FY22/23 (Column T, Row 43). As defined in the Fund Balance and Reserve Policy,
the estimated required 120-day General Fund Balance Reserve would be $8,787,381 and so
the amount projected is approximately $8,179,963 higher than the required General Fund
Balance. Included in the General Fund balance is the American Rescue Plan Act COVID funds
in the amount of $3,682,586 which staff has reserved for the Route 31 widening capital
project. Also included in the General Fund balance are PSAP Grant funds ($769,696) which
are reserved specifically for dispatch expenses and are approved for spending by the
NERCOM board. The remaining General Fund Balance as of FY22/23 (Column T, Row 47) is
the amount that could be reserved for capital projects, but as you will see this amount is
much lower after the FY23/24 proposed budget due to increases in operating expenses and
capital project expenses.
REVENUES:
General Fund Revenues - FY22/23 Budgeted, FY22/23 Estimated, FY23/24 Proposed
General Fund Revenues are derived from a number of sources - taxes, video gaming, licenses
and permits, fines and forfeitures, franchise fees, charges for services, reimbursement for
services, donations, interest income, and other miscellaneous sources. While some
revenues, like Property Taxes, can be clearly identified and estimated based on the adoption
of the annual property tax levy, or based on historical performance, other revenues - such
as Sales Taxes and State Income Tax - can be volatile based on economic trends.
If anything, the economic recession of 2007/2008 and the current pandemic sent a message
to local governments that economic -based revenues are not guaranteed and can fluctuate
based on the economy and disposable income. Actions taken at the local level to plan/adjust
from this event resulted in the establishment of a "new norm" for future budget
considerations.
In estimating General Fund Revenues for the purpose of budget development, the City
Administration takes a conservative approach in order to: 1) ensure that General Fund
Revenue projections are not overstated to avoid deficit spending and the need to utilize the
General Fund Balance (e.g., 120 day unassigned fund balance) for operational expenses; 2)
limit excessive increases in operating expenditures; and 3) maintain a financial "buffer", in
the form of the General Fund Balance, to protect the City from future unforeseen economic
threats. Utilizing this philosophy, the City Administration then considers past revenue
performance, current economic trends, local economic conditions, and economic forecast
models developed by the Illinois Municipal League (IML) for use by local governments in
developing revenue projections for the purpose of budget development.
FY22/23 Budgeted Revenues (Column S)
In FY22/23 total budgeted General Fund Revenues were $26,514,999 (Column S) Row 26).
Of this, $5,037,941 (19%) was from Property Taxes, $9,212,492 (34.7%) was from the City's
1% share of the State Sales Tax, $3,277,972 (12.4%) was from the .75% Local Sales Tax, and
$3,589,961 (13.5%) came from the City 7s share of the State Income Tax. Revenues derived
from these four (4) sources were budgeted at $21,118,366 or 79.6% of total General Fund
Revenues. Of the remaining $5,396,633 (20.4%) in budgeted General Fund Revenues,
$1,173,889 (4.4%) were from Charges for Services, $1,970,394 (7.4%) from Reimbursement
for Services, $341,500 (1.3%) from Fines and Forfeitures, $307,500 (1.2%) from Licenses
and Permits, $380,000 (1.4%) from Franchise Fees, $850,000 (3.2%) from Video Gaming,
$200,000 from Telecommunications Tax (0.8%) and the remaining $173,350 (0.7%) came
from all other sources combined.
FY22/23 Estimated Revenues (Column T)
The following estimated revenues are based on 10-months of actual revenues and then
projected through the remainder of the fiscal year (April 30, 2023). Unfortunately, in some
cases this estimation is more difficult than simply dividing the 10-month actual by 10 and
multiplying by 12 because of when specific revenues are received. Further, FY22/23 Actual
revenues will not be known and confirmed until approximately 2-3 months (June -July) after
the close of the fiscal year due to the timing involved with the receipt of state -shared
revenues and, ultimately, the completion of the annual audit in September/October 2023, 4-
5 months into the new budget year.
At this time, estimated General Fund Revenues are projected to be $31,055,847 (Column T,
Row 26) or $4,540,848 (17.1%) higher than FY22/23 Budgeted revenues of $26,514,999.
This reflects an estimated increase of $378,456, or 1.2%, from FY21/22 Actual revenues of
$30,677,391.
Notably, FY22/23 Estimated Revenues, when compared to FY21/22 Actual revenues and
FY22/23 Budgeted revenues, highlight the following:
• (Row 10) State Sales Tax revenue is projected to be $179,268 (2%) higher than
budgeted and $164,355 (1.8%) higher than the FY21/22 Actual amount.
• (Row 11) Local Sales Tax revenue is projected to be $562,102 (17.2%) higher than
budgeted and $260,000 (7.3%) higher than received in FY21/22.
• (Row 10 +Row 11) Combined, total Sales Tax revenue is estimated to be $741,370
(5.9%) higher than budgeted and $424,355 (3.3%) higher than the FY21/22 Actual.
State Sales Tax have shown significant signs of an economic recovery since the
beginning of COVID49. Also, Local Sales Tax revenues do not include the sale of
licensed or titled items - such as cars, boats, motorcycles, etc. As such, while the
economic recovery and resulting increase in the sale of licensed vehicles has a
positive impact on the City's portion of the State Sales Tax, this aspect has had no
impact on Local Sales Tax revenues.
• (Row 12) State Income Tax receipts are estimated to be $643,099 (17.9%) higher
than budgeted and $68,191 (1.6%) lower than FY2IILLS
• (Row 13) State Replacement Tax receipts are estimated to be $174,105 (217.6%)
higher than budgeted and $70,000 (38%) higher than FY21/225
• (Row 17) Video Gaming revenues are estimated to be $940,000 or (90,000 (10.6%),
higher than budgeted and $33,767 (3.7%) higher than FY21/22.
• (Row 20) Fines and Forfeitures revenues are estimated to be $55,525 (16.3%) higher
than budgeted and $23,507(5.6%) lower than FY21/22.
• (Row 211 Charges for Services revenues are estimated to be $108,577 (9.3%) higher
than budgeted and $11,053 (0.9%) higher than FY21/22.
• (Row 22) Reimbursements for services revenues are estimated at $580,202 (29.5%)
higher than budgeted and $182,352 (6.7%) lower than FY21/22. The large increase
over FY22/23 budgeted is due to PSAP Dispatch Funds that were not budgeted for.
• (Row 23) Interest Income revenues are estimated to be $322,500 (12900%) higher
than budgeted and $312,843 (2573.4%) higher than FY21/22.
• (Row 25) Miscellaneous Income revenues are estimated at $1,884,059 (2898.6%)
higher than budgeted and $209,064 (9.7%) lower than FY21/22. This is due to ARPA
COVID funds received in two installments, one in FY21/22 and one in FY22/23 that
were not budgeted for.
In summary, FY22/23 Estimated Revenues are projected at $4,540,848 (17.1%)
higher than budgeted primarily due to State and Local Sales Tax receipts, State Income
Tax, Video Gaming receipts, Fines and Forfeitures, Charges for Services, Interest
Income, and Reimbursements. When compared to FY21/22 Actual revenues, total
General Fund Revenues increased $378,456 (1.2%), this is primarily due to State and
Local Tax receipts, State Replacement Tax, and Interest Income which offset decreases
in State Income Tax receipts, Licenses and Permits, Reimbursements, and
Miscellaneous Income.
FY23/24 Proposed Revenues (Column R)
FY23/24 Proposed General Fund Revenues represent a net increase of $3,060,255 (11.5%)
from FY22/23 Budgeted revenues and a decrease of $1,102,137 (3.6%) from FY21/22 Actual
revenues. Highlights of changes to General Fund Revenues proposed for FY23/24 include:
• (Row 9) City Staff did not recommend an increase to the property tax levy and with
declining Road and Bridge Taxes, Property Tax revenues are estimated to be $10,000
(0.2%) lower than FY22/23 Budget.
• (Row 10) State Sales Tax revenues are proposed at $9,460,894, $248,402 or 2.7%
higher than FY22/23 Budget. This is due to the increase in Use Tax from online sales
as well as rebounding Sales Taxes.
• (Row 11) Local Sales Tax revenues are proposed at $3,866,480, an increase of
$588,508 (18%) from the amount budgeted in FY22/23.
• (Row 10 +Row 11) Combined State and Local Sales Tax revenues are proposed 4-
(Row 12) State Income Tax revenues are proposed at $4,216,779, an increase of
$626,818 (17.46%) from FY22/23. Regarding State Income Tax revenues, please
note the following:
o There are multiple agencies working to restore the Local Government
Distributive Fund (LGDF), which includes Income Tax distribution, to its full
10 percent (which was cut to 6% in 2011 and changed a few times since then,
but sits at just over 6% currently). Over the years the Governor has proposed
cutting an additional 10% from the LGDF. Restoring or cutting these funds
could represent a large increase or decrease in revenues.
o Staff will continue to watch these developments closely in case expense
adjustments need to be made in order to offset the decrease in revenue.
• (Row 14) State Telecommunication Tax revenues are proposed at $200,000, which is
equal to the amount budgeted in FY22/23, revenues have been declining over the last
few years.
• (Row17) Video Gaming revenues are proposed at $900,000, a $50,000 (5.88%)
increase from FY22/23 Budget amount.
• (Row 19) Licenses and Permits revenues are proposed to decrease by $12,500, or
4.07% from the amount budgeted in FY22/23.
• (Row 21) Charges and Services revenues are proposed to increase by $39,400, or
3.36% from the amount budgeted in FY22/23.
• (Row 22) Reimbursements which includes the Police Dispatch Center revenues
derived from partner and customer agencies served through this facility, police
school resource reimbursements, police impound fees, and other miscellaneous
reimbursements are proposed to increase $1,028,477 or 52.2%.
• (Row 23) Interest Income is proposed to increase $347,500 (13900%) due to
increasing interest rates.
In summary, FY23/24 Proposed Revenues are $3,060,255 (11.54%) higher than
budgeted in FY22/23 and $1,480,593 (4.7%)lower than FY22/23 Estimated revenues.
The primary reasons for the proposed increase include an increase in State Sales Tax
($248,402), Home Rule Sales Tax ($588,508), an increase to the Income Tax
($626,818), an increase to State Replacement Tax ($120,000, an increase in Video
Gaming revenues ($50,000), an increase in Fines and Forfeitures Revenues ($21,500),
an increase to Charges and Services revenues ($39,400), an increase to
Reimbursement revenues ($1,028,477), and an increase to Interest Income
($347,500) These increases are offset by decreases to Property Tax revenue
($10,000) and Licenses and Permit Revenues ($12,500).
EXPENDITURES:
General Fund Expenditures - FY22/23 Budgetedl F122/23 Estimated FY23/24
Proposed
General Fund Expenditures include personnel, contractual, supplies and other operating
expenses related to the following operating budgets - Administration (100.01), Elected
Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources
(100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22),
Police Dispatch (100,23), Public Works -Administration (100,30), Public Works -Streets
(100.33), Parks and Recreation (100,41), and Parks Maintenance (100.45).
In addition, the General Fund is the funding source for all capital improvement and capital
equipment projects that are not related to water and/or sewer improvements or
maintenance projects as these are funded through the Water and Sewer Fund and Capital
Development Fund. Finally, the General Fund also serves as a funding source for revenue
transfers to other municipal accounts found within Special Revenue Funds, Debt Service
Funds, Internal Service Funds, and Fiduciary Funds,
FY22/23 Budgeted Expenditures (Column S)
In FY22/23, total budgeted expenditures (capital and operating) were $28,122,023.
Budgeted capital expenditures were $1,757,450 and budgeted operating expenditures were
$26,364,573. While this amount reflected an increase of $2,164,306 (8.3%) from the
FY21/22 Actual expenditures (Column R, Row 35), this difference was due to contractual
expenses added for street resurfacing as well as personnel expenses.
FYZZ/23 Estimated Expenditures (Column T)
In general, the City Administration - including Department Directors, Superintendents, and
Managers - closely monitor expenditures throughout the year to ensure that operating
budgets stay within the approved amounts. Fiscal diligence on behalf of all of these
individuals most often results in expenditures being less than the amount budgeted. Even
with surging prices due to inflation expenditures have been well managed and continue to
fall within the budget.
For FY22/23, operating expenditures are estimated at $26,362,142, or $2,431 (0.01%) less
than the budgeted amount of $26,364,573. Highlights of changes to FY22/23 Estimated
Expenditures include:
• (Row 29) Reduced Personnel costs of (t21,458 (0.1QM) resulting from budgeted
positions unfilled during the year which were offset slightly by higher overtime costs.
• (Row 30) Contractual costs are estimated at $43,736 (1.36) higher than the original
budget, but a few budget amendments ($195,285) were completed for the building
demolition expenses so overall expenditures are well under budget.
• (Row 31) Supply costs are estimated at $14,417 (1.37%) less than budget.
• (Row 32) Other estimated expenditures are estimated at $10,292 less than the
original budget.
• (Row 33) Capital Outlay expenditures are $671,861 more than the original budget,
but multiple budget amendments were completed ($905,000) for land acquisition
purchases, Phase III building construction, and engineering for ROW from Green to
Elm Street.
Note: City Administration anticipates changes to FY22/23 Estimated expenditures due to
increases or decreases in revenues and expenses through the end of the fiscal year.
17Y23/24 Proposed Expenditures (Column U)
FY23/24 Proposed operating expenditures represent an increase of $2,963,126 (11.24%)
from the FY22/23 operating Budget amount of $26,364,573. Highlights of changes to
General Fund Expenditures proposed for FY23/24 include:
• (Row 29) Personnel costs are proposed at $1,792,644, or 10.51%higher in FY23/24
than budgeted in FY22/23 due primarily to position additions, the salary increases
included in the union contract, CPI-U increase for non -bargaining unit employees, and
increases to health and dental insurance. Personnel costs include salaries, overtime,
health/dental/life/vision insurance, FICA, Police Pension and IMRF retirement, and
uniforms. There are a number of reasons for this increase.
1. Personnel costs related to salaries only for employees covered by collective
bargaining units - IUOE Local 150 (Public Works, Parks employees), FOP Unit
1 (Police Patrol), and FOP Unit 2 (Dispatch) - account for a $153,459 increase
in salaries from FY22/23 to FY23/24 due to contract steps and cost of living
adjustments.
2. Police Pension costs are proposed at $2,336,528, ($1,665,073 is a transfer to
the Debt Service Fund to cover the Pension Obligation Bond) an increase of
$46,101. Police Pension costs are determined by an actuary retained by the
Police Pension Board and are based on a number of factors, including wages,
investment rate, and age of the workforce. The City issued the Pension
Obligation Bonds to set the City up to be 100% funded by the required
deadline of 2040.
3. Non -bargaining unit employees and Police Sergeants salaries account for a
total increase $214,806 of the Personnel costs due to cost -of -living
adjustments. Wage increases are included for Police Sergeants and other non -
bargaining employees based on the previous year's Consumer Price Index for
All Urban Areas (CPI-U), which was 5.46% in 2022. The City Administration
has used the CPI-U as the marker for non -bargaining unit employee increases
since FY15/16 and in FY23/24 the increases were set at 5% just below the
CPI-U. There is no additional merit component proposed for FY23/24.
4. Three additional police officers are included in the FY23/24 budget which
adds $302,091 in personnel expenses. Two of these positions are new School
Resource Officers which were approved by City Council to be in the middle
schools and 70% of the cost will be covered by a reimbursement (included in
revenues) from McHenry School District 15,
5. The NERCOM board for the dispatch center approved adding two additional
Lead Telecommunicators which adds an additional $241,806 in personnel
expenses. These expenses are shared with the NERCOM partners, and the city
is responsible for 40.5% of the dispatch expenses. Also, NERCOM has voted
once again to use PSAP funds to supplement the budget, in FY22/23 $300,000
was deducted from the expenses. This year all expenses are budgeted and
$500,000 in revenues are budgeted to offset part of the expenses. By malting
this change, personnel expenses are $300,000 higher than in FY22/23.
6. A Communication Specialist role was added to the Administration budget for
FY23/24, per the request of City Council, and this adds $130,051 to the
personnel budget.
7. Total Benefit costs are proposed to increase $395,156 due to increases to
insurance, FICA, and IMRF costs.
• (Row 30) Contractual costs are anticipated to increase by $631,616 (19.61%) from
the amount budgeted in FY22/23 due to a few different reasons.
1. Corporate Legal Fees are increased $60,000 to better match actual expenses.
2. An additional $100,00 was added to the Community Development budget for
the Comprehensive Plan which includes Downtown.
3. HR Contractual expenses were increased by $23,500 for Gov HR and planning
for the City Administrator position.
4. An additional $85,000 was added to the Economic Development budget for the
expansion of the Facade Grant program.
5. Contractual Street Resurfacing expenses were increased by (215,000 due to
lower than expected expenses in FY22/23 which were carried over.
6. Additional funds were added to other line items due to expected increases in
prices due to inflation.
• (Row 31) Supplies expenditures are proposed to be increased by 10.04% ($105,875)
due to increases in prices for all supplies.
• (Row 32) Other expenditures are anticipated to increase by $43,061 (3.38%) due to
additional funds budgeted for Economic Incentive Agreements.
• (Row 34) Transfers are anticipated to increase by $389,930 (10.36%) due to Risk
Management premium increases as well as increases in expenses in the Information
Technology department increasing the transfers from the General Fund.
GENERAL FUND BALANCE:
On February 1, 2016 City Council adopted a new Fund Balance and Reserve Policy that, in
summary, established principles and parameters to which balances for all municipal funds
would be defined at the beginning of each budget period. This policy, which also meets the
reporting requirements of Government Accounting Standards Board (GASB) Statement 54,
which requires the formal adoption of a policy for the classification of fund balances to
categories other than "unassigned", was established to provide financial stability in the
various municipal funds, ensure adequate cash flow for operations, and provide some
assurance that the City will be able to respond to emergencies with fiscal strength.
In regards to the General Fund Balance, specifically, the Fund Balance and Reserve Policy
states:
"General Fund -The unrestricted fund balance target should be set at 120 (4
months) of estimated operating expenditures including those expenditures
reported in other Governmental Funds that receive annual operating transfers,
with the exception of transfers intended to fund capital projects. If the
unreserved fund balance falls below 120, a plan will be developed to return to
the target balance. If the unreserved fund balance reaches a low of 90-day (3
months), the plan will be implemented to return to the fund balance to the target
within a reasonable amount of time. Onetime revenues shall not be used to fund
current operations."
This level of fund balance shall provide the capacity to:
• Offset unexpected downturns in elastic revenues due to fluctuations in the
local, state and national economies or the loss of major sales tax
contributor(s);
• Offset negative fiscal changes brought about by action or legislation of
another unit ofgovernment or agency;
• Ensure the continued, timely repayment of debt obligations that the City may
have in the event of a financial downturn;
• Provide a sufficient cash flow for daily financial needs at all times; and,
• Provide a funding source for unanticipated expenditures or emergencies that
may occur.
As identified, the parameters in this policy help to guide the City Administration in the
development of the annual budget by ensuring that the General Fund Budget is presented as
balanced, revenues over expenditures, while maintaining this reserve. Further, the
establishment of the target minimum of 120 days provides clarity in identifying the level of
funding that is available - once revenues, expenditures and fund balance are identified - to
address the City's capital needs. In other words, any funds remaining after meeting the
operational and reserve needs of the municipality are "Assigned for Capital."
As a reminder, a combination of the economic recession of 2007/2008 and the loss of a major
retailer resulted in the municipality taking measures to freeze or reduce expenditures. This
included operating costs and capital improvement and capital equipment projects. In 2009
the City implemented a .5% Local Sales Tax and specifically identified that the additional
revenues generated by this should be used for capital projects and Police Pension funding.
Since the first full year of implementation of the Local Sales Tax and as a result of a recovering
economy, the City has been able to: 1) adopt a balanced General Fund Budget, including
meeting Police Pension costs; 2) reintroduce capital improvement and capital equipment
projects; and, 3) rebuild the General Fund Balance.
In reviewing the General Fund Balance as part of this discussion, the FY22/23 Budget
includes a beginning fund balance of $14,702,950 (Column S, Row 6) based on FY21/22
audited financial information. Based on FY22/23 budgeted revenues, operating
expenditures, and capital expenditures (which were funded with fund balance), it was
anticipated that the ending fund balance would be $13,095,926 (Column S, Row 43); the
estimated ending unassigned 120-day fund balance at $9,051,837 (Column S, Row 44);
showing a balance to be transferred to the Capital Improvements Fund of $4,044,089
(Column S, Row 45) in developing the FY23/24 Budget.
It is important to bring up at this point that the City has implemented two Utility Taxes to
address General Fund Capital needs. The ComEd Utility Tax was implemented for capital
asset maintenance and replacement and the Nicor Utility Tax was implemented for new
capital assets. The Capital Improvement and Capital Equipment Funds will be phased out
once projects are completed within those funds and they will be replaced with the Capital
Asset Maintenance and Replacement Fund and the Capital Asset New Project Fund. In future
years the Fund Balance and Reserve Policy will have to be addressed if Revenues are greater
than expenses and what the City will do with the excess funds, for example moving them to
one of the new Capital Funds. Currently, the Fund Balance in FY22/23 and FY23/24 is
budgeted to be used for capital projects as well as reserved for specific expenses. As in the
discussion above, this amount will most likely change upon completion of the annual audit
however, this is not done until September/October, 4-S months after the budget is adopted
and implemented.
ANALYSIS - GENERAL FUND OPERATING DEPARTMENTS:
Please reference the attached operating department spreadsheets for the following
discussion.
General Fund Operating Departments include personnel, contractual, supplies and other
operating expenses for the following departments - Administration (100.01), Elected
Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources
(100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22),
Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets
(100.33), Parks and Recreation (100.41), and Parks Maintenance (100.45). These
expenditures have already been summarized, in total, as part of the previous discussion of
General Fund Revenues and Expenditures. The following narrative will focus on identifying
the major points of each operating department. Note, the Budget Variance $ (Column U) and
Budget Variance % (Column V) are based on a budget -to -budget comparison from the
FY23/24 Budgeted amount to the FY22/23 Budgeted amount.
General Administration (100.01)
Overall, the Administration operating budget is proposed to increase by $296,377 or 26.5%
in FY23/24 (Column U, Row 59).
Salary/Benefit costs are identified to increase by a net of $235,341 or 41.19%which includes
a new Communications Specialist position which increases the salaries budget $90,000, Non -
Bargaining Unit increases of $18,459, Bargaining Unit increases of $1,102 and Benefit
increases of $125,780 (due to an expected retirement payout).
Contractual expenditures (Row 21) which includes property tax expenses, insurance
administrative expenses, shredding, and other miscellaneous administrative costs will
decrease $25,000 in FY23/24.
Corporate Legal Fees (Row 22) include the City Attorney, Traffic Attorney and Collective
Bargaining representation and are identified to increase $60,000 in FY23/240
Other expenditures -which includes Administrative Expenses and internal transfers for Risk
Management and Information Technology - is proposed to increase by $24,236 (Column U,
Row 45).
Elected Officials (100.02)
The Elected Officials budget is proposed fora $18,760 decrease, or 22.52%, due to
eliminating the administrative expense line item due to the account consistently being at a
$0 balance over the last few years. (Column U) Row 37).
Community Development (100.03)
The Community Development budget is proposed increase $173,276, or 13.13% (Column U,
Row 45).
Salary/Benefit costs are budgeted to increase by $23,382 (2.6%), which includes $15,888 in
non -union salary increases and $7,494 in benefit cost increases. Contractual Services are
identified to increase by $125,600 (43.89%) due to the addition of the Downtown Plan to the
total Comprehensive Plan expense. Supplies will increase by $5,000 (12.05%), and the
internal transfer for Risk Management and Information Technology will increase by $19,294
(21.01%).
Finance (100.04)
Salary/Benefit costs are anticipated to increase by $20,875 (3.90%) due to non -bargaining
unit salary and insurance increases. Contractual Expenses are expected to increase $18,000
(33.9S%) due to higher credit card fees and postage increases. Development Expenses are
expected to be $210,000 higher than budgeted in FY22/23 due to the addition of three sales
tax Incentives. A vehicle loan was budgeted in FY22/23 but was not initiated so the budget
is $144,989 lower in FY23/24. Transfers for Debt Service, Risk Management, Information
Technology, and Audit Funds increase $22,317,
Human Resources (100.05)
Salaries/Benefit costs are budgeted to increase by $10,168 (3.97%) which is primarily due
to salary and insurance increases. Contractual Services increase by $27,900 (81.08%) due
primarily to the contract with GovHR for the City Administrator hiring process, while Other
Expenses for Information Technology transfers increase by $3,787 (20.91%).
Economic Development (100.06)
Salary/Benefit costs are budgeted to increase by $11,924 (4.22%) due to salary and
insurance increases. Contractual Services increase $84,950 (74.5%) due to the expansion of
the Facade grant program. Purchase of Services - Information Technology expense increase
by $1,828.
Police (100.22)
The Police budget is proposed at an overall increase of $995,078, or 8.84010 from FY22/23.
Salary/Benefit costs are identified to increase by $683,677 due to the addition of three
officers for a total of $302,091, sworn salary increases of $161,230 and non -sworn salary
increases of $73,585. Benefit increases which include insurance, IMRF, and Police Pension
total $146,771.
As discussed earlier, Police Pension costs are determined by an actuary retained by the
Police Pension Board and are based on a number of factors, including wages, investment rate,
and age of the workforce. The City committed to full funding by 2040 which is why the City
issued the Pension Obligation Bonds to bring this funding under the City's control with the
anticipation that the City will save money. Contractual Services increase by $58,325 due to
increased telephone costs and training. Supplies increase by $60,675 due to higher gasoline
usage/costs. The Transfer to Risk Management increases $74,890 due to increasing
premiums and the Transfer to Information Technology increases by $114,715 due to higher
expenses within the IT Fund.
Dispatch Center 1100.23)
FY23/24 represents the seventh full year of operation for the fully developed, and staffed,
dispatch center. The FY17/18 budget established the baseline budget for the dispatch center
moving forward. The proposed FY23/24 budget has been presented and approved by the
partners of the dispatch center. The total amount proposed for the dispatch center in
FY23/24 is $3,156,939. Salaries/Benefit Costs show a net increase of $699,194 because the
partners voted to use $300,000 from the PSAP Grant funds received to offset personnel costs
for FY22/23 which were excluded from total personnel expenses. For FY23/24 the partners
agreed to use $500,000 from the PSAP Grant funds (which are in the General Fund Balance),
but this amount was not deducted from total expenses to better track actual expenses versus
net of revenue received. The remaining $399,194 increase is due to the addition of 2 Lead
Telecommunicators ($241,806) as well as increases in contract and insurance costs
($157,388). As a reminder, this amount is offset by more than $1.8 million in
reimbursements as a result of the partnerships with the City of Woodstock, City of Harvard
and McHenry Township Fire Protection District and through charges for dispatch services
paid by customers of the dispatch center. These are reflected as General Fund Revenues and
included in Row 22 of the General Fund - Revenues, Expenditures and Fund Balance Summary
sheet.
Public Works Administration (100.30)
The overall Public Works Administration budget is proposed to increase by $31,802 (6.27%)
due to increases to salaries and insurance costs as well as Purchase of Service Transfers for
Risk Management and Information Technology.
Public Works Streets (100.33)
The FY21/22 Public Works Streets budget is proposed to increase by a total of $332,344
(8.62%) from FY22/23. Salaries/Benefits are proposed to increase by $10,692 due to
insurance increases. Additionally, Contractual (Row 21) costs have been increased by
$277,000 due to carrying over non -spent road resurfacing expenses from FY22/23 to the
FY23/24 budget. Materials and Supplies costs are proposed $15,000 higher due to
increasing supply costs and additional Forestry programs. Transfers for Risk Management
and Information Technology increase $29,652.
Parks and Recreation (100.41)
As of FY23/24 the Parlcs Maintenance department has been removed from the Parks and
Recreation budget, but all programming expenses related to the Recreation Division not
associated with the McHenry Recreation Center are still included. Revenues from recreation
programming, reflected in General Fund Revenues, offset many of these costs.
As proposed the FY23/24 in the Parks and Recreating budget is proposed to decrease by a
total of $73,146 (4.38%). Salary/Benefit costs are identified to decrease by a total of
$141,187 (16.68%) with the movement of salaries and benefits for the Parks Maintenance
Superintendent position to the Parks Maintenance Budget; Contractual Services to decrease
by $1,834 (0.63%) due to decreased dues; Supplies to increase by $18,600 (21.26%); and,
Other costs to increase by $75,275 due to an increases to the Risk Management, Information
Technology, and Recreation Center Transfers.
Parks Maintenance (100.45)
The Parks maintenance budget is proposed to increase by $226,800, or 17.83% from
FY22/23. Salary/Benefit costs are identified to increase $219,800 due to the movement of
the Superintendent position from Parks and Recreation department as well as contract and
benefit increases. Supplies expenses will increase by $7,000 (5.11%) due to higher gasoline
usage/prices.
ANALYSIS - MCHENRY RECREATION CENTER:
Please reference the attached spreadsheet titled "Recreation Center -Fund Summary"
for the following discussion.
The McHenry Recreation Center officially opened on February 29, 2016 and, as such, the
FY17/18 Budgeted revenues and expenses were developed based on FY16/17 actuals and
on the business plan and best estimates available at that time. With more than 800
memberships sold prior to the opening date, the McHenry Recreation Center had exceeded
all expectations through its third full year of operation. Unfortunately, during the fourth year
of operations the COVID49 pandemic changed the outlook of the Recreation Center Fund
and revenues are currently unable to meet the demands of increasing expenses. Staff is
working diligently to produce a plan to make sure operating costs are covered with operating
revenues. At the close of FY20/21 and FY21/22 the McHenry Recreation Center was
required to use $183,183 and $137,793 of the Recreation Center Fund Balance respectively
to balance the operating expenses leaving an ending fund balance of $99,076 at the end of
FY21/22. This Fund Balance was to be used to pay for future capital needs of the facility
and/or any recreation center expansion efforts, but is also available for operating needs.
During FY22/23 an additional General Fund transfer was made to the Recreation Center to
help cover operating expenses as the Center continued to recover from COVID49 closures
and declining memberships.
In summary, memberships fell off in FY20/21, stabilized some in FY21/22 and have been
slowly increasing in FY22/23 allowing estimated actual revenues to be above budgeted
amounts by $49,915 (Columns R and S, Row 30) and FY22/23 expenditures directly related
to the operation of the facility (Salaries/Benefits, Contractual Services and Supplies) are
estimated at $23,431 higher than the budgeted amounts due to the increased salaries which
coincides with higher memberships as well as increased supply costs.
In developing the FY23/24 Proposed revenue and expenditures budget, staff continues to
estimate revenues conservatively to account for the recent decreases in membership. An
increase to the Transfer from the General Fund has been initiated to cover the Recreation
Center Debt Service payment due to revenues from memberships slowly increasing due the
impacts of the pandemic. Staff is closely watching memberships and actively marketing the
Recreation Center. Monthly membership fees have recently been increased to help alleviate
some of the increasing operating expenses (i.e., minimum wage increases and material and
supplies increases due to inflation). Revenues are proposed at $783,156) which is $116,971
higher than FY22/23. Expenditures for Salaries/Benefits, Contractual Services and Supplies
are budgeted at a total of $105,637 (15.45%) higher than FY22/23. Operationally for
FY23/24 it is anticipated that the fund will need to use an additional $6,100 of fund balance
to cover all expenses.
ANALYSIS -WATER AND SEWER FUND:
The Water and Sewer Fund is an enterprise fund -that is, a business -type fund utilized to
account for operations and activities that are financed and operated in a manner similar to a
private business enterprise, and where the cost of providing goods and services to the
general public on a continuing basis is expected to be recovered primarily through user
charges, including operating costs and capital improvement costs related to the maintenance
of the water and sewer utility systems. These fund the operations of the Water, Wastewater
and Utility Divisions in the Department of Public Works. The operating functions of these
three divisions are to provide a safe and reliable supply of high quality potable water and to
protect public health and the environment by treating sewage to meet stringent
environmental standards prior to discharge.
Of note, the Utility Division was established in FY15/16 combining existing Water and
Wastewater Division Maintenance Workers to specifically address utility system
maintenance needs more routinely. Prior to this, utility maintenance projects were
addressed by either the Water or Wastewater Division and often required coordination with
the other division to ensure adequate manpower. The creation of the Utility Division
established a more efficient methodology to handle utility maintenance projects. The
expenses for the Utility Division are split between the Water and Wastewater Divisions as
follows - approximately 63.7% of operating expenses are paid from the Water Division and
the remaining 36.3% are paid from the Wastewater Division. Contractual and Materials and
Supplies expenses have been moved back to the Water and Sewer Divisions and it has
become increasingly more difficult to track and ensure that the correct division is paying for
the correct expenses. Capital expenses are charged to the division that benefits from the
maintenance project.
In general, water and sewer revenues are derived directly from water and sewer sales, base
charges, connection fees, and service penalties and should be sufficient to fund the operating
and capital costs for the Water, Wastewater and Utility Divisions. Importantly, water and
sewer revenues are driven by consumption and, as such, with a growing awareness of water
conservancy (which the City supports) and wetter than average summer months,
consumption has been relatively flat over the last five years.
Prior to FY15/16, water and sewer rates were adjusted annually based primarily on the
Consumer Price Index (CPI). Unfortunately, this CPI adjustment did not correlate to the
actual cost of operations for McHenry 's Water and Wastewater Divisions and did not account
for the specific capital infrastructure needs of the municipality. This resulted in a shortfall
in water and sewer revenues and an inability to fund water and sewer capital projects of the
existing systems. To address this the City commissioned a water and sewer rate study that
was completed in FY13/14A. The results of this analysis identified the need to adjust water
and sewer rates at that time and to annually review and adjust water and sewer rates based
on operational costs and implement water and sewer base fees to fund utility system capital
improvements.
As a reminder, rate adjustments were completed during FY21/22 to directly address Capital
needs within the Water and Sewer Funds by increasing the Base Fees. As a result of this,
water and sewer sales and service penalties will be designated for all operating costs and
will be analyzed with the budget process to ensure they meet all operating needs only.
The narrative that follows provides a snapshot of the status of the Water and Sewer Fund
and identifies operational and capital expenses.
Please reference the attached worksheets titled "Water and SewerFund Summary (Fund
510, Department31 Water, Water and Sewer Fund Summary (Fund 510, Department32
Sewer, and Water and Sewer Fund Summary (Fund 510, Department 35 Utility)"for the
following discussion.
Water and Sewer Fund Revenues. Expenditures and Capital
FY23/24 Water Division
FY22/23 Water Division operating expenditures are proposed at $2,485,868, an increase of
$82,875 from FY22/23. This increase is due primarily to personnel cost contract, non-
contract, and benefit increases as well as increases to Materials and Supplies and Transfers
to Risk Management, Information Technology and Utility Division. No water rate
adjustment is recommended for FY23/24.
Water Capital Asset Maintenance and Replacement Projects
It is estimated that the new, increased capital base charge of $8 will generate $520,000 in
FY23/24 for capital projects. In FY23/24 this amount will be used to fund the following
water system capital projects identified in the Community Investment Plan - $100,000 for
Well #7 Pump Replacement and Aquifer Rehabilitation, $40,000 for Water Division Work
Truck Replacement, $45,000 for Water Division Operator Van Replacement, $150,000 for
Water Plant 2 Control Upgrade and MCC Relocation, $75,000 for Water Tower 4 Repainting
Design, $25,000 for 117 of a Utility Televising Camera Van (Split with Sewer Division), and
$35,000 for Water Plant 2 Aquifer Rehabilitation.
FY23/24 Wastewater Division
FY22/23 Wastewater Division operating expenditures are projected at $3,543,796, an
increase of $236,509 from FY22/23. This increase is due to personnel cost contract, non-
contract, and benefit increases as well as utilities and material and supplies costs. A 4%
sewer rate increase is recommended for FY23/24.
Sewer Capital Asset Maintenance and Replacement Projects
It is estimated that the existing $7 capital base charge will generate $500,000 in FY23/24 for
capital projects. This amount, along with existing Water and Sewer Fund Balance is used to
complete capital projects. In FY23/24 the following sewer capital projects identified in the
Community Investment Plan - $145,000 for Millstream Lift Station Control Upgrade,
$194,000 for Freund Lift Station Pump and Mechanical Upgrade (Design), $35,000 for
WWTP Mixed Liquor Gates, $25,000 for 1/2 of a Utility Televising Camera Van (split with
Water Division), $150,000 for Pearl/Lincoln Road, and $325,000 for Sanitary Sewer Lining
Annual Program.
FY23/24 Utility Division
FY22/23 Utility Division operating expenditures are projected at $1,057,870, an increase of
$24,670 from FY22/23. Personnel Costs have increased by $19,670 due to contract wage
increases and non -union wage increases. As identified in the Water and Wastewater
discussions above, the Utility Division is funded through transfers from the Water and
Wastewater Division revenues. If in one year the transfers from the Water and Wastewater
Division exceed expenses within the department, adjustments are made in following fiscal
years. This will result in lower operating budgets for the Water and Wastewater Divisions.
ANALYSIS -CAPITAL IMPROVEMENT/CAPITAL EQUIPMENT PROJECTS:
As was stated earlier the Capital Improvement/Capital Equipment Funds will be phased out
as projects that were budgeted in those two funds are completed. The creation of the Capital
Asset Maintenance and Replacement Fund and the Capital Asset New Project Fund using
Utility Taxes from ComEd and Nicor have replaced these two funds. The following capital
projects have been identified for implementation and funding through the FY23/24 General
Fund budget. These include a combination of new projects as well as projects identified for
"carryover" or "rebudgeting" from FY22/23 due to timing of the fiscal year end. As a
reminder beginning in FY21/22, the Local Street Program is being funded primarily through
Motor Fuel Tax revenues (as distinct from General Fund revenues).
General Fund Projects using Fund Balance (in Administration Budgetl
Those projects with asterisks *are funded in whole or in part from non -municipal sources.
Streets/Sidewalks/Signals
North Riverside Parking Lot Engineering - $45,000 (Rebudget from FY22/23)
North Riverside Parking Lot Construction - $300,000
Petersen Park Paving - $25,000 (Rebudget from FY22/23)
South Main Street Parking Lot Engineering - $40,000 (Rebudget from FY22/23)
Riverside Streetscape Design - $200,000 (Rebudget from FY22/23)
Elm to Green ROW Design - $30,000 (Rebudget from FY22/23)
Public Facilities
City Entrance Signs - $160,000 (Rebudget from FY22/23)
Parks and Recreation
Miller Point Construction - $1,590,900
Capital Improvements/Equipment Fund Projects
Public Facilities
Municipal Parking Lot Resurfacing Design - $5,000 (Rebudget from FY22/23)
Fueling Station Design - $15,000 (Rebudget from FY22/23)
Public Safety
License Plate Reader System - $30,000 (Rebudget from FY22/23)
Streets/Sidewalk�Signals
Venice Avenue Design - $25,000 (Rebudget from FY22/23)
Bull Valley Bike Path Engineering - $3,500 (Rebudget from FY22/23)
Capital Asset Maintenance and Replacement Fund Projects
Public Facilities
City Hall Parking Lot Rehab - $550,000
City Hall Entrance & Doors - $100,000
Public Safety
Ballistic Helmet Replacement - $40,000
Body -worn Cameras - $85,000
Parks and Recreation
Petersen Park Horse Barn Roof Replacement - $350,000
Freund Field Basketball Court Lighting - $50,000
Knox Park Maintenance Sheds Replacement - $20,000
Jaycees Park Gazebo Roof Replacement - $5,000
Miller Riverfront Gazebo Roof Replacement - $5,000
Motor Pool
Patrol SUV Replacement - $128,000
Patrol Utility Vehicle Replacement - $236,000
Vehicle Replacements - $190,000
Streets/Sidewalks/Signals
Pearl Street Bridge Deck Oil - $25,000
Motor Fuel Tax/Local Motor Fuel Tax Projects
Streets/Sidewalks/Signals
Local Street Program - $2,140,000 (MFT)
Local Street Program - $705,000 (Streets Expense Line Item)
Road & Bridge Funds Street Program - $350,000 (Streets Expense Line Item)
Dartmoor Resuracing - $300,000 (Local MFT)
Pearl St. ITEP - $25,000* (Rebudget from FY22/23)
Green St. STP - $470,206*
Total General Fund = $2,390,900
Total Capital Improvements/Equipment Fund = $78,500
Total Capital Maintenance & Replacement Fund = $1,699,000
Total Motor Fuel Tax Fund = $2,865,000
Total Local Motor Fuel Tax Fund = $300,000
Total Non -Municipal Funding Sources = $70,706
Total Amount Funded = $7,404,106
Additional capital projects are included in the Information Technology Fund, Developer
Donations Fund, and TIF Fund budgets. Water and Sewer Fund capital improvement and
capital equipment projects were included as part of the review of this fund above.
�rl' r �01
70 1�',•. ii .
Elected Officials
Wayne S. Jett, Mayor
Ward 1
Victor A. Sand, Alderman
Ward 2
Andy Glab, Alderman
Ward 3
Frank McClatchey, Alderman
Ward 4
Ryan Harding, Alderman
Ward 5
Shawn Strach, Alderman
Ward 6
Patrick Devine, Alderman
Ward 7
Sue Miller, Alderwoman
Ci Clerk
Trisha Ramel
Department Directors and Primary Administrators
Derilc Morefield
City Administrator
John Birlc, Chief of Police
Ann Campanella, Director of Human Resources
Bill Hobson, Director of Parks and Recreation
Carolyn Lynch, Director of Finance
Doug Martin, Director of Economic Development
Ross Polerecky, Director of Community Development
Troy Strange, Director of Public Works
Monte Johnson, Deputy City Clerk
History and Demographic Snapshot of McHenry
McHenry is located in east -central McHenry County, 55 miles northwest of the Chicago Loop and 35
miles from O'Hare International Airport. The City is centered on two major State highways - Illinois
Route 31, which runs north/south from Wisconsin to South Elgin; and, Illinois Route 120, which runs
east/west from Woodstock to Park City, The City consists of approximately 13 square miles in land
area.
In 1832 Major William McHenry led an expeditionary force through northern Illinois during the Blacic
Hawk War. Settlement of the Fox River Valley began over the next few years, and on the river's west
bank, at the site of an old Indian ford, the hamlet of McHenry established in 1836.
The McLean, Wheeler, McCullom, and Boone families were influential in the community's earlyyears.
A sawmill, hotel, and ferryboat were in operation by 1837 and legislation creating McHenry County
was passed that year, and the village served as county seat until 1844.
Gristmills started along newly dammed Boone Creels, and a wagon road entered town from the south
in 1851. In 1864, the famed Riverside Hotel was built and still stands today.
George Gage, who served as the region's first state senator (1854•-1858), owned the lands west of
the millpond, and was able to secure the route of the Fox Valley Railroad (afterward a branch of the
Chicago & North Western) from Chicago in 1854. Consequently, Gagetown (later West McHenry)
began to eclipse the older east side of town containing the Riverside section and Green Street area,
once known as Centerville. This can still be detected in the distinct commercial pattern that
characterizes McHenry's "downtown."
The village incorporated in 1872. Though there were fewer than 800 inhabitants, commerce
flourished. By 1876 there were seven churches and over 80 enterprises, including flour mills,
harnessmakers, a pickle factory, a brewery, seven saloons, and a newspaper. The newspaper, the
McHenry Plaindealer, was in publication from 1875 to 1985.
Over the next 50 years McHenry grew slowly. During the 1920's the town became known as a resort
destination because of the Fox River, surrounding lakes, and easy accessibility from Chicago. Bands
played at local pavilions, trainloads of visitors arrived to tour the famous lotus beds, and summer
cottages proliferated along the Fox River. A boat -building industry flourished; marine recreation still
remains important. For decades, McHenry took very seriously its title as the "Gateway to the Chain -
of -Lakes" and this is still evidenced today in the city's motto "Heart of the Fox River."
With the advent of the automobile, State Route 120 crossed the Fox River on a new two-lane bridge.
The old wagon trail, now Highway 31, doglegged along the same route for a critical half mile before
turning north toward Wisconsin. These configurations effectively relocated the city's commercial
center to Route 120, and had the unintended side effect of isolating the original business districts
(West Main, Riverside Drive, and Green Street).
In spite of its beauty and strong attraction to tourists, McHenry owed her growth to the stability
provided by the many farmers who worked the fertile land as well as the establishment of industry
with new factories such as Admiral, Borden and The Hunter Boat Company. The Fox River helped
facilitate the import and export of lumber, cigars, clay, food products and brewing which all helped
3
draw new residents to the area. The drainage of a large 60 acre pond that previously divided the
community in half, contributed to increased development and improved roadways, while the railroad
allowed commuters to find this area the perfect place to settle with their families.
A new wave of industry, including automotive components, elects onics, and metalworking, swept
into town after World War II. The Northern Illinois Medical Center, begun in 1956 as a 23-bed
community hospital, evolved into a regional trauma center serving two states. Beginning in the late
1940s, subdivisions were annexed on all sides of the city. By this time, many residents were
commuting to work in other localities, including Chicago. McHenry's population tripled from 2,080
in 1950 to 6,772 in 1970, and tripled again to 21,501 in 2000.
McHenry's current population is approximately 27,000, including 10,075 households, an average
household size of 2.66, and median household income of $68,024. Of the 10,075 households,
approximately 7,719 are owner -occupied and 2,356 are renter occupied. The median resident age is
37.1. The City's 2017 EAV was $638,080,968.
The City currently has more than 2,000 approved unplatted lots and platted vacant lots. Active
subdivisions in the City include: Abbey Ridge, Boone Creek, Burning Tree, Chesapeake Hills,
Deerwood Estates, Evergreen Parks, Foxcroft Ridge, Glacier Ridge, Knox Farm, Legend Lakes, Liberty
Trails, Lincoln Hills, Martin Woods, Morgan Hill, Oaks at Irish Prairie, Patriot Estates, Prairie Lakes
and Preserves at Boone Creek.
Total number of businesses in the City is 1,473 and total employment is approximately 19,661, with
an employee/residential population ratio of 73:1. The City 's three largest employment sectors, by
number of employees, are: Healthcare and Social Assistance: 5,136 employees/26%; Retail Trade:
3,139 employees/16% and Manufacturing: 2,418 employees/ 12.3%.
Green Street looi<ing south from State Route 120 (circa 1920's)
City of McHenry Strategic Plan Summary
Background
In the Fall of 2013 the City Council and Department Directors participated in a facilitated strategic
planning session and the results of this exercise were compiled and presented to Council in the form
of the City of McHenry Comprehensive Strategic Plan document thatwas adopted by Council in August
of 2014. In addition to establishing updated Mission and Vision statements, Governing Principles
and a Code of Ethics, the plan identified fifty-nine (59) Strategic Goals as guiding principles for
decision -malting.
1n the spring of 2016 Staff and Council undertook a review of the plan documentwith a focus towards
ensuring that the strategic plan remain relevant to the activities/actions being undertaken by staff
and elected officials, to revisit opportunities, and to identify/introduce any new strengths,
weaknesses, opportunities, and threats that may need to be incorporated in to the plan. While
regular annual or biannual review of the plan is essential to provide for a structured mechanism of
update, the plan itself is a "living breathing" documentthat consistently shifts as internal and external
factors change.
As a result of the initia12014 Strategic Planning Session and the 2016 follow-up review session, the
following now serves as McHenry's Strategic Plan. The attributes and identifiable goals that it
conveys have been identified as essential for the municipality and, as possible, are incorporated into
the annual Capital Improvement Program (CIP) and Annual Budget. Attributes are listed in order of
importance based on participant feedback.
Mission Statement
The City of McHenry is dedicated to providing the citizens, businesses and visitors of McHenry with
the highest quality of programs and services in a customer -oriented, efficient and fiscally responsible
manner.
Mission Accountability
As a continuous reminder of the mission, a commitment is made to undertake the following actions:
• The mission will be read at the beginning of each meeting of the City Council. (City Council)
• The mission will be placed prominently in each addition of the City Newsletter. (Office of the
City Adm in istra tor)
• The mission will be framed and posted at major portals within all municipal buildings. (Office
of the City Administrator, Department Directors)
• The mission will be incorporated in to daily decision -making and included in future municipal
planning documents. Examples include the annually updated 5-Year Capital Improvement
Program and the annual operating Budget. (Office of the CityAdministrator, All)
• The mission will be added to letterhead, memos, etc. (Office of the City Administrator, All)
• The mission will be added to website and other social media. (Office of the CityAdministrator)
5
Vision
To make McHenry a community of choice for living, working and recreating for all, with unique
natural resources, abundant cultural opportunities, outstanding neighborhoods, and a vibrant and
diverse economy.
Governing Principles
The values and beliefs guiding the actions of the elected and appointed officials of the City of McHenry
shall include the following.
• Provide an open and honest government.
• Establish an environment that fosters open communication, dialogue, and active listening
with both internal and external stakeholders and customers.
• Ensure quality, responsive customer service.
• Enhance the community's quality of life.
• Embrace the diversity of a multi -cultural and multi -generational working environment.
• Be fair and objective in making community decisions.
• Remember that municipal employees, through their individual and collective abilities to
provide quality services and programs to the residents, businesses and visitors of the
community, are our most valued asset.
Code of Ethics
In addition to the guidance of ethical behavior for elected and appointed officials provided in the
McHenry City Code (Sec. 2-55 Code of Ethics), the following Code of Ethics shall apply:
• Avoid illegalities, improprieties and any perception thereof.
• Avoid accusations or perceptions of wrongdoing.
• Do what makes the most sense.
• Do what is right, not what is easiest.
• Be fiscally responsible and manage budgets effectively.
• Be proactive, look for ways to anticipate and deal with issues.
• Seek innovative ways to improve public services and increase efficiency.
• Keep the public informed and provide opportunities for public engagement.
Strengths: Physical assets, supplies, talents, etc. that can assist in accomplishing our vision.
Attribute
Goal
To maintain a balanced budget while protecting
our healthy reserves, continuing to evaluate our
1. Stable Financial Position
annual levy with the potential keeping it flat as
long as our reserves are healthy, per our Fund
Balance and Reserve Policy.
To develop and continue marketing strategy for
the Riverwalk and Fox Reiver by expanding and
2. Fox River
developing riverfront recreational areas and
business opportunities,
Retain and support the position of Economic
Development Director to actively pursue
economic development opportunities and be
3. Economic Development
receptive to zoning changes to allow businesses
to grow. Diversity of business types identified
as important.
To maintain and utilize our 600+ acres of park
4. Parks System/Open Space
and open space to provide recreational
opportunities for residents and visitors.
To cooperate with local and area groups,
residents, businesses to have
events/recreational opportunities. Develop a
S. Public Event Coordination
plan that allows feedback from the community
and use data to develop future events. Increase
marketing of municipal and municipally"
supported events.
To continue to support staff development and
provide staff with the tools necessary to be
6. Staff Development
successful in a positive work environment
respecting their knowledge and expertise.
To continue to foster a climate of collaboration
7. Inter Departmental Teamwork
amongdepartments and within divisions.
Weaknesses: Physical assets, supplies, talents, etc. that are deficient and impede the ability to
achieve our vision.
Attribute Goal
To continue to evaluate and prioritize
infrastructure needs, continuously work to
1. Aging Infrastructure
leverage non -municipal funding, and attempt to
identify consistent funding sources.
To continue to promote respect and teamwork,
2. Internal Communication find ways to increase meaningful
communication and agree to disagree and move
on.
7
To define and prioritize technology needs of the
3. Aging Technology
municipality and develop and implement
technology lan s .
To continuously implement methods for
providing enhanced customer service,
4. Public Perception of Government
increased information and to make City
processes, procedures, intentions, actions as
transparent as possible,
To develop a methodology for prioritizing code
enforcement activities based on Council
S. Code Enforcement
direction and develop a Code Enforcement
Strategy,
To continue to coordinate with McHenry County
6. Public Transportation
and surrounding communities
Ounortunities: Situations that can have a positive effect on the organization if considered or acted
upon.
Attribute
Goal
1. Riverwalk Expansion
To review and utilize Riverwalk and Downtown
Plans which are already in place and undertake
2. Redevelopment of Central Wastewater
additional studies as needed, to ensure
Treatment Plant site
prioritization and coordination of projects 14
(left). Much of this depends on timing, cost,
3. Miller Point Redevelopment
redevelopment opportunities but the City and
partners should be prepared to act as
4. Downtown Theater Redevelopment
opportunities arise.
To evaluate long term feasibility for expansion
of the recreation center through assessing
S. Recreation Center Expansion
community desires and needs with an
understanding that future phases are driven by
the passage of referenda.
To establish the consolidated dispatch facility
6. Dispatch Facility Expansion
and continue to promote and attract new
customers to the facility.
To continue efforts to obtain construction
7. Fox River Access/Boat Ramp
permit from the USACE and fund and build the
facility.
To evaluate and redevelopment the City's
8. Reconstructed City Website and City Council
internet website to make it more transparent
and user friendly and to take the steps required
A/V
to be able to either live stream or record stream
City Council Meetings.
Es'
Threats: opposite of opportunities. Factors that can have a negative impact on local government.
Attribute
Goal
To continue efforts to establish an atmosphere
of respect and trust through open
1. Council -Council, Council -Staff Trust, Respect
communication and cooperation. All on the
same team.
To maintain the City's financial stability while
establishing a financial threshold at a
2. State Budget Crisis
"survivable" level to maintain City services
while continuing to monitor State 's financial
crisis.
To explore opportunities for extending the
current TIF; coordinate with other taxing
3. Extend the TIF
jurisdictions; educate public on benefits of TIF
and extension.
To develop a comprehensive assessment of all
4. Aging Infrastructure Costs
infrastructure and implement a prioritization
for replacement — Capital Improvement Plan.
To maintain pace of payment on Police Pension
and to ensure that we are competitive for
S. Pension, Benefit, Insurance Costs
insurance and benefits — adjusting employee
contributions as necessary.
To explore, implement unique opportunities for
business incentives for location and expansion
6. Business Incentives
that sets McHenry apart as a business -friendly
community regardless of the State's issues.
E
Budget Document Guide
This budget document is prepared with two major objectives in mind. First, to provide citizens and
others interested in the City's finances with complete and understandable information regarding the
budget. The second -is to develop an annual fiscal plan that will assist City leaders in making better
decisions and enhance financial accountability.
Given the constraints of a small community, this budget document is continually being changed and
is coming closer to meeting the requirements as a:
Policy Document
As a policy document, the City Council has established specific strategies to achieve its goals through
policy decisions as noted in the City Administrator's letter of transmittal. These sections include:
• A budget message, included in the transmittal letter, that articulates priou•ities and budget
issues, particularly major issues affecting budget decisions;
• Short-term initiatives that guide development of the budget in the upcoming years and
• General information describing each budget unit's prior year accomplishments and budget
year goals and objectives.
Operations Guide
As an operations guide, the budget document describes activities, services, and functions carried out
by the organizational units. In addition, it provides an organizational chart and summary of
authorized personnel for the prior year and the budget year.
Financial Plan
As a financial plan, the budget document describes all funds subject to appropriation in the fund
structure overview section. In addition, all summaries of all major revenues and expenditures are
provided in summary tables. The final budget also includes General Fund revenues for the 2017/18
through 2019/20 fiscal years as well as budget amounts for the current and upcoming years. Finally,
the summary section includes information as the projected changes in fund balances for all
appropriated funds.
Communication Device
The Budget Document contains narratives, supplemented with tables and charts, which present the
budget in a manner that is simple and understandable. The Proposed FY23/24 Budget is available
for public review at the McHenry Municipal Center, 333 S. Green Street, McHenry, as well as on the
City's website at www.ciityofmchenry.org prior to adoption by the City Council. Once adopted, the
budget is available for public review atthe McHenry Municipal Center, 333 S. Green Street, McHenry,
as well as on the City's website at www.cityofmchenry.org.
10
Basis of Accounting and Budgetin
The City of McHenry uses the modified accrual basis of accounting to budget and account for
transactions of the governmental funds. Under this basis of accounting, revenues are recognized
when susceptible to accrual (when they are measurable and available) and expenditures are
recognized when the fund liability is incurred. For the City's proprietary funds the City uses the
accrual basis of accounting. Under this basis, revenues are recorded when earned and expenses are
recorded when the liability is incurred. The City prepares the budgets for proprietary funds
consistent with this basis except that capital outlay items are included in the budget.
The City prepares its budget on a basis consistent with generally accepted accounting principles
except that the City also recognizes encumbrances for budgetary purposes. Encumbrances include
supplies ordered but not received, and services contracted but not yet expended by the City.
Encumbrances are charged against a budget or appropriation for account purposes. Accordingly,
expenditures/expenses in this document include encumbered expenditures/expenses.
Encumbrances do not lapse at year-end and provide authorization for expenditures/expenses for the
foRowing year.
The City appropriates funds for capital projects on a fiscal year basis. The Capital Projects section of
this document includes descriptive information on each project with estimated costs and financing
sources.
11
Budget Process Summa
Budget Process Overview
The City's annual fiscal year budget covers the period beginning May 1st and ending April 30th and
contains information relative to estimated revenues and planned operational and, capital
expenditures for the various funds of the municipality for the identified fiscal year.
Although the budget is not formally adopted by the City Council until April of each year, the Uudget
development process officially begins each Octoberwith the preparation of the annual tax levy, which
is used to fund many of the current programs and services, along with the development/update of
the five-year Capital Improvement Program (CIP). The budget preparation process provides the
various divisions and departments of the City with the opportunity to review accomplishments, set
goals and objectives, and identify the means for accomplishing these goals and objectives.
Capital Improvement Plan/Community Investment Plant
Previous to FY21/22 the City of McHenry utilized a five-year Capital Improvement Program (CIP) as
a planning tool for the identification of capital improvement and capital equipment projects. In an
effort to develop a more useful short and long-term planning and budgeting tool for capital
improvement and capital equipment items the City Administration, led by the Director of Public
Works, is in the process of developing a new Community Investment Plan document to replace the
Capital Improvement Plan beginning in FY22/23. This document will provide more accurate
financials for capital acquisition and replacement over a 20-year period. This document will also be
reviewed and updated on annual basis,
Budget Roles and Responsibilities
Every employee of the municipality plays a role in the budgeting process — be it formulation,
preparation, implementation, administration, or evaluation. Ultimately, Department Directors,
through the City Administrator, are accountable to the City Council and to the residents of McHenry
for the performance of departments in meeting goals and objectives as they are laid out in the budget
document.
Department Directors, with input from their respective managers, superintendents and
departmental staff analyze historical data, review existing operational needs, and project anticipated
operational needs in order develop detailed line -item budget requests that allow them to maintain
or enhance the level of programs and services within their departments. These detailed requests are
then submitted to the City Administrator and Finance Director, meetings are held with Department
Directors to adjust requests based on anticipated revenues keeping in mind the overall needs of the
municipality, and the fund line item requests found in the attached budget document are identified.
Budget Appropriation and Supplemental Appropriation
While the approved budget document establishes the estimates for revenues and guidelines for
expenditures of the municipality, the City is required to conduct a public hearing and adopt an annual
appropriation ordinance each July. The appropriation ordinance provides the legal authority to
allocate funds to specific spending activities and establishes the City's legal spending limit for the
fiscal year.
During the fiscal year it may be necessary, from time to time, to amend the approved budget (see
Budget Amendment Process below). As a result, in October following the close of the fiscal year
12
period (April 30111) the City is required to pass a supplemental appropriation ordinance to amend the
original appropriation ordinance to account for these budget amendments.
Budget Amendment Process
While budgets are prepared at the operational line item level and approved by Council at the fund
line item level, budget amendments are brought before Council, per the Purchasing Policy and
Procedures approved in 2016 and updated in 2020.
Budgetary Controls
Without proper internal financial controls, the budget document will not serve its role as a guidance
tool for City programs and projects. To this end, the Finance Department prepares monthly reports
which are reviewed by the Finance Director, respective Department Directors, and the City
Administrator. These monthly reviews provide, at a minimum, an opportunity to make operational
adjustments throughout the year as necessary. Any deviations from the fund budgetary amounts are
discussed in this document and, when necessary, solutions are presented. Quarterly financial reports
are also transmitted to the City Council via a City Council Meeting Consent Agenda to ensure that the
elected body is consistently apprised of the status of municipal revenues and expenditures.
Preparation to Achieve the Government Finance Officers Association (GEOA) Budget Award
Beginning with the FY15/16 Budget, the City Administration committed to undertaking continuous
improvements to the annual budget document that achieves the highest quality and reflects both the
guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA
best practices on budgeting. While some of these improvements are subtle, or related to unseen
operational modifications, others are more visible - such as the redevelopment of the budget to its
current form aimed at providing the reader with a more understandable and transparent document.
13
Budget Process Timeline
Tuesday, January 3, 2023 City Administrator, Finance Director distributes instructions
for budget preparation to Department Directors
Friday, January 20, 2023 Department Directors submit budget requests to City
Administrator and Finance Director - revenues and
expenditures only (no narratives)
January 23-February 3, 2023 City Administrator and Finance Director review budget
requests with respective Department Directors
Friday, February 3, 2023 Department Directors submit completed budget narratives to
City Administrator
February 6 -March 3, 2023 Preparation of the Draft FY23/24 Budget
Monday, March 6, 2023 Transmit Draft FY23/24 Budget to City Council (operating
funds)
Monday, March 20, 2023 City Council Regular Meeting -Discussion of Draft FY23/24
Budget (operating funds)
Monday, Apri13, 2023 City Council Regular Meeting -Discussion of Draft FY23/24
Budget (all funds)
Monday, April 10, 2023 Final FY23/24- Budget (including narratives) transmitted to
City Council
Apri] 17, 2023 Annual Meeting - FY23/2A Budget adopted by City Council
14
Mayor and City
Council
City
Clerk
Office of the City Deputy City
Administrator Clerk/Executive
Assistant
Parks & Community Economic Finance Public Works Human Police
Recreation Development Development Resources
Parks Planning & Accounts Treatment Field Operations
Maintenance Zoning Payable Operations Operations Division
Recreation Center Commercial Accounts Water Streets Support Services
Inspections Receivable Division Division Division
Aquatic Residential Utility Sewer Utility NERCOM
Center Inspections Billing Division Division Dispatch
Recreation Code Information
Programs Enforcement , , • Technology
Municipal
Center
Maintenance
Personnel Summary
The following table provides a summary overview of the staffing level of the municipality for the
previous five (5) fiscal years and identifies the proposed staffing level for FY21/22.
The increase in staffing levels in the General Fut1d from FY15/16 to FY17/18 of 15.42 employees was
primarily due to the development of the consolidated 911 dispatch center (NERCOM). During this
time period, ten (10) new dispatchers and one (1) civilian supervisor have been hired to fully staff
this facility. Importantly, the City of McHenry is responsible for only 46.8% of NERCOM personnel
costs due to partnerships with the City of Woodstock, City of Harvard and the McHenry Township
Fire Protection District which, through center revenues, pay the remainder of the costs. Prior to this
consolidation, the General Fund totaled 111.98 employees - 20.57 employees LESS than FY07/08
when measures were taken to reduce staffing due to the recession.
Staffing identified in the Recreation Center and Water and Sewer Funds is financed by revenues
generated by these funds.
Authorized Personnel Prior FY Proposed 22/23
21/22 i t16/17
General fund
Administration
1.00
5.00
4.00
4.00
IN
IN
IN
6.00
6.00
Elected Officials
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Community Development
0.00
8.00
8.00
7.00
7.50
7.50
6.50
7.90
7.90
Finance Department
0.00
5.00
5.00
5.00
5.00
5.00
6.00
5.00
5.00
Human Resource
Department
0.00
2.00
2.00
IN
2.00
2.00
1.00
0.00
0.00
Economic Development
Department
0.00
2.00
Z.00
2.00
2.00
2.00
3.00
0.00
0.00
Police Department
IN
57.00
54.00
53.75
54.75
54.75
52.75
52.75
51.75
NERCOM (Dispatch)
2400
25.00
23.00
23.25
23.25
23.25
22.25
22.25
12.25
Public Works
Administration
0200
3.00
IN
IN
IN
3.50
3.50
IS
4.5
Public Works Streets
1.00
13.00
14.00
14.00
17.00
19.00
19.00
19.00
18.00
Parks and Recreation
7.80
3.50
11.30
10.75
10.75
10.50
9.25
11.00
11.00
Parks Maintenance
8200
8.00
0.00
0.00
0.00
0.00
0.00
0.00
0100
Total General Fund
5.20
131.50
126.30
124.75
128.25
130.50
126.25
127.40
116.40
Recreation Center Fund
0,20
1.30
1.50
2.05
2.05
1 2000
2.25
1.00
1.00
Information Technology
Fund
0.00
3.00
3.00
2.00
2.00
2.00
2.00
2000
2.00
Water and Sewer Fund
Water Division
0.00
4.50
4.50
5.00
5.50
5.50
5.50
5.50
5.50
Wastewater Division
0.00
8.50
8.50
9.00
8.00
8.00
8.00
9.00
7.00
Utility
Division
1.00
7.00
8.00
7.00
8.00
8.00
8.00
8200
9.00
Total Water and Sewer
Fund
0.00
20.00
21.00
21.00
21.50
21.50
21.50
22.50
21.50
Total Cit of McHenry
4.00
155.80
151.80
1 149.80
153.80
156.00
152,00
152.90
140.90
Population
27,135
27,135
26,992
26,992
26,992
26,992
26,992
26,992
Employees per 1,000
Population
5.74
5,59
5.55
5.70 5.78 5.67
5.66 5.22
16
Fund Structure Overview
The accounting system and the budget appropriation process are structured according to the basic
guidelines established by the Government Finance Officers Association (GFOA) of the United States
and Canada. The format includes the basic funds and fund types which follow.
The City's governmental funds are as follows:
General Fund (100s)
This fund accounts for all transactions of the city that pertain to the general administration of the city
and the services traditionally provided to its citizens. This includes Administration, Elected Officials,
Community Development, Finance, Police, Public Works Administration, Streets, and Parks and
Recreation.
Special Revenue Funds (200s)
These funds are utilized to account for revenues derived from specific sources which are usually
required by law or regulation to be accounted for as separate funds. For the City of McHenry these
funds include the Tourism Fund, Pageant Fund, Band Fund, Civil Defense Fund, Alarm Board Fund,
Audit Fund, Annexation Fund, Motor Fuel Tax Fund, Developer Donation Fund, and Tax Increment
Fund.
Debt Service Fund (300)
This fund accounts for the accumulation of revenues for and payment of principal and interest on
general obligation longterm debt.
Capital Improvements Fund (440) and Capital Equipment Fund (450)
These funds are utilized to account for financial resources to be used for the acquisition or
construction of capital facilities or other major fixed assets.
The City's business -type funds include the following:
Enterprise Funds (500s)
These funds are utilized to account for operations and activities that are financed and operated in a
manner similar to a private business enterprise, and where the cost of providing goods and services
to the general public on a continuing basis is expected to be recovered primarily through user
charges. The City has also established Enterprise Funds when it was advantageous to segregate
revenues earned and expenses incurred for an operation for purposes of capital maintenance, public
policy, management control or accountability. Enterprise Funds for the City include the Water and
Sewer Fund, Capital Development Fund, Utility Improvements Fund, and Marina Operations Fund.
Internal Service Funds (600s)
These funds are established to finance and account for services and/or commodities furnished by
one department or agency to other departments or agencies of the city. The Internal Service Funds
of the City are the Employee Insurance Fund, Risk Management Fund, and Information Technology
Fund.
17
The City's other funds include the following:
Fiduciary Funds t. a)
These funds are used to account for resources held for the benefit of parties outside the city. The
fiduciary funds of the city are the Employee Flexible Spending Fund, Developmental Escrow Fund,
Retained Personnel Fund, Revolving Loan Fund, and the Police Pension Trust Fund.
Accounting for the financial activities of the City and the budget appropriation process are
also presented according to classifications required by the State of Illinois. Revenues are
credited to individual fund types while expenditures/expenses are recorded according to
functional areas within specific funds for budgetary control purposes. The following
functional areas are included in the budget:
Genet•al Government
This function provides for the operation of the government and assures the general administration
of the municipality. Activities included in this function also include Economic Development, Human
Resources, Information Technology and Municipal Center Building and Grounds Maintenance.
Community Development
The overall mission of this function is to protect and promote the health, welfare, safety and quality
of life of McHenry Citizens, property owners, visitors and commercial interests through the
development and implementation of the City's adopted ordinances and policies. Planning and
development activities are also included within this function.
Finance
This function applies modern financial managementpractices to ensure thatthe City is able to deliver
services effectively and efficiently on a sustained basis. Activities included in this function are
reporting financial transactions, billing and collecting money, accounts payable, managing cash and
investments, preparing the annual financial report, and developing the budget and financial
forecasts.
Public Safety
This function provides for services to t•educe the amount and effects of external hat•m to individuals
and damage to property, and in general to promote an atmosphere of personal security from external
events.
Public Works
This function provides for safe and well -maintained infrastructure for the City. Activities included in
this function are public works administration, roadway maintenance, snow and ice control, street
cleaning, traffic control and engineering.
Parks and Recreation
This function promotes the genet•al well-being of the City and encourages the fullest development of
cultural and educational potentials of the citizens in the community. This function includes the
activities of general parks, parks and maintenance, downtown maintenance and programs.
Debt Service
This function provides for the accumulation of resources for and the payment of principal and
interest on long-term debt of the City.
�E
Capital Projects
This function provides for the acquisition or construction of major capital facilities or equipment for
the City.
Business -Type Activities
This function includes activities of the City that are financed in whole, or in part, by fees charged to
external parties for goods and services. These activities are accounted for as enterprise funds and
include the Water and Sewer and Marina Operations Funds.
19
Chart of Accounts Overview
Funds are comprised of various line item accounts. These are separated as "Revenues" and/or
"Expenses" as appropriate and are assigned based on the following specific line item designations.
Revenues
3010 Property Tax Collection -Amount collected in taxes assessed on teal estate,
3020 Property Tax Collection -Road &Bridge -Amount collected in taxes assessed on real estate
by the McHenry and Nunda Township Road Districts and disbursed to the City for roads and bridges
within the City.
3030 Pt•opet•ty Tax Collection -Police Protection -Amount collected in taxes assessed on teal
estate that funds a portion of police protection expenses.
3040 Property Tax Collection -Retirement -Amount collected in taxes assessed on real estate
that funds a portion of retirement expenses,
3050 Property Tax Collection -Liability Insurance -Amount collected in taxes assessed on real
estate that funds a portion of liability insurance expenses.
3051 Property Tax Collection -Police Pension -Amount collected in taxes assessed on real estate
that funds the actuarial required contribution to the police pension fund.
3110 Personal Property Replacement Taxes -Revenues collected by the State of Illinois and
dI
sbursed to the City to replace money that was lost by local governments when their powers to
impose personal property taxes on corporations, partnerships, and other business entities was taken
away in 1979. These funds are limited to use for retirement funding.
3120 State Sales Taxes -The state collects a I tax on a seller's receipts from sales of tangible
personal property for use or consumption that is distributed based on sales in the City.
3121 Home Rule Sales Taxes The state collects a 0.5%tax on a seller's receipts from sales of
tangible personal property for• use or consumption that is distributed based on sales in the City. This
home rule sales tax is not charged on sales of vehicles.
3125 Telecommunications Taxes -The state collects an 8%tax that is imposed on intrastate and
intet•state messages and 1% is distributed to the City.
3130 State Income Taxes -Amount collected in taxes imposed on financial income generated by all
entities within the State. The State distributes 8% of the net collections of all income tax received
from individuals, trusts, and estates and 9.14% of the net collections of all income tax received from
corporations to local governments based on the population in proportion to the total state
population.
3140 Pull Tabs -Amount collected by the State and disbursed to the City for operator licenses and
taxes on gross proceeds of pull tabs and jar games,
20
3141 Inter -Track Wagering - Amount collected for a 1% tax collected on the handle at I rackside
McHenry Off Track Betting establishments within the City.
3142 Hotel/Motel Taxes -Amount collected For a 5%tax assessed on the rental or leasing charges
for hotel or motel rooms.
3150 Motor Fuel Tax Allotment -Taxes collected on gasoline and diesel fuel collected by the State
and disbursed to the City based on the population.
3210 Interest Income - Interest earned on cash temporarily held in checking accounts, certificates
of deposits, or other investments.
3310 Liquor Licenses -Amount paid by establishments within the City that hold valid liquor
licenses.
3320 City Licenses -Amount collected from businesses within the City for licenses for massage
parlors, athletic exhibitions for profit, billiard and pool halls, carnivals, circuses, exhibitions, motion
pictures and theatricals, public dance halls, skating rinks, bowling alleys, and mechanical amusement.
3330 Vehicle Sticl�ers -Amount paid annually by residents for each licensed motor vehicle owned
and operated by them.
3350 Video Gambling Licenses -Amount paid annually by each private business and terminal
operator for a video gambling license. Also includes the amount disbursed by the State of Illinois for
the City's portion of the video gaming tax.
3410 Permits -Amount collected to issue a building permit for miscellaneous improvements such
as roof repairs, siding repairs, fences, etc.
3420 Plumbinglnspections -Amount collected for the inspection of the connection to a water main
through a permit fee.
3430 Zoning &Plat Fees -Amount collected for residents or business owners to have a hearing
before the planning & zoning commission for items like conditional use permits, variances, etc.
3505 Traffic Fines -Amount collected by the McHenry County Circuit Clerk's office and forwarded
to the City for traffic fines that occurred within the City.
3510 Parking Fines -Amount collected in fines for parking violations.
3515 Police -Accident Reports -Amount collected for administrative fees to furnish accident
reports.
3520 Police -Field Reports -Amount collected for administrative fees to furnish field reports.
3 525 Drug Asset Forfeitures -Amount collected through the sale of assets that were forfeited.
3530 DUI Fines -Amount collected by the McHenry County Circuit Clerks office and forwarded to
the City for DUI charges.
21
3532 Overweight Truck Permits Amount collected for the issuance of overweight truck permits.
3536 Police Bail Bond Processing Fees - Amount collected in fees to process bail paperwork.
3537 Police Impound Fees -Amount collected as an administrative penalty for a motor vehicle that
is used in connection with the following driving violations such as driving under the influence, driving
while license is suspended or revoked, no valid driver's license, etc.
353f3 Warrant Execution -Amount received from other governmental agencies for the execution
of a warrant by the City's police department.
3539 Electronic Citation -Amount collected by the McHenry County Circuit Clerlc and forwarded
to the City for electronic citation.
3540 Vehicle License Fines -Amount collected for fines for vehicle stickers that are purchased after
the due date of June 30th.
3545 Vehicle Fund Fines -Amount collected by the McHenry County Circuit Clerlc and forwarded
to the City for vehicle court supervision fines.
3610 Sales -Water/Sewer -Amount collected For water and sewer usage based on meter readings
charged at a per 1,000 gallon rate.
3615 Base Charge -Capital -Amount collected through the utility bill for water and sewer base
fees that will be retained and used for development and repairs to the utility capital system.
3620 Penalties -Amount collected foz• utility bills that are paid after the due date.
3630 Hookup/Connection Fees -Amount collected for permit fees that are charged for the
connection to Lite water and sewer system.
3631 Parks &Recreation Programs -Amount collected for programs offered through the parks
and recreation department.
3632 Concessions -Amount collected at concession stands at City parks as well as at the Recreation
Center.
3633 Beach Programs -Amount collected for daily admission at the McCullom Lake Beach,
3634 Swimming Pool -Amount collected for admission to the Merkel Aquatic Center,
364.0 Water Meter Sales -Amount collected for the initial or replacement water meter.
3641 Babysitting -Amount collected for childcare services offered at the Recreation Center.
3642 Room Rentals Rentals -Amount collected at the Recreation Center for community room rentals.
3643 Birthday Parties -Amount collected for birthday parties that are held and run by personnel
at the Recreation Center.
22
3644 Sponsorship/Advertisement - Amount collected for sponsors or advertisements at the
Recreation Center.
3645 Annual Membership - Amount collected for membership fees For the Recreation Center.
3646 Short -Term Membership - Amount collected for temporary membership fees foz the
Recreation Center.
3647 Daily Admissions -Amount collected for daily membership fees for the Recreation Center.
3648 Punch Passes -Amount collected for 10 and 20 punch passes that act as daily membership to
the, Recreation Center as well as attendance at specialty fitness classes held at the center.
3649 Miscellaneous Fees -Amount collected at the Recreation Center For miscellaneous fees such
as workout logging devices, and other items sold at the center.
3650 Fitness Classes -Session Based -Amount collected for fitness classes held at the Recreation
Center.
3651 Small Group Personal Training -Amount collected for Recreation Center members that sign
up for a small group personal training session.
3652 Personal Training -Amount collected For Recreation Center members that sign up for
personal training services.
3653 Elective Participant Premium -Amount collected for City provided health insuz•ance for
retired employees or former employees on COBRA.
3660 Debt Service Fees -Amount collected from sewez• users to retire debt issued by the City.
3665 Debt Service Fees - IEPA Loan -Amount collected from sewer users to retire an Illinois
Enviz onmental Protection Agency loan used to consolidate the Central and South Wastewater
Treatment Plants.
3682 Mowing/Weeds -Amount collected for the cutting or removal of weeds and plant growth in
excess of 8 inches which is paid for by the owner of the property.
3683 Alarm Board Revenue -Fines collected on false alarms after having six free alarms.
3711 Meeting Fees -Planning &Zoning -Reimbursements by developers and zoning petitioners for
the Planning &Zoning Commission hearing attendance collected in the Retained Personnel Fund.
3715 Annexation Income -Amount collected as determined by the annexation agreement.
3720 Operating Fees -Amount collected through permit fees on behalf of the school districts, fire
district and library district froze the developer to pay its fair share of public improvements that may
be required because of the new development. These fees are paid out to the districts monthly.
3730 Engineering Fees -Reimbursements by developers for expenses paid for contracted
engineering adv6
ce and service in the Retained Personnel Fund.
3735 Legal Fees - Reimbursements by developers for expenses paid for legal Fees in the Retained
Personnel Fund.
3740 Fees -Developers -Miscellaneous -Reimbursements by developers for miscellaneous
expenses such as recording fees in the Retained Personnel Fund.
3745 Gravel Mining/Annexation Agreement -Amount received per the annexation agreement For
the gravel pit within the City.
3750 Refunds -Developers -Amount paid by developers for a retained personnel deposit that is
over and above the expenses and will be refunded to the developer.
3760 Received from Developers -- Amount collected from developers as contributions to public
improvements such as signs, traffic signals, intersection improvements, etc.
3775 Developer Donations -Schools -Amount collected through permit fees on behalf of the
school districts from the developer to pay its fair share of public improvements that may be required
because of the new development. These fees are paid out to the school districts annually.
3780 Developer Donations - Parlts -Amount collected through permit fees for parks from the
developer to pay its fair share of public improvements that may be required because of the new
development.
3785 Developer Donations -Library -Amount collected through permit fees on behalf of the
library district from the developer to pay its Fair share of public improvements that may be required
because of the new development. These fees are paid out to the library district annually.
3790 Developer Donations -Fire -Amount collected through permit fees on behalf of the AS
district from the developer to pay its fair share of public improvements that may be required because
of the new development, These fees are paid out to the fire district annually.
3815 Donations -Amount donated to the City for various reasons.
3830 Employer Contributions -Actuarial contrived amount that the City contributes to the Police
Pension Fund.
3831 Employee Contributions -Amount collected from employees for benefits provided by the
City.
3832 Cable Franchise Fees -Amount charged to a cable television company for the use of public
right-of-ways.
3835 Garbage Bags -Amount collected for the sale of garbage stickers to residents.
3845 Rental Income -Rent charged for the use of municipal properties including Main Street
Station, Hicicoi•y Creels Farm, farmlands, water towers, the marina, etc.
3 881 Reimbursement. Communication Desk -Amount charged to agencies that the City provides
dispatching services for.
3882 Reimbursement - Miscellaneous - Reimbursement for expenses for city services provided
such as school resource officers, traffic control, snowplowing, etc.
3885 Reimbursements - Property Insurance - Insurance payments for property damage within the
City.
3890 Miscellaneous Income -Revenue that does not fit into other categories such as handicap
placards, lien fees, collection fees, adjudication court fees, etc.
3915 Bond Interest Rebate -Interest rebate issued to the City from the Department ofthe Treasury
Internal Revenue Service for Recovery Zone Economic Development Bonds and Build America Bonds,
3920 Sale of Fixed Assets -Proceeds from the sale of municipal owned fixed assets.
3969 Transfer - TIF -Internal Fund'I'ransfer from the TIF Fund to cover debt service fees.
3970 Charges for Services -Internal Fund Transfer from the Water/Sewer Fund to cover
administrative costs for the issuance of utility bills.
3971 Transfers -Annexation Fund -Internal Fund Transfer from the Annexation Fund to cover
debt service fees.
3972 Transfers -Recreation Center Fund -Internal Fund Transfer from the Recreation Center
Fund to cover debt service fees.
3975 Transfers -General Fund -Internal Fund Transfer from the General Fund to cover debt
service fees, capital expenses, insurance expenses, and information technology expenses.
3978 Transfers -Water/Sewer Fund -Internal Fund Transfer from the Water/Sewer Fund to
cover debt service fees, utility division expenses, insurance expenses, and information technology
expenses.
3986 Transfers -Motor Fuel Tax Fund -Internal Fund Transfer from the Motoz• Fuel Tax Fund to
cover debt service fees.
3994 Transfers -SSA #4 -Internal Fund Transfer from the SSA #4 Fund to cover expenses for the
Lakewood Road Utility.
3999 Transfers -Other Funds -Internal Fund Transfer from miscellaneous special revenue funds
and internal service funds to cover items such as fireworks, risk management, etc.
25
Expenses
4010 Salaries- Regular- Salary expense for employees who work 40 hours or full time.
4020 Salaries - SWOrn -Salary expense for sworn police department employees who work 90 hours
or full time.
4030 Salaries -Regular Part-time -Salary expense for• employees who work less than 40 hours,
but are employed throughout the calendar year.
4050 Salaries - Regular• Ovet•tinte -Salary expense paid to non-exempt non -sworn employees at
one and one-half times or two times the employee's regular hourly rate for all hours worked in excess
of forty hours per week.
4055 Salaries - Regular• Sworn Overtime -Salary expense paid to non-exempt sworn employees
at one and one-half times the employee's regular hourly rate for all hours worked in excess of forty
hours per week.
4060 Salaries -Snow Removal Overtime -Salary expense paid to non-exempt non -sworn
employees at one and one-half times or two times the employee's regular hourly rate for all hours
worked in excess of forty hours per week for snowplowing.
4080 Salaries -Career Ladder -Salary expense paid to sworn police department employees for
on -call and investigator stipend pay.
4100 Salaries -Seasonal/Part-time -Salary expense for employees who work less than 40 hours
per week and can be seasonal help.
4220 Salaries -Boards -QV Commissions -Salary expense for the Mayor, Council members, the City
Clerk and the Planning and Zoning Commissioners.
4310 Health Insurance -Expenses for employee group medical insurance premiums.
4320 Dental Insurance -Expenses for employee group dental insurance premiums.
4330 Life Insurance -Expenses for employee group life insurance premiums for city provided
coverage at $30,000.
4340 Vision Insurance -Expenses for employee group vision insurance premiums.
4410 Contribution -FICA -The employer contribution of Social Security and Medicare, which is
currently at 7.65% of eligible wages.
4420 Contribution IMRF -The employer• contribution of IMRF for all employees covered under the
IMRF program.
4430 Contribution Police Pension The amount provided through property tax collection for the
Police Pension Fund. This amount is determined by an actuarial study conducted on an annual basis.
26
4510 Uniform Allowance - Expenses for uniforms and personal protective equipment provided for
those public service employees required to wear uniforms while performing their jobs.
4910 Retirement Benefits - Retirement benefits paid to police pension beneficiaries who apply for
a regular pension.
4920 Disability Benefits -Retirement benefits paid to police pension beneficiaries who have been
found to have a duty disability. This type of pensions must be approved by the Police Pension board.
4930 Survivor Benefits -.Retirement benefits paid to the surviving spouse of a police pension
beneficiary.
4940 Nozz-Duty Disability Benefits -Retirement benefits paid to police pension beneficiaries who
have been found to have a non -duty disability. This type of pensions must be approved by the Police
Pension board.
4990 Cozztribution Refund -Refund of police pension contributions made by a sworn employee
that is no longer employed with the City. The employee must request a refund from the pension fund.
5110 Contractual Services -Expenses that are based on a contract or are paid on a monthly basis
such as mowing, PACE fees, copier lease payments, bank service charges, miscellaneous building
charges, etc.
5200 Contract Custodial -Expenses for• monthly janitorial serves at the Recreation Center.
5215 Retention/Promotion -Expenses for promotional materials for the Recreation Center.
5Z20 Engineering Fees -Expenses paid for contracted engineering advice and service in the
Retained Personnel Fund, which are reimbursed by the developers.
5Z30 Legal Services -Expenses for contracted legal advice and services.
5Z45 Health HRA Reimbursement -- Employee health insurance reimbursement expenses paid by
the city that covers expenses above the in-house set deductible up to the insurance carrier's
deductible.
5310 Postage &Meter -Expenses for postal related services such as stamps, bulk mailings,
overnight deliveries, UPS, etc,
5320 Telephone -Expenses for telephone lines, alarm circuits, and cellular phone services.
5321 Gable/TV -Expenses for monthly cable television service at the Recreation Center.
5330 Printing &Publishing -Expenses for advertisements such as employee recruitment ads, bid
notices, legal notices, and other. required notices. Expenses also for the city newsletter and printing
of vehicle sticker notices and utility bills.
5370 Repair &Maintenance -Expenses for routine maintenance on municipal vehicles.
27
5375 Repair &Maintenance - Equipment - Expenses for routines maintenance on municipal
equipment.
5380 Repair &Maintenance -Utility System -Expenses for routine maintenance on municipal
utility systems.
5410 Dues -Expenses for membership dues for various professional organizations.
5420 Travel Expenses -- Expenses paid for travel related costs such as mileage, tolls, per diem,
lodging for conferences and training for employees on municipal business.
5430 Training -- Expenses including registration fees, tuition, etc, for attendance at professional
conferences and meetings for professional development.
5440 Tuition Reimbursement -Expenses for tuition that covers successful completion of course
work with proof of a passing grade or certification.
5450 Publications -Expenses for books, magazines, periodicals, pamphlets, maps, subscriptions,
training materials, etc. used for professional development.
5510 Utilities -Monthly expenses for utilities used by municipal buildings including electric and
natural gas.
5520 Street Lighting -Monthly expenses for electric usage for street lights throughout the city.
5580 Disposal -Expenses for sludge removal at the wastewater plant.
5600 Credit Card/Bank Fees -Expenses for monthly credit card and banking fees charged to the
Recreation Center.
5950 MCMRMA Fees -Expenses For McHenry County Municipal Risk Management Agency annual
fees for insurance that covers unemployment, workers compensation, car insurance, liability, fire,
theft, property damage, etc.
5960 Insurance Premiums -Miscellaneous -Expenses For notary bonds and public official bonds.
5980 Property Damage -Expenses to repair municipal property damage that will be covered with
insurance.
6110 Materials &Supplies -Expenses for operating materials &supplies such as custodial cleaning
supplies, garbage stickers, miscellaneous building supplies, police training supplies, ammunition,
badges, etc.
6111 Supplies -Custodial -Expenses for contracted custodial services at the Recreation Center.
6120 Supplies -Childcare -Expenses For small toys, books, and art supplies for the childcare room
at the Recreation Center.
6130 Supplies -Safety -Expenses for first aid and other miscellaneous safety items for the
Recreation Center.
6141 Office Furniture/Equipment - Expenses for desks, chairs, and other small equipment at the
Recreation Center.
6142 Fitness Equipment - Expenses for fitness balls, bands, mats, cardio equipment, etc. at the
Recreation Center.
6210 Bulk Office Supplies - Expenses for pens, pencils, paper, staples, binders, folders, calendars,
ink, etc.
6250 Gasoline &Oil -Expenses for gasoline and oil used for municipal vehicles.
6270 Small Equipment &Tools -Expenses for equipment and tools used to maintain municipal
equipment and personnel such as body armor, evidence equipment, weed trimmers, shop tools, etc.
6290 Safety &Personal Protection Equipment -Expenses for personal protective equipment
provided to employees such as goggles, boots, chest waders, etc.
6310 Police -Canine Unit -Expenses for training, food, veterinarian bills, etc. for the sworn canine
officer.
6340 Police -Forfeiture Expenses -Expenses that are paid for using police forfeiture funds that
must be tracked separately.
6920 Special Events -Expenses for community Festivals and events such as the fireworks,
community pool party, daddy/daughter date night, etc.
6940 Administrative Expenses -Expenses for notary fees, secretary of state fees For vehicles,
county recording fees, holiday lighting, real estate taxes, etc.
6945 Development Expense -Sales tax incentive payments based on the terms of the development
agreement.
6950 Forestry -Expenses for the tree program including trees, watering, chainsaws for trimming,
tree removal, etc.
6960 Miscellaneous Expenses -Expenses for miscellaneous items not previously covered such as
insurance processing fees.
6961 Miscellaneous Refunds -Expenses For refunds of retained personnel deposits that are not
used for development expenses.
6965 Reimbursements -Flexible Spending -
spending accounts for qualified medical expenses.
Expenses paid to employees from their flexible
6970 Distributions -Schools -Permit fees that are collected on behalf of the school districts from
the developer to pay its fair share of public improvements that maybe required because of the new
development. These fees are paid out to the school districts annually.
6980 Distributions -Library - Permit fees that are collected on behalf of the library district from
the developer to pay its fair share of public improvements that may be required because of the new
development. These fees are paid out to the library district annually,
6940 D13tz'ibutio113 -Fire -Permit fees that are collected on behalf of the fire district from the
developer to pay its fair share of public improvements that may be required because of the new
development. These fees are paid out to the fire district annually.
7100 Bond Principal -Amount paid for principal payment on bonds.
7110 Capital Lease Principal Payments -Amount paid for principal payments on capital leases,
Capital leases are used when the item is going to be purchased when the term of the lease is over,
7200 Bond Interest -Amount paid for interest payments on bonds, which are charges paid on the
principal based on an agreed upon rate.
7300 Fees -Paying Agent -Amount paid to an escrow agent for various filings For the issued bonds.
8100 Land Acquisition -Amount used for the purchase of land.
8200 Buildings -Amounts paid for the acquisition and improvements to municipal buildings.
8300 Equipment -Amount paid for the acquisition of equipment costing $5,000 or more such as
machines, shop equipment, playground equipment, mowers, etc.
8400 Vehicles -Amount paid for the acquisition of vehicles and the necessary equipment to use the
vehicle.
8500 Utility System -Amount paid for the acquisition and improvements to the water and sewer
utility systems,
8600 Streets -Amount paid for improvements to municipal streets.
8800 Parr Improvements -Amount paid for improvements to municipal parks,
8900 Public Improvements -Amount paid for the acquisition and improvements to other
miscellaneous municipal capital items.
9510 Depreciation - Amount charged as an expense for an expired portion of a fixed asset.
9901 Transfer - General Fund - Internal Fund Transfers from the Tourism Fund to cover
miscellaneous special events with hotel/motel taxes.
9904 Transfer -Debt Service Fund -Internal Fund Transfers from various City funds to cover
annual bond interest and principal costs for City projects.
9920 Purchase Service -Risk Management -Internal Fund Transfers from General Fund
Departments as well as Water/Sewer Fund Departments and Information Technology Fund to cover
the insurance premiums for McHenry County Municipal Risk Management Agency. These premiums
30
cover unemployment, workers compensation, car insurance, hability, fire, theft, property damage,
ACV
9921 Purchase Service - Billing General Fund - Internal Fund Transfers to the General Fund for
the water and sewer portion of costs that are paid for by the finance department for billing
administrative duties and water/sewer bill mailings.
9922 Purchase Service -Information Technology -Internal Fund Transfer to cover information
technology expenses for all departments within the city. These expenses include salaries and
benefits for Information Technology employees as well as computers, supplies, and software used in
all City departments.
9923 Purchase Service -Audit Fund -Internal Fund Transfer to cover the external auditing annual
fees for all funds within the City.
9930 Transfer --Water/Sewer Fund -Internal Fund Transfer to the Water and Sewer Divisions to
cover Utility Division expenses.
9936 Transfer -Utility Improvement Fund -Internal Fund Transfer From the Water and Sewer
Divisions to cover Capital expenses for the Utility System.
9942 Transfer -Capital Improvements Fund -Internal Fund Transfer From the General Fund
Departments to cover capital charges for items that are over $10,000 and have a useful life of over S
years.
9944 Transfer -Band Fund - Internal Fund Transfer from the General Fund to cover the music in
the park weekly event. This covers the expenses for the municipal band as well as community bands
that perform.
9945 Transfer -Civil Defense Fund -Internal Fund Transfer from the General Fund for expenses
to train personnel and maintain the early warning system equipment to protect and defend the City
from natural disasters or man-made environmental disasters through early warning and public
notification systems.
9946 Transfer -Capital Equipment Fund -Internal Fund Transfer from the General Fund
Departments to cover capital vehicle and equipment charges for items that are over $10,000 and
have a useful life of over 5 years.
31
W
�
if I
�t Revs
A 1
Summary of Proposed Revenues - All Funds
A B
C D E F
1Revenue
Budget
2
3
Total
Net
4
Revenue
Transfers
Revenue
5
General Fund
$29,775,254
$630,289
$29,1441965
6
7
Sp ecial Revenue Funds
8
Band Fund
12,000
12,000
0
9
Civil Defense Fund
41000
43000
0
10
Alarm Board Fund
2301000
0
230,000
11
Audit Fund
48,550
22,124
26,426
12
Annexation Fund
227,500
0
227,500
13
Motor Fuel Tax Fund
11283,672
0
11283,672
14
Local Motor Fuel Tax Fund
360,000
0
3601000
15
Developer Donations
120,000
0
120,000
16
Developer Donations Parks
2431000
0
243,000
17
TIF Fund
11513,000
0
11513,000
18
19
Pageant Fund 41000 0 41000
Tourism Fund 268.000 0 268,000
Total Special Revenue Funds 41313,722 38,124 41275,598
20
21
22
Capital Project Funds
23
Recreation Center Construction Fund
7833156
250,356
532,800
24
25
Special Service Area #1A
Special Service Area #4
0
15,580
0
0
0
15,580
26
Capital Improvements Fund
11950
0
11950
27
Capital Maintenance & Re lacement Fund
1,126,000
0
11126,000
28
Capital Equipment Fund 400 0 400
Total Capital Project Funds 11927,086 250t356 11676,730
29
30
31
Debt Service Funds
32
Debt Service Fund 2.349.940 2.349,940 0
Total Debt Service Funds 2,349,940 21349,940 0
33
34
35
Proprietary Funds
36
Public Works - Water
31197,500
0
31197,500
37
Public Works - Wastewater
51966,836
0
61966,836
38
Public Works - Utility
11057,870
11057,870
0
39
Capital Development Fund
221,000
0
221,000
40
Marina O erations Fund
45,500
0
451500
41
Utility Improvements Fund 271,580 265.580 6.000
Total Proprietary Funds 10,760,286 11323,450 9,436,836
42
43
44
Internal Service Funds
45
46
1 Risk Management Fund
1 Information Technology Fund
1,1491503
11293,988
11124,503
1,2903988
25,000
31000
47
1 Health Insurance Fund 4.125.008 3,6691912 555,096
Total Internal Service Funds 63568,499 51985,403 583,096
48
49
50
Fiduciary Funds
51
52
53
1 Medical Flexible Spending Fund
Revolving Loan Fund
Police Pension Fund
45,000
11230
2,861,455
0
0
671,455
45,000
11230
2,190,000
54
Develo ment Escrow Fund
0
0
0
55
Retained Personnel Fund 75.000 21 75.000
Total Fiduciary Funds 2.982.685 671A55 2.311.230
56
57
58
33
Comparison of Budget vs. Proposed Revenues - Aii Funds
A
B
C
D
E
1Revenue
Budget
2
3
Pecent
4
2022123
2023124
Difference
Chancie
5
General Fund
$26,614,999
$29,7751254
$3,260,255
12.3%
6
7
Special Revenue Funds
8
Band Fund
12,000
12,000d(457,750)
000%
9
Civil Defense Fund
41000
41000
0.0%
10
Alarm Board Fund
215,000
230,000
7.0%
11
Audit Fund
56,126
48,550
-13.5%
12
Annexation Fund
225,000
2279600
111%
13
Motor Fuel Tax Fund
137410422
11283,672-26.3%
14
Local Motor Fuel Tax Fund
3603000
360,000
0.0%
15
Develo er Donations
120,000
120,000
0.0%
16
Develo er Donations Parks
407,750
243,000-40.4%
17
TIF Fund
112750000
10513,000
18.7%
18
Pa eantFund
4,000
4,000
0.0%
19
Tourism Fund 225,000
Total Special Revenue Funds 41645,298
268,000 43,000
41313,722 (331,576)
19.1%
-7.1%
20
21
22
Capital Project Funds
23
Recreation Center Construction Fund
6661185
7839156
1163971
17.6%
24
Special Service Area #1A
0
0
0
0.0%
25
Special Service Area #4
15,580
151580
0
0.0%
26
Capital Improvements Fund
250
11950
1,700
680.0%
27
Capital Maintenance & Replacement Fung
0
1,126,000
1,126,000
#DIV/01
Equipment Fund
Total Capital Project Funds
1511900
833,915
400
11927,086
(151,500)
11093,171
0.0%
131.1%
qCapital
31
1 Debt Service Funds
32
Debt Service Fund
Total Debt Service Funds
2.351.470
21351,470
2,349,940
21349,940
1 530
(11630)
-0.1%
33
34
35
lProprlotary Funds
36
Public Works - Water
3,203,111
31197,500
51611
42%
37
Public Works - Wastewater
61836,358
61966,836
130,478
2.2%
38
Public Works" Uility
11033,200
11057,870
24,670
2.4%
39
Capital Development Fund
3710000
221,000
150,000
-40.4%
40
Marina Operations Fund
25,500
45,500
200000
78.4%
41
Utility Improvements Fund
Total Proprietary Funds
17.847
10,487,016
271,580
10,760,286
2531733
2731270
1421IN
2.6%
42
43
44
Internal Service Funds
45
Risk Management Fund
9430503
11149,503
206,000
21.8%
46
Information Technology Fund
l s0731337
11293,988
220,651
20.6%
47
Health Insurance Fund
Total Internal Service Funds
3,7264962
617430802
4.125.008
615681499
3980046
824,697
10.7%
14.4%
48
49
50
Fiduciary Funds
511
Employee Flexible Spending Fund
40,000
45,000
51000
12.5%
52
Revolving Loan Fund
0
11230
11230
#DIWOI
53
Police Pension Fund
238051600
21861,455
55,855
2.0%
54
Development Escrow Fund
0
0
0
0.0%
55
Retained Personnel Fund 75.000 75.000 0 0.0%
Total Fiduciary Funds 2.920,600 92. 82,685 62.085 2.1%
All Funds $53,497100
56
67
58Total
34
Summary of Revenues and Other Financing Sources - All Funds
Source 2022123
Property Taxes 517999947
..�
2023/24
Dollar Change
Change
51874,947
75,000
1.29%
Sales Taxes
12,490,464
13,327,374
836,910
6.70%
Intergovernmental Revenue
51636,733
1 619911451
13354,718
24.03%
Licenses & Fines
21084,000
210681000
(16,000)
-0.77%
Services Charges
11,764,709
11,871,532
1061823
0.91%
Interest Income
1,714,600
21353,580
638,980
37.27%
Bond Proceeds
-
-
-
0.00%
Transfers
10, 226, 253
11,249, 017
1,022,764
10.00%
Other Financing Sources
317801394
41941,571
11161,177
30.72%
Total
53,497,100
58,677,472
51180,372
9.68%
2023/24 Budget Revenues by Source
Other Financi
Sources
8%
Transfers
19%
Bond Proceeds ,
Interest Income J
4%
Licenses &Fines
4%
Sales Taxes
23%
I ntergovernmenta I
Revenue
12%
35
Summary of Proposed Expenditures - All Funds
A
B
C
D
E
F
G
1
pense Budgetr
2
3
Total
Net
4
Rudgell
ImsfeLs
d e
5
General Fund
6
Administration
$3,974,946
$1389357
$3,836 589
7
Elected Offices
64
b50
7 173
57,377
8
Community Development
1,493,227
1
111,1051
1,382122
9
Finance De artmenl
21291
091
375 677
11915,414
10
Human Resources
363,082
21,898
341,184
11
Economic Develo ment
6040062
10,571
493 491
12
Police Commission
81328
0
8 328
13
Police Department
123249,814
2 664,655
91565,159
14
Dispatch Department
3,166,939
132,872
3,024
067
15
Public
Works - Administration
538 614
50 667
479 947
161
Public Works - Streets
41139,726
163785
3,975,941
17
Parks and Recreation
1,597,919
469:602
11128,117
18
Total
Parks Maintenance
General Fund
1,499,041
310881,339
21
49154,562
1,499,041
27,726,777
19
20
21
Special
Revenue Funds
22
Band Fund
14,500
0
14,500
23
ICivil Defense Fund
5 300
0
5 300
24
Alarm Board Fund
145
000
0
145,000
25
Audit Fund
50,200
0
60,200
26
Annexation Fund
85,000
35,000
50,000
27
Motor Fuel Tax Fund
2,936,206
0
2 936,206
28
Local Motor Fuel Tax Fund
300,000
1
0
300,000
29
Developer Donations
120,000
0
120,000
301
Developer Donations Parks
600,959
0
600,959
31
TIF Fund
11421
535
221,635
11200
000
32
Pa eanl Fund
3 900
0
3 900
33
Total
JTourlsm Fund
Special Revenue Funds
261,260
61943,650
99,000
366,635
162,250
50588,315
34
35
36
Capital
Project
Funds
37
Recreation Center Construction Fund
789,256
210,960
578,306
38
Special Service Area M
0
0
0
39
Special Service Area 84
16,680
15,680
0
40
Capital Improvements Fund
48,500
0
48,500
41
Capital Maintenance & Replacement
1,974
000
0
1,974 000
42
Capital Equipment
Total Capital Project Funds
30.000
21857,336
0
226,530
30,000
2,6301806
43
44
45
Debt
Service
Funds
46
Total
Debt Service Fund
Debt Service Funds
24349,942
2,349,942
02,349,942
0
21349,942
47
48
49
Proprietary
Funds
50
Public Works - Water
3,135,868
1
234 331
1901 537
51
Public Works - Wastewater
716951137
7495183
6,945 954
52
Public Works - Ulilit
1,057,870
0
11057,670
53
Capital Development
Fund
250 000
250,000
0
54
Marina Operations Fund
44,000
0
44,000
55
Total
Utility Improvements Fund
Proprietary Funds
350.000
12,532,875
0
24233,614
350,000
10,299,361
b6
57
58
Internal
Service Funds
59
Risk
Mane ement Fund
1,149,503
22,503
11127,000
60
information TechnologyFund
1,370,152
10,683
16359,469
61
Total
Health Insurance Fund
Internal Service Funds
4,090,694
6,610,249
0
33,186
4,090,594
6,577,063
62
63
64
FiduciaryFunds
65
Employee Flexible Spending Fund
45,000
0
45,000
66
RevolvingLoan Fund
0
0
0
67
Police Pension Fund
2,450,444
4,325
2,446 119
68
Development
Escrow Fund
0
0
0
69
Retained Personnel Fund
Fiduciary Funds
75 000 0
2 570 444 4 325
75,000
2 566 119
70
71
72
Total All Funds $64,746tO35 $71007652
36
Comparison of Budget vs. Proposed Expenditures - All Funds
q
g a
C
D
E F
G H
I
M,Expense
Budget1
2
3
4
5
Total
Total
6
Budgeted
Budgeted
7
Expenditures
Expenditures
Percenta e
6
02 22123
ZqgM
l e e ce
C e
9 lGeneral
Fund
101
lAdmlnlstratton
321828169
$3,974,946
$1 148 777
40,65%
11
Elected Offices
83 310
04,550
18,760
-22.52%
12
Community Development
103191951
1,493,227
173,276
1113%
13
Finance Department
2,161,316
2,291091
129773
6,00%
14
Human Resources Department
309 057
363,082
54,025
0.00%
15
Economic Development Department
405,510
504,062
98,552
0000%
18
Police Commission
6953
81328
1,375
19078%
17
Police Department
11254,736
12,2491814
9950m
8084%
10
Dispatch Department
21447,519
93
3156,9
70942 0
28,09%
19
PublicWorks-Administration
5050012
5388614
1 31,802
8.27%
20
1 Public Works - Streets
3 857,382
4,139,726
282,344
7,32%
21
jParks and Recreation
2,943,306
1 697,918
1 1345,387)
4531%
22
Parks Maintenance
0
1 499 0 1
1.4996041 6
#DIVLOI
Total
General Fund
289122,023
31,061,339
3,7596316
13,37%
23
24
25 lSpeclal
Revenue Funds
26
Band Fund
14,500
14,500
0
0.00%
27
Civil Defense Fund
VOW
6 300
0
0000%
28
Alarm Board Fund
112,000
145,000
33 000
29.46%
29
Audit Fund
51,000
503200
800
-1 .67%
30
Annexation Fund
85 000
85,000
0
0000%
31
1 Motor Fuel Tex Fund
%293,511
20936,206
357 305
-10.85%
32
Locel Motor Fuel Tax Fund
30%000
300,000
0
0.00%
33
Develo er Donatlons
1201000
120,000
01
0600%
34
Developer Donations Parks
1,242,500
800,859
6416541
-51.63%
35
TIF Fund
2420735
1421,535
999,200
41.28%
36
Pa eanl Fund
30900
3 900
0
0,00%
37
Tourism Fund
256,350
261.250
9 90O
1,9I%
Total Special Revenue Funds
7,904,798
b,943,850
(1,960,948)
311
39
40
]Capital
Project Funds
41
Recreation Center Construction Fund
683,619
7890256
105 637
15.450/6
42
Special Service Area #1A
0
0
0
0,00%
43
Special Service Area #4A
15,347
156680
233
1,52%
44
Capital ImrovementsFund
8710000
48,500
823,400
-94,44%
451
1 Capital Maintenance R Replace entFund
0
1,974 000
1 974 000
#DIV/01
46
JCapllal Equipment Fund
151'900
30,00_00
(121,9001
AM
Total Capital Project Funds
1,722,766
20857,336
10134,570
65.86%
47
48
49
Debt Service Funds
50
IDebt Service Fund
1 2,3511,47112,349,9421
f1.5291
-0 07°
Total Debt Service Funds
2,351,471
2,3494942
(1,529)
-0,07%
51
52
53
Pro rietary Funds
54
Public Works - Water
21992*9932250gOOO
5
4.77%
55
Public Works - Wastewater
7108,628,9
40W��205000
8.25%
56
PublicWorks -Utili
1033820070
2.39°h
57
Capital Development Fund
145,00000
0.0058
Marina 0 erations Fund
43,00000
2,33%
59
Utility Improvements Fund
145,000
3500
Total Proprietary Funds
11,467,821
12,532,876
1,065,054
9,29%
60
61
62
Internal Service Funds
63
Risk Management Fund
11041,583
1,149,603
1071920
10,36%
64
Information TechnologyFund
1,204,337
1,370,152
1 165g!3151
13,77%
65
JHealth Insurance Fund
3,723,22
4,090 594
3137,35
9,87
Total Internal Service Funds
50969,149
s,610,249
641,100
10,74%
66
67
66!Fiduciary
Funds
69
Employee Medical Flexible Spending Fund
iRevolving
40,000
45 000
50000
12,60%
70
Loan Fund
0
0
0
0,00%
71
Police Pension Fund
2,582,423
21450444
131,979
5.11%
72
Development Escrow Fund
0
1 01
0
0000°%
73
Retained Personnel Fund
75a_000
75,000
0
0,00%
Total Fiduciary Funds
20697,423
21570,444
(126,979)
-4.71%
74
75
7s$64,746,035
r
37
Expenditures by Function - All Funds
Function
2021/22
2022/23
2023/24
Dollar
Change
Percent
Change
General Government
316521335
412171487
417701833
5531346
13.12%
Public Safety
1316151307
13,762,331
15,166,473
11404,142
10.20%
Public Works
11,900,579
13,454,337
14,4051749
951,412
7.07%
Culture and Recreation
310631941
31200,107
3,3881614
1881507
5.89%
Capital Projects
611001653
919701814
10,253,565
282,751
2.84%
Comm. & Econ. Dev.
11500,009
11919,907
21140,613
220,706
11.50%
Debt Service
213501326
21351,471
21349,942
(11529)
-0.07%
Other
41481,136
41782, 309
5, 262, 594
4801285
10.040/6
Total
46,664,286
531658,763
571738,383
41079,620
7.60%
other 2023/24 Budget
9%
Expenditures by Function*
Debt Service !/
Comm. &Econ
D ev.
4%
4%
Capital Projects
18%
Culture and
Recreation
6%
PublicVJori<s
25%
General
Government
8%
Public Safety
26%
O F T II E FOX R I V E R
Fiscal Year 2023/2024
Annual Budget
Is
39
General Fund Revenues, Expenditures & Fund Balance Summary
General Fund Overview
The General Fund represents the core revenue and expense fund for municipal functions. General
Fund Revenues are comprised of Intergovernmental sources such as Property Tax, State Sales Tax,
Local Sales Tax, State Income Tax, State Replacement Tax, State Pull Tabs, Inter Track Wagering, State
Communications Tax, and State Grants; Local Sources such as Franchise Fees, Licenses and Permits,
Fines and Forfeitures, Charges for Services, and Interest Income; and Miscellaneous sources such as
Donations and Reimbursements for Services.
General Fund Expenses include personnel, contractual, supplies and other operating expenses
related to the following operating budgets - Administration (100,01), Elected Officials (100.02),
Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic
Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100.23), Public
Works -Administration (100.30), Public Works -Streets (100.33), and Parks and Recreation (100.41).
Please reference the spreadsheet found at the end of this section titled "General Fund -Revenues,
Expenditures and Fund Balance Summary"for the following discussion.
General Fund Revenue. Expenditure and Fund Balance Summary
In summary, FY23/24 proposed General Fund Revenues and Expenditures reflect total
revenues of $29,775,254 (an increase of $3,260,255 or 12.30% from the FY22/23 Budget
amount — Rows 26 Column U), and total operating expenditures of $29,292,939 (an increase
of $2,928,366 or 11.11, less capital, from the FY22/23 Budget amount — Row 37, Column U).
This reflects a net difference (revenues over expenditures) of $482,315. Importantly,
this means that the proposed General Fund Operating Budget, as presented, is
BALANCED.
While COVID-19 has made many revenues volatile over the last few years, the City has been
fortunate to see recovery in many revenue sources. While specifics will be detailed in the
discussion that follows, the primary reasons for increases in revenues relate to projections
for State Sales Taxes (an increase of $248,402 or 2.7% - Row 10, Column V), Local Sales Taxes
(an increase of $588,508 or 17.95% - Row 11, Column V), State Income Taxes (an increase
of $626,818 or 17.46% - Row 12, Column V), State Replacement Taxes (an increase of
$120,000 or 150% - Row 13, Column V) and Reimbursements (an increase of $1,028,477 or
52.20% - Row 22, Column V). These are offset by a decrease to Property Taxes (a decrease
of $10,000 or 0.2% - Row 9, Column V) and a decrease to Licenses and Permits (a decrease
of $12,500 or 4.07% - Row 19, Column V).
Regarding General Fund Expenditures, Personnel costs are proposed to increase by
$1,807,884, or 10.60% (Row 29, Column V) due to Union Contract increases, CPI-U increases
for non -bargaining unit employees, the addition of 3 police officers, and 2 dispatchers, and
higher insurance costs. It should be noted that a portion of the Police Dispatch Center costs
and the School Resource Officers that are in the Middle and High schools are offset by General
Fund Revenue increases in the form of reimbursements (reflected in Row 22, Column U)
from dispatch partner agencies, customers, and the school districts. Most notably, FY23/24
General Fund Expenditures, as proposed, reflect increased Contractual costs of $581,616 or
18.06% (Row 30, Column U) and Supply costs reflect an increase of $105,875 or 10.04%
(Row 31, Column U). Reasons for these increases are discussed in detail on page 10 of this
memorandum.
Finally, the FY23/24 General Fund Expenditures, as identified in this attachment, do not
include any transfers for Capital Improvement or Capital Equipment. The Fund Balance
Policy defines the process for transferring excess funds to the Capital Improvement and
Capital Equipment Funds. In FY22/23 and FY23/24 capital projects have been budgeted in
the General Fund using Fund balance which has canceled the Fund Balance transfer that
would have occurred during the audit process. Also, with the creation of the ComEd and
Nicor Utility Taxes, capital projects will be budgeted using these funds going forward. The
Fund Balance and Reserve Policy may need to be addressed in the years ahead if the General
Fund Balance continues to grow.
Carrying the General Fund Revenue and Expenditure estimates through the end of the fiscal
year (April 301"), it is projected that the total General Fund Balance will be $16,935,220 at
the end of FY22/23 (Column T, Row 43). As defined in the Fund Balance and Reserve Policy,
the estimated required 120-day General Fund Balance Reserve would be $8,787,381 and so
the amount projected is approximately $8,147,839 higher than the required General Fund
Balance. Included in the General Fund balance is the American Rescue Plan Act COVID funds
in the amount of $3,682,586 which staff has reserved for the Route 31 widening capital
project. Also included in the General Fund balance are PSAP Grant funds ($769,696) which
are reserved specifically for dispatch expenses and are approved for spending by the
NERCOM board. The remaining General Fund Balance as of FY22/23 (Column T, Row 47) is
the amount that could be reserved for capital projects, but as you will see this amount is
much lower after the FY23/24 proposed budget due to increases in operating expenses and
capital project expenses.
General Fund Revenues
General Fund Revenues are derived from anumber ofsources -taxes, video gaming, licenses
and permits, fines and forfeitures, franchise fees, charges for services, reimbursement for
services, donations, interest income, and other miscellaneous sources. While some
revenues, like Property Taxes, can be clearly identified and estimated based on the adoption
of the annual property tax levy, or based on historical performance, other revenues - such
as Sales Taxes and State Income Tax - can be volatile based on economic trends.
If anything, the economic recession of 2007/2008 sent a message to local governments that
economic -based revenues are not guaranteed and can fluctuate based on the economy and
disposable income. Actions taken at the local level to plan/adjust from this event resulted in
the establishment of a "new norm" for future budget considerations.
In estimating General Fund Revenues for the purpose of budget development, the City
Administration takes a conservative approach in order to: 1) ensure that General Fund
Revenue projections are not overstated to avoid deficit spending and the need to utilize the
Al
General Fund Balance (e.g., 120 day unassigned fund balance) for operational expenses; 2)
limit excessive increases in operating expenditures; and 3) maintain a financial "buffer", in
the form of the General Fund Balance, to protect the City from future unforeseen economic
threats. Utilizing this philosophy, the City Administration then considers past revenue
performance, current economic trends, local economic conditions, and economic forecast
models developed by the Illinois Municipal League (IML) for use by local governments in
developing revenue projections for the purpose of budget development.
FY22/23 Budgeted Revenues (Column S)
In FY22/23 total budgeted General Fund Revenues were $26,514,999 (Column S, Row 26).
Of this, $5,037,941(19%) was from Property Taxes, $9,212,492 (34.7%) was from the City's
1% share of the State Sales Tax, $3,277,972 (12.4%) was from the .75% Local Sales Tax, and
$31S89;961 (13.5%) came from the City 's share of the State Income Tax. Revenues derived
from these four (4) sources were budgeted at $21,118,366 or 79.6% of total General Fund
Revenues. Of the remaining $5,396,633 (20.4%) in budgeted General Fund Revenues,
$11173,889 (4.4%) were from Charges for Services, $1,970,394 (7.4%) from Reimbursement
for Services, $341,500 (1.3%) from Fines and Forfeitures, $307,500 (1.2%) from Licenses
and Permits, $380,000 (1.4%) from Franchise Fees, $850,000 (3.2%) from Video Gaming,
$200,000 from Telecommunications Tax (0.8%) and the remaining $173,350 (0.7%) came
from all other sources combined.
FY22/23 Estimated Revenues (Column T)
The following estimated revenues are based on 10-months of actual revenues and then
projected through the remainder of the fiscal year (April 30, 2023). Unfortunately, in some
cases this estimation is more difficult than simply dividing the 10-month actual by 10 and
multiplying by 12 because of when specific revenues are received. Further, FY22/23 Actual
revenues will not be known and confirmed until approximately 2-3 months (June -July) after
the close of the fiscal year due to the timing involved with the receipt of state -shared
revenues and, ultimately, the completion of the annual audit in September/October 2023, 4-
5 months into the new budget year.
At this time, estimated General Fund Revenues are projected to be $31,096,84.7 (Column T,
Row 26) or $4,581,848 (17.28%) higher than FY22/23 Budgeted revenues of $26,514,999.
This reflects an estimated increase of $419,456, or 1.4%, from FY21/22 Actual revenues of
$30,677,391.
Notably, FY22/23 Estimated Revenues, when compared to FY21/22 Actual revenues and
FY22/23 Budgeted revenues, highlight the following:
• (Row 10) State Sales Tax revenue is projected to be $179,268 (2%) higher than
budgeted and $164•,355 (1.8%) higher than the FY21/22 Acfival amount.
• (Row 11) Local Sales Tax revenue is projected to be $562,102 (17.2%) higher than
budgeted and $260,000 (7.3%) higher than received in FY21/22.
42
• (Row 10 + Row 11) Combined, total Sales Tax revenue is estimated to be $74.1,370
(5.9%) higher than budgeted and $424•,355 (3.3%) higher than the FY21/22 Actual.
State Sales Tax have shown significant signs of an economic recovery since the
beginning of COVID49. Also, Local Sales Tax revenues do not include the sale of
licensed or titled items - such as cars, boats, motorcycles, etc. As such, while the
economic recovery and resulting increase in the sale of licensed vehicles has a
positive impact on the City's portion of the State Sales Tax, this aspect has had no
impact on Local Sales Tax revenues.
• (Row 12) State Income Tax receipts are estimated to be $643,099 (17.9%) higher
than budgeted and $68,191 (1.6%) lower than FY21/22.
• (Row 13) State Replacement Tax receipts are estimated to be $174,105 (217.6%)
higher than budgeted and $70,000 (38%) higher than FY21/22.
• (Row 15) Self Storage Tax receipts were not budgeted in FY22/23 as the tax was
passed by City Council in June of 2022 and went to effect on 1/1/2023. It is
anticipated that $41,000 will be collected in the four months of FY22/23.
• (Row 17) Video Gaming revenues are estimated to be $940,000 or $90,000 (10.6%),
higher than budgeted and $33,767 (3.7%) higher than FY21/22.
• (Row 20) Fines and Forfeitures revenues are estimated to be $55,525 (16.3%) higher
than budgeted and $23,507(5.6%) lower than FY21/22.
• (Row 21) Charges for Services revenues are estimated to be $108,577 (9.3%) higher
than budgeted and $11,053 (0.9%) higher than FY21/22.
• (Row 22) Reimbursements for services revenues are estimated at $580,202 (29.5%)
higher than budgeted and $182)352 (6.7%) lower than FY21/22. The large increase
over FY22/23 budgeted is due to PSAP Dispatch Funds that were not budgeted for.
• (Row 23) Interest Income revenues are estimated to be $322,500 (12900%) higher
than budgeted and $312,843 (2573.4%) higher than FY21/22.
• (Row 25) Miscellaneous Income revenues are estimated at $1,884,059 (2898.6%)
higher than budgeted and $209,064 (9.7%) lower than FY21/22. This is due to ARPA
COVID funds received in two installments, one in FY21/22 and one in FY22/23 that
were not budgeted for.
In summary, FY22/23 Estimated Revenues are projected at $4,581,548 (17.3%)
higher than budgeted primarily due to State and Local Sales Tax receipts, State Income
Tax, Video Gaming receipts, Fines and Forfeitures, Charges for Services, Interest
Income, and Reimbursements. When compared to FY21/22 Actual revenues, total
43
General Fund Revenues increased $419,456 (1.49/o), this is primarily due to State and
Local Tax receipts, State Replacement Tax, and Interest Income which offset decreases
in State Income Tax receipts, Licenses and Permits, Reimbursements, and
Miscellaneous Income.
FY23/Z4 Proposed Revenues (Column R)
FY23/24 Proposed General Fund Revenues represent a net increase of $3,260,255 (11.5%)
from FY22/23 Budgeted revenues and a decrease of $902,137 (2.9%) from FY21/22 Actual
revenues. Highlights of changes to General Fund Revenues proposed for FY23/24 include:
• (Row 9) City Staff did not recommend an increase to the property tax levy and with
declining Road and Bridge Taxes, Property Tax revenues are estimated to be $10,000
(0.2%) lower than FY22/23 Budget.
• (Row 10) State Sales Tax revenues are proposed at $9,460,894, $248,402 or 2.7%
higher than FY22/23 Budget. This is due to the increase in Use Tax from online sales
as well as rebounding Sales Taxes.
• (Row 11) Local Sales Tax revenues are proposed at $3,866,480, an increase of
$588,508 (18%) from the amount budgeted in FY22/23.
• (Row 10 +Row 11) Combined State and Local Sales Tax revenues are proposed at
$13,327,374, an increase of $836,910 (6.7%) from the FY22/23 Budget amount.
• (Row 12) State Income Tax revenues are proposed at $4,216,779, an increase of
$626,818 (17.46%) from FY22/23. Regarding State Income Tax revenues, please
note the following:
o There are multiple agencies working to restore the Local Government
Distributive Fund (LGDF), which includes Income Tax distribution, to its full
10 percent (which was cut to 6% in 2011 and changed a few times since then,
but sits at just over 6% currently). Over the years the Governor has proposed
cutting an additional 10% from the LGDF. Restoring or cutting these funds
could represent a large increase or decrease in revenues.
o Staff will continue to watch these developments closely in case expense
adjustments need to be made in order to offset the decrease in revenue.
• (Row 144) State Telecommunication Tax revenues are proposed at $200,000, which is
equal to the amount budgeted in FY22/23, revenues have been declining over the last
few years.
• (Row 15) Self Storage Tax receipts are expected to be $120,000 in FY23/24.
Revenues were not budgeted in FY22/23 as the tax was passed by City Council in June
of 2022 and went to effect on 1/1/2023.
• (Row17) Video Gaming revenues are proposed at $900,000, a $50,000
increase from FY22/23 Budget amount.
• (Row 19) Licenses and Permits revenues are proposed to decrease by $12,500, or
4.07% from the amount budgeted in FY22/23.
• (Row 21) Charges and Services revenues are proposed to increase by $39,400, or
3.36% from the amount budgeted in FY22/23.
• (Row 22) Reimbursements which includes the Police Dispatch Center revenues
derived from partner and customer agencies served through this facility, police
school resource reimbursements, police impound fees, and other miscellaneous
reimbursements are proposed to increase $1,108,477 or 56.3%.
• (Row 23) Interest Income is proposed to increase $347,500 (13900%) due to
I
ncreasing interest rates.
In summary, FY23/24 Proposed Revenues are $3,260,255 (12.3%) higher than
budgeted in FY22/23 and $1,321,593 (4.2%) lower than FY22/23 Estimated revenues.
The primary reasons for the proposed increase include an increase in State Sales Tax
($248,402), Home Rule Sales Tax ($588,508), an increase to the Income Tax
($626,818), an increase to State Replacement Tax ($120,000), the addition of Self
Storage Tax ($120,000), an increase in Video Gaming revenues ($50)000), an increase
in Fines and Forfeitures Revenues ($21,500), an increase to Charges and Services
revenues ($39,400), an increase to Reimbursement revenues ($1,108,477), and an
increase to Interest Income ($347)500) . These increases are offset by decreases to
Property Tax revenue ($10,000) and Licenses and Permit Revenues ($12,500).
General Fund Expenditures
General Fund Expenditures include personnel, contractual, supplies and other operating
expenses related to the following operating budgets - Administration (100.01), Elected
Officials (100,02), Community Development (100.03), Finance (100.04), Human Resources
(100.05), Economic Development (100.06), Police Commission (100,21), Police (100.22),
Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets
(100.33), and Parks and Recreation (100.4.1).
In addition, the General Fund is the funding source for all capital improvement and capital
equipment projects that are not related to water and/or sewer improvements or
maintenance projects as these are funded through the Water and Sewer Fund and Capital
Development Fund. Finally, the General Fund also serves as a funding source for revenue
transfers to other municipal accounts found within Special Revenue Funds, Debt Service
Funds, Internal Service Funds, and Fiduciary Funds.
GI✓
FY22/23 Budgeted Expenditures (Column S)
In FY22/23, total budgeted expenditures (capital and operating) were $28,122,023.
Budgeted capital expenditures were $1,757,450 and budgeted operating expenditures were
$26,364,573, While this amount reflected an increase of $2,164,306 (8.3%) from the
FY21/22 Actual expenditures (Column R, Row 35), this difference was due to contractual
expenses added for street resurfacing as well as personnel expenses.
FY22/23 Estimated Expenditures (Column T)
In general, the City Administration - including Department Directors, Superintendents, and
Managers - closely monitor expenditures throughout the year to ensure that operating
budgets stay within the approved amounts. Fiscal diligence on behalf of all of these
individuals most often results in expenditures being less than the amount budgeted. Even
with surging prices due to inflation expenditures have been well managed and continue to
fall within the budget.
For FY22/23, operating expenditures are estimated at $26,4.35,266, or $70,693 (0.27%)
more than the budgeted amount of $26,364,573. Highlights of changes to FY22/23
Estimated Expenditures include:
• (Row 29) Reduced Personnel costs of $21,458 (0.13%) resulting from budgeted
positions unfilled during the year which were offset slightly by higher overtime costs.
• (Row 30) Contractual costs are estimated at $116,860 (3.63) higher than the original
budget, but a few budget amendments ($195,285) were completed for the building
demolition expenses so overall expenditures are well under budget.
• (Row 31) Supply costs are estimated at $14,417 (1.37%) less than budget.
• (Row 32) Other estimated expenditures are estimated at $10,292 less than the
original budget.
• (Row 33) Capital Outlay expenditures are $671,861 more than the original budget,
but multiple budget amendments were completed ($905,000) for land acquisition
purchases, Phase III building construction, and engineering for ROW from Green to
Elm Street,
Note: City Administration anticipates changes to FY22/23 Estimated expenditures due to
increases or decreases in revenues and expenses through the end of the fiscal year.
7
Y23/24 Proposed Expenditures (Column U)
FY23/24 Proposed operating expenditures represent an increase of $2,928,366 (11.11%)
from the FY22/23 operating Budget amount of $26,364,573. Highlights of changes to
General Fund Expenditures proposed for FY23/24 include:
• (Row 29) Personnel costs are proposed at $1,807,884, or 10.6% higher in FY23/24s
than budgeted in FY22/23 due primarily to position additions, the salary increases
included in the union contract, CPI-U increase for non -bargaining unit employees, and
increases to health and dental insurance. Personnel costs include salaries, overtime,
health/dental/life/vision insurance, FICA, Police Pension and IMRF retirement, and
uniforms. There are a number of reasons for this increase.
1. Personnel costs related to salaries only for employees covered by collective
bargaining units - IUOE Local 150 (Public Works, Parks employees), FOP Unit
1 (Police Patrol), and FOP Unit 2 (Dispatch) - account for a $153,459 increase
in salaries from FY22/23 to FY23/24 due to contract steps and cost of living
adjustments.
2. Police Pension costs are proposed at $2,336,528, ($1,665,073 is a transfer to
the Debt Service Fund to cover the Pension Obligation Bond) an increase of
$46,101. Police Pension costs are determined by an actuary retained by the
Police Pension Board and are based on a number of factors, including wages,
investment rate, and age of the workforce. The City issued the Pension
Obligation Bonds to set the City up to be 100% funded by the required
deadline of 2040.
3. Non -bargaining unit employees and Police Sergeants salaries account for a
total increase $227,726 of the Personnel costs due to cost -of -living
adjustments. Wage increases are included for Police Sergeants and other non -
bargaining employees based on the previous year's Consumer Price Index for
All Urban Areas (CPI-U), which was 5.46% in 2022. The City Administration
has used the CPI-U as the marker for non -bargaining unit employee increases
since FY15/16 and in FY23/24 the increases were set at 5% just below the'
CPI-U. There is no additional merit component proposed for FY23/24.
4. Three additional police officers are included in the FY23/24 budget which
adds $302,091 in personnel expenses. Two of these positions are new School
Resource Officers which were approved by City Council to be in the middle
schools and 70% of the cost will be covered by a reimbursement (included in
revenues) from McHenry School District 15.
5. The NERCOM board for the dispatch center approved adding two additional
Lead Telecommunicators which adds an additional $241,806 in personnel
expenses. These expenses are shared with the NERCOM partners, and the city
is responsible for 40.S% of the dispatch expenses. Also, NERCOM has voted
once again to use PSAP funds to supplement the budget, in FY22/23 $300,000
was deducted from the expenses. This year all expenses are budgeted and
$500,000 in revenues are budgeted to offset part of the expenses. By making
this change, personnel expenses are $300,000 higher than in FY22/23.
47
6. A Communication Specialist role was added to the Administration budget for
FY23/24, per the request of City Council, and this adds $130,051 to the
personnel budget.
7. Total Benefit costs are proposed to increase $395,156 due to increases to
insurance, FICA, and IMRF costs.
• (Row 30) Contractual costs are anticipated to increase by $581,616 (18.06%) from
the amount budgeted in FY22/23 due to a few different reasons.
1. Corporate Legal Fees are increased $60,000 to better match actual expenses.
2. An additional $100,00 was added to the Community Development budget for
the Comprehensive Plan which includes Downtown.
3. HR Contractual expenses were increased by $23,500 for Gov HR and planning
for the City Administrator position.
4. An additional $85,000 was added to the Economic Development budget for the
expansion of the Facade Grant program.
5. Contractual Street Resurfacing expenses were increased by $165,000 due to
including Engineering for Oakwood Drive.
6. Additional funds were added to other line items due to expected increases in
prices due to inflation.
• (Row 31) Supplies expenditures are proposed to be increased by 10.04•% ($105,875)
due to increases in prices for all supplies.
• (Row 32) Other expenditures are anticipated to increase by $43,0.61 (3.38%) due to
additional funds budgeted for Economic Incentive Agreements.
• (Row 34•) Transfers are anticipated to increase by (t389,930 (10.36%) due to Rislc
Management premium increases as well as increases in expenses in the Information
Technology department increasing the transfers from the General Fund.
GENERAL FUND BALANCE:
On February 1, 2016 City Council adopted a new Fund Balance and Reserve Policy that, in
summary, established principles and parameters to which balances for all municipal funds
would be defined at the beginning of each budget period. This policy, which also meets the
reporting requirements of Government Accounting Standards Board (GASB) Statement 54,
which requires the formal adoption of a policy for the classification of fund balances to
categories other than "unassigned", was established to provide financial stability in the
various municipal funds, ensure adequate cash flow for operations, and provide some
assurance that the City will be able to respond to emergencies with fiscal strength.
In regards to the General Fund Balance, specifically, the Fur1d Balance and Reserve Policy
states:
"General Fund - The unrestricted fund balance target should be set at 120 (9
months) of estimated operating expenditures including those expenditures
reported in other Governmental Funds that receive annual operating transfers,
with the exception of transfers intended to fund capital projects. If the
unreserved fund balance falls below 120, a plan will be developed to return to
the target balance. If the unreserved fund balance reaches a low of 90-day (3
months), the plan will be implemented to return to the fund balance to the target
within a reasonable amount of time. Onetime revenues shall not be used to fund
current operations."
This level of fund balance shall provide the capacity to:
• Offset unexpected downturns in elastic revenues due to fluctuations in the
local, state and national economies or the loss of major sales tax
contributor(s),
• Offset negative fiscal changes brought about by action or legislation of
another unit ofgovernment or agency;
• Ensure the continued, timely repayment of debt obligations that the City may
have in the event of a financial downturn;
• Provide a sufficient cash flow for daily financial needs at all times; and,
• Provide a funding source for unanticipated expenditures or emergencies that
may occur.
As identified, the parameters in this policy help to guide the City Administration in the
development of the annual budget by ensuring that the General Fund Budget is presented as
balanced, revenues over expenditures, while maintaining this reserve. Further, the
establishment of the target minimum of 120 days provides clarity in identifying the level of
funding that is available - once revenues, expenditures and fund balance are identified - to
address the City's capital needs. In other words, any funds remaining after meeting the
operational and reserve needs of the municipality are "Assigned for Capital."
As a reminder, a combination of the economic recession of 2007/2008 and the loss of a major
retailer resulted in the municipality taking measures to freeze or reduce expenditures. This
included operating costs and capital improvement and capital equipment projects. In 2009
the City implemented a .5% Local Sales Tax and specifically identified that the additional
revenues generated by this should be used for capital projects and Police Pension funding.
Since the first full year of implementation of the Local Sales Tax and as a result of a recovering
economy, the City has been able to: 1) adopt a balanced General Fund Budget, including
meeting Police Pension costs; 2) reintroduce capital improvement and capital equipment
projects; and, 3) rebuild the General Fund Balance.
In reviewing the General Fund Balance as part of this discussion, the FY22/23 Budget
includes a beginning fund balance of $14,702,950 (Column S, Row 6) based on FY21/22
audited financial information. Based on FY22/23 budgeted revenues, operating
expenditures, and capital expenditures (which were funded with fund balance), it was
anticipated that the ending fund balance would be $13,095,926(Column S, Row 43); the
estimated ending unassigned 120-day fund balance at $9,051,837 (Column S, Row 44);
showing a balance to be transferred to the Capital Improvements Fund of $4,044,089
(Column S, Row 45) in developing the FY23/24 Budget.
It is important to bring up at this point that the City has implemented two Utility Taxes to
address General Fund Capital needs. The ComEd Utility Tax was implemented for capital
asset maintenance and replacement and the Nicor Utility Tax was implemented for new
capital assets. The Capital Improvement and Capital Equipment Funds will be phased out
once projects are completed within those funds and they will be replaced with the Capital
Asset Maintenance and Replacement Fund and the Capital Asset New Project Fund. In future
years the Fund Balance and Reserve Policy will have to be addressed if Revenues are greater
than expenses and what the City will do with the excess funds, for example moving them to
one of the new Capital Funds. Currently, the Fund Balance in FY22/23 and FY23/24 is
budgeted to be used for capital projects as well as reserved for specific expenses. As in the
discussion above, this amount will most likely change upon completion of the annual audit
however, this is not done until September/October, 4-5 months after the budget is adopted
and implemented.
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1 � • � � :iiTi: �:
General Fund Operating Budgets - Overview
This section includes the budgets for all operating departments funded through the General Fund.
General Fund Operating Departments include - Administration (100.01), Elected Officials (100.02),
Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic
Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100.23), Public
Works -Administration (100.30), Public Works -Streets (100.33), and Parks and Recreation (100.41).
While these expenditures have already been summarized, in total, as part of the previous discussion
of General Fund Revenues and Expenditures, the information contained in each of the following
sections will provide details regarding each operating department. The narrative below is a
summary overview of sections that follow.
General Administration (100.01)
Overall, the Administration operating budget is
proposed
Salary/Benefit costs are identified to increase by a net of $235,341 or 41.19%which includes a new
Communications Specialist position which increases the salaries budget $90,000, Non -Bargaining
Unit increases of $18,459, Bargaining Unitincreases of $1,102 and Benefit increases of $125,780 (due
to an expected retirement payout).
Contractual expenditures (Row 21) which includes property tax expenses, insurance administrative
expenses, shredding, and other miscellaneous administrative costs will decrease $25,000 in
FY23/249
Corporate Legal Fees (Row 22) include the City Attorney, Traffic Attorney and Collective Bargaining
representation and are identified to increase $60,000 in FY23/24.
Other expenditures -which includes Administrative Expenses and internal transfers for Risk
Management and Information Technology - is proposed to increase by $24,236 (Column U, Row 45).
Elected Officials (100.02)
The Elected Officials budget is proposed fora $18,760 decrease, or 22.52%, due to eliminating the
administrative expense line item due to the account consistently being at a $0 balance over the last
few years. (Column U, Row 37).
Community Development (100.03)
The Community Development budget is proposed increase $173,276, or 13.13% (Column U, Row 45).
Salary/Benefit costs are budgeted to increase by $23,382 (2.6%), which includes $15,888 in non-
union salary increases and $7,494 in benefit cost increases. Contractual Services are identified to
increase by $125,600 (43.89%) due to the addition of the Downtown Plan to the total Comprehensive
Plan expense. Supplies will increase by $5,000 (12.05%), and the internal transfer for Risk
Management and Information Technology will increase by $19,294 (21.01%).
Finance (100.04)
Salary/Benefit costs are anticipated to increase by $20,875 (3.90%) due to non -bargaining unit
salary and insurance increases. Contractual Expenses are expected to increase $180000 (33.95%)
due to higher credit card fees and postage increases. Development Expenses are expected to be
53
$210,000 higher than budgeted in FY22/23 due to the addition of three sales tax Incentives. A vehicle
loan was budgeted in FY22/23 but was not initiated so the budget is $144,989 lower in FY23/24.
Transfers for Debt Service, Risk Management, Information Technology, and Audit Funds increase
$22,317o
Human Resources (100,05)
Salaries/Benefit costs are budgeted to increase by $10,168 (3.97%) which is primarily due to salary
and insurance increases. Contractual Services increase by $27,900 (81.08%) due primarily to the
contractwith GovHR for the City Administrator hiring process, while Other Expenses for Information
Technology transfers increase by $3,787 (20,91%).
Economic Development (100.06)
Salary/Benefit costs are budgeted to increase by $11,924 (4.22%) due to salary and insurance
increases. Contractual Services increase $84,950 (74.5%) due to the expansion of the Facade grant
program. Purchase of Services - Information Technology expense increase by $1,8289
Police (100.22)
The Police budget is proposed at an overall increase of $995,078, or 8.84% from FY22/23.
Salary/Benefit costs are identified to increase by $683,677 due to the addition of three officers For a
total of $302,091, sworn salary increases of $161,230 and non -sworn salary increases of $73,585.
Benefit increases which include insurance, IMRF, and Police Pension total $146,771.
As discussed earlier, Police Pension costs are determined by an actuary retained by the Police
Pension Board and are based on a number of factors, including wages, investment rate, and age of the
workforce. The City committed to full funding by 2040 which is why the City issued the Pension
Obligation Bonds to bring this funding under the City's control with the anticipation that the City will
save money. Contractual Services increase by $58,325 due to increased telephone costs and training.
Supplies increase by $60,675 due to higher gasoline usage/costs. The Transfer to Risk Management
increases $74,890 due to increasing premiums and the Transfer to Information Technology increases
by $114,715 due to higher expenses within the IT Fund.
Dispatch Center (100.23)
FY23/24• represents the seventh full year of operation for the fully developed, and staffed, dispatch
center. The FY17/18 budget established the baseline budget for the dispatch center moving forward.
The proposed FY23/24 budget has been presented and approved by the partners of the dispatch
center. The total amount proposed for the dispatch center in FY23/24 is $3,156,939.
Salaries/Benefit Costs show a net increase of $699,194 because the partners voted to use $300,000
from the PSAP Grant funds received to offset personnel costs for FY22/23 which were excluded from
total personnel expenses. For FY23/24 the partners agreed to use $500,000 from the PSAP Grant
funds (which are in the General Fund Balance), butthis amountwas not deducted from total expenses
to better track actual expenses versus net of revenue received. The remaining $399,194 increase is
due to the addition of 2 Lead Telecomrnunicators ($241,806) as well as increases in contract and
insurance costs ($157,388). As a reminder, this amount is offset by more than $1.8 million in
reimbursements as a result of the partnerships with the City of Woodstock, City of Harvard and
McHenry Township Fire Protection District and through charges for dispatch services paid by
customers of the dispatch center. These are reflected as General Fund Revenues and included in Row
22 of the General Find - Revenues, Expenditures and Fund Balance Summary sheet.
Public Works Administration (100.30)
The overall Public Works Administration budget is proposed to increase by $31,802 (6.27%) due to
increases to salaries and insurance costs as well as Purchase of Service Transfers for Risk
Management and Information Technology.
Public Wor•Ics Streets (100,33)
The FY21/22 Public Works Streets budget is proposed to increase by a total of $332,344 (8.62%)
from FY22/23. Salaries/Benefits are proposed to increase by $10,692 due to insurance increases.
Additionally, Contractual (Row 21) costs have been increased by $277,000 due to carrying over non -
spent road resurfacing expenses from FY22/23 to the FY23/24 budget. Materials and Supplies costs
are proposed $15,000 higher due to increasing supply costs and additional Forestry programs.
Transfers for Risk Management and Information Technology increase $29,652,
Parks and Recreation (100.41)
As of FY23/24 the Parks Maintenance department has been removed from the Parks and Recreation
budget, but all programming expenses related to the Recreation Division not associated with the
McHenry Recreation Center are still included. Revenues from recreation programming, reflected in
General Fund Revenues, offset many of these costs.
As proposed the FY23/24- in the Parlcs and Recreating budget is proposed to decrease by a total of
$73,146 (4.38%), Salary/Benefit costs are identified to decrease by a total of $141,187 (16.68%)
with the movement of salaries and benefits for the Parks Maintenance Superintendent position to the
Parks Maintenance Budget; Contractual Services to decrease by $1,834 (0.63%) due to decreased
dues; Supplies to increase by $18,600 (21.26%); and, Other costs to increase by $75,275 due to an
increases to the Risk Management, information Technology, and Recreation Center Transfers.
Parlcs Maintenance (100,45)
The Parlcs maintenance budget is proposed to increase by $226,800, or 17.83% from FY22/23;
Salary/Benefit costs are identified to increase $219,800 due to the movement of the Superintendent
position from Parks and Recreation department as well as contract and benefit increases. Supplies
expenses will increase by $7,000 (5.11%) due to higher gasoline usage/prices.
55
�*p6. 2;'IIORION lk,
y..
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rof (
•,. Y ,. ��I el
OV
General Administration - Overview
The General Administration Budget contains personnel
and operational functions related to the provision of i
general administrative services and, beginning in
FY19/20, includes capital projects expenditures from the
General Fund Balance. Beginning in FY18/19, due to
operational/department restructuring, economic
development and human resources functions were
formed under separate departmental budgets (Economic
Development and Human Resources) and, as such, all related expenditures are now found within
these. Next, municipal center building and grounds maintenance activities are now included under
the Department of Community Development and, starting in FY19/20, all Contractual and Repair and
Maintenance costs related to these activities were also transferred to the Community Development
Budget. Finally, capital projects to be funded through the General Fund Balance are accounted for in
this fund.
The Office of the City Administrator, which includes the positions of City Administrator and Deputy
City Clerk, is responsible for providing management services, budgeting, legislative support, and
communications to elected officials, staff, and the public in carrying out the policy and direction as
set by the City Council.
57
General Administration - Organizational Chart
m
General Administration - FY22/23 Accomplishments
• Directed development of a 20-year Community Investment Plan to replace the 5-year Capital
Improvement Program. This plan was fully completed during FY22/23 and presented to the
City Council as part of the FY23/24 Budget development process to be used as the basis for
capital asset maintenance and replacement projects.
• Despite the economic impact of the COVID-19 Pandemic, developed and presented a balanced
operating budget to City Council for FY22/23. The budget included a more than $4 million
local road program, funded primarily with Motor Fuel Tax funds, for the first time in City
history.
• Complete redesign of the City of McHenry website to make it more user friendly, information,
and relevant to happenings in the community.
• Successful extension of the Downtown Tax Increment Finance District through 2037.
59
General Administration - FY23/24 Goals & Objectives
• Continuous monitoring of municipal budget and idencation of internal and external factors
that may have an impact on it.
• Develop structure for Capital Asset New Project program for use of COMED utility tax funds.
This will be for the development new capital projects as distinct from capital asset
maintenance and replacement projects.
• Implement quarterly updates of capital projects with Department Directs and for transmittal
to City Council.
• Develop along -term revenue revenue and expense forecast formula.
• Continue to provide leadership and oversight to all departments to provide the highest
quality of services in the most cost and time efficient manner to customers.
• Continue to evaluate and identify alternative revenue sources.
• Coordinate with Human Resources and Department Directors to develop departmental
succession plans.
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Dtticia
Elected Officials - Overview
The Elected Officials Budget contains personnel
and operational functions related to the elected
positions of the municipality. These include the
Office of the Mayor, the seven (7) Aldermen, and
the City Clerk. The primary functions of these
elected positions are described below.
The Office of the Mayor provides leadership,
initiative, and direction necessary to provide quality services to the citizens of McHenry. The Mayor
interacts continuously with the appointed City Administrator in ensuring that the established
policies and ordinances of the municipality, as set by the City Council, are carried out by the various
departments, divisions and employees of the city.
The City Council, comprised of seven (7) Aldermen representing geographically defined wards and
elected to staggered four (4) year terms, is the legislative body for the City of McHenry. The authority
of the City Council is expressed during regularly scheduled City Council Meetings (1st and 3rd Mondays
ofthe each month) through the adoption of policies, resolutions, ordinances and other related actions
as deemed appropriate to promote and protect the high level of service quality and financial stability
of the City.
The City Clerlc, elected every four (4) years, has the responsibility for taking minutes for all regular
City Council meetings, Council Committee meetings, Committee of the whole meetings, and Planning
and Zoning Board meetings. The City Clerk is also responsible for records management of the
municipality. The City Clerkis assisted in these efforts by a designated Deputy City Clerk who is also
a full-time employee of the city.
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ao
Community Development - Overview
The Department of Community Development is
responsible for promoting the health, welfare, safety,
and quality of life to McHenry citizens, property owners,
visitors, and commercial interests. These services are
provided by an experienced and professional staff that City of McHenry
consists of a City Planner, Building Inspector, Plans l
Examiner, Plumbing Inspector/ Code Enforcement Community and
Officer, and a full time Code Enforcement Officer. The Economic Development
administrative staff within the department includes one
Permit & Customer Service Representative, one
Administrative Assistant and one Customer Service
Specialist. The Community Development administrative
staff is also tasked with handling day to day operations
at the main counter, this incudes payment of water bills and answering general questions. Building
grounds and maintenance for the Municipal also falls under Community Development, this division
consists of one full time Facilities Manager and one part time cleaning position.
The Department relies on a partnership with local and regional government and public agencies,
community -based organizations and the business community to succeed in its mission. The
Department of Community Development strives to achieve the highest level of customer service and
professionalism in helping the community thrive.
Additionally, the Department of Community Development coordinates closely with the Director of
Economic Development to ensure that business expansion, relocation and development projects
remain top priorities for review and that processes are streamlined to the extent possible while
maintaining the appropriate attention to detail in `a
regard to applicable codes and other guidelines. — ,�\d t �;
Community Development
Director
Ross Polerecky
t and Cusomer Se
Representative
Susan Lackhouse
Customer Service
Specialist
Hailey Riendeau
Building
Planning &Zoning
Inspection
City Planner ■ Building Inspector
Cody Sherrif Dave Watkins
Plumbing Inspector /Code
Enforcment Officer
Norman Swanson
Plans Examiner
Dan Tonyan
Administrative
Assistant
Lynn Martenson
Code
Enforcement
Code Enforcement
Officer
Jake Marino
Building &Grounds
Maintenance
Facilities Manager
John Cummings
L'uzz Frelt
Community Development- FY23/24 Accomplishments
• Continued to provide exceptional service to the community
• Successful RFQ for the comprehensive plan
• The issuance of over 25 single and multi -family homes
• Consolidation of our GIS maps into one functional package that can be used by all individuals
in the City with restrictions for editing and viewing rights on certain layers (i.e. water sewer)
• Continued efforts to digitize historical building documents using Laserfishe
• Redevelopment of the Watertower Marina
• Completion of the Fox River Corridor plan
• Implementation of the downtown streetscape plan for the Riverside Drive Corridor
• Successful annexation of unincorporated pockets of land throughout the city
• Successful building of the Authentix McHenry development of 288 marltet rate apartments
• Completion of the riew Thorntons fueling station on Chapel Hill Road and Route 120
• Updates to the Municipal Code and Zoning Ordinance
• Acquisition of properties within the downtown to help facilitate development within the
downtown and TIF district
Community Development - FY23/Z4 Goals & Objectives
• Updating of building permit fees
• Updated building codes
• Continue to update antiquated ordinances
• Focus on redevelopment of vacant lots within the downtown districts
• Identify and annex properties contiguous or wholly surrounded
• Continue to provide a high level of customer service to residents and businesses.
• Focus on continuing education of employees within the department to ensure that we
provide the highest level of service possible.
• Worlc closely with Economic Development to continue efforts to draw development to the
City of McHenry.
• Explore options to create a unified development ordinance
• Continue code enforcement efforts
• Increase efforts to redevelop the central wastewater treatment plant site
• Continue to focus on residential growth, particularly single family homesites
71
Community Development - FY23/24 Performance Measures
Item
Goal
Description Proposed
Redevelopment of vacant
Focus efforts to redevelop
Recruit qualified Masterplan the downtown
downtown parcels
downtown vacant parcels
developers districts
A UDO is a document in
which traditional zoning
Explore options to create a
Research other
regulations are combined
unified development
municipalities and their
munUDO
with other desired city
To be ready to start
ordinance
to educate ourselves
regulations, such design
implementation of a UDO in
on the processes of
guidelines and water
w
the 24/25 fiscal year
implementing a UDO
management, Into a single
document
To use education and face
Are code compliance
Continue a high level of
Code Enforcements efforts
to face contact with
violations being mitigated
compliance in the code
residents to increase code
and closed in an efficient
enforcement department
compliance
manner
To continue to digitize
Digitize, label and file
building documents thus
documents to create a
Digitize historical building
eliminating paper and
60% of historic documents
documents
creating an easier more
more efficient method of
searching reviewing old
transferred to Laserfishe
efficient way to review
documents
these documents
Explore grant
To set a construction
Downtown Streetscape
Continue with design of
opportunities to help fund
schedule for the construction
Masterplan
tine Riverside Drive
construction of phase I of
of phase 1 of the downtown
corridor
the downtown streetscape
streetscape plan
plan
Select a firm and begin
Focus an community
Begin to develop a
Comprehensive Flan
working on developing the
outreach and develop
comprelensive plan foil the
new comprehensive plan
engagement strategies
City of McHenry
72
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74
Fiscal Year 2023/2024
Annual Budget
Finance
75
Finance - Overview
Mission Statement
It is the mission of the Finance Department to account for all
municipal resources and to apply such resources in a manner that is
most beneficial to the citizens of McHenry. The primary operating
functions of the Finance Department are as follows:
• Administration: Responsible for management of financial
affairs of the city, including budgeting and financial
planning, and supervision of operations within the
department.
• Accounting: Provides the City's financial reporting, payroll processing,accounts payable and
receivable, purchasing, fixed asset reporting, special tax collections, billing, and auditing
functions.
• Revenue: Collects various revenues, manages the Police Pension fund, ensures payments to
retirees are processed, and invests idle City funds.
Note that the'Finance Department expenditures include, under "Other", transfers to other funds.
76
Finance - Organizational Chart
Finance - FY22/23 Accomplishments
• Assisted with obtaining new software for Adjudication Court to streamline the processes.
• Completed analysis on water/sewer rates to ensure operating expenses are covered.
• Completed the transfer of the Police Pension assets to the Illinois Police officers' Pension
Investment Fund.
• Received an unqualified opinion on the audit.
Finance - FY23/24 Goals & Objectives
• Improve management of the City's investment portfolio, including implementing cash flow
modeling and investment strategies.
• Create a procedure manual for all duties within the finance department including screenshots
of the Tyler software to help with cross training.
• Begin cross training within the finance department to ensure vacancies can be covered.
• Improve communication of information to new residents.
• Begin using Tyler Content Manager within the finance software more to scan documents in
order to eliminate paper and streamline processes.
79
Finance - FY22/23 Performance Measures
Per i1mance Performance..
Item Goal
Measure
Proposed
Develop an update
Was the quarterly report
quarterly reports and
Quarterly Reports
updated and transmitted
September 2023, December 2023,
transmit to the
to the board quarterly?
March 2024, and June 2024
appropriate board,
Develop and present a
Was a balanced operating
Annual Budget
balanced operating budget
budget presented for City
April 2024
foil City Council
Council's consideration?
consideration
Whether or not an
An unqualified opinion issued on the
Annual Audit
Continually have an
unqualified opinion has
23/24 audit presented to council in
unqualified audit opinion
been issued
September or October of 2024
% of Time that Finance
Customer and Vendor
Return all calls within one
Department Responds to
100% of the time respond to calls
Concerns/Conplaints
business day
Calls within one business
within one business day,
day
Amorally apply for the
Illinois Government
Annual application of
Apply once budget has been approved
Annual Budget Award
Finance Officers
budget award submitted
by the City Council
Association (IGFOA)
to the IGFOA
budget award
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Fiscal Year 2023/2024
Annual Budget
m
Human Resources - Overview
The Department of Human Resources and Director of Human
Resources coordinates the employee and risluelated functions of the
City. This includes compensation, benefits, wellness, staffing,
recruitment & selection, internal policies, workers compensation and
safety, performance management, labor relations, and employee
relations, training, and process improvement,
Through the establishment of the McHenry Recreation Center, the
staffing size of The City has grown to have an average of 275 full and
permanent part time employees. During the summer season this
increases to around 330 employees.
Human •
ReSa� �rrAc
The 23/24 budget year we continue to watch insurance costs including health, workers
compensation, and liability. The insurance industry continues to be volatile with weather -based
claims throughout the country, the rising cost of pharmaceuticals, and the emotional health of our
employees and their families. We continue to be as proactive as possible to mitigate claims, train on
safety, and increasing rates.
Human Resources - Organizational Chart
Human Resources - FY22/23 Accomplishments
• Wellness. We met the goal to revise the wellness program to increase employee
accountability for their health year round. Continued success with our wellness program
including biometric screenings earning the City nearly $20,000 in rebate money from IPBC.
• NeoGov Perform Software Implementation Continued implementation of this software to
increase efficiency in conducting performance appraisals. Set up the Police Department as a
new user of this software.
• Harassment Prevention Training. Training is required yearly for all employees.
• Employee Handbook. Yearly updates of new laws
• Family &Medical Leave. Coordinator Meyer has kept the City compliant managing 35 FMLA
full time and intermittent cases in 2022.
• NeoGov Insight Software. Nicole is the Insight "guru" with all City recruitment now flowing
through Insight. We continue to build in new features such as applicant self -scheduling of
testing and interviews.
• Implementation of NeoGov Learn. Starting implementation of this learning management
software. With the increasing requirement of mandated training, even for part time
employees, this system that comes with thousands of interactive training modules, will track
each employees training, send reminders, and give employees greater opportunities for
development.
Human Resources - FY22/23 Goals & Objectives
• Processes & Procedures. Continue the process of written record of al] HR & Rislc processes
and procedures.
• Rislc Management. Wor1C with our insurer, Safety National to create more safety training
options. Develop electronic risk reporting forms in Laserfiche.
• Compliance. Each year employers are required to provide numerous compliance notices to
all employees, especially regarding health care. This year we will create a system to track and
disseminate these notices.
• Benefit Website. IPBC has contracted with a new company, P1anSource, to provide electronic
benefit selection and information. We will begin implementation of this system in spring
2023.
m
Human Resources - FY23/24 Performance Measures
Itein
Goal
Description
Proposed
Provide training &
Customize trainingraining
T&
Complete software
development
Development
implementation
and make available
opportunities to
to employees
employees
Continue
Analyze &
Process &
documentation of
document
Process & Procedure
Procedures
procedures &
procedures &
manual for HR/Risk
processes
processes
Eliminate different
Use Laserfiche to
versions of form
create online
Create one form
Risk Management
and implement one
usable by all
form for all
incident reporting
departments
from
departments.
Compliance
Over 20 healthcare
Ensure all paperwork
Become compliant
compliance notices
is available
paperwork for
With all associated
that must be given
electronically or
various healthcare
paperwork.
to new and current
manually for all
laws
employees
employees
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0
0
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Fiscal Year 2023/2024
Annual Budget
Economic
Economic Development - Overview
The Department of Economic Development Budget contains
personnel and operational functions related to the provision of
economic development services in the City. Before FY18/19,
costs related to economic development activities and personnel
were accounted for in the General Administration and
Community Development Budgets. With a growing emphasis
on economic development activities, a separate budget fund
was established to account for expenditures.
The Economic Development Department is the first point of
contact with potential businesses, citizens, and elected officials regarding business inquiries and
potential new business opportunities. The department is responsible for effectuating orderly
economic growth of the City, attracting, retaining, and serving businesses and residents in the
community.
PRIMARY GOALS AND OBJECTIVES
• Cultivate and develop continual relationships; with real estate brokers, current and
prospective businesses, retailers, manufacturers, developers, attorneys, architects,
engineers, etc.,
• Maintain contact with retailers, developers, manufacturers, and prospective business owners
regularly to assist in space needs and location preferences;
• Promote City successes through Social Media: businesses expanding; new business, events,
etc. to keep residents and business owners informed,
• Maintain a list of available properties, downtown, Richmond Road; demographics,
socioeconomic and other data and make it easily available to all inquiries on the City website;
• Maintain contact with Nicor and Com Ed executive staff as it relates to economic
development and business assistance,
• Work with the Community Development Department (zoning, subdivision, and coordination
of development) to facilitate business attraction and expansion;
• Facilitate Business Retention Visits with McHenry County Economic Development
Corporation (MCEDC), State Department of Commerce and Economic Opportunity (DCEO),
McHenry County Workforce Network, and the Small Business Development Center (SBDC) to
provide assistance with issues facing companies in today's business climate and to prevent
companies from closing or relocating to a new community;
• Maintain a List of City manufacturers, contacts, business type, space, employee count, etc.;
• Maintain a comprehensive list of all businesses in the City to ensure prompt and accurate
information sharing;
• Work with the Department of Commerce and Economic Opportunity (DCEO), McHenry
County Economic Development Corporation (MCEDC), Intersect Illinois; McHenry Area
Chamber of Commerce; Small Business Development Center (SBDC) and other economic
partners to provide business assistance, site selection, expansion, and retention;
• Continue multi -faceted efforts to retain existing businesses and attract new businesses to the
City.
91
Economic Development - Organizational Chart
92
Economic Development - FY22/23 Accomplishments
• Worked cooperatively with I<ey property owners and McHenry Area Chamber of Commerce,
downtown business owners, and other relevant organizations and parties in seeking additional
ways to revitalize downtown, working more closely with businesses with the goal being to attract
additional investment in the downtown area, retain existing businesses, promote investment in
older properties and assist smaller businesses struggling to keep doors open;
• Promoted business growth in all geographic areas of the City, on the City's major retail corridors,
downtown, Illinois Route 120, Illinois Route 31, and in the City's business parks;
• Worked with The Retail Coach in attracting new retail and restaurant tenants;
• Nominated several businesses as MCEDC Business Champions: Superior Felt and Filtration, Rock
Solid Builders, and Heartland Computers;
• Wrote incentive and annexation agreements and ordinances to facilitate and promote business
attraction, retention, and/or expansion; (Munson Marine; Whiskey Diablo)
• Worked with McHenry County College/Small Business Development Center (SBDC) onbusiness
attraction and retention, employment needs, and collaboration for business development of the
McHenry Riverwallc Shoppes;
• Continued to serve on the Manufacturing Pathways Consortium and make valuable business
connections at the MCC Manufacturing Breakfast;
• Represented the City attending McHenry Area Chamber Business Mixers, Multi -Chamber Mixers;
Ribbon Cuttings and Grand Openings for New Businesses;
• Continued to serve as a member of the McHenry County Public Transit Access Committee;
• Served as a board member of the McHenry Area Chamber of Commerce;
• Attended McHenry County Workforce Network Meetings (serve as alternate for City
Administrator) collaborating with other municipalities in the County in a concerted effort to assist
and meet the needs of our employers;
• Served alongside other municipalities and Organizations on the MCEDC Economic Development
Growth Experts (EDGE) group;
• Coordinated business retail and industrial site visits;
• Continued to work with Downtown Businesses and Community Organizations (City, Chamber,
School Districts, Rotary Club, Kiwanis, etc,);
• Attended Chamber of Commerce Business Networking Scrambles to market the City, explain our
role, and meet potential new businesses,
• Continued to lead and work on the development of the McHenry Riverwalk Shoppes initiative
with the Chamber of Commerce and High School District; (Completed McHenry Riverwallc
Shoppes Irrevocable License Agreement)
• Streamlined the City Mural Program connecting artists with businesses creating the first City
Mural, and in the process of creating and organizing a mural event in collaboration with the
schools and mural artists
• Created a new Facade Grant Program encouraging the revitalization of more building facades
throughout the City;
93
• Business Recognition (notably, 50 years -Natures Cornucopia and Riverside Bakery);
• Increased activity on social media incorporating Linkedln sharing business recognition, milestone
anniversariesI and industry trends using pictures and videos;
• Worked asserfiively with Developers and Entrepreneurs to fill vacant storefronts in all areas of the
City;
• Streamlined Economic Development website content for ease and attraction of new business
development, Creation of new brand: Think McHenry, and creatednew microsite to market and
increase visibility,
• Invited and introduced Economic Development Staff and City to prospective businesses by
attending all new business walk-through inspections when they are scheduled;
• Attended ICSC promoting City; (attended Navy Pier event and ICSC in Las Vegas);
• Encouraged development on the south side of the City; (Worked with Bradford Real Estate on
Pacini Property);
• Worked with the development of Redwood Apartments on the east side of the City Of McHenry;
• Worked on the development of RJ Roberts Property;
• Worked with several entities on attracting Recreational Cannabis Dispensaries to McHenry;
• Explored and researched the creation of a Business District;
• Encouraged the development of another hotel by obtaining an updated Market Study; (Work with
Cobblestone Hotel and Grand Stay Hotel, Hilton)
• Worked with owners of McHenry Commons to redevelop the site;
• Worked with The Retail Coach in bringing more retail and restaurants to the City and keeping
downtown vital,
• Adopted and implemented amulti-taxing body Vacant Building Incentive Policy.
Economic Development - FY23/24 Goals & Objectives
• Work cooperatively with I<ey property owners and the McHenry Area Chamber of Commerce,
downtown business owners, and other relevant organizations and parties in seeking additional
ways to revitalize downtown, working more closely with businesses with the goal being to attract
additional investment in the downtown area, retain existing businesses, promote investment in
older properties and assist smaller businesses struggling to Keep doors open;
• Promote business growth in all geographic areas of the City, on the City's major retail corridors,
downtown, Illinois Route 120, Illinois Route 31, and in the City's business parks;
• Continue to coordinate and promote the Commercial Tenant Incentive Improvement Program,
• Continue to coordinate and promote the Facade Improvement Grant Program;
• Represent the City in attending McHenry Area Chamber Mixers, Multi -Chamber Mixers; Ribbon
Cuttings and Grand Openings for New Businesses to attract new business;
• Continue to serve as a member of the McHenry County Public Transit Access Committee;
• Serve as a board member of the McHenry Area Chamber of Commerce;
• Attend McHenry County Workforce Network Meetings (serve as a proxy for City Administrator)
continuing to work together to meet the needs of all the City's employers,
• Coordinate Business Site visits to calculate business retention and expansion needs,
• Coordinate events across all organizations and joint marketing efforts to promote the City of
McHenry to gain new residents and businesses;
• Utilize CoStar to be more efficient in locating properties and providing information to prospective
retailers and other businesses;
• Be more active and present on all social media and advertising platforms: sharing business
recognition milestone anniversaries, promoting businesses and events in McHenry with pictures
and videos to have a competitive advantage over neighboring municipalities;
• Work assertively with Developers to fill vacant storefronts in all areas of the City;
• Streamline and promote Economic Development website content over a wider demographic area
for ease and attraction of new business developments
• Introduce Economic Development Staff and City to prospective businesses by attending all new
business walk-through inspections when they are scheduled;
• Attend ICSC promoting the economic advantages of the City of McHenry;
• Boost and promote development on the south side of the City;
• Continue to work on developing the NWC of Bull Valley Road and Illinois Route 310
• Increase efforts in the development of R.J. Roberts property;
• Encourage and promote the development of a hotel;
• Worl< assertively with the owners of McHenry Commons to redevelop the site;
• Work to bring one or more cannabis dispensary(ies) and related businesses to the City;
• Work cooperatively with the McHenry Riverwall< Shoppes owners to locate brick -and -mortar
locations for the new successful businesses to remain in McHenry after their first year,
increasing our tax base,
95
® Coordinate a second business symposium targeting property developers, realtors, and bankers
to continue developing relationships that will ultimately succeed in revitalizing vacant
properties.
Economic Development - Performance Measures FY23/24
Proposed OUtcorne(s)
Visit/Talk to 25 existing
Visit Talk to 25 existing Number of businesses 25 existing businesses
/ g businesses
businesses;
The building is no
Redevelop the former Get site redeveloped longer vacant, and the Redeveloped site
Sears/Kmart Building site is redeveloped
Bring another hotel to Have a new hotel built
the City
in the City of McHenry Hotel built or planned Hotel
Work on development
Develop site pads for Redevelop site at NWC of Begin to develop site pads
new construction at for construction at NWC of
of NWC of Bull Valle Bull Valley Road and
Y NWC of Bull Valley Road Illinois Route 31 Bull Valley Road and Illinois
Road and Illinois Route and Illinois Route 31 Route 31
31
97
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•
Police Commission - Overview
The purpose of the Police Commission is to select sworn personnel in accordance
with the employment policies of the City of McHenry, as well as investigate
conduct hearings regarding any sworn member of the McHenry Police
Department,
100
101
Fiscal Year 2023/2024
Annual Budget
102
Police - Overview
Vision Statement �%� _'
The McHenry Police Department will maintain the highest Ier =MM,
standards of criminal justice excellence in all aspects of policing. �� '
Through these standards the McHenry Police Department willquo
�,
define itself as a leader in the industry by those we serve and
protect. • ��
Mission Statement
The Mission of the McHenry Police Department is to work in a true partnership with the citizens we
serve, enhance the quality of life and provide excellence in public safety.
Agency Values
The McHenry Police Department is charged with the responsibility to serve and protect the citizens
of McHenry. Our agency values provide the foundation for our mission and guide us in our effort to
meet the vision of the agency. The McHenry Police Department operates off the core values of,
Integrity, Courage, Service, Honor and Duty.
Agency Structure
The McHenry Police Department is the third largest law enforcement agency in McHenry County.
Organized into four main divisions of Administration, Support Services, Field Operations and
Information Technologies (I.T.), the McHenry Police Department serves and protects the citizens of
McHenry and all those who visit. Within each division specialty units are established to meet specific
needs of the agency that support our vision and goals.
The McHenry Police Department is acommunity-oriented organization that operates off aproblem-
solving philosophy. The Administration Division is comprised of the Chief of Police, Deputy Chief of
Police and an administrative assistant. The Support Services Division and Field Operations Division
are each headed by Division Commanders and the I.T. Division is headed by a manager. These
supervisors report to the Deputy Chief of Police. The Deputy Chief of Police reports to the Chief of
Police. All sections and units of the organization are structured under one of the following divisions.
Field Operations Division
The Patrol Section is the largest component of the Field Operations Division and is responsible for
responding to both emergency and non -emergency calls for services from the public. The Patrol
Section is divided into three shifts in order to provide 24-hour police services. Each shift is
supervised by two Sergeants. Uniformed Patrol Officers and one Community Service Officer (CSO)
are responsible for partnering with the community to protect life and property and to maintain
peace, order and safety. In addition, this Division handles special assignments, self -initiated activities
and addresses community concerns. Additional Units within Field Operations include the Field
Training Unit, Canine Unit, Truck Enforcement Unit, Bicycle Patrol Unit, Major Crash Assistance
Team, Mobile Field Force Officers and Tactical Response Officers.
Support Services Division
The Support Services Division is comprised of the Investigation Section, Accreditation Unit, Training
Unit, Public Relations Unit, Communications Center and Planning/Research/Technical.
103
® Detectives work in plainclothes and provide expertise and resources to investigate crimes
that happen in McHenry. Detectives are able to investigate crimes that are often complex and
may extend over a significant period of time and geographical area. The cases are investigated
until an arrest is made or there are no longer leads to pursue. Many of the investigators have
received specialized training in the investigation of: homicides, child abuse, sexual assaults,
juvenile delinquency, crime scene processing, felony property crimes, robberies, felony
crimes against persons and cybercrime.
® The Accreditation Unit is utilized to revise and draft department policy and ensure that the
agency is performing its duties in a manner that is consistent with the Law Enforcement
Commission on Accreditation for Law Enforcement standards.
® The Training Unit is responsible for the management of all ongoing training for police
personnel. Training includes annual in-house training such as Defense Tactics and Firearms
along with all external training. Each officer and civilian employee is required to receive
mandated training in accordance with our departmental policy, CALEA standards and Illinois
statutes. This Unit is responsible for the coordination and implementation of thousands of
hours of training each year.
® The Public Relations Unit is charged with the responsibility to foster the community
orientated philosophy and problem -solving practices of the McHenry Police Department.
This is done through multiple educational and community events provided to our citizens by
the police.
® The Dispatch Center, named Northeast Regional Communications (NERCOM) is the final and
largest component of the Support Services Division. This unit is a consolidated dispatch
center that provides emergency dispatch services for sixteen (16) police, fire and EMS
agencies. Although the center is owned and operated by the McHenry Police Department, a
partnership through an intergovernmental agreement between McHenry Township Fire,
Harvard Police and Woodstock Police allows for joint decision making on policy development
and shared financial responsibility. The Dispatch Center operates off a separate budget
which is managed by the Chief of Police and Deputy Chief of Police.
In an overview of the day-to-day operations of the center, at optimal staffing level NERCOM
is manned twenty-four hours a day, seven days a week, 365 days a year by a minimum of four
dispatchers at all times. Each NERCOM dispatcher is crossed -trained to be proficient in both
police and fire/rescue disciplines of dispatching. In addition, NERCOM provides Emergency
Medical Dispatch services to all of our customers. Roles defined within the dispatch center
LT include 911 call takers, police dispatch and fire/EMS dispatch. These defined roles allow for
the center to provide services in the most efficient and effective way exceeding industry
standards.
® The Planning/Research/Technical sections coordinate the specific planning and research
activities ofthe department, complete short- and long-term special projects, attend to critical
risk management issues and research & write grant proposals.
104
Information Technologies (I.T.) Division
The I.T. Division provides not only the police department staff,
purchases, operations, maintenance, repair and replacement
but also City staff, services regarding
of all information technology related
programs, systems, software and hardware.
The mission of the Information Technology Division is to provide the most innovate, highest quality,
technology -based services in a cost-effective manner and to facilitate the achievement of the goals
anA objectives of each of the City's operating departments.
Information Technology Fund revenues are derived from transfers from the City's operating
departments and expenses are related to the direct provision of technology services by the Division's
three staff members and for the replacement of equipment and software throughout the municipality
105
Conunauder
Support Services
Michael Cruz
Chief of Police
John Birk
Executive Assistant
Debora Shuett
Deputy Chief of
Police
Thomas Walsh
LT. Manager
Aaron Greve
Social Services
Coo�Ainator
Jason Stetwerf
Commander
Ffeld Operations
Paul Funk
Telecommunications" Investigations Unit Pah•ol Day Shift " Patrol Day Shift
Supervisor Sergeant LT. Specialists Sergeant Sergeant
Jennifer Synek „ Nicholas Clesen Brian McKeen " Patrick Polidori
Lead Pahrol PM Shift " Patrol Ph1 Sldit
Teleconununfcat°rs Records Clerks Sergeant Sergeant
and
jeleecommunicators Brian Aalto Brett Kinney
trative Patrol MidnightShfft Patrol Midnight Shift
PublicAffairsOfficerj!dMnun
munity Service
Michaels ohn Officer Sergeant Sergeant
P Kelly Ducak . Jain» a Prather
Steuhanie Erb
FOIA Off cer
RogerPechous
Police Administration
107
Commander of
Field operations
Paul Punk
Day Shift Afternoon Shift
Sergeant Brian Sergeant Brian Aalto
MCKeen
Day Shift Afternoon Shift
Sergeant Patrick Sergeant Brett
Puliduri Kioney
Ouircr ■, Officer Officer
Robert Roske J11I Foley Lawrence Popp
Officer
0fticer Officer
Marc Fisher Jason Ducak Joshua Conway
& K9 Ell
Officer Officer officer
Ryan Pardue James Harris Megan Carey
Officer Community Service Officer
Officer
RnhertKlasek David Porter Ashley O'Herron
Officer Officer Officer
Samuel Shafer 00 Orahm McClure Alberto Martinez
Officer
Omar Morales
Midnight Shift
Sergeant Kelly Ducak
Midnight Shift
Sergeant Jaimle
Prather
0(ficer ., Otfiecr
)oho Adams ., Richard Rewlako
nlrirrr
Olila•r
�.
Officer
andya L(u,•nZ
Matthew c un it
ohert Beaudoin
Officer Officer
Diana Hernandez Roger Hendrickson
Officer
licnri ICrucger
Officer
Danlcl Lincicum
Oftle•er
Mat[hety Sml:c
Officer
Cole Templin
Officer , Officer . OQicer
William Campos TBD TBD
Officer
Peter Mader
Officer
Zachary Dlcbold
Officer
TBD
Police - investigations Section
109
Telecmnnumicatious
Center
Dispatch Center Supervisor
Jennifer Synek
Lead Telecommunlcators
Justin Leibach and Dexter Barrows
DayShitt
Commander of
Support Services
Michael Cruz
Mght Shift
Records, Connnunity Service Ofrcers,
Public Affairs, FOIA
Records
Clerk
..
Records Clerk
MarybethVarvil
ME
Debra Shoemaker
CALEA/Training „PublicAffaitsOfficer
Coordinator in MichaelSpohn
Stephanie Erb
FOIAOfticer
RogerPechous
Telecommuuicator �. Telecommuuicator Telecommunicator �� Telecomuuudcator
Tracy McNamara ,. Hollyheville PatriciaGairett „ BridgetteVeronese
Telecommunicator �� Teleconnunicator Telecommunicator �� Telecommunicator
Kelly Schmitt �. Grant Ha�•ens Eileen Beidelman „ Kathn•u Wilbur•
Teiecmmnunicator .. Telecommunicator Teleconmuwicator �� Telecommunicator
KathetineFitzgerald �� Ryanhtiller RebeccaMonison „ hlichelleZujervski
Telecommunicator ,. Telecommunicator Teleromnumicator .� Telecommuuicator
GtveudolynAllen �� Kaitlin Durbaud Penelope Wegner „ Tamara Soto
Teleconuuun(cator ,. Telecommunicator Teleconunuuicator .� Telecommunicator
Jose Colon .. TBD NicoleScichott•ski ■, TBD
Telecommunicator „ P� , Telecommunicator
■ Telecommunicator
TBD Maureen Doolan TBD
Information Technologies Manager
Aaron Greve
hiformation "Technologies (I: C) Specialist
Michael Nodge
Information Technologies (LT.) Specialist
9'I3D
Police - FYZO22/23 Accomplishments
Personnel
New Hires
• On June 2701, 2022, Michael Hodge was hired by the police department as an I.T. Specialist.
Michael is originally from Mount Vernon, Illinois, and earned his Bachelor's Degree from
Columbia College Chicago.
• Tamara Soto joined us as a Telecom mum cator on October 31st, 2022. Tami had experience
as a Tel ecommunicator with the Woodstock Police Department and SEECOM in Crystal
Lake.
• On January 17t1l, 2023, Nicole Scichowsire began her career as a Telecommunicator. Prior to
joining us Nicole had been a Deputy Coroner with the McHenry County Coroner's Office.
• Cole Templin was sworn in as a Police Officer on January 30th, 2022. Cole previously served
as an officer with the Wilmette Police Department.
Retirements
• On July 8�h, 2022, I.T. Specialist Jeffiey Foerster retired from the police department. Jeffrey
started with the department as a Patrol Officer in May 1980 and retired as Sergeant in June
2010. He then started his role as an I.T. Specialist finishing with just over 42 years of
service to the City of McHenry.
• On December 26th, 2022, Commander Ryan Sciame retired from the department. He had
been with the department since June of 1999. During Ryan's career, he served as a Patrol
Officer, Narcotics Investigator assigned to the McHenry County Sheriffs Office, Patrol
Sergeant, MIAT Investigator/Commander, Detective Sergeant, and Commander of Support
Services.
Training
The McHenry Police Department recognizes the need to make sure all our sworn and civilian
employees receive the highest level of training available. During FY 2022/23 sworn officers and
civilian staff members of the McHenry Police Department participated in approximately 3,800 hours
of training, both internally and externally. Training directly affects the success of service provided
to the community and liability placed on the City. Some highlights were:
• Chief Birk, Deputy Chief Walsh and Sergeant Aalto attended the International Association of
Chiefs of Police Conference in Dallas, Texas, and received world -renown training in topics
that addressed contemporary or emerging issues confronting the law enforcement
profession and the leaders of law enforcement agencies worldwide.
• Deputy Chief Walsh attended the 283rd session of the FBI National Academy in Quantico,
Virginia. The FBINA is a 10-week professional course of study for leaders and managers of
state and local police departments, sheriffs offices, military police organizations, and federal
law enforcement agencies from the United States and more than 150 partner nations. During
this session, approximately 230 students (of which are around 35 international students)
tools undergraduate or graduate courses from the University of Virginia in the following
areas: leadership development, behavioral science, forensic science, terrorism,
communications, and health & fitness.
112
Annual, Bi-Annual and Tri-Annual Training for the department includes:
® Arrest Search and Seizure law under the Fourth Amendment, Bias Based Policing (CALEA),
Bloodborne Pathogens (OSHA), Civil Rights, Constitutional and Proper Use of Law
Enforcement Authority, CPR/AED, Crisis Intervention Training, Critical Incident Response
(CALEA), Crowd Control Response Training (CALEA), Cultural Competency, Defensive Tactics
(CALEA), Emergency Medical Response, Ethics (CALEA), Firearms Qualifications, HAZMAT
first responder awareness level, High Risk Traffic Stops, Human Rights, Implicit Bias,
Investigations of Sexual Assault and Sexual Abuse, Law Legal Updates, Mental Health
Awareness*(CALEA), Narcan, Officer Safety Techniques, Officer Wellness and Mental Health,
Portable Fire Extinguisher Training, Procedural Justice, Psychology of Domestic Violence,
Racial and Ethnic Sensitivity, Reporting Child Abuse and Neglect, Sexual Harassment,
Standardized Field Sobriety Testing, Taser, Temporary Detention (CALEA), Trauma Informed
Responses to Sexual Assault and Sexual Abuse, Use of Force.
Sworn Officer training was conducted in:
® Law Enforcement Administration
® Canine Unit Operations
® Narcotics Investigations
® Weekly Case Law Updates
® Crime Scene Investigations
® Homicide Investigations
® Interview & Interrogations
® Special Response Teams Training
® Rapid Deployment Training
® Firearms Training -
® Critical Accident Investigations
® Patrol Operations
® Arson Investigations
® State Mandated Annual Training Segments
Civilian training was conducted in:
Dispatch Leadership Symposium
® Integrated Emergency Management Course
® Dispatch Rapid SOS Admin Training
® CIT for 911 Dispatchers
® Dispatch - IPSTA Conference
® Dispatch - Mental Health First Aid for Public Safety
6 Dispatch - Text To 911
® Dispatch -LEADS 3.0 Update
Weekly Dispatch In -House Training 1-2 hours weekly
® Dispatch CPR Training
® Dispatch Annual ICS Training
® Dispatch Annual LEADS Certification
® Dispatch - Monthly Police/Fire/EMS Scenario Based Training Modules
113
Calls for Service
Police Calls for Service
In the 2022 calendar year the McHenry Police Department handled 24,043 calls for service through
dispatch and police services. The following list highlights types and volume of specific areas of
investigation by the department. These investigations resulted in over 226 felony and misdemeanor
charges being filed.
Homicide
0
Sex Offenses
14
Robbery
1
Burglary
14
Theft
196
Motor Vehicle Theft
7
Weapons Offenses
2
Domestic Disturbances
335
Drug Investigations
47
Fire Investigations
13
Death Investigations
53
Burglary to Vehicle
18
Juvenile Incidents
1 343
Dispatch Center Calls for Service
During the 2022 calendar year, NERCOM answered approximately 40,027 Emergency 911 calls,
approximately 41 text4o-944 calls for service, and approximately 76,532 non -emergency
administrative calls. An additional 29,613 outgoing calls were made on the behalf of our customers
for additional tasks.
The dispatch center handled the following calls foi• service during the 2022 calendar year:
Department
Calls for Service
McHenry Police
241043
Johnsburg Police
31412
Marengo Police
31738
Union Police
81
Woodstock Police
36,104
Harvard Police
51350
Fox River Grove Police
41664
McHenry Fire
71505
Marengo Fire & Rescue
21039
Union Fire
110
Woodstock Fire
51336
Harvard Fire
11333
Cary Fire
21541
Nunda Fire
459
Fox River Grove Fire
770
Mutual Aid
During FY 2022/23 the McHenry Police Department participated in multiple mutual aid requests.
Sergeant Ducak and Detective J. Prather participated in one (1) taslcforce callout through the
McHenry County Major Investigation Assistance Team (MIAT), which resulted in one arrest for 1st
Degree Murder.
114
Multiple officers from the McHenry Police Department participated in six (6) callouts through the
McHenry County Major Accident Assistance Team. These officers investigated vehicle crashes that
resulted in death or serious bodily injury.
The McHenry Police Department has an officer assigned to the Northern Illinois Police Alarm System
(NI PAS) Emergency Service Team. That officer participated in twenty-four (28) callouts for incidents
such as high -risk felony arrest warrants and armed/barricaded subjects.
Public Safety Initiative
During FY2022/23 the McHenry Police Department continued to take on the opioid and heroin crisis
head on. Through a multi -tiered approach of solving this crisis, the McHenry Police Department has
taken action through enforcement efforts (arrests and drug seizures), the use of Narcan and
participation in the "A Way Out Program". During the 2022 calendar year the McHenry Police saved
11 lives through the use of Narcan and assisted seven (7) people into the "A Way Out Program".
The department's I.T. Division spearheaded a program and installed security cameras at City -owned
locations, including the Riverwalk, Veteran's Memorial Park, Fort McHenry and Peterson Park. These
cameras live -stream through the City's existing system and can be monitored by the police
department's dispatch center. In the rare case of a crime at one these locations (ex. Vandalism),
footage can be used to identify the offender(s) and hold them responsible for their actions.
Accreditation
The Commission on Accreditation for Law Enforcement (CALEA) has been an ongoing partnership
for the police department since 2002. The purpose of CALEA is to improve the delivery of public
safety services, primarily by: maintaining a body of standards, developed by public safety
practitioners, covering, a wide range of up-to-date public safety initiatives; establishing and
administering an accreditation process; and recognizing professional excellence.
® The continuous re -accreditation of the McHenry Police Department has proven that the
agency has set and followed the following goals set by CALEA.
® Strengthen crime prevention and control capabilities;
Formalize essential management procedures;
® Establish fair and nondiscriminatory personnel practices;
Improve service delivery;
® Solidify interagency cooperation and coordination; and
Increase community and staff confidence in the agency.
® Developed a comprehensive, well thought out, uniform set of written directives.
® Established a preparedness program that is ready to address natural or man-made critical
incidents.
Strengthened the agency's accountability, both within the agency and the community.
Limited the agency's liability and risk
The dispatch center was recognized by The International Academies of Emergency Dispatch
(IAED) as an Accredited Center of Excellence (ACE) for emergency dispatching. McHenry Police
Department/NERCOM is the 30701 Medical ACE in the world and only the 7th center in Illinois to
each this status.
IAED is the standard -setting organization for emergency dispatch services worldwide.
Accreditation (and subsequent re -accreditation) from the IAED is the highest distinction given to
emergency communication centers, certifying that the center is performing at or above the
115
established standards for the industry. Centers who earn ACE status are the embodiment of
dispatch done right, and have demonstrated strong local oversight, rigorous quality processes,
and a commitment to data -driven continuous improvement.
Social Services Program
The police department hired Social Services Coordinator Jason Sterwerf and began developing its
own social services program. Among his many responsibilities, Jason is the department's
victim/witness coordinator and can refer those in need to the proper social service agency. He is also
our handler for our very own therapy canine Oakley.
Oakley joined the department on August 3�'�, 2022 and immediately began the therapy dog
certification process. He has interacted with police department staff, Municipal Center staff and
community members on calls for service. Jason and Oakley have visited several schools and
businesses, including the Alexander Leigh Center for Autism, the McHenry Public Library, Rosecrance
and Illinois Masonic Hospital.
Community Outreach
The McHenry Police Department, in an effort to accomplish the agency's mission, participates in
many community outreach events each year. Below highlights some of the more notable events that
were able to occur in FY2022/23.
National Night Out
On August 8m, 2022 the police department hosted National Night Out at Knox Park. We were joined
by the McHenry County Sheriffs Office,.Johnsburg Police Department, McHenry County Conservation
District Police, the McHenry Township Fire Protection District, and the United States Secret Service.
National Night Out is a campaign that enhances the relationship between neighbors and law
enforcement while bringing back a true sense of community. Furthermore, it provides a great
opportunity to bring police and neighbors together under positive circumstances.
Child Safety Seat Installations
The McHenry Police Department has a team of certified car seat technicians dedicated to providing
education to parents and caretakers of young children. Members of the car seat team stay certified
by acquiring continued education credits and demonstrating their use of proper skills and education
techniques. Technician duties include offering free inspections of child's safety seats at both our
police department and scheduled events. In 2022, the McHenry Police Department installed over
105 child seats and showed current parents and parents to be how to keep their families safe.
Adopt -A -School Program
In FY 2022/23, the McHenry Police Department continued the agency's "Adopt -A -School"
program. This program pairs individual officers with specific grade schools with the community to
increase awareness and safety within those schools. The program entails individual Day Shift patrol
officers being assigned their own specific grade school. The objective is for the officers to get to know
the faculty and students at their respective school so that the police department can provide abetter
service. This program involves activities such as foot patrols, classroom instruction blocks, training
exercises, and a community approach to solving problems within our schools. The plan is designed
to further the McHenry Police Department's mission of increasing school safety in our local schools.
116
Social Media Messaain�
During FY2022/23, the McHenry Police Department continues its efforts to reach community
members through social media. These platforms disseminate critical information and also help us
show the lighter side of the department's daily operations.
Recognizing that many in and around our community utilize social media as an information source,
the police department improved its efforts on Facebook and Twitter, increasing our followers from
the previous year and having a reach of over 15,000 people on Facebook.
Since 2009, the McHenry Police Department has been using Nixle to communicate emergency
messages in real-time. The police department currently has over 21,000 subscribers to this free
service.
Special Olympics Illinois
Special Olympics is a global organization that unleashes the human spirit through the transformative
power and joy of sport, every day around the world. Through programming in sports, health,
education and community building, Special Olympics is changing the lives of people with intellectual
disabilities solving the global injustice, isolation, intolerance, and inactivity they face. Special
Olympics Illinois provides opportunities for more than 22,500 athletes, more than 20,000 Young
Athletes, 45,000 volunteers and thousands more people statewide through 18 area programs in all
102 counties of the state.
The Law Enforcement Torch Run is the single largest year-round fundraising vehicle benefiting
Special Olympics Illinois. The annual intrastate relay and its various fundraising projects have two
goals: to raise money and to gain awareness for the athletes who participate in Special Olympics
Illinois. The Law Enforcement Torch Run has raised nearly $43 million over 31 years while increasing
awareness of Special Olympics athletes and their accomplishments.
Our efforts helped raise almost $10,000.00 for the athletes of Special Olympics -Illinois.
Senior Citizen Dispatch Call -In Program
NERCOM participates in a Senior Citizen call -in program designed by Woodstock PD to keep daily
track of those who live alone within the Woodstock community. As a result of these daily phone calls
with the telecommunicators, they have established friendships with the senior citizens and again this
year, volunteered during their off time to bake Christmas cookies for them and to celebrate their
birthdays.
Coffee with the Chief
Since 2012, the police department has held an active "Coffee with the Chief' Program. Cw•rently this
program is a partnership with the McHenry Public Library. This public meeting is offered to residents
A McHenry as part of the McHenry Police Department's continued commitment in keeping our
citizens and community informed about their police department. These events are opportunities for
the Chief and members of the McHenry Police Department to obtain face to face feedback from our
citizens.
In addition, our Dispatch Center Supervisor and several Telecommunicators participated in
Woodstoclz s Coffee with the Chief this year as well. Our staff members were invited to discuss the
many challenges of dispatching police and fire services for multiple agencies. The presentation and
Q & A session were well -received, and we were invited to return again next year.
117
Police Department Tours
During FY2022/23 the police department was visited by several community and youth groups who
wanted to learn more about the functions and staff of the department. Officers gave tours and
discussed/demonstrated forensic techniques. One of the highlights was the annual visit from the
students of Riverwood School. Mayor Jett discussed the role of the City Council, Deputy Clerk Johnson
gave a tour of the Municipal Center and Chief Birk show the students the department an one of our
squad cars.
Rotary Secret Santa Program
This is the McHenry Police Department's fifth year assisting the McHenry Rotary Club with their
Secret Santa Program. This program collects, wraps and distributes over 12,000 gifts for children in
need throughout McHenry County and then hand delivers them all. Both sworn and civilian
employees of the department (and their family members) volunteered their time to sort, wrap and
participate in a coordinated deliver event of these gifts.
118
Police - FY2023/24 Goals & Objectives
Below are the highlighted Goals and Objectives that the McHenry Police Department will focus on
during the 2023/24 fiscal year.
• Continue to provide the highest level of police services to the citizens of McHenry.
• Complete the development of the department's Social Services Coordinator program.
• Continue with the department's renovation /expansion phases to meet the department's
performance and usage needs.
• Seek and secure the highest -level training opportunities for all agency members,
• Continue and expand the department's public relations/community involvement programs.
• Continued support for overall community school safety through the School Resource Officers
(SRO) and the Adopt -A -School program to include adding two new SROs to District 15.
• Conduct an in -person school safety training exercise of school faculty from District 156 and
District 15.
• In partnership with District 156, launch a new drug prevention program in the junior high
schools called "To Good for Drugs".
Continue the department's Traffic Safety Plan in order to keep our roadways safe.
• Maintain fiscal responsibility and reduce any financial burden on the City through grant
funding.
• Continue to maintain professional standards by being assessed through the Commission on
Accreditation for Law Enforcement Agencies (CALEA).
• Maintain Emergency Medical Dispatch (EMD) ACE Accreditation through Priority Dispatch.
• Continue to actively partner with other organizations such as MCAT, MIAT, NIPAS and ILEAS
in an effort to share police resources and reduce operational costs.
• Replace six police vehicles, all with appropriate emergency equipment.
• Replace six in -squad computers.
• Replace all department -issued ballistic helmets and issue ballistic chest plates.
• Continue Implement a new Body -Worn Camera program.
• Replace Create a nevv county -wide multi -agency police training facility with firearms range.
119
® Replace Improve the quality of services provided toot eroutside police agencies.
Strengthen our customer Uase through professional relationships.
® Continued review and revision (as needed) of department policies and opez-ational
procedures.
® Seek additional grant funding opportunities for the agency.
120
Police - FY2023/24 Performance Measures
Item Goa DescriptionProposed
Actively suppress property
crime and crimes against Did UCR reportable property crimes
Crime Rate persons in order to ensure the and crimes against person totals stay February 15, 2024
safety of the McHenry the same or see a reduction?
Community and its citizens.
Manage police department
To complete the PY 23/24 by keeping
Annual Police Budget
in efficient and
resolve
expenditure at o• under approved
ex pp
Aril 30, 2024
effective manner ensuring that
m
police budget.
community needs are met.
Create a safe roadway system
To complete the 2023 calendar year
A reduction is traffic crashes
Traffic Crash / Roadway
within the City by enforcing
with an overall reduction in traffic
investigated in 2023 as compared to
Safety
traffic laws in order to create
accidents.
2022a
safe driving behavior.
To improve the delivery of
public safety services,
1. Review and revise as
primarily by, maintaining a
needed all agency policies
body of standards, developed
'i'o successfnilly review and revise
by January 2024.
by public safety practitioners,
policies in accordance with new laws
2. Complete all required
Accreditation
covering a wide range of up-
or practices; Complete CALEA proofs
CALLA standard proofs and
to -date public safety
and reports as required.
reports for the 2023
initiatives; establishing and
calendar year by February
administering an accreditation
20246
process; and recognizing
professional excellence.
1. Improvements to community events
such as; Child Safety Seat Installations,
Maintain a strong working
Coffee with the Chief, School Safety,
relationship with the McHenry
Adopt4School Program, Garden
An increase in attendance to all
Community and its Citizens in
Quarter Community Days, Special
community events, positive
Community Relations
order to maintain trust and
Olympics Illinois, safety Expos and
community feedback and the launch of
support in our mission to
MCPOA Events
new initiatives by April 2023.
serve and protect.
2. Continued improvement to Public
Relations and Social Media Interaction.
2023/24 McHenry Police Department
Provide the highest level of
Training Plan,
Meet or exceed all training
professional police services
requirements in the calendar year
Training
with the lowest liability or risk
Illinois Police Training Act 50/1LCS
2022, established by departmental
to the City and the Citizens
705/7
policy and Illinois State Statute.
who we serve.
Arrest / investigation enforcement
Obtain a reduction in the amount of
action of the illegal sale and use of
opioid (specifically heroin) overdoses
Narcotics Enforcement
Reduce the amount of opioid
opioids. Narcan deployment.
and deaths in McHenry for the 2023
usage and overdoses.
Participation in the "A Way Out"
calendar year.
Program.
121
See alternative ways to fund
Awarded grant funding for traffic
police related projects that
Annual review of all grant submission
enforcement and ballistic vest
Grants
support the mission of the
applied foil and all grant submission
purchases with a minimum of two
organization,
awarded.
additional grants to be applied for.
Maintain state certification
Meet the standard goal of
All telecommunicators shall hold a
Measure will be evaluated continually
for Emergency Medical
priority dispatch for
current EMD certification from IDPH
throughout the year and produced in
Dispatching
certification
at all times,
amoral report.
Telecommunicator shall, within 60
seconds of answering an emergency
Initially process 95% of
call, acquire location of incident, phone
Measure will be substantiated through
Emergency Call Processing
emergency calls within 60
number of caller, complaint type, and
tine use of quarterly reporting, which
seconds of them being
create a CAD event OR complete a
will culminate into an annual report.
answered,
PSAP to PSAP transfer at least 95% of
the time.
Dispatch 95% of emergency
Telecommunicator group shall
Measure will be substantiated through
Emergency Call Dispatching
calls within 90 seconds of
dispatch at least 95 % of all emergency
the use of quarterly reporting, which
them being answered,
calls within 90 seconds of them being
will culminate into an annual n report.
answered.
Telecommunicator shall, within 60
minutes of receiving all necessary
Measure will be based on regular
LEADS Hot Pile Entry
All Criminal Hot Piles will be
information, complete each Criminal
auditing of the LEADS CHP records
entered without delay.
Hot Pile entry into the LEADS/NCIC
contained within the 911 center.
database,
Telecommunicator shall, within 120
seconds of answering a non -
Initially process 95% of all
emergency call, acquire location of
Measure will be substantiated through
Non -Emergency Call
non -emergency calls within
incident, phone number of caller,
the use of quarterly reporting, which
processing.
120 seconds of them being
complaint type, and create a CAD
will culminate into an annual report.
answered.
event OR complete a PSAP to PSAP
transfer at least 95% of the time.
Dispatch 95% of non-
Telecommunicator group shall
Measure will be substantiated through
Non -Emergency Call
emergency calls within 150
dispatch at least 95 % of all non-
the use of quarterly reporting, which
Dispatching
seconds of them being
emergency calls within 150 seconds of
will culminate into an annual report.
answered.
them being answered.
122
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H E A R T O F T H E
FOX R I V E R
Fiscal Year 2023/2024
Annual Budget
Administration
129
Public Works Administration - Overview
Public Works Departmeutal Mission
The mission of the Public Works Department is to respond to the
community needs consistent with the policies determined by City
Council, to maintain a working environment built upon trust, respect and
citizen involvement, and to achieve the City's goal of being responsive to
resident needs and focusing on customer service.
The Department consists of four operating sections that provide services
to the citizens of our community. These sections include Administration,
Field Operations Division, Water Division, and Wastewater Division.
In spring of 2020, the Public Worlcs Department was reorganized to consolidate duties, reduce
management personnel costs, and create opportunities for cross training between divisions.
Maintenance operations are now divided into two groups: Field Operations which includes the Street
and Utility Divisions and Treatment Operations which includes the Water and Wastewater Divisions,
Public Worlcs Administration Mission
It is the purpose of the Administration Division to provide
Erection and admi
dinistrative support to the Department of
Public Works. Public Works Administration is also responsible
for completing City projects for the public welfare, to the
highest quality, in accordance with legal and contractual
standards, and in accordance with City statutes. The Public
Works Department is responsible for the management of all
City Engineering and Construction Projects, Request for
Proposal solicitation for Engineering and Construction
projects, contract enforcement, and general technical
assistance for the Public Works Department.
There are several primary operating functions within the
Public Worlcs Administration Division:
• To coordinate with the Mayor, City Council and City Administrator to ensure proper
execution of the City's policies and departmental programs.
• To provide "in-house" engineering services for a number of City projects, to perform plan
review for development and utility projects, and to perform project management services for
the City's contracted engineering services and publicly bid capital construction projects.
• To provide administration, personnel management, asset management, departmental
strategic planning, financial management, and capital improvement program
planning/implementation for a Public Works Department responsible for all municipally
owned and operated public infrastructure within the corporate limits of the City of McHenry.
The Public Works Administration Division includes the Director of Public Works Troy Strange, Staff
Engineer Greg Gruen, and Administrative Analyst Elizabeth Roth.
130
Public Worl<s
Director
Troy Strange
Staff Engineer
Greg Gruen
Treatment
Operations Manager
Russell Ruzicka
Wastewater
Superintendent
Russell Adams
Water ROTC
Operator
Bryan Scheel
r
74��C
_
ffiz
Administrative
Analyst
Elizabeth Roth
Field Operations
Manager
Steve Wirch
Field Supervisor
Mile Lange
Field Supervisor &
Arborist
Mike Harper
Public Works Administration - FY22/23 Accomplishments
• Administration and oversight of Refuse Collection Contract.
• Awarded "Tree City USA" for the 27t�� consecutive year.
• Successful completion of FY22/23 Road Resurfacing Program which included over 11 miles
of resurfacing.
• Year 1 implementation of the 10-year Water and Sewer Community Investment Program
which was funded with base fees implemented in January of 2022.
• Finalization of the 20-year City Community Investment Program and presentation for
approval by the City Council in January of 2023.
• Implementation and startup of the new refuse hauling contract with Flood Brothers Disposal
in August of 2022.
• Consultant selection, contract negotiations, project initiation, and management of design
services for: FY22/23 Water Main Replacement Program, City Hall Parking Lot
Reconstruction, City Fueling Station Construction, Venire Avenue Reconstruction, North
Riverside Parking Lot Construction, Elm Street to Green Street Right of Way Development,
Water Well 14 Development.
• Consultant selection, project startup, project management and coordination with all City
Departments for the design of Riverside Drive Streetscape Improvements.
• Proj ect management for the construction of the Knox Parlc Parking Lot Rehabilitation Project.
• Proj ect management for the completion of the South Main Street Parking Lot Reconstruction.
• "In -House" plan and contract document preparationpublic bidding, and project management
for the resurfacing of parking lots at Petersen Park.
• Ongoing project management for the construction of the South Mairi Street Parking Lot
Rehabilitation.
• Ongoing project management and coordination of design services for utility relocation
associated with the future reconstruction of Illinois Route 31.
• Ongoing project management for Bull Valley Road Surface Transportation Program (STP)
• Finalization of Phase 2 Engineering and final submittal to November 2022 IDOT Letting for
Green Street STP
• Successful selection of the Barreville Road STP project in the Spring 2022 Council of Mayors
Call for Projects.
132
Ito
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Public Works Administration - FY23/24 Goals & Objectives
• Provide effective communication with the City residents about the various Public Worlcs
projects, programs, and services.
• Ongoing management of the City's refuse collection contract, leaf pickup, yard waste, and e-
waste/Christmas lights recycling programs.
• Provide responsible financial managementwhile maintaining existing Public Worlcs services.
• Continue electronic archiving efforts to fully digitize existing paper records into a searchable
electronic record.
• Continued implementation of an annual road resurfacing program of more than $2.0 million
including successful management & completion of a $4.0 million program in 2023.
• Year 1 implementation of the 20-year Community Investment Plan adopted by City Council
in February of 2022.
• Year 2 implementation of the 10-year Water and Sewer Capital Program associated with
recently adopted base fees.
• Finalization of Phase II Engineering plans and submittal to the State Letting for the Bull Valley
Road STP project.
• Completion of a joint consultant selection process with the Village of Prairie Grove for the
Barreville Road STP project
• Initiation of Phase II Engineering and project management for the Oakwood Drive Bridge
Project.
• Proj ect management for ongoing design projects including: City Fueling Station Construction,
Venice Avenue Reconstruction, Elm Street to Green Street Right of Way Development, Water
Well 14 Development.
• Project management, coordination with City Departments, and final plan delivery for the
Riverside Drive Streetscape Improvements Project.
• Project management for the design and construction of the North Riverside Parking Lot
Construction.
• Successful project management for the construction of the Green Street STP project.
• Successful project management for the reconstruction of the City Hall Parking Lot.
• Ongoing project management and securing of easements for the design of the Mill Street and
Richmond Road Water Main Replacement projects (FY22/23 Water Main Replacement
Program).
134
® Continued project management of design services for utility relocation associated with the
future reconstruction of Illinois Route 31.
® Continued implementation and maintenance of OHSA Safety Programs &Policies For all Local
150 and Public Works staff.
135
Public Works Administration - FY23/24 Performance Measures
. ,
?erfor ance.. ormance.uliumialice
Item Goal Measure Proposed
Was the CIP updated and
transmitted to the
Develop an updated CIP and
Capital Improvement Finance and
transmit to Finance and All deadlines are met
Program (CIP) Administration Department Administration
Department by the due
date?
Was the operating budget
transmitted to the
Develop and present an
andal
AnnualBudget
operating budget to the finance
Administration
All deadlines are met
and Administration Department
Department by the due
date?
Respond to resident
Respond to a resident complaint
% of time that Public
complaints/inquiries within
Resident
or inquiry within one working
Works Department staff
one working day 100% of
Complaints/Inquires
day from receipt
responds within one day
the time throughout the
year
Develop all RFP's for Engineering
All RFP's completed, issued,
Request for Proposals
Services and for Construction
Status of RFP's for
and contracts awarded for
(RFP) Development
projects for which the City
"in
budgeted projects
projects in currentUudget
performs house" engineering
year
services
Manage City Engineering and
Schedule and Budget
All Engineering and
Project Management
Construction Projects and assure
status of City Engineering
Construction Projects
projects are completed on time
and Construction Projects
completed on time and on
and on budget
budget
Assure that City Engineering and
All contract work and scope
Construction Projects are
Quality Assurance of City
items are completed in
Contract Enforcement
completed in accordance with
Engineering and
accordance with contract
contract documents and scope of
Construction Projects
provisions
services
All issued permits are
Review and issue utility permit
completed and closed per
applications and assure that City
the terms of the original
Permit Reviews
Infrastructure is undamaged or is
Status of issued permit
permit application,
fully restored upon completion of
No/minimal outstanding
permit work
permits.
Provide all requested technical
Completion status of
All requests for technical
Technical Support for
support for Operations Managers,
requests for technical
assistance are completed on
Maintenance Staff
Maintenance Superintendents,
assistance
"as needed" basis
and Supervisors
All operating funds are at or
Final Operating
below the approved
Financial Management
Efficient management of all
Expenditures relative to
operating budget and/or
operating fund accounts
budgeted operating
overages are documented
expenditures
and justified
136
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Public Works Field Operations Division
Public WWA I Field Operations Division (Streets) Mission
It is the mission of the Field Operations Division (Streets) to
support and enhance a high quality of life for the City's
residents, businesses, and visitors by providing a well -
planned, environmentally sensitive, and cost-effective
infrastructure through superb customer service. In
addition, the division will provide residents with a quality
urban forestry program which is cost effective and acts as a
responsible steward for the natural resources of the
community.
The functions of the Field Operations Division (Streets)
include street cleaning, street maintenance, responding to
all resident requests, and snow and ice removal. All City -
owned vehicles and various pieces of equipment are
repaired and maintained at the Public Works Facility with
two full-time mechanics. The Division also maintains public sidewalks and curbs.
- Overview
The Field Operations Division (Streets) provides residents with cost effective and quality urban
forestry services and delivers responsible stewardship for the natural resources of the
community. The arborist's crews utilize professional management practices in tree planting,
maintenance, and removal to improve the quality of the urban tree canopy.
In summary, Field Operations Division (Streets) employees undertake the following tasks:
• Division crews remove snow, control ice, conduct street cleaning, and perform other
necessary miscellaneous repairs.
• Maintenance and repair all City owned vehicles and various equipment through the city
garage with two full-time mechanics.
• Monitoring and maintenance of City streetlights and signals by a private contractor.
• Maintenance of City streets by filling potholes and patching.
• Monitoring of creek levels and maintenance of channels to prevent flooding.
• Advising and consulting with the Department Director regarding fleet and infrastructure
needs and responses to service requests.
• Tree planting; maintenance and removal, completion of tree inventories, performance of tree
surveys for insect, disease and any hazardous tree problems, administration of the City Arbor
Day Program, maintenance of the City's status in the Tree City USA and Growth Awards
Program. Coordination with other City departments, community groups and volunteers on
tree related issues, and oversight of the Tree Preservation Ordinance for compliance.
• Oversight of the mowing contract for City properties.
140
Public Works Field Operations Division - Organizational Chart
In May of 2022, the Public Worlcs
Department combined the Street
Division and the Utility Division into
the Field Operations Division.
Combining the two divisions into one
was done to further utilize City
personnel for daily operations.
Street -related operations are solely
funded through the General Fund
while Utility -related operations are
funded through both the
Water/Sewer Fund and General Fund.
The hours worked and expenses for
FY22/23 have been properly
separated by Fund to account for the
amount budgeted annually in the
Field operations Division.
141
Public Works Field Operations Division - FY22/23 Accomplishments
• Maintained level of service while reducing personnel costs through an ongoing staff attrition
process.
• Replaced 125 signs throughout the city (Sign Replacement Program).
• Completion ofthe bi-annual brush pick-up program.
• Completion of ADA ramps and concrete curb in advance of the 2023 Road Resurfacing
Program.
• Removed brush and clea►ed the Lakeland Parlc Drainage Ditch of excess vegetation.
• Fleet maintenance staff performed ongoing maintenance of City -owned vehicles and
equipment.
• Division staff performed ongoing right of way maintenance including parkway restoration,
mowing, and creels cleaning.
• Staff successfully completed snow removal, ice control, and conducted street cleaning in
addition to making miscellaneous repairs.
• Staff completed resurfacing of the Parlts Maintenance Garage parking lot.
• 322 City trees were trimmed by staff and 1,000 contracted trees were trimmed in various
locations throughout city rights -of --way.
• 60 trees were removed in 2022 by city personnel and 10 trees were contracted for removal.
• 29 trees were planted throughout the city.
• Contracted with Precision Pavement Markings, Inc. for City street pavement marking
program. Striping tools place in various parts of town striping stop bars, crosswalks, and
longitudinal lines.
• 90%completion of ADA sidewalk survey.
142
Public Works Field Operations Division - FY23/24 Goals & Objectives
• Continue to provide a quality level of service while reducing personnel costs through an
ongoing staff attrition process.
• Address all snow and ice events by clearing roadways to ensure safe travel on City streets.
• Maintain the City's fleet to ensure efficient operations and maximize fleet service life.
• Repair and maintain City streets by dedicating personnel to patch grinding and pothole
repair.
• Continued successful performance of mowing of the City's rights -of -way and property in a
timely fashion.
• Successfully respond to all resident requests in a timely manner.
• Continue a 5-year striping program interval for all neighborhood crosswalks and stop bars
not currently on a schedule,
• Continue a 10-year Sign Replacement Program.
• Inspect and maintain the City owned street light systems.
• Continued assistance with the preparation for Fiesta Days, 4dof July activities and other City
festivals.
• Plant five trees for the City Arbor Day celebration, ten trees within the City Park System, and
70 trees in City parkways.
• Successfully assist Developers with tree planting in new subdivisions on an as -needed basis.
• Continue implementation of the 5-year pruning rotation in City parks and City parkways.
• Identify hazardous trees for removal and remove other trees as required.
• Continue to monitor for Emerald Ash Borer, Gypsy Moth, and Japanese Beetle.
• Manage contracted services agreements.
• Assist with the administration of Capital Improvement Projects including the 2023 Road
Resurfacing Program.
• Complete ADA sidewalk survey for IDOT ADA transition plan.
• Contract bi-annual sidewalk inspection program.
143
Public Works Field Operations Division - FY23/24 Performance Measures
F erformance
Performance
Perrormance FZ37ZzFItem
Goal
Measure Proposed Outcome(s)
Provide all necessary
Staff is fully prepared for work.
Was all training required
Internal Training
training for all division
Work related injuries are
for the completed?
employees each year
year
minimized.
Sweep 121 center lane
Number of sweeping
Clean streets & welIJUnctioning
Sheet Sweeping
miles per year
cycles completed
closed drainage systems
Sidewalk
Repair all uneven sidewalk
Number of locations
panels identified through
completed and
Safer sidewalks for residents
Maintenance
sidewalk survey
outstanding locations
Safe roads, well maintained roads,
Asphalt Maintenance
Pothole and spot patching
Were all necessary road
and cost-effective roadway
repairs made7
maintenance
Road Resurfacing
All ADA ramps in next
All ADA ramps in next year's Road
Program Support
ADA ramp installation
year's Road Program
Program in advance of the bidding
process.
Provide all necessary
Repairs completed and
Well maintained creeks and
Drainage
ditching and creek
outstanding necessary
drainage ways which reduce the
Maintenance
maintenance to prevent
repairs
City's risk of flooding
flooding
Perform ADA sidewalk
Completion ADA
ADA Sidewalk Survey
sidewalk survey for City
Complete IDOT ADA transition plan
survey.
sidewalks
Manage Woodland
Creels
One prescribed burn/all
Successful maintenance of the
Areas
Maintenance/Controlled
creeks maintained
City's natural areas/preserve
burns
creeps
144
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Annual Budget
147
Parks and Recreation - Overview
McHenrY1-
Parks h Recrealion Depannient t
Mission
It is the mission of the Parks and Recreation Department
to provide planned recreation programs and maintain
facilities and parks to meet the recreational and park
facility needs of the public, recognizing that leisure
activities, facilities, and open spaces are important to
individuals, families, and community life.
The Recreation Division of the Parks and Recreation Department consists of five full-time
personnel on the recreation side. Director of Parks and Recreation Bill Hobson works
alongside Athletics and Aquatics Supervisor Nicole Thompson, Recreation Supervisor Cindy
Witt, Fitness Coordinator Becky Moore and Recreation Program Specialist Mannon Amelio
to coordinate the various programs, events and services provided by the Department.
Additionally, staff oversees the management of the McHenry Recreation Center, Petersen
Beach and Merkel Aquatics Center facilities for the Department.
The Parlcs Division, consisting of Superintendent of Parlcs and Downtown Maintenance Pat
Gorniak, Assistant Superintendent Jeff Friedle and six (6) full-time Parks Maintenance
workers continue to tackle the massive task of maintaining the City's more than 650 acres
of park space, contained in thirty-eight (38) municipally -owned park sites. In addition, the
)arks Division is responsible for maintaining the amenities of the City's three downtown
business districts - Riverside Drive, Green Street, and Main Street.
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Parks and Recreation - FY22/23 Accomplishments
Recreation Center
• Recreation Center memberships began to z ebound in 2022 from the significant losses
I
n 2021 with multiple variants of the Covid pandemic striking the nation. Membership
totals have returned to nearly 1,200. These "active members" are paying members
who are in an annual contract, in good standing, and do not include employees, punch
pass holders or other short-term memberships.
Special Events
• Several events were held this year, and included: Daddy Daughter Dance (Feb),
Breakfast with the Bunny (Apr), River Run SK (July), Big Wheels Race (July),
Halloween Bash (Oct) and Candy Cane Hunt (Dec).
Programs
• Sixteen sessions of the Explorers Camp (ages 4-6) were held at Knox Park during the
summer. Activities, arts & crafts and games were scheduled based on different daily
themes.
• The Summer Day Camp (ages 645) was very successful during the summer. Ten
weeks of camp were held at Knox Park and were full with a maximum of 80 campers
each week.
• The fall/spring dance program has 125 students participating. A dance recital is
scheduled to take place May 6 at McHenry High School West Campus.
• Art themed "Bags -to -Go" were continued through the year for toddler -aged kids. Bags
of activities and supplies were prepared monthly and could be purchased and picked -
up.
• The McHenry Recreation Center community rooms continue to be a popular location for
family and business gatherings. The community rooms were utilized for birthday parties,
bridal & baby showers, seminars, meetings and celebration of life luncheons.
• Collaborations - Programs offered working with local businesses.
o Rock'n' Kids - Children's music programs
o Snapology of McHenry - Children's programs, camps & birthday parties
o Totally Cupcaked (pick-up) - Monthly cupcake club
o The Studio - Children's art & poetry classes at the local art studio
o Young Rembrandts - Children's art & cartooning programs and camps
o Minds in Motion - Children's STEM programs & camps
Field Trips
• Adult field trips have become a very popular addition to recreation offerings. In
cooperation with Crystal Lake, Cary and Barrington Park Districts and Lake in the
Hills Parks and Recreation Department, senior trips are offered at least twice a month.
Trips have included theater and musical productions, casinos, museums, historical
tours, food tours, educational outings and lunch outings.
150
Athletics
Starting in the summer of 2021, we were able to bring our full program scheduling
back through our parks and community school gymnasiums. We saw a large increase
in program registration coming out of COVID. We served 1,248 local youth through
our athletic programs over the 2021-2022 budget year.
® In total, the department ran 96 programs over the summer with a total of 788 athletes
enrolled. The toddler leagues for soccer and t-ball continue to be successful and a hit
for summer programming. This is an increase of 37 program sessions from pre-COVID
years. It accounts for an increase of over $25,000 in summer athletic program
revenue.
The adult leagues continue to have a steady average of 125 teams each season. We
had 27 summer teams, and 25 fall teams. The winter adult leagues did not run this
season due to low interest. With the programming being indoors and D15 mask policy
at the time, I found that we didn't have adult interest under the current guidelines.
Fall/Winter swim team has been holding steady with 80 swimmers enrolled over the
last three seasons. We have the following number of kids qualify for championship
meets: 18 swimmers for Illinois Swimming Regionals, 6 swimmers for Illinois
Swimming State, and 9 swimmers for NCSA Nationals. For our rec division, we have
35 swimmers that will be competing in the NIWSC Championship meet in McHenry
on March 20.
® In the fall of 2021, the department formed a new partnership with Northern United
Football club to run a co-ed recreational soccer league. The league had a great first
year with 40 adult athletes. The partnership helped us get the program off the ground
after 4 years of failed attempts. We are looking to offer a spring league as well.
Our McHenry Instructional Basketball league went into it's 4tn year of operations. We
had 159 children enrolled in the league from grades 1st through 801. The league
showed an increase of 12 athletes and $5,400 in additional revenue from pervious
seasons.
The maintenance team completed renovations of the Petersen Parlc tennis courts. The
new courts bring additional pickleball courts to the community. We also installed
adjustable basketball hoops at the park which will allow us additional program space
for our younger classes that need a lower hoop to shoot on.
Aquatics
® The pool resumed pre-COVID operations including general open swim and pool pass
sales for the season. The prices were increased for the first time since 2018 to reflect
the increased minimum wage.
The pool had a total of 7,676 visits during the 2021 operating season. This was slight
decrease from pervious year. The beach had a total of 2,372 visits during the 2021
operating season. The beach saw an increase of around 100 visitors last year.
® We sold 530 pool passes to community members, and we hosted 18 private pool
parties last season.
® Our largest increase was in youth aquatics programming. We saw 72 swimmers for
our summer team which increased by 6 children more than 2019. We serviced over
300 children through private swim lessons for a total of 500 lessons taught. Our group
151
lessons had 69 kids served hitting our highest number of students dating back to
2017.
® 'We continue to monitor the changing economy regarding aquatics. We saw the largest
increase in staff costs and product price increases this summer. The department
director and aquatics supervisor spoke about meeting to discuss long term planning
for the summer aquatic facilities to help keep debt to revenue ratio manageable.
Parks Improvements
® Veteran's Memorial Park was the main focus for improvements last year. After expanding the
bathrooms in previous years, the picnic pavilion was replaced with a structure that is more
open and much larger than the existing one was. While undertaking this project stone was
added to the columns and to the base of the gazebo. The gazebo was also had the roof
replaced. Finally, through a cooperative project with the Public Works Department, all the
roads around the park and the parking stalls were redone. The exterior sidewalk
replacement was also included in the scope of work.
® The front entryway of Veteran's Park is the last element of the park that needs to be
replaced/upgraded. The design work, was complete this Spring and the city will look to bid
the work in late Spring or early Summer.
® Petersen Park also saw a number of improvements in the last year. The LED message board
sign at the park, entrance was replaced. Lights were installed in the main parking lot in
preparation for the repaving of the lot in the coming year. A new shade structure is to be
installed along the beachfront this Spring.
® The major improvement at Petersen Park was the complete removal and renovation of the
basketball and tennis courts adjacent to the picnic shelters. The courts have been a
maintenance issue for years as pavement would shift and crack. During the renovation the
courts were also expanded to add two pickleball courts. New fencing was placed around all
the courts and lights were added.
® Though it is not an alteration to the park, the Parks and Recreation Department hosted the
largest concert that has been held to date at Petersen Park, The R.I.S.E Up Foundation hosted
a concert as a benefit to install a splash playground at Fort McHenry. Almost 8,000 people
attended the Saturday night concert. Weather was not as cooperative on the preceding Friday
night however another 2,000 people attended. Overall, nearly $200,000 was raised by the
Foundation for the imitative, which looks to be installed in early Summer.
® Plans are already in place for the 2022 concert. The funds for the concert this year will be
dedicated towards a "tiny shops" economic development incubator that will be located in
Miller Point Park. In order to accommodate the shops which will be dubbed "The McHenry
Riverwalk Shoppes", a master plan of the park was undertaken and approved. The project
will be a complete redesign of the park, and create a public gathering space and event hub
downtown McHenry on the Fox River. The park will have a new amphitheather, permanent
washrooms added, a turf area that could be utilized as an ice rink in the winter. The park will
add green space and redesign the park, entrance.
® Plans for a future bike park, in Knox Park were also completed this Spring. The park would
have 3 different types of bike park, elements to accommodate many different age groups.
® Knox Park is also the home to a new Natural Park. Formerly, unusable woods were groomed
and a 1/3 mile crushed limestone trail that traverses the wooded area was introduced along
will all natural elements for children to climb on and wall, along. Staff also worked with the
Land Conservancy to plant 10 oak trees and reintroduce them to the area. The park will pair
well with our summer day camp and in general offers children big and small the opportunity
to play and interact in a natural setting.
152
® A second project completed with the assistance of outside groups, was a pollinator garden at
Petersen Park along the banks of the pond. The volunteer project is one designed to attract
butterflies and bees with many colorful plants. The garden was designed by Small Waters
Education and installed with the assistance of the Land Conservancy of McHenry County, The
Environmental Defenders of McHenry County and Hachmatack National Wildlife Refuge,
McHenry County Conservation District and Hispanic Connections Woodstock.
® The Parks and Recreation Department replaced two of our oldest playgrounds last year.
These were at Pebble Creek Park and at Knox Park. Playground replacement will continue in
the coming years.
® The department took the formal steps to add another improved park to our roster as well.
Galway Park playground design was finalized and ordered. Installation will be completed by
the end of April 2022. The department is also partnering with Lennar Homes on the donation
of sidewalks and landscaping for the park.
® Renovation and restoration of the Petersen Farm Horse Barn is underway. The Barn was hit
by a storm last fall and changed the scope of the project, however the end goal remains in line
with the results of the Petersen Farm Market Study that was completed in 2020.
® The Parks Department also spearheaded many of our downtown initiatives and projects. in
the last year these included:
o New public boats piers at Weber Park and along the Riverwalk
o Complete repainting of the Cunat Bridge on the Riverwalk
o Brick Paver replacement along the Riverwalk
o Light replacement on Riverside Drive
153
Parks and Recreation - FY23/24 Goals & Objectives
• Continue to maintain Lite City's quality parks and parks amenities and to offer quality
recreation programming for our residents
• Coordinate with user groups, service groups and businesses to manage McHenry's fantastic
public events
• Enhance Department's sponsorship program.
• Continue to develop relationships with school districts, chamber, and various social clubs in
community.
154
Parks and Recreation - FY23/24 Performance Measures
Item G
.. D- •
Are the Department's
Measure the Departments
marketing efforts reaching the October 2023
Marketing marketing success and intended audience and which
effectiveness, methods are most effective?
Explore opportunities to What technology are we
Improve customer service and utilizing and is it the most
Technology department operations through effective tool for the specific December 2023
the Introduction of task? i.e. Programming
technological advancements. Software
Invest in training, retention
methods, staff recognition and How do we improve the
Staff Development/Retention cross training in order to performance of department February 2024
develop staff workforce and staff?
reduce turnover/loss,
Run professional Marketing
campaigns with a wider reach to What is the value of a
gain memberships. Contniue to membership? Are we
Membership Rebuilding continuing to offer the most January 2024
reach out to potential corporate current group exercise classes?
partners. Are we maintain a clean facility?
155
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Tourism Fund - Overview
The purpose of the Tourism Fund is to finance tourism -related
promotions of the City of McHenry. Revenues of the Tourism Fund
are derived from a 5% tax on motel and hotel room receipts.
Expenditures currently include annual contributions to the Visit
McHenry County organization (formerly McHenry County
Convention and Visitors Bureau), partnering with the McHenry
Jaycees to fund a portion of the annual Independence Day fireworks
in Petersen Park, and on the municipal portion of various festivals
and special events held within the municipality such as Fiesta Days
and Blue, Brews and BBQ.
For FY22/23, the Tourism Fund is being used to continue to pay the
principle and interest on the acquisition of the Green Street Parking Lot.
162
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Annual Budget
164
Pageant Fund - Overview
The purpose of the Pageant Fund is to account for
revenues and expenditures used to conduct the annual
Miss McHenry Pageant. The pageant, a community
tradition for 60 years, is conducted annually. Female
contestants between the ages of 16 and 20, living with the
boundaries of the McHenry District 156 school district
and having a McHenry address, are eligible to participate.
Revenues are derived from entrance fees of $200 per
participate, normally paid by a sponsor, and other
donations. Expenditures are directly related to the
holding of the pageant.
165
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166
Fiscal Year 2023/2024
Annual Budget
167
Band Fund - Overview
The purpose of the Band Fund is to finance and
account for expenditures incurred for the
provision of summer concerts by the municipal
and to promote culture and recreation in
McHenry. Revenues are derived through a
transfer from the General Fund and expenditures
are related to stipends paid to the members of the
and.
169
Fiscal Year 2023/2024
1
Annual Budget
170
Civil Defense Fund - Overview
The Civil Defense Fund accounts is for the training of personnel and the
purchase and maintenance of equipment needed to protect and defend
the municipality from natural disasters or man-made environmental
disasters through early warning and public notification systems.
Revenues.are derived from a General Fund transfer and expenditures
are as -needed.
171
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Fiscal Year 2023/2024
Annual Budget
173
Alarm Board Fund - Overview
The Alarm Board Fund is to pay for the maintenance of radios
and "head -end" equipment in the municipal 911 dispatch center
(NERCOM). This equipment comprises the city's direct connect
radio fire alarm monitoring network. City businesses which are
required, by building code, to have a fire alarm monitoring
system are required to be monitored via direct connection to
NERCOM. This direct connection helps to ensure a more
efficient emergency response.
174
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Annual Budget
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176
Audit Fund - Overview
The purpose of the Audit Fund is to account for expenses
incurred to complete the annual audit of the city's financial
statements. The State of Illinois requires that the City of
McHenry conducts an independent audit on an annual basis.
Statutes provide authority for an entity to levy a portion of the
property tax to pay for the audit. Since the authority to levy a
property tax for the audit is separate from the authority to levy
the corporate rate, the levy amount for audit is deposited into a
separate fund and kept segregated from the General Fund
receipts.
177
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Fiscal Year 2023/2024
Annual Budget
179
Annexation Fund - Overview
The Annexation Fund is a non -operating fund that is used to
account for receipts from generally non -recurring revenue
sources resulting from negotiated annexation agreements.
Revenues include a fee assessed on gravel mining on a per
on basis, revenues from property being annexed into the
City on an acreage and lot basis, and an additional per unit
fee that is distributed to other taxing bodies.. Expenses in the
fund are related to improvements to infrastructure or
municipal facilities.
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Annual Budget
182
Motor Fuel Tax Fund - Overview
The purpose of the Motor Fuel Tax (MFT) Fund is to provide
dedicated revenues from taxes on gasoline and diesel sales
primarily to road improvements and maintenance. Motor fuel taxes
are generated by a flat rate of cents per gallon, plus a sales tax ROAD
transfer. This sales tax transfer was eliminated by the State of WORK
Illinois in 2000 and replace by certain vehicle registration fees. In
2021, the State of Illinois Increased the monthly Municipal Motor AHEAD
Fuel Tax allotment by approximately 40% bringing the annual
revenue to $1.2 Million. Beginning in FY22/23, the entirety of the
Motor Fuel Tax revenues was dedicated to the Local Streets
Resurfacing Program. These revenues combined with the
implementation of a Municipal Retailer Motor Fuel Sales Tax, dedication of all Township Road and
Bridge Fund distributions, and the dedication of Street Division operating capital fund have created
a consistent annual program budget for the Local Streets Resurfacing Program of more than $2.3
million. Due to carryover balances in the Motor Fuel Tax Fund the FY23/24 program is in excess of
$4.0 million.
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185
Fiscal Year 2023/2024
Annual Budget
Developer Donation Fund - Overview
The Developer Donation Fund is to account for donations collected
from developers on behalf of the primary and secondary school
districts, fire protection district, library district and the municipal
park system. Developer Donations are collected to ensure the
provision of public facilities to serve new development by requiring
each new developer to pay a calculated share of the costs of such
improvements as a condition of approval. By municipal ordinance,
anyone applying for a building permit for a residential unit are
required to pay fees for each unit constructed.
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Tax Increment Finance Fund - Overview
The Tax Increment Finance (TIF) Fund accounts for revenues
and expenditures related to the city's Downtown Tax
Increment Finance District, established in 2002. TIF
revenues are derived from the collection of property taxes
each year at an increment based on the increase in the
assessed valuation of properties within the area since
creation of the district. Expenditures are related to the
repayment of private development "extraordinary costs" per
approved development agreements and for public
improvements within the district which increase the value of
all properties within the area.
Over the course of the past year the city was able to garner support from every tying body in terms
of a letter of support in extending the TIF District. City staff has made numerous presentations to the
public boards of taxing bodies not only within the city limits but also in the county. These meetings
have ultimately resulted in the public endorsements from the bodies for the extension and an
ordinance passed by city officials to request the extension from the state legislature. The measure
was included in the fall veto session on an omnibus extension bill at the state house. The measure
was passed and the 12 year extension was granted.
This extension will be invaluable as a tool to continue to attract developers on key sites that were
identified in the initial planning stages of the TIF District; sites such as the Central Wastewater
Treatment Plant site and the Central Green Street area. Additionally, the extension will enable the
completion of the Riverwallc and the implementation of a vast streetscape program. Collectively,
these items will reshape the downtown area in McHenry for generations to come.
This is already occurring with the vibrant buildings and developments such as the Riverwallc Place
fiownhomes and the River Place mixed use building. The Riverwallc has created a pedestrian friendly
flow between the streets and serves as a draw for residents and visitors. Land has been acquired and
transformed into thriving event spaces and hubs of downtown activity. And new public boat slips
have been introduced to draw those patrons off the river and into the downtown areas.
190
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Fiscal Year 2023/2024
Annual Budget
192
O F T 11 E FOX R I V E R
Fiscal Year 2023/2024
Annual Budget
Debt Service
193
Debt Service Fund - Overview
The Debt Service Fund accounts for the bonded indebtedness
incurred by the City's General Fund, including bond and interest
payments.
194
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Fiscal Year 2023/2024
Annual Budget
Recreation Center Fund - Overview
In March of 1999 the City Council passed a
resohrtion stating that 50% of developer
donation fees for parks were to be set aside for
the construction of a recreation center.
Consequently, the Recreation Center Fund was
created to account for these donations. In
addition, any future funding sources identified
for the construction of the facility would be
deposited in this fund and, further, the
expenditure of funds for the construction of a
recreation facility would be taken from this
fund.
In 2013 and 2014 City Council undertook a process to evaluate the feasibility of various options for
recreation facilities, including the development of a family aquatics facility and/or a recreation
center. Ultimately, it was determined that a recreation center should be the primary focus,
construction began in 2015 and the McHenry Recreation Center was opened in February of 2016.
Construction was financed through a combination of cash payments from the Recreation Center Fund
and the issuance of debt. This was done to ensure that funding remained in the Recreation Center
Fund to cover any operating shortfalls, to serve as capital improvement funding for facility needs, or
seed money for future expansions of recreation facilities.
J-
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In 2020, McHenry and the world navigated the beginnings ofthe Covid-19 pandemic. The restrictions
imposed by the State of Illinois closed the facility entirely for over 3 months. Extremely restrictive
mitigations lasted throughout the remainder of the 2020 and have continued into 2021. This has
had a near catastrophic impact on the membership levels at the Recreation Center. Membership
levels have hit the lowest levels ever at roughly 1,000 active members. The severe drop in
197
membership due to Covid has forced the depletion of the much of the reserve funds that were left
from the construction,
In 2022, staff was able to close out the remaining hold on membership for Covid reasons. Staff
instituted a number of promotions throughout the year to attract new members, including utilization
A professional marketing campaigns. A rebound has begun to occur and active members have
increased to nearly 1,200 members.
Recreation Center Fund - FY22/23 Accomplishments
Recreation Center
• Group fitness class attendance has seen a large jump in numbers since November 2022.
Average class numbers for the week leading up to November was around 550 participants.
Since mid -November that number has increased to around 700 participants per week.
• Group Fitness attendance from May 2022 -January 2023 - 23,266 visits
• Personal training has also seen an increase in PT clients which began in September 2022. Our
trainers are seeing around 60 clients per week which is up from 35-4.0 per week. Our PT
department has also seen an increase in partner trainings. May - July 2022 we were
averaging 3 groups of partner trainings and we are now at 7 groups of partner trainings per
week
• We offer 55 classes per week in categories ranging from HIIT, Strength, Mind/Body, Active
Adults, Barre, TRX, Cycle, Cardio Kickboxing, Dance, Pilates and Kettlebell.
• Our group fitness staff heads up 4 holiday bootcamps per year for our Rec Center members.
The 1.5-hour bootcamps are well attended by members and non-members with around 50
people
• The recreation center serves as a hub for much more than simply a fitness center. The facility
houses many of our classes and workshops. It also is a location that is rented out for any
number of occasions to our community.
Recreation Center Fund - FY23/24 Goals & Objectives
• Create a collaborative marketing plan foi programs, events and facilities; whereby
increasing community reach, efficiency, return on investment.
• Increase visitation at rec center thereby increasing revenue. This shall include quarterly
free community fitness days.
• Research trends, explore community partnerships and evaluate existing programs in an
effort to consistently develop new programs and special events.
• Enhance Department's sponsorship program and apply it where applicable at the
Recreation Center.
200
Recreation Center Fund - FY23124 Performance Measures
Item Goal Description •
Through outreach to members
To maintain a 60%fitness and continual update of Membership loss is minimized
Membership Retention membership retention rate for offerings, the goal is to keep and client base remains fairly
the facility. members engaged and constant.
interested.
In identifying a comprehensive
Further develop and apply a sponsorship program, additional Fostering community
Sponsorship sponsorship program to the community connections will be partnerships and adding a
Recreation Center. created as well Introducing revenue stream to the facility
additional revenue
Utilization of active marketing
campaigns at key times of the What is the value of a
year as well as free fitness days membership? Are we Rebuild membership base
Membership Rebuilding continuing to offer the most dramatically impacted by the
to increase the facility's current group exercise classes? Covid-19 Mitigations
community exposure. Are we maintain a clean facility?
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Special Service Area 44 Fund - Overview
The Special Service Area (SSA) #4 Fund is to account for revenues and
expenses associated with annual debt service for a sewer project that
was completed in 2004 in the Lakewood Road Subdivision. SSA's allow
a city to levy a property tax on property within a defined area to fund
specific improvements. Through an SSA payments are spread equally
over the identified number of taxable lots rather than through
assessment (Special Assessment). The SSA is to expire in 2024.
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Capital Improvements Fund - Overview
Historically, the purpose of the Capital Improvements Fund
has been to account for funds identified for the maintenance
and construction of public infrastructure projects other than
water and sewer utilities. This includes roads and public
facility maintenance, improvements and/or construction.
Through FY21/22, Capita] Improvements Fund Revenues `��`v' ��'��`� � ='`t'``
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previous fiscal year-end surplus (revenues/expenditures) of
the General Fund which, by policy, is then assigned for future capital asset maintenance and
replacement projects. During FY21/22 the City Council adopted a tax on electric (started in June
2022) and natural gas (to begin June 2023) utilities. Per City Ordinance adopted by Council, those
revenues derived from the electric usage portion of these taxes are to be used to fund the City's
General Fund capital asset and maintenance replacement program for projects identified as part of
the Community Investment Plan.
In FY23/24, the Capital Improvements Fund will be used to account for any carryover funding from
FY22/23 and capital asset maintenance and replacement projects, identified in the Community
Investment Plan, will be funded through a newly established "Capital Asset Maintenance &
Replacement Fund" section of the budget. This Capital Improvements Fund will then be removed
from future budget documents.
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Capital Equipment Fund - Overview
Historically, the Capital Equipment Fund has been utilized to
track annual expenditures of equipment replacement (e.g.,
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capital projects. During FY21/22 the City Council adopted a tax on electric (started in June 2022)
and natural gas (to begin June 2023) utilities. Per City Ordinance adopted by Council, those revenues
derived from the natural gas usage portion of these taxes are to be used to fund any new (as distinct
from maintenance and replacement) projects as identified as part of the Community Investment Plan.
In FY23/24, the Capital Equipment Fund will be used to account for any carryover funding from
FY22/23 and capital equipment projects, identified in the Community Investment Plan, will be
funded through a newly established "Capital Asset New Projects Fund" section of the budget. This
Capital Equipment Fund will then be removed from future budget documents.
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Capital Asset New Projects Fund - Overview
The Capital Asset Maintenance &Replacement Fund is being
established in the FY23/24 Budget to identify the funding for
the maintenance and replacement of existing capital assets
with a cost of more than $10,000.
During FY21/22 the City Council adopted a tax on electric ����v� ,/ "�,��'
utilities and, per City Ordinance, those revenues derived fromWL
�4y M16y4`:�;�
this tax are to be used for the sole purpose of funding the h�; > , .�� 'r '•
Capital Asset Maintenance & Replacement Program as
identified in the Community Investment Plan (CIP). The CIP is updated by Staff and reviewed and
approved by the City Council on an annual basis as part of the budget development process.
Capital Asset Maintenance &Replacement Projects identified for funding in FY23/24include:
City Hall Parking Lot Rehabilitation $550,000
City Hall Front Entrance and Doors $1000000
Jaycees Park and Gazebo Roof Replacement $5,000
I(nox Park Maintenance and Sheds Replacement $20,000
Miller Riverfront Gazebo Roof Replacement $5,000
Petersen Park Horse Barn Roof Replacement $350)000
Freund Field Basketball Court Lighting $50,000
Ballistic Helmet Replacement $40,000
Patrol SUV Replacement (310) $64,000
Patrol SUV Replacement (311) $64,000
Patrol Utility Vehicle Replacement (325) $590000
Patrol Utility Vehicle Replacement (317) $59,000
Patrol Utility Vehicle Replacement (327) $59,000
Patrol Utility Vehicle Replacement (326) $591000
Pearl Street Bridge Deck Oil $25,000
14on Dump Truck (Snowplow) $115,000
1-ton Pickup Truck (Concrete) $75,000
Total $1,699,000
Detailed descriptions of these projects can be found in the attached Community Investment Plan
document.
216
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Introduction
The capital needs of a municipality can be divided into two distinct categories: 1) those related to the
maintenance and replacement of existing capital assets; and 2) those related to the development of new
capital assets. In McHenry, all capital asset maintenance, replacement, and expansion costs are funded
through the General Fund, except for those projects related to the City's water and sanitary sewer utilities
and those related to the McHenry Recreation Center. Water and sewer maintenance and replacement
projects are funded through user base fees, and Recreation Center projects are funded through the user
fees forthe facility. The purpose of this Community Investment Plan (CIP) is to serve as a realistic, strategic
blueprint for the maintenance and replacement of the City's General Fund capital assets.
Background
Prior to 2013/2014, the City of McHenry did not have a comprehensive multi -year capital
improvement/equipment planning process. Capital asset maintenance and replacement and capital
improvements (defined as those projects with a cost of more than $10,000) were identified and funded
annually as part of the municipal budget process. Beginning in 2013/2014, the City Administration
introduced a 5-year Capital Improvement Program planning document. This document, reviewed and
updated on an annual basis, became the basis for the City's capital improvement and equipment planning.
While the Capital Improvement Program serviced the city well, current trends in municipal capital asset
maintenance and replacement planning have shifted towards a need for a longer term, and much more
strategic, planning tool — commonly referred to as a Community Investment Plan —with a focus on capital
asset maintenance and replacement projects, and importantly, the identification of funding sources for
these projects. This Community Investment Plan provides a framework for long-range capital investment
planning allowing for better resource management and the ability for staff and elected officials to ensure
that short term needs are met with a knowledge of future demands. This Community Investment Plan
includes only the maintenance and replacement of existing capital assets and does not include the
development of new assets (e.g., the construction of a new public facility), providing a clear separation
between meeting existing needs versus implementing new capital asset projects.
In analyzing identified General Fund capital asset maintenance and replacement needs through 2042, the
City Administration has determined that between $1.4 million and $2.3 million annually will be required
to support these needs, based on the specific programs implemented. A listing of capital asset
maintenance and replacement projects are identified in Appendix C.
Goals for the Plan
During 2019 Strategic Planning sessions, a goal was sefi to create along -term projection of capital costs
associated strictly with maintenance and replacement of assets thatthe City already holds. This need was
identified due to the sporadic nature of the capital budgeting process which grouped capital projects in
one class regardless of whether the capital expenditure was for the purposes of acquiring a new asset or
maintenance and replacement of an existing asset. The logic for the change in the approach was that for
the City to develop better control and predictability in its capital planning processes, projections of future
GENERAL FUND (MUTJ CIP
219
capital costs based upon realistic service lives of existing assets were going to have to be developed. In
short, the goals for the plan are as follows:
1. The "wish list" approach forcapita) budgeting is abandoned and replaced with a plan and schedule
that is realistic to implement.
2. Priorities for maintenance and replacement of existing assets are set based upon current
operational requirements rather than desired or additional new services and programs.
3. Maintenance and replacement of existing capital assets is scheduled and implemented based
upon acceptable costs and reasonable service lives.
4. The cost projections are met or funded by a protected revenue source that is dedicated by
ordinance for the maintenance and replacement of existing assets only and matches the cost
projection. No new assets are funded through this protected revenue source.
5. Projects for the development of new assets are funded through General Fund balances or new
sources of revenue; significant facilities and infrastructure expansion projects should be
considered for funding through referendums, bonded debt services, special assessments, etc.
Development of the Plan
The tasl<of developing this projection was assigned to City staff and all department heads worked together
to develop these cost projections. Capital expenditures were classified by department, expenditure, and
type of treatment. Costs were also given a projected year for implementation which was used to develop
a long-term projection and implementation schedule. The method of developing these costs included the
following assumptions: small items which are sporadically replaced through operating budgets are not
included in the projection, only existing capital assets were to be included in the projection, both
maintenance treatments to fulfill the full asset service life and asset replacement costs were included,
and each treatment or asset replacement was to include a cost and service life associated. Annualized
costs were simply generated by dividing the capital cost over the projected service life; inflation was not
included in the projection and therefore, all costs are present costs. The sum of annualized costs was
then utilized to develop funding and implementation strategies for the plan.
Funding the Plan
Traditionally, McHenry's General Fund capital asset maintenance and replacement needs have been
funded through excess General Fund revenues over expenditures after the achievement of a balanced
operating budget and ensuring the existence of sufficient funds for the maintenance of the required (by
)olicy) 120-day minimum General Fund balance. While conservative budgeting practices have resulted in
the ability to address some of the City's maintenance and replacement needs, funding levels can be
unreliable from yeamo-year, resulting in the inability to budget for, plan, and implement a regularly
scheduled program.
In February 2022, the City Council took a significant step in ensuring annual funding for General Fund
capital asset maintenance and replacement projects included in this Community Investment Plan by
adopting a new Electricity Use Tax. Annual revenues of this tax are estimated at $1.1 million. The result
of this action is that projects within this plan are organized and presented based on this $1.1 million
guaranteed annual revenue source.
GENERAL FUND (MUT) CIP
220
Organization of the Plan
Capital asset maintenance and replacement projects included in the Community Investment Plan are
estimated to cost at least $10,000 and have a useful life of greater than one year. Projects are presented
in two formats: 1) via a brief project description that identifies the proposed project maintenance needs
and/or replacement timeframe and estimated cost(s) (Appendix B); and 2) via a summary spreadsheet
that identifies projects by classification (see below) and maintenance/replacement schedule within the
20-year span of this plan (Appendix C). The summary spreadsheet also serves as a master database used
perform simple analysis, summarization, categorization, and projection exercises for all the City's assets.
From these exercises, several charts have been generated to illustrate the data. These charts include a
breakdown of expenditures by year, a summary of expenditures by asset category, and expenditures by
department. These charts are included as Appendix A.
Projects are classified into one of the following categories for reference purposes:
Infrastructure Maintenance/Improvements
Improvements to publicly owned infrastructure such as multi -use paths, crack sealing, culvert
rehabilitation and replacement, bridge rehabilitation and replacement, street lighting replacement, signal
equipment replacement, curb replacement, sidewalk replacement, and corrugated steel culvert
replacement. Local streets are funded with Motor Fuel Tax Funds and, as such, are not included in this
category.
Parks and Land Maintenance/Improvements
Improvements to publicly owned properties outside of a building footprint and for projects that are not
eligible for funding through other municipal funds. Examples include parking lots, playground equipment
replacement, ball courts, gazebos and other accessory structures, and fences.
Building. Maintenance/Improvements
Improvements to the exterior or interior of publicly owned facilities that are not eligible for funding
through other municipal funds (i.e., McHenry Recreation Center, water or sewer conveyance/treatment
facilities). The primary example in this category is the maintenance and replacement needs of the
McHenry Municipal Center.
Vehicles and Equipment Replacements
Maintenance or replacement of municipal vehicles and equipment that are not eligible for funding
through other municipal funds (i.e., Water/Sewer Fund for Water and Sewer vehicles). This category
includes road vehicles as well as other motorized equipment such as backhoes, end -loaders, etc.
Additionally, this includes all light equipment which is routinely replaced by the Police Department. This
equipment includes radar, radios, helmets, shields, body cameras, etc, and annually averages
approximately $155,000,
Implementation of the Plan
Because it was uncertain when the electric use utility tax revenues would start to be received after the
passing of the ordinance in February of 2022, the Fiscal Year 22/23 Capital Improvement Program was
funded through the traditional means of General Fund balances that were left after meeting operating
GENERAL FUND (MUT) CIP
221
budgets and minimum fund balances. The Capital Improvement Program also included projects both for
the development of new assets as well as maintenance and replacement of existing assets, all of which
were funded through the same source (General Fund Balances available for capital).
As the original capital projection was "front -loaded" with maintenance and replacement projects that
were considered immediately necessary, staff began preparations for the implementation of the plan by
updating the schedule and beginning to shift projects to better match revenues to expenditures in the
early years of the plan. Electric Utility Taxes are now being received in a predictable manner and staff are
now prepared to begin implementation of the plan in Fiscal Year 2023/2024, Fiscal Year 2022/2023
revenues are projected to be $0.7 million and Fiscal Year 2023/2024 revenues are projected to be $1.1
million, which brings the available funding for capital maintenance and replacement projects to $1.8
million.
To ensure project readiness and implementation of projects within the constraints of the intended fiscal
year, it is crucial that projects are ready for a bidding process early in the fiscal year so that contractors
and vendors are under contract with a good portion of the fiscal year remaining. This will eliminate or
reduce the number of projects that are carried over between fiscal years, which is a burdensome and
inefficient process for project accounting. To ensure project readiness, projects which are to be
implemented soon which require engineering or architectural services for the development of plans,
specifications, and bid documents are split into two expenditures. A portion of the project budget is
assigned in the fiscal year prior to full project implementation such that the plans, specifications, and bid
documents can be developed and ready for use in the fiscal year intended for project implantation or
construction.
The Fiscal Year 2023/2024 program includes a budget of $1,784,000 and will begin implementation on
May 1, 2023. The list of Fiscal Year 2023/2024 projects is as follows:
1. City Hall Parking Lot Rehabilitation $550,000
2. City Hall Front Entrance and Doors $100,000
3. Jaycees Park Gazebo Roof Replacement $51000
4. Knox Park Maintenance Sheds Replacement $20,000
5. Miller Riverfront Gazebo Roof Replacement $5,000
6. Petersen Park Horse Barn Roof Replacement $350,000
7. Freund Field Basketball Court Lighting $501000
8. Ballistic Helmet Replacement $40,000
9. Patrol SUV Replacement (310) $64,000
10. Patrol SUV Replacement (311) $64,000
11. Patrol Utility Vehicle Replacement (325) $59,000
12. Patrol Utility Vehicle Replacement (317) $59,000
13. Patrol Utility Vehicle Replacement (327) $59,000
14. Patrol Utility Vehicle Replacement (326) $59,000
15. Pearl Street Bridge Deck Oil $25,000
We 1-Ton Dump (Snowplow) $115,000
17. 1-Ton Pickup (Concrete Trucic) $75,000
A detailed description of each of these projects is included in Appendix B of this document.
GENERAL FUND (MUT) CIP
222
Future Considerations
Because the Con, portion of the Municipal Utility Taxes is assigned for maintenance and replacement
projects only the following projects are not included in the preceding portion of the Community
Investment Plan. These projects are considered facilities and infrastructure expansion projects and are to
be paid for by other funding sources including year-end General Fund capital balances, the Nicor portion
of the Municipal Utility Tax, General Obligation Bonds, Tax Increment Finance District (TIF) revenues, and
other new assigned sources of revenue. These projects will not move forward until funding sources are
assigned and implemented for the individual projects as they are approved and incorporated into the
City's Budget.
Venice Avenue $600,000
This project includes the reconstruction of Venice Avenue and Court Street south of Illinois Route 120.
This will include the addition of concrete curb and gutter as well as the addition of a pedestrian walkway
to facilitate pedestrian movement from the Green Street Downtown Corridor to the Miller Point and
Riverside Drive Corridor. The project is currently in design and will be funded for construction upon the
assignment of a revenue source for construction funding.
Fueling Station $400,000
This project will include the construction of a new City fueling station on the property at the Public Works
Department located at 1415 Industrial Drive. The facility will include above ground gas and diesel tanks,
an overhead canopy, necessary utility work, and fuel use tracking software. The proposed facility is
currently in design and permitting and will be constructed upon the assignment of a funding source for
this new facility project.
Police Bu*MIA out $800,000
This project will include the expansion and modification of the sallyport in the Police Department portion
of the building and the construction of a covered parking area on the north side of the building in the
current Police Department parking area.
Riverside Sidewalk $1501000
This project includes the necessary design and construction costs to complete missing gaps in the sidewalk
along Riverside Drive between Pearl Street and McCullom Lake Road. Necessary work will include grading
and drainage work as well as the construction of new base course and sidewalk on the west side of
Riverside Drive.
Kane Avenue Sidewalks $25,000
This project will include the replacement of all sidewalks on Kane Avenue which front Edgebroolc and
Duker Schools. City Staff were approached by School District Staff in Summer of 2022 with a request to
partner on the replacement of both City sidewalks and School District sidewalks/flatwork. This project
will move forward pending a funding commitment from both the School District and the City.
GENERAL FUND (MUTJ CIP
223
Streetscape Improvements
In 2021 the City of McHenry commissioned an engineering and planning study to create a Downtown
Streetscape Master Plan to be implemented over a multi -year period. The Study was finalized and
adopted in December of 2021. Because of the large capital costs, which are not currently all accounted
for, the project locations were prioritized, and preliminary engineering was initiated in 2022 on the
highest-ranking location (Riverside Drive). Locations will be implemented and constructed in the future
upon assignment of capital funding sources. A brief listing and order of magnitude cost of each corridor
included in the Master Plan is as follows:
1. Riverside Streetscape $3,000,000
2. Green Street Streetscape $3,000,000
3. Main Street Streetscape $3,000,000
4. Elm Street Streetscape $3,000,000
5. Miscellaneous Streetscape Improvements $1,500,000
Riverwallc Expansion COSTTBD
TIF District Improvements COST TBD
Route 31 local Matches (Non -Water -Sewer) $2,000,000
Illinois Department of Transportation (IDOT) is currently in Phase 11 Design for Me reconstruction of Illinois
Route 31 between the City of Crystal Lake and the City of McHenry. Construction is currently anticipated
no earlier than 2025. In addition to the roadway costs which are strictly [DOT costs there are several costs
for optional local improvements which have been outlined in a previously executed Letter of Intent (LOI)
between the City of McHenry and IDOT. These costs include the City's local funding obligations for
optional decorative street lighting, the local match for the construction of a multi -use path, and the local
match for the municipal legs of signalized intersections.
Annual Review and Approval Process
The Community investment Plan will be reviewed and updated annually to ensure that maintenance and
replacement schedules are updated appropriately. Identified projects will be included for approval as
part of each fiscal year budget based on the maintenance and replacement schedules identified in this
document.
GENERAL FUND (MUTJ CIP
224
Appendix A
Included in this appendix are charts and tables which summarize the program by year of expenditure,
project categories, and sponsoring departments.
GENERAL FUND (MUiJ CIP
225
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Appendix B
Included in this appendix is an individual projects CUL for each capital item that is being funded in Fiscal
Year 2023-2024. Sheets include a brief project description, sponsoring department information,
engineering expenditure information, an anticipated service life, and a cost. Each page also includes a
photo representing the project and a five year table of expenditures for multi -year projects.
GENERAL FUND (MUT) CIP
231
Project
City Hall Parking Lot Rehabilitation
Project Description
McHenry City Hall parking lot rehabilitation includes, reconfiguration of
drive isles, curb/sidewalk replacement, storm structure repairs, grinding and
overlay and striping. Also included in this project are new pavers at Police,
Administration, and City Council Chambers entrance as well as area below
the flag poles on the east side of the building.
Community Investment Plan (General Fund)
Project Number 01-FAC-001
Department Community
Development
Treatment Rehabilitation
Service Life 30 Years
Design Fiscal Year FY22/23
Design Cost $50,000,00
Construction Fiscal Year FY23/24
Construction Cost 5550,000.00
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 550,000000
GENERAL FUND (MUTJ CIP
232
Project
Front Entrance and Front Doors (City Hal
Project Description
The front entry doors to City Hall are original to the building's construction
in 1991. Normal wear and tear over the years has taking its toll on the
doors, doors no longer open and close properly and are in dire need of
replacement. The replacement includes adding new automated sliding type
doors that would comply with Illinois accessibility code and International
energy conservation codes.
Community Investment Plan (General Fund)
Project Number 01-FAC-002
Department Community
Development
Treatment Rehabilitation
Service Life 30 Years
Design Fiscal
Design Cost
Construction Fiscal Year FY23/24
Construction Cost 1 $1001000.00
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 100,000000
GENERAL FUND (MUTJ CIP
233
Project
Miller Riverfront & Jaycess Gazebo Roof Replacements
Project Description
This project includes the replacement of the roofs of the gazebos at both
Miller Riverfront Park and Jaycees Park, Asphalt shingle roofs are planned
for replacement on 25 year intervals and the roofs of both of these gazebos
located at City Park properties are due for replacement as well as repairs
incidental to the replacements.
Community Investment Plan %General Fund)
Project Number 41-PARK-001&003
Department Parl<s and
Recreation
Treatment Replacement
Service Life 25 Years
Design Fiscal Year
Design Cost
Construction Fiscal Year FY23/24
Construction Cost $10,000,00
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 10,000,00
GENERAL FUND (MUTJ ClP
f�.iCL!
Project
Petersen Horse Barn Roof Replacement
Project Description
This project includes the replacement of the roof of the horse barn at
Petersen Park. Asphalt shingle roofs are planned for replacement on 25
year intervals and the roof for the horse barn is overdue for replacement as
well as repairs incidental to the replacements.
Community Investment Plan (General Fund)
Project Number 41-PARK-004
Department�Parl<s and
Recreation
TreatmentlRehabilitation
Service Life 25 Years
Design Fiscal Year
Design Cost
Construction Fiscal Year IFY23/24
Construction Cost $350,000.00
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 350,000,00
GENERAL FUND (MUTJ CIP
235
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y I r
bp
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Project
Freund Field Basketball Court Light Replacements
Project Description
This project includes the replacement of lighting for the basketball courts at
Freund Field. The current poles and fixtures are beyond their expected
service life and will be replaced with modern LED fixtures with an
anticipated service life of 25 years.
Community Investment Plan (General Fund)
Project Number 41-PARK-005
Department Parl<s and
Recreation
Treatment Replacement
Service Life 25 Years
Design Fiscal Year
Design Cost
Construction Fiscal Year FY23/24
Construction Cost $501000.00
Fiscal Year Expenditures
23/24 24/25 25/26 26/27 27/28
$ 50,000600
GENERAL FUND (MUT) CIP
237
Police Vehicle / Eauipment Replacement Program
Project pescription
The purpose of this project is to maintain the function of the McHenry
Police Department's Vehicle / Equipment Replacement Program. This
program was established in order to ensure the agency is capable of
maintaining the proper level of dependable police vehicles needed to
service the community in all law enforcement efforts. Vehicles are a
primary piece of law enforcement equipment that must be replaced in
order to ensure fleet dependability and service to the community. This
project is classified as an ongoing program. Vehicles and equipment are
replaced every 5-7 years based upon age, condition, and mileage.
Community investment Plan (General Fund)
Project Number 22-EQPT 001to006
Department Police
Treatment I Replacement
Service Life 5-7 Years
Fiscal Year FY23/24
Replacement Cost $364,000.00
Recurring Project Yes
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 364,000.00
GENERAL FUND (MUTJ CIP
Ballistic Helmets
Project Description
Ballistic I�elmets provide protection to officers involved in high risk incidents
and incidents involving firearms. The purpose of this project is to replace all
agency ballistic helmets every five years when they expire. These helmets
are individually assigned to all officers as a piece of mandatory tactical
(safety equipment required by the Police Department.
Community Investment Plan (General Fund)
Project Number 22-LEQPT-002
Department�Police
Treatment Replacement
Service Life 5 Years
Fiscal Year FY23/24
Replacement Cost $40,000.00
Recurring Project Yes
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 40,000.00
GENERAL FUND (MUT) CIP
239
Project
Body / Vehicle Cameras
Project Description
This project replaces the Police Department's current in -car video camera
systems and incorporates the use of body -worn cameras into the agency's
video camera program as required by Illinois Law. Specifically this project is
classified as an onging program that requires maintenance and replacement
of equipment every 3-5 years. This program has an annual re-occuring cost
paid each budget year.
Community investment Plan (General Fund)
Project Number 22-LEQPT-001
Department Police
iTreatment) Replacement
Servce Life 3-5 Years
Fiscal Year FY23/24
Replacement Cost $85,000.00
Recurring Project Yes
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 85,000.00
$ 85,000.00
$ 85,000.00
$ 85,000.00
$ 851000.0O
GENERAL FUND (MUT) CIP
240
Project
Public Works 1 Ton Replacement (With Plow
This truck is currently used for street maintenance and as a spare truck for
plowing. Due to high projected capital equipment costs for plow trucks, the
Public Works Department began to test the concept of utilizing 1-Ton 550
units for plowing neighborhood routes which has been implemented
successfully. Additionally, these units are versatile for year round
maintenance purposes. The current unit is beyond its typical service life and
is due for replacement.
Community Investment Plan (General Fund)
Project Number, 30-EQPT-001
Department�Public Worl<s
ice Life
TreatmentlReplacement
Sery15 Years
Fiscal Year FY23/24
Replacement Cost l$115,000.00
Recurring Project Yes
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 115,000200
GENERAL FUND (MUTJ CIP
241
Project
Public Works 1 Ton Replacement (Concrete
Project Description
This truck is used as a maintenance truck and for hauling the equipment
trailer for the concrete crew. The current unit is a 2003 Ford F350 which is
beyond its normal service life. The truck will be replaced with another 1-
Ton this Spring pending the results of the City's procurement processes.
Community Investment Plan (General Fund)
Project Number 30-EQPT-002
Department�Public Worl<s
Treatment Replacement
Service Life 12 Years
Fiscal Year FY23/24
Replacement Cost $75,000,00
Recurring Project Yes
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 75,000.00
GENERAL FUND (MUT) CIP
242
Project
Pearl Street Bridge Deck Sealer
Project Description
The purpose of this project is maintenance and rehabilitative sealing of the
bridge deck superstructure for the Pearl Street Bridge. In the most recent bi
annual bridge inspection for the structure it was recommended that the
bridge deck be re -sealed as soon as practical. It is recommended to re -seal
the deck on regular intervals to maximize the service life of the deck
superstructure and delay the eventual replacement of the bridge deck,
Community Investment Plan (General Fund)
Project Number 30-INF-002
Department�Public Worl<s
Treatment ice Life I Reha bilitation
Sery5
Design Fiscal Year
Design Cost
Construction Fiscal Year FY23/24
Construction Costl$25,000.00
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 25,000.00
GENERAL FUND (MUTJ CIP
243
Appendix C
This appendix is the master spreadsheet of all capital items included in the 20-year projection. This
spreadsheet is annually updated and is utilized to perform simple data analysis and to produce charts
for illustration of the plan which are included in Appendix A.
GENERAL FUND (MUTJ CIP
244
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Fiscal Year 2023/2024
Annual Budget
250
Capital Asset New Projects Fund - Overview
The Capital Asset New Projects Fund is being estaUlished in the
FY23/24 Budget to identify the funding for the development of
new capital assets (as distinct from maintenance and
replacement of existing capital assets) with a cost of more than
$10,0006
During FY21/22 the City Council adopted a tax on natural gas �`��`rp
�,'?';;•,`�.,� 4
utilities and, per City Ordinance, those revenues derived from `:, ,
this tax are to be used for the sole purpose of funding the
Capital Asset New Projects Fund. Since the implementation of the natural gas tax was deferred until
June 2022, projects will not be identified for funding as part of the Community Investment Plan until
such time as the city realizes a full fiscal year of revenues. As such, no new capital asset projects are
identified for funding through this source for FY23/24.
251
Fiscal Year 2023/2024
Annual Budget
252
Fiscal Year 2023/2024
Annual Budget
Water/Sewer Revenues and Public Works
Water, Wastewater, Utility
253
Water & Sewer Fund - Overview
The Water and Sewer Fund is an enterprise fund —that is, a
business -type fund utilized to account for operations and activities
that are financed and operated in a manner similar to a private
business enterprise, and where the cost of providing goods and
services to the general public on a continuing basis is expected to
be recovered primarily through user charges, including operating
costs and capital improvement costs related to the maintenance of
the water and sewer utility systems. These fund the operations of
the Water, Wastewater and Utility Divisions in the Department of
Public Works. The operating functions of these three divisions are
to provide a safe and reliable supply of high -quality potable water
and to protect public health and the environment by treating
sewage to meet stringent environmental standards prior to discharge.
Of note, the Utility Division was established in FY15/16, combining existing Water and Wastewater
Division Maintenance Workers to specifically address utility system maintenance needs more
routinely. Prior to this, utility maintenance projects were addressed by either the Water or
Wastewater Division and often required coordination with the other division to ensure adequate
manpower. The creation of the Utility Division established a more effective means to deliver utility
maintenance projects. The Utility Division has now been combined with the Street Division into the
new Field Operations Division. The operating expenses for all Utilities maintenance are still
accounted for separately and are reflected in the Field Operations Division (Utility) section of the
Enterprise Fund Budget. The expenses for the Utility Division are split between the Water and
Wastewater Divisions as follows - approximately 63.7% of operating expenses are paid from the
Water Division and the remaining 36.3% are paid from the Wastewater Division. Capital expenses
are charged to the division that benefits from the maintenance project.
In general, water and sewer revenues are derived directly from water and sewer sales, base charges,
connection fees, and service penalties and should be sufficient to fund the operating and capital costs
for the Water, Wastewater and Utility Divisions. Importantly, water and sewer revenues are driven
by consumption and, as such, with a growing awareness of water conservancy (which the City
supports) and wetter than average summer months, consumption has been relatively flat over the
last two years.
Prior to FY15/16, water and sewer rates were adjusted annually based primarily on the Consumer
Price Index (CPI). Unfortunately, this CPI adjustment did not correlate to the actual cost of operations
for McHenry's Water and Wastewater Divisions and did not account for the specific capital
infrastructure needs of the municipality. This resulted in a shortfall in water and sewer revenues
and an inability to fund water and sewer capital projects of the existing systems. To address this the
City commissioned a water and sewer rate study that was completed in FY13/14. The results of this
analysis identified the need to adjust water and sewer rates at that time and to annually review and
adjust water and sewer rates based on operational costs and implement water and sewer base fees
to fund utility system capital improvements.
The narrative that follows provides a snapshot of the status of the Water and Sewer Fund and
identifies operational and capital expenses. This is followed by more detailed summaries of the
Water, Wastewater and Utility Divisions of the Department of Public Works.
254
Water and Sewer Fund Revenues, Expenditures and Capital
FYZ3/14 Water Division
FY22/23 Water Division operating expenditures are proposed at $2,485,868, an increase of
$82,875 from FY22/23. This increase is due primarily to personnel cost contract, non-
contract, and benefit increases as well as increases to Materials and Supplies and Transfers
to Risk Management, Information Technology and Utility Division. No water rate
adjustment is recommended for FY23/24.
Water Capital Asset Maintenance and Replacement Projects
It is estimated that the new, increased capital base charge of $8 will generate $520,000 in
FY23/24 for capital projects. In FY23/24 this amount will be used to fund the following
water system capital projects identified in the Community Investment Plan - $100,000 for
Well #7 Pump Replacement and Aquifer Rehabilitation, $40,000 for Water Division Work
Truck Replacement, $45,000 for Water Division Operator Van Replacement, $150,000 for
Water Plant 2 Control Upgrade and MCC Relocation, $75,000 for Water Tower 4 Repainting
Design, $25,000 for 1/2 of a Utility Televising Camera Van (Split with Sewer Division), and
$35,000 for Water Plant 2 Aquifer Rehabilitation.
FY23/Z4 Wastewater Division
FY22/23 Wastewater Division operating expenditures are projected at $3,543,796, an
increase of $236,509 from FY22/23. This increase is due to personnel cost contract, non-
contract, and benefit increases as well as utilities and material and supplies costs. A 4%
sewer rate increase is recommended for FY23/24.
Sewer Capital Asset Maintenance and Replacement Projects
It is estimated that the existing $7 capital base charge will generate $500,000 in FY23/24 for
capital projects. This amount, along with existing Water and Sewer Fund Balance is used to
complete capital projects. In FY23/24 the following sewer capital projects identified in the
Community Investment Plan - $145,000 for Millstream Lift Station Control Upgrade,
$194,000 for Freund Lift Station Pump and Mechanical Upgrade (Design), $35,000 for
WWTP Mixed Liquor Gates, $25,000 for 1/2 of a Utility Televising Camera Van (split with
Water Division), $150,000 for Pearl/Lincoln Road, and $325,000 for Sanitary Sewer Lining
Annual Program.
FY23/24 Utility Division
FY22/23 Utility Division operating expenditures are projected at $1,OS7,870, an increase of
$24,670 from FY22/23. Personnel Costs have increased by $19,670 due to contract wage
increases and non -union wage increases. As identified in the Water and Wastewater
discussions above, the Utility Division is funded through transfers from the Water and
Wastewater Division revenues. If in one year the transfers from the Water and Wastewater
Division exceed expenses within the department, adjustments are made in following fiscal
years. This will result in lower operating budgets for the Water and Wastewater Divisions.
255
Public Works Water Division
Public Worlcs Water Division Mission
The primary focus and overlying responsibility of the
Water Division is to provide a safe and reliable supply
A potable water. This is accomplished by producing,
treatingwater and conducting over 500 required water
samples, thereby meeting or exceeding all federal and
state health standards. Of major importance to the
Water Division employees is providing the consumer
with the highest level of customer service possible. We
believe this inspires public trustwithin the community.
In summary, Water Division employees undertake the
following tasks:
• Production of safe potable water that meets or
exceeds State and Federal Drinking Water
Regulations.
• Water Production The Division maintains
four iron removal filtration treatment plants
served by eight active wells. The City has two
emergency or backup wells that have no iron
removal filtration but do have temporary
chemical feed buildings.
• Water Storage consists of four elevated water
storage tanks with a combined storage
capacity of 2,750,000 gallons.
• Operation and maintenance of one booster
pumping station.
• Provide meter readings to the Finance
Department for utility billing for City water
and sewer services. The Division manages
meter accuracy and replacements as needed of
approximately 8,487 water meters.
• Respond to consumer inquiries within 24
hours regarding water quality or high
consumption questions or general concerns.
256
Public Works Water Division - Organizational Chart
257
Public Works Water Division - py zz/23 Accomplishments
• Met or exceeded all State and Federal Drinking water regulations.
• The Water Division employees provided a high level of customer service by responding to
customer requests within 24 hours and making available information consumers need to be
informed about their drinking water source and water treatment technologies.
• In 2022, the Water Division produced over 770 million gallons of potable water and provided
meter readings for over 8,487 water and sewer accounts for billing purposes.
• Received 26��� consecutive annual fluoride award from the Illinois Department of Public
Health.
• Installed 131 water meters for new construction.
• Completed an upgrade of the SCADA radio system.
• The Water Division had no reported personnel injuries or accidents in the past year.
258
Public Works Water Division - FY23/24 Goals & Objectives
• Continue to meet oi• exceed all Federal and State drinking water regulations.
• Continue to provide the highest level of customer service possible by responding to customer
requests within 24 hours and make information available for consumers to be informed
about their drinking water source and water treatment technologies.
• Loolc for new opportunities to improve customer service to the consumer.
• Continue to maintain and improve water treatment facilities while remaining in budget.
• Continue to be injury and accident free.
• Water Well #7 Pump Replacement &Aquifer Rehabilitation
• Water Plant #2 MCC Relocation
• Continue to develop and train existing licensed operators.
• Complete Engineering &Design for Water Tower #4 repainting (FY24/25)
259
Public Works Water Division - FY23/24 Performance Measures
Performance PerformancePerformance,
Item Goal Measure Proposed Outcome(s)
100% 100% compliance with 100% compliance is expected with
IEPA Compliance compliance in all no violations no violations
categories
Respond to Customer
Respond to all inquiries
percentage responded
Response to all customer inquiries
Inquiries and
within 24 hours of
to within 24 hours
and complaints.
Complaints
receiving
Complete all Capital
Were projects
All capital projects completed in a
Capital Projects
Projects on time and
completed on time and
timely manner and under budget
within budget
within budget
Keep operators current
Trainings
Operators keep license current. New
Training/Licensing
with trainings, Highest
completed/Tests passed
licensed operators.
possible license
Safety —Personal
Zero Injuries/ Accidents
How many reported
No loss of worlc-days and remain
Injury/Vehicle Accidents
injuries/accidents
on/under budget.
260
Public Works Wastewater Division
Public Worlcs Wastewater Division Mission
It is the mission of the Public Works Department Wastewater Division to protect public health and
the environment by treating sewage to meet stringent environmental standards prior to discharge.
The function of the Wastewater Division is to operate and maintain the Wastewater Treatment Plant
and twenty lift stations. The goal of the Wastewater Division is to efficiently maintain these facilities
and to produce plant effluents which either meet or exceed State and Federal standards. The division
is also responsible for the removal and disposal of all by-products generated by the treatment
process. This is accomplished by daily testing and monitoring of the treatment process and by
operating sludge de -watering equipment to produce a high -quality biosolids product.
In summary, Wastewater Division employees undertake the following tasks:
• Provide for the operation and maintenance of the City's Wastewater Treatment Plant as well
as the care and upkeep of twenty lift stations.
• Conduct daily testing and monitoring to ensure the treatment processes are working
properly and efficiently and make any necessary changes to operations.
• Disliose of all treatment process by-products in a safe and cost-effective manner.
• Maintain records on the amount of wastewater treated and the quality of water discharged
into the Fox River and report this information to the Illinois Environmental Protection
Agency in compliance with NPDES permits.
Cleaning of SBR Basin on 6/21/2022.
Operational SBR Basin at WWTP.
261
Public Works Wastewater Division - Organizational Chart
262
Public Works Wastewater Division - FY22/23 Accomplishments
• In FY22/23, the Wastewater Division continued to maintain compliance with the City NPDES
permits.
• In 2022 the Wastewater Division treated over 1 BILLION gallons of wastewater.
• In 2022 Wastewater Division personnel responded to 156 emergency callouts. Quickly
responding to, and resolving these events prevents other incidents such as overflows or
backups from occurring.
• The City of McHenry's new NPDES discharge permit went into effect on July 1St, 2021.
Included in this permit was a lower discharge limit for Total Phosphorous that will go into
effect in 2030. Wastewater Division personnel have begun monitoring new parameters of the
treatment process to determine overall efficiency and identify specific areas to target for
potential improvement.
• The Wastewater Division added two more licensed operators to the roster. Tim Hendrickson
(IEPA Class 1) was hired in August to fill a vacant position. Greg Oliver passed his IEPA Class
4 exam in September and was formally licensed in October.
• In 2022 the Wastewater Division partnered with Dahm Enterprises, Inc. to begin applying its
Class A, Exceptional Quality (EQ) biosolids product to agricultural land. This has allowed the
Division to put its dried biosolids to beneficial use while simultaneously reducing our
disposal costs.
263
Public Worlcs Wastewater Division - FY23/24 Goals & Objectives
• Continue to meet or exceed the NPDES perinit requirements and regulations as set forth by
the Illinois Environmental Protection Agency.
• Operate treatment plants and lift stations in a manner which minimizes the potential for a
sanitary sewer overflow.
• Continue to analyze ways to maintain a high level of service and performance while
minimizing operating costs.
• Optimize the Phosphorous removal process to achieve atwelve-month average discharge
concentration below 0.40 mg/L. The methods previously identified by plant staff will be
implemented, and their effectiveness monitored, over the next several years to determine the
best way to accomplish this goal.
• Promote individual advancement and certification through training opportunities for
operations and maintenance personnel in the Wastewater division.
• Millstream Lift Station Control Upgrade
• Freund Lift Station Mechanical Improvements
• Replacement of two slide gates on south oxidation ditch
Belt Press at WWTP.
Disk Filters at WWTP.
264
Public Works Wastewater Div. — FY26124 Performance Measures
..tormance �?Frrorniance .. ,
ProposedItem Goal Measure
Satisfactory annual
Annual
Compliance with all NPDES 100% Compliance with all inspection/report and no
inspection/evaluation and
Permits issued by the IEPA permits at all times violations on monthly
monthly reports
reports
Reduce effluent
Achieve a twelve-month
Achieve effluent
Phosphorous
average effluent
phosphorous limits below
Phosphorous Optimization
concentrations to a level
concentration of 0.40 mg/L
0.50 mg/L during winter
compliant with future
or lower.
months.
limits.
Lift Stations
Reduction in number of off
Track number of callouts to
Reduce overtime costs
hours call -outs
each lift station
Safety
Reduce lost time hours due
Continued safety training
0 lost time days due to
to work related injuries
work related injuries
Sanitary Sewer Overflows
Prevent sanitary sewer
Operate Acti-flo storm
clarifier at the correct
No sanitary sewer
(SSO's)
overflows
capacity
overflows
Grow the knowledge of the
Increase the number of
Select one employee to
Certification
operations team through
licensed plant staff.
send to training; pass IEPA
certification,
wastewater license exam.
265
Public Works Field Operations Division (Utili
Public WOrlcs Tl@ld Operations Division (Utility)
Mission
The City of McHenry Field Operations Division
(Utility) is committed to providing the highest level of
customer service to its residents and consumers.
Maintaining the water distribution, sanitary sewer
collection systems and storm sewer system to peak
performance will continue to ensure reliable services
to City of McHenry's residents and businesses. This
will enhance public safety within the community.
The Field Operation Division (Utility) maintains and
repairs all water mains, valves, fire hydrants, and
"buffalo" boxes which are all part of the water
distribution system. Another one of its dirties is to
maintain, clean, and televise the sanitary sewer
collection system. The Division also maintains and
repairs the storm sewer system.
The Field Operations Division (Utility) also serves an
emergency response role for winter snow plowing
operations, after-hours water- main breaks, and after-
hours sanitary sewer backups.
In summary, employees undertake the following
tasks:
• Maintenance of the City sanitary sewer
collection system.
• . Maintenance of the City water distribution
system.
• Maintenance of the City owned storm water
infrastructure.
• Support of winter operations.
• Emergency response for after-hours utility
emergencies.
266
Public Works Field Operations Div. (Utility) - Organizational Chart
In May of 2022, the Public Works Department combined the Street Division and the Utility Division
into the Field Operations Division. Combining the two divisions into one was done to further utilize
city personnel for daily operations. Street -related operations are solely funded through the General
Fund while Utility -related operations are funded through both the Water/Sewer Fund and General
Fund. The hours worked and expenses for FY22/23 have been properly separated by Fund to
account for the amount budgeted annually in the Field Operations Division.
For personnel organizational chart please refer to the organizational chart included in the Field
Operations Division (Streets) budget section. The equivalent of 8 FTE's out of Field Operations are
funded out of the Water and Sewer Fund.
267
Public Works Field Operations Division (Utility)
FY22/23 Accomplishments
• Replacement of 4 fire hydrants and replaced of 5 failed Hydrant shoes.
• Flushed all the Gity's fire hydrants for spring and fall hydrant flushing programs.
• Cleaned and televised over a 110,000' of sanitary main.
• Repaired 12 water main breaks.
• Repaired 17 water services.
• Responded to multiple possible sanitary sewer backups.
• Cleaned and televised the storm sewer system in advance of the 23/24• Road Resurfacing
Program.
• Repaired and rehabilitated storm sewer structures in advance of the 23/24 Road Resurfacing
Program.
• Assisted with the ADA ramps for 23/24 Road Resurfacing Program.
• Completed 99% of water service material survey for IEPA lead service inventory.
• Continued the annual Sewer Lining Program.
• Cleaned 25% of all City storm sewer catch basins.
• Completed 15t year of 3-year contracted hydrant painting program
r.:
Public Works Field Operation Division (Utility)
FY23/24 Goals & Objectives
• Continue to keep the sanitary collection system well maintained, which includes cleaning and
televising the entire collection system on regularly scheduled intervals.
• Reduce inflow and infiltration in the collection system through the Capital Improvement
Program which includes the sanitary sewer main and sewer manhole rehabilitation
programs. Replace old style manhole covers with "new" sealed covers.
• Perform annual routing maintenance of the water distribution system through the annual
water valve maintenance program, annual hydrant painting program, spring and fall hydrant
flushing programs and the water main replacement program through the Community
Investment Plan.
• Insta115 new fire hydrants to improve water quality and fire flow protection.
• Continue ongoing mapping of the storm sewer system in the City GIS database.
• Management of Sewer Lining Program.
• Oversee water main replacement program (Mill Street and Richmond Road/Broad Street)
269
Public Works Utility Division - FY23/24 Performance Measures
.. .. ..
,
Item Goal Measure
Proposed
Fire hydrant replacement Replace outdated fire Number of hydrants
Replace S fire hydrants
hydrants replaced
Clean & Televise sanitary
100,000 lineal ft/year
Lineal ft/year
Clean & televise 100,000
sewer collection system
lineal ft/year
Complete spring and fall
Flush all hydrants spring
Completion of spring and
Hydrant Flushing
hydrant flushing programs
and fall
fall flushing programs
Complete water service
Survey and map lead
Complete survey and map
Water Service Survey
survey
service
lead service inventory
inventory
Number of hydrants
20% of hydrants painted &
Water Distribution System
Hydrant Painting & Valve
painted; number of valves
20 /o of valves exercised
Maintenance
Exercising
exercised
annually
Storm sewer mapping
Locate and shoot structures
Amount of storm sewer
Complete mapping of the
structures shot on GIS
storm sewer system
270
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�r:
Capital Development Fund - Overview
This fund accounts for the construction, expansion and/or extension of
water and wastewater systems to accommodate new development and
growth in the community. Revenues are generated through capital
development fees on new residential and non-residential development,
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Utility Improvements Fund - Overview
The Utility Improvements Fund was created to provide a single fund to
record revenues and expenses for capital asset maintenance and
replacement projects for the water and wastewater utilities. Funding for
these projects is derived primarily from water and sewer base fees that are
paid by users of the system. In FY21/22, City Council reviewed and
updated these base fees to be $8 bi-monthly for water and $7 bi-monthly
for sewer.
Water Capital Asset Maintenance and Replacement Projects
It is estimated that the new, increased capital base charge of $8 will generate $520,000 in FY23/24
for capital projects. In FY23/24 this amount will be used to fund the following water system capital
projects identified in the Community Investment Plan - $100,000 for Water Well #7 Pump
Replacement & Aquifer Rehabilitation, $40,000 for Water Division Work Truck Replacement,
$45,000 Water Division Operator Van Replacement, $75,000 for Water Tower #4 Repainting Design,
$150,000 for Water Plant 2 Control Upgrade & Motor Control Center Relocation, $35,000 for Water
Well 2 Aquifer Rehabilitation, and $200,000 for Well 14 Test & Production Well (WS Capital
Development Fees).
Sewer Capital Asset Maintenance and Replacement Projects
It is estimated that the existing $7 capital base charge will generate $500,000 in FY23/24 for capital
projects. This amount, along with existing Water and Sewer Fund Balance is used to complete capital
projects. In FY23/24 the following sewer capital projects are identified for completion in the
Community Investment Plan - $325,000 for Sewer Lining, $50,000 for a Sewer Televising Camera
/an, $145,000 for Millstream Lift Station Control Upgrades, $194,000 for Freund Avenue Lift Station
Mechanical Upgrades (Design & Construction, $35,000 for replacement of mixed liquor gates at the
Wastewater Treatment Plant, and $100,000 for Phosphorus Optimization Study (WS Capital
Development Fees).
Detailed descriptions of these projects can be found in the attached Water and Sewer Fund
Community Investment Plan document.
283
Water and Sewer Fund
Community Investment Plan (CIP)
Years 2023 through 2032
:-
Introduction
Capital investment planning is a necessary exercise for both public and private organizations who are
charged with the maintenance and operation of capital assets. To maintain long-term sustainability of
level of service, management of operations, and fiscal stability, public utilities must forecast capital costs
and account for them. Public utilities must account for both annual operating expenses, routine capital
expenses, as well as less routine major capital expenses if they are to achieve this long-term stability and
provide consistent levels of service and predictable costs. Ideally, these costs grow at a consistent rate
which is like the rate of inflation consumer price indexes. Large increases above these benchmark values
are ideally avoided if capital planning efforts are successful.
Background
Prior to 2014, the City of McHenry Water and Sewer Fund was funded through the following means:
operating rates, debt service fees, and capital development fees. These sources, however, did not account
for the cost of depreciation of certain capital assets. Operating rates were essentially the operating costs
of the Water, Wastewater, and Utility Divisions divided over the number of users utilizing the system.
Debt service fees accounted for the cost of major facilities overhauls and replacements for water and
sewer plants. These fees were typically the debt service cost of the improvement divided over the number
of users utilizing the system. Lastly, capital development fees were fees which were put up by property
developers and property owners as they annexed into the City or connected to the City's utility systems.
These capital development fees are system expansion fees which account for the cost of infrastructure
and facilities expansions to accommodate them as users.
While this approach was somewhat functional for a time, there were some fundamental problems with
the approach that became apparent. In general, the greatest problem was that the cost of depreciation
and therefore replacement of non -major facilities with finite service lives and significant replacement
costs) were not accounted for by any of the traditional sources of revenue. Examples of these costs
include the replacement of equipment in wastewater and water plants, wells, and lift stations that are to
remain in operation but require certain major equipment replacement. Additionally, the cost for
maintenance and replacement of the City's water distribution system and the City's wastewater collection
system was not accounted for. When major failures occurred or certain facilities required major
maintenance treatments, then these costs would sometimes be absorbed by other revenue sources to
avoid taking on new debt service fees. At other times, debt would need to be taken on and added to user
rates; and still, at other times, large expenses would be absorbed in divisional operating costs and would
thus create large swings in divisional operating budgets.
To correct these effects, the City of McHenry undertook a Water and Sewer Rate Study in 2014 to examine
and reset current rates, initiate the creation of a capital projects' base fee, and evaluate the assessment
of debt service fees for the pending Wastewater Treatment Plant Consolidation project. As a result of this
study, a $2.00 per bi-monthly billing cycle water base fee and a $4.00 per billing cycle sewer base fee was
adopted and added to each user's water and sewer bill. This fee structure was not set based upon any
specific schedule of projects but rather as a modest addition to rates which would create a structure that
began to account for depreciation and replacement of Water and Sewer Funded capital assets.
Additionally, this was the time that debt service fees for the Wastewater Treatment Plant Consolidation
WATER &SEWER FUND CIP
285
project completed in 2018 were set. From that point forward, debt service fees and base fees were fixed,
and operating rates were reviewed on an annual basis with usage rates adjusted annually as a result.
Included in the 2014 Water and Sewer Rate Study was a recommendation that a rate study be completed
at least every five (5) years. Because of this recommendation, and because of a continued decline in the
balances of the Water and Sewer Fund, staff undertook a study and inventorying process for the City's
Water and Sewer Funded capital assets to make a recommendation for new capital base fees i
Wn 2019.
This two-year effort resulted in presentations in Fall of 2021 of several different options for water and
sewer base fees which were matched to specific improvement programs and projects. The options were
vetted and considered by the City Council and an ordinance was adopted for an $8.00 per billing period
water base fee and $7.00 per billing period sewer base fee at the October 18, 2021, City Council Meeting.
Goals for the Plan
Upon the adoption of these updated base fees, it was determined that a strategy needed to be developed
for planning and implementation of Water and Sewer Funded capital asset maintenance projects. The
goals for implementation of this plan are as follows:
1. Create a funding source for non -facilities' expansion/replacement projects utilized to repair,
rehabilitate, and replace depreciated capital assets.
2. Priorities for maintenance and replacement of existing assets are set based upon current
operational requirements rather than desired or additional new services and programs.
3. Maintenance and replacement of existing capital assets are scheduled and implemented based
upon acceptable costs and intended service lives.
4. Initiation of the systematic replacement of equity in the system that is being lost due to
depreciation.
Development of the Plan
The tasl< of developing this projection was assigned to Public Worl<s Management staff who wort<ed
together to develop these cost projections. Capital expenditures were classified by division, expenditure,
and type of treatment. Costs were also given a projected year for implementation which was used to
develop a long-term projection and implementation schedule. The method of developing these costs
included the following assumptions: small items which are sporadically replaced through operating
budgets are not included in the projection, only existing capital assets were to be included in the
projection, both maintenance treatments to fulfill the full asset service life and asset replacement costs
were included, and each treatment or asset replacement was to include a cost and projected service life.
Annualized costs were simply generated by dividing the capital cost over the projected service life.
Inflation was not included in the projection and therefore, all costs are present costs. The sum of
annualized costs was then utilized to develop funding and implementation strategies forthe plan.
WATER &SEWER FUND CIP
Funding the Plan
Because there was no existing revenue source for the maintenance and replacement of these Water and
Sewer funded assets, it was necessary to create anew revenue source or adjust an existing revenue source
to fund the program. As was stated in the Background section of this document, the City Council adopted
an ordinance for a $8.00 per billing period water base fee and $7.00 per billing period sewer base fee at
the October 18, 2021 City Council Meeting. The revenues for these fees are projected to generate
approximately $1.1 Million per year to be utilized for Water and Sewer Funded maintenance and
replacement projects, which approximately matches the proposed expenditures.
Organization of the Plan
Projects are classified into one of the following categories for reference purposes:
Infrastructure Maintenance/Improvements
These improvements involve either maintenance, major rehabilitation, or replacement of permanent
infrastructure. Typical improvements are the maintenance and replacement of sanitary sewers or water
mains.
Technology Maintenance/Improvements
These improvements typically involve the replacement of aging technology infrastructure such as SCADA
systems and servers as well as radio communication systems.
Building and Facilities Maintenance/Improvements
These improvements involve either the maintenance, major rehabilitation, or replacement of Water and
Sewer Funded buildings and/or facilities.
Vehicles and Equipment Replacements
These improvements involve the maintenance and replacement ofvehicles and equipment for the Public
Works Departments' three (3) Water and Sewer Funded operating divisions (Water, Wastewater, Utility).
Typical expenditures include the replacement of excavation equipment and maintenance/service trucks
for these divisions.
Implementation of the Plan
Because the implementation of the fees occurred at a point which was late in the Fiscal Year 2021/2022
Budget, the list of capital projects funded in FY 22/23 was somewhat limited. This allowed for balances in
the fund to rebuild and to defer expenditures to future years in which the projected expenditures are
projected to be higher. A list of FY 22/23 capital projects and updates is as follows:
1. Utility Division Truck with Lift Gate $75,000
This vehicle was purchased in Spring of this year and equipped at Knapheide in McHenry. The
vehicle was put into service in the Public Works Fleet in Summer of this year.
WATER &SEWER FUND C/P
2. Wastewater UTV/Gator $15,000
After being in service for 15 years, the Wastewater Division's UTV was due for replacement.
Staff solicited quotes for comparable vehicles from three different vendors and ultimately
selected the lowest -priced option from John Deere in the amount of $16,233.12. Delivery is
expected this Winter.
3. Millstream Lift Station Control Upgrade $30,000
Staff originally scoped this project and attempted to release a contract proposal prepared "in-
house". After an unsuccessful bidding process staff reached out to one of the City's
prequalified firms to prepare a set of bidding documents and construction plans. Upon the
consultant's working with local electrical contractors and the City's SCADA integration
consultant to develop preliminary costs estimates, it has become apparent that this project
will be substantially more costly than originally planned. Therefore, this project is being re -
budgeted for implementation in Fiscal Year 2023-2024.
4. WWTP UV Lamps $30,000
This project consisted of replacing the UV light bulbs in two of the three UV disinfection
channels at the Wastewater Treatment Plant. Staff was able to maximize the service life of
the original bulbs by monitoring the operating conditions and replacing the bulbs only when
a decrease in performance was observed. The replacement was performed by Wastewater
Division personnel in July 2022 with a total material cost of $21,055,00.
5. Sewer Lining Annual Program $325,000
This project was released for bidding in August of this year. The low successful bidder was
National Power Rodding of Chicago, Illinois. This project is now completed.
6. Water SCADA Radios
$40,000
As of October 31, 2022, all 6 programmable logic controllers (PLCs) have been installed. The
11 new radios will be installed by the end of November 2022. This project is now
completed.
7. SBR Control Room Air Conditioning
$30,000
This project was completed in May of 2022 by Platinum Heating &Cooling, Inc. The air
conditioning system protects critical control systems from overheating due to the large
amount of heat they generate while operating. The project was completed on -time and under
budget at $28,172.00, The new system performed well throughout the hot summer months.
8.
Mill Street
Water Main
Design
9.
Richmond
Road Water
Main Design
$50,000
$100,000
An RFP was issued for design services for both projects at the start of the fiscal year. The
projects are currently in design and the combined preliminary EOPC is approximately $1.2
million. Construction of these projects was originally scheduled for Fiscal Year 2023-2024.
However, due to developments in overall capital program costs and well as easement
acquisition challenges these projects will be deferred to Fiscal Year 2024-2025.
WATER &SEWER FUND CIP
Additionally, there was a small group of Water and Sewer Capital Development Fee funded projects which
were completed for the purposes of system expansion and stability. The list of Capital Development Fee
funded projects is as follows:
1. Temporary iron Filtration Piping Design &Construction $20,000
This project has been abandoned due to a lack offeasibility which was discovered in the early
stages of engineering work. Only a small portion of the budgeted amount was utilized for this
project.
2. Water Well 14 Development
$125,000
A designer was retained by the City at the start of the fiscal year for purposes of performing
preliminary engineering design services for the commissioning of a new well and facilitating
the process for hiring a driller for a test well. Engineering costs have been lower than
anticipated but the costs for the drilling of a test well have pushed the total costs beyond the
original budget appropriation. Therefore, the remaining balance on this project is being
carried over and the overall project will be re -budgeted in Fiscal Year 2023-2024 to include
the updated drilling costs.
The Fiscal Year 2023/2024 program includes a budget of $1,194,000 and will begin implementation on
May 1, 2023. A few projects are carry-over projects and/or projects which were budgeted to begin design
during Fiscal Year 2021/2022 with full implementation of construction to follow in the next fiscal year.
The list of Fiscal Year 2023/2024 Water and Sewer Capital Projects is as follows:
1. Water Well 7, Pump Replacement &Aquifer Rehabilitation
7. WWTP Mixed Liquor Gates
8. Water Tower 4 Repainting (Design)
9. Utility Division Televising Camera Van
10. Sanitary Sewer Lining Annual Program
11. Water Plant 2 Aquifer Rehabilitation
$100000
$145,000
$194,000
$35,000
$75,000
$50,000
$3251000
$35,000
The list of Fiscal Year 2023/2024 Water and Sewer Capital Development Funded Projects is as
follows:
1. Well 14 Test Well $200,000
2. Phosphorus Study $50,000
A detailed description of each of these projects is included Appendix B of this document.
WATER &SEWER FUND CIP
Future Considerations
Projects Currently Without a Funding Source Assigned
1. Route 31 Utilities
Within the next five years, Illinois Route 31 is scheduled to be reconstructed within the corporate
limits of McHenry up to the intersection of Illinois Route 31 and Illinois Route 120. Because of the
scope of underground improvements and IDOT standard practices regarding municipal utility
relocation, there is a significant amount of utility relocation which the City must perform prior to
the initiation of the Roadway project. These costs are 100% the responsibility of the municipality.
Currently, the City's anticipated cost for utility relocation is $15 Million which does not currently
have a funding source. Currently, the only funding that has been identified for this project is the
approximately $3.0 Million that the City received through ARPA. However, the remainder of
funding is yet to be determined.
2. Lead Service Program
On January 1, 2022, the Illinois Legislature passed a bill requiring the abandonment and
replacement of all lead water services in all public water supply systems in the State of Illinois.
The date of compliance for replacement is set based upon the population of the individual
municipality. in addition to the mandate for replacement, an inventory and plan for replacement
must be initiated prior to there placement schedule beginning. Based upon McHenry's population
and number of lead services, the City of McHenry will have 15 years to replace approximately 300
lead services beginning in 2027. The cost for the program will be approximately $2.5 Million
distributed over a fifteen -year period. A funding source for this replacement is yet to be
determined.
Capital Development Fee Projects
1. Water Plant 5
Currently, the City's four (4) water plants meet daily and peak demand with no issues and some
level of redundancy. The City's current near -term (20 years or less) population projections from
various planning documents would push the water system to the threshold of requiring a fifth
water plant. Currently, the reserves in the Water and Sewer Capital Development fee fund would
accommodate the approximate $2.0 Million cost for Water Plant 5. Planning efforts and
preliminary design are projected by staff to begin in the next SAO years.
2. WWTP Aeration Improvements
This project will update the aeration and mixing systems on the oxidation ditches at the
Wastewater Treatment Plant from mechanical aeration to a bubble -diffused aeration system.
Currently, the method of aerating and mixing the oxidation ditches is with large inefficient
mechanical mixers. There is little or no operator control allowed for with the current setup. This
project would consist of installing blowers and fine bubble diffusers, like what is used in digesters
and submersible mixers. Completion of this capital project will allow for more accurate control
over the treatment process which in turn will allow the Plant to run efficiently and in a cost-
effective manner. The cost for this project is approximately $1.5 Million.
WATER &SEWER FUND CIP
290
3. WWTP Phosphorus Improvements
This project may be necessary to meet a future NPDES permit limit of 0.50 mg/L (rolling twelve-
month geometric mean). When the City of McHenry renewed its NPDES permit for the
Wastewater Treatment Plant in 2021, the City was notified that it would have to meet this new,
lower limit by 2030. The current permit limit is 1.0 mg/L monthly average. Staff is currently
working on optimizing the phosphorous removal aspect of the treatment process to the greatest
extent possible to determine whether facility upgrades may be necessary to achieve this limit. It
is also possible that the WWTP Aeration Improvements outlined in item "2" above would afford
the City the operational control necessary to meet this goal. If staff is unable to consistently meet
this future limit under the current plant design, an engineering analysis would be necessary to
determine the proper scope of necessary improvements.
Annual Review and Approval Process
The Community Investment Plan will be reviewed and updated annually to ensure that maintenance and
replacement schedules are updated appropriately. Identified projects will be included for approval as
part of each fiscal year budget based on the maintenance and replacement schedules identified in this
document.
WATER &SEWER FUND CIP
291
Appendix A
$1,600,000
$11400,000
$11200,000
10-Ye01 Expenditure Total by Division
$1,000,000
$800,000
$600,000
i
$400,000
$200,000
$ Year Year Year Year Year Year Year Year Year Year
2023 ( 2024 12025 12026 12027 12028 12029 12030 12031 12032
Public Works
Utility $375,0 $1,525 $875,0 $490,0 $815,0 $525,0 $655,0 $325,0 $450,0 $980,0
■ Wastewater $374,0 $170,0 $73,00 $310,0 $188,0 $85,00 $12010 $42010 $51010 $175,0
■ Water $445,0 $635,0 $1,070 $135,0 $35,00 $150,0 $85,00 $520,0 $- $48510
10-Year Total Expenditure by Division
Utility
■Wastewater
■Water
292
Appendix A
10-Year Expenditure Total by Asset
$1,600,000
$11400,000
$11200,000
$100000000
$800,000
$600,000
■
$200,000
Al
1,
A111
AI
A
J1I
III
$"
Am.
NMI
ear
12024
Year
12025
Year
12026
Year
12027
Year
12028
Year
12029
Year
12030
Year
12031
Year
12032
Year
2023
Public
Works
■ Building
$-
$10,00
$-
$-
$-
$-r$6551510
$-
$15,00
$110,0
■ Equipment
$14510
$160,0
$25810
$19510
$36310
$10510
$27010
$29010
$65,00
■ Facility
$58910
$63510
$99510
$13500
$-
$15010
$47510
$-
$48510
■ Infrastructure
$325,0
$1,525
$72510
$32510
$67510
$32510
$325,0
$450,0
$925,0
Vehicle
$135,0
$-
$40,00
$280,0
$-
$180,0$195,0
$205,0
$55,00
10-Year Total Expenditure by Asset
1%
a%
LLB
29%
■ Building
■ Equipment
■ Facility
■Infrastructure
Vehicle
WATER &SEWER FUND CIP
293
Project
Water Well 7 Pu
Community Investment Plan (Water & Sewer)
Appendix B
lacement &Aquifer Rehabilitation
Project Description
The purpose of this project is to replace the pump for well #7
and the chemical rehabilitation of the aquifer that well # 7 is in.
The pump is currently 18 years old and beyond its average life
span. Treatment of the aquifer is necessary to maintain
maximum capacity of the wells.
Project Number 31-FAC-013/014
Operating Division Water
Category Facility
Treatment Rehabilitation
Service Life 12 Years
Design Fiscal Year
Design Cost
Construction Fiscal Year 23-24
Construction Cost $100,000
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 100,000
294
Community Investment Plan (Water & Sewer)
Appendix B
Project
Water Division Vehicle Replacement
Project Description
The purpose of this project is to replace two vehicles in the
Water Divisionmotor pool. The vehicles being replaced are a
2009 Dodge Durango and a 2011 Ford Connect Transit Van. Both
vehicles are past the 12 year replacement cycle. The Dodge
Durango will be replaced with a half ton 2 wheel drive pickup
truck. The Ford Connect Transit Van will be replaced with a full
sized cargo van. This full sized cargo van will serve as a daily
Water Division work truck in addition to being the back-up
Project Number 31-VEH-001/002
Operating Division
Category
Treatment
Service Life
Design Fiscal Year
Design Cost
Construction Fiscal Year
Construction Cost
i
i
Water
Facility
Replacement
12 Years
$85
23-24
1000
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 85,000
295
Community investment Plan (Water & Sewer)
Appendix B
Project
Water Plant 2 Motor Control Center relocation & control
Project Description
The purpose of this project is to relocate the motor control
center (MCC) for water plant 2 and upgrade several of the
controls. The MCC is currently in a room where the well piping
and other plumbing currently exists. There have been water
leaks which resulted in damage and deteriation to the current
MCC. It must be relocated to an area with an environment that
is not harmful to the electrical components.
i
1
Project Number I 31-FAC-033
Operating Division Water
Category Facility
Treatment Upgrade
Service Life 20 Years
Design Fiscal Year 23-24
Design Cost $251000.00
Construction Fiscal Year 23-24
Construction Cost $150,000
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 150,000
296
Community Investment Plan (Water & Sewer)
Appendix B
Project
Millstream Lift Station Electrical & Control Improvements
Project Qescription
The Millstream Lift Station last underwent a major overhaul in
1989. The controls are over 30 years old and becoming difficult
to maintain and repair. The underground electrical conduits and
control enclusure have deteriorated and require replacement.
This project consists of a full replacement of the electrical
components to modernize the station controls and improve
operational reliability.
Project Number 32-EQPT-030/031
Operating Division Wastewater
Category Facility
Treatment Replacement
Service Life 20 Years
Design Fiscal Year 23 - 24
Design Cost $25,000
Construction Fiscal Year 23 - 24
Construction Cost $120,000
\i4
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 145,000
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Community Investment Plan (Water & Sewer)
Appendix B
Project
Water Tower 4 Maintenance & Painting Design Phase
Project Description
The purpose of this project is to have the necessary perodic
maintenance done to the water tower as well as repainting the
water tower.
Project Number 31-FAC-044/045
Operating Division
Category
Treatment
Service Life
Design Fiscal Year
Design Cost
Construction Fiscal Year
Construction Cost
$75
Water
Facility
Clean & Paint
25 Years
23-24
1000
24-25
$5001000
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 75,000
$ 500,000
ICiIII]
Community Investment Plan (Water & Sewer)
Appendix B
Project Vehivle Replacement Truci< 804
ect Description
Truck 804 is used as the camera vehicle to televeise the
sanitary collection and storm system to evalution the
condition. The vehicle currently is a 2000 GMC. This vehicle
is in need of replacement due to escalating maintenance
and repair costs.
Project Number 35-VEH-001
Operating Divisior
Category
Treatmerr
Service LifE
Design Fiscal Yea
Replacement Cos
$50
Utility
Vehicle
Replacement
12 Years
23-24
1000
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 50,000
301
Community Investment Plan (Water & Sewer)
Appendix B
Project
SEWER LINING PROJECT FY22/23
Project Description
The sewer lining project for FY22/23 will be the second year of
the program that was initiated last year. The reoccuring annual
budget for this item is $3251c/yr. The goal is to line all of our
older, deteriorating clay sanitary sewers over the next 20 year
period. This is a common practice among all major municipal
utility operators. The older clay pipes are more prone to failure,
root intrusion, sewer backups and infiltration. This non-
destructive sewer rehabilitation method is cost-effecive with a
net cost 1/10th of a traditional removal and replacement
method.
Project Number 35-INF-001
Operating Division�Sanitary
Category Utility
Treatmentl Rehabilitation
Service Life 150 years
Design Fiscal Year
Design Cost
Construction Fiscal Year123-24
Construction Costl$325,000
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 325,000,00
$ 325,000.00
$ 325,000.00
$ 325,000,00
$ 325,000.00
302
Community Investment Plan (Water & Sewer)
Appendix B
Project
Well 2 Aauifer
Project Description
This project is for a rehabilitative treatment for the aquifer for
Water Well 2. A process known as high rate injection or (Hy -
RIP) is used to rehabilitate the aquifer. This process injects high
rates of National Sanitation Foundation (NSF) approved
chemicals into the well, removing any mineral and biological
buildup which enables additional water production capacity in
Ithe well.
Project Number 31-FAC-006
Operating Division�Water
Category Facility
Treatment Rehabilitation
Service Life 2 Years
Design Fiscal Year
Design Cost
Construction Fiscal YearJ23-24
Construction Costl$35,000.00
303
Community Investment Plan (Water & Sewer)
Appendix B
Project Mill Street and Richmond Road Water Main
Project Description
Replacement to the water main is necessary to due the
condition and failures on Mill Street between Crystal Lake Rd.
The replacement on Broad Street from Green Street to
Richmond Road and on Richmond Road from Broad Street to
Washington Street is necessary to eliminate the "bottleneck".
Proper sizing will improve circulation and water quality in the
system.
Project Number 35-INF-001
Operating Division�Water
Category
Treatmerr
Service Lif(
Design Fiscal Yea
Design Cos
Construction Fiscal Yea
Construction Cos
Fiscal Year Expenditures
22/23
23/24
24/25
25/26
26/27
$ 60,100.00
$ 1,2001000
304
Project
II 14 Test Well (Ca
Project Description
Community Investment Plan (Water & Sewer)
Appendix B
I Development Fee Funded)
The purpose of this project is to drill a test well to ultimately
replace Water Well #14 which has been steadily declining in
production for the past several years. Well 2 is also currently
the only city water well which contains trace amounts of PFAS.
The well is currently well below threshold levels but it is in the
City's best interest to begin preparing for the abandonment of
his well.
Project Number
Operating Division Water
Category Facility
Treatment Expan!
Service Life 50 yea
Design Fiscal Year 23-24
Design Cost
Construction Fiscal Year 23-24
Construction Cost $2001(
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 200,000.00
305
Community Investment Plan (Water & Sewer)
Appendix B
Project
WWTP Phosphorous Improvements Engineering Report
Project Description
The Wastewater division is comissioning HR Green to conduct a
preliminary study of the two oxidation ditches at the
wastewtaer treatment plant to identify potential improvements
that would enable the city to meet a new, lower effluent
Phosphorous limit that will go into effect in 2030. The results of
the study will help guide future capital investments to achieve
lower Phosphorous discharges to comply with this future
standard.
Project Number
Operating Division
Category
Treatment
Service Life
Design Fiscal Year
Design Cost
Construction Fiscal Year
Construction Cost
Wastewater
Facility
Upgrade
50 Years
23-24
$50,000400
TBD
TBD
Fiscal Year Expenditures
23/24
24/25
25/26
26/27
27/28
$ 50,000.00
306
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Fiscal Year 2023/2024
Annual Budget
312
Marina Operations Fund - Overview
The City of McHenry acquired the marina in 2000 to be able to expand the
Central Wastewater Treatment Plant. After itwas acquired it was determined
that the wastewater facility could not be expanded at the existing site. At this
time the Marina Operations Fund is an enterprise fund that provides for the
maintenance of a 60-slip marina on the Fox River.
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Annual Budget
316
Employee Insurance Fund - Overview
The City of McHenry recognizes that health insurance benefits are "Al important
component of an employee's total compensation package, therefore, the purpose
of the Employee Insurance Fund is to finance and account for expenditures
incurred to provide health insurance benefits to employees.
The current health insurance plan provided to employees offers a choice between
a PPO (Preferred Provider Organization), an HMO (Health Maintenance
Organization), and an HSA (Health Savings Account). Providing employees with
a choice of plans allows for flexibility based on preference and affordability. In
addition, employees receive dental and vision benefits. All IUOE 150 employees
(Public Works, Parks) are required to be on the IUOE 150 insurance plan as per their collective
bargaining agreement.
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318
Risk Management Fund - Overview
The purpose of the Risk Management Fund is to account for all activity related to risk management
and insurance costs (other than employee health insurance) including loss control, loss prevention,
risk transfer, and risk assessment.
The City of McHenry is a member of the MclIenry County Rislc Management Agency (MCMRMA), a
public entity risk pool through which property, general liability, automobile liability, crime, excess
property, excess liability, and boiler and machinery coverage is provided. The relationship between
the City and MCMRMA is defined through a contractual obligation approved by both the City Council
and MCMRMA Executive Board. Revenues for the fund are generated by service charges to the City's
General Fund and non -General Fund operating units. The service charges to the General Fund are
provided for the most part by the liability insurance portion of the property tax levy. Incidental
revenues from interest earnings and reimbursements from MCMRMA are also occasionally posted to
the fund.
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Fiscal Year 2023/2024
Annual Budget
322
Fiscal Year 2023/2024
Annual Budget
323
Employee Flexible Spending Fund - Overview
The Employee Flexible spendind account is used to account for
employee pre-tax medical spending accounts that are offered
as a benefit to City employees. i ' •
Under the Internal Revenue Service (IRS) rules and --
regulations, employees can set aside money for certain ,It P
: �
medical benefits on a pre-tax basis. These benefits includeMP
medical expenses not covered under the employee's health
insurance plan. When allowable medical costs are paid by the
employee, he or she can get reimbursed from his flexible spending account. Depending on the tax
bracket of the employee and the extent of utilization, an employee could potentially save several
hundred dollars through medical and dependent care flexible spending deductions.
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Development Escrow Fund - Overview
The Development Escrow Fund is a fiduciary fund used to account for assets
held by the City in a trustee capacity or as an agent for individuals, private
organizations, other governments or funds. The Development Escrow Fund
holds funds deposited by developers until such time as certain improvements
are completed or in lieu of developer provided improvements. These funds
are custodial in nature and do not involve measurement of results of
operations.
327
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Fiscal Year 2023/2024
Annual Budget
Retained Personnel Fund - Overview
The Retained Personnel Fund is used to account for funds
collected as reimbursement and expended for professional
and technical services used to assist or advise the City in
connection with land development. The City's retained
personnel costs included engineering, legal, planning, and
other technical professional matters. The City typically
collects a deposit from property owners at the initiation of
annexation, zoning, or other development proceedings that
approximate the total retained personnel costs expected to be
incurred.
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Fiscal Year 2023/2024
Annual Budget
332
Revolving Loan Fund - Overview
The Revolving Loan Fund provides low interest loans to qualified existing
and prospective businesses within the City of McHenry. The loan
proceeds can be used to assist in the startup of a new business, expand
and existing business update existing facilities to make the business more
competitive, or provide an incentive for established businesses to
relocate to the City. The primary goal of the program is job creation and
expansion of the sales and property tax bases.
The program requires loan applicants to complete a formal application �/
which is then reviewed by the Revolving Loan Fund Committee -
comprised of the Mayor and Finance and Personnel Committee. Terms are identified/negotiated and
a recommendation is provided to the full City Council for consideration. Of note, the Revolving Loan
Fund itself does not have expenditures as the loans are originated through the City's identified lender.
Revenues are comprised of receivables, or payments, which are budgeted.
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'L'',`Y •
Police Pension Fund - Overview
The Police Pension Fund accounts for retirementbenefits for retired police officers
and their beneficiaries through employer and employee contributions and
investment earnings.
�1��The primary pw•pose of this non -operating budgetary unit is to finance pensions
�I for employees by both employer and employee contributions combined with
interest earnings on those contributions. These three revenue streams, if based on
sound actuarial assumptions should generate sufficient funds for employee retirement without
placing undue burden on the employer or a risk to the pension due the employee.
The Police Pension plan is administered by a board of trustees. The duties of the board are to control
and manage the pension fund, to enforce the collection of contributions, to hear and determine
applications for pensions, to authorize payment of pensions, and to invest funds. Account and
actuarial services are provided by the city at no cost to the plan. Financial planning and investment
management are provided by outside vendors.
The City's pension plan is a defined benefit plan meaning that regardless of investment performance,
the plan is obligated to pay the defined benefit. If the pension plan makes unwise investment
decisions, the City is currently obligated to guarantee the obligations. However, as of the year 2033,
the pension plan will be self-supporting with no further obligations placed on the City.
In FY20/21 the City bonded the outstanding Police Pension balance to achieve the self-supporting
level and, as such, the financial commitment will be relatively fixed moving forward.
336
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337
i
Fiscal Year 2023/2024
Annual Budget
Information
338
Financial Policies Overview
The following City financial policies, along with the approved Fund Balance and Reserve, Investment
and Capital Improvement Program policies, establish the framework for McHenry's overall fiscal
planning and management.
Operating Budget and Expense Policies
1. The City shall annually adopt a balanced budget where operating revenues are equal to, or
exceed, operating expenditures in each fund.
2. Beginning fund balance should only be appropriated to the extent it supports non -recurring
expenditures, replaces temporary declines in revenue, or is reasonably anticipated to be offset
by an increase in revenue.
3. As part of the annual budget review process, the City will project General Fund revenues and
expenditures for four years beyond the budget year and compare the projected balances to the
fund balance policy. This will allow the City to identify potential problems early enough to correct
them.
4. The City Council shall be provided monthly actual revenues and expenditures for all funds. Any
departments or divisions projected to exceed their annual spending authority for the year shall
work with the City Administrator to reduce expenses. This may include a deferral of hiring and
major expenses for goods and services.
Revenue Policies
1. The City shall maintain a diversified and stable revenue system to the extent provided by law to
insulate it from short-term fluctuations in any one revenue source.
2. The City will not budget one-time revenue sources to fund annual operating expenditures. Such
revenues will fund non -recurring activities, such as capital projects and major capital equipment
purchases.
3. Grant revenues shall be pursued to provide or enhance City services. However, recurring
activities shall be initiated with grant funds only if the activity can be terminated in the event
grant funds are discontinued or the activity should and can be funded within recurring City
revenues.
4. All non -enterprise user fees and charges will be examined annually to determine the direct and
indirect cost of service recovery rate. The acceptable recovery rate and any associated changes
to user fees and charges will be approved by the City Council.
5. The City will set fees and user charges for the Water and Sewer funds at a level that fully supports
the total direct and indirect costs of the activity. Indirect costs include the replacement of the
capital assets of the fund.
r<�
Debt Management Policies
1. The City limits long-term debt to only those capital improvements that cannot be financed from
current revenues and have an estimated useful life of at least ten years.
2, For General Obligation Debt, the City will maintain a debt to assessed valuation ratio that is 2S%
more stringent than the state debt limit.
340
Puna Balance and Reserve Policy
Overview
• The purpose of this policy is to establish the principles and parameters to which a Fund
Balance target will be defined at the beginning of each budget period. This policy is
established to provide financial stability, cash flow for operations, and the assurance that the
City will be able to respond to emergencies with fiscal strength.
• In the event that unexpected situations may cause the City to fall below the minimum fund
balance level, certain steps will be followed to correctthe deficiency, as outlined in the section
below titled "Fund Balance Parameters."
Definitions
• Fund Balance -The difference between assets and liabilities in a Governmental Fund.
• Net Position -The amount remaining after subtracting total liabilities from total assets for
Proprietary Funds.
• Operating Expenditures -Total expenditures minus capital and debt service.
• Governmental Funds -Are used to account for all or most of the City's general activities,
including the collection and disbursement of restricted or committed monies (special
revenue funds), the funds restricted, committed or assigned for the acquisition or
construction of major capital assets (capital projects fund), and the funds restricted,
committed or assigned for the servicing of general long-term debt (debt service funds). The
general fund is used to account for all activities of the general government not accounted for
I
n some other fund.
o General Fund -Accounts for all activities of the City not accounted for in another
fund. The General Corporate Fund is used to account for most of the day-to-day
operations of the City, which are financed from tax revenues and other general
revenues. Nine (9) separate activities are accounted for within the General Fund
including: Administration, Elected Officials, Community & Economic Development,
Finance Department, Police Commission, Police Department, Public Works -
Administration, Public Works -Streets, and Parks and Recreation.
o Special Revenue Funds -These funds are utilized to account for revenues derived
from specific sources which are usually required by law or regulation to be accounted
for as separate funds. For the City of McHenry these funds include the following
funds, with definitions provided:
■ Tourism Fund The Tourism Fund is used for the purpose of financing
tourism through promotion of the City. It is derived from a 5%occupancy tax
on motel and hotel receipts.
341
■ Pageant Fund -The purpose of the Pageant Fund is to account for revenues
and expenditures used to conduct the annual Miss McHenry Pageant.
■ Band Fund -The purpose of the an Fund is to finance and account for
expenditures incurred in the provision of summer concerts to promote
culture and recreation to the community.
■ Civil Defense Fund -The City Defense Fund is used to Eund and account for
activities related to the training of personnel and the purchase and
maintenance of equipment to protect and defend the City from natural
disasters or man-made environmental disasters through early warning and
public notification systems.
■ Alarm Board Fund -The purpose of this fund is to pay for the maintenance
of radios, as well as the annual maintenance of the head -end equipment, in
the City's dispatch center. Revenues are derived from the monitoring of
business fire alarms, which are directly connected to the dispatch center.
■ Audit Fund -The Audit Fund accounts for expenses incurred to complete the
annual financial audit of the City.
■ Annexation Fund -This fund tracks funds received from negotiated
annexation agreements that are intended to be used for improvements to
infrastructure or City facilities.
■ Motor Fuel Tax Fund -The Motor Fuel Tax (MFT) Fund is to provide
dedicated revenues from taxes on gasoline and diesel sales primarily to road
maintenance and improvements.
■ Developer Donation Fund -The purpose of this fund is to account for
donations collected from developers on behalf of the primary and secondary
school districts, fire protection district, and the City's park system.
■ Tax Increment Finance Fund -The Tax Increment Finance (TIF) Fund is
utilized to capture the tax increment on property taxes generated through
private investment within the downtown TIF District. These funds are then
reinvested into this area to undertake public improvements and/or as
incentivization to spur additional private investment,
o Capital Projects Fund -Capital Projects Fund is utilized to account for financial
resouc•ces to be used for the acquisition or construction of capital facilities or other
major fixed assets. The following funds are identified within the Capital Projects
Fund.
■ Recreation Center Construction Fund -The purpose of this fund is to, first,
account for revenues and expenditures related to the construction of the
recreation center facility; and, second, to account for capital expenditures
specific to the completed recreation center facility.
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■ Special Service Area 414A - The SSA#4 Fund is utilized to account for
revenues and expenses associated with annual debt service for the sewer
project located in the Lakewood Road Subdivision.
■ Capital Improvements Fund -The purpose of the Capital Improvements
Fund is to account for funds identified for the maintenance and construction
of public infrastructure projects other than water and sewer utilities. This
includes roads and public facility maintenance, improvements and/or
construction.
■ Capital Equipment Fund -The Capital Equipment Fund is utilized to track
annual expenditures of equipment replacement (e.g., vehicles, computer
equipment) as identified in the S-Year Capital Improvement Program.
o Debt Service Fund -The Debt Service Fund accounts for bonded indebtedness
I
ncurred by the City's General Fund, including bond and interest payments.
• Enterprise Funds -Enterprise Funds are business -type funds utilized to account for
operations and activities that are financed and operated in a manner similar to a private
business enterprise, and where the cost of providing goods and services to the general public
on a continuing basis is expected to be recovered primarily through user charges. The City
has also established Enterprise Funds when it was advantageous to segregate revenues
earned and expenses incurred for an operation for purposes of capital maintenance, public
policy, management control, or accountability. The following funds comprise the City's
Enterprise Funds:
o Water and Sewer Fund -The Water and Sewer Fund funds the operations of the
Water, Wastewater and Utility Division of the Department of Public Worlcs who's
functions are to provide a safe and reliable supply of high quality potable water and
to protect public health and the environment by treating sewage to meet stringent
environmental standards prior to discharge.
o Capital Development Fund -This fund accounts for the construction, expansion
and/or extension of water and wastewater systems to accommodate new
development and growth in the community. Revenues are generated through capital
development fees on new residential and non-residential development.
o Utility Improvements Fund -The Utility Improvements Fund is utilized for capital
projects that improve or expand the capacity of the Water and Wastewater utilities.
o Marina Operations Fund -This Enterprise Fund is used to maintain achy -owned
60-slip marina on the Fox River.
• Internal Service Funds -Internal Service Funds are established to finance and account for
services and/or commodities furnished by one department or agency to other departments
or agencies of the city. The Internal Service Funds of the City are as follows:
o Employee Insurance Fund -The purpose of this fund is to finance and account for
expenditures incurred to provide health insurance benefits to employees.
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o Risk Management Fund - The Rislc Management Fund accounts for all activity
related to risk management and insurance costs (other than employee health
insurance) including loss control, loss prevention, risk transfer, and risk assessment,
o Information Technology Fund -The IT Fund facilitates the implementation of
innovative, high quality technology -based services to each of the City's departments.
• Fiduciary Funds -These funds are used to account for resources held for the benefit of
parties outside of the city. The Fiduciary Funds of the city include the following funds:
o Employee Flexible Spending Fund -Accounts for employees' pre-tax medical
spending accounts that are offered as a benefit to City employees.
o Development Escrow Fund -This fund is used to segregate developer funds held by
the City to ensure the completion of specific public improvements such as sidewalks
and traffic signals.
o Retained Personnel Fund -The Retained Personnel Fund accounts for funds
collected as reimbursement and expended for professional and technical services
used to assist or advise the City in connection with land development.
o Revolving Loan Fund -This fund accounts for activity in the Revolving Loan
Program, a low -interest program for businesses and industry with the goal of job
creation.
o Police Pension Fund -Accounts for retirement benefits for retired police officers
and their beneficiaries through employer and employee contributions and
investment earnings.
Governmental Fund Equity
• With the implementation of GASB 54, the fund balance structure for governmental funds
changed as of the fiscal year ended April 30, 2012. Multiple fund balance classifications
include: Non -Spendable, Restricted, and Unrestricted, with unrestricted being further
broken down into: Committed, Assigned, and Unassigned.
• Expenses that can be attained from multiple fund classifications shall be used from the most
to least restrictive fund. With the discretion of the Finance Director, and with the advice and
consent of the Finance and Personnel Committee, a deviation can be made from this policy if
it is in the best interest of the City of McHenry.
• Fund classifications are described by the following:
o Non -Spendable Fund Balance - (1 of 2 conditions)
■ Amounts that are not in spendable form
➢ Can never be spent (i.e., Inventory, Prepaid Rent)
➢ Cannot currently be spent because of cash flow timing (i.e., Long -Term
Receivables)
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■ Amounts that are required to be maintained intact (i.e,, principal of an
endowment)
o Restricted
■ Externally enforceable legal restrictions (Le., grants, debt proceeds, tax levies)
o Unrestricted (3 designations)
M Committed -Amounts constrained for a specific purpose by a government
using its highest level of decision -malting authority
➢ Must be committed prior to fiscal year-end, however, dollar amount
can be decided at a later time.
➢ Revenues reported within any given special revenue fund are
considered "Committed" by the City Council in accordance with GASB
Statement 54 and are intended to be used for the related purpose.
■ Assigned - Amounts constrained, for the intent to be used for a specific
purpose by the City Administrator and Finance Director
➢ Includes any remaining positive balances in governmental funds
(other than the General Fund) that is not classified in any other fund
balance category
➢ A drawdown of the fund balance would be classified within this
category
■ Unassigned - Remainder of the General Fund's fund balance that is not
classified in a previous category and amounts have not been expended in
excess of resources available in other governmental funds
Proprietary (Enterprise/internal Servicel Fund Equity
• Proprietary funds include Enterprise and Internal Service Funds.
• Expenses that can be attained from multiple fund classifications shall be used from the most
to least restrictive fund. With the discretion of the Finance Director, and with the advice and
consent of the Finance and Personnel Committee, a lesser restrictive net asset classification
can be used if they determine that it is in the best interest of the City.
• The net assets will be composed of three primary categories;
o Net Investment in Capital Assets -That portion of a proprietary fund's net assets
that reflects the fund's net investment in capital assets less any amount of outstanding
debt related to the purchase/acquisition of said capital assets.
■ Related debt, for this purpose, includes the outstanding balances of any
bonds, mortgages, notes, or other borrowings that are attributable to the
acquisition, construction, or improvement of capital assets of the
Government.
o Restricted Net Assets That portion of a proprietary fund's net assets that are
subject to external enforceable legal restrictions (e.g., grantor, contributor and bond
covenants).
o Unrestricted Net Assets -That portion of a proprietary fund's net assets that is
neither restricted nor invested ita capital assets (net of related debt).
Fund Balance Parameters (By Fund)
• It is Lite City's philosophy to support, long4erm financial strategies, where fiscal sustailict ty
is it first priority, while also building funds for future growth. It is essential to maintain
adequate levels of fund balance to mitigate current and future risks and to ensure stable tax
levies. Credit rating agencies carefully monitor levels of fund balance to evaluate a City's
credit worthiness.
• Revenues received within a given fund are specifically committed For its related purpose.
Revenues reported within any fund may be modified from time to time through the annual
budget process.
• The following parameters will be used as part of the budget process to establish targets for
the following funds:
o General Ftind -The unrestricted fund balance target should be set at 120 days (4
months) of estimated operating expenditures including those expenditures reported
in other Governmental Funds that receive annual operating transfers, with the
exception of transfers intended to fund capital projects. If the unreserved fund
balance falls below 120 days, a plan will be developed to return to the target balance.
If the unreserved fund balance reaches a low of 90 days (3 months), the plan will be
implemented to return the fund balance to the target within a reasonable amount of
time. One-time revenues shall not be used to fund current operations.
This level of fund balance shall provide the capacity to:
■ Offset unexpected downturns in elastic revenues due to fluctuations in the
local, state and national economies o, the loss of a major sales tax
contributor(s);
■ Offset negative fiscal changes brought about by action or legislation of
another unit of government or agency,
• Ensure the continued, timely repayment of debt obligations that the City may
have in the event of a financial downturn;
■ Provide a sufficient cash flow for daily financial needs at all times; and,
■ Provide a funding source for unanticipated expenditures or emergencies that
may occur.
Funds in excess of the minimum may be
nonrecurring expenditures, assigned for
funding of other long-term obligations.
considered for the funding of one-time,
future capital activities or used for the
o Tourism Fund - No target is established for this fund. The expenditures in this fund
are to be used for financing tourism through promotion of the City.
o Pageant Fund - No target is established for this fund.
o Band Fund - No target is established for this fund. There is an estimated yearly
operating transfer provided by the Genez•al Fund to cover expenses.
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o Civil Defense Fund - The unrestricted fund balance should be maintained at 120
days (4 months) of estimated operating expenditures. Additional fund balance needs
to be retained to address long-term equipment replacement and or repair.
o Alarm Board Fund - The unrestricted fund balance should be maintained at 120
days (4 months) of estimated operating expenditures. Additional fund balance needs
to be retained to address long-term equipment replacement,
o Audit Fund - No target is established for this fund. Any fund balance accumulated
within this fund will be utilized to lower operating transfers from other funds or the
property tax levy.
o Annexation Fund -The unrestricted fund balance should be maintained at sufficient
levels to address the related annual debt service payments pledged by this fund and
additional funding for capital projects.
o Motor Fuel Tax Fund - No target is established for this fund. The expenditures
intended for the Motor Fuel Tax revenues must not exceed the amount of funds
available from the State of Illinois Motor Fuel Tax Fund. These revenues should only
be used for street improvements and repair, as allowed by the State of Illinois Law.
o Developer Donation Fund -The unrestricted fund balance should be maintained at
sufficient levels to fund park related capital projects.
o Tax Increment Finance Fund - No target is established for this fund. All fund
balance within this fund will go to pay for improvements completed within the TIF
district.
o Recreation Center Construction Fund -The unrestricted fund balance should be
maintained at 120 days (4 months) of estimated operating expenditures. Additional
fund balance needs to be retained to address long-term equipment/furniture
replacement or other unforeseen capital needs.
o Special Service Area #4 [SSA#4) - No fund balance is maintained in this fund, all
revenues are transferred to the Utility Improvements Fund to cover project costs.
o Capital Improvements Fund - No target is established for this fund. The
expenditures in this fund are to be used For retiring debt service and for capital
infrastructure expenditures. One-time revenues should be placed in this fund.
However, the City will plan appropriately and maintain a sufficient reserve in order
to meet the long-term capital planning, projected cash flow requirements, and
infrastructure needs of the community.
o Capital Equipment Fund - No target is established For this fund. The expenditures
in this fund are to be used for capital equipment expenditures.
o Debt Service Fund - No target is established for this fund. This fund is used only as
a debt service fund.
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o Water and Sewer Fund - The Water and Sewer Fund cash and investment balance
should be maintained at a minimum level of 2S%/ 35% of the previous year's
operating expenses taking into account typical levels of expenditures required for
capital outlays. Rates should be maintained at sufficient levels to meet the costs of
water and sewer programs, fund depreciation, and build reserves for future capital
needs. Water rates for consumers will be reviewed on an annual basis based on
operating and capital needs. If the balances fall below the minimum, rates will be
adjusted so as to gradually return to the minimum within a reasonable period of time.
If balances exceed the minimum, the overage will be used to keep future rate
increases lower or fund capital projects for the water/sewer systems.
o Capital Development Fund - No target is established For this fund. The
expenditures in this fund are to be used for retiring debt service and for capital
expenditures.
o Utility Improvements Fund - No target is established for this fund. The
expenditures in this fund are to be used for capital infrastructure expenditures. One-
time revenues should be placed in this fund. However, the City will plan
appropriately and maintain a sufficient reserve in order to meetthe IongAerm capital
planning, projected cash flow requirements, and infrastructure needs of the
community.
o Marina Operations Fund - No target is established for this fund. All fund balance
within this fund will go to maintain the City owned marina.
o Employee Insurance Fund - No target is established for this Fund. Any fund balance
accumulated within this fund will be utilized to provide stability for the City's health
I
nsurance costs.
o Risli Management Fund - No target is established For this fund. Any fund balance
accumulated within this fund will be utilized to provide stability for the City's risk
management costs.
o Information Technology Fund -The unrestricted Fund balance should be
maintained at 120 days (4 months) of estimated operating expenditures. Additional
fund balance needs to be retained to address capital expenditures.
o Employee Flexible Spending Fund - No fund balance is maintained within this fund.
This fund is used only as an agency fund.
o Development Escrow Fund - No fund balance is maintained within this fund. This
fund is used only as an agency fund.
o Retained Personnel Fund -- No fund balance is maintained within this fund. This
fund is used only as an agency fund.
o Revolving Loan Fund - No target is established for this fund. Any fund balance
accumulated within this fund will be utilized to offer low infierest loans to local
businesses.
o Police Pension Fund - Fund balance targets will be determined through the Police
Pension Board and the annual actuarial analysis.
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Capital Improvement Program Financial Policy
1. The Capital Improvements Program (CIP) plan shall identify projects, their costs and the
revenue sources and amounts needed to finance them.
Z. The first year of the CIP program effectively becomes the capital projects budget within the
operating budget for the year subject to the availability of adequate funds in the operating
budget. Approval of the CIP does not guarantee that funds will be appropriated for the
projects included in the first year of the CIP.
3. For General Obligation Debt, the City will maintain a debt to assessed value ratio that is 25%
more stringent than the state debt limit (State limit is 8.62S% of EAV; proposed limit would
reduce to this ceiling to approximately 6.5%.of EAV or $25.5 million outstanding).
4. Bonds issued to finance capital projects shall be structured to coincide as closely as feasibly
possible to the useful life of the project. By equitably distributing the costs of the project over
time, those citizens actually benefiting from the project will share in the cost. In no instance
shall the maturity exceed the useful life of the project.
5. The City will not use long-term debt for current operations.
6. Where feasible, the City shall investigate the use of all sources of revenue available before
using local property tax funds for capital projects.
7. Where feasible, the City will pursue project financing mechanisms -such as special service
areas, special assessments or other mechanisms - that target citizens receiving a
disproportionate share of the project benefit.
350
Investment Policy
I. Policy
It is the policy of the City of McHenry to invest public funds in a manner which will provide
the highest investment return with the maximum security while meeting the daily cash flow
demands of the City and conforming to all state and local statutes governing the investment
of public funds.
II. Scope
This policy includes all funds governed by the Mayor and Council ("City Council").
III. General Objectives
The primary objectives, in priority order, of investment activities shall be safety, liquidity,
and yield:
A. Safety. Safety of principal is the foremost objective of the investment program.
Investments shall be undertaken in a manner that seeks to ensure the preservation
of capital in the overall portfolio. The objective will be to mitigate credit risk and
interest rate risk.
1. Credit Rislc. The City will minimize credit rislt, the risk of loss due to the
failure of the security issuer or backer, by:
(a) Limiting investments to the safest types of securities.
(b) Pre -qualifying the financial institutions, brokers/dealers,
intermediaries, and advisers with which the City will do business.
(c) Diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
2. Interest Rate Rislc. The City will minimize the risk that the market value of
securities in the portfolio will fall due to changes in general interest rates, by:
(a) Structuring the investment portfolio so that securities mature to meet
cash requirements for ongoing operations, thereby avoiding the need
to sell securities on the open market prior to maturity.
(b) Investing operating funds primarily inshorter-term securities, money
market mutual funds, or similar investment pools.
B. Liquidity. The investment portfolio shall remain sufficiently liquid to meet all
operating requirements that may be reasonably anticipated. This is accomplished by
structuring the portfolio so that securities mature concurrent with cash needs to meet
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IV.
V
anticipated demands (static liquidity). Furthermore, since all possible cash demands
cannot be anticipated, the portfolio should consist largely of securities with active
secondary or resale markets (dynamic liquidity). A portion of the portfolio also may
be placed in money marketmutual funds or local government investment pools which
offer same -day liquidity for short-term funds,
C. Yield. The investment portfolio shah be designed with the objective of attaining a
market rate of return throughout budgetary and economic cycles, taking into account
the investment constraints and liquidity needs. Return on investment is of secondary
importance compared to the safety and liquidity objectives described above. The core
of investments are limited to relatively low risk securities as identified in this policy
in anticipation of earning a fair return relative to the risk being assumed. Securities
shall not be sold prior to maturity with the following exceptions:
1. A security with declining credit may be sold early to minimize loss of
principal.
2. A security swap would improve the quality, yield, or target duration in the
portfolio.
3. Liquidity needs of the portfolio require that the security be sold.
Prudence
The standard of prudence to be used by investment officials shall be the "prudent person"
standard and shall be applied in the context of managing an overall portfolio. Investment
officers acting in accordance with written procedures and this investment policy and
exercising due diligence shall be relieved of personal responsibility for an individual
security's credit risk or market price changes, provided deviations from expectations are
reported in a timely fashion and the liquidity and the sale of the securities are carried out in
accordance with the terms of this policy.
Investments shall be made with judgment and care, under circumstances then prevailing,
which persons of prudence, discretion and intelligence exercise in the management of their
own affairs, not for speculation, but for investment, considering the probable safety of their
capital as well as the probable income to be derived.
Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal
business activity that could conflict with the proper execution and management of the
investment program, or that could impair their ability to make impartial decisions,
Employees and investment officials shall disclose any material interests in financial
institutions with which they conduct business. They shall further disclose any personal
financial/investment positions that could be related to the performance of the investment
portfolio. Employees and officers shall refrain from undertaking personal investment
transactions with the same individual with whom business is conducted on behalf of the City.
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VI. Delegation of Authority
Authority to manage the investment program is granted to the City Treasurer or his designee,
hereinafter referred to as Investment Officer. Responsibility for the operation of the
investment program is hereby delegated to the Investment Officer, who shall act in
accordance with established procedures and internal controls for the operation of the
investment program consistent with this investment policy. Procedures should include
z eferences to: safekeeping, delivery vs. payment, investment accounting, repurchase
agreements, wire transfer agreements, and collateral/depository agreements. No person
may engage in an investment transaction except as provided under the terms of this policy
and the procedures established by the Investment Officer. The Investment Officer shall be
responsible for all transactions undertaken and shall establish a system of controls to
regulate the activities of subordinate officials.
VII. Authorized Financial Dealers and Institutions
A list will be maintained of Financial institutions authorized to provide investment services.
In addition, a list also will be maintained of approved security broker/dealers selected by
creditworthiness (e.g., a minimum capital requirement of $10,000,000 and at least five years
of operation). These may include "primary" dealers or regional dealers that qualify under
Securities and Exchange Commission (SEC) Rule 1SC34 (uniform net capital rule).
All financial institutions and broker/dealers who desire to become qualified for investment
transactions must supply the following as appropriate:
A. Audited financial statements.
13. Proof of National Association of Securities Dealers (NASD) certification.
C. Proof of state registration,
D. Completed broker/dealer questionnaire.
E. Certification of having read and understood and agreeing to comply with the City's
investment policy.
An annual review of the financial condition and registration of qualified financial institutions
and broker/dealers will be conducted by the Investment Officer.
VIII. Suitable and Authorized Investments
The City may invest in any investment allowed for in the Illinois statutes regarding
investment of public funds including but not limited to the following:
A. U.S. government obligations, U.S. government agency obligations, and U.S.
government instrumentality obligations, which have a liquid market with a readily
determinable market value.
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B, Canadian government obligations (payable in local currency).
C. Certificates of deposit and other evidences of deposit at financial institutions,
bankers' acceptances, and commercial paper, rated in the highest tier (e.g., A4, P4,
174, or D4 or higher) by a nationally recognized rating agency.
D, investment -grade obligations of state, provincial and local governments and public
authorities,
E. Repurchase agreements only if the underlying purchased securities consist of
government securities which are subject to the Government Securities Act of 1986 or
as authorized in 30 ILCS 235/2(h)(1)-(11).
F. Money market mutual funds regulated by the Securities and Exchange Commission
and whose portfolios consist only of dollar -denominated securities.
G. Local government investment pools, either state -administered or through joint
powers statutes and other intergovernmental agreement legislation.
IX. Collateralization
Funds on deposit (checking accounts, certificates of deposit, etc,) in excess of FDIC limits must
be secured by some form of collateral, witnessed by a written agreement and held at an
independent - third party institution in the name of the City.
X. Safekeeping and Custody
All security transacfiions, including collateral for repurchase agreements, entered into by the
Crty, shall be conducted on adelivery-versus-payment (DVP) basis. Securities will be held by
an independent third party custodian designated by the Investment Officer and evidenced by
safekeeping receipts and a written custodial agreement,
XI. Diversification
The investments shall be diversified by:
A. Limiting investments to avoid over concentration insecurities from a specific issuer
or business sector (excluding U.S. Treasury securities).
B. Limiting investment in securities that have higher credit risks.
C. Investing in securities with varying maturities.
D. Continuously investing a portion of the portfolio in readily available funds such as
local government investment pools (LGIPs), money market funds or overnight
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XIII.
repurchase agreements to ensure that appropriate liquidity is maintained in order to
meet ongoing obligations.
Maximum Maturities
To the extent possible, the City shall attempt to match its investments with anticipated cash
flow requirements. Unless matched to a specific cash flow, the City will not directly invest in
securities maturing more than two years from the date of purchase or in accordance with
state and local statutes and ordinances,
Reserve funds may be invested in securities exceeding two years if maturity of such
investments are made to coincide as nearly as practicable with the expected use of the funds.
The intent to invest in securities with longer maturities shall be disclosed to the corporate
authorities.
Internal Controls
The Investment Officer is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the City are protected from loss, theft or
misuse. The internal control structure shall be designed to provide reasonable assurance that
these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of
a control should not exceed the benefits likely to be derived and (2) the valuation of costs and
benefits requires estimates and judgments by management.
Accordingly, the Investment Officer shall establish a process for an annual independent
review by an external auditor to assure compliance with policies and procedures. The
internal controls shall address the following points.
A. Control of collusion.
B. Separation of transaction authority from accounting and recordiceeping.
C. Custodial safekeeping.
D. Avoidance of physical delivery securities.
E. Clear delegation of authority to subordinate staff members.
F. Written confirmation of transactions for investments and wire transfers.
G. Development of a wire transfer agreement with the lead bank and third -party
custodian.
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XIV. Performance Standards
The investment portfolio will be managed in accordance with the parameters specified within
this policy. The portfolio should obtain a market average rate of return during a
market/economic environment of stable interest rates. A series of appropriate benchmarks
shall be established against which portfolio performance shall be compared on a regular
basis,
XV. Reporting
The Investment Officer, or his designee, shall prepare an investment report at least quarterly,
including a management summary that provides an analysis of the status of the current
investment portfolio and transactions made over the last quarter. This management
summary will be prepared in a manner which will allow the City to ascertain whether
investment activities during the reporting period have conformed to the investment policy.
The report should be provided to the Investment Officer, the legislative body, and any pool
participants. The report will include the following;
A, Listing of individual securities held at the end of the reporting period,
B. Realized and unrealized gains or losses resulting from appreciation or depreciation
by listing the cost and market value of securities over one-year duration that are not
intended to be held until maturity.
C. Average weighted yield to maturity of portfolio on investments as compared to
applicable benchmarks.
D. Listing of investment by maturity date.
E. Percentage of the total portfolio which each type of investment represents.
XVI. Marking to Market
A statement of the market value of the portfolio shall be issued to the Mayor and City Council
quarterly.
XVII. Exemption
Any investment currently held that does not meet the guidelines of this policy shall be
exempted from the requirement of this policy. At maturity or liquidation, such monies shall
be reinvested only as provided by this policy.
XVIII. Amendments
This policy shall be reviewed on an annual basis. The Investment Officer may implement
changes in the investment policy after gaining approval from the Mayor and City Council for
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the amendments. Any and all amendments to the investment policy shall be provided to the
individual(s) charged with maintaining internal controls.
XTX. Investment Policy Adoption
The investment policy shall be adopted by the Mayor and City Council. The policy shall be
reviewed on an annual basis by the Investment Officer and any modifications made thereto
must be presented to the Mayor and City Council for approval.
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Purchasing Policy and Procedures
A. General Rules. Regulations and Ethics
Purchasing of goods and services for the City of McHenry shall be in accordance with this Purchasing
Policy, City Ordinances and applicable statutes of the State of Illinois. Items procured must represent
the maximum economic benefit for each dollar spent. Purchases shall be of high quality and
continued availability. Purchases shall be based on obtaining cost comparisons, quotations, or
competitive bids. Purchases shall be based on obtaining better knowledge of methods and of
commodities required to operate cost effectively. Local participation will be encouraged in the
purchasing process. Consideration should be given to participate in cooperative purchasing efforts
with other local government entities and in the State of Illinois Joint Purchasing Program whenever
possible.
All personnel involved in the purchasing process shall conduct themselves with fairness and
impartiality and demand the same of all vendors. Negotiations and discussions involving purchases
shall be conducted in compliance with the Code of Ethics and Rules of Conduct in the City's Personnel
Handbook. The purchasing process shall promote professionalism and be committed to the
efficiencies of centralized purchasing.
B. Expenditure Approval Authority
The following table includes the personnel authorized to make purchases and the amount each are
authorized to spend on items included in the annual fiscal year budget, as approved by the City
Council:
Mayor, City
Budgeted
Designated Supervisors/Managers
Department
Administrator
Amounts
Employees*
Directors
or Finance
Director
Less than
X X
X
X
$750
Less than
X
X
X
$2,500
Less than
X
X
$10,000
Less than
X
$20,000
* Designated Employees:
• Executive Assistant/Deputy City Clerk
• Coordinators and Analysts
• Administrative Assistants (all departments)
• Public Works Maintenance Worker
• Public Works Operator
• Public Works Mechanic
• Parks & Recreation Maintenance Worker
• Public Works Project Engineer
• Community Development Plumbing Inspector
• Community Development Code Enforcement Officer
• Community Development Permit Technician
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C. PurchasinE Procedure for Budeeted ltetns
The following purchasing procedures apply to budgeted amounts, excluding architectural,
surveying or engineering, legal, auditing, information technology or other professional
services.
o For budgeted items from $21500.00 to $91999.99, three (3) cost comparisons shall be
obtained prior to all purchases.
o For budgeted items from $10,000.00 to $19,999.99, three (3) written quotations shall
be obtained prior to all purchases.
o For budgeted items $20,000.00 and over, all purchases shall follow a competitive
bidding process whereby bid specifications are developed, bids solicited, bids are
received and evaluated by staff, and a recommendation is forwarded to the City
Council for award/approval. The City Council reserves the right to waive the
competitive bidding process upon the vote of 2/3 of the City Council members then
holding office.
D. Purchasing Procedure for Non -budgeted Amounts
For all purchases that are not included in the annual fiscal year budget, a budget amendment
request must be approved by the City Council prior to purchase, unless the actions are
considered emergency in nature. Once approved, purchases may be made in accordance with
the Expenditure Approval Authority set forth above.
E. Purchasing Procedure -Emergencies
For all purchases considered emergency in nature by the City Administrator or Mayor, such
as threats to public health or safety, where immediate repairs to City property are required
to protect or prevent against further loss or damage, or where immediate action is needed to
prevent or minimize serious disruption to City services, competitive purchasing procedures,
as directed by the Mayor or City Administrator under the circumstances, shall be used. The
City Council shall be notified of the emergency circumstances and the expenditure amount
and the item will be presented for formal approval or ratification at the next regular meeting
of the City Council.
F. Change Orders
Change orders $20,000.00 and over shall be brought before the City Council unless
specifically authorized in the bid selection process. However, if a change order for any public
works contract authorizes or necessitates any increase in the contract price that is fifty
percent (50%) or more of the original contract price or that authorizes or necessitates any
increase in the price of a subcontract under the contract that is fifty percent (50%) or more
ofthe original subcontract price, then the portion ofthe contractthatis coveredbythe change
order must be resubmitted for bidding in the same manner for which the original contract
was bid pursuant to the Public Works Contract Change Order Act, 50 ILCS 525.
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Glossary of Terms
Accrual Basis of ACCOUI1t1nE: A method of accounting that recognizes the financial effect of
transactions, events, and interfund activities when they occur, regardless of the timing of related cash
flows.
Activity: Specific or distinguishable type of worlt performed by a component of government for the
purpose of accomplishing a function for which the government is responsible.
Appropriation: Legal authorization by the City :Council to matte expenditures and to incur
obligations for specific purposes.
Assessed Valuation: A valuation set upon real estate or other property by a government as a basis
for levying taxes.
Availability Criterion: Principle of the modified accrual basis of accounting according to which
revenues may only be recognized when they are collectible within the current period or soon enough
thereafter to be used to pay liabilities of the current period.
Basis of Accounting; The timing of recognition, that is, when the effects of transactions or events
should be recognized for financial reporting purposes. For example, the effects of transactions or
events can be recognized on an accrual basis (that is, when the transactions or events take place), or
on a cash basis (that is, when cash is received or paid).
Bond: A written promise to pay a specific sum of money, called the face value or principal amount,
at a specified date or dates in the future, called the maturity dates, together with periodic interest at
a specified rate.
Budget; The financial plan for the operation of a program or organization, which includes an
estimate of proposed expenditures fora given period, and the proposed means of financing those
expenditures.
Budget Message: A general outline of the budget, which includes comments regarding the
government's experience during the past period, its financial status at the time of the message, and
recommendations regarding the financial policy for the coming period,
Budgetary Basis of Accounting: The method used to determine when revenues and expenditures
are recognized for budgetary purposes.
Business -Type Activities: Activities of the City that are financed in whole, or in part, by fees charged
to external parties for goods or services. These activities are accounted for as enterprise fimds and
include the Airport, Transit, Parking, Golf Course, Boat Harbor, Marina, Ambulance, Refuse Collection,
Landfill, Transfer Station, Water Pollution Control, and Collection and Drainage Funds.
Capital Improvements Program: An annually updated plan or schedule of projected expenditures
for public facilities and improvements which includes estimated project costs, sources of funding,
and timing of work over a five-year period. For financial planning and general management, the
program is presented as a plan of work and proposed expenditures, and is the basis for appropriation
requests and bond issues.
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Capital Outlaw Fixed assets which have a value of $300 or more and have a useful economic lifetime
of more than one year.
Capital Projects Fund: Fund used to account for financial resources to be used Jul the acquisition
or construction of major capital facilities.
Commodities: Supplies required by the municipality in order to perform the services to its citizens.
Community and Economic Development Function: Government function that provides for
planning and development of the City including the social, physical and economic needs of the City.
Activities included in this function are Planning, Zoning and Building Safety, Economic Development
and the Municipal Housing Programs,
Contractual Services: Services other than employee services such as contractual arrangements and
consultant services, which may be required by the municipality.
Culture and Recreation Function: This function promotes the general well being of the City and
encourages the fullest development of cultural and educational potentials of the citizens in the
community. This function includes the activities of library, art center, parks and recreation, and
cemetery.
Debt Service Fund: A fund established to account for the accumulation of resources for and the
payment of general long-term debt, principal, and interest.
Depreciation: An appropriation is expended when a capital asset is acquired or constructed. By
definition, a capital asset has a service life expected to extend over more than one Fiscal period. The
process of allocating the cost of a capital asset to the periods during which the asset is used is called
depreciation.
Encumbrances: Obligations in the Form of purchase orders, and/or contracts, which are chargeable
to an appropriation and for which a part of the appropriation is reserved.
Enterprise Fund: A fund established to account for operations that are financed and operated in a
manner similar to private business enterprises. The intent of a governing body is that the cost of
providing goods and services to the general public on a continuing basis be financed or recovered
primarily through user charges orwhere the governing body has decided that periodic determination
of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance,
public policy, management control, accountability, or other purposes.
Expenditures: The cost of goods received or services rendered for the government unit. For the City
of McHenry, expenditures are charged against an appropriation when incurred, not when paid.
Fiscal Policy; The City of McHenry's policy with respect to taxes, spending and debt management as
they relate to government services, programs, and capital investments.
Fiscal Year: A twelve-month period to which an annual operating budget applies.
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Fringe Benefits: Benefits paid by the City of McHenry For social security, retirement, group health,
life, dental and long-term disability insurance. It also includes costs for worker's compensation and
unemployment.
Function: A group of related activities aimed at providing a major service or regulatory program for
which a government is responsible.
Fund: The fiscal and accounting entity with aself-balancing set of accounts recording cash and other
financial resources together with all related liabilities and residual equity or balances and changes
therein which are segregated for the purpose of carrying out specific activities or obtaining certain
objectives in accordance with special regulations, restrictions or limitations.
Fund Balance: Funds remaining after the application of available revenues and resources to support
expenditures for the fund.
General Fund: A Fund used to account for all financial resources except those required to be
accounted for in another fund.
Geueral Government Function: Function that provides for the operation of the government and
assures the general administration of the municipality. Activities included in this function are mayor
and council, legal services, city administrator, human resources, wellness program, finance,
computer operations, risk management, and buildings and grounds.
General Obligation Bonds:, Bonds for fihe payment of which the full faith and credit of the issuing
government are pledged. Goal: Broad statement of desired results for the city, department, and/
activity relating to the quality of services to be provided to the citizens of McHenry.
Governmental Funds: Funds generally used to account for tax -supported activities. Thore are five
different types of governmental funds: the general fund, special revenue funds, debt service Funds,
capital projects funds, and permanent hinds.
Health and Social Services Function: Government function which provides for assistance to
service agencies involved in providing health and social services in the community. For the City, this
function includes the Economic Well -Being activity.
Intergovernmental Revenues: Revenue from -other governments, primarily in the Form of Federal
and State grants, but may also be payments from other local governments.
Internal Service Fund: A fund used to account for the financing of goods and services provided by
one department or agency to other departments or agencies of a government on a cost -
reimbursement basis.
T.egal Debt Martin: The excess of the amount of debt legally authorized over the amount of debt
outstanding.
Level of Service: Generally used to define the existing or current services, programs and facilities
provided by the government for its citizens. Level of service of any given activity may be increased,
decreased, or remain the same depending upon the needs, alternatives, and available resources.
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Lev : The total amount of taxes, special assessments, or service charges imposed by a government
to support governmental activities.
Modified Accrual Basis of Accounting: Basis of accounting according to which (a) revenues are
recognized in the accounting period in which they become available and measurable and (b)
expenditures are recognized in the accounting period in which the fund liability is incurred, if
measurable, except for unmatured interest on general long-term debt and certain similar accrued
obligations, which should be recognized when due.
Objectives: Specific measurable achievements that an activity seeks to accomplish within a given
time frame, which are directed to a particular goal. An objective should be stated in terms of results,
not processes or activities. For the City of McHenry, departmental objectives are included in the
department's budget request.
Ordinance: A formal legislative enactment by the governing body of a municipality.
Performance Measurement: Commonly used term for service efforts and accomplishments
reporting.
Permanent Funds: A fiduciary fund type used to report resources that are legally restricted to the
extent that only earnings, and not principal, may be used for purposes that support the reporting
government's programs.
Personal Services: Expenditures For salaries, wages, and related employee benefits for persons
employed by the municipality.
Proprietary Funds: Funds that focus on the determination of operating income, changes in net
assets (or cost recovery), financial position, and cash flows. There are two different types of
proprietary funds: enterprise funds and internal service funds.
Public Safety Function: Government function that provides for services to reduce the amount and
effects of external harm to individuals and damage to property, and in general to promote an
atmosphere of personal security from external events. Police, animal control, communications, fire,
and civil defense activities are included in this function.
Public Works Function: Government function that provides for safe and well -maintained
infrastructure for the City. Activities included in this function are public works administration,
roadway maintenance, snow and ice control, street cleaning, traffic control and engineering.
Resolution: An order of a legislative body requiring less legal formality than an ordinance;
additionally, it has less legal status.
Revenue: Income received by the City of McHenry to support the government's program of services
to the citizens. Income includes such items as property tax, fees, user charges, grants and fines.
Special Assessment: A compulsory levy made against certain properties to defray part or all of the
cost of a specific improvement or service deemed to primarily benefit those properties.
Special Revenue Funds: Funds used to account for proceeds of specific revenue sources that are
legally restricted to expenditures for specified purposes.
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Taxable Valuations: Valuations set uppn real estate or other property by a government as the basis
for levying taxes,
Taxes: Compulsory charges levied by government for the purpose of financing services performed
For the common benefit. This does not include specific charges made against particular persons or
property for current or permanent benefits such as special assessments.
Trust and Agency Funds: Funds used to account for assets held by a government in a trustee or
agent capacity for individuals, private organizations, other governments, and/or other finds.