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HomeMy WebLinkAboutMinutes - 4/29/1999 - Finance and Personnel Committee Finance Committee Meeting Apri129, 1999 � Present: Chairman Alderman Murgatroyd,Alderman McClatchey Alderman Baird arrived at 7:45 p.m. Others Present: Mayor Cuda,City Clerk Althoff,Alderman Glab,City Administrator Lobaito,Assistant Administrator Maxenier Chairman Alderman Murgatroyd called the meeting to order at 7:30 p.m. stating the purpose of this evening's finance committee meeting was to continue discussions regarding the proposed 1999-2000 budget. Chairman Murgatroyd stated the proposed budget required balancing. Expenditures needed to be reviewed and prioritized. FINAL BUDGET DISCUSSIONS 1999-2000 FISCAL YEAR City Administrator Lobaito informed council the total projected year-end general fund expenditure figure is$7,794,002,which is approximately$700,000 less than the 1998-99 budget figure. Projected year-end revenues are $8,603,000 leaving a year-end General Fund balance of $3,518,000. Assistant Administrator Maxenier noted the total projected year-end revenues were approximately$60,000 over the 1998-99 Budget. He stated although retail sales tax collections were higher than anticipated,the income tax collections were slightly lower. L City Administrator Lobaito reviewed the 1998-99 budget figures,the year-to-date revenues and expenditures and the proposed 1999-2000 budget. He requested the committee provide further direction regarding the Shamrock/Route 31 traffic signal and lane improvement project. The project's total cost is approximately$660,000 with the City of McHenry's share approximately $220,000. Consideration should be given to expensing the full $220,000 from the 1999-2000 General Fund or bonding the project's full amount and expensing the city's prorata share over ten years similar to all other participating Special Service Area properties. In response to committee inquiry City Administrator Lobaito noted the 1999-2000 estimated interest earned revenue was lower as the bond balance has been reduced and interest rates have remained low. City Administrator Lobaito also stated the$27,000 administrative computer carryover has been eliminated. The total conversion cost was expensed this 1998-99 fiscal year. Chairman Murgatroyd also noted the estimated 1999-2000 Funeral Home Income revenue line item should be corrected to read$6,000. City Administrator Lobaito reviewed the proposed 1999-2000 personnel additions. Police Department 2 officers Parks Department 2 parks maintenance personnel Public Works Dept. 1 streets division 1 building&grounds personnel � Finance Committee Meeting � Apri130, 1999 Page Two City Administrator Lobaito recommended the following budget reductions: -1 parks maintenance staff addition -elimination of the$15,000 public works administration customer service software -reduction of the$62,500 Crystal Lake Road engineering study expenditure to $20,000 He cited the anticipated staff changes in the Parks Deparhnent with the eminent retiring of Parks Supervisor William Oeffling questioning the advisability of adding two new staff inembers at this time. Further information and investigation needs to be provided for the proposed Public Works Department's customer service software program. If applicable this expenditure will be budgeted in 2000-01. Council direction regarding the Crystal Lake Road appeared to be more of a planning issue at this stage. City Administrator Lobaito suggested a planner, in lieu of an engineer,be utilized for phase I of the planning study significantly reducing the project's cost. Alderman Baird arrived at 7:45 p.m. City Administratar Lobaito noted effects of the proposed Darhnoor and Royal Drive traffic signal installation on the Dartmoor and Crystal Lake Road traffic installation needs to be analyzed in addition to the land usage on the east side of Crystal Lake Road and the West Campus High School bus problem. A comprehensive study on the entire Crystal Lake Road area from State Route 120 to Bull Valley Road should be conducted. Some discussion followed regarding the need for a$40,000 mower for the Parks Deparhnent. � City Administrator Lobaito noted to properly care for the Dartmoor property,Althoff Park and the city's open space areas,this piece of equipment was necessary. City Administrator Lobaito reviewed the 1999-2000 proposed capital projects by department. POLICE City Administrator Lobaito noted expenditures for mobile data terminals and radio microphones have been incorporated into the 1999-2000 budget as these are collective bargaining issues. In addition revenues and expenditures for the donations and purchase of two community policing bicycles have been allocated. Some discussion followed regarding the hiring of two additional patrolmen. City Administrator Lobaito stated the City's intent to apply for a third COPS grant which would offset salary costs for a period of three years. The committee directed staff to incorporate these grant revenues in the 1999-2000 budget. STREETS City Administrator Lobaito also noted, as per committee direction,the Lakeland Park Phase IV project had been postponed until the 2000-01 fiscal year. Only$10,000 in engineering services fees has been included in the 1999-2000 fiscal year budget. Carryover expenditures include $100,000 McHenry Bypass $40,000 Lakeland Park/Phase III $28,000 Shamrock Lane Improvements/Engineering $18,000 Main Street Drainage from Route 31 to Crystal Lake Ave � Finance Committee Meeting April 29, 1999 `- Page Three In addition the 1999-2000 budget includes$18,000 in fees for engineering services for the Main Street Revitalization program. Council authorized the expenditure this year,which includes a grant application for TEA-21 grant monies. The grant will provide up to 80%of the cost of streetscape improvements. The grant application and drainage improvements will probably postpone the revitalization project for one more year. The committee suggested letters be sent to the Main Street Merchants informing them why the project has been postponed for another year. Chairman Alderman Murgatroyd stated the two main budget issues to consider were: The city's portion of Shamrock Lane traffic improvements The cost and financing of the proposed 1999 Streets Program City Administrator Lobaito noted city engineer's Baxter and Woodman have not yet provided staff with a specific cost estimate for the 1999 Streets Project. The projected preliminary cost is still $1,500,000. The City's Motor Fuel Tax Fund will have a balance of approximately$900,000 after the receipt of May and June State allotments. Chairman Alderman Murgatroyd noted the $600,000 balance would have to be expensed through the General Fund. The current projected General Fund balance is $3,500,000. Subtracting the$600,000 for the 1999 Streets Program the General Fund balance is then$2,900,000. Chairman Alderman Murgatroyd also noted maintaining a three-month operating balance of$2,200,000 and including the 1998/99 carryover expenditures creates a General Fund balance of$2,600,000. �- Further discussion continued. It was noted the estimated cost of the Shamrock Lane traffic improvement project was$650,000. Deducting the state's grant of$150,000 and the contribution of$60,000 leaves a balance of$440,000. Council has discussed the desirability of establishing a 50%public benefit. The establishment of a 50%public benefit would create a city expenditure of $220,000. A lengthy discussion followed regarding the best funding mechanism for this project. Funding options include bonding for the total project and becoming a participant in the ten-year Special Services area or expensing the City's total portion this fiscal year. In response to Mayor Cuda's inquiry Assistant Administrator Maxenier stated the current bond rate is in the area of 5.25%. City Administrator Lobaito noted the City is earning an average of 5% on city investments. In addition he noted only 92% of the 1998-99 budgeted expenditures were paid out. Chairman Alderman Murgatroyd also stated his wish to keep a reserve of$2,600,000 in the General Fund. Some discussion followed regarding the Shamrock Lane traffic improvements. It was the consensus of the committee to expense the city's total portion of the Shamrock Lane improvements this fiscal year. Assistant Administrator Maxenier was directed to complete a time value analysis once definitive project cost figures are presented. The committee also directed staff to include the COPS grant monies on the revenue side, expense the 1999 Streets program at $1,400,000,eliminate the $15,000 Public Works Deparhnent software expenditure and reduce the Crystal Lake Road Planning Study from $60,000 to$20,000. In addition the retail sales tax revenues should be increased by$75,000 to$4,575,000. � Finance Co�nmittee Meeting � April 29, 1999 Page Four WATER AND SEWER FUNDS WATER City Administrator Lobaito stated the water/sewer fund is responding positively to the 10%rate increase instituted this fiscal year. The committee opined the projected 1999-2000 revenue figure is very conservative. Some further discussion occurred. It was the consensus of the committee to increase the projected 1999-2000 water revenues to$1,000,000. City Administrator Lobaito also noted the Water Fund's CAPITAL OUTLAY account reflects an increase in the line item Media Renlacement from a$5,000 to$25,000 expenditure. No net change occurred in the account as the$40,000 Water/Sewer expenditure was eliminated from this account. The Atlas needs to be a coordinated effort between both the Public Works Deparhnent and the Community Development Deparhnent. In response to Alderman Baird's inquiry, City Administrator Lobaito noted the maintenance painting of the water tower is not reflected in this year's budget proposal as it was impractical with only two elevated tanks operational. Once the third elevated tank is constructed, maintenance painting will be addressed. Some discussion followed regarding the$150,000 expenditure in the 1998-99 budget for the engineering of two elevated tanks. The 1999-2000 budget reflects a line item for elevated storage tank engineering in the amount of$75,000, however the$75,000 balance was allocated to �- engineering services for the extension of water east of the river. In addition it was the consensus of the committee to allocate $600,000 in the Capital Development Fund for the water extension east of the river to the proposed elevated storage tank site on the Adams Commercial Park property. Staff was directed to investigate the feasibility of assessing per acre fees to all future benefited parties. SEWER City Administrator Lobaito noted although the 1998-99 sewer revenues reflect an overall increase,the 1998-99 expenditures created a deficit spending situation. Some discussion followed regarding the hiring of one additional employee for this division. The committee noted only one additional employee was hired during the 1998-99 fiscal year although Director Batt requested two. Some discussion followed regarding the three-year rate increase program and it's overall effectiveness. City Administrator Lobaito noted the City was entering into year two of the program. Chairman Alderman Murgatroyd stated the fund balance would improve significantly when the outstanding water/sewer bonds are paid. Final payment is due in the year 2006. City Administrator Lobaito explained the Water/Sewer Fund was a single Fund,although accounting was done for each division separately. It was the consensus of the committee to review water capital development fees as well as the methodology of calculating the fee amounts. �... Finance Committee Meeting Apri129, 1999 �-" Page Five Motion by McClatchy, seconded by Baird to go into Executive Session to discuss Personnel at 8:45 p.m. Voting Aye: Baird,McClatchy,Murgatroyd Voting Nay: None Absent: None Motion carried. Motion by Baird, seconded by McClatchey to go back into Open Session at 9:25 p.m. Voting Aye: Baird,McClatchey, Murgatroyd Voting Nay: None Absent: None Motion canied. Motion by Baird, seconded by McClatchey to recommend to full council the approval of the 1999-2000 budget as amended. Voting Aye: Baird,McClatchey,Murgatroyd Voting Nay: None �• Absent: None Motion carried. City Administrator Lobaito was directed to footnote the$500/alderman allowance policy on the internal budget pages. The meeting was adjourned at 9:27 p.m. -''t�,�LCnJ�;a Steven Murgatroyd,Finan Chai erson �