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HomeMy WebLinkAboutMinutes - 12/4/2017 - Finance and Personnel Committee t � FINANCE AND PERSONNEL COMMITTEE � Monday, December 4, 2017 Municipal Center Classroom, 5:30 PM 1. Call to Order: The meeting was called to order at 5:30 pm. 2. Roll Call: Chairman Alderman Curry, Alderman Schaefer, and Alderman Mihevc. Also in attendance Director of Finance Carolyn Lynch, Director of Economic Development Douglas Martin, Mayor Wayne Jett, and Kim Calousek owner of DIY Barkin Bath Haus. 3. Public Comment: None. 4. Motion to approve the September 5, 2017 Finance and Personnel Committee meeting report. Motion by alderman Mihevc, seconded by Alderman Schaefer to approve the September 5,2017 Finance and Personnel Committee meeting report as presented. Chairman Curry asked the Clerk to call the roll: Voting Aye: Mihevc, Schaefer, Curry Motion carried. � 5. Review, discussion, and consideration of a Revolving Loan Fund application for $20,000 submitted by Kim Calousek owner of DIY Barkin Bath Haus, Inc. located at 1126 North Green Street and direction to place this item on the next available City Council meeting agenda. Chairman Curry opened the floor to the Committee for comments and questions. Alderman Schaefer said in his opinion, this application meets the criteria set by the Committee and asked where the business would be located. Ms. Calousek said she intends to open in the Riverwalk Place. Alderman Schaefer said other applicants have noted the rent is high for Riverwalk Place. Ms. Calousek said she negotiated a fair rent and noted the existing tenants had negotiated deals with the previous owner of the center. The previous owner advertised rent between $13 and $16/sq. ft. and she will pay $9.85/sq. ft. Chairman Curry invited Ms. Calousek to make a statement before the Committee. Ms. Calousek said she anticipates signing a lease this week. She has a Facetime conference scheduled this week with the manufacturer and U.S. distributor to finalize purchase of the machines, which will be shipped from Australia. There is a 45-60 day lead-time for the equipment to arrive so if she signs a lease effective January 1, 2018, she will begin the buildout prior to delivery of the machines. � . � Finance and Personnel Committee Page 2 December 4,2017 �, Alderman Mihevc said in his opinion, this is a great concept and that it meets the criteria of the revolving loan program. He asked how Ms. Calousek would ensure that the $100,000 she would be investing in the project and the$20,000 from the city would all be used for this project. Ms. Calousek said all the funds would be used for the $20,000 down payment for the machines and expenses for the buildout. In the recommendation from Mr. Busse he asked that the lease be signed, agreement with the distributor secured, and tlie business is incorporated as conditions for the loan. Her bank accounts are setup, business cards ordered, paint purchased, security system purchased, and interior accessories are ready to go. Ms. Calousek said she is prepared to move into the space now. Alderman Mihevc asked if the city takes a security interest on the bank account. Director Lyncli said the equipment is the collateral and Ms. Calousek's personal guarantee. Alderman Schaefer explained that questions about loan security are often asked because if the business goes under the city does not get to collect first. Chairman Curry noted Mr. Busse's conditions require that the lease is first signed and the purchase of the machines has to be negotiated and agreed to in writing. The city will need to see those documents prior to releasing the funds. As far as securing the loan, typically the city files a form with the UCC to secure an interest in the equipment, which in this case will be the machines coming from Australia. Ms. Calousek said she and Mr. ,� Busse discussed the value of the machines. As the machines are new to the U.S. and very popular in Australia, the resale value would be high. Currently, the machines cost 500£ each. The location of the proposed business on Green Street was discussed. Ms. Calousek told the Committee that within the shop there will be fencing around each unit so they are self-contained for the owner and the animal. The animals will be restrained inside the machine and cannot jump out. Three stations will be installed and one will be ADA compliant. Potentially two trained employees will be hired. Customers will be required to leash their dogs and a security system has been purchased. Alderman Schaefer asked if an employee would be required to be on duty when the shop is open. Mr. Calousek said the landlord would prefer that someone be there. As with a coin laundry there is no need to have an attendant present at all times and over time as the landlord is more secure with the operation, she is hopeful that customers can be issued a cardkey to wash their dogs after hours. A kitchen will be installed with ovens for baking dog treats, which will be cordoned off from the public area. The sale of pet treats is not subject to health department regulations. The only public access will be to the washing and vending machines. In response to Alderman Schaefer's inquiry, Director Martin said pet grooming is a permitted use in C-3 and above; this location is C-4. The water meter size needed for this � business will be determined during the building permit process. Ms. Calousek informed Finance and Personnel Committee Page 3 December 4,2017 �. the Committee that a three-stage filter process is installed in each washing machine to catch the pet hair before it enters the sewer. The business is anticipated to open by March 1, 2018, depending on how quickly the machines are delivered and installed. Alderman Schaefer asked Ms. Calousek if she attempted to secure a loan from a bank. She answered that she preferred to go through the city as the time frame to secure a private loan was longer than she wanted to wait. Motic�n by Alderman Schaefer, seconded by Alderman Mihevc to recommend approval of a Revolving Loan in the amount of$20,000 with the conditions placed on the loan by lst National Bank of McHenry and to present this item to the full City Council at the next available meeting. Chairman Curry asked the Clerk to call the roll: Voting Aye: Schaefer, Mihevc, Curry Motion carried. Ms. Calousek left the meeting at approximately 6:10 PM. 6. Review and discussion of the PACE Suburban Bus Dial-a-Ride, Voucher Program for Seniors, consideration of the McHenry Township Senior Dial-a-Ride Program, � and motion to place this item on the next available City Council meeting agenda. Chairman Curry asked Director Martin to present this item to the Committee. Director Martin provided a suminary on the background of the Senior Bus Voucher Program that was created in conjunction with the Pace Suburban Dial-a-Ride Service. A grant of$20,000 was awarded to the city in 2001 to fund the voucher program for the purpose of augmenting limited transportation for senior citizens living with the city limits. The grant was extended twice until 2003. The vouchers were issued to residents 55 years and older, collected by PACE who in turn was reimbursed by the city for costs associated with the program. Although the $20,000 was expended in 2003, the city continued to administer the program. Since the expiration of the grant funding, the issuance of the free vouchers has evolved and expanded beyond the original scope of the senior program to include people with disabilities. From 2004 to 2013, the annual cost of the program has averaged $10,074. The city also spends about $1,200 per year to print and mail the vouchers. In 2013, the program was revised to limit the free vouchers to city residents 60 years and over. Recently staff was informed that the city was not being charged by the county for the free vouchers. In addition, Pace drivers often confuse city vouchers with McRide vouchers and consequently, 10-20 regular users of the city's free program receive up to 40 free � one-way rides per month. Finance and Personnel Committee Page 4 December 4,2017 L An alternative to the current program would be the McRide voucher program for a cost of $3 per ride. The County would sell the vouchers to the city at the discounted rate of$2 per vuucher. At 10 riders a month, 40 vouchers would cost the city$9,600 per year. Anotlier option that staff recommends is a partnership with McHenry Township for the Township Dial-a-Ride program. This program is funded by a grant and offers door-to- door transportation for seniors and people with disabilities using four buses owned by the Township. Service operates Monday through Friday, 8:30 AM to 3:00 PM and is offered only to McHenry Township residents. Director Martin reported that he met with McHenry Township Supervisor Adams and the Township is willing to offer door-to-door service for all City riders including those in who live in Nunda Township who use the voucher program. The expanded service would require an additional driver. Bus tickets would cost $1 per ride and the Township would sell books of 10 tickets to the city for $5 a book, or$.50 per ride. Residents would be able to purchase Township bus tickets at the Municipal Center or they can be mailed upon verification of residency and age. In the next grant year, the Township would administer the program and the city would discontinue the free voucher program. Ultimately, the city could discontinue offering any type of voucher program completely. Residents would still have the option to use the existing Pace Dial-a-Ride program for � their transportation needs. Alderman Schaefer asked if the Dial-a-Ride program includes vouchers and Director Martin answered no. Chairman Curry asked Director Martin to confirm that the city has to make a decision soon because the County has an issue with the program. Director Martin noted that for the past three months, the County has been cooperating with city staff to find a solution. Chairman Curry said the simplest solution would be for the city to continue to offer the existing voucher program until the end of next year and then move to the Township program. Director Martin said the vouchers currently issued by the City are not being accounted for and the users are basically getting free rides. Director Lynch added there is no way for the city to know if the vouchers are being used. Aldennan Schaefer asked if the 40 vouchers per month are per person and are they all handed out at one time and Director Martin answered yes, and the city pays to print and mail them. Chairman Curry summarized that staff is proposing to change over to the Township system at the end of this year (2017) or beginning of next (2018) and offer $5 books for 10 rides or $0.50 per ride, until the end of 2018 and then the Township will use that data � to justify a new grant. The Township would continue to pick up city riders from both Finance and Peisonnel Committee Page 5 December 4,2017 �. Townships henceforth; Director Martin concurred. Alderman Schaefer asked if either of these plans affect the agreement with Pace that is on the Council agenda presented this evening and Director Martin answered no, this is a separate issue. Alderman Schaefer asked if the city has a clear understanding of the city's cost for the voucher program. Director Lynch said we knew what our costs were when the County annu�illy invoiced the City. Chairman Curry read a summary provided to him earlier by Director Martin: partner with McHenry Township for one year (next year), purchase the Township $1 per ride vouchers for $0.50 per ride (half-of�, after which the city would no longer offer free rides for seniors. Assuming 20 riders at 40 rides per month, the cost to the city would be $4,800 in 2018. The alternative option would be to go to the County at $2 per voucher (assuming a discount from the County's $3 voucher price); same number of riders would cost $19,200 in 2018. The Township option is $14,500 less expense than the County option. Director Martin recommended that the city continue to offer the program to only seniors 60 and over. Alderman Schaefer asked would it still be considered a full price fare if city residents pay half price for the Township ride and Director Martin answered yes. � Chairman Curry said the Township should pick up city residents who reside in McHenry Township riders for free now and Director Martin said the reason they do not is because of the grant program. Once the grant program is reinitiated they will be included. Chairman Curry said he was in favor of the Township program and asked should the city give people more notice than just in October as proposed. Director Martin suggested sending a letter of notification to the current voucher users after Council approval and a second letter in October. Alderman Schaefer said he was in favor of the Township proposal but when Supervisor Adams said he would have to add another driver and possibly another bus, he is concerned that the city would be asked to subsidize the costs. Director Martin said the Township is just proposing to add another driver. Director Lynch noted that many of the residents that will be added to the Township service already reside in McHenry Township. Chairman Curry said after next year, the only exception to any of this is that Nunda residents will also benefit from the McHenry Township program. Director Lynch said there is only one Nunda Township resident who uses the City's current voucher program. Alderman Mihevc said it is his understanding that the proposed partnership with � McHenry Township will cost the City $4,800 with 20 riders. If we discontinue it at the Finance and Petsonnel Committee Page 6 December 4,2017 � end of 2018, we would be spending the $4,800 in 2019 so, what would prevent the City from continuing to subsidize the program at that number in 2019, get the same deal from the Township, and be able to offer seniors a free ride? Director Martin said if the Cormnittee directed him to do so, he would ask the McHenry Township Supervisor how the grant is structured to determine if this would be possible. Alderman Mihevc said he assumes the profile of the average rider is someone who does not have their own car, does not drive, and has limited income so a$1 per ride may cause a hardship for some. Chairman Curry suggested that the city move forward with the proposal and ask Director Martin to confer with McHenry Township about Alderman Mihevc's proposal. Alderman Schaefer inquired about a statement in the supplement that mentions the program is good for seniors and people with disabilities and asked if Director Martin intended to relay that the program is good for seniors and/or people with disabilities to which, Director Martin answered yes. Alderman Mihevc made a motion, seconded by Alderman Schaefer to continue the City's free voucher program until December 2018 through the McHenry Township Senior Dial- a-Ride Program and the City will subsidize the program at the rate of$5 per 10-ride pack or$0.50 per ride. Chairman Curry asked the Clerk to call the roll: � Voting Aye: Mihevc, Schaefer, Curry Motion carried. 7. Staff Reports. Director Lynch informed the Committee there are no Finance topics for the January meeting agenda and asked the Committee if they had any items for the agenda. She also noted that the City Council has one regular meeting scheduled in January on the 15tn Alderman Curry suggested moving the regularly scheduled meeting on January 2 to January 15 prior to the Council meeting, with the knowledge that the meeting may be cancelled for lack of an agenda. Alderman Mihevc reported the Public Works Committee proposed an aggressive 2018 Street Program in addition to discussing the Public Works list of projects in the CIP. He suggested that at some point the Finance and Personnel Committee discuss what the city can do to meet those needs. Director Lynch stated the CIP for all proposed General Fund projects would be the topic for discussion at the January 29 Committee of the Whole meeting. � Finance and Perso�mel Committee Page 7 December 4,2017 � Alderman Curry said the Committee could discuss the CIP on January 15. Director Lynch said she was not certain if the information for the CIP would be available for discussion on January 15. In conclusion, the Committee agreed to move the January 2 meeting to January 15. 8. Any 4ther Business. None 9. Motion to Adjourn: Alderman Mihevc made a motion, second by Alderman Schaefer, to adjourn the meeting. Chairman Curry asked the Clerk to call the roll: Voting Aye: Mihevc, Schaefer, Curry Motion carried. The meeting adjourned at 6:36 pm. Respectfully submitted, Marci Geraghty, Executive Assistant/Deputy City Clerk � Reviewed and approved this,��day of �E�,�y 2018. �° � /1" Alde an Scott rry, Chai an �