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Home My WebLink AboutMinutes - 10/17/2016 - Finance and Personnel Committee FINANCE & PERSONNEL COMMITTEE MEETING REPORT October 17, 2016, 5:30 PM �-- McHenry Municipal Center In Attendance: Committee Members: Alderman Curry and Alderman Condon. Absent: Chairman Alderman Wimnier. Also in Attendance: City Administrator Morefield, Deputy City Administrator Hobson, and Deputy City Clerk Geraghty. 1. Call to Orde_: The meeting was called to order at 5:30 PM. 2. Public Input None 3. Motion to axprove the March 23, 2016 and Apri14, 2016 Finance and Personnel meetin�reports. Alderman C,zrry made a motion, seconded by Alderman Condon to approve the July 18, 2016 Finance and Personncl Committee meeting reports as presented. All ayes, motion carried. 4. Review and discussion of General Fund budget trends and identification of Capital Funds for FY 17/18 Bud� Director Morefield presented a six-year overview of General Fund activity and an update on the status of the unassigned and assigned fund balances in preparation for development of the five-year Capital Improvement Program and FY 2017/18 budget. The committee packet contained a General Fund spreadsheet that provided a six-year snapshot of actual revenues and expenditures based on final audit numbers. L Director Morefield noted that although the Fund Balance and Reserve Policy was implemented in 2416, for informational purpose its guidelines were applied to the period covered in the spreadsheet. The assigned fund balance going into FY 16/17 was $3,518,908, and includes a transfer of$2,349,593 committed for capital improvements. Consequently, the assigned fund balance for Capital heading into FY 17/]8 is approximately $1.17 million. Since the city conservatively budgets revenues, it is likely that unbudgeted revenues will be realized in FY 16/17. However, this balance is not identified until completion of the audit and it could change based on next fiscal year's estimate revenues and expenses. Based on FY 16/17 budgeted revenues and expenditures, Administrator Morefield informed the committee that since the FY 17/18 budget is developed prior to obtaining the exact amount for revenues an�i expenditures, the most conservative assumption to use when budgeting for capital improvemen1:s is $1.17 million. He reminded the committee that this amount reflects only the remaining G�neral Fund surplus for capital expenditures and as such, the FY 17/18 CIP budget will be significantly reduced from the current fiscal year. Alderman Cc�ndon thanked Administrator Morefield for the information and stated the organization of the spreadsheet including the highlighting in Column G was helpful and the information was concise. Alderman Curry concuned stating the spreadsheet was easy to read and added it was a good idea to develop the assumptions as if we had a policy in effect. � 1 Alderman Curry stated budgeting sales taxes below where we were three or four years ago seems too conservative. Per capita, income tax is down but it depends on the number we use for population. Administratc�r Morefield answered the Illinois Municipal League provides municipalities with a table � that determines the amount to use per capita for each fiscal year. Alderman Curry noted the Community & Economic Department expenses were $205,000 higher and seems like more than would be acceptable for the addition of two positions. Administrator Morefield said he would research and provide the committee with the reason(s) for the increase. Alderman C�irry noted Police and Dispatch expenses increased by $1 million and asked for the value of the new contracts. Administrator Morefield said he will look into the increase however, he reminded the committee that the city's partnerships for the dispatch center have not yet in effect and over time, th�;city is expected to save over$200,000 per year. Alderman Curry stated the Public Works budget increased by $575,000. Deputy Administrator Hobson informed the committee that staffing costs for the Recreation Center are included under Public Works. In summary, Administrator Morefield stated he will include similar trends in the FY 17/18 budget document to assist with monitoring the unassigned fund balance. Mayor Susan Low joined the meeting at 5:50 PM. 5. Discussion re�ardin�2016 Propertv Tax Levy Request. Director Morefield addressed the committee and stated staff is seeking input on the levy amount to be � included in the Resolution that will be presented to the Council on November 7`h. As the Committee is aware, the Council has maintained a flat levy for the past five years. Despite the fact that as a home rule community the city is not subject to PTELL, we still follow PTELL guidelines for establishing the levy and have limited the levy request to the identified rate of inflation. However it is important to note that this does not mean homeowners will not see an increase in their property tax bill. An increase or decrease in the EAV will affect the amount of property tax. When the EAV declines, the tax rate must increase to fully fund the levy. Alternatively, when the EAV increases, there is the potential for tax rates to decrease based on the total levy request. For example, in 2015, the EAV increased therefore, the tax rate for the city's portion of the tax bill decreased slightly. Unfortunately, levy increases by other taxing districts resulted in an overall increased tax rate nullifying any benefits provided by the city's reduction. Administrator Morefield informed the committee staff is waiting for information from the county regarding the estimated 2016 EAV. However it is known that the 2016 tax year inflationary rate is 0.70%, theref�re, staff is able to estimate the PTELL by calculating the 2015 EAV and the 0.7% inflationary rate. This equates to a property tax extension of$4,813.509, or a $51,874 increase over last year. Alderman CuTry stated it seems there would be a consensus of the Council to keep the levy flat in 2017, and suggested the committee look at possibly reducing the levy request. Even if it is a small amount is may be symbolic and an example to other taxing districts. Alderman Condon asked for a recommendation and Alderman Curry suggested .5% or 1%. Mayor Low stated she somewhat agrees with Alderman Curry's suggestion for keeping the levy flat adding the city has attempted `-- unsuccessfully to influence District 15 to maintain a flat levy. 2 In summary, Administrator Morefield offered to provide the Council at the time the levy is presented on November 7th, with examples of the calculations for the levy recommendation at a flat rate and with a reduction of .5% and 1%. Alderman Condon stated the comparisons would be beneficial to the L Council. 6. Transmittal ��f the FY 17/18 — FY 21/22 Capital Improvement Pro�ram (CIP) and FY 17/18 Bu�et Process Timehne. For information purposes, Administrator Morefield presented a scheduled for the development of the FY 17/18 — FY 21/22 CIP and FY 17/18 Budget. Staff identified Wednesday, March 22°`� and Wednesday, April 5`", as dates for the Finance and Personnel Committee to discuss the proposed FY 17/18 budget. 7. Adjournment: Motion by Alderman Condon, seconded by Alderman Curry to adjourn the meeting at 6:10 PM. All ayes, motion carried. Reviewed and approved this �':. day of ��/�-�c�' 201�. G'7f�,,.��... Alderman Richard Wimmer, Chairman � \ - • 3