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Home My WebLink AboutMinutes - 3/23/2016 - Finance and Personnel Committee FINANCE & PERSONNEL COMMITTEE MEETING REPORT March 23, 2016, 5:30 PM �-- McHenry Municipal Center In Attendance: Committee Members: Chairman Alderman Wimmer, Alderman Curry and Alderman Condon. Abse�it: None. Also in Attendance: City Administrator Morefield, Deputy City Administrator Hobson; Finance Director Lynch; Chief of Police Jones; Public Works Director Schmitt; Economic Development Director Martin; Community Development Director Polerecky, and Deputy City Clerk Geraghty. Seated in the Audience: Mayor Susan Low, Superintendent Wirch, Superintendent Schmidt, and Superintendent Ruzicka. l. Call to Order: Chairman Alderman Wimmer called the meeting to order at 5:30 PM. 2. Public Input: None 3. Motion to approve the January 11, 2016 Finance and Personnel meetin�port. Motion by Curry second by Wimmer to approve the January 11, 2016 Finance and Personnel Committee meeting report. Voting Aye: Curry, Wimmer. Voting Nay: None Absent:Condon `' Motion carried. 4. Transmittal and Discussion of Draft Fiscal Year 2016/17 Bud�et Chairman Wimmer asked City Administrator Morefield to begin the discussion. Administrator Morefield reported the Draft FY 2016/17 budget is subject to further modification based on input from the Committee and/or further needs identified as part of the ongoing review. Staff has identified some corrections/clarifications that will be discussed during the fund reviews; new summary sheets will be provided where appropriate; and additional funding requests will be identified. Alderman Condon joined the meeting at 5:40 PM. General Fund Revenues Highli�hts The FY 2016/17 proposed budget identifies Revenues of$20,377,013; an increase of 5.1% from last fiscal year: • State Sales Tax and Use Tax receipts comprise 33.4% of revenues and are proposed to be $6,808,038; an increase of 3.7% from current fiscal year. • Home Rule Sales Tax receipts comprise 9.1% of revenues and are proposed to be $1,858,118; a decrease of 1.8% from current fiscal year. '`,� • Income Tax Receipts comprise 13.5% of revenues and are proposed to be $2,753,184; an increase of 12.4% from current fiscal year. 1 . � • $161,800 IGA reimbursement from MTFPD for Fire Dispatchers. • $1��1,100 in Drug Asset Forfeitures. � • $9�,000 increase in Video Gaming. • The remaining$84,932 in revenues is attributed to miscellaneous adjustments/revenues. Alderman Curry referred to the projected revenues and asked if revenues were flat the last two ye�irs. He further stated for the last five or six years we had a $1.SM flow into the unassigned fund, which means our revenues have been over expenditures by quite a bit. Administrator Morefield answered over the last two years income tax receipts whether Home Rule Tax, State Sales Tax, and video gaming, is where a majority of the $1.SM has come from. ��e added that prior to the 2007/08 economic downturn the Home Rule Sales Tax did not exist. Revenues for the most part especially in sales tax, were not achieving what was budgeted and we were drawing down the fund balance. In FY 2009/10 we lost a major retailer in the community and the Council at that time chose to implement the Home Rule Sales Tax and we are always uncertain how much that tax will generate or when the economy will recover. Staff budgets conservatively for fear of what happened leading up to the economic downturn and the fact that those revenue sources identified are based purely on the economy. He added Video Gaming is a relatively new source. Alderman Curry stated our worst case in that time period referenced shows a drop of about 7% to 8%. The projection we received at the last Council meeting indicated we are close to setting a record on excess funds at $1.93M that will flow to the unassigned fund balance by the end of April. Finance Director Lynch added we have three-months of expenses that have not hit and we have a large amount of revenues the city receives at the beginning of the year `. and we are already at 100%, so at the end of the fiscal year the excess will not be $1.93M. Alderman Curry inquired about the projections provided in the documentation. Finance Director Lynch stated those are not projections but the actual fund balance; if we were to add all the revenues we receive for the first three quarters and take out the expenses for the first three quarters that is what the fund balance would be at that point. Right now we are at $1.93M however adjustments previously mentioned have not been made. Administrator Morefield added there is still the potential for the State to reduce the Local Government Distribution Fund. If the state reduces the LGDF as previously proposed by 50%; revenues would be reduced by as much as $1.3M. Even if the reduction is 10%, it will impact the city's revenues. General Fund Expenditures General Fund Expenditures - less capital improvements and equipment—just operating costs is proposed at $20,107,062; an increase of 7.7% from the current fiscal year. General Fund Operating budgets are comprised of Administration, Elected Officials, Community Development, Finance, Police Commission, Police, Police Dispatch, Public Works Administration, Public Works Streets Division, and Parks and Recreation. � Administrator Morefield provided the Committee with an overview of proposed expenses for each department and division. 2 Alderman Curry stated that in some of the detail sheets, salaries are shown for the current budget and the proposed budget and then there are some increases in double digits and asked if that �vas correct. Administrator Morefield said he would review the numbers. Alderman `- Wimmc�r stated the Committee will mark this topic as something staff will look into and report rack with an answer. Alderman Curry said that he went through all of the departments for salaries and it seems like many of the higher level personnel have higher percent increases with the exception of the ones just mentioned, versus some of the lower level and asked if this was cause for concern. Administrator Morefield explained with the new merit system this should actually be the opposite because due to identified low, medium, and high evaluation tiers the opportunity for increases for the lower salaried employees in terms of percentages are higher than those at the top. Alderman Curry asked if the salaries are set for the next fiscal year and Administrator Morefield answered performance evaluations are currently underway and due in April. Administration Bud et Hi�hli h�ts • $28,985 increase in Personnel due to merit and/or contractual salary adjustments; Health/Dental/Vision/Life Insurance; FICA Medicare; and IMRF Retirement • $12,250 increase in contractual services with $7,000 added for mosquito spraying during major events • $4,050 decrease in supplies • $16,479 decrease in"other,"primarily due to a decrease in Risk Management Costs � Elected Officials Bud eg t Hi�ghts • $58,858 decrease in Personnel due to transfer of costs for Administrative Assistant to the Community Development Department budget. • $1,125 decrease in contractual primarily due to transfer of training costs ($1,075) to Administration(added Deputy Clerk responsibilities) and Community Development. • $800 decrease in supplies primarily due to the electronic distribution of information to City Council and staff, • $10,569 decrease in "other," specifically related to purchase of services/Information Technology, Communitv Develonment Bud e�Hi�� • $194,401 increase in Personnel due to hiring of department director; transfer of Administrative Assistant costs; one-half the cost for shared Office Assistant position with Finance Department; adjustments to Health/DentalNision/Life Insurance, FICA Medicare, and IMRF Retirement; and reintroduction of Uniform Allowance for the purpose of reimbursing inspectors for safety boots for field inspections. • $19,200 increase in contractual services including an increase of$17,500 for mowing contracting services mostly recaptured through liens, etc; and $3,000 for the purchase of new building code books. Director Polerecky reported currently in this fiscal year, the city invoiced $31,231 for mowing services of which $20,853 was recovered, leaving approximately $10,000 uncollected of which $3,500 was wrote-off mostly `,. due to agreed settlements. 3 • $6,400 increase in supplies due to the acquisition of a color scanner (misidentified in the budget as Mobile Table Printers in account 6110). • $14,090 increase in "other" related to cost for the purchase of services/Information �'' Technology and capital lease payments for the department copy machine. Finance Department Bud e��hts • $28,520 increase in Personnel due to cost-sharing of one-half Office Assistant position with Community Development; costs related to merit-based wage increases; Health/Dental/Vision/Life Insurance, FICA Medicare, and IMRF Retirement • $8,575 increase in contractual primarily due to increases for printing and mailing of utility bills • '`Other" less capital improvement and capital equipment transfers include a $140,000 increase in development expenses related to existing sales tax abatement agreements. Alderman Santi entered the meeting at 6:20 PM. Police Department Bud eg t Hi�� • Net decreases in personnel, contractual, supplies and other primarily due to the transfer of dispatch related costs to the newly created police dispatch fund . Chairman Alderman Wimmer asked if there was any new business to discuss and there was none. Adj ournment: `'' Motion by Condon to second by Curry to adjourn the meeting at 7:07 PM. Voting Aye: Condon, Curry, Wimmer. Voting Nay: None Absent:None Motion carried. Reviewed and Approved: �" � ��.,. , --. 'r✓� � �� Date: J� �� , 2016 Alderman R. Wimmer, Ch irman ' � 4