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Home My WebLink AboutMinutes - 3/17/2014 - Finance and Personnel Committee �� ,.fi��:. � � - � ,^ v .i► � McHenr FINANCE AND PERSONNEL COMMITTEE Meeting Minutes 6:00 pm,Monday,March 17,2014 Aldermen's Conference Room Call to Order Chairman Alderman Wimmer called the meeting of the Finance and Personnel Committee to order at 6:00 PM. Other committee members present: Alderman Geri Condon, Alderman Jeffrey Schaefer. Also in attendance: City Administrator Derik Morefield, Finance Director Carolyn Lynch, and Executive Assistant Marci Geraghty Public Attendance: Emily Coleman,Northwest Herald Public Input None. � Review and Discussion—Draft Fiscal Year 14/15 Budget Chairman Alderman Wimmer told the Committee the purpose of the meeting was to review the first Draft of the FY 14/15 budget and gave the floor to City Administrator Morefield. Mr. Morefield reported staff continues to take a conservative approach in developing the FY 14/15 budget. Revenue projections continue to be based on historical trends and economic forecasts while taking into account the current state of the economy and financial instability of the State of Illinois. The city's budget as proposed is balanced and continues to meet the community's programs and services, capital equipment and capital improvement needs. The proposed spending plan is $38,494,742 for All Funds and $18,857,994 for the General Fund. Mr. Morefield hegan the discussion with a PowerPoint presentation on the status of the current fiscal year budget and an overview of the proposed budget highlighting revenue trends as well as identifying specific revenue and expenditure areas of increase or decrease. FY 13/14 General Fund Overview: Total budgeted revenues for FY 13/14 total $18,117,598, vs. projected total expenses of $18,089,792, which is expected to result in a fund balance of+ $27,806. Highlights of FY 13/14 General Fund include a reduction of 1.5 full time employee positions, retention of police pension funding levels, and retention of capital equipment funding. � In the current fiscal year, revenues from sales and use taxes increased, fines and forfeitures and Parks & Recreation programs decreased; and other revenue sources increased for total revenue at $110,000 over budget. Finance and Persoimel Committee March 17,2014 Page Two �"" In the current fiscal year, expenses increased for personnel, contractual, supplies, and other miscellaneous expenses for a total amount of$110,000 over budget. Revenues compared to expenses resulted in a $0 net change in fund balance. Mr. Morefield noted the Government and Finance Officers Association recommends municipalities maintain unresrxicted funding levels of 35-40% in the General Fund or 90-120 days of expenses to mitigate risks. 'I'he City of McHenry maintains 38.6%,which is within GFOA guidelines. Propertv Tax R�venue, 27.4% of GF. Property Tax receipts have remained steady due to a flat levy. The proposed FY 14_/15 budgets tax receipts at$5,150,183, a decrease of$25,000 from the current fiscal year. Sales Tax Reve�lue, 33.9%of GF. In October 2011,the relocation of Walmart caused sales tax revenue to decrease from �6,473,004 in FY 11/12 to $6,276,057 in FY 12/13. However estimates have steadily increased and sales tax is projected to increase in FY 14/15 to $6,442,779 vs. $6,399,703 in the current fiscal year. Sales tax revenues are nearly back to FY 11/12 levels. Alderman Schaefer asked if sales tax rebates have an effect on revenue projections. Ms. Lynch explained sales tax rebates are reflected as expenses in the General Fund. Income Tax Revenue, 11.7% of GF. Ms. Lynch reported income tax numbers are only estimates as it is difficult to determine what the city will actually receive from the State of Illinois. Projected receipts in the proposed FY 14/15 budget are down $150,000; a conservative estimate. General Fund Fersonnel, 16% of GF. Since FY 07/08 the number of full time equivalent positions has �''' decreased by 2l to 110 employees. Proposed FY 14/15 Budget Summary: Mr. Morefield reported the FY 14/15 budget proposed is balanced and will continue to meet the community's program, serviced, capital equipment and capital improvement needs. Department Directors continue to submit conservative operating expenditures where possible. Proposed capital improvement expenditures focus primarily on needed maintenance projects such as Municipal Center building maintenance, vehicle replacements, streets program, crack sealing, and projects to increase efficiency and enhance customer service such as finance/utility billing software, building permitting software, and Municipal Center building improvements. The proposed spending plan is $38,494,742 for All Funds and $18,857,994 for the General Fund. General Fund. Total budgeted revenues for FY 14/15 total $18,878,352 and proposed expenses total $18,857,994, fcr a projected fund balance of +$20,358. Staff projects an increase in total revenue of $760,900 or 4.2% from FY 13/14. Total expenses for FY 14/15 are expected to increase $500,000 due in part to salary a:�d wage adjustments for bargaining unit contracts, wage step increases for non-contract employees, and an increase in the cost of providing employee health insurance. Staff is proposing an increase of one patrol officer to fill the School Resource Officer position. If the position is approved, D- 156 will fund 70%the SRO position; cost to the city is approximately$30,000. Alderman Schaefer asked about the merit-based evaluation program for non-contract employees previously proposed. Mr. Morefield said �nerit-based evaluations will go into effect May l, 2014. Alderman Schaefer asked about the increase in legal services. Mr. Morefield answered legal fees have increased due to the city's more aggressive enforcement of DUI processing. � Finance and Persor nel Committee March 17,2014 Page Three � Special Revenue Funds. Special Revenue Funds include Tourism, pageant, Band, Civil Defense, Alarm Board, Audit, Annexation, MFT, Developer ponation, and TIF Funds. Overall the Special Revenue Fund revenues are budgeted at $1,753,855. This reflects a decrease of$529,773 or 23.2%, from FY 13/14. In addition, expenditures are budgeted at $2,573,610, an increase of $467,588 or 22.2% from the current fiscal year. The primary reason for the decrease in revenue and increase in expenses is found in the Motor Fuel Tax Fund where total revenues are estimated to decrease by $461,663 and estimated expenditures are expected to increase by $411,103 due to a rise in road salt purchases and funding for a variety of local roadway projects. Capital Project Funds. Capital Project Funds include the Recreation Center Construction Fund, Special Service Areas #�lA and #4; Capital Improvements, Local Streets Improvements, and Capital Equipment Funds. The praposed budget amount for Capital Project Fund revenues is $1,119,272, an increase of $592,925 from current fiscal year. Mr. Morefield explained the primary reason for the increase is a $400,000 commitment to the Street Program and $197,700 in private contributions for the Knox Drive improvement project. Mr. Morefield provided the committee with additional detail on major projects and expenditures: Finance and CF;D software, police vehicle replacement and equipment, and a replacement wood chipper for the Streets Division are included in the proposed budget. Mr. Morefield reported the Public Works Department reyuested a replacement dump truck however that purchase is not feasible at this time and will be considered in the next budget cycle. Alderman Condon asked if delaying the purchase of replacement vehicles will create problems in the future. Mr. Morefield answered yes it is a possibility � however projects must be prioritized; the current Finance software is archaic and difficult to use and maintain. Effective finance software is critical to efficiently and accurately perform payroll, accounts payable and receiving, and water/sewer billing functions. CED software will improve department efficiency and customer service. Staff is awaitinb a decision from the Army Corps of Engineers for construction of the Miller Riverfront Park boat ramp. This funding is included in the Park Development Fund. Crack sealing in FY 14/15 will be funded through the MFT fund at$30,000. Several multi jurisdictional projects are scheduled to begin in FY 14/15 that require a local match; Route 120/Route 31 improvements, $216,000; McCullom Lake Road improvements, $242,000 from MFT; Bull Valley Road improvements design and engineering; and the Knox Drive extension, $57,300 from the General Fund. A few other capital projects included in the FY 14/15 budget are Municipal Center maintenance and reconfiguration for $50,000; mandated ADA park improvements for $20,000 funded through the Park Development Fund; and roof repairs at the SWWTP for$116,200. Mr. Morefield told the Committee Department Directors and their assistants are mindful of the City Council and Administration's conservative approach to city finances and commended them for submitting reasonable and effective budget proposals. The next meeting of the Finance and Personnel Committee is April 7`h at which time, staff will ask for a recommendation to forward the proposed FY 14/15 budget to the full City Council on April 2g`n '`. Subsequent to adoption, the budget will be published in book format and forwarded to the City Council. Alderman Condon asked if the budget as presented this evening could change before the 7`h. Mr. Morefield said any changes made before the next committee meeting will be discussed with the committee. Finance and Personnel Committee March 17,2014 Page Four �' Adjournment Alderman Schai-er made a motion, seconded by Alderman Condon to adjourn the meeting. Aye: Schafer, Condon, Wimmer Nay: None Absent: None Motion carried The meeting was adjourned at 7:00 PM. Respectfully submitted, �//G(�—� Alderman Richard V. W'mmer � �