HomeMy WebLinkAboutMinutes - 3/26/2012 - Finance and Personnel Committee FINANCE AND PERSONNEL COMMITTEE MEETING
`— Monday, March 26,2012
Aldermen's Conference Room, 6:00 p.m.
In Attendance: Committee Members: Chairman Alderman Schaefer, Alderman Blake and
Alderman Wimmer. Absent: None. Staff in Attendance: City Administrator Black, Deputy
Administrator Martin, Assistant Administrator Hobson, Finance and Personnel Manager Lynch,
Deputy Clerk Kunzer.
Others in Attendance: Mayor Low, Alderman Santi.
Chairman Alderman Schaefer called the meeting to order at 6:01 p.m.
Discussion: 2012-2013 Fiscal Year Bud�et
Overview
City Administrator Black provided the committee with a brief summary and overview of the
proposed 2012-2013 Fiscal Year Budget in order to initiate this evening's discussion. He noted
most line items in the General Fund remain at the status quo relative to the 2011-2012. The
current reserve is in the 20% range which is moving toward an ideal of between 25% and 30%.
He noted if the reserve exceeds the 30% level, it would be in the City's best interest to contribute
to the capital expenditure fund toward infrastructural improvements.
`„ General Fund
City Administrator Black noted a reduction in sales tax revenue for November and December
due to the move of Wa1Mart to Johnsburg. The City has the capability of acquiring from the
State sales tax revenue by business as a direct result of the City having attained home rule status.
Information obtained from inquiries will better assist Staff in projecting likely revenues from
variance retail business sources.
City Administrator Black also noted the reduction in fulltime staff due to attrition resulting from
retirements and pointed out the City has maintained the service quality in spite of the decrease in
staff. There has been a reduction in parks programs due to lower registrations as a direct result of
the economy downturn. However, there is a corresponding reduction in instructor costs
associated witli the programs which have been canceled. There has been an increase in dispatch
revenue resulting from the increased dispatch contracts acquired during the past year.
Administration
City Administrator Black pointed out the proposed adjustment in personnel expenses due to the
salary of the City Administrator. There is a proposed reduction in contractual (5110) largely due
to a decrease in anticipated legal fees resulting from union contract negotiations. The general
administration account (6940) shows an increase of$8,700 which reflects budgeted amounts for
Landmark Commission expenses such as the Facade Improvement Grant and Day at Petersen
Park event.
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Finance and Personnel Committee Meeting
March 26, 2012
Page 2
`"' Elected Officials
City Administrator Black stated with the pending retirement of the Deputy Clerk, there has been
a distribution of duties among existing employees which includes an increase of hours from part
time to full time of an office assistant in the Construction and neighborhood Services
Department. 7'he retirement will result in a cost savings of approximately $51,000 in salary and
benefits.
Construction and Neighborhood Services
City Administrator Black noted a reduction in the personnel costs in the amount of$31,957 due
to the reassigunent of duties for the part time office assistant to Deputy Clerk responsibilities.
The part time position has temporarily been retained in the CNS Department although it is not
currently being filled. There is also an increase in the contractual account (5110) due to the
increasing number of properties in a state of disrepair which require mowing and/or other
maintenance. The costs for these services are liened against the pertinent property but liens are
not always collected upon sale of property.
Finance
Finance and Accounting Manager Lynch stated there has been an increase in personnel cost due
to a finance specialist taking on some of the responsibilities of the Deputy Clerk. The finance
specialist hours will increase from 30 to 40 per week (full time). An increase in contractual
services (5110) is due to the vehicle sticker program cost which offers a first and second notice
option. Utilizing the second notice option resulted in dramatic increase in vehicle sticker revenue
� during the 2011-2012 fiscal year. There is an increase in small equipment(6270) to allow for the
purchase of a new shredder. FA Manager Lynch also pointed out the increase in development
expenses (6945) due to anticipated payments/reimbursements to Gary Lang and Regency Center.
The transfer indicated to the Civil Defense Fund (9945) is a result of the City's no longer levying
for the Civil Defense Fund following attainment of home rule status. Instead, the funds are
collected for the General Fund and transferred to the Civil Defense Fund.
Police Commission
City Administrator Black noted this department includes the salaries for Police Commissioners
and testing and interview costs for new police officers and promotional exams for sergeants, As
there will not be testing for new officers in this fiscal year(the list when posted is for a two-year
period and will not expire until later in 2013), the budgeted amount will be reduced when the
final budget draft is presented.
Police Department
Part time salaries have been increased due to an increase in hours worked by Jeff Foerster. City
Administrator Black also noted career ladder line item is going down but the holiday pay will
increase. Police Pension amounts paid this year include the actual actuarial requirements.
Eventually, the City will catch up due to increased contributions made possible by the increase in
sales tax following attainment of home rule status. The City has opted to aim for eventual 100%
funding for the Police Pension. Vehicle maintenance expenses show a decrease due to the
purchase of new vehicles during the past year. Travel and training expenses have also been
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Finance and Personnel Committee Meeting
March 26, 2012
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�" reduced. As in all departments there has been an increase in gasoline and fuel. A capital
equipment purchase of a radio antenna is included in 8300.
Public Works Administration
City Administrator Black noted the health insurance category shows a$6,000 decrease due to the
conclusion of the early retirement program being completed.
Public Works Streets
City Administrator Black noted a $100,000 increase in personnel, which includes the step
increases resulting from recent contract negotiations. Health insurance is up about $41,100 and
street lighting is down. As will all departments fuel costs have gone up. City Administrator
Black pointed out that overtime due to snowplowing is down this year as a result of the light
snowfall. Next year's budget will not be reduced for this line item, however.
Parks and Recreation
City Administrator Black noted the department will retain the same amount of staff. Health and
vision insurance costs are down. Activity charges are going up due to increased program costs,
rental costs, and instructor fees.
City Administrator Black pointed out the replacement cost of the community sign is included as
line item 8800 in the amount of$45,000. Assistant Administrator Hobson stated Architect John
Jurewicz, as noted in last week's Friday Report, has volunteered his services to design and
`- construct a new community sign. Hopefully, this will reduce the project's cost below the $45,000
budgeted amount.
Proprietary Funds
Public Works Water
City Administrator Black stated there has been a vacant position of Water Operator 1 in the
Water Division since last year. At this point staff would like to reduce the position as it appears
that the department functions well without it. The City authorized a significant rate increase in
order to keep up with infrastructure repair costs. He further noted $2.2 million worth of
improvements are needed for Water Plant #2. The city will issue bonds to pay for those
improvements over a 20-year term. Meter replacements are budgeted (8300) as some of the
meters were changed out in 1985-86 with an inferior brand. Purchase of an antenna and software
are also required to accommodate the new meters. The total cost is approximately$100,000.
Chairman Schaefer noted with the hi-tech computers and remote readers, there is probably less
overtime than when personnel had to go out and read each individual meter. City Administrator
Black confirmed that was correct. Additionally, may repairs can be made via computer
monitoring and correction, although water main breaks must still be repaired manually. He noted
the reduction in breaks this past year has largely been due to the mild winter. This has resulted in
a reduced overtime line item.
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`" Public Works Sanitary Sewer
City Administrator Black noted there is a projected reduction of $18,000 in personnel due to the
retirement of a longtime employee who will be replaced at a lower salary. Contractual fees
(5110) show a reduction attributable to the purchase last year of sewer line televising equipment.
There is no longer a need to contract for an outside source to televise the sewer lines. However,
there is an increase in supplies and materials (6110) for camera supplies. Replacement of the
emergency generator at the Willow Street Lift Station in the amount of $50,000 is included
(9936). This amount will be transferred to the Utility Improvement Fund.
Utility Improvement Fund
City Administrator Black reiterated the renovations to Water Plant #2 will require issuance of
#2.2 million bonds. Transfers to this fund will be made to accommodate the replacement of the
emergency geiierator for the Willow Street Lift Station, the CWWTP clarifier rehabilitation, and
to upgrade return sludge pumps at the SWWTP.
Capital Development Fund
City Administrator Black stated funds will be transferred to the Utility Improvement Fund to
assist in funding the two new projects.
Marina Operations Fund
City Administrator Black stated approximately $30,000 of the budgeted amount for this fund is
contractual (5110) to cover the cost of repairs and maintenance to the marina. The other fees
�— refers to property taxes due and payable during the fiscal year.
Assistant Administrator Hobson noted there are some seawall issues that will come up for repair
within the next couple of years.
Information Technology Fund
City Administrator Black noted the IT Department makes most of the computer technology
purchases for the entire City staff and the cost is spread across all departments. Contractual costs
(5110) have been reduced. The cost to replace some desktop computers is included in this year's
budget. Additionally, a new email server system has been included. The fund currently has a
$75,000 balance.
Risk Management
City Administrator Black stated the City formerly had a bad claims history with McMRMA. The
City had depleted its reserve. The current premiums are $750,000 and the City is moving in a
good direction.
Chairman Schaefer inquired as to the nature of the bad claims. Deputy Administrator Martin
responded 6 or 7 years ago there were some major workers compensation cases which have
finally been resolved. Therefore, the premium costs are finally going down.
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�" Employee Insurance Fund
FA Manager Lynch stated the renewal came in the same as last year which helped the City
toward balancing this fund. By the end of 2012-2013 the fund should be balanced. There was a
slight increase in premium cost as well. She noted it is good to create a reserve to reduce the
impact of futui•e potential exaggerated premiums increases.
Special Revenue Funds
Annexation Fund
FA Manager I,ynch pointed out the revenue for this fund has encountered a complete slowdown
as there has been no annexation activity. City Administrator Black acknowledged the gravel
mining income which had typically been $75,000 per year has now dwindled to approximately
$40,000 per year. The fund shows an expense of transferring $35,000 for debt service for the
public works building purchase.
Audit Fund
FA Manager Lynch stated the cost of the annual audit increases 2%per year. The police pension
fund audit increases by 2% as well. The pension fund pays their portion of the City's audit.
Band Fund
FA Manager Lynch stated the City no longer levies for the Band Fund since attaining home rule
status. A transfer is made from the General Fund to pay for the band expenses which amount to
$15,000 per year.
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Civil Defense Fund
FA Manager Lynch noted it cost approximately $2,000-$3,000 per year to maintain the sirens.
This year's budget includes the narrow banding antenna. As stated previously, the City no longer
levies for the Civil Defense Fund, but transfers money from the General Fund to accommodate
expenses.
Developer ponations Fund
City Administrator Black noted the City had stopped contributing 50% of the parks developer
donations to the Recreation Center Fund after being advised Council had reversed its decision
and directed that 100% of the parks developer donations be placed into the Developer ponations
Fund. As there has been very little development, there has been very little activity in this fund.
Motor Fuel Tax Fund
FA Manager Lynch noted these funds are obtained from the state on a per capita basis. Money in
this fund can be utilized for road-related expenses, including the cost to purchase salt. Due to the
limited snowfall this year, there is a surplus of salt which will require a smaller purchase during
the next fiscal year. Last year $400,000 was used from the MFT Fund to pay for the road repair
project. Additional money for this fund has been received for the past two years from the Illinois
Jobs Now Program, which is a five-year program. This resulted in an additional $120,000
annually.
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�' Cit Administrator Black stated the Cit
Y y issued bonds for a road improvement project in the
amount of$3.1 million; however the cost of the improvements was only $2.7 million. The city
expects to use the remainder of$400,000 in road improvements in this budget year. Transfers are
included to accommodate the engineering for the Crystal Lake Road Improvement Project, the
engineering for the Route 12/Route 31 improvements, and local street improvement program
costs.
Chairman Schaefer inquired how MFT money is paid. City Administrator Black responded it is a
flat fee per gallon collected. The amount is then distributed on a per capita basis.
Pageant Fund
FA Manger stated all money contained in this fund is donated or collected through the
application, sponsorship and fundraising processes.
Tax Increment Financing Fund
City Administrator Black stated the City will see a decrease in revenue in the TIF Fund based on
the decline on Equalized Assessed Valuation (EAV). He noted $75,000 is included to cover the
cost of reimbursements resulting from the redevelopment agreement with River Place owners.
City Administrator Black stated the TIF Fund is in good shape.
Tourism Fund
City Administrator Black stated before the City attained home rule status, use of the tourism
`-- funds was restricted as to its use. Since the City attained home rule status, the City may use the
funds as it chooses. Staff is proposing to use these funds to underwrite the cost of design and
replacement of the community sign at Front Royal Drive.
Capital Proiects/Debt Service Funds
Capital Improvement Fund
City Administrator Black pointed out there is a current balance of$1.565 million in this fund.
After proposed expenditures for 2012-2013 there would remain a $400,000 fund balance.
Projects for 2012-2013 include local road improvements, Public Works facility improvements,
engineering for the Crystal Lake Road project, engineering for the Route 120/Route 31
improvements, and a pavement maintenance program.
Capital Equipment Fund
City Administrator Black stated the Capital Equipment Fund was created last year. Its purpose is
to ensure timely replacement of capital equipment throughout the City. This year's program
includes the purchase of three squad cars, two police command vehicles, Hi-Ranger (to be used
by various departments), dump truck (Streets), Ford F250 (Streets), sedan (CNS), a sand-pro
infield machine(Parks) and a utility tractor(Parks). Total expenditure for this year is projected to
be $571,075.
Recreation Center Construction Fund
City Administrator Black noted this fund was established in 1999 when Council passed a
�...- resolution directing 50% of parks developer donation fees to be set aside for the design and
Finance and Personnel Committee Meeting
March 26, 2012
Page 7
�" construction of a recreation center. The fund currently contains approximately $4 million. As
stated previously, Council subsequently passed a resolution directing Staff to place 100% of
developer donations in the Parks Donation Fund and to cease mandatory contributions to the
Recreation Center Construction Fund.
Special Service Area#lA Fund
FA Manager Lynch noted this fund will be closed as the bonds have been paid off. City
Administrator Black stated the small deficit created by payments into the fund being a little short
during each year needs to be rectified. When that is accomplished the fund will be closed.
Special Service Area 4A Fund
FA Manager Lynch stated funds received in this fund are transferred to the Utility Improvement
Fund for Debt Service repayrnent over a twenty-year term. Funds are collected from each of the
Lakewood Road property owners on a cost per parcel tax basis.
Debt Service Fund
City Administrator Black pointed out this fund includes the transfer to accommodate bond
payments for the improvements to the public works facility. The total in this fund matches the
annual bond payments.
Fiduciary Funds
Developmental Escrow Fund
��-' FA Manager Lynch stated there was a paytnent of approximately $170,OOOfrom this fund during
the past year to refund a deposit made toward the construction of a railroad crossing at Dartmoor
Drive which never occurred during the specified time agreed upon in the annexation agreement
with Alberts General Partners.
Employee Flexible Spending Fund
FA Manager Lynch stated this fund is based upon what employees elect to set aside for
allowable expenses and what is used during the course of the year.
Police Pension Fund
City Administrator Black reminded the committee that during the past two years the City has
strived to build up the police pension so that it could be self sustaining. Previously the City was
not collecting enough money to make that happen. When Council agreed to implement the home
rule local sales tax of.OS%, the proceeds have assisted in making strides toward this fund being
healthy. The City is on track with attaining actuarial requirements. At this point the City is 52-
53% funded and is currently on pretty solid ground.
FA Manager Lynch informed the committee the City is no longer taking money from the police
officers investments to pay pension benefits. This was the case at one time.
Retained Personnel Fund
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March 26, 2012
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`' FA Manager Lynch stated this fund is money collected/deposited up front to cover the cost of
contractual expenses incurred by the City in conjunction with development and/or planning and
zoning matters.
Revolving Loan Fund
City Administrator Black reminded the committee that money from this fund was used to
provide a sm�ill interest loan to Buddyz in the amount of $75,000 and to Epic Cycle in the
amount of$2�,000. The loans are being handled through the First National Bank who provides
the City with reimbursements paid toward the fund. At the current time payments are
replenishing the fund in order to provide for other future low interest loans.
Other Business
Following a brief discussion it was agreed the committee would reconvene on Monday, April 9,
2012 at 5 p.m. to continue discussion,review adjustments made to the General Fund, and finalize
the proposed budget which will be presented to Council for consideration.
Adiournment
Motion by Blake, seconded by Wimmer, to adjourn the meeting at 7:42 p.m.
Voting Aye: Schaefer, Blake, Wimmer.
Voting Nay: None.
Absent: None.
Motion carried.
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Respectfully submitted,
J c e er, hairman
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