HomeMy WebLinkAboutMinutes - 3/28/2011 - Finance and Personnel Committee FINANCE AND PERSONNEL COMMITTEE MEETING
� Monday,March 28, 2011
Aldermen's Conference Room,4:00 p.m.
In Attendance: Committee Members: Chairman Alderman Schaefer, Alderman
Blake and Alderman Wimmer. Absent: None.
Also in Attendance: Alderman Peterson, City Administrator Black, Deputy City Clerk
Kunzer.
Chairman Alderman Schaefer called the meeting to order at 4:02 p.m.
Continued Discussion: 2011/2012 Fiscal Year Bud�et
City Administrator Black noted he would provide additional newly-obtained information
regarding the proposed General Fund Budget at the end of today's discussions regarding
the remainder of City funds.
Special Revenue Funds
Band Fund
City Administrator Black stated the Band Fund is handled through a transfer from the
General Fund. Additionally, transfers are deposited from the Tourism Fund to help
subsidize the costs of the summer band concerts.
Chairnlan Schaefer inquired if there would be a possibility of soliciting funds to support
�' the band concerts from the community. City Administrator Black responded that could be
a possibility. Staff could investigate the possibility of band concert sponsorships. He
noted last year Fox Point donated $1,500 toward s defraying the cost of the summer
concert series.
Chairnlan Schaefer suggested creating a concert program and use it as a vehicle to
announce that band concert sponsorships are available.
Civil Defense Fund
City Administrator Black noted in 2009-10 an expense of$7,800 was attributed to battery
replacement in the equipment. He stated the expenses incurred during this past year in the
amount of $2,000 are typical, and is the amount included in the proposed budget for
2011-12.
Audit Fund
City Administrator Black stated the City has one more year, 2011-12 on the current
contract with our present auditor. The contract also includes services provided for the
Water/Sewer Fund and the Police Pension Fund.
Annexation Fund
City Administrator Black noted revenues are down in this fund as a result of the current
state of the economy. Revenues are generated as a result of annexation agreements with
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newly annexed developments and/or properties. As there have been no new annexations
in recent years, the revenue has decreased. Additionally, the City's revenue from the
gravel mining industry is down due to the reduced building climate and need for mining
products. The revenue from gravel mining has decreased from a typical $60,000 annually
to approximately$40,000 annually.
Motor Fuel Tax Fund
City Administrator Black stated the revenue received in the MFT Fund is from the State
of Illinois and is based on a per capita basis. The funds are used to purchase toad salt, to
fund ruad improvement projects, and to pay off bonds issued to fund road improvement
projects. The City received $25.70 per capita plus a special allotment of $120,000,
available through the Illinois Jobs Now Program.
Chairnian Schaefer expressed concern regarding the possibility that the State could cut
MFT disbursements due to states financial difficulties. City Administrator Black
responded and noted this has been discussed, although at the present time there is no clear
indication they will move forward with MFT disbursement reductions.
City Administrator Black noted the MFT Fund includes a $143,000 line item for transfer
� to the Capital Improvements Fund. The transfer would cover the cost of the Pearl Street
Bridge Improvements and the installation of lighting along Route 120 from Front Street
to Richmond Rd
Develouer ponallon Fund
City Administrator Black noted this fund provides for a depository of funds collected
from developers for McHenry School District 15, McHenry School District 156,
McHenry Township Fire Protection District, McHenry Public Library District and City
Parks. All funds except those collected on behalf of City Parks are disbursed to the public
entity for whom they are collected.
City Administrator Black noted the monies received in the Developer ponation Fund has
gone down considerably as a result of the current economy. He noted there is a reserve in
the Parks Donation Fund of approximately $700,000. During the past two years transfers
in the amount of$165,000 per year were made to the Capital Improvements Fund to pay
for repairs of park equipments and structures.
Tax Increment FinancinE Fund
City Administrator Black noted the revenue has decreased in the TIF Fund because of the
decrease in the estimated value of the property. Once more unites are sold and occupied
in Riverwalk Center the value of the property should increase causing the TIF revenue to
increase as well. Debt service for the TIF in 2011-12 is $238,705.
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In response to an inquiry, City Administrator Black stated the original projected valuation
of Ri��erwalk Center was $12 million, however, in all likelihood, when the project is
completed it will be closer to the $6-$7 million range.
Alderman Wimmer states as more units are sold the value of the building will increase.
As units are built out and purchased it will increase the tax roll on the building.
City Administrator Black noted there is a complex difference in the valuation of a
commercial/residential property in relation to whether or not it is occupied versus a
vacant strictly residential property. In response to an inquiry, City Administrator Black
stated there are still cosmetic-type of improvements required in the individual residential
units (i.e. carpeting,painting, installation of appliances, etc), however, nothing that would
require a building permit.
In response to Chairman Schaefer's inquiry, City Administrator Black noted the
Riverwalk Foundation is donation driven and is not under the umbrella or control of the
City of McHenry.
Tourism Fund
City Administrator Black noted the City increased its Hotel Motel Tax last year from
`'" 2.5% to 5% which resulted in an increase in the Tourism Fund. The annual revenue for
this fund is approximately $130,000. Last year the City transferred $75,000 out of the
fund and dedicated the use for special events. This year Staff is proposing an additional
$40,000 to be used for the gazebo roof replacement in Veterans Park and for payment of
the McCullom Lake milfoil remediation project.
Brief discussion occurred regarding the need to complete the McCullom Lake milfoil
remediation project and the timing for implementing the treatment. It was noted water
temperature must be within a specific range in order for the treatment to be effective. City
Administrator Black suggested if it appears that the Finance Committee and Council
would approve the proposed budget which includes the lakes remediation, Staff could
move forward quickly to ensure that the treatment occurs this year in order to reduce the
amount of weeds/milfoil in the lake for this year's boating season.
Pa�eant Fund
City Administrator Black noted the Pageant Fund accounts for revenues and expenses
relating to the Miss McHenry Pageant. The fund is self-sustaining.
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Capital Proiects Funds
Recreation Center Construction Fund
City Administrator Black stated the purpose of this fund is to set aside monies which will
be used to construct a proposed recreation center. It is anticipated the fund will grow by
approximately $20,000-$30,000 this year. In addition to interest earned, funds are
deposited in this account as a result of a 50/50 split of Parks Developer ponation money
received: 50% of the money remains in the Parks Developer ponation Fund and 50% is
transferred into the Recreation Center Construction Fund.
Chairman Schaefer suggested it might be time to discuss this fund at a Parks and
Recreation Committee Meeting. The question should be raised as to the eventual use of
the funds, if a Recreation Center is not feasible. Perhaps funds could be used to construct
a water park or for Knox Park Pool improvements. In response to Chairman Schaefer's
inquiry, City Administrator Black acknowledged there is a current balance of
approximately$4 million in this fund.
Special Service Area #lA
City Administrator Black stated this SSA was established to fund the public
improvements at Shamrock Lane and Route 31 including the installation of traffic
�'" signalization and lane improvements. This will be the last year of debt service for this
SSA. Final debt service payments will be made on 6/1/11 and 12/1/11 which will retire
the debt. Payments from those within the SSA are collected by the County Clerk. The
City annually has contributed $25,000 toward this SSA.
Capital Improvements Fund
City Administrator Black stated anticipated expenses in this fund include $15,000 for
engineering and $60,000 for construction costs for the Pearl Street Bridge required
maintenance. Also included is $50,000 for the Phase I engineering of the Crystal Lake
Road improvements project. Both of these projects will be funded by the MFT Fund.
City Administrator Black noted the engineering for the sidewalk and lighting
impro��ements relating to the Illinois Routes 120/31 project will be funded by MFT Fund
in the amount of $18,000 and IDOT Illinois Transportation Enhancement Program
(ITEP) in the amount of$74,000.
In response to Chairman Schaefer's inquiry, City Administrator Black noted the lighting
impro�•ements will extend all the way to Front Street, although the actual scope of the
IDOT project ends going west at Third Street.
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Suecial Service Area#4A
City Administrator Black stated SSA #4A was created to assist with the installation of
sanitary sewer in the Lakewood Road Subdivision. Assessment monies collected by the
County Clerk are paid to the City and deposited into the City's Water/Sewer Fund.
Debt Service Fund
City Administrator Black stated the purpose of the Debt Service Fund is to account for
the bonded indebtedness incurred by the City's General Fund. It is a non-operating
budgetaty unit. He reminded the committee that this Fund realized a savings of more than
$110,000 last year as a result of refunding bonds. Fund balance will go back to its normal
level this year.
Fiduciary Funds
City Administrator Black reminded the Committee Fiduciary Funds are funds held for
another entity; they are typically pass-thru accounts.
Emplovee Flexible Saendin�Account
City Administrator Black stated this fund accounts for money employees set aside for
pre-tax health and child care expenses.
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Revolvin�Loan Fund
City Administrator Black noted this Fund is set aside to provide assistance to small
businesses in the community who wish to expand or grow their businesses. Last year
Council authorized a $75,000 loan to Buddyz who began repayment upon opening the
business.
Police Pension Fund
City Administrator Black stated recent state legislation has changed the logistics of the
Police Pension Fund. There is now a two-tiered system effective January l, 2011. There
has also been a recent change in the actuary provisions: Previously the municipality
would need to be 100% funded by the year 2033; New legislation requires the City be
90% funded by 2040.
City Administrator Black stated that between 4/30/2010 and today, the fund level went up
approximately 2.3% so that today it is slightly more than 50% funded.
Development Escrow Fund
City Administrator Black stated the purpose of the Development Escrow Fund is to
segregate developer funds held by the City to ensure the completion of specific projects
such as sidewalks and traffic signals. There are no changes anticipated in this fund as
compared to last year.
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McHenry Economic Develoument Fund
City Administrator Black noted this fund accounts for revenues and expenditures in
suppo�t of the McHenry Economic Development Commission. There are no significant
change�s anticipated compares to last year.
Retained Personnel Fund
City Administrator Black stated the fund is used to deposit money by land developers for
the express use of City reimbursement for professional services (i.e. engineering, legal,
technical, etc.) provided during the review, inspection and approval of specific projects.
Upon City-approved completion of a project any remaining funds are returned to the
developer/applicant.
General Fund Amendments
City Administrator Black stated he received information since the last meeting of the
Committee at which General Fund budget discussions occurred. As a consequence of
new information received, he is anticipating a reduction in General Fund revenues
attributable to Income Tax receipts in the amount of almost $190,000. Projections from
the Illinois Municipal League (IML) provided this amended revenue, which is based on
information received from the Illinois Department of Revenue. He noted the state is
trying to work through the adjustments to the implementation of the new state income
�" tax. Consequently, the IML is recommending municipalities plan for a conservative
$73/capita revenue relating to state income tax receipts.
A brief discussion occurred regarding the status of the state's economy and how it could
potentially impact municipal funding.
City Administrator Black suggested possible adjustments to the proposed General Fund
Budget for 2011/2012. Discussion followed regarding possible means of reducing
General Fund expenditures in light of decreased revenues from the state income tax..
Executive Session: Personnel and Collective Bar�aining
Motion by Wimmer, seconded by Blake, to go into Executive Session to discuss
Personnel and Collective Bargaining at 4:56 p.m.
Voting Aye: Schaefer, Blake, Wimmer.
Voting Nay: None.
Absent: None.
Motion carried.
The Finance and Personnel Committee went into Executive Session at 4:56 p.m.
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Motio�i by Wimmer, seconded by Blake, to go back into Open Session at 5:35 p.m.
Voting Aye: Schaefer, Blake, Wimmer.
Voting Nay: None.
Absent: None.
Motio�i carried. The Committee went back into Open Session at 5:35 p.m.
New Business
It was the consensus of the committee the next meeting will be scheduled for Monday,
April 11, 201 l.
Adiournment
Motion by Wimmer, seconded by Blake, to adjourn the meeting at 5:37 p.m.
Aye: Blake, Schaefer, Wimmer.
Nay: None.
Absent: None.
Motion carried.
Respectfully submitted,
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Je re . aefer, Chai n
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