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HomeMy WebLinkAboutMinutes - 10/11/2010 - Finance and Personnel Committee FINANCE AND PERSONNEL COMMITTEE MEETING `— Monday, October 11, 2010 Alderman Conference Room, 6:30 p.m. In Attendance: Committee Members: Chairman Alderman Schaefer, Alderman Blake and Alderman Wimmer. Absent: None. Also in Attendance: Mayor Low, Alderman Santi, City Administrator Black, Deputy City Administrator Martin and City Clerk Jones. Alderman Glab arrived at 7:10 p.m. City Attorney McArdle arrived at 7:10 p.m. Chairman Alderman Schaefer called the meeting to order at 6:33 p.m. General Fund Forecast City Administrator Black informed the Committee that the 2009/2010 budget experienced an $89,975 deficit resulting primarily from a significant loss in sales tax and income tax revenue due to the economic downturn. He stated that receipts for these revenue sources were approximately $50,000 less than projected for the fiscal year. However, he noted that conservative budgeting and good fiscal management by the operating departments has resulted in expenditures being approximately $600,000 under budget. As a result, a larger budget deficit was avoided. � City Administrator Black stated that General Fund reserves at the end of the fiscal year totaled $2.51 million, or 15.3% of budgeted expenditures. He informed the Committee that it is the 15% or higher percentage that enables to City to maintain a high rating. 2010/2011 Forecast City Administrator Black informed the Committee that the City's budget for 2010/2011 is $16,294,748, �i decrease of $441,900 (2.7%) from the prior year. The budget includes the elimination of five full-time and one part-time position, as well as a pay freeze for exempt employees and wage concessions from two of the City's bargaining units. Additionally, he indicated that a one time reduction in debt service payments in the amount of $110,000 was realized through refunding a prior bond issue. Also, other cost-cutting measures in the service contract and supply accounts were implemented. City Administrator Black stated that revenues for 2010/2011 are expected to be approximately $16.427 million, $575,000 more than the budgeted amount. The local sales tax is projected to bring in $475,000 in the last four months of the fiscal year and an additional $186,000 in one time revenue was received through the sale of property as part of the Medela expansion. He noted the increases are partially offset by projected shortfalls in the vehicle impound fees, parking fines and vehicle sticker fee revenue. Sales tax and income tax receipts are expected to meet budgeted amounts. � Finance and Personnel Committee Meeting `- October 11, 2010 , Page 2 City Administrator Black informed the Committee that expenses are projected to be approximatel5� $16.377 million. The City's projected year end surplus is expected to be approximately $50,000 and the unreserved fund balance will be approximately $2.56 million, or 15.6% of the City's expenditures. 2011/2012 Financial Outlook City Administrator Black informed the Committee that in 2011/2012 the General Fund revenues are expected to increase $1.4 million from the 2010/2011 budget to $17.84 million. Most of the increase is attributable to an increase in the local sales tax. The City will receive twelve months of this revenue source, rather than just four months, for the first time in 2011/2012. Sales tax receipts and income tax receipts are expected to increase by 1.3% and 3.0%, respectively. Preliminary estimates indicate expenses will be $17.735 million, an increase of$965,000 from the prior year's budget. Salary estimates are preliminary. FOP Unit 1 and Local 150 have agreements in place for the fiscal year. FOP Unit 2 and non-represented employee increases are yet to be determined. In the area of benefits, health and dental benefits continue to be a concern as many employers have seen premium increases exceeding 15% over the previous year. Contractual and supply expenses are projected to increase 3%. The 2011/2012 projection also includes funding for capital equipment. � City Administrator Black stated the financial outlook for the next two years is adequate. The additional sales tax revenue will allow the City to address Police Pension funding and permit funds to be reserved for capital equipment and building improvements for General Fund operating units. City Administrator Black advised that the City will need to continue limiting the growth in expenditures, adjust fees annually and continue strong fiscal management to assure financial stability in future years. City Administrator Black also stated that Staff is researching different methods to bring City residents in compliance regarding the purchase of vehicle stickers annually. It was noted that Antioch attaches the fee for vehicle stickers to the water bill. City Administrator Black informed the Committee that in an effort to guide future financial decision making, Staff would like to discuss amending the City's Financial Policies to address the use of local sales tax revenue. He noted the local sales tax was established to fund the City's Policy Pension contributions, deal with future projected deficits and address capital equipment needs. Staff bclieves it may be useful to modify the financial policies to reflect these goals and establish a Capital Equipment Building Improvement Fund, as a mechanism to reserve funds and plan for future capital equipment and building improvement needs in the General Fund. Responding to an inquiry from the Committee, City Administrator Black announced that there has been no purchase of capital equipment in three years. Chairman Alderman Schaefer opined that establishing a Capital Equipment Building Improvement Fund has merit. Alderman Blake and Alderman Wimmer concurred. � Finance and Personnel Committee Meeting `- October 1 l, 2(110 Page 3 Mayor Low, r•esponding to an inquiry by Chairman Alderman Schaefer regarding TIF funds, stated that the TIF is fine. The City will never be harmed by the TIF. City Administrator Black informed the (�ommittee that the TIF is positive and that revenue continues to come in from the TIF. Citv Administrator/Denartment Head Performance Evaluations City Administrator Black informed the Committee that he has received numerous comments from the Aldermen regarding the difficulty posed by the general performance evaluation form currently in use by the City of McHenry when evaluating the City Administrator and Department Heads. In an effort to address those concerns, Staff obtained information and documents from surrounding municipalities. City Administrator Black provided the Committee with examples of the following: ■ The document currently is use by the City of McHenry to evaluate both the City Administrator and Department Heads ("General Appraisal"); ■ The document used by the City of Woodstock to evaluate the City Manager("City Manager Evaluation Form"); and ■ The document used by the Village of Woodridge to evaluate the Village Administratar("Village Administrator Performance Evaluation"). � Specific concerns regarding the current evaluation document used by the City of McHenry included: ■ Evaluation areas for which the aldermen had insufficient knowledge to form an opinion about an employee; ■ Attendance and project managemendtask completion (which would be more common to an evaluation conducted by a manager having daily contact with an employee). City Administrator Black opined that both the Woodstock and the Woodridge documents appear to use standards better suited for evaluation of the City Administrator by the individual members of the Council. He noted the attached evaluation documents contain fewer criteria and focus more on leadership, management and Council interaction. City Administrator Black informed the Committee that, in some of the other communities contacted, department head evaluations were not performed by the Board or City Council. Rather, their e�-aluations were conducted by the City Administrator, with informal feedback from the board members or aldermen. City Administrator Black opined he believes that the Council should evaluate the Department Heads annually since Council has regular interaction with Department Heads. He then suggested that the City Administrator prepare a separate evaluation on each Department Head and then the two should be compared for a final evaluation. � Finance and Personnel Committee Meeting `- October 11, 2010 Page 4 Alderman Blaice opined that Attachment B, the City of Woodstock City Manager Evaluation Form, appear� to include all the necessary categories. Chairman Alderman Schaefer and Alderman Winimer concurred. Following a brief discussion the Committee concurred that: • Woodstock's City Manager Evaluation Form will be revised to be used by the City of McHenry in evaluation the City Administrator; • The City of McHenry's General Appraisal form will be utilized by the City Administrator and Council in the evaluations of the Department Heads. • Evaluation of the City Administrator and all Department Heads will be conducted prior to the end of the fiscal year; • Deputy City Administrator Martin and Assistant City Administrator Hobson will be included in the evaluation process; � The number of evaluations may be narrowed down in the future, but to start all will be evaluated. Alderman Glab and Attorney McArdle arrived at 7:10 p.m. �.- New Business No new business was discussed. Adiournment Motion by Wimmer, seconded by Blake, to adjourn the meeting at 7:12 p.m. Aye: Blake, Schaefer, Wimmer. Nay: None. Absent: None. Motion carried. Respectfully si�bmitted�, � � �� ; J ey A. a fer, Chai n �