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.
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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.
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Finance and Personnel Committee Meeting
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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.
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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.
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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").
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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.
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Finance and Personnel Committee Meeting
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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�,
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J ey A. a fer, Chai n
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