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HomeMy WebLinkAboutMinutes - 9/14/2009 - Finance and Personnel Committee FINANCE AND PERS�NNEL COMMITTEE MEETING Monday, September 14, 2009 Aldermen's Conference Room, 6:30 p.m. �' In Attendance:Committee Members: Chairman Alderman Murgatroyd, Alderman Schaefer and Alderman Wimmer. Absent: None. Also in Attendance: Alderman Peterson, City Administrator Maxeiner, Assistant City Administrator Hobson, Directar of Finance Black, Police Chief Brogan and City Clerk Jones. Also in Attendance: Assistant Fire Chief Mike Majercik, McHenry Township Fire Protection District Chairman Alderman Murgatroyd called the meeting to order at 6:38p.m. He apologized to the Committee for the delay citing excessive traffic. Discussion: Acauisition of a Wireless Monitoring System Finance Director Black informed the Committee that Northshore Alarm owns and maintains the aIarm monitoring board in the City dispatch center, pursuant to an agreement with the City of McHenry. He noted that the alarm monitoring board is appro�umately 30-years old, is a phone-line based system and is becoming difficult to maintain. Director Black stated that businesses in the City have the option of having their alarms rnonitored by the City (via Northshore) or a private alarm monitoring service. The building code requires that approximately 200 commercial and industrial businesses located within the City to have fire alarms. Currently, an estimated 130 alarms are monitored by the City dispatch center. Staff has ascertained that moving to a wireless system would provide several public safety benefits, including: �-- • A reduced number of false alarms;and • Improved response time for fire ca11s. Alderxnan Peterson arrived at 6:47 p.m. Director Black noted tha.t with the current system, false alarms often occur during power outages and power surges. This type of false alarm would be significantly reduced with a wireless system. Moving to a wireless system is being advocated by both the Police Department and Fire Department. Assistant Chief Majercik informed the Committee that based upon information he has obtained from Algonquin, since the change to wireless equipment, there have been 50% less false fire alarms and 75% less false troub�e (i.e., burglar) alarms. Assistant Chief Majercik opined that within two years every municipality will be on a central(wireless)station. Director Black informed the Committee that municipalities and/or districts tha.t have implemented wireless systems have passed an ordinance which requires all alarms to be monitored by the government entity. In the City of McHenry, this would result in all businesses currently using central alarm services to have their alarms monitored by the City. He noted, however, that a11 users would benefit from fewer false alarnns and better response times, with many seeing no increase in their current monthly rates. Improved response times to fire alarm ca11s would occur since a11 businesses with fire alarm systems would be required to have them monitored by the City's dispatch center. Currently, when a central alarrn monitoring service accepts an alarm, it must be fonvarded to the City's dispatch center, which slows the emergency response time. The cunent process is estimated to sometimes ta.ke up to ten minutes frorn the time of the alarm to the arrival of an emergency responder,which is longer than alarms monitored directly �. by the City's dispatch center. Director Black informed the Committee that currently users with alarms monitored by the City pay, at a minimum, $70 per month ($50 for a telephone line and $20 for each alarm monitored by Northshore Finance and Personnel Committee Meeting �. September 14, 2009 Page 2 Alarm). The monthly phone line charge alone could be as much as $80 per month and monitoring could be as high as $40 per month if the business has both a fire and a burglar alazm. With a wireless system, the City could mainta.in the same monthly charge a.nd generate revenue after appro�mately a 3-year payback period for initial equipment costs. Director Black noted that under the current agreement with Northshore, Northshore charges customers $20 per month and pays the City$5 per month for each customer. Under the agreement the City receives approximately $7,800 in revenue annually. He stated that recently alazm board revenue has declined as businesses within the City have moved to wireless central monitoring systems. Staff research indicates the wireless system initial investment for �uipment purchase and ic►stallation would be approximately $270,000. Ongoing maintenance and operational costs would be $45,000 annually. Upfront cost for the purchase and installation of equipment includes: • The wireless alarm receiver(head-end equipment); • Radio equipment for each end-user; • Ongoing costs for hardware, soflware and radio maintenance. Director Black informed the Committee that based upon estimates, subscriber revenue may recover the initial investment and operation costs in less than three years. Thereafter, an annual revenue of approximately $90,000 would be received by the City. He noted these estimates are preliminary and are dependent upon final pricing from vendor proposals, the number of subscribers on the system and L-- whether purchase of the system is financed or purchased outright. Staff requests that the Committee consider recommending the solicitation of bids to provide a wireless municipal alarm system and maintenance service to the City of McHenry. Cha.irman Alderman Murgatroyd stated that the fact that the equipment could be revenue generating is secondary. The fact that it is a safety concern is primary. Everyone concurred. Alderman Wimmer opined tha.t it makes sense to look into it. Responding to an inquiry from the Committee, Chief Brogan stated that fire alarms are district-wide while burglar alarms are monitored only within the municipality. Motion by Wimmer, seconded by Schaefer, to recommend that Sta.ff prepare a presentation for Council consideration to request bids on a wireless municipal alarm system and maintenance service. Voting Aye: Murgatroyd, Schaefer,Wimmer. Voting Nay: None. Absent: None. Motion carried. Police Chief Brogan and Assistant Fire Chief Majercik departed at 6:55 p.m. Discussion Regarding General Fund Forecast Director Black provided the Committee with a breakdown of the 2008/2009 budget compared to the 2009/2010 budget and the 2009/2010 forecast for informational purposes. � Director Black indicated that expenses are projected to be approximately $160,000 under budget at $16.135 million in 2009/2010. Finance and Personnel Committee Meeting September 14, 2009 � Page 3 Regaxding the �O10/2011 financial outlook, Director Black explained that General Fund revenues are expected to decrease$91,200 (0.6%); from the 2009/2010 budget to$16.247 million. The City will likely see only negligible growth in property tax revenue due to the tax cap limiting levy growth by 0.1%and a limited amount of new property. Sales taxes are projected to increase approximately 3.5% over the 2009/2010 actual amount, while the local share of state replacement ta�� and income tax are expected to decrease slightly. The decrease in grant revenue ($80,500) will be offset by a corresponding decrease in expenses. Preliminary estimates indicate expenses will be $16.881 million, an increase of$586,000 from the prior year's budget. Salary estimates are based on non-represented staff pay remaining at the cunent level and increases for Unit I and Local 150,which currently have open contracts. In the area of benefits,the IMRF employer contribution rate increases 10%, but the City's contribution rate for health insurance should remain relatively stable. Contractual and supply expenses are projected to increase 3%, while risk management fees are expected to increase $60,000. The 2010/2011 projection (and each year thereafter) includes$300,000 for capital equipment. Director Black informed the Committee that the preliminary review and expense estimates indica.te a projected deficit of $673,000 in 2010/2011. In future years, the deficit is projected to increase as "normal" revenue growth does not keep pace with expenditure increases, particularly in the area of salaries and benefits. Director Black conf'irmed the financial conclusions reached during the budget process each of the last two � years, specifically the City is experiencing budget challenges because of structural deficit that is being made worse by the economic downturn. He noted that the financial projections will change particularly as elastic revenue sources (i.e., sales tax and income ta�c) rebound and actions are ta.ken to reduce e�enses. Responding to Alderman Schaefer's inquiry regarding the grant for three police officers, City Administrator Maxeiner informed the Committee that the City has been initially unsuccessful in obtaining the grant. Cha.irman Alderman Murgatroyd suggested that expenditures such as NISRA contributions should be looked at in an�.ffort to ascertain if there are alternative solutions rather than drawing out of the General Fund. Responding to Alderman Schaefer's inquiry regarding Home Rule, Director Black informed the Committee that Hame Rule would be determined in Fiscal Year 2011/2012 based upon the most recent census. He indicated that Home Rule could provide the Gity with some options to generate revenue. City Administrator l�'Iaxeiner informed the Committee that if there is a perception that Horne Rule is being abused, voters can cea.se Home Rule status through a referendum process. He noted that should that oceur it is a lengthy proeess from which a municipality must recover. Citing meeting time constraints, Chairman Alderman Murgatroyd requested that Staff compile a list of matters that need to be addressed and should be considered. Director Black informed the Committee that full funding of the Police Pension Fund should be addressed � sooner rather than later. A brief discussion ensued regarding the deadline for the Police Pension Fund to be fully funded. Finance and Pe�rsonnel Committee Meeting \.- September 14, 2009 Page 4 New Business No new business was discussed. Adiournment Motion by Schaefer, seconded by Wimmer,to adjourn the meeting at 7:16 p.m. Aye: Murgatroyd, Schaefer,Wimmer. Nay: None. Absent: None. Motion carried. Respectfully submitted, � .� ,.�,,,,,- l� Steven C. Murgatroyd, Chair an � �...