HomeMy WebLinkAboutMinutes - 4/16/2008 - Finance and Personnel Committee ,
� FINANCE AND PERSONNEL COMMITTEE MEETING
Wednesday,April 16, 2008
Aldermen's Conference Room, 7:00 p.m.
`-' In Attendance: Committee Members: Chairman Alderman Murgatroyd, Alderman
Schaefer and Alderman Peterson. Absent: None.
Also in Attendance: City Administrator Maxeiner, Assistant City Administrator Hobson,
Director of Finance Black and Deputy City Clerk Kunzer.
Chairman Alderman Murgatroyd called the meeting to order at 7:00 p.m.
Fiscal Year 2008/2009 Budget—Continued Discussion
Proprietary Funds
Finance Director Black stated this evening's discussion would first involve the Proprietary Funds
beginning with the Risk Management Fund. He noted an increase of $15,000 for a total of
$615,000. It is anticipated the premiums could go down neart year.
Director Black noted the Information Technology Fund included a contractual increase of
$10,300 and a small equipment purchase line item of $20,695. The small equipment purchase
was previously in the capital equipment line items; however, as a result of the reduced cost of
replacement work stations, appro�mately $1,000/station, the line item was incorporated into the
small equipment purchases. Fixed assets in IT included the purchase of a new server which
would ultimately replace two operating servers.
Director Black stated the employer share of the Employee Insurance Fund has escalated to $1.75
�. million for the General Fund and $270,000 for the Water Sewer Fund.
The fund has a deficit of $180,000. Director Black reminded the Committee that Staff is
initiating an Employee Committee whose function will be to discuss and find ways to help
reduce the health insurance cost to the City.
Responding to an inquiry from Chairman Murgatroyd, City Administrator Maaceiner stated
retired employees pay health insurance premiums in full.
�ecial Revenue Funds
Director Black noted there is a small increase in the Band Fund which reflects an increase in
contractual expenditures. Last year $9,000 was transferred from the General Fund to cover the
increase.
Responding to an inquiry, Assistant City Administrator Hobson stated the City had received a
grant for the Farmers Market, but was unable to utilize the funds as they were specifically
targeted for a market manager. Since the City had no designated Market Manager, the grant
monies were returned to the State.
Director Black stated the Audit Fund increased due to a 4.3% increase in the second year of a
three-year contract with the City auditor. Brief discussion occurred regarding the reason for the
increase which was due largely to City compliance with GASB requirements.
� Director Black noted the Annexation Fund shows a budgeted amount of $682,500 which
includes a $12,500 transfer to the Capital Improvements Fund to pay for sidewalk improvements
along Barreville Road. He noted the Annexation Fund would be reduced to approximately
� Finance and Peisonnel Committee Meeting
Apri116,2008
Page 2
� $50,000 by the end of the year as a result of paying for improvements to the Public Works
Garage facility.
Responding to an inquiry from Alderman Schaefer, City Administrator Maxeiner stated
Annexation Fees are paid pursuant to the terms of each negotiated annexation agreement.
Sometimes fees are paid at the time of annexation. Other fees may be required at time of building
permitting or when certificate of occupancy is granted.
Director Black stated the Motor Fuel Tax Fund shows an increased expenditure for salt purchase
and calcium chloride. He noted the MFT revenues are distributed by the State on a per capita
basis. Once the special census is completed, the City's MFT Fund per capita payments will
increase accordingly.
Director Black stated with regard to the Developer ponation Fund, the revenue actually needs to
be adjusted as a result of reduced building activity which directly correlates to the fund balance.
He noted a $245,000 transfer to the Recreation Center Construction Fund which represents 50%
of the Parks and Recreation Developer ponations.
Director Black stated the Tax Increment Financing Fund shows a levy of $569,000 which
includes a $70,000 increase over last year's budgeted amount. He noted that bonds will be issued
to finance the remaining phases of the Riverwalk.
Responding to an inquiry from Chairman Murgatroyd, City Administrator Maxeiner stated the
`— $3 million would likely cover property acquisition, engineering and design of the remainder of
the Riverwalk. It would not include the actual construction cost.
Director Black noted the Tourism Fund should include conected expenditures including $60,000
for the purchase and installation of downtown business district signage and a payment of
$14,500 to the McHenry County Convention and Visitor's Bureau Fund.
In response to Alderman Schaefer's question, City Administrator Maxeiner stated the
HoteUMotel Tax is applicable solely to hotels, motels and bed and breakfasts, i.e. overnight
stays.
Regarding the Pageant Fund, Director Black noted no change over last year's budgeted amount.
In response to Alderman Peterson's inquiry, Assistant City Administrator Hobson stated the
miscellaneous funding sources included fund-raising, entry fees, etc.
Capital Projects/Debt Service Funds
Director Black stated there is a projected balance of $3.8 million in the Recreation Center
Construction Fund at year end 2007/2008. Staff is hopeful this would increase to $4 million
during the 2008/2009 fiscal year.
Director Black noted there is no significant change in Special Service Area#lA. Debt service on
the bonds is approximately $53,000 annually for the life of the bonds which results in a City cost
� of$26,550, 100% funded through property t�.
With regard to the Capital Improvements Fund, Director Black stated there is a total
recommended projects budgeted amount of$2.65 million.
,
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April 16,2008
Page 3
� Director Black noted the budgeted amount for Special Service Area #4A is the same as
2007/2008 which is funded 100%through property taxes of impacted property owners.
Director Black stated the Debt Service Fund shows an $88,300 increase due to the purchase of
the Public Warks Garage facility.
Fiduci , Funds
Director Black stated the Employee Flexible Spending Fund is solely employee funded through
payroll contributions with expenditures being made pursuant to IRS permitted expenses.
Director Black noted the Revolving Loan Fund is an interest earning account which incurs no
expenditures annually. Responding to a question by Alderman Schaefer, City Administrator
Maxeiner stated the City advertises the availability of loans through a City brochure and
Chamber of Commerce advertising.
Director Black stated the Police Pension Fund is cunently funded at 65%. By the year 2033, per
State Statute, this fund must be 100% funded. Director Black noted the City contributed
$190,000 less than the annual required contribution recommended by the City actuary. City
Administrator Maxeiner stated the City needs to work toward 100% funding. Fund growth is in
part dependent upon investments made by the Police Commission. The fund increased from 61%
to 65% funding during the past year. In 2033, the Fund would be turned over to the Police
Commission who would then be responsible to maintain the 100% funding.
� Director Black noted the Development Escrow Fund holds deposits made by developers until
such time as certain improvements are completed or in lieu of developer-provided
improvements. These funds are custodial and do not involve the measurement of the results of
operations.
Director Black noted the McHenry Economic Development Fund is targeted to assist in
attracting new business to the community.
Director Black stated the Retained Personnel Fund is used to account funds collected as
reimbursement and expended for third party professional and technical services used to assist or
advise the City in connection with land development.
2008/2009 General Fund—Continued Discussion
Director Black suggested the Committee continue discussions regarding the proposed 2008/2009
General Fund budget.
Responding to a question, City Administrator M�einer noted the cost of living increase for non-
union personnel is based on the property tax cap or the CPI rate effective December 31�`.
Discussion occurred regarding proposed budget reductions by department. Noting the potential
for retirements, City Administrator Maxeiner stated there could be a positive impact on the
health insurance funds of the City.
�,. Alderman Schaefer inquired if Staff had considered holding salaries at the current level. Director
Black responded that could only be done with non-union employees. City Administrator
Maxeiner suggested the Committee not balance the budget at the employees' expense. Further
discussion occurred. Chairman Murgatroyd noted further budget discussions could occur as the
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April 16,2008
Page 4
� year progressed. Following monitoring of actual revenue and expenditures, it is possible that
items currently being cut could be reincorporated back into the budget should revenues permit.
In response to Alderman Schaefer's inquiry, Director Black stated as a result of the City-wide
department reductions, the proposed 2008/2009 General Fund Budget would be balanced. He
noted several items would have to be added back in, such as additional fuel costs and building
security expenses. However, the budget would remain balanced.
Alderman Peterson inquired if there had been any discussions regarding increased revenue
adjustments. Chairman Murgatroyd noted after the overall budget is balanced this year, the
Committee will need to review all revenue sources to determine where adjustments should be
made in order to maintain existing City services.
Some discussion followed regarding the reduction in traffic fine revenue (down $90,000 from
last year) versus the increase in police department overtime. Some concern was expressed
regarding the disparity between the two. Discussion also occuned regarding the City's cost to
provide police staffing, as well as public works and parks department maintenance services for
various events which aze not reimbursed to the City. It was suggested the Committee review the
City's assistance for such events, particularly the large-scale ones, in which City services are
utilized at no cost to the event host. It was noted the City expends approximately $50,000 in
overtime costs for the annual Fiesta Days events.
City Administrator Maxeiner addressed several possible options which are currently being
�-' examined for cost savings through contracting and or out-sourcing services. He stated that once
the investigation and analysis is complete, any recommendations in this area would be brought to
the appropriate committee and City Council.
Discussion occurred regarding possible ways to increase revenue. It was noted the more the City
waives fees for services, the deeper the impact on the direct cost to the City.
Responding to City Administrator Maxeiner's inquiry, the Committee responded they are not
comfortable with the proposed reductions, but realize they are necessary.
Motion by Peterson, seconded by Schaefer, to direct Staff to make the suggested adjustments,
and to send the 2008/2009 Fiscal Year Budget to the City Council for review and consideration
at the Annual Meeting on Apri128, 2008.
Voting Aye: Schaefer, Murgatroyd, Peterson.
Voting Nay: None.
Absent: None.
Motion carried
Other Business
City Administrator M�einer announced an addition to the Agenda for the April 21, 2008
regularly scheduled Council meeting. He stated the flashing pedestrian signals to be located at
the intersection of Dartmoor Drive and Crystal Lake Road is being added to the Agenda. The
cost for the item is $6,500. It is hoped the signals(one for northbound, one for southbound traffic
`..- on Crystal Lake Road), as well as the painted cross walk would be installed and in use for the
last month of the school year.
F'u►ance and Personnel Committee Meeting
Apri116,2008
Page 5
�� In response to Alderman Schaefer's inquiry, City Administrator M�einer stated the introduction
of credit card usage at the administration counter and online is on City Council Agenda for its
Apri121, 2008 regularly scheduled meeting.
Adiournment
Motion by Schaefer, seconded by Peterson, to adjourn the meeting at 8:33 p.m.
Aye: Murgatroyd, Peterson, Schaefer.
Nay: None.
Absent: None.
Motion carried.
Respectfully submitted,
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Steven C. Murgatroyd, Ch man
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