HomeMy WebLinkAboutMinutes - 4/9/2007 - Finance and Personnel Committee FINANCE AND PERSONNEL COMMITTEE MEETING
� Monday,Apri19, 2007
Aldermen's Conference Room, 7:00 p.m.
In Attendance: Committee Members: Alderman Schaefer, Alderman Peterson. Absent:
Chairman Alderman Murgatroyd. Also in Attendance: City Administrator Maxeiner, Finance
Director Black.
Alderman Peterson called the meeting to order at 7:00 p.m. after being informed Chairman
Murgatroyd was tied up at work and would be late to the meeting if he is able to make it at all.
Discussion ReQarding Fiscal Year 2007-2008 Budget
Finance Director Black asked if there were any questions on the material provided at the last
meeting. He explained a handout showing a comparison of the budget from 2006/07 for the
Administration and Building and Grounds departments as compared to the re-organized
Administration Department in the 2007/08 request.
Staff explained the revenue structure in the General Fund and the limitations on these
mechanisms since the city is not home-rule and subject to t� caps. A brief discussion ensued
regarding funding mechanisms available to the city as a non-home rule entity.
There were no further questions regarding the General Fund.
� Director Black introduced the Water Division budget request. He highli�hted the most
significant increases in the request as being in the utilities account for electricity and the direct
and indirect purchase of services from the General Fund. Examples of direct services provided
to the Water and Sewer Fund from the General Fund were provided such as utility billing and
payroll services provided by the Finance Department and vehicle repair services provided by the
Public Works Department on vehicles operated by the utility. Alderman Peterson asked if the
charges in direct and indirect services should have been made in the past. Staff responded that
many of the direct charges were implemented approximately six years ago and that the transition
to a fully funded water and sewer fund has been on�oing. Staff stated that where the direct and
indirect charges were not being assessed to the utility fund, the General Fund was subsidizing the
operation of the Water and Sewer Fund. Consequently, Staff expressed the belief that the direct
and indirect charges for services were correct providing a complete accountin� of the cost to
provide water and sewer services to the customers. Director Black explained the capital requests
of a replacement backhoe and a truck replacement for$45,000 each. The increase in debt service
transfer was also explained as being the Water Division's share of the principal and interest for
the bonds issued to purchase the new Public Works Garage.
For the Wastewater Division, Director Black addressed the significant chan�es from the prior
year's budget. Specifically, he stat�i that the contractual services account decreases $225,000
with the completion of the sewer atlas project. Account 53�5 — Repairs and Maintenance of
Equipment - was questioned by Alderman Schaefer. Staff stated that this account is not
maintenance and repairs for vehicles but for the actual mechanical equipment in the treatment
plants. Director Black noted that the increases in electric rates affect the city as well with a
�— $30,000 increa.�e in the utilities account. The materials and supplies account was discussed with
budgeted costs for chemicals shown as increasing from $130,000 to $160,000. The budget for
Parks and Recreation Committee Meeting
Apri19, 2007
Page 2
`— capital equipment shows the planned purchase of two vehicles—an International dump truck and
a van—both as scheduled replacements of existing vehicles.
Alderman Schaefer asked about staffing at the treatment plants and what will happen when the
central plant is decommissioned. City Administrator Maxeiner replied that the thought is that
some savings :n personnel will be realized since we will no longer be required to duplicate
services at two locations. However, the savings will likely be only one or two positions.
Director Black summarized the Water and Sewer budget request as stable and self-sufficient.
Alderman Peterson asked about the need for rate increa.ses. Staff responded that there is not a
rate increase planned — other than the automatic inflation adjustment - to accommodate this
budget requesi. The existing rate is sufficient to fund this operation as well as fund
approximately $700,000 in necessary infrastructure repair and maintenance items.
Director Black highlighted the Special Revenues funds for the committee. Alderman Schaefer
asked if the city were participating in the countywide tourism board and if we fett we were
getting value from that participation. City Administrator Maxeiner explained the efforts of the
McHenry Area Convention and Visitors Bureau and the exposure provided for McHenry. With
regard to the Pageant Fund, Alderman Schaefer asked how that operated. Staff responded that
for the past two years, the Pageant Fund has been self-sufficient but that Assistant City
Administrator��obson's time is not being chazged to the fund.
�. With regard to the Annexation Fund, Alderman Schaefer asked if this is the only location where
�ravel mining income is being recorded and if the annual amount received is relatively
consistent. Staff responded yes to both questions. Alderman Schaefer asked if the gravel trucks
paid more in vehicle taxes or some other tax. City Administrator Maxeiner replied that there are
no other taxes available to the city that can be charged against the gravel trucks.
With regard to Developer ponations for parks, the committee asked how much is being diverted
to the Recreation Center Construction Fund. Staff responded that 50% of the amount collected
in park donations is earmarked for the Recreation Center. Director Black explained that the
Recreation Center Construction Fund is expected to have a fund balance of approximately $3.3
to$3.4 million at the end of the current fiscal year.
Director Black explained the TIF budget a.nd highlighted the recent information from the County
Clerk on the TIF levy for 2007 in the amount of$502,000. The debt service requirement for
Phase I of the Riverwalk is $228,727 for the current year so there is more than enpugh increment
to meet the city's obligations to date.
City Administrator Maxeiner briefly explained the budget request for capital projects included in
the Capital Improvements Fund and the Utility Improvements Fund. Nine projects are listed in
the request for the Capital Improvements Fund totaling $9.155 million for the current year. Of
that amount, $3.2 million is included for the purchase of the Public Works Garage using bonds
while $3.0 millian is included for Phase II of the Riverwalk. For Phase II, $2.2 million would be
� derived from bonds and the remainder coming from donations from the Riverwalk Foundation.
However, staff pointed out that it would be their recommendation to only proceed with Phase II
if a firm commitment on a second large development project were secured. Grant funding is
shown as approximately $2.2 million for two large transportation projects. $300,000 is identified
Parks and Recreation Committee Meeting
Apri19, 2007
Page 3
� from MFT funding for a small street resurfacing program. The Petersen homestead silo project
is included at $30,000 (grant funded) while $150,000 is included for improvements to the
homestead fro�n park donation fees. City Administrator Maa�einer noted there are no projects
included in the capital projects budget this year requiring the use of General Fund monies.
Finance Direct or Black briefly introduced the Capital Development and Marina Operation
Funds. City Administrator Maxeiner explained the Utility Improvements Fund and the nine
projects includ�:d in the request for 2007/08 totaling appro�mately $3.9 million. Funding for the
projects includ�;s $700,000 from the Water Sewer Fund, $465,000 from developer contributions,
$215,000 from other local governments, and $2.0 million from capital development fees.
The Internal Services Fund and Fiduciary Funds were described by Director Black. City
Administrator '1�axeiner added comments on the Fiduciary Funds stating that these funds are
held by the city but controlled by other parties. The most significant of the Fiduciary Funds is
the Police Pension Fund.
Director Black offered to field any additional questions on the budget. City Administrator
Maxeiner stated that since Chairman Murgatroyd was unable to attend this evening's meetin�, it
was his suggestion to have one final meeting of the committee to provide a wrap-up of the
budget request prior to sending it to the City Council. A date of April 23, 2007 at 6:30 PM was
suggested.
� Motion by Peterson, seconded by Schaefer, to schedule a meeting of the Finance and Personnel
Committee on Monday, Apri123, 2007 at 6:30 p.m. in the Aldermen's Conference Room for the
purpose of a final review of the budget request prior to sending it to the full City Council. All
ayes. Motion carried.
Voting Aye: Schaefer, Peterson.
Voting Nay: None.
Absent: Murgatroyd.
Motion carried.
New Business
There was no New Business.
Adjournment
Motion by Schaefer, seconded by Peterson,to adjourn the meeting at 8:36 p.m.
Voting Aye: Schaefer, Peterson.
Voting Nay: None.
Absent: Mur�atroyd.
Motion carried.
Res ectfully s ,
�
�
Robert J. Peter cting Chairman