Loading...
HomeMy WebLinkAboutMinutes - 12/04/1992 - City CouncilREGULAR MEETING WEDNESDAY, DECEMBER 9, 1992 The Regular Meeting of the McHenry City Council was called to order by Mayor Busse on Wednesday, December 9, 1992 at 7:35 P.M. in the Municipal Center Classroom. At roll call the following Aldermen were present: Bolger, Lieder, Smith, Adams, Serritella, Patterson. Absent: Dohabue, Locke. City Staff in attendance: Assistant to City Clerk Marth, Attorney Narusis, City Administrator Peterson. Absent: City Clerk Gilpin. Other Department Heads were not required to be present. Also in attendance were the following representatives from the School Districts: District #156 Robert Swartzloff, Supt. Jim Finch, Board Member Jim Heffelfinger, Board Member Steve Cuda, Board Member Dorothy Ropp, Board Member District #15 D. William Dodds, Supt. Lucy Fick, Board Pres. Chris Cardamone, Board Member Richard Losch, Board Member Mike Morris, Board Member Paula Ekstrom, Board Member Kenneth Bruce, Board Member Candy Spasojevich Dr. James Mowery, Board Pres. (arrived late due to a prior commitment) Mayor Busse, announced that the meeting would begin with the Public Hearing on the City's Tax Levy for fiscal year 1992-93, with the second portion of the meeting being the joint meeting between the City and School Districts #156 and #15 to discuss the schools' funding crises and possible solutions. PUBLIC INPUT - 10 MINUTE LIMITATION No one signed in to speak. PUBLIC HEARING - 1992-93 TAR LEVY Mayor Busse opened the Public Hearing and announced that Notice of the Hearing was published in the Northwest Herald on November 27, 1992 and that the proposed levy amount to be extended was $1,630,000.00. Busse asked the Assistant to the City Clerk if any comments on the levy had been received and Marth responded that to date no written comments had been received. Busse asked if anyone had any oral comments on the proposed tax levy. There was no response. Motion by Serritella, seconded by Lieder, to adjourn the Public Hearing on the 1992-93 Tax Levy. Voting Aye: Lieder, Bolger, Adams, Smith, Patterson, Serritella. Voting Nay: None. Absent: Locke, Donahue. Motion carried. Mayor Busse adjourned the Public Hearing and stated that the Tax Levy Ordinance would be passed at the December 14, 1922 Regular City Council Meeting. JOINT MEETING BETWEEN CITY OF McHENRY AND McHENRY SCHOOL DIST'S #15 & #156 Oueninic Statements Mayor Busse stated that he hoped this meeting would be the beginning of positive commitments to solving the Schools' funding crises and that the finger -pointing and placing blame on the various governmental units would be in the past. Rehashing the last decade would be counterproductive and could possibly jeopardize any solutions that might come from these meetings. Wednesday, December 9, 1992 Page 2. Busse believed that the reason for the joint meeting was because the public didn't want to hear any more rhetoric or the casting of blame. They want results, he said. In prior meetings between the City and the Schools, information was exchanged and some of the magnitude of the problem was assessed. Busse said we now need to find constructive solutions. He believed that the three most important occurrences that brought the funding crises to the front burner were: 1. The property tax cap legislation which after operating under it for one year, shows disastrous results; 2. The defeat again of District #15 's referendum, which had sobering results; and 3. A lawsuit challenging the integrity and constitutionality of the City's Developer Donation Ordinance, along with possible State legislation to further restrict the City's ability to set and collect developer donation fees which has been proposed recently during the veto session in Springfield. Fortunately, Busse said, the issue is currently dead, but assuredly will be resurrected again in the Spring session for which we need to be prepared. Busse said that if we are unable, for whatever reason, to change the State educational funding for schools, we have no choice but to support our schools locally and by ourselves, for we are ultimately responsible for the quality of our schools and City life. That responsibility includes raising funds and also cutting expenses as the needs dictate. Busse believed the people seated at tonight's meeting have the ability and resourcefulness to help solve the problems, but is won't be easy. By combining resources, Busse said, we have the collective ability to direct resources to the area of greatest need, for the benefit of the community as a whole. Standing alone as separate units of local government, we have no such luxury. Busse said he did not believe that anyone present was prepared to declare a permanent moritorium on annexations in the City and that McHenry has never been or will be a zero growth community. To interfere with demand for housing by controlling or reducing the supply of housing stock would result in higher assessed valuations for everyone and in time that demand, absence supply, would result in a reduction in affordability. That has the potential to hurt many people in the long run, he said. Everyone talks of managed growth, which seems to be very hard to define, but it does need discussion. Busse had hoped the community was heading in the right direction based on the broad mix of land use as seen in the last five to six years. Busse ended his opening statement by stating that a new course for development strategy needs to be addressed and discussed and hopefully it can begin with this meeting with finding areas of agreement and defining areas of disagreement. The Mayor recognized Supt. Swartzloff of District #156. In Dr. Mowery's absence, Supt. Swartzloff read the following prepared statement: "The Board of Education and Administration would first like to thank the Mayor and City Council for their concern regarding the current state of affairs related to the funding crises facing the schools in our community. We also want to express our appreciation for the opportunity to explain the High School District's financial dilemma and the contributing factors. Many people in our community are genuinely concerned about the future of our schools and if we will be able to continue to provide our young people with the quality education necessary to adequately prepare them for their adult lives. Like most other schools in the six -collar counties that are affected by the tax cap, and are experiencing rapid growth, McHenry High School is also experiencing severe financial difficulties. Last year, the District experienced an operating deficit of $452,000. This year the short -fall is projected to be about $70,000, after the Board imposed $154,000 in expenditure reductions, fee increases and new participation fees for sports, driver education and other activities. The Board is currently struggling with a forecasted operating deficit of $665,000 for next year and $945,000 for 1994-95. As a result, the Board and Administration are in the process of Wednesday, December 9, 1992 Page 3. identifying more cuts and fee increases that will be announced in January. In addition, a decision has been made to hold a tax rate increase referendum next November. The factors that have caused schools such as ours to experience these financial problems are primarily the responsibility of our State Legislature. The tax cap has resulted in $320,000 lost revenue for this year and the 3.1% cap for next year will cost us another $716,000 in revenue. The following year it will result in $1,200,000 in lost revenue. In addition, the State share of funding for our District has decreased more than $950,000 over the last three years. Next year State Aid will decrease by another $275,000 and will account for less than 10% of the District's revenue. By 1994-95 we will receive only $33,000 from State Aid - virtually nothing. A drop of $1,630,000 over a five year period. All of this is occurring while the District is growing at a rate of about seventy-five additional students for each of the next five years. We believe the solutions to these funding problems lie primarily with those who created them - the politicians in Springfield. When schools are funded almost entirely by capped property taxes, something is obviously broken and needs to be fixed. We implore you to prevail upon those in our Legislature to repair the current State Aid formula for Districts in the tax capped counties. New residential development is also one of the many factors that impacts upon the schools. We would ask you to consider allowing the schools in our community to be formally involved with the City Council in the process of approving proposed annexations and developments. Since the schools are monetarily affected to a greater extent than any other entity providing vital services, we feel it is essential for the schools to develop a meaningful partnership with you. Your help is essential if we are going to begin to resolve the financial crises we find ourselves in. Thank you again for your concern and your help." School District S15 Board President Lucy Fick was recognized by Mayor Busse, and read the following statement: "District #15 is also pleased to be here this evening and have a format where the two School Districts and the City can address some of the problems facing us all and where hopefully we can find some solutions to these problems. We certainly know that our schools are in a state of crises - no money - no room. Before we can find solutions to this crisis, I think we must understand how it came about. Both School Districts spend considerably less to educate each child than our neighboring Districts do. Right now, District #15 is the lowest in the County and that is before we make $1,000,000 worth of cuts next month, so I do not believe that our problems are caused by mis-management by the school. So what did cause it? If the Council will indulge me for a minute, let me try to illustrate. Assume that our State Legislators determine that the lakes and rivers of Illinois are among our most prized resources and must therefore be protected. To reduce pollution, they pass a law requiring the City of McHenry to supply water and sewer to all homes and businesses on both sides of the Fox River from the McHenry Dam to the Johnsburg Bridge. To offset the impact of this project, the State will donate the necessary pipe. The City however, must find the water and the sewer capacity and pay the labor cost for installing the system. Because this is to protect State resources, the homes and businesses can not be charged. In addition, when the State lawmakers re-evaluate their budget, they say this water and sewer growth is an indicator that McHenry is getting more local funds and therefore repeals its portion of the State income tax in order to give it to a needier municipality. When the City officials protest, they're reminded that there is always the option of raising money with a local referendum. This nightmare is reality for the schools in McHenry. The number of homes whose children we have to service has increased by a staggering number. The growth has been largely residential and at a price level that usually brings school -age children. The State Aid formula does not evaluate whether the growth is the result of residential homes which brings more children or businesses which do not. It simply reduces our State Aid dollars by a larger amount than the new taxes generated by the growth. Our resources have been depleated because of the decisions of others. The school officials are addressing the State Legislature. We are addressing the taxpayers of McHenry Wednesday, December 9, 1992 Page 4. to find solutions to the crises that is before us and we welcome the opportunity to work with you also to find solutions. We are separate taxing bodies. Decisions on streets should be left to your expertise. Decisions on curriculum should be left to ours. Decisions involving the taxpayers' dollars however, must be made with all of us working together as a community. Underfunded schools damage more than the children whose education is short-changed. They damage the entire community and its future. Our working as a community, for the community, is the only way for us to find the answers to the problems that must be solved." Discussion Upon completion of opening statements, lengthy discussion commenced and following are some of the comments, observations and opinions that were made: - A group of approximately 235 people, headed by Richard Goodman, a teacher at District #15, is making a positive effort to solve the current proposed program and teacher cut -backs by working together to raise $1,000,000 through various fund raising projects. Although this effort is only temporary relief, the group hopes it will give the School time until a referendum passes or other ways are found. - The schools spend a great deal of time trying to convince the Legislators, prior to the time a bill is passed, of the devasting effect it will have on the schools. The schools face a double -whammy with the tax cap and reduction in State Aid, because when the assessed valuation goes up, the State Aid is reduced. - McHenry County does not have the needed power in Springfield. This community is looked upon by the Legislature as being a very wealthy, well-off area and they feel why shouldn't this community pay more to fund other needed schools. We need to make a bigger impact on others in addition to our own representatives in Springfield. - The State does not make any adjustment for the tax cap in State Aid. If the recent referendum of the 58� increase in the education fund had passed, it would NOT have affected the State Aid formula. The ONLY thing that affects State Aid is a district's assessed valuation. - The tax cap has kept the schools from getting at the monies that they have been able to survive on in the past. - The High School budget calls for approximately $12,000,000 in revenue; 87.9% comes locally; 10.5% comes from the State and 1.6% comes from the Federal Government. Of the 87.9% local money, 72.3 is tax revenue; about 6% of the 10.5% is general State Aid, which is expeced to drop to zero in the next two years. The remaining 4% comes from transportation aid and special education aid funding. - A formula established last year by both School Districts, shows the kind of money received from a new three -bedroom home is approximately $659 in tax revenue, but generates $917 in operating costs and gives the schools a $258 operating deficit. - The State School Board of Education Task Force, comprised of members from the General Assembly, State Education Board and several educational groups is currently working on formula reform which they hope to propose to the State Board of Education with submittal to the Legislature this spring. But with all the political manuevering by various regions, the possibility of help from this area seems unlikely. - Twenty years ago there was talk about major changes in the State funding formula being needed. Twenty years later, there is still talk. Perhaps with the set up of the Educational Task Force, it may be closer. - The taxing rate that would have been levied had the referendum been successful for District #15, is currently being levied in Crystal Lake. District #15 has managed on a tight budget for the last 25 years to absorb the growth. The tax cap ended that management. Wednesday, December 9, 1992 Page 5. - School District #15's referendum should be the last solution to use for new revenue. The failure of the referendum is a voice of the people on low income or fixed income. These people could loose their homes because of the tax increases and it will be tough to convince them to vote for it. - Development in the City has been put on hold temporarily. Developers are waiting to see what comes out of these meetings and in what direction the community is heading. More and better information is needed on where the students are coming from - whether it's single-family, apartments, condos or multi -family. - School District #15 has approximately $300,000 accumulated in Developer Donation fees and District #156 has a little over $500,000, to be used for classroom construction or expansion. Even if these funds could be used for operations, it would only be enough for half a year. - The most creative attempts at solving the funding crises has to come in the educational fund. That is where the deficit is and where it will continue to grow. Alderman Serritella left the meeting at 10:05 P.M. Solutions Suggested Everyone agreed that help from Springfield was unlikely. That the solution to the schools' funding crises had to be found locally. Following are some of the solutions suggested: - In the future, the City could use a process whereby all new residential developments could be treated at PUD's (Planned Unit Developments). As such, the City has a PUD Review Committee where the Schools could have a seat in the review process which would give them active involvement. - In an annexation agreement, provisions could be made for the prospective home buyer to pay some kind of enrollment fee to the School for the first year, since taxes on a new home are delayed a year in collection but the home buyer would be using the services of the school that first year. - Possibly an increase in the Developer Donation Fees. These are to be reviewed every year with the possibility that they could be raised each year. - Cooperation from the community of engineers, architects, tradespeople to possibly provide services and save money in the construction or repair of schools. - The combining or sharing of uses and money from different governmental units in the construction of buildings, such as building a school where the gym could be used during the day for school purposes but at night and weekends and during the summer could be used by the City as a recreational center. A school learning center could also be a public library. There are creative ways to find solutions to community needs. - Looking at the way Developer Donation fees are divided up among the taxing districts could be a solution, directing those resources, on a temporary basis, to where the greatest need is. - Consolidation of both Districts should be looked at as a solution, to possibly foster greater long term savings for the taxpayers. Action Motion by Adams, seconded by Patterson, to authorize staff to put together recommendations for the Council to consider a change in the ordinance that would create an ad hoc committee, consisting of representatives from both School Districts and the Council, to review developments in terms of their impact on the School Districts. Wednesday, December 9, 1992 Page 6. Voting Aye: Lieder, Bolger, Adams, Smith, Patterson. Voting Nay: None. Absent: Locke, Donahue, Serritella. Motion carried. Another joint meeting will be set for sometime in late January. ADJOURNMENT Motion by Adams, seconded by Smith, to adjourn. Voting Aye: Lieder, Bolger, Adams, Smith, Patterson. Voting Nay: None. Absent: Locke, Donahue, Serritella. Motion carried. Meeting adjourned at 10:30 P.M. A istant to City Clerk or