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HomeMy WebLinkAbout23-24 Budgetf""' �•. `,. r. .. i� AU -=: ,K TrI e .� _ ,M,�i`,,,;ryY� _ IN I' Aw I' -'� City of McHenry, Illinois F (2O23/2O24 Annual Budget Table of Contents Letter of Transmittal Introduction....................................................................................................................... 1 Elected Officials, Department Directors and Primary Administrators... all see none 2 History and Demographic Snapshot of McHenry...... Mom Sol sea mammas NEE Sam mammas son man message 3 City of McHenry Strategic Plan Summary.......................................................... 5 Budget Document Guide......... sea losses Iva not Env Eno *am moo new him son @at INS @sages 001 moo Ron Nam moo was Ego beeline 10 Basis of Accounting and Budgeting...... Mae MENNEN moo man seaman man Is@ Become Nam END moo Engage sea oil age 110 Bee 11 Budget Process Summary...... now mob Nam smalls @@Blow won MEG moo Owasso mammas assets gnomon IBM MEN Mae NOREEN age has IRS 12 Budget Process Timeliness. mammas man MOORES 14 City of McHenry Organizational Chart...... summon moo Sol Dan moo motels NEE sea sea omegas 000 min ERE mammas loss 15 PersonnelSummary...... MENNEN Now driver son assets mammas MEN Now MEN agrees mammas Rotor* Noe Pon Mae MENNEN moo Eno massissaff 16 Fund Structure Overview...... oil Bog top moo Mon Mon sun mom smasse esteems@@ mammas BEE GEE GEE mom Nam mammas @so ago goo mom 17 Chart of Accounts Overview. . a 1 0 a 0 0 2 a 0 5 1 1 Igoe Ism mom man MEN mom mom mammas &IN Imasawago Ism Dan son mom mom mom mob Smile 20 Summary of Revenues &Expenditures -All Funds ....................................................... 32 Summary of Proposed Revenues - All Funds... Not now stools mammas low run GEE MENNEN mom mom Norman Real 33 Comparison of Budget vs. Proposed Revenues - All Funds... all Sao Freese mom Monson mammas 34 Summary of Revenues and Other Financing Sources - All Funds .................... 35 Summary of Proposed Expenditures - All Funds... mammas see Neff all III @so goo ME* NOONAN mammas Rome 36 Comparison of Budget vs. Proposed Expenditures - All Funds... mom Kos min tam Ism Damage 37 Expenditures by Function - All Funds............................................................... 38 General Fund Revenues, Expenditures &Fund Balance Summary ............................... 39 General Fund Overview...... son sea IBM Dow BEE mom not Roger* ago mammas naffaff4wom MEE mom ammanwast mom met ago Wagner 40 General Fund Revenues, Expenditures and Fund Balance Summary...... Baltimore 40 General Fund Revenues - Budgeted, Estimated, Proposed......... Dallas Ism egg mammas Iowa 41 General Fund Expenditures - Budgeted, Estimated, Proposed......... Beazer mammas same 45 General Fund - Fund Balance............ gamine mmamoff mom ON& Nam III Eno III gap Egg Dan MEMNON Not mammal EBB Iva III Boom 48 General Fund Operating Budgets...................................................................................... 52 General Fund Operating Budgets Overview ........................... met masons sea all mom mom Ron NONE 53 General Administration...... nor mom son sea son mom MEN mom MONROE 8*2 Boo omegas mammas WEE MENNEN Eno masses Nam sea @Be @so BONN 56 ElectedOfficials... got MENNEN mosses ff Eno a a a a R 0 a a 0 a 0 0 0 ff 0 0 0 ff a ff a 9 a w moo 0 an RES 0 a 0 a 0 0 a 0 2 a 0 ff 0 0 0 in 0 sea 0 a a a a 0 all a I a a 5 a 0 a a a a I a a 0 63 CommunityDevelopment...... Sam obsess see INN Sam MEN mom mom onglassom IBM III @Islas mom MEMNON mammon gas RON Beeson sees 67 Finance... MEMNON oil villas gee ERE mom MENNEN season a a I a I I a 6 4 0 a a 0 a a a a a a a a a a mass sea as loop I a a a 0 0 a 1 0 a a 0 a a a 0 0 0 0 0 U a U a a a ff all a 0 a as I a 0 0 a 75 HumanResources... mammas mammas now mom masserses agrees MEN MEN MEN Mon now min EBB all Sal Egg owl are MENNEN mom Env ON* @as ERE mass 83 Economic Development...... too Warren alp affammm roffamm mom *00111 a 0 a a a I I a a a 0 1 0 0 0 a 0 0 a 0 0 0 a ff 0 0 0 to 2 a U a a a ff I I ff 0 0 a 0 1 1 a R 0 a 90 PoliceCommission...... amalmomom Mao Mon a 0 a 0 a a I I 1 0 us 4 1 a a I a a a a a a a a 0 0 on a a as a so see age Igo sea a 4 a 0 0 0 0 0 0 ff a 0 0 0 0 a a 0 in 0 mom oil 99 Police...................................................................................................................... 102 Public Works - Administration...... was goo mom Mon moo mammas all season@@@ Beg RED NOREEN man mammas Nam gnomon sea logo 129 PublicWorks - Streets................ 0 0 0 on 0 0 0 0 in a a a a go 1 0 4 0 0 a a a 4 ME no on 0 on a a 0 *66 mom sea a a a mom son 0 a 5 0 6 0 a a a ME a a I a a 0 a 139 Parksand Recreation......... mom Env MEN Nam goo ISO I a 1 0 0 0 a 0 a 0 0 0 0 0 0 0 0 b 1 0 a 0 0 8 0 0 1 a a I I I I a 0 0 a 0 0 a a a ff 0 0 a a a 0 a a 0 0 0 06*011000121 147 Special Revenue Funds........................................................................................................ 160 Tourism................................................................................................................... 161 Pageant...... on@ mosimalls sea mom BERNE mammon his @me III mom Mon mom mom mom goals@ Nam mammas see mammas MEN MENNEN mammas be@ Goo NMI sea PRE game 164 Band......................................................................................................................... 167 CivilDefense... Sol now Sam arm Env EMBOSS III arm won MENNEN MENNEN season RES sea age seaman MODERN mom @no mom season mammas egg MEN OWN Emmons 170 AlarmBoard...... NOR Ism Mae Dan mommas all all One Ism Sam MEN Eno mammas oil Boo oil Nagger Ron MENNEN MAN ova MENNEN man sea MR@ VON MEN mmammia 173 Audit........................................................................................................................ 176 Annexation............................................................................................................... 179 MotorFuel Tax...... Now soulas mosses use woussffeas offsomm BROOMS 000055 mosses mossom mannesees emems 182 Developer Donation............ was BOB oil van Ban gag BDREMM emems6mossin gooses masons assmon 186 Tax Increment Finance......... son NNW MEN MEN MEN BAR sonswagoomme Bstoom moommmialass causal museums 189 Capital Projects & Debt Service Funds. . 0 1 5 6 0 5 5 6 1 6 5 5 5 a a 1 0 a a a a a a 0 a I I a 19 a 0 0 0 2 1 ff a a a a I I a a a 2 2 0 a a a I t I V 5 5 1 a 6 5 5 5 5 6 1 a I 1 6 a a a 9 0 0 192 DebtService Fund................................................................................................... 193 Recreation Center Fund.......................................................................................... 196 Special Service Area#4.......................................................................................... 204 Capital Improvements Fund...... Sam Noumea somasomme seammmsEPAO 209 CapitalEquipment Fund......................................................................................... 212 Capital Asset Maintenance & Replacement Fund (New FY23/24)..................... 215 Capital Asset New Projects Fund (New FY23/24)................................................ 250 EnterpriseFunds................................................................................................................. 252 Water& Sewer Fund............ onemns OEM gag a 0 a 0 a a a a a 0 0 a a 2 4 a a 1 9 0 a 2 a a 5 5 5 8 9 a 6 5 5 a 0 0 a a a 0 0 0 a a 9 a a 0 0 253 PublicWorks —Water............................................................................................ 256 Public Works - Wastewater................................................................................... 261 PublicWorks — Utility............................................................................................ 266 Capital Development.................. NOREEN beemmm 279 Utility Improvements............ see mosses Oswego sonwag EnEssammm allovolsouse 282 MarinaOperations...... owsommooff mesons Bosoms mosman mommme mmmmstess III III sommAm allows nommem monseeme 312 Internal Service Funds....................................................................................................... 315 Employee Insurance.................. sea mom NOREEN Memnon smemooffillouNnown 316 RiskManagement...................., mosses nommon monamn SEE mom moo mom won now mom mom mom mom Mon mom MENNEN NNEM20994*68 MENEM 319 FiduciaryFunds................................................................................................................... 322 Employee Flexible Spending............... mom *IT MEMNON mom MENEEMENSEEMENE man nommommannow 119141 assislonoxonooffm 323 Development Escrow............ nommon omegas MOORES sag mom via mom mmmmmmmmmmxzmmmzmm 326 Retained Personnel. . a 0 a a a * 0 a 0 0 * 10 0 a a a 9 a 0 5 4 5 5 5 6 5 5 0 5 0 6 a 6 5 5 6 a a 8 5 a a 4 a a a 0 a I I a I I 1 0 a a mosolowswoon malmmmssannn MENNEN nommoon 329 RevolvingLoan............ onsomm mommem moommm offiffisom Bannon mom MEN Emmannaammmmomm Montag 006*40666 MENNEN MEMO 332 PolicePension............ sommon sommom moommm emommm SUN MENNEN MEN MENNEN Evennnomm Monson Moslem 044 Dobson MENNEN 335 Supplemental Information.................................................................................................. 338 Financial Policies Overview................................................................................... 339 Fund Balance and Reserve Policy.......................................................................... 341 Community Investment Program Financial Policies............ MR&MES1260so mom ZEN mom onsomm mesa 350 InvestmentPolicy................................................................................................... 351 Purchasing Policy and Procedures......... onammusla EBB III Ramada his mom mammon BONN 358 Glossaryof Terms................................................................................................... 360 Derik Morefield, City Administrator McHenry Municipal Center 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 Fax: (815) 363-2119 dmorefield@cityofmchenry.org LETTER OF BUDGET TRANSMITTAL April 17, 2023 Honorable Mayor and City Council and Residents of McHenry: On behalf of the Department Directors and all employees of the City of McHenry, I am pleased to be able to submit for your consideration the Fiscal Year 2022/2023 Budget. The purpose of this Letter of Budget Transmittal is to provide a broad overview of the budget information contained in the detailed budget document that follows. As always, it is the goal of the City Administration to provide the City Council and general public with a budget document that is transparent and provides an accounting for all of the funds that the City receives and expends. BACKGROUND: The City's annual fiscal year budget covers the period beginning May 1st and ending April 30th. The budget document itself, upon completion, contains information relative to estimated revenues and planned operational and capital expenditures for the various funds of the municipality for the identified fiscal year. Although the budget is not formally adopted by the City Council until April of each year, the budget development process officially begins each October with the preparation of the annual tax levy, which is used to fund many of the current programs and services, along with the development/update of the Community Investment Plan. The budget preparation process provides the various divisions and departments of the City with the opportunity to review accomplishments, set goals and objectives, and identify the means for accomplishing these goals and objectives. Every employee of the municipality plays a role in the budgeting process - be it formulation, preparation, implementation, administration, or evaluation. Ultimately, Department Directors, through the Finance Director and City Administrator, are accountable to the City Council and to the residents of McHenry for the performance of departments in meeting the goals and objectives of a full -service municipality, and for the diligent fiscal management of funds, as set forth in the budget document. Department Directors, with input from their respective managers, superintendents and departmental staff, analyze historical data, review existing operational needs, and project anticipated operational needs in order develop line -item budget requests that allow them to 1 maintain or enhance the level of programs and services within their departments. These detailed requests submitted to the City Administrator and Finance Director, and meetings are held with Department Directors to review and adjust requests based on identified need and anticipated revenues, keeping in mind the overall services that the municipality must provide to residents. As always, it is the goal of the City Administration to present Council with a balanced operating budget. This goal is able to be achieved in the attached budget information. The discussion that follows includes analyses and recommendations based on the best available information that staff has at the time of budget development and reflects a commitment to meeting or exceeding budgetary guidelines as established by the National Advisory Council on State and Local Budgeting and the Government Finance Officers Association best practices on budgeting. ANALYSIS -GENERAL FUND: The General Fund represents the core revenue and expense fund for municipal functions. General Fund Revenues are comprised of Intergovernmental sources such as Property Tax, State Sales Tax, Local Sales Tax, State Income Tax, State Replacement Tax, State Pull Tabs, Inter Track Wagering, State Communications Tax, and State Grants; Local Sources such as Franchise Fees, Licenses and Permits, Fines and Forfeitures, Charges for Services, and Interest Income; and Miscellaneous sources such as Donations and Reimbursements for Services. General Fund Expenses include personnel, contractual, supplies and other operating expenses related to the following operating budgets - Administration (100.01), Elected Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets (100.33), Parks and Recreation (100.41), and Parks Maintenance (100.45). Please reference the attached spreadsheet titled "General Fund - Revenues, Expenditures and Fund Balance Summary"for the following discussion. General Fund Revenue. Expenditure and Fund Balance Summary In summary, FY23/24 proposed General Fund Revenues and Expenditures reflect total revenues of $29,575,254 (an increase of $3,060,255 or 11.54% from the FY22/23 Budget amount - Rows 26 Column U), and total operating expenditures of $29,327,699 (an increase of $2,963,126 or 11.24%, less capital, from the FY22/23 Budget amount - Row 37, Column U). This reflects a net difference (revenues over expenditures) of $247,555. Importantly, this means that the proposed General Fund Operating Budget, as presented, is BALANCED. While COVID49 has made many revenues volatile over the last few years, the City has been fortunate to see recovery in many revenue sources. While specifics will be detailed in the discussion that follows, the primary reasons for increases in revenues relate to projections for State Sales Taxes (an increase of $248,402 or 2.7% - Row 10, Column V), Local Sales Taxes an increase of $588,508 or 17.95% - Row 11, Column V), State Income Taxes Can increase of $626,818 or 17.46% - Row 12, Column V), State Replacement Taxes (an increase of $120,000 or 150% - Row 13, Column V) and Reimbursements (an increase of $1,028,477 or 52.20% - Row 22, Column V). These are offset by a decrease to Property Taxes (a decrease of $10,000 or 0.2% - Row 9, Column V) and a decrease to Licenses and Permits (a decrease of $12,500 or 4.07% - Row 19, Column V). Regarding General Fund Expenditures, Personnel costs are proposed to increase by $1,792,644, or 10.51% (Row 29, Column V) due to Union Contract increases, CPI-U increases for non -bargaining unit employees, the addition of 3 police officers, and 2 dispatchers, and higher insurance costs. It should be noted that a portion of the Police Dispatch Center costs and the School Resource Officers that are in the Middle and High schools are offset by General Fund Revenue increases in the form of reimbursements (reflected in Row 22, Column U) from dispatch partner agencies, customers, and the school districts. Most notably, FY23/24 General Fund Expenditures, as proposed, reflect increased Contractual costs of $631,616 or 19.61% (Row 30, Column U) and Supply costs reflect an increase of $105,875 or 10.04% (Row 31, Column U). Reasons for these increases are discussed in detail on page 10 of this memorandum. Finally, the FY23/24 General Fund Expenditures, as identified in this attachment, do not include any transfers for Capital Improvement or Capital Equipment. The Fund Balance Policy defines the process for transferring excess funds to the Capital Improvement and Capital Equipment Funds. In FY22/23 and FY23/24 capital projects have been budgeted in the General Fund using Fund balance which has canceled the Fund Balance transfer that would have occurred during the audit process. Also, with the creation of the ComEd and Nicor Utility Taxes, capital projects will be budgeted using these funds going forward. The Fund Balance and Reserve Policy may need to be addressed in the years ahead if the General Fund Balance continues to grow. Carrying the General Fund Revenue and Expenditure estimates through the end of the fiscal year (April 30th), it is projected that the total General Fund Balance will be $16,967,344 at the end of FY22/23 (Column T, Row 43). As defined in the Fund Balance and Reserve Policy, the estimated required 120-day General Fund Balance Reserve would be $8,787,381 and so the amount projected is approximately $8,179,963 higher than the required General Fund Balance. Included in the General Fund balance is the American Rescue Plan Act COVID funds in the amount of $3,682,586 which staff has reserved for the Route 31 widening capital project. Also included in the General Fund balance are PSAP Grant funds ($769,696) which are reserved specifically for dispatch expenses and are approved for spending by the NERCOM board. The remaining General Fund Balance as of FY22/23 (Column T, Row 47) is the amount that could be reserved for capital projects, but as you will see this amount is much lower after the FY23/24 proposed budget due to increases in operating expenses and capital project expenses. REVENUES: General Fund Revenues - FY22/23 Budgeted, FY22/23 Estimated, FY23/24 Proposed General Fund Revenues are derived from a number of sources - taxes, video gaming, licenses and permits, fines and forfeitures, franchise fees, charges for services, reimbursement for services, donations, interest income, and other miscellaneous sources. While some revenues, like Property Taxes, can be clearly identified and estimated based on the adoption of the annual property tax levy, or based on historical performance, other revenues - such as Sales Taxes and State Income Tax - can be volatile based on economic trends. If anything, the economic recession of 2007/2008 and the current pandemic sent a message to local governments that economic -based revenues are not guaranteed and can fluctuate based on the economy and disposable income. Actions taken at the local level to plan/adjust from this event resulted in the establishment of a "new norm" for future budget considerations. In estimating General Fund Revenues for the purpose of budget development, the City Administration takes a conservative approach in order to: 1) ensure that General Fund Revenue projections are not overstated to avoid deficit spending and the need to utilize the General Fund Balance (e.g., 120 day unassigned fund balance) for operational expenses; 2) limit excessive increases in operating expenditures; and 3) maintain a financial "buffer", in the form of the General Fund Balance, to protect the City from future unforeseen economic threats. Utilizing this philosophy, the City Administration then considers past revenue performance, current economic trends, local economic conditions, and economic forecast models developed by the Illinois Municipal League (IML) for use by local governments in developing revenue projections for the purpose of budget development. FY22/23 Budgeted Revenues (Column S) In FY22/23 total budgeted General Fund Revenues were $26,514,999 (Column S) Row 26). Of this, $5,037,941 (19%) was from Property Taxes, $9,212,492 (34.7%) was from the City's 1% share of the State Sales Tax, $3,277,972 (12.4%) was from the .75% Local Sales Tax, and $3,589,961 (13.5%) came from the City 7s share of the State Income Tax. Revenues derived from these four (4) sources were budgeted at $21,118,366 or 79.6% of total General Fund Revenues. Of the remaining $5,396,633 (20.4%) in budgeted General Fund Revenues, $1,173,889 (4.4%) were from Charges for Services, $1,970,394 (7.4%) from Reimbursement for Services, $341,500 (1.3%) from Fines and Forfeitures, $307,500 (1.2%) from Licenses and Permits, $380,000 (1.4%) from Franchise Fees, $850,000 (3.2%) from Video Gaming, $200,000 from Telecommunications Tax (0.8%) and the remaining $173,350 (0.7%) came from all other sources combined. FY22/23 Estimated Revenues (Column T) The following estimated revenues are based on 10-months of actual revenues and then projected through the remainder of the fiscal year (April 30, 2023). Unfortunately, in some cases this estimation is more difficult than simply dividing the 10-month actual by 10 and multiplying by 12 because of when specific revenues are received. Further, FY22/23 Actual revenues will not be known and confirmed until approximately 2-3 months (June -July) after the close of the fiscal year due to the timing involved with the receipt of state -shared revenues and, ultimately, the completion of the annual audit in September/October 2023, 4- 5 months into the new budget year. At this time, estimated General Fund Revenues are projected to be $31,055,847 (Column T, Row 26) or $4,540,848 (17.1%) higher than FY22/23 Budgeted revenues of $26,514,999. This reflects an estimated increase of $378,456, or 1.2%, from FY21/22 Actual revenues of $30,677,391. Notably, FY22/23 Estimated Revenues, when compared to FY21/22 Actual revenues and FY22/23 Budgeted revenues, highlight the following: • (Row 10) State Sales Tax revenue is projected to be $179,268 (2%) higher than budgeted and $164,355 (1.8%) higher than the FY21/22 Actual amount. • (Row 11) Local Sales Tax revenue is projected to be $562,102 (17.2%) higher than budgeted and $260,000 (7.3%) higher than received in FY21/22. • (Row 10 +Row 11) Combined, total Sales Tax revenue is estimated to be $741,370 (5.9%) higher than budgeted and $424,355 (3.3%) higher than the FY21/22 Actual. State Sales Tax have shown significant signs of an economic recovery since the beginning of COVID49. Also, Local Sales Tax revenues do not include the sale of licensed or titled items - such as cars, boats, motorcycles, etc. As such, while the economic recovery and resulting increase in the sale of licensed vehicles has a positive impact on the City's portion of the State Sales Tax, this aspect has had no impact on Local Sales Tax revenues. • (Row 12) State Income Tax receipts are estimated to be $643,099 (17.9%) higher than budgeted and $68,191 (1.6%) lower than FY2IILLS • (Row 13) State Replacement Tax receipts are estimated to be $174,105 (217.6%) higher than budgeted and $70,000 (38%) higher than FY21/225 • (Row 17) Video Gaming revenues are estimated to be $940,000 or (90,000 (10.6%), higher than budgeted and $33,767 (3.7%) higher than FY21/22. • (Row 20) Fines and Forfeitures revenues are estimated to be $55,525 (16.3%) higher than budgeted and $23,507(5.6%) lower than FY21/22. • (Row 211 Charges for Services revenues are estimated to be $108,577 (9.3%) higher than budgeted and $11,053 (0.9%) higher than FY21/22. • (Row 22) Reimbursements for services revenues are estimated at $580,202 (29.5%) higher than budgeted and $182,352 (6.7%) lower than FY21/22. The large increase over FY22/23 budgeted is due to PSAP Dispatch Funds that were not budgeted for. • (Row 23) Interest Income revenues are estimated to be $322,500 (12900%) higher than budgeted and $312,843 (2573.4%) higher than FY21/22. • (Row 25) Miscellaneous Income revenues are estimated at $1,884,059 (2898.6%) higher than budgeted and $209,064 (9.7%) lower than FY21/22. This is due to ARPA COVID funds received in two installments, one in FY21/22 and one in FY22/23 that were not budgeted for. In summary, FY22/23 Estimated Revenues are projected at $4,540,848 (17.1%) higher than budgeted primarily due to State and Local Sales Tax receipts, State Income Tax, Video Gaming receipts, Fines and Forfeitures, Charges for Services, Interest Income, and Reimbursements. When compared to FY21/22 Actual revenues, total General Fund Revenues increased $378,456 (1.2%), this is primarily due to State and Local Tax receipts, State Replacement Tax, and Interest Income which offset decreases in State Income Tax receipts, Licenses and Permits, Reimbursements, and Miscellaneous Income. FY23/24 Proposed Revenues (Column R) FY23/24 Proposed General Fund Revenues represent a net increase of $3,060,255 (11.5%) from FY22/23 Budgeted revenues and a decrease of $1,102,137 (3.6%) from FY21/22 Actual revenues. Highlights of changes to General Fund Revenues proposed for FY23/24 include: • (Row 9) City Staff did not recommend an increase to the property tax levy and with declining Road and Bridge Taxes, Property Tax revenues are estimated to be $10,000 (0.2%) lower than FY22/23 Budget. • (Row 10) State Sales Tax revenues are proposed at $9,460,894, $248,402 or 2.7% higher than FY22/23 Budget. This is due to the increase in Use Tax from online sales as well as rebounding Sales Taxes. • (Row 11) Local Sales Tax revenues are proposed at $3,866,480, an increase of $588,508 (18%) from the amount budgeted in FY22/23. • (Row 10 +Row 11) Combined State and Local Sales Tax revenues are proposed 4- (Row 12) State Income Tax revenues are proposed at $4,216,779, an increase of $626,818 (17.46%) from FY22/23. Regarding State Income Tax revenues, please note the following: o There are multiple agencies working to restore the Local Government Distributive Fund (LGDF), which includes Income Tax distribution, to its full 10 percent (which was cut to 6% in 2011 and changed a few times since then, but sits at just over 6% currently). Over the years the Governor has proposed cutting an additional 10% from the LGDF. Restoring or cutting these funds could represent a large increase or decrease in revenues. o Staff will continue to watch these developments closely in case expense adjustments need to be made in order to offset the decrease in revenue. • (Row 14) State Telecommunication Tax revenues are proposed at $200,000, which is equal to the amount budgeted in FY22/23, revenues have been declining over the last few years. • (Row17) Video Gaming revenues are proposed at $900,000, a $50,000 (5.88%) increase from FY22/23 Budget amount. • (Row 19) Licenses and Permits revenues are proposed to decrease by $12,500, or 4.07% from the amount budgeted in FY22/23. • (Row 21) Charges and Services revenues are proposed to increase by $39,400, or 3.36% from the amount budgeted in FY22/23. • (Row 22) Reimbursements which includes the Police Dispatch Center revenues derived from partner and customer agencies served through this facility, police school resource reimbursements, police impound fees, and other miscellaneous reimbursements are proposed to increase $1,028,477 or 52.2%. • (Row 23) Interest Income is proposed to increase $347,500 (13900%) due to increasing interest rates. In summary, FY23/24 Proposed Revenues are $3,060,255 (11.54%) higher than budgeted in FY22/23 and $1,480,593 (4.7%)lower than FY22/23 Estimated revenues. The primary reasons for the proposed increase include an increase in State Sales Tax ($248,402), Home Rule Sales Tax ($588,508), an increase to the Income Tax ($626,818), an increase to State Replacement Tax ($120,000, an increase in Video Gaming revenues ($50,000), an increase in Fines and Forfeitures Revenues ($21,500), an increase to Charges and Services revenues ($39,400), an increase to Reimbursement revenues ($1,028,477), and an increase to Interest Income ($347,500) These increases are offset by decreases to Property Tax revenue ($10,000) and Licenses and Permit Revenues ($12,500). EXPENDITURES: General Fund Expenditures - FY22/23 Budgetedl F122/23 Estimated FY23/24 Proposed General Fund Expenditures include personnel, contractual, supplies and other operating expenses related to the following operating budgets - Administration (100.01), Elected Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100,23), Public Works -Administration (100,30), Public Works -Streets (100.33), Parks and Recreation (100,41), and Parks Maintenance (100.45). In addition, the General Fund is the funding source for all capital improvement and capital equipment projects that are not related to water and/or sewer improvements or maintenance projects as these are funded through the Water and Sewer Fund and Capital Development Fund. Finally, the General Fund also serves as a funding source for revenue transfers to other municipal accounts found within Special Revenue Funds, Debt Service Funds, Internal Service Funds, and Fiduciary Funds, FY22/23 Budgeted Expenditures (Column S) In FY22/23, total budgeted expenditures (capital and operating) were $28,122,023. Budgeted capital expenditures were $1,757,450 and budgeted operating expenditures were $26,364,573. While this amount reflected an increase of $2,164,306 (8.3%) from the FY21/22 Actual expenditures (Column R, Row 35), this difference was due to contractual expenses added for street resurfacing as well as personnel expenses. FYZZ/23 Estimated Expenditures (Column T) In general, the City Administration - including Department Directors, Superintendents, and Managers - closely monitor expenditures throughout the year to ensure that operating budgets stay within the approved amounts. Fiscal diligence on behalf of all of these individuals most often results in expenditures being less than the amount budgeted. Even with surging prices due to inflation expenditures have been well managed and continue to fall within the budget. For FY22/23, operating expenditures are estimated at $26,362,142, or $2,431 (0.01%) less than the budgeted amount of $26,364,573. Highlights of changes to FY22/23 Estimated Expenditures include: • (Row 29) Reduced Personnel costs of (t21,458 (0.1QM) resulting from budgeted positions unfilled during the year which were offset slightly by higher overtime costs. • (Row 30) Contractual costs are estimated at $43,736 (1.36) higher than the original budget, but a few budget amendments ($195,285) were completed for the building demolition expenses so overall expenditures are well under budget. • (Row 31) Supply costs are estimated at $14,417 (1.37%) less than budget. • (Row 32) Other estimated expenditures are estimated at $10,292 less than the original budget. • (Row 33) Capital Outlay expenditures are $671,861 more than the original budget, but multiple budget amendments were completed ($905,000) for land acquisition purchases, Phase III building construction, and engineering for ROW from Green to Elm Street. Note: City Administration anticipates changes to FY22/23 Estimated expenditures due to increases or decreases in revenues and expenses through the end of the fiscal year. 17Y23/24 Proposed Expenditures (Column U) FY23/24 Proposed operating expenditures represent an increase of $2,963,126 (11.24%) from the FY22/23 operating Budget amount of $26,364,573. Highlights of changes to General Fund Expenditures proposed for FY23/24 include: • (Row 29) Personnel costs are proposed at $1,792,644, or 10.51%higher in FY23/24 than budgeted in FY22/23 due primarily to position additions, the salary increases included in the union contract, CPI-U increase for non -bargaining unit employees, and increases to health and dental insurance. Personnel costs include salaries, overtime, health/dental/life/vision insurance, FICA, Police Pension and IMRF retirement, and uniforms. There are a number of reasons for this increase. 1. Personnel costs related to salaries only for employees covered by collective bargaining units - IUOE Local 150 (Public Works, Parks employees), FOP Unit 1 (Police Patrol), and FOP Unit 2 (Dispatch) - account for a $153,459 increase in salaries from FY22/23 to FY23/24 due to contract steps and cost of living adjustments. 2. Police Pension costs are proposed at $2,336,528, ($1,665,073 is a transfer to the Debt Service Fund to cover the Pension Obligation Bond) an increase of $46,101. Police Pension costs are determined by an actuary retained by the Police Pension Board and are based on a number of factors, including wages, investment rate, and age of the workforce. The City issued the Pension Obligation Bonds to set the City up to be 100% funded by the required deadline of 2040. 3. Non -bargaining unit employees and Police Sergeants salaries account for a total increase $214,806 of the Personnel costs due to cost -of -living adjustments. Wage increases are included for Police Sergeants and other non - bargaining employees based on the previous year's Consumer Price Index for All Urban Areas (CPI-U), which was 5.46% in 2022. The City Administration has used the CPI-U as the marker for non -bargaining unit employee increases since FY15/16 and in FY23/24 the increases were set at 5% just below the CPI-U. There is no additional merit component proposed for FY23/24. 4. Three additional police officers are included in the FY23/24 budget which adds $302,091 in personnel expenses. Two of these positions are new School Resource Officers which were approved by City Council to be in the middle schools and 70% of the cost will be covered by a reimbursement (included in revenues) from McHenry School District 15, 5. The NERCOM board for the dispatch center approved adding two additional Lead Telecommunicators which adds an additional $241,806 in personnel expenses. These expenses are shared with the NERCOM partners, and the city is responsible for 40.5% of the dispatch expenses. Also, NERCOM has voted once again to use PSAP funds to supplement the budget, in FY22/23 $300,000 was deducted from the expenses. This year all expenses are budgeted and $500,000 in revenues are budgeted to offset part of the expenses. By malting this change, personnel expenses are $300,000 higher than in FY22/23. 6. A Communication Specialist role was added to the Administration budget for FY23/24, per the request of City Council, and this adds $130,051 to the personnel budget. 7. Total Benefit costs are proposed to increase $395,156 due to increases to insurance, FICA, and IMRF costs. • (Row 30) Contractual costs are anticipated to increase by $631,616 (19.61%) from the amount budgeted in FY22/23 due to a few different reasons. 1. Corporate Legal Fees are increased $60,000 to better match actual expenses. 2. An additional $100,00 was added to the Community Development budget for the Comprehensive Plan which includes Downtown. 3. HR Contractual expenses were increased by $23,500 for Gov HR and planning for the City Administrator position. 4. An additional $85,000 was added to the Economic Development budget for the expansion of the Facade Grant program. 5. Contractual Street Resurfacing expenses were increased by (215,000 due to lower than expected expenses in FY22/23 which were carried over. 6. Additional funds were added to other line items due to expected increases in prices due to inflation. • (Row 31) Supplies expenditures are proposed to be increased by 10.04% ($105,875) due to increases in prices for all supplies. • (Row 32) Other expenditures are anticipated to increase by $43,061 (3.38%) due to additional funds budgeted for Economic Incentive Agreements. • (Row 34) Transfers are anticipated to increase by $389,930 (10.36%) due to Risk Management premium increases as well as increases in expenses in the Information Technology department increasing the transfers from the General Fund. GENERAL FUND BALANCE: On February 1, 2016 City Council adopted a new Fund Balance and Reserve Policy that, in summary, established principles and parameters to which balances for all municipal funds would be defined at the beginning of each budget period. This policy, which also meets the reporting requirements of Government Accounting Standards Board (GASB) Statement 54, which requires the formal adoption of a policy for the classification of fund balances to categories other than "unassigned", was established to provide financial stability in the various municipal funds, ensure adequate cash flow for operations, and provide some assurance that the City will be able to respond to emergencies with fiscal strength. In regards to the General Fund Balance, specifically, the Fund Balance and Reserve Policy states: "General Fund -The unrestricted fund balance target should be set at 120 (4 months) of estimated operating expenditures including those expenditures reported in other Governmental Funds that receive annual operating transfers, with the exception of transfers intended to fund capital projects. If the unreserved fund balance falls below 120, a plan will be developed to return to the target balance. If the unreserved fund balance reaches a low of 90-day (3 months), the plan will be implemented to return to the fund balance to the target within a reasonable amount of time. Onetime revenues shall not be used to fund current operations." This level of fund balance shall provide the capacity to: • Offset unexpected downturns in elastic revenues due to fluctuations in the local, state and national economies or the loss of major sales tax contributor(s); • Offset negative fiscal changes brought about by action or legislation of another unit ofgovernment or agency; • Ensure the continued, timely repayment of debt obligations that the City may have in the event of a financial downturn; • Provide a sufficient cash flow for daily financial needs at all times; and, • Provide a funding source for unanticipated expenditures or emergencies that may occur. As identified, the parameters in this policy help to guide the City Administration in the development of the annual budget by ensuring that the General Fund Budget is presented as balanced, revenues over expenditures, while maintaining this reserve. Further, the establishment of the target minimum of 120 days provides clarity in identifying the level of funding that is available - once revenues, expenditures and fund balance are identified - to address the City's capital needs. In other words, any funds remaining after meeting the operational and reserve needs of the municipality are "Assigned for Capital." As a reminder, a combination of the economic recession of 2007/2008 and the loss of a major retailer resulted in the municipality taking measures to freeze or reduce expenditures. This included operating costs and capital improvement and capital equipment projects. In 2009 the City implemented a .5% Local Sales Tax and specifically identified that the additional revenues generated by this should be used for capital projects and Police Pension funding. Since the first full year of implementation of the Local Sales Tax and as a result of a recovering economy, the City has been able to: 1) adopt a balanced General Fund Budget, including meeting Police Pension costs; 2) reintroduce capital improvement and capital equipment projects; and, 3) rebuild the General Fund Balance. In reviewing the General Fund Balance as part of this discussion, the FY22/23 Budget includes a beginning fund balance of $14,702,950 (Column S, Row 6) based on FY21/22 audited financial information. Based on FY22/23 budgeted revenues, operating expenditures, and capital expenditures (which were funded with fund balance), it was anticipated that the ending fund balance would be $13,095,926 (Column S, Row 43); the estimated ending unassigned 120-day fund balance at $9,051,837 (Column S, Row 44); showing a balance to be transferred to the Capital Improvements Fund of $4,044,089 (Column S, Row 45) in developing the FY23/24 Budget. It is important to bring up at this point that the City has implemented two Utility Taxes to address General Fund Capital needs. The ComEd Utility Tax was implemented for capital asset maintenance and replacement and the Nicor Utility Tax was implemented for new capital assets. The Capital Improvement and Capital Equipment Funds will be phased out once projects are completed within those funds and they will be replaced with the Capital Asset Maintenance and Replacement Fund and the Capital Asset New Project Fund. In future years the Fund Balance and Reserve Policy will have to be addressed if Revenues are greater than expenses and what the City will do with the excess funds, for example moving them to one of the new Capital Funds. Currently, the Fund Balance in FY22/23 and FY23/24 is budgeted to be used for capital projects as well as reserved for specific expenses. As in the discussion above, this amount will most likely change upon completion of the annual audit however, this is not done until September/October, 4-S months after the budget is adopted and implemented. ANALYSIS - GENERAL FUND OPERATING DEPARTMENTS: Please reference the attached operating department spreadsheets for the following discussion. General Fund Operating Departments include personnel, contractual, supplies and other operating expenses for the following departments - Administration (100.01), Elected Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets (100.33), Parks and Recreation (100.41), and Parks Maintenance (100.45). These expenditures have already been summarized, in total, as part of the previous discussion of General Fund Revenues and Expenditures. The following narrative will focus on identifying the major points of each operating department. Note, the Budget Variance $ (Column U) and Budget Variance % (Column V) are based on a budget -to -budget comparison from the FY23/24 Budgeted amount to the FY22/23 Budgeted amount. General Administration (100.01) Overall, the Administration operating budget is proposed to increase by $296,377 or 26.5% in FY23/24 (Column U, Row 59). Salary/Benefit costs are identified to increase by a net of $235,341 or 41.19%which includes a new Communications Specialist position which increases the salaries budget $90,000, Non - Bargaining Unit increases of $18,459, Bargaining Unit increases of $1,102 and Benefit increases of $125,780 (due to an expected retirement payout). Contractual expenditures (Row 21) which includes property tax expenses, insurance administrative expenses, shredding, and other miscellaneous administrative costs will decrease $25,000 in FY23/24. Corporate Legal Fees (Row 22) include the City Attorney, Traffic Attorney and Collective Bargaining representation and are identified to increase $60,000 in FY23/240 Other expenditures -which includes Administrative Expenses and internal transfers for Risk Management and Information Technology - is proposed to increase by $24,236 (Column U, Row 45). Elected Officials (100.02) The Elected Officials budget is proposed fora $18,760 decrease, or 22.52%, due to eliminating the administrative expense line item due to the account consistently being at a $0 balance over the last few years. (Column U) Row 37). Community Development (100.03) The Community Development budget is proposed increase $173,276, or 13.13% (Column U, Row 45). Salary/Benefit costs are budgeted to increase by $23,382 (2.6%), which includes $15,888 in non -union salary increases and $7,494 in benefit cost increases. Contractual Services are identified to increase by $125,600 (43.89%) due to the addition of the Downtown Plan to the total Comprehensive Plan expense. Supplies will increase by $5,000 (12.05%), and the internal transfer for Risk Management and Information Technology will increase by $19,294 (21.01%). Finance (100.04) Salary/Benefit costs are anticipated to increase by $20,875 (3.90%) due to non -bargaining unit salary and insurance increases. Contractual Expenses are expected to increase $18,000 (33.9S%) due to higher credit card fees and postage increases. Development Expenses are expected to be $210,000 higher than budgeted in FY22/23 due to the addition of three sales tax Incentives. A vehicle loan was budgeted in FY22/23 but was not initiated so the budget is $144,989 lower in FY23/24. Transfers for Debt Service, Risk Management, Information Technology, and Audit Funds increase $22,317, Human Resources (100.05) Salaries/Benefit costs are budgeted to increase by $10,168 (3.97%) which is primarily due to salary and insurance increases. Contractual Services increase by $27,900 (81.08%) due primarily to the contract with GovHR for the City Administrator hiring process, while Other Expenses for Information Technology transfers increase by $3,787 (20.91%). Economic Development (100.06) Salary/Benefit costs are budgeted to increase by $11,924 (4.22%) due to salary and insurance increases. Contractual Services increase $84,950 (74.5%) due to the expansion of the Facade grant program. Purchase of Services - Information Technology expense increase by $1,828. Police (100.22) The Police budget is proposed at an overall increase of $995,078, or 8.84010 from FY22/23. Salary/Benefit costs are identified to increase by $683,677 due to the addition of three officers for a total of $302,091, sworn salary increases of $161,230 and non -sworn salary increases of $73,585. Benefit increases which include insurance, IMRF, and Police Pension total $146,771. As discussed earlier, Police Pension costs are determined by an actuary retained by the Police Pension Board and are based on a number of factors, including wages, investment rate, and age of the workforce. The City committed to full funding by 2040 which is why the City issued the Pension Obligation Bonds to bring this funding under the City's control with the anticipation that the City will save money. Contractual Services increase by $58,325 due to increased telephone costs and training. Supplies increase by $60,675 due to higher gasoline usage/costs. The Transfer to Risk Management increases $74,890 due to increasing premiums and the Transfer to Information Technology increases by $114,715 due to higher expenses within the IT Fund. Dispatch Center 1100.23) FY23/24 represents the seventh full year of operation for the fully developed, and staffed, dispatch center. The FY17/18 budget established the baseline budget for the dispatch center moving forward. The proposed FY23/24 budget has been presented and approved by the partners of the dispatch center. The total amount proposed for the dispatch center in FY23/24 is $3,156,939. Salaries/Benefit Costs show a net increase of $699,194 because the partners voted to use $300,000 from the PSAP Grant funds received to offset personnel costs for FY22/23 which were excluded from total personnel expenses. For FY23/24 the partners agreed to use $500,000 from the PSAP Grant funds (which are in the General Fund Balance), but this amount was not deducted from total expenses to better track actual expenses versus net of revenue received. The remaining $399,194 increase is due to the addition of 2 Lead Telecommunicators ($241,806) as well as increases in contract and insurance costs ($157,388). As a reminder, this amount is offset by more than $1.8 million in reimbursements as a result of the partnerships with the City of Woodstock, City of Harvard and McHenry Township Fire Protection District and through charges for dispatch services paid by customers of the dispatch center. These are reflected as General Fund Revenues and included in Row 22 of the General Fund - Revenues, Expenditures and Fund Balance Summary sheet. Public Works Administration (100.30) The overall Public Works Administration budget is proposed to increase by $31,802 (6.27%) due to increases to salaries and insurance costs as well as Purchase of Service Transfers for Risk Management and Information Technology. Public Works Streets (100.33) The FY21/22 Public Works Streets budget is proposed to increase by a total of $332,344 (8.62%) from FY22/23. Salaries/Benefits are proposed to increase by $10,692 due to insurance increases. Additionally, Contractual (Row 21) costs have been increased by $277,000 due to carrying over non -spent road resurfacing expenses from FY22/23 to the FY23/24 budget. Materials and Supplies costs are proposed $15,000 higher due to increasing supply costs and additional Forestry programs. Transfers for Risk Management and Information Technology increase $29,652. Parks and Recreation (100.41) As of FY23/24 the Parlcs Maintenance department has been removed from the Parks and Recreation budget, but all programming expenses related to the Recreation Division not associated with the McHenry Recreation Center are still included. Revenues from recreation programming, reflected in General Fund Revenues, offset many of these costs. As proposed the FY23/24 in the Parks and Recreating budget is proposed to decrease by a total of $73,146 (4.38%). Salary/Benefit costs are identified to decrease by a total of $141,187 (16.68%) with the movement of salaries and benefits for the Parks Maintenance Superintendent position to the Parks Maintenance Budget; Contractual Services to decrease by $1,834 (0.63%) due to decreased dues; Supplies to increase by $18,600 (21.26%); and, Other costs to increase by $75,275 due to an increases to the Risk Management, Information Technology, and Recreation Center Transfers. Parks Maintenance (100.45) The Parks maintenance budget is proposed to increase by $226,800, or 17.83% from FY22/23. Salary/Benefit costs are identified to increase $219,800 due to the movement of the Superintendent position from Parks and Recreation department as well as contract and benefit increases. Supplies expenses will increase by $7,000 (5.11%) due to higher gasoline usage/prices. ANALYSIS - MCHENRY RECREATION CENTER: Please reference the attached spreadsheet titled "Recreation Center -Fund Summary" for the following discussion. The McHenry Recreation Center officially opened on February 29, 2016 and, as such, the FY17/18 Budgeted revenues and expenses were developed based on FY16/17 actuals and on the business plan and best estimates available at that time. With more than 800 memberships sold prior to the opening date, the McHenry Recreation Center had exceeded all expectations through its third full year of operation. Unfortunately, during the fourth year of operations the COVID49 pandemic changed the outlook of the Recreation Center Fund and revenues are currently unable to meet the demands of increasing expenses. Staff is working diligently to produce a plan to make sure operating costs are covered with operating revenues. At the close of FY20/21 and FY21/22 the McHenry Recreation Center was required to use $183,183 and $137,793 of the Recreation Center Fund Balance respectively to balance the operating expenses leaving an ending fund balance of $99,076 at the end of FY21/22. This Fund Balance was to be used to pay for future capital needs of the facility and/or any recreation center expansion efforts, but is also available for operating needs. During FY22/23 an additional General Fund transfer was made to the Recreation Center to help cover operating expenses as the Center continued to recover from COVID49 closures and declining memberships. In summary, memberships fell off in FY20/21, stabilized some in FY21/22 and have been slowly increasing in FY22/23 allowing estimated actual revenues to be above budgeted amounts by $49,915 (Columns R and S, Row 30) and FY22/23 expenditures directly related to the operation of the facility (Salaries/Benefits, Contractual Services and Supplies) are estimated at $23,431 higher than the budgeted amounts due to the increased salaries which coincides with higher memberships as well as increased supply costs. In developing the FY23/24 Proposed revenue and expenditures budget, staff continues to estimate revenues conservatively to account for the recent decreases in membership. An increase to the Transfer from the General Fund has been initiated to cover the Recreation Center Debt Service payment due to revenues from memberships slowly increasing due the impacts of the pandemic. Staff is closely watching memberships and actively marketing the Recreation Center. Monthly membership fees have recently been increased to help alleviate some of the increasing operating expenses (i.e., minimum wage increases and material and supplies increases due to inflation). Revenues are proposed at $783,156) which is $116,971 higher than FY22/23. Expenditures for Salaries/Benefits, Contractual Services and Supplies are budgeted at a total of $105,637 (15.45%) higher than FY22/23. Operationally for FY23/24 it is anticipated that the fund will need to use an additional $6,100 of fund balance to cover all expenses. ANALYSIS -WATER AND SEWER FUND: The Water and Sewer Fund is an enterprise fund -that is, a business -type fund utilized to account for operations and activities that are financed and operated in a manner similar to a private business enterprise, and where the cost of providing goods and services to the general public on a continuing basis is expected to be recovered primarily through user charges, including operating costs and capital improvement costs related to the maintenance of the water and sewer utility systems. These fund the operations of the Water, Wastewater and Utility Divisions in the Department of Public Works. The operating functions of these three divisions are to provide a safe and reliable supply of high quality potable water and to protect public health and the environment by treating sewage to meet stringent environmental standards prior to discharge. Of note, the Utility Division was established in FY15/16 combining existing Water and Wastewater Division Maintenance Workers to specifically address utility system maintenance needs more routinely. Prior to this, utility maintenance projects were addressed by either the Water or Wastewater Division and often required coordination with the other division to ensure adequate manpower. The creation of the Utility Division established a more efficient methodology to handle utility maintenance projects. The expenses for the Utility Division are split between the Water and Wastewater Divisions as follows - approximately 63.7% of operating expenses are paid from the Water Division and the remaining 36.3% are paid from the Wastewater Division. Contractual and Materials and Supplies expenses have been moved back to the Water and Sewer Divisions and it has become increasingly more difficult to track and ensure that the correct division is paying for the correct expenses. Capital expenses are charged to the division that benefits from the maintenance project. In general, water and sewer revenues are derived directly from water and sewer sales, base charges, connection fees, and service penalties and should be sufficient to fund the operating and capital costs for the Water, Wastewater and Utility Divisions. Importantly, water and sewer revenues are driven by consumption and, as such, with a growing awareness of water conservancy (which the City supports) and wetter than average summer months, consumption has been relatively flat over the last five years. Prior to FY15/16, water and sewer rates were adjusted annually based primarily on the Consumer Price Index (CPI). Unfortunately, this CPI adjustment did not correlate to the actual cost of operations for McHenry 's Water and Wastewater Divisions and did not account for the specific capital infrastructure needs of the municipality. This resulted in a shortfall in water and sewer revenues and an inability to fund water and sewer capital projects of the existing systems. To address this the City commissioned a water and sewer rate study that was completed in FY13/14A. The results of this analysis identified the need to adjust water and sewer rates at that time and to annually review and adjust water and sewer rates based on operational costs and implement water and sewer base fees to fund utility system capital improvements. As a reminder, rate adjustments were completed during FY21/22 to directly address Capital needs within the Water and Sewer Funds by increasing the Base Fees. As a result of this, water and sewer sales and service penalties will be designated for all operating costs and will be analyzed with the budget process to ensure they meet all operating needs only. The narrative that follows provides a snapshot of the status of the Water and Sewer Fund and identifies operational and capital expenses. Please reference the attached worksheets titled "Water and SewerFund Summary (Fund 510, Department31 Water, Water and Sewer Fund Summary (Fund 510, Department32 Sewer, and Water and Sewer Fund Summary (Fund 510, Department 35 Utility)"for the following discussion. Water and Sewer Fund Revenues. Expenditures and Capital FY23/24 Water Division FY22/23 Water Division operating expenditures are proposed at $2,485,868, an increase of $82,875 from FY22/23. This increase is due primarily to personnel cost contract, non- contract, and benefit increases as well as increases to Materials and Supplies and Transfers to Risk Management, Information Technology and Utility Division. No water rate adjustment is recommended for FY23/24. Water Capital Asset Maintenance and Replacement Projects It is estimated that the new, increased capital base charge of $8 will generate $520,000 in FY23/24 for capital projects. In FY23/24 this amount will be used to fund the following water system capital projects identified in the Community Investment Plan - $100,000 for Well #7 Pump Replacement and Aquifer Rehabilitation, $40,000 for Water Division Work Truck Replacement, $45,000 for Water Division Operator Van Replacement, $150,000 for Water Plant 2 Control Upgrade and MCC Relocation, $75,000 for Water Tower 4 Repainting Design, $25,000 for 117 of a Utility Televising Camera Van (Split with Sewer Division), and $35,000 for Water Plant 2 Aquifer Rehabilitation. FY23/24 Wastewater Division FY22/23 Wastewater Division operating expenditures are projected at $3,543,796, an increase of $236,509 from FY22/23. This increase is due to personnel cost contract, non- contract, and benefit increases as well as utilities and material and supplies costs. A 4% sewer rate increase is recommended for FY23/24. Sewer Capital Asset Maintenance and Replacement Projects It is estimated that the existing $7 capital base charge will generate $500,000 in FY23/24 for capital projects. This amount, along with existing Water and Sewer Fund Balance is used to complete capital projects. In FY23/24 the following sewer capital projects identified in the Community Investment Plan - $145,000 for Millstream Lift Station Control Upgrade, $194,000 for Freund Lift Station Pump and Mechanical Upgrade (Design), $35,000 for WWTP Mixed Liquor Gates, $25,000 for 1/2 of a Utility Televising Camera Van (split with Water Division), $150,000 for Pearl/Lincoln Road, and $325,000 for Sanitary Sewer Lining Annual Program. FY23/24 Utility Division FY22/23 Utility Division operating expenditures are projected at $1,057,870, an increase of $24,670 from FY22/23. Personnel Costs have increased by $19,670 due to contract wage increases and non -union wage increases. As identified in the Water and Wastewater discussions above, the Utility Division is funded through transfers from the Water and Wastewater Division revenues. If in one year the transfers from the Water and Wastewater Division exceed expenses within the department, adjustments are made in following fiscal years. This will result in lower operating budgets for the Water and Wastewater Divisions. ANALYSIS -CAPITAL IMPROVEMENT/CAPITAL EQUIPMENT PROJECTS: As was stated earlier the Capital Improvement/Capital Equipment Funds will be phased out as projects that were budgeted in those two funds are completed. The creation of the Capital Asset Maintenance and Replacement Fund and the Capital Asset New Project Fund using Utility Taxes from ComEd and Nicor have replaced these two funds. The following capital projects have been identified for implementation and funding through the FY23/24 General Fund budget. These include a combination of new projects as well as projects identified for "carryover" or "rebudgeting" from FY22/23 due to timing of the fiscal year end. As a reminder beginning in FY21/22, the Local Street Program is being funded primarily through Motor Fuel Tax revenues (as distinct from General Fund revenues). General Fund Projects using Fund Balance (in Administration Budgetl Those projects with asterisks *are funded in whole or in part from non -municipal sources. Streets/Sidewalks/Signals North Riverside Parking Lot Engineering - $45,000 (Rebudget from FY22/23) North Riverside Parking Lot Construction - $300,000 Petersen Park Paving - $25,000 (Rebudget from FY22/23) South Main Street Parking Lot Engineering - $40,000 (Rebudget from FY22/23) Riverside Streetscape Design - $200,000 (Rebudget from FY22/23) Elm to Green ROW Design - $30,000 (Rebudget from FY22/23) Public Facilities City Entrance Signs - $160,000 (Rebudget from FY22/23) Parks and Recreation Miller Point Construction - $1,590,900 Capital Improvements/Equipment Fund Projects Public Facilities Municipal Parking Lot Resurfacing Design - $5,000 (Rebudget from FY22/23) Fueling Station Design - $15,000 (Rebudget from FY22/23) Public Safety License Plate Reader System - $30,000 (Rebudget from FY22/23) Streets/Sidewalk�Signals Venice Avenue Design - $25,000 (Rebudget from FY22/23) Bull Valley Bike Path Engineering - $3,500 (Rebudget from FY22/23) Capital Asset Maintenance and Replacement Fund Projects Public Facilities City Hall Parking Lot Rehab - $550,000 City Hall Entrance & Doors - $100,000 Public Safety Ballistic Helmet Replacement - $40,000 Body -worn Cameras - $85,000 Parks and Recreation Petersen Park Horse Barn Roof Replacement - $350,000 Freund Field Basketball Court Lighting - $50,000 Knox Park Maintenance Sheds Replacement - $20,000 Jaycees Park Gazebo Roof Replacement - $5,000 Miller Riverfront Gazebo Roof Replacement - $5,000 Motor Pool Patrol SUV Replacement - $128,000 Patrol Utility Vehicle Replacement - $236,000 Vehicle Replacements - $190,000 Streets/Sidewalks/Signals Pearl Street Bridge Deck Oil - $25,000 Motor Fuel Tax/Local Motor Fuel Tax Projects Streets/Sidewalks/Signals Local Street Program - $2,140,000 (MFT) Local Street Program - $705,000 (Streets Expense Line Item) Road & Bridge Funds Street Program - $350,000 (Streets Expense Line Item) Dartmoor Resuracing - $300,000 (Local MFT) Pearl St. ITEP - $25,000* (Rebudget from FY22/23) Green St. STP - $470,206* Total General Fund = $2,390,900 Total Capital Improvements/Equipment Fund = $78,500 Total Capital Maintenance & Replacement Fund = $1,699,000 Total Motor Fuel Tax Fund = $2,865,000 Total Local Motor Fuel Tax Fund = $300,000 Total Non -Municipal Funding Sources = $70,706 Total Amount Funded = $7,404,106 Additional capital projects are included in the Information Technology Fund, Developer Donations Fund, and TIF Fund budgets. Water and Sewer Fund capital improvement and capital equipment projects were included as part of the review of this fund above. �rl' r �01 70 1�',•. ii . Elected Officials Wayne S. Jett, Mayor Ward 1 Victor A. Sand, Alderman Ward 2 Andy Glab, Alderman Ward 3 Frank McClatchey, Alderman Ward 4 Ryan Harding, Alderman Ward 5 Shawn Strach, Alderman Ward 6 Patrick Devine, Alderman Ward 7 Sue Miller, Alderwoman Ci Clerk Trisha Ramel Department Directors and Primary Administrators Derilc Morefield City Administrator John Birlc, Chief of Police Ann Campanella, Director of Human Resources Bill Hobson, Director of Parks and Recreation Carolyn Lynch, Director of Finance Doug Martin, Director of Economic Development Ross Polerecky, Director of Community Development Troy Strange, Director of Public Works Monte Johnson, Deputy City Clerk History and Demographic Snapshot of McHenry McHenry is located in east -central McHenry County, 55 miles northwest of the Chicago Loop and 35 miles from O'Hare International Airport. The City is centered on two major State highways - Illinois Route 31, which runs north/south from Wisconsin to South Elgin; and, Illinois Route 120, which runs east/west from Woodstock to Park City, The City consists of approximately 13 square miles in land area. In 1832 Major William McHenry led an expeditionary force through northern Illinois during the Blacic Hawk War. Settlement of the Fox River Valley began over the next few years, and on the river's west bank, at the site of an old Indian ford, the hamlet of McHenry established in 1836. The McLean, Wheeler, McCullom, and Boone families were influential in the community's earlyyears. A sawmill, hotel, and ferryboat were in operation by 1837 and legislation creating McHenry County was passed that year, and the village served as county seat until 1844. Gristmills started along newly dammed Boone Creels, and a wagon road entered town from the south in 1851. In 1864, the famed Riverside Hotel was built and still stands today. George Gage, who served as the region's first state senator (1854•-1858), owned the lands west of the millpond, and was able to secure the route of the Fox Valley Railroad (afterward a branch of the Chicago & North Western) from Chicago in 1854. Consequently, Gagetown (later West McHenry) began to eclipse the older east side of town containing the Riverside section and Green Street area, once known as Centerville. This can still be detected in the distinct commercial pattern that characterizes McHenry's "downtown." The village incorporated in 1872. Though there were fewer than 800 inhabitants, commerce flourished. By 1876 there were seven churches and over 80 enterprises, including flour mills, harnessmakers, a pickle factory, a brewery, seven saloons, and a newspaper. The newspaper, the McHenry Plaindealer, was in publication from 1875 to 1985. Over the next 50 years McHenry grew slowly. During the 1920's the town became known as a resort destination because of the Fox River, surrounding lakes, and easy accessibility from Chicago. Bands played at local pavilions, trainloads of visitors arrived to tour the famous lotus beds, and summer cottages proliferated along the Fox River. A boat -building industry flourished; marine recreation still remains important. For decades, McHenry took very seriously its title as the "Gateway to the Chain - of -Lakes" and this is still evidenced today in the city's motto "Heart of the Fox River." With the advent of the automobile, State Route 120 crossed the Fox River on a new two-lane bridge. The old wagon trail, now Highway 31, doglegged along the same route for a critical half mile before turning north toward Wisconsin. These configurations effectively relocated the city's commercial center to Route 120, and had the unintended side effect of isolating the original business districts (West Main, Riverside Drive, and Green Street). In spite of its beauty and strong attraction to tourists, McHenry owed her growth to the stability provided by the many farmers who worked the fertile land as well as the establishment of industry with new factories such as Admiral, Borden and The Hunter Boat Company. The Fox River helped facilitate the import and export of lumber, cigars, clay, food products and brewing which all helped 3 draw new residents to the area. The drainage of a large 60 acre pond that previously divided the community in half, contributed to increased development and improved roadways, while the railroad allowed commuters to find this area the perfect place to settle with their families. A new wave of industry, including automotive components, elects onics, and metalworking, swept into town after World War II. The Northern Illinois Medical Center, begun in 1956 as a 23-bed community hospital, evolved into a regional trauma center serving two states. Beginning in the late 1940s, subdivisions were annexed on all sides of the city. By this time, many residents were commuting to work in other localities, including Chicago. McHenry's population tripled from 2,080 in 1950 to 6,772 in 1970, and tripled again to 21,501 in 2000. McHenry's current population is approximately 27,000, including 10,075 households, an average household size of 2.66, and median household income of $68,024. Of the 10,075 households, approximately 7,719 are owner -occupied and 2,356 are renter occupied. The median resident age is 37.1. The City's 2017 EAV was $638,080,968. The City currently has more than 2,000 approved unplatted lots and platted vacant lots. Active subdivisions in the City include: Abbey Ridge, Boone Creek, Burning Tree, Chesapeake Hills, Deerwood Estates, Evergreen Parks, Foxcroft Ridge, Glacier Ridge, Knox Farm, Legend Lakes, Liberty Trails, Lincoln Hills, Martin Woods, Morgan Hill, Oaks at Irish Prairie, Patriot Estates, Prairie Lakes and Preserves at Boone Creek. Total number of businesses in the City is 1,473 and total employment is approximately 19,661, with an employee/residential population ratio of 73:1. The City 's three largest employment sectors, by number of employees, are: Healthcare and Social Assistance: 5,136 employees/26%; Retail Trade: 3,139 employees/16% and Manufacturing: 2,418 employees/ 12.3%. Green Street looi<ing south from State Route 120 (circa 1920's) City of McHenry Strategic Plan Summary Background In the Fall of 2013 the City Council and Department Directors participated in a facilitated strategic planning session and the results of this exercise were compiled and presented to Council in the form of the City of McHenry Comprehensive Strategic Plan document thatwas adopted by Council in August of 2014. In addition to establishing updated Mission and Vision statements, Governing Principles and a Code of Ethics, the plan identified fifty-nine (59) Strategic Goals as guiding principles for decision -malting. 1n the spring of 2016 Staff and Council undertook a review of the plan documentwith a focus towards ensuring that the strategic plan remain relevant to the activities/actions being undertaken by staff and elected officials, to revisit opportunities, and to identify/introduce any new strengths, weaknesses, opportunities, and threats that may need to be incorporated in to the plan. While regular annual or biannual review of the plan is essential to provide for a structured mechanism of update, the plan itself is a "living breathing" documentthat consistently shifts as internal and external factors change. As a result of the initia12014 Strategic Planning Session and the 2016 follow-up review session, the following now serves as McHenry's Strategic Plan. The attributes and identifiable goals that it conveys have been identified as essential for the municipality and, as possible, are incorporated into the annual Capital Improvement Program (CIP) and Annual Budget. Attributes are listed in order of importance based on participant feedback. Mission Statement The City of McHenry is dedicated to providing the citizens, businesses and visitors of McHenry with the highest quality of programs and services in a customer -oriented, efficient and fiscally responsible manner. Mission Accountability As a continuous reminder of the mission, a commitment is made to undertake the following actions: • The mission will be read at the beginning of each meeting of the City Council. (City Council) • The mission will be placed prominently in each addition of the City Newsletter. (Office of the City Adm in istra tor) • The mission will be framed and posted at major portals within all municipal buildings. (Office of the City Administrator, Department Directors) • The mission will be incorporated in to daily decision -making and included in future municipal planning documents. Examples include the annually updated 5-Year Capital Improvement Program and the annual operating Budget. (Office of the CityAdministrator, All) • The mission will be added to letterhead, memos, etc. (Office of the City Administrator, All) • The mission will be added to website and other social media. (Office of the CityAdministrator) 5 Vision To make McHenry a community of choice for living, working and recreating for all, with unique natural resources, abundant cultural opportunities, outstanding neighborhoods, and a vibrant and diverse economy. Governing Principles The values and beliefs guiding the actions of the elected and appointed officials of the City of McHenry shall include the following. • Provide an open and honest government. • Establish an environment that fosters open communication, dialogue, and active listening with both internal and external stakeholders and customers. • Ensure quality, responsive customer service. • Enhance the community's quality of life. • Embrace the diversity of a multi -cultural and multi -generational working environment. • Be fair and objective in making community decisions. • Remember that municipal employees, through their individual and collective abilities to provide quality services and programs to the residents, businesses and visitors of the community, are our most valued asset. Code of Ethics In addition to the guidance of ethical behavior for elected and appointed officials provided in the McHenry City Code (Sec. 2-55 Code of Ethics), the following Code of Ethics shall apply: • Avoid illegalities, improprieties and any perception thereof. • Avoid accusations or perceptions of wrongdoing. • Do what makes the most sense. • Do what is right, not what is easiest. • Be fiscally responsible and manage budgets effectively. • Be proactive, look for ways to anticipate and deal with issues. • Seek innovative ways to improve public services and increase efficiency. • Keep the public informed and provide opportunities for public engagement. Strengths: Physical assets, supplies, talents, etc. that can assist in accomplishing our vision. Attribute Goal To maintain a balanced budget while protecting our healthy reserves, continuing to evaluate our 1. Stable Financial Position annual levy with the potential keeping it flat as long as our reserves are healthy, per our Fund Balance and Reserve Policy. To develop and continue marketing strategy for the Riverwalk and Fox Reiver by expanding and 2. Fox River developing riverfront recreational areas and business opportunities, Retain and support the position of Economic Development Director to actively pursue economic development opportunities and be 3. Economic Development receptive to zoning changes to allow businesses to grow. Diversity of business types identified as important. To maintain and utilize our 600+ acres of park 4. Parks System/Open Space and open space to provide recreational opportunities for residents and visitors. To cooperate with local and area groups, residents, businesses to have events/recreational opportunities. Develop a S. Public Event Coordination plan that allows feedback from the community and use data to develop future events. Increase marketing of municipal and municipally" supported events. To continue to support staff development and provide staff with the tools necessary to be 6. Staff Development successful in a positive work environment respecting their knowledge and expertise. To continue to foster a climate of collaboration 7. Inter Departmental Teamwork amongdepartments and within divisions. Weaknesses: Physical assets, supplies, talents, etc. that are deficient and impede the ability to achieve our vision. Attribute Goal To continue to evaluate and prioritize infrastructure needs, continuously work to 1. Aging Infrastructure leverage non -municipal funding, and attempt to identify consistent funding sources. To continue to promote respect and teamwork, 2. Internal Communication find ways to increase meaningful communication and agree to disagree and move on. 7 To define and prioritize technology needs of the 3. Aging Technology municipality and develop and implement technology lan s . To continuously implement methods for providing enhanced customer service, 4. Public Perception of Government increased information and to make City processes, procedures, intentions, actions as transparent as possible, To develop a methodology for prioritizing code enforcement activities based on Council S. Code Enforcement direction and develop a Code Enforcement Strategy, To continue to coordinate with McHenry County 6. Public Transportation and surrounding communities Ounortunities: Situations that can have a positive effect on the organization if considered or acted upon. Attribute Goal 1. Riverwalk Expansion To review and utilize Riverwalk and Downtown Plans which are already in place and undertake 2. Redevelopment of Central Wastewater additional studies as needed, to ensure Treatment Plant site prioritization and coordination of projects 14 (left). Much of this depends on timing, cost, 3. Miller Point Redevelopment redevelopment opportunities but the City and partners should be prepared to act as 4. Downtown Theater Redevelopment opportunities arise. To evaluate long term feasibility for expansion of the recreation center through assessing S. Recreation Center Expansion community desires and needs with an understanding that future phases are driven by the passage of referenda. To establish the consolidated dispatch facility 6. Dispatch Facility Expansion and continue to promote and attract new customers to the facility. To continue efforts to obtain construction 7. Fox River Access/Boat Ramp permit from the USACE and fund and build the facility. To evaluate and redevelopment the City's 8. Reconstructed City Website and City Council internet website to make it more transparent and user friendly and to take the steps required A/V to be able to either live stream or record stream City Council Meetings. Es' Threats: opposite of opportunities. Factors that can have a negative impact on local government. Attribute Goal To continue efforts to establish an atmosphere of respect and trust through open 1. Council -Council, Council -Staff Trust, Respect communication and cooperation. All on the same team. To maintain the City's financial stability while establishing a financial threshold at a 2. State Budget Crisis "survivable" level to maintain City services while continuing to monitor State 's financial crisis. To explore opportunities for extending the current TIF; coordinate with other taxing 3. Extend the TIF jurisdictions; educate public on benefits of TIF and extension. To develop a comprehensive assessment of all 4. Aging Infrastructure Costs infrastructure and implement a prioritization for replacement — Capital Improvement Plan. To maintain pace of payment on Police Pension and to ensure that we are competitive for S. Pension, Benefit, Insurance Costs insurance and benefits — adjusting employee contributions as necessary. To explore, implement unique opportunities for business incentives for location and expansion 6. Business Incentives that sets McHenry apart as a business -friendly community regardless of the State's issues. E Budget Document Guide This budget document is prepared with two major objectives in mind. First, to provide citizens and others interested in the City's finances with complete and understandable information regarding the budget. The second -is to develop an annual fiscal plan that will assist City leaders in making better decisions and enhance financial accountability. Given the constraints of a small community, this budget document is continually being changed and is coming closer to meeting the requirements as a: Policy Document As a policy document, the City Council has established specific strategies to achieve its goals through policy decisions as noted in the City Administrator's letter of transmittal. These sections include: • A budget message, included in the transmittal letter, that articulates priou•ities and budget issues, particularly major issues affecting budget decisions; • Short-term initiatives that guide development of the budget in the upcoming years and • General information describing each budget unit's prior year accomplishments and budget year goals and objectives. Operations Guide As an operations guide, the budget document describes activities, services, and functions carried out by the organizational units. In addition, it provides an organizational chart and summary of authorized personnel for the prior year and the budget year. Financial Plan As a financial plan, the budget document describes all funds subject to appropriation in the fund structure overview section. In addition, all summaries of all major revenues and expenditures are provided in summary tables. The final budget also includes General Fund revenues for the 2017/18 through 2019/20 fiscal years as well as budget amounts for the current and upcoming years. Finally, the summary section includes information as the projected changes in fund balances for all appropriated funds. Communication Device The Budget Document contains narratives, supplemented with tables and charts, which present the budget in a manner that is simple and understandable. The Proposed FY23/24 Budget is available for public review at the McHenry Municipal Center, 333 S. Green Street, McHenry, as well as on the City's website at www.ciityofmchenry.org prior to adoption by the City Council. Once adopted, the budget is available for public review atthe McHenry Municipal Center, 333 S. Green Street, McHenry, as well as on the City's website at www.cityofmchenry.org. 10 Basis of Accounting and Budgetin The City of McHenry uses the modified accrual basis of accounting to budget and account for transactions of the governmental funds. Under this basis of accounting, revenues are recognized when susceptible to accrual (when they are measurable and available) and expenditures are recognized when the fund liability is incurred. For the City's proprietary funds the City uses the accrual basis of accounting. Under this basis, revenues are recorded when earned and expenses are recorded when the liability is incurred. The City prepares the budgets for proprietary funds consistent with this basis except that capital outlay items are included in the budget. The City prepares its budget on a basis consistent with generally accepted accounting principles except that the City also recognizes encumbrances for budgetary purposes. Encumbrances include supplies ordered but not received, and services contracted but not yet expended by the City. Encumbrances are charged against a budget or appropriation for account purposes. Accordingly, expenditures/expenses in this document include encumbered expenditures/expenses. Encumbrances do not lapse at year-end and provide authorization for expenditures/expenses for the foRowing year. The City appropriates funds for capital projects on a fiscal year basis. The Capital Projects section of this document includes descriptive information on each project with estimated costs and financing sources. 11 Budget Process Summa Budget Process Overview The City's annual fiscal year budget covers the period beginning May 1st and ending April 30th and contains information relative to estimated revenues and planned operational and, capital expenditures for the various funds of the municipality for the identified fiscal year. Although the budget is not formally adopted by the City Council until April of each year, the Uudget development process officially begins each Octoberwith the preparation of the annual tax levy, which is used to fund many of the current programs and services, along with the development/update of the five-year Capital Improvement Program (CIP). The budget preparation process provides the various divisions and departments of the City with the opportunity to review accomplishments, set goals and objectives, and identify the means for accomplishing these goals and objectives. Capital Improvement Plan/Community Investment Plant Previous to FY21/22 the City of McHenry utilized a five-year Capital Improvement Program (CIP) as a planning tool for the identification of capital improvement and capital equipment projects. In an effort to develop a more useful short and long-term planning and budgeting tool for capital improvement and capital equipment items the City Administration, led by the Director of Public Works, is in the process of developing a new Community Investment Plan document to replace the Capital Improvement Plan beginning in FY22/23. This document will provide more accurate financials for capital acquisition and replacement over a 20-year period. This document will also be reviewed and updated on annual basis, Budget Roles and Responsibilities Every employee of the municipality plays a role in the budgeting process — be it formulation, preparation, implementation, administration, or evaluation. Ultimately, Department Directors, through the City Administrator, are accountable to the City Council and to the residents of McHenry for the performance of departments in meeting goals and objectives as they are laid out in the budget document. Department Directors, with input from their respective managers, superintendents and departmental staff analyze historical data, review existing operational needs, and project anticipated operational needs in order develop detailed line -item budget requests that allow them to maintain or enhance the level of programs and services within their departments. These detailed requests are then submitted to the City Administrator and Finance Director, meetings are held with Department Directors to adjust requests based on anticipated revenues keeping in mind the overall needs of the municipality, and the fund line item requests found in the attached budget document are identified. Budget Appropriation and Supplemental Appropriation While the approved budget document establishes the estimates for revenues and guidelines for expenditures of the municipality, the City is required to conduct a public hearing and adopt an annual appropriation ordinance each July. The appropriation ordinance provides the legal authority to allocate funds to specific spending activities and establishes the City's legal spending limit for the fiscal year. During the fiscal year it may be necessary, from time to time, to amend the approved budget (see Budget Amendment Process below). As a result, in October following the close of the fiscal year 12 period (April 30111) the City is required to pass a supplemental appropriation ordinance to amend the original appropriation ordinance to account for these budget amendments. Budget Amendment Process While budgets are prepared at the operational line item level and approved by Council at the fund line item level, budget amendments are brought before Council, per the Purchasing Policy and Procedures approved in 2016 and updated in 2020. Budgetary Controls Without proper internal financial controls, the budget document will not serve its role as a guidance tool for City programs and projects. To this end, the Finance Department prepares monthly reports which are reviewed by the Finance Director, respective Department Directors, and the City Administrator. These monthly reviews provide, at a minimum, an opportunity to make operational adjustments throughout the year as necessary. Any deviations from the fund budgetary amounts are discussed in this document and, when necessary, solutions are presented. Quarterly financial reports are also transmitted to the City Council via a City Council Meeting Consent Agenda to ensure that the elected body is consistently apprised of the status of municipal revenues and expenditures. Preparation to Achieve the Government Finance Officers Association (GEOA) Budget Award Beginning with the FY15/16 Budget, the City Administration committed to undertaking continuous improvements to the annual budget document that achieves the highest quality and reflects both the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA best practices on budgeting. While some of these improvements are subtle, or related to unseen operational modifications, others are more visible - such as the redevelopment of the budget to its current form aimed at providing the reader with a more understandable and transparent document. 13 Budget Process Timeline Tuesday, January 3, 2023 City Administrator, Finance Director distributes instructions for budget preparation to Department Directors Friday, January 20, 2023 Department Directors submit budget requests to City Administrator and Finance Director - revenues and expenditures only (no narratives) January 23-February 3, 2023 City Administrator and Finance Director review budget requests with respective Department Directors Friday, February 3, 2023 Department Directors submit completed budget narratives to City Administrator February 6 -March 3, 2023 Preparation of the Draft FY23/24 Budget Monday, March 6, 2023 Transmit Draft FY23/24 Budget to City Council (operating funds) Monday, March 20, 2023 City Council Regular Meeting -Discussion of Draft FY23/24 Budget (operating funds) Monday, Apri13, 2023 City Council Regular Meeting -Discussion of Draft FY23/24 Budget (all funds) Monday, April 10, 2023 Final FY23/24- Budget (including narratives) transmitted to City Council Apri] 17, 2023 Annual Meeting - FY23/2A Budget adopted by City Council 14 Mayor and City Council City Clerk Office of the City Deputy City Administrator Clerk/Executive Assistant Parks & Community Economic Finance Public Works Human Police Recreation Development Development Resources Parks Planning & Accounts Treatment Field Operations Maintenance Zoning Payable Operations Operations Division Recreation Center Commercial Accounts Water Streets Support Services Inspections Receivable Division Division Division Aquatic Residential Utility Sewer Utility NERCOM Center Inspections Billing Division Division Dispatch Recreation Code Information Programs Enforcement , , • Technology Municipal Center Maintenance Personnel Summary The following table provides a summary overview of the staffing level of the municipality for the previous five (5) fiscal years and identifies the proposed staffing level for FY21/22. The increase in staffing levels in the General Fut1d from FY15/16 to FY17/18 of 15.42 employees was primarily due to the development of the consolidated 911 dispatch center (NERCOM). During this time period, ten (10) new dispatchers and one (1) civilian supervisor have been hired to fully staff this facility. Importantly, the City of McHenry is responsible for only 46.8% of NERCOM personnel costs due to partnerships with the City of Woodstock, City of Harvard and the McHenry Township Fire Protection District which, through center revenues, pay the remainder of the costs. Prior to this consolidation, the General Fund totaled 111.98 employees - 20.57 employees LESS than FY07/08 when measures were taken to reduce staffing due to the recession. Staffing identified in the Recreation Center and Water and Sewer Funds is financed by revenues generated by these funds. Authorized Personnel Prior FY Proposed 22/23 21/22 i t16/17 General fund Administration 1.00 5.00 4.00 4.00 IN IN IN 6.00 6.00 Elected Officials 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Community Development 0.00 8.00 8.00 7.00 7.50 7.50 6.50 7.90 7.90 Finance Department 0.00 5.00 5.00 5.00 5.00 5.00 6.00 5.00 5.00 Human Resource Department 0.00 2.00 2.00 IN 2.00 2.00 1.00 0.00 0.00 Economic Development Department 0.00 2.00 Z.00 2.00 2.00 2.00 3.00 0.00 0.00 Police Department IN 57.00 54.00 53.75 54.75 54.75 52.75 52.75 51.75 NERCOM (Dispatch) 2400 25.00 23.00 23.25 23.25 23.25 22.25 22.25 12.25 Public Works Administration 0200 3.00 IN IN IN 3.50 3.50 IS 4.5 Public Works Streets 1.00 13.00 14.00 14.00 17.00 19.00 19.00 19.00 18.00 Parks and Recreation 7.80 3.50 11.30 10.75 10.75 10.50 9.25 11.00 11.00 Parks Maintenance 8200 8.00 0.00 0.00 0.00 0.00 0.00 0.00 0100 Total General Fund 5.20 131.50 126.30 124.75 128.25 130.50 126.25 127.40 116.40 Recreation Center Fund 0,20 1.30 1.50 2.05 2.05 1 2000 2.25 1.00 1.00 Information Technology Fund 0.00 3.00 3.00 2.00 2.00 2.00 2.00 2000 2.00 Water and Sewer Fund Water Division 0.00 4.50 4.50 5.00 5.50 5.50 5.50 5.50 5.50 Wastewater Division 0.00 8.50 8.50 9.00 8.00 8.00 8.00 9.00 7.00 Utility Division 1.00 7.00 8.00 7.00 8.00 8.00 8.00 8200 9.00 Total Water and Sewer Fund 0.00 20.00 21.00 21.00 21.50 21.50 21.50 22.50 21.50 Total Cit of McHenry 4.00 155.80 151.80 1 149.80 153.80 156.00 152,00 152.90 140.90 Population 27,135 27,135 26,992 26,992 26,992 26,992 26,992 26,992 Employees per 1,000 Population 5.74 5,59 5.55 5.70 5.78 5.67 5.66 5.22 16 Fund Structure Overview The accounting system and the budget appropriation process are structured according to the basic guidelines established by the Government Finance Officers Association (GFOA) of the United States and Canada. The format includes the basic funds and fund types which follow. The City's governmental funds are as follows: General Fund (100s) This fund accounts for all transactions of the city that pertain to the general administration of the city and the services traditionally provided to its citizens. This includes Administration, Elected Officials, Community Development, Finance, Police, Public Works Administration, Streets, and Parks and Recreation. Special Revenue Funds (200s) These funds are utilized to account for revenues derived from specific sources which are usually required by law or regulation to be accounted for as separate funds. For the City of McHenry these funds include the Tourism Fund, Pageant Fund, Band Fund, Civil Defense Fund, Alarm Board Fund, Audit Fund, Annexation Fund, Motor Fuel Tax Fund, Developer Donation Fund, and Tax Increment Fund. Debt Service Fund (300) This fund accounts for the accumulation of revenues for and payment of principal and interest on general obligation longterm debt. Capital Improvements Fund (440) and Capital Equipment Fund (450) These funds are utilized to account for financial resources to be used for the acquisition or construction of capital facilities or other major fixed assets. The City's business -type funds include the following: Enterprise Funds (500s) These funds are utilized to account for operations and activities that are financed and operated in a manner similar to a private business enterprise, and where the cost of providing goods and services to the general public on a continuing basis is expected to be recovered primarily through user charges. The City has also established Enterprise Funds when it was advantageous to segregate revenues earned and expenses incurred for an operation for purposes of capital maintenance, public policy, management control or accountability. Enterprise Funds for the City include the Water and Sewer Fund, Capital Development Fund, Utility Improvements Fund, and Marina Operations Fund. Internal Service Funds (600s) These funds are established to finance and account for services and/or commodities furnished by one department or agency to other departments or agencies of the city. The Internal Service Funds of the City are the Employee Insurance Fund, Risk Management Fund, and Information Technology Fund. 17 The City's other funds include the following: Fiduciary Funds t. a) These funds are used to account for resources held for the benefit of parties outside the city. The fiduciary funds of the city are the Employee Flexible Spending Fund, Developmental Escrow Fund, Retained Personnel Fund, Revolving Loan Fund, and the Police Pension Trust Fund. Accounting for the financial activities of the City and the budget appropriation process are also presented according to classifications required by the State of Illinois. Revenues are credited to individual fund types while expenditures/expenses are recorded according to functional areas within specific funds for budgetary control purposes. The following functional areas are included in the budget: Genet•al Government This function provides for the operation of the government and assures the general administration of the municipality. Activities included in this function also include Economic Development, Human Resources, Information Technology and Municipal Center Building and Grounds Maintenance. Community Development The overall mission of this function is to protect and promote the health, welfare, safety and quality of life of McHenry Citizens, property owners, visitors and commercial interests through the development and implementation of the City's adopted ordinances and policies. Planning and development activities are also included within this function. Finance This function applies modern financial managementpractices to ensure thatthe City is able to deliver services effectively and efficiently on a sustained basis. Activities included in this function are reporting financial transactions, billing and collecting money, accounts payable, managing cash and investments, preparing the annual financial report, and developing the budget and financial forecasts. Public Safety This function provides for services to t•educe the amount and effects of external hat•m to individuals and damage to property, and in general to promote an atmosphere of personal security from external events. Public Works This function provides for safe and well -maintained infrastructure for the City. Activities included in this function are public works administration, roadway maintenance, snow and ice control, street cleaning, traffic control and engineering. Parks and Recreation This function promotes the genet•al well-being of the City and encourages the fullest development of cultural and educational potentials of the citizens in the community. This function includes the activities of general parks, parks and maintenance, downtown maintenance and programs. Debt Service This function provides for the accumulation of resources for and the payment of principal and interest on long-term debt of the City. �E Capital Projects This function provides for the acquisition or construction of major capital facilities or equipment for the City. Business -Type Activities This function includes activities of the City that are financed in whole, or in part, by fees charged to external parties for goods and services. These activities are accounted for as enterprise funds and include the Water and Sewer and Marina Operations Funds. 19 Chart of Accounts Overview Funds are comprised of various line item accounts. These are separated as "Revenues" and/or "Expenses" as appropriate and are assigned based on the following specific line item designations. Revenues 3010 Property Tax Collection -Amount collected in taxes assessed on teal estate, 3020 Property Tax Collection -Road &Bridge -Amount collected in taxes assessed on real estate by the McHenry and Nunda Township Road Districts and disbursed to the City for roads and bridges within the City. 3030 Pt•opet•ty Tax Collection -Police Protection -Amount collected in taxes assessed on teal estate that funds a portion of police protection expenses. 3040 Property Tax Collection -Retirement -Amount collected in taxes assessed on real estate that funds a portion of retirement expenses, 3050 Property Tax Collection -Liability Insurance -Amount collected in taxes assessed on real estate that funds a portion of liability insurance expenses. 3051 Property Tax Collection -Police Pension -Amount collected in taxes assessed on real estate that funds the actuarial required contribution to the police pension fund. 3110 Personal Property Replacement Taxes -Revenues collected by the State of Illinois and dI sbursed to the City to replace money that was lost by local governments when their powers to impose personal property taxes on corporations, partnerships, and other business entities was taken away in 1979. These funds are limited to use for retirement funding. 3120 State Sales Taxes -The state collects a I tax on a seller's receipts from sales of tangible personal property for use or consumption that is distributed based on sales in the City. 3121 Home Rule Sales Taxes The state collects a 0.5%tax on a seller's receipts from sales of tangible personal property for• use or consumption that is distributed based on sales in the City. This home rule sales tax is not charged on sales of vehicles. 3125 Telecommunications Taxes -The state collects an 8%tax that is imposed on intrastate and intet•state messages and 1% is distributed to the City. 3130 State Income Taxes -Amount collected in taxes imposed on financial income generated by all entities within the State. The State distributes 8% of the net collections of all income tax received from individuals, trusts, and estates and 9.14% of the net collections of all income tax received from corporations to local governments based on the population in proportion to the total state population. 3140 Pull Tabs -Amount collected by the State and disbursed to the City for operator licenses and taxes on gross proceeds of pull tabs and jar games, 20 3141 Inter -Track Wagering - Amount collected for a 1% tax collected on the handle at I rackside McHenry Off Track Betting establishments within the City. 3142 Hotel/Motel Taxes -Amount collected For a 5%tax assessed on the rental or leasing charges for hotel or motel rooms. 3150 Motor Fuel Tax Allotment -Taxes collected on gasoline and diesel fuel collected by the State and disbursed to the City based on the population. 3210 Interest Income - Interest earned on cash temporarily held in checking accounts, certificates of deposits, or other investments. 3310 Liquor Licenses -Amount paid by establishments within the City that hold valid liquor licenses. 3320 City Licenses -Amount collected from businesses within the City for licenses for massage parlors, athletic exhibitions for profit, billiard and pool halls, carnivals, circuses, exhibitions, motion pictures and theatricals, public dance halls, skating rinks, bowling alleys, and mechanical amusement. 3330 Vehicle Sticl�ers -Amount paid annually by residents for each licensed motor vehicle owned and operated by them. 3350 Video Gambling Licenses -Amount paid annually by each private business and terminal operator for a video gambling license. Also includes the amount disbursed by the State of Illinois for the City's portion of the video gaming tax. 3410 Permits -Amount collected to issue a building permit for miscellaneous improvements such as roof repairs, siding repairs, fences, etc. 3420 Plumbinglnspections -Amount collected for the inspection of the connection to a water main through a permit fee. 3430 Zoning &Plat Fees -Amount collected for residents or business owners to have a hearing before the planning & zoning commission for items like conditional use permits, variances, etc. 3505 Traffic Fines -Amount collected by the McHenry County Circuit Clerk's office and forwarded to the City for traffic fines that occurred within the City. 3510 Parking Fines -Amount collected in fines for parking violations. 3515 Police -Accident Reports -Amount collected for administrative fees to furnish accident reports. 3520 Police -Field Reports -Amount collected for administrative fees to furnish field reports. 3 525 Drug Asset Forfeitures -Amount collected through the sale of assets that were forfeited. 3530 DUI Fines -Amount collected by the McHenry County Circuit Clerks office and forwarded to the City for DUI charges. 21 3532 Overweight Truck Permits Amount collected for the issuance of overweight truck permits. 3536 Police Bail Bond Processing Fees - Amount collected in fees to process bail paperwork. 3537 Police Impound Fees -Amount collected as an administrative penalty for a motor vehicle that is used in connection with the following driving violations such as driving under the influence, driving while license is suspended or revoked, no valid driver's license, etc. 353f3 Warrant Execution -Amount received from other governmental agencies for the execution of a warrant by the City's police department. 3539 Electronic Citation -Amount collected by the McHenry County Circuit Clerlc and forwarded to the City for electronic citation. 3540 Vehicle License Fines -Amount collected for fines for vehicle stickers that are purchased after the due date of June 30th. 3545 Vehicle Fund Fines -Amount collected by the McHenry County Circuit Clerlc and forwarded to the City for vehicle court supervision fines. 3610 Sales -Water/Sewer -Amount collected For water and sewer usage based on meter readings charged at a per 1,000 gallon rate. 3615 Base Charge -Capital -Amount collected through the utility bill for water and sewer base fees that will be retained and used for development and repairs to the utility capital system. 3620 Penalties -Amount collected foz• utility bills that are paid after the due date. 3630 Hookup/Connection Fees -Amount collected for permit fees that are charged for the connection to Lite water and sewer system. 3631 Parks &Recreation Programs -Amount collected for programs offered through the parks and recreation department. 3632 Concessions -Amount collected at concession stands at City parks as well as at the Recreation Center. 3633 Beach Programs -Amount collected for daily admission at the McCullom Lake Beach, 3634 Swimming Pool -Amount collected for admission to the Merkel Aquatic Center, 364.0 Water Meter Sales -Amount collected for the initial or replacement water meter. 3641 Babysitting -Amount collected for childcare services offered at the Recreation Center. 3642 Room Rentals Rentals -Amount collected at the Recreation Center for community room rentals. 3643 Birthday Parties -Amount collected for birthday parties that are held and run by personnel at the Recreation Center. 22 3644 Sponsorship/Advertisement - Amount collected for sponsors or advertisements at the Recreation Center. 3645 Annual Membership - Amount collected for membership fees For the Recreation Center. 3646 Short -Term Membership - Amount collected for temporary membership fees foz the Recreation Center. 3647 Daily Admissions -Amount collected for daily membership fees for the Recreation Center. 3648 Punch Passes -Amount collected for 10 and 20 punch passes that act as daily membership to the, Recreation Center as well as attendance at specialty fitness classes held at the center. 3649 Miscellaneous Fees -Amount collected at the Recreation Center For miscellaneous fees such as workout logging devices, and other items sold at the center. 3650 Fitness Classes -Session Based -Amount collected for fitness classes held at the Recreation Center. 3651 Small Group Personal Training -Amount collected for Recreation Center members that sign up for a small group personal training session. 3652 Personal Training -Amount collected For Recreation Center members that sign up for personal training services. 3653 Elective Participant Premium -Amount collected for City provided health insuz•ance for retired employees or former employees on COBRA. 3660 Debt Service Fees -Amount collected from sewez• users to retire debt issued by the City. 3665 Debt Service Fees - IEPA Loan -Amount collected from sewer users to retire an Illinois Enviz onmental Protection Agency loan used to consolidate the Central and South Wastewater Treatment Plants. 3682 Mowing/Weeds -Amount collected for the cutting or removal of weeds and plant growth in excess of 8 inches which is paid for by the owner of the property. 3683 Alarm Board Revenue -Fines collected on false alarms after having six free alarms. 3711 Meeting Fees -Planning &Zoning -Reimbursements by developers and zoning petitioners for the Planning &Zoning Commission hearing attendance collected in the Retained Personnel Fund. 3715 Annexation Income -Amount collected as determined by the annexation agreement. 3720 Operating Fees -Amount collected through permit fees on behalf of the school districts, fire district and library district froze the developer to pay its fair share of public improvements that may be required because of the new development. These fees are paid out to the districts monthly. 3730 Engineering Fees -Reimbursements by developers for expenses paid for contracted engineering adv6 ce and service in the Retained Personnel Fund. 3735 Legal Fees - Reimbursements by developers for expenses paid for legal Fees in the Retained Personnel Fund. 3740 Fees -Developers -Miscellaneous -Reimbursements by developers for miscellaneous expenses such as recording fees in the Retained Personnel Fund. 3745 Gravel Mining/Annexation Agreement -Amount received per the annexation agreement For the gravel pit within the City. 3750 Refunds -Developers -Amount paid by developers for a retained personnel deposit that is over and above the expenses and will be refunded to the developer. 3760 Received from Developers -- Amount collected from developers as contributions to public improvements such as signs, traffic signals, intersection improvements, etc. 3775 Developer Donations -Schools -Amount collected through permit fees on behalf of the school districts from the developer to pay its fair share of public improvements that may be required because of the new development. These fees are paid out to the school districts annually. 3780 Developer Donations - Parlts -Amount collected through permit fees for parks from the developer to pay its fair share of public improvements that may be required because of the new development. 3785 Developer Donations -Library -Amount collected through permit fees on behalf of the library district from the developer to pay its Fair share of public improvements that may be required because of the new development. These fees are paid out to the library district annually. 3790 Developer Donations -Fire -Amount collected through permit fees on behalf of the AS district from the developer to pay its fair share of public improvements that may be required because of the new development, These fees are paid out to the fire district annually. 3815 Donations -Amount donated to the City for various reasons. 3830 Employer Contributions -Actuarial contrived amount that the City contributes to the Police Pension Fund. 3831 Employee Contributions -Amount collected from employees for benefits provided by the City. 3832 Cable Franchise Fees -Amount charged to a cable television company for the use of public right-of-ways. 3835 Garbage Bags -Amount collected for the sale of garbage stickers to residents. 3845 Rental Income -Rent charged for the use of municipal properties including Main Street Station, Hicicoi•y Creels Farm, farmlands, water towers, the marina, etc. 3 881 Reimbursement. Communication Desk -Amount charged to agencies that the City provides dispatching services for. 3882 Reimbursement - Miscellaneous - Reimbursement for expenses for city services provided such as school resource officers, traffic control, snowplowing, etc. 3885 Reimbursements - Property Insurance - Insurance payments for property damage within the City. 3890 Miscellaneous Income -Revenue that does not fit into other categories such as handicap placards, lien fees, collection fees, adjudication court fees, etc. 3915 Bond Interest Rebate -Interest rebate issued to the City from the Department ofthe Treasury Internal Revenue Service for Recovery Zone Economic Development Bonds and Build America Bonds, 3920 Sale of Fixed Assets -Proceeds from the sale of municipal owned fixed assets. 3969 Transfer - TIF -Internal Fund'I'ransfer from the TIF Fund to cover debt service fees. 3970 Charges for Services -Internal Fund Transfer from the Water/Sewer Fund to cover administrative costs for the issuance of utility bills. 3971 Transfers -Annexation Fund -Internal Fund Transfer from the Annexation Fund to cover debt service fees. 3972 Transfers -Recreation Center Fund -Internal Fund Transfer from the Recreation Center Fund to cover debt service fees. 3975 Transfers -General Fund -Internal Fund Transfer from the General Fund to cover debt service fees, capital expenses, insurance expenses, and information technology expenses. 3978 Transfers -Water/Sewer Fund -Internal Fund Transfer from the Water/Sewer Fund to cover debt service fees, utility division expenses, insurance expenses, and information technology expenses. 3986 Transfers -Motor Fuel Tax Fund -Internal Fund Transfer from the Motoz• Fuel Tax Fund to cover debt service fees. 3994 Transfers -SSA #4 -Internal Fund Transfer from the SSA #4 Fund to cover expenses for the Lakewood Road Utility. 3999 Transfers -Other Funds -Internal Fund Transfer from miscellaneous special revenue funds and internal service funds to cover items such as fireworks, risk management, etc. 25 Expenses 4010 Salaries- Regular- Salary expense for employees who work 40 hours or full time. 4020 Salaries - SWOrn -Salary expense for sworn police department employees who work 90 hours or full time. 4030 Salaries -Regular Part-time -Salary expense for• employees who work less than 40 hours, but are employed throughout the calendar year. 4050 Salaries - Regular• Ovet•tinte -Salary expense paid to non-exempt non -sworn employees at one and one-half times or two times the employee's regular hourly rate for all hours worked in excess of forty hours per week. 4055 Salaries - Regular• Sworn Overtime -Salary expense paid to non-exempt sworn employees at one and one-half times the employee's regular hourly rate for all hours worked in excess of forty hours per week. 4060 Salaries -Snow Removal Overtime -Salary expense paid to non-exempt non -sworn employees at one and one-half times or two times the employee's regular hourly rate for all hours worked in excess of forty hours per week for snowplowing. 4080 Salaries -Career Ladder -Salary expense paid to sworn police department employees for on -call and investigator stipend pay. 4100 Salaries -Seasonal/Part-time -Salary expense for employees who work less than 40 hours per week and can be seasonal help. 4220 Salaries -Boards -QV Commissions -Salary expense for the Mayor, Council members, the City Clerk and the Planning and Zoning Commissioners. 4310 Health Insurance -Expenses for employee group medical insurance premiums. 4320 Dental Insurance -Expenses for employee group dental insurance premiums. 4330 Life Insurance -Expenses for employee group life insurance premiums for city provided coverage at $30,000. 4340 Vision Insurance -Expenses for employee group vision insurance premiums. 4410 Contribution -FICA -The employer contribution of Social Security and Medicare, which is currently at 7.65% of eligible wages. 4420 Contribution IMRF -The employer• contribution of IMRF for all employees covered under the IMRF program. 4430 Contribution Police Pension The amount provided through property tax collection for the Police Pension Fund. This amount is determined by an actuarial study conducted on an annual basis. 26 4510 Uniform Allowance - Expenses for uniforms and personal protective equipment provided for those public service employees required to wear uniforms while performing their jobs. 4910 Retirement Benefits - Retirement benefits paid to police pension beneficiaries who apply for a regular pension. 4920 Disability Benefits -Retirement benefits paid to police pension beneficiaries who have been found to have a duty disability. This type of pensions must be approved by the Police Pension board. 4930 Survivor Benefits -.Retirement benefits paid to the surviving spouse of a police pension beneficiary. 4940 Nozz-Duty Disability Benefits -Retirement benefits paid to police pension beneficiaries who have been found to have a non -duty disability. This type of pensions must be approved by the Police Pension board. 4990 Cozztribution Refund -Refund of police pension contributions made by a sworn employee that is no longer employed with the City. The employee must request a refund from the pension fund. 5110 Contractual Services -Expenses that are based on a contract or are paid on a monthly basis such as mowing, PACE fees, copier lease payments, bank service charges, miscellaneous building charges, etc. 5200 Contract Custodial -Expenses for• monthly janitorial serves at the Recreation Center. 5215 Retention/Promotion -Expenses for promotional materials for the Recreation Center. 5Z20 Engineering Fees -Expenses paid for contracted engineering advice and service in the Retained Personnel Fund, which are reimbursed by the developers. 5Z30 Legal Services -Expenses for contracted legal advice and services. 5Z45 Health HRA Reimbursement -- Employee health insurance reimbursement expenses paid by the city that covers expenses above the in-house set deductible up to the insurance carrier's deductible. 5310 Postage &Meter -Expenses for postal related services such as stamps, bulk mailings, overnight deliveries, UPS, etc, 5320 Telephone -Expenses for telephone lines, alarm circuits, and cellular phone services. 5321 Gable/TV -Expenses for monthly cable television service at the Recreation Center. 5330 Printing &Publishing -Expenses for advertisements such as employee recruitment ads, bid notices, legal notices, and other. required notices. Expenses also for the city newsletter and printing of vehicle sticker notices and utility bills. 5370 Repair &Maintenance -Expenses for routine maintenance on municipal vehicles. 27 5375 Repair &Maintenance - Equipment - Expenses for routines maintenance on municipal equipment. 5380 Repair &Maintenance -Utility System -Expenses for routine maintenance on municipal utility systems. 5410 Dues -Expenses for membership dues for various professional organizations. 5420 Travel Expenses -- Expenses paid for travel related costs such as mileage, tolls, per diem, lodging for conferences and training for employees on municipal business. 5430 Training -- Expenses including registration fees, tuition, etc, for attendance at professional conferences and meetings for professional development. 5440 Tuition Reimbursement -Expenses for tuition that covers successful completion of course work with proof of a passing grade or certification. 5450 Publications -Expenses for books, magazines, periodicals, pamphlets, maps, subscriptions, training materials, etc. used for professional development. 5510 Utilities -Monthly expenses for utilities used by municipal buildings including electric and natural gas. 5520 Street Lighting -Monthly expenses for electric usage for street lights throughout the city. 5580 Disposal -Expenses for sludge removal at the wastewater plant. 5600 Credit Card/Bank Fees -Expenses for monthly credit card and banking fees charged to the Recreation Center. 5950 MCMRMA Fees -Expenses For McHenry County Municipal Risk Management Agency annual fees for insurance that covers unemployment, workers compensation, car insurance, liability, fire, theft, property damage, etc. 5960 Insurance Premiums -Miscellaneous -Expenses For notary bonds and public official bonds. 5980 Property Damage -Expenses to repair municipal property damage that will be covered with insurance. 6110 Materials &Supplies -Expenses for operating materials &supplies such as custodial cleaning supplies, garbage stickers, miscellaneous building supplies, police training supplies, ammunition, badges, etc. 6111 Supplies -Custodial -Expenses for contracted custodial services at the Recreation Center. 6120 Supplies -Childcare -Expenses For small toys, books, and art supplies for the childcare room at the Recreation Center. 6130 Supplies -Safety -Expenses for first aid and other miscellaneous safety items for the Recreation Center. 6141 Office Furniture/Equipment - Expenses for desks, chairs, and other small equipment at the Recreation Center. 6142 Fitness Equipment - Expenses for fitness balls, bands, mats, cardio equipment, etc. at the Recreation Center. 6210 Bulk Office Supplies - Expenses for pens, pencils, paper, staples, binders, folders, calendars, ink, etc. 6250 Gasoline &Oil -Expenses for gasoline and oil used for municipal vehicles. 6270 Small Equipment &Tools -Expenses for equipment and tools used to maintain municipal equipment and personnel such as body armor, evidence equipment, weed trimmers, shop tools, etc. 6290 Safety &Personal Protection Equipment -Expenses for personal protective equipment provided to employees such as goggles, boots, chest waders, etc. 6310 Police -Canine Unit -Expenses for training, food, veterinarian bills, etc. for the sworn canine officer. 6340 Police -Forfeiture Expenses -Expenses that are paid for using police forfeiture funds that must be tracked separately. 6920 Special Events -Expenses for community Festivals and events such as the fireworks, community pool party, daddy/daughter date night, etc. 6940 Administrative Expenses -Expenses for notary fees, secretary of state fees For vehicles, county recording fees, holiday lighting, real estate taxes, etc. 6945 Development Expense -Sales tax incentive payments based on the terms of the development agreement. 6950 Forestry -Expenses for the tree program including trees, watering, chainsaws for trimming, tree removal, etc. 6960 Miscellaneous Expenses -Expenses for miscellaneous items not previously covered such as insurance processing fees. 6961 Miscellaneous Refunds -Expenses For refunds of retained personnel deposits that are not used for development expenses. 6965 Reimbursements -Flexible Spending - spending accounts for qualified medical expenses. Expenses paid to employees from their flexible 6970 Distributions -Schools -Permit fees that are collected on behalf of the school districts from the developer to pay its fair share of public improvements that maybe required because of the new development. These fees are paid out to the school districts annually. 6980 Distributions -Library - Permit fees that are collected on behalf of the library district from the developer to pay its fair share of public improvements that may be required because of the new development. These fees are paid out to the library district annually, 6940 D13tz'ibutio113 -Fire -Permit fees that are collected on behalf of the fire district from the developer to pay its fair share of public improvements that may be required because of the new development. These fees are paid out to the fire district annually. 7100 Bond Principal -Amount paid for principal payment on bonds. 7110 Capital Lease Principal Payments -Amount paid for principal payments on capital leases, Capital leases are used when the item is going to be purchased when the term of the lease is over, 7200 Bond Interest -Amount paid for interest payments on bonds, which are charges paid on the principal based on an agreed upon rate. 7300 Fees -Paying Agent -Amount paid to an escrow agent for various filings For the issued bonds. 8100 Land Acquisition -Amount used for the purchase of land. 8200 Buildings -Amounts paid for the acquisition and improvements to municipal buildings. 8300 Equipment -Amount paid for the acquisition of equipment costing $5,000 or more such as machines, shop equipment, playground equipment, mowers, etc. 8400 Vehicles -Amount paid for the acquisition of vehicles and the necessary equipment to use the vehicle. 8500 Utility System -Amount paid for the acquisition and improvements to the water and sewer utility systems, 8600 Streets -Amount paid for improvements to municipal streets. 8800 Parr Improvements -Amount paid for improvements to municipal parks, 8900 Public Improvements -Amount paid for the acquisition and improvements to other miscellaneous municipal capital items. 9510 Depreciation - Amount charged as an expense for an expired portion of a fixed asset. 9901 Transfer - General Fund - Internal Fund Transfers from the Tourism Fund to cover miscellaneous special events with hotel/motel taxes. 9904 Transfer -Debt Service Fund -Internal Fund Transfers from various City funds to cover annual bond interest and principal costs for City projects. 9920 Purchase Service -Risk Management -Internal Fund Transfers from General Fund Departments as well as Water/Sewer Fund Departments and Information Technology Fund to cover the insurance premiums for McHenry County Municipal Risk Management Agency. These premiums 30 cover unemployment, workers compensation, car insurance, hability, fire, theft, property damage, ACV 9921 Purchase Service - Billing General Fund - Internal Fund Transfers to the General Fund for the water and sewer portion of costs that are paid for by the finance department for billing administrative duties and water/sewer bill mailings. 9922 Purchase Service -Information Technology -Internal Fund Transfer to cover information technology expenses for all departments within the city. These expenses include salaries and benefits for Information Technology employees as well as computers, supplies, and software used in all City departments. 9923 Purchase Service -Audit Fund -Internal Fund Transfer to cover the external auditing annual fees for all funds within the City. 9930 Transfer --Water/Sewer Fund -Internal Fund Transfer to the Water and Sewer Divisions to cover Utility Division expenses. 9936 Transfer -Utility Improvement Fund -Internal Fund Transfer From the Water and Sewer Divisions to cover Capital expenses for the Utility System. 9942 Transfer -Capital Improvements Fund -Internal Fund Transfer From the General Fund Departments to cover capital charges for items that are over $10,000 and have a useful life of over S years. 9944 Transfer -Band Fund - Internal Fund Transfer from the General Fund to cover the music in the park weekly event. This covers the expenses for the municipal band as well as community bands that perform. 9945 Transfer -Civil Defense Fund -Internal Fund Transfer from the General Fund for expenses to train personnel and maintain the early warning system equipment to protect and defend the City from natural disasters or man-made environmental disasters through early warning and public notification systems. 9946 Transfer -Capital Equipment Fund -Internal Fund Transfer from the General Fund Departments to cover capital vehicle and equipment charges for items that are over $10,000 and have a useful life of over 5 years. 31 W � if I �t Revs A 1 Summary of Proposed Revenues - All Funds A B C D E F 1Revenue Budget 2 3 Total Net 4 Revenue Transfers Revenue 5 General Fund $29,775,254 $630,289 $29,1441965 6 7 Sp ecial Revenue Funds 8 Band Fund 12,000 12,000 0 9 Civil Defense Fund 41000 43000 0 10 Alarm Board Fund 2301000 0 230,000 11 Audit Fund 48,550 22,124 26,426 12 Annexation Fund 227,500 0 227,500 13 Motor Fuel Tax Fund 11283,672 0 11283,672 14 Local Motor Fuel Tax Fund 360,000 0 3601000 15 Developer Donations 120,000 0 120,000 16 Developer Donations Parks 2431000 0 243,000 17 TIF Fund 11513,000 0 11513,000 18 19 Pageant Fund 41000 0 41000 Tourism Fund 268.000 0 268,000 Total Special Revenue Funds 41313,722 38,124 41275,598 20 21 22 Capital Project Funds 23 Recreation Center Construction Fund 7833156 250,356 532,800 24 25 Special Service Area #1A Special Service Area #4 0 15,580 0 0 0 15,580 26 Capital Improvements Fund 11950 0 11950 27 Capital Maintenance & Re lacement Fund 1,126,000 0 11126,000 28 Capital Equipment Fund 400 0 400 Total Capital Project Funds 11927,086 250t356 11676,730 29 30 31 Debt Service Funds 32 Debt Service Fund 2.349.940 2.349,940 0 Total Debt Service Funds 2,349,940 21349,940 0 33 34 35 Proprietary Funds 36 Public Works - Water 31197,500 0 31197,500 37 Public Works - Wastewater 51966,836 0 61966,836 38 Public Works - Utility 11057,870 11057,870 0 39 Capital Development Fund 221,000 0 221,000 40 Marina O erations Fund 45,500 0 451500 41 Utility Improvements Fund 271,580 265.580 6.000 Total Proprietary Funds 10,760,286 11323,450 9,436,836 42 43 44 Internal Service Funds 45 46 1 Risk Management Fund 1 Information Technology Fund 1,1491503 11293,988 11124,503 1,2903988 25,000 31000 47 1 Health Insurance Fund 4.125.008 3,6691912 555,096 Total Internal Service Funds 63568,499 51985,403 583,096 48 49 50 Fiduciary Funds 51 52 53 1 Medical Flexible Spending Fund Revolving Loan Fund Police Pension Fund 45,000 11230 2,861,455 0 0 671,455 45,000 11230 2,190,000 54 Develo ment Escrow Fund 0 0 0 55 Retained Personnel Fund 75.000 21 75.000 Total Fiduciary Funds 2.982.685 671A55 2.311.230 56 57 58 33 Comparison of Budget vs. Proposed Revenues - Aii Funds A B C D E 1Revenue Budget 2 3 Pecent 4 2022123 2023124 Difference Chancie 5 General Fund $26,614,999 $29,7751254 $3,260,255 12.3% 6 7 Special Revenue Funds 8 Band Fund 12,000 12,000d(457,750) 000% 9 Civil Defense Fund 41000 41000 0.0% 10 Alarm Board Fund 215,000 230,000 7.0% 11 Audit Fund 56,126 48,550 -13.5% 12 Annexation Fund 225,000 2279600 111% 13 Motor Fuel Tax Fund 137410422 11283,672-26.3% 14 Local Motor Fuel Tax Fund 3603000 360,000 0.0% 15 Develo er Donations 120,000 120,000 0.0% 16 Develo er Donations Parks 407,750 243,000-40.4% 17 TIF Fund 112750000 10513,000 18.7% 18 Pa eantFund 4,000 4,000 0.0% 19 Tourism Fund 225,000 Total Special Revenue Funds 41645,298 268,000 43,000 41313,722 (331,576) 19.1% -7.1% 20 21 22 Capital Project Funds 23 Recreation Center Construction Fund 6661185 7839156 1163971 17.6% 24 Special Service Area #1A 0 0 0 0.0% 25 Special Service Area #4 15,580 151580 0 0.0% 26 Capital Improvements Fund 250 11950 1,700 680.0% 27 Capital Maintenance & Replacement Fung 0 1,126,000 1,126,000 #DIV/01 Equipment Fund Total Capital Project Funds 1511900 833,915 400 11927,086 (151,500) 11093,171 0.0% 131.1% qCapital 31 1 Debt Service Funds 32 Debt Service Fund Total Debt Service Funds 2.351.470 21351,470 2,349,940 21349,940 1 530 (11630) -0.1% 33 34 35 lProprlotary Funds 36 Public Works - Water 3,203,111 31197,500 51611 42% 37 Public Works - Wastewater 61836,358 61966,836 130,478 2.2% 38 Public Works" Uility 11033,200 11057,870 24,670 2.4% 39 Capital Development Fund 3710000 221,000 150,000 -40.4% 40 Marina Operations Fund 25,500 45,500 200000 78.4% 41 Utility Improvements Fund Total Proprietary Funds 17.847 10,487,016 271,580 10,760,286 2531733 2731270 1421IN 2.6% 42 43 44 Internal Service Funds 45 Risk Management Fund 9430503 11149,503 206,000 21.8% 46 Information Technology Fund l s0731337 11293,988 220,651 20.6% 47 Health Insurance Fund Total Internal Service Funds 3,7264962 617430802 4.125.008 615681499 3980046 824,697 10.7% 14.4% 48 49 50 Fiduciary Funds 511 Employee Flexible Spending Fund 40,000 45,000 51000 12.5% 52 Revolving Loan Fund 0 11230 11230 #DIWOI 53 Police Pension Fund 238051600 21861,455 55,855 2.0% 54 Development Escrow Fund 0 0 0 0.0% 55 Retained Personnel Fund 75.000 75.000 0 0.0% Total Fiduciary Funds 2.920,600 92. 82,685 62.085 2.1% All Funds $53,497100 56 67 58Total 34 Summary of Revenues and Other Financing Sources - All Funds Source 2022123 Property Taxes 517999947 ..� 2023/24 Dollar Change Change 51874,947 75,000 1.29% Sales Taxes 12,490,464 13,327,374 836,910 6.70% Intergovernmental Revenue 51636,733 1 619911451 13354,718 24.03% Licenses & Fines 21084,000 210681000 (16,000) -0.77% Services Charges 11,764,709 11,871,532 1061823 0.91% Interest Income 1,714,600 21353,580 638,980 37.27% Bond Proceeds - - - 0.00% Transfers 10, 226, 253 11,249, 017 1,022,764 10.00% Other Financing Sources 317801394 41941,571 11161,177 30.72% Total 53,497,100 58,677,472 51180,372 9.68% 2023/24 Budget Revenues by Source Other Financi Sources 8% Transfers 19% Bond Proceeds , Interest Income J 4% Licenses &Fines 4% Sales Taxes 23% I ntergovernmenta I Revenue 12% 35 Summary of Proposed Expenditures - All Funds A B C D E F G 1 pense Budgetr 2 3 Total Net 4 Rudgell ImsfeLs d e 5 General Fund 6 Administration $3,974,946 $1389357 $3,836 589 7 Elected Offices 64 b50 7 173 57,377 8 Community Development 1,493,227 1 111,1051 1,382122 9 Finance De artmenl 21291 091 375 677 11915,414 10 Human Resources 363,082 21,898 341,184 11 Economic Develo ment 6040062 10,571 493 491 12 Police Commission 81328 0 8 328 13 Police Department 123249,814 2 664,655 91565,159 14 Dispatch Department 3,166,939 132,872 3,024 067 15 Public Works - Administration 538 614 50 667 479 947 161 Public Works - Streets 41139,726 163785 3,975,941 17 Parks and Recreation 1,597,919 469:602 11128,117 18 Total Parks Maintenance General Fund 1,499,041 310881,339 21 49154,562 1,499,041 27,726,777 19 20 21 Special Revenue Funds 22 Band Fund 14,500 0 14,500 23 ICivil Defense Fund 5 300 0 5 300 24 Alarm Board Fund 145 000 0 145,000 25 Audit Fund 50,200 0 60,200 26 Annexation Fund 85,000 35,000 50,000 27 Motor Fuel Tax Fund 2,936,206 0 2 936,206 28 Local Motor Fuel Tax Fund 300,000 1 0 300,000 29 Developer Donations 120,000 0 120,000 301 Developer Donations Parks 600,959 0 600,959 31 TIF Fund 11421 535 221,635 11200 000 32 Pa eanl Fund 3 900 0 3 900 33 Total JTourlsm Fund Special Revenue Funds 261,260 61943,650 99,000 366,635 162,250 50588,315 34 35 36 Capital Project Funds 37 Recreation Center Construction Fund 789,256 210,960 578,306 38 Special Service Area M 0 0 0 39 Special Service Area 84 16,680 15,680 0 40 Capital Improvements Fund 48,500 0 48,500 41 Capital Maintenance & Replacement 1,974 000 0 1,974 000 42 Capital Equipment Total Capital Project Funds 30.000 21857,336 0 226,530 30,000 2,6301806 43 44 45 Debt Service Funds 46 Total Debt Service Fund Debt Service Funds 24349,942 2,349,942 02,349,942 0 21349,942 47 48 49 Proprietary Funds 50 Public Works - Water 3,135,868 1 234 331 1901 537 51 Public Works - Wastewater 716951137 7495183 6,945 954 52 Public Works - Ulilit 1,057,870 0 11057,670 53 Capital Development Fund 250 000 250,000 0 54 Marina Operations Fund 44,000 0 44,000 55 Total Utility Improvements Fund Proprietary Funds 350.000 12,532,875 0 24233,614 350,000 10,299,361 b6 57 58 Internal Service Funds 59 Risk Mane ement Fund 1,149,503 22,503 11127,000 60 information TechnologyFund 1,370,152 10,683 16359,469 61 Total Health Insurance Fund Internal Service Funds 4,090,694 6,610,249 0 33,186 4,090,594 6,577,063 62 63 64 FiduciaryFunds 65 Employee Flexible Spending Fund 45,000 0 45,000 66 RevolvingLoan Fund 0 0 0 67 Police Pension Fund 2,450,444 4,325 2,446 119 68 Development Escrow Fund 0 0 0 69 Retained Personnel Fund Fiduciary Funds 75 000 0 2 570 444 4 325 75,000 2 566 119 70 71 72 Total All Funds $64,746tO35 $71007652 36 Comparison of Budget vs. Proposed Expenditures - All Funds q g a C D E F G H I M,Expense Budget1 2 3 4 5 Total Total 6 Budgeted Budgeted 7 Expenditures Expenditures Percenta e 6 02 22123 ZqgM l e e ce C e 9 lGeneral Fund 101 lAdmlnlstratton 321828169 $3,974,946 $1 148 777 40,65% 11 Elected Offices 83 310 04,550 18,760 -22.52% 12 Community Development 103191951 1,493,227 173,276 1113% 13 Finance Department 2,161,316 2,291091 129773 6,00% 14 Human Resources Department 309 057 363,082 54,025 0.00% 15 Economic Development Department 405,510 504,062 98,552 0000% 18 Police Commission 6953 81328 1,375 19078% 17 Police Department 11254,736 12,2491814 9950m 8084% 10 Dispatch Department 21447,519 93 3156,9 70942 0 28,09% 19 PublicWorks-Administration 5050012 5388614 1 31,802 8.27% 20 1 Public Works - Streets 3 857,382 4,139,726 282,344 7,32% 21 jParks and Recreation 2,943,306 1 697,918 1 1345,387) 4531% 22 Parks Maintenance 0 1 499 0 1 1.4996041 6 #DIVLOI Total General Fund 289122,023 31,061,339 3,7596316 13,37% 23 24 25 lSpeclal Revenue Funds 26 Band Fund 14,500 14,500 0 0.00% 27 Civil Defense Fund VOW 6 300 0 0000% 28 Alarm Board Fund 112,000 145,000 33 000 29.46% 29 Audit Fund 51,000 503200 800 -1 .67% 30 Annexation Fund 85 000 85,000 0 0000% 31 1 Motor Fuel Tex Fund %293,511 20936,206 357 305 -10.85% 32 Locel Motor Fuel Tax Fund 30%000 300,000 0 0.00% 33 Develo er Donatlons 1201000 120,000 01 0600% 34 Developer Donations Parks 1,242,500 800,859 6416541 -51.63% 35 TIF Fund 2420735 1421,535 999,200 41.28% 36 Pa eanl Fund 30900 3 900 0 0,00% 37 Tourism Fund 256,350 261.250 9 90O 1,9I% Total Special Revenue Funds 7,904,798 b,943,850 (1,960,948) 311 39 40 ]Capital Project Funds 41 Recreation Center Construction Fund 683,619 7890256 105 637 15.450/6 42 Special Service Area #1A 0 0 0 0,00% 43 Special Service Area #4A 15,347 156680 233 1,52% 44 Capital ImrovementsFund 8710000 48,500 823,400 -94,44% 451 1 Capital Maintenance R Replace entFund 0 1,974 000 1 974 000 #DIV/01 46 JCapllal Equipment Fund 151'900 30,00_00 (121,9001 AM Total Capital Project Funds 1,722,766 20857,336 10134,570 65.86% 47 48 49 Debt Service Funds 50 IDebt Service Fund 1 2,3511,47112,349,9421 f1.5291 -0 07° Total Debt Service Funds 2,351,471 2,3494942 (1,529) -0,07% 51 52 53 Pro rietary Funds 54 Public Works - Water 21992*9932250gOOO 5 4.77% 55 Public Works - Wastewater 7108,628,9 40W��205000 8.25% 56 PublicWorks -Utili 1033820070 2.39°h 57 Capital Development Fund 145,00000 0.0058 Marina 0 erations Fund 43,00000 2,33% 59 Utility Improvements Fund 145,000 3500 Total Proprietary Funds 11,467,821 12,532,876 1,065,054 9,29% 60 61 62 Internal Service Funds 63 Risk Management Fund 11041,583 1,149,603 1071920 10,36% 64 Information TechnologyFund 1,204,337 1,370,152 1 165g!3151 13,77% 65 JHealth Insurance Fund 3,723,22 4,090 594 3137,35 9,87 Total Internal Service Funds 50969,149 s,610,249 641,100 10,74% 66 67 66!Fiduciary Funds 69 Employee Medical Flexible Spending Fund iRevolving 40,000 45 000 50000 12,60% 70 Loan Fund 0 0 0 0,00% 71 Police Pension Fund 2,582,423 21450444 131,979 5.11% 72 Development Escrow Fund 0 1 01 0 0000°% 73 Retained Personnel Fund 75a_000 75,000 0 0,00% Total Fiduciary Funds 20697,423 21570,444 (126,979) -4.71% 74 75 7s$64,746,035 r 37 Expenditures by Function - All Funds Function 2021/22 2022/23 2023/24 Dollar Change Percent Change General Government 316521335 412171487 417701833 5531346 13.12% Public Safety 1316151307 13,762,331 15,166,473 11404,142 10.20% Public Works 11,900,579 13,454,337 14,4051749 951,412 7.07% Culture and Recreation 310631941 31200,107 3,3881614 1881507 5.89% Capital Projects 611001653 919701814 10,253,565 282,751 2.84% Comm. & Econ. Dev. 11500,009 11919,907 21140,613 220,706 11.50% Debt Service 213501326 21351,471 21349,942 (11529) -0.07% Other 41481,136 41782, 309 5, 262, 594 4801285 10.040/6 Total 46,664,286 531658,763 571738,383 41079,620 7.60% other 2023/24 Budget 9% Expenditures by Function* Debt Service !/ Comm. &Econ D ev. 4% 4% Capital Projects 18% Culture and Recreation 6% PublicVJori<s 25% General Government 8% Public Safety 26% O F T II E FOX R I V E R Fiscal Year 2023/2024 Annual Budget Is 39 General Fund Revenues, Expenditures & Fund Balance Summary General Fund Overview The General Fund represents the core revenue and expense fund for municipal functions. General Fund Revenues are comprised of Intergovernmental sources such as Property Tax, State Sales Tax, Local Sales Tax, State Income Tax, State Replacement Tax, State Pull Tabs, Inter Track Wagering, State Communications Tax, and State Grants; Local Sources such as Franchise Fees, Licenses and Permits, Fines and Forfeitures, Charges for Services, and Interest Income; and Miscellaneous sources such as Donations and Reimbursements for Services. General Fund Expenses include personnel, contractual, supplies and other operating expenses related to the following operating budgets - Administration (100,01), Elected Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets (100.33), and Parks and Recreation (100.41). Please reference the spreadsheet found at the end of this section titled "General Fund -Revenues, Expenditures and Fund Balance Summary"for the following discussion. General Fund Revenue. Expenditure and Fund Balance Summary In summary, FY23/24 proposed General Fund Revenues and Expenditures reflect total revenues of $29,775,254 (an increase of $3,260,255 or 12.30% from the FY22/23 Budget amount — Rows 26 Column U), and total operating expenditures of $29,292,939 (an increase of $2,928,366 or 11.11, less capital, from the FY22/23 Budget amount — Row 37, Column U). This reflects a net difference (revenues over expenditures) of $482,315. Importantly, this means that the proposed General Fund Operating Budget, as presented, is BALANCED. While COVID-19 has made many revenues volatile over the last few years, the City has been fortunate to see recovery in many revenue sources. While specifics will be detailed in the discussion that follows, the primary reasons for increases in revenues relate to projections for State Sales Taxes (an increase of $248,402 or 2.7% - Row 10, Column V), Local Sales Taxes (an increase of $588,508 or 17.95% - Row 11, Column V), State Income Taxes (an increase of $626,818 or 17.46% - Row 12, Column V), State Replacement Taxes (an increase of $120,000 or 150% - Row 13, Column V) and Reimbursements (an increase of $1,028,477 or 52.20% - Row 22, Column V). These are offset by a decrease to Property Taxes (a decrease of $10,000 or 0.2% - Row 9, Column V) and a decrease to Licenses and Permits (a decrease of $12,500 or 4.07% - Row 19, Column V). Regarding General Fund Expenditures, Personnel costs are proposed to increase by $1,807,884, or 10.60% (Row 29, Column V) due to Union Contract increases, CPI-U increases for non -bargaining unit employees, the addition of 3 police officers, and 2 dispatchers, and higher insurance costs. It should be noted that a portion of the Police Dispatch Center costs and the School Resource Officers that are in the Middle and High schools are offset by General Fund Revenue increases in the form of reimbursements (reflected in Row 22, Column U) from dispatch partner agencies, customers, and the school districts. Most notably, FY23/24 General Fund Expenditures, as proposed, reflect increased Contractual costs of $581,616 or 18.06% (Row 30, Column U) and Supply costs reflect an increase of $105,875 or 10.04% (Row 31, Column U). Reasons for these increases are discussed in detail on page 10 of this memorandum. Finally, the FY23/24 General Fund Expenditures, as identified in this attachment, do not include any transfers for Capital Improvement or Capital Equipment. The Fund Balance Policy defines the process for transferring excess funds to the Capital Improvement and Capital Equipment Funds. In FY22/23 and FY23/24 capital projects have been budgeted in the General Fund using Fund balance which has canceled the Fund Balance transfer that would have occurred during the audit process. Also, with the creation of the ComEd and Nicor Utility Taxes, capital projects will be budgeted using these funds going forward. The Fund Balance and Reserve Policy may need to be addressed in the years ahead if the General Fund Balance continues to grow. Carrying the General Fund Revenue and Expenditure estimates through the end of the fiscal year (April 301"), it is projected that the total General Fund Balance will be $16,935,220 at the end of FY22/23 (Column T, Row 43). As defined in the Fund Balance and Reserve Policy, the estimated required 120-day General Fund Balance Reserve would be $8,787,381 and so the amount projected is approximately $8,147,839 higher than the required General Fund Balance. Included in the General Fund balance is the American Rescue Plan Act COVID funds in the amount of $3,682,586 which staff has reserved for the Route 31 widening capital project. Also included in the General Fund balance are PSAP Grant funds ($769,696) which are reserved specifically for dispatch expenses and are approved for spending by the NERCOM board. The remaining General Fund Balance as of FY22/23 (Column T, Row 47) is the amount that could be reserved for capital projects, but as you will see this amount is much lower after the FY23/24 proposed budget due to increases in operating expenses and capital project expenses. General Fund Revenues General Fund Revenues are derived from anumber ofsources -taxes, video gaming, licenses and permits, fines and forfeitures, franchise fees, charges for services, reimbursement for services, donations, interest income, and other miscellaneous sources. While some revenues, like Property Taxes, can be clearly identified and estimated based on the adoption of the annual property tax levy, or based on historical performance, other revenues - such as Sales Taxes and State Income Tax - can be volatile based on economic trends. If anything, the economic recession of 2007/2008 sent a message to local governments that economic -based revenues are not guaranteed and can fluctuate based on the economy and disposable income. Actions taken at the local level to plan/adjust from this event resulted in the establishment of a "new norm" for future budget considerations. In estimating General Fund Revenues for the purpose of budget development, the City Administration takes a conservative approach in order to: 1) ensure that General Fund Revenue projections are not overstated to avoid deficit spending and the need to utilize the Al General Fund Balance (e.g., 120 day unassigned fund balance) for operational expenses; 2) limit excessive increases in operating expenditures; and 3) maintain a financial "buffer", in the form of the General Fund Balance, to protect the City from future unforeseen economic threats. Utilizing this philosophy, the City Administration then considers past revenue performance, current economic trends, local economic conditions, and economic forecast models developed by the Illinois Municipal League (IML) for use by local governments in developing revenue projections for the purpose of budget development. FY22/23 Budgeted Revenues (Column S) In FY22/23 total budgeted General Fund Revenues were $26,514,999 (Column S, Row 26). Of this, $5,037,941(19%) was from Property Taxes, $9,212,492 (34.7%) was from the City's 1% share of the State Sales Tax, $3,277,972 (12.4%) was from the .75% Local Sales Tax, and $31S89;961 (13.5%) came from the City 's share of the State Income Tax. Revenues derived from these four (4) sources were budgeted at $21,118,366 or 79.6% of total General Fund Revenues. Of the remaining $5,396,633 (20.4%) in budgeted General Fund Revenues, $11173,889 (4.4%) were from Charges for Services, $1,970,394 (7.4%) from Reimbursement for Services, $341,500 (1.3%) from Fines and Forfeitures, $307,500 (1.2%) from Licenses and Permits, $380,000 (1.4%) from Franchise Fees, $850,000 (3.2%) from Video Gaming, $200,000 from Telecommunications Tax (0.8%) and the remaining $173,350 (0.7%) came from all other sources combined. FY22/23 Estimated Revenues (Column T) The following estimated revenues are based on 10-months of actual revenues and then projected through the remainder of the fiscal year (April 30, 2023). Unfortunately, in some cases this estimation is more difficult than simply dividing the 10-month actual by 10 and multiplying by 12 because of when specific revenues are received. Further, FY22/23 Actual revenues will not be known and confirmed until approximately 2-3 months (June -July) after the close of the fiscal year due to the timing involved with the receipt of state -shared revenues and, ultimately, the completion of the annual audit in September/October 2023, 4- 5 months into the new budget year. At this time, estimated General Fund Revenues are projected to be $31,096,84.7 (Column T, Row 26) or $4,581,848 (17.28%) higher than FY22/23 Budgeted revenues of $26,514,999. This reflects an estimated increase of $419,456, or 1.4%, from FY21/22 Actual revenues of $30,677,391. Notably, FY22/23 Estimated Revenues, when compared to FY21/22 Actual revenues and FY22/23 Budgeted revenues, highlight the following: • (Row 10) State Sales Tax revenue is projected to be $179,268 (2%) higher than budgeted and $164•,355 (1.8%) higher than the FY21/22 Acfival amount. • (Row 11) Local Sales Tax revenue is projected to be $562,102 (17.2%) higher than budgeted and $260,000 (7.3%) higher than received in FY21/22. 42 • (Row 10 + Row 11) Combined, total Sales Tax revenue is estimated to be $74.1,370 (5.9%) higher than budgeted and $424•,355 (3.3%) higher than the FY21/22 Actual. State Sales Tax have shown significant signs of an economic recovery since the beginning of COVID49. Also, Local Sales Tax revenues do not include the sale of licensed or titled items - such as cars, boats, motorcycles, etc. As such, while the economic recovery and resulting increase in the sale of licensed vehicles has a positive impact on the City's portion of the State Sales Tax, this aspect has had no impact on Local Sales Tax revenues. • (Row 12) State Income Tax receipts are estimated to be $643,099 (17.9%) higher than budgeted and $68,191 (1.6%) lower than FY21/22. • (Row 13) State Replacement Tax receipts are estimated to be $174,105 (217.6%) higher than budgeted and $70,000 (38%) higher than FY21/22. • (Row 15) Self Storage Tax receipts were not budgeted in FY22/23 as the tax was passed by City Council in June of 2022 and went to effect on 1/1/2023. It is anticipated that $41,000 will be collected in the four months of FY22/23. • (Row 17) Video Gaming revenues are estimated to be $940,000 or $90,000 (10.6%), higher than budgeted and $33,767 (3.7%) higher than FY21/22. • (Row 20) Fines and Forfeitures revenues are estimated to be $55,525 (16.3%) higher than budgeted and $23,507(5.6%) lower than FY21/22. • (Row 21) Charges for Services revenues are estimated to be $108,577 (9.3%) higher than budgeted and $11,053 (0.9%) higher than FY21/22. • (Row 22) Reimbursements for services revenues are estimated at $580,202 (29.5%) higher than budgeted and $182)352 (6.7%) lower than FY21/22. The large increase over FY22/23 budgeted is due to PSAP Dispatch Funds that were not budgeted for. • (Row 23) Interest Income revenues are estimated to be $322,500 (12900%) higher than budgeted and $312,843 (2573.4%) higher than FY21/22. • (Row 25) Miscellaneous Income revenues are estimated at $1,884,059 (2898.6%) higher than budgeted and $209,064 (9.7%) lower than FY21/22. This is due to ARPA COVID funds received in two installments, one in FY21/22 and one in FY22/23 that were not budgeted for. In summary, FY22/23 Estimated Revenues are projected at $4,581,548 (17.3%) higher than budgeted primarily due to State and Local Sales Tax receipts, State Income Tax, Video Gaming receipts, Fines and Forfeitures, Charges for Services, Interest Income, and Reimbursements. When compared to FY21/22 Actual revenues, total 43 General Fund Revenues increased $419,456 (1.49/o), this is primarily due to State and Local Tax receipts, State Replacement Tax, and Interest Income which offset decreases in State Income Tax receipts, Licenses and Permits, Reimbursements, and Miscellaneous Income. FY23/Z4 Proposed Revenues (Column R) FY23/24 Proposed General Fund Revenues represent a net increase of $3,260,255 (11.5%) from FY22/23 Budgeted revenues and a decrease of $902,137 (2.9%) from FY21/22 Actual revenues. Highlights of changes to General Fund Revenues proposed for FY23/24 include: • (Row 9) City Staff did not recommend an increase to the property tax levy and with declining Road and Bridge Taxes, Property Tax revenues are estimated to be $10,000 (0.2%) lower than FY22/23 Budget. • (Row 10) State Sales Tax revenues are proposed at $9,460,894, $248,402 or 2.7% higher than FY22/23 Budget. This is due to the increase in Use Tax from online sales as well as rebounding Sales Taxes. • (Row 11) Local Sales Tax revenues are proposed at $3,866,480, an increase of $588,508 (18%) from the amount budgeted in FY22/23. • (Row 10 +Row 11) Combined State and Local Sales Tax revenues are proposed at $13,327,374, an increase of $836,910 (6.7%) from the FY22/23 Budget amount. • (Row 12) State Income Tax revenues are proposed at $4,216,779, an increase of $626,818 (17.46%) from FY22/23. Regarding State Income Tax revenues, please note the following: o There are multiple agencies working to restore the Local Government Distributive Fund (LGDF), which includes Income Tax distribution, to its full 10 percent (which was cut to 6% in 2011 and changed a few times since then, but sits at just over 6% currently). Over the years the Governor has proposed cutting an additional 10% from the LGDF. Restoring or cutting these funds could represent a large increase or decrease in revenues. o Staff will continue to watch these developments closely in case expense adjustments need to be made in order to offset the decrease in revenue. • (Row 144) State Telecommunication Tax revenues are proposed at $200,000, which is equal to the amount budgeted in FY22/23, revenues have been declining over the last few years. • (Row 15) Self Storage Tax receipts are expected to be $120,000 in FY23/24. Revenues were not budgeted in FY22/23 as the tax was passed by City Council in June of 2022 and went to effect on 1/1/2023. • (Row17) Video Gaming revenues are proposed at $900,000, a $50,000 increase from FY22/23 Budget amount. • (Row 19) Licenses and Permits revenues are proposed to decrease by $12,500, or 4.07% from the amount budgeted in FY22/23. • (Row 21) Charges and Services revenues are proposed to increase by $39,400, or 3.36% from the amount budgeted in FY22/23. • (Row 22) Reimbursements which includes the Police Dispatch Center revenues derived from partner and customer agencies served through this facility, police school resource reimbursements, police impound fees, and other miscellaneous reimbursements are proposed to increase $1,108,477 or 56.3%. • (Row 23) Interest Income is proposed to increase $347,500 (13900%) due to I ncreasing interest rates. In summary, FY23/24 Proposed Revenues are $3,260,255 (12.3%) higher than budgeted in FY22/23 and $1,321,593 (4.2%) lower than FY22/23 Estimated revenues. The primary reasons for the proposed increase include an increase in State Sales Tax ($248,402), Home Rule Sales Tax ($588,508), an increase to the Income Tax ($626,818), an increase to State Replacement Tax ($120,000), the addition of Self Storage Tax ($120,000), an increase in Video Gaming revenues ($50)000), an increase in Fines and Forfeitures Revenues ($21,500), an increase to Charges and Services revenues ($39,400), an increase to Reimbursement revenues ($1,108,477), and an increase to Interest Income ($347)500) . These increases are offset by decreases to Property Tax revenue ($10,000) and Licenses and Permit Revenues ($12,500). General Fund Expenditures General Fund Expenditures include personnel, contractual, supplies and other operating expenses related to the following operating budgets - Administration (100.01), Elected Officials (100,02), Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic Development (100.06), Police Commission (100,21), Police (100.22), Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets (100.33), and Parks and Recreation (100.4.1). In addition, the General Fund is the funding source for all capital improvement and capital equipment projects that are not related to water and/or sewer improvements or maintenance projects as these are funded through the Water and Sewer Fund and Capital Development Fund. Finally, the General Fund also serves as a funding source for revenue transfers to other municipal accounts found within Special Revenue Funds, Debt Service Funds, Internal Service Funds, and Fiduciary Funds. GI✓ FY22/23 Budgeted Expenditures (Column S) In FY22/23, total budgeted expenditures (capital and operating) were $28,122,023. Budgeted capital expenditures were $1,757,450 and budgeted operating expenditures were $26,364,573, While this amount reflected an increase of $2,164,306 (8.3%) from the FY21/22 Actual expenditures (Column R, Row 35), this difference was due to contractual expenses added for street resurfacing as well as personnel expenses. FY22/23 Estimated Expenditures (Column T) In general, the City Administration - including Department Directors, Superintendents, and Managers - closely monitor expenditures throughout the year to ensure that operating budgets stay within the approved amounts. Fiscal diligence on behalf of all of these individuals most often results in expenditures being less than the amount budgeted. Even with surging prices due to inflation expenditures have been well managed and continue to fall within the budget. For FY22/23, operating expenditures are estimated at $26,4.35,266, or $70,693 (0.27%) more than the budgeted amount of $26,364,573. Highlights of changes to FY22/23 Estimated Expenditures include: • (Row 29) Reduced Personnel costs of $21,458 (0.13%) resulting from budgeted positions unfilled during the year which were offset slightly by higher overtime costs. • (Row 30) Contractual costs are estimated at $116,860 (3.63) higher than the original budget, but a few budget amendments ($195,285) were completed for the building demolition expenses so overall expenditures are well under budget. • (Row 31) Supply costs are estimated at $14,417 (1.37%) less than budget. • (Row 32) Other estimated expenditures are estimated at $10,292 less than the original budget. • (Row 33) Capital Outlay expenditures are $671,861 more than the original budget, but multiple budget amendments were completed ($905,000) for land acquisition purchases, Phase III building construction, and engineering for ROW from Green to Elm Street, Note: City Administration anticipates changes to FY22/23 Estimated expenditures due to increases or decreases in revenues and expenses through the end of the fiscal year. 7 Y23/24 Proposed Expenditures (Column U) FY23/24 Proposed operating expenditures represent an increase of $2,928,366 (11.11%) from the FY22/23 operating Budget amount of $26,364,573. Highlights of changes to General Fund Expenditures proposed for FY23/24 include: • (Row 29) Personnel costs are proposed at $1,807,884, or 10.6% higher in FY23/24s than budgeted in FY22/23 due primarily to position additions, the salary increases included in the union contract, CPI-U increase for non -bargaining unit employees, and increases to health and dental insurance. Personnel costs include salaries, overtime, health/dental/life/vision insurance, FICA, Police Pension and IMRF retirement, and uniforms. There are a number of reasons for this increase. 1. Personnel costs related to salaries only for employees covered by collective bargaining units - IUOE Local 150 (Public Works, Parks employees), FOP Unit 1 (Police Patrol), and FOP Unit 2 (Dispatch) - account for a $153,459 increase in salaries from FY22/23 to FY23/24 due to contract steps and cost of living adjustments. 2. Police Pension costs are proposed at $2,336,528, ($1,665,073 is a transfer to the Debt Service Fund to cover the Pension Obligation Bond) an increase of $46,101. Police Pension costs are determined by an actuary retained by the Police Pension Board and are based on a number of factors, including wages, investment rate, and age of the workforce. The City issued the Pension Obligation Bonds to set the City up to be 100% funded by the required deadline of 2040. 3. Non -bargaining unit employees and Police Sergeants salaries account for a total increase $227,726 of the Personnel costs due to cost -of -living adjustments. Wage increases are included for Police Sergeants and other non - bargaining employees based on the previous year's Consumer Price Index for All Urban Areas (CPI-U), which was 5.46% in 2022. The City Administration has used the CPI-U as the marker for non -bargaining unit employee increases since FY15/16 and in FY23/24 the increases were set at 5% just below the' CPI-U. There is no additional merit component proposed for FY23/24. 4. Three additional police officers are included in the FY23/24 budget which adds $302,091 in personnel expenses. Two of these positions are new School Resource Officers which were approved by City Council to be in the middle schools and 70% of the cost will be covered by a reimbursement (included in revenues) from McHenry School District 15. 5. The NERCOM board for the dispatch center approved adding two additional Lead Telecommunicators which adds an additional $241,806 in personnel expenses. These expenses are shared with the NERCOM partners, and the city is responsible for 40.S% of the dispatch expenses. Also, NERCOM has voted once again to use PSAP funds to supplement the budget, in FY22/23 $300,000 was deducted from the expenses. This year all expenses are budgeted and $500,000 in revenues are budgeted to offset part of the expenses. By making this change, personnel expenses are $300,000 higher than in FY22/23. 47 6. A Communication Specialist role was added to the Administration budget for FY23/24, per the request of City Council, and this adds $130,051 to the personnel budget. 7. Total Benefit costs are proposed to increase $395,156 due to increases to insurance, FICA, and IMRF costs. • (Row 30) Contractual costs are anticipated to increase by $581,616 (18.06%) from the amount budgeted in FY22/23 due to a few different reasons. 1. Corporate Legal Fees are increased $60,000 to better match actual expenses. 2. An additional $100,00 was added to the Community Development budget for the Comprehensive Plan which includes Downtown. 3. HR Contractual expenses were increased by $23,500 for Gov HR and planning for the City Administrator position. 4. An additional $85,000 was added to the Economic Development budget for the expansion of the Facade Grant program. 5. Contractual Street Resurfacing expenses were increased by $165,000 due to including Engineering for Oakwood Drive. 6. Additional funds were added to other line items due to expected increases in prices due to inflation. • (Row 31) Supplies expenditures are proposed to be increased by 10.04•% ($105,875) due to increases in prices for all supplies. • (Row 32) Other expenditures are anticipated to increase by $43,0.61 (3.38%) due to additional funds budgeted for Economic Incentive Agreements. • (Row 34•) Transfers are anticipated to increase by (t389,930 (10.36%) due to Rislc Management premium increases as well as increases in expenses in the Information Technology department increasing the transfers from the General Fund. GENERAL FUND BALANCE: On February 1, 2016 City Council adopted a new Fund Balance and Reserve Policy that, in summary, established principles and parameters to which balances for all municipal funds would be defined at the beginning of each budget period. This policy, which also meets the reporting requirements of Government Accounting Standards Board (GASB) Statement 54, which requires the formal adoption of a policy for the classification of fund balances to categories other than "unassigned", was established to provide financial stability in the various municipal funds, ensure adequate cash flow for operations, and provide some assurance that the City will be able to respond to emergencies with fiscal strength. In regards to the General Fund Balance, specifically, the Fur1d Balance and Reserve Policy states: "General Fund - The unrestricted fund balance target should be set at 120 (9 months) of estimated operating expenditures including those expenditures reported in other Governmental Funds that receive annual operating transfers, with the exception of transfers intended to fund capital projects. If the unreserved fund balance falls below 120, a plan will be developed to return to the target balance. If the unreserved fund balance reaches a low of 90-day (3 months), the plan will be implemented to return to the fund balance to the target within a reasonable amount of time. Onetime revenues shall not be used to fund current operations." This level of fund balance shall provide the capacity to: • Offset unexpected downturns in elastic revenues due to fluctuations in the local, state and national economies or the loss of major sales tax contributor(s), • Offset negative fiscal changes brought about by action or legislation of another unit ofgovernment or agency; • Ensure the continued, timely repayment of debt obligations that the City may have in the event of a financial downturn; • Provide a sufficient cash flow for daily financial needs at all times; and, • Provide a funding source for unanticipated expenditures or emergencies that may occur. As identified, the parameters in this policy help to guide the City Administration in the development of the annual budget by ensuring that the General Fund Budget is presented as balanced, revenues over expenditures, while maintaining this reserve. Further, the establishment of the target minimum of 120 days provides clarity in identifying the level of funding that is available - once revenues, expenditures and fund balance are identified - to address the City's capital needs. In other words, any funds remaining after meeting the operational and reserve needs of the municipality are "Assigned for Capital." As a reminder, a combination of the economic recession of 2007/2008 and the loss of a major retailer resulted in the municipality taking measures to freeze or reduce expenditures. This included operating costs and capital improvement and capital equipment projects. In 2009 the City implemented a .5% Local Sales Tax and specifically identified that the additional revenues generated by this should be used for capital projects and Police Pension funding. Since the first full year of implementation of the Local Sales Tax and as a result of a recovering economy, the City has been able to: 1) adopt a balanced General Fund Budget, including meeting Police Pension costs; 2) reintroduce capital improvement and capital equipment projects; and, 3) rebuild the General Fund Balance. In reviewing the General Fund Balance as part of this discussion, the FY22/23 Budget includes a beginning fund balance of $14,702,950 (Column S, Row 6) based on FY21/22 audited financial information. Based on FY22/23 budgeted revenues, operating expenditures, and capital expenditures (which were funded with fund balance), it was anticipated that the ending fund balance would be $13,095,926(Column S, Row 43); the estimated ending unassigned 120-day fund balance at $9,051,837 (Column S, Row 44); showing a balance to be transferred to the Capital Improvements Fund of $4,044,089 (Column S, Row 45) in developing the FY23/24 Budget. It is important to bring up at this point that the City has implemented two Utility Taxes to address General Fund Capital needs. The ComEd Utility Tax was implemented for capital asset maintenance and replacement and the Nicor Utility Tax was implemented for new capital assets. The Capital Improvement and Capital Equipment Funds will be phased out once projects are completed within those funds and they will be replaced with the Capital Asset Maintenance and Replacement Fund and the Capital Asset New Project Fund. In future years the Fund Balance and Reserve Policy will have to be addressed if Revenues are greater than expenses and what the City will do with the excess funds, for example moving them to one of the new Capital Funds. Currently, the Fund Balance in FY22/23 and FY23/24 is budgeted to be used for capital projects as well as reserved for specific expenses. As in the discussion above, this amount will most likely change upon completion of the annual audit however, this is not done until September/October, 4-5 months after the budget is adopted and implemented. 3 t1iH W H H O N in N o y I` O O O O H o In N N pp d; OC V' N �p D; h H O in OD 00 N r H O O �U N Oki) o o O O O O N o 0 o ' to 0 f` p O O O N Z� H O N o o co o ' W N O O O N o 0 OO ' In h o O N v o M m O O iq H N M M to O gq �Y OP M ZP e y w h h d' 00 o o o O OO N 0 O In 1� d' o A ' m H O O O N N o (� H IA In N O �O 'd' o ID o H O 00 h O OO q!����� m H ID to H b N 00 In O H h 00 �+1 O �"' M H O M 'd' h d O N DI O M 00 in .+ O M rl H H H O ID tD M H ID O N in O� 6 0a OD M N M h DI in N p N H d• O r N O N d• O� O o ��pp W T O pp ID IO 0) M OI h h IO H N d' O O O o O N O O O 0 O N O O O 0 N H O O O H O O O in N O O O 0 O O O O O o N M O O O N DI N O O O M ID M O W N M H N rl H h m Co h O M' O O O o N in O O O tl h d' N N y' O N h yd'� DD tp O O '„� M O h N m 1n O m 00 .� DI '+ O 00 to O h O o w H rl H H vi H N H O 0 W co w M N N N OI ID M in N N DI .h r4 N M H N M N N h � (n h %D O N N d• N tD Zt M n 00 M 00 N N In co O b O ,.{ y M ID ID O 00 M co co �` h H T N n P O N M O tD M eH�I 00 h ID h IO H n N O m T N N N N tR ID in N yj h N Ot to M M CO OD �O O• N ON t: h `� N co M M H ID M v; O M O N H l� M M M O h n O M O rl N In H N ID N H H �"� N DI N '3 N O h N N M N N O N DI n rl d' M h in h OI O h t-i OI in DZ d' h 0 pp d' CD N O b C (n M N d' In O H 0 VI N O Cp 'd' o O N O O o rl d• ID H N r1 ID VI W h N O O o oO d' OI O O o d' N M O H H C4 O N M N O N DI 0n b ��pp W N O y, H b OI vi O to Vi N O O O In N to 00 In I O H DI In o D+ d' Di H F- N OI O d' tj in tD N rt pt h h b G M M N O O O y N M M M N h b O In d' N y' ID N t0 t L H M O O N N O h in r1 rl 00 d h fZ b N O o w M O 0 N M N d' N N In O O O O In ID d' o O H Ow^ d' ID h O NO N W OD h to O DI N �-I O tT d' M rt d' O rl m h N O to t0 O h DP N m d' 'r'I O CO H h h h O d' m M H In ID IO O co h N M tq N 00 d• d• 00 d' M N O h N d' OI D� H In O N O N O N tY M to OI H d• N O I-1 o N •C fI'1 h N rl o to d' n N h '+ d' N O h O t0 I -I i O N O N nO �^ H d' DI ri M VI N DI d• N H N DI N h OI t` h N� M H b O N 00 M O O O O O O O O o O N 0 N OD 0 O O N N 0 O O 0 In 00 0 O O 0 00 M 0 O N n O (A 0 O lli H •}' In DI O m M h H rl %t DI M o h DI rl O O N O O O m IO M w hi w m H t% h ID CI rl 'd' ID O r h CP N In 00 N O O I-� w N (� h N h r1 'd' h IO O H h d' IO N M N N O µ d� co N qq W n N N d' h O O w N H to N H O M In 0 H d' N H DI O t� C3 O N d' h OD O IA Vj H M 0n M N m O O N N Iq b 00 M DI O W h DI M N M UI O N d' in H 'd_ H h N OD 'd' C� N M h N h In rl N H 'd' tO O to H M N 'i m In H N K In M 'd ID ID N d' ID O h O O N h d• OI N d' ID O In d• O Ili H O In rl d• '+ M 00 M N d H pO�� 0o M DI H N O d• OI 'd N 1n i z O M h m in H h{ h O OI N M In M ID h N M H ID IA m h O M OI ..dd.. d' N M O w co O o IO H h O r1 O� N b N N M O b M d' M r1 �p d' in h N o tT O M d' In r1 ri N O O O I -I d' O Iq M H h 1 Z N H O to h N M in O N ^ N M ID h ri DI fn N O In IO w co M to rl ri M n N h N ID h O co ri M N N N N rl M N Nd, � P O O M O N N M `t' N O O O ^ O '+ M d' rl d• ID O N M O DI d' t� N h e-I [li d' rt DI IA In O d' `O CO O d' O O `� O rt N N d' Q. 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General Fund Operating Departments include - Administration (100.01), Elected Officials (100.02), Community Development (100.03), Finance (100.04), Human Resources (100.05), Economic Development (100.06), Police Commission (100.21), Police (100.22), Police Dispatch (100.23), Public Works -Administration (100.30), Public Works -Streets (100.33), and Parks and Recreation (100.41). While these expenditures have already been summarized, in total, as part of the previous discussion of General Fund Revenues and Expenditures, the information contained in each of the following sections will provide details regarding each operating department. The narrative below is a summary overview of sections that follow. General Administration (100.01) Overall, the Administration operating budget is proposed Salary/Benefit costs are identified to increase by a net of $235,341 or 41.19%which includes a new Communications Specialist position which increases the salaries budget $90,000, Non -Bargaining Unit increases of $18,459, Bargaining Unitincreases of $1,102 and Benefit increases of $125,780 (due to an expected retirement payout). Contractual expenditures (Row 21) which includes property tax expenses, insurance administrative expenses, shredding, and other miscellaneous administrative costs will decrease $25,000 in FY23/249 Corporate Legal Fees (Row 22) include the City Attorney, Traffic Attorney and Collective Bargaining representation and are identified to increase $60,000 in FY23/24. Other expenditures -which includes Administrative Expenses and internal transfers for Risk Management and Information Technology - is proposed to increase by $24,236 (Column U, Row 45). Elected Officials (100.02) The Elected Officials budget is proposed fora $18,760 decrease, or 22.52%, due to eliminating the administrative expense line item due to the account consistently being at a $0 balance over the last few years. (Column U, Row 37). Community Development (100.03) The Community Development budget is proposed increase $173,276, or 13.13% (Column U, Row 45). Salary/Benefit costs are budgeted to increase by $23,382 (2.6%), which includes $15,888 in non- union salary increases and $7,494 in benefit cost increases. Contractual Services are identified to increase by $125,600 (43.89%) due to the addition of the Downtown Plan to the total Comprehensive Plan expense. Supplies will increase by $5,000 (12.05%), and the internal transfer for Risk Management and Information Technology will increase by $19,294 (21.01%). Finance (100.04) Salary/Benefit costs are anticipated to increase by $20,875 (3.90%) due to non -bargaining unit salary and insurance increases. Contractual Expenses are expected to increase $180000 (33.95%) due to higher credit card fees and postage increases. Development Expenses are expected to be 53 $210,000 higher than budgeted in FY22/23 due to the addition of three sales tax Incentives. A vehicle loan was budgeted in FY22/23 but was not initiated so the budget is $144,989 lower in FY23/24. Transfers for Debt Service, Risk Management, Information Technology, and Audit Funds increase $22,317o Human Resources (100,05) Salaries/Benefit costs are budgeted to increase by $10,168 (3.97%) which is primarily due to salary and insurance increases. Contractual Services increase by $27,900 (81.08%) due primarily to the contractwith GovHR for the City Administrator hiring process, while Other Expenses for Information Technology transfers increase by $3,787 (20,91%). Economic Development (100.06) Salary/Benefit costs are budgeted to increase by $11,924 (4.22%) due to salary and insurance increases. Contractual Services increase $84,950 (74.5%) due to the expansion of the Facade grant program. Purchase of Services - Information Technology expense increase by $1,8289 Police (100.22) The Police budget is proposed at an overall increase of $995,078, or 8.84% from FY22/23. Salary/Benefit costs are identified to increase by $683,677 due to the addition of three officers For a total of $302,091, sworn salary increases of $161,230 and non -sworn salary increases of $73,585. Benefit increases which include insurance, IMRF, and Police Pension total $146,771. As discussed earlier, Police Pension costs are determined by an actuary retained by the Police Pension Board and are based on a number of factors, including wages, investment rate, and age of the workforce. The City committed to full funding by 2040 which is why the City issued the Pension Obligation Bonds to bring this funding under the City's control with the anticipation that the City will save money. Contractual Services increase by $58,325 due to increased telephone costs and training. Supplies increase by $60,675 due to higher gasoline usage/costs. The Transfer to Risk Management increases $74,890 due to increasing premiums and the Transfer to Information Technology increases by $114,715 due to higher expenses within the IT Fund. Dispatch Center (100.23) FY23/24• represents the seventh full year of operation for the fully developed, and staffed, dispatch center. The FY17/18 budget established the baseline budget for the dispatch center moving forward. The proposed FY23/24 budget has been presented and approved by the partners of the dispatch center. The total amount proposed for the dispatch center in FY23/24 is $3,156,939. Salaries/Benefit Costs show a net increase of $699,194 because the partners voted to use $300,000 from the PSAP Grant funds received to offset personnel costs for FY22/23 which were excluded from total personnel expenses. For FY23/24 the partners agreed to use $500,000 from the PSAP Grant funds (which are in the General Fund Balance), butthis amountwas not deducted from total expenses to better track actual expenses versus net of revenue received. The remaining $399,194 increase is due to the addition of 2 Lead Telecomrnunicators ($241,806) as well as increases in contract and insurance costs ($157,388). As a reminder, this amount is offset by more than $1.8 million in reimbursements as a result of the partnerships with the City of Woodstock, City of Harvard and McHenry Township Fire Protection District and through charges for dispatch services paid by customers of the dispatch center. These are reflected as General Fund Revenues and included in Row 22 of the General Find - Revenues, Expenditures and Fund Balance Summary sheet. Public Works Administration (100.30) The overall Public Works Administration budget is proposed to increase by $31,802 (6.27%) due to increases to salaries and insurance costs as well as Purchase of Service Transfers for Risk Management and Information Technology. Public Wor•Ics Streets (100,33) The FY21/22 Public Works Streets budget is proposed to increase by a total of $332,344 (8.62%) from FY22/23. Salaries/Benefits are proposed to increase by $10,692 due to insurance increases. Additionally, Contractual (Row 21) costs have been increased by $277,000 due to carrying over non - spent road resurfacing expenses from FY22/23 to the FY23/24 budget. Materials and Supplies costs are proposed $15,000 higher due to increasing supply costs and additional Forestry programs. Transfers for Risk Management and Information Technology increase $29,652, Parks and Recreation (100.41) As of FY23/24 the Parks Maintenance department has been removed from the Parks and Recreation budget, but all programming expenses related to the Recreation Division not associated with the McHenry Recreation Center are still included. Revenues from recreation programming, reflected in General Fund Revenues, offset many of these costs. As proposed the FY23/24- in the Parlcs and Recreating budget is proposed to decrease by a total of $73,146 (4.38%), Salary/Benefit costs are identified to decrease by a total of $141,187 (16.68%) with the movement of salaries and benefits for the Parks Maintenance Superintendent position to the Parks Maintenance Budget; Contractual Services to decrease by $1,834 (0.63%) due to decreased dues; Supplies to increase by $18,600 (21.26%); and, Other costs to increase by $75,275 due to an increases to the Risk Management, information Technology, and Recreation Center Transfers. Parlcs Maintenance (100,45) The Parlcs maintenance budget is proposed to increase by $226,800, or 17.83% from FY22/23; Salary/Benefit costs are identified to increase $219,800 due to the movement of the Superintendent position from Parks and Recreation department as well as contract and benefit increases. Supplies expenses will increase by $7,000 (5.11%) due to higher gasoline usage/prices. 55 �*p6. 2;'IIORION lk, y.. •, in, .. rof ( •,. Y ,. ��I el OV General Administration - Overview The General Administration Budget contains personnel and operational functions related to the provision of i general administrative services and, beginning in FY19/20, includes capital projects expenditures from the General Fund Balance. Beginning in FY18/19, due to operational/department restructuring, economic development and human resources functions were formed under separate departmental budgets (Economic Development and Human Resources) and, as such, all related expenditures are now found within these. Next, municipal center building and grounds maintenance activities are now included under the Department of Community Development and, starting in FY19/20, all Contractual and Repair and Maintenance costs related to these activities were also transferred to the Community Development Budget. Finally, capital projects to be funded through the General Fund Balance are accounted for in this fund. The Office of the City Administrator, which includes the positions of City Administrator and Deputy City Clerk, is responsible for providing management services, budgeting, legislative support, and communications to elected officials, staff, and the public in carrying out the policy and direction as set by the City Council. 57 General Administration - Organizational Chart m General Administration - FY22/23 Accomplishments • Directed development of a 20-year Community Investment Plan to replace the 5-year Capital Improvement Program. This plan was fully completed during FY22/23 and presented to the City Council as part of the FY23/24 Budget development process to be used as the basis for capital asset maintenance and replacement projects. • Despite the economic impact of the COVID-19 Pandemic, developed and presented a balanced operating budget to City Council for FY22/23. The budget included a more than $4 million local road program, funded primarily with Motor Fuel Tax funds, for the first time in City history. • Complete redesign of the City of McHenry website to make it more user friendly, information, and relevant to happenings in the community. • Successful extension of the Downtown Tax Increment Finance District through 2037. 59 General Administration - FY23/24 Goals & Objectives • Continuous monitoring of municipal budget and idencation of internal and external factors that may have an impact on it. • Develop structure for Capital Asset New Project program for use of COMED utility tax funds. This will be for the development new capital projects as distinct from capital asset maintenance and replacement projects. • Implement quarterly updates of capital projects with Department Directs and for transmittal to City Council. • Develop along -term revenue revenue and expense forecast formula. • Continue to provide leadership and oversight to all departments to provide the highest quality of services in the most cost and time efficient manner to customers. • Continue to evaluate and identify alternative revenue sources. • Coordinate with Human Resources and Department Directors to develop departmental succession plans. 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Dtticia Elected Officials - Overview The Elected Officials Budget contains personnel and operational functions related to the elected positions of the municipality. These include the Office of the Mayor, the seven (7) Aldermen, and the City Clerk. The primary functions of these elected positions are described below. The Office of the Mayor provides leadership, initiative, and direction necessary to provide quality services to the citizens of McHenry. The Mayor interacts continuously with the appointed City Administrator in ensuring that the established policies and ordinances of the municipality, as set by the City Council, are carried out by the various departments, divisions and employees of the city. The City Council, comprised of seven (7) Aldermen representing geographically defined wards and elected to staggered four (4) year terms, is the legislative body for the City of McHenry. The authority of the City Council is expressed during regularly scheduled City Council Meetings (1st and 3rd Mondays ofthe each month) through the adoption of policies, resolutions, ordinances and other related actions as deemed appropriate to promote and protect the high level of service quality and financial stability of the City. The City Clerlc, elected every four (4) years, has the responsibility for taking minutes for all regular City Council meetings, Council Committee meetings, Committee of the whole meetings, and Planning and Zoning Board meetings. The City Clerk is also responsible for records management of the municipality. The City Clerkis assisted in these efforts by a designated Deputy City Clerk who is also a full-time employee of the city. 0 y N u in Poo N v "J O y • �O V l� v tn N u7 M a � O a PCs Ln'',. M C \ f0 Lr) %D �Nr W W O M � � • M • \ b Co �Ni W � N • rmi N ^' • M • r\-1 � •• ui rn � o � Q W N � O � N � q n a q � Q CL u u � � O A n w F Lzi • w a Q F • O F w a� A d z •..t i age ao Community Development - Overview The Department of Community Development is responsible for promoting the health, welfare, safety, and quality of life to McHenry citizens, property owners, visitors, and commercial interests. These services are provided by an experienced and professional staff that City of McHenry consists of a City Planner, Building Inspector, Plans l Examiner, Plumbing Inspector/ Code Enforcement Community and Officer, and a full time Code Enforcement Officer. The Economic Development administrative staff within the department includes one Permit & Customer Service Representative, one Administrative Assistant and one Customer Service Specialist. The Community Development administrative staff is also tasked with handling day to day operations at the main counter, this incudes payment of water bills and answering general questions. Building grounds and maintenance for the Municipal also falls under Community Development, this division consists of one full time Facilities Manager and one part time cleaning position. The Department relies on a partnership with local and regional government and public agencies, community -based organizations and the business community to succeed in its mission. The Department of Community Development strives to achieve the highest level of customer service and professionalism in helping the community thrive. Additionally, the Department of Community Development coordinates closely with the Director of Economic Development to ensure that business expansion, relocation and development projects remain top priorities for review and that processes are streamlined to the extent possible while maintaining the appropriate attention to detail in `a regard to applicable codes and other guidelines. — ,�\d t �; Community Development Director Ross Polerecky t and Cusomer Se Representative Susan Lackhouse Customer Service Specialist Hailey Riendeau Building Planning &Zoning Inspection City Planner ■ Building Inspector Cody Sherrif Dave Watkins Plumbing Inspector /Code Enforcment Officer Norman Swanson Plans Examiner Dan Tonyan Administrative Assistant Lynn Martenson Code Enforcement Code Enforcement Officer Jake Marino Building &Grounds Maintenance Facilities Manager John Cummings L'uzz Frelt Community Development- FY23/24 Accomplishments • Continued to provide exceptional service to the community • Successful RFQ for the comprehensive plan • The issuance of over 25 single and multi -family homes • Consolidation of our GIS maps into one functional package that can be used by all individuals in the City with restrictions for editing and viewing rights on certain layers (i.e. water sewer) • Continued efforts to digitize historical building documents using Laserfishe • Redevelopment of the Watertower Marina • Completion of the Fox River Corridor plan • Implementation of the downtown streetscape plan for the Riverside Drive Corridor • Successful annexation of unincorporated pockets of land throughout the city • Successful building of the Authentix McHenry development of 288 marltet rate apartments • Completion of the riew Thorntons fueling station on Chapel Hill Road and Route 120 • Updates to the Municipal Code and Zoning Ordinance • Acquisition of properties within the downtown to help facilitate development within the downtown and TIF district Community Development - FY23/Z4 Goals & Objectives • Updating of building permit fees • Updated building codes • Continue to update antiquated ordinances • Focus on redevelopment of vacant lots within the downtown districts • Identify and annex properties contiguous or wholly surrounded • Continue to provide a high level of customer service to residents and businesses. • Focus on continuing education of employees within the department to ensure that we provide the highest level of service possible. • Worlc closely with Economic Development to continue efforts to draw development to the City of McHenry. • Explore options to create a unified development ordinance • Continue code enforcement efforts • Increase efforts to redevelop the central wastewater treatment plant site • Continue to focus on residential growth, particularly single family homesites 71 Community Development - FY23/24 Performance Measures Item Goal Description Proposed Redevelopment of vacant Focus efforts to redevelop Recruit qualified Masterplan the downtown downtown parcels downtown vacant parcels developers districts A UDO is a document in which traditional zoning Explore options to create a Research other regulations are combined unified development municipalities and their munUDO with other desired city To be ready to start ordinance to educate ourselves regulations, such design implementation of a UDO in on the processes of guidelines and water w the 24/25 fiscal year implementing a UDO management, Into a single document To use education and face Are code compliance Continue a high level of Code Enforcements efforts to face contact with violations being mitigated compliance in the code residents to increase code and closed in an efficient enforcement department compliance manner To continue to digitize Digitize, label and file building documents thus documents to create a Digitize historical building eliminating paper and 60% of historic documents documents creating an easier more more efficient method of searching reviewing old transferred to Laserfishe efficient way to review documents these documents Explore grant To set a construction Downtown Streetscape Continue with design of opportunities to help fund schedule for the construction Masterplan tine Riverside Drive construction of phase I of of phase 1 of the downtown corridor the downtown streetscape streetscape plan plan Select a firm and begin Focus an community Begin to develop a Comprehensive Flan working on developing the outreach and develop comprelensive plan foil the new comprehensive plan engagement strategies City of McHenry 72 r- 0 0 C 0 0 0 C 0 0 C C 0 0 C 0 C 00 _ r-i C o rn o o C '-i r C o 0 o h h o 0 0 0 o o rn o o cn o �.D O O �,O 00 �-D d' O �O N �o O O O O p O O 00 N h h d' N N O Ln N %lD h O O O o O O M O C7 r-i O ri T-i r-i N d' m Ln d h �k 00 ri M N r-I to O^i L/') N — _— — CD CD' O ' ' ' CD' CD M O N m O H m h w O O O O O co h ri r-i N O d' m �,D O Lr) r-i r-i O N fn Ln Ln N rpi OO L1") M d' O kD M M N o O O O O O O O O O O O O N r-i M � M h h h N O O O O O O O O O O O O O Ln 00 �o %lo 0o h O M w ri �D O m O �o O O co O m O O N kD r-i ri vi ri M r-i' r-i CD N N NODt\ N co r i M rN-i %lo .-i rn m d In In M O d' OJ N D� 00 OD 6� r-i M In _ 00 r-i O � M h N Lo O N m G� O r-i h N Lo O� �D d' r-i �,D d' O O%% d' d' O m m r-i klo h O %10 m (IN N M m �D r-1 d' h N m O �D d' LO r-I O h r-i d' r-I' %,D r-I r-I d' In O d' d' ko %%O N M %D ri r-I �O r1 0o m O O O M O O O O O O O O O O O O �D M ri M d r-i h M CO %D %%D O d' O O O O O O O O O O O O O �D r-i m �o h m r-i O� d' ri O O N O �%D O O N O Ln O O 00 h %,D kD m c-I O kD O r-i rA N r-I m ri %O O - 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The primary operating functions of the Finance Department are as follows: • Administration: Responsible for management of financial affairs of the city, including budgeting and financial planning, and supervision of operations within the department. • Accounting: Provides the City's financial reporting, payroll processing,accounts payable and receivable, purchasing, fixed asset reporting, special tax collections, billing, and auditing functions. • Revenue: Collects various revenues, manages the Police Pension fund, ensures payments to retirees are processed, and invests idle City funds. Note that the'Finance Department expenditures include, under "Other", transfers to other funds. 76 Finance - Organizational Chart Finance - FY22/23 Accomplishments • Assisted with obtaining new software for Adjudication Court to streamline the processes. • Completed analysis on water/sewer rates to ensure operating expenses are covered. • Completed the transfer of the Police Pension assets to the Illinois Police officers' Pension Investment Fund. • Received an unqualified opinion on the audit. Finance - FY23/24 Goals & Objectives • Improve management of the City's investment portfolio, including implementing cash flow modeling and investment strategies. • Create a procedure manual for all duties within the finance department including screenshots of the Tyler software to help with cross training. • Begin cross training within the finance department to ensure vacancies can be covered. • Improve communication of information to new residents. • Begin using Tyler Content Manager within the finance software more to scan documents in order to eliminate paper and streamline processes. 79 Finance - FY22/23 Performance Measures Per i1mance Performance.. Item Goal Measure Proposed Develop an update Was the quarterly report quarterly reports and Quarterly Reports updated and transmitted September 2023, December 2023, transmit to the to the board quarterly? March 2024, and June 2024 appropriate board, Develop and present a Was a balanced operating Annual Budget balanced operating budget budget presented for City April 2024 foil City Council Council's consideration? consideration Whether or not an An unqualified opinion issued on the Annual Audit Continually have an unqualified opinion has 23/24 audit presented to council in unqualified audit opinion been issued September or October of 2024 % of Time that Finance Customer and Vendor Return all calls within one Department Responds to 100% of the time respond to calls Concerns/Conplaints business day Calls within one business within one business day, day Amorally apply for the Illinois Government Annual application of Apply once budget has been approved Annual Budget Award Finance Officers budget award submitted by the City Council Association (IGFOA) to the IGFOA budget award :1 0 0 0 0 0 0 0 0 0 0 0 0 0 L 0 0 C 0 rl 00 M CD c-I OO 00 O O -. CD O -. 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This includes compensation, benefits, wellness, staffing, recruitment & selection, internal policies, workers compensation and safety, performance management, labor relations, and employee relations, training, and process improvement, Through the establishment of the McHenry Recreation Center, the staffing size of The City has grown to have an average of 275 full and permanent part time employees. During the summer season this increases to around 330 employees. Human • ReSa� �rrAc The 23/24 budget year we continue to watch insurance costs including health, workers compensation, and liability. The insurance industry continues to be volatile with weather -based claims throughout the country, the rising cost of pharmaceuticals, and the emotional health of our employees and their families. We continue to be as proactive as possible to mitigate claims, train on safety, and increasing rates. Human Resources - Organizational Chart Human Resources - FY22/23 Accomplishments • Wellness. We met the goal to revise the wellness program to increase employee accountability for their health year round. Continued success with our wellness program including biometric screenings earning the City nearly $20,000 in rebate money from IPBC. • NeoGov Perform Software Implementation Continued implementation of this software to increase efficiency in conducting performance appraisals. Set up the Police Department as a new user of this software. • Harassment Prevention Training. Training is required yearly for all employees. • Employee Handbook. Yearly updates of new laws • Family &Medical Leave. Coordinator Meyer has kept the City compliant managing 35 FMLA full time and intermittent cases in 2022. • NeoGov Insight Software. Nicole is the Insight "guru" with all City recruitment now flowing through Insight. We continue to build in new features such as applicant self -scheduling of testing and interviews. • Implementation of NeoGov Learn. Starting implementation of this learning management software. With the increasing requirement of mandated training, even for part time employees, this system that comes with thousands of interactive training modules, will track each employees training, send reminders, and give employees greater opportunities for development. Human Resources - FY22/23 Goals & Objectives • Processes & Procedures. Continue the process of written record of al] HR & Rislc processes and procedures. • Rislc Management. Wor1C with our insurer, Safety National to create more safety training options. Develop electronic risk reporting forms in Laserfiche. • Compliance. Each year employers are required to provide numerous compliance notices to all employees, especially regarding health care. This year we will create a system to track and disseminate these notices. • Benefit Website. IPBC has contracted with a new company, P1anSource, to provide electronic benefit selection and information. We will begin implementation of this system in spring 2023. m Human Resources - FY23/24 Performance Measures Itein Goal Description Proposed Provide training & Customize trainingraining T& Complete software development Development implementation and make available opportunities to to employees employees Continue Analyze & Process & documentation of document Process & Procedure Procedures procedures & procedures & manual for HR/Risk processes processes Eliminate different Use Laserfiche to versions of form create online Create one form Risk Management and implement one usable by all form for all incident reporting departments from departments. Compliance Over 20 healthcare Ensure all paperwork Become compliant compliance notices is available paperwork for With all associated that must be given electronically or various healthcare paperwork. to new and current manually for all laws employees employees 0 0 0 0 0 o 0 0 C C 0 0 0 0 0 0 In H Ln O O Ln M N N O m O O H H •• kD O N t�h N O O CD O O CDO� m O �O N d' O O m 00 W O O O H O O O O H m N N - H m tMD N d N m O O 00 co N m Ln 00 M 0� O� O r-I N N N N <}• N m %,D %%0 H t� d' O O O O O O O 00 00 �D m O� %lD L� to m N O H O O H Ln M GN O� %�D kO (J� H H %�D m O co N N co 00 t� r-1 I%D .--I CO I- H N H N L� Ln %1D N N • N N H 00 OO N m d' Ln O� O O H H H h m O �D d' O� �O %�O H N h O N N d' N N H H H `d' Co H H 'c}' N d' 00 %,D <N H H H H �D O d' ri m O) O 00 co In O� N H N Lo H N H H H N N kO O O O O O H H L� 00 %�O d' \O m O O N H L� t� O H co O H O O H Ln Ln H H d M Q H H H H M Ln O d N N H H O Ln N �O M r-I N t� d' 00 00 K N H N Ln N fn H H H N m G� d Ln m tin Ln d' d' d L� 1� d m O O% r� N H W H �,D M (3� M N d' O� ON %%O ON d\ 00 00 H m H H Ln O 00 �'O d' N M %10 %.O 00 OO H C N O d' LO l� Cl (D t� H H N N M M H H LO C) 4mJ _ O� L� O H d' d' 00 M O ON M N N N O O M \,D to m m t� N (3� M H W M Ln Ln Ln Ln to M co H kO Ln H C� N Lo h H H O� 00 H Q\ O H N d' O O Q Ln H H H H N N H H H N a A m O� ko d H d' M m M m t� 0O %O m CYN d' M 00 OD H d!, klO O% d!, L� N Ln Ln ko OH M 0 d H 00 M V w M U [� O Fi N O W v clipp w wW �D ' V L Y N V) VI U U U� W N In W N (Y CAW � N N �. W bA V � V) O ,0 , �F'� b> r Y o U U (D 0) w " V O o 1-4 � O O O a O O O O O O 1 O O O O O N v"iCD H N M <h H N N � Q �r-i � � N � d d' In Ln Ln Ln %,D rn x O N m d' Ln QO CO M O N m d' Ln LO c0 m O r- LD CO M r- N N N N N N N N N N M m Fiscal Year 2023/2024 Annual Budget Economic Economic Development - Overview The Department of Economic Development Budget contains personnel and operational functions related to the provision of economic development services in the City. Before FY18/19, costs related to economic development activities and personnel were accounted for in the General Administration and Community Development Budgets. With a growing emphasis on economic development activities, a separate budget fund was established to account for expenditures. The Economic Development Department is the first point of contact with potential businesses, citizens, and elected officials regarding business inquiries and potential new business opportunities. The department is responsible for effectuating orderly economic growth of the City, attracting, retaining, and serving businesses and residents in the community. PRIMARY GOALS AND OBJECTIVES • Cultivate and develop continual relationships; with real estate brokers, current and prospective businesses, retailers, manufacturers, developers, attorneys, architects, engineers, etc., • Maintain contact with retailers, developers, manufacturers, and prospective business owners regularly to assist in space needs and location preferences; • Promote City successes through Social Media: businesses expanding; new business, events, etc. to keep residents and business owners informed, • Maintain a list of available properties, downtown, Richmond Road; demographics, socioeconomic and other data and make it easily available to all inquiries on the City website; • Maintain contact with Nicor and Com Ed executive staff as it relates to economic development and business assistance, • Work with the Community Development Department (zoning, subdivision, and coordination of development) to facilitate business attraction and expansion; • Facilitate Business Retention Visits with McHenry County Economic Development Corporation (MCEDC), State Department of Commerce and Economic Opportunity (DCEO), McHenry County Workforce Network, and the Small Business Development Center (SBDC) to provide assistance with issues facing companies in today's business climate and to prevent companies from closing or relocating to a new community; • Maintain a List of City manufacturers, contacts, business type, space, employee count, etc.; • Maintain a comprehensive list of all businesses in the City to ensure prompt and accurate information sharing; • Work with the Department of Commerce and Economic Opportunity (DCEO), McHenry County Economic Development Corporation (MCEDC), Intersect Illinois; McHenry Area Chamber of Commerce; Small Business Development Center (SBDC) and other economic partners to provide business assistance, site selection, expansion, and retention; • Continue multi -faceted efforts to retain existing businesses and attract new businesses to the City. 91 Economic Development - Organizational Chart 92 Economic Development - FY22/23 Accomplishments • Worked cooperatively with I<ey property owners and McHenry Area Chamber of Commerce, downtown business owners, and other relevant organizations and parties in seeking additional ways to revitalize downtown, working more closely with businesses with the goal being to attract additional investment in the downtown area, retain existing businesses, promote investment in older properties and assist smaller businesses struggling to keep doors open; • Promoted business growth in all geographic areas of the City, on the City's major retail corridors, downtown, Illinois Route 120, Illinois Route 31, and in the City's business parks; • Worked with The Retail Coach in attracting new retail and restaurant tenants; • Nominated several businesses as MCEDC Business Champions: Superior Felt and Filtration, Rock Solid Builders, and Heartland Computers; • Wrote incentive and annexation agreements and ordinances to facilitate and promote business attraction, retention, and/or expansion; (Munson Marine; Whiskey Diablo) • Worked with McHenry County College/Small Business Development Center (SBDC) onbusiness attraction and retention, employment needs, and collaboration for business development of the McHenry Riverwallc Shoppes; • Continued to serve on the Manufacturing Pathways Consortium and make valuable business connections at the MCC Manufacturing Breakfast; • Represented the City attending McHenry Area Chamber Business Mixers, Multi -Chamber Mixers; Ribbon Cuttings and Grand Openings for New Businesses; • Continued to serve as a member of the McHenry County Public Transit Access Committee; • Served as a board member of the McHenry Area Chamber of Commerce; • Attended McHenry County Workforce Network Meetings (serve as alternate for City Administrator) collaborating with other municipalities in the County in a concerted effort to assist and meet the needs of our employers; • Served alongside other municipalities and Organizations on the MCEDC Economic Development Growth Experts (EDGE) group; • Coordinated business retail and industrial site visits; • Continued to work with Downtown Businesses and Community Organizations (City, Chamber, School Districts, Rotary Club, Kiwanis, etc,); • Attended Chamber of Commerce Business Networking Scrambles to market the City, explain our role, and meet potential new businesses, • Continued to lead and work on the development of the McHenry Riverwalk Shoppes initiative with the Chamber of Commerce and High School District; (Completed McHenry Riverwallc Shoppes Irrevocable License Agreement) • Streamlined the City Mural Program connecting artists with businesses creating the first City Mural, and in the process of creating and organizing a mural event in collaboration with the schools and mural artists • Created a new Facade Grant Program encouraging the revitalization of more building facades throughout the City; 93 • Business Recognition (notably, 50 years -Natures Cornucopia and Riverside Bakery); • Increased activity on social media incorporating Linkedln sharing business recognition, milestone anniversariesI and industry trends using pictures and videos; • Worked asserfiively with Developers and Entrepreneurs to fill vacant storefronts in all areas of the City; • Streamlined Economic Development website content for ease and attraction of new business development, Creation of new brand: Think McHenry, and creatednew microsite to market and increase visibility, • Invited and introduced Economic Development Staff and City to prospective businesses by attending all new business walk-through inspections when they are scheduled; • Attended ICSC promoting City; (attended Navy Pier event and ICSC in Las Vegas); • Encouraged development on the south side of the City; (Worked with Bradford Real Estate on Pacini Property); • Worked with the development of Redwood Apartments on the east side of the City Of McHenry; • Worked on the development of RJ Roberts Property; • Worked with several entities on attracting Recreational Cannabis Dispensaries to McHenry; • Explored and researched the creation of a Business District; • Encouraged the development of another hotel by obtaining an updated Market Study; (Work with Cobblestone Hotel and Grand Stay Hotel, Hilton) • Worked with owners of McHenry Commons to redevelop the site; • Worked with The Retail Coach in bringing more retail and restaurants to the City and keeping downtown vital, • Adopted and implemented amulti-taxing body Vacant Building Incentive Policy. Economic Development - FY23/24 Goals & Objectives • Work cooperatively with I<ey property owners and the McHenry Area Chamber of Commerce, downtown business owners, and other relevant organizations and parties in seeking additional ways to revitalize downtown, working more closely with businesses with the goal being to attract additional investment in the downtown area, retain existing businesses, promote investment in older properties and assist smaller businesses struggling to Keep doors open; • Promote business growth in all geographic areas of the City, on the City's major retail corridors, downtown, Illinois Route 120, Illinois Route 31, and in the City's business parks; • Continue to coordinate and promote the Commercial Tenant Incentive Improvement Program, • Continue to coordinate and promote the Facade Improvement Grant Program; • Represent the City in attending McHenry Area Chamber Mixers, Multi -Chamber Mixers; Ribbon Cuttings and Grand Openings for New Businesses to attract new business; • Continue to serve as a member of the McHenry County Public Transit Access Committee; • Serve as a board member of the McHenry Area Chamber of Commerce; • Attend McHenry County Workforce Network Meetings (serve as a proxy for City Administrator) continuing to work together to meet the needs of all the City's employers, • Coordinate Business Site visits to calculate business retention and expansion needs, • Coordinate events across all organizations and joint marketing efforts to promote the City of McHenry to gain new residents and businesses; • Utilize CoStar to be more efficient in locating properties and providing information to prospective retailers and other businesses; • Be more active and present on all social media and advertising platforms: sharing business recognition milestone anniversaries, promoting businesses and events in McHenry with pictures and videos to have a competitive advantage over neighboring municipalities; • Work assertively with Developers to fill vacant storefronts in all areas of the City; • Streamline and promote Economic Development website content over a wider demographic area for ease and attraction of new business developments • Introduce Economic Development Staff and City to prospective businesses by attending all new business walk-through inspections when they are scheduled; • Attend ICSC promoting the economic advantages of the City of McHenry; • Boost and promote development on the south side of the City; • Continue to work on developing the NWC of Bull Valley Road and Illinois Route 310 • Increase efforts in the development of R.J. Roberts property; • Encourage and promote the development of a hotel; • Worl< assertively with the owners of McHenry Commons to redevelop the site; • Work to bring one or more cannabis dispensary(ies) and related businesses to the City; • Work cooperatively with the McHenry Riverwall< Shoppes owners to locate brick -and -mortar locations for the new successful businesses to remain in McHenry after their first year, increasing our tax base, 95 ® Coordinate a second business symposium targeting property developers, realtors, and bankers to continue developing relationships that will ultimately succeed in revitalizing vacant properties. Economic Development - Performance Measures FY23/24 Proposed OUtcorne(s) Visit/Talk to 25 existing Visit Talk to 25 existing Number of businesses 25 existing businesses / g businesses businesses; The building is no Redevelop the former Get site redeveloped longer vacant, and the Redeveloped site Sears/Kmart Building site is redeveloped Bring another hotel to Have a new hotel built the City in the City of McHenry Hotel built or planned Hotel Work on development Develop site pads for Redevelop site at NWC of Begin to develop site pads new construction at for construction at NWC of of NWC of Bull Valle Bull Valley Road and Y NWC of Bull Valley Road Illinois Route 31 Bull Valley Road and Illinois Road and Illinois Route and Illinois Route 31 Route 31 31 97 - o O 0 OD 0 0 0 0 0 0 M \ o 0 C C) o o � o o o 0 a o O O n r-I �-{ �] M O O o O O O O O O In h N m O O In M N 03 d' M O O O O O O O O O O M O O M ON ON 00 O d' O O h � ^ In M CD CZ)m N N A �k m N� M O� d' O ' O O ' ' ' i O% M v n m 00 00 O m 00 O N m M M N N m O N v�--j ,d; v .�. m I co 00 r-I . i V-1 a) to d' In %D %D kD o In o 0 0 0' M N r-I 00 .--I CDV-1 N N N kD t� O N In O CD CDn O M M Md' N O N t� N In M In ON �-.� N M M ~ N V-4 N m N co 0. N CD d' M ' M M V-1 m d' M rn h CO %D ,1 m `D M cn I o o d' m kD kD In t-I r-I M N N m d' Ln %D m e�-1 ON .-1 TMA t� M N 00 N N n In O d' tr -1 N 00 fV c-1' fV 00' OO N N M N co 00 M O O M M O h d' d' kD 00 O M O O o o O m M I� '-1 N d' %D M O O O O N O O O O In In In M O r-I M d' n l� D' NHN coMO N m N d' 00 00' N H V- '-4 ' O Q h h d' �-1 Q` h O 00 00 h (\ In ♦-1 r-1 O T-1 �D H cr In O M M n n q N d t\ ,-I T-1 In t-I V-/ O v m M .- �M-I N M � N c--1 �-1 r'i 00 00 c-1 N M �""1 T"I a M M m r-1 c-i ON n V-I m In H M V-1 m M ko N d' O kD O d' � r �D m M O kD ~ M N N N M N W M VN-I N M VM-1 0 N VMMI i t�-I O m d' M O� lD h V-I N O m m m .y M O tM-I In H O � � 00 n T M N In m �y ~ d' �N-1 M M llj N 2 � M eN-1 � M .M-i i-1 N M N 4 `-A N c�-1 0 Qf) PS b E+ IV � 5 w I F � � W • 0 m p z bD M U ()u U U W N W °; b °�' v a�i O M W 'cGct 0 C aa) at bD bD y O A p p ft1 jy bD ,F J� N CDG U M J�7 in dC a s> w H 9 4)U c�CL4q t� H a ll o EO a ll Ao 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q O V--1 O T-I M N M M M d' M I-1 d' N d� .--I r-I .-i M M M .--1 d' N d' M Motct• In d' d' d' d' d' d' In In to In to to to r-IN Wd• N M V M �D �D ON T-- tD t� CO Ol CDN M d' In N N N N N N N N rOrl M M M M M 'i i s fit; .rP. 0 • Police Commission - Overview The purpose of the Police Commission is to select sworn personnel in accordance with the employment policies of the City of McHenry, as well as investigate conduct hearings regarding any sworn member of the McHenry Police Department, 100 101 Fiscal Year 2023/2024 Annual Budget 102 Police - Overview Vision Statement �%� _' The McHenry Police Department will maintain the highest Ier =MM, standards of criminal justice excellence in all aspects of policing. �� ' Through these standards the McHenry Police Department willquo �, define itself as a leader in the industry by those we serve and protect. • �� Mission Statement The Mission of the McHenry Police Department is to work in a true partnership with the citizens we serve, enhance the quality of life and provide excellence in public safety. Agency Values The McHenry Police Department is charged with the responsibility to serve and protect the citizens of McHenry. Our agency values provide the foundation for our mission and guide us in our effort to meet the vision of the agency. The McHenry Police Department operates off the core values of, Integrity, Courage, Service, Honor and Duty. Agency Structure The McHenry Police Department is the third largest law enforcement agency in McHenry County. Organized into four main divisions of Administration, Support Services, Field Operations and Information Technologies (I.T.), the McHenry Police Department serves and protects the citizens of McHenry and all those who visit. Within each division specialty units are established to meet specific needs of the agency that support our vision and goals. The McHenry Police Department is acommunity-oriented organization that operates off aproblem- solving philosophy. The Administration Division is comprised of the Chief of Police, Deputy Chief of Police and an administrative assistant. The Support Services Division and Field Operations Division are each headed by Division Commanders and the I.T. Division is headed by a manager. These supervisors report to the Deputy Chief of Police. The Deputy Chief of Police reports to the Chief of Police. All sections and units of the organization are structured under one of the following divisions. Field Operations Division The Patrol Section is the largest component of the Field Operations Division and is responsible for responding to both emergency and non -emergency calls for services from the public. The Patrol Section is divided into three shifts in order to provide 24-hour police services. Each shift is supervised by two Sergeants. Uniformed Patrol Officers and one Community Service Officer (CSO) are responsible for partnering with the community to protect life and property and to maintain peace, order and safety. In addition, this Division handles special assignments, self -initiated activities and addresses community concerns. Additional Units within Field Operations include the Field Training Unit, Canine Unit, Truck Enforcement Unit, Bicycle Patrol Unit, Major Crash Assistance Team, Mobile Field Force Officers and Tactical Response Officers. Support Services Division The Support Services Division is comprised of the Investigation Section, Accreditation Unit, Training Unit, Public Relations Unit, Communications Center and Planning/Research/Technical. 103 ® Detectives work in plainclothes and provide expertise and resources to investigate crimes that happen in McHenry. Detectives are able to investigate crimes that are often complex and may extend over a significant period of time and geographical area. The cases are investigated until an arrest is made or there are no longer leads to pursue. Many of the investigators have received specialized training in the investigation of: homicides, child abuse, sexual assaults, juvenile delinquency, crime scene processing, felony property crimes, robberies, felony crimes against persons and cybercrime. ® The Accreditation Unit is utilized to revise and draft department policy and ensure that the agency is performing its duties in a manner that is consistent with the Law Enforcement Commission on Accreditation for Law Enforcement standards. ® The Training Unit is responsible for the management of all ongoing training for police personnel. Training includes annual in-house training such as Defense Tactics and Firearms along with all external training. Each officer and civilian employee is required to receive mandated training in accordance with our departmental policy, CALEA standards and Illinois statutes. This Unit is responsible for the coordination and implementation of thousands of hours of training each year. ® The Public Relations Unit is charged with the responsibility to foster the community orientated philosophy and problem -solving practices of the McHenry Police Department. This is done through multiple educational and community events provided to our citizens by the police. ® The Dispatch Center, named Northeast Regional Communications (NERCOM) is the final and largest component of the Support Services Division. This unit is a consolidated dispatch center that provides emergency dispatch services for sixteen (16) police, fire and EMS agencies. Although the center is owned and operated by the McHenry Police Department, a partnership through an intergovernmental agreement between McHenry Township Fire, Harvard Police and Woodstock Police allows for joint decision making on policy development and shared financial responsibility. The Dispatch Center operates off a separate budget which is managed by the Chief of Police and Deputy Chief of Police. In an overview of the day-to-day operations of the center, at optimal staffing level NERCOM is manned twenty-four hours a day, seven days a week, 365 days a year by a minimum of four dispatchers at all times. Each NERCOM dispatcher is crossed -trained to be proficient in both police and fire/rescue disciplines of dispatching. In addition, NERCOM provides Emergency Medical Dispatch services to all of our customers. Roles defined within the dispatch center LT include 911 call takers, police dispatch and fire/EMS dispatch. These defined roles allow for the center to provide services in the most efficient and effective way exceeding industry standards. ® The Planning/Research/Technical sections coordinate the specific planning and research activities ofthe department, complete short- and long-term special projects, attend to critical risk management issues and research & write grant proposals. 104 Information Technologies (I.T.) Division The I.T. Division provides not only the police department staff, purchases, operations, maintenance, repair and replacement but also City staff, services regarding of all information technology related programs, systems, software and hardware. The mission of the Information Technology Division is to provide the most innovate, highest quality, technology -based services in a cost-effective manner and to facilitate the achievement of the goals anA objectives of each of the City's operating departments. Information Technology Fund revenues are derived from transfers from the City's operating departments and expenses are related to the direct provision of technology services by the Division's three staff members and for the replacement of equipment and software throughout the municipality 105 Conunauder Support Services Michael Cruz Chief of Police John Birk Executive Assistant Debora Shuett Deputy Chief of Police Thomas Walsh LT. Manager Aaron Greve Social Services Coo�Ainator Jason Stetwerf Commander Ffeld Operations Paul Funk Telecommunications" Investigations Unit Pah•ol Day Shift " Patrol Day Shift Supervisor Sergeant LT. Specialists Sergeant Sergeant Jennifer Synek „ Nicholas Clesen Brian McKeen " Patrick Polidori Lead Pahrol PM Shift " Patrol Ph1 Sldit Teleconununfcat°rs Records Clerks Sergeant Sergeant and jeleecommunicators Brian Aalto Brett Kinney trative Patrol MidnightShfft Patrol Midnight Shift PublicAffairsOfficerj!dMnun munity Service Michaels ohn Officer Sergeant Sergeant P Kelly Ducak . Jain» a Prather Steuhanie Erb FOIA Off cer RogerPechous Police Administration 107 Commander of Field operations Paul Punk Day Shift Afternoon Shift Sergeant Brian Sergeant Brian Aalto MCKeen Day Shift Afternoon Shift Sergeant Patrick Sergeant Brett Puliduri Kioney Ouircr ■, Officer Officer Robert Roske J11I Foley Lawrence Popp Officer 0fticer Officer Marc Fisher Jason Ducak Joshua Conway & K9 Ell Officer Officer officer Ryan Pardue James Harris Megan Carey Officer Community Service Officer Officer RnhertKlasek David Porter Ashley O'Herron Officer Officer Officer Samuel Shafer 00 Orahm McClure Alberto Martinez Officer Omar Morales Midnight Shift Sergeant Kelly Ducak Midnight Shift Sergeant Jaimle Prather 0(ficer ., Otfiecr )oho Adams ., Richard Rewlako nlrirrr Olila•r �. Officer andya L(u,•nZ Matthew c un it ohert Beaudoin Officer Officer Diana Hernandez Roger Hendrickson Officer licnri ICrucger Officer Danlcl Lincicum Oftle•er Mat[hety Sml:c Officer Cole Templin Officer , Officer . OQicer William Campos TBD TBD Officer Peter Mader Officer Zachary Dlcbold Officer TBD Police - investigations Section 109 Telecmnnumicatious Center Dispatch Center Supervisor Jennifer Synek Lead Telecommunlcators Justin Leibach and Dexter Barrows DayShitt Commander of Support Services Michael Cruz Mght Shift Records, Connnunity Service Ofrcers, Public Affairs, FOIA Records Clerk .. Records Clerk MarybethVarvil ME Debra Shoemaker CALEA/Training „PublicAffaitsOfficer Coordinator in MichaelSpohn Stephanie Erb FOIAOfticer RogerPechous Telecommuuicator �. Telecommuuicator Telecommunicator �� Telecomuuudcator Tracy McNamara ,. Hollyheville PatriciaGairett „ BridgetteVeronese Telecommunicator �� Teleconnunicator Telecommunicator �� Telecommunicator Kelly Schmitt �. Grant Ha�•ens Eileen Beidelman „ Kathn•u Wilbur• Teiecmmnunicator .. Telecommunicator Teleconmuwicator �� Telecommunicator KathetineFitzgerald �� Ryanhtiller RebeccaMonison „ hlichelleZujervski Telecommunicator ,. Telecommunicator Teleromnumicator .� Telecommuuicator GtveudolynAllen �� Kaitlin Durbaud Penelope Wegner „ Tamara Soto Teleconuuun(cator ,. Telecommunicator Teleconunuuicator .� Telecommunicator Jose Colon .. TBD NicoleScichott•ski ■, TBD Telecommunicator „ P� , Telecommunicator ■ Telecommunicator TBD Maureen Doolan TBD Information Technologies Manager Aaron Greve hiformation "Technologies (I: C) Specialist Michael Nodge Information Technologies (LT.) Specialist 9'I3D Police - FYZO22/23 Accomplishments Personnel New Hires • On June 2701, 2022, Michael Hodge was hired by the police department as an I.T. Specialist. Michael is originally from Mount Vernon, Illinois, and earned his Bachelor's Degree from Columbia College Chicago. • Tamara Soto joined us as a Telecom mum cator on October 31st, 2022. Tami had experience as a Tel ecommunicator with the Woodstock Police Department and SEECOM in Crystal Lake. • On January 17t1l, 2023, Nicole Scichowsire began her career as a Telecommunicator. Prior to joining us Nicole had been a Deputy Coroner with the McHenry County Coroner's Office. • Cole Templin was sworn in as a Police Officer on January 30th, 2022. Cole previously served as an officer with the Wilmette Police Department. Retirements • On July 8�h, 2022, I.T. Specialist Jeffiey Foerster retired from the police department. Jeffrey started with the department as a Patrol Officer in May 1980 and retired as Sergeant in June 2010. He then started his role as an I.T. Specialist finishing with just over 42 years of service to the City of McHenry. • On December 26th, 2022, Commander Ryan Sciame retired from the department. He had been with the department since June of 1999. During Ryan's career, he served as a Patrol Officer, Narcotics Investigator assigned to the McHenry County Sheriffs Office, Patrol Sergeant, MIAT Investigator/Commander, Detective Sergeant, and Commander of Support Services. Training The McHenry Police Department recognizes the need to make sure all our sworn and civilian employees receive the highest level of training available. During FY 2022/23 sworn officers and civilian staff members of the McHenry Police Department participated in approximately 3,800 hours of training, both internally and externally. Training directly affects the success of service provided to the community and liability placed on the City. Some highlights were: • Chief Birk, Deputy Chief Walsh and Sergeant Aalto attended the International Association of Chiefs of Police Conference in Dallas, Texas, and received world -renown training in topics that addressed contemporary or emerging issues confronting the law enforcement profession and the leaders of law enforcement agencies worldwide. • Deputy Chief Walsh attended the 283rd session of the FBI National Academy in Quantico, Virginia. The FBINA is a 10-week professional course of study for leaders and managers of state and local police departments, sheriffs offices, military police organizations, and federal law enforcement agencies from the United States and more than 150 partner nations. During this session, approximately 230 students (of which are around 35 international students) tools undergraduate or graduate courses from the University of Virginia in the following areas: leadership development, behavioral science, forensic science, terrorism, communications, and health & fitness. 112 Annual, Bi-Annual and Tri-Annual Training for the department includes: ® Arrest Search and Seizure law under the Fourth Amendment, Bias Based Policing (CALEA), Bloodborne Pathogens (OSHA), Civil Rights, Constitutional and Proper Use of Law Enforcement Authority, CPR/AED, Crisis Intervention Training, Critical Incident Response (CALEA), Crowd Control Response Training (CALEA), Cultural Competency, Defensive Tactics (CALEA), Emergency Medical Response, Ethics (CALEA), Firearms Qualifications, HAZMAT first responder awareness level, High Risk Traffic Stops, Human Rights, Implicit Bias, Investigations of Sexual Assault and Sexual Abuse, Law Legal Updates, Mental Health Awareness*(CALEA), Narcan, Officer Safety Techniques, Officer Wellness and Mental Health, Portable Fire Extinguisher Training, Procedural Justice, Psychology of Domestic Violence, Racial and Ethnic Sensitivity, Reporting Child Abuse and Neglect, Sexual Harassment, Standardized Field Sobriety Testing, Taser, Temporary Detention (CALEA), Trauma Informed Responses to Sexual Assault and Sexual Abuse, Use of Force. Sworn Officer training was conducted in: ® Law Enforcement Administration ® Canine Unit Operations ® Narcotics Investigations ® Weekly Case Law Updates ® Crime Scene Investigations ® Homicide Investigations ® Interview & Interrogations ® Special Response Teams Training ® Rapid Deployment Training ® Firearms Training - ® Critical Accident Investigations ® Patrol Operations ® Arson Investigations ® State Mandated Annual Training Segments Civilian training was conducted in: Dispatch Leadership Symposium ® Integrated Emergency Management Course ® Dispatch Rapid SOS Admin Training ® CIT for 911 Dispatchers ® Dispatch - IPSTA Conference ® Dispatch - Mental Health First Aid for Public Safety 6 Dispatch - Text To 911 ® Dispatch -LEADS 3.0 Update Weekly Dispatch In -House Training 1-2 hours weekly ® Dispatch CPR Training ® Dispatch Annual ICS Training ® Dispatch Annual LEADS Certification ® Dispatch - Monthly Police/Fire/EMS Scenario Based Training Modules 113 Calls for Service Police Calls for Service In the 2022 calendar year the McHenry Police Department handled 24,043 calls for service through dispatch and police services. The following list highlights types and volume of specific areas of investigation by the department. These investigations resulted in over 226 felony and misdemeanor charges being filed. Homicide 0 Sex Offenses 14 Robbery 1 Burglary 14 Theft 196 Motor Vehicle Theft 7 Weapons Offenses 2 Domestic Disturbances 335 Drug Investigations 47 Fire Investigations 13 Death Investigations 53 Burglary to Vehicle 18 Juvenile Incidents 1 343 Dispatch Center Calls for Service During the 2022 calendar year, NERCOM answered approximately 40,027 Emergency 911 calls, approximately 41 text4o-944 calls for service, and approximately 76,532 non -emergency administrative calls. An additional 29,613 outgoing calls were made on the behalf of our customers for additional tasks. The dispatch center handled the following calls foi• service during the 2022 calendar year: Department Calls for Service McHenry Police 241043 Johnsburg Police 31412 Marengo Police 31738 Union Police 81 Woodstock Police 36,104 Harvard Police 51350 Fox River Grove Police 41664 McHenry Fire 71505 Marengo Fire & Rescue 21039 Union Fire 110 Woodstock Fire 51336 Harvard Fire 11333 Cary Fire 21541 Nunda Fire 459 Fox River Grove Fire 770 Mutual Aid During FY 2022/23 the McHenry Police Department participated in multiple mutual aid requests. Sergeant Ducak and Detective J. Prather participated in one (1) taslcforce callout through the McHenry County Major Investigation Assistance Team (MIAT), which resulted in one arrest for 1st Degree Murder. 114 Multiple officers from the McHenry Police Department participated in six (6) callouts through the McHenry County Major Accident Assistance Team. These officers investigated vehicle crashes that resulted in death or serious bodily injury. The McHenry Police Department has an officer assigned to the Northern Illinois Police Alarm System (NI PAS) Emergency Service Team. That officer participated in twenty-four (28) callouts for incidents such as high -risk felony arrest warrants and armed/barricaded subjects. Public Safety Initiative During FY2022/23 the McHenry Police Department continued to take on the opioid and heroin crisis head on. Through a multi -tiered approach of solving this crisis, the McHenry Police Department has taken action through enforcement efforts (arrests and drug seizures), the use of Narcan and participation in the "A Way Out Program". During the 2022 calendar year the McHenry Police saved 11 lives through the use of Narcan and assisted seven (7) people into the "A Way Out Program". The department's I.T. Division spearheaded a program and installed security cameras at City -owned locations, including the Riverwalk, Veteran's Memorial Park, Fort McHenry and Peterson Park. These cameras live -stream through the City's existing system and can be monitored by the police department's dispatch center. In the rare case of a crime at one these locations (ex. Vandalism), footage can be used to identify the offender(s) and hold them responsible for their actions. Accreditation The Commission on Accreditation for Law Enforcement (CALEA) has been an ongoing partnership for the police department since 2002. The purpose of CALEA is to improve the delivery of public safety services, primarily by: maintaining a body of standards, developed by public safety practitioners, covering, a wide range of up-to-date public safety initiatives; establishing and administering an accreditation process; and recognizing professional excellence. ® The continuous re -accreditation of the McHenry Police Department has proven that the agency has set and followed the following goals set by CALEA. ® Strengthen crime prevention and control capabilities; Formalize essential management procedures; ® Establish fair and nondiscriminatory personnel practices; Improve service delivery; ® Solidify interagency cooperation and coordination; and Increase community and staff confidence in the agency. ® Developed a comprehensive, well thought out, uniform set of written directives. ® Established a preparedness program that is ready to address natural or man-made critical incidents. Strengthened the agency's accountability, both within the agency and the community. Limited the agency's liability and risk The dispatch center was recognized by The International Academies of Emergency Dispatch (IAED) as an Accredited Center of Excellence (ACE) for emergency dispatching. McHenry Police Department/NERCOM is the 30701 Medical ACE in the world and only the 7th center in Illinois to each this status. IAED is the standard -setting organization for emergency dispatch services worldwide. Accreditation (and subsequent re -accreditation) from the IAED is the highest distinction given to emergency communication centers, certifying that the center is performing at or above the 115 established standards for the industry. Centers who earn ACE status are the embodiment of dispatch done right, and have demonstrated strong local oversight, rigorous quality processes, and a commitment to data -driven continuous improvement. Social Services Program The police department hired Social Services Coordinator Jason Sterwerf and began developing its own social services program. Among his many responsibilities, Jason is the department's victim/witness coordinator and can refer those in need to the proper social service agency. He is also our handler for our very own therapy canine Oakley. Oakley joined the department on August 3�'�, 2022 and immediately began the therapy dog certification process. He has interacted with police department staff, Municipal Center staff and community members on calls for service. Jason and Oakley have visited several schools and businesses, including the Alexander Leigh Center for Autism, the McHenry Public Library, Rosecrance and Illinois Masonic Hospital. Community Outreach The McHenry Police Department, in an effort to accomplish the agency's mission, participates in many community outreach events each year. Below highlights some of the more notable events that were able to occur in FY2022/23. National Night Out On August 8m, 2022 the police department hosted National Night Out at Knox Park. We were joined by the McHenry County Sheriffs Office,.Johnsburg Police Department, McHenry County Conservation District Police, the McHenry Township Fire Protection District, and the United States Secret Service. National Night Out is a campaign that enhances the relationship between neighbors and law enforcement while bringing back a true sense of community. Furthermore, it provides a great opportunity to bring police and neighbors together under positive circumstances. Child Safety Seat Installations The McHenry Police Department has a team of certified car seat technicians dedicated to providing education to parents and caretakers of young children. Members of the car seat team stay certified by acquiring continued education credits and demonstrating their use of proper skills and education techniques. Technician duties include offering free inspections of child's safety seats at both our police department and scheduled events. In 2022, the McHenry Police Department installed over 105 child seats and showed current parents and parents to be how to keep their families safe. Adopt -A -School Program In FY 2022/23, the McHenry Police Department continued the agency's "Adopt -A -School" program. This program pairs individual officers with specific grade schools with the community to increase awareness and safety within those schools. The program entails individual Day Shift patrol officers being assigned their own specific grade school. The objective is for the officers to get to know the faculty and students at their respective school so that the police department can provide abetter service. This program involves activities such as foot patrols, classroom instruction blocks, training exercises, and a community approach to solving problems within our schools. The plan is designed to further the McHenry Police Department's mission of increasing school safety in our local schools. 116 Social Media Messaain� During FY2022/23, the McHenry Police Department continues its efforts to reach community members through social media. These platforms disseminate critical information and also help us show the lighter side of the department's daily operations. Recognizing that many in and around our community utilize social media as an information source, the police department improved its efforts on Facebook and Twitter, increasing our followers from the previous year and having a reach of over 15,000 people on Facebook. Since 2009, the McHenry Police Department has been using Nixle to communicate emergency messages in real-time. The police department currently has over 21,000 subscribers to this free service. Special Olympics Illinois Special Olympics is a global organization that unleashes the human spirit through the transformative power and joy of sport, every day around the world. Through programming in sports, health, education and community building, Special Olympics is changing the lives of people with intellectual disabilities solving the global injustice, isolation, intolerance, and inactivity they face. Special Olympics Illinois provides opportunities for more than 22,500 athletes, more than 20,000 Young Athletes, 45,000 volunteers and thousands more people statewide through 18 area programs in all 102 counties of the state. The Law Enforcement Torch Run is the single largest year-round fundraising vehicle benefiting Special Olympics Illinois. The annual intrastate relay and its various fundraising projects have two goals: to raise money and to gain awareness for the athletes who participate in Special Olympics Illinois. The Law Enforcement Torch Run has raised nearly $43 million over 31 years while increasing awareness of Special Olympics athletes and their accomplishments. Our efforts helped raise almost $10,000.00 for the athletes of Special Olympics -Illinois. Senior Citizen Dispatch Call -In Program NERCOM participates in a Senior Citizen call -in program designed by Woodstock PD to keep daily track of those who live alone within the Woodstock community. As a result of these daily phone calls with the telecommunicators, they have established friendships with the senior citizens and again this year, volunteered during their off time to bake Christmas cookies for them and to celebrate their birthdays. Coffee with the Chief Since 2012, the police department has held an active "Coffee with the Chief' Program. Cw•rently this program is a partnership with the McHenry Public Library. This public meeting is offered to residents A McHenry as part of the McHenry Police Department's continued commitment in keeping our citizens and community informed about their police department. These events are opportunities for the Chief and members of the McHenry Police Department to obtain face to face feedback from our citizens. In addition, our Dispatch Center Supervisor and several Telecommunicators participated in Woodstoclz s Coffee with the Chief this year as well. Our staff members were invited to discuss the many challenges of dispatching police and fire services for multiple agencies. The presentation and Q & A session were well -received, and we were invited to return again next year. 117 Police Department Tours During FY2022/23 the police department was visited by several community and youth groups who wanted to learn more about the functions and staff of the department. Officers gave tours and discussed/demonstrated forensic techniques. One of the highlights was the annual visit from the students of Riverwood School. Mayor Jett discussed the role of the City Council, Deputy Clerk Johnson gave a tour of the Municipal Center and Chief Birk show the students the department an one of our squad cars. Rotary Secret Santa Program This is the McHenry Police Department's fifth year assisting the McHenry Rotary Club with their Secret Santa Program. This program collects, wraps and distributes over 12,000 gifts for children in need throughout McHenry County and then hand delivers them all. Both sworn and civilian employees of the department (and their family members) volunteered their time to sort, wrap and participate in a coordinated deliver event of these gifts. 118 Police - FY2023/24 Goals & Objectives Below are the highlighted Goals and Objectives that the McHenry Police Department will focus on during the 2023/24 fiscal year. • Continue to provide the highest level of police services to the citizens of McHenry. • Complete the development of the department's Social Services Coordinator program. • Continue with the department's renovation /expansion phases to meet the department's performance and usage needs. • Seek and secure the highest -level training opportunities for all agency members, • Continue and expand the department's public relations/community involvement programs. • Continued support for overall community school safety through the School Resource Officers (SRO) and the Adopt -A -School program to include adding two new SROs to District 15. • Conduct an in -person school safety training exercise of school faculty from District 156 and District 15. • In partnership with District 156, launch a new drug prevention program in the junior high schools called "To Good for Drugs". Continue the department's Traffic Safety Plan in order to keep our roadways safe. • Maintain fiscal responsibility and reduce any financial burden on the City through grant funding. • Continue to maintain professional standards by being assessed through the Commission on Accreditation for Law Enforcement Agencies (CALEA). • Maintain Emergency Medical Dispatch (EMD) ACE Accreditation through Priority Dispatch. • Continue to actively partner with other organizations such as MCAT, MIAT, NIPAS and ILEAS in an effort to share police resources and reduce operational costs. • Replace six police vehicles, all with appropriate emergency equipment. • Replace six in -squad computers. • Replace all department -issued ballistic helmets and issue ballistic chest plates. • Continue Implement a new Body -Worn Camera program. • Replace Create a nevv county -wide multi -agency police training facility with firearms range. 119 ® Replace Improve the quality of services provided toot eroutside police agencies. Strengthen our customer Uase through professional relationships. ® Continued review and revision (as needed) of department policies and opez-ational procedures. ® Seek additional grant funding opportunities for the agency. 120 Police - FY2023/24 Performance Measures Item Goa DescriptionProposed Actively suppress property crime and crimes against Did UCR reportable property crimes Crime Rate persons in order to ensure the and crimes against person totals stay February 15, 2024 safety of the McHenry the same or see a reduction? Community and its citizens. Manage police department To complete the PY 23/24 by keeping Annual Police Budget in efficient and resolve expenditure at o• under approved ex pp Aril 30, 2024 effective manner ensuring that m police budget. community needs are met. Create a safe roadway system To complete the 2023 calendar year A reduction is traffic crashes Traffic Crash / Roadway within the City by enforcing with an overall reduction in traffic investigated in 2023 as compared to Safety traffic laws in order to create accidents. 2022a safe driving behavior. To improve the delivery of public safety services, 1. Review and revise as primarily by, maintaining a needed all agency policies body of standards, developed 'i'o successfnilly review and revise by January 2024. by public safety practitioners, policies in accordance with new laws 2. Complete all required Accreditation covering a wide range of up- or practices; Complete CALEA proofs CALLA standard proofs and to -date public safety and reports as required. reports for the 2023 initiatives; establishing and calendar year by February administering an accreditation 20246 process; and recognizing professional excellence. 1. Improvements to community events such as; Child Safety Seat Installations, Maintain a strong working Coffee with the Chief, School Safety, relationship with the McHenry Adopt4School Program, Garden An increase in attendance to all Community and its Citizens in Quarter Community Days, Special community events, positive Community Relations order to maintain trust and Olympics Illinois, safety Expos and community feedback and the launch of support in our mission to MCPOA Events new initiatives by April 2023. serve and protect. 2. Continued improvement to Public Relations and Social Media Interaction. 2023/24 McHenry Police Department Provide the highest level of Training Plan, Meet or exceed all training professional police services requirements in the calendar year Training with the lowest liability or risk Illinois Police Training Act 50/1LCS 2022, established by departmental to the City and the Citizens 705/7 policy and Illinois State Statute. who we serve. Arrest / investigation enforcement Obtain a reduction in the amount of action of the illegal sale and use of opioid (specifically heroin) overdoses Narcotics Enforcement Reduce the amount of opioid opioids. Narcan deployment. and deaths in McHenry for the 2023 usage and overdoses. Participation in the "A Way Out" calendar year. Program. 121 See alternative ways to fund Awarded grant funding for traffic police related projects that Annual review of all grant submission enforcement and ballistic vest Grants support the mission of the applied foil and all grant submission purchases with a minimum of two organization, awarded. additional grants to be applied for. Maintain state certification Meet the standard goal of All telecommunicators shall hold a Measure will be evaluated continually for Emergency Medical priority dispatch for current EMD certification from IDPH throughout the year and produced in Dispatching certification at all times, amoral report. Telecommunicator shall, within 60 seconds of answering an emergency Initially process 95% of call, acquire location of incident, phone Measure will be substantiated through Emergency Call Processing emergency calls within 60 number of caller, complaint type, and tine use of quarterly reporting, which seconds of them being create a CAD event OR complete a will culminate into an annual report. answered, PSAP to PSAP transfer at least 95% of the time. Dispatch 95% of emergency Telecommunicator group shall Measure will be substantiated through Emergency Call Dispatching calls within 90 seconds of dispatch at least 95 % of all emergency the use of quarterly reporting, which them being answered, calls within 90 seconds of them being will culminate into an annual n report. answered. Telecommunicator shall, within 60 minutes of receiving all necessary Measure will be based on regular LEADS Hot Pile Entry All Criminal Hot Piles will be information, complete each Criminal auditing of the LEADS CHP records entered without delay. Hot Pile entry into the LEADS/NCIC contained within the 911 center. database, Telecommunicator shall, within 120 seconds of answering a non - Initially process 95% of all emergency call, acquire location of Measure will be substantiated through Non -Emergency Call non -emergency calls within incident, phone number of caller, the use of quarterly reporting, which processing. 120 seconds of them being complaint type, and create a CAD will culminate into an annual report. answered. event OR complete a PSAP to PSAP transfer at least 95% of the time. 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F V F F Q r1 r0-I h H o O N O r-i N N Ln %10 lD m M H m Ln LQ LD L'O h o rn o .- N rn �t Ln m m } d � Ln Ln Ln Ln Ln Ln 128 H E A R T O F T H E FOX R I V E R Fiscal Year 2023/2024 Annual Budget Administration 129 Public Works Administration - Overview Public Works Departmeutal Mission The mission of the Public Works Department is to respond to the community needs consistent with the policies determined by City Council, to maintain a working environment built upon trust, respect and citizen involvement, and to achieve the City's goal of being responsive to resident needs and focusing on customer service. The Department consists of four operating sections that provide services to the citizens of our community. These sections include Administration, Field Operations Division, Water Division, and Wastewater Division. In spring of 2020, the Public Worlcs Department was reorganized to consolidate duties, reduce management personnel costs, and create opportunities for cross training between divisions. Maintenance operations are now divided into two groups: Field Operations which includes the Street and Utility Divisions and Treatment Operations which includes the Water and Wastewater Divisions, Public Worlcs Administration Mission It is the purpose of the Administration Division to provide Erection and admi dinistrative support to the Department of Public Works. Public Works Administration is also responsible for completing City projects for the public welfare, to the highest quality, in accordance with legal and contractual standards, and in accordance with City statutes. The Public Works Department is responsible for the management of all City Engineering and Construction Projects, Request for Proposal solicitation for Engineering and Construction projects, contract enforcement, and general technical assistance for the Public Works Department. There are several primary operating functions within the Public Worlcs Administration Division: • To coordinate with the Mayor, City Council and City Administrator to ensure proper execution of the City's policies and departmental programs. • To provide "in-house" engineering services for a number of City projects, to perform plan review for development and utility projects, and to perform project management services for the City's contracted engineering services and publicly bid capital construction projects. • To provide administration, personnel management, asset management, departmental strategic planning, financial management, and capital improvement program planning/implementation for a Public Works Department responsible for all municipally owned and operated public infrastructure within the corporate limits of the City of McHenry. The Public Works Administration Division includes the Director of Public Works Troy Strange, Staff Engineer Greg Gruen, and Administrative Analyst Elizabeth Roth. 130 Public Worl<s Director Troy Strange Staff Engineer Greg Gruen Treatment Operations Manager Russell Ruzicka Wastewater Superintendent Russell Adams Water ROTC Operator Bryan Scheel r 74��C _ ffiz Administrative Analyst Elizabeth Roth Field Operations Manager Steve Wirch Field Supervisor Mile Lange Field Supervisor & Arborist Mike Harper Public Works Administration - FY22/23 Accomplishments • Administration and oversight of Refuse Collection Contract. • Awarded "Tree City USA" for the 27t�� consecutive year. • Successful completion of FY22/23 Road Resurfacing Program which included over 11 miles of resurfacing. • Year 1 implementation of the 10-year Water and Sewer Community Investment Program which was funded with base fees implemented in January of 2022. • Finalization of the 20-year City Community Investment Program and presentation for approval by the City Council in January of 2023. • Implementation and startup of the new refuse hauling contract with Flood Brothers Disposal in August of 2022. • Consultant selection, contract negotiations, project initiation, and management of design services for: FY22/23 Water Main Replacement Program, City Hall Parking Lot Reconstruction, City Fueling Station Construction, Venire Avenue Reconstruction, North Riverside Parking Lot Construction, Elm Street to Green Street Right of Way Development, Water Well 14 Development. • Consultant selection, project startup, project management and coordination with all City Departments for the design of Riverside Drive Streetscape Improvements. • Proj ect management for the construction of the Knox Parlc Parking Lot Rehabilitation Project. • Proj ect management for the completion of the South Main Street Parking Lot Reconstruction. • "In -House" plan and contract document preparationpublic bidding, and project management for the resurfacing of parking lots at Petersen Park. • Ongoing project management for the construction of the South Mairi Street Parking Lot Rehabilitation. • Ongoing project management and coordination of design services for utility relocation associated with the future reconstruction of Illinois Route 31. • Ongoing project management for Bull Valley Road Surface Transportation Program (STP) • Finalization of Phase 2 Engineering and final submittal to November 2022 IDOT Letting for Green Street STP • Successful selection of the Barreville Road STP project in the Spring 2022 Council of Mayors Call for Projects. 132 Ito `:: �•^ ,t r. - . ' • I I6" ik Public Works Administration - FY23/24 Goals & Objectives • Provide effective communication with the City residents about the various Public Worlcs projects, programs, and services. • Ongoing management of the City's refuse collection contract, leaf pickup, yard waste, and e- waste/Christmas lights recycling programs. • Provide responsible financial managementwhile maintaining existing Public Worlcs services. • Continue electronic archiving efforts to fully digitize existing paper records into a searchable electronic record. • Continued implementation of an annual road resurfacing program of more than $2.0 million including successful management & completion of a $4.0 million program in 2023. • Year 1 implementation of the 20-year Community Investment Plan adopted by City Council in February of 2022. • Year 2 implementation of the 10-year Water and Sewer Capital Program associated with recently adopted base fees. • Finalization of Phase II Engineering plans and submittal to the State Letting for the Bull Valley Road STP project. • Completion of a joint consultant selection process with the Village of Prairie Grove for the Barreville Road STP project • Initiation of Phase II Engineering and project management for the Oakwood Drive Bridge Project. • Proj ect management for ongoing design projects including: City Fueling Station Construction, Venice Avenue Reconstruction, Elm Street to Green Street Right of Way Development, Water Well 14 Development. • Project management, coordination with City Departments, and final plan delivery for the Riverside Drive Streetscape Improvements Project. • Project management for the design and construction of the North Riverside Parking Lot Construction. • Successful project management for the construction of the Green Street STP project. • Successful project management for the reconstruction of the City Hall Parking Lot. • Ongoing project management and securing of easements for the design of the Mill Street and Richmond Road Water Main Replacement projects (FY22/23 Water Main Replacement Program). 134 ® Continued project management of design services for utility relocation associated with the future reconstruction of Illinois Route 31. ® Continued implementation and maintenance of OHSA Safety Programs &Policies For all Local 150 and Public Works staff. 135 Public Works Administration - FY23/24 Performance Measures . , ?erfor ance.. ormance.uliumialice Item Goal Measure Proposed Was the CIP updated and transmitted to the Develop an updated CIP and Capital Improvement Finance and transmit to Finance and All deadlines are met Program (CIP) Administration Department Administration Department by the due date? Was the operating budget transmitted to the Develop and present an andal AnnualBudget operating budget to the finance Administration All deadlines are met and Administration Department Department by the due date? Respond to resident Respond to a resident complaint % of time that Public complaints/inquiries within Resident or inquiry within one working Works Department staff one working day 100% of Complaints/Inquires day from receipt responds within one day the time throughout the year Develop all RFP's for Engineering All RFP's completed, issued, Request for Proposals Services and for Construction Status of RFP's for and contracts awarded for (RFP) Development projects for which the City "in budgeted projects projects in currentUudget performs house" engineering year services Manage City Engineering and Schedule and Budget All Engineering and Project Management Construction Projects and assure status of City Engineering Construction Projects projects are completed on time and Construction Projects completed on time and on and on budget budget Assure that City Engineering and All contract work and scope Construction Projects are Quality Assurance of City items are completed in Contract Enforcement completed in accordance with Engineering and accordance with contract contract documents and scope of Construction Projects provisions services All issued permits are Review and issue utility permit completed and closed per applications and assure that City the terms of the original Permit Reviews Infrastructure is undamaged or is Status of issued permit permit application, fully restored upon completion of No/minimal outstanding permit work permits. Provide all requested technical Completion status of All requests for technical Technical Support for support for Operations Managers, requests for technical assistance are completed on Maintenance Staff Maintenance Superintendents, assistance "as needed" basis and Supervisors All operating funds are at or Final Operating below the approved Financial Management Efficient management of all Expenditures relative to operating budget and/or operating fund accounts budgeted operating overages are documented expenditures and justified 136 0 0 0 0 0 C C 00 �D 0 % C C M 0 0 0 0 0 0 0 0 N O (7J O ri O O \10 O M M p O d' o N O M �,D O O O O O O O M M O O O d' Lf') CD Ln OO D\ O to N Lf) d' ? 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Ln d T N � � W W • N N co • N Ry o 0 LO W � N N � • N ' � W iy 8 co • O cq >K w d o Npig• co rn • C) 4 0 W z 0 H V) z_ q L1r) N O 'iJ Q q a tL u A v a C1 • G. a • F^ • O q d F- d .a u . ¢ z �3 •T• Public Works Field Operations Division Public WWA I Field Operations Division (Streets) Mission It is the mission of the Field Operations Division (Streets) to support and enhance a high quality of life for the City's residents, businesses, and visitors by providing a well - planned, environmentally sensitive, and cost-effective infrastructure through superb customer service. In addition, the division will provide residents with a quality urban forestry program which is cost effective and acts as a responsible steward for the natural resources of the community. The functions of the Field Operations Division (Streets) include street cleaning, street maintenance, responding to all resident requests, and snow and ice removal. All City - owned vehicles and various pieces of equipment are repaired and maintained at the Public Works Facility with two full-time mechanics. The Division also maintains public sidewalks and curbs. - Overview The Field Operations Division (Streets) provides residents with cost effective and quality urban forestry services and delivers responsible stewardship for the natural resources of the community. The arborist's crews utilize professional management practices in tree planting, maintenance, and removal to improve the quality of the urban tree canopy. In summary, Field Operations Division (Streets) employees undertake the following tasks: • Division crews remove snow, control ice, conduct street cleaning, and perform other necessary miscellaneous repairs. • Maintenance and repair all City owned vehicles and various equipment through the city garage with two full-time mechanics. • Monitoring and maintenance of City streetlights and signals by a private contractor. • Maintenance of City streets by filling potholes and patching. • Monitoring of creek levels and maintenance of channels to prevent flooding. • Advising and consulting with the Department Director regarding fleet and infrastructure needs and responses to service requests. • Tree planting; maintenance and removal, completion of tree inventories, performance of tree surveys for insect, disease and any hazardous tree problems, administration of the City Arbor Day Program, maintenance of the City's status in the Tree City USA and Growth Awards Program. Coordination with other City departments, community groups and volunteers on tree related issues, and oversight of the Tree Preservation Ordinance for compliance. • Oversight of the mowing contract for City properties. 140 Public Works Field Operations Division - Organizational Chart In May of 2022, the Public Worlcs Department combined the Street Division and the Utility Division into the Field Operations Division. Combining the two divisions into one was done to further utilize City personnel for daily operations. Street -related operations are solely funded through the General Fund while Utility -related operations are funded through both the Water/Sewer Fund and General Fund. The hours worked and expenses for FY22/23 have been properly separated by Fund to account for the amount budgeted annually in the Field operations Division. 141 Public Works Field Operations Division - FY22/23 Accomplishments • Maintained level of service while reducing personnel costs through an ongoing staff attrition process. • Replaced 125 signs throughout the city (Sign Replacement Program). • Completion ofthe bi-annual brush pick-up program. • Completion of ADA ramps and concrete curb in advance of the 2023 Road Resurfacing Program. • Removed brush and clea►ed the Lakeland Parlc Drainage Ditch of excess vegetation. • Fleet maintenance staff performed ongoing maintenance of City -owned vehicles and equipment. • Division staff performed ongoing right of way maintenance including parkway restoration, mowing, and creels cleaning. • Staff successfully completed snow removal, ice control, and conducted street cleaning in addition to making miscellaneous repairs. • Staff completed resurfacing of the Parlts Maintenance Garage parking lot. • 322 City trees were trimmed by staff and 1,000 contracted trees were trimmed in various locations throughout city rights -of --way. • 60 trees were removed in 2022 by city personnel and 10 trees were contracted for removal. • 29 trees were planted throughout the city. • Contracted with Precision Pavement Markings, Inc. for City street pavement marking program. Striping tools place in various parts of town striping stop bars, crosswalks, and longitudinal lines. • 90%completion of ADA sidewalk survey. 142 Public Works Field Operations Division - FY23/24 Goals & Objectives • Continue to provide a quality level of service while reducing personnel costs through an ongoing staff attrition process. • Address all snow and ice events by clearing roadways to ensure safe travel on City streets. • Maintain the City's fleet to ensure efficient operations and maximize fleet service life. • Repair and maintain City streets by dedicating personnel to patch grinding and pothole repair. • Continued successful performance of mowing of the City's rights -of -way and property in a timely fashion. • Successfully respond to all resident requests in a timely manner. • Continue a 5-year striping program interval for all neighborhood crosswalks and stop bars not currently on a schedule, • Continue a 10-year Sign Replacement Program. • Inspect and maintain the City owned street light systems. • Continued assistance with the preparation for Fiesta Days, 4dof July activities and other City festivals. • Plant five trees for the City Arbor Day celebration, ten trees within the City Park System, and 70 trees in City parkways. • Successfully assist Developers with tree planting in new subdivisions on an as -needed basis. • Continue implementation of the 5-year pruning rotation in City parks and City parkways. • Identify hazardous trees for removal and remove other trees as required. • Continue to monitor for Emerald Ash Borer, Gypsy Moth, and Japanese Beetle. • Manage contracted services agreements. • Assist with the administration of Capital Improvement Projects including the 2023 Road Resurfacing Program. • Complete ADA sidewalk survey for IDOT ADA transition plan. • Contract bi-annual sidewalk inspection program. 143 Public Works Field Operations Division - FY23/24 Performance Measures F erformance Performance Perrormance FZ37ZzFItem Goal Measure Proposed Outcome(s) Provide all necessary Staff is fully prepared for work. Was all training required Internal Training training for all division Work related injuries are for the completed? employees each year year minimized. Sweep 121 center lane Number of sweeping Clean streets & welIJUnctioning Sheet Sweeping miles per year cycles completed closed drainage systems Sidewalk Repair all uneven sidewalk Number of locations panels identified through completed and Safer sidewalks for residents Maintenance sidewalk survey outstanding locations Safe roads, well maintained roads, Asphalt Maintenance Pothole and spot patching Were all necessary road and cost-effective roadway repairs made7 maintenance Road Resurfacing All ADA ramps in next All ADA ramps in next year's Road Program Support ADA ramp installation year's Road Program Program in advance of the bidding process. Provide all necessary Repairs completed and Well maintained creeks and Drainage ditching and creek outstanding necessary drainage ways which reduce the Maintenance maintenance to prevent repairs City's risk of flooding flooding Perform ADA sidewalk Completion ADA ADA Sidewalk Survey sidewalk survey for City Complete IDOT ADA transition plan survey. sidewalks Manage Woodland Creels One prescribed burn/all Successful maintenance of the Areas Maintenance/Controlled creeks maintained City's natural areas/preserve burns creeps 144 O O O O O O O O O O O O O O O O O O O O O Ln O O O d' N t-i h d' N O d' M %�D O O O O m %lD O O O O O M O� d; m h to In � rl Ln O O O O O O M N O ri O O O N N r-i O O M m O O O O O O O O� to O d p N %�D G N N Lo N O O p p N O D\ d' m Ln O h O� O O O O O Ln m v klo m N �D O O O O r-I N �D l� O' N Ln O h vm v r-i O� %10 N rn o 0 o M q7JA rn CO <N rn M r-I o 0 0 0 0 0 0 0 0 OO O O O r-i N h N ri �D N d' O O O O O O O O O Ln Ln Ln O m %D O N h kD ri O\ O O O O Ln O O Ln O N Ln r-I r-1 r-i t� O 00 LO Ln O O r-I M O d' O i d L h i M m r4 m d' O O h r-i m O M r-i %.D N h m r-I N h M � rj ri M m O O� kD MD Ln O O N O O O ' O� h O Lo L-1 LD Ln N Ln Ln M O m r-I m d' N N N O O L-t Ln O d' d' \D Co lD \D M r-1 d' o N h ri m O 00 O O M m O �D kD O N d' Ln N r-I r-I r-I r i m 00 M h O o %.O M In - ci `-I M c-i d' m N M d' O m LD m �D co) M c-1 t%D ri Ln M N M N r-I c I M O O O r-i m m O �10 M O m O O O ' O O O ' O O O r-I O O O N h ri m kD h M d' O O O O O O O O O �D m m m O m N N M O m N O O O O In O O Ln O i N h N N d' L"j r-i 00 n t� C` On o O O r-i Cn O t� CD Ln r-i h r-I T 00 Ln d' O h N m m O N r-1 �.D cl LO M ri m d' M ri r 1 ri N LO klD d' to O \-D h d' O M N r-I ' ' ' m O O C CD N CD CO O N d m O h N O� h m N CD O Ln CD �1 Ln m r-iH M M h r-iLD t�M CD�D �D CO CD m M co dz Ln co t� ri 00 0 m Ln m a cri M (� oN rl d' O h N 00 t�r�-i N h ON m LO N .{..I r-I m O M Ln d' t�D Ln d' N ON d' (D Ln ' M d' d' d' ' h Ott m t� r-i m CD H M m N N M Lf') d' O O d' N Ln Liz ri M \�D c-I h O� 00 CD mLO N O Poo d' r-1 Cn ri m G� N O LO ON m h M N m N ri M Q N h in M N N N d' m in ri r-i M ' ' r-i O ' d' O t�N M t� d' ri M M O m r-iO t��D N N M l c-I �D r-1 m Lf') �,D r-I h O ri h O N D\ CD m t� di d' N CD �O m M h ri �D O� d' m M r-i Ln r-i Nil CD N LO 00 ci M i1 N M ri ri O� N ci m h N V-4 ci �1 >~ �1 N H W V NO bl) �L V' u GG i-L Cli '0 W „ cn CTS "' Ix x V)(D a) 4" V) v v r" Es� pq 0 cn 0 L~ N 0 �N!! 3 -y tj 0 'fl � bA CL (n H L(V. 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The Recreation Division of the Parks and Recreation Department consists of five full-time personnel on the recreation side. Director of Parks and Recreation Bill Hobson works alongside Athletics and Aquatics Supervisor Nicole Thompson, Recreation Supervisor Cindy Witt, Fitness Coordinator Becky Moore and Recreation Program Specialist Mannon Amelio to coordinate the various programs, events and services provided by the Department. Additionally, staff oversees the management of the McHenry Recreation Center, Petersen Beach and Merkel Aquatics Center facilities for the Department. The Parlcs Division, consisting of Superintendent of Parlcs and Downtown Maintenance Pat Gorniak, Assistant Superintendent Jeff Friedle and six (6) full-time Parks Maintenance workers continue to tackle the massive task of maintaining the City's more than 650 acres of park space, contained in thirty-eight (38) municipally -owned park sites. In addition, the )arks Division is responsible for maintaining the amenities of the City's three downtown business districts - Riverside Drive, Green Street, and Main Street. ± / ;0 Ln }/ ) E &c )% � \/ 0 Ora e Q£Qj { - m � � tn : « ) \ Q®f \ k� \� a % CAP / \k 0 \§} \CC (ri 7 IV § $ $ \( (\ (\ §# 0 c 10ID 3 L " \ i L ° \ \ \ \ \ \ Parks and Recreation - FY22/23 Accomplishments Recreation Center • Recreation Center memberships began to z ebound in 2022 from the significant losses I n 2021 with multiple variants of the Covid pandemic striking the nation. Membership totals have returned to nearly 1,200. These "active members" are paying members who are in an annual contract, in good standing, and do not include employees, punch pass holders or other short-term memberships. Special Events • Several events were held this year, and included: Daddy Daughter Dance (Feb), Breakfast with the Bunny (Apr), River Run SK (July), Big Wheels Race (July), Halloween Bash (Oct) and Candy Cane Hunt (Dec). Programs • Sixteen sessions of the Explorers Camp (ages 4-6) were held at Knox Park during the summer. Activities, arts & crafts and games were scheduled based on different daily themes. • The Summer Day Camp (ages 645) was very successful during the summer. Ten weeks of camp were held at Knox Park and were full with a maximum of 80 campers each week. • The fall/spring dance program has 125 students participating. A dance recital is scheduled to take place May 6 at McHenry High School West Campus. • Art themed "Bags -to -Go" were continued through the year for toddler -aged kids. Bags of activities and supplies were prepared monthly and could be purchased and picked - up. • The McHenry Recreation Center community rooms continue to be a popular location for family and business gatherings. The community rooms were utilized for birthday parties, bridal & baby showers, seminars, meetings and celebration of life luncheons. • Collaborations - Programs offered working with local businesses. o Rock'n' Kids - Children's music programs o Snapology of McHenry - Children's programs, camps & birthday parties o Totally Cupcaked (pick-up) - Monthly cupcake club o The Studio - Children's art & poetry classes at the local art studio o Young Rembrandts - Children's art & cartooning programs and camps o Minds in Motion - Children's STEM programs & camps Field Trips • Adult field trips have become a very popular addition to recreation offerings. In cooperation with Crystal Lake, Cary and Barrington Park Districts and Lake in the Hills Parks and Recreation Department, senior trips are offered at least twice a month. Trips have included theater and musical productions, casinos, museums, historical tours, food tours, educational outings and lunch outings. 150 Athletics Starting in the summer of 2021, we were able to bring our full program scheduling back through our parks and community school gymnasiums. We saw a large increase in program registration coming out of COVID. We served 1,248 local youth through our athletic programs over the 2021-2022 budget year. ® In total, the department ran 96 programs over the summer with a total of 788 athletes enrolled. The toddler leagues for soccer and t-ball continue to be successful and a hit for summer programming. This is an increase of 37 program sessions from pre-COVID years. It accounts for an increase of over $25,000 in summer athletic program revenue. The adult leagues continue to have a steady average of 125 teams each season. We had 27 summer teams, and 25 fall teams. The winter adult leagues did not run this season due to low interest. With the programming being indoors and D15 mask policy at the time, I found that we didn't have adult interest under the current guidelines. Fall/Winter swim team has been holding steady with 80 swimmers enrolled over the last three seasons. We have the following number of kids qualify for championship meets: 18 swimmers for Illinois Swimming Regionals, 6 swimmers for Illinois Swimming State, and 9 swimmers for NCSA Nationals. For our rec division, we have 35 swimmers that will be competing in the NIWSC Championship meet in McHenry on March 20. ® In the fall of 2021, the department formed a new partnership with Northern United Football club to run a co-ed recreational soccer league. The league had a great first year with 40 adult athletes. The partnership helped us get the program off the ground after 4 years of failed attempts. We are looking to offer a spring league as well. Our McHenry Instructional Basketball league went into it's 4tn year of operations. We had 159 children enrolled in the league from grades 1st through 801. The league showed an increase of 12 athletes and $5,400 in additional revenue from pervious seasons. The maintenance team completed renovations of the Petersen Parlc tennis courts. The new courts bring additional pickleball courts to the community. We also installed adjustable basketball hoops at the park which will allow us additional program space for our younger classes that need a lower hoop to shoot on. Aquatics ® The pool resumed pre-COVID operations including general open swim and pool pass sales for the season. The prices were increased for the first time since 2018 to reflect the increased minimum wage. The pool had a total of 7,676 visits during the 2021 operating season. This was slight decrease from pervious year. The beach had a total of 2,372 visits during the 2021 operating season. The beach saw an increase of around 100 visitors last year. ® We sold 530 pool passes to community members, and we hosted 18 private pool parties last season. ® Our largest increase was in youth aquatics programming. We saw 72 swimmers for our summer team which increased by 6 children more than 2019. We serviced over 300 children through private swim lessons for a total of 500 lessons taught. Our group 151 lessons had 69 kids served hitting our highest number of students dating back to 2017. ® 'We continue to monitor the changing economy regarding aquatics. We saw the largest increase in staff costs and product price increases this summer. The department director and aquatics supervisor spoke about meeting to discuss long term planning for the summer aquatic facilities to help keep debt to revenue ratio manageable. Parks Improvements ® Veteran's Memorial Park was the main focus for improvements last year. After expanding the bathrooms in previous years, the picnic pavilion was replaced with a structure that is more open and much larger than the existing one was. While undertaking this project stone was added to the columns and to the base of the gazebo. The gazebo was also had the roof replaced. Finally, through a cooperative project with the Public Works Department, all the roads around the park and the parking stalls were redone. The exterior sidewalk replacement was also included in the scope of work. ® The front entryway of Veteran's Park is the last element of the park that needs to be replaced/upgraded. The design work, was complete this Spring and the city will look to bid the work in late Spring or early Summer. ® Petersen Park also saw a number of improvements in the last year. The LED message board sign at the park, entrance was replaced. Lights were installed in the main parking lot in preparation for the repaving of the lot in the coming year. A new shade structure is to be installed along the beachfront this Spring. ® The major improvement at Petersen Park was the complete removal and renovation of the basketball and tennis courts adjacent to the picnic shelters. The courts have been a maintenance issue for years as pavement would shift and crack. During the renovation the courts were also expanded to add two pickleball courts. New fencing was placed around all the courts and lights were added. ® Though it is not an alteration to the park, the Parks and Recreation Department hosted the largest concert that has been held to date at Petersen Park, The R.I.S.E Up Foundation hosted a concert as a benefit to install a splash playground at Fort McHenry. Almost 8,000 people attended the Saturday night concert. Weather was not as cooperative on the preceding Friday night however another 2,000 people attended. Overall, nearly $200,000 was raised by the Foundation for the imitative, which looks to be installed in early Summer. ® Plans are already in place for the 2022 concert. The funds for the concert this year will be dedicated towards a "tiny shops" economic development incubator that will be located in Miller Point Park. In order to accommodate the shops which will be dubbed "The McHenry Riverwalk Shoppes", a master plan of the park was undertaken and approved. The project will be a complete redesign of the park, and create a public gathering space and event hub downtown McHenry on the Fox River. The park will have a new amphitheather, permanent washrooms added, a turf area that could be utilized as an ice rink in the winter. The park will add green space and redesign the park, entrance. ® Plans for a future bike park, in Knox Park were also completed this Spring. The park would have 3 different types of bike park, elements to accommodate many different age groups. ® Knox Park is also the home to a new Natural Park. Formerly, unusable woods were groomed and a 1/3 mile crushed limestone trail that traverses the wooded area was introduced along will all natural elements for children to climb on and wall, along. Staff also worked with the Land Conservancy to plant 10 oak trees and reintroduce them to the area. The park will pair well with our summer day camp and in general offers children big and small the opportunity to play and interact in a natural setting. 152 ® A second project completed with the assistance of outside groups, was a pollinator garden at Petersen Park along the banks of the pond. The volunteer project is one designed to attract butterflies and bees with many colorful plants. The garden was designed by Small Waters Education and installed with the assistance of the Land Conservancy of McHenry County, The Environmental Defenders of McHenry County and Hachmatack National Wildlife Refuge, McHenry County Conservation District and Hispanic Connections Woodstock. ® The Parks and Recreation Department replaced two of our oldest playgrounds last year. These were at Pebble Creek Park and at Knox Park. Playground replacement will continue in the coming years. ® The department took the formal steps to add another improved park to our roster as well. Galway Park playground design was finalized and ordered. Installation will be completed by the end of April 2022. The department is also partnering with Lennar Homes on the donation of sidewalks and landscaping for the park. ® Renovation and restoration of the Petersen Farm Horse Barn is underway. The Barn was hit by a storm last fall and changed the scope of the project, however the end goal remains in line with the results of the Petersen Farm Market Study that was completed in 2020. ® The Parks Department also spearheaded many of our downtown initiatives and projects. in the last year these included: o New public boats piers at Weber Park and along the Riverwalk o Complete repainting of the Cunat Bridge on the Riverwalk o Brick Paver replacement along the Riverwalk o Light replacement on Riverside Drive 153 Parks and Recreation - FY23/24 Goals & Objectives • Continue to maintain Lite City's quality parks and parks amenities and to offer quality recreation programming for our residents • Coordinate with user groups, service groups and businesses to manage McHenry's fantastic public events • Enhance Department's sponsorship program. • Continue to develop relationships with school districts, chamber, and various social clubs in community. 154 Parks and Recreation - FY23/24 Performance Measures Item G .. D- • Are the Department's Measure the Departments marketing efforts reaching the October 2023 Marketing marketing success and intended audience and which effectiveness, methods are most effective? Explore opportunities to What technology are we Improve customer service and utilizing and is it the most Technology department operations through effective tool for the specific December 2023 the Introduction of task? i.e. Programming technological advancements. Software Invest in training, retention methods, staff recognition and How do we improve the Staff Development/Retention cross training in order to performance of department February 2024 develop staff workforce and staff? reduce turnover/loss, Run professional Marketing campaigns with a wider reach to What is the value of a gain memberships. Contniue to membership? Are we Membership Rebuilding continuing to offer the most January 2024 reach out to potential corporate current group exercise classes? partners. 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Fj:j� L(A y q O y y y ��+ -C''i 4C''i U) N m 4I 0 b M W y v a �.d a � esoU NEC En M 0 � uF a A H w F A o a Fl a F E� cz o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 HM in rl In rl N M d' HN rl rl r1 N M n r1 N M d� Q O O O r1 '-1 m m M M d' d' 'd' Ln Hd' m M m M m m m M m Ln d' Ln d' Ln d' m dm' m � m d' d' d' d' d' d' d' d' d' d' d' a O N M d' W r• N M d' L/1 LO t` M �r- N N N N N N N N N N M m m m m 0 0 0 0 0 0 0 0 0 0 0 M ON �D O _ O N M O O O O O O O \ O ri k \ oo N O t� O \ \ \ p N M O N c-i N N .--1 O O 0 0 I o o O .-A o d' Ln o 0 o O o o N t� o to h o 0 to O O �o M N LD N O O 00 v ri co v co ON o� Lf1 d' W � c-i ri M ri ri h v v O O O O O LD O O O O O Ln O d' O c-1 O O ri O M co LD M CD O N N O N In O ri (3� ri ri N ri ri d' O_ O _ I -kD %0 M Ln d' CO O ' N ri m LD N W O w O h O� O� M ko ON �D ON N r ri d t` i L1 d o to N N N ri Go m N ri O O O O O I M d' OD h -- O O O O O O to w O w N O O Lo O O Ln LD m to O O co M co co .-i co ON N N N N d I , co r d' M 00 t� W ko ri ri �1 O %D ko Ln rn m rn d' Ln Ln a y r-1 r-I t� �-'1 kD O t� Ln Ln m ri �0 0o rn ri ri ,-i N ft m co d' ri ri ' to m m M Ln M t d' N h Ln Ln m t� m o� O 0� m in N .-i o. rn m LD O r-1 N' [� r-1 %O m e-1 M M' 1p �D N r-i �o t� 00 ri N co %D ' d' d' M OO e-i O ' Q� O� FFF111 _ co d' m N to l� k-O (� •a• O� d' to O� O� O to N 0o O Py OD CD ri r-I LO M M O O Ln M LD LD � r-i r-1 m A ri ri N „O N c-I On �d o ' M M m N co N t� N m coM Y .• Qi O W lf] N N M V1 cca o o � > o G W a �y u i a a o y rn a' d N � O a $ z! u u w> a a, o P- Ln m m at m w v r a w q O w w N p, M a ; o o f �C �e CL. or (A PEI to G W m w w N N O W W [/o a c7 to F to L14 F P. a, F CJ u v cri F �] O O O O O O N O N O O O Q ►4 rA r-i to t� N m O N N O o O o (y ri N N a\ m ON O\ M d' t� W ko LD LD %lo LD ko m m O� co N M OD a r- N m Ln N O LD w m N (Yl Ln LD r CO M O N m d' Ln ko n o0 m rn m tom V' 4t d %* T "t d V <t Ln Ln Ln Ln Ln Ln Ln Ln Ln 157 0 0 0 0 0 0 0 % o 0 C C 0 0 rD kD m0 0 0 M d' N CD M N O r l M r1 N rD O p O O p O O O In O CD O Y N t\ r l N O ko N N A r1 N A N O O tit m rD 'd' M M h O O Q A 0 o dr LD Ln %kD L` OD . i o 0 00 Ln %�D N M t10 r-1 O %-i N 00 ON N Lo L� r-i N' m -+ co r1 d' '-1 r1 r1 N m O o 00 N d' 00 m N o r1 O O O O LD O 'd' LD M %60 M h Ln O d' O O O O h O O Ln kD %60 N h N O Ln Ln O O in 00 O' N %kb N' 1Oi N' 'd' h' O' LO N' h' - M d' Ln h OD r--I r1 n N N r-1 h d kO O d 00 O 00 m r-i M �D 00 O Ln r1 In O m r1 M O M %4D O N Qr M O 'd' kO h O In d' r1 r1 r0 O r1 d' LD rD Ln 00 N O% r\ r1 M r1 00 %60 M' Ib �6 Ln ON %-1 2 LD M M 00 d' LO 'd' Or r1 N Ln r1 Or O V-1 r--1 N O O h O O M kD m M m O O r0 O O O n O O M O 'd' O O O O O Ln O M N O r1 OD h In O O Ln 00 h h Or V-1 N' M n O Ln N' h l7 %40 r1 co t\ d L� N W r1 r1 O Ln r1 m r 1l N N 00 M 'dr i-i Or Ln O 00 r1 Or 00 Or d' L� O r1 In %D M h O O O �D Or N N O r-i r� r1 rD r1 rD Ln Or v-1 r4 00 Ln m In N 00 Or LD 00 L� r-I M r-I l� 6 N h' 00 Or r-1 H .-1 LL M M h 'd' rD r1 Ln N r1 O Ln r1 Or r1 N Ln L� 00 m Or CDLn r1 m N 1 d' L� kD r1 00 L� Ln eom1 r1 d' rD N r1 N N Ln O d' M r-i N m �o M ui Ln r-i h h d O Ln %D N O r1 N 'd' Or Co N h 'd' LO ri m 00 M' 00 'd' �C/ N M' W by - r-1 %-I kO d' LD MO r-I T-1 N M r-i L� m r-1 M %10 M 00 OD h Or d' 00 m 00 00 h in m LD N r1 L� Ln N M h Ln O h m N r1 N 'd' Ln Ln N O M r1 Or O n O N r-I r1 M 0 M Or qqz 0 00 T-i Ln LLO Ott lLo N N Oo A d r1 OD r I r-I r0 Lr)N M In M O O r-Im h d' d' rD in N LD M m N M N C) O N Or m M M O l� N N ON Ln b W r-i M M N O C) O 'd' N co h `-' rD N N O 11') .,,...i11 O 00 Ln Ln %D' r i Oi N N' O n m N' N' Lr) U N�" r1 Ln M in r1 r-i ko rN-I n rm-I En 5 E� w w a� Ln m L z u ay pig p� G ++ o u u ry di Ltl ) id F ai C ' ' po bD U y (1) O Ena v 0 F�D b o V) o aa)AV) > w F u o�, H a F O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q r1 Ln r1 Ln r-I N M d' r1 r-i r1 r-I N L� M r1 dNd�� to m Ln m m m <h d W <N d dr d d d d a N m 'ct In LD r aD rn o N m d' Ln to r� co m o N m �t Ln LD n co 158 159 +•�r, '1� 71;fy i.Ilk�,. Oil I 1 _ *1;6 `XA . <- 'I Tourism Fund - Overview The purpose of the Tourism Fund is to finance tourism -related promotions of the City of McHenry. Revenues of the Tourism Fund are derived from a 5% tax on motel and hotel room receipts. Expenditures currently include annual contributions to the Visit McHenry County organization (formerly McHenry County Convention and Visitors Bureau), partnering with the McHenry Jaycees to fund a portion of the annual Independence Day fireworks in Petersen Park, and on the municipal portion of various festivals and special events held within the municipality such as Fiesta Days and Blue, Brews and BBQ. For FY22/23, the Tourism Fund is being used to continue to pay the principle and interest on the acquisition of the Green Street Parking Lot. 162 o a o 0 0 0 0 0 0 m _ _ p _ r-I klD %�D ^ p N % O %D Ln O O O O O Ln Ln O m M O O O "� rn Lri Lri Ln ni y o 0 N Q Q Q Q A Q O O ' ' ' ' O O O ' O O ' O O O O O O Ln Ln O O O O O O M N v CD M M Ln Ln v N n o 0 0 0 0 o O o 0 0 Lp O CD O CDO O In CD Ln m CD O O O CD O h Ln CDN O� ON �p O� r�-I ~ I N CD M LO O CD CD •, O\ N N coN N O O N LO i r--I N O O th Ln Ln V-i �O Ln N r� N O� O � N 00 NLO M M O co �D O� LO LO ri p CD CD CD CD CDci N CDM M N Q� O� d' Q` ko [� m Cn ID 1p I I I rI ri N O O LO In Ln ON m M Ln �o m ONLn � o N r� Ln N LD d O O Ln C7 N r4 4D Ln Ln r-i N N m O N O� M 00 N M r Ln00 00 r--I r-I M M 00 00 O� O� 0) m N 00 00 r-I rA Ln m � r--I r-1 N O m C� O ' d' Ln Ln ' %D d' O O Ln m .� ON LO [� (� M OJ p N f rD N Ln N N N O r1 N O O O t0 O� m co Ln �D M M r-I Ln Cn kD O N 1 c N N r-I I Ln 1 ❑a U Lil W C TA Q m �r1 �D w U !+ N 0 (n [� (V F W Fpl y U W (J W a O 0 t N C u 'd I +� w p o a' E cd Z La s° U n F x w N C N C H O W (, u 2) a ? ro O 0 0 b o 0 m O O H Q d a F u F a a a F F F z d W C W) W �Fr 'C r-+ d' CD o 0 0 0 0 0 I(S c-I ON N00 O� Q 6 M M M m M m In N N .— N m 'd' to tD I� 00 CDr- N M d- Ln r coN N N N N N N N co N Om to rro m rM m m Fiscal Year 2023/2024 Annual Budget 164 Pageant Fund - Overview The purpose of the Pageant Fund is to account for revenues and expenditures used to conduct the annual Miss McHenry Pageant. The pageant, a community tradition for 60 years, is conducted annually. Female contestants between the ages of 16 and 20, living with the boundaries of the McHenry District 156 school district and having a McHenry address, are eligible to participate. Revenues are derived from entrance fees of $200 per participate, normally paid by a sponsor, and other donations. Expenditures are directly related to the holding of the pageant. 165 0 0 0 C 0 C O O O O p O O O p O O O _ O O O O O O - Q Q �O O O O i O O O O O O O O O O O O O O N N h n rn O M N ko � O� ON rq L--1 N �O O O O O O O O I %40 O CD 444 O O O CD CD CD O O N N 0� i 0 'r"1 N N M N LO v G' �}' O CD Ln O O (3� O LO 00 v r-4 H O C O 4mJ — cu r-i M' Lf7 O ,i Ln O lam. I � %-D OMi e--1 N N N It Ln ry 00 00 H N � O %0 M CD 00 v: a cu A Ln 0 N "d w _ w V) m V) U � W U W W F.4 ro cU O F DC w ai W U � O u z cis � (15 w cu w W o 0 0 0 o o o z u a. F E F b w H Q _ rn 50 M M Ln Ln a 1 W O N m '� Ln t D h o0 M O N m d' Ln l0 CO Ol Ln lfl 00 6l �-- c- c- .- N N N N N N N N.. 166 Fiscal Year 2023/2024 Annual Budget 167 Band Fund - Overview The purpose of the Band Fund is to finance and account for expenditures incurred for the provision of summer concerts by the municipal and to promote culture and recreation in McHenry. Revenues are derived through a transfer from the General Fund and expenditures are related to stipends paid to the members of the and. 169 Fiscal Year 2023/2024 1 Annual Budget 170 Civil Defense Fund - Overview The Civil Defense Fund accounts is for the training of personnel and the purchase and maintenance of equipment needed to protect and defend the municipality from natural disasters or man-made environmental disasters through early warning and public notification systems. Revenues.are derived from a General Fund transfer and expenditures are as -needed. 171 0 0 0 o O O O O O O C) C) C)_ O C:) CD O A o 0 0 0 o O o O d MI O O M M M O N d' in Lo e-1 O C) Ln 117 M kO O C)i O C)n N M C) d d V M VI o 0 I i 0 0 0 � o0 00 0 M o C)O 'd' M M Ln W d• Ln v I I lqt CD C) O in LO in I O co � o CMC)CDCDO CDC) d M ! 00 O N N � �:, co ni ni C00 0 toI O Nr-I Mcy) M 1� m N r-I o C) ()000 , i co M M M N' N A i N N — 'd p W � I c� ro N N V W w 0 0 m ) i� oq ro � ~ E w E F. c� H cy H z cw w a b d bIA Wq Q cNn m m • I w .-- N M 'd' lfl lD h m Ol lfl l0 1� M Ql O 172 0 Fiscal Year 2023/2024 Annual Budget 173 Alarm Board Fund - Overview The Alarm Board Fund is to pay for the maintenance of radios and "head -end" equipment in the municipal 911 dispatch center (NERCOM). This equipment comprises the city's direct connect radio fire alarm monitoring network. City businesses which are required, by building code, to have a fire alarm monitoring system are required to be monitored via direct connection to NERCOM. This direct connection helps to ensure a more efficient emergency response. 174 0 0 o 0 Ln 00 O kD O O %,D QN 00 OLo O N q G-1 I0 �k �k CD O o 0 0 0 0 CD CDo o CD o 0 0 Ln O Ln M m ri `-i M M p p O O O O O m CD p O O O G� CD O I� M O O O O O CD O M to CD Ln O Ln Ln I a� ~ C) M N N d' 00 00 N I I -LO m Cn 1 h co 0� l ; c-1 In N N h m Ln Ln 00' d' N co, N M rl r-1 c-1 O ON N N c-1 ri c-i r-I O —_ — c-1 O O O% O O [� O O O O O O L\ O O O O O O <` in Lry m N O N m 00 CO r-i O 00 N N c-I r-i O N 0� M C>\ �D 0� ' N O OJ Ln Oi� 0n Ln CD`-i Co CDN N h O c i NJ N' �D' �O Ln Ln N co co N rp-i ��-I (3� to Il') M O OCO 00 CD N h dam' co N N N c-i in Q) I � Ln W rq LO cz O Ch CT\ 00 N M M O M C co N i--1 i--1 -A N M Ln G N A Ln 1� N W�l N um, Cd y w u U :J V)Z °' w o WQW�Wc4 iwu u w� F CD CD to �pbuA t4M 0 Co J 'pLl M M M Ln N ��lji pq W Ln lfl r 00 C, o N m d' Ln lD 1� 00 M IDN c C N N N 175 Fiscal Year 2023/2024 Annual Budget � 1 1 176 Audit Fund - Overview The purpose of the Audit Fund is to account for expenses incurred to complete the annual audit of the city's financial statements. The State of Illinois requires that the City of McHenry conducts an independent audit on an annual basis. Statutes provide authority for an entity to levy a portion of the property tax to pay for the audit. Since the authority to levy a property tax for the audit is separate from the authority to levy the corporate rate, the levy amount for audit is deposited into a separate fund and kept segregated from the General Fund receipts. 177 Z *O�a o 0 0 O r-I O t� 1� O O O Ln l.n Ln Ln A A � ' %40 .D o O h 1� o 0 Ln Ln coo n h v v 00 O O O O co h l N N Ln O O Ln N r-I Ln N N kD dD M I N N 'd' Ln Ln I DOo1, t� N O O N N h t� L-1 N h O 00 m 4914 m Ln - �--�� N N Ln Lo d' —� W O �D o O �D co ' ' �r CD o LO-I 'd' -I •� 'd'� d' v N N in Ln Ln I LO �� ��� �I kD � m r-I d' N N 00 c-I v Q' I i N H d' Ln Ln I Ln Ln co co e-I N N �D ko � MD %hD v d' Q I N r-I M d' I %BD Itt C\ rmi M Ln Ln Ln O %BO }L �; m M ko o � � co I N N-I 00 rN-1 N co I � I I N I "d m i 0 � W N U O (n !sl I N j I F !�+WSj FLCJYiI rri ca FF d 4W C) 4J U 'd aka a�i 4 z N PQ A v F c0 F z cu'I o 0 0 0O w HtC:) Ln 'd p W N m 'V' Ln lD 1� a0 Ol CD Ln LD h �-- 00 cn c- CDN N N N .- a- .-- .-- 178 N Fiscal Year 2023/2024 Annual Budget 179 Annexation Fund - Overview The Annexation Fund is a non -operating fund that is used to account for receipts from generally non -recurring revenue sources resulting from negotiated annexation agreements. Revenues include a fee assessed on gravel mining on a per on basis, revenues from property being annexed into the City on an acreage and lot basis, and an additional per unit fee that is distributed to other taxing bodies.. Expenses in the fund are related to improvements to infrastructure or municipal facilities. I— 0 C 0 _ O O O p O O O O O O r-I O O cI J Q Q Q Q Q Q Q o i i i i i i p O C=) In L17 nj N 0 0 C C 0C O O O O O O O O O O O O O O O O n a Q Q0 O6 1O1 1 1 1O O O O O ' O O O h O O O O O O O O O O O Ln O O LO O O O O O LO N d u'i Ln M 00 o Lp � N I 00 O ' i i p O ' i ' ' o h, O o CD CD O O h CJNp O� CD CD d\ O ft LO LO ft N ko Ln I 1 �', i O O CD CD O O ' CD' CD O OD h o p CD O CD CD CD O CD th o CD O O O O O O Uj Ln O Ln Ln Ln LO CDcyp) CD M �O LO N m r�-I c-I O� rj � CD CD CD OD CD � CD M O O M h M O r-I O CDri �-i jr)M 0� 00 00 N H O d' N to O O d' �,D Ln O ' O ' 'c-I M Ln d d' d' h O klD co O ton1 N N d' O al h O 'd' aN h O O nj � CDt� M Ln t\ t\ M tf) d O N O O 00 dN' N M c�-I OD { CoClID h d' O •M "D O '� d' O� kD O O O O %lo h M h O %�D M O 00 h \D m O O O 00 ONcq h l0 N M N N co Ln O � LD M M O m CDc-I act CD m CD 00 N ODrl c-I N In N N M 00 v O� A — N 'CS ors a�i w Ln LO .0 0 0 N bCa x 0 w aO� u W . � u cn P' cn a Lit N cn co V) y to \ z I � � Z to u c� p w w w w w 0 0 0 o o w C M O O bU bA bA by bA '� Wu V ao oo cd i 0 '� '� � ,0 n fl w w 4� x w ca co m ca ai (n W ti to b G Qp o 0 0 0 o O E� w DC _ bi O O In O m 'd' in O O O c-I d' N bo �y F. H N c-1 N N N N N d' h O� O O 'c}' al Cn O� \0 %,D O O Q� W N M d' lfl h co O-L O N M V' m h 00 N N N N N N N N N N rn rn m m Fiscal Year 2023/2024 Annual Budget 182 Motor Fuel Tax Fund - Overview The purpose of the Motor Fuel Tax (MFT) Fund is to provide dedicated revenues from taxes on gasoline and diesel sales primarily to road improvements and maintenance. Motor fuel taxes are generated by a flat rate of cents per gallon, plus a sales tax ROAD transfer. This sales tax transfer was eliminated by the State of WORK Illinois in 2000 and replace by certain vehicle registration fees. In 2021, the State of Illinois Increased the monthly Municipal Motor AHEAD Fuel Tax allotment by approximately 40% bringing the annual revenue to $1.2 Million. Beginning in FY22/23, the entirety of the Motor Fuel Tax revenues was dedicated to the Local Streets Resurfacing Program. These revenues combined with the implementation of a Municipal Retailer Motor Fuel Sales Tax, dedication of all Township Road and Bridge Fund distributions, and the dedication of Street Division operating capital fund have created a consistent annual program budget for the Local Streets Resurfacing Program of more than $2.3 million. Due to carryover balances in the Motor Fuel Tax Fund the FY23/24 program is in excess of $4.0 million. 183 M r-I O O O O O O O O O N O O 00 �D O O Ln O 00 m N %ct CDO CD O M Lo _ A� A o Q O Q ' %kD ' O O \D rA tin — O %MD o O M O O r-I O o ON Lr^ t t� Ln t� tin m Lnft N O\ O h v M O h M O% Ln d' Ln %kO N Ln LO v co N v r-Iv r N \.D i i O i IMO ' ' N CDkO i i �O } M h LD O O h O O O M 00 O� O [� \10 Ln t�N Ln M O� N F Ln in �O 00 M M Ln O � M r-I N 0� ON H N N v I M ' M r-i O ' ' N ' ' ' O M r-I Ln t� 00 00 M M h r-1 .--I 00 t� r'I Ln •� m CD ri LD Ln M N 00 O! Ln DFAM ; O O Ln %4 h O O N d' O N ri M i I M r-1 r-i ' N r-I' N v ' r-1 ON N N O O O ' O O ri ' Ln %lD %MD O O N O Cl r-I r-I 00 �D rl; ON D\ Ln O d' O O Ln Ln O O O' � t� N O' r-I e-1 N O' M N' 00 cl� 00' H ON M d' t� N O Ln N O, r-I Ln O N N Ln Ln L•n'I r-i ri N rl' M' v L-1 I Ln d' ' %MO 00 M 00 O ' ' Ln ' r-I ' ' M co Ln O1 M N N ri ri lD Ln m Ln Ln Opl Ln t� O N d m m LO N N r-I 00 e}' N c-1 %JD O 00 d' M O m r-I qt' %0 M LO %D O nj rj r-I M M CDO h O in O1 N h N M Ln Ln O M O r-iLn CZ) ON N ml� c-I ft LD CDm D\ LO r-1 Co r; d' h N O Ln O O O' m O Ln \MD O M O O rr-I T"'i LO m ri ON py r-1 I I M r-1 r-I N ' O r-I O, 00 N N Ln Ln ' 00 t� ' Ln d ' ri m M LO O ri N ri 00 m cu 00I h �D N h 444 O N t� O t� A Ln; Ln a; Ln a; a; m in ri O r-I O N •c?' in O O N r-II O r-1 r-I r- N M m M O i r-I ri ri' N � j � I p d p � Ln Piz H id ' ME w N N pp h1 •� 'c7 F" cn G \ wo 43 0 O CL 0 ro L] W °pp� N o o NCh? A U CS o P A .a q y a 4 aL bq .o fl O 0 a 49i y w H ccd d +� °' w F a4 ai m M m.fl 03 Ln N F E~ H Z o ppME l q I O •� CD CD CD O N LO Ln O� O O Ln r-I Q to m 00 c--I d' m m h O r� CD CD O O r� r i r-1 N N m m O\ m r-I kD �O 6� O O •gyp .I M M M M M M M M M LD 00 O O O q W W r- N rn %;t Ln lO t� 00 Ol O r-- N m '[t' Ln lfl CO Ol O r- r- N M 'd' 1.n lD t� tb Ol r r �- c r N N N N N N N N N N m m 185 Fiscal Year 2023/2024 Annual Budget Developer Donation Fund - Overview The Developer Donation Fund is to account for donations collected from developers on behalf of the primary and secondary school districts, fire protection district, library district and the municipal park system. Developer Donations are collected to ensure the provision of public facilities to serve new development by requiring each new developer to pay a calculated share of the costs of such improvements as a condition of approval. By municipal ordinance, anyone applying for a building permit for a residential unit are required to pay fees for each unit constructed. iE:37 C C O O O O h O O h N O O ON O O O kD O O N O �O CDO O N O O O O p r-1 O r! _ O O O O � O O CZ) O L l� > O O M Ol ri ri O Q i O O O i i C) i i i i V-1 r 4 -_ N O O O n Ln Ln L\ Ln O M N kD N �D Co 0 0 0 O O O O CDO O CDON m m L� Ln O CD CD CD O CD O O O O CD O If) LO Ln N O O O O O Co O O In O CD O d' ON m n1' I— l� 00 ko N N d' M rNi 00 N N 00 N to H Off_ r-1 m Ln L� m 00! O Md' W 00 Ln 00 Ln 00 ' OD to el' kO kO m N d' 00 M �p to c-I M N N I M Ln N N M N �0 <H r"I m m N N O� N O L 00 k6 h L� Ln � 0% � N Co t� � co In r-1 O'I M [� M M M Ln h � N ln', N h LO ON r-1 � 00l O O O O O O O O C) Cl O O O O O O In M N o 0 0 o n C) O N O O O O Ln h Ln O O' O O' Ln O r N O O O O' N' % I LL' O m ko N N M O rl N r-I N N N M �O M koi Ln ri N Ln N M O0, ko i rj r-1 r-I O N d' 'd' a-i In r-1 00 O m Ln O) m O ch d' N Ln 001 chl O m m M d ' ri 0\ m Od' ' 00 Ln N CD m 00 O rLn co LDj Ln M Ln Ln ri ri N LO 1� %D 00 M M m m In h h LO N m M h O, r4 r-1 M ON M Ln Ln H r-II c Q M 00 kD N N 'ch m ri h ri 00 N N Ln ri kD O N J N tv ri T-I r-I Ln N ri ri t�m N Ln a-1' r-1 r-1 I M N N O m 00 d' O O d' O h M 00 O m In O d' O r-1 h kO LO m m ri N 'd' O ri lO %D ON N O m 01 a-1 �1' %D CDri Ln Lnft 00 �N 00 r-1 �O O CD t� M LO ft Q 00j LO ko c-1 d' M M O ri � ri d' n 'd' 'd' co, a M d' LD V N rii ril A I ri 00 co %-1 N' h m N I 00 M O h O M W h Ln Ln %0 ri LO m L� kO kn d' M in kO ri O t� t� i M I O� N �O M M ri M O d' LO h O� �D M d' O t!] O� ' t-1 �D' N' 0i O' m' <f O� t\ M' rA �O O� O' 00 n to l; m in d' M ri co ri Mai' d' M d' L00 M 00 N rh w c� I� b 0 q 0 f° A In aA0ai aAeLCa�ai k�ca�v u.D o m w LAnqai Wo _ (IIf O _Wa) goo{ WO) CUM z 0000 ` >W ,G O C A ' O O O O I 4D v o cAawALWZ�] u Q,�►OFQ..'"jI1 0 0 0 0 Q Z0 Nro0o .afl)� ro y o a) a) a) ca A A A A v PO A C4 a s is W 9 O bO Lft n O m CD O O O 'd' Ln m N LD O O O O O O O xq Q h 00 00 Q` a-i N d' 00 ri d' 00 W O 'd' n DD m O O q 17 n h h (� N N N LD 00 00 m 00 m M M M ON r-1 Co M M M M M M M M m M M M M �60 t%D LO LO M D7 'o A ali iW 'cr Ln L� O r N m to lD r co Ol O N M 'd' Ln lO r Co. Ol O N m d' Ln LO ti r N m LD 00 Ol r r r r r N N N N N N N N N N m to m m m m m m v�r not t 1 ' Oki Allb�q: •r +:�d'r�.�l:' „' Y1•i`"�i�'f.��lilFio 1 r �i�i�• i.. %�'`r�` Tax Increment Finance Fund - Overview The Tax Increment Finance (TIF) Fund accounts for revenues and expenditures related to the city's Downtown Tax Increment Finance District, established in 2002. TIF revenues are derived from the collection of property taxes each year at an increment based on the increase in the assessed valuation of properties within the area since creation of the district. Expenditures are related to the repayment of private development "extraordinary costs" per approved development agreements and for public improvements within the district which increase the value of all properties within the area. Over the course of the past year the city was able to garner support from every tying body in terms of a letter of support in extending the TIF District. City staff has made numerous presentations to the public boards of taxing bodies not only within the city limits but also in the county. These meetings have ultimately resulted in the public endorsements from the bodies for the extension and an ordinance passed by city officials to request the extension from the state legislature. The measure was included in the fall veto session on an omnibus extension bill at the state house. The measure was passed and the 12 year extension was granted. This extension will be invaluable as a tool to continue to attract developers on key sites that were identified in the initial planning stages of the TIF District; sites such as the Central Wastewater Treatment Plant site and the Central Green Street area. Additionally, the extension will enable the completion of the Riverwallc and the implementation of a vast streetscape program. Collectively, these items will reshape the downtown area in McHenry for generations to come. This is already occurring with the vibrant buildings and developments such as the Riverwallc Place fiownhomes and the River Place mixed use building. The Riverwallc has created a pedestrian friendly flow between the streets and serves as a draw for residents and visitors. Land has been acquired and transformed into thriving event spaces and hubs of downtown activity. And new public boat slips have been introduced to draw those patrons off the river and into the downtown areas. 190 0 0 0 0 C 0 0 0 0 r-f O r-I h (3� O 00 w Oo p Ln 1p p O O� O W N H O \ \ d' of \ O H' O r-I 0o r-I co A A Q O ' O O O O O O O ' O O O O Cl O O O O O O O O O O O O O O O N N Ln m O O m O O LO 'd' ON co Ln O m r-I <}' lD v O� 1 Op O O O O O O O O O O m M %D I V) m O O O O O O O O O M O M �' OD kD M O M O m M O O O N ON rl I— 00 O O Ln Ln rA r-i r-i co N '�}' ON 11') d' m N d Ln �D h r i O O CO -- �o � m O m %,p W ib N M h O O N M LD N d' N !� lD c1 O O Oft C) LOLO M N O N M N h %DIn �', O� � N Ln h '-I N 00 O W ON h O N N v c-I c-I �pI O O I O O O O Co LIl m LO (y CD O CD O O CD CDM M M p �,D j O O O O O O m O O LO Ln O M N M O M nj pC 0" N O Ln h Ln d' N N d' Ln i ON �� In O c-I O Lf') O O CD to O i N d N O h CD M r-i � rN-i O O In M r-i In M 00 N C i� M to M O\ r-1 N N N Ln h M ¢.d Lr) O� y c} 00 lD O O h r I O M M c 1 to i� N M 00 N di co m Ln M m OD O LO N h M N N m rA ON QJ Ln %,D h C N D^, ,� i �D h r-i o Ln m m a O Oo �p O M m N CD b M � N M m N M N �i LP Ln r-4 h M In N O ri �O co _ � .--I h rml V w - � V) m a) tLoy m o a� L w P W a V ua) 0 in H Ri r z (D O N o L7 A pW W u E p 00 io u R o o iV 0 ,--� ro u w w ro F p o ro � o O o v Lro. N O z j-I W a Cr' _ bi w H bb opo O rM-I rn r0-I CD O O ]C*:>��' O r-I N M 00 r-i O` O1 ON M M M M m Ln %D OD � ' pC1 W m Ln lD h co m Ln 19 h Co M CDN m d' Ln L9 h N N 191 Fiscal Year 2023/2024 Annual Budget 192 O F T 11 E FOX R I V E R Fiscal Year 2023/2024 Annual Budget Debt Service 193 Debt Service Fund - Overview The Debt Service Fund accounts for the bonded indebtedness incurred by the City's General Fund, including bond and interest payments. 194 G O O O OO O O O O O O Cq O M 0M O O r-I O Q G-i Q Q Q Q Q �k CD O N OD ' O O O M M M N OO O d Ln v v O O O [) CDL\ ri N O O O i Q �k O N O In N N v In O %o N L� O O N O N v O M O m H' O d' O O O O M O t\ (3� Ln O m r-I m Ln CDd' N ri m m m r-i d'LO *444 N r-i OD r-i m %,D %.D m rA N r-I N m - p -- Ln o �o O rn o o r-i p M O lf') r-i l0 O 0? O i0 Ln Ln N O r-4 (DO N if)r-j N Ln N O' O r-I lfi N N m N N M M Ln r-i LO N ri co r-i M \D \10 M rI N ri N r-� coI to O %o O O� O �M O Lo r-i \,D O h O [� Lf' LO N O r-i 00 N 'd' O 'd' O LO M Ln N O CD r-I in N d' r-i N M M Ln r-i Ln Lo N r-i co r-i m kD \�D M r-i N r-I N ii r-1 O �D r-i ' [� 'd' co �D N N O\ m O m � � C LO O N M Ln O O\ �D u] M N [� O CD O N t N Ln rr) CD 00 Ln r-I r-1 00 Ln in M N M UKt M In O Ln M N rA 00 ri M ri N c 1 (V i N O 0� ' 00 m O �o O O\ M N co \�o I 00 M O LO d' N r-I N O r-i O\ r-i 00 N o �o m O \.o �o �o rn rn O �i Cn r-i Ln O N O' O� M Cj `� 00 N M M co r-i a\ m Ln m 00 N r-i r-i r-i m O o� ri O r-i r-1 I i N 00 ON N Ln O t� d' M Q` M O ' M O ri 00 '�}' O M O M O d' N H O ko O� %�D Ln p M O N O m w d' N m O O\ Ln to O t\ CD if'i N O� N O� m Lo L� N Ln N ON 00 \D in m N ri M r-i M r-I \D vrA r-i p -4 � w w a�, u" bA m ai w w d v Ln , bi v 'biD w Wa r� N O bA •P OO � q y G] o o N kL ti Ii° O o O a> O z Lr u cn m aPi q E E E H F F F W oa w m F N ri O O O In kD O1 r-I N In D CD CD CD CD'F3 ri N c-I �D �D l� h [� [� OO Q N N O` m O` ON m m ON ON ON r-I N (n Ln M M M M M M M M M M M r- N m d' Ln lfl r Co rn o N ro%q Ln �D 1` m m o r- N m d' Ln Lo r co m o r- N N N N N m m Fiscal Year 2023/2024 Annual Budget Recreation Center Fund - Overview In March of 1999 the City Council passed a resohrtion stating that 50% of developer donation fees for parks were to be set aside for the construction of a recreation center. Consequently, the Recreation Center Fund was created to account for these donations. In addition, any future funding sources identified for the construction of the facility would be deposited in this fund and, further, the expenditure of funds for the construction of a recreation facility would be taken from this fund. In 2013 and 2014 City Council undertook a process to evaluate the feasibility of various options for recreation facilities, including the development of a family aquatics facility and/or a recreation center. Ultimately, it was determined that a recreation center should be the primary focus, construction began in 2015 and the McHenry Recreation Center was opened in February of 2016. Construction was financed through a combination of cash payments from the Recreation Center Fund and the issuance of debt. This was done to ensure that funding remained in the Recreation Center Fund to cover any operating shortfalls, to serve as capital improvement funding for facility needs, or seed money for future expansions of recreation facilities. J- Y In 2020, McHenry and the world navigated the beginnings ofthe Covid-19 pandemic. The restrictions imposed by the State of Illinois closed the facility entirely for over 3 months. Extremely restrictive mitigations lasted throughout the remainder of the 2020 and have continued into 2021. This has had a near catastrophic impact on the membership levels at the Recreation Center. Membership levels have hit the lowest levels ever at roughly 1,000 active members. The severe drop in 197 membership due to Covid has forced the depletion of the much of the reserve funds that were left from the construction, In 2022, staff was able to close out the remaining hold on membership for Covid reasons. Staff instituted a number of promotions throughout the year to attract new members, including utilization A professional marketing campaigns. A rebound has begun to occur and active members have increased to nearly 1,200 members. Recreation Center Fund - FY22/23 Accomplishments Recreation Center • Group fitness class attendance has seen a large jump in numbers since November 2022. Average class numbers for the week leading up to November was around 550 participants. Since mid -November that number has increased to around 700 participants per week. • Group Fitness attendance from May 2022 -January 2023 - 23,266 visits • Personal training has also seen an increase in PT clients which began in September 2022. Our trainers are seeing around 60 clients per week which is up from 35-4.0 per week. Our PT department has also seen an increase in partner trainings. May - July 2022 we were averaging 3 groups of partner trainings and we are now at 7 groups of partner trainings per week • We offer 55 classes per week in categories ranging from HIIT, Strength, Mind/Body, Active Adults, Barre, TRX, Cycle, Cardio Kickboxing, Dance, Pilates and Kettlebell. • Our group fitness staff heads up 4 holiday bootcamps per year for our Rec Center members. The 1.5-hour bootcamps are well attended by members and non-members with around 50 people • The recreation center serves as a hub for much more than simply a fitness center. The facility houses many of our classes and workshops. It also is a location that is rented out for any number of occasions to our community. Recreation Center Fund - FY23/24 Goals & Objectives • Create a collaborative marketing plan foi programs, events and facilities; whereby increasing community reach, efficiency, return on investment. • Increase visitation at rec center thereby increasing revenue. This shall include quarterly free community fitness days. • Research trends, explore community partnerships and evaluate existing programs in an effort to consistently develop new programs and special events. • Enhance Department's sponsorship program and apply it where applicable at the Recreation Center. 200 Recreation Center Fund - FY23124 Performance Measures Item Goal Description • Through outreach to members To maintain a 60%fitness and continual update of Membership loss is minimized Membership Retention membership retention rate for offerings, the goal is to keep and client base remains fairly the facility. members engaged and constant. interested. In identifying a comprehensive Further develop and apply a sponsorship program, additional Fostering community Sponsorship sponsorship program to the community connections will be partnerships and adding a Recreation Center. created as well Introducing revenue stream to the facility additional revenue Utilization of active marketing campaigns at key times of the What is the value of a year as well as free fitness days membership? Are we Rebuild membership base Membership Rebuilding continuing to offer the most dramatically impacted by the to increase the facility's current group exercise classes? Covid-19 Mitigations community exposure. 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' �k O ak ' O r N O� r O O O O O O O N M Ln M O N O O OD O 00 r in Nt N v v v O v in 00 N Ln cI N O O O O O ' ' O O O ' to c4 M O O M N O O O O O O O Ln �D (M M O N O O O M N Lf7 O O m N cn c-i kp 6� '--I' O f N \.D Lr-I N co I O ri N r ci r-i CDO O ON m CD In LON O r-I in H O�m-I Lo co O to r-1' (b 00 r O� OD In cN-i M N d' O O O c-i r c-i r-i �1 I O O O O O O O I ko d' H r-' Q d N r--I 'c4l O O O O O O O m m O M I%.D �.j O O M O O Lo co r-i Ln oo �}� N N 00r-i R M N d' � OD v 00 M CDN r N M VID r-4 N N I ' ' ' ' "o O Rill N m N r M 0� N N m CD r O r il. 0T m c-i CDk-o � CD co M m r CD cn c-i H cr; G� rri o �Li O CC) r O\ CY e i - M N M rn co m m 0 00 Ln O CD' O� ' N ' ' ' ' l0 O M m M I � Q� CD W M cn Ln O O Ln m O In m 01 O \p O M cn . i % L11 W Lvj �D M O — m N co N 1� N r A d I rA ON O C) N c 1 M M d } r r O r r 'd' �o c-i M to O Ln Lo r� W N-4 Q �D d' rA r V-i m r N d' 'c-1 M O rO OD 00 �}' tV �O N o � c" r co N v �y �I 4� N I i bjD �}yy w C a�i cWiL b a N Ln m p' CD Ln L�4 a H byn to y al u u F Qv ' u N � o m u p b F. al F W a� 0 Z Ln � � � q Q w w 0 : ,[ u? coo •R u as a+ + o cu m 0 Lo 0 0 O W vL 0.i bA (is N cis cn z u (a o L� 'd GL u u F 44 �L p a' i H F C � o 0 � v 0ti � �j O O z Ir! u Ln N O k O F W W W F P P F F Ly O ci O O �4 N O O CD O r-i d' CDN Lbl bA (.q r-i �--I N M %44 d' O CD CD O O N N Q U - r-i ci r-i '-1 N d' N M m � ON O � %D .D ko kD � ko .D r m co c\ O O` Q \ W W O N m to t9 r CO Ol O N m d• Ln L.D r co Ol O N m d' Ln �-- N M �• r r r r r r r r r r 00 00 Mco ao m m w w m m m m m m m 205 Fiscal Year 2023/2024 Annual Budget 206 Special Service Area 44 Fund - Overview The Special Service Area (SSA) #4 Fund is to account for revenues and expenses associated with annual debt service for a sewer project that was completed in 2004 in the Lakewood Road Subdivision. SSA's allow a city to levy a property tax on property within a defined area to fund specific improvements. Through an SSA payments are spread equally over the identified number of taxable lots rather than through assessment (Special Assessment). The SSA is to expire in 2024. 207 o o O O O O O O N N Ln Ln CD r-I A A co cn M M N N OT, O ' O O O ' O� M 1 0 00 M o Ln iLn Ln O F ! Lo LO LO c-I t 00 � N I m MOD M M Li LO M coN In Lr) `r) LO aLn ^I N j ' Cl h th M O M 00 00 d' d' M N ! v' Ln Ln M M N •' Ln Ln Lo LO i t�I ri Lf] LO ON ((N M ' M r-1 V4 h l� '� LO Ln cr I co: rq cq%t Nil v v i A 00 � CD [� N _ � N 00 00 co co W N lr0 G r�-1 �r-4 1-4 , d� Piz w y W m - O vl H i i o A U ro W z �0 uv cn� v z A z wI h0', w F F F' Lti p O o o �o Q vi �-1 N M p P9 O CD M M M d ON a ice! W N M 'ci Ln l0 i� 00 '0n CD r' N M '[j' Ln l0 r� 00 Ol O r- c- .— a c � ' r � N N Fiscal Year 2023/2024 Annual Budget Improvements Fund 209 Capital Improvements Fund - Overview Historically, the purpose of the Capital Improvements Fund has been to account for funds identified for the maintenance and construction of public infrastructure projects other than water and sewer utilities. This includes roads and public facility maintenance, improvements and/or construction. Through FY21/22, Capita] Improvements Fund Revenues `��`v' ��'��`� � ='`t'`` were derived from transfers from other funds -primarily theVq# b previous fiscal year-end surplus (revenues/expenditures) of the General Fund which, by policy, is then assigned for future capital asset maintenance and replacement projects. During FY21/22 the City Council adopted a tax on electric (started in June 2022) and natural gas (to begin June 2023) utilities. Per City Ordinance adopted by Council, those revenues derived from the electric usage portion of these taxes are to be used to fund the City's General Fund capital asset and maintenance replacement program for projects identified as part of the Community Investment Plan. In FY23/24, the Capital Improvements Fund will be used to account for any carryover funding from FY22/23 and capital asset maintenance and replacement projects, identified in the Community Investment Plan, will be funded through a newly established "Capital Asset Maintenance & Replacement Fund" section of the budget. This Capital Improvements Fund will then be removed from future budget documents. 210 0 C C 0 0 0 0 C O In O O d' O O O O -.. O _. O _.. O O _. O _. O O CO O %,D O d' o o o d o d o d' p O o it U O O o o O o O O O o o O o O o p o O Ln rn d O O O ri c-i M O d' N r-i Ln N r-i r-+ `--' d' r-i o0 In O O ' O O I I p I O I p pp Ln � 'd' O Ln O M O O O LO CZ) \O O N h O� O Ln Ln to Ti r-I LO m 00 kJD N O LO O O� d' O O ' ' Ln I I I CD in Ln N O O r-i r-1 O O� 00 r-I CD 00 M N N M O N r-I O O� M \.O M c-I l0 h O Ln N ri 6� r-I I ri In ri M M O h 00 Ln O N p r-A ri m ri 00 v CT O O O O 0 ' O O O O p I I N lf] In O CD CD O O CD Ln ! � CD CD CD O O� O� �0 . M O LO O to ri r-i r-i ! r-i d, r-IO %D N m Ln L� i\ ri I p', r-i r-i d' r-i 00 co r-i N M CD N N m ' d' O I I I I I 00 t� m h O N N Lh M r-i r-i 00 Ln OD I M M I �.y � M Q� Ln O 0� u% I I O ' O m 00 O O r� Ln O M O O M d' LM M �O O M 00 j POT OM M ri o Q� - I N CD m N N M r-L r-i v A � - - O N ' m V.LI N I - - \10 OJ d' CO ri CO O m ri M O Ln V� ON r-i d' 00 N rrwrryyy r-i %lD N N Ln O %D N Ln m M CD r-i CD %D h' M r-i co co %lo CD Ln m w ! 'LJ Piz z � T1 N F1 Q) CL wo N M CID O N N cO Lil M 04 L. O Vp to G D O U hl Q 4 4 o A � A W ��+ 1:3z� CO7 �i .m aa)i (L) E ¢ W Qi 00 O r O O J N O 4^ V p q `� d O W v� v� p n ��A Ofii }� Vl N O i^ � 4� W (V Qi r p. b x cu Ca a) 0 .� � � O o M Lea PO L% Z I --I J v rz �:D rx cx P F4 F V en wbjO +3 O O O h N LO r 1 Ln O O O O O o c I �rl ri N %lD m 00 00 h t� r-I O O O O O O Q L� 00 co 00 D\ ri ri N �D CO m O.\ �p M M M M M M M M Ln co 0u tb 00 00 ON V m w O N N M Ln LD r� 00 m CDN m 'cY m LD i, m m CDN r- r- m Ln lD t` Cp Ol r- N N N N N N N N N N m m m ti41.11s'. ;s ,r , t1`.� 14 Capital Equipment Fund - Overview Historically, the Capital Equipment Fund has been utilized to track annual expenditures of equipment replacement (e.g., vehicles, computer equipment) as identified in the five-year Capital Improvement Plan. Through FY21/22, Capital Equipment Fund Revenues were �����" ,/ ���; derived from transfers from other funds - primarily the 1A previous fiscal year-end surplus (revenues/expenditures) of ` a�. ''•.; 4�� 4 the General Fund which, by policy, is then assigned for future ° ' } capital projects. During FY21/22 the City Council adopted a tax on electric (started in June 2022) and natural gas (to begin June 2023) utilities. Per City Ordinance adopted by Council, those revenues derived from the natural gas usage portion of these taxes are to be used to fund any new (as distinct from maintenance and replacement) projects as identified as part of the Community Investment Plan. In FY23/24, the Capital Equipment Fund will be used to account for any carryover funding from FY22/23 and capital equipment projects, identified in the Community Investment Plan, will be funded through a newly established "Capital Asset New Projects Fund" section of the budget. This Capital Equipment Fund will then be removed from future budget documents. 213 0 C 0 C C 0 C O O O O CD CD CDO CD CD - O O O O O O O O O O O O r-I c-1 ri r� r-I O O O O O O O O O O O O d rn rn rn O rn ci ri r-4 O r-i Ln Ln O 1-0 Ln ri r-I t-1 r-i Ln O O O O ._— O In r-I CD O CD CD CD r-i �j• O O %�o r-1 O O (3� LO) 1- M m N M I Ln O CD O O CD LO O O %O' Ln O M O O O Ln r-1 M N ()N 00 O CO m [� r-1 N L� O t� L/L - Lf) U) m Ln 00 \lO \ho Lr) O O O O Lin O ko 0 0 0 0 0 m M i QN O� 0� (D m cl� Lf) Ln O Ln Lo i �-i r-I c1 rA I N; m M LO I m M' i rn o r-i r i N .-i t� O th h O O O p v N N N QM cu A O i ri O O (3� m h h r-i r-i (M 'cM C rI O O (TN h iy (3� C� 00 M C v �I f ^ I � TJ cn [Y] - W W W HW E _ En En w z r a w N a� W U 'a 0) L, � N u z F" P. a E" w IL? z oq W �QHH uco u b W) `• O O In O O � ^ r-I N h CD CD •�q M M M 00 00 'C3 U vn w CD`- N M �t m to co m CD N r- N m d' Ln id m rn 214 AM ��'i `ice 4 ,B y� le �r. 1 r •� �.�Vill . ;eli4 "I �`, n • n • i� t Capital Asset New Projects Fund - Overview The Capital Asset Maintenance &Replacement Fund is being established in the FY23/24 Budget to identify the funding for the maintenance and replacement of existing capital assets with a cost of more than $10,000. During FY21/22 the City Council adopted a tax on electric ����v� ,/ "�,��' utilities and, per City Ordinance, those revenues derived fromWL �4y M16y4`:�;� this tax are to be used for the sole purpose of funding the h�; > , .�� 'r '• Capital Asset Maintenance & Replacement Program as identified in the Community Investment Plan (CIP). The CIP is updated by Staff and reviewed and approved by the City Council on an annual basis as part of the budget development process. Capital Asset Maintenance &Replacement Projects identified for funding in FY23/24include: City Hall Parking Lot Rehabilitation $550,000 City Hall Front Entrance and Doors $1000000 Jaycees Park and Gazebo Roof Replacement $5,000 I(nox Park Maintenance and Sheds Replacement $20,000 Miller Riverfront Gazebo Roof Replacement $5,000 Petersen Park Horse Barn Roof Replacement $350)000 Freund Field Basketball Court Lighting $50,000 Ballistic Helmet Replacement $40,000 Patrol SUV Replacement (310) $64,000 Patrol SUV Replacement (311) $64,000 Patrol Utility Vehicle Replacement (325) $590000 Patrol Utility Vehicle Replacement (317) $59,000 Patrol Utility Vehicle Replacement (327) $59,000 Patrol Utility Vehicle Replacement (326) $591000 Pearl Street Bridge Deck Oil $25,000 14on Dump Truck (Snowplow) $115,000 1-ton Pickup Truck (Concrete) $75,000 Total $1,699,000 Detailed descriptions of these projects can be found in the attached Community Investment Plan document. 216 217 op Ab 01 I it Opt of ' -e2p AdsPA ; �. F n \ Y Plop _nFr•, I ` ` i, Il �u [M:1 �1►�1: Introduction The capital needs of a municipality can be divided into two distinct categories: 1) those related to the maintenance and replacement of existing capital assets; and 2) those related to the development of new capital assets. In McHenry, all capital asset maintenance, replacement, and expansion costs are funded through the General Fund, except for those projects related to the City's water and sanitary sewer utilities and those related to the McHenry Recreation Center. Water and sewer maintenance and replacement projects are funded through user base fees, and Recreation Center projects are funded through the user fees forthe facility. The purpose of this Community Investment Plan (CIP) is to serve as a realistic, strategic blueprint for the maintenance and replacement of the City's General Fund capital assets. Background Prior to 2013/2014, the City of McHenry did not have a comprehensive multi -year capital improvement/equipment planning process. Capital asset maintenance and replacement and capital improvements (defined as those projects with a cost of more than $10,000) were identified and funded annually as part of the municipal budget process. Beginning in 2013/2014, the City Administration introduced a 5-year Capital Improvement Program planning document. This document, reviewed and updated on an annual basis, became the basis for the City's capital improvement and equipment planning. While the Capital Improvement Program serviced the city well, current trends in municipal capital asset maintenance and replacement planning have shifted towards a need for a longer term, and much more strategic, planning tool — commonly referred to as a Community Investment Plan —with a focus on capital asset maintenance and replacement projects, and importantly, the identification of funding sources for these projects. This Community Investment Plan provides a framework for long-range capital investment planning allowing for better resource management and the ability for staff and elected officials to ensure that short term needs are met with a knowledge of future demands. This Community Investment Plan includes only the maintenance and replacement of existing capital assets and does not include the development of new assets (e.g., the construction of a new public facility), providing a clear separation between meeting existing needs versus implementing new capital asset projects. In analyzing identified General Fund capital asset maintenance and replacement needs through 2042, the City Administration has determined that between $1.4 million and $2.3 million annually will be required to support these needs, based on the specific programs implemented. A listing of capital asset maintenance and replacement projects are identified in Appendix C. Goals for the Plan During 2019 Strategic Planning sessions, a goal was sefi to create along -term projection of capital costs associated strictly with maintenance and replacement of assets thatthe City already holds. This need was identified due to the sporadic nature of the capital budgeting process which grouped capital projects in one class regardless of whether the capital expenditure was for the purposes of acquiring a new asset or maintenance and replacement of an existing asset. The logic for the change in the approach was that for the City to develop better control and predictability in its capital planning processes, projections of future GENERAL FUND (MUTJ CIP 219 capital costs based upon realistic service lives of existing assets were going to have to be developed. In short, the goals for the plan are as follows: 1. The "wish list" approach forcapita) budgeting is abandoned and replaced with a plan and schedule that is realistic to implement. 2. Priorities for maintenance and replacement of existing assets are set based upon current operational requirements rather than desired or additional new services and programs. 3. Maintenance and replacement of existing capital assets is scheduled and implemented based upon acceptable costs and reasonable service lives. 4. The cost projections are met or funded by a protected revenue source that is dedicated by ordinance for the maintenance and replacement of existing assets only and matches the cost projection. No new assets are funded through this protected revenue source. 5. Projects for the development of new assets are funded through General Fund balances or new sources of revenue; significant facilities and infrastructure expansion projects should be considered for funding through referendums, bonded debt services, special assessments, etc. Development of the Plan The tasl<of developing this projection was assigned to City staff and all department heads worked together to develop these cost projections. Capital expenditures were classified by department, expenditure, and type of treatment. Costs were also given a projected year for implementation which was used to develop a long-term projection and implementation schedule. The method of developing these costs included the following assumptions: small items which are sporadically replaced through operating budgets are not included in the projection, only existing capital assets were to be included in the projection, both maintenance treatments to fulfill the full asset service life and asset replacement costs were included, and each treatment or asset replacement was to include a cost and service life associated. Annualized costs were simply generated by dividing the capital cost over the projected service life; inflation was not included in the projection and therefore, all costs are present costs. The sum of annualized costs was then utilized to develop funding and implementation strategies for the plan. Funding the Plan Traditionally, McHenry's General Fund capital asset maintenance and replacement needs have been funded through excess General Fund revenues over expenditures after the achievement of a balanced operating budget and ensuring the existence of sufficient funds for the maintenance of the required (by )olicy) 120-day minimum General Fund balance. While conservative budgeting practices have resulted in the ability to address some of the City's maintenance and replacement needs, funding levels can be unreliable from yeamo-year, resulting in the inability to budget for, plan, and implement a regularly scheduled program. In February 2022, the City Council took a significant step in ensuring annual funding for General Fund capital asset maintenance and replacement projects included in this Community Investment Plan by adopting a new Electricity Use Tax. Annual revenues of this tax are estimated at $1.1 million. The result of this action is that projects within this plan are organized and presented based on this $1.1 million guaranteed annual revenue source. GENERAL FUND (MUT) CIP 220 Organization of the Plan Capital asset maintenance and replacement projects included in the Community Investment Plan are estimated to cost at least $10,000 and have a useful life of greater than one year. Projects are presented in two formats: 1) via a brief project description that identifies the proposed project maintenance needs and/or replacement timeframe and estimated cost(s) (Appendix B); and 2) via a summary spreadsheet that identifies projects by classification (see below) and maintenance/replacement schedule within the 20-year span of this plan (Appendix C). The summary spreadsheet also serves as a master database used perform simple analysis, summarization, categorization, and projection exercises for all the City's assets. From these exercises, several charts have been generated to illustrate the data. These charts include a breakdown of expenditures by year, a summary of expenditures by asset category, and expenditures by department. These charts are included as Appendix A. Projects are classified into one of the following categories for reference purposes: Infrastructure Maintenance/Improvements Improvements to publicly owned infrastructure such as multi -use paths, crack sealing, culvert rehabilitation and replacement, bridge rehabilitation and replacement, street lighting replacement, signal equipment replacement, curb replacement, sidewalk replacement, and corrugated steel culvert replacement. Local streets are funded with Motor Fuel Tax Funds and, as such, are not included in this category. Parks and Land Maintenance/Improvements Improvements to publicly owned properties outside of a building footprint and for projects that are not eligible for funding through other municipal funds. Examples include parking lots, playground equipment replacement, ball courts, gazebos and other accessory structures, and fences. Building. Maintenance/Improvements Improvements to the exterior or interior of publicly owned facilities that are not eligible for funding through other municipal funds (i.e., McHenry Recreation Center, water or sewer conveyance/treatment facilities). The primary example in this category is the maintenance and replacement needs of the McHenry Municipal Center. Vehicles and Equipment Replacements Maintenance or replacement of municipal vehicles and equipment that are not eligible for funding through other municipal funds (i.e., Water/Sewer Fund for Water and Sewer vehicles). This category includes road vehicles as well as other motorized equipment such as backhoes, end -loaders, etc. Additionally, this includes all light equipment which is routinely replaced by the Police Department. This equipment includes radar, radios, helmets, shields, body cameras, etc, and annually averages approximately $155,000, Implementation of the Plan Because it was uncertain when the electric use utility tax revenues would start to be received after the passing of the ordinance in February of 2022, the Fiscal Year 22/23 Capital Improvement Program was funded through the traditional means of General Fund balances that were left after meeting operating GENERAL FUND (MUT) CIP 221 budgets and minimum fund balances. The Capital Improvement Program also included projects both for the development of new assets as well as maintenance and replacement of existing assets, all of which were funded through the same source (General Fund Balances available for capital). As the original capital projection was "front -loaded" with maintenance and replacement projects that were considered immediately necessary, staff began preparations for the implementation of the plan by updating the schedule and beginning to shift projects to better match revenues to expenditures in the early years of the plan. Electric Utility Taxes are now being received in a predictable manner and staff are now prepared to begin implementation of the plan in Fiscal Year 2023/2024, Fiscal Year 2022/2023 revenues are projected to be $0.7 million and Fiscal Year 2023/2024 revenues are projected to be $1.1 million, which brings the available funding for capital maintenance and replacement projects to $1.8 million. To ensure project readiness and implementation of projects within the constraints of the intended fiscal year, it is crucial that projects are ready for a bidding process early in the fiscal year so that contractors and vendors are under contract with a good portion of the fiscal year remaining. This will eliminate or reduce the number of projects that are carried over between fiscal years, which is a burdensome and inefficient process for project accounting. To ensure project readiness, projects which are to be implemented soon which require engineering or architectural services for the development of plans, specifications, and bid documents are split into two expenditures. A portion of the project budget is assigned in the fiscal year prior to full project implementation such that the plans, specifications, and bid documents can be developed and ready for use in the fiscal year intended for project implantation or construction. The Fiscal Year 2023/2024 program includes a budget of $1,784,000 and will begin implementation on May 1, 2023. The list of Fiscal Year 2023/2024 projects is as follows: 1. City Hall Parking Lot Rehabilitation $550,000 2. City Hall Front Entrance and Doors $100,000 3. Jaycees Park Gazebo Roof Replacement $51000 4. Knox Park Maintenance Sheds Replacement $20,000 5. Miller Riverfront Gazebo Roof Replacement $5,000 6. Petersen Park Horse Barn Roof Replacement $350,000 7. Freund Field Basketball Court Lighting $501000 8. Ballistic Helmet Replacement $40,000 9. Patrol SUV Replacement (310) $64,000 10. Patrol SUV Replacement (311) $64,000 11. Patrol Utility Vehicle Replacement (325) $59,000 12. Patrol Utility Vehicle Replacement (317) $59,000 13. Patrol Utility Vehicle Replacement (327) $59,000 14. Patrol Utility Vehicle Replacement (326) $59,000 15. Pearl Street Bridge Deck Oil $25,000 We 1-Ton Dump (Snowplow) $115,000 17. 1-Ton Pickup (Concrete Trucic) $75,000 A detailed description of each of these projects is included in Appendix B of this document. GENERAL FUND (MUT) CIP 222 Future Considerations Because the Con, portion of the Municipal Utility Taxes is assigned for maintenance and replacement projects only the following projects are not included in the preceding portion of the Community Investment Plan. These projects are considered facilities and infrastructure expansion projects and are to be paid for by other funding sources including year-end General Fund capital balances, the Nicor portion of the Municipal Utility Tax, General Obligation Bonds, Tax Increment Finance District (TIF) revenues, and other new assigned sources of revenue. These projects will not move forward until funding sources are assigned and implemented for the individual projects as they are approved and incorporated into the City's Budget. Venice Avenue $600,000 This project includes the reconstruction of Venice Avenue and Court Street south of Illinois Route 120. This will include the addition of concrete curb and gutter as well as the addition of a pedestrian walkway to facilitate pedestrian movement from the Green Street Downtown Corridor to the Miller Point and Riverside Drive Corridor. The project is currently in design and will be funded for construction upon the assignment of a revenue source for construction funding. Fueling Station $400,000 This project will include the construction of a new City fueling station on the property at the Public Works Department located at 1415 Industrial Drive. The facility will include above ground gas and diesel tanks, an overhead canopy, necessary utility work, and fuel use tracking software. The proposed facility is currently in design and permitting and will be constructed upon the assignment of a funding source for this new facility project. Police Bu*MIA out $800,000 This project will include the expansion and modification of the sallyport in the Police Department portion of the building and the construction of a covered parking area on the north side of the building in the current Police Department parking area. Riverside Sidewalk $1501000 This project includes the necessary design and construction costs to complete missing gaps in the sidewalk along Riverside Drive between Pearl Street and McCullom Lake Road. Necessary work will include grading and drainage work as well as the construction of new base course and sidewalk on the west side of Riverside Drive. Kane Avenue Sidewalks $25,000 This project will include the replacement of all sidewalks on Kane Avenue which front Edgebroolc and Duker Schools. City Staff were approached by School District Staff in Summer of 2022 with a request to partner on the replacement of both City sidewalks and School District sidewalks/flatwork. This project will move forward pending a funding commitment from both the School District and the City. GENERAL FUND (MUTJ CIP 223 Streetscape Improvements In 2021 the City of McHenry commissioned an engineering and planning study to create a Downtown Streetscape Master Plan to be implemented over a multi -year period. The Study was finalized and adopted in December of 2021. Because of the large capital costs, which are not currently all accounted for, the project locations were prioritized, and preliminary engineering was initiated in 2022 on the highest-ranking location (Riverside Drive). Locations will be implemented and constructed in the future upon assignment of capital funding sources. A brief listing and order of magnitude cost of each corridor included in the Master Plan is as follows: 1. Riverside Streetscape $3,000,000 2. Green Street Streetscape $3,000,000 3. Main Street Streetscape $3,000,000 4. Elm Street Streetscape $3,000,000 5. Miscellaneous Streetscape Improvements $1,500,000 Riverwallc Expansion COSTTBD TIF District Improvements COST TBD Route 31 local Matches (Non -Water -Sewer) $2,000,000 Illinois Department of Transportation (IDOT) is currently in Phase 11 Design for Me reconstruction of Illinois Route 31 between the City of Crystal Lake and the City of McHenry. Construction is currently anticipated no earlier than 2025. In addition to the roadway costs which are strictly [DOT costs there are several costs for optional local improvements which have been outlined in a previously executed Letter of Intent (LOI) between the City of McHenry and IDOT. These costs include the City's local funding obligations for optional decorative street lighting, the local match for the construction of a multi -use path, and the local match for the municipal legs of signalized intersections. Annual Review and Approval Process The Community investment Plan will be reviewed and updated annually to ensure that maintenance and replacement schedules are updated appropriately. Identified projects will be included for approval as part of each fiscal year budget based on the maintenance and replacement schedules identified in this document. GENERAL FUND (MUTJ CIP 224 Appendix A Included in this appendix are charts and tables which summarize the program by year of expenditure, project categories, and sponsoring departments. GENERAL FUND (MUiJ CIP 225 0 I— 0 0 0 0 0 0 o a o 0 0 0 0 0 0 o d o O O O O O O O tll O lry O N a/T 4A 01- lvF LF N O m O o O N in N (p LO W N } V) O M Cl O C N In Ol (p O O O M O O O N O 0) t0 O N } V) N O O O N O O f0 U) N LO } N O N O O O N O W } = n U � O O N O O N 001 af0i n 7 N 10 N O O O N ul � Ol m n } +n o N O O O N O n N l0 } L1 cl O N O O O N N LC N ul AA U1 } M C N C O Ca N a o n w } IV CC .n F 226 L O O O O O O oLO o Ln o Ln 0 0 O D 0 0 o n O I� e-i l0 O O O O 0 0 o LO O Q1 eI O t1 I O O O O 0 0 0 0 o m o '-1 N O O O O O O O O O M r1 W i1 Ll O O O O O O Cl c1 00 Ica O O O O O Ol O O O O O O O � O O1 n I 4A O O O O o 0 0 0 0 O N c0I in . I N' vt yr O O O O o v O 00 i h eI r Itn 227 N p m p o O 0 0 o to M Ol Ln pp N O O O l/j W O O O O M O O O O t%r V eI O O O O O O O O n N yh vi O 0 0 0 0 0 0 1f1 � t/t Cin Ln l 0 O i O O O O N VI O O O lfl 00Ln �}An- 0 O O uI' N rI 0 � 0 �* 0 ik 0 O O l1 N D 0 V O O O l!1 O O O 0 O O O uT Ln I u O O In M O O O O' t\ '-1 N O O O M m M 0 0 O n Il) N 0 O O O �o O O O t!1 N O O O f\ Ol �-1 .-I 0 O O tt M LF Y C U1 E w u .c O1 228 A H a 0 �-1 M O O O O N 00 Ln V)- ��-I 0 6 o ,n O N O N t0 iyj l0 Vl .� lf) ■ ■ 229 w G L a a� cl .a c 3 L LJ. � ED �a a = c Q W 0- D x W 0 0 0 0 0 T U L O O u u L - .o -o o m o Q U a a a ❑ ■ ■ ■ ■ 0 N N O O O ft Ln co N d^ � O ■ N ■ 230 Appendix B Included in this appendix is an individual projects CUL for each capital item that is being funded in Fiscal Year 2023-2024. Sheets include a brief project description, sponsoring department information, engineering expenditure information, an anticipated service life, and a cost. Each page also includes a photo representing the project and a five year table of expenditures for multi -year projects. GENERAL FUND (MUT) CIP 231 Project City Hall Parking Lot Rehabilitation Project Description McHenry City Hall parking lot rehabilitation includes, reconfiguration of drive isles, curb/sidewalk replacement, storm structure repairs, grinding and overlay and striping. Also included in this project are new pavers at Police, Administration, and City Council Chambers entrance as well as area below the flag poles on the east side of the building. Community Investment Plan (General Fund) Project Number 01-FAC-001 Department Community Development Treatment Rehabilitation Service Life 30 Years Design Fiscal Year FY22/23 Design Cost $50,000,00 Construction Fiscal Year FY23/24 Construction Cost 5550,000.00 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 550,000000 GENERAL FUND (MUTJ CIP 232 Project Front Entrance and Front Doors (City Hal Project Description The front entry doors to City Hall are original to the building's construction in 1991. Normal wear and tear over the years has taking its toll on the doors, doors no longer open and close properly and are in dire need of replacement. The replacement includes adding new automated sliding type doors that would comply with Illinois accessibility code and International energy conservation codes. Community Investment Plan (General Fund) Project Number 01-FAC-002 Department Community Development Treatment Rehabilitation Service Life 30 Years Design Fiscal Design Cost Construction Fiscal Year FY23/24 Construction Cost 1 $1001000.00 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 100,000000 GENERAL FUND (MUTJ CIP 233 Project Miller Riverfront & Jaycess Gazebo Roof Replacements Project Description This project includes the replacement of the roofs of the gazebos at both Miller Riverfront Park and Jaycees Park, Asphalt shingle roofs are planned for replacement on 25 year intervals and the roofs of both of these gazebos located at City Park properties are due for replacement as well as repairs incidental to the replacements. Community Investment Plan %General Fund) Project Number 41-PARK-001&003 Department Parl<s and Recreation Treatment Replacement Service Life 25 Years Design Fiscal Year Design Cost Construction Fiscal Year FY23/24 Construction Cost $10,000,00 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 10,000,00 GENERAL FUND (MUTJ ClP f�.iCL! Project Petersen Horse Barn Roof Replacement Project Description This project includes the replacement of the roof of the horse barn at Petersen Park. Asphalt shingle roofs are planned for replacement on 25 year intervals and the roof for the horse barn is overdue for replacement as well as repairs incidental to the replacements. Community Investment Plan (General Fund) Project Number 41-PARK-004 Department�Parl<s and Recreation TreatmentlRehabilitation Service Life 25 Years Design Fiscal Year Design Cost Construction Fiscal Year IFY23/24 Construction Cost $350,000.00 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 350,000,00 GENERAL FUND (MUTJ CIP 235 P y I r bp IF ..1.1 `'••►'ice. t ' lagilaidiiiiii APO IF 1 9 oil All f to kk �..i�t�" :ram: ��'• Project Freund Field Basketball Court Light Replacements Project Description This project includes the replacement of lighting for the basketball courts at Freund Field. The current poles and fixtures are beyond their expected service life and will be replaced with modern LED fixtures with an anticipated service life of 25 years. Community Investment Plan (General Fund) Project Number 41-PARK-005 Department Parl<s and Recreation Treatment Replacement Service Life 25 Years Design Fiscal Year Design Cost Construction Fiscal Year FY23/24 Construction Cost $501000.00 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 50,000600 GENERAL FUND (MUT) CIP 237 Police Vehicle / Eauipment Replacement Program Project pescription The purpose of this project is to maintain the function of the McHenry Police Department's Vehicle / Equipment Replacement Program. This program was established in order to ensure the agency is capable of maintaining the proper level of dependable police vehicles needed to service the community in all law enforcement efforts. Vehicles are a primary piece of law enforcement equipment that must be replaced in order to ensure fleet dependability and service to the community. This project is classified as an ongoing program. Vehicles and equipment are replaced every 5-7 years based upon age, condition, and mileage. Community investment Plan (General Fund) Project Number 22-EQPT 001to006 Department Police Treatment I Replacement Service Life 5-7 Years Fiscal Year FY23/24 Replacement Cost $364,000.00 Recurring Project Yes Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 364,000.00 GENERAL FUND (MUTJ CIP Ballistic Helmets Project Description Ballistic I�elmets provide protection to officers involved in high risk incidents and incidents involving firearms. The purpose of this project is to replace all agency ballistic helmets every five years when they expire. These helmets are individually assigned to all officers as a piece of mandatory tactical (safety equipment required by the Police Department. Community Investment Plan (General Fund) Project Number 22-LEQPT-002 Department�Police Treatment Replacement Service Life 5 Years Fiscal Year FY23/24 Replacement Cost $40,000.00 Recurring Project Yes Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 40,000.00 GENERAL FUND (MUT) CIP 239 Project Body / Vehicle Cameras Project Description This project replaces the Police Department's current in -car video camera systems and incorporates the use of body -worn cameras into the agency's video camera program as required by Illinois Law. Specifically this project is classified as an onging program that requires maintenance and replacement of equipment every 3-5 years. This program has an annual re-occuring cost paid each budget year. Community investment Plan (General Fund) Project Number 22-LEQPT-001 Department Police iTreatment) Replacement Servce Life 3-5 Years Fiscal Year FY23/24 Replacement Cost $85,000.00 Recurring Project Yes Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 85,000.00 $ 85,000.00 $ 85,000.00 $ 85,000.00 $ 851000.0O GENERAL FUND (MUT) CIP 240 Project Public Works 1 Ton Replacement (With Plow This truck is currently used for street maintenance and as a spare truck for plowing. Due to high projected capital equipment costs for plow trucks, the Public Works Department began to test the concept of utilizing 1-Ton 550 units for plowing neighborhood routes which has been implemented successfully. Additionally, these units are versatile for year round maintenance purposes. The current unit is beyond its typical service life and is due for replacement. Community Investment Plan (General Fund) Project Number, 30-EQPT-001 Department�Public Worl<s ice Life TreatmentlReplacement Sery15 Years Fiscal Year FY23/24 Replacement Cost l$115,000.00 Recurring Project Yes Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 115,000200 GENERAL FUND (MUTJ CIP 241 Project Public Works 1 Ton Replacement (Concrete Project Description This truck is used as a maintenance truck and for hauling the equipment trailer for the concrete crew. The current unit is a 2003 Ford F350 which is beyond its normal service life. The truck will be replaced with another 1- Ton this Spring pending the results of the City's procurement processes. Community Investment Plan (General Fund) Project Number 30-EQPT-002 Department�Public Worl<s Treatment Replacement Service Life 12 Years Fiscal Year FY23/24 Replacement Cost $75,000,00 Recurring Project Yes Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 75,000.00 GENERAL FUND (MUT) CIP 242 Project Pearl Street Bridge Deck Sealer Project Description The purpose of this project is maintenance and rehabilitative sealing of the bridge deck superstructure for the Pearl Street Bridge. In the most recent bi annual bridge inspection for the structure it was recommended that the bridge deck be re -sealed as soon as practical. It is recommended to re -seal the deck on regular intervals to maximize the service life of the deck superstructure and delay the eventual replacement of the bridge deck, Community Investment Plan (General Fund) Project Number 30-INF-002 Department�Public Worl<s Treatment ice Life I Reha bilitation Sery5 Design Fiscal Year Design Cost Construction Fiscal Year FY23/24 Construction Costl$25,000.00 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 25,000.00 GENERAL FUND (MUTJ CIP 243 Appendix C This appendix is the master spreadsheet of all capital items included in the 20-year projection. This spreadsheet is annually updated and is utilized to perform simple data analysis and to produce charts for illustration of the plan which are included in Appendix A. 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ss>esaosss » >s>aaas`> eMaa"aaaa"a ssase �saaa�kkkk4a 4i .5bdbR Fiscal Year 2023/2024 Annual Budget 250 Capital Asset New Projects Fund - Overview The Capital Asset New Projects Fund is being estaUlished in the FY23/24 Budget to identify the funding for the development of new capital assets (as distinct from maintenance and replacement of existing capital assets) with a cost of more than $10,0006 During FY21/22 the City Council adopted a tax on natural gas �`��`rp �,'?';;•,`�.,� 4 utilities and, per City Ordinance, those revenues derived from `:, , this tax are to be used for the sole purpose of funding the Capital Asset New Projects Fund. Since the implementation of the natural gas tax was deferred until June 2022, projects will not be identified for funding as part of the Community Investment Plan until such time as the city realizes a full fiscal year of revenues. As such, no new capital asset projects are identified for funding through this source for FY23/24. 251 Fiscal Year 2023/2024 Annual Budget 252 Fiscal Year 2023/2024 Annual Budget Water/Sewer Revenues and Public Works Water, Wastewater, Utility 253 Water & Sewer Fund - Overview The Water and Sewer Fund is an enterprise fund —that is, a business -type fund utilized to account for operations and activities that are financed and operated in a manner similar to a private business enterprise, and where the cost of providing goods and services to the general public on a continuing basis is expected to be recovered primarily through user charges, including operating costs and capital improvement costs related to the maintenance of the water and sewer utility systems. These fund the operations of the Water, Wastewater and Utility Divisions in the Department of Public Works. The operating functions of these three divisions are to provide a safe and reliable supply of high -quality potable water and to protect public health and the environment by treating sewage to meet stringent environmental standards prior to discharge. Of note, the Utility Division was established in FY15/16, combining existing Water and Wastewater Division Maintenance Workers to specifically address utility system maintenance needs more routinely. Prior to this, utility maintenance projects were addressed by either the Water or Wastewater Division and often required coordination with the other division to ensure adequate manpower. The creation of the Utility Division established a more effective means to deliver utility maintenance projects. The Utility Division has now been combined with the Street Division into the new Field Operations Division. The operating expenses for all Utilities maintenance are still accounted for separately and are reflected in the Field Operations Division (Utility) section of the Enterprise Fund Budget. The expenses for the Utility Division are split between the Water and Wastewater Divisions as follows - approximately 63.7% of operating expenses are paid from the Water Division and the remaining 36.3% are paid from the Wastewater Division. Capital expenses are charged to the division that benefits from the maintenance project. In general, water and sewer revenues are derived directly from water and sewer sales, base charges, connection fees, and service penalties and should be sufficient to fund the operating and capital costs for the Water, Wastewater and Utility Divisions. Importantly, water and sewer revenues are driven by consumption and, as such, with a growing awareness of water conservancy (which the City supports) and wetter than average summer months, consumption has been relatively flat over the last two years. Prior to FY15/16, water and sewer rates were adjusted annually based primarily on the Consumer Price Index (CPI). Unfortunately, this CPI adjustment did not correlate to the actual cost of operations for McHenry's Water and Wastewater Divisions and did not account for the specific capital infrastructure needs of the municipality. This resulted in a shortfall in water and sewer revenues and an inability to fund water and sewer capital projects of the existing systems. To address this the City commissioned a water and sewer rate study that was completed in FY13/14. The results of this analysis identified the need to adjust water and sewer rates at that time and to annually review and adjust water and sewer rates based on operational costs and implement water and sewer base fees to fund utility system capital improvements. The narrative that follows provides a snapshot of the status of the Water and Sewer Fund and identifies operational and capital expenses. This is followed by more detailed summaries of the Water, Wastewater and Utility Divisions of the Department of Public Works. 254 Water and Sewer Fund Revenues, Expenditures and Capital FYZ3/14 Water Division FY22/23 Water Division operating expenditures are proposed at $2,485,868, an increase of $82,875 from FY22/23. This increase is due primarily to personnel cost contract, non- contract, and benefit increases as well as increases to Materials and Supplies and Transfers to Risk Management, Information Technology and Utility Division. No water rate adjustment is recommended for FY23/24. Water Capital Asset Maintenance and Replacement Projects It is estimated that the new, increased capital base charge of $8 will generate $520,000 in FY23/24 for capital projects. In FY23/24 this amount will be used to fund the following water system capital projects identified in the Community Investment Plan - $100,000 for Well #7 Pump Replacement and Aquifer Rehabilitation, $40,000 for Water Division Work Truck Replacement, $45,000 for Water Division Operator Van Replacement, $150,000 for Water Plant 2 Control Upgrade and MCC Relocation, $75,000 for Water Tower 4 Repainting Design, $25,000 for 1/2 of a Utility Televising Camera Van (Split with Sewer Division), and $35,000 for Water Plant 2 Aquifer Rehabilitation. FY23/Z4 Wastewater Division FY22/23 Wastewater Division operating expenditures are projected at $3,543,796, an increase of $236,509 from FY22/23. This increase is due to personnel cost contract, non- contract, and benefit increases as well as utilities and material and supplies costs. A 4% sewer rate increase is recommended for FY23/24. Sewer Capital Asset Maintenance and Replacement Projects It is estimated that the existing $7 capital base charge will generate $500,000 in FY23/24 for capital projects. This amount, along with existing Water and Sewer Fund Balance is used to complete capital projects. In FY23/24 the following sewer capital projects identified in the Community Investment Plan - $145,000 for Millstream Lift Station Control Upgrade, $194,000 for Freund Lift Station Pump and Mechanical Upgrade (Design), $35,000 for WWTP Mixed Liquor Gates, $25,000 for 1/2 of a Utility Televising Camera Van (split with Water Division), $150,000 for Pearl/Lincoln Road, and $325,000 for Sanitary Sewer Lining Annual Program. FY23/24 Utility Division FY22/23 Utility Division operating expenditures are projected at $1,OS7,870, an increase of $24,670 from FY22/23. Personnel Costs have increased by $19,670 due to contract wage increases and non -union wage increases. As identified in the Water and Wastewater discussions above, the Utility Division is funded through transfers from the Water and Wastewater Division revenues. If in one year the transfers from the Water and Wastewater Division exceed expenses within the department, adjustments are made in following fiscal years. This will result in lower operating budgets for the Water and Wastewater Divisions. 255 Public Works Water Division Public Worlcs Water Division Mission The primary focus and overlying responsibility of the Water Division is to provide a safe and reliable supply A potable water. This is accomplished by producing, treatingwater and conducting over 500 required water samples, thereby meeting or exceeding all federal and state health standards. Of major importance to the Water Division employees is providing the consumer with the highest level of customer service possible. We believe this inspires public trustwithin the community. In summary, Water Division employees undertake the following tasks: • Production of safe potable water that meets or exceeds State and Federal Drinking Water Regulations. • Water Production The Division maintains four iron removal filtration treatment plants served by eight active wells. The City has two emergency or backup wells that have no iron removal filtration but do have temporary chemical feed buildings. • Water Storage consists of four elevated water storage tanks with a combined storage capacity of 2,750,000 gallons. • Operation and maintenance of one booster pumping station. • Provide meter readings to the Finance Department for utility billing for City water and sewer services. The Division manages meter accuracy and replacements as needed of approximately 8,487 water meters. • Respond to consumer inquiries within 24 hours regarding water quality or high consumption questions or general concerns. 256 Public Works Water Division - Organizational Chart 257 Public Works Water Division - py zz/23 Accomplishments • Met or exceeded all State and Federal Drinking water regulations. • The Water Division employees provided a high level of customer service by responding to customer requests within 24 hours and making available information consumers need to be informed about their drinking water source and water treatment technologies. • In 2022, the Water Division produced over 770 million gallons of potable water and provided meter readings for over 8,487 water and sewer accounts for billing purposes. • Received 26��� consecutive annual fluoride award from the Illinois Department of Public Health. • Installed 131 water meters for new construction. • Completed an upgrade of the SCADA radio system. • The Water Division had no reported personnel injuries or accidents in the past year. 258 Public Works Water Division - FY23/24 Goals & Objectives • Continue to meet oi• exceed all Federal and State drinking water regulations. • Continue to provide the highest level of customer service possible by responding to customer requests within 24 hours and make information available for consumers to be informed about their drinking water source and water treatment technologies. • Loolc for new opportunities to improve customer service to the consumer. • Continue to maintain and improve water treatment facilities while remaining in budget. • Continue to be injury and accident free. • Water Well #7 Pump Replacement &Aquifer Rehabilitation • Water Plant #2 MCC Relocation • Continue to develop and train existing licensed operators. • Complete Engineering &Design for Water Tower #4 repainting (FY24/25) 259 Public Works Water Division - FY23/24 Performance Measures Performance PerformancePerformance, Item Goal Measure Proposed Outcome(s) 100% 100% compliance with 100% compliance is expected with IEPA Compliance compliance in all no violations no violations categories Respond to Customer Respond to all inquiries percentage responded Response to all customer inquiries Inquiries and within 24 hours of to within 24 hours and complaints. Complaints receiving Complete all Capital Were projects All capital projects completed in a Capital Projects Projects on time and completed on time and timely manner and under budget within budget within budget Keep operators current Trainings Operators keep license current. New Training/Licensing with trainings, Highest completed/Tests passed licensed operators. possible license Safety —Personal Zero Injuries/ Accidents How many reported No loss of worlc-days and remain Injury/Vehicle Accidents injuries/accidents on/under budget. 260 Public Works Wastewater Division Public Worlcs Wastewater Division Mission It is the mission of the Public Works Department Wastewater Division to protect public health and the environment by treating sewage to meet stringent environmental standards prior to discharge. The function of the Wastewater Division is to operate and maintain the Wastewater Treatment Plant and twenty lift stations. The goal of the Wastewater Division is to efficiently maintain these facilities and to produce plant effluents which either meet or exceed State and Federal standards. The division is also responsible for the removal and disposal of all by-products generated by the treatment process. This is accomplished by daily testing and monitoring of the treatment process and by operating sludge de -watering equipment to produce a high -quality biosolids product. In summary, Wastewater Division employees undertake the following tasks: • Provide for the operation and maintenance of the City's Wastewater Treatment Plant as well as the care and upkeep of twenty lift stations. • Conduct daily testing and monitoring to ensure the treatment processes are working properly and efficiently and make any necessary changes to operations. • Disliose of all treatment process by-products in a safe and cost-effective manner. • Maintain records on the amount of wastewater treated and the quality of water discharged into the Fox River and report this information to the Illinois Environmental Protection Agency in compliance with NPDES permits. Cleaning of SBR Basin on 6/21/2022. Operational SBR Basin at WWTP. 261 Public Works Wastewater Division - Organizational Chart 262 Public Works Wastewater Division - FY22/23 Accomplishments • In FY22/23, the Wastewater Division continued to maintain compliance with the City NPDES permits. • In 2022 the Wastewater Division treated over 1 BILLION gallons of wastewater. • In 2022 Wastewater Division personnel responded to 156 emergency callouts. Quickly responding to, and resolving these events prevents other incidents such as overflows or backups from occurring. • The City of McHenry's new NPDES discharge permit went into effect on July 1St, 2021. Included in this permit was a lower discharge limit for Total Phosphorous that will go into effect in 2030. Wastewater Division personnel have begun monitoring new parameters of the treatment process to determine overall efficiency and identify specific areas to target for potential improvement. • The Wastewater Division added two more licensed operators to the roster. Tim Hendrickson (IEPA Class 1) was hired in August to fill a vacant position. Greg Oliver passed his IEPA Class 4 exam in September and was formally licensed in October. • In 2022 the Wastewater Division partnered with Dahm Enterprises, Inc. to begin applying its Class A, Exceptional Quality (EQ) biosolids product to agricultural land. This has allowed the Division to put its dried biosolids to beneficial use while simultaneously reducing our disposal costs. 263 Public Worlcs Wastewater Division - FY23/24 Goals & Objectives • Continue to meet or exceed the NPDES perinit requirements and regulations as set forth by the Illinois Environmental Protection Agency. • Operate treatment plants and lift stations in a manner which minimizes the potential for a sanitary sewer overflow. • Continue to analyze ways to maintain a high level of service and performance while minimizing operating costs. • Optimize the Phosphorous removal process to achieve atwelve-month average discharge concentration below 0.40 mg/L. The methods previously identified by plant staff will be implemented, and their effectiveness monitored, over the next several years to determine the best way to accomplish this goal. • Promote individual advancement and certification through training opportunities for operations and maintenance personnel in the Wastewater division. • Millstream Lift Station Control Upgrade • Freund Lift Station Mechanical Improvements • Replacement of two slide gates on south oxidation ditch Belt Press at WWTP. Disk Filters at WWTP. 264 Public Works Wastewater Div. — FY26124 Performance Measures ..tormance �?Frrorniance .. , ProposedItem Goal Measure Satisfactory annual Annual Compliance with all NPDES 100% Compliance with all inspection/report and no inspection/evaluation and Permits issued by the IEPA permits at all times violations on monthly monthly reports reports Reduce effluent Achieve a twelve-month Achieve effluent Phosphorous average effluent phosphorous limits below Phosphorous Optimization concentrations to a level concentration of 0.40 mg/L 0.50 mg/L during winter compliant with future or lower. months. limits. Lift Stations Reduction in number of off Track number of callouts to Reduce overtime costs hours call -outs each lift station Safety Reduce lost time hours due Continued safety training 0 lost time days due to to work related injuries work related injuries Sanitary Sewer Overflows Prevent sanitary sewer Operate Acti-flo storm clarifier at the correct No sanitary sewer (SSO's) overflows capacity overflows Grow the knowledge of the Increase the number of Select one employee to Certification operations team through licensed plant staff. send to training; pass IEPA certification, wastewater license exam. 265 Public Works Field Operations Division (Utili Public WOrlcs Tl@ld Operations Division (Utility) Mission The City of McHenry Field Operations Division (Utility) is committed to providing the highest level of customer service to its residents and consumers. Maintaining the water distribution, sanitary sewer collection systems and storm sewer system to peak performance will continue to ensure reliable services to City of McHenry's residents and businesses. This will enhance public safety within the community. The Field Operation Division (Utility) maintains and repairs all water mains, valves, fire hydrants, and "buffalo" boxes which are all part of the water distribution system. Another one of its dirties is to maintain, clean, and televise the sanitary sewer collection system. The Division also maintains and repairs the storm sewer system. The Field Operations Division (Utility) also serves an emergency response role for winter snow plowing operations, after-hours water- main breaks, and after- hours sanitary sewer backups. In summary, employees undertake the following tasks: • Maintenance of the City sanitary sewer collection system. • . Maintenance of the City water distribution system. • Maintenance of the City owned storm water infrastructure. • Support of winter operations. • Emergency response for after-hours utility emergencies. 266 Public Works Field Operations Div. (Utility) - Organizational Chart In May of 2022, the Public Works Department combined the Street Division and the Utility Division into the Field Operations Division. Combining the two divisions into one was done to further utilize city personnel for daily operations. Street -related operations are solely funded through the General Fund while Utility -related operations are funded through both the Water/Sewer Fund and General Fund. The hours worked and expenses for FY22/23 have been properly separated by Fund to account for the amount budgeted annually in the Field Operations Division. For personnel organizational chart please refer to the organizational chart included in the Field Operations Division (Streets) budget section. The equivalent of 8 FTE's out of Field Operations are funded out of the Water and Sewer Fund. 267 Public Works Field Operations Division (Utility) FY22/23 Accomplishments • Replacement of 4 fire hydrants and replaced of 5 failed Hydrant shoes. • Flushed all the Gity's fire hydrants for spring and fall hydrant flushing programs. • Cleaned and televised over a 110,000' of sanitary main. • Repaired 12 water main breaks. • Repaired 17 water services. • Responded to multiple possible sanitary sewer backups. • Cleaned and televised the storm sewer system in advance of the 23/24• Road Resurfacing Program. • Repaired and rehabilitated storm sewer structures in advance of the 23/24 Road Resurfacing Program. • Assisted with the ADA ramps for 23/24 Road Resurfacing Program. • Completed 99% of water service material survey for IEPA lead service inventory. • Continued the annual Sewer Lining Program. • Cleaned 25% of all City storm sewer catch basins. • Completed 15t year of 3-year contracted hydrant painting program r.: Public Works Field Operation Division (Utility) FY23/24 Goals & Objectives • Continue to keep the sanitary collection system well maintained, which includes cleaning and televising the entire collection system on regularly scheduled intervals. • Reduce inflow and infiltration in the collection system through the Capital Improvement Program which includes the sanitary sewer main and sewer manhole rehabilitation programs. Replace old style manhole covers with "new" sealed covers. • Perform annual routing maintenance of the water distribution system through the annual water valve maintenance program, annual hydrant painting program, spring and fall hydrant flushing programs and the water main replacement program through the Community Investment Plan. • Insta115 new fire hydrants to improve water quality and fire flow protection. • Continue ongoing mapping of the storm sewer system in the City GIS database. • Management of Sewer Lining Program. • Oversee water main replacement program (Mill Street and Richmond Road/Broad Street) 269 Public Works Utility Division - FY23/24 Performance Measures .. .. .. , Item Goal Measure Proposed Fire hydrant replacement Replace outdated fire Number of hydrants Replace S fire hydrants hydrants replaced Clean & Televise sanitary 100,000 lineal ft/year Lineal ft/year Clean & televise 100,000 sewer collection system lineal ft/year Complete spring and fall Flush all hydrants spring Completion of spring and Hydrant Flushing hydrant flushing programs and fall fall flushing programs Complete water service Survey and map lead Complete survey and map Water Service Survey survey service lead service inventory inventory Number of hydrants 20% of hydrants painted & Water Distribution System Hydrant Painting & Valve painted; 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AL iu e�'! �r: Capital Development Fund - Overview This fund accounts for the construction, expansion and/or extension of water and wastewater systems to accommodate new development and growth in the community. 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Funding for these projects is derived primarily from water and sewer base fees that are paid by users of the system. In FY21/22, City Council reviewed and updated these base fees to be $8 bi-monthly for water and $7 bi-monthly for sewer. Water Capital Asset Maintenance and Replacement Projects It is estimated that the new, increased capital base charge of $8 will generate $520,000 in FY23/24 for capital projects. In FY23/24 this amount will be used to fund the following water system capital projects identified in the Community Investment Plan - $100,000 for Water Well #7 Pump Replacement & Aquifer Rehabilitation, $40,000 for Water Division Work Truck Replacement, $45,000 Water Division Operator Van Replacement, $75,000 for Water Tower #4 Repainting Design, $150,000 for Water Plant 2 Control Upgrade & Motor Control Center Relocation, $35,000 for Water Well 2 Aquifer Rehabilitation, and $200,000 for Well 14 Test & Production Well (WS Capital Development Fees). Sewer Capital Asset Maintenance and Replacement Projects It is estimated that the existing $7 capital base charge will generate $500,000 in FY23/24 for capital projects. This amount, along with existing Water and Sewer Fund Balance is used to complete capital projects. In FY23/24 the following sewer capital projects are identified for completion in the Community Investment Plan - $325,000 for Sewer Lining, $50,000 for a Sewer Televising Camera /an, $145,000 for Millstream Lift Station Control Upgrades, $194,000 for Freund Avenue Lift Station Mechanical Upgrades (Design & Construction, $35,000 for replacement of mixed liquor gates at the Wastewater Treatment Plant, and $100,000 for Phosphorus Optimization Study (WS Capital Development Fees). Detailed descriptions of these projects can be found in the attached Water and Sewer Fund Community Investment Plan document. 283 Water and Sewer Fund Community Investment Plan (CIP) Years 2023 through 2032 :- Introduction Capital investment planning is a necessary exercise for both public and private organizations who are charged with the maintenance and operation of capital assets. To maintain long-term sustainability of level of service, management of operations, and fiscal stability, public utilities must forecast capital costs and account for them. Public utilities must account for both annual operating expenses, routine capital expenses, as well as less routine major capital expenses if they are to achieve this long-term stability and provide consistent levels of service and predictable costs. Ideally, these costs grow at a consistent rate which is like the rate of inflation consumer price indexes. Large increases above these benchmark values are ideally avoided if capital planning efforts are successful. Background Prior to 2014, the City of McHenry Water and Sewer Fund was funded through the following means: operating rates, debt service fees, and capital development fees. These sources, however, did not account for the cost of depreciation of certain capital assets. Operating rates were essentially the operating costs of the Water, Wastewater, and Utility Divisions divided over the number of users utilizing the system. Debt service fees accounted for the cost of major facilities overhauls and replacements for water and sewer plants. These fees were typically the debt service cost of the improvement divided over the number of users utilizing the system. Lastly, capital development fees were fees which were put up by property developers and property owners as they annexed into the City or connected to the City's utility systems. These capital development fees are system expansion fees which account for the cost of infrastructure and facilities expansions to accommodate them as users. While this approach was somewhat functional for a time, there were some fundamental problems with the approach that became apparent. In general, the greatest problem was that the cost of depreciation and therefore replacement of non -major facilities with finite service lives and significant replacement costs) were not accounted for by any of the traditional sources of revenue. Examples of these costs include the replacement of equipment in wastewater and water plants, wells, and lift stations that are to remain in operation but require certain major equipment replacement. Additionally, the cost for maintenance and replacement of the City's water distribution system and the City's wastewater collection system was not accounted for. When major failures occurred or certain facilities required major maintenance treatments, then these costs would sometimes be absorbed by other revenue sources to avoid taking on new debt service fees. At other times, debt would need to be taken on and added to user rates; and still, at other times, large expenses would be absorbed in divisional operating costs and would thus create large swings in divisional operating budgets. To correct these effects, the City of McHenry undertook a Water and Sewer Rate Study in 2014 to examine and reset current rates, initiate the creation of a capital projects' base fee, and evaluate the assessment of debt service fees for the pending Wastewater Treatment Plant Consolidation project. As a result of this study, a $2.00 per bi-monthly billing cycle water base fee and a $4.00 per billing cycle sewer base fee was adopted and added to each user's water and sewer bill. This fee structure was not set based upon any specific schedule of projects but rather as a modest addition to rates which would create a structure that began to account for depreciation and replacement of Water and Sewer Funded capital assets. Additionally, this was the time that debt service fees for the Wastewater Treatment Plant Consolidation WATER &SEWER FUND CIP 285 project completed in 2018 were set. From that point forward, debt service fees and base fees were fixed, and operating rates were reviewed on an annual basis with usage rates adjusted annually as a result. Included in the 2014 Water and Sewer Rate Study was a recommendation that a rate study be completed at least every five (5) years. Because of this recommendation, and because of a continued decline in the balances of the Water and Sewer Fund, staff undertook a study and inventorying process for the City's Water and Sewer Funded capital assets to make a recommendation for new capital base fees i Wn 2019. This two-year effort resulted in presentations in Fall of 2021 of several different options for water and sewer base fees which were matched to specific improvement programs and projects. The options were vetted and considered by the City Council and an ordinance was adopted for an $8.00 per billing period water base fee and $7.00 per billing period sewer base fee at the October 18, 2021, City Council Meeting. Goals for the Plan Upon the adoption of these updated base fees, it was determined that a strategy needed to be developed for planning and implementation of Water and Sewer Funded capital asset maintenance projects. The goals for implementation of this plan are as follows: 1. Create a funding source for non -facilities' expansion/replacement projects utilized to repair, rehabilitate, and replace depreciated capital assets. 2. Priorities for maintenance and replacement of existing assets are set based upon current operational requirements rather than desired or additional new services and programs. 3. Maintenance and replacement of existing capital assets are scheduled and implemented based upon acceptable costs and intended service lives. 4. Initiation of the systematic replacement of equity in the system that is being lost due to depreciation. Development of the Plan The tasl< of developing this projection was assigned to Public Worl<s Management staff who wort<ed together to develop these cost projections. Capital expenditures were classified by division, expenditure, and type of treatment. Costs were also given a projected year for implementation which was used to develop a long-term projection and implementation schedule. The method of developing these costs included the following assumptions: small items which are sporadically replaced through operating budgets are not included in the projection, only existing capital assets were to be included in the projection, both maintenance treatments to fulfill the full asset service life and asset replacement costs were included, and each treatment or asset replacement was to include a cost and projected service life. Annualized costs were simply generated by dividing the capital cost over the projected service life. Inflation was not included in the projection and therefore, all costs are present costs. The sum of annualized costs was then utilized to develop funding and implementation strategies forthe plan. WATER &SEWER FUND CIP Funding the Plan Because there was no existing revenue source for the maintenance and replacement of these Water and Sewer funded assets, it was necessary to create anew revenue source or adjust an existing revenue source to fund the program. As was stated in the Background section of this document, the City Council adopted an ordinance for a $8.00 per billing period water base fee and $7.00 per billing period sewer base fee at the October 18, 2021 City Council Meeting. The revenues for these fees are projected to generate approximately $1.1 Million per year to be utilized for Water and Sewer Funded maintenance and replacement projects, which approximately matches the proposed expenditures. Organization of the Plan Projects are classified into one of the following categories for reference purposes: Infrastructure Maintenance/Improvements These improvements involve either maintenance, major rehabilitation, or replacement of permanent infrastructure. Typical improvements are the maintenance and replacement of sanitary sewers or water mains. Technology Maintenance/Improvements These improvements typically involve the replacement of aging technology infrastructure such as SCADA systems and servers as well as radio communication systems. Building and Facilities Maintenance/Improvements These improvements involve either the maintenance, major rehabilitation, or replacement of Water and Sewer Funded buildings and/or facilities. Vehicles and Equipment Replacements These improvements involve the maintenance and replacement ofvehicles and equipment for the Public Works Departments' three (3) Water and Sewer Funded operating divisions (Water, Wastewater, Utility). Typical expenditures include the replacement of excavation equipment and maintenance/service trucks for these divisions. Implementation of the Plan Because the implementation of the fees occurred at a point which was late in the Fiscal Year 2021/2022 Budget, the list of capital projects funded in FY 22/23 was somewhat limited. This allowed for balances in the fund to rebuild and to defer expenditures to future years in which the projected expenditures are projected to be higher. A list of FY 22/23 capital projects and updates is as follows: 1. Utility Division Truck with Lift Gate $75,000 This vehicle was purchased in Spring of this year and equipped at Knapheide in McHenry. The vehicle was put into service in the Public Works Fleet in Summer of this year. WATER &SEWER FUND C/P 2. Wastewater UTV/Gator $15,000 After being in service for 15 years, the Wastewater Division's UTV was due for replacement. Staff solicited quotes for comparable vehicles from three different vendors and ultimately selected the lowest -priced option from John Deere in the amount of $16,233.12. Delivery is expected this Winter. 3. Millstream Lift Station Control Upgrade $30,000 Staff originally scoped this project and attempted to release a contract proposal prepared "in- house". After an unsuccessful bidding process staff reached out to one of the City's prequalified firms to prepare a set of bidding documents and construction plans. Upon the consultant's working with local electrical contractors and the City's SCADA integration consultant to develop preliminary costs estimates, it has become apparent that this project will be substantially more costly than originally planned. Therefore, this project is being re - budgeted for implementation in Fiscal Year 2023-2024. 4. WWTP UV Lamps $30,000 This project consisted of replacing the UV light bulbs in two of the three UV disinfection channels at the Wastewater Treatment Plant. Staff was able to maximize the service life of the original bulbs by monitoring the operating conditions and replacing the bulbs only when a decrease in performance was observed. The replacement was performed by Wastewater Division personnel in July 2022 with a total material cost of $21,055,00. 5. Sewer Lining Annual Program $325,000 This project was released for bidding in August of this year. The low successful bidder was National Power Rodding of Chicago, Illinois. This project is now completed. 6. Water SCADA Radios $40,000 As of October 31, 2022, all 6 programmable logic controllers (PLCs) have been installed. The 11 new radios will be installed by the end of November 2022. This project is now completed. 7. SBR Control Room Air Conditioning $30,000 This project was completed in May of 2022 by Platinum Heating &Cooling, Inc. The air conditioning system protects critical control systems from overheating due to the large amount of heat they generate while operating. The project was completed on -time and under budget at $28,172.00, The new system performed well throughout the hot summer months. 8. Mill Street Water Main Design 9. Richmond Road Water Main Design $50,000 $100,000 An RFP was issued for design services for both projects at the start of the fiscal year. The projects are currently in design and the combined preliminary EOPC is approximately $1.2 million. Construction of these projects was originally scheduled for Fiscal Year 2023-2024. However, due to developments in overall capital program costs and well as easement acquisition challenges these projects will be deferred to Fiscal Year 2024-2025. WATER &SEWER FUND CIP Additionally, there was a small group of Water and Sewer Capital Development Fee funded projects which were completed for the purposes of system expansion and stability. The list of Capital Development Fee funded projects is as follows: 1. Temporary iron Filtration Piping Design &Construction $20,000 This project has been abandoned due to a lack offeasibility which was discovered in the early stages of engineering work. Only a small portion of the budgeted amount was utilized for this project. 2. Water Well 14 Development $125,000 A designer was retained by the City at the start of the fiscal year for purposes of performing preliminary engineering design services for the commissioning of a new well and facilitating the process for hiring a driller for a test well. Engineering costs have been lower than anticipated but the costs for the drilling of a test well have pushed the total costs beyond the original budget appropriation. Therefore, the remaining balance on this project is being carried over and the overall project will be re -budgeted in Fiscal Year 2023-2024 to include the updated drilling costs. The Fiscal Year 2023/2024 program includes a budget of $1,194,000 and will begin implementation on May 1, 2023. A few projects are carry-over projects and/or projects which were budgeted to begin design during Fiscal Year 2021/2022 with full implementation of construction to follow in the next fiscal year. The list of Fiscal Year 2023/2024 Water and Sewer Capital Projects is as follows: 1. Water Well 7, Pump Replacement &Aquifer Rehabilitation 7. WWTP Mixed Liquor Gates 8. Water Tower 4 Repainting (Design) 9. Utility Division Televising Camera Van 10. Sanitary Sewer Lining Annual Program 11. Water Plant 2 Aquifer Rehabilitation $100000 $145,000 $194,000 $35,000 $75,000 $50,000 $3251000 $35,000 The list of Fiscal Year 2023/2024 Water and Sewer Capital Development Funded Projects is as follows: 1. Well 14 Test Well $200,000 2. Phosphorus Study $50,000 A detailed description of each of these projects is included Appendix B of this document. WATER &SEWER FUND CIP Future Considerations Projects Currently Without a Funding Source Assigned 1. Route 31 Utilities Within the next five years, Illinois Route 31 is scheduled to be reconstructed within the corporate limits of McHenry up to the intersection of Illinois Route 31 and Illinois Route 120. Because of the scope of underground improvements and IDOT standard practices regarding municipal utility relocation, there is a significant amount of utility relocation which the City must perform prior to the initiation of the Roadway project. These costs are 100% the responsibility of the municipality. Currently, the City's anticipated cost for utility relocation is $15 Million which does not currently have a funding source. Currently, the only funding that has been identified for this project is the approximately $3.0 Million that the City received through ARPA. However, the remainder of funding is yet to be determined. 2. Lead Service Program On January 1, 2022, the Illinois Legislature passed a bill requiring the abandonment and replacement of all lead water services in all public water supply systems in the State of Illinois. The date of compliance for replacement is set based upon the population of the individual municipality. in addition to the mandate for replacement, an inventory and plan for replacement must be initiated prior to there placement schedule beginning. Based upon McHenry's population and number of lead services, the City of McHenry will have 15 years to replace approximately 300 lead services beginning in 2027. The cost for the program will be approximately $2.5 Million distributed over a fifteen -year period. A funding source for this replacement is yet to be determined. Capital Development Fee Projects 1. Water Plant 5 Currently, the City's four (4) water plants meet daily and peak demand with no issues and some level of redundancy. The City's current near -term (20 years or less) population projections from various planning documents would push the water system to the threshold of requiring a fifth water plant. Currently, the reserves in the Water and Sewer Capital Development fee fund would accommodate the approximate $2.0 Million cost for Water Plant 5. Planning efforts and preliminary design are projected by staff to begin in the next SAO years. 2. WWTP Aeration Improvements This project will update the aeration and mixing systems on the oxidation ditches at the Wastewater Treatment Plant from mechanical aeration to a bubble -diffused aeration system. Currently, the method of aerating and mixing the oxidation ditches is with large inefficient mechanical mixers. There is little or no operator control allowed for with the current setup. This project would consist of installing blowers and fine bubble diffusers, like what is used in digesters and submersible mixers. Completion of this capital project will allow for more accurate control over the treatment process which in turn will allow the Plant to run efficiently and in a cost- effective manner. The cost for this project is approximately $1.5 Million. WATER &SEWER FUND CIP 290 3. WWTP Phosphorus Improvements This project may be necessary to meet a future NPDES permit limit of 0.50 mg/L (rolling twelve- month geometric mean). When the City of McHenry renewed its NPDES permit for the Wastewater Treatment Plant in 2021, the City was notified that it would have to meet this new, lower limit by 2030. The current permit limit is 1.0 mg/L monthly average. Staff is currently working on optimizing the phosphorous removal aspect of the treatment process to the greatest extent possible to determine whether facility upgrades may be necessary to achieve this limit. It is also possible that the WWTP Aeration Improvements outlined in item "2" above would afford the City the operational control necessary to meet this goal. If staff is unable to consistently meet this future limit under the current plant design, an engineering analysis would be necessary to determine the proper scope of necessary improvements. Annual Review and Approval Process The Community Investment Plan will be reviewed and updated annually to ensure that maintenance and replacement schedules are updated appropriately. Identified projects will be included for approval as part of each fiscal year budget based on the maintenance and replacement schedules identified in this document. WATER &SEWER FUND CIP 291 Appendix A $1,600,000 $11400,000 $11200,000 10-Ye01 Expenditure Total by Division $1,000,000 $800,000 $600,000 i $400,000 $200,000 $ Year Year Year Year Year Year Year Year Year Year 2023 ( 2024 12025 12026 12027 12028 12029 12030 12031 12032 Public Works Utility $375,0 $1,525 $875,0 $490,0 $815,0 $525,0 $655,0 $325,0 $450,0 $980,0 ■ Wastewater $374,0 $170,0 $73,00 $310,0 $188,0 $85,00 $12010 $42010 $51010 $175,0 ■ Water $445,0 $635,0 $1,070 $135,0 $35,00 $150,0 $85,00 $520,0 $- $48510 10-Year Total Expenditure by Division Utility ■Wastewater ■Water 292 Appendix A 10-Year Expenditure Total by Asset $1,600,000 $11400,000 $11200,000 $100000000 $800,000 $600,000 ■ $200,000 Al 1, A111 AI A J1I III $" Am. NMI ear 12024 Year 12025 Year 12026 Year 12027 Year 12028 Year 12029 Year 12030 Year 12031 Year 12032 Year 2023 Public Works ■ Building $- $10,00 $- $- $- $-r$6551510 $- $15,00 $110,0 ■ Equipment $14510 $160,0 $25810 $19510 $36310 $10510 $27010 $29010 $65,00 ■ Facility $58910 $63510 $99510 $13500 $- $15010 $47510 $- $48510 ■ Infrastructure $325,0 $1,525 $72510 $32510 $67510 $32510 $325,0 $450,0 $925,0 Vehicle $135,0 $- $40,00 $280,0 $- $180,0$195,0 $205,0 $55,00 10-Year Total Expenditure by Asset 1% a% LLB 29% ■ Building ■ Equipment ■ Facility ■Infrastructure Vehicle WATER &SEWER FUND CIP 293 Project Water Well 7 Pu Community Investment Plan (Water & Sewer) Appendix B lacement &Aquifer Rehabilitation Project Description The purpose of this project is to replace the pump for well #7 and the chemical rehabilitation of the aquifer that well # 7 is in. The pump is currently 18 years old and beyond its average life span. Treatment of the aquifer is necessary to maintain maximum capacity of the wells. Project Number 31-FAC-013/014 Operating Division Water Category Facility Treatment Rehabilitation Service Life 12 Years Design Fiscal Year Design Cost Construction Fiscal Year 23-24 Construction Cost $100,000 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 100,000 294 Community Investment Plan (Water & Sewer) Appendix B Project Water Division Vehicle Replacement Project Description The purpose of this project is to replace two vehicles in the Water Divisionmotor pool. The vehicles being replaced are a 2009 Dodge Durango and a 2011 Ford Connect Transit Van. Both vehicles are past the 12 year replacement cycle. The Dodge Durango will be replaced with a half ton 2 wheel drive pickup truck. The Ford Connect Transit Van will be replaced with a full sized cargo van. This full sized cargo van will serve as a daily Water Division work truck in addition to being the back-up Project Number 31-VEH-001/002 Operating Division Category Treatment Service Life Design Fiscal Year Design Cost Construction Fiscal Year Construction Cost i i Water Facility Replacement 12 Years $85 23-24 1000 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 85,000 295 Community investment Plan (Water & Sewer) Appendix B Project Water Plant 2 Motor Control Center relocation & control Project Description The purpose of this project is to relocate the motor control center (MCC) for water plant 2 and upgrade several of the controls. The MCC is currently in a room where the well piping and other plumbing currently exists. There have been water leaks which resulted in damage and deteriation to the current MCC. It must be relocated to an area with an environment that is not harmful to the electrical components. i 1 Project Number I 31-FAC-033 Operating Division Water Category Facility Treatment Upgrade Service Life 20 Years Design Fiscal Year 23-24 Design Cost $251000.00 Construction Fiscal Year 23-24 Construction Cost $150,000 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 150,000 296 Community Investment Plan (Water & Sewer) Appendix B Project Millstream Lift Station Electrical & Control Improvements Project Qescription The Millstream Lift Station last underwent a major overhaul in 1989. The controls are over 30 years old and becoming difficult to maintain and repair. The underground electrical conduits and control enclusure have deteriorated and require replacement. This project consists of a full replacement of the electrical components to modernize the station controls and improve operational reliability. Project Number 32-EQPT-030/031 Operating Division Wastewater Category Facility Treatment Replacement Service Life 20 Years Design Fiscal Year 23 - 24 Design Cost $25,000 Construction Fiscal Year 23 - 24 Construction Cost $120,000 \i4 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 145,000 ►�'rl At mot a to to ore AM, .: woj to 00 'r ,1 so m f 1Pv At it ot 44 or " :.� • F 3 , f .r�i 1 . '• • I _ i I , i . S.. i - q• > + .,. r' \ i `da 'ice T� � Nsji bi NVL e b, TA i Community Investment Plan (Water & Sewer) Appendix B Project Water Tower 4 Maintenance & Painting Design Phase Project Description The purpose of this project is to have the necessary perodic maintenance done to the water tower as well as repainting the water tower. Project Number 31-FAC-044/045 Operating Division Category Treatment Service Life Design Fiscal Year Design Cost Construction Fiscal Year Construction Cost $75 Water Facility Clean & Paint 25 Years 23-24 1000 24-25 $5001000 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 75,000 $ 500,000 ICiIII] Community Investment Plan (Water & Sewer) Appendix B Project Vehivle Replacement Truci< 804 ect Description Truck 804 is used as the camera vehicle to televeise the sanitary collection and storm system to evalution the condition. The vehicle currently is a 2000 GMC. This vehicle is in need of replacement due to escalating maintenance and repair costs. Project Number 35-VEH-001 Operating Divisior Category Treatmerr Service LifE Design Fiscal Yea Replacement Cos $50 Utility Vehicle Replacement 12 Years 23-24 1000 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 50,000 301 Community Investment Plan (Water & Sewer) Appendix B Project SEWER LINING PROJECT FY22/23 Project Description The sewer lining project for FY22/23 will be the second year of the program that was initiated last year. The reoccuring annual budget for this item is $3251c/yr. The goal is to line all of our older, deteriorating clay sanitary sewers over the next 20 year period. This is a common practice among all major municipal utility operators. The older clay pipes are more prone to failure, root intrusion, sewer backups and infiltration. This non- destructive sewer rehabilitation method is cost-effecive with a net cost 1/10th of a traditional removal and replacement method. Project Number 35-INF-001 Operating Division�Sanitary Category Utility Treatmentl Rehabilitation Service Life 150 years Design Fiscal Year Design Cost Construction Fiscal Year123-24 Construction Costl$325,000 Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 325,000,00 $ 325,000.00 $ 325,000.00 $ 325,000,00 $ 325,000.00 302 Community Investment Plan (Water & Sewer) Appendix B Project Well 2 Aauifer Project Description This project is for a rehabilitative treatment for the aquifer for Water Well 2. A process known as high rate injection or (Hy - RIP) is used to rehabilitate the aquifer. This process injects high rates of National Sanitation Foundation (NSF) approved chemicals into the well, removing any mineral and biological buildup which enables additional water production capacity in Ithe well. Project Number 31-FAC-006 Operating Division�Water Category Facility Treatment Rehabilitation Service Life 2 Years Design Fiscal Year Design Cost Construction Fiscal YearJ23-24 Construction Costl$35,000.00 303 Community Investment Plan (Water & Sewer) Appendix B Project Mill Street and Richmond Road Water Main Project Description Replacement to the water main is necessary to due the condition and failures on Mill Street between Crystal Lake Rd. The replacement on Broad Street from Green Street to Richmond Road and on Richmond Road from Broad Street to Washington Street is necessary to eliminate the "bottleneck". Proper sizing will improve circulation and water quality in the system. Project Number 35-INF-001 Operating Division�Water Category Treatmerr Service Lif( Design Fiscal Yea Design Cos Construction Fiscal Yea Construction Cos Fiscal Year Expenditures 22/23 23/24 24/25 25/26 26/27 $ 60,100.00 $ 1,2001000 304 Project II 14 Test Well (Ca Project Description Community Investment Plan (Water & Sewer) Appendix B I Development Fee Funded) The purpose of this project is to drill a test well to ultimately replace Water Well #14 which has been steadily declining in production for the past several years. Well 2 is also currently the only city water well which contains trace amounts of PFAS. The well is currently well below threshold levels but it is in the City's best interest to begin preparing for the abandonment of his well. Project Number Operating Division Water Category Facility Treatment Expan! Service Life 50 yea Design Fiscal Year 23-24 Design Cost Construction Fiscal Year 23-24 Construction Cost $2001( Fiscal Year Expenditures 23/24 24/25 25/26 26/27 27/28 $ 200,000.00 305 Community Investment Plan (Water & Sewer) Appendix B Project WWTP Phosphorous Improvements Engineering Report Project Description The Wastewater division is comissioning HR Green to conduct a preliminary study of the two oxidation ditches at the wastewtaer treatment plant to identify potential improvements that would enable the city to meet a new, lower effluent Phosphorous limit that will go into effect in 2030. The results of the study will help guide future capital investments to achieve lower Phosphorous discharges to comply with this future standard. 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F H O o th oo .-+ <r o Q co O m h co m o Ln O� ON O� M M M co O N C!L d' Ln Lfl r 00 Ol N m d' Ln t O r o0 Ol 311 Fiscal Year 2023/2024 Annual Budget 312 Marina Operations Fund - Overview The City of McHenry acquired the marina in 2000 to be able to expand the Central Wastewater Treatment Plant. After itwas acquired it was determined that the wastewater facility could not be expanded at the existing site. At this time the Marina Operations Fund is an enterprise fund that provides for the maintenance of a 60-slip marina on the Fox River. 313 0 0 0 0 0 0 O O co O h M O O d' O m O M O 00 O M N \ > W A O o 0 0 o O o 0 0 0 0 0 0 (D r i H � N N O O O O O O O O O O O O O O Ln O Ln O O O Ln LO Ln LO r-i I— N d O Ln LO %D Or %D Ln Cl Ln r-4 rl Cn Lr') M ND M M M r-1' r-1 00 00 M N r-1 O O O O O O O O O O O O O O In CDLn O O O Ln • L N N r-1 O r--1 l� H cr LD kD %D Or U N N M M N Ln Ln O M %D Or d• M h m 00 0D r� ko ko O Ln Or O 1 r 1 M M r-1 1 N 444 h r- H kD LnLn M N N lt� i� w vl y V) b � u m - W w Ln 4) V) ap w L Ln °; E� cn w�` & A w o Ln > 3 W !Q o id(1) d ro D �7 u c� b w f��y � �a z b z F u F EA � � m Q M M LD � OrLn r r- N M 'd' Ln 00 mO a N M d' Ln lfl r e- r 314 Izi 1, 1 dew ��Ik3lt�f i. 1.. , .. •d : ' �.�7� 9 r �.r 4 ;sIm._.�; Fiscal Year 2023/2024 Annual Budget 316 Employee Insurance Fund - Overview The City of McHenry recognizes that health insurance benefits are "Al important component of an employee's total compensation package, therefore, the purpose of the Employee Insurance Fund is to finance and account for expenditures incurred to provide health insurance benefits to employees. The current health insurance plan provided to employees offers a choice between a PPO (Preferred Provider Organization), an HMO (Health Maintenance Organization), and an HSA (Health Savings Account). Providing employees with a choice of plans allows for flexibility based on preference and affordability. In addition, employees receive dental and vision benefits. All IUOE 150 employees (Public Works, Parks) are required to be on the IUOE 150 insurance plan as per their collective bargaining agreement. 317 0 0 0 0 0 0 L 0 0 0 CC Lf) m m h O d; l0 O r-I �O kD 'd0 h O c-I O W t-1 N 'cN N O O O %D Ln N O m N L-i r-1 N r-I H A O O h M O kD Ln h M O ' Ln O N m N �,D O 'd' kO m 'cH O �10 O m M ri Ln M O 00 l N Ln M N fr'1 W n N Ln OD m Cr m N r-I O L r) %O M M m M O O %�D M M M r-I Lo O O O O h N h ,%%o m m O 01 d' Ln 0 0 m r-I O r-1 m O 'cr m O O M ON Ln 00 Ln d' N Ln h �o d' O to Ln LO M O r}' ~ N m r-I M 00 rN-1 ri r-I O N N Ln O N Ln O� M h h d' 'd' O In M L1') N O O DO Ln N %,D Ln h h r-I ON N O\ r-I O 'c1' M r-I M 'cF' m m L� LM Ln to O m Ln ko 'cM m N h h 00 r-i M kD N r l r1 Ln N M M N M m O ON M %D �10 m %�0 Co Ln O O 'd' �' N Ln N O ri O O N m d Ln m m O O�l H Lo h O 00 N h 00 0� 00 Ln LD Cn 'c1' 'd' O M M O m Lo h N 6N 'd' N %0 N N m Lr) Ln h co r-I r-I h (y M r-I O m M h N N r-I 00 N M Ln ri O O Ln kD \D h h ri rl O OO oN d' h 00 00 co N ci O in Lo %D r-I 00 dt r-I O h ri t� o r-i dz m %�o' in 03 m r4 ri ON M N ed' N N N M LO O aN-I rh-I 'mod' N m m M M 0 0 O O 0 h �O DD O M Ll7 r-I OD O H O O O�, h M N m N O M O "t 00 Ln h Ln h Ln Cn r-4 rj' \D O L� i-I O LO LO O r-I 00 m rmi "t O kD N N 00 ON N N M Ln M O r-I t--4 M N m M m �1 N O ri h m 1%0 �,D "t W h N O\ O 0 kD M M h 'd' M w O h O %D ri N Ln O h M h O M Ln ri h Ln CO 00 O (JN O a%% L\ 00 ri N M N N N CV ri r-I N N M N M C. O�y po i�l G Ld 1-.' Qi _ 4 3 y �, N n a Ww u Cl aD L cq N OOyJ p{O. H F'1 4' 1. uL0L. LOLB� F Pv P. P+ Oco P� CD 4r W u W u U i" h'y LUG , y' w w a cis M M Hw U)� v C) F~- E� FFA-L Z ON O O O in O ON r-i N d' 'd' �10 N �D 00 O% O\ M M m m N O m m m m m m cj <} t Ln 1%0 W lD h coOl CDr- N m Ln to h co Ol O r- N rn N 318 Risk Management Fund - Overview The purpose of the Risk Management Fund is to account for all activity related to risk management and insurance costs (other than employee health insurance) including loss control, loss prevention, risk transfer, and risk assessment. The City of McHenry is a member of the MclIenry County Rislc Management Agency (MCMRMA), a public entity risk pool through which property, general liability, automobile liability, crime, excess property, excess liability, and boiler and machinery coverage is provided. The relationship between the City and MCMRMA is defined through a contractual obligation approved by both the City Council and MCMRMA Executive Board. Revenues for the fund are generated by service charges to the City's General Fund and non -General Fund operating units. The service charges to the General Fund are provided for the most part by the liability insurance portion of the property tax levy. Incidental revenues from interest earnings and reimbursements from MCMRMA are also occasionally posted to the fund. 320 C 0 0 O O O O d' O O O O O7 O Q Q Q Q Q Q Q �k #k O O O O �O %lO O O N N o m M O o 0 O irn U) rn I- N cq � r-I � m N O ko LO Co In N ` � O c-I 00 co .--I M i--I to M O M In to � M N lf7 M ci � a L �k U N � w � a, � fl w a3i N 0 � cu rx u C w Q E H cD 04 w o Q w o uja a o c y U O N m w L4 OG a`. U F~- F� Fes- � F Wa` N 00 O� m O� O� O 00 M M M M M M M M 0 C C 0 C 0 00 O O O O %O O� O O O p O M Q O O O O M M 0 0 0 0 0 0 0 0 o O m in O In O N N a\ O N N c1' M M M O N to 00 M %O G- � M O N O O 0 0 0 o m m o o� o 0 0 o m o0 0 0 0 o m Ln o to N N N d' a\ O `CD Ln N N N N in M N %10 ro 7 ci M N O m W N Ln N M m V O v�i Cw7 w a Eon W A a a Q o ba x c c�u ro W :o, u u F �O 07 d' �O N O` 0 O Ln Lf") In D \,O 3� �I oI mI cI �I �I �I �I �I `°I�I �I �I NI NI NI NI NI NI NIN 321 i Fiscal Year 2023/2024 Annual Budget 322 Fiscal Year 2023/2024 Annual Budget 323 Employee Flexible Spending Fund - Overview The Employee Flexible spendind account is used to account for employee pre-tax medical spending accounts that are offered as a benefit to City employees. i ' • Under the Internal Revenue Service (IRS) rules and -- regulations, employees can set aside money for certain ,It P : � medical benefits on a pre-tax basis. These benefits includeMP medical expenses not covered under the employee's health insurance plan. When allowable medical costs are paid by the employee, he or she can get reimbursed from his flexible spending account. Depending on the tax bracket of the employee and the extent of utilization, an employee could potentially save several hundred dollars through medical and dependent care flexible spending deductions. 324 O oO O O OO O O O M O In p Ln O CO O Ln C�i\ \ N Q Q O �k O O �k O O O O O O o O O LO Ln Ln LO O O O O O O o 0 0 O O O LO LO O LO N LO F- <h d M O d' N M to m 6� 11l d Ln d m o O 0 O o o O O o O O O m LO O O O O 'd' M d' co LO W N c-1 m 00 m O M ri '-i c-1 Ln M c-I m d' co d' CO M m m %di d ri N d r L-I' N d' Ln i-A h N h h l� 00 O O Li w O O r-II �-1' N N %O c-I Ln Ln d Ln �1 0 b w c� - O W V) —_ m aL y N 0 LOi tn U O w En per, � Q) w UP) L u ' N(i w O r-i N O LO m Q �,I M W d' \-O ON 00 W Q� 0� ON m m rn W Ln l0 r m �- N m d' Lf'1 l0 r 325 Development Escrow Fund - Overview The Development Escrow Fund is a fiduciary fund used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments or funds. The Development Escrow Fund holds funds deposited by developers until such time as certain improvements are completed or in lieu of developer provided improvements. These funds are custodial in nature and do not involve measurement of results of operations. 327 O O O O O O O Q Q Q Q Q Q Q N N N �1 N LO 0N0 r M "4 \�I cz Cr1 u 3 0 w (D cn En bA W 0 O Nd O U 1+ W E i•. w V _ (n Q ] U J � N w A � � z m fit ca l 0 U ca � �p w �4 +� 4 � A N ro w Z cu H H U En > W a � a 0 rl O O Q 17 N h 61 cy� M M M D O Q A cv m �t Ln (-o r co m CD ro Ln to r 328 Fiscal Year 2023/2024 Annual Budget Retained Personnel Fund - Overview The Retained Personnel Fund is used to account for funds collected as reimbursement and expended for professional and technical services used to assist or advise the City in connection with land development. The City's retained personnel costs included engineering, legal, planning, and other technical professional matters. The City typically collects a deposit from property owners at the initiation of annexation, zoning, or other development proceedings that approximate the total retained personnel costs expected to be incurred. 330 O O O O O O O O O O O O O O CD CD CD O O CD O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O' LO m N m O' in m N LO Lo �l Ln r-A N M N M N m N O ' mM O N h CDN M l co t� Ln Ln m t� Ln M In r-1 r-1 M O O �-I ri M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O to M N M O m M N m Lo r-i Lo ri l� ' 'd' d' N L� Ln M N d' �D M N OO N d' rl OD CO O t� 00 M LO �0 O rA OD O Q Lo N 00 �,D r-i 00 CYN O O O O M M M M O O O O Q M M M M O co ' O 00Lo -%D N r-1 h ' co CC) LO LO 00 %,D (n Oo Lf) LO �D Piz rw v c� rA "Ct a w V) (1) � w � 0 m ��] w O TJ f� Upp 47 En _ Q) z [i a Ci � a w � bA rx bn o o 44 (q Ln W V w o o Cl)~ (1) u d N C � a �n > E" CTJ U u E" .d bA � by M 0 o z '^ O LO Cl o O O O r-1 t� r� n 0� 0n M M M M m Lo \D �,D W O r N m d' LIl l0 I- M M O L!j l0 I� Op Ol r r N 331 Fiscal Year 2023/2024 Annual Budget 332 Revolving Loan Fund - Overview The Revolving Loan Fund provides low interest loans to qualified existing and prospective businesses within the City of McHenry. The loan proceeds can be used to assist in the startup of a new business, expand and existing business update existing facilities to make the business more competitive, or provide an incentive for established businesses to relocate to the City. The primary goal of the program is job creation and expansion of the sales and property tax bases. The program requires loan applicants to complete a formal application �/ which is then reviewed by the Revolving Loan Fund Committee - comprised of the Mayor and Finance and Personnel Committee. Terms are identified/negotiated and a recommendation is provided to the full City Council for consideration. Of note, the Revolving Loan Fund itself does not have expenditures as the loans are originated through the City's identified lender. Revenues are comprised of receivables, or payments, which are budgeted. 333 0 0 0 0 0 0 A A Ask 0 0 A � o A O M M O N N O O C:) O m N O N N 1 r1 o O O O O O �i `�rl '-I r"I Ln d' co 00 N M � 00 M M M O rl M H m O ko t\ to N N N' M M O N N N M 1 qqt O �-1 Ln �l7 em1 M Ln Ln C rI V-1 ,I Ln w W i�l ,L RICO ro U M N U A - nFr a H V O z i-I q '5 C o o Ln o Q > N N rn cI Kl M M Ln �W/ W N M d' Ln l4 OO Ql CDc- N m �' Ln w �- 334 r 'L'',`Y • Police Pension Fund - Overview The Police Pension Fund accounts for retirementbenefits for retired police officers and their beneficiaries through employer and employee contributions and investment earnings. �1��The primary pw•pose of this non -operating budgetary unit is to finance pensions �I for employees by both employer and employee contributions combined with interest earnings on those contributions. These three revenue streams, if based on sound actuarial assumptions should generate sufficient funds for employee retirement without placing undue burden on the employer or a risk to the pension due the employee. The Police Pension plan is administered by a board of trustees. The duties of the board are to control and manage the pension fund, to enforce the collection of contributions, to hear and determine applications for pensions, to authorize payment of pensions, and to invest funds. Account and actuarial services are provided by the city at no cost to the plan. Financial planning and investment management are provided by outside vendors. The City's pension plan is a defined benefit plan meaning that regardless of investment performance, the plan is obligated to pay the defined benefit. If the pension plan makes unwise investment decisions, the City is currently obligated to guarantee the obligations. However, as of the year 2033, the pension plan will be self-supporting with no further obligations placed on the City. In FY20/21 the City bonded the outstanding Police Pension balance to achieve the self-supporting level and, as such, the financial commitment will be relatively fixed moving forward. 336 O M 00 O M O O O O O A A A A M O i N Ln O Ln 00 O% 00 qt r-1 Lf) 0 0 0 0 0 0 0 o o C O r-i 0 h 00 M N LO O O O H 00 O 00 N to 444 Q Q N N (IN r-1 ' O ' ' in ON O N N O N t� O r-i O% d Od M o v v v CD Ln O In h O [� IcD O N r-1 CDd' CD fit' �O U'^ r-1 l O M O O - O CD t M 'd' O m O Ln c-1 OO 00 M r-1 r-I r-j N r-1 N ON r-i r-I •d' ' k ' ' O O O h (7% O t� h O m r-I N d' Ln LD ko Ln O t� o M O% ON m t-1 d' M LD M t� M N O Lo d' T-1 Cl 00 r-i N in N ON t� O r-I O R' h Lf) �O Ln l0 ON LO 00 M M m r-i N v r-I N v O M t� Lo O M ' O ' ' O O O O ' ' ' ' O O O O h h O %D O O N t� O LO O •cM M h O N d' rl tj in O NO N 'd' r-1 to ,A;t, 00 N %lo 00 OD M rI N' N ri N Lo co N d) LO M M 00 Ln O in N 00 N w � ' M O r-I ON m r-I O r q N LD O iD M 00 N m h N M to M 00 N d' d' Lo d' l� ri m M 'd' O •dam m M Ln M ft M ODr-4 O h O 'cM �-i d' ON N O tin ON N O %D O ci m O %D O� h t1 �,o d� Ov0 M d' l� N N V-I rl Ln O ^ M %v0' v r-I N v %40 N d' r-1 O Lo M O� M ' ' O O O O ' N r-I H ri O 00 MD N M Lo o0 O OO M M w %D o N l� M �O h %0 N 0% N O Oi o' d� mot' t\ C3 00 m O t\ d' t\ M N' Ln O 0 t� Ln ri Ln m .-i �D to Lo ko � N N N ci LO O r-4 Ln 00 '�" l ft N N M Lo M ON LD •� 00 M M h Cn ' Ln M lit N M in 00 t-1 O O t� N M O m 00 t� LD M N h Ln M h N N 00 N a% a\ r i Ln t� 00 •c}' h UM) M h 00 Ln t-1' t� r11 ko m Ln N Ln co (INN O O in r-I M 00 �O N N M Ln r-4 N N v to y 5 to 1-+ N O O tb O O toEn z q a4� W A W o o >~ z j, N m p 4 pW, u U o d aoi ca fl Q o ca o W L� a w L. N N a w to �N O o U '� o A D Q P to • °c[i E-t F 1.4 a a L) d to F q 0 cn z c� A a F O O O O O O O O O O M :.� V-i m M fM M M 00 r-I N M �{' O r-4 r1i 'CZP N Q O N 00 00 00 00 W 00 ON O% O O 6N r-i d' ON O� M M M M M M M 'd' Nt �N mCD a r- N M 'd' to LO co Ol N M V' to l0 00 61 O r- N M V' Ln Lo i� 00 �-- �- �-- �- .- �- r- .- N N N N N N N N N 337 i Fiscal Year 2023/2024 Annual Budget Information 338 Financial Policies Overview The following City financial policies, along with the approved Fund Balance and Reserve, Investment and Capital Improvement Program policies, establish the framework for McHenry's overall fiscal planning and management. Operating Budget and Expense Policies 1. The City shall annually adopt a balanced budget where operating revenues are equal to, or exceed, operating expenditures in each fund. 2. Beginning fund balance should only be appropriated to the extent it supports non -recurring expenditures, replaces temporary declines in revenue, or is reasonably anticipated to be offset by an increase in revenue. 3. As part of the annual budget review process, the City will project General Fund revenues and expenditures for four years beyond the budget year and compare the projected balances to the fund balance policy. This will allow the City to identify potential problems early enough to correct them. 4. The City Council shall be provided monthly actual revenues and expenditures for all funds. Any departments or divisions projected to exceed their annual spending authority for the year shall work with the City Administrator to reduce expenses. This may include a deferral of hiring and major expenses for goods and services. Revenue Policies 1. The City shall maintain a diversified and stable revenue system to the extent provided by law to insulate it from short-term fluctuations in any one revenue source. 2. The City will not budget one-time revenue sources to fund annual operating expenditures. Such revenues will fund non -recurring activities, such as capital projects and major capital equipment purchases. 3. Grant revenues shall be pursued to provide or enhance City services. However, recurring activities shall be initiated with grant funds only if the activity can be terminated in the event grant funds are discontinued or the activity should and can be funded within recurring City revenues. 4. All non -enterprise user fees and charges will be examined annually to determine the direct and indirect cost of service recovery rate. The acceptable recovery rate and any associated changes to user fees and charges will be approved by the City Council. 5. The City will set fees and user charges for the Water and Sewer funds at a level that fully supports the total direct and indirect costs of the activity. Indirect costs include the replacement of the capital assets of the fund. r<� Debt Management Policies 1. The City limits long-term debt to only those capital improvements that cannot be financed from current revenues and have an estimated useful life of at least ten years. 2, For General Obligation Debt, the City will maintain a debt to assessed valuation ratio that is 2S% more stringent than the state debt limit. 340 Puna Balance and Reserve Policy Overview • The purpose of this policy is to establish the principles and parameters to which a Fund Balance target will be defined at the beginning of each budget period. This policy is established to provide financial stability, cash flow for operations, and the assurance that the City will be able to respond to emergencies with fiscal strength. • In the event that unexpected situations may cause the City to fall below the minimum fund balance level, certain steps will be followed to correctthe deficiency, as outlined in the section below titled "Fund Balance Parameters." Definitions • Fund Balance -The difference between assets and liabilities in a Governmental Fund. • Net Position -The amount remaining after subtracting total liabilities from total assets for Proprietary Funds. • Operating Expenditures -Total expenditures minus capital and debt service. • Governmental Funds -Are used to account for all or most of the City's general activities, including the collection and disbursement of restricted or committed monies (special revenue funds), the funds restricted, committed or assigned for the acquisition or construction of major capital assets (capital projects fund), and the funds restricted, committed or assigned for the servicing of general long-term debt (debt service funds). The general fund is used to account for all activities of the general government not accounted for I n some other fund. o General Fund -Accounts for all activities of the City not accounted for in another fund. The General Corporate Fund is used to account for most of the day-to-day operations of the City, which are financed from tax revenues and other general revenues. Nine (9) separate activities are accounted for within the General Fund including: Administration, Elected Officials, Community & Economic Development, Finance Department, Police Commission, Police Department, Public Works - Administration, Public Works -Streets, and Parks and Recreation. o Special Revenue Funds -These funds are utilized to account for revenues derived from specific sources which are usually required by law or regulation to be accounted for as separate funds. For the City of McHenry these funds include the following funds, with definitions provided: ■ Tourism Fund The Tourism Fund is used for the purpose of financing tourism through promotion of the City. It is derived from a 5%occupancy tax on motel and hotel receipts. 341 ■ Pageant Fund -The purpose of the Pageant Fund is to account for revenues and expenditures used to conduct the annual Miss McHenry Pageant. ■ Band Fund -The purpose of the an Fund is to finance and account for expenditures incurred in the provision of summer concerts to promote culture and recreation to the community. ■ Civil Defense Fund -The City Defense Fund is used to Eund and account for activities related to the training of personnel and the purchase and maintenance of equipment to protect and defend the City from natural disasters or man-made environmental disasters through early warning and public notification systems. ■ Alarm Board Fund -The purpose of this fund is to pay for the maintenance of radios, as well as the annual maintenance of the head -end equipment, in the City's dispatch center. Revenues are derived from the monitoring of business fire alarms, which are directly connected to the dispatch center. ■ Audit Fund -The Audit Fund accounts for expenses incurred to complete the annual financial audit of the City. ■ Annexation Fund -This fund tracks funds received from negotiated annexation agreements that are intended to be used for improvements to infrastructure or City facilities. ■ Motor Fuel Tax Fund -The Motor Fuel Tax (MFT) Fund is to provide dedicated revenues from taxes on gasoline and diesel sales primarily to road maintenance and improvements. ■ Developer Donation Fund -The purpose of this fund is to account for donations collected from developers on behalf of the primary and secondary school districts, fire protection district, and the City's park system. ■ Tax Increment Finance Fund -The Tax Increment Finance (TIF) Fund is utilized to capture the tax increment on property taxes generated through private investment within the downtown TIF District. These funds are then reinvested into this area to undertake public improvements and/or as incentivization to spur additional private investment, o Capital Projects Fund -Capital Projects Fund is utilized to account for financial resouc•ces to be used for the acquisition or construction of capital facilities or other major fixed assets. The following funds are identified within the Capital Projects Fund. ■ Recreation Center Construction Fund -The purpose of this fund is to, first, account for revenues and expenditures related to the construction of the recreation center facility; and, second, to account for capital expenditures specific to the completed recreation center facility. 342 ■ Special Service Area 414A - The SSA#4 Fund is utilized to account for revenues and expenses associated with annual debt service for the sewer project located in the Lakewood Road Subdivision. ■ Capital Improvements Fund -The purpose of the Capital Improvements Fund is to account for funds identified for the maintenance and construction of public infrastructure projects other than water and sewer utilities. This includes roads and public facility maintenance, improvements and/or construction. ■ Capital Equipment Fund -The Capital Equipment Fund is utilized to track annual expenditures of equipment replacement (e.g., vehicles, computer equipment) as identified in the S-Year Capital Improvement Program. o Debt Service Fund -The Debt Service Fund accounts for bonded indebtedness I ncurred by the City's General Fund, including bond and interest payments. • Enterprise Funds -Enterprise Funds are business -type funds utilized to account for operations and activities that are financed and operated in a manner similar to a private business enterprise, and where the cost of providing goods and services to the general public on a continuing basis is expected to be recovered primarily through user charges. The City has also established Enterprise Funds when it was advantageous to segregate revenues earned and expenses incurred for an operation for purposes of capital maintenance, public policy, management control, or accountability. The following funds comprise the City's Enterprise Funds: o Water and Sewer Fund -The Water and Sewer Fund funds the operations of the Water, Wastewater and Utility Division of the Department of Public Worlcs who's functions are to provide a safe and reliable supply of high quality potable water and to protect public health and the environment by treating sewage to meet stringent environmental standards prior to discharge. o Capital Development Fund -This fund accounts for the construction, expansion and/or extension of water and wastewater systems to accommodate new development and growth in the community. Revenues are generated through capital development fees on new residential and non-residential development. o Utility Improvements Fund -The Utility Improvements Fund is utilized for capital projects that improve or expand the capacity of the Water and Wastewater utilities. o Marina Operations Fund -This Enterprise Fund is used to maintain achy -owned 60-slip marina on the Fox River. • Internal Service Funds -Internal Service Funds are established to finance and account for services and/or commodities furnished by one department or agency to other departments or agencies of the city. The Internal Service Funds of the City are as follows: o Employee Insurance Fund -The purpose of this fund is to finance and account for expenditures incurred to provide health insurance benefits to employees. 343 o Risk Management Fund - The Rislc Management Fund accounts for all activity related to risk management and insurance costs (other than employee health insurance) including loss control, loss prevention, risk transfer, and risk assessment, o Information Technology Fund -The IT Fund facilitates the implementation of innovative, high quality technology -based services to each of the City's departments. • Fiduciary Funds -These funds are used to account for resources held for the benefit of parties outside of the city. The Fiduciary Funds of the city include the following funds: o Employee Flexible Spending Fund -Accounts for employees' pre-tax medical spending accounts that are offered as a benefit to City employees. o Development Escrow Fund -This fund is used to segregate developer funds held by the City to ensure the completion of specific public improvements such as sidewalks and traffic signals. o Retained Personnel Fund -The Retained Personnel Fund accounts for funds collected as reimbursement and expended for professional and technical services used to assist or advise the City in connection with land development. o Revolving Loan Fund -This fund accounts for activity in the Revolving Loan Program, a low -interest program for businesses and industry with the goal of job creation. o Police Pension Fund -Accounts for retirement benefits for retired police officers and their beneficiaries through employer and employee contributions and investment earnings. Governmental Fund Equity • With the implementation of GASB 54, the fund balance structure for governmental funds changed as of the fiscal year ended April 30, 2012. Multiple fund balance classifications include: Non -Spendable, Restricted, and Unrestricted, with unrestricted being further broken down into: Committed, Assigned, and Unassigned. • Expenses that can be attained from multiple fund classifications shall be used from the most to least restrictive fund. With the discretion of the Finance Director, and with the advice and consent of the Finance and Personnel Committee, a deviation can be made from this policy if it is in the best interest of the City of McHenry. • Fund classifications are described by the following: o Non -Spendable Fund Balance - (1 of 2 conditions) ■ Amounts that are not in spendable form ➢ Can never be spent (i.e., Inventory, Prepaid Rent) ➢ Cannot currently be spent because of cash flow timing (i.e., Long -Term Receivables) 344 ■ Amounts that are required to be maintained intact (i.e,, principal of an endowment) o Restricted ■ Externally enforceable legal restrictions (Le., grants, debt proceeds, tax levies) o Unrestricted (3 designations) M Committed -Amounts constrained for a specific purpose by a government using its highest level of decision -malting authority ➢ Must be committed prior to fiscal year-end, however, dollar amount can be decided at a later time. ➢ Revenues reported within any given special revenue fund are considered "Committed" by the City Council in accordance with GASB Statement 54 and are intended to be used for the related purpose. ■ Assigned - Amounts constrained, for the intent to be used for a specific purpose by the City Administrator and Finance Director ➢ Includes any remaining positive balances in governmental funds (other than the General Fund) that is not classified in any other fund balance category ➢ A drawdown of the fund balance would be classified within this category ■ Unassigned - Remainder of the General Fund's fund balance that is not classified in a previous category and amounts have not been expended in excess of resources available in other governmental funds Proprietary (Enterprise/internal Servicel Fund Equity • Proprietary funds include Enterprise and Internal Service Funds. • Expenses that can be attained from multiple fund classifications shall be used from the most to least restrictive fund. With the discretion of the Finance Director, and with the advice and consent of the Finance and Personnel Committee, a lesser restrictive net asset classification can be used if they determine that it is in the best interest of the City. • The net assets will be composed of three primary categories; o Net Investment in Capital Assets -That portion of a proprietary fund's net assets that reflects the fund's net investment in capital assets less any amount of outstanding debt related to the purchase/acquisition of said capital assets. ■ Related debt, for this purpose, includes the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of capital assets of the Government. o Restricted Net Assets That portion of a proprietary fund's net assets that are subject to external enforceable legal restrictions (e.g., grantor, contributor and bond covenants). o Unrestricted Net Assets -That portion of a proprietary fund's net assets that is neither restricted nor invested ita capital assets (net of related debt). Fund Balance Parameters (By Fund) • It is Lite City's philosophy to support, long4erm financial strategies, where fiscal sustailict ty is it first priority, while also building funds for future growth. It is essential to maintain adequate levels of fund balance to mitigate current and future risks and to ensure stable tax levies. Credit rating agencies carefully monitor levels of fund balance to evaluate a City's credit worthiness. • Revenues received within a given fund are specifically committed For its related purpose. Revenues reported within any fund may be modified from time to time through the annual budget process. • The following parameters will be used as part of the budget process to establish targets for the following funds: o General Ftind -The unrestricted fund balance target should be set at 120 days (4 months) of estimated operating expenditures including those expenditures reported in other Governmental Funds that receive annual operating transfers, with the exception of transfers intended to fund capital projects. If the unreserved fund balance falls below 120 days, a plan will be developed to return to the target balance. If the unreserved fund balance reaches a low of 90 days (3 months), the plan will be implemented to return the fund balance to the target within a reasonable amount of time. One-time revenues shall not be used to fund current operations. This level of fund balance shall provide the capacity to: ■ Offset unexpected downturns in elastic revenues due to fluctuations in the local, state and national economies o, the loss of a major sales tax contributor(s); ■ Offset negative fiscal changes brought about by action or legislation of another unit of government or agency, • Ensure the continued, timely repayment of debt obligations that the City may have in the event of a financial downturn; ■ Provide a sufficient cash flow for daily financial needs at all times; and, ■ Provide a funding source for unanticipated expenditures or emergencies that may occur. Funds in excess of the minimum may be nonrecurring expenditures, assigned for funding of other long-term obligations. considered for the funding of one-time, future capital activities or used for the o Tourism Fund - No target is established for this fund. The expenditures in this fund are to be used for financing tourism through promotion of the City. o Pageant Fund - No target is established for this fund. o Band Fund - No target is established for this fund. There is an estimated yearly operating transfer provided by the Genez•al Fund to cover expenses. 346 o Civil Defense Fund - The unrestricted fund balance should be maintained at 120 days (4 months) of estimated operating expenditures. Additional fund balance needs to be retained to address long-term equipment replacement and or repair. o Alarm Board Fund - The unrestricted fund balance should be maintained at 120 days (4 months) of estimated operating expenditures. Additional fund balance needs to be retained to address long-term equipment replacement, o Audit Fund - No target is established for this fund. Any fund balance accumulated within this fund will be utilized to lower operating transfers from other funds or the property tax levy. o Annexation Fund -The unrestricted fund balance should be maintained at sufficient levels to address the related annual debt service payments pledged by this fund and additional funding for capital projects. o Motor Fuel Tax Fund - No target is established for this fund. The expenditures intended for the Motor Fuel Tax revenues must not exceed the amount of funds available from the State of Illinois Motor Fuel Tax Fund. These revenues should only be used for street improvements and repair, as allowed by the State of Illinois Law. o Developer Donation Fund -The unrestricted fund balance should be maintained at sufficient levels to fund park related capital projects. o Tax Increment Finance Fund - No target is established for this fund. All fund balance within this fund will go to pay for improvements completed within the TIF district. o Recreation Center Construction Fund -The unrestricted fund balance should be maintained at 120 days (4 months) of estimated operating expenditures. Additional fund balance needs to be retained to address long-term equipment/furniture replacement or other unforeseen capital needs. o Special Service Area #4 [SSA#4) - No fund balance is maintained in this fund, all revenues are transferred to the Utility Improvements Fund to cover project costs. o Capital Improvements Fund - No target is established for this fund. The expenditures in this fund are to be used For retiring debt service and for capital infrastructure expenditures. One-time revenues should be placed in this fund. However, the City will plan appropriately and maintain a sufficient reserve in order to meet the long-term capital planning, projected cash flow requirements, and infrastructure needs of the community. o Capital Equipment Fund - No target is established For this fund. The expenditures in this fund are to be used for capital equipment expenditures. o Debt Service Fund - No target is established for this fund. This fund is used only as a debt service fund. 347 o Water and Sewer Fund - The Water and Sewer Fund cash and investment balance should be maintained at a minimum level of 2S%/ 35% of the previous year's operating expenses taking into account typical levels of expenditures required for capital outlays. Rates should be maintained at sufficient levels to meet the costs of water and sewer programs, fund depreciation, and build reserves for future capital needs. Water rates for consumers will be reviewed on an annual basis based on operating and capital needs. If the balances fall below the minimum, rates will be adjusted so as to gradually return to the minimum within a reasonable period of time. If balances exceed the minimum, the overage will be used to keep future rate increases lower or fund capital projects for the water/sewer systems. o Capital Development Fund - No target is established For this fund. The expenditures in this fund are to be used for retiring debt service and for capital expenditures. o Utility Improvements Fund - No target is established for this fund. The expenditures in this fund are to be used for capital infrastructure expenditures. One- time revenues should be placed in this fund. However, the City will plan appropriately and maintain a sufficient reserve in order to meetthe IongAerm capital planning, projected cash flow requirements, and infrastructure needs of the community. o Marina Operations Fund - No target is established for this fund. All fund balance within this fund will go to maintain the City owned marina. o Employee Insurance Fund - No target is established for this Fund. Any fund balance accumulated within this fund will be utilized to provide stability for the City's health I nsurance costs. o Risli Management Fund - No target is established For this fund. Any fund balance accumulated within this fund will be utilized to provide stability for the City's risk management costs. o Information Technology Fund -The unrestricted Fund balance should be maintained at 120 days (4 months) of estimated operating expenditures. Additional fund balance needs to be retained to address capital expenditures. o Employee Flexible Spending Fund - No fund balance is maintained within this fund. This fund is used only as an agency fund. o Development Escrow Fund - No fund balance is maintained within this fund. This fund is used only as an agency fund. o Retained Personnel Fund -- No fund balance is maintained within this fund. This fund is used only as an agency fund. o Revolving Loan Fund - No target is established for this fund. Any fund balance accumulated within this fund will be utilized to offer low infierest loans to local businesses. o Police Pension Fund - Fund balance targets will be determined through the Police Pension Board and the annual actuarial analysis. 349 Capital Improvement Program Financial Policy 1. The Capital Improvements Program (CIP) plan shall identify projects, their costs and the revenue sources and amounts needed to finance them. Z. The first year of the CIP program effectively becomes the capital projects budget within the operating budget for the year subject to the availability of adequate funds in the operating budget. Approval of the CIP does not guarantee that funds will be appropriated for the projects included in the first year of the CIP. 3. For General Obligation Debt, the City will maintain a debt to assessed value ratio that is 25% more stringent than the state debt limit (State limit is 8.62S% of EAV; proposed limit would reduce to this ceiling to approximately 6.5%.of EAV or $25.5 million outstanding). 4. Bonds issued to finance capital projects shall be structured to coincide as closely as feasibly possible to the useful life of the project. By equitably distributing the costs of the project over time, those citizens actually benefiting from the project will share in the cost. In no instance shall the maturity exceed the useful life of the project. 5. The City will not use long-term debt for current operations. 6. Where feasible, the City shall investigate the use of all sources of revenue available before using local property tax funds for capital projects. 7. Where feasible, the City will pursue project financing mechanisms -such as special service areas, special assessments or other mechanisms - that target citizens receiving a disproportionate share of the project benefit. 350 Investment Policy I. Policy It is the policy of the City of McHenry to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. II. Scope This policy includes all funds governed by the Mayor and Council ("City Council"). III. General Objectives The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: A. Safety. Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. 1. Credit Rislc. The City will minimize credit rislt, the risk of loss due to the failure of the security issuer or backer, by: (a) Limiting investments to the safest types of securities. (b) Pre -qualifying the financial institutions, brokers/dealers, intermediaries, and advisers with which the City will do business. (c) Diversifying the investment portfolio so that potential losses on individual securities will be minimized. 2. Interest Rate Rislc. The City will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates, by: (a) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. (b) Investing operating funds primarily inshorter-term securities, money market mutual funds, or similar investment pools. B. Liquidity. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet 351 IV. V anticipated demands (static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). A portion of the portfolio also may be placed in money marketmutual funds or local government investment pools which offer same -day liquidity for short-term funds, C. Yield. The investment portfolio shah be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments are limited to relatively low risk securities as identified in this policy in anticipation of earning a fair return relative to the risk being assumed. Securities shall not be sold prior to maturity with the following exceptions: 1. A security with declining credit may be sold early to minimize loss of principal. 2. A security swap would improve the quality, yield, or target duration in the portfolio. 3. Liquidity needs of the portfolio require that the security be sold. Prudence The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidity and the sale of the securities are carried out in accordance with the terms of this policy. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions, Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City. 352 VI. Delegation of Authority Authority to manage the investment program is granted to the City Treasurer or his designee, hereinafter referred to as Investment Officer. Responsibility for the operation of the investment program is hereby delegated to the Investment Officer, who shall act in accordance with established procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include z eferences to: safekeeping, delivery vs. payment, investment accounting, repurchase agreements, wire transfer agreements, and collateral/depository agreements. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Investment Officer. The Investment Officer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. VII. Authorized Financial Dealers and Institutions A list will be maintained of Financial institutions authorized to provide investment services. In addition, a list also will be maintained of approved security broker/dealers selected by creditworthiness (e.g., a minimum capital requirement of $10,000,000 and at least five years of operation). These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 1SC34 (uniform net capital rule). All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply the following as appropriate: A. Audited financial statements. 13. Proof of National Association of Securities Dealers (NASD) certification. C. Proof of state registration, D. Completed broker/dealer questionnaire. E. Certification of having read and understood and agreeing to comply with the City's investment policy. An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be conducted by the Investment Officer. VIII. Suitable and Authorized Investments The City may invest in any investment allowed for in the Illinois statutes regarding investment of public funds including but not limited to the following: A. U.S. government obligations, U.S. government agency obligations, and U.S. government instrumentality obligations, which have a liquid market with a readily determinable market value. 353 B, Canadian government obligations (payable in local currency). C. Certificates of deposit and other evidences of deposit at financial institutions, bankers' acceptances, and commercial paper, rated in the highest tier (e.g., A4, P4, 174, or D4 or higher) by a nationally recognized rating agency. D, investment -grade obligations of state, provincial and local governments and public authorities, E. Repurchase agreements only if the underlying purchased securities consist of government securities which are subject to the Government Securities Act of 1986 or as authorized in 30 ILCS 235/2(h)(1)-(11). F. Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar -denominated securities. G. Local government investment pools, either state -administered or through joint powers statutes and other intergovernmental agreement legislation. IX. Collateralization Funds on deposit (checking accounts, certificates of deposit, etc,) in excess of FDIC limits must be secured by some form of collateral, witnessed by a written agreement and held at an independent - third party institution in the name of the City. X. Safekeeping and Custody All security transacfiions, including collateral for repurchase agreements, entered into by the Crty, shall be conducted on adelivery-versus-payment (DVP) basis. Securities will be held by an independent third party custodian designated by the Investment Officer and evidenced by safekeeping receipts and a written custodial agreement, XI. Diversification The investments shall be diversified by: A. Limiting investments to avoid over concentration insecurities from a specific issuer or business sector (excluding U.S. Treasury securities). B. Limiting investment in securities that have higher credit risks. C. Investing in securities with varying maturities. D. Continuously investing a portion of the portfolio in readily available funds such as local government investment pools (LGIPs), money market funds or overnight 354 XIII. repurchase agreements to ensure that appropriate liquidity is maintained in order to meet ongoing obligations. Maximum Maturities To the extent possible, the City shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than two years from the date of purchase or in accordance with state and local statutes and ordinances, Reserve funds may be invested in securities exceeding two years if maturity of such investments are made to coincide as nearly as practicable with the expected use of the funds. The intent to invest in securities with longer maturities shall be disclosed to the corporate authorities. Internal Controls The Investment Officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. Accordingly, the Investment Officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures. The internal controls shall address the following points. A. Control of collusion. B. Separation of transaction authority from accounting and recordiceeping. C. Custodial safekeeping. D. Avoidance of physical delivery securities. E. Clear delegation of authority to subordinate staff members. F. Written confirmation of transactions for investments and wire transfers. G. Development of a wire transfer agreement with the lead bank and third -party custodian. 355 XIV. Performance Standards The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return during a market/economic environment of stable interest rates. A series of appropriate benchmarks shall be established against which portfolio performance shall be compared on a regular basis, XV. Reporting The Investment Officer, or his designee, shall prepare an investment report at least quarterly, including a management summary that provides an analysis of the status of the current investment portfolio and transactions made over the last quarter. This management summary will be prepared in a manner which will allow the City to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report should be provided to the Investment Officer, the legislative body, and any pool participants. The report will include the following; A, Listing of individual securities held at the end of the reporting period, B. Realized and unrealized gains or losses resulting from appreciation or depreciation by listing the cost and market value of securities over one-year duration that are not intended to be held until maturity. C. Average weighted yield to maturity of portfolio on investments as compared to applicable benchmarks. D. Listing of investment by maturity date. E. Percentage of the total portfolio which each type of investment represents. XVI. Marking to Market A statement of the market value of the portfolio shall be issued to the Mayor and City Council quarterly. XVII. Exemption Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirement of this policy. At maturity or liquidation, such monies shall be reinvested only as provided by this policy. XVIII. Amendments This policy shall be reviewed on an annual basis. The Investment Officer may implement changes in the investment policy after gaining approval from the Mayor and City Council for 356 the amendments. Any and all amendments to the investment policy shall be provided to the individual(s) charged with maintaining internal controls. XTX. Investment Policy Adoption The investment policy shall be adopted by the Mayor and City Council. The policy shall be reviewed on an annual basis by the Investment Officer and any modifications made thereto must be presented to the Mayor and City Council for approval. 357 Purchasing Policy and Procedures A. General Rules. Regulations and Ethics Purchasing of goods and services for the City of McHenry shall be in accordance with this Purchasing Policy, City Ordinances and applicable statutes of the State of Illinois. Items procured must represent the maximum economic benefit for each dollar spent. Purchases shall be of high quality and continued availability. Purchases shall be based on obtaining cost comparisons, quotations, or competitive bids. Purchases shall be based on obtaining better knowledge of methods and of commodities required to operate cost effectively. Local participation will be encouraged in the purchasing process. Consideration should be given to participate in cooperative purchasing efforts with other local government entities and in the State of Illinois Joint Purchasing Program whenever possible. All personnel involved in the purchasing process shall conduct themselves with fairness and impartiality and demand the same of all vendors. Negotiations and discussions involving purchases shall be conducted in compliance with the Code of Ethics and Rules of Conduct in the City's Personnel Handbook. The purchasing process shall promote professionalism and be committed to the efficiencies of centralized purchasing. B. Expenditure Approval Authority The following table includes the personnel authorized to make purchases and the amount each are authorized to spend on items included in the annual fiscal year budget, as approved by the City Council: Mayor, City Budgeted Designated Supervisors/Managers Department Administrator Amounts Employees* Directors or Finance Director Less than X X X X $750 Less than X X X $2,500 Less than X X $10,000 Less than X $20,000 * Designated Employees: • Executive Assistant/Deputy City Clerk • Coordinators and Analysts • Administrative Assistants (all departments) • Public Works Maintenance Worker • Public Works Operator • Public Works Mechanic • Parks & Recreation Maintenance Worker • Public Works Project Engineer • Community Development Plumbing Inspector • Community Development Code Enforcement Officer • Community Development Permit Technician 358 C. PurchasinE Procedure for Budeeted ltetns The following purchasing procedures apply to budgeted amounts, excluding architectural, surveying or engineering, legal, auditing, information technology or other professional services. o For budgeted items from $21500.00 to $91999.99, three (3) cost comparisons shall be obtained prior to all purchases. o For budgeted items from $10,000.00 to $19,999.99, three (3) written quotations shall be obtained prior to all purchases. o For budgeted items $20,000.00 and over, all purchases shall follow a competitive bidding process whereby bid specifications are developed, bids solicited, bids are received and evaluated by staff, and a recommendation is forwarded to the City Council for award/approval. The City Council reserves the right to waive the competitive bidding process upon the vote of 2/3 of the City Council members then holding office. D. Purchasing Procedure for Non -budgeted Amounts For all purchases that are not included in the annual fiscal year budget, a budget amendment request must be approved by the City Council prior to purchase, unless the actions are considered emergency in nature. Once approved, purchases may be made in accordance with the Expenditure Approval Authority set forth above. E. Purchasing Procedure -Emergencies For all purchases considered emergency in nature by the City Administrator or Mayor, such as threats to public health or safety, where immediate repairs to City property are required to protect or prevent against further loss or damage, or where immediate action is needed to prevent or minimize serious disruption to City services, competitive purchasing procedures, as directed by the Mayor or City Administrator under the circumstances, shall be used. The City Council shall be notified of the emergency circumstances and the expenditure amount and the item will be presented for formal approval or ratification at the next regular meeting of the City Council. F. Change Orders Change orders $20,000.00 and over shall be brought before the City Council unless specifically authorized in the bid selection process. However, if a change order for any public works contract authorizes or necessitates any increase in the contract price that is fifty percent (50%) or more of the original contract price or that authorizes or necessitates any increase in the price of a subcontract under the contract that is fifty percent (50%) or more ofthe original subcontract price, then the portion ofthe contractthatis coveredbythe change order must be resubmitted for bidding in the same manner for which the original contract was bid pursuant to the Public Works Contract Change Order Act, 50 ILCS 525. 359 Glossary of Terms Accrual Basis of ACCOUI1t1nE: A method of accounting that recognizes the financial effect of transactions, events, and interfund activities when they occur, regardless of the timing of related cash flows. Activity: Specific or distinguishable type of worlt performed by a component of government for the purpose of accomplishing a function for which the government is responsible. Appropriation: Legal authorization by the City :Council to matte expenditures and to incur obligations for specific purposes. Assessed Valuation: A valuation set upon real estate or other property by a government as a basis for levying taxes. Availability Criterion: Principle of the modified accrual basis of accounting according to which revenues may only be recognized when they are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Basis of Accounting; The timing of recognition, that is, when the effects of transactions or events should be recognized for financial reporting purposes. For example, the effects of transactions or events can be recognized on an accrual basis (that is, when the transactions or events take place), or on a cash basis (that is, when cash is received or paid). Bond: A written promise to pay a specific sum of money, called the face value or principal amount, at a specified date or dates in the future, called the maturity dates, together with periodic interest at a specified rate. Budget; The financial plan for the operation of a program or organization, which includes an estimate of proposed expenditures fora given period, and the proposed means of financing those expenditures. Budget Message: A general outline of the budget, which includes comments regarding the government's experience during the past period, its financial status at the time of the message, and recommendations regarding the financial policy for the coming period, Budgetary Basis of Accounting: The method used to determine when revenues and expenditures are recognized for budgetary purposes. Business -Type Activities: Activities of the City that are financed in whole, or in part, by fees charged to external parties for goods or services. These activities are accounted for as enterprise fimds and include the Airport, Transit, Parking, Golf Course, Boat Harbor, Marina, Ambulance, Refuse Collection, Landfill, Transfer Station, Water Pollution Control, and Collection and Drainage Funds. Capital Improvements Program: An annually updated plan or schedule of projected expenditures for public facilities and improvements which includes estimated project costs, sources of funding, and timing of work over a five-year period. For financial planning and general management, the program is presented as a plan of work and proposed expenditures, and is the basis for appropriation requests and bond issues. 360 Capital Outlaw Fixed assets which have a value of $300 or more and have a useful economic lifetime of more than one year. Capital Projects Fund: Fund used to account for financial resources to be used Jul the acquisition or construction of major capital facilities. Commodities: Supplies required by the municipality in order to perform the services to its citizens. Community and Economic Development Function: Government function that provides for planning and development of the City including the social, physical and economic needs of the City. Activities included in this function are Planning, Zoning and Building Safety, Economic Development and the Municipal Housing Programs, Contractual Services: Services other than employee services such as contractual arrangements and consultant services, which may be required by the municipality. Culture and Recreation Function: This function promotes the general well being of the City and encourages the fullest development of cultural and educational potentials of the citizens in the community. This function includes the activities of library, art center, parks and recreation, and cemetery. Debt Service Fund: A fund established to account for the accumulation of resources for and the payment of general long-term debt, principal, and interest. Depreciation: An appropriation is expended when a capital asset is acquired or constructed. By definition, a capital asset has a service life expected to extend over more than one Fiscal period. The process of allocating the cost of a capital asset to the periods during which the asset is used is called depreciation. Encumbrances: Obligations in the Form of purchase orders, and/or contracts, which are chargeable to an appropriation and for which a part of the appropriation is reserved. Enterprise Fund: A fund established to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of a governing body is that the cost of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges orwhere the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Expenditures: The cost of goods received or services rendered for the government unit. For the City of McHenry, expenditures are charged against an appropriation when incurred, not when paid. Fiscal Policy; The City of McHenry's policy with respect to taxes, spending and debt management as they relate to government services, programs, and capital investments. Fiscal Year: A twelve-month period to which an annual operating budget applies. 361 Fringe Benefits: Benefits paid by the City of McHenry For social security, retirement, group health, life, dental and long-term disability insurance. It also includes costs for worker's compensation and unemployment. Function: A group of related activities aimed at providing a major service or regulatory program for which a government is responsible. Fund: The fiscal and accounting entity with aself-balancing set of accounts recording cash and other financial resources together with all related liabilities and residual equity or balances and changes therein which are segregated for the purpose of carrying out specific activities or obtaining certain objectives in accordance with special regulations, restrictions or limitations. Fund Balance: Funds remaining after the application of available revenues and resources to support expenditures for the fund. General Fund: A Fund used to account for all financial resources except those required to be accounted for in another fund. Geueral Government Function: Function that provides for the operation of the government and assures the general administration of the municipality. Activities included in this function are mayor and council, legal services, city administrator, human resources, wellness program, finance, computer operations, risk management, and buildings and grounds. General Obligation Bonds:, Bonds for fihe payment of which the full faith and credit of the issuing government are pledged. Goal: Broad statement of desired results for the city, department, and/ activity relating to the quality of services to be provided to the citizens of McHenry. Governmental Funds: Funds generally used to account for tax -supported activities. Thore are five different types of governmental funds: the general fund, special revenue funds, debt service Funds, capital projects funds, and permanent hinds. Health and Social Services Function: Government function which provides for assistance to service agencies involved in providing health and social services in the community. For the City, this function includes the Economic Well -Being activity. Intergovernmental Revenues: Revenue from -other governments, primarily in the Form of Federal and State grants, but may also be payments from other local governments. Internal Service Fund: A fund used to account for the financing of goods and services provided by one department or agency to other departments or agencies of a government on a cost - reimbursement basis. T.egal Debt Martin: The excess of the amount of debt legally authorized over the amount of debt outstanding. Level of Service: Generally used to define the existing or current services, programs and facilities provided by the government for its citizens. Level of service of any given activity may be increased, decreased, or remain the same depending upon the needs, alternatives, and available resources. 362 Lev : The total amount of taxes, special assessments, or service charges imposed by a government to support governmental activities. Modified Accrual Basis of Accounting: Basis of accounting according to which (a) revenues are recognized in the accounting period in which they become available and measurable and (b) expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt and certain similar accrued obligations, which should be recognized when due. Objectives: Specific measurable achievements that an activity seeks to accomplish within a given time frame, which are directed to a particular goal. An objective should be stated in terms of results, not processes or activities. For the City of McHenry, departmental objectives are included in the department's budget request. Ordinance: A formal legislative enactment by the governing body of a municipality. Performance Measurement: Commonly used term for service efforts and accomplishments reporting. Permanent Funds: A fiduciary fund type used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs. Personal Services: Expenditures For salaries, wages, and related employee benefits for persons employed by the municipality. Proprietary Funds: Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. There are two different types of proprietary funds: enterprise funds and internal service funds. Public Safety Function: Government function that provides for services to reduce the amount and effects of external harm to individuals and damage to property, and in general to promote an atmosphere of personal security from external events. Police, animal control, communications, fire, and civil defense activities are included in this function. Public Works Function: Government function that provides for safe and well -maintained infrastructure for the City. Activities included in this function are public works administration, roadway maintenance, snow and ice control, street cleaning, traffic control and engineering. Resolution: An order of a legislative body requiring less legal formality than an ordinance; additionally, it has less legal status. Revenue: Income received by the City of McHenry to support the government's program of services to the citizens. Income includes such items as property tax, fees, user charges, grants and fines. Special Assessment: A compulsory levy made against certain properties to defray part or all of the cost of a specific improvement or service deemed to primarily benefit those properties. Special Revenue Funds: Funds used to account for proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. 363 Taxable Valuations: Valuations set uppn real estate or other property by a government as the basis for levying taxes, Taxes: Compulsory charges levied by government for the purpose of financing services performed For the common benefit. This does not include specific charges made against particular persons or property for current or permanent benefits such as special assessments. Trust and Agency Funds: Funds used to account for assets held by a government in a trustee or agent capacity for individuals, private organizations, other governments, and/or other finds.