City Council

MINUTES SPECIAL MEETING OF CITY COUNCIL CITY OF DEKALB April 13, 2013 The City Council of DeKalb, Illinois, held a Special Meeting on Saturday, April 13, 2013 at 9:00 a.m. in the Council Chambers of the DeKalb Municipal Building, 200 South 4th Street, DeKalb, Illinois. Notice was given and the meeting was called pursuant to the provisions of Chapter 2, Section 2.05 of the Municipal Code of the City of DeKalb, Illinois. Mayor Povlsen called the meeting to order at 9:00 a.m. A. ROLL CALL: City Clerk Wright called the roll and the following members of City Council were present: Mayor Kris Povlsen, Alderman David Jacobson, Alderman Tom Teresinski, Alderman Kristen Lash, Alderman Brendon Gallagher, Alderman Ronald Naylor, Alderman David Baker and Alderman Monica O’Leary (arrived at 9:10 a.m.). Also present were: Mark Biernacki, City Manager; Dean Frieders, City Attorney; Gene Lowery, Police Chief; Eric Hicks, Fire Chief; T.J. Moore, Public Works Director; Laura Pisarcik, Finance/Purchasing Director; Byron Wilkins, IT Contracted Technician; and Diane Wright, City Clerk. Additionally present were John Rey, Mayor-Elect; Bob Snow, Alderman Ward Two-Elect; Liz Peerboom, City Clerk-Elect; Rob Oberwise, Executive Partners; Peter Burchard, Executive Partners; Larry Kujovich, Executive Partners; Bert Nuehring, Crowe Horwath; and Ann Ruggiero, Crowe Horwath. B. PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was said by all. C. CONSIDERATION ITEM: 1. CONSIDERATION OF THE EXECUTIVE PARTNERS REPORT Mr. Oberwise stated that the City took to heart the recommendations made by Executive Partners (EPI) four years ago and should be congratulated. He said that recommendations will be given to continue to move forward. He added that this is a workshop and not the final workshop. Ald. O’Leary arrived at 9:10 a.m. Mr. Nuehring stated he will discuss opportunities for revenues. He noted that there are approximately 375 fines and fees and enforcement can be a challenge. He added that a full review of all may be necessary. The question was asked of staff yesterday, he said, if fines and fees are viewed as revenue Special Meeting April 13, 2013 Page 2 of 5 or used for public safety and compliance. Staff stated they are meant for public safety and compliance. Mayor Povlsen agreed. Mr. Nuehring addressed TIF I and II and impacts to the City. TIF I will expire in 2021 and TIF II in 2018. He cautioned that the City will need to have a plan in place when TIF I expires in that monies are transferred from it to the General Fund to cover administrative costs. Council agreed there needs to be a plan. Mr. Biernacki stated the City needs to look at weaning away from the transfer. He added that FY 13 is the last year of the sales tax TIF and in 2014 the City can retain the $500,000 that went into that TIF into the General Fund instead. Mr. Espiritu stated that TIF will be discussed during the budget and possibly move a portion into capital funds in order to catch up on capital needs. Mr. Nuehring next addressed water utilities and noted there is a $500,000 transfer from the Water Fund to the General Fund which represents recovery of administrative costs. He added that if the Water Fund was privately owned, it would be taxed. Thus, the City may be able to collect some assets and suggested a pilot calculation. Additionally he discussed the water rates and noted the City is low. Ms. Ruggiero noted that $186,366 could be additional revenue if the City implemented a tax rate. Mayor Povlsen stated it seems like a shell game. Ald. Gallagher disagreed and said this is an opportunity; other communities are doing it. Ald. Teresinski agreed and said this is a business entity and could be viewed from an opportunity perspective. Ald. Lash disagreed and asked how much a water bill would increase. Mr. Nuehring did not have the figures but said it could be looked at. Ald. Naylor stated he would rather see a long term capital improvement program for water and replace some parts of the system. Mr. Nuehring stated there are various aspects to look at; there is some room in the rates DeKalb charges, he added. Mr. Biernacki pointed out the data shown for Sycamore is from 2005 and believed there has been an increase since that time. Mayor Povlsen said he would rather look at the rates rather than call it a tax. Ald. Gallagher stated this is a way to keep up with expenses. Mr. Nuehring next addressed costs associated with the Fire Department. He stated there are no charges for treat and no-transport and the average cost per run was $1,300. He added the current contract with NIU for emergency services is $500,000 and should be looked at as additional revenue could be achieved through a new contract. Also, the treatment with no transfers amounts to approximately $350,000 in lost revenue based on 2012 activity. Chief Hicks addressed these calls and stated many municipalities are in this same position. Ald. Teresinski stated this is a conversation that needs follow up. Ald. Jacobson asked if there are any figures on NIU campus costs for this care. Chief Hicks replied 711 calls were made to NIU addresses amounting to approximately $629 per call. Council discussed the NIU contract and Ald. Naylor pointed out that this is a voluntary contract. Mr. Biernacki added NIU could choose not to pay us yet the City would continue to be obligated to provide these services. Mr. Nuehring next discussed stormwater utilities. Ms. Ruggiero stated some communities participate in a stormwater rate for residential customers. If DeKalb implemented such a rate, approximately $500,000 could be realized, she said. Ald. Baker stated this was attempted but was not well received. Ald. Naylor agreed and said the study was done and it was determined it was not viable.  Special Meeting April 13, 2013 Page 3 of 5 Ms. Ruggiero stated that Naperville has two taxes set up and collects the money for the city. Currently DeKalb is collecting one tax, she said. Mr. Nuehring added that they do not have impact numbers, but the ordinance in Naperville appears to be similar to DeKalb. Mr. Kujovich discussed the critical strategic trends recommended. He noted that if demands double, current staff won’t be able to handle all. He added that Council and staff must decide at what pace they want to change. If the City had to fund all pension costs and capital items, there would be a huge hole, he said; the City has been making short term decisions. He suggested that the City reallocate costs and free up money for reinvestments. He stressed the importance of addressing the NIU/City relationship and noted the City has a huge opportunity to form a relationship with NIU. He pointed out that the City needs an organizational plan, long term procurement strategy, long term IT strategy, NIU partnership strategy and airport strategy. Mr. Kujovich stated that by out sourcing many duties, the City could save a minimum of 10-20% or as high as 40%. He noted the core areas the City should retain include: IT Cloud Management, Economic Development, Treasury/Finance/Accounting; Public Safety (Police and Fire) and City Management (leadership). He noted that the City needs to focus on communications, specifically with a staff person as communication with its citizens is not a luxury. He added if the citizens want more, you have to be able to tell them what it costs. Also, he said, the City’s ability to raise revenues outside of Economic Development is limited. Further Mr. Kujovich recommended that the City add a Procurement Specialist and that the City centralize all purchasing. He added that the City needs to look further into state contracts and develop relationships for procurement opportunities with NIU and other agencies. This could possibly save 5% of the $12 million spent in purchasing each year, he said. He strongly urged that the City consider this position. Ald. Naylor stated that it has been his experience that getting the cooperation from other entities hasn’t been successful. Mr. Kujovich encouraged the City to pursue partnerships. Mr. Kujovich next discussed cloud computing and noted that it will pay benefits long term and take the City out of the cycle of keeping up with the latest software and hardware. He stated this could save the City approximately $100,000 long term. Mr. Kujovich again discussed the relationship with NIU and noted there are opportunities with NIU regarding procurement, police and fire, IT, economic development, and innovation initiatives. Many universities pay cities because they know they need the city even though they do not need to. He stated that a leadership team should be formed consisting of the Mayor, NIU President and other key staff. This team could develop a strategic plan, he said. Mr. Rey stated that the student directory for incoming NIU students has nothing from the City of DeKalb. Mr. Oberwise noted that the reality is that NIU is probably not paying their fair share for fire services, but that is not the place to start. Ald. Gallagher stated both entities must be joined and suggested that other key staff must be included in this leadership team. Mr. Kujovich next addressed the airport. He recommended a separate taxing authority through a referendum and suggested a needs assessment be done from the airport’s potential customers. This should be compared with the City’s other assets. Mr. Kujovich stated that when the discussion arose regarding outsourcing utility functions, management staff yesterday stated many customer service roles are provided in addition to these jobs Special Meeting April 13, 2013 Page 4 of 5 and did not feel comfortable the service to customers would continue to be provided. Mr. Kujovich noted that if the Council wants that to continue, the customers must know it comes with a cost. Mr. Burchard next addressed health care and noted that the City spends more money on health care than on water utilities and 3 ½ times more than is spent on the airport. Employees are looking at a 4 ½% increase, he said. He noted that 50% of all claims paid by insurance companies are paid incorrectly. When Blue Cross was contacted, Mr. Burchard said they could not provide reports on claims because they said DeKalb is too small to count. Claims aren’t being managed as the companies say they are, he said. The City does have leverage through its membership in IPBC. Mr. Burchard stated that approximately 15% of insureds are spending 80% of the costs; approximately $5 Million and he noted that two-thirds of that is preventable. Mr. Espiritu noted that with 65 other municipalities, IPBC is the second largest public customer buying health care in the nation. Mr. Oberwise stated there are three ways to save on costs: 1) contractual relationship with suppliers; 2) management of claims; and 3) implementation of wellness program. Mr. Oberwise stated there is a need for the City to have a long term plan with a capital item component. He suggested that the City do a realistic long term analysis from financial revenues and a cost standpoint for five years. It should include identifying specific costs and revenue opportunities. Also, he recommended that the City look at the image it presents and build on it. The costs can be shared with NIU, he said. The long term planning and image building will contribute to economic development, he said. Mayor Povlsen encouraged Mayor-elect John Rey and new Council Members to create a task force or internal commission to address these issues. Mr. Oberwise added that there are more opportunities for economic development and the City must ensure it has enough resources for it along with image building. Mr. Kujovich stated that many DeKalb businesses have told them that DeKalb is not business friendly. Ald. Teresinski stated that there is no standing still; long term strategic planning makes a difference. Mayor-elect John Rey stated that he has a session scheduled with President Baker and Bill Nicklas of NIU next week to begin conversations. 2. APPROVAL OF STAFF REQUEST TO HOLD A CLOSED SESSION TO DISCUSS PERSONNEL AS PROVIDED FOR IN 5 ILCS 120/2(c)(1) AND COLLECTIVE BARGAINING 5 ILCS 120/2(c)(2) MOTION Ald. Gallagher moved to closed session; seconded by Ald. Teresinski. Motion carried 8-0 on roll call vote. Aye: Jacobson, Teresinski, Lash, Gallagher, Naylor, Baker, O’Leary, Povlsen. Mayor Povlsen declared the motion passed. Mayor Povlsen closed the meeting to the public at 11:44 a.m. Mayor Povlsen opened the meeting to the public at 1:17 p.m.  Special Meeting April 13, 2013 Page 5 of 5 D. ADJOURNMENT: MOTION Ald. Teresinski moved to adjourn the meeting; seconded by Ald. Lash. Motion carried on voice vote. Mayor Povlsen declared the meeting adjourned at 1:17 p.m. DIANE K. WRIGHT, City Clerk