City Council

MINUTES SPECIAL MEETING OF CITY COUNCIL CITY OF DEKALB June 11, 2013 The City Council of DeKalb, Illinois, held a Special Meeting on Tuesday, June 11, 2013 at 6:00 p.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 Rey called the meeting to order at 6:00 p.m. A. ROLL CALL: Deputy City Clerk Wright called the roll and the following members of City Council were present: Mayor John Rey, Alderman David Jacobson (arrived at 6:11 p.m.), Alderman Bill Finucane, Alderman Kristen Lash (arrived at 6:08 p.m.), Alderman Bob Snow, Alderman Ronald Naylor, and Alderman Monica O’Leary. Absent was Alderman David Baker. 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, Deputy City Clerk. Additionally, Rob Oberwise, Larry Kujovich and Bert Nehring were present from Executive Partners and Crowe Horwath. Mayor Rey announced that Ald. Lash and Ald. Jacobson would be late to the meeting. B. PLEDGE OF ALLEGIANCE: Ald. Finucane led the Pledge of Allegiance. C. 1. CONSIDERATION OF THE EXECUTIVE PARTNERS REPORT Mayor Rey stated that last night Council passed the FY 14 budget which represented focus on the immediate year ahead of the City and affords an opportunity to focus on longer term and policy issues that will drive the five year budget projection. The GF is projected with 19.58%, the core service budget projections are tight and there will need to be cost reductions to address safety and economic development, he said. Ald. Lash arrived at 6:08 p.m. Mr. Biernacki asked to amend agenda to include an item under Closed Session. MOTION Ald. Finucane moved to amend the Agenda to include under closed session Pending Litigation 5 ILCS 120/2(c)(11); seconded by Ald. Snow. Motion carried on voice vote. Mayor Rey declared the motion passed. Special Meeting June 11, 2013 Page 2 of 4 Mr. Espiritu stated Staff and Council continue to look at financial stability of the City. Last time EPI was here we were in a crisis situation and immediate needs had to be addressed. We have asked EPI to come back and look at long term suggestions for the City, he said. Ald. Jacobson arrived at 6:11 p.m. Mr. Kujovich stated that the essence of this report is to not end up in another financial crisis. Many of the suggestions cannot be implemented overnight, he said, and this report should refocus the City’s model of government. The City cannot bank on significant increase in revenues, he said. Citizens will expect current level of services or more. The key message is the current way of doing services may not be the best way to do them in the long term. He stressed that the City should focus on outcome: what services do you want to provide and at what level. The next step is finding the lowest cost to perform the services, no matter who performs them. He noted that this is not a new concept – cities have done it from the extreme to somewhere in between. The critical key is to consider the City providing services and developing the process that is high quality. The City may need to investigate other sources for some functions, he said. However, he noted, there are political ramifications, personal ramifications and logistic ramifications. He pointed out there are five areas that are important: outsourcing; procurement strategy (centralization); look at contracts – see about better pricing to determine if any can be consolidated; develop a long term IT strategy. He suggested finding a combination using the cloud approach and using someone else’s hardware. Cloud service provides upgrades; the City does not pay for them, he added. IT can then focuses on applications, he said. There are significant relationship possibilities with NIU, he said and combining forces could yield savings. He suggested implementing a separate taxing authority for airport. He stressed that the City needs to reinvent itself, focus on productivity; outcome, implement long term financial strategic plan (how will you get revenues for 5 years), and continue to look at privatization. There may be ways to reinvent processes to increase productivity, he said. Mr. Oberwise discussed the medical cost containment. He noted that it would be valuable for the City to remain as member of IPBC. Their approach could be enhanced by the City helping them understand the need for a more aggressive approach how health care components are managed. Additionally, he suggested that the City pursue a wellness program. He pointed out that 5% of the City’s claims drive 80% of the costs. Ald. Naylor asked if the current provider is not doing this. Mr. Oberwise affirmed the statement. Ald. Lash stated she agreed with the wellness aspect. Mr. Espiritu noted that one of the reasons EPI suggests staying with IPBC is the collective benefit. If DeKalb was alone it would be difficult to have a broker looking out for the City’s best interests. There is buying power with 65 municipalities, he added. There is no incentive for the broker or carrier to change. This will be an education for the IPBC – a change in culture in getting them to go to performance measurement and will take some time to do, he said. Ald. Naylor inquired as to what needs to be done for a wellness program. Mr. Espiritu replied he has been meeting with the unions on this topic and employees want this. He added that the goal is to implement a comprehensive wellness program with screens, tests, and health management, making sure employees are taking medications, seeing doctors for preventative care and developing a program together. He noted that in the long term it has been proven that these programs provide cost savings; short term there is a cost to make the program work. Mr. Nehring next discussed revenues and pointed out that the City has number of revenue sources. He recommended that the City look at all fines, fees, and revenues. He asked if the City is covering all costs with regard to fees and fines and suggested a thorough review of all. He stated that the City should look at the six different revenue sources which can potentially provide most impact: TIF  Special Meeting June 11 2013 Page 3 of 4 revenues; TIF districts – one district the City can no longer extend and will expire soon.. He added that the City needs to determine what the economic development needs are for that district now. Consider how you will utilize those funds. He recommended that the City leave the sales tax rate alone. Other areas he focused on were: Emergency services (paramedic and fire activities). Currently the City has a contract with NIU which pays the City $500,000 each year. Based on calls, he said, the City’s cost seems to be higher than what is paid. He recommended looking at the true cost of services for fire protection to NIU to determine if that rate is proper. Additionally, he noted that the city doesn’t charge for “treat no transfer,” and recommended that the City consider implementing this charge which could bring in an additional $350,000 in revenue. He also discussed water utilities and suggested the City consider a payment in lieu of taxes. He stated that there could be $186,000 potential from water utilities. He added he performed a comparison of water rates with other municipalities and DeKalb’s rates are less than other cities. He stressed that the City needs to look at capital needs and develop a capital improvement plan relating to water utilities. He also discussed a storm water utility fee but noted there is cost to implement this. Finally, he suggested that the City look at natural gas and noted that some municipalities capture additional tax revenue based on out– of-state suppliers of natural gas. The City’s current ordinance does not address out-of-state suppliers of natural gas, he said. Bert that particular company would have to charge for their operations. Ald. Snow noted that the City is transferring $500,000 from the water fund. Mr. Nehring stated that the cost of a service study would need to be done to determine if the $500,000 is appropriate. Ald. Finucane stated that customers pay utility tax on Nicor. Mr. Nehring replied that if it is supplied through out-of-state, it does not get assessed. Mr. Frieders stated that the analysis in the report is what the City has done and would require a minor change. Mr. Espiritu noted that this was brought before the Department of Revenue previously and the City was advised it could only charge one or the other. Ald. Naylor stated that cost to implement and maintain the storm water and operate it did not generate sufficient funds to pursue. He questioned the estimate of $75,000 for implementation which he said is significantly less than what the City was told. Mr. Moore clarified that the $75,000 was for the study – not the full implementation. . Mr. Oberwise stated that long term planning has been addressed. DeKalb has significant assets, he said, and promoting those assets would be in the City’s best interest from an economic development and community image standpoint. He recommended that the City focus on long term planning to balance revenue demands. Mayor Rey suggested that he work with staff to lead Council through recommendations for systemic changes to achieve financial health for the City. This requires a long term view, cost implications and trade-offs among services and capital investments through infrastructure. There may be trade-offs on core services, he said. He suggested looking at FY 15 strategic goals and working beyond to FY 16- 19. Ald. Naylor stated he generally concurs with the Mayor but added he would like to study the report thoroughly. Additionally he suggested another meeting be scheduled with the Finance Advisory Committee. Ald. Lash stated that the implementation needs to go hand in hand with the long term strategic plan. Ald. Jacobson stated he appreciates the Mayor’s suggestion, but these changes take time. By the time the long term planning and direction is set, most of the information is outdated, he said. He concurred that more meetings may need to be scheduled. He added that Council needs to do the bulk of the work – staff cannot do this in a reasonable time frame. Mayor Rey stated that Council needs to agree on the priorities and envisions this compiled into strategic planning for FY 15. He also agreed this must be kept it the forefront. Mr. Espiritu stated Special Meeting June 11, 2013 Page 4 of 4 there is the need for long term strategic planning and there is some time to work on it. Plans need to be in place on phasing the changes in and the method, he said. 2. APPROVAL OF A STAFF REQUEST TO HOLD A CLOSED SESSION TO DISCUSS PERSONNEL AS PROVIDED FOR IN 5 ILCS 120/2(c)(1) COLLECTIVE BARGAINING 5 ILCS 120/2(c)(2) AND PENDING LITIGATION 5 ILCS 120/2(c)(11). MOTION Ald. Lash moved to approve staff’s request to hold A closed session to discuss Personnel as provided for in 5 ILCS 120/2(c)(1) Collective Bargaining 5 ILCS 120/2(c)(2) and Pending Litigation 5 ILCS 120/2(c)(11); seconded by Ald. Finucane. Motion carried 7-0-1 on roll call vote. Aye: Jacobson, Finucane, Lash, Snow, Naylor, O’Leary, Rey. Absent: Baker. Mayor Rey declared the motion passed. Mayor Rey closed the meeting to the public at 7:45 p.m. Mayor Rey opened the meeting to the public at 9:00 p.m. D. ADJOURNMENT MOTION Ald. Finucane moved to adjourn the meeting; seconded by Ald. Lash. Motion carried on voice vote. Mayor Povlsen declared the meeting adjourned at 9:00 p.m. _____________________________________ DIANE K. WRIGHT, Deputy City Clerk Approved by City Council June 24, 2013