City Council

MINUTES JOINT CITY COUNCIL AND FINANCE ADVISORY COMMITTEE CITY OF DEKALB MAY 27, 2015 The Joint City Council and Finance Advisory Committee meeting of May 27, 2015, was called to order at 5:11 p.m. by Mayor Rey. ROLL CALL City Council members present were: Alderman David Jacobson, Alderman Bill Finucane, Alderman Michael Marquardt, Alderman Bob Snow, Alderman Kate Noreiko, Alderman David Baker (arrived at 5:21 p.m.), Alderman Monica O’Leary, and Mayor John Rey. Finance Advisory Committee members present were: Chair Mike Peddle and Tom Teresinski. Others present: City Manager Anne Marie Gaura, Finance Director Cathy Haley, Fire Chief Eric Hicks, Police Chief Gene Lowery, Assistant City Manager Patty Hoppenstedt, Interim Public Works Director/City Engineer John Laskowski, Streets Superintendent Mark Espy, Community Development Director Ellen Divita, Utilities Superintendent Bryan Faivre, Account Technician Carri Parker, and Deputy City Clerk Julie Abraham. Not Present: Alderman David Baker and Finance Advisory Committee members Thomas Gearhart, Dave Conlin, Connie Golden, Mike Verbic, and Lynn Neeley. Mayor Rey stated that the Finance Advisory Committee has not met quorum as only two members are present, therefore they will be participating as a public comment. WRAP-UP AND FINAL RECOMMENDATIONS Finance Director Haley provided a summary of the balanced budget. She added that staff would recommend passing this budget with one exception, that we wait until the State approves their budget. City Manager Gaura added that staff will not move forward on those new items until there is final action taken in Springfield on a budget. Finance Director Haley summarized the budget and how it will affect the future of the City and find ways to lower expenditures and to hit the 25% fund balance. She commented on what the meeting will entail and that the Public Hearing on the first reading will be on June 8th. She reviewed the wrap-up memorandum. City Manager Gaura replied to Alderman Snow’s question from a previous meeting of if you could only chose one director position. She stated that the Executive Team met and the recommendation would be the HR Director and to defer the IT Director. She recommended that the City do a strategic IT assessment through a third party. They would create a plan and show areas of City Council approved minutes on July 6, 2015 / Finance Advisory Committee approved minutes on July 14, 2015  Joint City Council and Finance Advisory Committee Meeting May 27, 2015 Page 2 of 6 remediation and a 3 year technology plan. She mentioned that we need to do more to support the employees. Finance Director Haley opened up the floor to questions on the General Fund. Alderman O’Leary asked what if you were not able to get either. City Manager Gaura replied the City would continue to operate, but not as efficiently and productive. She added mostly on the HR side, staff is not able to fill vacant position adequately. She suggested that the IT Assessment would develop a plan to address current and future IT needs. Mr. Teresinski stated for the FY16 budget impact, relative to accounting changes and one-time items, there are a few items to discuss. (1) Items that are positive to the General Fund is the Work Comp transfer of $250,000. He stated that this is favorable and this is Work Comp from FY15 that hits FY16. (2) There is a cost shift that is moving monies from the General Fund to the Water Fund of $220,000 is a favorable change as well. He mentioned that in the Airport budget there is a $200,000 cash operating deficit. He stated that if you strip out all of the grants and funds. He recommended that adjust the budget to a $750,000 surplus. He stated that this would put the Council in a much more meaningful situation. He also suggested that the City freeze hiring at the current level. Finance Director Haley responded that the Airport budget is ending with a positive cash balance at the end of FY16. She added that the staff has spent a lot of time on this budget. The objective was to balance the budget while providing the level of services that the residents and the City needs. She realized that there are one-time expenses as well that do not have to be done in FY16. Alderman Finucane left the meeting at 5:29 p.m. City Manager Gaura explained that when providing the budget the staff kept in line with the recommendations of the Council from March 15, 2014 and in continued discussions with regard to the six phases: infrastructure, financial stability, sustainable operations, public safety, strategic planning and regional airport. She added that the regional airport will be addressed in the next coming months when the study is completed. She stated that there are some specific items that are part of public safety with regard to promoting a Police Officer, Fire Intern and Camp Power. She commented on strategic planning would reflect in the neighborhood #3 plan and sustainable operations would reflect in the budget moving forward and the Council will have some policy decisions to make. She added that infrastructure and financial stability fall into the policy changes as well. Alderman Marquardt left the meeting at 5:31 p.m. Alderman Finucane returned to the meeting at 5:32 p.m. Alderman Marquardt returned to the meeting at 5:33 p.m. Alderman Snow asked to see the positions on a monthly basis to show the savings. He stated he City Council approved minutes on July 6, 2015 / Finance Advisory Committee approved minutes on July 14, 2015  Joint City Council and Finance Advisory Committee Meeting May 27, 2015 Page 3 of 6 liked how the City would be holding off until the State approves their budget, but the City needs to look at the temporary fixes, maybe the staff needs to make a 5% cut in expenditures. Alderman Noreiko suggested that the City cannot continue deferring maintenance and repairs. She stated that the Council will make unpopular decisions and what is in the best interest of the City. Alderman Baker requested that Mayor Rey request the resignation of the two committee members that never show. He suggested that we need to put more money into the streets. He questioned where the money is from the tax bill that states DeKalb streets and roads, he would like to see where those funds are going. Alderman Marquardt questioned the one offs, he asked if the accounting changes done to have a truer picture of our operating expenses. Finance Director Haley replied stating the water transfer, it’s something that was done years ago, they wanted to start hitting the enterprise fund directly. Similar with the Sanitary District, both are not one-offs. With regard to the Airport, we are trying to make that sustainable, the staff will be doing a revamp of revenue. She added the Workers Comp transfer, we have 3 internal service funds that have a nice reserve fund balance. But do not want to make all the changes in one year. She suggested that the changes that are being made are to streamline and simplify the budgeting process. Mr. Peddle believed that the City is not appropriately insured for Workers Comp. He suggested that there was a mistake made when they did not join a risk pool. He stated that if we were to have one large suit it could use up entire fund balance and we are essentially self-insured. He added that it is important that the positions are not new positions. The City is hiring new people into those positions, but making money in the budget for those individuals in those positions to be in a different position. He believed the memorandum states exactly how the HR Director can pay for themselves. He included that it is possible that it is not the expenditures that are off, but possibly the revenue of the budget. Mayor Rey responded that the new positions are not new but new skill sets. He wanted to make aware of response time of HR is lacking, as well as, employee response is lacking. He believes that the employee morale will help significantly with the HR Director with the appropriate skill set. He added with regard to the IT department will be able to fulfill the software and technology response that are currently lagging. Alderman O’Leary believed that the financial software company needs to bring something to the table and make it work. She added that she does not agree with the new Director positions and does agree with adding a Water position. She agreed that Public Works needs vehicles and the money in TIF can fix the streets. Discussions were made with regard to the Workers Compensation package. Mr. Peddle summarized what he remembered what the current coverage is. Assistant City Manager Hoppenstedt explained that the $600,000 is per occurrence not per employee. City Manager Gaura stated that the staffs plan is to go out for an RFP next year and get the pricing and coverage that the City needs. She recommends that the Council not make a decision tonight, and would like to defer the Water Fund until July. City Council approved minutes on July 6, 2015 / Finance Advisory Committee approved minutes on July 14, 2015  Joint City Council and Finance Advisory Committee Meeting May 27, 2015 Page 4 of 6 Alderman O’Leary requested if cuts have been made. She asked how we can utilize what we have better, instead of increasing costs. City Manager Gaura replied that staff has spent two weeks going through each line item to reduce expenditures. She added that we looking at Capital, you have options with fleet, street and water. She stated that the staff has provided what the Council has requested and need direction on which option. Alderman Jacobson stated that he understands that this situation is inherited. He added that the community is suffering and cannot afford it. He mentioned that salaries are going up, but yet the revenue is not increasing. He stated that the City has not talked about reducing calls at the PD, or reducing overtime hours. He suggested that the residents do not want their taxes to go up. He felt that the budget deals with the symptoms but not addressing what its needs are. Police Chief Lowery addressed the changes that PD has made. He discussed the overtime, the number of calls and the community interaction. He suggested that the transparency has been better in the last few years. He explained that the lack in the HR Division has impacted the PD directly as they are unable to hire new employees, therefore, the PD is having to have overtime. Economic Development Director Divita commented on the community is breaking the barriers and working together. She stated she is concerned that the communication be given is that everyone is leaving. She suggested that this is not what we want to communicate as new businesses will not want to come in knowing that everyone is leaving. Alderman Baker stated that people are not leaving, a few years ago but I have noticed the problems are gone as a result of the Police Chief. He added that previously the Council would not have even know about these problems. He commented that the City got what it paid for and that was mediocre. City Manager Gaura stated that unless there is a plan now to fund the fleet, the City will be in the same position then as now. She added that the concern is how you want to spend it and when. She commented on how to prevent mistakes in the future. Alderman Finucane asked how the departments are paying for the use of the vehicle. He suggested that the employees do not have the invested interested thus they may not be taken care of as if they were their own. Mr. Peddle suggested that we build in a fee into the garbage fees to include for street maintenance. City Manager Gaura stated that the City is locked in an agreement, but with direction the staff can do an RFP for when the contract is over. Mr. Peddle added that the rate in the contract does not have to be the rate that is in the bill. City Manager Gaura recommends that the City builds up the fund balance to 25%. She stated that she has seen other municipalities with 33-50% fund balances. Alderman Jacobson left the meeting at 7:11 p.m. City Council approved minutes on July 6, 2015 / Finance Advisory Committee approved minutes on July 14, 2015  Joint City Council and Finance Advisory Committee Meeting May 27, 2015 Page 5 of 6 DISCUSSION ON LONG-TERM LIABILITIES Finance Director Haley discussed the memorandum on Long-Term Liabilities. Alderman Baker left the meeting at 7:14 p.m. Assistant Public Works Director - Water Faivre left the meeting at 7:15 p.m. Alderman Noreiko asked if staff is aware of any employees that have excessive time that if retired this could affect the balance. City Manager Gaura stated that each department head can meet and figure the employees that are going to retire by June 30, 2016. She suggested this will provide better operations in larger department. Police Chief Lowery left the meeting at 7:17 p.m. Assistant Public Works Director - Streets Espy left the meeting at 7:17 p.m. Alderman Jacobson returned to the meeting at 7:18 p.m. Assistant Public Works Director - Water Faivre returned to the meeting at 7:18 p.m. Overall agreement on getting rid of the IMRF and get it off the books. Police Chief Lowery returned to the meeting at 7:22 p.m. Alderman Baker returned to the meeting at 7:23 p.m. Assistant Public Works Director - Streets Espy returned to the meeting at 7:23 p.m. OVERVIEW OF GFOA BUDGET AWARD PROGRAM Finance Director Haley stated that they are going to be submitting the budget to GFOA Award Program. She stated that by following this model it not only will assist in presentation but result in a document that is clearer, easier to understand and friendlier for the residents to read. She added that Council will receive an electronic copy by June 8th. OTHER ITEMS Mayor Rey asked if there are any changes or additions that the Council would like to comment on. Alderman Finucane stated that the two positions are split between General Fund and Water. He questioned why it is not budgeted to the Airport. Finance Director Haley replied that when the analysis is completed on the Airport these items will be found. Fire Chief Hicks left the meeting at 7:27 p.m. City Council approved minutes on July 6, 2015 / Finance Advisory Committee approved minutes on July 14, 2015  Joint City Council and Finance Advisory Committee Meeting May 27, 2015 Page 6 of 6 Alderman Snow commented on the new positions. He stated he could support one position, HR Director, but not until the City knows what the State is going to do. He agreed that when you hire the right people with the right tools you gain. Fire Chief Hicks returned to the meeting at 7:29 p.m. Alderman Noreiko asked if the IT assessment would have to be done before purchase and implementation of the software requests. Finance Director Haley replied that the financial software would be affected. Alderman O’Leary asked if the budget included the heated patch mix trailer was in the budget. City Manager Gaura stated that it is one of those items that would be covered under fleet and equipment and by keeping those costs as low as possible that was one of the items that was not recommended. If the direction of the Council is to put the trailer in we can put it in. Alderman Baker replied that it is directed. Alderman Finucane left the meeting at 7:39 p.m. Discussion was made with regard to outsourcing HR or IT. Members of the Council discussed both sides but there was a consensus on keeping both in-house. Alderman Finucane returned to the meeting at 7:41 p.m. Mayor Rey confirmed with Mr. Peddle on solidifying the Finance Advisory Committee recommendations. City Manager Gaura requested that the Council provide direction on the Water Rate Study early on in FY2016. PUBLIC PARTICIPATION Mayor Rey asked if there is anyone in the public to speak. No response. ADJOURNMENT Mayor Rey requested a move to adjourn, moved by Alderman O’Leary and seconded by Alderman Noreiko. Meeting adjourned at 7:58 p.m. __________________________________________ JULIE ABRAHAM, Deputy City Clerk Minutes prepared by Account Technician Carri Parker City Council approved minutes on July 6, 2015 / Finance Advisory Committee approved minutes on July 14, 2015