City Council

MINUTES CITY OF DEKALB COMMITTEE OF THE WHOLE MEETING NOVEMBER 23, 2015 The City Council of DeKalb, Illinois held a Committee of the Whole meeting on November 23, 2015 in the City Council Chambers of the DeKalb Municipal Building, 200 South Fourth Street, DeKalb, Illinois. Mayor Rey called the meeting to order at 5:03 p.m. A. ROLL CALL City Clerk Jennifer Jeep Johnson called the roll and the following members of City Council were present: Alderman Bill Finucane, Alderman Michael Marquardt, Alderman Bob Snow, Alderman Kate Noreiko, Alderman Dave Baker, and Mayor John Rey. Alderman Dave Jacobson arrived at 5:05 p.m. Also present were: City Manager Anne Marie Gaura, Assistant City Manager Patty Hoppenstedt, City Attorney Dean Frieders, Finance Director Cathy Haley, Police Chief Gene Lowery, Fire Chief Eric Hicks, Community Development Director Ellen Divita, Interim Public Works Director/City Engineer John Laskowski, Management Analysts Lauren Stott, Management Analyst Jared Heyn, and City Clerk Jennifer Jeep Johnson. B. ITEMS ALSO ON THE REGULAR AGENDA C. CONSIDERATIONS 1. Strategic Plan. City Manager Gaura introduced Diana Robbins of the Center for Governmental Studies who provided an overview of the Strategic Planning process. The process began in the late spring when 15 Community Conversations were scheduled, along with 48 small group discussions around the City. She explained the City’s Executive Team had the following goals: 1) to create a comprehensive document; 2) that the ideas flowed in a linear way; and 3) that this document offered a transition between the previous strategic plan, and the one being developed. City Manager Gaura provided background for the framework on how the plan was established, providing: 1) Mission statement Committee of the Whole November 23, 2015 Page 2 of 5 2) Core values: She read aloud the following values that will shape the behavior, and guide the actions of City employees:  Integrity  Professionalism  Excellence  Service  Collaboration  Accountability 3) Vision Statements: The following 5 Vision Statements were included in the Strategic Plan: 1. Sense of Place 2. Community Vitality and a Vibrant Downtown 3. Inclusiveness 4. Accessibility 5. Quality, Responsive Services City Manager Gaura explained that the Vision Statement components were yielded from the Community Conversations, and wished to emphasize that they came from the citizens in the community. She explained that the document will help guide the City’s investments, programs and policy authority. She explained the Vision Statements will be connected to, and incorporated into, the fiscal budget on an annual basis, emphasizing that Council will regularly receive updates as well. Moving forward: City Manager Gaura explained that the City is currently seeking feedback on the document from the community, hoping to hear back by December 7. City Manager Gaura concluded by stating that they are seeking input from Council on how to move forward. She also extended thanks to everyone involved in creating the document, and facilitating the whole process, noting key players. City Manager Gaura also emphasized the importance of the 10 year plan over that of a 5 year plan. She mentioned that she considers it a living document, and one that should be revisited yearly, with an even more in depth analysis at the 5 year mark. Mayor Rey thanked everyone for their work, and a job well done. Alderman Noreiko congratulated City staff as well as the Center for Governmental Studies, and commended them on a job well done. She offered that breaking the Strategic Plan into smaller pieces for further discussion would facilitate the process, given the length and breadth of the document.  Committee of the Whole November 23, 2015 Page 3 of 5 City Manager Gaura suggested that a Council retreat, as a follow up to the Strategic Planning Session, might be a way to discuss the contents of the document in a more manageable way. Alderman Baker offered that Council had previously had Strategic Plans, as well as City Council retreats, which were previously held on an annual basis. He offered his belief that the document should be revisited on an annual basis. City Manager Gaura offered that the document is intended to be a prelude to the budgetary process, so it will be visited on an annual basis. Mayor Rey encouraged everyone to consider the December 7 timeline so that a final draft can be published after input is received and incorporated. Alderman Marquardt expressed support for meeting in January, and City Manager Gaura stated that she will direct Executive Assistant Ruth Scott to schedule the event. 2. Presentation on the Moody Rating and a Financing Update on Senate Bill 318 by Managing Director Elizabeth Hennessey of William Blair. Finance Director Haley provided an explanation for the issue at hand, and introduced Elizabeth Hennessey. Ms. Hennessey explained that Moody’s upheld the credit rating of the City (Aa2: very strong capacity to meet debt obligations) which is excellent, though they did give a negative outlook. She explained the factors that were taken into consideration for assigning the outlook. Ms. Hennessey also explained factors that could increase/decline the status of the City. She explained how the methodology of the index has changed (since the last time the City of DeKalb was analyzed), and explained the revised rating criteria. She explained how Moody’s calculates the Adjusted Net Pension Liability (ANPL), and how the City of DeKalb is calculated within that framework. She explained why DeKalb’s numbers have changed since the last assessment, under the new methodology. Mayor Rey pointed out a mistake in the slides used, and Ms. Hennessey confirmed that the numbers were mistaken in that section. Ms. Hennessey said the goal moving forward with the debt ratio would be to stabilize according to Moody’s preferred method. She went through the various factors taken into consideration for calculating the credit rating, explaining where the City of DeKalb falls, where the medians are, and where we would need to be according to Moody’s preference for Aa2 cities. Committee of the Whole November 23, 2015 Page 4 of 5 Alderman Marquardt asked for clarification on overlapping debt, with Ms. Hennessey explaining that it incorporates all aspects on what appears on your tax bill. Ms. Hennessey then moved onto Senate Bill 318, explaining that all taxing bodies would become subject to the tax limitation law, and explained how the law would impact the City of DeKalb. She provided a brief background on Property Tax Limitation Law in Illinois, explaining that it is currently law in 39 of 102 counties. She explained that PTELL creates 2 buckets of tax revenue: 1) Aggregate Extension Base (operating), and 2) Debt Service Extension Base. Ms. Hennessey explained the formula, and provided an example calculation of Aggregate Extension Base. She offered some additional considerations for the Aggregate Extension Base, and used the City of DeKalb’s 2014 tax extension as an example of how some of these issues would play out numerically. She offered a chart for Non-Home Rule City Subject to Tax Limitation Law (from McHenry County) in order for the Council to see how many different areas are considered in order to ensure the municipality has enough funds to cover all areas, with the Mayor asking for clarification that the City’s day-to-day operations were funded via tax, with Ms. Hennessey confirming. Ms. Hennessey then turned to the Debt Service, and explained how the caps would impact DeKalb. Alderman Marquardt asked for clarification that we would not be able to pay for any bonds via property tax, with Ms. Hennessey confirming. She provided a hypothetical to help illustrate the effect of the cap. She then turned to Non-Referendum Bonds Under Senate Bill 318, then Bonds with Tax Caps, explaining Debt Certificates, and Alternate Bonds. Brief discussion ensued as to how the numbers can be balanced in order to keep the effective tax rate, despite having to increase in one area. Brief discussion ensued as to the intent of the Bill, and how municipalities approach the tax caps. Alderman Baker expressed his favor of meeting the 25% fund balance, with brief discussion ensuing as to how the City’s rating would be affected by meeting different percentages.  Committee of the Whole November 23, 2015 Page 5 of 5 Brief discussion ensued as to how the City’s expenditures are audited, with Finance Director Haley stating that the process is remarkably in depth. Mayor Rey sought confirmation that there is a time period where the City can make changes before the bond rating is negatively impacted; that the outlook is a “head’s up” of sorts, which Ms. Hennessey confirmed. Further discussion ensued regarding what actions Moody’s might like to see in order to eliminate the negative outlook. Alderman Baker wondered what the impact of the bond rating is on the City, with Ms. Hennessey explaining that it impacts new bond ratings, as well as refinancing existing bonds. Mayor Rey encouraged any further questions to be directed to Finance Director Haley. D. PUBLIC PARTICIPATION Mac McIntyre expressed his opinions on Moody’s intent, and how the City approaches costs, encouraging the City not to accrue further debt. He encouraged the City to be mindful of how they approach these issues. He highlighted that the City is experiencing higher vacancy rates in apartment buildings, which will negatively impact the City, encouraging the City to heed the warnings that Moody’s conveyed. He then transitioned to his opinion of the Strategic Plan, suggesting that the feedback does not adequately represent the community, as it is largely from one or two wards. He encouraged the Aldermen to reach out to their constituents in order to ensure that the document is truly representative of the people. He also encouraged greater communication between the City and other units of government in order to eliminate duplication of services. The Mayor highlighted that City Manager Gaura regularly networks with her counterparts in other taxing bodies. He stated agreement with Mr. McIntyre’s assessment that more input from all of the wards was needed, and encouraged the Alderman to follow the lead of Alderman Noreiko, and reach out to their constituents. F. ADJOURNMENT MOTION Alderman Marquardt moved to conclude the Committee of the Whole; seconded by Alderman Finucane. VOTE Motion carried on a 7-0 voice vote. Mayor Rey declared the motion passed, and concluded Committee of the Whole at 6:27 p.m. ____________________________________ JENNIFER JEEP JOHNSON, City Clerk Approved by City Council: December 14, 2015