Finance Advisory Committee

AGENDA Finance Advisory Committee Meeting Thursday, November 2, 2017 5:00 p.m. Police Department Training Room 1. Call to Order 2. Roll Call for Attendance 3. Public Participation 4. Approval of Minutes a. Minutes of the Finance Advisory Committee Meeting of October 30, 2017 5. Review Fiscal Year 2018 Budget 6. Recommendations 7. Other Items 8. Confirm Next Meeting Date and Time 9. Adjournment The Finance Advisory Committee’s role (as listed in Chapter 54-11) is to provide well-reasoned, financially sound recommendations to the Council. Meetings and reporting shall be on a project-by-project basis or as otherwise assigned by the City Council. The Finance Advisory Committee shall work in cooperation with the City Council and the City Manager to analyze the City’s financial policies, long term financial stability, options for greater efficiencies and possible revenue and expenditure modifications.  MINUTES FINANCE ADVISORY COMMITTEE CITY OF DEKALB OCTOBER 30, 2017 1. CALL TO ORDER The Finance Advisory Committee meeting of October 30, 2017, was called to order at 5:01 p.m. by Chair Peddle. 2. ROLL CALL Committee members present were Tom Teresinski, Lynn Neeley, Steve Parker, Dave Conlin, Ron Partch and Chair Mike Peddle. Staff present: City Manager Anne Marie Gaura, Assistant City Manager Patty Hoppenstedt, Finance Director Molly Talkington, Assistant Finance Director Robert Miller, and Account Technician III Carri Parker. Staff present in audience: Deputy Fire Chief Jeff McMaster, Human Resources Director Cris Randall, Public Works Director Tim Holdeman (arrived at 5:30 p.m.), Fire Chief Eric Hicks (arrived at 5:35 p.m.), Police Chief Eugene Lowery (arrived at 5:42 p.m.) and Economic Development Director Jo Ellen Charlton (arrived at 5:55 p.m.). 3. PUBLIC PARTICIPATION No public participation 4. APPROVAL OF MINUTES 1. Minutes of the Finance Advisory Committee Meeting of October 17, 2017. MOTION Committee Member Teresinski moved to approve the minutes; seconded by Committee Member Neeley. VOTE Motion carried on a unanimous vote. Chair Peddle declared motion passed. 5. REVIEW FISCAL YEAR 2018 BUDGET RECOMMENDATIONS Finance Director Talkington presented the FY2018 budget. She stated that the budget is balance and is safety and development focused. She added that the budget meets the City’s polices where funding allows and added that the general fund reserve is 26.2% which is above the funding policy of 25%. She pointed out the history of the fund balance and explained the balances of each fund. She focused on the top ten The Finance Advisory Committee has not approved these minutes.  Finance Advisory Committee Meeting October 30, 2017 Page 2 of 5 revenues and the top five expenditures. Finance Director Talkington explained that the majority of the spending is for public safety. She discussed the key priorities of the Police Department staffing plan. Finance Director Talkington explained that the Police Department has done a deep dive into their staffing levels and because short staffing is causing more overtime and then causes stress resulting in sick time or on-duty injuries. The staffing plan is a three year plan to add seven officers to be more proactive instead of reactive. The funding for these hires would not go into effect until 2019 due to the timing and current vacancies. With the increase of the staffing, more administration is needed which includes bringing the part-time Human Resources Generalist to full-time. She added that the Police Department would be converting to digital radios for better communication between other governmental agencies. She explained the re-allocation of the funds from the termination of the Peace Road Interchange. There was a discussion between the Committee and staff regarding the termination of the Peace Road Interchange. Finance Director Talkington continued with her presentation on the Streets and Fleet condition. She added that there is an immediate need for vehicle replacement throughout the City. Committee Member Teresinski asked about the fleet purchases. Finance Director Talkington responded that the sales tax increase would be split between the funds. Finance Director Talkington explained the improvements to the downtown area. She added that this would increase the tax base of those properties. Finance Director Talkington continued by explaining the future development projects in FY2018 resulting in the budget increases to support the development efforts. A discussion ensued with the Committee and staff relative to the funds used from Community Development Block Grant (CDBG) for administrative costs. Chair Peddle asked Assistant City Manager Hoppenstedt to explain what Camiros is. Assistant City Manager Hoppenstedt explained that Camiros is a planning and development consulting service that is focused on the Annie Glidden Revitalization Plan. Fire Chief Hicks arrived at the meeting at 5:35 p.m. Finance Director Talkington continued her presentation of the FY2018 budget. She added that the FY2018 taxable base is increasing. The County did provide an estimate of 5.2% or $26.3 million in increase taxable property and $11 million was from new development that will help fund other core services throughout the City. Finance Director Talkington continued explaining the funding to support key priorities. Fire Chief Hicks and Deputy Fire Chief McMaster left the meeting at 5:40 p.m. Finance Advisory Committee Meeting October 30, 2017 Page 3 of 5 Fire Chief Hicks and Deputy Fire Chief McMaster returned to the meeting at 5:41 p.m. Chair Peddle stated that the City is not funding pensions by the financial policies. He added that the property tax levy is supposed to fund Police, Fire, IMRF and Social Security. He stated that the City would need an additional $1 - $1.2 million to fully fund the pensions. Police Chief Lowery arrived at the meeting at 5:42 p.m. Committee member Teresinski commented on the built-ins and would like to see the key revenue streams and an explanation of the previous projections provided. Chair Peddle stated that he is troubled based on the presentation of the funding to support key priorities. He added that the amount of $2.6 million for streets and fleet is not enough to bring the streets up to where we need to be. He mentioned that with the new revenue source, he would like to be shown the longer term package of what is needed. Committee Member Neeley asked to see the charts that were emailed to the Committee. Committee Member Partch questioned why three officers are costing over $300,000 and asked what is being done to change the pension assignment. Finance Director Talkington explained that it depends on the tiers on which they are hired and that there are two tiers. A discussion ensued between the Committee and staff about the amount devoted to the new hiring of the Police Officers in FY2018. City Manager Gaura arrived at the meeting at 5:50 p.m. Economic Development Director Charlton arrived at the meeting at 5:55 p.m. Human Resource Director Randall left the meeting at 6:02 p.m. Committee Member Neeley mentioned that she was grateful with the assumptions that were provided. Committee Member Teresinski questioned the amount of on page 236 in the FY2018 budget showing the assumptions. Human Resources Director Randall returned to the meeting at 6:07 p.m. A discussion ensued between the Committee and staff on the assumptions of the FY2018. The Finance Advisory Committee has not approved these minutes.  Finance Advisory Committee Meeting October 30, 2017 Page 4 of 5 Chair Peddle stated that difficult decisions need to be made and the Committee needs to recommend something for the Streets and Fleet. He added that the Committee needs to go through the budget and decide what the Five-Year Plan will look like. Police Chief Lowery left the meeting at 6:25 p.m. Police Chief Lowery returned to the meeting at 6:26 p.m. Chair Peddle mentioned that the Property Taxes are explainable. He added that the total Sales and Use Tax, the majority of the increase is the 1%. He asked if the Committee needs to look at the assumptions of the increase of the revenues. A discussion ensued between the Committee and staff on the revenue calculations. Assistant City Manager Hoppenstedt left the meeting at 6:44 p.m. Committee Member Steve Parker left the meeting at 6:44 p.m. Committee Member Steve Parker returned to the meeting at 6:46 p.m. A discussion ensued between the Committee and staff with regard to census numbers and Northern Illinois University enrollment related to the per capita calculation. Assistant City Manager Hoppenstedt returned to the meeting at 6:53 p.m. The discussion continued between the Committee and staff regarding the revenue calculations. Chair Peddle asked for clarification under General Fund expenditures relative to wages in the budget. The discussion continued between the Committee and staff regarding the wage calculations. Committee Member Parker expressed his concern on the timing of receiving the budget and having the opportunity to provide recommendations by the next meeting. Chair Peddle explained that the transmittal letter would provide guidance on how to read the document. He explained that the main area to focus on would be the general fund. Committee Member Neeley stated that what is very helpful is the section on page 237. She added that it is a great tool. Finance Advisory Committee Meeting October 30, 2017 Page 5 of 5 Chair Peddle added that the budget document contains all pertinent information relative to the financial information for the City. 6. OTHER ITEMS 1. Home Rule Sales Tax 0.75% increase would raise approximately $2.8 million annually. Chair Peddle stated that the information provided within the budget clarifies the request within the budget. Chair Peddle called for public participation due to late arrivals. Bessie Chronopoulos commented that she thought there was going to be more discussion on Tax Increment Financing (TIF) Funds. She also stated that the Committee should be meeting more often and sooner. She added that frequent meetings were brought up by Council and Committee members. Chair Peddle responded that the meetings did start in August and will be meeting earlier next year. He added that the Five-Year Financial Plan would be enhanced next year and use it earlier as the budget is being developed. He mentioned that there would be more discussion on the TIF once the City has begun the appropriate steps in the process that is required. He stated that it would not be until April/May 2018 until the TIF is brought to a review board. Committee Member Conlin asked about how much detail the Committee should go into regarding the FY2018. Chair Peddle asked that if there are items that a member has questions on that they should bring it to the Committee. He explained the appropriate way to communicate to the City and Committee by Opens Meeting Act regulations. 7. CONFIRM NEXT MEETING DATE AND TIME The next Finance Advisory Committee meeting will be on Thursday, November 2, 2017, at 5:00 p.m. to review the Fiscal Year 2018 Budget and Recommendations. 8. ADJOURNMENT Chair Peddle requested a motion to adjourn, moved by Committee Member Parker and seconded by Committee Member Teresinski. The motion passed by a unanimous vote. Meeting adjourned at 7:09 p.m. _______________________________________ Carri Parker, Account Technician III The Finance Advisory Committee has not approved these minutes.