Finance Advisory Committee

MINUTES CITY OF DEKALB SPECIAL JOINT MEETING OF THE CITY COUNCIL AND FINANCE ADVISORY COMMITTEE MEETING NOVEMBER 16, 2020 The City Council of DeKalb, Illinois, held a Special Joint Meeting with its Finance Advisory Committee on November 16, 2020, in the Yusunas Room of DeKalb Public Library, 309 Oak Street, DeKalb, Illinois. A. CALL TO ORDER AND ROLL CALL Mayor Smith called the meeting to order at 6 p.m. City Clerk Lynn Fazekas was attending remotely but had audio difficulties and could not take roll call. Executive Assistant Ruth Scott called the roll of City Council, and the following members were present: Alderman Carolyn Morris, Alderman Bill Finucane, Alderman Tracy Smith, Alderman Greg Perkins, Alderman Scott McAdams, Alderman Mike Verbic, Alderman Tony Faivre, and Mayor Jerry Smith. Executive Assistant Ruth Scott called the roll of the Finance Advisory Committee (FAC), and the following FAC members were present: Chair Lynn Neeley, Bob Higgerson, Lance McGill, and Tom Teresinski. FAC members Ron Partch, Sheelah Prahlad, and Dytania Washington were absent. Others present included: City Manager Bill Nicklas, Assistant City Manager Josh Boldt, and Utilities Director Bryan Faivre. Audio capabilities were restored to Clerk Fazekas following the opening roll call. B. PUBLIC PARTICIPATION There was none. C. CONSIDERATION OF THE PROPOSED FY2021 BUDGET City Manager Nicklas presented highlights as presented in the Transmittal Letter, and then by fund. Joint Council-FAC Special Meeting Minutes November 16, 2020 Page 2 of 5 City Manager Nicklas directed attention to fund balances being placed more prominently in this budget, and to the enterprise and fiduciary funds now showing assets and liabilities as well as operating balances. The City Manager’s comments about the General Fund budget included: • The property tax levy will be totally dedicated to police and fire pensions, yet will not cover $1.4 million of those costs, nor nearly $500,000 in general obligation debt for the DeKalb Public Library. Other general revenues will need to be found for these purposes. • The City did receive the entire federal CARES Act allocation of $1.8 million in COVID-19 pandemic-related reimbursements, which was deposited into the General Fund. • The City has had a significant amount of turnover of personnel and has not been able to fill all the positions authorized this year. FAC member Higgerson asked about the latest meeting with Moody’s. City Manager Nicklas reported the factors weighing heavily in determining DeKalb’s latest bond rating include COVID-19 pandemic impacts, the City’s heavy reliance on sales and use taxes for revenues, and the ongoing statewide pension crisis. He said Moody’s downgraded the bond rating from A1 to A2 but lifted the negative outlook. Despite the lowered bond rating, DeKalb obtained favorable pricing on the refunding bond, about 15 to 20 basis points better than expected, he said. Discussion then turned to the Police Department’s new Community Support Services Division. The City Manager said it is budgeted at $2.2 million, an increase of $1.5 million over this year. City Manager Nicklas brought up staffing issues in public safety positions, including the following points: • Council decided in 2017 that the optimal number of sworn police officers is 65 but the City currently employs 61. • Fire Department staffing levels, which are now a focus of current labor negotiations, lie below National Fire Protection Association (NFPA) mandatory minimums. The shortage plus increased demand for services have resulted in doubled overtime costs that could reach $1 million by the end of this year.  Joint Council-FAC Special Meeting Minutes November 16, 2020 Page 3 of 5 • Public Works workforce has been substantially reduced for fiscal reasons. On top of the reductions, retirements are expected. Alderman Verbic commented that the high amount of overtime justifies new hires in the Fire Department. Mayor Smith expressed concern about the impacts of the staff reductions in Public Works. He also said he hopes the fleet leasing program will result in lowered maintenance costs in the next 2-3 years in that department. City Manager Nicklas explained a change in use of General Fund Support to account for general operating funds that are transferred to police and fire pension funds and the Library Fund. Pension amounts shown in General Fund Support are in addition to property taxes levied for the purpose, he said. FAC member Teresinski pointed out that accounting for the transfers using General Fund Support instead of the departmental budgets themselves means they no longer are shown in personnel expense totals of departmental budgets and it complicates year-over- year comparisons of the departmental budgets. Likewise, Alderman Perkins asked for and received confirmation that to get the total amounts contributed by the City as employer to the police and fire pensions, the line-item expense in each departmental budget must be added to a transfer line item in General Fund Support. Additional budget items highlighted or clarified by the City Manager included: • The city hopes to initiate an update of its comprehensive plan in the coming year. • State motor fuel taxes (MFT) will be increasingly devoted to bridge work and are also committed to Twombly Road improvements and completion of Afton Road. • Two new Special Service Areas are being added this year. • Regarding tax increment financing (TIF), City has agreed to pick up some costs incurred by the school district for its role in drafting the latest intergovernmental agreement. • Annie Glidden North neighborhood is a primary focus of Community Development Block Grant (CDBG) funding, including demolition, lighting, and Wi-Fi projects. • DeKalb is benefitting from Illinois Department of Transportation pass-through funds and Rebuild Illinois bonds added to local fuel taxes to fund improvements to the Gurler-Route 23 intersection and 13th, 14th, Taylor, and First streets. Joint Council-FAC Special Meeting Minutes November 16, 2020 Page 4 of 5 • The Water Capital Fund section of the budget includes charts detailing the portions of water rate hikes that were pledged to be transferred to Water Capital Fund for water infrastructure, and how they have been/are being spent. • The airport is seeing more jets and large planes, including freighters. Its budget includes federal funding for repaving runways and taxiways, pilot services upgrades for those who must wait for offloading, and marketing of those services. • Health insurance costs have risen by more than 10%. FAC member Teresinski joined Council and other FAC members in complimenting staff for their work on the budget. Mr. Teresinski added that the City has also been conscientious in maintaining a General Fund reserve of 25% or more of the GF balance, now projected to be $11 million and 31% of the balance. He said additionally he would like the audience to understand that $1.8 million of the reserve are the proceeds from the debt refinancing that was done, meaning that portion of the reserve effectively is debt. Chair Neeley asked the FAC for a motion on an affirmative recommendation for Council approval of the budget. MOTION FAC member Higgerson moved to make the recommendation. FAC member Teresinski seconded. VOTE Motion carried 4-0-3 on roll call vote. Aye: Higgerson, McGill, Teresinski, Chair Neeley. Nay: none. Absent: Partch, Prahlad, Washington. D. ADJOURNMENT Upon ascertaining no one in either body had additional comments to make, Mayor Smith suggested adjournment. Chair Neeley said she would entertain a motion to adjourn. MOTION FAC member McGill moved to close the FAC portion of the meeting. FAC member Higgerson seconded. VOTE Motion carried 4-0-3 on roll call vote. Aye: McGill, Teresinski, Higgerson, Chair Neeley. Nay: none. Absent: Partch, Prahlad, Washington.  Joint Council-FAC Special Meeting Minutes November 16, 2020 Page 5 of 5 At 8:03 p.m., Mayor Smith declared the FAC had indicated it was adjourned for the evening. He called for a motion to adjourn the Council meeting. MOTION Alderman Finucane moved to adjourn. Alderman Faivre seconded. VOTE Motion carried 8-0 on roll call vote. Aye: Finucane, Smith, Perkins, McAdams, Verbic, Faivre, Morris, Mayor Smith. Nay: none. Mayor Smith declared Council adjourned at 8:04 p.m. ________________________________ LYNN A. FAZEKAS, City Clerk Minutes approved by City Council on December 14, 2020. Minutes approved by the Finance Advisory Committee on October 19, 2022. Click here to view the agenda packet for the November 16, 2020, Joint City Council and Finance Advisory Committee meeting. Click here to view the video recording of the November 16, 2020, Joint City Council and Finance Advisory Committee meeting.