City Council

MINUTES WOODSTOCK CITY COUNCIL SPECIAL BUDGET/CIP WORKSHOP City Council Chambers February 25, 2025 A Special Budget Workshop meeting of the Woodstock City Council was called to order at 5:30 p.m. by Mayor Michael Turner on Tuesday, February 25, 2025, in the Council Chambers at Woodstock City Hall. A roll call was taken. COUNCIL MEMBERS PRESENT: Darrin Flynn, Melissa McMahon, Bob Seegers, Gordie Tebo, Natalie Ziemba and Mayor Michael Turner. COUNCIL MEMBERS ABSENT: Tom Nierman. STAFF PRESENT: City Manager Roscoe Stelford, Deputy City Manager/Executive Director of Strategy & Planning Paul Christensen, Executive Director of Operations Christina Betz, Parks & Recreation Director Mark Pentecost, Police Chief John Lieb, Deputy Chief George Kopulos, Public Works Director Brent Aymond, City Engineer Chris Tiedt, Opera House Managing Director Daniel Campbell, Human Resources Director Deb Schober, Information Technology Director Dan McElmeel, Economic Development Director Jessica Erickson, Building and Planning Director Joe Napolitano, Business Development Manager Laura Cullotta and Deputy Clerk Bernie Walker. OTHERS PRESENT: President Brad Ball, Woodstock Area Chamber of Commerce & Industry. Mayor Turner noted the presence of a quorum. PUBLIC COMMENTS: There were no comments forthcoming from the Public. DISCUSSION ITEMS: a. FY25/26 Budget Development Mayor Turner acknowledged that City Manager Stelford and staff have been working together for months to develop a budget for the upcoming fiscal year, which begins May 1, 2025. They will provide updates to Council, seeking their feedback and discussion as they move forward with the budget development process. A follow up budget meeting is planned for April. City Manager Stelford thanked Mayor Turner, adding that he appreciates the opportunity to walk Council through the budget. He stated that the City Administration will deliver the budget at the March 18th Council meeting and a public hearing will be held at the April 1st Council meeting. The second Budget Workshop will be held on April 8th at which time staff will present their budget proposals for the upcoming year.  Woodstock City Council Budget Meeting 02/25/2025 Page 2 City Manager Stelford stated that there is a $700,000 surplus projected for FY24/25, which is proposed to be transferred to the General Corporate – CIP Fund, but cautioned there could still be significant swings in this projection. Councilman Seegers asked about other options other than transferring the surplus to the General – CIP Fund, as he would like to see funds designated for the continuation of road repairs that won’t get done with the current Enhanced Streets Improvement Program. City Manager Stelford confirmed the Council can designate these funds; however, Executive Director Christensen cautioned they may need to use some of the funds, which will be addressed later in the presentation. City Manager Stelford shared preliminary budget projections. He stated for FY25/26, the General Fund currently has a $380,000 deficit and a large part of the deficit is caused by significant reductions to two state shared revenues, personal property replacement tax and use tax. According to the Illinois Municipal League (IML), the state has been overpaying municipalities over time so they revised what they are paying local governments in Illinois, and they are not only reducing the City’s payment to the appropriate amount that should be distributed, but they are also reclaiming the money that was overpaid with further reductions. City Manager Stelford hopes to have more information in the next couple of weeks. Councilman Tebo asked how the taxes are generated to which City Manager Stelford stated the use tax is paid when people purchase items out of state like internet sales; personal property replacement tax is a corporate income tax paid into the state that gets allocated to the state and municipalities. City Manager Stelford shared that Staff has been directed to revisit their budgets to hopefully reduce the deficit and other options are being discussed to further reduce the deficit. Councilman Flynn questioned what the Environmental Management Fund is being used for and if it can be used for specific items like the maintenance done on the soccer fields. City Manager Stelford stated it was initially established for the Davis Road landfill, but was expanded on for other environmental causes, and he confirmed the money can be used for these soccer fields. Councilman Flynn would also like to see signage, specifically to bring awareness of the utilization of these funds. Councilman Tebo stated that people have the idea that the “bag fee” is going in the General Fund, which Executive Director Christensen confirmed has never happened. Mayor Turner stated the bag tax wasn’t created for revenue, but rather for environmental purposes. Executive Director Christensen noted that all capital improvements are currently in the same place rather than spread out in different funds. He also stated that an option to eliminate the deficit would be to transfer $100,000 from the Environmental Management Fund along with additional surplus funds. City Manager Stelford stated, with Council’s support, the proposed spending for FY25/26 presented in the FY25/26 – FY34/35 CIP document has been incorporated within the annual operating budget. City Manager Stelford provided an overview on Revenue Highlights – the General Fund includes the impact from IML projections, sales tax, building permit revenues and the cannabis tax at 3%. Councilman Tebo questioned if there would come a time where we wouldn’t see an Opera House subsidy to which Director Campbell doesn’t believe so, unless they entirely change the business model of the theater and eliminate the resident companies. Councilman Seegers questioned if the subsidy includes the line item on the tax bill to which City Manager Stelford confirmed it doesn’t. Executive Director Christensen added it was $300,000 back in FY18/19 and remains the same  Woodstock City Council Budget Meeting 02/25/2025 Page 3 today. Councilman Seegers clarified the total subsidy as being $581,400, which Executive Director Christensen confirmed, adding that CIP projects aren’t included either. City Manager Stelford reviewed the planned fee increases for the Playground Program. Mayor Turner questioned how much additional revenue the changes would bring if enrollment remained the same, to which City Manager Stelford stated almost double. Councilwoman McMahon opined the appeal of the program was the cost at $130 for six weeks, which is amazing, compared to the proposed $125 for four weeks, which may result in the number of program participants going down. Director Pentecost stated that even with the proposed increases, they will still lose money on the program. City Manager Stelford also reviewed the planned fee increases for the Aquatic Center. Discussion ensued regarding pricing for residents and non-residents (outside City limits) and Council recommended increasing the daily resident rate to $12 and daily non-resident daily rate to $15, and decreasing resident passes to $70. City Manager Stelford also shared they are merging the aquatic center and recreation center into a single fund which will be a 4% increase when compared to the FY24/25 budgets for the separate funds. He opined that overall, they are doing well managing expenses based on where inflation is at. City Manager Stelford reviewed the wage increases for Fraternal Order of Police (FOP) and Local 150, which Council previously approved, and briefly explained the Steps and COLA increases. He also reviewed supporting data for non-represented merit increases for FY25/26 and asked Council their thoughts on keeping it at the current 5% increase, or reducing it to a 4% increase, adding that the Collective Bargaining Units wage increases are higher than 5% when you add in their Step increases. Human Resources Director Schober further explained how a “3” rating would earn a represented employee a higher raise than a non-represented employee, opining the non-represented employee is truly on a performance-based pay system. Mayor Tuner appreciates the balancing of maximizing the potential for employees along with being stewards of the people’s money at the same time. City Manager Stelford presented the staffing positions that were requested for FY25/26, noting that with a deficit, any new position would increase the current deficit. Mayor Turner has concerns about not honoring some of the position requests and would like to see at least 3-4 new positions established, specifically Police, IT and Public Works. City Manager Stelford proposed revisiting with Council after they see how the numbers are maturing in the new fiscal year. Discussion ensued about the cannabis tax and the possibility of using the tax to fund a position, facilities staff, cross over training, protecting our huge investments, and being proactive rather than reactive. Mayor Turner requested stats on officer ratio to population and calls per officer over a year’s time, compared to Crystal Lake and McHenry. City Manager Stelford stated they are looking at a 5% Water and Sewer (W&S) rate increase which will result in the necessary funding needed to meet the ever increasing capital requirements funded by the W&S CIP. The City Administration is projecting a surplus in the W&S Operating Fund and Executive Director Christensen noted they will increase the transfer amount to the W&S Fund. Executive Director Christensen noted that not enough underground water and sanitary sewer pipes are on the funded list, adding they are just as bad as the roads and they are more expensive to repair.  Woodstock City Council Budget Meeting 02/25/2025 Page 4 This concluded the operating budget portion of the meeting and City Manager Stelford reiterated they will deliver a proposed budget on March 18th and meet with Council after April 1st to get their input and make any necessary modifications. b. FY25/26-FY34/35 Capital Improvement Program City Manager Stelford stated the Capital Improvement Program (CIP) revenues for FY24/25 were $22.9 million with projected expenditures being $35.2 million. He provided an overview of the major projects completed and discussion ensued about the projects. Councilwoman McMahon suggested listing out the CIP projects and what the project entails for the public. It was also suggested to spell out “Capital Improvement Program” rather than using “CIP” as most people don’t know this initialism. Discussion ensued about reaching the public on an annual basis so they are aware of what projects have been completed, what future projects are being worked on, and what each project entails. It was also suggested to simplify conversations to help people understand, doing another State of the City for the community or a taped version where the CIP is covered, and placing a “Thank You” ad in the paper to the residents, elaborating on the City’s successes. City Manager Stelford reviewed the proposed FY25/26 CIP revenues, of which $36.3 million is projected, with $40.5 million projected in spending. Major projects were highlighted and discussion ensued about TIF #2 and the need to get projects completed. Councilman Tebo asked how much TIF #2 will get each year from the hotel, which City Manager Stelford estimated to be around $50,000, but Executive Director Christensen believes it may be closer to $30,000. Councilwoman McMahon inquired about the funding for streetscape improvements on Benton Street and City Manager Stelford stated it is for design work and improvements on Benton Street; however, they are waiting on a cost proposal from ComEd to take the wires down over Benton Street, along with potential funding solutions, which could include a distribution rate adjustment on future electric bills and the need to identify the impact on residents and businesses, before bringing this project before Council. There also was a discussion about possibly utilizing a Special Service Area. City Manager Stelford highlighted the Water & Sewer Fund, adding he has concerns about a future phosphorus decision, and lowering the discharge levels, resulting in great costs. Executive Director Christensen shared that the lead service lines changed their grant criteria, so we may be eligible and Executive Director Betz stated we need to submit a grant application by March 31st. Executive Director Christensen opined we may be able to get a 30-year loan at 0% interest. Executive Director Betz noted this loan would be capped at $3 million. City Manager Stelford shared that funding is included for Route 47 and that the State is offering the City a seven-year, interest free, payment plan. He also mentioned that the City could still benefit from the Illinois Transportation Enhancement Program (ITEP) grant for landscape beautifying, but not utilities. Mayor Turner shared that 90% of their time in Springfield was focused on Route 47 and asking for assistance for utilities, requesting $10 million in assistance. Legislators were asked to write letters to IDOT on behalf of Woodstock and lobbyist Joyce  Woodstock City Council Budget Meeting 02/25/2025 Page 5 Nardulli is trying to set up a short visit with the governor, if possible. There will need to be a change in the CIP that was submitted due to the first IDOT payment not being due now until May 2026, so the numbers will need to move back a fiscal year. Executive Director Christensen gave kudos to Director Tiedt for his negotiating efforts, which Council also recognized. Discussion ensued about Congressman Foster and the $3 million that is being held up by the Federal budget. City Manger Stelford reviewed debt issuances and he also shared a chart that shows the available debt margin, which has been impacted by the Enhanced Streets Improvement Program, but also benefitting from the growth in EAV. Mayor Turner shared he wants to maintain a strong bond rating. Unfunded Projects were also discussed and Mayor Turner asked that the downtown event pavilion be removed. City Manager Stelford noted that Stage Left was moved from the unfunded list to the funded list due to receiving a $1.4 million RISE grant. City Manager Stelford expressed concerns regarding the Water & Sewer EPA mandates, not only due to cost, but because phosphorus generated by agriculture is likely the main cause of algae bloom and other concerns environmentalists are raising. He feels the EPA would be better served by trying to find a solution to capture it and prevent it from getting into the streams, rather than expanding investment in wastewater treatment plants. This concluded the CIP portion of the meeting and City Manager Stelford asked if there were any additional questions. Councilman Tebo asked about the work that was going to be done on the ponds at Emricson to which Director Aymond stated rather than dredging the ponds at a cost of $1.0 million, they are going to bring in a company that will add a product which should reduce the amount of muck. It will cost around $20,000 annually and should provide a 2’ muck reduction annually over the next 5-6 years, so the plan is to try it for a couple of years and see how it works. Councilman Flynn asked if there is a plan for the remaining streets, once the five-year plan is complete to which Executive Director Betz stated they are currently working with the City’s Engineering Firm, Trotter and Associates, who scanned the entire City, and they will map out the Pavement Condition Index (PCI) ratings for the current system and help the City put together another five-year plan. Executive Director Betz expects to have a plan by mid to late summer. Councilwoman McMahon asked what the Motor Fuel Tax (MFT) is used for and Executive Director Christensen stated we currently use MFT funds for street lighting and salt, but if we want to use it to pave roads, it must be engineered to a higher level, because it’s a state of Illinois requirement and we lose approximately 20% - 30% of the value. Councilwoman McMahon asked what the plan is to account for electric vehicles that require the benefits of salt and paving, but aren’t paying into the motor fuel tax. Executive Director Christensen believes the state is trying to tackle this issue and fast chargers may end up getting taxed. Councilman Tebo asked if the per capita tax that the City gets for motor fuel, takes into account the difference they get from electric cars for registration fees, to which Executive Director Christensen stated he would need to look into this, but City Manager Stelford and Executive Director Christensen believe the state receives all the additional funds from the electric car license plates, and the City doesn’t receive anything.  Woodstock City Council Budget Meeting 02/25/2025 Page 6 Councilman Seegers brought up the $700,000 surplus and Executive Director Christensen stated if you take that out, they would have to go back to the General Corporate – CIP Fund and delay some of the projects, so in his mind, the City needs this funding to move over to the General Corporate – CIP. Human Resources Director Deb Schober questioned why they can’t use the $700,000 surplus to fund new positions and pay increases. Mayor Turner opined they do a good job of rolling surpluses over every year and he challenged City Manager Stelford and his team to find a way to fund the mission critical positions. Councilman Seegers stated a surplus can be used once; an operating budget expense lives forever. Executive Director Christensen stated the City should avoid budget deficits, adding that they have some projects earmarked, and if the surplus comes through, they will get funded, and if not, they won’t do those capital projects this year. Executive Director Christensen also acknowledged the importance of training. Executive Director Betz suggested that the departments look at an exercise on ideas for generating more revenue. Mayor Turner supports the idea, adding that it should be ongoing and that it is an expectation that they are being creative in ways to operate better. He also recommended spending money that will end up saving us money. ADJOURN Motion by Flynn, second by Tebo, to adjourn this special City Council Budget Workshop to the next regular City Council meeting at 7:00 p.m. on Tuesday, March 4, 2025. Ayes: D. Flynn, M. McMahon, B. Seegers, G. Tebo, N. Ziemba and Mayor M. Turner. Nays: None. Abstentions: None. Absentees: T. Nierman. Motion carried. The meeting was adjourned at 7:39 p.m. Respectfully submitted, Bernie Walker Deputy Clerk