HomeMy WebLinkAboutMINUTES-2007-02-26-20072_gZ
�� pp Ev�q,�s
0
U 'Z,
CITY COUNCIL * February 26, 2007
n�kca
ROLL CALL — PRESENT:
Alderman Bernstein Alderman Rainey
Alderman Holmes Alderman Hansen
Alderman Moran Alderman Wollin
Alderman Tisdahl Alderman Jean -Baptiste
A Quorum was present. Alderman Wynne
ABSENT: Mayor Lorraine H. Morton
PRESIDING: Mayor Pro Tem Wynne
City Clerk Mary Moms announced that, in the absence of Mayor Morton, nominations for the election of a Mayor Pro
Tem are in order and, in accordance with Council Rule 14.7, Alderman Melissa Wynne is next on the list of aldermen, by
seniority, who have not served as Mayor Pro Tem.
Alderman Rainey moved that nominations be closed and that Alderman Wynne be elected Mayor Pro Tem Seconded by
Alderman Bernstein. Motion carried unanimously.
The OFFICIAL REGULAR MEETING of the City Council was called to order by Mayor Pro Tem Wynne on Monday,
February 26, 2007, at 8:35 p.m. in the Aldermanic Library.
At 8:36 p.m., Alderman Bernstein moved that Council convene into Executive Session for the purpose of discussing
matters related to personnel and closed session minutes pursuant to 5 Illinois Compiled Statutes 120/2 (c) (1) and (21).
The motion was seconded.
2. All meetings of public bodies shall be public meetings except for the following:
(1) The appointment, employment, compensation, discipline, performance, or dismissal of specific employees
of the public body, including hearing testimony on a complaint lodged against an employee to determine its validity.
(2 1) Discussion of minutes of meetings lawfully closed under this Act, whether for purposes of approval by the body
of the minutes or semi-annual review of the minutes as mandated by Section2.06.
Roll call. Voting aye —Bernstein, Holmes Moran, Tisdahl, Rainey, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay —
none. Motion carried (9-0).
At 9:02 p.m. Alderman Bernstein moved that Council reconvene into Open Session. The motion was seconded.
Roll call. Voting aye — Bernstein, Holmes Moran, Tisdahl, Rainey, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay —
none. Motion carried (9-0).
Mayor Pro Tem Wynne reconvened the Council at 9:16 p.m.; expressed deepest sympathy on behalf of the City Council
to Mayor Morton and her family on the passing of her older sister Mamie Seruby over the weekend.
ANNOUNCEMENTS:
City Manager Julia Carroll announced the funeral service for Mamie Seruby would be at 8:00 p.m. the next evening with
visitation from 7:30-8:00 p.m., at Second Baptist Church.
Ms. Carroll invited the community to Part 2 of the citywide discussion, "Partnering Toward a Safer Evanston," Saturday,
March 3, from 9:00 a.m. to 12:30 p.m. in the Parasol Room of the Civic Center.
Mayor Pro Tem Wynne proclaimed March 4-10, as
"National Severe Weather Awareness Week" in Evanston
q
2 February 26, 2007
COMMUNICATIONS: City Clerk Mary P. Morris announced that the Consolidated Election would be held on
Tuesday, April 17 and that early voting would start Monday, March 26 through April 12 at the Civic Center.
CITIZEN COMMENT:
Timothv Schoolmaster. 1454 Elmwood Ave., resident, 30-year City employee, 25-year Trustee of the Police Pension
Fund spoke about adoption of the tax levy which includes a separate levy for the pension fund. He applauded the long
hours, discussions, debate and the hard and painful choices Council had to make to arrive at this year's budget. Some of
the results of this budget are just beginnings as they continue the process of reordering the City's finances to hopefully
live within reduced budgetary means. He applauded City Manager Carroll's acknowledgement that pension funding is a
serious problem that must be addressed without further delay. Mayor Morton was quoted in the local press about her
State of the City address that if not for the $40 million the City is required to pay into the Fire and Police Pension funds,
the City would be in tip top shape. In budget policy meetings some 20 years ago when she was Alderman Morton,
Alderman Jack Korshak made incisive arguments cautioning Council about the perils to City finances if this issue was
ignored as it was. The latest figures are $67 million for police pensions and mid -forty million for the fire pensions. By not
properly funding, previous Councils have turned the funding equation upside down so that now the bulk of payments are
borne by taxpayers and not by investment income as was the plan design. Of that $110 million, about one-third is service
costs and two-thirds (about $72.5 million) are interest payments on the money that had not been put in over the years.
In budget memo 21, requested by Alderman Rainey, the per capita figure for police services was pegged at $249. That
could mislead, unless the additional $902 per capita to amortize the pension costs of that $67 million is included.
Pensions are part of police services deferred salary. Today's taxpayers should pay for today's services, not those rendered
years ago. It is poor public policy and manifestly unfair to hand the bill for current police services to our children and
their children. Mayor Morton said unless the City eliminates this problem and returns to full funding, the City is subject
to loss of its Aaa bond rating. That is true. Former Alderman Jon Nelson made that same observation some 20 years ago
and was surprised then that the City had not experienced bond rating trouble. Would it not be nice, even if not true, in
Mayoral addresses and City Manager budget memos that it be mentioned that the City pursues the pension fund business
because it is the law, it is deferred salary owed to public safety employees who put their lives on the line daily and
because it is the right thing to do, rather than "we might lose our Aaa bond rating." He asked them to think of the message
that sends to employees, which seems to fly in the face of the customer service ethic the manager tries to promote.
He stated the City has continued to paint itself into a comer on several counts related to the tax levy; cautioned them as
trustees and fiduciaries of the obligation to take corrective action if friendly persuasion fails. They have had a number of
fruitful discussions with Finance Director Matt Grady, who arrived in October 2006 and have been impressed with his
candor, grasp of the situation and ultimately with his ability to come up with some kind of solution. They are inclined to
give him and the manager 90 days to come up with a workable solution.
The Illinois Pension Code requires an actuarially determined figure for the tax levy they adopt that evening. The code
further defines the qualifications necessary to do such a study. They learned recently that the City had not employed such
a person for at least the past 14 years. If true, this means that the actuarial study, that is required and directed to be done
by the Appellate Court, was not done. They objected to this levy as being insufficient and not complying with either the
letter or spirit of the Illinois Pension code. One required actuarial report is on the table, the Tepfer Consultants Report,
which the Police Pension Fund paid for and gave to Mr. Grady last October30. Aldermen who wish a copy can contact
him. That report requires an additional $1 million minimally to comply with the pension code this year. The Pension
Board will take the position, if no workable plan is realized by June 1, to not excuse the City from making the minimally
required tax levy now. A budget is just that, an estimate of revenues and expenses. The levy they are about to pass is $1
million short and will not be applied until June 1, so they have time to make corrections.
Under the Freedom of Information Act, he got the report that the City relied on for this pension levy and it astounded
industry professionals and officials from the state regulator. The report contained numerous unsupportable, questionable
and even fraudulent assumptions. The pension fund will hold off on a public hearing on this matter, which he thought
they would appreciate in time.
3 (b
3 February 26, 2007
They all have a lot of work to do on this in the next few months. Some issues are defined clearly and others may take
some educating. Accurate information is essential to make good decisions. In the city manager's message on page 13 of
the proposed budget, Ms. Carroll stated: "Over the years we have funded our public safety pensions in accordance with
actuarial requirements to meet current obligations and reduce our substantial unfunded liability." Moody's Bond Rating
did not zing the City for the unfunded requirements, but for letting them rise. Ms. Carroll continued: "The issues have
recently been exacerbated by increased benefits approved by the State and poor performance of the investment portfolio
which we do not control." Police officers have seen no benefit increases since 2000. A historically expected rate of return
for what the pension fund is allowed to invest in is 6.25%. Last year the Police Fund did just over 9% totally with the
equity portion at 15.6%, which is in the top quartile of all stock picker performance. The Pension Board is ready to meet
with Council; give information and make presentations to aldermen and staff that might help with future decision -making.
Alderman Bernstein asked for the name of the document Mr. Schoolmaster referenced. It is the evaluation the City
commissioned to support this tax levy. He would be happy to discuss the issues privately or in Executive Session.
Junad Rizki. 2757 Ridge Ave., has attended many meetings over the years where residents wanted "something" and
claimed that it created or maintained diversity in Evanston. Affordable housing supporters used the concept of lost
diversity. Under State of Illinois standards, 26% of Evanston's housing stock is affordable. Recently an alderman had a
guest essay in the local press stating that Evanston was moving in the direction of Winnetka with the loss of affordable
housing. He stated that it was important to look at things realistically as they deal with pensions and other concerns. From
census data, he noted Winnetka has a population of 12,500 with 177 people in Winnetka in poverty. Evanston's
population is 74, 000 and 7,500 people are in poverty, 11 % of the population. In Winnetka it is 1.4%. In racial diversity,
Winnetka has 31 black individuals. Evanston has 16,700 black residents. Evanston has 4,500 Hispanic residents and
Winnetka has 156. Evanston is nowhere near the 97% white population as is Winnetka. On income diversity, Evanston
has great diversity in income in the 29,000 households: 6,000 households have an income under $25,000, 11,000
households have incomes between $25,000-75,000, which is the group affordable housing advocates say are leaving
town. Evanston has more than 2,000 households that make more than $200,000. Winnetka only has 1,800 households
with more than $200,000. He did not think that Evanston was losing diversity. He saw that they spent a lot of time on
issues such as affordable housing when the City had $1.8 million in housing funds that it did not use, while the prior
speaker had issues with pension funding. It is time to deal with affordable taxes, not affordable housing. Maybe in the
next budget cycle something will be done with this whole affordable housing program; possibly eliminate it and use
money from housing to pay for infrastructure. He favored only one affordable housing program and the City should not
run it. They need a program to permit police officers to live here. The federal government has done this and given police
officers housing at a low rate in which they build up equity. At the P&D Committee meeting it was mentioned there are
35 vacant homes. He suggested those be given to police officers in high -crime neighborhoods. A friend, who is a parent
of an Evanston police officer, indicated that they looked to buy a home here, could not do it and ended up in another
county. The officer found the City programs too complicated. He said someone suggested that maybe police officers
don't want to live here due to crime problems. If police officers don't want to live here, perhaps they need to discuss that
at the community meeting on crime.
CONSENT AGENDA (Any item marked with an Asterisk*)
Alderman Moran moved Council approval of the Consent Agenda with these exceptions: Resolution 6-R-07 — Operating
Budget FY 2007-08; Resolution 5-R-07 — Transfer Monies from General to Fleet Fund; Ordinance 19-0-07 — Class D
Liquor Licenses — New Mandarin House, 819 Noyes St; Ordinance 21-0-07 — Amends Sections of City Code for Issue of
Permits; Ordinance 13-0-07 — Easement Agreement for 1570 Elmwood Ave.; West Side Master Plan for Sub -Areas 1, 2
and 3; and Ordinance 31-0-07 — Extend to 120 day Moratorium of new Construction Building Permits on Central St.
from Ashland Ave. to 2200 Central St. Seconded by Alderman Jean -Baptiste.
Roll call. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Rainey, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay —
none. Motion carried (9-0).
ITEMS APPROVED ON CONSENT AGENDA
MINUTES:
4 February 26, 2007
* Approval of Minutes of the Special City Council Meetings of January 31, 2007 and the Regular City Council Meeting
of February 12, 2007. * APPROVED - CONSENT AGENDA MOTION AND ROLL CALL (9-0)
ADMINISTRATION & PUBLIC WORKS:
Approval, as recommended, of City of Evanston payroll for the period February 22, 2007 and City of Evanston bills for
the period ending February 27, 2007, authorized and charged to the proper accounts:
City of Evanston payroll (through 02/22/07) $2,260,905.41
City of Evanston bills (through 02/27/2007) $2,295,778.80
* APPROVED - CONSENT AGENDA MOTION AND ROLL CALL (9-0)
* Request for ratification of emergency purchase for security staffing by Metro Security Force Inc. (6546 W. Higgins,
Chicago) in an amount not -to -exceed $14,700. Staff has identified Business Unit 3710.61060, Noyes Cultural Arts
Center, permanent part-time staffing, where there will be an available fund balance to transfer funds to cover the over
expenditure for James Park Hill staffing costs. * APPROVED - CONSENT AGENDA MOTION & ROLL CALL (9-0)
* Ordinance 17-0-07 — Decrease in the Number of Class D Liauor Licenses — Consideration of
proposed Ordinance 17-0-07, introduced February 12, 2007, which amends Section 3-5-6(D) of the
City Code to decrease the number of Class D liquor licenses from 25 to 24 due to the sale of Mandarin
House, Inc. d/b/a Mandarin House at 819 Noyes St. * ADOPTED - CONSENT AGENDA MOTION
& ROLL CALL (9-0)
* Ordinance 18-0-07 — Decrease in the Number of Class D Liauor Licenses — Consideration of
proposed Ordinance 18-0-07, introduced February 12, 2007, which amends Section 3-5-6(D) of the
City Code to decrease the number of Class D liquor licenses from 24 to 23 due to New Day Caf6
discontinuing its liquor license d/b/a New Day Cafe at 2916 Central St. * ADOPTED - CONSENT
AGENDA MOTION & ROLL CALL (9-0)
* Ordinance 22-0-07 — Decrease in the Number of Class D Liauor Licenses — Consideration of
proposed Ordinance 22-0-07, introduced February 12, 2007, which amends Section 3-5-6(D) of the
City Code to decrease the number of Class D liquor licenses from 24 to 23 due to the closing of New
Sushi Arigato, Inc. d/b/a New Sushi Arigato Restaurant at 822 Clark St. * ADOPTED - CONSENT
AGENDA MOTION & ROLL CALL (9-0)
* Ordinance 26-0-07 — Amends Fee Ordinance reeardine Fire Sunpression and Fire Alarm Permit
Fees — Consideration of proposed Ordinance 26-0-07, introduced February 12, 2007, which amends
Ordinance 46-0-99 to establish a charge for Fire Suppression and Fire Alarm Plan Review fees and to
increase Fire Suppression and Fire Alarm Permit fees. * ADOPTED - CONSENT AGENDA
MOTION & ROLL CALL (9-0)
PLANNING & DEVELOPMENT:
* Ordinance 24-0-07 — Amends Ordinance 114-0-06 — Granting a Special Use for a Planned
Development at 2424 Oakton St. — Consideration of a staff recommendation, introduced February 12,
2007,to list the Special Uses approved in Ordinance 114-0-06. * ADOPTED - CONSENT AGENDA
MOTION & ROLL CALL (9-0)
* HOME Fund Reauest from Housing ODDortunity Development Comoration for Single-Familv New
Construction at 1820 Dodge — Consideration of the Housing Commission recommendation to grant the
request for $95,000 in HOME funds to subsidize the new construction of a pre -fabricated single-family
home at 1820 Dodge Ave. to be sold at an affordable price to a household under 60% of the Area
Median Income. * APPROVED - CONSENT AGENDA MOTION & ROLL CALL (9-0)
5 February 26, 2007
* Ordinance 14-0-07 — Planned Develovment Request for 959 Dobson St. — Consideration of the
recommendation from the Plan Commission, introduced February 12, 2007, for approval of the request
for a planned development proposal at 959 Dobson St. as a multi -family residential project consisting
of approximately 33 dwelling units, a maximum defined building height of 60 feet to the average pitch
of the roof and about 45 off-street enclosed parking spaces. * ADOPTED - CONSENT AGENDA
MOTION & ROLL CALL (9-0)
HUMAN SERVICES COMMITTEE
* Ordinance 11-0-07 — Add Non -Tobacco Products to Indoor Clean Air Ordinance— Consideration of
Ordinance 11-0-07, introduced February 12, 2007, which amends the Definitions section of the Clean
Air Ordinance to prohibit the use of non -tobacco products. * ADOPTED - CONSENT AGENDA
MOTION & ROLL CALL (9-0)
* Ordinance 12-0-07 — Amends the Noise Ordinance — Consideration of Ordinance 12-0-07,
introduced February 12, 2007, which amends the Noise Ordinance to define the distance and fine
structure related to automobile speaker systems. * ADOPTED - CONSENT AGENDA MOTION &
ROLL CALL (9-0)
APPOINTMENTS:
Mayor Pro Tem. Wynne asked that the following reappointments be confirmed:
Joel S. Freeman Energy Commission
2151 Hartrey Ave.
For term ending February 28, 2011
James G. Woods Plan Commission
2436 Central Park Ave.
For term ending February 28, 2010
* APPROVED - CONSENT AGENDA
REPORT OF THE STANDING COMMITTEES
ADMINISTRATION & PUBLIC WORKS:
Resolution 5-R-07 — Transfer Funds from the General Fund to the Fleet Fund — Consideration of
proposed Resolution 5-R-07, which requests a transfer of $300,000 from the General Fund balance to
the Fleet Fund to cover a FY 2005-06 deficit.
Alderman Wollin moved that $300,000 be transferred from the General Fund to the Fleet Fund to cover the FY 2005-06
deficit. Seconded by Alderman Jean -Baptiste
Alderman Rainey asked for an explanation of the impact to the General Fund, which was held in the A&PW Committee
for more detail. Aldermen were told they could not make major transfers from the General Fund because the money was
not available. Ms. Carroll explained that the $300,000 was included in calculations ofthe reserve fund balance. There is a
policy that each fund should have a 10% reserve. They asked for less than 10% of the annual appropriation because they
wanted to get back to a positive fund balance. If they looked for a reserve of 10%, as budget policy requires, they would
ask for $800,000. When they met with rating agencies in the summer this had been anticipated. The City told them that
they would propose to Council to get back to a positive fund balance and that is why this is proposed. The rating agency
was concerned about operating with a deficit.
353
6 February 26, 2007
Alderman Rainey stated she has always relied on having accurate information to make moderately good decisions; was
surprised to see this in her packet. She felt that this year she had less information to make decisions and some information
was inconsistent. She asked the implications of not making this transfer. They were told the reduction in the City's bond
rating would amount to $10,000 for a $10 million indebtedness; she did not have the same fear about a reduced bond
rating of one level based on the report from the City's bond counsel.
Ms. Carroll stated staff makes the recommendation, not the decision. In January when they discussed fund balances
Insurance and Fleet funds were covered. They were waiting for the special procedures report that they received that
evening before this was put on the agenda.
Alderman Jean -Baptiste asked the impact on the levy. There is none. Alderman Jean -Baptiste asked if there was more
money in the reserve fund that they could tap. Mr. Grady stated that was in a response to Gerald Gordon concerns about
the General Fund balance. Several budget memos showed the fund balance for FY 2005-06 was $18 million. The
question was how that fund balance was to be used. He explained how much was needed for debt, monthly payments, and
covering deficits in the Insurance and Fleet funds. There were dollars they recommended be allocated to pensions so the
City does not have to incur debt to cover unfunded liabilities. Mr. Grady said it was important to get authority to transfer
these dollars, since this is the last meeting of the fiscal year, so that they can do what they told the rating agencies they
would do. The rating agencies thought it fiscally responsible for the City to cover deficits and not have a deficit the next
time they report. Alderman Jean -Baptiste asked how much is in the general reserve and is there money that could be used.
Mr. Grady stated there is $18 million and a proposal about how the funds would be used. He did not recommend using
one-time fixes to balance the budget. Alderman Hansen noted that budget memo 45 lists the General Fund, unreserved
fund balances of approximately $7 million, transfers to capital improvement and the balance to the Police and Fire
Pension funds, leaving the unreserved fund balance at zero. She saw a $2.6 million option to the pensions, but believed
there is some money there.
Roll call. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay— Rainey.
Motion carried (8-1).
Ordinance 19-0-07 — Increase in the Number of Class D Liauor Licenses — Consideration of proposed
Ordinance 19-0-07, which amends Section 3-5-6(D) of the City Code to increase the number of Class
D liquor licenses from 23 to 24 due to the application of New Mandarin House, Inc. d/b/a Mandarin
House at 819 Noyes St.
Alderman Wollin asked that Ordinance 19-0-07 be marked introduced.
Alderman Wollin moved to Suspend the Rules to adopt an ordinance at the same meeting in which it was introduced.
Seconded by Alderman Moran. Motion carried unanimously.
Alderman Wollin moved approval of Ordinance 19-0-07. Seconded by Alderman Moran.
Roll call. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Rainey, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay —
none. Motion carried (9-0).
Ordinance 21-0-07 — Amend Various Sections of the Citv Code for Issue of Permits — Consideration
of Ordinance 21-0-07, which amends various sections of the City Code to allow issuance of certain
permits by the City Manager or his/her designee for the following permits: Sidewalk Sale Permits
(Public Works), Sidewalk Cafe Permits (Health & Human Services), Raffle Permits (Finance), Tag
Day Permits (Finance) and Loudspeaker Permits (Parks/Forestry & Recreation).
Alderman Wollin noted that aldermen amended the ordinance to be advised when Loudspeaker Permits are given.
Alderman Wollin asked that Ordinance 21-0-07 be marked introduced.
35-q
7 February 26, 2007
Alderman Wollin moved to Suspend the Rules to adopt an ordinance at the same meeting in which it was introduced.
Seconded by Alderman Holmes. Motion carried unanimouslv.
Alderman Wollin moved approval of Ordinance 21-0-07. The motion was seconded..
Roll call. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Rainey, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay —
none. Motion carried (9-0).
Ordinance 13-0-07 — Easement Aereement for 1570 Elmwood Ave. (Formerly Winthron Properties
Development at 1567 Maple Ave.) — Consideration of proposed Ordinance 13-0-07, introduced
February 12, 2007, which authorizes the City Manager to execute an agreement for balcony and
subsurface easement for the 1570 Elmwood Ave. Development (formerly Winthrop Properties
development at 1567 Maple Ave.).
Alderman Wollin moved approval of Ordinance 13-0-07. The motion was seconded.
Voice vote, motion carried. (Alderman Bernstein abstained from this vote due to a possible conflict of interest.)
Alderman Wollin reported the committee had an excellent discussion about composting after a PowerPoint presentation
by Mr. Jennings and Ms. Eggleston. The proposed plan is to apply for an EPA permit to take leaves to the transfer station
in Glenview for composting and $80,000 would be saved. Alderman Rainey suggested looking at other contractors.
PLANNING & DEVELOPMENT:
West Side Master Plan for Sub -Areas 1.2 and 3 — Consideration of a recommendation from the Plan
Commission to approve the West Side Master Plan for sub -areas 1, 2 and 3, including its
recommendations related to land use, building type and location, public streets and pedestrian
accessibility.
Alderman Jean -Baptiste asked that this item be held.
At a Special P&D Committee meeting staff was asked to look at the plan, sort out areas where they need to apply the plan
on an amendatory basis and others where further review is needed. Another Special P&D Committee meeting will be held
when the report is ready.
AGENDA ADDENDUM
Ordinance 31-0-07 — Extends to 120 Days the Moratorium on Buildine Permits for new Construction
on Central St. from Ashland Ave. to 2200 Central St. — Consideration to extend the moratorium on
new building permits on Central St. from Ashland Ave. to 2200 Central St. for another 120 days.
Alderman Jean -Baptiste asked that Ordinance 31-0-07 be marked introduced.
Alderman Jean -Baptiste moved to Suspend the Rules to adopt an ordinance at the same meeting in which it was
introduced. Seconded by Alderman Moran. Motion carried unanimouslv.
Alderman Jean -Baptiste moved approval of Ordinance 31-0-07. The motion was seconded.
Roll call. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Rainey, Hansen, Wollin, Jean -Baptiste, Wynne. Voting nay —
none. Motion carried (9-0).
He reported the committee discussed a Housing Commission report on affordable housing. Staff will review and return to
the committee for a decision. The original Inclusionary Housing Ordinance would come back to the committee with an
amendment and be discussed on March 12.
" 5
8 February 26, 2007
SPECIAL ORDER OF BUSINESS
Resolution 6-R-07 — Operating Budget Fiscal Year 2007-2008 — Consideration ofproposed Resolution
6-R-07, which is the Operating Budget for FY 2007-08 in the amount of$188,161,769.
Spreadsheets prepared by Alderman Rainey were passed out to Council members. She had done this so that all
information was on one page.
Alderman Rainey moved approval of Resolution 6-R-67, the FY 2007-08 Operating Budget. Seconded by Alderman
Jean -Baptiste
Alderman Rainey was pleased that staff revised estimated revenue for the sales tax for this year — actual year to date is
$8.860 million. Staff projected $9 million. However, the Home Rule Sales tax, if they follow it from 2003-04 actual
revenues, is about 67% of the basic sales tax. She proposed staff underestimated based upon underestimating the basic
sales tax, thus she recommended that staffs revenue be increased from $5.7 million to $6,030,000, which is 67% of the
$9 million and an increase of $230,000 to revenue. She thought it was a calculation error.
Alderman Rainey moved that the Home Rule Tax revenue be increased to $6,030,000, which is a $230,000 revenue
increase. Seconded by Alderman Jean -Baptiste.
Mr. Grady stated staff was comfortable with $5.8 million. Looking at the four year trend, they believed the Home Rule
Sales Tax will bring in $5.8 million. Alderman Rainey argued that did not matter; that this tax has run at 67% ofthe basic
sales tax every year and trends along the basic sales tax. There was a recommendation to reduce the sales tax that was
incorrect. She agreed with the basic sales tax of $9 million but the Home Rule Sales Tax is hooked to that number. Mr.
Grady stated staff did not believe that history would continue to support that relationship.
Alderman Rainey asked for an explanation of the Sales Tax. Ms. Carroll explained the 1 % sales tax is levied against all
goods and services, but not professional services. The Home Rule Sales Tax excludes automobiles, boats, food and
certain other things. In the past few years the 67% ratio was different. Staff was recommending about $100,000 more than
was received this year. Alderman Rainey stated they were talking about the last four years and this is the trend. When
items are taken away that are not covered by the 1% it is 67%. There was no good reason to under estimate revenues
unless it was due to a conservative approach so that later they could spend extra funds.
Alderman Tisdahl asked, if when sales tax revenues were being estimated, did they consider that several Target stores
will open in Chicago, which may impact the Evanston Target. Yes and it was the reason the revenue was increased
$100,000. Was the opening of Sherman Plaza considered? Yes. Staff also considered that Toyota and Subaru were gone.
Ms. Carroll noted the trend had been the Home Rule Tax was about 67% of the basic Sales Tax. Staff has examined
month -by -month numbers of both and, based on history, believed that the Home Rule Tax revenue should not be
increased as suggested by Alderman Rainey. Mr. Grady, Ms. Carroll, Aldermen Jean -Baptiste and Wynne discussed the
history of the trend. Mr. Grady explained these funds come from the state and are behind about three or four months, so
the numbers are estimates.
It made no sense to Alderman Rainey to low ball the Home Rules Sales Tax unless they lower the $9 million for sales tax.
Roll call. Voting aye —Bernstein, Holmes, Rainey, Hansen, Jean -Baptiste. Voting nay —Moran, Tisdahl, Wollin, Wynne.
Motion carried (5-4).
Alderman Rainey asked for staff analysis of the State Income Tax revenue. From 2003-04 there were increases of about
$400,000 annually. What is staff justification for the $6.1 million recommendation for this budget year and how is the
State Income Tax revenue calculated. Mr. Grady stated it is the state rate times the population. Staff projection is $6.1
million and they had no problem supporting $6.2 million. She asked for more detail on staff s calculation. Ms. Carroll
said this tax is based upon income tax receipts. The legislature agreed to give a 1 / 10`s share to municipalities, which have
-356
9 February 26, 2007
fought to keep the 1 / 10`h as several years ago the state threatened to cut municipalities share to 1/1 Vh -- a significant loss.
The City receives an estimate from the Illinois Municipal League every year and last year was $83 per capita. This year's
estimate supports something higher. They have nothing because no 2006 income tax returns have been filed.
Alderman Rainey moved an increase in the State Income Tax revenue from $6.1 million to $6.2 million, an increase of
$100,000. The motion was seconded. Motion carried.
Alderman Rainey asked for an explanation of the Natural Gas Utility Tax and the Natural Gas Use Tax Home Rule Tax.
She thought the City would benefit from the increased prices charged to consumers. Mr. Grady said they know the
Natural Gas Rate is going up, but usually when the rate goes up, usage goes down. Staff was sensitive to that and is why
they projected $1.5 million. Ms. Carroll said that utility taxes are weather dependent. They need to look at the average
over the past several years. She would be concerned about raising it, noting the history. Staff looked at a longer time
trend. The same is true for the Home Rule Tax.
Alderman Rainey asked about the amusement tax and why there is no money in it. Ms. Carroll explained that is a per
capita tax paid by the state. It is a tax on amusement device licenses. Ms. Carroll thought they could put in $5,500 for that
tax. By consensus Council agreed to put $5,500 under revenue.
Alderman Rainey recalled at the P&D Committee that evening they had a spreadsheet regarding affordable housing that
showed $90,000 in income from the Demolition Tax. Community Development Director James Wolinski stated the
$90,000 was shown in the 2006-07 fiscal year. There was no demolition tax in 2005. Ms. Carroll explained the $90,000
was in an escrow account until they decide how to spend it. It is not recognized as revenue until there is a plan to use it.
In response to Alderman Jean -Baptiste, Ms. Carroll stated the Demolition Tax is earmarked for affordable housing.
Alderman Tisdahl moved that the Council keep the $250,000 in the Water Fund and not transfer it to the General Fund.
Seconded by Alderman Moran.
Alderman Moran referred to the city manager's memo in which Ms. Carroll listed four issues that would negatively
impact the City if they transferred funds from the Water Fund to the General Fund. Alderman Tisdahl stated that
Alderman Rainey had done a masterful job of reducing the property tax, so they could eliminate this transfer. Alderman
Jean -Baptiste asked the impact of a transfer of water funds to purchase software in 2000. Management, Business &
Information Systems Director Pat Casey explained that that purchase was a budgeted expenditure in the Water Fund so
there was no negative impact. Alderman Wynne recalled the Water Division was a direct beneficiary of the software.
Alderman Jean -Baptiste thought the Water Fund was healthy and that this transfer would not result in a calamity.
Alderman Wynne viewed the software purchase as an investment in efficiency. Alderman Rainey did not propose the
transfer of $250,000 to impact the City's bond rating. She said the bond rating companies always say the reason Evanston
has such a high bond rating is because of the willingness of residents to pay high taxes. That is always stressed and
Council is also willing to charge. She recommended the transfer of $250,000, which is money that all have paid in.
Taxpayers paid in for something that does not need to be spent. All other expenditures in the Water Fund have been
accounted for and covered. Council's never challenged expenditures by the Water Division. When money is left over,
taxpayers are entitled to get some back and this is a small portion. People don't complain about the water rates. The
sewer rate is a killer; all voted for it and they are paying back what was borrowed. Alderman Wynne said the manager's
memo outlined the benefits to residents if this $250,000 was not transferred in terms of future budgets. Alderman Wollin
said with the two large projects going through the First Ward and the possible effect upon existing water mains, the
reserve is needed. The manager's memo convinced Alderman Holmes they would be better off not to transfer the funds.
Roll call. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Hansen, Wollin, Wynne. Voting nay— Rainey, Jean -Baptiste.
Motion carried (7-2).
Alderman Hansen asked if the budget had been adjusted to reflect a savings of $80,000 on the new compost plan. Ms.
Carroll explained that is not all cash savings. Mr. Jennings explained there is a savings in moving staff. They will be able
to use $100,000 for street maintenance staff. He would have to do a calculation, which was why they did not propose a
number. Alderman Wynne asked how much $100,000 buys in maintenance. It is 1.5 persons roughly. Alderman Hansen
351
10 February 26, 2007
asked about savings from not having to rent the tub grinder or the contractor to run it. There is another cost for hauling
the material. The number was not firm enough to get a savings figure. Alderman Holmes noted the hauling fee of
$80,000, $70,000 tipping fee and $6,000 in personnel cost that would be $156,000. The $236,000 has the personnel costs
in it ($100,000 for employees to streets). Alderman Wollin thought there were too many questions, no contract with a
hauler and the numbers were not firm enough to put in the budget. Mr. Jennings noted the committee recommended staff
look at alternatives other than taking the leaves to SWANNC. Alderman Holmes commented that the $130,000 to remove
leaves is on page 265 of the budget. Mr. Jennings stated that includes rental fees for the grinder and the contractor.
Alderman Hansen referred to budget memo 45 that recommended they take $2,624, 412 and split it evenly between the
Police and Fire Pension funds. On page 34 of the budget, the actuarially funding requirements show $588,300 or 11.4%
is required for the Fire Pension Fund, an 11.6% increase in the property tax levy. On the Police Pension Fund, the
requirement indicates $889,300 or a 14.8% increase for the upcoming fiscal year and an 11.78% increase in the property
tax levy. She thought they would go beyond the funding requirement in the Fire Pension Fund.
Alderman Hansen moved to transfer $250,000 from the Unreserved General Fund balance to reduce the tax levy in the
General Fund. Seconded by Alderman Rainey.
Ms. Carroll noted on page 461 of the budget is a net property tax levy of $4,174,300 compared to $4, 174, 271 due to
projected losses. She thought they had budgeted at what they were supposed to. On page 462, under police, property tax
levy of $4,636,500 and it is $4,636,539. Alderman Hansen had talked about taking $2,624,412 into the two pension funds
in addition to what was already projected. Ms. Carroll stated staff would come back to Council in March to talk about the
total solution for the unfunded pension liabilities. Current policy says any excess in the General Fund: first goes to fund
the 10% reserve in any other fund and second, any unused amount goes to the Capital Improvement Program In budget
memo 45, Council has shown current policy and the optional use as one way that this money could be used. Staff
recommends that it not be used towards operating expenses, which is what would happen if transferred at this time. Use it
for capital needs or to make up the unfunded liability in the pensions. The recommendation is not to use any reserves to
fund operating expenses. The problem if transferred to operating expenses is that it would have to be made up next year.
Ms. Carroll stated it would better be used in pensions. Alderman Hansen argued that these funds could be transferred due
to more than $2 million going to the pension funds.
Alderman Bernstein said Tim Schoolmaster has lived with this for years and they have an opportunity before they levy
the fund; have under funded pensions for years; suggested they wait on this transfer. Alderman Tisdahl believed that Mr.
Schoolmaster's numbers may be good and that police officers do not retire at age 65 but earlier.
Alderman Hansen thought that $250,000 could be taken from the Unreserved General Fund Balance. Ms. Carroll stated
that all along they have said that they would deal with a $98 million debt by the end of March. She agreed with Alderman
Bernstein that this be held until they have the presentation. A recommendation for hiring new financial advisers would be
at the next meeting and options would be presented to the Council for their consideration. This is complex. They will
have to go through the liabilities and options, which was why they did not touch monies in the General Fund.
Alderman Jean -Baptiste noted they have $2 million in unreserved funds in the General Fund and they intend to deplete it
to zero. Ms. Carroll stated there is $18.5 million in reserves in the General Fund; $11.5 is needed to fund the 10% and
5% reserves, which leaves about $7 million. Of that they have shown, per policy, what staff recommends and says at this
point it is an optional use to be discussed when they talk about pensions. Ms. Carroll made the same argument as
transferring funds from the Water Fund. It is not good budget policy to transfer one-time funds to operating expenses.
These other uses are for capital or reducing significant tax liability for pensions.
Roll call. Voting aye — Rainey, Hansen, Jean -Baptiste. Voting nay — Bernstein, Holmes, Moran, Tisdahl, Wollin Wynne.
Motion failed (3-6).
Alderman Rainey went to budget page 72 under parking ticket fines, projected at $490,000 less. They were told the
reason is when Crossing Guards are absent, they have to put Parking Enforcement Officers in their place. She asked if
there is any new information on this. Mr. Jennings said they are trying to correct this situation. They have double staffed
3 S`6
11 February 26, 2007
some corners and recommended that four additional guards be hired at $32,000 to further minimize the use of Parking
Enforcement Officers. Alderman Rainey did not ever recall a reduction of this amount. He recalled that revenue from
ticket fines has increased annually.
At this time a ten minute recess was taken.
Ms. Carroll referred to budget memo 2 (January 17, 2007), which explained the City budgeted $3,790,000 in 2006-07 for
ticket fines and year to date collected only $3.1 million, so they will come in below the current fiscal year and project
$3.3 million, which they believe is accurate.
Roll call on the Operating Budget for 2007-08. Voting aye — Bernstein, Holmes, Moran, Tisdahl, Rainey, Hansen,
Wollin, Jean -Baptiste, Wynne. Voting nay —none. Motion carried (9-0).
Alderman Rainey had information from some 20 neighboring municipalities and 19 provide a product called Plus One
that employees may purchase for themselves and spouse. There is also a product for an individual, an employee and
children and one for a family. Those who are a two -person household, taxpayers pay the same as for a family with six
children. That makes no sense. She suggested that the City could save thousands if it would agree to administer this
program and she recommended they see how much other communities pay. She gave the material to the city manager and
asked for a response.
CALL OF THE WARDS:
Each alderman expressed their personal condolences to Mayor Morton on the passing of her sister, Mamie Semby. They
also thanked Northwestern University for its contribution of $50,000 to the Library for the children's section.
4`' Ward. Alderman Bernstein stated that the Civic Center is under scrutiny as to whether it should continue to be the
seat of Evanston government. A citizen group put an advisory referendum on the ballot that asked whether the property
should be rehabbed and continue to be used as the Civic Center. The City Council crafted a referendum in which they
stated it would cost $31 million to stay in this building paid by taxpayers. That $31 million included $6.5 million for a
parking deck and $3.5 million for staff relocation during the rehab. Those numbers are not what the physical
rehabilitation would cost. The figure he had worked with is $20 million. He thought the $31 million was a mistake and
the true figure is around $20 million to rehab the Civic Center. This Council and the prior Council found it impossible to
stay and need a revenue stream. The hope is to use this building and develop the land by creating a TIF so that they will
have funds to build a new facility. Better information will be provided.
51b Ward. Alderman Holmes reported the African -American Achievement awards were held recently at ETHS where 40
students were honored for academic achievement. It was spearheaded by Mary Wilkerson, a District 202 Board member.
She encouraged all to attend the "Partnering Toward a Safer Evanston" meeting on Saturday.
Alderman Holmes thanked the city manager, staff and other aldermen for all the hard work on the budget, particularly
Alderman Rainey. She noted that several groups have talked about moving the Civic Center to the 50' Ward. The Civic
Center is already in the 5`b Ward.
6ch Ward. Alderman Moran was grateful to the city manager and staff who worked on the budget. They have discussed
dealing with the structural budget and this budget moved them in the right direction. He thanked all who worked so hard
and creatively to keep the tax increase down.
He reminded all that the next planning study on Central Street would occur Thursday, at the Civic Center Parasol Room
from 6 to 9:00 p.m.
7ch Ward. Alderman Tisdahl also reminded constituents of the Central Street study on Thursday.
359
12 February 26, 2007
8`' Ward. Alderman Rainey stated that Alderman Wynne had done an excellent job at Mayor Pro Tem.
She said that staff had overestimated the cost of rehabilitating the Civic Center and would suffer for that; also had
underestimated revenue to be generated by the community for the community.
Tonight was important for the 8 h Ward because the final step in the Oakton project was approved. She wanted staff to
stay on top of the developer. At the comer of Ridge/Dobson there will be a new condominium that is beautifully designed
and supported by the community. She thanked the developers, the George Douvikas family and Lee Fry.
91h Ward. Alderman Hansen thanked staff, city manager and colleagues for working hard on the budget --a painful and
difficult process. She was excited about moving the compost pile elsewhere and improving the quality of life.
She invited all to a 9`h Ward meeting at 7:00 p.m. on March 6 when Finance Director Matt Grady will speak.
1" Ward. Alderman Wollin announced that tomorrow evening there would be a meeting on home ownership from 6:30
to 8:30 p.m. in the Parasol Room.
On March 7 there will be a neighborhood meeting at the Family Institute on Sheridan Road. Searle will rebuild its health
center and it is of right. No variances will be sought from the City.
2°d Ward. Alderman Jean -Baptiste congratulated the staff, particularly new Finance Director Matt Grady who came in
recently and did a fantastic job under the leadership of Ms. Carroll. There were issues he did not agree with regarding the
Human Relations Department and hoped they would get good guidance from the new Assistant Manager. He
congratulated Gerald Gordon for his vigilance. His work was appreciated and he helped aldermen to understand more. He
looked forward to the youth initiative and getting some updates as they progress. He hoped to see a lot of activity.
3rd Ward. Alderman Wynne thanked the staff and manager for such hard work on a difficult budget. She thought this is
the lowest property tax levy they have enacted in the nine years she has served on Council. She also thanked fellow
aldermen for achieving this significant goal.
There being no further business to come before the Council, Mayor Pro Tem Wynne asked for a motion to adjourn and
the Council so moved at 11:50 p.m.
Mary P. Morris,
City Clerk
A videotape recording of this meeting has been made part of the permanent record and is available in the City Clerk's office.
C