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HomeMy WebLinkAboutMINUTES-2007-02-05-20073Iq EV���O CITY COUNCIL * * February 5, 2007 0 U �CQ ROLL CALL - PRESENT: D Alderman Holmes Alderman Hansen Alderman Moran Alderman Wollin Alderman Tisdahl Alderman Jean -Baptiste A quorum was present.. _ Alderman Rainey Alderman Wynne ABSENT: Alderman Bernstein PRESIDING:, Mayor Lorraine H. Morton A SPECIAL CITY COUNCIL meeting, was -held,; Monday, February 5, 2007 for the purpose of conducting a public hearing on the 2007-08 proposed budget and was called to order by -Mayor Morton at 7:25 p.m. in the: Council Chamber. City Manager Julia Carroll announced that a proposed neighborhood meeting at 1200 Davis (The General Board of Pensions and Health Benefits of the United Methodist Church) wa's'cancelled. The board will be responsible for notifying ,neighbors of'a:future meeting:... , Community Development; Director JamesWolinski announced the Board of Pensions was to be at the Plan Commission on February 2.1. and that would be continued. Mr. Wolinski announced that, with the extreme cold, minimum temperatures are required for Evanston residential rental properties daily from 6-8:0,0 a.m-. - 65°F, from 8`10:00 a.m: - 68°F and.from 10:00 p.m-6:00 a.m. - 63°F. Residents who -lack heat should call (847) 866-2927, Property Standards at the City from 8:30 a.m. to 5:00 p.m. After 5:00 p.m.; call the Police Service Desk at (847) 866-5000. Property Standards inspectors are on duty 24 hours during the winter. The Police Department will notify the inspectors who will do. their best to rectify the problem. If they cannot be rectified, on -site, the City will re -locate residents. Alderman Rainey asked which City buildings serve as warming centers. Health & Human Services Director Jay Terry explained that under the City's Extreme Weather Plan, all City buildings can be used, during normal business hours, including recreation centers and libraries. The Hospitality Center at St. Mark's Church is open and the Interfaith Council uses different churches for warning centers during the day. After normal business hours, the Robert Crown Center is open late in the evening. Staff knows that if someone is there at closing time with no place to"go they should be assisted. There have been no such.requests. Connections for the Homeless has not had any extraordinary requests for service due to the weather. Traditionally,;the City does not have calls for service. Skokie Valley Senior Services, an agency the City contracts with, does "well-being" checks by phone of clientele that live alone. They are in close contact with the Police Department and, if aware of people in need of emergency accommodations; the City is ready to step in. Alderman Jean -Baptiste asked what happens with the homeless. Mr. Terry had not heard of any people on the street who requested accommodations nor from Connections for the Homeless or the Police Department that they are encountering homeless with no place to go. Alderman Rainey said that people living in multi -family buildings have called about persons sleeping in unsecured entryways. What happens to the people that residents send away? Chief Dennis Nilsson stated they have an agreement with Hilda's Place; those individuals are brought to the Police Station and taken to Hilda's Place. Some stay in the lobby of St. Francis Hospital. Alderman Rainey moved that there be no time limit on speakers. The motion was seconded. Motion carried unanimously. Public Hearing Lois Roewade. 933 Maple Ave., spoke on behalf of the Evanston Arts Council; its proposal was before them and hoped they would give it serious consideration. Council members asked for additional information that was submitted and if me February 5, 2007 they had any questions of anyone on the Arts Council or Leah Callahan would be happy to respond in writing or in person. She recognized there are tough choices this year and voiced support of the arts in Evanston. The proposal was well thought out in a creative new way to look at funding for the Cultural Arts Division. It won't raise anybody's taxes. It is a revenue generating proposal, will allow the division to expand its programming and bring some events tied to the festivals into a broader community.. It seemed like a winner and she hoped.they agreed. Jonathan Perman. Evanston Chamber,of Commerce Executive Director, stated that the Chamber endorses the basic . principles of the City of Evanston's proposed 2067-08 budget. The Chamber commends City Council for directing the City Manager to address the structural deficit facing Evanston. The commitment by this Council to tackle the structuralfinancial issues and make tough decisions both this year and in the next'several years is laudable and deserves respect and support. The Chamber is impressed with the eagerness of the Council'to make this year's budget decisions consistent with priorities it outlined in its Strategic Plan. In past years, proposals for wholesale cuts in services have met vocal resistance that generated great heat on issues, though rarely shedding light on appropriate alternatives. What's different about this year's budget is that no basic services will be cut. ,Instead, the City.Manager proposed a combination of greater efficiencies and new ways 'of delivering the same: services. Supporting this approach, we can look to innovations.that local and county legislatures in this region have utilized to generate new. revenues and service alternatives including: sale of the Chicago Skyway, Skokie's commercial " waste hauling, the private maintenance operations of Millennium Park, and Cook County''s. golf courses: The budget proposal's recommendation to transfer, some health care services to local hospitals. is in keeping with a movement by governmental bodies allover the region to focus their efforts on core services: The public sector will look to local companies, institutions and organizations to deliver other vital programs that can supplied by other capable providers -often more effectively. The other key piece of the budget proposal is a consolidation of some City departments and a reorganization of how and . who provides a number of administrative services. The Chamber believes the Council should support these administrative recommendations, which again, permit no reduction in serviceAelivery, but simply a new way of execution. If the City is able to achieve the projected savings from these proposed initiatives,, we. expect it will be easier to face the even greater . budget challenges confronting the Council in the ensuing two years._ The Chamber believed it is important for the public to appreciate that a large part of the budget is now driven by. unfunded mandates in the areas of homeland security and pension obligations for fire and police personnel. Employee groups.that will benefit in retirement from the new investments made by the City are sure to recognize the advantages to their long-term best interests with this budget approach. We hope they will both support the budget recommendations of the City Manager and accept the City's invitations to assist with the investment decisions.of those pension contributions. .Additionally, the City Budget's recommendation to raise property taxes the equivalent of 1.1% of one's tax bill seems fair and reasonable. As Evanston's equalized assess value (EAV) has increased because of the City's prescient development policies, the City has been able to lower its tax rate and spread the property tax burden. Recent analysis conducted by the Chamber comparing Evanston's effective tax (the amount one actually pays as a proportion to real market values) with other municipalities in the region, shows that Evanston's residential rates have fallen by 10.6% since 1999. This places Evanston with above -average rates in Cook County but lower than most collar county towns. Similar trends can also be seen with effective commercial and industrial property tax rates, except that all Cook County municipalities have higher rates than the collar counties because of the classification system. Businesses in Cook County already face a disproportionate property tax burden. This has been one important factor causing businesses to relocate or expand elsewhere. A City budget that does not include higher fees and taxes on commercial enterprises is a very sensible policy for Evanston. 1 u 3z(" 3 - February 5, 2007 Gerald Gordon.,1228 Lake St., asked that the budget worksheet be displayed. On the bottom, depending on the total tax, it shows 28¢ or 35¢ a day and he found that disingenuous. This tax increase is 6.50% and he thought it not reasonable to show it on a "per day" basis. He congratulated City Manager Carroll on her plan to _structurally re -align the organization. It is refreshing to see such a move and he believed.it could have great impact in the coming years. He was a little dismayed; improperly he hoped, at the complacency and resignation when people face a 6.50%increase in property taxes. He. thought it was too large and something needed to be done to reduce it. Calmly enacting a tax increase of this magnitude, which they are apparently about to do, would have a negative impact on the City's relationship with the unions. What incentive will the unions have to make reasonable demands in forthcoming negotiations when they see a 6.50% increase roll right through the Council. Anotherquestion about incentives - when Mayor Morton asked about the $700;000 in contributions from Northwestern . University to replace lost taxes at 1800 Sherman, -residents learned these funds were placed in a savings account and seemed to be forgotten. They were not added to the revenue stream, so had no effect.on taxes. Northwestern might ask itself why,it pays the City for lost taxes. when "those payments- do: not .reduce taxes. Why; does .the City not'add them directly to revenue? Maybe Northwestern will think the City does not need it. What incentive does Northwestern have to' continue these payments, if all the City does is put, them in a savings account: In the meantime residents are faced with a large tax increase that Council isn't* doing much about. He thought there were some.mitigaiing factors this year that they could take advantage of Ms. Carroll's re-structuring.plan that'shouldbring significant reductions ih expenditure§.now and in`the future. There is the possible fiuiding for the police and fire pension shortfall"through a bond issue. The imminent maturing of some of the TIFsshould provideadditional revenue. The November interim report indicated a $1.7 million suiplusin the. General Fund in the current year. This is on top of an unrestricted; unreserved $7.31 million fund balance described in budget memo #14. He recommended a transfer . of $1.5 million to lower the proposed tax increase. This could come 'from, some combination of the Water Fund; as Alderman Rainey has suggested, the General Fund, or all -or part of the $700,000 from Northwestern University.. It should be used to' eliminate the $491,000'increase in the Fire Pension Fund and the $488; 000 increase in the Police Pension. Fund and to cut the proposed increase in the General Fund to $377, 531.. That would lower the tax increase to a more manageable $693,000 or 2.06%. David Bradford-. 2102 Dobson St., former chair of the Human Relations Commission, spoke about the proposed elimination of the director's position. He quoted from an article .in the. Chicago Tribune .(April 1; -1996) about panhandling, "For years tolerance, enlightenment and compassion.have been a religion of sort.in Evanston: A way of living that residents and officials say has helped seethe community apart from many of its neighbors." Evanston always has been characterized by being a North Shore community that is different in many wonderful ways, which is exemplified . by its commitment to .fairness, tolerance, and compassion. Serving on the Human Relations Commission was a tremendous growth experience and he thanked the Mayor for giving . him that opportunity. He felt.strongly that an organization as vital as the Human Relations Commission should have a full-time director. Ms: Carroll shared the transition plan with:him. The director plays an essential role in administering the residential landlord/tenant ordinance by working directly with landlords and tenants and resolving disputes between the two so the ordinance has compliance. He spent six years on the commission and was amazed at the problems that arose and was impressed by the professionalism of the staff and current director. Eliminating a strong executive director is an evisceration that will lead to dissolution of the Human Relations Commission. Ms. Carroll was candid and pointed out that reductions in staff that they will see this year are just the beginning. He opined if this proposal is approved, if not next year, the year after the Human Relations Commission would die. Subsequent to serving on the commission, he worked with a neighborhood organization - South West Evanston Area Residents (SWEAR). In conjunction with the Police and Human Relations departments, they addressed a number of issues that negatively affected many in their neighborhood. With a specific executive director, citizens such as himself could contact and work successfully with the Police Department to help ameliorate problems that arise, especially those of illegality. He strongly encouraged Council to reconsider this proposal. 3 1. 2- 4 February 5, 2007 As they review the tasks of the Human Relations Department, they also notice that it is involved in the Equal Opportunity laws, including investigation of sexual harassment charges, and the executive director plays the sole role. That would be transferred to the Law and Human Resources departments, which seemed to him a direct conflict of interest. He did not think any organization could realistically be expected to objectively investigate itself so it was important to maintain the integrity of the commission as it exists. He suggested that eliminating this position is not eliminating fat, but severing a. vital organ that ultimately will lead to the death of this organization: This summer he was invited to work with the Summer Youth Employment Program. It was wonderfully organized. More than 500 youth came (to the job fair), but there were only 300 jobs to offer. The services the Human Relations Department provides are, sometimes hard to measure on paper. But people who have children that are gainfully employed that show up for work everyday, when its hot, been up late the night before, see a corresponding reduction in the need for , police and social activities. He knew they have to make tough decisions, and sometimes they take positions that need to be revisited. One sign of wisdom, given new information, is to re-evaluate a decision. He strongly urged -that they not destroy the Human gelation •Commission._ Junad Rizki; 2784 Sheridan Rd.; found the most interesting thing about this budget is that change is starting. The positive is that. there is an attempt to control costs and decisions by the City Manager. The -negative is the attitudethat employees -. can be cut without cutting services, which seemed unrealistic. If the City did not want to provide a service, it should be . cut and be honest about; it. The approach taken in the, Health Department is reasonable because these services will be. outsourced. Whether the same services will be rendered is unknown and he suspected they would get different services. He was confused about the Human Relations and the Facilities -Management departments. Basically, the Human Relations director's position would go to an Assistant City Manager. With Facilities, it appeared the assistant would take over. Human Relations has some components that could be outsourced and eliminated, although some might -disagree. He was troubled by the Facilities change because it appeared to him that little had been done through the years to maintain City. facilities and it appears that there is.more work than manpower iri that department. He noted they will add the position of full-time emergency manager. He thought the current Facilities Management Director had two positions: director and emergency manager. He did not think a full-time emergency manager was needed. He hoped that the excuse of homeland - security would not be used to spend money. The.Police Chief, Fire Chief, Facilities Director, Water Superintendent, Public Health Director and City Manager should.be able to assume this function without creating'a position., Hespoke recently -about 1600 Benson, the City's new Sherman Plaza garage and that the retail space .there is not built out. He asked who would finish this job. Maybe there is no money and that is why it isn't finished. If they are going to finish it, they -will need somebody from Facilities to do that. Will there .be enough manpower to do the job if they 'downsize. It appeared to him the City is losing thousands of dollars in rent and, sales tax from that space. He did not .think a Youth Coordinator was a good use of taxpayers' money. He had no problem with helping disadvantaged youth, but saw no value in another City employee. He preferred they take the $150,000 and let the 5`�' and 8'h ward aldermen use it in their areas with the Recreation Division or others to provide service.. Aldermen have a vested interest in those areas. They don't needmore employees, if they are laying employees off and downsizing. On the Sustainability Coordinator, even though it is funded by a grant, those things always become permanent positions. After the conference on sustainability, he went to the Portland, Oregon website and looked at their trees, which were "twigs" compared to Evanston's. Sustainability is a "buzz" word. Recently he attended a memorial and spoke with an elderly priest who said his father was interested in trees years ago. Evanston has had sustainability for years, so why is a position needed. If residents here want sustainability let them push for it. Every time somebody wants something here another employee is added. That is why the City is in trouble with too many employees. This is not the end. Council has been told that next year they will have to deal with more cuts. There is a $94 million pension issue here that will have to be addressed. He also saw water lines will require updating due to age. He saw two numbers, $17 million and $27 million. He advised that they need to stop spending time on affordable housing and ask developers for impact fees. He hoped the Mayor would keep to what she said. He just read that a traffic signal is needed on Emerson St. Will they use TIF money? It is preferable to make developers pay for infrastructure. Taxpayers complain 3e 3 5 February 5, 2007 because they see all this development downtown while all the money goes to the TIFs. If TIFs are kept small, maybe taxpayers can benefit from them. He disliked the Council taking the position of a fire sale mentality. That is to sell off City assets to balance the budget. He noticed a TIF is being developed and a public park eliminated. On principle he did not like to eliminate park land anywhere in the community. It is the same with the open space at the Civic Center. He did not like to see loss of open space in exchange for high density development just to make money. A $189 million budget does not indicate poverty. Judith Treadway. 226 Callan Ave., thought that many know budget decisions have already been made. She was just adding continents about future budgets. They have commissions, boards and committees that fulfill many responsibilities to help Council make decisions. But many citizens are not aware of particulars when the budget is not specific about department expenditures. She thanked the corporation counsel, Mr. Grady and the city manager for their response regarding a municipal tax. People know the City has tried to involve residents in the budgetary process and the strategic planning process, which was significant. She wanted to see more citizens involved after the manager and Council set their priorities, but before the budgetary process begins. Next year more cuts and another deficit are anticipated and she wanted the manager and Council to consider an ernployers' expense tax. According to the memo she received, the City of Chicago adopted one in the 1970s that helped generate revenues by requiring employees to live within Chicago. It would generate revenue. People who work at the City and don't live in Evanston take out significant dollars. If that can be investigated, she asked the manager and Council to ask the General Assembly of the State of Illinois to consider permission to have a municipal income tax. That was discussed in the memo. That kind of tax can be authorized only by the state's General Assembly. She asked whether all senior staff are Evanston residents. She suggested that they need to put a West Side branch library on the capital improvements list for next year. They cannot limit service to a verified underserved population when they can spend more than $2 million on the main library and branches. They cannot verify that this underserved population is being served at the main library and two branches as indicated by the City's federally funded survey. She said stimulation of neighborhoods should be based upon the most important factor that makes people move to a particular neighborhood --a school. Every neighborhood wants to have a neighborhood school. That is a tradition in Evanston. She urged them to work with the school district to build a new school, preferably in the 5`h Ward. Building housing in the 5a' Ward that is not affordable to current residents does not sustain this communiry, nor does it atttract young families of color. They need to work to build affordable housing and a school in the community where they want to create more economic energy. She referred this matter to the City -School Liaison Committee to focus with Council on cooperative economic development around a new school in the 50' Ward. With regard the dismantling of the Human Relations Department, she knows the decision has been made. She said they ftxpect a review of the effectiveness of this new structure after one year. After that time, if there is reason to believe this likes not worked, she requested that the department be reinstated with leadership that is qualified and sensitive to meet the needs related to race, housing, landlord/tenant, discrimination and employee relations issues, etc. P'roposed jobs in this budget are not needed necessarily and appear to contradict cutting other essential jobs and services that they have deemed citizens could do without. If they plan to create new revenues for services, they should be for s- ervices that they (public) have determined are necessary to meet the needs of citizens and not to cause a budget deficit. whey should look to generate revenue for the near future, not just create jobs that appear to be required but do not necessarily fulfill a needed service. They have to look carefully at what services are necessary when they cut jobs of roesidents who have provided essential services. She knew the task of making these decisions is difficult. She urged Council to consider the two taxes she has requested for the past five years. The deficit is growing, more jobs will be cut a -aid they cannot continue to burden property taxpayers. 3 a� 6 February 5, 2007 Bennett Johnson, 708 Washington Street, disagreed somewhat with Ms. Treadway's statement that things have already been decided. He has spent his life changing the unchangeable and muting the immutable. Things can be changed. He has a lot of experience with budgets. In 1960 he worked for the Illinois State Employment Service and did its budgets. In the Walker administration, he was director of Program Development & Planning in the Governor's Office of Human Resources, where they prepared State of Illinois projected budgets for ten years. He was also a member of the late Harold Washington's "kitchen cabinet" and advised on budget matters, so he is familiar with the complexity of doing a budget. He has learned that the mission of an organization is what financial resources are applied toward. When the mission of the City is human relations, they have to apply financial resources to fulfill that mission. Someone may say that this is 2007 and we don't need it anymore. He recalled attending the 50`h annual convention of the NAACP and the slogan was "Free by 63." Fifty years later there are still many problems. In some ways the problem of race is like approaching infinity, something strived for but never quite reached. When the Human Relations Department is downgraded to a division, the City, in effect, says that it is no longer needed in Evanston. That reminds him of "mission accomplished" and all know who said that and where we are now in the world. The needs for human relations are in housing discrimination and affordability. When many homes are built that are not affordable by low and middle income households. Human relations is needed in employment, where discrimination is alive and well, and is more subtle and sophisticated than it used to be. In the past an ad would say "no blacks need apply." It isn't done that way now, instead it is by name and sound of voice. "The job is filled or the room is no longer available." Human relations is needed for minority contractors. There is a great deal of building going on. He asked how many tax dollars are allocated to minority contractors. Oversight is needed in that area. They all are aware of the achievement gap in education and need to know the cause if they are to have a society of equals. There are some problems with law enforcement. He has been involved with police misconduct for more than 50 years. Certain things inherent in being a police officer cause persons to do things they would not ordinarily do that are unfair and sometimes illegal. That needs more oversight and understanding and needs to be done outside the Police Department so they can instruct themselves on how to improve. He said the same holds for recreation. Go to a particular park or recreation center and one will find a particular ethnic group represented. That is okay if that is what is wanted. But if leaders say they want a diverse and integrated City, then they need a commission to look at these problems and do something. Mr. Johnson added that not only should human relations not be under the city manager, but it also should be elected like aldermen so it would be truly independent and represent the wishes of residents. He did not think they could do a line item for Human Resources. How valuable is Paula Haynes to the City of Evanston? How much information and skill resides in that woman they plan to discard. They also have George Dotson. His family hk.as been here for almost a century as homeowners and 30-plus years with the City. To him, that was inexcusable and a waste of human resources. They cannot replace people like that and those positions need to be preserved. He tried to live what he preached. Human relations cannot be treated lightly and they cannot say the mission of this town im not to develop relationships among all sections of the society. If they don't believe that, look at who walks down the s treet and lives next door. People live as tribes and don't interact with each other as much as they should. The Human Relations office plays a vital role and should not be turned into a division, but become more independent than it is today. h✓Iayor Morton declared the public hearing over at 8:25 p.m. General Budget Discussion N-layor Morton asked if there are any services or jobs that the TIFs could pay for. Ms. Carroll stated they currently pay for Poolice officers downtown. There has to be a relationship of the job to the TIF. Assistant City Manager Judith Aiello e:�cplained that since the cinema was built, during the summer months a police beat was created that is funded from the CIF. If there is a need at other times for a police officer, that too, is paid from the TIF. There are a number of positions t*iat are funded from a TIF but they have to show a relationship to various eligible activities within the TIF to do it. Mayor Morton asked about CDBG funds. Alderman Rainey explained they fund recreation, housing, human relations, the N-O/EBE coordinator and economic development, with the bulk going to Community Development. Cornnnunity 32S 7 February 5, 2007 Development Director James Wolinski described the positions in that department funded by CDBG. Mayor Morton wanted to know if more could be added. Alderman Rainey pointed out that the City has been urged by HUD to fund non- profit agencies. They could always divert those funds to the City for allowable expenditures. Mr. Wolinski stated that HUD is strict on what positions can be funded with CDBG funds; must be located in the target area or with residents who live in the target area. Alderman Jean -Baptiste asked the formula for funding money from TIFs. Ms. Aiello stated that it is based on how much money it would take to administer the TIF and do work related to what goes on within the TIF. In the early years, because there is more activity, more can be charged. In the older TIFs, where there is not as much administrative work, they have to be careful about what they charge. The City defines how much work is necessary. Parts of many salaries are paid from TIFs. She believed they have taken as much money that they can. Alderman Jean -Baptiste asked for a budget memo on who gets paid from TIFs and how much, and how much is in the Economic Development Fund. In response to Mayor Morton, Ms. Carroll explained that they budget for salaries in the departments but salaries that are paid from CDBG funds are handled as transfers. It is around $742,593 for TIF funds. A memo will be prepared. Alderman Rainey explained when they created the Howard/Hartrey TIF, it became apparent that there were many accidents and some theft with many calls to the Police Department. She suggested to Ms. Aiello that the TIF should fund some police services and it is in the budget for $135,000. She did not think there was any transfer from TIFs to the Fire Department. She was certain that due to economic development within TIFs, the Fire Department responds to more calls than previously. She suggested they look at a transfer to the Fire Department from one of these TIFs. Ms. Carroll said staff would look at that and prepare a budget memo. Alderman Rainey wanted the formula for calculating the amount. Alderman Jean -Baptiste asked about the allocation for the new position in Emergency Management. Ms. Carroll said that . currently the City receives $20,000 from FEMA to partially offset the cost of the Emergency Management Program and will seek more funds. $30,000 is proposed for next year. Alderman Jean -Baptiste asked why Facilities Management is not funded through TIFs. Ms. Aiello said vehicles were purchased with TIF funds and one position that does maintenance at the garages plus part of a supervisor's salary. The Facilities Management Director position is funded by FEMA and the General Fund. The director's responsibilities are in the transition plan. The new Emergency Manager will be a full-time position. Currently about 500 hours of the Facilities Management Director's job go to emergency management. Ms. Carroll thought it important to have a full-time emergency manager to coordinate activities. With the university, two hospitals, two rail lines, senior facilities and schools, they need a. fully exercised emergency plan for Evanston. That salary would be partially from the General Fund and grants. Alderman Rainey moved that they add the corporate sponsorship account representative for the Arts Council at $52,000. Seconded by Alderman Wollin. She suggested that this be for one year, so that the Arts Council can prove to Council that it will work. Greg Salestro, who does similar work for National Public Radio, convinced her. There is no reason that taxpayers should pay 100% of all the wonderful activities of the Arts Council. She thought this job would generate enough dollars so these programs could be run without City funds. Alderman Rainey moved that $500,000 be moved from the Water Fund to the General Fund. Seconded by Alderman F can -Baptiste. Alderman Rainey believed that this money could be moved; noted that all expenditures are taken care of in tl1be Water Fund. Alderman Tisdahl asked for the impact on the Water Division. WVater & Sewer Superintendent Dave Stoneback acknowledged there is a substantial amount in the current Water Fund balance. If they looked at what is proposed to be spent in 2009-10, they will run into the red, and either have to sell bonds Oftr have a water rate increase. Currently, most of the $3 million spent annually is for water main replacement because 47% Oftf the water mains in Evanston are more than 100 years old. Spending $3 million a year allows them to replace about 1.5 miles of water main, just under 1/1001h of a percent. Water mains are expected to last a hundred years and it seems Prudent to do that work. If they cut back, they will run out of money. Alderman Rainey asked what was wrong with issuing water bonds. Mr. Stoneback said they will incur debt service rather than being able to pay for it. She noted it is a c a apital expenditure. The City will probably have to rebuild the Robert Crown Center and they would likely have to take o%ut bonds. Mr. Stoneback thought it more prudent not to have to sell bonds and incur debt. Alderman Rainey asked how �26 8 February 5, 2007 they planned to raise $10 million in cash. Taking out bonds when interest rates are low is not necessarily a negative. He explained they transferred $2.5 million on return from investment and also transferred$590,000 to the General Fund in other costs. If the $2.5 million was not transferred to the General Fund, the Water Fund could proceed without selling bonds well into the future. He realized that may not be feasible; agreed they could sell bonds and the Water Fund could absorb it. They are trying to be cost effective and self supporting. To do that they need to minimize transfers. Alderman Rainey asked if somebody could take the other financing sources under the Water Fund and go through Council with the transfers. She was looking at January 17 memo, November Year -to -Date Actual Budget Report. She was told almost three weeks ago that the Water Division would respond to her idea of transferring $500,000 to the General Fund. Budget memo 37 explained that, but she found it unconvincing. According to Mr. Grady the Year -to -Date Actual Budget Report should be available in another week. Ms. Carroll explained that if Council wanted to go in a different direction by funding water/sewer capital improvements through bonds was a policy decision they could make. That is not what the City has been doing. The rate study done last year was based on the assumption that pay-as-you-go would continue as long as the money was there. She thought that Dave Stoneback was operating under past assumptions. She noted that revenue bonds are more expensive to issue and was not opposed to discussing them. Alderman Rainey believed that, due to expenditures they are unable to make in their budget because of cutbacks, that they could access the $500,000, especially for the item that is a one-time use for the Arts Council. She stated that the elimination of the Human Relations Department was a policy decision that this Council did not make, except that they were asked to eliminate the director and transfer those services to the City Manager's Department. It was done without consultation with the Council and came to them as a budget issue. She believed, like others, that it will erode over time. She wanted to see the Human Relations Department and director restored for the next year so they can figure out the dissolution of that department. She knows the manager has been praised by the Chamber of Commerce, for doing a fabulous job. She understood why, because nothing was imposed on businesses. All they have done is taken from those who are least likely to come before Council. She saw serious problems and the $500,000 could help avoid some of them. Ms. Carroll said the $500,000 can be transferred if Council chooses. If they take money from a revenue producing fund such as a utility, what would they do for the long term? Alderman Rainey had talked about one-time items. She wished to retain the Human Relations Director so that Council could participate in the dissolution of that department. Another is a vne-time shot for the Arts Council to prove a corporate sponsorship program is workable. She thought if they take S�500,000 one time from the Water Fund and, if that caused a total deterioration of provisions for water main replacements, they would have a more structural and deeper problem than the Water Fund. Ms. Carroll said that staff had explained that if they take the $500,000, they would have to borrow money sooner. If Council wanted to go from pay-as-you-go to borrowing, that was a policy decision. N*4ayor Morton asked if they did not expect funds from other sources in the future. Ms. Carroll stated they won't receive a-dditional revenues until 2010-11 based on a 2009 tax levy. One TIF would produce an additional $2 million. Her czoncern was that these proposed items would not take the entire $500,000 and how would they fill that gap in the future. Alderman Jean -Baptiste noted they also have $700,000 from Northwestern University. He thought by the time the Water mound needs money, the City would have one more payment of $350,000 that the City will receive this spring. He thought they could avoid borrowing money that Alderman Rainey's idea was reasonable. Once that is put on the board, they can s-ee how it will impact the property tax and what could be restored. h►4r. Grady said if they take the $500,000, they must consider revenue projections. This year Water Fund revenues did not come in due to summer weather conditions. It is high risk. If they take $500,000 they may get some property tax relief but eventually it will catch up with them and they would have to increase water rates. He explained transfers to the Insurance mound and Capital Improvements. Alderman Tisdahl recalled that when Northwestern University gave the $350,000 a year f' or three years, Council said they would re-evaluate it at the end of three years. 3 �- 9 February 5, 2007 Alderman Hohnes asked if there are other positions at the City that receive a commission as proposed by the Arts Council Corporate Sponsorship position. No. Ms. Carroll was sure that person would be a contractual employee. The position is $46,000 plus benefits. Ms. Carroll thought there would be a salary and commission based upon the premise that a certain amount would be raised. Alderman Wollin re -read the budget memo on the transfer of funds from the Water Fund stating that the financial projections verified by.the VK Rate Study indicated the Water Fund would be depleted by 2008; thought it not wise to transfer the $500,000. Alderman Rainey has never understood the contribution of new customers to Water Fund revenues; thought there were. 1,000, new residential units downtownand asked how, would that affect -the five-yearprojection for revenue. Ms. Carroll stated that all those households were accounted for based upon data given to the consultants. Mr. Stoneback explained, that residential .condo users don't use a lot of water. They recognize that. especially in summer when there is lawn sprinkling: Those in condominium facilities don't have lawns. Mayor Morton asked when water contracts are, up for negotiation. Mr. Stoneback said they are currently negotiating with the Northwest Water Commission and have the right to extend it for another five years. He thought 20 years remained on the current contract, so it would probablybe, another 25 years: Ms. Carroll explained that the City asked for, a re -opener to the contract because they felt it was being under compensated. They have until March..to conclude negotiations. The City would have a number of the increase or go to arbitration by March 1. The City gets an increase each.year. . Alderman Jean -Baptiste stated some aldermen are concerned that they need to allow for a longer transition for changes to the Human Relations Department. The perception in, the community is that the Human Relations Department is being dismantled. He supported Alderman Rainey's suggestion to take a longer. transition -period and retain the director to improve that department's work, then come back with closure of certain positions if necessary: He did not think it a good.; policy to drop the director because it symbolized a departure from what the City has done. Fund the Human Relations Department for another year. until they are clear about the direction they want to go. They could fund it with the Water; - Fund $500,000 or the $700,000 from Northwestem University: He noted they.'ve talked about focusing on youth and the Recreation Division will lose, a significant youth worker -who has done this for a long time and urged them to reconsider. He has not worked closely with others who will be let go; but it seemed counter -productive to cut from.services to youth. He supported finding funds for the: Human Relations Department Director and the youth worker in Recreation. Alderman Rainey tried to figure out what the policy change would be if they don't.use bonds for capital improvements in the Water Division when for the last few years there is over $600,000 for debt service. What were those bonds for? Mr. Stoneback said a large capital expenditure was added in 1982-86 for major, improvements when they bonded for $20 million. Now they do not look to make major improvements, just routine maintenance of facilities and hoped to do it without a bond issue. Selling bonds. would be acceptable; has been done in the past and will occur in the future. Alderman Wollin thought there was a cap on debt service. Alderman Wynne talked about the perception that the City was eliminating health care and thought that now people understand that these services will be transitioned to the hospitals. The same thing will happen with the Human Relations Department the structure of the. organization will change and they need to get this out to the public. She saw no issue of managing perception. She said that the City has used one-time revenues too many times and could not support using Northwestern money to fill a budget fund or that is not a capital improvement. A decision was made years ago that they. would not use one-time revenue, unless that money would be used forsomething of long-time value to the City. She urged them to use the bond cap where they don't have a system in place that allows them to maintain capital assets..She appreciated people trying to hold onto positions when they are struggling to turn the City in a direction so they don't sit there every year trying to close larger and larger budget gaps. Now, they are doing what they heard was needed for years and that is to rethink how they run the City. Mr. Grady stated that staff did not recommend transferring the $500,000 because issuing bonds to pay for operating costs was similar to using a credit card to pay for groceries. 3 `,? 10 February 5, 2007 Alderman Tisdahl agreed with Alderman Jean -Baptiste that they have a Strategic Plan and a Youth Initiative, which are basic goals. Therefore, cutting the position at Robert Crown bothered her. The Human Relations Department was also a concern. Given that they have to make cuts, the position at Crown ties in with the Youth Initiative, she wished to consider keeping that. She agreed that one-time revenue should not be used, but hoped the Northwestern money was not one time. Ms Carroll said she had tried hard not to make it about individuals and make it about the needs of the organization; how they need to streamline operations and try to do more with less:. it bothers her when they "discuss adding back two positions when 25 others are in a similar situation. They looked carefully at a number of positions suggested by directors. .. This was not a personal attack, but gets expenditures in line with revenues. A greater burden is on employees. Alderman Hansen said- that elimination of positions would'not mean elimination of services. The Program Coordinator at Robert Crown will be eliminated and she understood that somebody else in. Recreation would pick up that job. The manager was given the task to put. this budget together. Position elimination is not limited to Evanston. Over time there are changes and some new positions are needed. On the one-time transfer of $500,000; she wanted to reduce the property, tax on residents. She predicted that Cook County would increase its'share of the property tax. Alderman Moran noted they have been warned by the bond companies that the City's bond rating is under review. They y - have serious makeup to do regarding the -pension funds. If the bond rating slips, they will see a significant impact on the • bottom line. It will cost the City more money to carry debt and that will hurt. It troubled him to hear that they should take from one reserve fund to another and use it to pay operating expenses. It is'particularly dangerous to say they will see flow it goes or maybe "there will be more revenue: That is not proper,budget ng: 3everal people have said they don't understand why they are adding positions. He stated the manager is making decisions to right -size government and pursue efficiencies where possible. They have discovered there are needs and have to add a position. Years ago they cut the Risk Management position and over time, the City has'lost money because no one was controlling their risk. They need someone in that position and it would lead to`savings over time. It is a combination of how they carry out their functions responsibly while seeking efficiencies wherethey can. Organizations do what they must to survive. He thought it important that they exercise these functions responsibly and, generally, they have to support the budget presented by the citymanager. There is broad support for the progress this'budget represents:' . Alderman. Wollin agreed with Aldermen Wynne and Hansen; that the position cuts were made thoughtfully: She took staff at their word that services would not be depleted. Alderman W ollin moved to remove the $500,000 from the revenue side. Seconded by Alderman Moran: Alderman Rainey suggested that they have no budget meetings or discussions next year because if they do not challenge the manager's budget, what are they doing here., The reason this budget is being embraced is because all the cuts made are in areas that serve low and modest income persons. She fully supported cuts in the Health Department; was sorry for those who will lose their jobs, but they are skilled and are needed in the medical community. She was convinced the two hospitals could provide the services being cut; saw the City's provision of those services as duplication. She stated there is nobody in the city manager's office who could do the Human Relations Director's job. That is cutting a service. Additions to the budget have come in the branch libraries and three people at the main library. Poor folks are getting cut and the well-to-do are getting service. She said it is an embarrassment for this City that brags about its diversity. The City Manager's office is becoming an upside down pyramid, a huge outreach gathering in all these services. The reason many feel that these services will be provided is that they have little interaction with the Human Relations Department. She doubted that many had more than an hour's interaction during their term. In her ward, she has a lot of interaction and sees people suffering. She won't send them to the manager's office for help. She stated this was not the way to dismantle this department by placing it in the manager's office. She thought it a shame that the "haves" and the "have nots" are treated differently in this budget. She asked for a memo from bond counsel regarding the effects of a lowered bond rating. Mr. Grady stated that had not been provided and would be available when the pension proposal is presented. They will get something out by the end of the week. Alderman Jean -Baptiste noted that in the past, aldermen got together and made changes to the budget. This year they are genuflecting before the city manager, conveniently after the branch libraries were off the table. So then everybody would 30 1 1 11 February 5, 2007 be satisfied with everything the city manager says, once she has accommodated those aldermen's requests. Technicians and analysts have been added. The reality is that the Human Relations Department ought to be managing the youth services they are creating; have the ethnic outreach person serving Latinos, the Summer Youth Employment Program should continue and the outreach to "businesses that sought to expand jobs and serve more youth. Even the M/E/EBE ought to be under the oversight of the Human Relations Department. It is there that issues of equity are best addressed. He urged them to take a close look at what they are adding and taking away. On that basis, he was not genuflecting and suggested for the coming year that in respect for the years of service and'the importance of the Human Relations Department to, the City that they restore it. Consider making sure in reorganizing that all services that have a human relations component are in the Human Relations Department. He recalled aldermen complaining about the services they receive from the City Manager's off ce. So what makes them think that passing this on to the manager's office that all will be well. In the, Recreation Division, staff has said the work done by George Dotson will be absorbed by somebody else.' Department heads have presented a unified position: No one has come here saying this is a crisis and asking "please add this back." That is not how organizations work. At Robert Crown businessmill be as usual. George Dotsonwas invisible and did not need to be therein the first place: People are. promoting that kind of posture which isn't real. Support for this budget has come from those whose projects were preserved; therefore, everything, else is expendable. He still believed they must find funds to keep the Human Relations Department Director, at least for a period of time, because a transition cannot be made without her participation. He will continue to -look for funds for these positions.:. ~ "Alderman Rainey asked the status of the leasehold tax at.1800 Sherinan Avenue. Ms. Carroll stated that PIN numbers have been set up for those leaseholds. There will be follow up: Mayor Morton was concerned about payments from Cook County Housing Authority to the City. There is a new director and she foundthat the Authority pays .$30,000 to Cook ;County and the City gets only $5,000. "Roll call on transferring $500',000 from Water Fund to the General Fund. Voting aye - Rainey, Hansen; Jean -Baptiste. Voting nay - Holmes, Moran; Tisdahl, Wollin, Wynne: Motion failed (3-5): Alderi-han Rainey asked for a detailed explanation of expenditures in the Insurance Fund; page 460 budget. There being no further business to ,come before Council, Mayor.Morton asked for a.motion to adjoum.,.The Council so moved at 9:55., 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 Citv Clerk's office.