HomeMy WebLinkAboutMinutes 1989Draft - Not Avvroved
Minutes
Budget Policy Committee Meeting
of May 18, 1989
Members Present: Aldermen Brady, Collens, Juliar and Korshak
Members Absent: Aldermen Drummer and Nelson
Staff and
Officials Present: Vincent Adamus, Management Intern; Keith Bennett,
Assistant to the City Manager; Bruce Zimmerman,
Assistant City Manager (Joel Asprooth, City
Manager; Mayor Barr; and Robert Shank, Finance
Director were involved in another meeting being
held at the same time, and arrived while this
meeting was in progress.)
Others Present:' Ira Golan, Evanston Chamber of Commerce; Jerrold
Wolf, David M. Griffith and Associates;
Unidentified Daily Northwestern reporter
Presiding Official: Alderman Collens, Chair
Summary of Action:
The meeting was tailed to order at 7:51 P.K.
Minutes;
The minutes of the November 9, 1981 meeting (Public Hearing on Revenue
Proposals) were approved as submitted.
Receipt/Discussion of User Fee Assessment Study
Alderman Collens acknowledged an article on user fees from the March, 1989
issue of Governing magazine which Alderman Korshak had distributed to the
Committee. Discussion next turned to the study of inspection services and
user fees conducted by David M. Griffith and Associates, Ltd. (DMG), of
Northbrook.
Jerrold Wolf, Vice -President of DMG, summarized the report, the study
methodology, and its findings. He explained that the methodology seeks to
identify all central administrative costs, and allocate these costs to all
of the departments that benefit from them. He indicated that the data was
obtained through interviews with senior personnel in the departments of
Building and Zoning, Finance, Fire. Health and Rehabilitation and Property
Maintenance. In order to determine the costs for the inspectional services,
Mr. Wolf explained, it was necessary to determine the costs for all tasks
performed by these departments. Mr. Wolf added that in the area of Fire
Prevention, he did interview each individual firefighter, and found that
some Suppression personnel have responsibility in that area as well.
In the Building and Zoning Department, Mr. Wolf indicated that the analysis
was based on nine months of experience, which was extrapolated over a full
year. This information indicated that the City received revenues of
Minutes of the Budget Policy Committee Meeting
May 18, 1989............ Page Two
$573,500, but that this activity required a subsidy of $194,500. Mr. Wolf
stated that certain specific activities performed by the Department could be
viewed as being done at a "profit", but overall, the inspection activity
here requires a subsidy from general revenues. Mr. Wolf added that the
larger projects (those on which the City engages a consultant) would appear
to subsidize the smaller projects.
Ira Golan asked Mr. Wolf if, from his experience, there were communities
which contracted out all building permit activity. Mr. Wolf responded that
this was done in smaller municipalities, primarily due to a lack of
professional sophistication or an inability to afford a significant staff.
Alderman Korshak indicated that it needs to be known what percentage of jobs
are over $200,000 (the point at which projects are contracted out).
Alderman Collens asked whether or not the rationale for contracting out was
the degree of sophistication of the projects. Alderman Korshak stated that
the City could hire someone who has the expertise to handle such major
projects, but that person could be idle much of the year. On that point,
Mr. Wolf added that building permits are a very cyclical activity.
Alderman Korshak stated that he would think that an administrator would want
to have a policy that enabled him the flexibility to determine when projects
were contracted, taking advantage of the peaks and valleys in the workload
of the in-house staff. Mr. Golan asked whether the cost of a similar unit
was cheaper if handled in-house rather than by contract. Mr. Zimmerman
responded that the information DMG examined would be unable to answer that
question. Alderman Brady indicated that she thought handling the projects
in-house would be cheaper in larger cities, and more expensive in smaller
cities. Mr. Zimmerman pointed out that when the City moved to contract out
these projects, staff was reduced by two full-time inspectors.
In the Licenses and Measures element in the Finance Department, Mr. Wolf
indicated that the cost of providing the services was $10,860. with
resulting revenue of $4.510. He presented some recommendations on
recovering a significant portion of the difference through increased fees.
Mr. Wolf added that these inspections represented a small part of the time
of the License and Measures Inspector's time. Alderman Collens wondered why
there appeared to a separation between the inspection of taxicabs and the
inspection of taxicab meters. She requested some additional information on
what these inspections represent, why the fees are separate, whether the
inspections are performed at the same time, and the license fee history.
In the Fire Department, Mr. Wolf indicated that two services worthy of
consideration for the institution of user fees were routine inspections and
tank inspections. There are other inspections that the Fire Department
provides that are related to the functions of other departments (examples
being plan reviews and inspection of day care facilities), and the study
includes those costs in the cost summaries for those departments. Mr. Wolf
pointed out that while routine fire inspections are a responsibility of the
Fire Prevention Bureau, they also occupy a fair amount of the time of the
Fire Suppression staff. Mr. Wolf raised an issue for consideration with
regard to inspections of commercial buildings: that of whether the business
itself or the landlord should pay the fee. He added that these inspections
4
Minutes of the Budget Policy Committee Meeting
May 18, 1989............ Page Three
serve something of a public purpose in that those buildings are used by the
public and the inspections serve to familiarize the firefighting force with
the facility layout. Mr. Wolf stated that where the City may want to
consider some type of fee is where citations have been ignored or
recommendations pursuant to inspections have not been followed. Regarding
the inspection of underground tanks, Mr. Wolf would encourage the
institution of a fee, and included a fee schedule used by the State of
Wisconsin. He indicated that another option may be to collect the cost of
inspections by handling it as a lien on the property.
In the Food Sanitation and Environmental Health functions of the Health
Department, DMG found there to be an approximate subsidy of 70%. Fees for
restaurant inspections were found to cover about 20% of related costs.
Alderman Collens asked how these results compared with generally accepted
standards, and Mr. Wolf responded that there really were no generally
accepted standards in that area. Alderman Collens requested detailed
Information on the services provided for which no charges are levied, and
the reasons no charges are levied in these instances. She also requested
information on what resources are received on the City's contract with the
Village of Glencoe to provide these services there.
Mr. Wolf pointed out that the Long -Term Care function was added to the study
at the request of the Health Department. This function showed a subsidy of
86%, which worked out to approximately $185 per bed. Alderman Korshak
declared that a subsidy of that magnitude required some additional
information. Alderman Collens requested a breakdown of how many inspections
and reinspections were required per home.
Mr. Wolf indicated that the fees for inspections in the Rehabilitation and
Property Maintenance Department come very close to covering costs. Alderman
Juliar pointed out that when he purchased his house, he hired a contractor
to inspect it. He inquired as to why in the case of condominiums, the
inspection could not be performed at the expense of the prospective buyer.
Alderman Juliar also requested additional information on the nature of the
condominium inspections (whether the inspection is confined to the
individual unit, or whether other aspects of the building are involved as
well). Alderman Brady noted that the subject of fees for property
maintenance inspections is on hold before the Planning and Development
Committee, and wondered if it is now feasible to resume those discussions.
Alderman Collens suggested that the Committee wait for more information
(such as the number of area inspections and reinspections). Mr. Wolf
responded that at approximately $10 each, initial inspections brought in
$136,095 in revenue, and at approximately $15 each, reinspections brought in
$59,093. The issue was raised as to how (in terms of numbers) these
inspections are distributed between the CDBG target area and the remainder
of the city.
The Committee directed staff to distribute the repo:-t to the full Council.
Alderman Korshak stated that the role of Council is to establish a policy,
and for the City Manager to outline some recommendations within the
framework of that policy. Mr. Zimmerman stated that it was clear that fees
are low in some areas, and that it is feasible to consider which fees to
Minutes of the Budget Policy Committee Meeting
May 18, 1989............ Page Four
raise and provide comments on each area of the DMG report. Mr. Wolf
mentioned for purposes of clarification that in its report, DMG did not
address how services are performed, limiting its scope to the cost of
existing practices. Alderman Collens, on behalf of the Committee, thanked
Mr. Wolf for the report. She indicated that the Committee would reserve for
further discussion what other City services to look at, and suggested that
the Committee make some recommendations and turn them over to the
appropriate committees. Mr. Zimmerman suggested that the next steps would
be the setting of appropriate targets, establishing the mechanisms for
reaching those targets, and including some sort of inflation factor.
Consideration of Changes in the Budget Review Process
Mayor Barr arrived for this discussion. Alderman Collens asked Mayor Barr
and Alderman Korshak to explain their concerns.
The Mayor stated that as she sees it, starting in January, an immense
document is dropped in the laps of the Council, but the Council perhaps does
not become quite familiar with it. She continued that Council must deal
with the budget immediately, and has very little means of dealing with what
is in it. Mayor Barr expressed the belief that Council has little input on
what goes into the budget, except on some broad policy aspects. She
indicated that she had thought of some ways to consider the budget, or some
aspects of it, earlier. She stated that every year, a number of things are
passed without sufficient thought given to the implications of those
actions. The Mayor suggested that the existing standing committees divide
into special committees to consider the budget.
Alderman Korshak concurred that the budget contained too much material to be
absorbed in too little time. He suggested the creation of six committees of
three Aldermen each, supplemented by citizens who are familiar with finances
and budgets in an advisory, non -voting capacity. These committees would
convene in the fall for the purpose of understanding the current year's
budget.
Alderman Collens pointed out that the Human Services Committee goes over the
Board and Commission budgets in a rather short period, and discusses with
staff as well as those boards various issues of the proposed budget. She
asked whether that process has been helpful and whether anyone on Council
other than the Human Services Committee benefits from it. Mayor Barr
responded that perhaps the solution would be to have the other two standing
committees review other aspects of the budget. Alderman Brady stated that
the situation would be somewhat different if, for example. the
Administration and Public Works Committee reviewed the Police and Fire
budgets. Alderman Collens stated that she is not sure what is wrong with
what Council does now. She made reference to some budget materials she had
directed staff to obtain from the City of Dayton, Ohio. In that city,
citizen committees make recommendations and set goals and priorities.
Alderman Collens remarked that there has been no success with goal and
priority setting processes here. Alderman Korshak commented that in
addition to the bulk of the material being awesome, a subject that needs to
be addressed is how to proceed if it becomes clear chat revenues and
expenditures do not match.
Minutes of the Budget Policy Committee Meeting
F.ay 18, 1989............ Page Five
Alderman Brady stated that she feels that the topic of the budget is the
responsibility of the whole Council, and expressed curiosity about what
other communities do. She suggested that perhaps on four off -Mondays during
the summer, department heads could make presentations on the progress of the
current year, and that this would include dialogue and citizen comments.
Alderman Brady envisioned this process as forming the basis of priorities
that Council would like to see the City Manager incorporate into the
budget. Alderman Juliar questioned whether it was desirable to have that
many meetings and that many committees. Alderman Collens commented on the
recently instituted monthly activity reports, indicating that they contain
the type of ongoing information that would enable Council to consider why
things are done as they are. She added that monthly reports may be too
frequent, but quarterly reports may be sufficient. Alderman Collens pointed
out that staff prepares quarterly financial reports, and the Budget Policy
Committee places them on the Council agenda, but there are never any issues
or questions raised. Alderman Brady wondered whether the timing of the
budget presentation and adoption are part of the problem. Mr. Golan
suggested that the support that goes into the quarterly financial reports
could be further refined. Alderman Brady requested that staff obtain
Information from similar communities on their budget processes. The
consensus of the Committee was to continue this discussion at the next
meeting. Alderman Collens requested some input from staff on the internal
budget preparation process, which was summarized briefly by Mr. Zimmerman.
Communication from Police Pension Fund on Tax Levv Reauirements
The Committee acknowledged receipt of this communication and referred it to
the Finance Director.
Consideration of Regular Meeting Schedule
The consensus of the Committee was to meet regularly on the third Wednesday
of each month. Meetings were set for the following dates: June 21, July
19, August 16, September 20, October 18, and November 29 (due to a conflict
on the third Wednesday of that month). No meeting was scheduled for
December.
With no further business to come before the Committee, the meeting was
adjourned at approximately 9:50 P.N.
Minutes to be approved at the next meeting of the Budget Policy Committee.
Respectfully submitted,
1116 ,a
Keith Bennett, Staff
e
DRAFT - NOT APPROVED
Minutes
Budget Policy Committee
June 21. 1169
lembers Present: Ald. Brady. Collens. korshak. Nelson
Members Absent: Ald. Drummer. Jullar
Staff Present: V . Adamus . Ci tv Manager Asorcct_` . K . Bennett.
C . flowers . R . Shank, B . Zimmerman
Others Present: Ira Golan. Chamber of Commer,e; Timcthv
Schoolmaster, Police Rensicr Board
Presiding Official: aid. Collens
ummary of Action
Chair Collens called the meeting to order at 7:45 p.m. ___. Manager
Asprooth informed Committee members that Keith Bennett. Ass_. to the City
Manager and Budget Officer accepted a new oosition as Budget Analyst for
Arlington County, Virginia. Bennett stated that he hsd enjoved working with
the Committee and appreciated their support. Chair CcI lens wished Bennett
good luck in his new position and complimented his work or :ne recent budget
process survev crojert; Ald. kcrshal offered oraise in- Cie avalit of
meeting minutes Dreoa.red by Bennett.
WFer Pee ?ssev=mer• t S twd'.
Cho:- Col Len: =ta`ed that no response had been recei,es - :m other Cit'"
Council members on the April 1984 User Fee 45zessmerr ieocp` prepared 4or
the Ciiv ov Da�id M. Griftith I Associates.
ALd, r orsna+ reauesYed iniorm?tion on the number roi m_'-W�-5 ior -a-leas
ser' _ves and what assumat.cns mare .:Sec � - - _ _"nula
=r=v • - = omal :sl- zoo on cru',_ ;ec.
DIS7 0_;10r Wegar or a =,is/vi staf•-Svown_o to .omm:1709
-ocorllrq in,crmat_Wn presented in the 4/SQ ;=r_r+_r- n-_r_, A!=. Brad'
=OmmertSt nrll =ta•_ -eSDonses carrerted zerinin ln"o -- srd zoln,ed SQt
;m. _.=_^n= in _^e Sr _ _th Reccrt.
001 : _ _a ___r an•_ - _ er_t "a_,.tenancs. ar_^mmergdg -. _-.- - --
:_- 10m: vom "0=0.0 17avention •ees 3r; tnon 1-e _r_: =esnec
some ca5eti or :ants and -�c4t- �'e �tiP - -- _ _ _��sr -
"A iPr --
...-v .anrina arc 00-0: 1cment Committee t~e-erommero= __=r -ectQr _:
-c"sinc Pehanilitaricn and Prooert� Maintenance that » _,mi-__r -ejale
:nigeCtlars we 7i yon�In ted.
budget Policy Committee ... 2
June 21, 1989
Referring to the 6/16/99 memo from Asst. Finance Director, Wathryn Booth on
Environmental Health License Fees Chair Callens noted that tees listed in the
Griffith study are business license fees: no inspection gees are charged.
Referring to the Environmental Health Cost/Revenue Summary in the Gri*Vith
Reoort, Chair Collens noted certain totally subsidized empen,es. [n resmonso
to Ald. t orsha4 's question, City Manager 45prooth stated tn_.nfa license We
could be used to subsidize inspection co=_ts. Mid. C01100= rc_ed that ver the
6/1/W memo from the stealth Director, swimming pools are licensed by the State
and the City is reimbursed fcr inspections through the estate ionic Health
Grant (SBHG), an item not shown In the 'Sr,irith Reporn. He octed that the
5BHG is a broad grant. could be studied to determine use for ctler services.
but that life the Library's per capita State grant, the would have to
specLfw fund usage.
:n response to Ald. Brady's ouestion regarding nealth services orovided to the
li n age of Glencoe. the Citv Manager stated that the Cft, n5 % llv reimbursed
i_r all services OrovLded.
Cant Managers Recommendations on Inspection Fees
The Committee then reviewed the 6i16•Sq report. City varager"s Pecommendations
on Inspection Fees. a response to the Committee questiors on the Gri++ith
S tudv .
WILDING and ZONING - 41d. Nelson stateo that user fees 1_r Verge regulations
Inc l _ode a
79% subsidv and sign
tees ryoresen t a
48% su t E J
_ . ?rc uggeg ted that
these are
out of line compareo
to more eFsen*ial
serve=as
_.- =_ n1owinq_ and
electric.
Ald. Nelson state;
general egreement
w• to r'-s :...
'^=eager =
`ecommendatlons but nrwocseC that
-ence or= sign
tees _e
=_-__-.
Old. Nelson mcvmd PCcpiimr n; the ` . ?nscy- =._inn -10 ZUL:71nq
and .cnirg inspectional aer'.:.._a Vees nct be increased. _`a= i- 1atlonar'v
adjustments as needed be made to maintain a -S% recove-. -sie. not added that
_Lure consideration be given to bri^q a!: serylce fees in n-to=ategory to e
25% subsidv level.
...• ?. d. ^c*_ed that _"e ___, tce=- t eice . _.
_.usel lacy -al! _. _ ;'J es tea "" n _ _ _ ;
re , I _ - _ -ar r
.:UGC. ._ne a.vo n-ren --a v a
reg -•__:n_ Pr_ e = _.a
~ _ ��-
shcull me assisted and that r-eGe
lycn2ry could ]us__ e
_.-. a. =u_.j,nq
-n'3Cectlon-e'_cy9ry ra =ic a' -1%
M* tonal most.
4. . ' Or_ nAF _;q reeC IN1 `n A;... I r?r,-!.
0-0 --ran *".at t-wy- ....J=
.-a Acer loan
rest . , tMe area, `ae swilesred
t i` - neBwores qF -- -
_,. :mst-owner,,
-TAW to open space areas ar . what
i -_-arty .s a 1 -. ... . D
_0
.T T�_ user _Z-r. •-W. `C = 3t
_cmfTe-Ted t-ar Zt% is -
_ ;mco -nc to Otte- acerat ions Ord
augges'_ec t"a* Otte" - ,
"osem `a
_ -r S I le-e , Aid, Ve ! =on agreed
* na t -ee lnc,esSeS Cc_:
eC On^T. _
levelopment but roved that orceert'.
-eracil_tation =_=nS a-V
-_- a--erte=
-once'' or sign ct =t3.
r
Budget Policy Committee...3
June 21. 1989
!'lotion to adopt the City Manager recommendation, that building and zoning
lnsoectional service fees not be increased and that in4lationary adjustments
is needed be made to maintain a 71% recovery rate, was aooroved inanimously.
LICENSES and MEASURES - Aid. Nelson moved approval o = the :in Manager's
recommendation of no insoectianal fee increase. Following dic._,ssion on the
merits or the recommendation, motion approved unan imcu5l ,
FIFE DEFARTMENT INSPECTIONS - Ald. nelson moved aoproval _c the City Manager's
recommendation of no Tee increase for routine fire inspections and adooticn ,o�
a see structure for tank inspections based an the State ci Wisconsin s fee
schedule.
In J1 cussion it was requested that Staff provide more inin-motion on the
number o= these inspections oT underground fuel ana comb,_=_-iwie storage tam s.
iwoes of tees to be charged and revenue projections for --_ s set /l-e.
Xesoundina to Ald. Nelson's question about roof water can, s. the City Manaaer
=tstsd that In older buildings these mane beer Lned ar -.r? aowmressicn and
many Ara obsolete Aue to Use of sprinkler systems. Pe-070mmenden no charge
Tcr .•miter tar; insoections because 1! wvie-s "ire 1ns=e -:rs --y nopor'tunity
to enolain and recommend to property owners the benet_ts oi =orintler systems
including lowered insurance rates. It was noted that t _rsaectional
service has resulted in postive comments from the business ummunity.
Notion passed unanimously.
! 000 ?H f T"T T ON and ENVIRONMENT
Fhalr ,_a ens rioted that the Manager s recommendation -ese =e-view
ir7 iuoac a recovery rate tprpet of 50% overa wive •. oar oe-ina lers,oi the
nwrrent '��% recover. rare. -
lid. Nelson commented that some +ees now o4erlap and aw§7a=_`ed ? laondr,,
1nsoection wee increase. The Cltv Manager noted }hat: a 1-war Surcharge is
assessed for laundrle5.
. ,--enrcn-e is Aid. Dracy = guesnicn tDou* restsurar
--- `e tit-,
Manses✓ oscor 9d inat r itrhens. Z7= ,er4 iig at
- . -
;m-- Ter .Air Ma=_ec 2n a _t3mcg— a - ,- q g _
- -7, -_ _
recu_remen _s or _ode vio; : ~.ion remeh.a -_on zeal 01_. _
-. = _ n^ __. 110o,
- l ear-.. _r e _ a^w nemoe-a`_ure ni 'coo vet� i ne _ra . q . �=
_ - _' _ ' _ . J .
r ershal s question about food handlers. t"e _itv Manage-
=tat7C omst po' 1cjai
.gr WeiWein emolonees are `'heck ea are as oestivgs c* --
- -- - ic. :ame xrl,_
--r_.Q:e gin,. nothing and s?nita-. -icthinqFer_-n-1 -*III-
._ --,pried on..
amen a orTm .gem o,, ists and void _ tv re=_ ?r..ran t
• - -- -_ 3iicr.-. Gzl ler s suq;cesysc Br _mv.en -9v7 _
re-tawra^r iee , -e cit. yarnT, .-
_ .._a_- lees _P—e
SeNeoa, yegrs anc. sic. Nelson -oi-rest—" ---.
_,—: 12r'= r2
.. - re- Per w nel, -ec e t"e ni,moer m, :.aowl,ror --
_ate a A17.
aa% suggested that _ LUS5 a restaurant S t L-s t"ra._
_ szen ..._r' s an not
'JAS , brat a murth lnsnec __on =e drooped. A! 0 . .L . :_
� - �.;qQestad the
0"ELjerptWn be al -en to --eating base line a} ;ou- _a-__
_ imsot_ons _m _
veo r , then -educing in=pec t ions to three n ne -o 1 1 ]W LPC
Budget Policy Committee ... 4
June 21, 19e9
Ald. Nelson moved that City Staff be sensitive to Committed concerns regarding
food sanitation and environmental health inspections. look at costs for
various categories and prepare a recommendation on fees for Committee rev Lew
and City Council approval. Motion approved unanimously.
FEHABILITATION and NFFIPE?TY MAINTENANCE
Aid. Nelson moved approval of the Citv Manager s recommendation that the
Griffith Studv on multi -family housinn unit inspection; be referred to the
Planning and Deve1ooment Committee and that the cresent oolicy of indexing
•-oom house inspection fees to 95% of the rate of Inilaticn to retained.
Motion approved unanimously.
cONG TEF" CAFE
Old. borshak moved aporovel of the City manager s recommenda`icr that tong
term care service rees be referred to the Human Services ommittae.
In dz_cuasinn 41d. ►,orshak suggested that the Flanninc ara Qp4e icoment and
Homan Services Committee respond to the referrals or service teas by the end
Mf July. The City Manager stated that in the case cl long term rare, more
time will be needed due to pending ordinance revisions and the possible need
for increased staffing. Motion approved unanimously.
Old. Brady asked it more user fee studies should be cCr.=ideretl. Ald. Yorshak
uggeSted a studv an Perreation Dept. Veer. City a
Mwra;e- Owprooih stated that e
a cgnsultent s sroov would be required iar `-ne nro2wc— ?^0 suggested that
resuits would indicate a high level =i autlic =uo=iu. ._. &-?A, stated
swoport Or zuch a wows.. Asprooth suggested :hat t-n-e=ommenlation to study
4ecreaticn mer•* Demarrzees pia Oreseried -_ the �_ir. -.-_. Or= Saageste - - - - d that
tte ` wman Service _cmmttt9e inform the 0e7-sv .-._ t -- _ it_ nmze. All.
_ol lens aaggested Cr,at =mmunico iQr• to the Ter. -evil_ i7--d inj!Qte tme
original memo on the Griffith Stud:. evol iin the pu -=se anC ;tionale for
same and that comment_ 4-sm the Recreatior Bcard shco:: se solicited. The
Committee agreed to do so.
'ate . r - ,G- - =as;==nsw
_0 _"Rml'tee `=r CW SWC ?r_.=nse= to i r1ucger _ „t_
F
3ta" Ord=omoietec w ten municipalities_. &la. Dr c-wnsr.ec that--e=_nonses
were interesting, that Evonstar i new at mid -'.ea- .-__?. rear _end r"?t
gesplte vAr4ing oroCar"y,-os. most 71tiP "S a ___rn _ ru
S 3C oul �_i' i r_Omme r-
--ai- V-ec?-_-,-,r -_ 0 n-ODCc._rj ti-ager. 010. eir- --non 1 --91r - ;iice. W?
resoonton _„ _ Es l 1 z—eci- let tee-.?'_ -i -a" _ews wit- -=.-?r-7e.-,t hens_= -�•
i`_atel that iome -?s(J' n:ant= -A. e -or -ewe- E.anst=m our 7mat
gym_ 1 ar grsce=- wgi_ 1 7e ne:-e. _'veo+ - , 3: -r .e- 3- - - _ - _ ...nr- sr
-w ;urrtior wit-_•-e ._tiny or, 7r 7 Tersei onnnec-rs -_ Enaro Fri
r. .-1 t r 1 c e-7 - - we= r
'_:mm1=;iCr+ reviews _ arLCl.ra -'? 5. ,p' - na .__ - -:l t.TPnY= t,Jr
-e4 lew eaCn vear. Ald. Nelson suggesteo t"at consice-. le gi4w" t_ n"dgy
�vvlirq or two no throe vears for =cme Ceoartmertz.
Budget Policy Committee...5
June 21, 1989
In response to Aid. Collens question about an appropriate time to review
budgets, Asprooth suggested Fall. He stated that the most instructive aspects
of the budget process are messages Aram City Council-eaarding: 1.) the ta:;
levy; C.) general discussion of new revenues; and oriorities established
by City Council regarding unmet needs. As enamples he cited recommendations
from the Planning and Development Committee regarding w4cansion of general
planning capacity and from the City Council regardinc, additiznzl police
officers In the vice and narcotics bureau.
Old. Korshak commented that these processes have led to additionsi
egpendltures. that Ald. Nelson continually emphasise[ _he need to hold costs.
The City Manager responded that sta*f loots at potential economies throughout
the budget process but that Council consideration of service reductions is
necessary before evoendltures can be reduced. He notes that !tree years ago
staff reviewed and prioritised program elements as "basic" or "elective" and
"essential" and "non -essential". Ald. Nelson zugaestcc taut Ynother approach
would be a consultants studv on streamlining three or i7ur departments or to
ask aldermen to mate smecirlc suggestions on what shoo!: oe done. Ald.
Korshak responded that while no siderman has su'rered :,r .7iinq on s ta•:
increase, that the voter s message is is keen oo gccC se -vices and keen t.a7es
down. Ald. Collens pointed out that decisions are neeaeo on mechanics
regarding changes In the current budget process.
Ald. Korshah suggested creating five or sin Council review Groups composed of
three aldermen each to study emisting departmental tu=gets In the Fall and
review proposed budgets in December in an effort to oe.eloo specific a"pertise
on various sections and include some citizens in review groups. If started in
the Fall, the budget could be better understood by JarwArv. old. Brad•;
suggested that such a orocess could be coun}erorcdocii e. creating advocates
Or various programs, aid. Collens suggested using aiv-wimg _omm_ttees ror a
small gr=uo -en iew of budgets; Aid. k orshah rameri ec - ? : cermen a l ready
have too mac- Work. rho City Manager noted that wcr. 100 c t"e throe
standing committees are very uneven. particularl -a Qlm.'ristration and
Publl_ Worts Committee. but that ii this conceot we-e 1_==ecies. the Flood and
Pollution Contrcl Committee could review the water art =ewe- Test. buagnt.
Asorooth stated serious concern about the need ror sinii sw=cort Voo the
budget reviewcommittees and aresent difficulties ter Eta" kPsTi7q up ,,,fish
current iemanps . "e notec a ❑rocess used by Pres i ve- - ..reme- ?I ;.lnrtnwes to---
Qri4erso n =rig -am a• a.ua-_on `_echnLiye usirr
7m on— — ri.w—oities. a work imtensi.e ant, a_ sem-.
Old. Nelson _.t?tac !hat 'tar: ations on tie onesent 7L � _ _ -_e=s ..:era triad it
147P and two cr three veers sago but neither one gene"a-=a new ideas. -^e
summarized three ;tiers: Ald. t cr}hah 5 committee a:.: Taz`. _ T1odi ied
`onsultant sworoach using peer groups. or acceCtIon _-e orese-n oroces5 with
oec: iic suggestions. alit. Nelson stated that =emet-- , _ - to coglysted
tc .1t l_o"nr;:. that tneny 1s no mechanism to a1_mi7- then a =. :hem
oeeos to 5e to r'?jo - 7 7rsersys tO mal e 1 r7." - - _ _ _ ",j - '10-01 a
S. XmQ i es oc l -.a zommar - -`__a me _D main_ Qr2rram s- cart
Ti t4 ^cy- 47 : 0 1 .
Budget Policy Committee...6
June 21. 1989
The Committee discussed the need for additional revenues to balance the 90-91 1
budget. The City Manager noted that a proposed State surcharge an income tau
is eNpected to generate $2.0 million additional dollars annually starting Julyi
1. 1999. Aid, Collens suggested using budget revenue ans a"oenditure
oro]ectlons. quarterly reports and reaffirming the current budget oolico as
the basis !or a special meeting for aldermen to focus Dn nudget issues. Aid.
V orshav, eicressed concern abcu t use oT the CF i and ri _ina in" l ation . Aid.
Bradv s"gaes ted that aldermen with an idea For budge _?-=nanges solicit
oositive support for same from two ether aldermen arc a ,_'lien and tiring the
idea to the Budget Policy Committee for review ano mL,cusnLon. Aid. 1orshak.
? ore==_ed interest in creak1nq down the budget boov cotter comprehension.
The Citv Manager suggested that Starr Could create a cudget agenda in a dozen
segments for-eview of departmental omeratlons *or t"e Ccurail in January but
stated _once-n chat based on ennerlQncv. if the process loe's not include the
i-11 Council. information would `lave to oe reviewed nu;c_c,e tines. He also
suggested that i* an eamly review orocess is chosen. would nave to be done
1- i=ctoter er November. Old. CoKen, asked that Staii a-avide a soeclfic memo'
ir Otis regart -or the CQmmi~tee meeting Ln +JV I .
Adjournment
the meeting was adjourned at apowmimately q: 70 p.m. 'he ne• Budget Policy
Committee meeting will be held on Wednesday. Julv lz a: 1:45 p.m.
cc: Joel Asoroctm ,
c t tv Manage-
Members Present:
Member Absent:
Staff Present:
Presiding Official:
DRAFT - NOT APPROVED
Minutes
Budget Policy Committee
July 19, 1989
Ald. Brady, Collens, Drummer, Juliar, Nelson
Ald. Korshak
V. Adamus, J. Asprooth, R. Shank, B. Zimmerman
S. Roethle
Ald. Collens
4.
Chair Collens called the meeting to order at 7:50 p.m.
Minutes of the 6/21/89 meeting were approved as submitted.
Chair Collens requested Committee consideration of the City Manager's memo of
7/14/89 regarding FY1990-91 general fund budget projections, the proposed
budget policy and the budget preparation process.
City Manager Asprooth stated that revenue and expenditure projections for
FY1990-91 were prepared in accordance with the City's budget policy guidelines
and based on 95% of the Consumer Price Index (CPI), as estimated through
8/89. He noted that projected revenues were significantly less than
expenditures resulting in a $1,536,278 shortfall, assuming that $750,000 in
revenue from the recently approved state income tax rate Will be included to
replace for one-time revenues in the FY1989-90 budget.
In response o Ald. Brady the City Manager explained that the City was
anticipatin $2.2 million each of the two years the tax rate is in effect.
The City Ma r noted that $ 4 million will be available in our current
fiscal year because the rate increase takes effect July 1, 1989, the beginning
of the State's fiscal year. It was agreed that a decision on the use of these
funds in FY1969-90 will need to be made.
The City Manager explained that projected expenditures for FY1990-91 were
based on current year trends, the rate of inflation, and modest increases in
employee wages. He noted that projected employee health insurance costs
include a substantial increase but that Staff is evaluating alternatives for
different insurance programs. Also noted was the heavy impact of increased
City contributions for IMRF benefits as required by rates set by the State.
Budget Policy Committee Minutes ... 2
July 19, 1989
The City Manager emphasized that Staff needs broad general direction from the
City Council regarding the budget policy for FY1990-91 and needs to know what
direction to take.
Ald. Brady then discussed the possibility of not increasing property taxes and
the effect of such action on the General Fund. The City Manager noted that
implementing no property tax increase in FY1990-91 would increase the revenue
shortfall by about $714,000 in the General Fund. Regarding the new state tax,
he noted $750,000 is projected for FY 1990-91 for General Fund revenues. Ald.
Nelson stated that any use of state income tax revenues should be considered
as a one-time benefit for two years and should not used for General Fund
operations. Ald. Collens noted that use of $750,00 for FY 1990-91 matches the
one-time revenue amounts budgeted in FY1989-90. The City Manager responded
that one-time revenues have been used to balance the budget for the past ten
years. Ald. Drummer suggested use of $2.2 million in new state income tax
revenues to reduce taxes or to support programs which need a cash infusion
such as recreation programs which rely heavily on fees. Ald. Nelson noted a
basic philosophical disogreement with that approach.
Ald. Brady stated due to the five year property reassessment this Fall, the
City cannot continue using its regular budget policy and expect public
understanding. She emphasized that the City will have to show it interest in
curtailing property tax increases. Ald. Drummer responded that the public has
to see something more for increased taxes.
Ald. Collens stated that the City must continue to provide services and
explain how the City is working to hold down costs, she suggested that in
February 1990 the City Council Will not want to give up any services. Ald.
Brady stated and Ald. Nelson agreed that program reductions will have to be
made. Ald. Nelson advised against tax reductions one year that may require
even greater increases the next year, against use of state tax revenues for
General Fund operations and suggested spending the new state income tax
revenue for capital outlay, debt, to fund insurance or some capital
improvements. Ald. Drummer restated his interest in using the new revenues tc
support programs in the current and next fiscal year. Ald. Collens stated
that new money could be earmarked for certain items. Ald. Brady suggested use
of $1.2 million to abate taxes. It was noted that availability of the new
state income tax revenue after the current two year period is uncertain.
Ald. Nelson reiterated his concern that use of these revenues for operating
expenses poses greater jeopardy than capital purchases and suggested that
impact could made by reducing pension tax levies but that too could create
problems. He noted that the new library project requires an additional $4
million. The City Manager responded that $4.5 million in state income tax
revenues will be available over the next two years. Ald. Nelson stated that
the City portion of property tax levies has decreased, that it will continue
to decrease compared to other local taxing bodies and that tax relief would be
meaningless. He suggested use of new state revenues for projects the City
must present to taxpayers anyway such as a new library and fire stations.
Budget Policy Committee Minutes ... 3
July 19, 1989
Ald. Brady suggested use of 50% of state income tax revenue to abate taxes,
50% for capital projects and looking at FY 1992-93 in terms of increases.
Ald. Nelson then suggested that the Committee recommend allocating $1.4
million to be made available for FY 1989-90 for the new library project ($1
million) and for pension funds ($400,000), based on the City Manager's
recommendation and that the Committee solicit comments from City Council
regarding $2.2 million available in FY 1990-91. Ald. Brady suggested
allocating $1.4 to be available in FY1989 for use in FY1990-91. Ald. Juliar
stated his support of Ald. Nelson's recommendation. Ald. Nelson suggested
that the Committee prepare a memorandum to City Council requesting their
comments and in order to prepare a set of recommendations to be presented to
the Council at the end of August 1989.
Additional funding ideas were discussed. Ald. Drummer suggested funding
summer playgrounds for the next five years. The City Manager explained a
proposal to ask water system customers to round off their quarterly bills
beyond the balance or add $1 to fund needed recreation programs. Ald. Brady
suggested that an adjustment is needed to fund a non-profit mortgage program;
the City Manager indicated that the test of time would first be necessary.
Ald. Collens suggested that the Committee ask City Council to think of ways tc
use the new state income tax revenues, for programs, infusions into capital
outlay, capital projects or tax abatement. Ald. Brady added that suggestions
should be clearly phrased and responses signed.
Ald. Nelson moved: that the $1.4 million to be received for the state income
tax increase in FY1989-90 be expended as follows: that $1 million be set
aside for new library construction and $400,000 be set aside for pension
purposes as identified by the City Manager. After brief discussion the motion
was approved unanimously.
Ald. Nelson then moved that a decision regarding $2.2 million in new state
income tax revenues received in FY 1990-91 be deferred until suggestions from
City Council members are solicited and returned to the Budget Policy Committee
for its review and consideration. The Committee recommendations based upon
same will be reported back to City Council by September 1989. After brief
discussion, motion was approved unanimously.
Ald. Nelson then moved that the Committee adopt for FY1990-91 the Budget
Policy as approved for FY1989-90, In discussion, Ald. Brady stated that the
Committee needs another month to reflect on property tax increases and to
consider Ways to present this to the public. The Committee agreed to continue
the discussion at its next meeting.
Budget Policy Committee Minutes...4
July 19, 1989
The Committee: briefly reviewed a suggested schedule for Council review of
various city department budgets for the current year. It was agreed that thi!
item would be discussed again at the August meeting.
The next Budget Policy Committee tweeting was set for Tuesday, August 15, 1989
at 7:45 p.m. An explanatory memo will be sent to all Aldermen, who will be
invited to present their ideas about the new state income tax revenues, in
writing before or in person at the next meeting. The meeting adjourned at
approximately 9:45 p.m.
�$4 14Ki.4.
S ff
cc: Joel Asprooth, City Manager
DRAFT - NOT APPROVED
Minutes
Budget Policy Committee
August 15, 1989
Members Present: Ald. Collens, Drummer, Korshak
Member Absent: Ald. Brady, Juliar, Nelson
Others Present: Mayor Barr, Ald. Esch, Lanyon, wollin
Staff Present: V. Adamus, R. Alexander, S. Roethle
Presiding Official: Aid. Collens
Summary nf_ Action
Minutes of the July 19, 1989 Committee meeting were approved as
submitted.
Aid. Collens requested Committee consideration and recommendation on
the Budget Policy for FY1990-91. use of new state income tax revenues
and the budget process for FY1990-91. Aid. Korshak stated agreement
with Aid. Nelson's position that state income tax revenues not be used
for operating purposes. He proposed funding for major sidewalk
improvements throughout the City as a project to pr-v_±e -angible
evidence of city wide improvement, noting that numer7_._ req gists from
property ,owners for these improvements are denied ea year lue
lack of _.nd_na o noted that $75.joj was a-_oCa_ = - - Q a.,._
=uggestod _.,_re.ssing that amount in F'.a` 90 1 or to . Ail
Drummer suggested expanding sidewalk, curb and alley � ;r`:';'ments ty
adding incentives for property owner participation.
Aid. Korshak auggagtea establishing gaud?? lnes either =-r -?ratingor
capital use tc provide a tangible benefit from the new .ta__ income
tax revenues. He stated disagreement with the -_,rre - F�tysn� regarding p:_i-= and fire pensions, Ail. C, Ilenz p__.. - .. -ha- _v-
�vmmi ttee had recommended use of these revenues in F - - - r
pension purpozes in aid:. .iDn to t+`1- -Arrant budget
appropriatiDn guidelines.
Budget Policy Committee ... 2
August 15, 1989
Ald. Collens noted Ald. Warshaw's suggestion that $2.3 million in
FY1990--91 state income tax revenue be used to balance the budget in
FY1990-91 at the FY1989-90 level. Ald. Drummer disagreed noting a
possible to double the increase in two years. Ald. Lanyon noted that
Property taxes will increase regardless of the City's efforts due to
increases by other taxing bodies and suggested use of the new revenues
for capital improvements and to supplement City programs. Aid.
Drummer agreed that additional capital purchase spending one year
could save tax dollars in future years.
Ald. Collens stated agreement with tangible projects, cited the
library building project as an example and noted that the Village of
Schaumberg had recently publicized use of new state income tax
revenues to build a firehouse. She stated that other tax levies will
increase and that a $3 tax break may be meaningless to residents.
Ald. Drummer moved approval of the 1989-90 Budget Policy for
FY1990-91. In discussion Ald. Korshak stated concern over rising
inflation but noted that the policy could be adjusted next year if
needed. Mayor Barr stated support for the current policy allowing a
budget increase based on 95% of the CPI. The Mayor alto _supported use
of new revenues for one time projects versus ongoing programs given
possible discontinuation of the new revenue source. :she also stated
disagreement with freezing the budget at the FY89-90 level. Ald.
Korshak agreed that new revenues should support one-time projects,
noted problems in program expansion which may require cuts at a later
time and stated concern regarding the level of police and fire pension
funding. Motion passed unanimously.
Ald. Collens stated that new state income tax revenue projection for
FY 1989-90 is $1.316,000 and noted a previous Committee recommendation
that $1 million be set aside for new library construction and $316.000
for unspecified pension funding purposes. She stated that W3.357
million is projected from this source as new revenue fcr FY1990-91•
Aid. Korkshak restated his interest in a major sidewalk improvements
project. Aid. Drummer stated interest in expanding lee 3•.:pport for
summer playgrounds and suggested adding $50 . 00i) f a: _ 1 4
4 disagreement with exT'and,ng _ inan_� .- _ -r«
the 'uncertainty `u, urn
Aid. K,Dr! ;hak sug.4+ezted separating financing, .-)i anrj
,,pares ing ---_xrenses .and recommended S1 i't) , 000 t(Dr impr,�V4�t'n-_3
and additional recreation program funding at 1-no as
?xpenses are n,Dr increased. Regarding program t•.ind,n_ verEus tax
redL1Ct1•-)n, he sugge!a ted that a greater impact
r��t.l•_ inn pr-:,�a ram fees f ve � _ � Marc �r a 2 � '" _•3
111 L_i:s ,n a 11 tax o,11 Al' T any-n
`_:1a'_ '?n� �_ i''•.a alp_ alteCt ^.?
L"a1.31''a':ri, an? ?rks ma_ntenan��:a- ay7r Barr ;rate: 2" _:r
library construction funding.
Budget Policy Committee ... 3
August 15, 1989
The Committee and other aldermen present unanimously agreed with the
recommendation that 1989-90 state income tax revenues be set aside for
the new library construction and pension funding.
The Committee then discussed state income tax revenues projected for
1990-91. Ald. Drummer suggested that service cuts are needed in
FY1990-91. Ald. Collens noted a projected $1.536 million shortfall
and that some of this money could be used to help reduce the projected
deficit.
Ald. Drummer moved approval of the City Manager's recommendation that
$750,000 in 1990-91 state income tax revenues be used for the General
Fund budget. Ald. Collens noted that the City Manager had proposed a
continuation budget for 1990-91. Ald. Korshak noted that provision of
the same services as in 1989--90 costs much more, that service demands
in Evanston are very high. Discussion then focused on problems
regarding public understanding of different taxing bodies' use of tax
dollars, cutting services, underfunding programs and new Levy Center
costs. Motion approved unanimously.
It was agreed that the costs for recreation playground assistance and
sidewalk improvements would be provided to City Council for
consideration.
Ald. Drummer requested information on recycling cost projections and
when the program surcharge to residents could be discontinued. Ald.
Wollin stated that this is not likely to be discontinued for the next
five years based on the consultant's study. Ald. Collens suggested
use of funds for capital expenditures in FY90--91. Ald. Esch suggested
sewer improvement funding; Ald. Collens noted that this project is now
underway with considerable funding set aside. Ald. Lanyon suggested
additional funding for Unified Budgeting; Ald. Collens restated the
problem of increasing funding now and future loss of additional
revenues for same.
B, r g-t Process
The Committee discussed reviewing the currant Budget n_=: ^r it
Novembar and
a process for reviewing the Proposed
_'_ :7a" igreei
that Ali, t._11ens an"
Korshak wDuLj inr-
?� -Arid % r
r ti, ,-)Sand anrmat L,ir `he
tu.jget pn: -ess
Eam-
the ;mm2*t''.
It was agreed that
an r:,rientatl-]n r'i
f-:,r
new aldermen
would be presented at
the September (cmm_'-aa
mee•' ng
Ad ;,-tirnmen-r
at I ll - 1 5 p m -he
ma?-_ 4�3t' was tantatyVal: S.�n.V,�•,�c.d f,_,L September
Sal_y-4rathl=
cc: Joel Asprooth, City Manager
Members Present:
Members Absent:
Other Officials
Present:
Staff Present:
Guests Present:
Presiding Official:
Draft - Not Avrroved
Minutes
Budget Policy Committee Meeting
q
of September 20, 198M.
Aldermen Korshak and Juliar
Aldermen Brady, Collens, Drummer and Nelson
Mayor Barr; Aldermed Each, Lanyon, Washington and Wollin
Joel Asprooth, City Manager; Vince Adamus, Reese
Alexander, Sally Roethle
Cynthia Scott, League of Women Voters
Alderman Korshak, Acting Chair
Summary of Action:
Alderman Korshak called the meeting to order at 7:45 P.M. The agenda topic was an
orientation on the City Budget process for new aldermen.
To begin. Alderman Korshak explained the difference between the Proposed Budget
document. presented annually to City Council at the end of December and the final
Budget, adopted by the City Council prior to the new fiscal year which begins March
1. Alderman Korshak then asked the City Manager to provide a perspective on the
City Budget from a new alderman's point of view.
City Manager Asprooth described the Budget as a financial guide which establishes
expectations, limits on expenditures and purposes of expenditures. He stated that
budget preparation takes considerable time to estimate and finalize proposed
revenues and expenditures. He described this as an art, the tools for which are
prior year's performance and changing conditions. A policy for the City Budget is
established by City Council each year to address the rate of property tax levy and
goals set by City Council. Deficit budgeting is not allowable under State or local
law, and in Illinois a budget must be enacted before property taxes can be levied.
He suggested looking at the budget format as it is separated to provide detailed
information on each of the various funds and operations within funds. Funds are an
accounting concept created to separate and evaluate revenues and expenditures for
the intended purposes of each fund. The General Fund, the primary Operating fund,
includes most City operations and the largest City departments, Police and Fire.
Reviewing the multiplicity of revenues which support the General Fund. it was noted
that the property tax is the largest amount but less than half the total General
Fund revenue.
Enterprise funds, which include Water, Sewer and Parking, derive sole source
financing for each fund from the operation of each fund. Trust funds, which
include Police, Fire and Pension Funds are funded by City and employee benefit
contributions. The Motor Fuel Tax Fund revenues, provided by the State, are the
City's share of gasoline tax money. Community Development Block Grant funding is
provided by the Federal government Housing and Urban Development program.
Budget Policy Committee Minutes
9/20/89...2
The City's Fleet Services Fund is an internal service fund. Operational revenues
are derived from chargebacks to each department for vehicles assigned and are
calculated based on maintenance and depreciation costs. A minimal fund is
accumulated at year end in order to limit the cost of that fund.
The Housing Fund revenues are dollars from an advance refund of City mortgage
revenue bonds sold in the late 1970's. These bonds Were refinanced two years ago
providing $2 million in equity. Housing Fund revenues are being used used to
finance some housing rehabilitation projects and the new Families In Transition
(FIT) program.
The Debt Service Fund derives its revenues from property taxes levied to retire the
general obligation debt and finances the City's Capital Improvements Program.
The Economic Development Fund has derived fees from prior years' sale of industrial
revenue bonds which were sold by the City as private purpose bonds to fund various
local improvements and has since been funded through Real Estate Transfer Tax
revenues to support various economic development activities. A portion of the
revenues are transferred to the General Fund to support job training activities.
The budget document backs up summaries and charts found in part II showing purposes
of expenditures within each fund and a breakdown of expenses by department and
function. The City uses a standard system of accounts to classify expenditures by
personal services, commodities, contractual services, other charges and capital
outlay. Capital equipment purchases are also detailed.
A summary message prepared by the City Manager is also presented in the Budget
which outlines the environment and context in which the budget is prepared and
provides assumptions made in preparing the budget, a summary of revenues and
expenditures, a statement of economic conditions, and a forecast of issues which
may arise that are affected by the budget. In the final budget document a list of
Proposed Budget changes made by the City Council is also provided. It was also
noted that each year the budget document is evaluated by the Government Finance
Officers Association, the result of which is shown at the front of each final
budget. Sources of revenue and basis for predicting revenue are also provided in
the document.
The City Manager then provided answers to various questions.
The nine funds outlined on pages x and xi of the 1989-90 Budget (General, Water,
Sewer, Parking, Fire Pension, Police Pension, Fleet Services, Housing and Economic
Development) were explained as locally controlled operating and pension funds which
are within the total control of the City, they are not debt service funds. The
City Council is entirely in control of the source of funding and expenditure of
these funds. These are characterized in the budget document separately from
Community Development and Motor Fuel Tax funds, revenues for which are determined
by Federal and State government. Also separated are Capital Improvement and Debt
Service funds which are not considered in the same context.
It was noted that there is no time limit on expenditures for the Housing Fund,
revenues for which were derived from mortgage bond refinancing. All revenues are
fixed with the exception of interest earned on invested proceeds from refinancing.
Budget Policy Committee Minutes
9/20/89...3
Refinancing was done anticipating that when all bonds were retired and mortgages
repaid there would be money remaining because when the original bond issues were
set up a higher default ratio on the mortgages was assumed. The default ratio was
very low, so the City refinanced. The fund has not been spent out quickly because
the Housing Commission and City Council are carefully examining options.
For the Research Park $1 million in general obligation debt was sold and is being
retired through Downtown II development district tax increment revenues which are
adequate to retire that debt service.
Regarding the Custer Street townhouse development, it was noted that the land for
the project was purchased as part of the Capital Improvement Program supported by
general obligation bonds.
The difference between general obligation and revenue bonds is the revenue source.
The only revenue bonds -sold recently are water system revenue bonds which are all
supported by the water system revenues. Parking system bonds, sold two years ago,
were general obligation bonds because it was felt that the system would not meet
the tests of the financial community without substantial parking fee increases.
Transfers among funds are made for various purposes. Most represent transfers from
enterprise funds and other operating funds into the General Fund to cover the
employer cost to the Illinois Municipal Retirement Fund (IMRF). IMRF is the
pension fund to which all City employees belong, except sworn police and firemen.
It is a State operated fund and is not controlled by the City. The City
contributes an amount equivalent to the employee contribution. The entire City
expense is budgeted in the General Fund and transfers are made to the General Fund
for employees budgeted in enterprise funds.
Other transfers are made from enterprise funds into the General Fund to cover
General Fund operations that benefit those funds, i.e., data processing which is
operated and paid for in the General Fund but also benefits enterprise funds by
providing services such as payroll and water system billing. Also transferred are
insurance expenses paid from the General Fund to benefit other funds. The biggest
interfund transfer is $2 million from the Water Fund to the General Fund
characterized as a return on investments because the system was initially built and
financed by tax payers rather than rate payers.
Several years ago, several small funds were consolidated into the General Fund,
including Mental Health, IMRF, Insurance, Library and Recreation, because these
funds were becoming financially unstable due to limited revenue sources. This
resulted in far fewer interfund transfers than previously existed.
Budget Agenda and Process
The City Manager stated that City staff begins budget preparation the first week in
August. A manual, memos and forms are distributed to departments for budget
preparation. Also provided are budget guidelines based on projections and
assumptions regarding revenues and expenses. In October and November department
budgets are reviewed by the City Manager and a proposed budget is balanced by the
last week of November. At the same time certain Board and Commission budgets
(those for which the appointed bodies have budgetary responsibility) are reviewed
by the Human Services Committee, the Community Development Block Grant Committee
Policy Committee Minutes
9/20/89... 4
and the Unified Budget Panel. The City Manager then prepares the budget summary
message and a proposed budget document is completed and distributed to City Budget
Council. The Mayor creates an agenda for City Council review of the Proposed
Budget in January, a public hearing is scheduled for the first Monday in February
and a final Budget, as required by law, is adopted by City Council by February 28.
In response to questions, the City Manager explained the general contingency
program element which includes a budgeted amount as a provision for compensation
adjustment to cover merit adjustments, wage and benefit settlements in the Proposed
Budget and a small amount to cover underbudgeted expenses throughout the fiscal
year.
The General Fund balance was explained as the net worth of the fund after all
expenses are accounted for. Monthly cash flow is projected each year and presented
in the 1989-90 Budget on pages A-15 and A -lb.
The Budcet Document Format
Vince Adamus and Sally Roethle explained the format and content of the budget
document, including the City Manager's budget, charts and summaries and the
presentation of operations within each fund. Information provided in the appendix
was also reviewed.
The financial summary, performance report on past year objectives, performance page
for the current year and line item pages were reviewed. Objects of expenditure
were explained and information was provided on how to relate this information to
details provided in the bills lists.
Alderman Esch requested that staff provide Council members with a definition
listing of all object codes as a means to better understand the bills list.
Alderman Korshak provided additional information on the Budget Policy, the tax
levy, inflation rates and use of the CPI in determining Budget Policy each year.
Adjournment
The meeting adjourned at approximately 10:00 P.M. The next Budget Policy Committee
meeting will be held Wednesday, October 18, 1989 at 8:00 P.M.
AA&e Qmzovle
Sally R ethle
Draft -- Not AaDroved
Minutes
Budget Policy Committee Meeting
October 18, 1989
Present: Aid. Brady, Aid. Collens, Aid. Korshak, Aid. Nelson
Other Officials
Present: Aid. Esch, Aid. Canyon, Aid. Washington
Staff: Robert Shonk, David Johnson, Vince Adamus, S. Roethle
Guest: Cynthia Scott, League of Women voters
Presiding
Official: Ald. Collens. Chair
Summary of Action:
Aid. Collens called the meeting to order at 8:00 p.m. 7 ne main agenda topic
was an informational and educational presentation on the City Financial
Audit Report for FY1988-89 by Finance Director Robert Shonk and Aid.
Korshak's reference regarding fees for service to Nor —western University
was preliminarily reviewed.
Approval of Minutes
The Committee approved minutes of the 9/20/89 meetinc as submitted.
Finance Director's Presentation an the FYlgeE3-89 Finar:ial Report
Finance Director Robert Shonk introduced David Johnsa-, the City's new Chief
Accountant stating that he was instrumental in the *i-al. crmoletion of the
1988-9Q Audi'-.
The icilowing Lnformatlion oeta7.ls Mr. Shonk s ecplanati=- c '^e Audit
Report. The Audit is a report on actual financiai res-:'s in- FY1988-99 as
a comoared to t`�e planning nature of the budget docu-ert. T'-Ie Audit follows
the standard format prescribed for local governments a-C is Dresented in
three sections: introductory, financial and statistica.. T^e :-�troduC:Cry
Section prop -'C'es a 1e` -er from the '_its; Manager anc, - - a�,_e --irecto-
su+nmari,:ng t`-e ::perating results L:• qaz-, c,-"r cC' and -- - ':a-___ ci ma__
assets and dec's o* t')e City. The tulle o* the repC>"- - '-.e �iha^vial
Section.
The General Purpose Financial Statements are presentee pre Gages 2 through
7, The Combined Balance Sheet, on pp. 2-3, lists all t-e assets and Cebt of
the City on last day of the fiscal year, 2/28/99, Tn,- -wc combined
operating statements on pages 4 and 5 list revenue, e•4enGitures anc net
gain or loss mar the bear for eacC, major governmenta: Ge 'und on a
generally accep-ed accountino principles (GAAP) basis a-= a budgetary
n,asis. a Slight' r di*ferent =o-mat than the �AAP pas._.
Budget Policy Committee..2
Minutes of October 18, 1989
Pages 6-7 present combined proprietary fund statements for enterprise funds
(water, sewer and parking) and for the internal service fund (fleet
services) and the fiduciary funds (pension funds). On an operating basis
these funds are recorded separately on a cost measurement basis which
reflects profit or loss and cost as the most important +attars.
Footnote information (Notes to Financial Statements), pp. 8-65, are
presented to provide full disclosure on all major assets and liabilities of
the City through 2/2B/89. This section, together with the combined
financial statements, provide the full financial report for the City.
In response to Ald. Brady it was explained that the City"s total assets of
$252,696,539 (p. 2) minus total liabilities (p. 3) of $106,533,343 report
the net book value or total fund equity of $146.1d3,196. in response to
Ald. Nelson, it was noted that this includes fixed assets out these are
stated, according to governmental accounting principles, .,n the _^_tial cost
basis which excludes depreciation and does not reflect present—2olacement
value.
Responding to Aid. Brady, it was noted that the long terry debt -_tal of
$56,440,991 represents what is owed on Existing debt as o* 2' may. David
Johnson noted that debt in the enterprise funds is not iri,71uded -r-% this
amount. Answering a question regarding the City s financial ccnc_t_on.
Shonk noted that the Cit; has a very good credit rating and t-at -;inancial
review parameters include a review of financial po51t_Cn at ea- end as well
as tax base, caoital planning and other factors.
The combining and lnd.vidual fund statements provide adoit_onal details on
each fund and are published as supporting material for tt-e combined
statements which, as noted, appear on pages 2 through 7.
The Supplementary data appearing on pp, 146-154. include a statement of
parking fund revenues ny lot, street meter area and space rentals. inese
totals t_e ..^`_.... t'le ec-,e nte l - • pa^ye ::�. _'� . •�• ..resents a
schedule of insurarce in force a5 of 212e'99. As requir e=. ten near
information on pension funos is presented on pp. }50-154.
The statistical secticn on pp. 155-1-76 provides general anciai
information for ten cast ?fiscal year perieds. Revenue a-: exr-e^diture
summaries by crcpram and type are oresented on -in. pacert,, -ax
levy rates and actLa: jollars �:Iollc�rted 5,, UnC : DF— a
the total cn r. a taCle 1„ properi-, 31:rys c,n -e _a•
rates for all vanstpn governments on p. It-;; caller~__- rr'3'___l -
special assessments on p. 165; data showing debt ou'starc_-g to ce Ra_d by
property tax and on a per capita basis on p. 166.
Population counts and the 1990 Census were discussed a-_ cuest_c^s ra-sed on
problems associated with accurate counts of certain pcc..:3'lons part,c,.larly
college and university students �,nd low income or minor-,--, resiaerts. Ald.
h,orshak emphasized the Unportance of an aCCurate count -7 c" tarlous
in tergavernmen'_31 grants. Ald. Brady noted that a alar _ Decaert study
gn aro iect?' had been prepared and was _.: ':C'�'?- _ "le
HacsSln❑ Cpmsni5=3_an.
am
Budget Policy Committee
Minutes of 10/18/89... 3
Aid. Nelson asked that staff prepare a communication on plans and
recommendations for action that may be necessary to ensure an accurate
population count for the City. He suggested that if necessary consideration
should be given to expenditure of economic development funds to ensure a
fair count.
Continuing his explanation, Mr. Shonk noted that a summary of outstanding
debt to be paid from the property tax for all governmental taxing units is
provided on p. 167 and the current State law on the City's legal debt limit
on debt financing on p. 166. Mr. Shonk agreed to publish the City's own
budget policy with regard to debt service in the next annual financial
report. A comparison of annual debt service payment to oaerating funds is
provided on p. 169. For the water fund, coverage required for protection of
revenue bond holders, showing debt operating revenue, a,;ter paying operating
expenses, available to retire the revenue bonds outstard:na each year is
presented on p. 170 and for the parking fund on p. 171.
Regarding the parking fund Ald. Nelson compared net revenues to lebt service
requirements. Mr. Shonk noted that the picture will soon change when
payments for new garage are made. More than $7 million in the parking fund
is for a one-time, turnkey payment in November to the =eveloper of the
garage. Ald. Nelson asked Mr. Shank to provide an update of a previous
parking fund memorandum on long term costs for Church/Chicago including a
fund balance projection. This will be done in conjunctio- with preparation
and presentation of the proposed 1990-91 budget.
Demographic data for the City is provided on p. 172 and .includes summary per
capita income and educational levels. Additional data c^ D. 17a includes
property and construction values. The ten largest property tax payers are
listed on p. 174. Final data required to be published =^_r histor=cal
purposes is the miscellaneous statistical information r--- pp. I75-176.
Respondinq to Ald. Nelsons point that depreciation is n_ IL -corded for
general fixed assets, Mr. Shonk stated that this metncc IS a rRcu:red
government accounting standard and is applied in all rlro art , tax suCoorted
funds of the City which exclude" sewer, water and par'..-z funds. Alc.
Nelson commented that reporting initial cost does nct w 7-vide a realistic
growth picture, evaluation of worth or replacement vale and makes planning
difficult. Resoondinki to a recuest for that informatic- 'Ir. Shonk stated
that It waulo tape -,L)ne _.me ra gather thu data but _3n be done.
Ala. Bradv askE'C .]Uo,it
t-e managemer,*
report on t',c
5hc16, stated
the auditors had
a• epared it Ln drar`t
form and that -e should
prat ide it
to Council within
the month. He stated
that the sta*=
encouraged a
management letter
each year from the
auditors so as rc
receive
advice for
internal control and accounting system
inporevements.
lie lack
of a
management letter
could be construed
as the accountir::
;:rm not
doing a
thorough review.
Regarding last years report it was -z'ed
that
there
appeared to be no carry over Items.
in response to Al--. Nelson it was noted teat Industr.a: Ze.enue bo,ncs are
now Cons -,der -el a Cr.'vate ente,-or.se aCtivlty accorr;:'„ ^ew tax la.15.
r
Budget Policy Committee
Minutes of 10/18/99... 4
Responding to questions about risk management Mr. Shonk explained the City's
decision to continue self —insured programs and when asked about about
accounting rules in this regard responded that the City is required at year
end to report a fair estimate of claims and accident costs incurred. The
amount of carryover for estimated claims is reported. The long term debt
portion (as reduced from last year) is a reported reserve amount set by the
Safety Director upon advise from insurance consultants. Actual annual costs
are included under General Fund budget information. Ald. Nelson noted that
the budget and actual figures vary by $214,602 and asked how a determination
can be made over time as to the return on investment in the department
compared to the amount paid out.
Assistant City Manager Bruce Zimmerman explained that such a study would be
quite involved. He noted that the City has two contracts: general liability
(claims administration) and worker's compensation (employee injuries). The
risk management program was phased -in and began with general liability, then
worker's compensation was added. An analysis would require consideration of
salaries and contract costs and means to measure benEfits of bringing
employees back to work sooner requiring some guess work, Mr. Zimmerman
noted that from a management perspective the success of the program could be
measured in terms of a decline in the number of lost workdays, quicker
processing of claims for general liability and avoiding litigation in some
cases. Also, employee safety --ocedures training is an important component
of the program. Regarding the budget versus actual variation "fr. Zimmerman
noted an overall trend or' higher settlements by the Industr.al Commisslon in
worker s compensation cases and one or two high settlements in liability.
He noted that the City does not budoet for specific settlements.
Ald. Collens asked when a fourth quarter financial statement of revenues and
expenditures was to be provided to show budget variations. Mr. Shonk
explained that the report was not provided in the past because in that
Quarter efforts are concentrated on preparation of the audit report. The
books are necessarily held open through March in order to properly record
all costs *or -na pr_Cr f15C31 Aar. T'Ie �omm.—ee -eq.:ested that
staff provide a ;ourth quarter report e,,pclaining variaticns over 25% for
FY19B9-C 0.
Ald. Korshak compared the budget versus actual figures for Miscellaneous
Operating Exoenses. He noted that expenditures in the categcr•, shower" a
credit total of s_"61? against a ioudget p* 33--91.O�Q. i^r. 5:7Cn�, stated t!iat
this would have t 7 be dncll zed Ln 7riG+r 10 determy e `_ iF' ar
contingent,, account or 3Cwount5 that Caused the o"erai. _ s�2,c1R.
He noted that in some past years health insurance cost-esuits nave resulted
in a credit total. Mr. Shonk stated that expenses for health and insurance
costs are charged to departments on a monthly basis. Ii estimates are high
a Credit results at vear end.
Old. Lanvon
noted the comment
on p. iv regarding single -cam-,I
h^using i..-I
Evanston.
Ald. Brady noted that 50'/. of Evanston s hous:ng is
--Iti--fam_1v
units, 58'.
including condominiums. Mr. Shonk stated that t~is
ccTment would
be cr.an.:ed
it tn,e next reoort.
Regar,iry me Ctt•, Budge- __-__-eIt
Ald.
Korsn'a evOresse--
Lnte-est in
cubiicatior• .:.f emolovee Sa.a'.e5
tre :-.or
year. "Id.
Collers suggested
tnis matter' de d_scussed ..__" -"?
:* ma -aver
at -,tie ne-t
meet_^g.
Budget Policy Committee
Minutes of 10/18/89... 5
Responding to questions on the Fleet Services Fund, Mr. Shonk explained that
costs are based on maintenance and depreciation and are charged to various
funds for each vehicle as assigned. Regarding pension funds, Aid. Nelson's
noted that the Fire Pension Fund is nearly 50% funded and compared that
funding with IMRF. Mr. Shonk stated that IMRF costs are related to payroll
but that it is not a lessor value given the fact that fire and police
employees do not participate in FICA (social security).
Reference Reoardino Fees for Service to Northwestern University
Regarding Ald. Korshak"s reference Aid. Collens asked for suggestions on
additional information that may be needed to discuss the matter. Aid.
Korshak asked that a 1983 communication on tuition tax be updated by
memorandum to determine if any change has occurred in the legai opinion
embodied therein. Aid. Korshak stated that he will chec, =or an,/ further
information he may have that may be useful.
Ald. Collens noted that she will attend the National Leaque of Cities caucus
on University Communities in November. The 1990 Census r,i:l be discussed and
roundtables held on university payments and voluntary =ees in lieu of taxes
which may provide valuable information that can be use{,.:? to this
discussion. Ald. Brady noted that a recent NLC survey. "Issues and
Opportunities for University Communities", provided data on universities
which do or do not provide contributions for essential services (police,
water, fire and sewer) and compared that with past Citr romrn:unlcations on the
topic. Ald. Collens stated that she would contact NLC to to-equest any
additional data that may be available on their study.
Staff was requested to obtain information on Northwestern University's
security department in terms of their police authority and territory covered.
Next Meetina Date
The nest Committee meeting was scheduled 4or November. It was agreed that
the university matter would be discussed at the Decemr,e- Committee -meeting
(date to be determined) when Aid. k corshax can attend.
Adjournment
The meeting adjourned at approximately 10:00 p.m.
cc: Joel Asprooth, City Manager
C
Draft — Not Aooroved
Minutes
Budget Policy Committee Meeting
November 29, 1989
Present: Ald. Brady, Ald. Collens, Ald. Juliar, Ald. Nelson
Members Absent: Ald. Drummer, Ald. Korshak
Staff: Joel Asproath, Bruce Zimmerman, Robert Shank,
Vince Adamus, Richard Carter, Regina Steuben,
Charmain Borys
Guests: Cynthia Scott, League of Women Voters; Anne Hollyday,
Roncia Roth
Presiding
Official: Ald. Callen%, Chair
Summary of Action:
Aaoroval of Minutes
The Committee approved minutes of the 10/18/89 meeting as submitted.
Staff Reoart on 1990 Census
Ald. Collens reviewed the previous Committee discussion regarding the
significance of an accurate census count. Planning Director Richard
Carter's written report to the Committee on the Census was discussed.
Carter noted the importance of the final count representation as statistical
data to be used for a ten year time period, that it is worth pursuing the
best possible job but that there is no way to guarantee complete accuracy.
The City is allowed a preliminary period to cross check and return data on
housing units to assure the inclusion of all known housing in the City. He
noted that the housing count is the only category which the City is allowed
to verify but the population count is justified on the basis of the housing
units count. Carter expressed confidence in the City's efforts to assure a
more accurate housing figures.
Problems associated with population undercount were discussed. Carter
pointed out the importance of concentrating on the Latinc populaticn which
may have little compelling interest in the process. He also noted that the
college age population offers the best possibility for an improved count.
Ald. Brady expressed concern about per capita funding and the need to reach
students, group care residents and the poverty level ocpulation. aid.
Collens acknowledged Ald. Nelson's description of the Census as a "snapshot
in time" explaining that the Census form is mailed to all known hcuseholds.
Only one in 6 household will receive a long farm census survey and a special
date is scheduled far a count of homeless persons. Dec- _o door ce-,sus
collection is very limited and the work carefully presc-.oed.
i7@u;&;e1-- Policy Committee..2
Minutes of November 29, 1989
Responding to Ald. Juliar's suggestions regarding efforts to ensure
collection, Ald. Collens stated that the Census Bureau discourages. cities
from taking extraordinary measures. Carter stated that efforts are being
coordinated to ensure that group housing quarters including dormitories are
counted. Students should be urged to report in the community in which they
attend school. In response to Ald. Nelson's point about new multi -family
buildings under construction the City Manager stated that occupancy on the
census count date was the sole criteria for a population count. In response
to Ald. Nelson's questions Carter explained that a city property file has
not yet been computerized. Census data is not correlated with school
district, township or the assessor's data.
Ald. Collens suggested follow through on the Staff Report suggestion that a
task force be created to publicize the Census and stated that she will meet
with Carter to create a strategy for contacting community groups who can
best reach populations residing in group quarters. Ald. Brady stated that
she would assist and suggested that the City -School Liaison Committee also
consider Census publicity efforts at its next meeting. Ald. Collens stated
that she would report back to the Budget Policy Committee regarding a
publicity strategy.
1989-90 Income Tax Surcharge Revenues
City Manager Asprooth explained that the current fiscal year situation as
indicated in the recent six month financial statement is not expected to
improve and that general fund revenues cannot support the costs associated
with prosecution of fair housing cases. He noted that in previous Committee
disucsions regarding the Income Tax Surcharge Revenues it was agreed that
the best use would be for capital purchases. He suggested that due to a
projected revenue shortfall in the coming year that some capital purchases
that would otherwise be purchased in FY90-91, be purchased in the current
year using these additional funds. The City Manager reauested that the
Comnmittee authorize him to come back at the December meeting with a
recommendation on the use of the current year income tax surcharge
revenues. He emphasized that the City Council must ultimately give final
authorization on appropriation of these funds adding that it is necessary
and appropriate that the the new library project be allocated the vast
majority of funding.
In response to Ald. Nelson's questions regarding use c-� -=using Fund
revenues for Fair Housing legal fees the City Manager-esapnded that Housing
Fund revenues are largely committed and overall this fur_ respresents a
minimal allocation compared to the immense needs involvet. Asprooth also
noted that the CD Committee recently recommended a reduced allocation for
Single Family Rehabilitation. Ald. Juliar responded tn.at the CD Committee
action was based on the need to balance that budget and acknowledged that
the CD Committee suggested use of Housing Funds for housing rehabil tation.
Ald. Brady stated disagreement with the CD Committee ra`_crale in that
regard and noted that the funding recommendation provides _cc little for any
activity in FY1990-91. She pointed out that the Housing �.�nd was
established to create initiatives in affordable housing.
Budget Policy Committee
Minutes of 11/29/89... 3
Ald. Nelson stated his doeire that the City establish some long term budget
guidelines an expenditures to create a mechanism which would limit some
programs to a specfic period of time.
Ald. Brady moved that the Committee consider the City Manager's
recommendation an 1999-90 Income Tax Surcharge Revenues at the December
meeting. In discussion it was noted that the recommendation would adhere to
the budget policy. The motion was approved unanimously.
Multi -Family Units Inspection Fees
The Committee asked the minutes of the Planning and Development Committee
meeting of July 24, 1989 be reviewed regarding multi -family unit inspections
and fees for same and agreed that this item be held over for discussion at
the December 13 Budget Policy Committee meeting.
1990 Committee Meetina Calender
The Committee adopted a meeting calender for 1990. Meeting dates will be an
the third Wednesday of the month at 7:45 p.m. with the exception of November
which was scheduled for the fourth Wednesday at 7:45 p.m.
Other Business
Ald. Brady stated concern regarding the treatment by some Committees of the
City Budget Policy as a guideline, not as a policy, and suggested that the
Budget Policy Committee send a communication to City Council reiterating
the Budget Policy and the need for strong Council endorsement.
cc: Joel Asprooth, City Manager