City of Mt. Vernon Special City Council met March 13.
Here is the minutes provided by the Council:
Roll Call
Roll call showed present: Council Members Jeff May, Dennis McEnaney, Donte Moore, Todd Piper and Mayor Mary Jane Chesley. Also in attendance were City Manager Mary Ellen Bechtel, Finance Director Merle Holmann and Nathan McKenna.
Visitor Citizen Requests/Addresses From The Audience
No visitors addressed the City Council.
Resolution For Weedy Acres Properties, Llc
Bechtel presented for Council's consideration a Resolution Approving a Subordination Agreement for the Weedy Acres Properties, LLC Project. The City is a holder of a mortgage upon property purchased by Weedy Acres Properties LLC for the Phoenix Modular Elevator project within the new Industrial Park. Community First Bank of the Heartland previously provided financing and obtained a mortgage for the construction by Weedy Acres Properties, LLC of improvements upon the property purchased from the City; and, the City previously subordinated its mortgage to the mortgage of Community First Bank of the Heartland. Weedy Acres Properties is refinancing the mortgage indebtedness and has requested a subordination agreement from the City.
Council Member Moore made a motion to approve a Resolution Approving a Subordination Agreement for the Weedy Acres Properties, LLC Project. Seconded by Council Member McEnaney. Yeas: May, McEnaney, Moore and Chesley. Abstain: Piper.
3rd Quarter Budget Review
Bechtel and Finance Director Merle Hollmann presented the following spreadsheets:
After nine months of the fiscal year, the city's general corporate fund is at 71.2 percent of its projected revenues and at 69.1 percent of its projected expenditures. City Finance Director Merle Hollmann said the expenditures are down mainly due to the layoffs of seven employees in November and implementing furloughs for remaining city employees. Bechtel noted that all department heads have made a point to be sure to spend less than their allotments during the first nine month of the fiscal year.
Health insurance for 91 retired employees is $500,000 a year. Several other retired employees have been moved to Medicare Plan F coverage for health insurance. The City projected a 20 percent increase in health insurance costs, but have experienced a 40 percent increase.
Hollmann stated that the public utilities fund actual revenues are at 82.4 percent (should be at 75 percent) while the actual expenditures are at 76.4 percent (should be at 75 percent). Several large water breaks occurred during the year requiring more overtime hours than anticipated. The City budgeted for $77,500.00 for the year but have spent $109,000.00 for nine months.
Holmann advised that the IML projections are used in preparing the budget, but he noted that their projections have not been accurate. The City's state income tax receipts are down 13.7% from this year's projected budget amount which equates to a loss of $158,000.00 for nine months. Council urged Bechtel to inquire with the Department of Revenue and the Illinois Municipal league (IML) regarding the loss in state sales tax due to online shopping. She will also talk with ML regarding their projections.
Revenue from the 1% sales tax, the 1% home rule sales tax and the state income tax is $495,000.00 less than the amount projected in the budget.
Working Fund Balance Projections Assuming Spending Cuts Continue 3/10/2017
Year Year Year Year Ending Ending Ending Ending 4/30/2017 4/30/2018 4/30/2019 4/30/2020
General Corporate Fund Working Fund Balance at Beginning of Year ReWe mue:S
Expenses Working Fund Balance at End of Year A’-4---*F (Assuming spending cuts for 2016-2017 continue on 5/1/2017 and thereafter)
Revenue Projections
3/10/2017
Year Year Year Year Ending Ending Ending Ending 4/30/2017 4/30/2018 4/30/2019 4/30/2020 Originally budgeted revenue San F-gro e -urgery ra: 1% Sales tax adjustment 1%Home Rule adjustment State income Tax adjustment
Adjusted Revenue Year Ending 4/30/2017 Sale offixed assets will go down Funding from Revolving loan will go down 1.2% increase for Year Ending 4/30/2018 Adjusted Revenue Year Ending 4/30/2018 1.2% increase for Year Ending 4/30/2019 increase in licenses, permits, fees, etc. Adjusted Revenue Year Ending 4/30/2019 Tax levy for ER Payment 1.2% increase for Year Ending 4/30/2020
Health insurance costs increased 42% and are projected to increase another 39.7% this year. Retiree insurance costs amounted to more than $1 million in 2015-2016, with the City paying for 95 retirees. Qualifying retirees were moved to Medicare Plan Ffor a large savings.
Council suggested that Bechtel prepare some matrix comparing Mt. Vernon to other communities containing trend items - revenue, debt maintenance, etc.
Bechtel is working on the budget for the next fiscal year, 2017-2018, and does not anticipate any increases in revenues.
Expense Projections 3/10/2017
Originatly budgeted expenses for Year Ending 4/30/17 Estimated Fire Dept Overtime over budget Wage and Benefit Savings from 7 layoffs Estimated Savings from 1 clay furloughs (2017), including benefits Estimated Savings from no Dept Head raises 2017, including benefits Sawings from cut to JCDC
Savings from cut to DMDC Savings from laying off part-time ee's early/no part-time ee's Savings from cutting Demo expenses Adjust to anticipated ending Working Fund Balance at 4/30/2017 Originally budgeted expenses for Year Ending 4/30/17 Estimated increase in wages and benefits (a) 2.77%, 2.77%, 2.77% Estimated increase in health ins benefits () (40%/5%), 0%.15%), (0%f5%) Estimated savings from employees switching to Plan F in 2017 - Estimated savings from decrease in Plan F employees in 2017 Estimated decrease in Commercial insurance (4%, 4%, 4% Estimated increase in commercial insurance deductibles Estimated increases in other expenses ER Annual Debt Service Payments
Working Fund Balance Projections Assuming no Spending Cuts After 5/1/17
Working Fund Balance at Beginning of Year
Revier Lles - Expenses
(Assuming spending levels go back to 2016-2017 original levels starting 5/1/2017)
Originally budgeted expenses for 4/30/17
Wage & Benefit Savings from 7 layoffs Estimated Savings from 1 day furloughs including benefits
Estimated Savings from no Dept. Head raises (2017) incl. benefits
Savings from cut to JCDC. '" Savings from cut to DMDC
Savings from cutting Demo expenses
* Estimated increase in wages and benefits () 2.77%, 2.77%, 2.77%
Estimated savings from 5 employees switching to Plan Fin 2017
City of Mt Vernon, Il Revenue Projections
State income Tax adjustment
Adjusted Revenue Year Ending 4/30/2017 Sale of fixed assets will go down Funding from Revolving loan will go down 1.2% increase for Year Ending 4/30/2018 Adjusted Revenue Year Ending 4/30/2018 1.2% increase for Year Ending 4/30/2019 increase in licenses, permits, fees, etc. Adjusted Revenue Year Ending 4/30/2019 Tax levy for ERI Payment 1.2% increase for Year Ending 4/30/2020
City of Mt. Vernon, IL Expense Projections
3/10/2017
Estimated Fire Dept Overtime over budget -
Savings from laying off part-time emp. early/no part-time emp.
Adjust to anticipated ending WFB at 4/30/17 Originally budgeted expenses for 4/30/17
Estimated incr in health ins benefits @ (40%/5%), (0%/5%), (0%/5%)
Estimated savings from decrease in Plan F employees in 2017 Estimated decrease in commercial insurance (34%.4%, 4% Estimated increase in commercial insurance deductibles Estimated increases in other expenses - ER Annual Debt Service Payments
New sources of revenue are needed. Bechtel noted that the City's licensing fees have not been raised in 30 years and the present fees do not cover the cost of issuing them. City Clerk Jeri Hopkins previously presented Bechtel with a spreadsheet of proposed fee increases by about $40,000.00 per year.
Resolution For Ewr Associates, Inc. For Armory Project
Bechtel presented for Council's consideration a Resolution Approving an Agreement with EWR Associates Inc. for Professional Services (Architects) Related to the Armory Project. The cost of these proposed services is $89,000.00 plus hourly reimbursables. An architect is necessary to drill down on what is needed for the building, i.e. ADA compliance, historical renovation, etc. EWR has designed and renovated many YMCA facilities.
Previously, Poettker Construction was chosen by Council for construction management of the Armory project. Poettker submitted a budget estimate for the anticipated renovation of the former Illinois National Guard building (the old Amory) into a multi-use community recreation facility for recreation, civic and cultural activities. Bechtel reminded that the Armory is a way to grow amenities and revenues in the City with tournaments, trade shows and other activities in the building.
The handout distributed is an estimate summary. The estimated budget range is about $2.1 million with a contingency of $180,000.00. It was suggested that perhaps alternative bids may be sought to include the phasing-in of the air conditioning for the auditorium, the benefits of three phase power, and utilizing the building most efficiently. Some of the work will be performed in-house to reduce costs. The bids are expected to be ready in a month.
A stakeholders meeting is set for Wednesday, March 15, at 11:00 a.m. at City Hall. Those invited include the YMCA, Tourism Department, Parks Department, Jefferson County Sports Authority (JCSA) and Rachel's Dance Studio.
Corporate naming rights and donations will be discussed soon.
Council Member Piper made a motion to approve a Resolution Approving an Agreement with EWR
Associates Inc. for Professional Services Related to the Armory Project. Seconded by Council Member McEnamey. Yeas: May, McEnaney, Moore, Piper and Chesley.
Adjournment
Council Member Piper made a motion to adjourn the Special City Council Meeting. Seconded by Council Member May. Yeas: May, McEnaney, Moore, Piper and Chesley.
The meeting was adjourned at 5:55 p.m.
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