City Council Budget Workshop Meeting
June 12, 2008
The Mt. Vernon City Council met in a Workshop Meeting on Thursday, June 12, 2008, at 4:00 p.m. in the Council Chambers at City Hall, 1100 Main Street, Mt. Vernon, Illinois.
The purpose of this Workshop Meeting was for discussion of the 2008-2009 budget.
Mayor Mary Jane Chesley called the Workshop Meeting to order. Roll call showed present: Council Member Mary Burgan, Council Member Shirilyn Holt, Council Member David Wood and Mayor Mary Jane Chesley. Absent: Council Member Mike Walker. Council Member Mike Walker entered the meeting at 4:05 p.m.
City Manager Ron Neibert handed Council Members a worksheet showing an analysis of the current budget. Mr. Neibert stated that this sheet shows a $573,000.00 deficit in the Working Fund Balance with the current figures plugged in. Mr. Neibert stated that the newer worksheet shows the increase in the hotel/motel tax and several budget cuts that have been made in the last week or so. Mr. Neibert explained that they tried to cut some corners that would not affect cuts in services to the public. Eliminating some travel, not hiring a laborer in the Parks Department to fill a vacancy, cutting seasonal labor in the Public Works Department, cutting demolitions in the Inspection Department and not doing the work in the City Clerks Office. These cuts would save $311,325.00 and bring the Revised Budget Balance to ($ 52,462.00). This in turn would bring the Working Fund Balance to $ 1,266,684.00.
Council Member David Wood stated that this is still not enough. This is not a balanced budget. Some services may have to be cut.
Discussion was held regarding the Working Fund Balance being $1.4 million dollars estimate. Two months of services runs about $2 million dollars, so we need at least that much. Mr. Neibert stated that the $1.4 million dollars is actual hard cash, which makes us still $1.2 million or so down.
Council Member David Wood stated that revenue sources are variable. The State Tax is down. We have a debt service of $15 - $16 million dollars for the Interstate Project. We have to make debt service payments. There is still about $10 million dollars needed to finance the improvements for the overpass.
Mayor Mary Jane Chesley asked if there was a goal for finances? Mayor Chesley stated that City Manager and Finance Director were directed to go over the budget again and try to trim it. The Interchange Project has a potential to make Mt. Vernon grow and develop, but the City has no funds to finish the project. Mayor Chesley stated that she, Merle and Ron Neibert are actually going over the budget day by day to stay on top of all the spending and funds.
City Manager Ron Neibert gave each Council Member a copy of the Proposed Infrastructure Projects that need to be done. Council discussed the projects and their costs.
The State of Illinois will send portions of the funds to do the Davidson Avenue Projects. Council discussed the fact that 34th Street will need to be done, but can be done in phases like many other road projects have been done. The sewer & water extensions for exits 94 & 95 have to be done.
Council Member David Wood stated that if the sales tax funds don’t bounce back soon, we will be forced to borrow money.
Council asked if there are any other revenue alternatives. Discussion was held regarding taxes and income from any other sources. Mayor Chesley stated that the City is sincere about the budget and she has promised the public that there would be no sales tax increases without a referendum.
Council Member Mary Burgan asked if the $7 million dollars comes in from the State, where will the City’s $2.5 million dollars come from.
City Manager Ron Neibert stated that within 2 years, the Veterans Memorial Project has to be done along with several other projects.
Council Member David Wood asked the Mayor what we are going to do, she wants a referendum before raising any taxes, so should we not do the Interchange Project? Mayor Chesley stated that Council needs to work hard and explain to the voters why we need the extra money and why we have to have this Interchange Project done. Discussion was held regarding the de-watering project for the sewer treatment plant that will need to be done, as the first payments are due in September 2009.
City Manager Ron Neibert gave Council a list showing the summary of the taxes we collect. The list also showed potential revenues and comparison of cities in the area and their rates, and what income would come from these revenues should we decide to implement them. The list also showed potential new revenues.
Council Member David Wood asked if we should jeopardize the projects that we have that need to be done. Mr. Wood stated that Council needs to see another 3 or 4 hundred thousand dollars in expenditures cut. How many employees can be cut? Mayor Chesley stated that there were 28 employees laid off before when she was on Council and the City had financial downfalls.
Council Member David Wood asked where do we go from here? Mary Burgan stated that we can make more cuts, but they will not make up enough to get us to where we need to be. Discussion was held regarding gas taxes and diesel tax possibilities. Council discussed Fire Protection and Police Protection taxes and telecommunications taxes.
City Manager Ron Neibert stated that there are some of the projects that would have matching funds from the State.
Council Member David Wood stated that we need to look at a financial plan as a committee. Mr. Wood stated that he would like to call in Jim Leuty of Krebhiel’s to sit in on these Workshop Meeting regarding the budget because he works on the City’s audit.
Mayor Chesley again stated that she would not do a tax without a referendum from the voters. The average median family income for Mt. Vernon is only $38,000.00. The average income per person in Southern Illinois is only $28,000.00. With the gas prices, food prices and everything else going up, people cannot do much more. Mary Burgan asked if it would be next April for a referendum? City Manager Ron Neibert stated that it could be put on in November.
Council Member David Wood stated that he wants to see what a $300,000.00 cut in employees and services would be. How many employees and how many services are we talking about.
Mayor Mary Jane Chesley stated that Council would need to have another Budget Workshop Meeting next Thursday, June 19, 2008, at 4:30 p.m. to further discuss the Budget.
Motion by Council Member Mike Walker to adjourn this Workshop Meeting. Second by Council Member David Wood. Yeas: Burgan, Holt, Walker, Wood and Chesley.