City of
City Council
Workshop Meeting
Monday,
August 29, 2011
The
Mayor Mary
Jane Chesley called the Workshop Meeting to order.
Roll call
showed present: Councilman Ron Lash, Councilman Dennis McEnaney, Councilman Todd
Piper and Mayor Mary Jane Chesley. Absent: Councilman David Wood.
Mayor
Chesley noted there are two items on the agenda today.
One being the quarterly budget review and the other, the new telephone
system proposal.
New
Telephone System
City Manager
Ron Neibert advised that the City’s present telephone system is fragmented,
antiquated and in need of updating.
He noted that the present system has no voicemail or messaging system and
limited intercom capabilities. Josh
Kunce of Kunce Computers was present to answer questions regarding the proposed
system with Phone Masters. The
System cost analysis is as follows:
$69,307.34 for hardware; $30,298.05 to Kunce Computers for Cat5 wiring;
$4,300.00 to Mt. Vernon Net for installation of fiber optic cable from City Hall
to the Police Department; and up to $15,000.00 for expense if the antennas are
unable to handle the band width which cannot be determined until the project is
underway. The total cost of the new
phone system is $118,905.39.
Estimated monthly cost to finance the system over five years at a local bank at
4.5% is $2,216.75; estimated monthly VOIP phone bill with the new phone system
is $2,350.00; current monthly phone bill (average of last two bills) is
$4,471.09. The increase in the
monthly cost for the new phone system for the first five years until the
hardware is paid off is $95.66.
The new
phone system will be installed in eight City department buildings:
City Hall, Police Department, Rolland W. Lewis Bldg., Municipal West
Bldg., Fire Station #3, Fire Station #4, Maintenance Bldg. at 1201 Casey Avenue
and the Downtown Development Bldg.
Installation of the system will take from three to six months to complete.
The new system will not affect the 911 system in any way.
City Manager
Neibert recommended that the 242-5000 number be answered by the automated system
and callers will be prompted to punch “1” for the water department, “2” for
inspection, etc. Concern was voiced
that the City maintains personal service with citizens.
It was noted that only one level of automation will be utilized.
Once the caller punches “1” for the water department, an employee will
answer the phone and provide them with personal service.
The new system will have voice mail capabilities.
City Clerk Jeri Hopkins will conduct a tally of calls received in her
office so that the most requested departments will be listed at the beginning of
the options when placing a call to 242-5000.
The “0” for the operator option will be available, and those calls will
be answered by the City Clerk’s office.
City Manager
Neibert requested that a Resolution approving the contract with Phone Masters be
placed on the Agenda for the City Council meeting on Tuesday, September 6, 2011.
Quarterly
budget Review
City Manager
Neibert began discussion of the City’s three month budget review as of July 31,
2011 and referred to several spreadsheets (attached) prepared by Merle Hollmann,
Finance Director. The operating
budget balance as of 4/30/11 was $2,090,854.00; as of 7/31/11 it was
$1,881,714.00 which was attributed to extra payroll in July for $140,000.00 as
in the previous year, and the purchase of Industrial Park land for $50,000.00
which will be resold. Councilman
McEnaney inquired as to the total of the General Corporate Budget for
operations. That total is
$12,851,000.
The working
fund balance as of 4/31/11 was $2,885,390.00 which came in higher than
anticipated at the end of the year.
The working fund balance is calculated by adding the cash balance as of 4/31/11
to two months of anticipated revenue and two months of anticipated expenses.
The working fund balance as of 7/31/11 is $2,665,373.00.
Actual
revenues as of 7/31/11 are 24% of the budget.
Typically the first three months of the fiscal year are lower because
these are revenues that come in for March, April, and May and these are not
historically big sales tax months.
The original
budgeted deficit for FY 2011-12 was ($132,593.00) and actual budget surplus
(deficit) for three months ending 7/31/11 was ($220,017.00).
City Manager Neibert noted that the deficit is on track, and the City
will be able to overcome the deficit because of the anticipated higher revenues
coming in. City Manager Neibert
predicts a zero deficit balance at the end of the fiscal year.
In the
Public Utilities Fund, the operating cash balance as of 4/30/11 was $44,296.00.
The public utilities operation is a zero operating fund out of a total
revenue of $6,500,000.00 which is less than one-tenth of a percent.
The budget is on target for this fund. The last rate increase was set at
the correct amount showing that the City didn’t over increase or under increase
the rate.
There was a
deficit in the Public Utilities Operating Cash Fund in the amount of
($20,740.00) because of the extra payroll in July (similar to last year).
As of 4/31/11, the Public Utilities Working Fund balance was $331,419.00
and $339,049.00 as of 7/31/11.
Actual revenues and actual expenditures are on target at 25%.
The original budgeted Public Utilities Fund is $2,417.00 and actual
budget surplus (deficit) as of 7/31/11 is $7,630.00.
General
Corporate Fund
1% State
Sales Tax
The
spreadsheet represents the 1% state sales tax comparison of current year actual
to budget and prior year actual for FY 2011-12.
City Manager Neibert noted that the City is 0.5% below what was budgeted,
but 3.1% higher than where we were at this time last year.
A new
spreadsheet, a multi-year comparison of the 1% state sales tax, was included.
In FY 2007-08 $4,893,824.44 was collected; FY 2008-09 experienced a 2.3%
decrease; FY 2009-10 increased by 3.6% and FY 2010-11 increased by 3.7%. The
increase may be attributed to Kohl’s, Dunham’s, and the new car dealership.
Councilman McEnaney asked for a breakdown of what segment of business
accounted for the increase (i.e. cars, furniture).
1% Home Rule
Tax
City Manager
Neibert stated that the 1% home rule tax comparison of current year actual to
budget and prior year actual for FY 2011-12 is up 4.3%. The City experienced a
larger increase in home rule tax over the 1% state sales tax for the current
quarter. Home rule tax is imposed
on the same general merchandise base as the state sales tax, excluding titled or
registered tangible personal property (such as vehicles, watercraft, aircraft,
trailers, and mobile homes), and qualifying food, drugs and medical appliances.
A multi-year
comparison of the 1% home rule sales tax reflects that $3,370,253.50 was
collected during FY 2007-2008; there was a (1.8%) decrease during FY 2008-2009;
5.7% increase in FY 2009-2010; 3.4% increase in FY 2010-2011; and 3.4% increase
year to date. Again, these figures
represent healthy increases.
Councilman McEnaney requested a breakdown of each business segment’s share of
these taxes.
Reports are
available online at the Illinois Department of Revenue website:
https://www.revenue.state.il.us/app/kob/KOBReport?r=Specific.
This link is for both types of sales tax collected by Mt. Vernon
businesses, sales tax and home rule sales tax.
Councilman McEnaney was interested to know how the City compares to other
regions in tax revenues. Mayor
Chesley noted in the past she received a publication titled Southern Illinois
Business Journal which contained these comparisons.
She will instruct Jane to order the Journal in the future.
State Income
Tax
On the
year-to-date comparison, the City accrued $290,606.65 in income tax revenue that
has not been received. The State is
running about four months behind in disbursing these funds.
According to Merle Hollmann, City Finance Director, the State is in
arrears to the City for a total of $442,000 so the cash balance as of 7/31/11 in
the amount of $1,881,714 does not include the $442,000 still owed to the City
from the State. The City is about
(1.9%) below where we anticipated year-to-date and actual is 1.9% higher than
where we were at this time last year.
That indicates a small increase in the state economy at least on payroll
taxes to the tune of 1.9%. This tax
is assessed to every municipality on a per capita basis.
Food and
Beverage Tax
The Food and
Beverage Tax shows a 1.7% increase over budget and a 1.9% increase over the
previous fiscal year. Yearly
comparison of the Food and Beverage Tax reflects a 4.2% increase over FY
2009-2010 with a year-to-date increase of 1.9%.
Mayor
Chesley noted that because of the Interstate Highway construction, she wants to
pay particular attention to the Food and Beverage Tax and the Diesel Fuel Tax
figures over the next two to three years.
2 Cent
Diesel Fuel Tax
The first
year for collecting the Diesel Fuel Tax was FY 2009-10 so the City had a 0.2%
increase over FY 2010-11 with an overall year-to-date increase of 8.5%.
Activity in
Restricted Capital and Restricted Bond Funds
First
Quarter FY 2011-12
Pursuant to
a request from Councilman McEnaney, Finance Director Hollmann prepared a
break-out of the General Corporate Capital Funds, General Corporate 2010 Bond
Funds, Public Utilities Capital Funds and Public Utilities 2010 Bond Funds.
The
Restricted Revenue Fund ($341,579.43) includes the Food and Beverage Tax, Diesel
Fuel Tax and Telecommunication Tax (2%).
It was noted that the Telecommunication Fund breakdown was not
included in this schedule.
As of
7/31/11, the General Corporate Capital Fund reflected a restricted cash balance
of $981,530.73. The ongoing North
Davidson Drive project is included in this fund.
Capital expenditures from restricted revenues included new copier, squad
car, engineering software, replacement police dog, and other equipment type
expenses.
Update on
Bonded Projects
Update on
Non-Bonded Project
Councilman
Lash inquired as to what determines if a project is bonded or non-bonded.
Bonded projects usually total over a million dollars.
We have some smaller bonded projects at $300,000 to $400,000.
The Public
Utilities Capital Funds revenues are coming from 3% rate increases implemented
on November 1. The next increase
will be November 1, 2011 and the last one on November 1, 2012.
These increases were implemented to build a Capital Fund for the Public
Utility Department to pay for bonded projects and smaller Public Utilities
Capital projects such as a one-block water line as well as the Water Tower,
Wells Bypass sewer project, and Veterans/Davidson South Extensions for water and
sewer.
Projected
completion for the Veterans/Davidson South Extension is probably 12-14 months.
In late 2012 the entire project will be complete and ready for
development. City Manager Neibert
will have a sign erected to describe the progress of the project as well as to
promote the area for development.
Mayor
Chesley noted that these funds were instigated to go along with the
Comprehensive Plan as we promised residents that improved services would be
provided.
Councilman
McEnaney requested that the Engineering Department provide the Council with a
matrix of all capital projects.
The Mayor
and Finance Director have a meeting scheduled on September 9, 2011 to review the
audit report. It is anticipated
that a draft of the audit will be presented to the City Council at the September
19, 2011 Council meeting. At the
Council Retreat on July 29, 2011, it was determined that the audit would be
presented to the City Council at the second meeting in September.
Discussion was held concerning an audit committee consisting of the
Mayor, Finance Director, City Manager, and auditor.
There was a question as to if a civilian would be asked to serve on the
audit committee. City Clerk Hopkins
will have that portion of the Retreat transcribed for verification of the
Council’s decision regarding members of the audit committee.
Councilman
Piper stated that he appreciated the financial breakdown provided at today’s
meeting. Councilman Lash noted that
he appreciates the updates on the construction projects and would appreciate the
matrix discussed earlier.
Motion by
Councilman McEnaney to adjourn the City Council Workshop Meeting.
Second by Councilman Ron Lash.
Yeas: Lash, McEnaney, Piper and Chesley.
Absent Councilman Wood.