City Council

MINUTES CITY OF DEKALB REGULAR MEETING OF CITY COUNCIL MARCH 12, 2018 The City Council of DeKalb, Illinois held a Regular meeting on March 12, 2018, in the City Council Chambers of the DeKalb Municipal Building, 200 South Fourth Street, DeKalb, Illinois. Mayor Smith called the meeting to order at 6:00 p.m. A. ROLL CALL City Clerk Herrmann called the roll, and the following members of the City Council were present: Alderman Bill Finucane, Alderman Mike Marquardt, Alderman Pat Fagan, Alderman Kate Noreiko, Alderman Mike Verbic, Alderman Tony Faivre, and Mayor Jerry Smith. Alderman Dave Jacobson arrived at 6:10 p.m. Also present were: Assistant City Manager Patty Hoppenstedt, City Attorney Dean Frieders, Finance Director Molly Talkington, Police Chief Gene Lowery, Fire Chief Eric Hicks, Community Development Director Jo Ellen Charlton, Public Works Director Tim Holdeman, Information Technology Director marc Thorson, management Analyst Aaron Stevens, Management Analyst Ray Munch, Economic Development Planner Jason Michnick, Principal Planner Dan Olson, and City Clerk Susanna Herrmann. B. PLEDGE OF ALLEGIANCE Police Detective Keith Ehrke led the Pledge of Allegiance. C. APPROVAL OF THE AGENDA – ADDITIONS / DELETIONS There were no additions to or deletions from the agenda. MOTION Alderman Noreiko moved to approve the agenda; seconded by Alderman Faivre. VOTE Motion carried on 7-0-1 roll call vote. Aye: Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Absent: Jacobson. Mayor Smith declared the motion passed. D. PUBLIC HEARINGS There were none scheduled. E. SPECIAL ITEMS OR PRESENTATIONS & CITIZEN’S COMMENTS 1. Special Items Regular Meeting of City Council Minutes March 12, 2018 Page 2 of 22 a. Proudly DeKalb • GENTRI Music Video. Using the television screens in Council Chambers, Mayor Smith showed a music video from the group GENTRI who recently performed at the Egyptian Theatre. b. Annie Glidden North Revitalization Plan Task Force Update. Alderman Finucane reported that all the subcommittees have conducted at least one meeting and are working on a second. He then stated that all the Council liaisons are gathering a general sense of accomplishment from each of those subcommittees. 2. Presentations a. DeKalb Welcoming Proclamation. Mayor Smith expressed appreciation for all of the various boards and commissions within the City and briefly discussed the proclamation. Larry Apperson, Chairman of the Human Relations Commission, provided a brief history of the Proclamation and discussed the importance of allowing our immigrant community members to feel welcomed. Mayor Smith read the Proclamation aloud and presented it to Mr. Apperson. Mr. Apperson thanked Mayor Smith and offered copies of the Proclamation in Spanish to anyone who is interested. Susana DasNeves, from the Universidad Para Padres, thanked Council and honored members of her organization. Lizbeth Roman, with Welcoming Western Counties, thanked Council for the Proclamation and thanked Mayor Smith for his immediate recognition of the importance of implementing a Proclamation of this nature. Dave Becker echoed the sentiments of other speakers. Dana Yarak also echoed the sentiments made by other speakers. He mentioned the Pleasant Street neighborhood and discussed the impact that will be made there now that this small step has been taken to make residents in that neighborhood feel supported by the City. Alderman Noreiko relayed a communication from Herb and Irene Ruben in support of the Proclamation.  Regular Meeting of City Council Minutes March 12, 2018 Page 3 of 22 3. Approval of the Mayor’s Appointments There were none. 4. Public Participation F. CONSENT AGENDA – OMNIBUS VOTE Mayor Smith read the following items by title only: 1. Approval of City Council Minutes a. Minutes of the Committee of the Whole Meeting of February 12, 2018. b. Minutes of the City Council Meeting of February 12, 2018. 2. Receive & File a. Accounts Payable and Payroll through March 12, 2018, in the Amount of $1,501,501.66. MOTION Alderman Verbic moved to approve the Consent Agenda; seconded by Alderman Faivre. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Mayor Smith declared the motion passed. G. ITEMS FOR SEPARATE ACTION 1. Ordinance 2018-007 Abating Taxes Levied for the DeKalb Public Library and Corporate Purposes of the City of DeKalb, Illinois for the Tax Year 2017 (Library and Bonds). (Passage on First Reading, Waiver of Second Reading) Mayor Smith read Ordinance 2018-007 by title only. MOTION Alderman Finucane moved to consider Ordinance 2018-007; seconded by Alderman Marquardt. Finance Director Talkington provided an overview of this item and stated that the abatement can now go forward. She explained that the DeKalb Public Library (the Library) is requesting to abate its tax levy, to reduce the tax rate to the 2014 tax rate that was in effect prior to the increased levy in 2015. This abatement would have the effect of maintaining the 2014 tax rate, expressed as a percentage, for the 2017 tax levy payable in 2018. This maintains the Library’s commitment to retaining the same effective tax rate Regular Meeting of City Council Minutes March 12, 2018 Page 4 of 22 and the rate would be applied against the now-current equalized assessed valuation in the City. She requested passage on First Reading and a waiver of Second Reading to meet the deadline for the abatements. Alderman Finucane congratulated the Library Board for being able to complete the task without the expected state funding. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Mayor Smith declared the motion passed. MOTION Alderman Jacobson motioned to waive Second Reading of Ordinance 2018-007; seconded by Alderman Finucane. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Mayor Smith declared the motion passed. 2. Ordinance 2018-008 Amending Chapter 23 “Unified Development Ordinance", Article 3 “Definitions,” Article 5 “Zoning District Regulations,” and Article 7 “Supplementary District Regulations" Regarding Self-Service Storage Facilities. (First Reading) Mayor Smith read Ordinance 2018-008 by title only. MOTION Alderman Fagan moved to consider Ordinance 2018-008; seconded by Alderman Verbic. Principal Planner Olson provided an overview of this item, stating that the proposed amendments are to the following Articles of Chapter 23 “Unified Development Ordinance” of the Municipal Code: Article 3 “Definitions”, Article 5 “Zoning District Regulations”, and Article 7 “Supplemental District Regulations”. He added that the applicant is proposing to amend the UDO to create uses and definitions for indoor and outdoor self-service storage facilities and to add indoor self-service storage facilities as a special use in the “LC” Light Commercial and “GC” General Commercial Districts. In addition, amendments are proposed to allow indoor self-service storage facilities as a permitted use in the “LI” Light Industrial and “HI” Heavy Industrial Districts and outdoor self-service storage facilities as a special use in those districts. He stated that the current UDO regulations allow “self-service storage facilities” as a special use in the “LI” and “HI” Districts. There is no current distinction between indoor and outdoor facilities in the UDO, so new definitions are proposed. Finally, standards are suggested to make sure indoor and outdoor self-service storage facilities reviewed under a special use permit are in  Regular Meeting of City Council Minutes March 12, 2018 Page 5 of 22 appropriate areas, protect prime retail space, and are compatible with the surrounding neighborhood. He read aloud the proposed definition changes and noted that the Planning and Zoning Commission (PZC) conducted a public hearing on January 17, 2018, which was continued to February 7, 2018, where they recommended approval of the proposed amendments by a vote of 5-0-2 (Commissioners Vicki Buckley and Jerry Wright were absent). He noted that part of the PZC’s recommendation was to require an applicant to prove a building or property was obsolete for retail use based upon a list of economic factors. At the January 17, 2018, hearing, local business owners spoke mentioning their support of the amendments indicating it would offer a good option for commercial and industrial space. He recommended passage on First Reading and a waiver of Second Reading. Jim Mason provided his personal perspective regarding the needs for this type of storage facility in the community and announced that he will pre-lease space within the facility. Alderman Finucane asked Principal Planner Olson if there was a reason for specifying that this Ordinance pertains to existing buildings only. Principal Planner Olson replied that the goal was to utilize existing structures. Alderman Noreiko asked Mr. Mason how many units he is expecting to create within the space and inquired about how he will factor parking into the project plans. Mr. Mason replied that the demand will dictate the number of units and there is no need for parking. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Mayor Smith declared the motion passed. MOTION Alderman Finucane motioned to waive Second Reading and pass Ordinance 2018-008; seconded by Alderman Faivre. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, and Smith. Nay: none. Mayor Smith declared the motion passed. 3. Ordinance 2018-009 Amending Chapter 64 “Smoking Regulations”, Section 64.16 “Tobacco/Smoking Sales, Use and Licensing” as it Pertains to Existing Retail Tobacco Stores. (First Reading) Mayor Smith read Ordinance 2018-009 by title only. MOTION Alderman Verbic moved to consider Ordinance 2018-009; seconded by Alderman Verbic. Regular Meeting of City Council Minutes March 12, 2018 Page 6 of 22 Community Development Director Charlton clarified that this Ordinance and discussion is not related to the recent Council discussion regarding patio smoking and stated that this ordinance contemplates a minor amendment to City Code, Section 64.16, to extend grandfathering of currently operational retail tobacco stores, even following changes in ownership. Community Development Charlton then explained that in 2014, the City adopted Ordinance 2014-029, which implemented certain regulations pertaining to retail tobacco stores. Retail tobacco stores are defined in City Code as businesses that derive more than 30% of their revenue from the sale of tobacco or smoking-related items, or that dedicate more than 25% of their floor area to the sale of such items. Under that ordinance, new retail tobacco stores were limited to being located only in freestanding buildings that do not share ventilation equipment with any other tenancies. Then-existing retail tobacco stores that did not satisfy this requirement were grandfathered under their then-lawful operational model (in multi-tenant buildings) until there was a surrender or revocation of their license, or until there was a change in ownership. Community Development Director Charlton continued, adding that at the time this ordinance was adopted, the City Council engaged in a detailed discussion of the impact of the ordinance, and acknowledged that the ordinance would result in existing retail tobacco store businesses being unable to be sold as an ongoing venture. For example, if the owners sought to retire or move, they would simply have to close their business and could not sell it to a new owner to continue operating it. The Council, while mindful of that concern, nonetheless approved the ordinance by a 5-3 vote. The ordinance has not been an issue for the City or local businesses since its passage, until this year. She stated that this year, the City received inquiries from two different retail tobacco stores with regard to the potential to sell their businesses to successor owners who have an interest in continuing the businesses in their current location and configuration. Under existing City Code, such sales would not be permitted and the establishments would lose licensure and be ineligible for retail tobacco store licensure. In other words, they would either need to close, relocate to a freestanding building, or change their business model to reduce their dependence on tobacco and smoking related items. Upon understanding that regulatory model, the licensees inquired about the potential to revise the City Code to permit them to engage in a sale of business. She noted that Mayor Smith, Alderman Verbic, City Manager Gaura and City Attorney Frieders engaged in a recent meeting with the owner of one such affected business, Mohammed Labadi, owner of Aroma’s Hookah Bar at 811 W. Lincoln Highway. Based upon the owner’s request, which was supported by Mayor Smith and Alderman Verbic, an ordinance amendment has been prepared for consideration by Council. Finally, she clarified that the proposed ordinance amendment reflects that existing retail tobacco stores (in operation as of December 31, 2017, as indicated by outstanding City licenses at that time) would be permitted to continue their operations as retail tobacco stores, in their current locations, even after a change of ownership. If the licenses were surrendered or revoked for reasons unrelated to a change of ownership, that grandfathering would terminate. This proposed change accommodates the request of local businesses that they be permitted to continue the operation of their facilities and the  Regular Meeting of City Council Minutes March 12, 2018 Page 7 of 22 related employment and tax generation opportunities for the City and allows existing businesses to be sold and maintained as operational. Alderman Noreiko asked Community Development Director Charlton if there are similar stipulations regarding other types of businesses. Community Development Director Charlton replied that Council recently implemented that change to the UDO and this Ordinance would be consistent with that change. Alderman Jacobson provided historical perspective regarding this item and added that he “told them so”. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, and Smith. Nay: none. Mayor Smith declared the motion passed. MOTION Alderman Fagan motioned to waive Second Reading of Ordinance 2018-009; seconded by Alderman Finucane. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, and Smith. Nay: none. Mayor Smith declared the motion passed. 4. Resolution 2018-030 Authorizing an Amendment to the 230 East Lincoln Highway Development Incentive Agreement (The Bandit’s Castle, LLC). Alderman Fagan recused himself at 7:01 p.m. MOTION Alderman Noreiko moved to approve Resolution 2018-030; seconded by Alderman Faivre. Economic Development Planner Michnick provided a summary of this item, stating that The Bandit’s Castle, LLC (TBC) has requested an amendment to their Development Incentive Agreement for the property located at 230 E. Lincoln Highway that would increase their reimbursement from the City from $400,000 to $468,282, stating that the total project costs incurred through the rehabilitation of the 120 year old building were significantly higher than originally estimated. At the time of approval of the project, it was estimated that acquisition, remediation, and rehabilitation of the building would be a total of $1.2 million. To date, the total project costs have exceeded $1.47 million, or $273,131 greater than anticipated. The previous incentive was calculated as one-third of the estimated project cost, with a not to exceed Regular Meeting of City Council Minutes March 12, 2018 Page 8 of 22 figure of $400,000. The amendment would increase the total project cost to $1.47 million with the incentive amount not to exceed $468,282. Economic Development Planner Michnick then reminded Council that on March 13, 2017, the City approved a Development Incentive Agreement with TBC for the acquisition and rehabilitation of the building located at 230 E. Lincoln Highway, with the intent of renovating the space into a multi-tenant building. Renovations to the building would allow SundogIT to occupy the second floor of the building, and lease the ground floor of the building until a future date when SundogIT would require the space for its own operation. At the time of estimating the total project cost, it was believed that $1.2 million was a conservative estimate. Due to the project being brought forward as a conceptual plan while the property was under contract, there were factors that could not be accounted for in the estimates and in order to accurately determine the cost of rehabilitation, a more thorough inspection that involves a level of demolition would be required. He explained that the seller of the building would generally not be willing to allow for this, as it could have a significant negative impact on the value of the property at the time of sale and he added that a developer or business would either not be willing to move forward with purchasing a property, or would have difficulty financing the purchase of a property, without some level of guaranteed incentive. Although it was believed that the estimated cost to complete the project was conservative, there were several factors that led to substantial cost overruns such as: • Demolition of ceiling to remove rotted lathe and plaster from water damage. • Construction of a structural shear wall from basement to the upper joist to raise the elevation of the roof line. • Modification to structural steel while constructing elevator shaft. • Removal of plaster due to water damage and sandblasting and sealing brick walls. • Discovery of asbestos tile during demolition in basement. • Greater than anticipated labor hours for demolition in basement and upper floor. • Removal of old air handling equipment. • Adjustments to the installation method of fire suppression system to accommodate open concept. • Salvaging brick from original façade to construct elevator shaft. Economic Development Planner Michnick continued with his overview and noted that it is now not financially feasible for TBC to provide a tenant build-out allowance for the ground floor spaces. He clarified that the requested amendment to increase the incentive would not be for the full 33.3% of the project’s cost overruns, which would have resulted in an additional $90,000. He added that staff worked with TBC to determine what specific cost overruns were due to unforeseen circumstances, and which were due to higher than  Regular Meeting of City Council Minutes March 12, 2018 Page 9 of 22 anticipated costs to achieve the desired design elements of the renovations. It was determined that of the $271,131 in cost overruns, $203,348.25 were attributable to the conditions of the building. The increased incentive is based on 33.3% of the $203,248.25, which is $67,782.07. The resolution and amended agreement have been drafted to increase the total estimated project cost to $1.473 million and allow for the maximum reimbursement to be $468,000. In addition to increasing the total reimbursement amount, the amendment also makes modifications to the required documentation that needs to be submitted for reimbursement, allowing for a sworn contractor affidavit to be submitted as a summary for project costs. He indicated that Cohen Barnes was present in the audience should Council have any questions for him. Alderman Noreiko asked Economic Development Planner Michnick if it is common practice to factor in a percentage of the cost for unforeseen circumstances, to which he replied in the affirmative. He went on to explain that the original 1.2 million was a conservative figure and due to the age and condition of the building, it is very challenging to predict those circumstance. Alderman Noreiko verbalized her understanding and added her support for the Resolution. Alderman Jacobson asked what the square footage of the building is. Mr. Barnes answered that it is approximately 8,800 square feet. Alderman Jacobson noted his concerns regarding the remodeling of this building and provided his personal perspective in regard to the building and the project as a whole. Mayor Smith asked if there were any other projects where the owner came back to Council for additional funding. Alderman Verbic asked Mr. Barnes if there was an inspection prior to the purchase of the building. Mr. Barnes addressed the concerns that were mentioned by Council members. Alderman Faivre expressed appreciation toward staff for their methodology in taking a second look at this item. He provided his personal perspective and verbalized his support for the Resolution. City Attorney Frieders discussed the cap put into place in order to limit the City’s exposure for projects of this nature. He clarified that staff analyzed the costs and noted that this process is intentional and meant to increase transparency. Bessie Chronopoulos commented that she is torn regarding this issue because of her belief that old buildings are worth saving. However, she has two main issues with this item. The first issue is that detailed TIF information has not come before the Council or the community. The second issue is regarding City staff’s practice of bringing information forward to Council members, either individually or two at a time, to discuss matters that should be done openly. Regular Meeting of City Council Minutes March 12, 2018 Page 10 of 22 Mayor Smith asked Council and staff if those meetings discussed by Ms. Chronopoulos took place regarding this item. Alderman Verbic responded in the affirmative. Alderman Jacobson discussed the architectural features of the building and expressed his opinion that this is an attempt to get more funding from the City and Council should not approve this Resolution. Economic Development Planner Michnick addressed Alderman Jacobson’s concerns regarding the building structure and claimed that there were several original structural components maintained throughout the project. Mayor Smith proposed implementing restrictions on developers for bringing projects back for additional funding. Alderman Verbic suggested that there could be some language put in place that the developer needs to perform their due diligence before the elected body provides an incentive for projects to ensure that the unforeseen circumstances are minimal. Alderman Finucane reiterated that Mr. Barnes was prohibited from gathering some of the information without an initial inspection. MOTION Alderman Finucane motioned to table the item; seconded by Alderman Jacobson with the caveat that there is an updated financial picture provided to Council. Mr. Barnes expressed that another delay of the project construction would be a financial burden to him. VOTE Motion failed on a 3-4-1 roll call vote. Aye: Jacobson, Finucane, Verbic. Nay: Marquardt, Noreiko, Faivre, Smith. Absent: Fagan. City Clerk Herrmann declared the motion failed. MOTION Alderman Verbic motioned to amend Resolution 2018-030 to indicate a one-time only half payment to Mr. Barnes; seconded by Alderman Jacobson. Mayor Smith asked Economic Development Planner Michnick and Mr. Barnes if that was an acceptable compromise. Mr. Barnes expressed appreciation toward Council for their willingness to work with him but reiterated that not receiving the full amount, as outlined in the Resolution, would be devastating. He commented that the amount of energy and activity created because of this building is important to keep in mind.  Regular Meeting of City Council Minutes March 12, 2018 Page 11 of 22 VOTE Motion failed on a 3-4-1 roll call vote. Aye: Jacobson, Verbic, Smith. Nay: Finucane, Marquardt, Noreiko, Faivre. Absent: Fagan. City Clerk Herrmann declared the motion failed. Mayor Smith clarified that the preceding vote will be in regard to the original motion. VOTE Motion carried on a 5-2-1 roll call vote. Aye: Finucane, Marquardt, Noreiko, Faivre, Smith. Nay: Jacobson, Verbic. Absent: Fagan. Mayor Smith declared the motion passed. Mr. Barnes further discussed the energy that the new building has created in the downtown area. He then thanked Council for their commitment to downtown. Alderman Finucane left the dais at 7:39 p.m., returning at 7:40 p.m. 5. Ordinance 2018-010 Amending the Fiscal Year-End December 31, 2018 (FY2018) Budget. (First Reading) Mayor Smith read Ordinance 2018-010 by title only. Alderman Jacobson left the dais at 7:40 p.m. Economic Development Planner Michnick gave a summary of this item and stated that at the time the FY2018 Budget was being considered, it was believed that the TIF incentive for SundogIT would be paid out of the FY2017 Budget. However, a final Certificate of Occupancy was not issued until after the start of the year, meaning that the payout of the incentive for 230 E. Lincoln Highway will be paid from the FY2018 Budget. He explained that this Ordinance would authorize an amendment to the FY2018 Budget that would add the 230 E. Lincoln Highway incentive to account 13-00-00-300-8624 in an amount of $468,282. MOTION Alderman Noreiko moved to consider Ordinance 2018-010; seconded by Alderman Marquardt. Alderman Finucane asked Finance Director Talkington for clarification that this expense will not impact the reserve, to which she responded in the affirmative. VOTE Motion failed on a 5-2-1 roll call vote. Aye: Finucane, Marquardt, Noreiko, Faivre, Smith. Nay: Jacobson, Verbic. Absent: Fagan. City Clerk Herrmann declared the motion failed. Regular Meeting of City Council Minutes March 12, 2018 Page 12 of 22 City Attorney Frieders announced that the vote required a supermajority to pass, which would be a minimum of six yes votes. He then added that the inability to pass Ordinance 2018-010 would prohibit the City from being able to pay out any portion of the project mentioned in Resolution 2018-030. Alderman Finucane and City Attorney Frieders briefly discussed the specifications of a supermajority vote. 6. Resolution 2018-031 Authorizing the City Manager to Sign an Intergovernmental Agreement with Northern Illinois University for the Implementation of a Secondary Internet Connection and Primary LEADS Connection in an Amount Not to Exceed $4,800 Annually. Mayor Smith read Resolution 2018-031 by title only. Alderman Marquardt left the dais at 7:44 p.m. MOTION Alderman Noreiko moved to approve Resolution 2018-031; seconded by Alderman Faivre. Information Technology Director Thorson provided an overview of this item, stating that staff is requesting Council’s authorization to sign an IGA with Northern Illinois University (NIU) to implement a secondary internet connection and primary LEADS, the state and federal government’s criminal information database, connection. The secondary internet connection will be established as 100 megabits per second (Mb/s) in a synchronous fashion (meaning same speeds for uploads and downloads) to increase internet access resiliency should the primary internet connection fail. Additionally, NIU would be tasked to provide a minimum 10 Mb/s private, secured connection for access to LEADS. Alderman Fagan asked Information Technology Director Thorson how much was budgeted for this item. He replied, $700,000. Alderman Jacobson, Police Chief Lowery, and Information Technology Director Thorson briefly discussed the current services from a financial perspective, including associated fees. Alderman Fagan asked if it would come out of the Information Technology Department’s budget or the Police Department’s budget. Information Technology Director Thorson responded that the cost would be split. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Mayor Smith declared the motion passed.  Regular Meeting of City Council Minutes March 12, 2018 Page 13 of 22 City Attorney Frieders called attention to Ordinance 2018-010 and advised the Council that the failure to adopt a budget consistent with the terms of the agreement puts the City in violation of the two separate provisions within said agreement. MOTION Alderman Jacobson motioned to reconsider Resolution 2018-030; seconded by Alderman Verbic. VOTE Motion carried on an 8-0 roll call vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: None. Mayor Smith declared the motion passed. MOTION Alderman Jacobson motioned to approve Resolution 2018-030, minus the additional $67,782.07; seconded by Alderman Verbic. Alderman Fagan recused himself at 7:52 p.m. Alderman Finucane clarified that the amendment would be for the Resolution to include the original $400,000 that Council agreed upon. City Attorney Frieders expressed concern in regard to Alderman Jacobson’s motion. Discussion ensued amongst Council and staff in regard to this issue. MOTION Alderman Finucane motioned to amend the previous budget amendment to include the additional $67,782.07 provided in the back-up documentation; seconded by Alderman Faivre. City Attorney Frieders clarified the components of the motion and the requirements for its passage. VOTE Motion carried on a 6-1-1 roll call vote. Aye: Jacobson, Finucane, Marquardt, Noreiko, Faivre, Smith. Nay: Verbic. Absent: Fagan. Mayor Smith declared the motion passed. Alderman Noriko asked Council to consider the greater good and take reasonable action. VOTE Motion failed on a 5-2-1 roll call vote. Aye: Finucane, Marquardt, Noreiko, Faivre, Smith. Nay: Jacobson, Verbic. Absent: Fagan. City Clerk Herrmann declared the motion failed. Regular Meeting of City Council Minutes March 12, 2018 Page 14 of 22 City Attorney Frieders encouraged Council members on the prevailing side to reconsider their vote to avoid the City being in default of its obligations. Discussion ensued amongst Council and staff in regard to this issue. H. NEW OR UNFINISHED BUSINESS 1. Barb City Manor Ownership and Operations. Economic Development Planner Michnick provided background on this item and stated that The Barb City Manor (BCM) facility was formerly the site of the DeKalb Public Hospital, which closed in 1975 and was relocated to the existing Kishwaukee Hospital site. In 1977, the City acquired ownership of the BCM site and the structure remained vacant until 1979, when BCM opened and started operating the facility. Originally, BCM was governed by the DeKalb Housing Commission, but in 1993, BCM was designated as an independent not-for-profit entity. BCM continues to operate as a not-for-profit and provides affordable, independent living facilities for retirees, with most of their occupants being residents of DeKalb prior to living at BCM. Economic Development Planner Michnick continued, explaining that in 1993, the City entered into a 20-year lease agreement with BCM to continue operating the facility. This agreement was extended, and the current agreement expires June 30, 2019. The original lease agreement included provisions that BCM would fund capital improvements that were under $10,000, and the City would fund significant projects with costs that exceeded $10,000. He added that through researching historic documents, it is believed that the creation of TIF 2 was partially motivated by a desire to have an adequate funding source for BCM capital projects. TIF 2 was designated in 1996 and BCM has received TIF funding on an annual basis since then. Between FY2000 and FY2017, BCM has received $1.53 million in TIF funding for capital projects and during that time, BCM has also undertaken self-funded renovation of the interior of the structure both to update it, and to address code violations observed through the City’s annual inspections. He stated that with the impending end of the current TIF districts, the City has been evaluating potential options for the future of the facility. Other alternatives would include sale or development of the structure or soliciting interest in operating the facility as a for-profit enterprise. Economic Development Planner Michnick listed and explained the two primary options available for future operation of the facility and gave Council two questions to consider: 1. Is Council satisfied with the current operational model for BCM and does it wish to retain this service in the community? 2. Based on the information in the report, does the City Council support continued City ownership with a lease agreement? a. If yes, should staff explore reasonable revenue options with BCM? If no, is the City willing to donate or sell the property at little to no cost to BCM, and what zoning measures are desired to protect the City’s future interest if BCM ceases to exist or operate in the future and sells the property?  Regular Meeting of City Council Minutes March 12, 2018 Page 15 of 22 Averil Schreiber, former BCM administrator, provided a history of the building and verbalized her personal perspective that the building provides affordable care for senior citizens in the City. She asked that Council retain the relationship that was established in 1993 and that it remain on the lease agreement with the City. Ann Cheladyn, BCM employee, provided an anecdotal perspective of the BCM and she expressed her opinion that the BCM is a special place and the residents are very distraught at the thought of losing their home. Don Whitmore worked with BCM in maintaining the building as an architect and noted that the board of directors has done an excellent job with maintaining the property. Alderman Finucane commented that it is imperative to allow BCM to exist. Alderman Jacobson noted how refreshing it is to him to be thanked for funding provided to public establishments by the City. He then provided a historical perspective of the City’s ownership of the building. Alderman Fagan added that the City is very fortunate to have BCM. There was a brief discussion between Council and Economic Development Planner Michnick regarding the details of the agreement moving forward. Consensus was reached to keep the agreement as is. Maureen Gerrity discussed the services and amenities that BCM provides and noted that they serve low to moderate income seniors who are living on social security with modest, if any, savings. She asked that the building remain under City ownership, rent-free. She distributed a packet to Council that included a partial list of improvements and communications from BCM residents. 3. Video Gaming Policy Alderman Jacobson recused himself from discussion and joined the audience at 8:35 p.m. Community Development Director Charlton discussed this item and reminded Council that in February and March of last year, Council approved ordinances regulating establishments that include video gaming machines or terminals. These actions were the culmination of research conducted as part of a six month moratorium on new video gaming licenses due to the high volume of requests for stand-alone video gaming establishments in 2016. In addition to amendments to the UDO that created a new definition and separation requirements for standalone video gaming establishments as a principal use, the Council also asked for revisions to Chapter 38 “Intoxicating Liquors” to limit the number of new standalone video gaming establishments to the number that existed at the time of adoption, which was seven establishments. She stated that none of the changes made impacted existing or future bar license holders who wished to add video gaming machines as an accessory to their principal use. She explained that over Regular Meeting of City Council Minutes March 12, 2018 Page 16 of 22 the last year, the City has fielded requests from four separate locations that cannot be considered unless the Council amends the City Code to increase the number of video gaming establishment licenses. She added that staff is requesting policy direction from Council as to how requests for new video gaming establishments should be handled. Is it Council’s intent for staff simply to say there are no more allowed and there is no interest to hear further requests? Or, is it Council’s intent that individual requests should be handled on a case by case or periodic basis? She highlighted the three locations that the Ordinance refers to: 1. Mixed Use Commercial Building at 850/852 S. Fourth Street. This property contains a roughly 3,800 square foot commercial building, partially occupied by Brian Scholle State Farm Insurance. The southern portions of the commercial space has sustained prolonged vacancy. The property is located two blocks north of Twins (1028 S. Fourth Street), which has accessory video gaming. American Legion is located two blocks south of Twins, which also has accessory video gaming. 2. Vacant Property at 1221 W. Lincoln Highway. Currently a vacant lot utilized for Fatty’s overflow parking. The owner desires to construct a mixed use commercial building with a drive through liquor store and a video gaming establishment. The property is across the street from Fatty’s (1312 W. Lincoln Highway), which has accessory video gaming. 3. Mixed Use Commercial Building at 110-124 E. Hillcrest Drive. This property contains a roughly 9,000 square foot commercial building, with a mix of small tenants that include pet grooming, a thrift store, a barber shop, and tobacco store. There are no existing bars or video gaming establishments in close proximity to this location. The closest is CJ’s Gaming (1406 Sycamore Road), which is a stand-alone video gaming establishment. Community Development Director Charlton stated that all three of these locations meet the separation requirements established in the UDO, which require a minimum of 500 feet between video gaming establishments. She then asked Council to recall that the separation requirement does not apply between video gaming establishments and bars that have accessory video gaming and authorizing video gaming establishments in these locations would require Council to amend Chapter 38 “Intoxicating Liquors” of the City Code to increase the number of Video Gaming Establishment licenses from seven to 10. Community Development Director Charlton continued, stating that the fourth facility was being proposed at 850 N. Annie Glidden Road, but the applicant has since withdrawn the application. She explained that it still warranted discussion since the property faced two challenges: first, the Planned Development Agreement in place for this property doesn’t provide for a list of permitted and special uses. The second challenge is whether the proposed use is to be defined as a video gaming establishment needing the City’s approval of another license, or a bar with accessory video gaming terminals. 4. Mixed Use Commercial Building at 850 N. Annie Glidden Road. This property contains a roughly 8,500 square foot commercial building, currently occupied by Jimmy Johns and a laundry facility. This building and two commercial buildings under  Regular Meeting of City Council Minutes March 12, 2018 Page 17 of 22 separate ownership to the north, including Lukulos and the building that contains the new Rosati’s, are part of a commercial planned development approved in 1996. Unfortunately, the ordinance approving those projects did not include a list of permitted and special uses, so although bars and/or video gaming are sometimes identified as special uses, there is no way to authorize any use. This is something that needs to be fixed independent of whatever the City decides to do with video gaming. Staff is working with the three property owners to process the necessary work as a City initiated petition through the public hearing and Council approval process. Community Development Director Charlton went on to discuss the process staff follows when determining whether an establishment is to be classified as a Video Gaming Establishment (and therefore subject to the license limitations). She noted that the UDO lists seven criteria and provides that “any one or a combination of the following criteria may be considered in the City’s decision, as determined by the Community Development Director.” Not surprisingly, potential applicants want to avoid being classified as a video gaming establishment to avoid an extra processing step, so the challenge for staff becomes making the call based on the criteria. Using the criteria and measuring them against what is proposed at the Annie Glidden Road address, staff is initially inclined to identify the facility as a bar (with accessory video gaming) if they could make a few minor adjustments. She asked Council to keep in mind that a bar would likely be classified as a special use as part of the planned development amendment discussed above, so a public hearing would still be required. Classification as a bar, however, would not require increasing the license count for Video Gaming Establishments. Community Development Director Charlton then listed the seven criteria listed in the UDO for determining which ones are to be classified as gaming facilities and discussed the financial impact these facilities have on the City and the fees associated with these establishments. She noted that increased fees support the City’s time spent administering the licenses, as well as providing public services related to the use including police, fire, paramedic, and social services. Increased fees would impact the community’s establishments in different ways. Annual revenues for bars that have video gaming as an accessory to their principal use generate between $29,000 and $221,000, while stand- alone video gaming establishments generate revenues of between about $174,000 to over $365,000 annually. Given that video gaming establishments were initially envisioned to support existing businesses, it may be worthwhile to consider taxing stand-alone video gaming establishments at a higher rate. She stated that this would best be accomplished with an amendment to the liquor code, and can be researched further if there is Council interest to do so. Dewayne Brown recalled the meeting where this item was originally discussed and stated there should be no cap on standalone establishments. He suggested that this item be brought back to Council since there is a new Mayor and new Aldermen. He also suggested that these establishments not be taxed at a higher rate. Regular Meeting of City Council Minutes March 12, 2018 Page 18 of 22 Brian Scholle spoke on behalf of the S. Fourth Street businesses in support of the establishment of a video gaming facility in the area. Alderman Jacobson explained the reason for his recusal and provided personal perspective regarding this item. Alderman Finucane stated that he is in favor of increasing the limit to 10 and would be interested in participating in a discussion regarding the cap. Alderman Faivre concurred with Alderman Finucane. Alderman Verbic suggested creating a designated area for smokers outside of these facilities. Alderman Fagan asked Community Development Director Charlton if this facility was within a legal distance from Huntley Middle School, to which she replied in the affirmative. He then stated that he would not support increased fees to these facilities. Mayor Smith expressed concern that these issues are not being brought back to Council in an efficient manner. Alderman Noreiko stated that she would rather look at these individually as opposed to increasing the number of licenses. Alderman Finucane responded that increasing the number of licenses doesn’t prohibit those facilities from coming to Council for establishment. Community Development Director Charlton stated that Council is delivering a confusing message to staff and to the community and provided options for remediating that issue. There was discussion amongst Council and staff regarding this item. Consensus was reached. 3. Demolition of 912 Edgebrook Drive Update. Alderman Finucane left the dais at 9:24 p.m., returning at 9:25 p.m. Alderman Jacobson returned to the dais at 9:24 p.m. Public Works Director Holdeman provided an overview of this item and reminded Council that at the January 17, 2018, City Council meeting, Council requested that Public Works solicit bids for the asbestos abatement and demolition of 912 Edgebrook Drive. The Request for Bids (RFB) resulted in nine submissions. Immediately following the close of the bidding process, the Public Works Department conducted reference checks on the two lowest bidders, and based on the satisfactory reference checks and bid, staff believes Abel Plus Services (APS) is the most responsive bidder at $374,600.  Regular Meeting of City Council Minutes March 12, 2018 Page 19 of 22 Public Works Director Holdeman continued and added that the Public Works Department solicited bids for 14 business days. Prior to the bid closing date, Public Works hosted a walk-through of the building. During the walk-through, participants suggested the project included a higher quantity of concrete deck caulk containing asbestos than reported in TNC’s 2016 survey. TNC’s report estimates 4,000 linear feet, however participants estimate an additional 12,000 linear feet, totaling as much as 16,000 linear feet, 4,000 linear feet per floor. He added that in response to the discrepancy, the Public Works Department issued an addendum asking each bidder to submit a price per 1,000 linear feet for any additional concrete deck caulk containing asbestos beyond the 4,000 linear feet stated in TNC’s report. Furthermore, the Public Works Department contacted TNC to inform them of the possible discrepancy. He stated that TNC dispatched an inspector immediately and confirmed the additional 12,000 linear feet. He is seeking Council direction regarding the scope of the project and the funding source. Alderman Fagan asked Public Works Director Holdeman for confirmation that the Public Works Department recently lost a dump truck, to which he responded in the affirmative. Alderman Fagan then stated that the main issue for him in reference to this item is the funding. Alderman Jacobson recalled previous discussion regarding this item and asked what staff has done to consider alternative uses of the building. Assistant City Manager Hoppenstedt stated that as part of the Annie Glidden North Revitalization Plan (AGNRP), this is something being addressed within the subcommittees and at this point. Staff is operating under the direction from Council to investigate the demolition of the property. She assured Council that staff can move forward to gather more information for repurposing the building. Discussion ensued amongst Council and staff regarding the presence of asbestos in the building and options for its remediation. Alderman Verbic verbalized his support of tearing the building down in order to further the goals of the Safe Streets Initiative. Alderman Noreiko stated she is also in support of the demolition of the building but would like to participate in discussion with the AGNRP subcommittees. Alderman Jacobson reiterated his position that he is interested in seeing other options to minimize the financial burden. Discussion ensued. Alderman Verbic asked if an August 1, 2018, date would allow staff enough time to come back to Council with alternative uses for the property. Alderman Marquardt left the dais at 9:42 p.m. 4. FY2017 Strategic Plan Update. Regular Meeting of City Council Minutes March 12, 2018 Page 20 of 22 Management Analyst Munch used a Power Point presentation to provide the Strategic Plan Update. He highlighted key items in the presentation and discussed action taken by staff to ensure that these goals are achieved. Alderman Marquardt returned to the dais at 9:45 p.m. Alderman Jacobson left the dais at 9:45 p.m., returning at 9:46 p.m. Alderman Jacobson referenced the section of the presentation that discussed the General Fund balance and clarified there is no unassigned 25% General Fund balance. He stated that using that term is setting a bad precedent. He then expressed additional concerns regarding the terminology used in the report and suggested that Council compose a review process for those specific items in the report to ensure they are being completed in a satisfactory manner. 5. FY2019 Budget Workshops. Finance Director Talkington addressed Alderman Jacobson’s terminology concerns about the General Fund balance and clarified that it is an accepted accounting term. She then provided an overview of the Budget Workshops schedule. Alderman Fagan verbalized his issues with the proposed schedule and reiterated his concerns that Council is not going to have enough time to thoroughly consider each department. Discussion ensued between Council and Finance Director Talkington regarding this item. Alderman Jacobson verbalized his concern that the lack of Council direction execution by staff is being done intentionally. There was further discussion amongst Council and staff. Assistant City Manager Hoppenstedt asked if the Council desires to change course for the March 20, 2018, Special Committee of the Whole meeting and discuss the budget instead of the Police Department level of service. Alderman Fagan stated that the Police discussion will take place at the March 20, 2018, meeting and the budget discussion can continue at the April 17, 2018, meeting. Discussion continued amongst Council and staff. Finance Director Talkington asked Council for a clear consensus as to how they want the budget presented. Alderman Marquardt stated he is interested in gathering more information regarding what types of expenses go into each individual line item.  Regular Meeting of City Council Minutes March 12, 2018 Page 21 of 22 Alderman Jacobson provided more historical perspective regarding his concerns with the budget process and past expenditures. There was further discussion amongst Council and staff. Following their discussion, there was a consensus reached about the schedule of the upcoming Budget Workshop meetings. MOTION Alderman Jacobson motioned to reconsider Ordinance 2018-010; seconded by Alderman Finucane. Alderman Fagan recused himself at 10:50 p.m. City Attorney Frieders clarified that the following vote will only determine whether that item should be reconsidered or not. VOTE Motion carried on a 7-0-1 roll call vote. Aye: Jacobson, Finucane, Marquardt, Noreiko, Verbic, Faivre, Smith. Nay: none. Absent: Fagan. Mayor Smith declared the motion passed. MOTION Alderman Finucane motioned to approve Ordinance 2018-010; seconded by Alderman Faivre. Alderman Finucane verbalized his understanding that the impact of not approving this item will expose the City up to a breach of contract and potential litigation. City Attorney Frieders explained the implications of not approving the Ordinance and reminded Council that a supermajority vote would be required for passage. Alderman Jacobson expressed frustration regarding this issue. VOTE Motion carried on a 6-1-1 roll call vote. Aye: Jacobson, Finucane, Marquardt, Noreiko, Faivre, Smith. Nay: Verbic. Absent: Fagan. Mayor Smith declared the motion passed. I. REPORTS – COMMUNICATIONS Alderman Marquardt reminded the public that the primary elections are on March 20, 2018, and encouraged everyone to vote. Mayor Smith expressed appreciation to the Council and the community for their emotional support to him for the recent loss of his brother. Regular Meeting of City Council Minutes March 12, 2018 Page 22 of 22 City Attorney Frieders commented that Council displayed a willingness to work through issues that deserved recognition. Community Development Director Charlton referred to earlier comments made by Ms. Chronopoulos and clarified that staff thoroughly reported on TIF funding at the January 22, 2018, Committee of the Whole meeting. Public Works Director Holdeman was surprised at the reaction from Council about the 912 Edgebrook Drive property and he read aloud the minutes from the January 22, 2018, which indicated that Council directed staff to procure bids for the demolition of the building. He assured Council that he listens to their direction and responds to their requests. Mayor Smith clarified that there was no question regarding the task given to the Public Works Department and the validity of the presentation Public Works Director Holdeman gave to Council regarding the 912 Edgebrook Drive property. There was a brief discussion amongst Council and staff regarding the direction given regarding this issue. J. RECESS FOR EXECUTIVE SESSION OF THE CITY COUNCIL There was nothing scheduled under this item. K. ADJOURNMENT MOTION Alderman Jacobson moved to adjourn the meeting; seconded by Alderman Fagan. VOTE Motion carried on an 8-0 voice vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: none. Mayor Smith declared the motion passed and the meeting adjourned at 11:03 p.m. ________________________________ SUSANNA HERRMANN, City Clerk Approved by City Council: April 9, 2018.