City Council

MINUTES CITY OF DEKALB SPECIAL COMMITTEE OF THE WHOLE MEETING SEPTEMBER 18, 2018 The City Council of DeKalb, Illinois held a Special Committee of the Whole meeting on September 18, 2018, in the City Council Chambers of the DeKalb Municipal Building, 200 S. Fourth Street, DeKalb, Illinois. Mayor Smith called the meeting to order at 5:00 p.m. A. ROLL CALL City Clerk Fazekas called the role and the following members of City Council were present: Alderman Dave Jacobson, Alderman Bill Finucane, Alderman Mike Marquardt, Alderman Pat Fagan, Alderman Kate Noreiko, Alderman Mike Verbic, Alderman Tony Faivre, and Mayor Jerry Smith. Also present were: Interim City Manager Molly Talkington, Interim Assistant City Manager Ray Munch, City Attorney Dean Frieders, Police Chief Gene Lowery, Community Development Director Jo Ellen Charlton, Information Technology Director Marc Thorson, Management Analyst Aaron Stevens, Management Analyst Patrick DiDiana, Airport Manager Tom Cleveland, and City Clerk Lynn Fazekas. B. PUBLIC PARTICIPATION Steve Ramsdell spoke about Tax Increment Financing (TIF) accountability. He would like for the City to account for what it’s already done before opening a new TIF district. Ed Balli talked about the impacts to small businesses now that Northern Illinois University’s enrollment is down, and crime. He does not want to see cuts made to public safety, especially law enforcement. C. CONSIDERATIONS 1. 2018 Property Tax Levy Overview. Interim City Manager Talkington observed that this is the first of two workshops on the tax levy, the other coming in October. She presented an overview of property tax policy. Currently, Police, Fire, and Illinois Municipal Retirement Fund pensions are priorities for this tax; some funding is necessarily shifted to other revenues, primarily sales tax. The City abates all the property tax levied for debt. Property tax levied for corporate purposes currently also go toward Police/Fire pensions. Interim City Manager Talkington continued that DeKalb County says assessed growth is 4%. She explained that Special Service Areas (SSAs) are separate taxing districts and therefore levied separately; there are four of those. Payments in lieu of taxes, (PILOTs) from the Water Fund, which if counted as tax levy would reduce impact on homeowners. Special Committee of the Whole Meeting Minutes September 18, 2018 Page 2 of 3 Interim City Manager Talkington is recommending a levy at 6% of growth, using this optimistic projection for the cap with a fill-in-the-blank reduction of levy in the spring when the growth is known. Then the City could try to keep the rate the same by capturing as much growth as possible. Mayor Smith asked whether DeKalb does this the same way as other communities. Interim City Manager Talkington said it’s about 50-50. Some communities levy for the dollars they need and don’t try to capture the new growth. Alderman Noreiko asked how the property tax rebate from the Library will work. Interim City Manager Talkington said the rebate will not be individualized on the tax bills. Alderman Marquardt asked how the PILOT ends up affecting the numbers – does affect in the rate scenario. 2. Proposed FY2019 General Fund Budget Planning Measures. Interim City Manager Talkington reported that building permits are going to increase, but not as much as this year might suggest. Also, the discussion about discontinuing the tax sharing arrangement with DeKalb County was tabled, so the City still has to pay that out. Bottom line, DeKalb is looking at correcting a $1.6 million deficit five years from now. The City Council began discussing the document that outlines budget-balancing measures, including organizational restructuring steps that, taken together, would reduce the workforce by 10, back to 2013 levels. Alderman Fagan said he was not understanding how the City can reduce the budget with the suggested changes to Police and Fire, and he noted that Public Works was already down to the bare minimum. He would like to take a closer look at Crime Free Housing, and at outsourcing for downtown events instead of paying the DeKalb Chamber of Commerce to do it. Alderman Fagan and Alderman Marquardt expressed interest in getting sales of City property on the agenda. Interim City Manager Talkington said that one-time revenues would not fix the structural budget issues, but they do have value in buying time to fix the issues. Alderman Noreiko questioned the elimination of tuition reimbursement and how that affects recruiting. She also asked who picks up the slack with the elimination of the Information Technology Director position. Interim City Manager Talkington answered that the Assistant City Manager will fill that role and the Human Resources Director’s role.  Special Committee of the Whole Meeting Minutes September 18, 2018 Page 3 of 3 Alderman Finucane asked if the reductions would affect only the General Fund. Interim City Manager Talkington responded that it would affect all personnel expenses, including pensions. Alderman Verbic asked about the possibility of a commercial transfer tax. Interim City Manager Talkington answered that this also is known as a real estate transfer tax, which requires a referendum, even with home rule. Alderman Jacobson said a lot of community input has been gathered, and that the City has done a lot of the soft cuts and what’s left is to raise taxes or cut services. He said this is the information Council needs, and he appreciates the level of detail. Alderman Marquardt noted that elimination of staff might be unnecessary depending on the property tax decision. He noted that it might involve a policy change. Interim City Manager Talkington agreed that the tax levy will guide the rest of the reduction decisions. Alderman Jacobson said that to affect pensions, the City must reduce employee headcount and compensation. Alderman Noreiko disagreed, saying that she wants to look at revenues too. Alderman Verbic commented that “we need to make smarter decisions” concerning compensation. 3. Five-Year Financial Plan Discussion. Interim City Manager Talkington presented this item for Council to discuss other options that have not already been covered. There were none. Alderman Jacobson urged the public to read the backup materials because of their outstanding detail. D. ADJOURNMENT MOTION Alderman Jacobson moved to adjourn. Alderman Verbic seconded. VOTE Motion passed on an 8-0 voice vote. Aye: Jacobson, Finucane, Marquardt, Fagan, Noreiko, Verbic, Faivre, Smith. Mayor Smith declared the meeting adjourned at 6:39 p.m. ________________________________ LYNN A. FAZEKAS, City Clerk Approved by City Council: October 22, 2018.