City Council

MINUTES SPECIAL MEETING OF DEKALB CITY COUNCIL DECEMBER 18, 2018 The City Council of DeKalb, Illinois held a Special Meeting on December 18, 2018, in City Council Chambers of the DeKalb Municipal Building, 200 South Fourth Street, DeKalb, Illinois. Mayor Smith called the meeting to order at 5:31 p.m. A. ROLL CALL City Clerk Lynn Fazekas called the roll, and the following members of the City Council were present: Alderman Bill Finucane, Alderman Pat Fagan, Alderman Kate Noreiko, Alderman Mike Verbic, Alderman Tony Faivre, and Mayor Jerry Smith. Alderman David Jacobson arrived at 5:40 p.m. Present also were: Interim City Manager Ray Munch, Economic Development Planner Jason Michnick, Information Technology Director Marc Thorson, and City Attorney Dean Frieders. B. APPROVAL OF THE AGENDA Mayor Smith requested that Council approve the agenda with a change in order that Ordinance 2018-092 (F.5.) be moved to the last spot under Items for Separate Action and the rest of the action items be renumbered accordingly. There were no objections. MOTION Alderman Noreiko moved to approve the agenda. Alderman Fagan seconded. VOTE Motion was approved by 6-0-1 roll call vote. Aye: Fagan, Noreiko, Verbic, Faivre, Finucane, Smith. Nay: none. Absent: Jacobson. C. PUBLIC HEARINGS 1. Proposed Body Art Establishment Licensure for Out on a Whim Tattoo. Mayor Smith opened the hearing at 5:36 p.m. After ascertaining that no one wished to speak, Mayor Smith closed the hearing at 5:37 p.m. Special Meeting Minutes December 18, 2018 Page 2 of 11 D. PUBLIC PARTICIPATION Dave Lehman gave reasons for opposing a proposal to allow backyard chickens. Jim Mason distributed handouts to council and expressed support for Bill Nicklas for City Manager. Michael Haji-Sheikh commented on the new City Manager’s appearance in a state ethics report and said he was disappointed but not surprised. E. CONSENT AGENDA – OMNIBUS VOTE 1. Approval of City Council Minutes a. Minutes of the Special Meeting of City Council of November 16, 2018. b. Minutes of the Special Joint Meeting of City Council and the Finance Advisory Committee of November 20, 2018. c. Minutes of the Special Meeting of City Council of December 6, 2018. 2. Resolution 2018-161 Authorizing the City Manager to Sign Agreements for Insurance Coverage Effective January 1, 2019, through December 31, 2019, in the Amount of $506,668.78. 3. Resolution 2018-162 Amending Section 1 of Resolution 2018-062 “Approving a Temporary Process for Interim Licensure of Food and Beverage Vending Vehicles” to Extend the Effective Date to June 30, 2019. 4. Resolution 2018-163 Authorizing an Amendment to the Barb City Manor FY2018 Tax Increment Financing (TIF) Funding Agreement. Mayor Smith read each item on the consent agenda by title. MOTION Alderman Faivre moved to approve the Consent Agenda. Alderman Noreiko seconded. VOTE Motion was approved on 7-0 roll call vote. Aye: Noreiko, Verbic, Faivre, Jacobson, Finucane, Fagan, Smith. Nay: none. F. ITEMS FOR SEPARATE ACTION  Special Meeting Minutes December 18, 2018 Page 3 of 11 1. Resolution 2018-164 Approving of the Appointment of a City Manager for the City of DeKalb, Illinois. Mayor Smith read the resolution by title only. MOTION Alderman Verbic moved to approve the resolution. Alderman Fagan seconded. City Attorney Frieders explained that an employment agreement with Bill Nicklas would be prepared for Council consideration January 14, and that Interim City Manager Munch would be restored by Mr. Nicklas as assistant city manager or management analyst. Dwayne Brown noted that Bill Nicklas has a proven track record. He also expressed sadness about local restaurants closing and thanked Public Works for starting up leaf collection again. VOTE Motion was approved on 6-1 roll call vote. Aye: Verbic, Faivre, Finucane, Fagan, Noreiko, Smith. Nay: Jacobson. 2. Ordinance 2018-091 Amending Chapter 67 “Body Art Establishments (Tattooing)”, Section 67.03 “Qualification for Body Art Establishment License”. (First Reading) Mayor Smith read the ordinance by title only. MOTION Alderman Verbic moved to approve first reading. Alderman Finucane seconded. City Attorney Frieders explained that this changes the number of body art establishment permits from two to three within a specified geographic area of the downtown. Michael Stiles said the issue of sales taxes being paid to the wrong city previously brought up has been fixed, but he expressed concern about issuing licenses to naïve new business owners and urged the City to consider updating the regulations and costs first. VOTE Motion was approved on 7-0 roll call vote. Aye: Faivre, Jacobson, Finucane, Fagan, Noreiko, Verbic, Smith. Nay: none. MOTION Special Meeting Minutes December 18, 2018 Page 4 of 11 Alderman Verbic moved to waive second reading and approve the ordinance. Alderman Finucane seconded. VOTE Motion was approved on 7-0 roll call vote: Aye: Jacobson, Finucane, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: none. Mayor Smith declared the motion carried. 3. Resolution 2018-158 Approving a Body Art Establishment License for Mindful Tattoo 625 E. Lincoln Highway. Mayor Smith read the resolution by title only. MOTION Alderman Noreiko moved to approve the resolution. Alderman Faivre seconded. City Attorney Frieders said the application has been approved by all applicable departments. Michael Stiles said unless the application is complete; i.e., includes Illinois Business Tax Permit, he feels the City should deny the license. He says the permit is easy to get. Mark Doherty identified himself as representing the applicant, and said he believes the application is complete. VOTE Motion was approved on 7-0 roll call vote. Aye: Finucane, Fagan, Noreiko, Verbic, Faivre, Jacobson, Smith. Nay: none. Mayor Smith declare the motion passed. 4. Resolution 2018-165 Approving a Body Art Establishment License for Out on a Whim Tattoo, 127 E. Lincoln Highway. Mayor Smith read the resolution by title only. MOTION Alderman Verbic moved to approve the resolution. Alderman Noreiko seconded. Attorney Frieders noted the application has a positive recommendation for approval. VOTE Motion was approved on 7-0 roll call vote. Aye: Fagan, Noreiko, Verbic, Faivre, Jacobson, Finucane, Smith. Nay: none. Mayor Smith declared the motion passed.  Special Meeting Minutes December 18, 2018 Page 5 of 11 5. Resolution 2018-166 Authorizing a Preliminary Development Incentive Agreement for the Renovation of the Former St. Mary’s Hospital at 145 Fisk Avenue to a Boutique Hotel and Associated Commercial Uses. Mayor Smith read the resolution by title only. MOTION Alderman Finucane moved to approve the resolution. Alderman Faivre seconded. Economic Development Planner Michnick said the incentive reflects about 35% of the total project cost. He noted this is a preliminary agreement with zoning and other considerations coming later. Mayor Smith read a statement about the meeting called by the State’s Attorney. The Mayor said he agreed with comments made by the County that some of the Tax Increment Financing (TIF) projects should go forward (Egyptian Theatre and Hometown renovations) while others (Fisk Avenue, fiber optic) should wait until a forensic audit is complete. The Mayor asked for Council to consider postponing the Fisk project. MOTION Alderman Noreiko moved to postpone consideration of the project. Alderman Fagan seconded. Attorney Frieders suggested Council postpone to a date and time determined by the Mayor. Alderman Noreiko said this amendment to her motion was acceptable. Jim Mitchell spoke against postponement, saying the project has a strong local developer and the building has been empty for 26 years. Herb Rubin recommended deferring action on all four TIF proposals. He said doing otherwise would magnify negative perceptions of local government, that he has technical issues with all four proposals, and that the City should improve its evaluation of projects better. Andre Crittendon said this project is perhaps overly optimistic, and he doesn’t understand where such information as occupancy rate assumptions came from. He said he hopes, if it gets postponed, this information is shared with the public and that Council would give due consideration in view of past TIF projects. Council discussion of postponement considered the December 31 deadline for earmarking the money for the projects versus the money’s going to surplus; and of the redevelopment agreements being preliminary, which would allow time to further refine the plans before approval of final agreements. There were also the questions of whether approval would constitute an affront to the other taxing bodies and how much say other Special Meeting Minutes December 18, 2018 Page 6 of 11 bodies should have over individual projects. Some expressed the desire to wait until the new TIF regulations are put into place and/or audit results obtained. VOTE Motion to postpone failed on 2-4 roll call vote. Aye: Noreiko, Smith. Nay: Verbic, Faivre, Jacobson, Finucane. VOTE Motion to approve the resolution carried on 5-2 roll call vote. Aye: Verbic, Faivre, Jacobson, Finucane, Smith. Nay: Fagan, Noreiko. Mayor Smith declared the motion passed. 6. Resolution 2018-167 Authorizing a Tax Increment Financing Incentive for the Rehabilitation of the Properties Located at 241-249 E. Lincoln Highway. Mayor Smith read the resolution by title only. MOTION Alderman Faivre moved to approve the resolution. Alderman Jacobson seconded. Economic Development Planner Michnick identified the project as an expansion and renovation of Hometown Sports Bar and Grill, including renovation of residential units and façade improvements. Alderman Jacobson stated he wants the development incentive tied to performance with clawback provisions. MOTION Alderman Jacobson moved to add the word “preliminary” to the development incentive agreement. The motion died for lack of a second. Discussion continued about performance measures. MOTION Alderman Jacobson moved to add the word “preliminary” to the development incentive agreement. Alderman Faivre seconded. Mayor Smith read the resolution title again, inserting the word “preliminary.” Alderman Jacobson clarified that his intention with this amendment was to make the agreement subject to change before being finalized.  Special Meeting Minutes December 18, 2018 Page 7 of 11 VOTE Motion was approved on 6-1 roll call vote. Aye: Faivre, Jacobson, Finucane, Fagan, Noreiko, Smith. Nay: Verbic. Mayor Smith declared the motion passed. VOTE Motion to approve the resolution as amended was approved on 7-0 roll call vote: Aye: Jacobson, Finucane, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: none. Mayor Smith declared the motion passed. 7. Resolution 2018-168 Authorizing a Preliminary Development Incentive Agreement for the Renovation of the Egyptian Theatre, 135 N. 2nd Street. Mayor Smith read the resolution by title only. MOTION Alderman Verbic moved to pass the resolution. Alderman Faivre seconded. Economic Planner Michnick summarized the project, which includes expansion/renovations to bathrooms and concessions. He said the City has received letters of support from downtown business owners. Alex Nerad described the history of public support for this project. Rosa Balli spoke in support of new air conditioning to allow year-round programming and said more bathrooms are a necessity. Gavin Wilson said the theatre will make up the money with the expanded scheduling. He also spoke in support of Bill Nicklas as the new city manager. VOTE Motion was approved on 7-0 roll call vote. Aye: Jacobson, Finucane, Fagan, Noreiko, Verbic, Faivre, Smith. Nay: none. Mayor Smith declared the motion passed. 8. Resolution 2018-169 Authorizing the Design and Construction of a Fiber-Optic Network System and Related Public Safety Camera System for the Central Business District. Mayor Smith read the resolution by title only. MOTION Alderman Finucane moved to pass the resolution. Alderman Verbic seconded. Special Meeting Minutes December 18, 2018 Page 8 of 11 Information Technology Director Thorson showed on a map where the “Smart City” connectivity expansion would occur. He also pointed out additional access points and camera locations. Council members had questions about costs, potential alternatives to the camera proposal, and the public’s concerns about spending tax increment financing (TIF) funds on infrastructure. Council also established that the proposed fiber path would basically follow the existing path and replace failing fiber as well as expand it. Alderman Fagan said felt the differences in opinions on costs meant Council should go out to bid before making a final decision, and Alderman Jacobson felt the City should explore opportunities to patch into private networks. VOTE Motion failed on 0-6 roll call vote. Aye: none. Nay: Finucane, Fagan, Noreiko, Verbic, Faivre, Jacobson. Mayor Smith declared the motion failed. 9. Ordinance 2018-090 Adopting the Annual Budget of the City of DeKalb, Illinois for the Fiscal Year Beginning January 1, 2019, and Ending December 31, 2019, in the Amount of $99,065,366 and Approving Related Regulations Having Financial Impact. (Second Reading) Mayor Smith read the ordinance by title only. MOTION Alderman Noreiko moved to pass the ordinance. Alderman Finucane seconded. Interim City Manager Munch gave total budgeted expenditures of $99,065,365 following amendments made during the December 10 meeting, but said more amendments to the budget are required due to actions taken since then, though they would not affect the General Fund numbers. He listed revisions that still needed to be made, most of them relating to TIF expenditures, transfers and surpluses, but one of them a correction of a mis-numbered reference to city code. MOTION Alderman Fagan moved to amend the annual budget to add $100,000 in spending from each TIF for the forensic audits, adjust the final surplus amounts in TIF 1 and TIF 2 by $500,000, take out the fiber optic project amounts, and reduce the transfer from TIF 2 to TIF 1 by $500,000. Interim Manager Munch helped Alderman Fagan with the wording of the motion. Alderman Verbic seconded the motion.  Special Meeting Minutes December 18, 2018 Page 9 of 11 Mayor Smith asked what the amendments change the final budget number to and asked whether the final number must be determined before the vote. Attorney Frieders summarized the proposed adjustments, adding the renumbering revision as well, and observed they would not affect the General Fund. Attorney Frieders said Council could approve the budget subject to the stated amendments and direct a return of the budget afterward, as has been done in the past. Mayor Smith asked for the motion to be repeated. City Attorney Frieders said it was to “revise Section 7 of the budget to change the reference from Section 9.04 to Section 5.14; to reduce the TIF 2 budgeted expenditure for the fiber optic project to eliminate that $500,000 expenditure; to add a [sic] expenditure under TIF 1 and under TIF 2 allocating completion of an audit; to reduce the transfer from TIF 2 to TIF 1 by $500,000 (again related to the fiber project); and to increase the surplus distribution from TIF 2 that is budgeted for FY19 to add in the funding for the fiber project not going forward, and to take out the funding for the audit potentially to be completed, so a net effect there of $400,000.” MOTION Alderman Finucane moved to call the question. Mayor Smith called Dwayne Brown up to speak, as Mr. Brown had signed up to speak to this item. Mr. Brown said the budget is the City’s most important item. He called for additional money to be allocated to pensions a la Sycamore, no new taxes, more business friendliness, and a new website. He expressed concern about TIF and over NIU’s enrollment. VOTE Motion was approved on 6-1 roll call vote. Aye: Verbic, Faivre, Finucane, Fagan, Noreiko, Smith. Nay: Jacobson. Mayor Smith declared the amendment passed. VOTE Motion to approve the budget as amended was approved on 6-1 roll call vote. Aye: Faivre, Finucane, Fagan, Noreiko, Verbic, Smith. Nay: Jacobson. 10. Ordinance 2018-092 Amending the Fiscal Year-End December 31, 2018 (FY2018) Budget and Authorizing a Declaration of Surplus from Tax Increment Financing (TIF) District No. 2. (First Reading) Mayor Smith read the ordinance by title only. MOTION Alderman Noreiko moved to pass first reading. Alderman Faivre seconded. Special Meeting Minutes December 18, 2018 Page 10 of 11 Economic Development Planner Michnick reminded Council that a supermajority vote was required on this item, and said staff recommended a waiver of second reading on the ordinance. Mayor Smith asked for clarification of the wording of the ordinance with the dollar amount of the transfer adjusted to conform to the rejection of the fiber optic project (Item 8 above). Planner Michnick answered that the transfer from TIF 2 to TIF 1 would now be $156,078 and that the surplus declaration wouldn’t change at this time. MOTION Alderman Verbic moved to amend the ordinance to reflect the new transfer amount of $150,678. Attorney Frieders clarified this was a motion to reduce the transfer from TIF 2 to TIF 1 from $650,678 to $150,678. Alderman Verbic accepted this wording of the amendment. Alderman Faivre seconded the motion. VOTE Motion was approved on 7-0 roll call vote. Aye: Fagan, Noreiko, Verbic, Faivre, Jacobson, Finucane, Smith. Nay: none. Mayor Smith declared the amendment passed. VOTE Original motion as amended was approved on 7-0 roll call vote. Aye: Finucane, Fagan, Noreiko, Verbic, Faivre, Jacobson, Smith. Nay: none. MOTION Alderman Verbic moved to waive second reading and approve the ordinance. Alderman Finucane seconded. VOTE Motion was approved on 7-0 roll call vote. Aye: Noreiko, Verbic, Faivre, Jacobson, Finucane, Fagan, Smith. Nay: none. Mayor Smith declared the motion passed. G. NEW OR UNFINISHED BUSINESS 1. Discussion Regarding Tax Increment Financing Districts and Expenditures. Mayor Smith read the item title. Attorney Frieders explained the need for Council to direct the City’s approach on matters related to TIF, such as the anticipated TIF audit.  Special Meeting Minutes December 18, 2018 Page 11 of 11 Several Council members expressed support for the forensic audits of the TIF districts, citing support for audits by other taxing bodies and the general public. H. RECESS FOR EXECUTIVE SESSION OF THE CITY COUNCIL Council did not hold an Executive Session during this meeting. I. ADJOURNMENT MOTION Alderman Jacobson moved to adjourn at 8:15 p.m. Alderman Noreiko seconded. VOTE Motion was approved on majority voice vote. Mayor Smith declared the meeting adjourned at 8:15 p.m. ________________________________ LYNN A. FAZEKAS, City Clerk Approved by City Council: January 28, 2019.