FINANCE COMMITTEE MEETING
Tuesday, November 29, 2011 – 6:00 p.m.
I. Call to Order & Roll Call.
Committee Members: Chairman Steve Jasinski, Ald. Michalczyk,Sean McDermott Others Present.
II.Approval of the Minutes: November 15, 2011.
III.Discussion related to preliminary General Fund budget for FY13 and property tax levy/abatements (continuation from November 15, 2011)
V. Adjourn to executive session to discuss personnel.
MINUTES OF THE FINANCE COMMITTEE MEETING
CITY OF COUNTRYSIDE – CITY HALL
NOVEMBER 29, 2011 – 6:00 P.M. COUNCIL CHAMBER ROOM
1.The meeting is called to order at 6:00 P.M. Present: Chairman Steven Jasinski, Alderman Karen Michalczyk, Alderman Sean McDermott. Also present:
Mayor Ed Krzeminski; City Clerk Sharon Sweeney; Alderman James Jasinski;
Alderman Bob Pondelicek, Alderman John VonDrasek; City Administrator Gail Paul; Assistant Sharon Peterson; Finance Director Steven Drazner; ESDA Director Steve Norman.
APPROVAL OF MINUTES
2. The minutes of November 15, 2011 were approved as submitted.
DISCUSSION RELATED TO PRELIMINARY GENERAL FUND BUDGET FOR FY13 AND PROPERTY TAX LEVY/ABATEMENTS
3. Staff presented the committee members four options to review related to the preliminary general fund budget and property tax levy/abatements.
Option 1 involved leaving the proposed General Fund budget as discussed from prior meetings with $1,474,828 included as levy revenue to pay annual debt service on Series 2008 bonds. Under this option, the budget is balanced as presented.
Option 2 presented the General Fund budget without a property tax levy along with various suggestions to reduce expenses in order to balance the budget with $1,474,828 in less revenue. Under this option, hypothetical position reductions and program cuts were presented as possibilities to balance the budget.
Option 3 was similar to option 1 which included $1,474,828 in property tax revenue but also included an additional interfund transfer of $768,000 from the Hotel/Motel Fund to pay for street resurfacing projects.
Option 4 eliminated the property tax levy of $1,474,828 and presented the General Fund budget with a deficit of this amount which would draw down on the City’s reserves.
Mayor Krzeminski asked Finance Director Drazner to confirm that the amount of fund balance in the General Fund was $10.7 million. Finance Director Drazner said that it was approximately $10 million between both the General and Hotel/Motel Funds.
Mayor Krzeminski stated that if the City did not levy a property tax of $1.5 million and instead took it out of the City’s reserves, there would still be about $9 million left.
Finance Director replied that he estimated the reserves/fund balance after drawing down $1.5 million would be about $8.5 million combined between the General and Hotel/Motel Funds.
The Mayor asked other elected officials if that would be acceptable and that there is always room for discussion. He asked FD Director what the minimum fund balance would be in terms of financial difficulty.
FD Drazner stated that the recommended amount of reserves for a City which relies primarily on sales tax revenue is anywhere between six to nine months of annual operating expenditures.
There was further discussion by Mayor Krzeminski about prior year deficits and the fact that if the City did draw down on its fund balance by not levying a property tax, that the City’s reserves would still be in the general recommended range. He asked other elected officials if they still do not want to rebate the property tax.
Alderman McDermott replied that he wanted to go with option 3.
There were then some inquires from two residents in attendance regarding concern on drawing down of City reserves and to re-assess the City’s financial condition in another year after Harley begins operations.
Alderman McDermott agreed with the residents that the plan has always been to rebate the taxes the City is collecting after the development is up and running.
Mayor Krzeminski requested the other elected officials to consider an option then by reducing the annual property tax levy by perhaps only half the amount.
There was some additional discussion among elected officials about State mandates requiring 90% police pension funding by 2040 which would take major financial planning.
As the majority of elected officials agreed on option 3, Ald. McDermott then requested that $3,000 be added back to the Community Garden line expenditure and this was agreed by the others. FD Director confirmed that this additional $3,000 would be added back in the General Fund.
4. Administrator Paul informed the committee members a recorded utility easement is required before work begins at the City Center. The Public Utilities Plat of Easement will be presented at the next Council meeting for approval.
5. No further discussion. Motion and seconded to adjourn at 6:15 p.m. to executive session to discuss personnel.
Dated: ______________________ __________________________
Steven Jasinski, Chair