City of Mt. Vernon City Council met April 3.
Here is the minutes provided by the council:
The Mt. Vernon City Council met for a Special City Council Meeting at 10:30 a.m. in the City Council Chamber at City Hall, 1100 Main Street, Mt. Vernon, Illinois via teleconference due to the Covid-19 Virus quarantine.
Mayor John Lewis called the meeting to order.
ROLL CALL
Roll call showed present: Council Member Ray Botch, Council Member Joe Gliosci, Council Member Donte Moore, Council Member Mike Young, and Mayor John Lewis.
VISITORS/CITIZENS REQUESTS/ADDRESSES FROM THE AUDIENCE
No comments were heard.
CITY MANAGER
City Manager Mary Ellen Bechtel presented a Resolution to Enter into an Agreement for the Purchase of Electricity for City Facilities. Bechtel stated that this is separate from the residential aggregate program and only for electricity for City facilities served by Ameren. The current contract is up in December 2020 and the current rate is 0.04759. Rates have dropped and the Council might consider locking in a lower rate effective January 2021. Constellation New Energy Inc. rates for a 36-month period is 0.04431. The bid results:
AEP Energy 0.04453/kWh 36 months
Homefield Energy 0.04433/kWh 36 months
Constellation New Energy 0.04431/kWh 36 months
MP 2 Energy 0.04549/kWh 36 months
Council Member Ray Botch motioned to approve the Resolution to Enter into an Agreement for the Purchase of Electricity for City Facilities with Constellation New Energy Inc. Seconded by Council Member Joe Gliosci. Yeas: Botch, Gliosci, Moore, Young, and Lewis.
City Manager Mary Ellen Bechtel presented a Resolution to Enter into a Development Agreement Between the City of Mt. Vernon and Jung Properties, LLC. Jung is building a new 126,000 square foot facility at an estimated cost of $5.9 million dollars in the Fountain Place Industrial Park. This Agreement states that the City will reimburse Jung up to $85,000 of actual costs for site preparation and development costs. The funds will come from the Quality of Life and Economic Development Fund. This keeps the project moving forward with a completion date of September 1, 2020. In addition, the City previously agreed to relocate the sewer line for $102,000.
Council Member Donte Moore motioned to approve the Resolution to Enter into a Development Agreement Between the City of Mt. Vernon and Jung Properties, LLC. Seconded by Council Member Mike Young. Yeas: Botch, Gliosci, Moore, Young, and Lewis.
Discussion of the Downstate Small Business Stabilization Program Grant Application
and Funding Limits
City Manager Mary Ellen Bechtel opened discussion of the Downstate Small Business Stabilization Program Grant Application and Funding Limits. Bechtel explained that the State of Illinois set aside $20 million for small businesses with less than fifty employees who had some hardship due to COVID-19 Virus. Businesses can apply for up to $25,000. Businesses are required to enter into a participation agreement with the City and then the City would apply for the State funds. Bechtel warned that if the business defaults, the City would be responsible for paying the grant back to the State. There is no mechanism in the grant which would allow the City to place a lien on the property in case they default. The State would recoup the funds by locking the City out of other grants such as the Community Development Block Grant (CDBG). Council Member Donte Moore did not want to jeopardize the City’s CDBG funding. No administrative costs are included in the grant, but the City can partner with other entities to administer it.
Tony Iriti, Executive Director of the Jefferson County Development Corporation, spoke on the grant. Iriti explained that businesses have to prove that they have an urgent need for the funds due to the COVID-19 Virus. The State makes the final determination if the business qualifies, determines the business’ needs, and how much funds that they would be awarded for two months of the business’ working fund. The risk of default is high, and all responsibility of payback falls back on the City. This is a last resort option for businesses as there are many other programs available for assistance. Council Member Joe Gliosci stated that the grant criteria are intense, and the businesses must open their financial books from the past three years to the public. Council Member Donte Moore stated that there are many programs available to help businesses due to the COVID-19 Virus. He is concerned that the City has to repay the funds at a time no one knows how long the Virus is going to last and the effect of it on the City’s tax revenue. Mayor John Lewis stated that the City has no control as there is not any way that the City knows if a business is participating in another type of funding program. Iriti stated that businesses only have to commit to re-employing their employees on staff as of January 1, 2020, but it does not say how long they need to keep them employed.
Gliosci stated that in order to remain business friendly, the City could instead offer a small business information center to direct business to other loan or grant programs. Bechtel stated that as more information becomes available on the Downstate Small Business Stabilization Program Grant Application, the Council can decide how to proceed.
City Manager Mary Ellen Bechtel stated that the chart was prepared Mid-March when the restaurants and bars first closed down. The City projects that it will lose at least $1,384,575 in revenue. Mayor John Lewis stated that the chart was prepared before the closure of retail stores.
Finance Director Merle Hollmann presented a chart showing the General Corporate Annual Operating Budget Summary. Bechtel stated that the decrease in revenue due to the COVID-19 Virus is included in the chart. It includes the six part-time temporary employees and no lay-offs.
Hollmann explained that the budget shows $14,861,962 in revenue for Fiscal Year 2019-2020, but it is estimated at $15,182,361. Last year, the budget showed a 2% decrease in Sales Tax Revenue, but the revenue came in higher even considering the COVID-19 Virus impact. For Fiscal Year 2019-2020 expenditures, there is estimated a projected surplus of $1,286,419 due to the Department Heads’ keeping under budget. The estimated Working Fund Balance ending April 30, 2020 is $5,325,042 or 4.8 months of operating expenditures. Even with the COVID impact, the City may receive $185,000 on the low end from upcoming Cannabis Sales.
Hollmann presented and explained the following charts for the Home Rule Sales Tax Fund: Revenues from
Restricted Sources for Capital Items.
City Manager Mary Ellen Bechtel presented two scenarios about refinancing the existing bonds. The scenarios are based on the ability to refinance the bonds at 2.5% interest. This would reduce the City’s payment every year. She suggested that instead of paying off the 2032 Bonds with the $2.4 million set aside in the sinking fund to use the cash from the refunds from the bonds and not pay the last bond off. Then use $1.2 million of the $2.4 million to “pay as you go” for the South 26th Street & Bridge Replacement/Forest. Bechtel said that the City should be debt free and have the above projects completed in thirteen years. The City will be able to refinance the bonds in September (ninety days before the call date). Council Member Donte Moore stated that when the bonds retire in thirteen years in 2033, the tax revenue streams will be freed up.
City Manager Mary Ellen Bechtel and Finance Director Merle Hollmann presented and explained the following charts for the Water Fund.
City Manager Mary Ellen Bechtel requested that the Council review the charts and to let her know if they have any questions. City Council Workshop will be held to review other City funds.
VISITORS/CITIZEN’S REQUESTS/ADDRESSES FROM THE AUDIENCE
No visitors spoke at the meeting.
EXECUTIVE SESSION
No Executive Session was held.
ADJOURNMENT
Council Member Joe Gliosci motioned to adjourn. Seconded by Council Member Mike Young. Yeas: Botch, Gliosci, Moore, Young, and Lewis.
The meeting was adjourned at 12:27 p.m.
http://www.mtvernon.com/wp-content/uploads/2016/10/04032020-Special-Council-Meeting.pdf
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