City of Mt. Vernon City Council met April 13.
Here are the minutes provided by the council:
The Mt. Vernon City Council called a Workshop Meeting at 3:30 p.m. at City Hall, 1100 Main Street, Council Chamber Room, 2nd Floor, Mt. Vernon, Illinois.
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.
Also present: City Manager Mary Ellen Bechtel, Finance Director Steve Tate, Assistant City Manager Nathan McKenna, and Deputy City Clerk Becky Barbour.
VISITORS/CITIZEN’S REQUESTS/ADDRESSES FROM THE AUDIENCE
No visitors spoke at the meeting.
REVIEW AND DISCUSSION ON THE PROPOSED 2022-2023 BUDGET
City Manager Mary Ellen Bechtel distributed the 2022-23 Tentative Budget, along with the Budget Summary pages. The proposed Budget has been advertised in the newspaper and has been, and will remain, in the Clerk’s Office for public review. It will be on the Agenda for Final Approval at a future Council Meeting. City Manager Bechtel turned the meeting over to Finance Director Steve Tate. He stated that everyone has a complete 2022-23 Budget. It is for all of the funds except for the Police and Firefighters’ Pension Funds. The total City-wide budgeted expenditures for the fiscal year ending April 30, 2023 are $79,374,296.
GENERAL FUNDS BUDGETARY HIGHLIGHTS:
The General Funds are made up of the General Corporate Fund and the Aquatic Zoo Fund. Together, they comprise the major operating fund of the City. We have separated the Aquatic Zoo Fund from the General Corporate Fund to track its operating results of the Aquatic Zoo.
The General Corporate Fund is expected to end 2021-2022 with an operating surplus of $234,958 which includes transfers of $2 million each to the Capital Projects and Quality of Life Funds. This surplus is attributable to operating revenues expected to be $3,290,374 over budget and operating expenses are expected to be $839,409 under budget. This leaves a balance of $8,504,939.
If you take the expenses and average those out over the amount of fund balance, it comes out 7.2 months for operating expenses at the end of this corporate year. We have had $18.3 million of revenues and $14.1 million of expenses and then the two transfers to Capital Projects and Quality of Life.
2022-2023 will be the fifth full year since we raised the fees for liquor and video gaming licenses. We had no increase in our property taxes from the previous year, with the Council passing a 0.25% increase in our Home Rule Sales Tax, effective July 1, 2020, to subsidize the tax levy for the three pension funds of the City.
The General Corporate working fund balance for operations projected on April 30, 2023 in this fund is $8,586,688, with $15,582,516 of projected revenues and $15,500,767 of expenditures, which leaves a proposed surplus in operations of $81,749 in the General Corporate Fund for the year ending April 30, 2023. After this surplus, we expect to have 6.6 months’ worth of operating expenditures in our operating working fund balance.
MOTOR FUEL TAX
The Motor Fuel Tax is projected with a $570,017 surplus for 2022, which leaves the ending fund balance of $2,099,665. If you take revenues next year of $793,418 and expenditures of $1,694,592 this leaves a fund balance of $1,198,491. The expenditures include oil chip materials, street patching materials, asphalt and primer which have all significantly increased. This also includes the Shiloh Drive repair, Exit 94 Bridge repair, a project for Woodglen Acres overlay and a project which includes from Lake Street to Columbia. City Manager Bechtel spoke about the capital projects and expenditures.
SANITATION FUND
The Sanitation Fund records the revenues and expenses associated with garbage collection, recycling, yard waste pick-up and bulk trash pick-up. We have a deficit of $68,663 in our Sanitation Fund, which brings the working fund balance down to $38,249 at the end of April this year. The proposed budget includes a rate increase of $2.50 per customer per month effective May 1, 2022. The monthly rates were last changed to $19.00 per month effective May 1, 2016. Even with the increase in rates, there will still be a fund deficit of $33,210. We are hopeful that with the increase in revenues the fund will have a working fund balance on April 30, 2023 of $5,039.
AQUATIC ZOO FUND
The Aquatic Zoo Fund is projected to end with a deficit of $36,319 at the end of this budget. That leaves a negative fund balance of -$157,143 on April 30, 2022. We are projecting an $88,028 deficit for next year and that would leave a -$245,171 deficit in the working fund balance for the Aquatic Zoo for 2022-2023. This is the ninth season for the Aquatic Zoo.
TOURISM FUND
Tourism had a good year compared to the prior year. It is projected to end with $121,775 surplus, which gives it a fund balance of $252,102 on April 30, 2022. Looking at next year, we are looking at about $1,894 surplus and that gives a fund balance of $253,996.
CDAP FUND
The next fund is CDAP Fund. We did not budget anything for that for next year. City Manager Bechtel explained that there is a grant application in to the State of Illinois for sewer relining in the south part of the town. We have the match budgeted in the sewer fund and if we receive that grant, we will make an adjustment. We are not eligible to apply for the housing CDAP Grants for another year.
QUALITY OF LIFE/ECONOMIC DEVELOPMENT FUND
The Quality of Life/Economic Development Fund is limited to expenditures that improve the quality of life of our citizens or provide economic development to our city and accounts for the 0.5% Home Rule Sales Tax started on July 1, 2012. This fund is projected in with $2,656,796 surplus, which gives it a $10,278,406 fund balance. We will be drawing from this fund by doing several projects, including the L & N Reservoir, Muni-West building improvements, Veterans Park walking path improvements, and the new Police Station. The 2020 bonds are also paid out of this fund. We will be receiving $1,000,753 from ARPA (American Recovery Plan Act) Grant. We are projecting a total working fund balance on April 30, 2023, of $416,662 in this fund.
HOME RULE SALES TAX FUND
The Home Rule Sales Tax Fund, which was created to account for the 1% Home Rule Sales Tax that went into effect on January 1, 2018. The City Council restricted the use of this funding to expenses incurred for capital construction projects for the Water and Sewer Funds, capital vehicle and equipment purchases for all City Departments, capital expenditures for road construction or road maintenance, early retirement of existing indebtedness and nuisance abatement expenditures including demolition of dangerous and dilapidated structures. A total of $6.14 million of the 2020 general obligation bonds was allocated to this fund for various road projects. The annual payments for these bonds will be approximately $373,000. A total of $7.75 million has been budgeted in this fund for equipment, capital, and infrastructure expenditures in 2022-2023. The Working Fund balance in this fund is projected to be $160,774 on April 30, 2023.
PENSION SALES TAX FUND
The Pension Sales Tax Fund was created for the 0.25% Home Rule Sales Tax that went into effect on July 1, 2020. This sales tax will subsidize the property taxes levied for pension funds, including IMRF, FICA, Medicare, Police Pension and Firefighters’ Pension. This fund did really well last year which leveled off the contribution. The fund ended up with a $702,520 surplus, which would give us a $868,411 working fund balance at the end of fiscal year 2022. The working fund balance in this fund is projected to have a $532,928 surplus leaving a $1,401,369 working fund balance on April 30, 2023.
GENERAL CORPORATE CAPITAL PROJECTS FUND
General Corporate Capital Projects Fund is another Special Revenue Fund, created on May 1, 2012 to account for the 1% Food and Beverage Tax, 2 cents per gallon Diesel Fuel Tax, and the additional 1% Telecommunications Tax which have been restricted by the City Council to be used to finance capital and infrastructure expenditures and related debt service expenses. These restricted funds, in addition to occasional transfers from the General Corporate Fund, are used to pay the debt service on a portion of the 2010 and 2012 bonds, which were later refunded in September 2020, other loan debt service expenditures, and various capital and infrastructure improvements. This fund is projected to end with a $2,656,872 surplus in this budget year, which gives a $3,413,608 working fund balance. In the Capital Projects Fund, we are proposing to spend a total of $5.34 million for capital and infrastructure expenditures and related debt service expenses during 2022-2023. This fund is projected to have a total working fund balance of $290,941 on April 30, 2023.
HEALTH INSURANCE FUND
The City maintains a self-insured Health Insurance Fund, which is also treated as a Proprietary Fund. It is considered an “Internal Service Fund.” The City’s health insurance is one of its largest line-item expenses. We did not have increases from the beginning of 2018 through 2022, after substantial increases during 2016 and 2017. Also, we are estimating no increase in our rates effective January 1, 2023. Effective May 1, 2016, we transferred our health insurance coverage for 56 retirees to Medicare Plan F coverage and have since transferred additional retirees to this plan. We are looking at a $469,523 surplus this year and are projecting a $233,448 surplus next year with a working fund balance of $3,327,876 on April 30, 2023.
SPECIAL SERVICE AREA #1
This account will be drawn down to zero at the end of this year and nothing is budgeted for next year because the Special Service Area #1 has been closed out and dissolved.
WATER FUND
The Public Utilities - Water Fund operates the water distribution system of the City. The Water Fund is projected to have an operating surplus of $649,080 for 2021-2022. We are looking at $1,242,632 working fund balance at the end of this budget for operations. The fund is also projecting a working fund balance for operations on April 30, 2023 of $528,400 and total expenditures for operations of $3,981,225. We are proposing $7.04 million of capital expenses, infrastructure improvements and related debt service expenses in the Water Fund for 2022-2023. This leaves a working fund balance of $2,894,407.
SEWER FUND
The Public Utilities - Sewer Fund operates the sanitary sewer systems of the City. The Sewer Fund was separated out of the previous Public Utilities Fund on May 1, 2018, leaving the Water Fund to operate separately as well. The Fund is projected to have a -$261,962 deficit in operations for this budget year. With the $332,000 transfer from the Water Fund, this leaves a balance of $238,659 fund balance. The Sewer Fund is projected to have an operating deficit of -$142,096 for 2022-2023, a working fund balance for operations on April 30, 2023 of $428,563 and total expenditures for operations of $3.165 million. We have projected again an operating transfer from the Water Fund to the Sewer Fund in the amount of $332,000 to partially offset the operating deficit of the Sewer Fund. We are proposing $8.3 million of capital expenses, infrastructure improvements and related debt service expenses in the Sewer Fund for 2022-2023. We are also proposing a 5% increase in the sewer rate effective May 1, 2022 to offset the rising cost of operations.
Water and Sewer revenue from a 3% rate increase on May 1, 2009 and 3% rate increases on November 1, 2009, 2010, 2011, and 2012 have been restricted by the City Council for capital, infrastructure, and related debt service expenses. These funds are being separately accounted for in the Water and Sewer Funds.
Effective November 1, 2016, and each November 1 since then, an additional 2% increase in water and sewer rates was implemented and was also restricted by the City Council for capital, infrastructure, and related debt service expenses. These funds are being separately accounted for in the Water and Sewer Funds.
DOWNTOWN TIF FUND
The Downtown TIF Fund is projected in with a deficit of $84,180 and a working fund balance of -$86,273. The TIF Fund revenues are projected at $509,453 and expenditures are coming down and projected at $389,173, leaving a working fund balance of $34,007.
INDUSTRIAL PARK CONSERVATION AREA (WESTSIDE) TIF
The Industrial Park Conservation Area (Westside) TIF Fund is projected in at $233,239 and a working fund balance of $578,822. The revenues are projected at $550,000 and expenditures are projected at $955,033, leaving a working fund balance of $173,789 at the end of fiscal year of 2022-2023.
RTE 15/I-57 (EASTSIDE) TIF
The RTE 15/I-57 (Eastside) TIF Fund is projected in at $57,695 surplus and a working fund balance of $205,239. The revenues are projected at $330,000 and expenditures are projected at $522,727, leaving a working fund balance of $12,512 at the end of fiscal year of 2022-2023.
EXECUTIVE SESSION
No Executive Session was held.
ADJOURNMENT
Council Member Ray Botch motioned to adjourn. Seconded by Council Member Joe Gliosci. Yeas: Botch, Gliosci, Moore, Young, and Lewis.
The meeting was adjourned at 4:43 p.m.
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