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August 08, 2006

Mayor Krajewski called the Workshop meeting of the Village Council of the Village of Downers Grove to order at 6:30 p.m. in the Council Chambers of the Village Hall.

Present:Mayor Brian Krajewski; Commissioners Marilyn Schnell, Martin Tully, Ron Sandack, Stan Urban, William Waldack; Village Manager Cara Pavlicek; Village Attorney Enza Petrarca; Village Clerk April Holden

Absent:None

Visitors: Press: Kevin Stahr, Downers Grove Reporter Residents: John Schofield, 1125 Jefferson Avenue; Greg Bedalov, 4840 Seeley Avenue; Carl & Linda Clevenger, 438 Lake Avenue Staff: Fire Chief Phil Ruscetti, Mary Scalzetti, Director, Tourism & Community Events; Police Chief Bob Porter; Dave Barber, Director, Public Works; Andy Matejcak, Director, Counseling & Social Services; Don Scheidler, Deputy Director, Community Development; Greg Zimmerman, Director, Human Resources; Liangfu Wu, Director, Information Services; Mike Baker, Assistant Village Manager; Dave Fieldman, Deputy Village Manager; Rita Trainor, Director, Financial Services; Doug Kozlowski, Director, Marketing & Media Relations; Megan Bourke, Intern

Mayor Krajewski explained that Council Workshop meetings are held the second and fourth Tuesdays at 6:30 p.m. The meetings are video taped live and for later cable cast over cable channel 6.

The Workshop meeting is intended to provide Council and the public with an appropriate forum for informal discussion of any items intended for future Council consideration or just for general information. No formal action is taken at Workshop meetings.

The public is invited to attend and encouraged to comment or ask questions in an informal manner on any of the items being discussed or on any other subject. The agenda is created to provide a guideline for discussion.

MANAGER

Consent Agenda Items

Purchase of Application Enabler Module for Village’s Document Management System.

John Schofield , 1125 Jefferson, asked what effect this change would have on the Village’s ability to respond to Freedom of Information Act (FOIA) requests, saying he hoped it would make it more open and not more obstructive.

Village Manager Cara Pavlicek responded that there should be no noticeable impact on the FOIA requests, and, down the road, it might make retrieval of archival information easier. The purpose of the module is to allow for various software packages to communicate to one another.

Active Agenda and Informational Items

FY 2007 General Fund Revenue Discussion.

Mike Baker , Assistant Village Manager, said this is an overview of the 2007 budget process. He reviewed the preliminary general fund revenue projections and the proposed schedule as follow: September 12, 2006 – Workshop, budget issue discussions; September 22, 2006 – publishing of budget documents; September 26, 2006 – budget issues discussed; October 7, 2006 – Council/Staff budget review; October 17, 2006 – public hearing; October 21, 2006 – budget discussion at Coffee With the Council; November 7, 2006 – adoption of the budget; December 5, 2006 – public hearing on the tax levy; December 19, 2006 – adoption of the 2006 tax levy; January 2007 – begin the fiscal year.

Mr. Baker then reviewed the general revenue trends from 2000-01 to 2005-06. He used a slide presentation to show cash and investments for the same time periods.

Mayor Krajewski asked for a copy of the audit report for 2004/05, recalling that the revenues were significantly higher than shown on the slide. He indicated that for two years the revenues have been higher than projections, which, in addition to reduced expenses, account for the surplus. The Manager said that staff is trying to improve projections with respect to revenues and be more conservative with the projections. The Mayor added that expenses are the easiest to control. The Mayor said in 2005 the surplus was $2 million. They have to compare like revenues in order to obtain a fair comparison.

Mr. Baker said the Council has been given a spread sheet giving a detailed snapshot of historical revenues and projections. He then highlighted some of the line items including property tax, utility tax, home rule sales tax, and sales tax. He noted that the property tax projection is flat, which should be a decline in the tax rate.

Commissioner Schnell asked if there is any increase anticipated in the pension funds. Mr. Baker said that information is not available as yet. The Mayor asked about investment projections and whether they were met last year. The Manager noted that any decisions made in Springfield regarding the pension funds should impact the 2008 budget and not 2007.

Mayor Krajewski asked about a report on the sales tax rebates.

Rita Trainor , Director, Financial Services, said that there are five rebate agreements, two of which are actively receiving rebates. Mr. Baker said that staff is projecting $200,000 increases in sales tax revenue, as well as increases in fees, charges and fines. He indicated the anticipated preliminary revenue for 2007 is $38,359,605.

Mayor Krajewski asked whether the administrative booking and tow fees are accurate.

Police Chief Bob Porter said staff would review that information. The Manager noted that all of the figures presented now will be refined, and there will be more interaction with the individual departments before the report is finalized.

The Mayor then noted that the ambulance fees had been raised and asked whether that was calculated in the figures. The Manager said that staff would verify those fees noting there are industry caps issued by Medicare and Medicaid.

Commissioner Schnell asked for clarification on the spread between resident and non-resident ambulance fees as she does not want to overly pursue fees from the residents. In addition, regarding the Hotel Sales Tax, Commissioner Schnell said that perhaps this should be reviewed in light of the Lombard hotel complex coming on next year which could have an effect on the Village’s hotels. She would like to be sure that the number is as accurate as possible. The Mayor suggested that it would be beneficial if they also talk with the Marriott and the Doubletree to learn their business projections as well.

Mayor Krajewski commented on the fines, saying he thinks that figure goes up yearly. It appears as though it is projected to be lower than last year. He recommended that this be reviewed more closely.

Mr. Baker then responded to another question from the Mayor regarding the State income tax stating the updates will be in August or September.

Commissioner Urban revisited the hotel tax asking the rate. Mr. Baker said the tax rate is at 4.5%. Commissioner Urban asked for a comparison to surrounding communities in terms of hotel tax. He also asked for a revenue projection for business licenses. Mr. Baker said that under Licenses and Permits they are not showing revenue in FY 2007 although they plan to present an ordinance in 2006. They want to provide incentives to the businesses in the first year to encourage voluntary compliance. Manager Pavlicek, in response to the Mayor’s and Commissioner Urban’s reaction, said that the Council will obviously make the final decision; however, staff felt comfortable at this time recommending some type of incentive in an effort to have the businesses voluntarily comply with the licensing issue. She added that staff will conduct a survey regarding business license revenues and hotel tax rates of surrounding communities.

The Mayor said the Council has been talking about licensing for a long time, one reason being that people with violations can be taken to court. He noted that now, without any type of licensing, the Village has little remedy in dealing with violators.

Commissioner Tully said that this is the earliest he can recall discussing revenue rates, and by necessity it must be preliminary. He said they must look at the historical increases in Police and Fire pensions and build in those increases. In addition they can talk to the hoteliers about the Hotel Use Taxes. With respect to the Community Grants Commission, Commissioner Tully said the Commission uses Hotel Use taxes to fund the Community Grants program and a minimum funding level has been established. He asked whether there is a record of complaints about over-zealous collection efforts for ambulance fees. With respect to ambulance fees, he noted that the spread between residents and non-residents appears to have been about the same for the past several years. Commissioner Tully added that he has supported and continues to support the implementation of business licenses.

Commissioner Schnell asked about the cable franchise fee and what effect there would be if AT&T does not want to pay a franchise fee.

Village Attorney Enza Petrarca said that preliminary discussions indicate that there will be a fee; however, it is too soon to impact the 2007 budget. She feels the Village is safe for 2007. The Manager added that legislation at the federal level would remove the regulation of* * local rights-of-way* * from local jurisdiction. She does not believe anything at the federal level would impact 2007, though. Commissioner Schnell said she is concerned about AT&T’s aggressive ad campaigns to get back into the market. The Manager said that staff believes at a legislative level the status quo would not change for 2007.

Mayor Krajewski asked that another letter be sent to Representative Biggert regarding allowing the FCC to regulate disputes on local rights-of-way.

Commissioner Sandack thanked staff for getting this discussion started early. For the first time the Village will tie the property tax levy into the budget. It is important to get the information out as to the schedule for budget implementation.

Mayor Krajewski said he would like to know about the sales tax rebates, as he is not comfortable with the $12.5 million number shown for sales taxes. The Manager said the submission of the rebate figure was preliminary, and staff will provide the actual figures.

Commissioner Tully said that the slide shows a diverse revenue stream which is a positive thing, and noted that the Council is not talking about a property tax increase at this time.

The Mayor said that property taxes make up only about 12% of the general fund, excluding Police and Fire pensions.

Fire Station 2 Funding Discussion. The Manager said staff is in process of working toward a schematic design for the new Fire Station at 55th and Main Street. This discussion is to review the proposed funding source for construction of the Fire Station. She said staff recommends $10 million in expenditures be included in the Major Buildings fund over two fiscal years. She said that on August 1, the Village retired a $4.5 million bond. Staff recommends that a General Obligation bond be issued to finance the project over 20 years with a portion of the one-half cent Home Rule Sales Tax in the Capital Fund used to pay the annual debt service. Generally, a $10 million issue over 20 years would require annual principal and interest (P&I) payments of $723,000 at a 3.8% average interest rate.

The Mayor asked who is managing the owners’ representative and the architects to assure there is no duplication of costs. The Manager said that Deputy Manager Fieldman is reviewing this and asked him to respond.

Dave Fieldman , Deputy Village Manager, said that the Village is not paying Williams for cost estimates and bidding reviews. There is no overlap. He indicated that the owners’ rep has a more direct oversight role, and the architect appears once a week for the weekly meetings. He said that staff would be providing a report to the Council.

Commissioner Waldack commented that it’s been about a year since Council adopted the fiscal policy, and he noted that using the home rule sales tax and issuing a bond to fund this is a worthwhile exercise that shows publicly that the Village is adhering to its debt management policy. He is pleased to see all of this coming together.

Regarding the bonding, the Mayor noted that Northern Trust was given specific instructions to include all Downers Grove banks on another matter, and they did not do that. He would not recommend using Northern Trust again.

Manager Pavlicek said that staff recommends using the bond counsel that they have always used.

The Manager clarified that the Village is using a very small percentage of the home rule sales tax for the annual principal and interest. There will be several opportunities to finalize that.

Commissioner Tully said he thinks the recommended way of paying for this is responsible and reasonable. There will be a dedicated source of revenue from the home rule sales tax to pay for the principal and interest of the general obligation bond. It will only be a portion of the home rule sales tax, with the remaining home rule sales tax funds to be used for other capital projects.

The Mayor said that about 70% of the home rule sale tax is from non-residents.

MANAGER ’S REPORT

The Manager commented that on August 26, Coffee with the Council will be held at 9:00 a.m. at the Main Street Train Station Farmers’ Market. At 10:15 a.m. that same day there will be an open house at Fire Station 2, 5420 Main, to display preliminary schematic designs for the new fire station. It will be open to the public.

ATTORNEY ’S REPORT

There was none.

COUNCIL MEMBERS

VISITORS

Linda Clevenger , 1016 Chicago Avenue, and also 438 Lake Avenue, asked for clarification regarding the residential signage. She received a call from a realtor indicating that Village staff said she could not have a realtor sign on a neighbor’s property, even with the neighbor’s permission. The neighbor was told the sign had to be removed or she would be fined.

The Mayor responded that realtor signs in parkways are legal for open houses.

Attorney Petrarca said that “For Sale” signs must be on the zoned lot that is for sale. Ms. Clevenger asked about the procedure to request a variance. Manager Pavlicek said that staff would discuss this with her. Ms. Clevenger said she was told by Community Development staff that the sign could be installed. Deputy Village Manager Fieldman said he would personally meet with the resident.

There being no further discussion, the Workshop meeting was adjourned at 7:55 p.m.

April K. Holden Village Clerk tmh