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HomeMy WebLinkAbout11-27-2012 Mechanical Committee Meeting MECHANICAL COMMITTEE OF CANTON CITY COUNCIL Tuesday, November 27, 2012 6:30pm Donald E. Edwards Way Historic Depot 50 N. 4th Avenue Canton I161520 Aldermen in attendance: Aldermen Ellis, Pickel, Fritz, Hartford, Schenck, Aldermen Absent: Aidermen West, Pasley, Nelson Staff in attendance: Attorney Chrissie Peterson, Mayor Kevin Meade, City Administrator Jim Snider, City Clerk Diana Pavley, Treasurer Nicole Marter, Comptroller Caty Campbell, Fire Chief Keith Frank, Police Chief Dan Taylor Others in attendance: Scott Stevenson, Elaine Mitchener Media in attendance: The Daily Ledger Video Services by: Joe Ginger PUBLIC SAFETY & TRAFFIC ALDERMAN JIM HARTFORD, CHA/RMAN POLICE REPORT ChieYs Comments: The intoxilyzer machine in the police department needs to be replaced. A new machine ($6,000.00) was given to the department by the Illinois Department of Transportation as part of their safety campaign. The statistics sent in by the Chief Taylor qualified the department for a new machine. Chief Taylor complimented the 3~d shift officers during the recent East Side Liquor burglary. The suspect was caught outside the business by Officer Darren Donald. The second suspect was caught inside the business by Officer Pollitt, McDowell and Freehill. The departments K-9 dog (Halo) was very instrumental during the arrest. The department assisted the Sheriff's Department with a suspect that escaped from the County jail. Officer Demott and the K-9 unit found the suspect in a cornfield. FIRE REPORT Chief Frank explained that the purchase of a used fire truck was completed last month. Chief Frank stated that he is doing his best to update the fleet at no additional cost to the tax payers. The newest pumper was purchased in 2001 and the department currently has several vehicles with more than 100,000.00 miles. Chief Fritz explained that he implemented an employee evaluation system and created new job descriptions within the department. DISCUSS. CONSIDER AND VOTE ON AN ORDINANCE ABATING ALL OF THE BOND LEVY FOR THE 2012-2013 FISCAL YEAR (26,430.000) PRINCIPAL AMOUNT ALTERNATE REVENUE BONDS SERIES 2005 Attorney Peterson explained that each year the City must go through a process to abate the tax levy on the 2005 bond. When municipal bonds are issued, there is a tax levy that is incorporated into the bond ordinance. As water and sewer money comes available the tax levy each year is abated by the County. If the levy is not abated the County Clerk is automatically entitled to extend the tax abatement. The amount this year is $2,242,705.00 Motion and second were made by Aldermen Hartford/Schenck to send the request to Council for consideration. The motion carried by voice vote and was unanimous. FIRE DEPARTMENT PUMP TEST BIDS Chief Frank explained that three bids were received for the fire department pump test. A bid in the amount of $985.00 was received from Alexis Fire Equipment Co. A bid in the amount of $675.00 was received from Lusk Fire and Safety. A bid in the amount of $874.00 was also received from Global Emergency Products. Chief Frank would like to request approval to use the bid from Lusk Fire and Safety in the amount of $675.00. The quote from Lusk Fire and Safety is from one of the current firefighters. The bid from Lusk Fire and Safety is the low bidder and Chief Frank would like to request approval to utilize the services from Lusk Fire and Safety since it was the low bid. Motion and second were made by Aldermen Ellis/Hartford to send the request to council for consideration. The motion carried by voice vote and was unanimous. TREADMILLS FOR THE CITY GYM The City of Canton currently has two treadmills purchased approximately eight years ago from a grant and money from the fire departments 2.0% fund. The treadmills have experienced problems within the last few months. The request is to purchase two true LC1100 with a five year warranty from Fitness for All out of Peoria lllinois at a price of $6,885.00 which includes $500.00 for a trade in of the old treadmills. The expenditure would be split as follows: 1/3 from Canton Police Department bonding fees 1/3 from the police department 2.0% fund 1/3 from the wellness program The City gym is currently being used by employees from all of the different departments. The gym is offered as part of the City's wellness program. Motion and second were made by Aldermen Hartford/Ellis to send the request to council for consideration in the amount of $6,885.00. The motion carried by voice vote and was unanimous. The Public Safety and Traffic Committee adjourned at 7:20pm STREETS & GARBAGE ALDERMAN JUSTIN NELSON (AbsentJ Alderman Ellis Acting Chair PRESENTATION BY THE U.S. DEPARTMENT OF AGRICULTURE- EMERALD ASH BORER Elaine Mitchener from the Illinois Department of Agriculture discussed the Emerald Ash Borer. The Emerald Ash Borer is an invasive pest that was originally from Asia and first discovered in North America in 2002. The Emerald Ash Borer infests our native Ash trees which have shown no resistance. The insect is a relatively small, iridescent green beetle that can fly up to 8 miles. It was first found in Illinois in 2006. The larval stage of the beetfe tunnels through the vascular system of the tree and impedes flow of water and nutrients. The initial stages of infestation are very difficult to detect, in fact symptoms will not be noticed until the 3rd or 4th year. Ash trees die in approximately five years after initial infestation. The disease is currently in 16 states and Canada. The symptoms of EAB on Ash trees can be observed by epicormic sprouting, woodpecker damage, bark splitting, or a D-shaped exit hole approximately 1/8 inch. In 2006 the EAB was discovered in Lily Lake/St. Charles, Wilmette, Evanston and Winnetka. There are now over 220 communities with confirmed EAB. Five new counties were confirmed in 2012- including Livingston, Macon, Lee, Henry and Knox. It is important to create an EAB management plan. The recommended management plan includes taking a tree inventory (this has been completed by the City of Canton.) Complete a cost analysis. This would include evaluating the cost for removal of infested trees and replanting. The costs should also include chemical treatment. The treatment options available are: • Annual application: Imidacloprid- soil drench or soil injection and dinotefuran- granular soil drench or soil injection • Bi-annual (every 2 years) application: Emamectin benzoate- trunk injections Ignoring EAB is the most dangerous choice. LAKE, BUILDINGS & GROUNDS ALDERMAN ERIC SCHENCK, CHA/RMAN FY 2013 TAX LEVY City Administrator Jim Snider explained that information was distributed for the actuarial report on the firefighter's pension fund. The City now has three options to address our tax levy. One is to move forward with the 2% levy as we have already discussed. Another option is to increase the levy by 2.9% to fund a portion of the firefighter pension increase recommended. This option would raise the levy up to the 4.9%. The final option is to move forward with a truth in taxation hearing and fund the entire amount recommend for the firefighter pension contribution. Outlined below is the recommendation for the levy for 2012. With the increase in fire pension, the overall increase proposed is now $151,035 or 7.2% over FY11. This is $109,295 more than last year. Pension costs represent $1,237,364 (55%) of our overall proposed levy for FY12. We would now be required to have a Truth in Taxation Public Hearing and notice published since the increase is over the 105% threshold. Outlined below you can see the proposed tax rate computation for 2012 on an assessed valuation of 112,604,622 with comments on each of the levy amounts on the next page. 2012 TAX Proposed 2011 Lv. Ext. Max. Rate 2011 Rate Corporate $ 28,644 $ 19,706 .25 .0175 IMRF $ 358,094 $ 325,540 none .2891 Fire Protection $ 161,025 $ 161,025 .150 .1430 Fire Pension $ 593,270 $ 483,975 none .4298 Police Protection $ 82,764 $ 82,764 .075 .0735 Police Pension $ 286,000 $ 283,313 none .2516 Cemetery $ 26,000 $ 26,012 .025 .0231 Audit $ 24,600 $ 27,025 none .0240 Liability Insurance $ 208,319 $ 208,318 none .1850 Civil Def. ESDA $ 3,600 $ 3,603 .05 .0032 Social Security $ 221,606 $ 221,606 none .1968 Workers Comp. $ 244,127 $ 244,127 none .2168 Total: (Increase of $151,035) $2,238,049 $2,087,014 1.8534 Summarv of chan~es: Corporate: Proposed amount adjusted $287 lower from original recommend levy to Reflect increase needed under Police Pension ($2,687) with receipt of Actuarial report and lower audit cost ($2,425). Proposed increase of $6,276 to reflect this tine item's share of the estimated 2% EAV growth. IMRF: Balance of estimated 2% EAV growth placed under IMRF to absorb an additional $32,554 due to an increase in the annual rate the City contributes from 11.4% to 12.56 for 2012. Applicable employees contribute 4.5%. Fire Protection: No increase on levy. Fire Pension: Proposed increase of $109,295 to reflect the Illinois Department of Insurance's actuarial report. Police Protection: No increase on levy. Police Pension: Proposed increase of $2,687 to reflect recommendation of the Police Pension Board's actuarial report received and discussed this last week in committee. Cemetery: No increase on levy. Audit: Decrease in levy by $2,425 to reflect lower cost. Liability Insurance: No increase on levy. Civil Defense ESDA: No increase of levy. Social Security: No increase on levy. Workers Compensation Insurance: No increase on levy. **********Levy amounts vs. extension amounts may vary when actual extension is computed by the County*********** The primary reason for the proposed 7.2% increase of our tax levy for 2012 is the increase in Fire Pension contributions. Increasing pension liabilities for municipal workers is a serious issue and one that should raise the concern of taxpayers. Although at face value, it may seem disingenuous for the City to "pass the buck", so to speak, on the State of Illinois. The fact is that these defined benefit programs are established by state legislation, not at the local level. The defined benefits for municipal employees are not all equal. Although we appreciate the service provided by our fire fighters and police officers, the fact is that their retirement benefit packages far exceed the Illinois Municipal Retirement Fund for the balance of the city employees. For example: We currently have 16 firefighters on staff with an annual pension cost of $593,270. This equates to a pension costs per active employee of $37,079. By state statue, Fire Fighters contribute 9.455% of their salary to their pension (40 ILCS 5/4-118.1). We currently have 23 police officers on staff with an annual pension cost of $286,000. This equates to a pension cost per active employee of $12,435. By state statute, Police Officers contribute 9.91% of their income to their pension (40 ILCS 5/3-125.1). We currently have 62 IMRF employees on staff with an annual pension cost of $358,094. This equates to a pension cost per active employee of $5,776. IMRF employees contribute 4.5% of their income to their pension. Police and fire employees do not contribute to Social Security on their earnings as IMRF employees. Obviously, there are several variables when computing the monies needed to fund these pensions: set contribution levels per employee, market conditions, age of employees, age and number of retires and actuarial estimates. City Administrator Jim Snider said he has been asked: "Why doesn't the Federal Government appropriate stimulus money to help offset this increased costs?" Snider said he agrees this is in area that should be addressed by our state and national representatives. All you have to do is pick up any newspaper in the state of Illinois and you will find articles relating to the financial trouble pension funds are having for all public employees. The plight of the state's retirement programs for public school teachers and state workers have been widely discussed in the media, but the pension funds serving police officers and fire fighters are even in worse financial condition. This growing crisis was outlined in a recent report provided to Illinois municipalities by the Illinois Municipal League with the cooperation of the Illinois City/County Management Association: • Illinois downstate police and fire pensions are near the top in benefit systems compared to others in the region and nation. Second only to lowa in the 16 Midwestern states surveyed. • On average, Illinois downstate police and fire fighter pensioners receive approximately $533 more per month than the average public safety personnel in the other 50 state defined benefit pension programs; 352 more per month than the average of their peers in the 16 Midwestern states; and $276 more per month than the average of their peers in the states bordering on Illinois. • It is a well known and acknowledged matter of public record that Illinois' employee retirement systems are in a state of crisis, with over $35 billion in unfunded obligations. Less well known is that the same crisis condition is also true for the state's twelve local government employee pension systems which, together, have another $15 billion in unfunded obtigations, with the police and fire pension funds being among the financially troubled. This is not fair and adequate for the municipalities or the police and fire personnel. • The report documents how the level of funding for these two respective pensions have been declining to a level of 62.4% for downstate police pensions and 65.9% fire fighter pensions. IMRF is currently over 80% funded. It should be noted that a standard actuarial rule of thumb holds that a funded ratio of less than 90% means that a retirement fund is financially unsound. • Unless reversed, these trends in the downstate police and fire pension's funds mean an increased tax burden upon local property owners and several long term problems in meeting the needs of the families of those police and fire personnel killed in the line of duty as well as of those who have retired. • The key elements of this growing crisis are as follows: 1. The increased life expectancy of the population. 2. Stock Market Returns of less than 7% per annum. 3. Benefit enhancements provided by the Illinois General Assembly for Police and Fire Fighters over the last several years which are disproportionate to the IMRF employees. Illinois state legislators must understand that any vote for increased police and fire fighter pension benefits is a vote to increase the property taxes of their constituents. 4. The state must stop granting any new retirement benefit enhancements unless they are also increase employee contributions sufficiently to fully fund the enhancement. Finally, our schedule to address our tax levy remains as follows: Tuesday, November 27, 2012 - Determination of levy amounts at the Mechanical Committee Meeting. Friday, December 7, 2012 - Tax Levy Notice in CDL Tuesday, December 18, 2012 - Public Hearing on proposed tax increase at 6:00 pm Tuesday, December 18, 2012 - Second and Final Reading of Tax Levy Ordinance Wednesday, December 19, 2012 - City Clerk files certified copy of Tax Levy Alderman Schenck suggested having the pension board come to the Council to explain their investment procedures. Alderman Schenck suggested moving forward with the City Administrators recommendation for the pension fund. Alderman Fritz agrees with the recommendation as well. If anyone is interested in serving on the fire pension board they are encouraged to contact the Mayor for additional information. Motion and second were made by Aldermen Schenck/Ellis to add $109,295.00 to the tax levy which would bring the total of $151,035.00 which wilt be a 107.2% increase and move forward with the scheduling of the truth in taxation hearing. A truth and taxation notice will be provided for a hearing to be he~d on December 18, 2012. The motion carried by voice vote and was unanimous. PUBLIC WORKS, WATER & SEWER ALDERMAN GERALD ELLIS, CHA/RMAN WATER AND WASTEWATER BOND REFINANCING In 2005 the water and sewer bonds were issued in the amount of $36 million dollars for improvements at the water and sewer plant. Conversation has recently taken place with Ruan Securities regarding refinancing the bonds. The City will be able to refinance the bonds over a two year period. The interest rates have dropped since 2005 so the City will be able to save $634,000.00 with the refinance. The City is currently considering 12 million dollars in additional projects. City Administrator Jim Snider further explained that the City will be evaluating the operations and working with the union to make sure the City is properly running all areas of operations. The City will make sure they are being efficient where they have the manpower within various departments. The intention, plans or thoughts is not to layoff any employees. The City feels confident that the manpower within the City is what is needed, however the City may need to move people from one area to another. Scott Stevenson- Senior Vice President with Ruan Securities discussed the refinancing of the 2005 water and wastewater bonds. Ruan Securities along with Ice and Miller submitted engagement letters to the City. Ice Miller would be serving as the bond and disclosure council. Ruan Securities would be underwriting and submitting the information to investors. A bond ordinance was prepared for review that would provide the authorization process necessary to move forward with the refinancing. The City is looking at some new money needs within the next few months. These needs along with future debt issuance would be addressed at a future time in a separate ordinance. The goal in the refinancing is not only to save the City interest costs, but to also restructure the debt in a fashion that is going to accommodate the new borrowing needs as well. Motion and second were made by Aldermen Ellis/Hartford to send the request to Council for consideration. The motion carried by voice vote and was unanimous. LEAF PROGRAM The leaf program will be finishing next week so people are reminded to take the leaves to the terrace for pickup. The Public Works, Water and Sewer Committee adjourned at 7:07pm. CHANGE IN MEETING DATES Due to the holiday season there will be no Meeting on Tuesday, December 25, 2012. This meeting will be held on Tuesday, December 18, 2012 with the regularly scheduled Council meeting. There will be no meeting on January 1, 2013. This meeting will be held on Wednesday, January 2, 2013. ADJOURNMENT Motion and second were made by Aldermen Schenck/Fritz to adjourn into executive session for: personnel, negotiations and a grievance by fire department The motion carried by voice vote and was unanimous. ~~y~,~ Diana Pavley City Clerk