Rock Island Today

Rock Island City Council met Sept. 23.

Here is the minutes provided by the council:

Present: Mayor Pro Tem Mark Poulos, Alderman Randy Hurt, Alderman James Spurgetis, Alderwoman Jenni Swanson, and Alderman Dylan Parker

Alderman Dave Geenen arrived at 5:19 p.m.

Absent: Mayor Mike Thoms and Alderman Ivory D. Clark

Staff: City Manager Randy Tweet, City Attorney Dave Morrison, City Clerk Judith Gilbert, and other City staff

FESTIVAL EN ROCK ISLAND

CED Housing Loan Officer Anamaria Vera presented information on the Mexican Festival that will be held in Rock Island on August 8, 2020 in Schwiebert Park. The outdoor event will feature street vendors that will showcase Mexican culture and heritage. Representatives from Q2030 (Greg Aguilar) and the YMCA (Daisy Moran) were present and they are also working on the festival. Proceeds from the festival will be turned into empowerment grants through the Quad City Hispanic Chamber of Commerce for opening, relocating, or expanding a business.

Alderman Parker asked for some background on the event. Community and Economic Development Director Chandler Poole explained they were trying to figure out how to engage all elements of the population. They were very successful working with Clock Inc. to reach the LGBT community. With the Hispanic population, they decided to throw a party with food, performers, and art. He said Ms. Vera put together a working group.

Mr. Aguilar said Q2030 is about how to showcase a welcoming and inclusive community such as Rock Island. He said the festival will be celebrating diversity and all things Mexico.

NEW REVENUES

Finance Director Stephanie Masson presented to Council a variety of new revenue options for their consideration as a result of questions from Council over the past two years. She began with a review of General Fund expenditures and revenues with a budget of $28 million. She explained that more than 75% of General Fund expenditures are personnel related with predetermined increases from union contracts, health insurance increases of more than 5% per year, and rising pension costs for IMRF, police and fire pension funds. Ms. Masson said 73% of General Fund revenues are tax related. She said of $36 million in revenues, the largest share is from property tax revenues of $8.5 million. She explained further that all but $1.7 million is funding police and fire pension contributions. Ms. Masson presented a chart of General Fund expenditures versus revenues. She said that without changes, the expenditures are rising faster than the revenues.

PAYMENT IN LIEU OF TAXES (PILOT)

Ms. Masson explained there is a loss of property tax revenue due to tax exempt ownership or use of property such as the federal government, colleges and universities, and nonprofit organizations such as churches and hospitals. She said that payments in lieu of taxes is not common in Illinois. She reported that of Rock Island's 16,000 parcels, 690 of those parcels had an assessed valuation of zero with no property taxes paid. Augustana College and the Rock Island Housing Authority own the most parcels. Other organizations not paying property taxes are Project Now, Alleman High School, Trinity Hospital, other government agencies, churches, and other non-profits. Ms. Masson said Illinois state law does allow taxing districts to enter into taxing agreements where property owners make direct payments for direct and indirect services provided by the taxing district. She noted there aren't many examples in Illinois. She reported the Rock Island Housing Authority does remit a PILOT to the County for distribution to the taxing bodies. The City received approximately $16,000 from the 2017 levy.

Ms. Masson stated there is not enough data to estimate additional revenue from PILOTS. She said if Council is interested in pursuing, they would establish a task force of City officials and community members. They would also evaluate the City services that have been provided over a multi-year period. City Manager Randy Tweet asked if Council wanted to move forward. He said it will take several months and establishing PILOTS would be a multi-year process.

Alderman Parker was in favor of moving forward. Alderwoman Swanson was not in favor. She said there is a merger with Trinity Hospital. She doesn't want to risk losing a hospital in Rock Island. She said the City needs to tread very carefully. Council discussed the impact on nonprofits. Alderman Spurgetis said he needed more information to make a decision. Alderwoman Swanson said it would be worth having a conversation with Augustana College, Alleman, and the hospital to see if they would be willing to pay some contribution.

STORAGE FACILITY FEE

Ms. Masson stated there are an estimated 1,800 storage units ("doors") in Rock Island. She said Iowa has a 6.5% service fee that applies to storage businesses. She noted Iowa has a different sales tax system than Illinois. She provided three examples of municipalities with the storage tax in Illinois; there are no local examples. Ms. Masson provided a hypothetical scenario with a $5 per month per unit tax and the amount of revenue that could be generated.

Alderman Parker asked for confirmation that for every 1% increase in property taxes, $100,000 is raised. Ms. Masson said that was correct. Alderman Geenen said he supports this revenue idea. Alderman Hurt agreed. Alderman Spurgetis asked if the tax is for those units rented or all of the units. Ms. Masson said her recommendation is to tax every unit whether rented or not. Discussion continued. Mr. Tweet said they would come back with a recommendation for implementation for the storage unit tax. He added they talked to UHaul when they came to town and they were in favor of the tax.

PLASTIC BAG TAX

Ms. Masson said the next two ideas are environmental related taxes. She said a plastic bag has a twelve minute lifespan if it is not reused and it decomposes slowly. It is not a common tax and there would be frustration by businesses and consumers. Ms. Masson noted it is not a stable revenue source, but it could support the General Fund or other initiatives and non-residents share in the tax. Alderman Geenen was in favor of the tax. Ms. Masson presented information on other governments that charge the tax and current state law. She also presented a hypothetical scenario on potential revenue that it could generate. Discussion continued. The state could include the tax in their FY 2021 budget which would preempt the local tax. Alderman Parker liked splitting the tax revenue with retailers. Alderman Geenen suggested reinvesting the tax in Schwiebert Park or Keep Rock Island Beautiful. Ms. Masson said that would free up Gaming funds if the money went to Keep Rock Island Beautiful. Alderwoman Swanson said it is a great idea, but she thinks the City should wait and see what the state does first. Mr. Tweet said he would check with the City's legislators to see how likely the state tax is. Ms. Masson said it is not a popular tax. Mr. Tweet said they could check on how the retailers would implement the tax.

PLASTIC STRAW TAX

Ms. Masson stated 500 million plastic straws are used per day worldwide and they have a twenty minute lifespan while remaining in landfills for decades. She said there would be frustration by businesses and it is not a typical tax. She said the revenue would not be ongoing. Ms. Masson presented hypothetical revenue for the tax. She said there were no examples in the state of Illinois. Alderwoman Swanson said businesses are voluntarily doing away with straws and thinks it would be a very short-lived source of revenue. Alderman Parker wasn't sure it was worth it. Alderman Spurgetis suggested Council consider a carryout food tax to counter the litter that is created.

ENTERTAINMENT/AMUSEMENT TAX

Ms. Masson said in the state of Illinois many municipalities charge a tax that applies to admissions, video rentals and tickets. The tax range is 3-9%. She said it is possible to carve out some entities like nonprofits so they are not affected by the tax. Ms. Masson presented examples of other municipalities that are charging the tax. She stated the Moline tax applies only to TaxSlayer events. She also presented a hypothetical scenario for potential revenue from different venues (Circa, Botanical Center, QCCA, and District events). She estimates the tax could generate $12,000 per year. Mr. Tweet said Council would need to decide if they wanted to include nonprofits in the tax. Alderman Hurt liked the idea of the revenue source for The District especially if the money was returned back for beautification efforts. Alderman Parker liked that idea too. Alderman Spurgetis likes the idea of non-residents paying the tax who come into Rock Island for events. Alderwoman Swanson feels that it is a tax on Circa and she is concerned about driving businesses out of town. Alderman Parker shares Alderwoman's concerns and would rather pursue an SSA in the downtown. Alderwoman Swanson said she would rather see an SSA too. She suggested giving up doing the free concerts in Schwiebert Park. Alderman Parker was not in favor of the tax, but was in favor of taxing internet streaming services such as Netflix. Discussion continued. The consensus was to move ahead with the tax and charge all venues with live entertainment.

REAL ESTATE TRANSFER TAX

Ms. Masson said the state and county already have a tax that is charged. She stated voters must pass a referendum before the tax can be imposed. There are many municipalities that charge the tax. She said a benefit is the municipality knows when a property is changing hands and another benefit is collecting any fees that are due the municipality before issuing the transfer stamp. The tax is usually paid by the seller. If the City is serious about the tax, they should consider joining with other county municipalities to get the tax passed via referendum. Ms. Masson presented a potential revenue scenario. Alderwoman Swanson said she was in favor of the tax. Mr. Tweet emphasized they would want to get other municipalities on board to sell it to the voters. Ms. Masson said it is a home rule tax. She said they could talk to Moline to combine for a marketing campaign. Mr. Tweet said it would take serious money for the marketing. Alderwoman Swanson said they should find out if Moline is interested before proceeding. She said it can be another negative for Rock Island.

HOME RULE USE TAX

Ms. Masson said this tax is a home rule use tax of 1% on the purchase of vehicles such as cars and boats. She thinks it could be done very easily. She said she doesn't think it would amount to much revenue. She suggested Council members provide their feedback to Mr. Tweet. Alderman Spurgetis asked if it applied to campers, motorhomes, motorcycles, etc. Ms. Masson replied yes. Alderman Spurgetis was in favor of it.

VEHICLE STICKERS

Ms. Masson said the City had the tax at one time. She added many municipalities in Illinois have vehicle stickers as a revenue source. Mercer County recently voted down this tax. Ms. Masson explained the tax could be used to pay for General Fund street maintenance and improvements. She said it was not popular with residents and there is a cost of administration of the tax. Ms. Masson said it would be an annual fee. She presented some examples; none were local. She also presented a potential revenue scenario estimated at $1.4 million at a cost of $60,000. Mr. Tweet said the revenue would go to streets. He said it is wildly unpopular and would hurt the poorest harder since it is a flat fee. Council discussed possible exemptions. Alderman Spurgetis would be in favor of a lower fee. Ms. Masson asked for any additional ideas be passed on to Mr. Tweet.

TRANSPORTATION UTILITY FEE

Ms. Masson explained this fee is treated as a utility and it is paid by property occupants based on their land use intensity. She said there are no examples in Illinois. She presented a revenue scenario generated through the City's utility billing system. She said there would probably be legal challenges. In Kansas, they had to repay the taxes collected. Ms. Masson explained an apartment building property would have a higher fee than a single family residence and would be based on some sort of measurement for trip calculations. Alderman Parker said legalities should be researched. Mr. Tweet responded they won't know it's legal until someone challenges it. He explained it has not been done in Illinois. Ms. Masson said it would be a tax with different grades of fees. Alderman Spurgetis said it doesn't make as much sense as vehicle stickers. Mr. Tweet explained it's based on the property use. Mr. Tweet said both the vehicle stickers and the transportation utility fee would be unpopular. Alderman Parker asked about the number of parking spaces or driveway space for taxing.

Mr. Tweet said each alderman could let him know if they want to move ahead with the vehicle stickers.

STREETS AND SIDEWALKS FUNDING PRESENTATION

Public Works Director Mike Bartels made a presentation on street funding for 2020. Pictures of some streets needing repair were included in his presentation.

Mr. Bartels said one of the City Council's goals is to improve street conditions throughout the city of Rock Island. He added the number one complaint from residents is about street conditions. Mr. Bartels said quality streets retain and attract residents to Rock Island. He also said that streets in good condition increase home values and encourage residents to maintain their property to the same standard. Mr. Bartels stated that in 2018, they had 2,106 calls related to street complaints and conditions.

Mr. Bartels reviewed estimated revenues for 2020 street maintenance: $970,000 in Motor Fuel Tax funds; $570,000 from the new MFT increase effective July 1, 2019; $500,000 from the City's local gas tax; and $170,000 in Gaming revenue; for a total of $2,210,000 estimated revenue.

Mr. Bartels explained the current uses of funding: in-house street maintenance activities such as street sweeping, pothole patching, concrete patching, street repair, snow removal, street lighting, and sign installation. He said the funds can also be used for maintenance contracts and street projects such as reconstruction and resurfacing. He said they have used MFT funds for snow operations and the purchase of salt. Mr. Bartels said Gaming funds are used to fund street maintenance program projects such as the asphalt patching program, brick patching, and pavement patching, etc.

Mr. Bartels reviewed the projects they expect to do with the 2020 funding. The Blackhawk Hills Drive Reconstruction / Valley Drive project will be two years; they will use the MFT funds of $570,000. The $970,000 in MFT funds will be used on general street maintenance; a good percentage is for labor and equipment costs plus $250,000 for salt purchases. The local gas tax funds of $500,000 will be used for the pavement patching and sidewalk replacement programs. Of the $500,000 funding, $200,000 will be spent on the mill and fill program, $250,000 for concrete patching, and $50,000 for sidewalk repairs. Mr. Bartels said it will all be lumped into one contract. The $170,000 in Gaming funds will be used for brick pavement patching and pavement striping.

Mr. Bartels presented a breakout of 2018 MFT expenditure categories by labor, equipment, and totals. He said 57% was used on labor and equipment and salt purchases.

Mr. Bartels explained the process for determining how much funding is needed. There was a survey conducted at the end of 2013 which reviewed and determined pavement condition values. He explained this data is collected in the field. He said from the results, they come up with maintenance recommendations and costs. A Pavement Condition Index (PCI) is created with a score for each street. Mr. Bartels said the survey is supposed to be updated every five years and there is a cost to doing the survey. Mr. Bartels doesn't think it would be worth doing the survey again right now. Mr. Bartels presented the score designations and a PCI values ranking of the street conditions at the last survey. Mr. Bartels noted 41% are rated very good to excellent; 43% fair to good; and 16% failed to poor.

Mr. Bartels presented the conclusions of the study. The average PCI is 62-65. The majority of the distresses were load and climate related. He said streets are in better shape than expected given their age, although streets are rougher than expected. Mr. Bartels said it would take $7.21 million per year to keep the PCI at the current level over the next 20 years and $5.4 million per year to attain a PCI of 55 at the end of 20 years. A citywide map with the streets color coded to match the PCI was presented.

Mr. Bartels showed the 2020 revenue comparisons for street maintenance with Moline and East Moline. No grants or utility funding were included in the graph of revenue comparisons.

Mr. Bartels compared the average cost per block for different types of projects. The costs include contingencies, but not engineering costs.

Mr. Bartels presented the current 5 Year Capital Improvement Plan with street maintenance projects. He said the plan is constantly changing due to lack of funding. Mr. Bartels summarized that significant funding is needed to keep the city's streets from deteriorating further. He said the local gas tax redistribution to street maintenance and the Motor Fuel Tax increase is a good start, but more funding is needed. He stated they continue to repair streets with the funding they have, but they fall further behind every year.

Mr. Bartels said streets are divided up by ward; they will do one street in each ward.

Alderwoman Swanson thanked Mr. Bartels and his team. She said they have an outstanding response to calls under the circumstances. She asked about 15th Street when coming off the Centennial Bridge when entering the city. Mr. Bartels said it is IL 67 (state) although the City does maintain the street. Mr. Bartels said they are working with IDOT to get that portion of the street fixed; the City engineers did all of the plans and gave them to the state. Mr. Bartels announced the project will be let this fall with the project to be completed next spring (all the way to 5th Avenue). He did say the road would be terrible this winter. The state will pay for the project.

Mr. Tweet said they are working with Augustana to get a street, alley, and avenue repaired and have Augustana pay half the costs.

Alderman Hurt thanked Mr. Bartels.

11TH STREET, US 67 IMPROVEMENTS PRESENTATION

There was not enough time during the study session for this presentation.

The study session concluded at 6:41 p.m.

https://www.rigov.org/AgendaCenter/ViewFile/Minutes/_09232019-456