Rock Island Today

City of Moline Committee of the Whole met May 12.

Here is the minutes provided by the committee:

PRESENT: Mayor Stephanie Acri (Chair)

Alderman Scott Williams (Ward 1)

Alderman David Parker, Jr. (Ward 2) ~Electronically

Alderman Mike Wendt (Ward 3) ~Electronically

Alderman Richard “Dick” Potter (Ward 4) ~Electronically

Alderman Sam Moyer (Ward 5)

Alderman Kevin Schoonmaker (Ward 6) ~Electronically

Alderman Mike Waldron (Ward 7) ~Electronically

Alderman Sonia Berg (Alderman At-Large) ~Electronically

ABSENT: None.

STAFF: J.D. Schulte, Interim City Administrator

Janine Hollembaek Parr, City Clerk

Rodd Schick, Interim Public Works Director ~Electronically

Alison Fleming, Human Resources Manager ~Electronically

Eric Griffith, Parks Recreation Director ~Electronically

Don Goff, Information Technology Manager

Bryon Lear, Library Director ~Electronically

Darren Gault, Chief of Police

Jeff Snyder, Fire Chief

Carol Barnes, Finance Director~Electronically

Jeff Anderson, City Planner~Electronically

Tony Loete, Utilities General Manager~Electronically

Sarah Mark, Interim Fleet Manager~Electronically

OTHERS: Derke Price, Ancel Glink

Mark Peterson, GovHR~Electronically

Lori Grafton, Kiwanis~Electronically

Mayor Acri called the meeting to order at 6:00 p.m. in Council Chambers.

Remote Attendance

Alderman Moyer, seconded by Alderman Williams, moved to approve the remote electronic attendance of Aldermen Parker, Wendt, Potter, Schoonmaker, Waldron and Berg. Motion passed unanimously.

Proclamation

A Proclamation from the Kiwanis Club of Moline to declare May 11-17, 2020, as “Kiwanis Week.” President Lori Grafton addressed the Council remotely.

Questions on the Agenda

There were no questions on the agenda.

Informational

COVID-19 Budget Update. Carol Barnes, Finance Director, explained that revenue forecasts have been published by the Illinois Municipal League (IML) for the 2020-2021 fiscal year, May 1 – April 30. Barnes compared four revenue streams included in the IML forecast and when those projections are applied to the City’s budget for the months of May-December, 2020, the projected shortfall shrinks by $1.5 million. Barnes explained that this is encouraging, however staff recommends continuing down the conservative path toward a $10 million shortfall. Cumulatively, application of those projections would put the general fund $845,000 to the good, with the remaining $662,000 to Motor Fuel Tax.

J.D. Schulte, Interim City Administrator, indicated that the Illinois Department of Transportation (IDOT) has implemented a $1.5 billion grant program using proceeds from general obligation (transportation series A) bonds authorized in the REBUILD Illinois capital program to provide Local Public Agencies with the funds for capital (infrastructure) projects. Projects must follow IDOT requirements. The first REBUILD Illinois grants, awarded this month and based on the regular MFT formula, will yield $477,617 semi-annually over a 3-year period to the City.

Staff has worked to reduce expenditures by $5,926,000 across all major funds. Barnes noted that bond refinancing and credit card payment reductions increase annual savings. There was discussion.

Schulte explained that the TaxSlayer Intergovernmental Agreement requires that the City use hotel/motel tax to fund a reserve account to pay for any operating deficits at Quad City Civic Center Authority (QCCCA) and that each year, that reserve be maintained at a level equal to the prior year’s operating deficit. All amounts generated by the hotel/motel tax in excess of that required amount may be used by the City for other purposes. If the reserve is deficient, the City would supplement the payment due to QCCCA from other sources. If the QCCCA has an operating surplus, that surplus must be reserved, in an interest bearing account, for use against future operating deficits and must be used before the City has an obligation to fund any deficit. At the end of last year, the reserve balance was $7.6 million. Effects of the pandemic may result in an approximate $6 million revenue shortfall, requiring a draw from the reserve account of $2 million. There was discussion. Staff recommends maintaining the City’s tourism (hotel/motel tax) fund balance of $650,000.

Actuary reports for Police and Firefighter Pension Funds are due out next week. Net investment savings is recovering, however is still down for the year. Quarterly updates will continue to be provided.

COVID-19 Work Session

Mark Peterson, GovHR, reviewed the attached presentation on the post COVID-19 economy and the impact on the City of Moline. Peterson explained that unlike other recessions, the impact on our current economy was caused by mandated closures, so it is difficult to gauge long-term implications. Peterson admittedly has a pessimistic perspective on the future of this economy as it relates to municipalities. It has become increasingly difficult for municipalities to balance budgets without raising taxes and fees. The current situation is forcing municipalities to make changes that they would have had to make eventually. Peterson stated that it is essential that the City put a plan in place to address financial challenges that are coming. Short-term plans are important, but greater importance should be placed on years 2, 3, 4 and beyond when profound impacts are projected. The City’s projected $10 million revenue shortfall is prudent and cuts to expenditures are critical. Peterson indicated that the City is in a good position to weather the storm for the remainder of this fiscal year. Some of what we know today may provide some clues as to what we can expect in the future. We cannot wait until we have all of the answers, but must make some assumptions and take action. The current economic condition, with a declining GDP and rising unemployment, has been compared to that of the Great Depression. The State of Illinois is projecting a $7 billion revenue shortfall, and Peterson fears that pass-through revenue to municipalities could be jeopardized. Other factors that will likely continue to impact local economies were discussed. Bottoming out of the local economy will likely not occur until the virus is no longer a threat. If the economic downturn continues for another two years, it could be 2026 before it rebounds. The economic impacts will continue and may be severe. Several municipal revenue sources will likely continue to be weakened. A responsible city develops a financial response plan to bring costs in line with decreased revenues with strategic policies that include: specific ways to cut costs via a reduction or elimination of specific municipal services; alternative methods for providing those services that the City continues to offer, including intergovernmental collaboration, insourcing, outsourcing, identifying more efficient service delivery methods; and restructuring and/or refinancing long-term debt. Cities cannot solve financial challenges by permanently avoiding infrastructure maintenance and equipment replacement. Waiting to make cuts will result in deeper, more profound cuts later. It is not prudent to wait until you are at the edge of the cliff before changing direction. The analysis of critical data points that provide insights into the evolving condition of the local economy will provide clues as to what is happening. Adverse data sets will trigger components of the plan. The City must fundamentally change the way it functions. At the end of the day, there is only so much that we can afford. The staff will be significantly smaller and services will be cut. The decisions that will be required of the City Council and the management team will be complex and difficult. often painful, but the sooner this is done, the better.

Mayor Acri asked Peterson to help guide the Council through the main points for discussion. What should be accomplished this evening? Looking beyond the current fiscal year and assuming the recession brought about by the pandemic will require dramatic cuts in spending. Strategic alternatives that provide decreased costs at a comfort level in this economy is an appropriate step. There was discussion that peripheral services should be cut. Service delivery should be reinvented. This is a challenge, but may be an opportunity. Concern for reaching $10 million in cuts was expressed. There was agreement that starting early with changes is the best strategy. Staff has the expertise to identify changes that may be made. Tracking business development is important. Looking to the past could provide a path to success and redevelopment. Peterson’s presentation validated the City’s current path. Mayor Acri stated that we should be prepared for what lies ahead and begin looking at next year. Barnes stated that staff’s work in revising the current budget is setting the stage for a leaner 2021 budget. Necessary capital expenditures (facilities, fleet and infrastructure) should move forward. Strategic changes to services provided will be ongoing. Peterson stated that current cuts assume that revenue does not continue to fall. If the economic decline continues into next year, the shortfall will be exacerbated. Mayor Acri expressed concern that pension returns will drop from the current 7 percent. There is much uncertainty and monitoring the changing economy is essential. Peterson stated that a 20% unemployment rate is earthshattering. Preparing for the worst is the best way to be prepared for what lies ahead. Mayor Acri asked Council to provide staff clear direction. Indicators, like the stock market and property/land values, point to a bigger picture. There was discussion. Alderman Wendt moved to direct staff to identify options for bridging the $1.5 million gap this year and a $5 million gap next year. Seconded by Alderman Schoonmaker. Alderman Schoonmaker asked that service cuts include alternatives and resulting cost savings. Motion carried with Aldermen Potter and Waldron voting nay. Staff will return in three weeks with options for Council’s consideration. Mayor Acri asked that staff continue to provide a budget update at each meeting.

Public Comment

View recorded meetings at http://www.moline.il.us/CivicMedia?CID=9 The meeting adjourned at 7:49 p.m.

http://www.moline.il.us/ArchiveCenter/ViewFile/Item/6295