City of Highland Park Committee of the Whole met Oct. 13.
Here is the minutes provided by the committee:
Call to Order
At 6:17 PM, Mayor Rotering called the meeting to order and asked for a roll call:
PRESENT:
Mayor Rotering, Councilman Stolberg, Councilwoman Stone, Councilman Kaufman, Councilman Blumberg, Councilman Knobel, Councilman Holleman
ABSENT: None
STAFF PRESENT: City Manager Neukirch, Fire Chief Amidei, Community Development Director Fontane, Police Chief Jogmen, Public Works Director Kanapareddy, Finance Director Logan, Assistant City Manager Sabo
ALSO PRESENT: Corporation Counsel Elrod
Approval of Minutes
1. Approval of the Minutes of the Special Meeting of the Committee of the Whole Held on September 29, 2020
Councilman Kaufman moved to approve the minutes of the Special Meeting of the Committee of the Whole held on September 29, 2020. Councilwoman Stone seconded the motion. Upon a roll call vote, the Mayor declared the motion passed unanimously.
RESULT: ADOPTED [UNANIMOUS]
MOVER: Daniel Kaufman, Councilman
SECONDER: Kim Stone, Councilwoman
AYES: Mayor Rotering, Councilman Stolberg, Councilwoman Stone, Councilman Kaufman, Councilman Blumberg, Councilman Knobel, Councilman Holleman
SCHEDULED BUSINESS
2021 Budget Workshop
Mayor Rotering introduced City Manager Neukirch who provided an overview of the presentations planned for tonight's Budget Workshop.
City Manager Neukirch stated that the budget document is the City's principle planning document that is used to guide the City's goals and objectives, priorities and mission for the upcoming fiscal year and long term. She provided a few highlights to the proposed budget and Capital Improvement Program. She requested feedback from the Council as it relates to the City's Small Business Façade Improvement Program. She explained how the program works and what is currently in place. She asked for feedback on the following question: Is there an interest in expanding this program beyond façade that would include interior renovations or COVID related operational improvements, such as purchasing heaters, tents, HVAC
improvements, etc. If so, there is the opportunity to utilize the Environmental Sustainability Fund. If there is not an interest in using the Environmental Sustainability Fund, staff is seeking policy feedback from the Council if there are recommendations to draw down the General Fund or if staff should review further cuts from the department's operation budgets. She noted that currently, the program provides for an up to $5,000 grant and asked the Council if they were interested in keeping the $5,000 grant level or if there should be an increase in funding made available to businesses.
Mayor Rotering provided important information as to why the City would be re-appropriating funds potentially from a Sustainability Fund to private businesses. She voiced concerns about drawing down on the General Fund especially in the environment we currently are in. She noted that she sees this as a temporary change and an opportunity to free up cash to help businesses.
Councilman Knobel agreed that she would not recommend drawing down the General Fund. She recommended increasing the $5,000 match and see how the City would be able to afford the increase. She stated that one of the things she would like to explore is eliminating the Visit Lake County membership that would ease the burden of taking some of the money out of the Sustainability Fund. She recommended choosing an amount that would be appropriate. She stated that she would like the City to have the ability to earmark money for the attraction of businesses and not just retention. She recommended calling it the Small Business Façade Improvement COVID+ Program for a period of 12 to 18 months.
Councilwoman Stone noted that the Environmental Sustainability Fund is what is being discussed. She explained that the fund uses revenue from recycling to fund environmental initiatives. She noted that Highland Park has been a leader on environmental leadership in part because of the fund. She noted that environmental sustainability is an important goal that very little money is spent on and the City has less than 10 years to make significant changes in order to address climate change to avoid worse impacts. She provided information on the different impacts of climate change that Highland Park has already experienced. She explained that the fund had been used to pay for the price difference to purchase more fuel efficient vehicles in order to save the City money, for permeable paving in City parking lots that leads to less maintenance in the parking lots and sustainable consulting services to assist with reducing greenhouse gas emissions and increase composting. She noted that all of these priorities have been laid out in the City's Sustainability Plan that was updated recently. She noted that if the City is interested in spending money to provide incentives to businesses and for business attraction, which is a goal she agrees with, staff should review the Business Development Budget and see where there may be some areas that can be cut.
Councilman Blumberg noted that he is very much in favor of supporting the attraction of small businesses and doing what the City can to retain the businesses that are currently in town. He stated that the retail climate has already been impacted by world events and modern life before the pandemic. He explained that the Environmental Fund is funded by sources related to environmental sustainability and it may be short sighted to use that fund. He noted that it would be completely appropriate to use funds from the Special Service Area ("SSA") to attract businesses to come to Highland Park. He felt it was appropriate to use funds from the General Fund because this is a unique situation. He stated that he does want to attract businesses but does not want to do that at the expense of what has been a particularly successful budget process.
Mayor Rotering noted that the current proposed budget has an estimated 4% sales tax revenue increase and if the businesses are not given the support they need, that revenue will not be coming in. She stated that 27 full-time employees have been cut from the proposed budget. She noted that she appreciates and supports sustainability but the nation is in a bit of a crisis right now. She discussed how the Council and staff continue to talk about supporting local businesses. She stated that for one year, it is vital that the City does what it can to support the community.
Councilman Stolberg stated that he completely understands where Councilwoman Stone is coming from and just because there is money in a fund, it needs to be juggled and spent. He noted that staff has worked very hard on the current budget in the type of environment we are currently in. He explained that there have been some assumptions that have been made and the question has been asked about the pandemic lasting longer than expected and the revenue is not coming in, even with the reduced projections that have been provided. He voiced his concerns about taking the money from the General Fund. He noted that Highland Park is always a community that likes to lead by example and be leaders, not followers, but maybe things need to be reevaluated and vehicles replaced one year later than expected to allow for the funds to be available to assist businesses. He voiced his support for financial assistance for current businesses and attracting new ones to Highland Park.
Mayor Rotering noted that it is all about striking a balance. She stated that the City is holding off on very important capital projects that need to be done and stretching things out in terms of major spending and major programs. She explained that the State of Illinois may not be providing all of the funding that the City is counting on. She stated that there are several agencies in town that are counting on the City to support them. She explained that the economics are not good right now but here are some things that the City can do to help local businesses.
Councilman Kaufman noted that everyone is in favor of attracting and retaining businesses. He stated that at the same time, sustainability is important as well. He explained that the issues the pandemic are causing need to be addressed in a holistic way. He stated that in the short term, he would be in favor of staff looking for other revenue sources to support businesses. He voiced his concerns of using money from the Sustainability Fund. He stated that he would be interested in hearing what the alternative may be and the City may end up in the same place it is now but he is interested in another review before the money is used from the Sustainability Fund.
Mayor Rotering added that she worked with the City Manager on a scenario if the revenues end up falling short and where those revenues would have to come from. She asked the Council as to how the City can continue to assist with the generation of sales tax revenue or the funds will have to come from somewhere else to pay for first responders, bridge repairs, etc.
Councilman Holleman stated that the City has to do everything it can for local businesses right now. She noted that businesses have been lucky with the weather but they will face a catastrophe when it comes to winter in the pandemic; they are making extraordinary investments in their survival right now and the City needs to do what we can do to support them. She was in favor of expanding the program and reviewing the Sustainability Fund to help pay for it.
Councilman Blumberg completely appreciates the urgency that the Mayor has expressed and agrees with it. He discussed how the reduction in sales tax revenue affected the City before the pandemic hit. He noted that the City must do what it can to support businesses but at the same time, the City has to recognize that supporting small businesses may be futile in the long haul. He requested the review of other funds to see if the money can come from other sources besides the Sustainability Fund.
Mayor Rotering noted that no one is intending to wipe out the Sustainability Fund and asked what that fund looked like five years ago in regards to what was sufficient for the fund.
Councilman Knobel noted that everyone's comments are well received, understood and appreciated. She voiced her concern about being panicked when the pandemic hit and the effect it was going to have on businesses. She discussed how the Façade Improvement grant has worked for businesses and kept businesses in town. She noted her appreciation that maybe the funds should not come from the Sustainability Fund but to the Mayor's point, there is no other money to be found to provide this type of grant money to the businesses. She reviewed the Business Development Budget and explained that the money in the budget pays for one full time staff member and a part time staff member; the rest of the money if from SSAs and TIFs that is not the City's money. She noted that the City should give the businesses a fighting chance to survive. She recommended holding some of the money from the Sustainability Fund as the City works to build a better program and if the money is not used in the next 12 to 18 months, it goes back into the Sustainability Fund. She stated that this is a hard decision but the businesses that are already here are doing what they can to survive and the City should assist.
Councilwoman Stone noted that she agreed with Councilman Blumberg that there are challenges to retail that predate the pandemic and agrees with everyone that the City should do what it can to support businesses and provide incentives to them so they can stay open. She requested that this be sent back to staff to review where the money can come from. She stated that if the funds from the Environmental Sustainability Fund are spent on something that is not the mission of the fund, which is environmental sustainability, it should be done as a loan that can be paid back in the future from the sales tax revenue that is received from those businesses.
Mayor Rotering noted that the City has a policy that the City does not spend down a fund balance more than 10% per year and based on projections, the City is having to break that policy in the next two years due to the current pandemic environment. She stated that she is dedicated to environmental sustainability but she is also a fiscally responsible official, just like everyone else on the Council, and the City needs to do what it can to find the balance to support the economy, the City and local businesses. She asked the Council to review the budget again to see if they can come up with where there are some extra monies that can be used to help local businesses because she feels that there is not another budget where the funds are available. She asked the City Manager if staff can provide information as to what the Sustainability Fund was five years ago.
City Manager Neukirch reinforced that when the proposed budget is put together, it is based on the Council's policy priority, mission and numerous conversations that are had starting back in April. She stated that for years, the City has been delaying vehicle replacements and capital projects. She discussed the Visit Lake County membership and how it has been marked as tentative for 2021. She explained that staff has reviewed everything and asked if the Council would like staff to look at services and programs. She noted that there are some funds available and the $5,000 grants are reasonable. She explained that the enhancements that the businesses are making is a lot and that is why they are looking for the greatest amount of support as possible. She discussed how the Sustainability Fund does staff two positions, both are part time positions. She noted that staff is looking at the City's finances on a regular basis and formally prepare a monthly financial report that is posted on the City's website. She explained that staff will continue to monitor the City's revenues and if revenues are not meeting proposed projections, staff will come back before the Council and discuss an amendment to the budget. She noted that staff does feel they are being fair and conservative in the estimates but it is also making a number of assumptions in a time when the City has not been a pandemic recently. She provided information regarding balances in the Sustainability Fund in past years. She stated that staff will continue to explore if there are additional opportunities. She noted that staff can put together a draft report and recommendation based on the feedback that has been provided this evening and the topic can be brought back before the Council at the next Committee of the Whole meeting where everyone can officially opine on the recommendations. She asked if $5,000 was the best dollar amount per grant or should it be a larger amount; staff is recommending a 50/50 match.
Councilman Knobel stated that the City may need to look at a higher amount and recommends coming up a little bit. She noted that she does not want to give the money retroactively but give it to them for items they are going to need to get through the winter months. She is recommending that money be set aside for a business that may come along that may need money right away and the City can assist quickly.
Councilman Blumberg agreed with Councilman Knobel's statements in going up a little bit on the grant amount. He noted that the façade improvement or interior improvement is usually done to the building and a tenant usually does not have permanent interest if they are leasing their space. He asked if strength and money can be added to this if the City looks to the landlord who is benefiting from the fact that the business owner is sustaining and the landlord's building is being improved.
Councilman Knobel noted that this is not just about improvements to the building but also related to COVID type improvements/enhancements. She stated that this would be for a short time and it would not go on for eternity. She explained that there would be set rules so that not every idea under the sun is presented to staff.
Councilman Blumberg stated that he understood what Councilman Knobel was saying and that some of the money was going to be used for disposable goods, but money was still going to be available for façade improvements and/or interior improvements and that the landlords should also be invested in that because having an active business is what the landlord wants.
Councilman Knobel agreed with Councilman Blumberg and recommended that a Property Owners Association meeting be held to discuss this topic with them.
Councilman Holleman pointed out that with most leases, things need to be undone and what is being done is not necessarily permanent improvements. She stated that she wants the landlords to chip in what they can, it would be great. She recommended bumping up the grant to $10,000 and give the businesses some guidelines to help them through winter.
Mayor Rotering noted that it looks like there are four Council members that are in support and there are three that would like to find funds elsewhere, if feasible.
Councilman Stolberg discussed the contract that was approved at the last meeting to not exceed $60,000 for snow removal and how the City can be creative when there is not endless money to pull from. He noted that the City has to do everything it can to help businesses and if the Sustainability Fund is the source, it is not something that will be used all the time. He discussed the importance of prioritization.
Councilwoman Stone noted that she had mentioned before about using the money like a loan instead of an expenditure from the Sustainability Fund if there is no other source of funding. She asked if the money can be loaned to Business Development and then paid back with the increased sales tax revenue when it is received by the City a few years down the line.
Councilman Stolberg stated that was kind of along the lines of what he was discussing with the snow removal contact and funds that were allocated for that.
Councilman Holleman noted that another option is that the contract could be cancelled.
Councilwoman Stone stated that there has not been a total amount discussed that would be needed for the improvement program.
City Manager Neukirch stated that the analysis has not been completed at this point but staff was looking for direction and policy feedback currently. She noted that the information will be provided at the next Committee of the Whole meeting.
Mayor Rotering stated that it looks like there is further information that is needed both in terms of pro forma potential going forward, whether other funds exist, and a number of unanswered questions that have been posed by everyone. She requested that the Council and staff circle back at the next Committee of the Whole meeting and any other questions may be forward to City Manager Neukirch and Finance Director Logan. She thanked those that raised this as an option to be considered.
City Manager Neukirch stated that the only thing staff is reviewing at this time is programs and services. She noted that if the Council was not interested in providing a specific service anymore because supporting the businesses is more important, that feedback is very helpful. City Manager Neukirch stated that next up were the department budget presentations; they were to be streamlined budget presentations because of the several conversations that have already been had regarding the proposed FY2021 budget. She noted that there was a power point presentation that staff could run through or staff could answer any questions from the Council instead.
Mayor Rotering recommended just going straight to questions unless others are in need of a presentation because there have been numerous one on one conversations regarding all of the budget proposals that were in the agenda packet for tonight's presentation.
Councilman Blumberg stated that he does not need a presentation and does not have a lot of questions. He explained that something that has happened over time as the City has moved over to its current budget form is that it is much easier to understand, even for those who do not read budgets a lot. He stated that the process of having the one on one meetings with the City Manager and Finance Director have been enormously successful in terms of understanding how the budget as a whole works and the ability to understand each departmental budget.
City Manager Neukirch noted that the Visit Lake County membership is listed as tentative because staff is waiting for some feedback from them in FY2021 which is anticipated to be provided within the first quarter as it pertains to if the membership will be able to also include promotion of the City's restaurants and retailers. She stated that based on feedback tonight, staff will not proceed with membership in 2021 and apply the membership dues towards the grant program. She explained that there is $300,000 in the budget that would be given as a grant to the Highland Park Community Foundation based on the agreement that is in place between the City and Foundation. She provided information as to how the money is generated. She explained that those funds would be conditional on whether or not the revenue is available to provide the grant funding. She noted that before the funds are dispersed, staff will report to the City Council regarding the revenue sources available.
Mayor Rotering asked if staff has communicated with the Highland Park Community Foundation that money is 100% absolutely conditional on Ravinia having a season and having the funds generated by Ravinia.
City Manager Neukirch stated that staff has had that conversation and the conversation will be had again. She noted that staff will follow-up with their Executive Director to reiterate the information so that it is clear.
Councilman Knobel stated that she has provided that information at every meeting because it comes up often. She noted that the Foundation understands where the money comes from.
Councilman Holleman explained that was one of the reasons why the City wanted them as the agency because they have an endowment that they can sustain longer term and fill in the gaps when situations like this happen. She commended them for the good work that they have done.
Councilman Kaufman noted that helpful aspects of the budget process include being able to review the draft budget, have one on one meetings with staff and raise questions, to which staff have provided comprehensive answers. He explained that it is an ongoing process that the Council and staff are engaged in.
City Manager Neukirch discussed the funding request for Sister Cities. She stated that in the budget is normally $5,000 and they have requested $8,000. She asked for feedback from the Council regarding the increase.
Mayor Rotering stated that she was unsure as to what the group was doing at this time due to the pandemic. She explained that a significant portion of the funding goes to humanitarian efforts and other programming that may be on pause right now.
Councilman Kaufman noted that he is the Council liaison to the group and he doesn't have all of the detail at this point. He stated that he is supportive of the cause but does wonder, during this time of a pandemic, if the budget can be more aligned with what can be done in this type of environment.
Councilwoman Stone agrees that the request needs to be reviewed and if it can be reduced.
City Manager Neukirch informed the public that the power point presentation will be available on the City's website so the public can take a look at all of the department highlights.
Mayor Rotering thanked the Senior Staff and their crew for their work on presentations and the budget.
CLOSED SESSION
Councilman Blumberg moved the Committee close its meeting to the public, pursuant to the following cited sections of the Illinois Open Meetings Act (5 ILCS 120/2(c)), for the purposes of i) approval of closed session minutes (5 ILCS 120/2(c)(21)); and ii) pending litigation (5 ILCS 120/2(c)(11)). Councilwoman seconded the motion. Upon a roll call vote, the Mayor declared the motion passed unanimously.
RESULT: ADOPTED [UNANIMOUS]
MOVER: Anthony Blumberg, Councilman
SECONDER: Kim Stone, Councilwoman
AYES: Mayor Rotering, Councilman Stolberg, Councilwoman Stone, Councilman Kaufman, Councilman Blumberg, Councilman Knobel, Councilman Holleman
At 7:36 PM, the Committee recessed the public portion of the meeting to meet in Closed Session.
At 7:47 PM, Mayor Rotering reconvened the open session of the Committee of the Whole Meeting.
Members Present: Mayor Rotering
Members Absent: Councilman Stolberg, Councilwoman Stone, Councilman Kaufman, Councilman Blumberg, Councilman Knobel, Councilman Holleman
City Staff Present: Ghida Neukirch, Rob Sabo Also Present: None
ADJOURNMENT
The City Council provided the Mayor the authority to adjourn the meeting. The Mayor declared the meeting adjourned at 7:48 PM.
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