The Rock Island City Council met in reconvened session on Saturday, February 23, 2008 at 8:00 a.m. in the Personnel Conference Room of Rock Island City Hall. Present were Mayor Mark W. Schwiebert, presiding, and Aldermen Terry M. A. Brooks I, David A. Conroy, Dennis E. Pauley, Stephen L. Tollenaer, Margie Mejia-Caraballo, Joy Murphy and Charles O. Austin III. Staff present included City Manager John C. Phillips, Finance Director Bill Scott, and Assistant to the Finance Director Niki Fallon. Other staff entered the room at various times of the morning pertinent to their presentations.

BUDGET OVERVIEW

Finance Director Bill Scott opened the discussion and provided the City Council with an overview of the proposed budget for fiscal year 2008-2009. Mr. Scott stated that a Public Hearing on the budget is scheduled for March 3, 2008 with the adoption of the budget on March 10, 2008. Mr. Scott noted that there will be a recommended change to the property tax levy; and any adjustments will be incorporated into the final budget Ordinance on March 10, 2008. Mr. Scott explained that the proposed 2008-2009 budget incorporates the first year funding of the Five Year Capital Improvement Plan in which $15,206,716.00 is budgeted this fiscal year for capital and infrastructure maintenance projects; and a total of $78,696,065.00 is planned for the next five years. The 2008-2009 budget also includes the Community Development Block Grant Program, other City funds and expenditures totaling $4,090.000.00 from riverboat gaming revenues.

Mr. Scott stated that the General Fund finances many of the basic services provided by the City including police and fire protection, street maintenance, sanitation services as well as support services of the Finance and Personnel Departments. The 2008-2009 General Fund is budgeted at $30,560,181.00. This is a 1% increase from fiscal year 2008. Personnel costs increased by 5%, Supplies are down $361,323.00, Services are down by $81,294.00 and Capital is down by $147,300.00.

Mr. Scott noted that Personnel costs are approximately 68% of General Fund expenditures followed by Services, which are 23 % of the General Fund; and supplies are 4% of the General Fund expenditures. Mr. Scott stated that salaries are 52% of the total increase in Personnel costs; with Health insurance showing an 11% increase and Pensions at a 3% increase. Mr. Scott pointed out that in the area of Supplies, last year there was $236,500.00 for City Hall windows and $85,000.00 for City Hall fire alarms. Mr. Scott commented that these two (2) items are not included in the General Fund, but are carried over in the fiscal year 2009 budget as capital improvement fund projects. Mr. Scott stated that several major increases in the Services area are $38,398.00 for general liability insurance; $102,012.00 for waste disposal; $62,500.00 for salt dome roof repair; $162.500.00 to remodel the police locker room and $153,087.00 for fleet services charges. Mr. Scott affirmed that in the area of Programs, the $50,000.00 that is allocated to social service agencies is included as a Community and Economic Development program.

Mr. Scott explained that the Total Budget includes the General Fund, Enterprise Funds, Internal Service Funds and Restricted Funds. The 2008-2009 budget after eliminations is $81,073,198.00. This is a 2.0% increase from the 2007-2008 budget. The greatest increases are in Personnel, which is up 4% and Services up at 7%. The greatest decreases are Programs, which are down 7%, Capital down at 6% and Transfers down by 8%.

Mr. Scott reviewed the Total Budget in terms of where the funds come from in which property taxes are at 13%. Mr. Scott noted that the property tax levy has been decreased from what was adopted in December by $112,000.00. Mr. Scott stated that the City was able to reduce this by eliminating an increase in General Fund operations. Mr. Scott commented that Parks, the Library and Pensions rely on the property tax revenues.

Mr. Scott offered that Local and State taxes are 20% of the total budget; and local taxes are down 2% while state taxes are down 5%. Mr. Scott noted that the largest change in Gaming is due to the decrease in revenue. In the area of Charges for services, which is 19% of the total budget, these reflect increases for utilities, wastewater and storm water services. Mr. Scott commented that Investments and Bonds are 21% of the total budget; and it was noted that two (2) bond issues are planned for May 2008, and January of 2009.

On the issue of where the funds are distributed, Mr. Scott offered that 38% of the total budget is Personnel with Services at 24%, Capital at 12%, Supplies at 5%, Debt service at 2%, Contingency at 12%, Programs at 5% and Other at 2%.

Mr. Scott then reviewed the remaining layout of the budget documents which included the budget digest, financial and comparative trends, and miscellaneous tables. After Mr. Scott finished the overview of the 2008-2009 budget, each scheduled department presented their budget to Council.

MARTIN LUTHER KING CENTER

Martin Luther King Center Director Jerry Jones stated to Council that the King Center will see an overall decrease of 16% for fiscal year 2009. Personnel costs will increase by 6% due to the benefit and merit increases. Services will increase by 33%; Supplies will increase by 106%; and the King Center will decrease other expenditures by 24%. Mr. Jones offered that Administrative costs will increase by 7%.

Mr. Jones explained that the King Center continues to seek diversification in its funding streams to ensure its financial viability. Mr. Jones pointed out that 15 sources of income are cited for fiscal year 2008-2009 with 12 of those being grants. The City of Rock Island has made operational costs a priority; and this budget proposes an $80,000.00 transfer from the General Fund to address building operations.

Mr. Jones acknowledged that the King Center will be starting a capital campaign for 1.6 million dollars in fiscal year 2009 to expand and renovate the building. There will be an effort to raise $300,000.00 for program endowment. Mr. Jones also indicated that the Board would be charged with creating a foundation to raise further funding for programming. Mr. Jones concluded that with these efforts and the City’s commitment to expansion, this will be crucial to the King Center mounting a successful campaign. These efforts display a long-term goal in dealing with rising costs and being able to provide opportunities to a diverse population in the community through a variety of programs and services.

POLICE

Chief John Wright along with Captain Don Reichert and Captain Scott Harris addressed the Council and presented the fiscal year 2008-2009 Police budget. Chief Wright stated that in fiscal year 2007-2008, the Rock Island Housing Officer program received national recognition from the National Association of Housing and Redevelopment Officials for the City's innovative community policing efforts. Chief Wright commented that the Rock Island Housing Authority obtained a grant to start the Gang Resistance Education and Training Program. Chief Wright stated that during 2007, there were no fire arm related homicides. The Chief also commented that contracts with FOP, Command and ASFSME B were completed.

Chief Wright stated that there is no change in the level of staffing for 2008-2009. It was noted that the department is currently reviewing the organizational hierarchy to improve communications and supervision. Also included in the budget is an agreement with the Parks Department to continue to allow the employment of an officer for Whitewater Junction in the summer months. Chief Wright stated that the budget is at approximately $11 million dollars. Supplies have an increase of 13% due to additional equipment for the Auxiliary Officers and equipment for the Narcotics Unit and Emergency Response Team using State Drug funds. The Other category as Chief Wright stated, decreased due to fewer expenses related to the DARE fund and a reduction in the annual payment to the Sex Offender Management Board. Chief Wright offered that expenditures in the U.S. Justice fund have increased due to a rise in Justice Assistance grant funding.

Captain Don Reichert stated that the two (2) revenues that will decrease are in the Special Police Forces and DUI Fine Law fund. It was noted that the DUI fund had been overpaid. The department will no longer receive this revenue until it is paid back, which will occur in June of 2010. Other areas where revenues will increase are in Code Hearings fees/charges and Court Costs fees/charges.

Captain Reichert stated that the funding level for the Justice Assistance grant was increased in 2007-2008 and it is anticipated that the funding level will continue in fiscal year 2008-2009. Also, the two traffic related grants from the State of Illinois, (the Roadside Safety Check grant and Speed Enforcement Program grant) will be increased in fiscal year 2008-2009 due to additional funding being available for these grants that provide for special traffic enforcement assignments.

COMMUNITY AND ECONOMIC DEVELOPMENT

Community and Economic Development Director Greg Champagne accompanied by Planning and Redevelopment Administrator Alan Carmen, Special Projects Manager Sally Heffernan and Chief Building Official Tom Ayers addressed Council and presented the department's 2008-2009 budget.

Mr. Champagne stated that the proposed fiscal year 2008-2009 budget shows a 4% decrease over the 2007-2008 budget. The decrease results primarily from a reduced allocation of gaming funds. Projects and activities proposed for funding with gaming dollars include; $200,000.00 for demolition of substandard structures; $185,000.00 for rebates to new homeowners and commercial development projects; $150,000,00 for the non-TIF district facade improvement program; $150,000.00 for Community Marketing; $100,000.00 for unanticipated economic development projects; $65,000.00 for the construction of one gateway sign; $55,000.00 to support the expansion of retail activity in the downtown; $50,000.00 to support social service agencies; $20,000.00 to support the coordination of events in the downtown; $16,270.00 for economic development activities by Renaissance Rock Island and $10,000.00 to support green initiatives.

Mr. Champagne offered that another significant source of support comes from Tax Increment Finance Funds (TIF). Various Major TIF supported projects and activities include $10,000.000.00 to support design and engineering of Armory Park; $400,000.00 for the redevelopment of the McKesson Property; $200,000.00 to assist with redevelopment of the Old Lincoln School property; $200,000.00 to assist with the redevelopment of the Rocket Theater property; and $135,000.000 for the implementation of Artsplan .

Mr. Champagne explained that department staff would be responsible for administering over $3 million dollars in grant funds. Various grant funds include; USEPA Brownfields Assessment grant of $200,000.00; US Housing and Urban Development Lead Based Paint grant of $1.9 million dollars; and Illinois Historic Preservation grant of $15,500.00. It was noted that this is exclusive of the 1.15 million CDBG entitlement grant. Mr. Champagne also commented that the recent changes in the block grant have not been incorporated into this budget. Mr. Champagne pointed out that a total of two million dollars has been budgeted for neighborhood development programs targeted primarily towards providing home rehabilitation and lead based paint remediation assistance to low-moderate income homeowners. Mr. Champagne stated that the overall budget is down 4 % this year. The Personnel category reflects an increase due to salaries and benefits including increases in health insurance costs. There is an 8% reduction in Supplies due to anticipated activity levels and cost effective purchasing methods. Services has a 20% increase due primarily to the budgeted cost for engineering and design services associated with the Armory Park project. Mr. Champagne stated that in the area of Programs, this category shows a decrease of 9% due to a reduction in budgeted funds for the McKesson project; the anticipated completion of the DeSoto project; and a $100,000.00 reduction in the amount of funding proposed for economic development special projects.

Mr. Champagne offered that that the Inspection budget continues support for the Rental Residential Housing Inspection program. Support for this program is derived primarily from CDBG funds with some program income from fees charged for inspections and licensing. Mr. Ayers stated that discussions continue regarding rental fees and how they are collected. Mr. Ayers noted that they are reviewing policy changes on this issue and on permitting.

LIBRARY

Library Director Ava Ketter along with Assistant Library Director Amy Penry presented the Library’s fiscal year 2008-2009 proposed budget.

Ms. Ketter affirmed that for the 2008-2009 budget, that in the category of Personnel, there is a 5% increase due to negotiated salary increase for a permanent part-time clerical position at the Southwest Branch. Ms. Ketter noted that the position allows for that branch to increase service hours from 40 per week to 56 ½ hours per week. Ms. Ketter offered that Supplies will remain the same. Services will be reduced by cutting equipment service contracts by half and lower heating costs due to the installation of a new boiler at the Main Library. Ms. Ketter pointed out that costs for projects completed in the past fiscal year were not carried over. Ms. Ketter noted that in the Other category, there will be an increase of 4% by Board policy to keep up with inflation and demand. This category consists of library materials including books, periodicals, DVD's etc. Ms. Ketter indicated Capital will increase due to replacing the Main Library's chiller system, which is funded through Gaming. The Contingency category includes $20,000.000 mandated by the Library Board.

Ms. Ketter concluded by stating that the major priorities for fiscal year 2008-2009 include; complete construction of the Main Library's canopy at the south entrance; replace the chiller (air conditioning) system at the Main Library; update the Library's Technology Plan; conduct a patron survey; and conduct a formal Board planning session and update the Library's goals and objectives.

FINANCE

Finance Director Bill Scott along with Assistant Niki Fowler and Accountant Tim Banks presented the Finance Department’s budget for fiscal year 2008-2009. Mr. Scott stated the department's goals and objectives; and offered that the Finance Department would focus on customer service. The addition of a bi-lingual Customer Service Representative has proven to be an asset to the Finance Department as well as to the City of Rock Island.

The department will monitor banking services to maximize investment income and efficiency. Mr. Scott also stated that they will continue to improve processing efficiency utilizing electronic transmission of financial data. Mr. Scott pointed out that the department has made much progress towards electronic imaging; and the department is very close to implementing the electronic signature process at the front window.

Mr. Scott offered that the centralized billing and collections systems have seen increased growth. Workloads have increased this year with annual registration, and inspection fees from the rental inspections program. Also, Sunset Marina fees, special assessments and various other billings continue to increase. Mr. Scott explained an example of the new customer billing form; stating that the department is working on eliminating the miscellaneous billing system and utilizing one form for all billing purposes. This will enable customers to go on-line (E-bills) and see all of their bills, which will be more convenient for the customer. Also, E-doc will allow the department to save documents directly to a customer’s account. Mr. Scott pointed out that this will be under one billing system in which all of the information becomes electronic and immediately accessible. Mr. Scott affirmed that the Finance Department would continue to increase the volume of electronic transmissions of financial information to enhance services and improve efficiency.

Mr. Scott stated that the new financial software project will start on April 1^st of this year. The Financial side will begin on April 1^st, followed by implementation for Personnel in January of 2009. The Utilities part will start in October.

Mr. Scott noted that no staffing changes are reflected in the document. However, changes will be made due to an employee leaving in the next several months. Mr. Scott stated that the total budget is up 5%; and this includes the General Fund and Contingencies. Mr. Scott pointed out that there is a transfer to the Martin Luther King Center from $50,000.00 to $80,000.00; and Mr. Scott offered that if the transfer and contingencies are backed out, the budget will reflect a 3 % increase.

Mr. Scott concluded that Personnel costs are up due to health insurance costs and merit raises. The increases in Supplies and Services are based on necessity and experience. The Contingency is set by City Financial Policy at 1% of budgeted expenditures, and is based on a total General Fund budget in excess of 30.5 million dollars.

Discussion followed regarding contingency and depreciation. Mayor Schwiebert inquired upon Mr. Scott to come back at a later date regarding clarification of the contingency factor.

INFORMATION TECHNOLOGY

Information Technology Services Department Director Claire Gordon and Assistant Director Tim Bain addressed Council and provided information regarding the fiscal year 2008-2009 budget.

Ms. Gordon stated that by category of expenditures, the Information Technology Services Department's budget has increased 34%. This increase is due to the software replacement capital project . In the category of Personnel, there is an increase of 5%, which is due to salaries and benefits. The supply category shows a 14% decrease due to the completion of the Public Works Time Tracking and the Finance Edocs. Ms. Gordon noted that there is an increase of $14,000.00 to provide mobility for some of the Public Works staff for Leak Detection and other field data collection. Ms. Gordon affirmed that there is an increase of 2% in the Services category. In the category of Other, there is a 9.0% increase primarily due to the increase of $6,769.00 for cooperative efforts.

Mr. Bain acknowledged that the Quad City Area grant has been ongoing for several years. This grant will help to improve public safety and communication. Mr. Bain offered that the network build out will take place in the summer of 2008. It was noted that this network is designed to connect essentially all of the local public safety points throughout the Quad City area.

Ms. Gordon then explained that the Capital category shows an increase of $547,200.00. This increase is for the Communications Infrastructure Phase IV, which accounts for $94,000.00; and there is an increase of $9,200.00 in hardware to replace Public Works large format printer/copier/scanner.

Ms. Gordon offered that the Transfer category shows a 7% decrease. This decrease is attributed to $4,000.00 in the transfer from the Capital Improvement fund for equipment, and the increase of $38,000.00 in the transfer from the Gaming fund for applicant tracking software and the Public Works large format printer/copier/scanner and toughbooks for greater mobility.

Ms. Gordon concluded by stating specific projects that will be a priority for fiscal year 2008-2009. These projects include; continuation of the Communications Infrastructure Enhancement with Phase IV and participation in the Inter-Agency Cooperative efforts; finish deployment and training of staff on new Microsoft Exchange E-mail; video surveillance for public safety vehicles; begin the voice over IP implementation; and the implementation of enterprise software (financial, human resource, utility billing and Ecare).

RECESS

Following discussion, a motion made by Alderwoman Murphy and seconded by Alderwoman Mejia-Caraballo to recess to Saturday, March 1 at 8:00 a.m. CARRIED on a Voice vote.

The meeting was recessed at 11:59 a.m.

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Aleisha L. Patchin, City Clerk