Finance Committee - Regular Meeting

Okay. It's called a meeting to order. Finance committee meeting here on Tuesday, July 19 at 05:30, City Hall Council Chambers. Roll call. We get a motion on the minutes?

A motion to approve.

Second.

All in favor? Aye. Any opposed? Same sign. Citizens to be heard on agenda items? Seeing none, we'll move into the first agenda item which I believe would be mister Singh.

Yep. So the first item we have is an ordinance maintaining the municipal grocery tax for the city of Joliet. So some background, as part of the '26 state budget, the state adopted a provision that required municipalities to adopt an ordinance to maintain this tax. So if we do nothing, the tax goes away. It is a tax a 1% tax on groceries. Statute defines groceries as food or food products intended for human consumption that are purchased for or basically off premise from where they're sold. So the idea is you're buying something that's designed to be consumed out of the place you buy it for. So like at a restaurant, it's designed to be consumed at the restaurant. So these are for groceries. The ordinance is to maintain the tax as it's a tax that's currently on the books.

We generate an estimate of about $3,700,000 annually from this tax. It is not taxed for groceries that are purchased using SNAP benefits. So if you're on government or public assistance for food or groceries, there's no tax on that. And that's pretty much it. I'd be happy to answer any questions. Just wanted to reiterate that it's existing tax keeping the existing tax on the books.

Kevin, did I read this tax has been on the books since 1990?

At least since 1990. In its current form since 1990. It was hard to go back to see how long it's been on. The state last change the state made was in '91.

So was there any other explanation with Pitzker and was there a sunset clause in this?

There never was. That was just something I think is part of the budget that they did to you know, there's many opinions on it but they did as an effort to try and provide relief without impacting the state's coffers.

Thanks. Yeah.

I did some research on it. In 1989, the tax on grocery was 5%, which was the same tax we paid on on grocery because it wasn't separated. In 1990, they separated it out and reduced it by 4% by giving its own classification of 1%. So Cities back then and the state, whatever revenues were lost, were not made up. You adjusted. You you live in your budget. So that's the historically, I think you and I discussed that briefly yesterday.

Yeah. Didn't wasn't able to take a take a look at it. Yeah.

It was 1989. Was the last time it was

5%,

which is interesting because now six and a quarter is the base rate from the state, not five. So even that's gone up. And if I were to state, this is this is about as rare as a unicorn seeing the state in any way, shape, or form toward tax rate reduction. But, of course, most of the revenue in

the vast majority is ours. Right? It's all it's all ours.

It's all it's all municipals. The state receives zero from this tax.

Right. And, you know, with that said, you know, I don't wanna get too many kudos to the state because I was just reading the number of taxes they

approved in

the spring session. There is a bustle tax. So yeah. You know, we're gonna try to save you, you know, the 1% on this, but we're gonna charge them that. I think we just graduated to the highest tax on cell phone service in the nation. It was amazing. You know? There's a whole list, and I didn't write them down. But I forgot what I was gonna ask you, Kevin, but let's go ahead.

No. I was done.

No. Something you had said, I I caught my attention. I can't remember.

Just a a 100% of this revenues?

No. Before that. When you were giving your presentation, before we talked before Pat and I talked.

I know it was Sherry. She asked why or what came about of this so that basically the same thing that the state did it to provide tax relief without impacting the state's budget.

Out of question though. Are you are you finished? Go ahead. Okay. This had to impact all of Illinois. Yes.

Every

city's municipality and and what how are the rest reacting?

So there's roughly, I think about I wanna say about two fifty who have already enacted the tax. Many of our neighbors have. The deadline to get it to the state is October 1. So I anticipate others may still do it. Some communities have enacted other taxes and so they've as an example, Naperville was in the news recently. They did not maintain the grocery tax. They instead increased their home world sales tax by a quarter point. So instead of taxing groceries, they taxed everything else a quarter point. I'll be honest, we looked at that here, that would have generated 5,400,000.0 instead of the $3.07. So we felt that the best op was to keep this tax as opposed to insane and not even Right.

Instead of taxing everything new because, you know, while these are groceries, if you think about the extra tax impacts things that everyone needs to live anyway. Right? You need clothes, you need, you know, toiletries, toothpaste, you know, plates

Stuff.

Stuff, school supplies. Yeah. Yeah. Okay.

Yeah. And I didn't I I didn't believe I don't believe Naperville actually formally voted on that. That was a proposal.

No. They I think they adopted it a month ago. I can double check, but I thought I saw a trib article.

Research and control that. I know that they were talking about possibly doing something. Yeah. But the other thing too is 200 how many? 200 some cities?

Two at least 250. I think it has municipally reported on their website.

And apparently, currently, and it fluctuates from near to year in Illinois between cities, towns and incorporated villages all the incorporated there's twelve ninety eight so quite a few haven't weighed in yet haven't they correct they're probably willing get your slide

it's hard to say I mean the deadline is October 1

And we have no sunset clause or anything on this ordinance.

Correct? No. If we No. At any I mean, you know, defer to legal, but at any point in the future, if the if you maintained this and wanted to keep it, you know, would be able to sunset it. But I don't know if you don't act today whether or not you could act in the future. I think that the absolute deadline to maintain it is this October. Okay.

Secretary position, are you still

I'll I'll just in interest of time Alison approved me to go through this one with her support if any questions come in. So this upgrade to Secretary I to a utility clerk. Secretary, this position is a union local four forty position. It moves it to a higher class. It allows for higher functions and higher level work product to be completed in a move to be more cost effective than hiring outside consultants.

And it does stay then under the four forty question?

It stays under four forty within the utility department.

What exactly is the secretary going to be doing now that you didn't before? And what consultants are going to be able to not pay

at the beginning?

So what we found is that the secretary level position is pretty much just entry level and requires really complete oversight. So we have a lot of programs that we need to have. We have our meter replacement program. There's a lot of data associated with the meters that then requires a higher level of a secretary to then troubleshoot alarms. So that's an example of what this person would be able to do versus a secretary.

We also have a fats, oils, grease program that we're required to start implementing, where we need to manage mailing to over 500 food establishments to do inspections for grease traps. We need someone who's going to be able to manage the mailings and then track and take action on next steps. So it's a position that's going to be doing things like that in addition to typical tasks a utilities clerk does, such as purchasing that's a task that is only performed by utilities clerk and processing of invoices. And so these are like some of the mailings. We had gotten quotes from having like a consultant do and manage the mailings. And it was much more cost effective to have those being done in house.

House. So are we hiring somebody new or are we elevating the current secretary?

So the current secretary is retiring. So we want to take that position and then post it at a higher position.

And are we eliminating the old one? Yes. And the union has signed off on eliminating it?

Yes Kathy has. It's not really eliminating it's just elevating it's replacing the existing position with a higher level position.

Right. What I'm trying to get at is we create the new position what's called?

Utilities clerk.

Do we still have the secretary down here? No. So we're eliminating the secretary? Yes. Changing you know, we're not adding a new position. We're just raising so it's a raise to the person

that is Yeah. It's the same employee count, just of the higher position.

And how much more does it pay?

I believe the differential is about $8,000 Yeah. It's a range of 40 to 75 as the secretary won. And the new range would be 46 to 87. So depending on where they come in at the range, can be a difference of about 6 to $12,000

Keep in mind, the union, if you're currently at a lower class, you can bid. So this will get posted internally first. So someone internally could bid. So you could have someone with years of service who goes in. If it goes to the street, they're at the low end.

So if I understand this correctly tonight, what we're expected to do up here, if we choose to, is to say we can afford to increase payroll by 6 to 12,000, but we can't afford to decrease your your save know, keep your savings on the tax. You see how the people watching are gonna be like you know, because we we had a a very public relations oriented press release put out there scaring people that we're gonna start cutting cops and and and I think I'm rich to this. Cops and firemen. Even back you guys lived in Joliet at the time, both of you. Even back in 2010 when we were near bankruptcy and we had a $26,000,000 not a 3,000,000, $26,000,000 shortfall, which today, fifteen years later, would be equivalent to probably almost 50,000,000.

We didn't cut the cops in. That's a scare tactic to convince people against their own interests. So I'm very upset by that. Not your fault. You guys aren't public relations. So we're supposed to sit up there and say, we can we can afford to add all these new positions, like the new position for what's it called? I can't even think of the name. Special events coordinator for what's gonna be upwards of 200,000 in total, you know, a cost between salary benefits and retirement payments. Public relations, we're adding all these new ones, but we can't afford we can't even give them a 50 to a $150 a year savings on taxes. That doesn't make sense.

Yeah. I think what Allison's saying on this one, though, is we're gonna spend more than the 12,000 with a consultant to do this work. So that's what she's saying is the work needs to get done. If I don't upgrade this this position, I still have to troubleshoot meters, do those mailings. It's gonna cost more than on the high end of this position, 12,000. That's what she's

trying say.

Appreciate it.

Yeah. But every damn position of of nearly over 90 positions we've had since 2022, we've all had good reasons. Mhmm. But we can't afford to get the taxpayer break, just the new employees. And that's not don't give me any nonsense that it's all police and fire because it's not all police and fire of those 90 plus jobs. Half of them a little bit less than half are police and fire critical. A couple, like you and I discussed in your office yesterday, a couple are four forty, so maybe we have two more plows on the street. Maybe. We we didn't nail that down. The rest are brand new positions for doubling the economic development department with no economic development happening. So, no. The the the the this this is frustrating

to me. I understand.

Thank you. I actually went beyond your purvey

Yeah. In my position. Okay.

Moving to the next item. Ordinance authorizing the amendment to the annual budget. So this one is actually I know it's hard to say

that a budget amendment is a good thing, but this is a good thing. So the council adopted and accepted a $1,900,000 grant from the state to fund the Joliet Community Health Program. So this budget amendment amends the budget to accept that money, that 1.9 is revenue, and then allow that money to go out the door for those services of 1,900,000.0. So this is a 100% funded by the state of Illinois, but it allows us to use that grant fund for the purposes it's Think of this as the Thriveworks program.

I would say, is this the mental health

then? Yep.

Which we were funding.

We were funding. So now the state's funding that. So

I think we were funding it at 500,000. Based

on timing, yeah, it could have been as high as 500. Were trying to target about $2.50 a year.

And this will eliminate that expenditure?

Yes.

And how long is this grant guaranteed? One year?

I think it's one year. I think it runs one year at a time, but seems to have a lot of support.

Is it lose it or use or use it or lose it, or do we get the the full amount?

I don't wanna answer. I have to look at the grant agreement but generally grants have a date in which you have to use it by. So Okay. But once again we use it for the services that are rendered. Right. Yeah.

Okay. That's the agenda items before we go to reports.

Would you

like me to make a motion? Motion.

Chairman, I'd like $8.70 $87.65 to be separate. But I'm not gonna support it, so I I don't wanna vote no on the other 20.

K. I'd like to make a motion to move eight seven sixty five to the full council for with this committee's support.

I'll second that motion. All in favor? Aye.

All opposed?

No. Okay. Now, to to take agenda items eighty eight eighty nine and eighty eight ninety to the full council with this committee's recommendation to approve. I'll second that motion.

Oh, I'm I'm I'm not go ahead.

Yeah. You hesitated.

Yes, sir.

All in favor?

Aye.

Any opposed? Thank you.

Reports. So you have the July monthly financial statement. So as I reported, so gaming sales income are all still trending slightly above budget. You know, keep in mind, you know, utility replacement tax, hotel, motel, and cannabis are all trending below budget. Overall, I still hold by my projection that we're going to do slightly better than budget on the revenue side.

Expenses are trending below budget. Keep in mind, historically, happens. The departments do a good job of, you know, delaying expenditures to make sure we're not gonna have a financial crunch, and we have certain one time expenditures that come at the end of the year. So I do anticipate that trending to be closer to budget as we close the year. Based on trends, I still feel that we'll be at or below budget on the expense side for the general fund.

Sewer and water, revenues are trending slightly better than budget and expenses are trending just like the general fund below. But once again, think tracking is gonna bring those closer to budget as Allison's group does more construction projects throughout the end of the year. Parking, no surprises. It still kind of goes according to budget. Revenues are slightly higher than anticipated, but funds still losing money.

Anyone?

Next one you've got just the exceptions once again these are invoices that are allowed in accordance with the code reimbursements, utility bills, and the like. So I'd be happy to answer any questions.

I'm good.

Good. Larry, any exceptions?

No. I got nothing.

Nope. I'm hearing none. Just gonna move to what's next? Travel? Oh, museum. So the museum had just under 6,000 visitors for the quarter, 2,800 were at the prison, and then their concert series was 800 of that number.

Kevin, you may not be able to answer this. It's probably something more for the oh, you're talking about the museum. I'm sorry. I'm thinking real I got a question reality.

Oh, okay. Yeah. Did. Here, none. Can keep going. Travel expenses Really? Returns to has returned to normal? Yeah. It did. And and still well, you have more than this, you know, majority of it is still our public police and fire departments attending, attending, you you know, know, public public safety safety training. Training. And I'll turn it over to Kathy for personnel.

Brief position update so local 04:40 open positions there were ten two have been hired and since the report was submitted and will be on boarded in September and we had one internal transfer for a temporary position other open positions there were six one has been hired and one internal transfer has taken place so that remaining position will be posted for September.

Kathy, the deputy city clerk. We don't have one right now?

That was an internal transfer. Yes.

Okay. So we do have one?

Yes.

Okay. And I think the other deputy went to the finance department or

something. HR.

HR went to HR.

That's all I have.

Any questions for Kathy on that? No. Not, we get a motion

to approve.

Motion to

approve. Second.

Thank you. Go ahead.

Okay. All in favor?

Aye.

Any opposed? None? Seeing none. Any new or old business, not for final action?

Just a quick question, Kevin. Going back to actually backtracking a bit too. So what is the revenues projected? Yeah. And I know you said we're not we're only roughly a little over halfway through the year. You're confident we're gonna have more higher revenue revenues in the general fund as well as the sewer and water fund? How much more?

I hate to peg a number because I don't wanna be stuck to, you know, because it's it's kind of a crystal ball. I haven't come up with an actual dollar amount because once again, one of the challenges that we're facing is this Internet sales tax. So those were being reported as a use tax previously. And so you had that issue that's now all gone to sales, so use is down. Compounding that, the state did a workaround for corporations to get around the SALTs deduction, the state and local tax deduction.

So they were capped at an amount federally and so the state came up with a way that they could pay a fee in lieu of tax. And so the fee was deducted on a on a federal tax return. So they basically got the benefit of the SALT's deduction without the SALT's deduction. That has since been phased out. So we're seeing more income tax, but we're seeing use gone down. It's hard to differ differentiate to what extent that that's evening out. It's not. It's not an exact one for one drop. And so this the projections from the Department of Revenue at the state level is that certain revenues like that are going down. And if I follow their guidance, we're gonna take less money than we did before.

But now when I look at what's coming in, it's contradictory to that information. So it's really difficult to kind of project. I'm going based on kind of month to month history. My gut is telling me based on what I'm seeing, things like general sales, probably because of inflation, are coming in higher and they're gonna offset some of that. It could be a 100,000. It could be a million dollars. But based on what I'm seeing and I'm seeing also things like permit revenue go higher. Well, it's because we issued a permit for, you know, large industrial building, which we don't budget for, but it happened. Why don't we budget for it? It's because we don't know if it's gonna happen.

And if it doesn't, we don't wanna have to make expense cuts. So there's a lot that goes into it. I don't wanna peg would still five months to go in the year, four months to go in the year. Five. I don't wanna peg a number because I don't wanna get help to it. I think it's gonna be over, but don't I wanna say it's gonna be over 100,000 and then it's over 2,000,000 and I was wrong. Or I say 2,000,000 and it's a 100,000.

Can you say where it's at right now? Month to month you know, at this point last year?

Yes. That I can tell you. Reopening my file. Give me a second. So this time last year, we were at a 106,000,000. We're at a 125 right now. 19. So we're up $2,019,000,000 dollars higher this year than last year. For overall revenues? For overall revenues.

And if we come in 16,000,000 lower in the next five months, and we'll be lucky to breakeven. Anything

else on new or old business? If not, public comment. Does anyone here would like to comment? If not, I'm looking for a motion.

Motion to adjourn. Second.

All in favor?

Aye. All right.