Finance Committee - Regular Meeting

Okay, welcome everyone city of Joey at Finance Committee meeting here Tuesday September 15th at 530 in the City Council chambers roll call Councilwoman Sherry Reardon here Councilman Larry hug and myself Pat Mudren are all here Can I get the motion to approve the minutes from our last meeting on August 18th?

So moved. Second.

All in favor? Aye. Any opposed? Same sign. Okay, so I can see we're very fortunate tonight. We have a number of citizens in the audience that I'm sure would like to be heard on agenda item. Or do you want to wait until your item comes up on the vote? We'll wait until it comes up. That would be better. Thank you. agenda items resolution except in the general operating support grant from the Illinois Arts Council for the 2027 grant fiscal year so this is a grant the council has received last few years it supports them for items such as advertising program supplies Commission projects and events and it has no match Can you get it higher than $2,500

So this one is actually a formula grant. This is, unfortunately, we apply for every year, and they determine based on an algorithm of how much we get. It's based on a review, our location to the area. We have in the past gotten up to $20,000, but it just depends on how many municipalities apply throughout the state of Illinois. And the more that apply, the lower the number gets, unfortunately. $2,500 is the minimum amount that is awarded.

happy to get anything so good job thank you thank you questions okay approval of group health dental vision and life insurance renewal for active and retired employees

Elizabeth Abrego director of human resources here to present the renewal for Blue Cross Blue Shield for health dental and vision for 2027 that would be offered to active and retirees As just a reminder. We are a self-funded plan and we also administer pre 65 and post 65 Retirees benefits are approximately 120 non-union employees, 725 union employees, and 745 retirees. And also a reminder, non-union benefits are governed by the ordinance, and then union benefits are governed by their CBA. This year we are offering two additional options for our non-union employees, which would be an HMO offered through Blue Cross Blue Shield and an HDHP. The PPO will remain the same. The average or the approximate increase for the renewal is 7%. The vision, we will be transitioning to VSP for members enrolled in either the 500 and 750 deductible plan, and then there's a four-year rate guarantee. If anyone has any questions, we do have individuals from Marsh here for support.

What was the 7% increase?

That's an overall increase for the negotiated, so what's factored into that is the claim administration, prescription drug rebates, and then the expected claim experience.

So this is an increase in our cost or an increase in the payment from the retirees?

In our cost, how much we pay.

So the cost to the employee stays the same?

The cost to the employee stays the same for union, and then there's the retirees still pay the same, which is nothing, unless they have a dependent.

Is that going up, the dependent?

No. All right.

Kevin, you went to a percentage, though, for the non-union.

Yeah, the non-union pay for everything but the 250 deductible, they pay 5.75% of premium. So that's going to go up based on this increase, roughly about 7%. The 250 deductible gets a little more complex, and basically what you take is what the city funds for the 500 deductible. We fund that share of the 250, and the employee pays the difference. just given the cost profile of that plan. But that's the only change to contributions is for the non-union folks.

And Liz, the reason for adding the high deductible and the HMO was that we have employees that have some interest in those plans?

Yes, over the years we've had employees express interest in alternative plans such as HMO and HDHP. If you're unfamiliar with HDHP, there is a contribution made, which would be dependent on if you're single or family or with spouse.

Yeah, let's cut to the chase. So am I understanding you're adding two more options in HMO?

Correct.

So there's four options now?

There'll be four options, a 500, 750, the HMO and HHP, and then there's also the union plan, which is the 250.

Right. So what is the cost to the employee and or retiree for the 500 plan? $500 plan. Yep.

For the retiree, it's the same that they pay under the 250 plan.

What's the cost on 750?

Same. The retiree cost does not change.

What's the cost on the HMO?

Retirees aren't eligible for HMO. That's only for the workers. Correct. Active employees.

What's the cost to the workers? HMO we had no we had employees during open enrollments and I'm the one who shared with Liz that during the last couple open enrollments I've had a few employees come to me and ask if we ever would consider

offering an HMO. It's just a certain, I'll call it lifestyle, that there's certain groups of employees that are okay with the referral concept, picking a doctor, so that their claims are known and minimal. Really, all they're paying is co-pays with an HMO versus deductible and everything else. So just some employee's preference is an HMO. I

So just for reference, for an employee, for HMOs, $2,609. Whereas for the $500 deductible, it's $3,205. So there is roughly about a $5 a month or a pay period difference. And some individuals would rather go to the doctor and not have to pay a co-pay and not have to worry about being billed anything in addition. So they might want to choose the HMO. Now which plans the high deductible plan you're offering the high deductible plan rate is 2461 for a single and what's the deductible the deductible is $3,500 correct No, mr. Singh is going to fund your account and

with one thousand two hundred and fifty dollars of the thirty five hundred no you didn't give in your yes resting but that still would leave us I'm trying to get twenty two hundred fifty so the young guy who doesn't think he's going in I think he's going to put that money in plus he can then put money considerably more than that I think it's about thirty five hundred dollars I don't remember the IRS cap but thirty five hundred cap in there That doesn't work for me, but for some people.

And by switching to the HMO, Pat, you're saving roughly $5 a month.

Yes.

But the high deductible will grow the contribution every year.

Correct. And the high deductible, you save another $5.

One of the things we learned is there is no, well, you know, one plan fits all and everyone likes the same plan. There is a host of people out there that want the high deductible just to be able to open an HSA account because it does provide some additional tax benefits and to invest monies pre-tax that they can get out before retirement for certain items such as insurance. You know or health related items and the definition is thing is you're aware for the health related items is vast It includes over-the-counter meds certain supplies as an example like contact solution and so there's a certain segment of the population that Likes that plan because it comes with the ability to create that HSA account not for everyone. But yeah, I

and you guys, I'll ask you this question. I don't deal a lot with it. We offer that as a sidebar. The health insurance, I don't deal a lot with it. Why not offer the HSA on the PPO on the existing policies?

Your deductible has to be of a certain amount to qualify for the federal benefits to offer that plan.

The HSA is still a PPO.

Still a PPO.

Okay. Is there any... Is there a health savings account attached to the HMO? Cannot be.

We do offer flex spending, which is offered to all employees. So it's the same concept, but they are kept.

Why do you know that? We have flex spending available for all the policies?

Yes.

I didn't know that. All right, thanks.

There's no other questions. I'd like to probably move on and go into much more detail in the full council chair. That's okay with everybody?

I'm okay. Okay.

Moving on into the approval of property, liability, and worksman's compensation renewal. I think you're still up, Liz.

Elizabeth Abrego, Director of Human Resources, here to present the renewal for the risk management and liability insurance. One second while I pull up the information. So we are requesting renewal of the current plan, which would be roughly a 1% increase to our risk and liability insurance to include cyber insurance as well. Do you have any questions? There's no changes to any of the current coverages.

OK. Thank you. Next item, ordinance amending the 2026 annual budget for the city of Joliet to authorize funding for the settlement of the claim of Castillo versus the city of Joliet. Thank you.

I spoke about this last night. I think everyone remembers, but we have a settlement in Castillo, and basically we're asking a budget amendment just to fund the SIR limit. I spoke about it last night, so I'm just asking a budget amendment to do that so that the SIR is funded.

Just take note. Do you like our wonderful local media after last night's media meeting? The headline, the Herald News. City to pay out $12.5 million. Now we're going to pay out a million. Did you listen to it, Bob? Did you listen to the explanation? The insurance is covering the rest.

Right. Well, one of the publications used my picture, so, you know.

I got a little shout-out on that one.

The paper wasn't here when I left. I must have missed your picture.

You might get groupies, man.

I might. I have to run out of here.

But you talk about yellow journalism just for clicks, right?

Right.

I agree. It should reach the city to pay out $1 million and then explain there's another $11.5 million or whatever, $10 million being paid out by insurance.

The insurance. Good. Everybody's up and out.

Oh, they're paying $12.5 million. No, we're not.

Right. This is what it is. Yep.

We can't control that. Right.

Okay, I'd like to make a motion to move the agenda items 1 0 2 5 5 1 0 2 8 1 and 1 0 2. I'm sorry 1 0 2 8 8 and 2 3 1 8 to the full council with this committee's recommendation to approve second all in favor aye Any opposed?

Thank you very much Moving to reports, monthly financial reports. Kevin?

You've got the monthly report for August, just some highlights. Total revenues continue to be at budget and expenses are less than the general fund. Revenues that are doing better than budget continue to be video gaming sales and income tax. Also want to report that real estate transfer tax now is trending above budget at approximately 3.2 million. Revenues that are trending below, this is the same as prior months, and I think the gap continues to get smaller, but permits, charges for service, and interest income. Sewer and water revenues are now trending above budget, and expenses are below, and parking is going according to budget. Yeah, I feel like that's the first time I've said that And so just moving on you've got the exceptions which is the invoices that we pay in between meetings generally utilities reimbursements and the like and The library, the summary of their report, they had just shy of 94,000 visitors for the quarter. They checked out 111,000, a little over 111,000 items. And they had an additional 25,000 attended just shy of 700 programs. And then you have some of their financial information in there as well.

For calls for service, is that unusual for us to be below budget? Charges for service?

I'm sorry, charges. Yeah, some of it is timing when we invoice. A lot of that is police and fire activities, and so just the invoice timing is usually what it is that we just project through the budget to do more. And so generally the expense, there's a like expense. It's almost a wash. And so if the revenue is down, generally the expense is going to be down as well.

Okay. And, you know, this is my redundant question. I don't even know the answer, but I always like to get it on the public record. Just like the Rialto or the museum, the library does not track how many I repeat visitors. Correct. 90,000 could be 9,000 of 10 people.

If I go out for lunch and come back, it's two visits.

Right. So it could be one-tenth of that if there's 9,000 visitors that come ten times. Correct. So we can't really track them, whether it's really popular or not, can we? No. Okay, thank you. Oh, is there any way we can track that?

It's just a scanner at the door that tracks the number of times somebody breaks the plane, so to speak.

So somebody can stand in the loop. Okay. All right. Yeah.

The one thing they do have is you could have one person check out 25 items, but the number of items checked out would be the only thing I would say is something that is a unique component.

Hey, see if we can get that in the report in the future.

The checked out? That's on there. Sorry, it's at the top of the report. I'm sorry, the mid part of the report. I'm pulling it up just so I

Circulation. Circulation.

When you had the 84 and the 26? I do not include the e-resources because that's people at home going to their website. I focused on in-person visits, and so based on the in-person visits, that's what they've checked out. But full disclosure, a person could walk out with 20 items.

Well, most people walk out with at least two or three. Yeah, yeah. For sure. So you can divide it by at least three.

But that would be the closest representation to what you're looking for.

Okay, thank you.

And then you've got the travel expense report, which is from historical, kind of short. But a lot of public safety, as usual. And I do have, if we have time, I'd like to give a brief just budget presentation, if it's okay, Chairman.

Unless, Sherry, do you have any other old business from new business before? I don't have any. I have nothing. Thank you. The stage is yours, sir.

How excited I am. All right 2027 budget first one of the first presentation of the year So just to recap We did a formal kickoff at the staff level on May 21st where we said, okay, it's budget time. We need you to start entering your items. Those items were due on June 16th. And then we moved right into the budget director and I compiling everything, putting it together so that we could start our budget meetings. Started budget meetings with the city manager, and I'll talk a little bit about this later, a budget committee, starting on July 6th. Then we concluded those, I believe, with the last first round meetings on August 31st. We then, you know, with many budgets, everyone asks for a ton of stuff. We sort through the funding and say, okay, we need you to reduce or get your budget request back in line to a certain number. Those corrections, as we call them, were due September 1st. And so then on September 8th, we met budget committee and city manager to compile and review what everyone had changed. Because remember, we reviewed their original request with city manager and budget committee. And so now, back on the 8th, we reviewed what would be kind of the final, if you will, or the latest draft, I want to call it by name. And then on September 11th, we started preparing it for distribution. We're still going through it. I've got a typo. Looking to distribute that actually next week, not tomorrow. It's being a little hopeful. We've still got some work to do on the budget side on preparing it. And so looking to actually potentially do a draft next week to council.

You mean the 15th? That's today.

That's today. I know. I know. Today's presentation was today. All right, so new things for 27. And so I think as you guys have seen over the past few years, we're always striving to improve on the budget and the city's finances. And so the first one was a budget committee. consisted of the deputy city manager, human resource director, myself, and the budget director. The goal of that committee was to assist the city manager and give another set of eyes beyond myself and the city manager of looking at the budget and meeting with the departments. And so good news, the committee met with all of the departments before they met with the city manager. That was actually at the request of the departments. It was well received by the departments. And so we talked about their requests, things that we had questions about. And it was, quite frankly, a nice addition to this year's process. I think it eased a lot of concerns and made the process go smoother and faster. I'm here in October or September. Normally I'm here in November, sometimes even December. So I think the process is working. The other thing we did was create what I call is a tort or insurance fund. And so the best way to explain this is, It's for auto property and liability, but it's similar to what we did on work comp and health insurance. Basically, we have a pool of expenses that we want to now track separately instead of having it mixed all throughout the general fund. So on our audit, it's a subset of the general fund, but it helps with our tracking so that we can see, is there issues we need to pay attention to, and what's the total cost, similar to where if we were not self-funded, what our claims would be. I'm going to disclose it's not going to be perfect in the first couple years. With anything, we're going to have to get some data behind it, but it is funded out of the general fund from areas like buildings and grounds, fleet for damage or vehicles that get totaled, and then human resources. So this liability renewal will be a transfer out of HR into the TORC fund, and the expense will get paid out of the TORC fund. So really it's just to add more transparency and to be able to track those expenses in one spot to be able to see them, to see how we're doing, to see if we need to pay attention to something. On the capital plan for next year, some notables. Public Safety Institute, so this is the training facility police and fire are working with JJC on. We've got ambulance replacements, continuing the sidewalk replacements that we pulled out last year to give those separately. And then also we have a line, some requests for street resurfacing. we wanna call them residential or neighborhood street resurfacing. You're making sure that we're paying attention to the neighborhoods. That is gonna be in addition to the normal MFT funding, which we'll have for other streets, but in the capital plan, we're gonna call out residential streets. We're also gonna have some plow trucks, police cars, sewer and water, we're continuing the water mains, and we're gonna continue, obviously, to do the improvements to accept Lake Michigan water. We'll have Grand Prairie, and then there's a treatment plant expansion on the west side.

I'll go back to that last screen question for you, Kevin. So what's the number on sidewalk replacements?

So far, we're continuing the same as last year, 2 million.

And what's, did we put a percentage on the amount of, what's the capital number for

Residential neighborhood I don't want to give that still sort through some of that. I'm you know, I've got a number but it You know, I don't want to get locked down to see if we can get that up We're gonna try and get that up internally. So I don't want to give that just yet get it up What do you mean more increase from what I have been plugged in so far? That's why I didn't want to have numbers here because we're still sorting through to see if we can identify some additional allocations

Because last year we had, what was it you and I talked about, $23 million for street roads and bridges?

So overall, the total budget had $23, but as we talked, I think some of that may have been some carryover that we were... And you were going to look into that? Yeah, we looked into it. I think the council got an email from Greg on this year's stuff. So looking at it, what I'm going to present, compiling all of that, is new monies. how much is being spent on the different components.

Right, and I never received any email telling us how much of the $23 million was from last year.

Okay, I'll follow up on that for you.

So I'm trying to get a number, and it's been squishy. I'm trying to get a number. If we have $23 million, that would include MFT, or is that just capital?

It includes MFT.

So if we take roughly $4.5 million out of that $23 million, we're at, like, $19 million. And I'd like to see...

So it includes MFT, and it includes... My 23 that I mentioned last year included MFT, and it included larger projects. like Theodore.

What can we do in the future so that when we roll it over, it's obvious?

That's what I'm working on for this year. I'm only going to talk about new monies. On personnel, no new personnel is being proposed as part of this budget. You've got vacant positions that obviously we're going to fill. We're not in a budget crunch. It's just we're not adding new positions. And so like with every other year, we still are looking at and we'll have things of reorganizations, take this position, make it this, just for the ever-changing environment to make sure that we're using our resources properly. I want to stress, no change in the full-time equivalent. We're not asking to add anything.

Is this exempt and union?

All across the board.

Because we can't just change titles on the union side. So for the 200 and some or 300 employees that we have non-union.

There's taking positions and saying, instead of this, we want to make it this in the future. In the exempt position. And all across the board.

We do that with the union contract?

Your counsel can do that. So more to come on that one. Health insurance, just the last year I gave you kind of the historical health insurance and then just some projections. And so the reason for this slide is just continuing to raise awareness that, and I think you're doing things like you did tonight with the health insurance, to make movement here. And so the idea is keep going on that. Without doing those things, health insurance as a percent of the general fund are going to grow. And the split here I just want to mention is still assuming 52% is active employees, 48% are retirees. Just a high-level overview, summary. Once again, no new personnel. And I just wanted to go back in the past and talk about how it's impacting the future. And so back in 24, we created some guardrails to make sure that we're allocating our infrastructure or our dollars appropriately between operations and capital and infrastructure and vehicles. And those were just different revenue streams, fuel tax for vehicle replacements. We've made gaming revenues of capital funding mechanisms that have been operations. We changed the way we do our revenue projections at the finance department. As I call them, realistic conservative estimates. We don't get ahead of our skis, and we're not going to go, you know, if we think it's coming in at $2 million, we're not going to budget a half million. It kind of packs up. And then we continue to do things to add transparency, to make sure that there's awareness on health care, workers' comp, costs with the insurances, and so just kind of reporting mechanisms just to make sure that everyone understands our conditions. With that, it also brings a different mindset. And so as you raise awareness and stuff, people start paying attention. And so some of those, we talk about increases and I wanna here talk a little bit about decreases. And so since 2024, a number of things have happened where cumulatively over the past couple of years, we've saved, the city has saved money. The biggest item that has saved money is we did a prescription drug audit and we've changed the health insurance. Those two items save significant dollars since 2024. In addition to that, we've seen, in my department's purchasing, competitive bidding and renegotiating of contracts. Across the board, departments are sending more through the bidding portal and engaging with contractors or companies that we do business with to get the prices down. We've also, like anything else, we've gotten grants. They may not be sexy at 2,500, but it's better than zero. And so we get grants whenever we can, and we're going to continue to do that. And then we just adjust our processes to see if we can do more with less. And I think you've kind of seen some of that across the board already, and we continue to make strides there. But the big note, and once again, most of it is drug card and health insurance, but $4.5 million in savings since 2024. That is significant, and it's all possible based on decisions that this council and staff has made.

Question on no new positions. I'm going to drill a little bit deeper, okay? No new positions, meaning that we're going to have the same positions. Obviously, we know what the increases are going to be for the union, because it's in contract. What are the raises that are being proposed for the exact?

Comparable to what the union is.

So we usually budget what the union coal is. And aside from any increase for the current,

salary you did leave a little wiggle room when you said well we could change this position from street sweeper to something else right if we choose to do it but that's also a way to increase the salary i know we possibly but that's not what i can tell you what we're doing is more operational stuff um and i have i'll be honest in my area i've got one position looking to converted from hourly to salary without a salary change just to make it in line with some of the others and then in utilities they've got some just based on what they're seeing workload. And I don't know that it's a change in salary, but it is a change in position type. So it's not being done to change salary. It's being done to adapt to the operation.

But you are saying that the loophole is there to abuse that?

It will be disclosed in the part of the budget if that's happening.

Can you make a note to highlight that if it does?

We definitely can cover it on our one-on-one. Property tax levy, just a reminder, we're about 12.8% of the total bill. The tax levy itself only represents 8.5% of the general fund, so it is not a major revenue for the city. It is a revenue for the pension system, the pension funds. So most of our levy goes to fund our pensions, and we do fund those at 102% of the required obligation to make sure we're not slipping in our requirements. And based on how we're structuring it, just to capture growth, I do expect it will be the fifth year that the actual rate does go down. Process upcoming. Here it is. The first draft to be distributed the week of the 21st to the mayor, council, and department heads, where, once again, we're going to kick off the formal one-on-ones. Where we're going to go through the budget and then hear any things with from Council and then and once again budgets fluid until it's adopted and so things can change as those one-on-ones happen My thought is that regardless of that, I'll be here September 5th just talking about the first draft to kind of release it to the public, if you will. And then we'll also talk about property tax levy. And the reason for that is- October 5th. October 5th. You said September 5th. I'm sorry.

Okay.

First time up, you got me. You threw me off. So October 5th, we have to talk about, and technically the statute says set the levy 20 days before it's adopted. And so it's not an adoption. The way I equate it is you tell me how much to put in the ordinance. And then we have to do that wait 20 days before you guys can adopt it So we're going to talk about that and do that on October 5th What I'd like to schedule It stands now of the public hearing on the budget for October 20th The budget can be a modified change in any way the council sees fit after the public hearing Public hearing though the sole purpose of that is we're going to give the public a draft and then they're going to comment on things in the budget I'll be up here again giving another budget presentation. And then October 20th will be the first option that you guys will have to adopt the budget. It has to be adopted by the end of December this year. Then in November 3rd, we'll bring the formal tax levy to council for consideration. That one has to be adopted by the fourth Tuesday. I would ask that you don't wait that long. of December, and we'll also have the two SSA levies that we levied the same amount every year, and then the bond abatement ordinance, which is the GO bond so that they don't go on the tax rolls since we have other funds to pay those. And that is my presentation.

Now, the levy last year, I'm trying to remember, didn't we do a partial levy increase? In other words, we captured new construction and anything you might say, expansion, but we didn't increase based on like residential. Yeah.

So we, we structure it. So the way I try to structure it, I look at permits, talk to the assessors and the new construction coming on the tax rolls, you know, you built a house, the warehouse came in. Right. I take that value, take our rate and say, okay, I want to capture that. What will our total levy go up? That's how I've been structuring it. And so that's why I can say, well, the levy went up, but, Hopefully in the fifth year in a row, the rates are going to go down. And so the idea is because really what we're doing is we're charging that new property their share of what everyone else paid.

But we're not raising the share of the existing residents.

That's our goal is to not do that. Correct. And that's how the rate goes down in that. So far, based on permitting data, my recommendation is going to be to do the same thing, and I expect it will be the fifth year with the rate decrease.

So essentially we're kind of freezing a portion of the levy, anything that's not new.

Yes.

And then also, too, did we go through any exercises, staff, you know, with this new committee, an exercise in actually trying to find out ways to cut?

Yes, your finance guidance answer is always going to be yes And I think you see a lot of areas that are not increasing But still getting the same amount of work done or some areas cost going down and so I think we're always trying to look for that But to say for certain that in every area that we've accomplished that I don't know we'll ever get to that point But we always do look for that and you know those consultants out there that can help staff do that

Can you look into those types of consultants? And I don't know that I'll have enough people on the council, but it might be somewhere to go because we've never really cut anything in 15 years. And other people are cutting because people are hurting out there. So every year it's expanding, and it's like everybody puts their hands on their hips and says that, hey, you have to expand. No, you don't.

Melissa's got her hand up.

Sure. I'll take the assist. That's up to the chairman. Absolutely.

Okay, so in 2026 we were budgeted for a staffing study and that was completed so it's in the draft stage at this point And will be presented to City Council in the near future before the end of 2027 He's talking about efficiency consultants actually say you need to do this to reduce your cost

Where we can make the cuts.

But not staffing.

Well, if that expert actually says, well, no, you really don't, your staffing consultant was very generous and said you need five new people, you don't need those people. Yeah, we need a budget consultant because we've never really, I'm not satisfied with any process we've done in the last 10 or 15 years to cut. You know, it would be different if somebody came up to us and said, you know, councilman, we hired this very good professional service to help cut, and they said, no, your budget's perfect. I don't think that's going to happen, but it could. But we don't even try that. And, you know, it's great that you have a committee, but everybody on that committee is the head of a department that wants and needs more money. Okay? They have self-interest involved, whereas an outside consultant has no self-interest. They're hard and fast on the numbers.

I understand. Thanks. We'll look into it.

thank you for letting me present tonight thank you for the update moving ahead public comment is there anybody in the public want to comment on something that was not on the agenda seeing none motion to adjourn can I get a second all in favor aye motion passes