City Council — Naperville, IL
Date: 2022-10-24

400 S. Eagle Street
 City of Naperville Naperville, IL 60540



 Meeting Agenda

 City Council

Monday, October 24, 2022 7:00 PM Council Chambers


 Budget Workshop 1



A. CALL TO ORDER:

B. INTRODUCTION:

C. PUBLIC FORUM:

D. PRESENTATION:
1. 22-1255 2023 Annual Operating Budget and Capital Improvement Program
 Workshop #1

E. ADJOURNMENT:
 Any individual with a disability requesting a reasonable accommodation in order to
 participate in a public meeting should contact the Communications Department at least
 48 hours in advance of the scheduled meeting. The Communications Department can
 be reached in person at 400 S. Eagle Street, Naperville, IL., via telephone at
 630-420-6707 or 630-305-5205 (TDD) or via e-mail at info@naperville.il.us. Every effort
 will be made to allow for meeting participation.




City of Naperville Page 1 Printed on 11/10/2022

400 S. Eagle Street
 City of Naperville Naperville, IL 60540



 Meeting Minutes

 City Council


Monday, October 24, 2022 7:00 PM Council Chambers

 Budget Workshop 1


A. CALL TO ORDER:

 Chirico called the meeting to order at 7:03 p.m.
 Present: 9- Mayor Steve Chirico
 Councilwoman Jennifer Bruzan Taylor
 Councilwoman Patty Gustin
 Councilman Paul Hinterlong
 Councilman Ian Holzhauer
 Councilman Patrick Kelly
 Councilman Paul Leong
 Councilwoman Theresa Sullivan
 Councilman Benjamin White




 Also Present
 City Manager, Doug Krieger; Deputy City Manager, Marcie Schatz; City
 Attorney, Mike DiSanto; Director of Community Services/City Clerk, Pam
 Gallahue; Fire Chief, Mark Puknaitis; Police Chief, Jason Arres; Director of
 Finance, Rachel Mayer; Director of Human Resources, James Sheehan;
 Director of IT, Jacqueline Nguyen; Director of TED, Bill Novack; Director of
 Public Utilities - Electric, Brian Groth; Director of Public Utilities - Water, Darrell
 Blenniss, Jr.; Director of Public Works, Dick Dublinski, Director of
 Communications, Linda LaCloche; Budget Manager, Ray Munch

 Daily Herald, Naperville Sun, NCTV-17


B. INTRODUCTION:

C. PUBLIC FORUM:

D. PRESENTATION:

1. 2023 Annual Operating Budget and Capital Improvement Program Workshop #1

 Chirico passed the floor to City Manager Doug Krieger to begin the budget
 presentation. Krieger began by acknowledging staff for the work done in
 preparing the budget and thanked Council for continued guidance. He then
 provided an overview of the budget discussion, including the City’s focus on
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City Council Meeting Minutes October 24, 2022

 Priorities, Performance, and Progress; what will be covered in each workshop,
 and how the budget is divided in the slated presentations. Following the
 overview, Krieger passed the presentation to City Finance Director Rachel
 Mayer.

 Mayer highlighted the proposed 2023 budget which totals $603.32 million, an
 11.6% increase from the 2022 budget. She indicated that operating expenses
 are only increasing 5.6% as the remainder is tied to increases in the capital
 improvement items, increased investment in the City’s infrastructure, and the
 impact of inflation on operating items. Mayer impressed upon the fact that even
 though the budget is increasing, there are no requests for new taxes or fees
 proposed to support the requests as projections are aligned with available
 resources.

 Moving to the summary of revenues and expenses, Mayer indicated that most
 increases in expenses are driven by capital improvement requests, purchased
 services, and transfers. Purchased services are increasing because of
 spending in the architectural and engineering space, transfers from the Water
 Utility to the Phosphorus Fund and noted that some capital items will be funded
 through debt issuances in accordance with the debt policy.

 Councilwoman Sullivan requested clarification on how the city is paying for the
 increases without increasing taxes. Mayer responded indicating that staff has
 plans in place to accommodate the expenses from sources such as sales and
 local taxes which have seen increases in revenues within the past year.
 Councilwoman Sullivan also questioned if the amount of debt in consideration
 for issuance in 2023 is in line with previous years. Mayer responded that no debt
 was issued in 2022, and that 2023 debt issuance remains in line with typical
 issuances of about $10 million each year.

 Councilwoman Sullivan requested if the ARPA funds, though not reflected in the
 presentation, are earmarked for anything. Mayer responded that there are
 currently no recommendations for that funding and would return to Council with
 a comprehensive discussion in 2023. Councilwoman Taylor asked if there is a
 point where the funds would need to be returned if not appropriated, to which
 Mayer responded yes, the funds will need to be obligated for use by the end of
 2024 and spent by the end of 2026

 Councilman Holzhauer questioned what is the current interest rate for Water
 Capital borrowing to which Mayer responded an estimated 2-4%.

 On the issue of the EAV and property taxes, Councilwoman Gustin asked if
 ARPA funds could be used to offer tax reduction/ relief on property taxes. Mayer
 indicated that those do not fall under the eligible use of ARPA funds.

 Returning to the presentation, Mayer continued to explain the fund balances
 denoting that all the funds are balanced. From the Water Utility Fund, more
 than $16 million was transferred to the Water Capital fund. The Self-Insurance
 fund transfer represents a one-time transfer from the General fund resulting
 from unrealized liabilities. Water Capital will be discussed in the second
 workshop on November 9th. Mayer moved on to point out that the Food &

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 Beverage Fund is increasing as a direct result of the industry returning to
 pre-pandemic levels. Councilman Kelly requested the projected actuals for
 2022.

 Moving on to notable changes in the budget, Mayer highlighted the eight
 personnel requests that are part of the 2023 budget proposal, noting the
 process by which each position is evaluated. Next, she moved on to discussing
 the capital projects and increases in the Water and Electric capital accounts.
 Mayor Chirico questioned if the water rate study had taken into consideration a
 surcharge each year, to which Mayer responded yes, and that the rate study is
 set to be evaluated at the end of 2023.

 Councilman Kelly asked staff to specify the nature of the discretionary areas in
 the Electric’s capital program and to detail if Federal funds will cover all the
 requests, and if not, where will the $9 million be sourced from. Mayer responded
 that the City is working with West Monroe Partners to identify projects that are
 best suited for those Grant funds. Councilman Kelly questioned what the
 matching requirements are, if applicable, that the City will be required to fund.
 Brian Groth, Electric Utility Director, responded that funding opportunities will not
 be released until late November 2022 and that the estimate is 25% City/75%
 Federal is possible. Mayor Chirico questioned if there will be a reduction in the
 $9 million if federal funding does not become available to which Groth
 responded, yes. Councilwoman Sullivan queried if West Monroe were sourcing
 other grants related to Sustainability, to which Groth responded that the grants
 being evaluated are not related to sustainability. Councilman White inquired
 whether the new CIP requests for both Water and Electric were funded by rates
 or taxes, to which Groth replied “rates”, except for the $9 million requests.
 Darrell Blenniss, Water Utilities Director, replied both rates and debt issuances
 for the Water capital.

 Mayer continued the presentation with the Economic trends and how the budget
 is affected by factors including inflation, which was at the highest level in 40
 years. She pointed out that the city has seen costs increases in various areas,
 with the greatest impacts in departments that utilize supplies, materials, and
 contracted services. Looking to technical changes in the budget, Mayor pointed
 out the items that accounted for more than one-quarter of the increases in the
 General Fund, mainly the additional self-insurance fund transfer, the elimination
 of the vacancy factor and the movement of the Body-worn camera costs into
 the General fund from the Capital Projects fund and finally, that the City will
 begin the use of phosphorus funds in 2023 to offset projects at the Springbrook
 plant.

 Councilwoman Sullivan asked to clarify that the transfer is only for phosphorus
 items and for staff to indicate how the cost is being accounted for. Mayer turned
 to the conversation to Blenniss who responded that the projects in 2023 are
 necessary to meet phosphorus limits . Councilwoman Gustin requested that
 staff compare the vacancy factor against the proposed FTEs.

 Moving to property taxes, Mayer noted that the EAV was higher than the
 estimated 2 percent and the rates will remain unchanged. This is the sixth year
 that the city will maintain a rate below 0.7, with the estimated rate being 0.6743.

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 Mayer turned the presentation back over to Krieger, to continue with the topic of
 Keeping Naperville safe.

 Krieger highlighted the general revenue sources that fund Public Safety as well
 as revenues generated on a department level. Chirico asked for clarification on
 whether the fees generated by specific departments are used for their specific
 purposes or are counted in the General fund. Krieger clarified that revenues are
 attributed to the fund. Gustin requested a chart of residents versus
 non-residents who were transported/ treated by Naperville ambulance.

 Moving to the personnel requests, Chirico asked if the high-tech crimes
 sergeant will be sworn personnel or will be assigned to the Information
 technology team, Krieger replied it is a sworn position. Councilman Hinterlong
 asked to discuss the radio project. Krieger responded that the item is upcoming
 in the following slides. Gustin asked if there are currently any technology that will
 allow Officers to take notes without the use of paper. Jason Arres, Police Chief,
 responded that the use of transcription on the body-worn cameras can dictate
 both the conversation and the interaction. Councilmen Kelly and Hinterlong
 inquired of the Police & Fire Chiefs on whether adequate staffing is available to
 operate the drones. Both responded favorably. Councilman White questioned
 the issue of CRT-trained personnel. Krieger responded alluding to the FTE’s
 that were requested by Fire but not allocated in the budget pending the outcome
 of legislations. This item will be brought back to the Council.

 The presentation continued to vehicles and public safety equipment.
 Councilwoman Sullivan asked if the $930K police replacements were net of
 trade-in -value. Mayer pointed out that staff has modified the practices around
 selling vehicles on the open market and will keep vehicles in pooled fleet
 pending the issues with supply chain and lead times.

 The discussion moved to public safety technology on the CAD/RMS
 replacement and the radio network system. Following a series of discussions
 on its compatibility with other systems, costs, the deadline to implement, and
 funding sources available to support it, the presentation moved on to the topic of
 supporting effective government.

 Marcie Schatz, Deputy City Manager opened the discussion with a focus on the
 requested Deputy City Attorney and Assistant to the City Manager positions.
 Councilman Kelly requested additional information identifying the need for the
 position.

 Citywide initiatives, technology projects, and healthcare costs were also
 discussed with Council requesting additional information, programming, and
 professional development surrounding the budget request for the Diversity,
 Equity, and Inclusion (DEI) initiatives. Councilwoman Taylor requested more
 information on expenses related to DEI initiatives. The merit pool for non-union
 staff was also addressed. Councilman Hinterlong indicated he is not in favor of
 the requested 4% percent. Mayor Chirico recommended a 3%. Councilman
 Kelly requested staff return with comparable data from other communities.


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 Krieger summarized the presentation and discussed the upcoming workshop
 meeting dates of November 9 and 21.

E. ADJOURNMENT:
 Council adjourned the Annual Operating Budget and Capital Improvement
 Program Workshop #1 of October 24, 2022 at 9:35 p.m.




 /S/ Sherrian Kelly
 Budget Analyst

 /S/ Nick Krueger
 Budget Analyst




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