Welcome to the Finance of Personnel Committee meeting held tonight, Tuesday, May 26, 2026.

Sir Clerk, please take roll.

Welcome in.

Here Toonberg.

Here, Frost.

Beach.

Here, five present.

Thank you.

First item under information only is financial discussion for April 2026.

Yes, sir.

Thank you.

So performance through April of 2026 in the general plan revenue performance.

We continue to see under performance and replacement tax or about 1.3 million under budget through three of eight payments or 30%.

That is offset in part by overperformance on income tax and other revenue sources.

On the expense side, a general fund a total 4.1 million under budget year to day or about 5.5% in the CAP fund.

We have CIP sales tax overperforming by about $460,000.

Water fuel tax is just about 1% over budget in total and in the redevelopment fund.

Are there any questions?

Thank you, Chair for allowing this week on your committee.

Quick question for you, Miss Haggerty.

On the police, I noticed year to date expenses versus the actual were trending three million.

Is that correct?

Under uh currently, yes, they're about three million under uh the expected uh expenditures for the year.

Um however, we have about 3.1 million budgeted for capital equipment purchases, several of which will be approved this evening.

Um, so there's some expenses that are uh one time in the HR that would sort of throw off those uh those totals.

So uh your forward pass projection is will beat that up completely.

Yeah, we we would anticipate that by year end the um police department budget will will end on budget.

Yeah, and then uh similar thing if I might ask one more uh fire.

I know that we're um running hot a little bit here over budget.

Is this trend going to continue from that perspective or year to date will balance out based on what we kind of forecast for this year?

Certainly, so overtime is currently over budget.

Um, if you look at the detail on uh the fire department's line by line as page 17 of 34 in the PDF document, um permanent salaries is currently under budget uh year to date, so anticipating that there will be some um offsetting uh expense savings there to cover the overtime expense.

Um additionally, there are um excuse me.

We have capital some capital expenses in the fire department that are uh sort of the opposite of police.

They're uh have been spent already um 851,000 at one point to budget.

Um so again, we anticipate by year end that the fire department budget will end that budget.

All right.

Thank you.

Yep.

Thank you.

Um moving on to committee reports item one is the approval of vouchers of 13,402,796 and 70 percent.

Is there a motion to approve out?

So moved.

Sorry, any questions or comments on seeing none, all is in favor to keep it.

Aye.

Aye, vote, very fast.

Item two is the approval of the 2025 supplemental appropriation ordinance.

Is there a motion to approve it?

Um before we take questions, Ms.

Haggard.

I'd turn to you to kind of give a uh overall perspective of what what happened, how it happened, why it happened, and then summary of the uh maybe the the revenues and and then the expense.

Yeah, absolutely.

Uh so I'll remind uh city council that when we approve the budget, we're technically approving, we're approving the expenditure plan.

So based on what we estimate revenues to be collected for the year.

Um we have a requirement to adopt the balance budget as everyone's aware, uh, but the official appropriation ordinance and uh this supplemental appropriation ordinance creates a spending authority or an upper limit that that um puts restrictions on where how much staff can spend throughout the fiscal year.

As part of our annual audit and and um year-end closing procedures, we always present a supplemental appropriation ordinance to city council to adjust the budget to reflect what actually transpired during the fiscal year.

Um we focus on uh the what the portions of the budget where we may have overspent or so than we focus on underspending.

So you'll see in this memo, we are proposing uh adjustments to the general fund that total approximately 2.1 million dollars in individual line adjustments.

That does not, however, adjust downward all of the budgets where we might have been under budget.

Based on our audit numbers, we uh the general fund expense for 2025 is approximately 43,000 over budget or approximately 0.02% on a 226 million dollar budget.

So while we're asking for 2.1 million in adjustments, that doesn't give us authority to spend that much.

We we this is just reflecting um actual expenditures for the fiscal year at 43,000 over budget in total.

Um we would normally this this uh SAO across what we call it SAO process is really just a final step before we conclude the audit, um establishing the legal authority to spend what was spent in 2025.

Uh we would generally, as part of that process discuss revenue while not officially part of the appropriation ordinance, we want to make sure council understands how we pay for this.

So in the general fund, while we we landed basically on budget for the fiscal year on the expense side, uh revenues fell short.

Um as you mentioned, as I mentioned in the financial discussion, um replacement tax or PPRT uh is under budget year to date, wasn't under budget as we monitor 2025 in our monthly uh year-to-day reports.

We ended the fiscal year approximately six million dollars under budget on PPRT.

In addition, we had an approximately six million dollar shortfall in ambulance revenue collections in 2025 as well.

That was in part due to uh a software change and a pretty extensive review of um of what we had booked as collectible balances that were determined to not be collectible, but in total, our uh revenue generated per transport is down in 2025, and we anticipate that that will likely um continue into 2026 as well.

Um that 12 million dollars in revenue underperformance was offset by some overperformance in other areas, income tax and sales tax for bright spots in 2025.

Um so that the net operating uh results for 2025 are negative 9.5 million dollars.

So while expenditures came in on budget, revenue fell short.

Um we will uh address that negative 9.4 million through our fund balance, which is there for this purpose.

Um we we maintain a 20% fund balance policy so that in the event that we have expenditures, um, unanticipated expenditures or revenue performance uh that doesn't meet budget, we have funds to rely on to keep the bills paid in the in the interim, and we can restore that uh fund balance to policy compliance over time.

Um I'm happy to answer any specific questions anyone has on that, but all we're asking you to approve tonight is the budget amendments that bring our uh appropriation into compliance with what actually transpired in 2025.

Are there any questions?

Thank you, Director Agary.

I imagine, especially with the risk uh the replacement tax, other municipalities in Illinois have been hit pretty hard.

Um can you detail any knowledge you have about any other municipalities in Illinois and how we're um navigating the situation?

I imagine Chicago is being quite hard.

Yes, so I think um record is unique in the state, so uh personal property replacement tax is called replacement tax because it replaces a locally imposed tax that was in place up until the 70s, when the state decided that they were going to they were going to take away the local jurisdiction's ability to levy that tax, it was it's a corporate, basically corporate income tax.

Rockford had a significant number of industries operating in the city at the time, and it was a significant revenue source for us at that point.

So while Rockford doesn't necessarily have the same manufacturing presence that we did in the 70s, we continue to receive a large proportion of the total replacement tax revenue that is shared amongst municipalities.

So while it's a it's a large revenue source for us, it is not necessarily a significant revenue source for a number of or all local governments in the city.

Certainly Chicago is, and and Chicago's had a number of they have a number of other creative options at their disposal for replacing that revenue.

I will point out that replacement tax in particular has been the source of significant uh variability over time before COVID, we averaged about between six to seven million dollars annually in revenue from the revenue source during COVID, it jumped uh or immediately post-COVID 2022.

That number jumped up in excess of 30 million and has been slowly declining since that point.

Um that number was driving uh significant budget surpluses in 2022 and 2023, and now partly responsible for the shortfall that we're seeing in 2025.

Any other questions?

On the beach of the money.

Thank you, Mr.

Chairman.

Um couple thoughts.

Uh one, uh, I don't mean to put the mayor on the spot, but we did have a conversation today, and I wish that he would tell us in the millions how much we lost that the state has taken from us in another ways, let alone um through unfunded mandates.

That's cost this community in the last 10-10 years.

Go ahead, Mary.

Uh so we were discussing Alderman Beach today, the local government distributed fund.

Uh, that local government distributed fund residents pay 10 or pay their income tax, 10% of that income tax goes back to local municipalities.

That's what the deal was always from day one, uh, I believe 1969, 1970, around that same time period.

Uh since probably 2011, 2012, uh they have slowly cut away from that percentage.

So today we get 6.47%, not 10%.

The budget before the legislators today drops at down another 12 or 0.12 or 0.14%.

Um if you go back to 2012, we have lost 2012 through 2025.

The state has taken 144 million dollars.

So what I was mentioning is if you look at all the property tax revenue in the city of Rockford, we generate about 48.2 million dollars in property tax revenue, so they've taken more than three years of property tax revenue.

As for unfunded mandates, um I could not begin to tell you the total cost of unfunded mandates.

And there are good ones uh that I think everyone agrees with that still cost us money.

Um I think everyone agrees that we need to get lead service uh out of our water planes.

Um there is not definitely not enough money from state or federal government to do it in the time frame that they've provided.

But it's a good mandate.

We need to do that.

We all want to do that.

We this council is working towards a body campus.

We want to do it, it's a good mandate, but also we have to pay for the storage, and I think that's hundreds of thousands of dollars every year.

We're paying just simply to store that body canned footage with no assistance from the state.

Then there's a whole host of others that are not uh that everyone doesn't agree with that are also costing.

Well, I thought it was just good that we hear that again that um three years roughly of total property tax collections disappeared.

We still try to make it work here a week after week.

One other comment.

Um the casino revenue guarantee seven million, is that equally divided per month over 12 months?

Because I noticed when I looked at what we collected, it was less than what we should have gotten.

If we took that number divided by 12, multiply it by three.

Yeah, I think that there's not necessarily an equal one twelve, you know, because we're only one year in to you know a little over I guess we're getting close to two years now of operations, but difficult to, you know, over time we'll be able to sort of better predict what monthly revenue will be, but until we have a couple more operating years under our belt for that for the that'll be a little bit more difficult to predict.

But I know it's not it's not equally dispersed over 12 months.

So are your from the 70 million?

How often they by year end, yes, correct.

Thank you.

All right.

Yeah, just uh quick question for Ms.

Hegger, and again, thank you for allowing me to speak in your committee.

Um getting back to the reserves, um what's I mean?

You mentioned 9.4 um under performance.

Um what what is the the drop um from year to year um on those reserves?

What percentage you mentioned 20% is what our policy or 25%, whatever it is, typically it's three months um of you know payroll essentially.

Um what is that percentage puts us at at this point in time?

Um I don't have the percentage calculated, but we were slightly over our ground balance policy going into 2025, so um the actual drawdown uh the this 9.5 million shortfall will put us 6.6 million under our fund balance policy um for the 2026 fiscal year.

Yeah, so similar discussion that we had last budget cycle, if we recall, um you know we were at 3.4 million dollar deficit, if you can't remember, um, and we have balanced budget.

So is that 3.4 additional that would eat into that reserves that we currently have, or how does that work?

No, well we approved a balance of it.

So the you know, assuming that we end the 2026 fiscal year with expenses read regulations.

We're still at 6.6 million, yes.

But as you know, because our our requirement is 20 percent of our operating budget, as our operating budget increases, so does our fund balance requirement.

So really we should be adding to that um you know surpluses annually to keep up with the requirement, um the policy requirement.

Yeah, and that's I just caution us to kind of look at that percentage and make sure that it's not significant in order to from uh auditing standpoint threshold as material um from that aspect of it.

So uh going into this um next cycle, um, you know, a little concern, you know.

It's uh some uh colleagues have said about the replayment tax on some of these things unfunded mandates, etc.

So hopefully you can keep an eye on that because it is a significant drop.

Thank you.

Thank you, Chairman.

Uh I would like to say thank you to Alden Beach for asking that question because I was going to address that as well.

Uh the mayor has been very vocal on the local government distributed fund in the past, uh, and I would uh commend anyone uh uh yourself, um anyone else go into the city to uh continue to put pressure on the state as much as we can to get uh what we believe should be coming back to us.

Um also you know, when we look at uh, and I spoke with Director Haggie Hagary today uh on some issues here, and again stressing the uh the property taxes that the city of Rockford collects, and many times we're lumped in with the other taxing bodies.

I think we take up about 20 percent the city of your property taxes.

Uh I think it's been what 12 years, 13 years uh since we've uh kept our living flat, so essentially we as a city are collecting the same amount in property taxes as we were 12 years ago.

Uh as other taxing bodies have taken the inflation bump and maybe even raised their levies.

Uh we as a city have kept that uh flat.

So I know that many of us here on council probably talking with constituents and uh other individuals that when people talk about rock from city property taxes, rocking property taxes.

We need to distinguish that there are how many taxing bodies.

I thought it was around there.

That your property taxes aren't all the city of Rockford.

It's about 20%.

Keep in mind that we have in the past kept this levy flat.

And that does by doing that.

We do find ourselves sometimes in a situation like this.

So we have been set fast on keeping reserves, which is prudent.

And so at times we might have to dip into those reserves, but there will be some obviously hard conversations coming to alleviate this from happening in the future.

So I just wanted to point that out.

Thank you very much.

Thank you.

All right, on item number two, all is in favor indicate by aye.

Aye.

Aye.

Opposed.

Matter passes.

Moving on to resolutions.

Number one is an approval and acceptance of a DCO grant award amount of three million dollars.

It will use the fund apportion of the cost associated with the acquisition and renovation of the new family peace center located at 214 street.

Their motion to approve.

So move.

Second.

Any questions or comments for staff?

Seeing none all is a favor to keep by posed.

Matter passes, thank you.

Number two is award of a joint purchasing contract for police vehicle computers, docking stations, printing, and components of CDS office technologies in the amount of 153,362.

It's a one-time purchase.

The funding source is the capital lease fund police department capital budget.

Is there a motion to approve?

So moved.

Any questions or comments for staff?

Seeing none of all is a favorite key by posed?

Item three is a board of joint purchasing contract for Panasonic Tough Hook Laptop Bundle and extended warranty for FTO to CDS office technology month in the amount of $36,900.

It's also a one-time purchase.

And the funding sources of police operating budget.

So move.

Any questions or comments for staff?

Seeing none all is a favorite to keep aye.

Aye.

Opposed?

Matter passes.

Item four is an award of a joint purchasing contract with police vehicle equipment and installation of data safety supply in the amount of 439,388.

This is also a one-time purchase, and the funding sources are the capital lease fund police department capital budget.

Is there motion to approve?

So moved.

Any questions or comments for staff?

Seeing none of all is a favorite indicate by aye.

Aye.

Opposed, matter passes.

Item five is an award of joint purchasing contract or police radar equipment, the custom signals in the amount of $39,870 and 46 cents.

This is also a one-time purchase and the funding source of the capital lease fund.

Is there a motion to approve?

So moved.

Second.

Any questions or comments for staff?

All in two words.

Thank you, Chairman.

We just had in the recent past uh running radar equipment to the uh squad cars front and back.

Just wondering how uh what this is in relation to what we've already done previous.

Sure.

This is uh for the 22 new squad cars that you just approved that were outfitting, sir.

We're replacing the radars that are currently in the old squads, but we will fork move because our fully isn't old thanks to the council members for approving that.

So we only need 14 out of the 22 to ensure all the controls have probably bankrupt.

Right.

Okay, any other questions?

Seeing none, all is a favor indicated by I.

Aye opposed, matter passes.

Item six is a change order for the activate Church Street and Main Street two-way conversion supplement number two to GFT infrastructure.

Uh the original contract was 799,243 and 56 cents.

Um there is a proposed supplement of 78,236 and 27 cents.

The change order includes additional consultant services for right-of-way acquisition appraisal and land acquisition negotiations, tablet limits and right-of-way plans for approximately 42 parcels along the quarter, as well as additional survey and design work to address IDOT review comments related to drainage plans, ADA ramps, and maintenance of trackings.

The funding sources are the 1% infrastructure sales tax and the state of Illinois jurisdictional transfer funds.

Is there a motion to prove the change order?

So move.

Sorry.

Any questions or comments for staff?

I'll grant.

Um, I sent a text to uh Mr.

Sanders this morning, and I just wanted to reiterate that what I was back got back was that we are adding the parcel costs we worked that wasn't in the original budget or the original thing.

So I think it's a project that has a lot of things on it, so but I would like to see if uh Mr.

Sanders had sure, Mr.

Sanders um Jerry OK.

Mr.

Carter.

So this this project started out of the contract.

I'm not even sure the contract's inception point or award point.

I know that we paused things in 2022, 23.

We started with a 700,000 contract.

We the first amendment you'll see for $300,000 was adding um land acquisition, right-a-way takes, and easement takes.

And that was even done with the some assistance from our own legal department back at that time.

That was for I believe 20 or 30 parcels back then, maybe 20, 30, 30 to take.

So funding what we thought with a six million dollar funding package we were getting back then, all of a sudden, to our surprise became a $300,000 funding package, and we paused the project.

We have since resumed or resurrected the six million dollar funding assistance.

The project has been reactivated, but a lot of time has passed.

And IDOT has changed their standards by which they make us get easements, which becomes more complicated and more like a more akin to a property acquisition.

If the initial agreement and supplement number one was 30 parcels, we have 47 more.

So we have 77 parcels now for them to assist us with getting the necessary legal documentation to move.

Also, since the product is laid dormant for so long, a lot of the reports, a lot of the studies, a lot of the permit applications that have been submitted are now outdated and need to be updated and submitted again.

That is so the bulk of this next amendment you're approving now is 700,000, roughly equates to another $500,000 of assistance in land acquisition and another $200,000 of design revision.

I will ask our traffic engineer to weigh in and correct anything I've just said.

Okay.

As I see you've shuffling over there, this has been a just a thorn personally in my side for umpteen years, mayor as well.

Uh I'm sure uh Mr.

Carter and uh some of the other public works, you know, it just seems as though you know working with IDOT sometimes, and I I'm not throwing IDOT under the bus here.

It's just it's you know, government entities working with government entities and uh etc.

etc.

And it just seems like who wants to outdo who, and I think sometimes with iDot.

Um how many times that you know I've I've been asking when is this going to get underway?

And uh really many times the answer in a nutshell is IDOT wants more changes, and you know, we have to come back with with other plans, and so I think the city we as a city have really done a uh in the most part a good job in trying to get this project underway, but I've just run into so many obstacles.

Uh and I've kept constituents updated as much as I I can.

Um and I guess my question here then with those statements is out of this proposed supplement, uh the supplemental change number two, uh we are using the one percent uh infrastructure sales tax, which this would be uh you know an example of why we have that.

What percentage of that is put into this change order versus the other state supplemental amount we're giving?

So the I believe our intention is to put uh all of the state money towards the actual construction of the project.

So that's currently estimated at about four million dollars, and so the six million that you got from that.

that what percentage of that is put into this change order versus the other state supplemental amount we're giving so the I believe our intention is to put uh all of the state money towards the actual construction of the project so that's currently estimated at about four point currency eight point four million dollars and so the six million that you've got from the bill is that so that to answer the question all of this would be more expensive all right uh when do we again I know I've asked this question multiple times I think we're looking at 2027 now for we are optimistic couldn't move out the instruction initiatives for Christmas like I said it's like the Cubs there's always next year in this project is the epitome of thank you or maybe no year at all yeah any other questions seeing that all is in favor to give aye aye opposed no all right there's a motion to adjourn okay so move second all is in favor aye aye all right thank you that's means adjourned