MINUTES Executive Board Meeting March 10, 2014

Transcription

1 Thomas Weisner Mayor, City of Aurora Executive Board Chairman Rahm Emanuel Mayor, City of Chicago Executive Board Vice Chairman Daniel J. McLaughlin President, Village of Orland Park Executive Board Secretary MINUTES I. Call to Order and Welcome Mayor Thomas Weisner, Executive Board Chair and Mayor of Aurora, representing the Metro West Council of Governments, called the meeting to order at 9: 35 am at the offices of CMAP/Metropolitan Mayors Caucus, 233 S. Wacker Drive, Suite 800, Chicago, IL. Others in attendance included: Directors Mayor Gerald R. Bennett, Palos Hills (representing the Southwest Conference of Mayors) Mayor Teresa Kernc, Diamond (representing the Will County Governmental League) Mayor Daniel J. McLaughlin, Orland Park (representing the Southwest Conference of Mayors) Mayor Jeffery D. Schielke, Batavia (representing the Metro West Council of Governments) Mayor Jeffrey T. Sherwin, Northlake (representing the West Central Municipal Conference) President Erin Smith, Lakewood (representing the McHenry County Council of Governments) Mayor Gayle A. Smolinski, Roselle (representing the DuPage Mayors and Managers Conference) Michael Ruemmler, Deputy Director of Government Affairs (representing the City of Chicago) Others Mark A. Baloga, Executive Director DuPage Mayors and Managers Conference Anna Bicanic-Moeller, Executive Director, McHenry County Council of Governments Mark L. Fowler, Executive Director, Northwest Municipal Conference Christine Gentes, Executive Director, Lake County Municipal League Steven A. Quigley, Executive Director, Will County Governmental League Vicky Smith, Executive Director, Southwest Conference of Mayors Sarah Wetmore, Vice President and Research Director, Civic Federation Peter Matuszak, Senior Analyst, Civic Federation Gordon Smith, Director of Governmental Affairs, Chicago Metropolitan Agency for Planning David Bennett, Executive Director, Metropolitan Mayors Caucus Edith Makra, Director of Environmental Initiatives, Metropolitan Mayors Caucus Allison Milld Clements, Director of Housing Initiatives, Metropolitan Mayors Caucus Jeffrey Walter, Project Coordinator, Environmental Initiatives, Metropolitan Mayors Caucus II. III. Approval of Minutes: January 13, 2014 Meeting Mayor Gerald Bennett of Palos Hills moved for the approval of the minutes of the January 13, 2014 Executive Board meeting. Mayor Jeffery D. Schielke of Batavia seconded and the motion was unanimously adopted Presentation: State of Illinois FY 2015 Budget Roadmap Sarah Wetmore, Vice President and Research Director of the Civic Federation, was introduced along with her colleague Peter Matuszak, Senior Analyst. Ms. Wetmore gave a brief explanation of the work of the City of Chicago DuPage Mayors and Managers Conference Lake County Municipal League McHenry County Council of Governments Metro West Council of Governments Northwest Municipal Conference South Suburban Mayors and Managers Association Southwest Conference of Mayors West Central Municipal Conference Will County Governmental League 233 South Wacker Drive, Suite 800, Chicago, Illinois Tel: Fax:

2 Page 2 Civic Federation, a non-partisan government research organization working to maximize the quality and cost-effectiveness of government services in the Chicago region and State of Illinois. The Civic Federation publishes reports and commentary about local government tax policies, government services, and public expenditures. Prior to the release of the Governor s annual budget recommendation, the Institute for Illinois Fiscal Sustainability at the Civic Federation releases an analysis of the State of Illinois fiscal condition. The report reviews Governor Quinn s three-year budget projection and proposes a comprehensive five-year plan for achieving long-term fiscal sustainability for the State of Illinois. This year s report was released on March 3, 2014, and Ms. Wetmore delivered a presentation on the main findings of the report. The Civic Federation has examined the effectiveness of multiple State budget scenarios through FY 2019 based on a series of long-term financial goals. The first scenario entails reducing spending to match State expenditures with State income. If spending reductions alone were used to eliminate the deficits and pay off the backlog of unpaid bills over the next five years, agency appropriations would have to be cut by $1.3 billion, or 8.4%, in FY2015 and an additional $1.4 billion in FY2016, or 9.6% from FY 2015 levels. Agency budgets would need to be cut an additional $665 million, an average of 5.3% annually from FY 2017 through FY 2019, to completely pay off the remaining backlog of bills. If the State could achieve the extraordinarily austere spending limits included in this five-year projection, it would balance its operating budgets and eliminate the backlog of unpaid bills. However, the report asserts that a reductions-only budget scenario does not serve enough of the broader goals of a long-term financial plan proposed by the Civic Federation. The second scenario entails benchmark projections based on Governor Quinn s recent three-year budget projection, which shows a $3.9 billion revenue drop by FY 2016 due to the scheduled rollback of income tax rates. The report finds this kind of fiscal cliff unsustainable for a government that has not been able to pay off a mountain of unpaid bills left over from the recession. Under this scenario, the State s backlog of unpaid bills could climb from $5.4 billion at the end of FY 2014 to $23.0 billion at the end of FY Annual General Funds deficits would also increase dramatically due to continued expenditure growth and the scheduled reduction in income tax rates. A spending reductions only proposal eliminates the State s backlog of unpaid bills but would require reducing net agency appropriations by $4.7 billion or 29.6% through FY Cuts of this size could involve the elimination of large portions of government services widely regarded as essential. A proposal to extend current income tax rates could provide enough revenue to pay down the bill backlog by FY However, this proposal offers no tax relief and does not allow for the creation of a rainy day fund. It also fails to provide additional funding to local governments, neglecting the State s responsibility to these financially distressed municipalities. Given these findings, The Civic Federation made its own five key recommendations to provide a comprehensive approach that, combined with the implementation of major pension reform legislation, would finally allow the State to move beyond what has become a perpetual fiscal crisis. The recommendations are as follows: 1. Completely pay down the bill backlog over the next five years by establishing spending controls that limit the growth in net agency spending and create annual operating surpluses to fund bill backlog payments;

3 Page 3 2. Gradually reduce the income tax rates by 20% by eliminating the pending revenue cliff that would accompany the January 1, 2015 income tax rollback through a one-year extension of the current income tax rate, followed by gradually reducing rates over the next three years; 3. Broaden the income tax base to include federally taxable amounts of retirement income to create greater equity among taxpayers and facilitate the gradual rollback of income tax rates. Out of the 41 states that impose an income tax, Illinois is one of only three that exempt all pension income and one of 27 that exclude all federally taxable Social Security income; 4. Build a rainy day fund totaling at least 5.0% of General Funds revenues to help cope with the next economic downturn; and 5. Restore the full share of income tax revenues to local governments to 10%. Municipalities did not share in the additional revenue generated by the 2011 tax increase, which reduced their share of total collections. Following Ms. Wetmore s presentation, a discussion was held to discuss its findings. Chairman Weisner expressed concern that implementing these recommendations during an election year would be difficult. Ms. Wetmore explained that the Civic Federation will continue to promote the report findings to influential groups and to the media. Mr. Matuszak held that despite being politically unattractive, the magnitude of the State s fiscal situation demands action, which is why the Civic Federation is promoting the report prior to the upcoming primary elections. Copies of the report have been provided to members of the Illinois General Assembly, with whom staff from the Civic Federation have not yet held an in-person meeting. Mayor Jeffery Schielke of Batavia asked if the Civic Federation s report included a list of specific recommendations to reduce state spending. Ms. Wetmore and Mr. Matuszak explained that there is not, and Indicated it is up to State legislators to decide how to make specific spending cuts. President Erin Smith of Lakewood predicted that the report s recommendation to no longer exempt federally taxable amounts of retirement income would receive pushback from the retirement industry. She suggested working in collaboration with industry leaders. Mayor Schielke asked if the Civic Federation has or will be producing a report summary of the key pieces of passed legislation that have resulted in the State s current financial difficulties, such as borrowing to pay pension contributions and allowing unpaid bills to increase. Ms. Wetmore explained that a brief summary was included in the current report. Mr. Matuszak said that the Civic Federation has recently received funding to conduct an in-depth 10-year analysis of these issues. Anna Bicanic-Moeller, Executive Director of the McHenry County Council of Governments, asked how much more income the State would receive if retirement income were taxed regularly. Ms. Wetmore replied $2 billion in the first year, if the measure were implemented in Mayor Daniel McLaughlin of Orland Park asked if the Civic Federation regularly takes vocal positions on legislation that have the potential to increase State fiscal turmoil. Ms. Wetmore answered affirmatively. She explained that the Civic Federation has been a strong supporter of fire and police pension reform, both in Chicago and throughout Illinois. IV. Policy Area: Legislative A. Springfield Update 1. Regional Fire Protection Agency SB 1681 Mayor Gerald R. Bennett of Palos Hills reported that this bill has passed out of committee and is

4 Page 4 now on the Senate floor. He urged Executive Committee members to contact their Senators and ask them to vote against it. 2. Prohibit Elected Officials from Serving on RTA, Service Boards HB 3659 Mayor Bennett stated that HB 3659 prohibits employees or Board members of the RTA, CTA, Pace and Metra from holding office or employment with the federal, state or any local government. The bill has passed out of committee and will likely be called for a final vote in the House when the General Assembly returns after the spring primary elections. 3. Prevailing Wage Act SB 2648 Pam Althoff is the sponsor of this bill. In its original form, it exempted the pruning, replacement or removal of hazardous trees from the application of the Prevailing Wage Act. The bill was stripped to a shell bill in Committee last week and then it passed the full Senate on a 48-0 vote. Senator Althoff indicates that she wants to keep the legislation active in order to apply pressure on the Department of Labor to adopt actual regulations on landscape activities. The Department currently provides guidelines. Washington Update 1. Marketplace Fairness Act (a/k/a Internet Sales Tax) Mayor Bennett reported that the U.S. House has finally started to consider the Marketplace Fairness Act. It is scheduled for a House Judiciary Committee hearing later this week and will likely be assigned to a subcommittee for mark up. He urged all Mayors in the region to contact Congressman Luis V. Gutierrez, Illinois only representative on the Judiciary Committee, and ask him to support the bill. C. Conversations with Paul Vallas Mayor Bennett described a conversation he had recently with Paul Vallas, who is running for Lieutenant Governor with Governor Pat Quinn. Mr. Vallas expressed to Mayor Bennett his desire to work in strong partnership mayors if and when the Governor is re-elected. He also stated that he would work to support local leaders if elected Lieutenant Governor and be a key voice in a Quinn Administration on important issues like pension reform, revenue sustainability, and unfunded mandates. D. Sales Tax Sourcing Task Force Recommendations re Comments on IDOR s Proposed Amendments to Sales Tax Regulations Mr. Bennett reported that a task force made up of village managers and finance directors had met recently to review the Illinois Department of Revenue s proposed amendments to the Retailers Occupation Tax. He reviewed a letter the task force recommends that the Caucus Board submit into the public record. In summary, it offers support for the proposed amendments and suggests language which would encourage those retailers who may still be unclear how to apply the new regulations to request a private ruling letter. Mayor Bennett made a motion to approve the letter. President Smith seconded and the motion was adopted unanimously. E. Other Legislative Issues Mayor Weisner spoke against Senate Bill 3411, legislation which would prohibit local governments from establishing ticket quotas for law enforcement officers. He stated that the City of Aurora was drafting an analysis of the bill that he will get to Dave Bennett so it could be shared with the Board and the COGs.

5 Page 5 V. Policy Area: Transportation A. Transit Working Group s Recommended Transit Reform Position Statement Mayor Jeffery Schielke reported that the transit group has met with representatives from RTA, Metropolis 2020, and CMAP on the topic of transit reform over the last few months and has drafted a position statement for the Board s consideration. The statement makes six main points: 1. Oppose the proposed merger of CMAP and the RTA: Proponents of the 2013 legislation to merge RTA with CMAP have yet to tangibly demonstrate how the merger would lead to a strengthened regional transit agency or an improved public transit system. This merger would potentially overburden CMAP and make it a less effective regional planning organization; 2. Increase investment in the region s transit system: Illinois policymakers must think beyond traditional sources in identifying funding options that are sustainable for maintaining the current system as well as for its future expansion. Two good places to start would be to eliminate the practice of diverting sales tax revenues to communities outside the RTA service area and to support taxation of e-commerce; 3. Governance and fiscal reform must be done concurrently and equitably: Governance and finance are very much interrelated. Decisions on the allocation of the region s transit funds should be done fairly, equitably, and consistently; 4. Revise the boundaries of the RTA s service area: The RTA service area should be expanded to match the boundaries of CMAP s planning area. If there is value for growing communities to be part of the region s planning efforts, then there is also value in being part of its transit service territory; 5. Reforms must focus on the needs of transit riders: Any discussions of public transit system reforms must be sensitive to the needs of the citizens who are most reliant on public transportation, particularly those who are elderly or differently abled; and 6. Restore public trust through local accountability: Transit governance, which has shaken the public s confidence in recent years, would greatly benefit from more direct input and leadership from local government leaders. Mayor Bennett made a motion to approve the position statement. It was seconded by Mayor Smolinski and approved unanimously. B. Transportation Demand Management (TDM) Follow Up Mayor Schielke invited Edith Makra, Director of Environmental Initiatives for the Mayors Caucus, to give an update on Transportation Demand Management. Ms. Makra reported that the Metropolitan Planning Council has completed a regional TDM study, including recommendations, which have been presented to the Illinois Department of Transportation. IDOT has expressed interest in both working with the City of Chicago and RTA to implement TDM regionally, in addition to implementing it statewide. IDOT has estimated that regional implementation will cost $5 million, and will look for funding

6 Page 6 VI. Policy Area: Environment A. Discussions re Alignment of State Water Policies and Programs to Assist Municipalities Mayor Weisner explained that the Illinois Department of Natural Resources is instituting new regulatory policies for users of Lake Michigan water that reduce the amount of allowable water loss in those communities. The new policy will put 130 of 200 municipalities out of compliance. IDNR will grant loans to municipalities through the Clean Water Initiative and State Revolving Loan Fund to assist these towns. Mayor Weisner underscored the importance of having the program be streamlined and approachable for municipalities, which has not always been the case in the past. Ms. Makra reported on a meeting held on February 20 with representatives from the state and federal Environmental Protection Agency, Illinois Finance Authority, Illinois Department of Natural Resources, Illinois Department of Commerce and Economic Opportunity, Northwest Water Planning Alliance, CMAP, MPC, and the Caucus. All parties involved expressed optimism for creating a streamlined approach to make loans available to municipalities to fund compliance work. Mayor Jeffrey Sherwin of Northlake commented that grant funding would be highly preferable to loan funding. B. Emerald Ash Borer Grant Update Ms. Makra reported that the first of two Emerald Ash Borer grants wrapped up on March 1, and that all municipal recipients were on target to finish their projects. They included 14 tree planting projects, 7 technical assistance projects, and one wood utilization project. Approximately 2,100 trees have been planted as a result of the funding. Municipalities have provided matching funds averaging 80% of the project cost which well exceeds the requirement of 50%. The second Emerald Ash Borer grant administered by the Caucus is funded by the Great Lakes Restoration Initiative and is for municipalities directly within the Lake Michigan watershed. These projects are also on target to finish by June 30, Ms. Makra noted that once this second grant expires, the Caucus has no additional funding for EAB projects. Mr. Bennett commented that the Caucus needs to keep beating the drum for EAB funding from the U.S. Forest Service. Unfortunately, the USFS has channeled a large portion of its available funds to managing the forest fires in the Western states. C. ICC Rulemaking on Electric Aggregation Update Mr. Bennett reported on the public briefing period on the Commerce Commission s proposed electric aggregation rules. He stated that the Caucus and the coalition of towns it represents in the proceeding filed initial comments in mid-february. Reply comments were submitted on March 3. Mr. Bennett stated that the Steering Committee created for this project is pleased with the impact the Caucus has had in representing and protecting municipal interests in the proceeding. He also noted, however, that continued due diligence is necessary as the proceeding continues both before the ICC and the Joint Committee on Administrative Rules. D. New Environmental Committee Co-Chairs Mayor Weisner announced the two new co-chairs of the Environment Committee: President John Ostenburg of Park Forest and President Barrett Pedersen of Franklin Park. VII. Policy Area: Economic Development A. Illinois Attorney General Foreclosure Settlement Grant Signed Mayor Sherwin reported that the Caucus received $335,536 of National Foreclosure Settlement Funds

7 Page 7 through the Illinois Attorney General s office to work with a team of partners to help the southern suburbs address the presence of investor-owned small multi-family and single-family rental properties in the area. Allison Milld Clements, the Caucus Director of Housing Initiatives, explained that we received notification that our contract has been signed by the Attorney General s Office and disbursement of our first payment will come through on March 15 th. This is a two-year grant. B. Diversity Issues Task Force Update: Immigrant Integration Toolkit Ms. Clements reported that last year the Caucus applied to CMAP s Local Technical Assistance (LTA) Program to receive staff assistance in creating an Immigrant Integration Toolkit for municipalities that would like to learn strategies to better engage foreign born residents in the civic life of their community. The project is a joint initiative between the Mayors Caucus, CMAP and the Latino Policy Forum. The hope is that the Immigrant Integration Toolkit will serve as an actionable tool to help communities address their growing diversity and increase the livability of communities as articulated in GO TO The Diversity Issues Task Force met on Tuesday, February 25th in Hanover Park to review a preliminary draft of the Toolkit. The Task Force provided comments to CMAP which will be incorporated into the final document. Overall, the Task Force was pleased with the document thus far. There are a lot of useful examples of best practices from municipalities from throughout the region. The Toolkit will be completed in April 2014 and the Task Force will work with CMAP on outreach activities to promote it throughout the region. VIII. IX. Feasibility of Hiring a Lobbyist for the Caucus The possibility of hiring a Caucus lobbyist was recently raised on an officers call. This topic was tabled for discussion until the visioning session at the next board meeting. COGs are being surveyed to find out what lobbying efforts are currently taking place. Executive Board Visioning Session: Next Board Meeting In preparation for the visioning session that will be held at the next board meeting on May 12, a survey will be circulated this month to the board and to Caucus directors. The focus of the next meeting will be more on the visioning session and less on standard business. X. Other Business Mayor Weisner reported that President Darch of Barrington was in Washington during today s meeting to meet with an undersecretary of transportation regarding the tanker car issue. XI. XII. Next Board Meeting Chairman Weisner announced that the next Board meeting will be held on Monday, May 12, 2014, at The DuPage Mayors and Managers Conference in Oak Brook at 9:00 am. Adjournment Mayor Sherwin made a motion to adjourn at 11:20 am. Mayor Smolinski seconded and the motion was unanimously approved. Respectfully submitted, David E. Bennett Executive Director