City of Belleville City Council met Feb. 18.
Here is the minutes provided by the council:
Mayor Eckert called this meeting to order.
Mayor Eckert explained the disaster procedures and reminded anyone speaking this evening to step up to a microphone because the meetings are being taped and posted the next day on the website.
Mayor Eckert called roll. Members present on roll call: Alderman Kinsella, Alderwoman Duco, Alderman Randle, Alderman Ferguson, Alderman Anthony, Alderman Ovian, Alderman Dintelman, Alderwoman Schaefer, Alderwoman Stiehl, Alderman Rothweiler (arrived at 7: 08 p.m.); Alderman Elmore, Alderman Weygandt, Alderman Wigginton, Alderman Barfield.
Alderman Hazel and Alderwoman Pusa we excused.
ROLL CALL DEPARTMENT HEADS
Roll Call Department Heads: City Clerk, Jennifer Gain Meyer; City Treasurer Hardt; Assistant City Attorney Flynn; Assistant Police Chief, Matt Eiskant; Finance Director, Jamie Maitret; Director of Maintenance, Ken Vaughn; Director of Public Works, Jason Poole; Assistant Director of Wastewater, Jay Godt; Director of Residential and Commercial Development Services, Annissa McCaskill; Director of IT, Scott Markovich; City Engineer, Michael Velloff.
City Attorney Hoerner; Police Chief, Bill Clay; Fire Chief, Tom Pour; Director of Wastewater, Royce Carlisle Director of Library, Leander Spearman were excused.
PLEDGE
Cub Scout Troop 212 led the Pledge of Allegiance.
ANNOUNCEMENTS
None.
PUBLIC HEARING
None.
PUBLIC PARTICIPATION
Bob White Mr. White stated he is all for new buildings/development; however, he is not in favor of city money or tax money going to the McDonald' s project. j
Michael Haebere Regarding the request for $50k of TIF funds for tearing down and rebuilding an existing restaurant. He has a hard time believing that but for$ 50k in TIF funding they would be unable to complete the $3.2 million dollar project. He wonders if this taxpayer gift is truly doing anything to alleviate the blight within TIF 3.
Last year McDonald' s corporation had an annual revenue of$21 billion dollars with net income after taxes of$6 billion dollars. Last year their CEO was paid $ 15. 8 million dollars. The local franchisee each would be looking elsewhere for the$ 50k rather than taking it from the taxpayers.
He is one taxpayer that is opposed to giving TIF funds to the existing building. A building that has no electrical code violations, no plumbing code violations, no structural code violations, a building that is not condemned or vacant.
Your decision tonight will tell the voters if you want their property taxes used to alleviate blight or use for corporate welfare.
PRESENTATIONS, RECOGNITIONS & APPOINTMENTS
Mayor Eckert and Director of Public Works, Jason Poole recognized Glenn Friederich.
Alderman Kinsella made a motion seconded by Alderman Dintelman to recommend Mike Heisler to fill the vacancy on the Parks& Recreation Board left by Glenn Friederich and to serve the 1- year of a 5- year tens.
Members voting aye on roll call: Kinsella, Duco, Randle, Ferguson, Anthony, Ovian, Dintelman, Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield. ( 14)
APPROVAL OF MINUTES
Alderwoman Schaefer made a motion seconded by Alderman Wigginton motion to approve City Council Meeting Minutes February 3, 2020.
All members voted aye.
CLAIMS, PAYROLL, AND DISBURSEMENTS
Alderman Dintelman made a motion seconded by Alderwoman Stiehl to approve claims and disbursements in the amount of$ 1, 170, 16033 and payroll in the amount of$834,124. 69.
Members voting aye on roll call: Duco, Randle, Ferguson, Anthony, Ovian, Dintelman, Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield, Kinsella. ( 14)
REPORTS
None.
ORAL REPORTS
TRAFFIC
Alderman Ovian made a motion seconded by Alderwoman Schaefer to change " No Parking" in Front of 314 East" E" Street to Handicap Parking in the Name of Applicant Only.
All members voted aye.
ECONOMIC DEVELOPMENT AND ANNEXATION
Alderman Kinsella made a motion seconded by Alderwoman Stiehl to approve a development agreement with Estel Foods Inc. for the demolition of the existing restaurant facility and construction of a new restaurant facility located at 906 Carlyle Avenue.
Discussion.
Assistant Director of Economic Development, Eric Schauster, said the restaurant has been there 40 years; however, the franchisee has been there for 15 years. Corporate, is not assisting with this
project.
Mayor Eckert advised he, Director of Residential and Commercial Development Services, Annissa McCaskill and Assistant Director ofEconomic Development, Eric Schauster met with the franchise owner and they are looking at other sites. Mayor Eckert said he would like to keep them in East Belleville in the corporate city limits. This is not a guarantee, but the owners are looking at purchasing the carwash.
Alderman Elmore asked if the city writes them a $50k check; Assistant Director of Economic Development, Eric Schauster, advised this is not a property tax rebate. This will be a reimbursement by incurring the cost of demolition, and then provide documentation for the city to reimburse. Mayor Eckert advised they paid in to TIF 3 for 35 years, sales tax for 35 years which is significant.
Alderman Elmore asked if you could apply for TIF money if you don't own the property; Assistant Director of Economic Development, Eric Schauster, stated yes. If you are paying for the project and are being reimbursed for the costs incurred. Alderman Elmore stated this property is owned by McDonald' s. Assistant Director of Economic Development, Eric Schauster, stated the franchisee is leasing the property from McDonald' s.
Alderman Elmore stated he is thrilled to make improvements in that area. The McDonald' s is dated, it's located across the street from the largest high school south of Chicago. This McDonald' s will not go anywhere. If they did move there are a dozen restaurants that would like to be across the street from Belleville East. His understanding is the city does not have $ 50k of tax revenue to loan out and wait for it to come back. Alderman Elmore stated the city is in budget constraints that he hears about monthly and knows are real. He does not think the city has this money to spare. If they are using $3 million dollars to improve the property.$ 50k is nothing.
Alderman Elmore asked for an explanation for the 1. 54% formula; Assistant Director of Economic Development, Eric Schauster, advised this is the amount the city would be putting into the project; Alderman Elmore asked if there is a standard formula when they apply that says you are eligible for a specified amount; Assistant Director of Economic Development, Eric Schauster, stated the city looks at each project on a case-by-case basis. In this case the eligible cost of the demolition and site preparation is an eligible cost.
Mayor Eckert stated the city has brought this forward, so this area of the city is back rolling again and reinvesting.
Alderman Dintelman stated the $50k for demolition is one thing but if this business is down for a year, we will lose sales tax in the amount of$42k so now we are approaching $ 100k which will take another two years to catch up.
Mayor Eckert stated they can walk away from the site. The city talked to them about building a new one and keeping the existing one open. They are looking at the carwash. Assistant Director ofEconomic Development, Eric Schauster, advised they have an aggressive timeline. They will reopen in three to four months.
Alderman Kinsella stated at Economic Development they advised they expected to be down three months and expect to take the employees there and offer them positions in other McDonald' s in the area. There will be continuity for employees.
Alderman Randle stated for those that attended the February 10, 2020 joint meeting with Economic Development and Finance Committee we were able to hear from James Williams. Mr. Williams has a self-description as an entrepreneur and successful business owner of 20 McDonald' s franchises.
Alderman Randle would like to bring up the franchise agreement, ownership of the property and taxpayer responsibility. Regarding the franchise agreement an initial down payment is required to purchase a new restaurant( 40% of the total cost) while an existing restaurant would require ( 25% ofthe total cost). There is generally a minimum of$500k non-borrowed personal resources, liquid cash to be considered for a franchise but a discount can be applied for someone with multiple franchises. That discount amounts to approximately 15%. The buyer takes a minimum of 25% cash as down payment to the purchase of a restaurant with the remaining balance for no more than seven years.
To build and equip the new restaurant can be upwards of$2 million dollars, in this case there is over $3 million depending on size and location. During the minimum 20-year franchise term the franchisee pays McDonald' s a monthly service fee based on the restaurants sales and performance currently 4% of monthly sales. McDonald' s also charges monthly rent. either a base amount or a percentage of monthly sales.
Regarding McDonald' s business model much of their revenue is derived from the rent they charge franchise operators because virtually in all cases McDonald's owns the real estate through the McDonald' s realty corporation established in 1956. The franchisee essentially finances real estate acquisition on behalf of the corporation.
McDonald' s has approximately 36 thousand properties and the rent is supplied by the sale of Big Macs, fries, Filet o Fish, Egg McMuffin and his personal favorite the chocolate shake.
While McDonald' s is enjoying the fruits of its real estate business model, let's not forget the franchisee.
It was noted in the combined Economic Development and Finance meeting the application was for the franchisee and not the McDonald' s corporation. If McDonald' s truly owns the real estate, they would benefit from the taxpayer contribution. The bottom line is ownership is not with the taxpayer.
Regarding taxpayer responsibility to be fair we must admit there is a benefit to the city with respect to sales tax. He does not know what sales tax the franchisee has generated since 2014.
He can think of better uses for the money and they end in street, avenue, drive or court. The City' s infrastructure is where this money should go.
Alderman Anthony asked the average annual sales tax and real estate taxes; Assistant Director of Economic Development, Eric Schauster, advised based yearly in sales the tax is approximately
42,000 and he does not have the property tax information and can provide later in the week.
Members voting aye on roll call: Ferguson, Anthony, Schaefer, Stiehl, Kinsella, Duco. ( 6)
Members voting nay on roll call Randle, Ovian, Dintelman, Rothweiler, Elmore, Weygandt, Wigginton, Barfield. (8)
FINANCE
Alderman Kinsella made a motion seconded by Alderwoman Schaefer to approve budget amendments as recommended by the Finance Director.
Members voting aye on roll call: Ferguson, Anthony, Ovian, Dintelman, Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield, Kinsella, Duco, Randle. ( 14)
ORDINANCE AND LEGAL
Alderman Wigginton made a motion seconded by Alderwoman Stiehl to repeal Section 111. 02
Fireworks) from Chapter 111 ( Amusements and Recreation; RafBes).
Members voting aye on roll call: Anthony, Ovian, Dintelman, Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield, Kinsella, Duco, Randle, Ferguson. ( 14)
COMMUNICATIONS
Alderwoman Schaefer made a motion seconded by Alderman Dintelman to approve Lincoln Theatre Concert — Wv11011112 & The Big Noise — 2/20/2020 Updated request from Lincoln Theatre for additional parking spaces on City parking lot ( comer of North High and East A Street). Request for up to 30 parking spaces for band, buses and trailers, as well as additional barricades and metal barriers for security on Thursday, February 20, 2020.
All members voted aye.
PETITIONS
None.
RESOLUTIONS
Alderwoman Stiehl made a motion seconded by Alderman Anthony to read by title only Resolution 3377 and 3378.
All members voted aye.
Alderwoman Schaefer made a motion seconded by Alderman Ferguson to approve the following Resolutions:
RESOLUTION 3377 A resolution amending the annual budget ofthe City ofBelleville, Illinois for the fiscal year beginning on the first day ofMay 2019 and ending on the 30th day of April 2020. ( line item transfers)
RESOLUTION 3378 A resolution amending the annual budget of the City of Belleville, Illinois for the fiscal year beginning on the first day ofMay 2019 and ending on the 30th day of April 2020. ( supplemental amendments)
Members voting aye on roll call: Ovian, Dintelman, Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield, Kinsella, Duco, Randle, Ferguson, Anthony. (14)
ORDINANCES
Alderwoman Schaefer made a motion seconded by Alderman Kinsella to read by title only and as a group Ordinances 8421- 2020; 8422-2020; 8423- 2020.
All members voted aye.
Alderwoman Schaefer made a motion seconded by Alderman Ferguson to approve the following Ordinances:
ORDINANCE 8421- 2020 A Zoning Ordinance In Re: 06-JAN-20— MVAH HOLDING LLC.
ORDINANCE 8422-2020 An Ordinance amending Title XI (Business Regulations), Chapter 111 ( Amusement and Recreation; Raffles), by Repealing Section 111. 002 ( Fireworks) of the revised Code of Ordinance of Belleville, Illinois, as amended, by amending portions of sections thereof.
ORDINANCE 8423-2020 An Ordinance amending Chapter 76 ( Parking Schedules) of the revised ordinance of the City of Belleville, Illinois as amended, by amending portions of sections thereof ( 314 East` E' Street)
Members voting aye on roll call: Dintelman, Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield, Kinsella, Duco, Randle, Ferguson, Anthony, Ovian. ( 14)
UNFINISHED BUSINESS
None.
MISCELLANEOUS& NEW BUSINESS
Alderwoman Schaefer made a motion seconded by Alderman Ferguson to approve Motor Fuel Claims in the Amount of$32,840.51.
Members voting aye on roll call: Schaefer, Stiehl, Rothweiler, Elmore, Weygandt, Wigginton, Barfield, Kinsella Doer, Randle, Ferguson, Anthony, Ovian, Dintelman. ( 14)
EXECUTIVE SESSION
None.
ADJOURNMENT
Alderwoman Schaefer made a motion seconded by Alderwoman Duco to adjourn at 7:37 p.m.
All members voted aye.
https://www.belleville.net/AgendaCenter/ViewFile/Minutes/_02182020-2166
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