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HomeMy WebLinkAbout2. COW Minutes 11/25/2014 COMMITTEE OF THE WHOLE MINUTES November 25, 2014 I. CALL TO ORDER – ROLL CALL The meeting was called to order at 7:09 p.m. in the Village Board Room of the Village Hall, 50 South Emerson Street, by Mayor Arlene Juracek. Trustees present included Paul Hoefert, John Korn, John Matuszak, Steven Polit, Richard Rogers and Michael Zadel. Staff present included Assistant Village Manager David Strahl, Finance Director David Erb, and Administrative Intern Alexander Bertolucci. II. APPROVAL OF COMMITTEE OF THE WHOLE MINUTES FOR NOVEMBER 11, 2014 Mayor Juracek stated the draft minutes were revised to add an explanatory sentence to the Citizens to be Heard section. Motion made by Trustee Korn seconded by Trustee Polit to approve the revised minutes of November 11, 2014. Minutes were approved. III. CITIZENS TO BE HEARD None IV. 2015 BUDGET FINAL WRAP UP DISCUSSION Mayor Juracek stated this is the third Committee of the Whole meeting to discuss the proposed 2015 Budget. She stated that at the conclusion of the second meeting the board directed staff to develop budget scenarios for a 1% and 2% property tax levy increase. Finance Director Erb stated staff developed budget scenarios for 1% and 2% property tax levy increase and also for a third levy scenario of 2.48%. He stated that to obtain a 2.48% property tax levy increase the Fire and Police pensions’ contributions would be reduced to the Annual Required Contribution (ARC) amount. He stated the ARC is the pension funds’ annual minimum contribution determined by an independent actuary, which is more conservative than statutory funding requirements but less than the Village’s proposed 7% contribution. He stated that the 7% contribution permits for a steadier levy from year to year and helps put additional funds toward fully funding pensions before the mandated period of 2040. He stated to reduce the levy to 2.0% would require an increase in the projected sales tax revenues from 1.0% to 1.7% and pension contributions to be reduced to the ARC amount. He stated to further reduce the levy to 1.0% would be possible through the use of General Fund reserves above the 25% projected level at January 1, 2015 and funding pension contributions at the ARC amount. He stated as the property tax levy is reduced it places pressure on future year’s budgets assuming consistent growth in revenues and expenditures. 11/25/14 Committee of the Whole Page 1 of 3 General comments from the Village Board members included the following items: There was general discussion on pension contributions and funding. There was clarification regarding sales tax projections and how an increase in the projection would create a new baseline for future budgets, which if the projection would not be realized then reserves would be used to compensate for the difference. There was a discussion on how every year’s budget analysis should stand alone. There was a general discussion about the recent fee increases and how a lesser levy would provide relief to residents. There was a suggestion that the computer and vehicle replacement funds should not be changed. There were general questions about the risk factors of the presented property tax levy scenarios and how they may affect the Village’s bond rating and reserves. Finance Director Erb addressed the Finance Commission comments presented at the November 11, 2014 Committee of the Whole meeting. He stated staff made conservative estimates for sales tax growth because long term trends have yet to be seen and it is difficult to determine if growth will continue. He also stated that if the projected baseline for sales tax revenue was adjusted upward to reflect growth that would become the new baseline for 2016 and subsequent budgets. He noted that if sales tax growth is greater than projected the difference will become an opportunity for a future budget revenue adjustment. He stated that staff did not adjust the telecommunication tax because there is no evidence that the decreasing revenues will level off. He stated the real estate transfer tax projection was not adjusted for the potential sale of Randhurst due to the complexity of the transaction and it is not the Village’s practice to budget for a one time revenue receipt. He stated that there are no anticipated changes to the proposed Village Hall workout area as the project utilizes risk management funds and would have no impact to the property tax levy or general fund. He stated the Finance Commission recommended using the Consumer Price Index to set the cost of living adjustments; however, as the Village has union and non-union employees it has been the Village’s practice that cost of living adjustments increases for non-union employees are in line with union employees’ collective bargaining agreements. Finance Director Erb stated in closing that staff provided the 1% and 2% property tax levy increase scenarios as directed by the Board with an additional 2.48% alternative scenario. He also stated that staff responded to the Finance Commission recommendations as appropriate and that the first public hearing for the proposed 2015 Budget is scheduled for December 2, 2014. General comments from the Village Board members included the following items: There was general discussion on the 4.42%, 2.48%, 2% and 1% proposed tax levy increase scenarios and the associated risks with each scenario. It was noted that revenue estimates are comparable to previous budgets and that there are opportunities to amend the budget throughout the year. 11/25/14 Committee of the Whole Page 2 of 3 There was a discussion regarding utilizing reserves and the potential affects to the Village’s bond rating. There was general support to maintain reserves to fund future budgetary challenges, capital projects or emergency response to weather events. There was a discussion of how state legislation and distributive revenue funds may impact the Village’s budget. There was general discussion of the Village’s pension funds contributions that included the Village’s practice of funding pensions at 7%, the ARC and the statutory minimum. There was general support to move forward with the 2.48% proposed property tax levy increase for the first public hearing on the proposed 2015 Budget that is scheduled for December 2, 2014. Mayor Juracek thanked the board for the discussion that addressed budgetary impacts of externalities, fiduciary responsibilities, risks, state issues and being sensitive to taxpayers. General comments from the Village Board members include the following items: There was a discussion on wages and fringe benefits of elected officials in relation to a discussion held during the October 28, 2014 Committee of the Whole meeting. The consensus was to keep compensation for elected officials unchanged. V. MANAGER’S REPORT Assistant Manager Strahl stated the Village Hall will be closing at 3:00 p.m. on Wednesday, November 26. He also stated that on Wednesday, November 26 the Village’s Tree Lighting Ceremony is set for 5:00 p.m. and the Christkindlmarket will take place in the Community Center of the Village Hall from 4 p.m. to 7 p.m. VI. ANY OTHER BUSINESS Mayor Juracek stated that the Special Events Commission New Year’s Eve-Eve tickets will be on sale at the Tree Lighting Ceremony and at the Christkindlemarket. VII. ADJOURNMENT The meeting adjourned at 9:22 p.m. ALEXANDER BERTOLUCCI Administrative Intern 11/25/14 Committee of the Whole Page 3 of 3