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HomeMy WebLinkAbout02/05/1986 FC minutesMINUTES FINANCE COMMISSION February 5, 1986 Call to Order The meeting was called to order at 7:40 PM. Commissioners present were Richard Bachhuber, Paul Davies, Tom Pekras and Ann Smilanic. Also present were Village Manager Terrance Burghard and Finance Director David Jepson. II Overview of 1986-1987 Budget Village Manager Terrance Burghard presented an overview of the Village's 1986-19B7 budget. The total budget at $26,841,945 represents a 4.17% increase over the 1985-1986 budget of $25,766,975. Included in the budget is a recommendation to add new personnel in Police, Fire and Public Works and to provide some additional clerical support. The budget includes the recommendation to increase vehicle license, business license and liquor license fees and implementing the water rate increase in October 1986 that originally had been planned for January 1985. The Village's real estate tax rate for 1986 is projected to be $1.0458 which represents a 2.240' increase over 1983 and is actually 1510 below the 1975 rate. Mr. Burghard reviewed the service areas that account for the largest portion of the 1986-1987 budget: Public Safety which includes Police, Fire and Central Dispatch account for 25% of the total budget. The new personnel that are being recommended are primarily due to the overtime requirements of the Fair Labor Standards Act which becomes effective in April 1986. The addition of the new personnel will enable the departments to maintain minimum shift strengths at straight -time pay rather than calling back other personnel at time and one-half. The community service officers in the Police Depart- ment will staff the 24-hour Police Desk and aid in handling of the 2,000 annual Teleserve calls and other non -emergency Police matters. A fire pumper is being recommended to replace a 1951 pumper. Public Works is the service area which includes Streets, Water, Parking and Engineering as well as certain costs in Community and Civic Services. The total amount of the Public Works budget is $9.9 million or 370 of the total budget. The budget anticipates the costs associated with Lake Michigan water for the full year and provides for maintenance of public buildings, roadways, and all public property. Also included are forestry and beauti- fication projects and the administration of the refuse pick-up and disposal contract. One new maintenance worker is being recommended. An aggressive street resurfacing program is also included. Planning and Zoning includes the administration of the CDBG Program and the Downtown Redevelopment TIF Project as well as Planning and Zoning. Provision for the continuation of the Facade Program and the Residential and Multi -Family Rehab Programs are included in the 1986-1987 budget. Concern was expressed over the possible loss of funding for the CDBG program. Additionally, the 1985 Tax Reform Act has raised questions over the eligibility of TIF Projects for tax-exempt bond financing. Pensions account for almost 1190' of the total budget and when added to personal services, the combined total represents 430 of the total budget. The amount included for Police and Fire pensions is equal to the total amount of revenue expected. Even though the amount will not be expended during the 1986-1987 fiscal year it will be set aside or reserved for future pension obligations. The Village has achieved a funding level of 11290' in the Police Pension Fund and 19190' in the Firemen's Pension Fund. Debt Service includes principal and interest on all Village debt including the issues expected to be sold in 1986-1987. In 1985, the Village's debt per capita was $54. When compared to a national average of over $300 for all municipalities in the 50,000 to 100,000 category, it demonstrates the excellent debt position of the Village. Insurance is included in the Finance budget and is expected to total $1.3 million in 1986-1987. This amount is some $255,000 more than in 1985-1986. The Village has realized some meaningful achievements in the past fiscal year including: - A long-term supply of Lake water. - Significantly increased road repairs. - 2 - - Dramatic downtown facade improvements. - An established Tax Increment District. - The completion of a million dollar sewer repair program. - Modernization of our water control system. - A computerized Police and Fire dispatch and record system. - Finalization of an area -wide refuse disposal plan. - Completion of the Opus annexation. - Establishment of an Arts Council. - Received a Certificate of Financial Reporting. - A continuing stable Tax Rate. Mr. Burghard pointed out that the above achievements have been accomplished in spite of the fact that Mount Prospect consistently spends less on Village services than many other communities. In a recent survey by the City of Park Ridge, the Village of Mount Prospect was again nineteenth out of nineteen communities in the cost per capita for municipal services. This is the fourth year that the Village of Mount Prospect has been lowest in this cate- gory. Summary Mr. Burghard summarized by pointing out the budget as presented represents a 4.1790' increase over last year. The revenue increases proposed are moderate and our policy to stabilize tax rates is being maintained. The Village should use the forthcoming year to build upon prior achievements and anticipate the future in the same spirit that has been used in the past. III 1986-1987 Budget Revenues Finance Director David Jepson presented an overview of the revenues that will be included in the 1986-1987 budget. It is expected that revenues will total $25,272,030 and that available fund balances, or savings, of $1,569,915 will be used to finance the total budget of $26,841,945. Specific revenue sources include: Sales Tax at $4,700,000 represents 19' of the total budget. The increase from 1985-86 to 1986-87 is expected to be 790'. Over the past twelve years the increase has averaged 7.5a. Fees include vehicle licenses, permits, business licenses, liquor licenses and franchise fees. An increase from $15 to $20 is being recommended for vehicle licenses, along with increases for business and liquor licenses. Sale of Bonds proceeds are expected to finance the fire pumper at $130,000 and the TIF Project at $1,530,000. Financing for the TIF Project is contingent upon continued progress in the Downtown - 3 - IV Redevelopment District and the outcome of the final version of the 1985 Tax Reform Act. Other Revenue includes fines, sale of property, employee withholdings, and all other miscellaneous sources of revenue. Intergovernmental Revenue includes: - State Income Tax 1,125,000 - Motor Fuel Tax 915,000 - Community Development Block Grant 646,000 - Revenue Sharing 121,000 - Other Grants 77,000 The Revenue Sharing grant is $175,000 less than last year and is expected to be completely eliminated before the 1987-88 budget year. The CDBG grant is also expected to be reduced considerably in future years. Service Charges is made up of water and sewer charges and parking fees. Included is a proposed water rate increase from $2.10 to $2.27 per 1,000 gallons which is expected to be implemented around October 1, 1986. Special Service Area Property Taxes There are five Special Service Areas, the largest of which is SSA 1d5. SSA #5 was established to provide for the fixed costs associated with obtaining Lake Michigan Water. The 1985 tax rate for SSA #5 is expected to be 31� and the 1986 rate is projected at 3 3 � . The 1986 rate is 6� lower than the original financing plan which projected a rate of 39� in 1986. Our most recent calculations project a high of 35� in 1987 and 1988 and then a declining rate from that time forward. This rate is in comparison to the original projections of 440 for 1987, 49� for 1988 and a peak of 53� for 1989. Property Tax revenues are expected to provide $4,964,700 or approximately 20o of the revenues in the 1986-1987 budget. The estimated tax rate for 1986 is projected at $1.0458 per $100 EAV. This compares with a rate of $1.0232 in 1983, $1.009 in 1980 and $1.232 in 1975. For a home in Mount Prospect with an EAV of $20,000 this will be a tax amounting to approximately $209 in 1986. Public Representation and Village Administration Mr. Burghard reviewed briefly the proposed budgets for - 4 - Public Representation and Village Administration. There is no significant change in the total amount budgeted for Public Representation in 1986-1987 compared to 1985-1986. Noteworthy expenditures include the annual contribution to the Northwest Municipal Conference ($10,500), the annual audit ($7,500), special projects ($7,500) and $20,000 for anticipated testing for Police and Fire eligibility lists. In Village Administration there are two areas that were singled out for discussion. The first is the provision of $190,000 for salary increases in the current budget that will be redistributed after the budget is adopted. The second is a decrease of approximately $100,000 in capital expenditures representing the one-time purchase of Cable TV equipment. V Management Services Mr. Jepson explained that the Finance Department, the Village Clerk's Office, and the Risk Management Fund make up Management Services. The total 1986-1987 budget is $1,962,925 or 7.3°0' of the total budget. Insurance costs account for 2/3 of this total. In the Finance Department budget, the noteworthy changes are: 1) the addition of one full-time employee in Customer Services in place of a part-time employee; 2) the inclusion of $10,000 in the Data Processing budget for an evaluation of the Village's total data processing needs; and 3) an increase in employee benefit costs of $20,000. It was mentioned that the crisis in the availability of liability insurance and the increase in insurance costs has been one of the ongoing concerns of the Village. Total insurance costs are expected to be $1,310,700, some $255,200 or 24"10' higher than 1985-1986 totals of $1,055,500. Excess insurance premiums for liability insurance are expected to increase $152,000 from 1985-1986 to 1986-1987 with total coverage reduced from $10,000,000 to $750,000. Although the Village's total exposure to insurance claims will be $850,000, only $275,000 has been budgeted for expected claims. During 1985-1986, the Village expects to establish an insurance reserve of $500,000 to protect against future uninsured claims and to provide the financial resources to enable the Village to reduce its dependency upon insurance providers. Also included in the 1986-1987 Budget is an appropriation of $6,000 to promote loss prevention safety programs. - 5 - VI Discussion by Finance Commission Discussion by the Commissioners focused on the Insurance problems, property tax rates, the increase in the proposed vehicle license fee and the various achievements during the past year. Mr. Burghard and Mr. Jepson provided additional information as requested. The Commissioners expressed their satisfaction at the informtion provided. VII Distribution of Requests From Civic Organizations Requests for funding from Shelter, Inc. and Omni House were distributed to the Commissioners. It was determined that these requests would be considered at the first Finance Commission meeting in March. The date for that meeting was changed by mutual agreement to Thursday March 6 . 1986 instead of March 5. VIII Next Meeting Date The next meeting will be Wednesday February 18, 1986 when the Public Works budget and the Planning and Zoning budget will be discussed. IX Ad_lournment There being no further business, the meeting was adjourned at 10:05 PM. Respectfully submitted David C. Jepson Finance Director