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HomeMy WebLinkAboutCOW Agenda Packet 08/10/2004 IV. NOTE: COMMITTEE OF THE WHOLE AGENDA Meeting Location: Mt. Prospect Park District Community Center 1000 West Central Road Meeting Date and Time: Tuesday, August 10,2004 7:00 p.m. I. CALL TO ORDER ~ ROLL CALL Mayor Gerald L. FarJey Trustee Timothy Corcoran Trustee Michaele Skowron Trustee Paul Hoefert Trustee Irvana Wilks Trustee Richard Lohrstorfer Trustee Michael Zadel II. ACCEPTANCE OF MINUTES OF COMMITTEE OF THE WHOLE MEETING OF JULY 13, 2004 CITIZENS TO BE HEARD III. PURCHASING POUCYITRAVEl POLICY MANUALS Operational changes have occurred over the past several years which necessitated the Purchasing Policy and Procedures Manual to be revised. Out of this revision, a separate Travel Policy Manual was created to offer a more comprehensive guideline for and direction to obtaining approval and reimbursement for travel related costs. The purchasing manual was last revised in September of 1998. In addition to changes in purchase authorization by departments, the documents format has been updated based on a model document from the Government Finance Officers Association. Changes include an expanded code of ethics section, the level of budgetary control is now identified, bid rigging and anti-collusion laws have been incorporated and provisions for the prompt payment act have been added. The new travel policy manual was prepared out of existing Village policy documents that were previously included in the purchasing manual. Language was added to reflect current trends in travel as well as an update to the per diem rates. Per diem rates had not been adjusted since 1998. Copies of both the purchasing and travel policy documents have been included in the agenda packet. Appropriate staff will be on hand to answer questions and facilitate discussion. ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A DISABILITY NEEDS SOME ACCOMMODATION TO PARTICIPATE, SHOULD CONTACT THE VILLAGE MANAGER'S OFFICE A T 50 SOUTH EMERSON, MOUNT PROSPECT, ILLINOIS 60056, 847/392-6000, EXTENSION 5327, TOD #847/392-6064. v. REVIEW OF VILLAGE SELF-INSURED PROGRAM The Village currently utilizes a multi-tier approach in its insurance program for auto and general liability coverages. The first $250,000 is self-insured by the Village. From $250,000 to $2,000,000, the Village obtains commercial insurance coverage. Coverage in excess of the $2,000,000 commercial policy is provided by HELP (high-level excess liability pool). This structure has been in place for several years and has served the Village well with few exceptions. At the request of the Board, staff obtained the services of an actuary firm to do an analysis of the Village's self-insured program. The request by the Board was prompted by a volatile insurance market that necessitated changes in insurance carriers from one policy year to the next. This resulted in difficulty in coordinating claims occurring over a multi-year period. The goal of the valuation was to determine an appropriate level of reserves for the program as it currently stands and determine reserve requirements if the Village were to self-insure up to the level where HELP excess coverage kicks in. This is the first step in determining whether a change in the self-insured program is possible. Staff will be on hand to share alternatives for administering the Village's risk management program. Appropriate staff will be on hand to answer questions and facilitate discussion. VI. PENSION UPDATE Each year the Village receives from its actuary, contribution requirements for the Police and Fire pension funds. In addition, IMRF submits to the Village the contribution rate for the upcoming year. Since payments to pensions are the second largest General Fund expense (after payroll itself) and account for 8.4% of the General Fund Budget, it is prudent to review this information as soon as it becomes available to provide ample time for potential adjustments to the budget. In July, the Village received its preliminary actuarial results for 2004 for the Police and Fire Pension Funds as well as the IMRF contribution rate for 2005. The required contribution for the Police Pension Fund rose slightly, just 1.4%, whHe the contribution for the Fire Pension Fund went up 10.9%. The 2005 budget forecast estimated a 10% increase in the required contribution from 2004 for these two pension funds. The contribution rate for IMRF in 2005 wiH be 8.58%. The 2005 budget forecast estimated the rate to increase to 9.5%. Overall there was a savings in the 2005 budget forecast as a result of the better than expected pension returns. Appropriate staff will be on hand to discuss the preliminary results for the pension funds and provide a forecast for the next year. VII. 2004 MID-YEAR REVIEW AND 2005 PRE~BUDGET WORKSHOP Each year, the Village Board engages in a mid-year review of the current budget as a means of monitoring the revenue and expenditure levels contained therein. in addition, the Village Board also engages in a pre-budget workshop, specifically designed to look forward toward the upcoming budget year with the idea of setting fiscal parameters and giving staff direction for preparation of next year's budget. ......-.c.............m"""""".'W.".'.'.'.'.'.'mm.""""""'C"""'."'.".".~.Wm'.'.'.'.'.'.'.".w.'.'.'.'.'.-.'.'.-.'.-m.'.'.-.'.'.. Wíth the close of June financial activity, staff is in position to present mid-year financial data as well as review the 2005 forecast budget. The Village is beginning to feel the effects of an improving economy. As opposed to last year where both the year-end budget projection and budget forecast projected operating deficits, this year's presentation will indicate an improved budget position. Although there is a deficit projected for year-end 2004, the deficit is lower than originally budgeted. We expect a draw down of fund balance in the General Fund of $351,857. This is $10,259 less than the original budget amount. We have projected the budget forecast for 2005 with a surplus of $126,833 versus a deficit of $1,672,764 from the original forecast done last fall. This is due to having the first full year of revenue enhancements hit the budget in 2005 along with saving in pension contributions and a one-time financing source Finance Director David Erb has prepared a comprehensive memorandum detailing the Village's financial condition for both the balance of 2004 and forecast 2005. Staff will share its current budget preparation strategy and look to the Village Board for direction regarding the upcoming budget. Appropriate staff will be on hand to answer questions and facilitate discussion. VIII. VILLAGE MANAGER'S REPORT IX. ANY OTHER BUSINESS X. ADJOURNMENT MINUTES COMMITTEE OF THE WHOLE JULY 13, 2004 I. CALL TO ORDER The meeting was called to order at 7:01 p.m., in the Mt. Prospect Park District Community Center, 1000 West Central Road, by Mayor Gerald Farley. Present at the meeting were: Trustees Timothy Corcoran, Paul Hoefert, Michaele Skowron, Irvana Wilks and Michael ZadeL Staff members present included: Village Manager Michael Janonis, Finance Director Dave Erb, Deputy Finance Director Carol Widmer, Deputy Community Development Director Michael Jacobs, Information Technology Director Joan Middleton, Fire Chief Michael Figolah, Deputy Fire Chief John Malcolm, Fire Marshall Paul Valentine, Training Captain Gary Klein, Police Chief Richard Eddington, Deputy Police Chief of Administration Michael Semkiu, Public Information Officer Maura Ei Metennani. II. APPROVAL OF MINUTES Approval of Minutes from May 11, 2004. Motion made by Trustee Zadel and Seconded by Trustee Skowron. Minutes were approved. III. CITIZENS TO BE HEARD Jeff Eirich of 306 N. Westgate explained to the Village Board that he was pursuing Eagle Scout designation and asked the board for suggestions of a community service project. IV. ANNUAL AUDIT Finance Director Dave Erb reviewed the 2003 Comprehensive Annual Financial Report (CAFR). The audit was performed by Sikich Gardner & Co, LLP for the Village for fiscal year ended December 31, 2003. Sikich has given its audit of the Village for year-end 2003 an "unqualified opinion." This means that their examination found our financial statements to be fairly presented and prepared in accordance with generally accepted accounting principles. Mr. Erb introduced Lou Karrison, Partner at Sikich Gardner who reviewed the highlights of the audit and CAFR and explained some of the recent changes made to the format of the report as a result of implementing Governmental Accounting Standards Board (GASB) Statement 34. Mr. Erb stated that the fund balance remained strong at 27.8%, due in large part to the Village Department heads submitting and maintaining lean budgets for the past few years. General discussion from the Village Board members included the following items: 1 Board members inquired whether the assets were valued historically and if they included infrastructure. There was also the question if the Village was investing back into the infrastructure at a rate that keeps pace with depletion. There was some discussion about developing a public report - in essence a summary of the CAFR that was easy for residents to understand. As part of the audit, Sikich is also required to present a management letter to the Village's governing board. The purpose of the management letter is to inform the board of any problems encountered during the audit, and to report any deficiencies in internal controls uncovered during the course of the audit. The management letter from Sikich mentioned the Risk Management fund and expressed concern that it showed a net loss for two years. Mr. Erb replied that the last two years had shown an unusually high level of claims, and they were expected to fall to a normal level. Staff is currently evaluating the Risk Management program. v. 2005-2009 CAPIT AllMPROVEMENTS PLAN Village Manager Michael Janonis provided an introduction to the discussion on the 2005 - 2009 Capital Improvements Plan (CIP). He stated that the last 3 years have seen a spartan CIP. Many projects have been deferred pending better revenue trends or a permanent funding source for mid-range projects. This is the first year that the newly formed Information Technology Division was included in the CIP. He said it might take some time to get a better handle on purchasing/planning to know where the path will lead us and what expenses we will be facing as we set up a technology replacement schedule. Finance Director Dave Erb emphasized that the CIP is an internal planning document. A project's inclusion in the CIP does not guarantee its funding and accomplishment. Mr. Erb also stated that the fund is expected to turn negative by 2006 and alternative funding sources need to be identified. Mr. Janonis highlighted the expenses under Village Administration. This included new cameras and studio equipment for the Television Services Division. Video Conferencing systems are slated for 2001, and the replacement of the entire Village telephone system is also planned for 2001. The telephone system the Village currently uses has been discontinued and replacement and service is anticipated to become more difficult as the system becomes outdated. Deputy Community Development Director Mike Jacobs highlighted the items related to Community Development. These include downtown redevelopment, façade improvement and interior build-out programs. Streetscape and corridor improvement programs are slated for later years as funds are available. Fire Chief Michael Figolah reviewed the items in the plan under the Fire Department. The first was the construction of a new Fire Station 14. Funds were slated for preliminary planning in 2005, with actual construction taking place in 2006 -2001. A video conferencing system is planned for 2007. This would help in training purposes - training among locations could take place at the same time. Funding is set aside for a new breathing air compressor in 2009. 2 Fire Chief Figolah also highlighted the following priorities from the Fire Department Five year plan: Station 14 replacement, replacing the squad at Station 13 with an engine, Staffing, moving Fire Department mechanics to the Public Works Department, disaster/terrorism training. Police Chief Richard Eddington presented the Police Department items included in the CIP. In 2005 the department is looking to purchase a new Uvescan booking station for fingerprinting. Improvements to the pistol range are also included as well as the installation of a radio booster system in Randhurst to eliminate poor radio reception in certain areas. In future years the department is looking to purchase Digital Mobile Recorders (2006 ~2007) allowing them to more accurately record evidence, and new Livescan systems for remote sites. In addition, the department is planning for a traffic enforcement vehicle for the downtown area, a prisoner transport van, and new traffic stop data collection hardware and software. Public Works Director Glen Andler reviewed the Public Works Department's programs. Most Public Works projects are repeats from previous years. Combined sewer improvements of televising and cleaning began this year and are planned to continue. This has proven extremely valuable thus far, locating gas lines and fiber optic lines running through the sewer lines as an example. These will have to be removed and relocated but we would not have known about it without this program. Other programs include a sanitary sewer flow monitoring system mandated by the Metropolitan Water Reclamation District, leak detection equipment and the street improvement project VI. VilLAGE MANGER'S REPORT The Midsummer Downtown Block Party is scheduled for July 24 from 4:00 - 9:00 p.m. at the intersection of Emerson and Busse Ave. The Village Hall move will take place July 29 and 30. Village Hall will open in its new location at 50 S. Emerson Street on August 2. Meetings will continue at the Central Community Center through August. VII. ANY OTHER BUS1NESS Trustee Wilks read a speak out she received regarding concerns about the amount of money the Village spent the 4th of July Fireworks. The Village Manager explained that the Village only contributed approximately $2.500 toward the fireworks. Local businesses and civic organizations also contribute to the cost. VIII. ADJOURNMENT There being no further business, the meeting adjourned at 9: 12 p.m. Respectfully submitted, Maura EI Metennani Public Information Officer 3 Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEl\10RANDUM FROM: MICHAEL E. JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE TO: DATE: AUGUST 4, 2004 EXPANDED TRAVEL POLICY SUBJECT: PURPOSE: To present an expanded travel policy for use by Village officials and staff in the course of business related travel. BACKGROUND: The Village currently does not have a separate travel policy manual to address travel related questions. Guidance for these questions is included in the existing Village Purchasing Policies and Procedures manual. The amount of information available in the Purchasing manual is limited and does not adequately address all the various questions that arise from official and staff business travel. The purpose of this manual is to provide comprehensive, although not absolute, guidelines and directions for obtaining approval and reimbursement for travel costs incurred during the course of normal Village business. DISCUSSION: Attached please find a copy of the expanded travel policy document. This travel policy manual was prepared from existing Village policy documents. In addition, a survey was sent out through the Northwest Municipal Conference (NWMC) to obtain information on how various aspects of travel are handled in other municipalities. Select language from these policies was also incorporated into the draft Village policy to help further clarify travel related issues. These changes will also make it easier for departments in the administration of travel related questions. In addition to clarifying language, the draft policy also updates per diem expense amounts. Per diem rates were last adjusted in 1998. To arrive at the new amounts, information from the NWMC survey was used to determine an appropriate per diem for meals and other travel related expenses. Attachment 1 is a summary of per diem rates for survey respondents. Based on survey results, it is recommended that the per diem for meals be increased from $5.50/$11.00/$16.50 (breakfast, lunch and dinner) to $8.00/$12.00/$20.00. In addition, there would be a separate per idem rate for in-state and out-of- state travel. Types of costs covered by the per diem would include meals and other personal expenses such as phone calls, baggage charges, newspapers, tips, etc. Travel Policy August4,2004 Page 2 RECOMMENDATION: It is recommended the ViHage Board accept the expanded Travel Policies and Procedures Manual for use by Village officials and staff in the course of business related travel. a " t" 11 ~ t~4:~~ / t: DAVID O. ERB DIRECTOR OF FINANCE f(~ DOE! c: Finance Commission Members 1:\Policies\TraveI\Memo to Board - August 2004.doc Attachment 1 Village of Mount Prospect, Illinois Survey of Per Diem Rate NWMC Municipalities Municipality Per Diem ~ Meals Breakfast Lunch Dinner 7.00 10.00 19.00 5.00 10.00 18.00 10.00 18.00 30.00 5.50 11.00 16.50 10.00 15.00 25.00 7.00 10.00 23.00 8.00 10.00 20.00 6.00 8.00 12.00 10.00 12.00 26.00 7.61 11.56 21.06 8.00 12.00 20.00 Elk Grove Lake Zurich Morton Grove Mount Prospect Northfield Park Ridge Prospect Heights Rolling Meadows Schaumburg Average Recommendation Notes: (1) The types of costs covered by the per diem allowance includes 3 meals and incidentals (personal phone calls, baggage charges, newspapers, tips, etc.) Other 2.00 4.00 3.00 nfa Per Diem - Travel (1) In-State Out-at-State 30.00 50.00 35.00 35.00 50.00 60.00 40.00 40.00 30.00 30.00 50.00 50.00 39.17 44.17 40.00 50.00 VILLAGE OF MOUNT PROSPECT Travel Policies and Procedures Manual Revised August, 2004 T ABLE OF CONTENTS CHAPTER 1 - INTRODUCTION A. Introduction/Statement of Policy CHAPTER 2 - TRAVEL POLICY A. General Travel Policy B. Travel Authorization C. Travel Advance D. Travel Expense Reports CHAPTER 3 - TRAVEL RULES AND REGULATIONS E. Per Diem Allowance F. Chicago Metropolitan Area Travel Expenses G. Transportation H. Lodging 1. Take-Home Vehicles CHAPTER 3 - EXHIBITS A. Exhibit 1 - Conference/Seminar Attendance Request Form B. Exhibit 2 - Employee Expense Report Form C. Exhibit 3 - Current Per Diem Amounts and Transportation Stipends 1 2 2 3 3 4 4 5 7 8 10 11 12 CHAPTER 1 - INTRODUCTION A. Introduction/Statement of Policy The purpose of this Travel Policy and Procedures Manual is to provide the Village of Mount Prospect officials and staff with guidelines and directions for obtaining approval and reimbursement for travel costs incurred during the course of normal village business. The Village of Mount Prospect utilizes a decentralized purchasing process. Initiating Village business-related travel activities (obtaining air fare quotes, hotel quotes, etc.) is the responsibility of the each individual department and must be conducted within policies and procedures contained within this Travel Policies and Procedures Manual. Employees are expected to read and understand the travel policies and procedures manual. This manual is designed to be a fluid document and will be modified from time to time to conform to changes in legislation, usual and customary travel expense charges and best management practices. Although it may not answer every question related to travel practices, it does provide general guidelines for travel activities. Employees who need help dealing with specific situations not covered by the manual should contact their department head. The Village Manager, or his/her designee, shall be the final authority with regards to enforcement of any of the provisions ofthis manual. Failure to follow the procedures outlined in this manual may lead to disciplinary action in accordance with the provisions of the Village of Mount Prospect Employee Personnel Manual. Michael E. Janonis Village Manager Dated this - day of August 2004. CHAPTER 2- TRA VEL POLICY A, General Travel Policy The purpose of the ViHage of Mount Prospect's Travel Policy is to set forth the regulations governing travel arrangements and reimbursement for travel expenses. This document explains the travel polices and procedures a traveler on official Village business is expected to follow. The regulations contained within this document are applicable for aU travel expenses incurred on behalf of the Village by employees and Village officials. For definition purposes, the President, Board of Trustees and all Commission Members are considered officials. Employees, by definition, include all full-time and part-time paid personnel. The Village of Mount Prospect, so as to advance the training and professionalism of its officials and employees, authorizes travel to certain seminars, conferences and conventions. Officials and employees also travel, on occasion, during the normal course of business or to promote the Village of Mount Prospect. It is not the intention of the Village to expect an individual conducting official Village business to incur personal out-of-pocket expenses without compensation or reimbursement. Control of travel authorization and adherence to approved travel budgets are the responsibilities of department heads. Travel authorization is a two-part process including: 1) approval of the travel request in advance; and 2) approval of the travel expense report following the completion of the traveL Approval of the travel expense report indicates that expenses submitted have been reviewed and have been found to comply with ViHage regulations regarding travel and authorized business expenses. All Village personnel traveling or incurring business expenses on behalf of the VíHage, and those responsible for the approval of these expenses, are expected to use these measures to assist in maintaining control over travel expenses. The policies detailed here apply to all funds under Village control and are superseded only in those instances where funding agencies apply specific and more restrictive rules and rates. B. Travel Authorization Authorized trips are determined through the budget fOlmulation process. Exceptions to this rule include unscheduled travel required in the line of duty or travel due to special circumstances, which require Village Manager approval. In general, no more than one national and one state conference may be authorized for any department head in any fiscal year and must be approved in advance. Attendance at other meetings outside the State of Illinois may be authorized when the department head or appropriate staff is an active participant in the national and/or state organization. Local professional and technical conferences/meetings are authorized as funding and duty conditions permit. 2 I B. Travel Authorization (coot.) It is Village policy that aU Village-related travel must be approved in advance. Department heads can authorize travel and training where the total cost for the travel or training is expected to be less than $1,000. In cases where the total costs for the travel and training is expected to be more than $1,000 approval in advance is required from both the department head and the Village Manager. The Village Manager may authorize exceptions when these regulations do not cover the situation. All employees attending conferences and seminars shall obtain approval in advance by submitting a completed Conference/Seminar Attendance Request form (Exhibit 1) no later than twenty-one (21) days prior to the conference or training event. A descriptive brochure or announcement describing the seminar or training session should accompany the attendance request form. C. Travel Advance Normal practice will be for the Village to directly pay vendors for as many travel expenses as possible, including seminar and conference registration fees. Travel advances to cover travel costs expected to be paid by the employee will be permitted through completion of the Conference/Seminar Attendance Request form and completion of a check request form. Conference/Seminar Attendance Request forms and travel advance check requests should be submitted far enough in advance to avoid having to issue manual checks, typically three weeks. Travel advance check requests, however, should not be submitted more than one month prior to the dates of travel. D. Travel Expense Report The Village of Mount Prospect Employee Expense Report (Exhibit 2) is to be completed and submitted within five business days after returning from the business trip. The form should be submitted to the department head, and once reviewed and approved, forwarded to the Finance Department. Original receipts for all expenditures are to be attached to the Employee Expense Report. If total eligible out-of-pocket expenses paid by the employee exceed any travel advance received, a check request should be completed and submitted to reimburse the employee for the difference. The check request fonn will be processed as part of the routine accounts payable process. Special checks will be authorized by the Director of Finance only when extraordinary circumstances make it necessary to deviate from the normal reimbursement policy. If total eligible out-of pocket expenses paid by the employee is less than the travel advance received, the employee is to return the excess funds along with the completed Employee Expense Report within five business days after returning from the business trip. 3 CHAPTER 3- TRA VEL RULES AND REGULA nONS E. Per Diem Allowance For travel requiring overnight lodging, the Village provides a per diem allowance to cover meals and other incidental travel expenses incurred in a day. Employees and Village officials will not be reimbursed for any expenses which exceed the per diem allowance. The per diem allowance is appropriate for education and conference type travel. Receipts are not required for expenses covered by the per diem. The types of costs covered by the per diem allowance includes 3 meals and incidentals (personal phone caBs, baggage charges, newspapers, tips, etc). The currently approved per diem amounts can be found in Exhibit 3 of this Travel Policies and Procedures Manual. 'Where conference registration fees include one or more daily meals, the per diem allowance will be reduced by the appropriate meal allowances as provided for above. The per diem allowance for the days of departure and return will be reduced by the appropriate meal allowance(s) not required for that day. Breakfast allowances will only be given when the employee or official was forced to obtain overnight accommodations the night before. Lunch allowances will be provided only when the employee or official has left the Village boundaries for the training session before 10:00 a.m. and is not expected to return until after 2:30 p.m. Dinner allowances will be given only if the employee or official will not be returning home prior to 8:00 p.m. or if the employee will be staying overnight on Village business. F. Chicago l\fetropolitan Area NIeeting Expenses and Other Business Related Travel Lodging Lodging expenses for travel within the Chicago Metropolitan Area will only be approved in the most unusual circumstances and must be authorized in advance by the Village Manager for employees and by the Village Board for pubHc officials. Transportation Private vehicles may be used for travel on Village business when authorized by the department head. If training is scheduled for the start of the workday, reimbursement is based upon the shortest distance to the training site from the closer of either the employee's residence or place of employment. If a private vehicle is used, mileage reimbursement will be paid at the current reimbursement rate allowed by the Internal Revenue Service. The mileage reimbursement rate is intended to cover the following expenses: gasoline, normal wear and tear on the vehicle, insurance, and any vehicle damage. In the case of vehicle accidents, the employee's insurance policy will be considered to be the primary insurance coverage. If public transportation is used, a receipt must be provided to obtain reimbursement. 4 F. Chicago Metropolitan Area Meeting Expenses and Other Business Related Travel (cont.) Parking and Tolls Parking lot receipts and toll receipts are required for reimbursement. Meal Expenses Total meal expenses, including tips, are generally not to exceed the per diem amounts set forth in Exhibit 3. However, under special circumstances, the Village Manager may approve reimbursements of a higher amount provided that the expenditure is reasonable and justifiable. Except for meals, receipts to document the above local travel expenses are required for reimbursement. Professional luncheon meetings will be reimbursed at actual cost if one price is charged to aU participants. Use of Petty Cash When travel allowances or reimbursements amount to less than $25.00, petty cash may be used. A petty cash slip must be completed and approved by the department head prior to receiving cash. Following the conference, receipts must be presented and if money is due the employee or official, the petty cash representative will calculate amount due and will reimburse the employee or official. If money is due the Village, it must be submitted at the time receipts are presented, which may be no later than five business days following the conference. Receipts will not be required for professional luncheons in which one price is charged all participants. However, the name ofthe association and description of the meeting must appear on the petty cash slip. Receipts will be required for transportation, parking and tolls in these cases; mileage should be recorded if a private vehicle was utilized. G. Transportation 1. Air Travel Air travel reimbursement is limited to "coach" or "economy" fares. Travel to and from airports may be by bus, limousine, taxi, or private vehicle (for which mileage will be paid), whichever mode of transportation is less costly. Receipts for such transportation costs, including airport or station parking, must be obtained and submitted after returning from the trip. In order to secure reduced rate tickets, air travel arrangements should be made as far in advance as possible. The Conference/Seminar Attendance Request foIm must be approved before airfare will be booked. Reduced rate tickets are often non~refundable and only exchangeable by paying a penalty fee. Therefore, travelers must be careful to specify the dates and times correctly before tickets are purchased. In case of emergency, the Village will bear the cost of the refunding or exchanging of tickets, but approval must be obtained from the Director of 5 1. Air Travel (coot.) Finance. The cost savings obtained by using non-refundable tickets are great enough to warrant the occasional extra charge for an emergency or othernrise unforeseen event. 2. Village V chicles Village of Mount Prospect vehicles are to be used to travel when available. Since the inventory of "pool cars" for use by employees and public officials is limited, it will not always be possible for a Village vehicle to be obtained. If a vehicle is unavailable, the employee should notify the department head. A private vehicle may be used in these cases. In addition, employees may use a private vehicle to attend meetings when leaving directly from their home if traveling from home is. more practicaL Village vehicles may be used to travel to destinations within 300 miles from Mount Prospect on official Village business. Special approval must be obtained for longer trips from the department head and the Director of Finance. If expenses are incurred which relate to the use of a Village vehicle, receipts are required in order to receive reimbursement Gasoline, tolls, repairs and other expenses attributable to the Village vehicle are reimbursable. 3. Private V chicles Private vehicles may be used for travel on Village business when a ViHage vehicle is not available or when traveling greater than 300 miles .from Mount Prospect. In either instance, the department head must grant approval. Reimbursement shall be limited to the lower of: II The amount due based upon the current mileage rate approved by the Internal Revenue Service plus tolls, parking, and garage charges (receipts required) or It The cost of air traveL The mileage reimbursement rate, as determined by the Internal Revenue Service, is intended to cover the following expenses: gasoline, normal wear and tear on the vehicle, insurance, and any vehicle damage. In the case of vehicle accidents, the employee's insurance policy will be considered to be the primary insurance coverage. 6 4. Taxi and Airport Transportation It is expected that employees will use the most effective ground transportation available, considering cost, hme, availability and scheduling. In travel between the employee's residence and the airport, the Village will reimburse the employee based on actual expenses incurred not to exceed the local transportation stipend provided for in Exhibit 3. Receipts must be submitted for reimbursement. An additional on-site transportation stipend will be available for other expenses related to transport between the airport and the conference/seminar hotel. The Village will reimburse the employee for actual expenses incurred not to exceed the on-site transportation stipend provided for in Exhibit 3. Receipts must be submitted for reimbursement. 5. Rental Vehicles The Village does not provide direct reimbursement for any car rental expenses. Should an employee choose to rent a vehicle at his or her own expense at the location of a conference or seminar, eliminating the need to take a taxi or bus between the airport and conference hotel, the Village will reimburse the employee up to an amount not to exceed the on-site transportation stipend provided for in Exhibit 3. Car rental receipts must be submitted before reimbursement is made. An employee may combine the local and on- site stipends for use either locally or at the conference/seminar location to allow flexibility in transportation options. H. Lodging 1. Hotel Reservations: General Information Reimbursement for lodging will be limited to the minimum number of nights required to conduct the assigned Village business including adequate travel time to and from the conference or business location. For example, if a conference opens on Monday morning at 8:00 a.m. in Springfield and closes on Thursday noon, reimbursement would be paid for Sunday through Wednesday night (assuming travel on Sunday with return on Thursday). Receipts for lodging are required. Additional nights lodging will be reimbursed if discount airfares are available and can be used by the employee so that the total cost of the discounted airfare and the additional lodging and other travel expenses produce a net savings for the Village. If an employee or official chooses to arrive earlier or stay later at hislher own discretion, the additional lodging and other expense incurred from the individual's decision will be considered personal expenses and will not be reimbursed. Various hotels/motels offer special discounts to government employees. The employee or official should check on such discounts when the reservation is placed. If a conference 7 1. Hotel Reservations: General Information (cont.) registration form indicates discounted. lodging rates for conference attendees, the employee or official should obtain a room at the hotel/motel suggested given the rate is moderate. If the suggested hotel/motel is different from the conference site, and the conference does not provide transportation (such as a shuttle) between the sites, reasonable travel fees will be reimbursed with proper receipts. A copy of the registration form with the lodging rates should accompany the expense report 2. Hotel Deposits The employee or official should pay hotel or motel deposits required to reserve accommodations unless this causes undue financial hardship. In most cases, the traveler can use a personal credit card to pay such a deposit. If the traveler wishes the Village to cover the deposit due to undue financial hardship, approval must be sought from the Department head and the Director of Finance. 3. Traveling With Spouse and/or Other Family Members If a spouse and/or other family members travel on an official trip, reimbursement will be limited to the single rate for the room occupied. 4. Miscellaneous Hotel Charges The Village will not reimburse employees for any hotel charges deemed to be personal. These include parking fees, in-room movies, health club charges, etc. The Village will reimburse for hotel parking charges if the use of a Village vehicle or rental car has been preauthorized. Any meals charged to the room are to be considered personal expenses in that the employee will be receiving a per diem for daily meals. I. TAKE~HOME VEHICLES Only those employees receiving authorization from the Village Manager may take VilIage- owned vehicles home. These employees are to use Village-owned vehicles for business purposes, commuting to and from work, and for occasional, incidental travel of short distance (such as stopping at a store on the way home). The Village will consider the personal use of Village-owned vehicles, including travel to and from home, a taxable fringe benefit as provided for in the Internal Revenue Code. 8 CHAPTER 3- TRAVEL RULES AND REGULATIONS A. Exhibit 1 - Conference/Seminar Attendance Request Form B. Exhibit 2 - Employee Expense Report Form C. Exhibit 3 - Current Per Diem Amounts and Transportation Stipends 9 Exhibit 1 VILLAGE OF MOUNT PROSPECT Conference/Seminar .Attendance Request Employee & Department: Dates of Conference/Seminar: to Conference/Seminar Topic: Sponsoring Organization: Location: Purpose: Estimated Cost Registration Fee: Lodging: Meal Expense (Per Diem): - Bkfst @ $8.00 _Lunch @ $12.00 - Dinner @ $20.00 -or- Per Diem - Daily Rate: # of Days Rate Transportation: Air Fare Private Car Miles at Village Car MlscelJaneous: Tota! Estimated Cost Advance Requested (Attach Check Request) Date Submitted By Date Authorized By H: \MISC\Director\Policies\ T ravel\forms .doc Exhibit 2 VILLAGE OF MOUNT PROSPECT Employee Expense Report Employee & Department: Dates of Conference/Seminar: to Conference/Seminar Topic: Sponsoring Organization: Location: Expenses Registration Fee: Lodging: Meal Expense (Per Diem): - Bkfst @ $8.00 _lunch @ $12.00 - Dinner @ $20.00 -or- Per Diem - Daily Rate: # of Days Rate Transportation: Air Fare Private Car Miles at Village Car MisceUaneous: Total Expense Advance Received < > Balance Due or <Refund> Date Submitted By Date H :\M ISC\Director\Policies\ Travel\forms.ooc Authorized By Exhibit 3 VILLAGE OF MOUNT PROSPECT, ILLINOIS CURRENT PER DIEM AND TRANSPORT A TION ALLOWANCE AMOUNTS Per Diem Meal Reimbursements Breakfast Lunch Dinner $ 8,00 S 12.00 $20.00 Per Diem - In-State/Out-of-State Overnight Travel In-State Out-of-State $40.00 $50,00 Reimbursement for Use of Personal Vehicle Mileage Rate set by Internal Revenue Service - Recertify Each Year Conference Transportation Stipends Local Transportation $50.00 On-site Transportation $50.00 Revised: August 2004 12 Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: FROM: MICHAEL E. JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE DATE: AUGUST 4, 2004 REVISED PURCHASING POLICY AND PROCEDURES SUBJECT: PURPOSE: To present a revised purchasing policy and procedures manual for use by Village officials and staff in the acquisition of goods and services for the Village. BACKGROUND: The Village Manager had previously authorized certain changes to the Village's purchasing policy and procedures. Specifically, the Manager authorized department directors and their delegates to approve purchases of less than $1,000 without Finance Director or Village Manager approval. Due to this change it was necessary to amend the existing Purchasing Policies and Procedures document. DISCUSSION: Attached please find a copy of a revised purchasing policy and procedures document. The document's format has been updated, and hopefully improved. These changes should make it easier for departments in their administration of purchasing related questions. The basic format was taken from a model policy document provided by the Illinois Government Finance Officers Association. With the new format, it was not practical to provide you with a black-lined version. Following is a summary of some of the more significant changes from the existing document. Summary of Changes: 1. There is an expanded code of ethics section and conflict of interest section (Pages 2-4). 2. Department directors have authority to issue purchase orders and purchase products or services up to $999.99 without Finance Department approval (Page 4). Purchasing Policy and Procedures AugustA, 20Q4 Page 2 3. The requirements for obtaining competitive quotes have. been softened slightly (Page 5). 4. The level of budgetary control is now in writing (Chapter 2, L, Page 8). 5. The Travel Policy portion of the document has been separated out into a stand- alone travel policy. 6. The provisions for the bid-rigging and anti-collusion laws have been incorporated {Pages 5, 19, 20, 21}. 7. The provisions of the Prompt Payment Act have been incorporated (Pages 23). RECOMMENDATION: It is recommended the Village board accept the revised Purchasing Policy and Procedures manual for use by Village officials and staff in the acquisition of goods and services for the Village. ,(.,æ~,~J¿) £¿ DAViD O. ERa DIRECTOR OF FINANCE DOE! c: Finance Commission Members 1:\Policies\Purchasing\Memo to Board - August 2004 (Purchasing).doc VILLAGE OF MOUNT PROSPECT Purchasing Policies and Procedures Manual Revised August 2004 TABLE OF CONTENTS CHAPTER 1 - INTRODUCTION A. Introduction/Statement of Policy 1 CHAPTER 2 - GENERAL PURCHASING POLICIES A. Purchasing Code of Ethics B. Conflict of Interest Policy C. Gifts and Gratuities - Village Guidelines for Accepting Do Approval ofViUage Purchases E. Competitive Bidding and Quotation Policy F. Waiver of Competitive Bidding G. Emergency Purchases Policy H. Sole Source Purchases 1. Competitive Bidding Exemption J. Joint Purchasing K. Local Vendor Preference L. Adherence to Budget 2 3 3 4 5 5 6 6 6 7 7 7 CHAPTER 3 - MISCELLANEOUS PURCHASING POLICIES AND GUIDELINES A. Disposal of Village Property B. Purchases Near Year-end C. Use of Sales Tax Exemption Number D. Change Order Policy E. Fixed Asset Policy 9 9 9 10 10 CHAPTER 4 - COMPETITIVE BIDDING & REQUESTS FOR PROFESSIONAL SERVICES A. \Vhen a Fonnal Bid Is Required B. Preparing the Bid Document C. Additional Requirements for the Bid Document D. Bid Opening Requirements E. Bid Lists F. Requests for Professional Services G. Contracts 12 12 13 14 16 17 17 TABLE OF CONTENTS (cont.) CHAPTER 5 - METHODS OF PAYMENT PROCESSING A. BiB List Approval by the Village Board B. Regular Purchase Orders C. Changes to Existing Purchase Orders D. Blanket Purchase Orders E. Payment Directly from Invoices F. Prepayments G. Manual Checks H. Petty Cash I. Credit Card Payments J. Check Requisitions K. Prompt Payment Act 18 18 18 18 19 19 20 20 22 23 23 CHAPTER 6 - GLOSSARY OF TERMS A. Glossary of Tenns 24 CHAPTER 8 - EXHIBITS 28 A. Exhibit 1 - Budget Transfer Form B. Exhibit 2 - Sales Tax Exemption Letter C. Exhibit 3 - Bid Invitation Package D. Exhibit 4 - Instructions to Bidders - Equipment and Products E. Exhibit 5 - Instructions to Bidders - Services and Projects F. Exhibit 6 - Sample Bid Recommendation Memo G. Exhibit 7 -Purchase Order H. Exhibit 8 - Check Requisition Form I. Exhibit 9 - Petty Cash Request Form CHAPTER 1 - INTRODUCTION A. Introduction/Statement of Policy The purpose of this purchasing manual is to provide the Village of Mount Prospect officials and staff with guidelines and directions for the acquisition of goods and services. When used with good judgment and common sense, the policies and procedures conveyed herein will allow the Village to obtain required supplies and services efficiently and economically. The Village of Mount Prospect utilizes a decentralized purchasing process. Purchasing activities (specification preparation, bid reviews, telephone quotation solicitation, and requisition preparation) are the responsibility ofthe using department and must be conducted within policies and procedures contained within this Purchasing Policies and Procedures Manual. The manual is divided into sections dealing with purchasing policies and procedures. The policy sections contain all the purchasing policies reviewed and recommended by the Village Manager and adopted by the Village Board, which must be adhered to by Village employees. The procedures sections provide a "how to" guide for processing purchase orders and other procedures regarding payment processing. Employees are expected to read and understand the purchasing policies and procedures manual. This manual is designed to be a fluid document and will be modified from time to time to conform to changes in legislation, technology, and actual practice. Although it may not answer every question related to purchasing practices, it does provide general guidelines for purchasing activities. Employees who need help dealing with specific situations not covered by the manual should contact their department head. The Village Manager, or his/her designee, shall be the final authority with regards to enforcement of any of the provisions of this manual. Failure to follow the procedures outlined in this manual may lead to disciplinary action in accordance with the provisions of the Village of Mount Prospect Employee Personnel Manual. Michael E. Janonis Village Manager Dated this - day of August 2004. CHAPTER 2 - PURCHASING POLICIES A. Purchasing Code of Ethics All Village personnel engaged in purchasing and related activities on behalf of the Village shaH conduct themselves in a manner above reproach in every respect. Transactions relating to the expenditure of public funds. require the highest degree of public trust to protect the interests of the Village and the residents of Mount Prospect Village employees shall strive to: 1. Ensure that public money is spent efficiently and effectively and in accordance with statutes, regulations, and ViUagepolicies. 2. Procure the item needed by the Village that when placed in use will represent the maximum benefit and most economical cost for each dollar spent over the use or service life of the item. 3. Consider cooperative purchasing with other local governments and/or with the state of Illinois. 4. Not accept gifts or favors from CUlTent or potential suppliers, which might compromise the integrity of their purchasing function. 5. Specify generic. descriptions of goods wherever possible in lieu of brand names when compiling specifications. 6. Not split purchase orders for identical or related goods or services to be received from the same vendor in order to circumvent established policy. 7. Purchase without favor or prejudice. 8. Ensure that all potential suppliers are provided with adequate and identical information upon which to base their offer or quotation and that any subsequent information is made available to all bidders. 9. Establish and maintain procedures to ensure that fair and equal consideration is given to each offer or quotation received. 10. Offer a prompt and courteous response to all inquiries from potential or existing suppliers. It shall be the responsibility of the Village Manager to determine if a violation of this Code of Ethics has occulTed and if disciplinary action is necessary in accordance with the Village's Employee Personnel Manual. 2 B. Conflict of Interest Policy Except as may be disclosed to and permitted by the Village Board, it shaH be a breach of ethical standards for any employee to participate directly or indirectly in the purchasing process when the employee knows that: 1. The employee is contemporaneously employed by a bidder, vendor, or contractor involved in the procurement transaction; or 2. The employee, the employeets partner, or any member of the employee's immediate family holds a position with a bidder, offeror or contractor such as an officer, director, trustee, partner or the like, or is employed in a capacity involving personal and substantial participation in the procurement transaction, or owns or controls an interest in the company; or 3. The employee, the employee's partner, or any member of the employee's immediate family has a financial interest arising from the procurement transaction; or 4. The employee, the employee's partner, or any member of the employee's immediate family is negotiating, or has an arrangement concerning, prospective employment with a bidder, vendor, or contractor. The employee's immediate family shall be defined as a spouse, children, parents, brothers and sisters, and any other person living in the same household as the employee. It shall be the responsibility of the Village Manager to determine if a violation of this Conflict of Interest policy has occurred and if disciplinary action is necessary in accordance with the Village's Employee Personnel Manual. C. Gifts and Gratuities - Village Guidelines for Accepting Village personnel should be aware that offers of gratitude from vendors could be designed to compromise objective judgment in product or service selection. Accordingly, it is Village policy to observe the highest standards of ethics and to shield the employee, the Village, and the vendor from any suggestion or appearance of conflict of interest. No employee shall permit any influence by vendors which could conflict with the best interest of the Village or prejudice the Village's reputation. Expenditures of Village funds to vendors shall not by intention personally benefit any person officially connected with the Village. Employees shall strive to follow the following guidelínes: 1. Tangible gifts or gratuities shall not be accepted where their value suggests something more than merely a social gesture. Such gifts should be returned with a statement of Village policy. Promotional or advertising items of nominal value such as key chains, pens, coffee mugs, calendars and holiday candy are acceptable. Gifts that are capable of being shared, 3 such as a box of chocolates, shaH be shared within the office or section where the recipient works. I I 2. Association with vendor representatives at business meals or business organization meetings is occasionally necessary and is neither questionable nor unethical, provided the individual keeps himselfì'herself free of obligation, 3. Personal loans of money or equipment are not to be accepted from a vendor or an individual associated with a vendor doing business with the Village. 4. Solicitation of vendors for merchandise or certificates to serve as door prizes or favors is nonnally prohibited. However, exceptions may be approved by the Víl1age Manager. 5, Corporate discounts granted to Village employees are acceptable only if they are offered to all Village employees and other corporate clients of the vendor. If in any doubt about the propriety of accepting a gift, the matter should be referred to the department head who will then, if necessary, discuss the matter with the Village Manager or hislher designee. In regards to gifts and gratuities, it is essential that all Village officials and staff conduct themselves according to the State of IUinois Gift Ban Act, Chapter 5 ILCS Section 425 of the Illinois Compiled Statutes. D. Approval of Village Purchases No employee shall purchase goods or services on behalf of the ViHage without first seeking approval as required by this policy. All purchases shall require advance approval of the appropriate individuals in accordance with the guidelines set forth below: Dollar Limits Under $1,000.00 ReQuired Approvals Department head $1,000.00- $9,999.99 Department head and Director of Finance $10,000.00 and above Department head, Director of Finance, Village Manager, and Board of Trustees Approval for purchases shall occur before the purchase is made, except in cases where the purchase is deemed to be an emergency. In emergency purchases, the required approvals are to be obtained as soon as reasonably possible. Any person responsible for approving purchases may delegate their approval authority to a designee in the event they are unable to approve purchases. 4 E. Competitive Bidding and Quotation Policy Whenever possible, aU purchases are to be based upon competitive bids or quotes in order to obtain the highest quality service, commodity or material at the lowest possible price. The following guidelines are to be followed in determining how many bids or quotes are required: Purchase Amount Under $1,000.00 Bidding and Quotation Requirement At least two competitive quotes recommended, but not required. $1,000.00 - $3,999.99 Two quote minimum, three quotes preferred. Verbal quotes are acceptable. $4,000.00 - $9,999.99 Two quote minimum, three quotes preferred. Quotes must be written. $10,000.00 and above Formal, advertised bidding process required. Village Board approval required. Requisitions submitted without the required quotes or a satisfactory explanation as to why quotes were not obtained (e.g. sole source, emergency, standardized vendor etc.) will be returned to the originator without approval. The splitting of a purchase into two or more purchase requisitions for the purpose of avoiding competitive quotes or the bidding process is an express violation of this policy. The unlawful stringing of bids for the purpose of evading the bidding requirements is a violation of state statute (720 ILCS 5/33E-18), and is a Class 4 felony. Items purchased more than once during a fiscal year (e.g. forms, copier supplies, etc.) do not need quotes every time a purchase is made. However, competitive quotes for these items shall be sought at least once each year to ensure that vendors are competitive. F. Waiver of Competitive Bidding The Village Board, by a two-thirds vote of all the Trustees then holding office, may waive the bidding procedures and enter into a contract or agreement. Requests for bid waivers shall be made only when goods or services are proprietary (i.e. sole source), where standardization is necessary or desirable (e.g. furniture), in emergencies as defined in this manual, or when it is in the best interests of the Village to do so. In any instance, a statement justifying the need for a bid waiver shall be included in the department's recommendation. G. Emergency Purchases Policy Emergencies are defined as events that could not have been foreseen where immediate action is necessary to safeguard the public's health and safety, and prevent excessive delays in work, contracts, and/or transportation. In the event of an emergency. a department head or his/her 5 designee may authorize a vendor to perfonn work. necessary to resolve such emergency without fonnal bid solicitation. If the emergency and the need for immediate action result in an expenditure of $10,000 or more, documentation shall be presented to the Village Manager prior to such authorization. Emergency purchases of $1 0,000 or more shall be presented to the Village Board for approval in a reasonable period of time following resolution of the crisis. Within one business day of procuring the emergency purchase, the department head shaH ensure that a. purchase order is generated for the item. The purchase order description should clearly indicate that this is a "confirming order". H. Sole Source Purchases Contracts for parts, supplies, or equipment that are available only from a single source are referred to as sole source purchases. Sole source procurements may arise from the following circumstances: 1. Equipment for which there is no comparable competitive product or is available only from one supplier. 2. Public utility services from natural or regulated monopolies. 3. A component or replacement part for which there is no commercially available substitute, and which can be obtained only from the. manufacturer. 4. An item where compatibility is the overriding consideration, such as computer software. 5. A used item that becomes immediately available and is subject to prior sale. These items shall not be subject to the requirement of seeking competitive quotes or bids. However, sole source purchases of $10,000 or more shaH be presented to the Village Board prior to acquisition with a request to waive bids, approve the purchase, and enter into a fonnal contract. I. Competitive. Bidding Exemption When, in the ordinary course of Village business, no single purchase of, or individual contract for specific types of supplies, materials, or services exceeds $1 0,000, but the total dollar value of all purchases and/or contracts for said specific types of supplies, materials, or services during the ViUage's fiscal year does exceed said amount, said purchases may not be subject to the competitive bidding requirement and may not require the Village Board to waive the competitive bidding requirement. At hislher discretion, the Village Manager shall determine whether these purchases require Village Board approval .of a waiver of bids. Where a bid waiver is determined to not be necessary, said purchases shaH still be subject to the requirements of Chapter 2, Section E of this manualconceming quote solicitation for purchases under $10,000. 6 It is not the intent of this subsection to encourage the circumvention of the bidding requirements and, to the extent practicable, Village staff is encouraged to rely upon the competitive bidding process. Rather, the competitive bidding exemption provided by this section is intended to recognize and address those situations in which a competitive bidding requirement is not necessarily practicable, and can be eliminated without jeopardizing the Village's ability to obtain a low and competitive price from a qualified responsible contractor/vendor. J. Joint Purchasing State of Illinois The State of Illinois Joint Purchasing Program was established by State Statute (30 ILCS 52512). The program is administered by the Procurement Services Division of the Illinois Department of Central Management Services. Appropriate Village employees are authorized to obtain goods and services using the State of Illinois Joint Purchasing program. When available through the State program, it is not necessary for Village employees to obtain quotes or to competitively bid the goods or services that are sought. Employees shall be responsible, however, for ensuring that the goods or services are of a quality sufficient to meet the Village's needs and that pricing is competitive. When making purchases using the State's assigned vendor, purchase requisitions are submitted to the vendor directly and shall include the State of Illinois contract number and the Village's assigned Joint Purchasing member J.D. number (L 3720-00) on the purchase order. Purchases through a Joint Purchasing Program in an amount of $10,000 or more still require Village Board approval as set forth in Section D. Other Units of Government Employees are permitted to purchase items jointly with other units of government or with the Northwest Municipal Conference when the price of the goods or services sought is competitive and the quality meets the Village's standards. Prior to initiating the transaction, employees shall seek the appropriate approvals as set forth in Section D of this purchasing policy. K. Local Vendor Preference The Village of Mount Prospect will strive to give vendors located within the Village's boundaries an opportunity to submit quotes or bids for services, commodities, or equipment if they are competitive in price and quality. The Village will not, however, pay a higher price to a vendor located in Mount Prospect for a comparable product or service offered by a vendor located outside the Village's corporate boundaries at a lower price. L. Adherence to Budget Village employees and officials shall not purchase goods or services unless there are adequate funds budgeted within the currently approved budget. The level of budgetary control is 7 established at the department level within each.fund.Department heads shall not expend funds in excess of the amounts budgeted for their department within each operating or capital fund. If under. extraordinary circumstances the department head .finds it necessary to exceed the budget established for his or her department, a.memorandum shaH be sent to the Director of Finance requesting a budget amendment. The Director of Finance shall obtain Village Manager approval prior to requesting the Village Board amend the current budget. In the event that circumstances require a department head to exceed a specific line-item budget by an amount in excess of 10%, he or she shaH request a line-item budget transfer using the appropriate budget transfer form (Exhibit 1). The budget transfer form shaH be forwarded to the Director of Finance for approvaL Department heads shall not charge purchases to improper expenditure accounts in order to stay within the approved budget. 8 CHAPTER 3 - MISCELLANEOUS PURCHASING POLICIES & GUIDELINES A. Disposal of Village Property Property owned by the Village may be sold or otherwise disposed of when such personal property is no longer necessary or useful to the Village. Village property of value may not be sold or traded without prior approval of the Village Board. The Director of Finance may authorize the disposal of ViHage property if the value of such property does not exceed $100. All proceeds from the sale or trade-in of Village owned property is to be forwarded to the Director of Finance for deposit into Village accounts. B. Purchases Near the End of the Fiscal Year When purchases are made near the end of the fiscal year (i.e. December 31), departments shall be responsible for ensuring that they are expensed (i.e. charged) against the fiscal year in which the goods or services were received. The date goods are received or services are performed determines which fiscal year they are expensed against. This is true regardless of when the purchase requisition is processed or the purchase order is issued. C. Use of Sales Tax Exemption Number 1. Use by Employees Village purchases are not subject to sales tax, therefore, employees shall make efforts to inform vendors of the Village's tax-exempt status and to ensure that sales tax is not paid for purchases made with petty cash or credit cards. Employees shall provide vendors who request them with a sales tax exemptíon form signed by the Director of Finance (Exhibit 2-1). Sales tax exemption letters may be obtained from the Accounts Payable Clerk in the Finance Department. Use ofthe Village's sales tax exemption number is restricted to purchases made on behalf of the Village. State law prohibits use of the Village's sales tax exemption number to secure exemptions for personal reasons and such use will subject the responsible individual and all guilty parties to a fine of not more than $10,000 or to imprisonment for not more than five years or both, together with costs of prosecutions. 2. Use by Outside Contractors or Vendors The Illinois Department of Revenue regulations allow contractors to use the Village's sales tax exemption number to purchase materials used in construction of public improvements, which will be eventually dedicated to the Village, Use of the exemption number is limited to purchases directly related to work being done on behalf of the Village, Contractors are responsible for any tax due on purchases determined to be non-exempt and for purchases not made on the Village's behalf, 9 -~-~?_<'_'_'m_'_"^"'=?m---' Requests by contractors for the Village's sales tax exemption number shall be forwarded to the Director of Finance. In order to obtain the number, the contractor shall be required to complete and submit to the Village a sales tax exemption request letter and a material and estimated quantities worksheet. After these documents have been received and approved, the Village will provide the contractor with a sales tax exemption certificate. D. Change Order Policy VmageManager and Village Board approval is required Jar aU change orders of $10,000 or more and for aU change orders which, when combined with those previously approved, increase or reduce the contract price by more than $10,000. The following financial policy is consistent with this statute. It shall be the responsibility of each department head to ensure that all applicable change orders are submitted to the Village Board for approval. In addition, department heads shall be responsible for monitoring aU contract payouts and retainages and ensuring that the amount of the change order is correct. In special circumstances a change order requiring Village Board approval may be authorized by the Village Manager or his/her designee prior to being placed on the Village Board agenda. After receiving authorization, however, the department, following the requirements outlined above, shall place the change order on the Village Board's agenda. Prior to approving a change order or series of change orders which authorize or necessitate an increase or decrease in either the cost of a public contract by a total. of $10,000 or more or the time of the completion by a total of 30 days or more the employee or official shall first present to the Village Board a determination in writing that (I) the.circumstances said to necessitate the change in performance were not reasonably foreseeable at the time the contract was signed, or (2) the change is germane to the original contract as signed, or (3) the change order is in the best interest of the Village. To fail to do so the employee or official commits a Class 4 felony. The written determination and the written change order resulting from that determination shall be preserved in the contract's file which shaH be open to the public for inspection. B. Fixed Asset Policy A fixed asset policy is herein established to ensure compliance with governmental financial reporting standards and to safeguard ViHage assets. Fixed assets shall include land, buildings, machinery, equipment and vehicles with a life expectancy of one year or more. To be included in this definition, the capitalization threshold of the asset or minimum value of the asset at the time of acquisition is established at $5,000. General infrastructure such as roads, sidewalks and stonn sewers shall be capitalized utilizing a threshold of $10,000. 10 Responsibility for control of fixed assets rests with the operating department wherein the asset is located. The Director of Finance shall ensure that such control is being maintained by establishing a fixed asset inventory that is updated on a regular basis and which documents all additions and deletions to the fixed asset inventory. Operating departments shall report the disposal or relocation of a fixed asset promptly to the Director of Finance or hislher designee. Assets acquired during the year shall be recorded as an expenditure against the appropriate capital expenditure account, which shall be used for financial reporting purposes. Assets shall be recorded in the fixed asset inventory by using an appropriate description and by recording serial numbers where applicable. Tagging of all assets will not be required. Assets not capitalized under this policy but which, in the opinion of the Director of Finance may, in the aggregate, account for a substantial asset group, shall be inventoried by the appropriate operating department by means or system suitable for maintaining control ofthe assets. Departments shall maintain separate detailed fixed asset inventory records for those capital assets falling below the capitalization threshold when the nature of those assets warrants close oversight and control. Examples include fireanns, computers, fire hose, and chainsaws. 11 ..----.m_~..mmm~ .,.,.,.,.,.,.,.,.,.,.,. CHAPTER 4-. COMPETITIVE. BIDDING AND REQUESTS FOR PROFESSIONAL. SERVICE A. When a FormalBid Is Required All purchases of goods or. services. exceeding $10,000 shall be. subject to. the competitive bidding process and shaH. be let, by. free and open competitive bidding after advertisement. to the lowest responsible bidder or any other bidder whom the Village Board deems to be in the best interest of the. Village. Sealed bids shaH be sought when goods or .services are anticipated to cost more than $10,000. B. Preparing the Bid Document 1. It is the responsibility of.the respective department to prepare the specifications for .the item(s} to be bid along with any other documents needed to complete the bid invitation package (Exhibit 3). 2. All bid documents must contain the following information: . Cover Letter . Instructions to Bidders (Exhibit 4 or Exhibit 5) . Notice of Bid . Bid Proposal Form . Bid Certification Form . General Terms, Conditions and Instructions . Specifications of the item/service 3. The department head shall determine a bid opening date. The bid opening date must be at least ten days and not more than forty-five days after the published notification date. 4. The department head is responsible for placing a legal notice concerning the bid in a local newspaper of general circulation at least ten days prior to the bid opening. 5. The department head shaH send bid invitations to an known responsible vendors on the bidders list for the particular item, as well as to any other prospective bidders the department head deems qualified and competitiveo Bid documents should not be mailed to bidders before the notice of bid ad is placed in the newspaper. This will help ensure that all prospective bidders have the same amount of time to complete the bid document. 6. The Instructions to Bidders shall specify that all submitted bids are to be sealed and delivered/mailed to the department preparing the bid documents. 12 ....'........................... .......,.,...............,...................... 7. The Instruction to Bidders shall specify that each submitted bid is to include a certification by the prime contractor that the prime contractor is not barred from contracting with any unit of State or local government as a result of a violation of either the State's bid~rigging law (720 ILCS 5/33E~3) or the bid rotating law (720 ILCS 5/33E- 4) 8. The department head shall determine if a pre-bidders conference meeting is to be held to explain to all potential bidders the purchase or project, the bidding requirements, and any other information the potential bidders might need to submit a qualified bid. Ideally, the notification of the pre-bidders conference will be included with the bid invitation package. This notification should indicate the date, time and location of the conference and who from the Village will be in attendance. The conference should be held early in the bidding process, leaving vendors ample time to submit their bid. A sign-in sheet should be available at the pre-bidders conference for aU attending vendors to sign. 9. Departments shall not provide anyone or more potential bidders with material information relative to the purchase or project without providing the same information to all vendors that requested bid documents. Any Village employee or official who knowingly conveys, directly or indirectly, outside of the publicly available invitation to bid, pre-bid conference, or solicitation for contracts procedure, to any person any information concerning tbe specifications for such contract or the identity of any particular potential subcontractor, when inclusion of such information in the bid would influence the likelihood of acceptance of such bid or offer, commits a Class 4 felony. It is not a violation of law to convey information intended to clarify plans or specifications regarding a public contract where such disclosure of information is also made generally available to the public and those companies that requested a bid document package. 10. An employee or official who, either directly or indirectly, knowingly informs a bidder or offeror that the bid or offer will be accepted or executed only if specified individuals are included as subcontractors commits a Class 3 felony. 11. Any employee or official who knowingly awards a contract based on criteria which were not publicly disseminated via the invitation to bid, the pre-bid conference, or any solicitation for contracts procedure, commits a Class 3 felony. C. Additional Requirements for tbe Bid Document 1. A bid bond, cashier's check, certified check, or other approved security in an amount equal to 10% of the bid should be required to be submitted at the time bids are due to guarantee the successful bidder will sign a contract when the Village deems it necessary. 2. When preparing the bid document, departments should consider whether to require contractors to provide a performance bond if awarded the contract. In instances where the bid is for construction services or significant building improvements, it is customary to require the contractor to provide a performance bond. A performance bond, issued by 13 i i i a surety company, stipulates a legal, written obligation to guarantee 100% payment for any financial loss caused by default of the contractor. When assigned to the Village of Mount Prospect, it grants an assurance as to the performance and successful completion of the. terms of the contract and. assures payment of the taxes, licenses, or assessments associated with the contract. The contractor shaUprovide the performance bond within ten (10) calendar days of award of the bid. Bonds required to guarantee performance shall be in a form acceptable to the Village and shall provide that they shall not terminate on completion of the work, but shall be reduced to ten percent (l 0%) of the contract sum upon the date of final payment by the Village for a period of one (1) year to cover a waITanty.and maintenance period which Contractor agrees shall apply to all material and workmanship for one (1) year from the date of issuance of the final payment by the Village. 3. During the tenn of the contract, the contractor shall provide the Village with a certificate of insurance. The limits of liability shall be specified in the bid document's General Terms and Conditions and shall include comprehensive general liability, auto liability, professional liability (required only where contracts are for professional services), workers compensation (the policy shall include a 'waiver of subrogation'), and umbrella coverage. 4. The aforementioned insurance requirements shall be fulfilled by the contractor by maintaining insurance policies which name the ViUage, its officers, agents, employees, representatives and assigns as additional insureds. The contractor shall furnish to the Village satisfactory proof of coverage by a reliable company or companies, before commencing any work. Such proof shall consist of certificates executed by the respective insurance companies and filed with the Village together with executed copies of an "Additional Insured Endorsement" form.. Said certificates shall contain a clause to the effect that, for the duration of the contract, the insurance policy shall be canceled, expired or changed so as to the amount of coverage only after written notification 30 days in advance bas been given to the Village. In addition, said certificates shall list the Village and its officers, agents and employees asadditiona! insureds on aU required insurance policies except the policy for professional liability. D. Bid Opening Requirements 1. The Village Manager's Office shall receive all sealed bids. Any bids submitted that are not sealed shall not be accepted and shall be returned to the vendor. All bids are to be date and time stamped upon receipt. All eligible bids must be received before the deadline on. the day of the. bid opening. Sealed bids are not to be opened by the Village prior to the published bid opening. date and time; to do $0 is to commit .a Class 4 felony. Any employee who knowingly discloses to any interested person any information related to the tenns of a sealed bid commits a Class 3 felony. 2. All formal bid openings are to. be conducted by the Village Clerk or hislher designee and aUeast one other viHage representative on the scheduled bid opening date and time. i4 3. A designated department employee shall review the post bid process with those vendors in attendance at the bid opening. 4. Upon opening the bids, a designated department employee shall provide the vendors in attendance at the bid opening the name of each vendor submitting a bid and their submitted price. 5. After the bid opening, the department head shall prepare a bid tabulation and review aU bids for compliance with the bid specifications. The department head shall then forward to the Village Manager a memorandum summarizing the bid results and his or her recommendation. This memorandum shall take the form shown in Exhibit 6. The responsible employee shall analyze the bid results and recommend which company should be awarded the bid. The recommendation should be based on the following: a) The lowest responsible bid. b) The ability, capacity, and skill of the bidder to perform the contract to provide the service required. c) Whether the bidder can perform the contract or provide the service promptly, or within the time specified, without delay or interference. d) The character, integrity, reputation, judgment, experience, and efficiency of the bidder. e) The quality of performance of previous contracts of services. f) The previous and existing compliance by the bidder with laws and ordinance relating to the contract or service. g) The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service. h) The quality, availability, and adaptability of the supplies or contractual service to the particular use required. i) The ability of the bidder to provide future maintenance and service for the use of the subject of the contract. j) The number and scope of conditions attached to the bid. k) Whether the bidder has a place of business in the Village. 1) Responsiveness to the exact requirements of the invitation to bid. 15 m) Ability to work cooperatively with the Village and its administration. n) Past records of the bidder's transactions with the Village or with other entities as evidence of the bidder's responsibility, character, integrity, reputation, judgment, experience, efficiency and cooperativeness. 6. Upon concurrence of the bid recommendation by the Village Manager, the bid award recommendation will be forwarded to the Village Clerk to be placed on the agenda of the next scheduled Village Board meetingo 7. Following the acceptance of the bid and awarding .of a contract by the Village Board, the department head shall notify the successful bidder of the Village . Board' s approval. The department head shall also notify the unsuccessful bidders of the results. 8. The department head shall then initiate a purchase order for the purchase. 9. The department head shall retain the originally submitted bids for a period of not less than ten years. 10. Within fourteen (14) days following Village Board approval of the contract, the issuing department will contact the. successful bidder to have the Village's contract signed and to obtain perfonnance bonds and certificates of insurance when required. The signed contract will be forwarded to the ViIlage Clerk for safekeeping after it is received. 11. Signed contracts, certificates of insurance and perfonnance bonds must be obtained from the contractor before work begins. It is the responsibility of the applicable department to ensure that the ViHage's contract has been signed, and certificate of insurance and performance bond obtained before work begins. 12. The issuing department shaH be responsible for handling bid deposits. The bid deposit of the accepted bidder is to be returned only after acceptance by the Village of a satisfactory perfonnance bond where such bond is required or completion of contract where no performance bond is required. The remaining bid deposits of each contractor should be returned after the Village Board has awarded the contract. E. Bid Lists Each. . department shall be responsible for maintaining a cummt list of bidders and for determining prospective bidder's qualifications for goods and services they might require. Requests to be placed on the bid list received by the Finance Department shall be forwarded to the appropriate individuals or departments for consideration. When developing the list of bidders, all relevant vendors within the Village of Mount Prospect will be given every opportunity to compete for the Village's business. 16 F. Requests for Professional Services Some contracts, by their nature, are not adapted to award by competitive bidding. These contracts generally result from a request for proposal (RFP). A request for proposal is utilized when professional services are being sought such as engineering, legal, audit, or consulting servIces. Essentially, all of the procedures that apply to sealed bids also apply to the request for proposal. The specifications, however, are written around performance standards rather than a description of a good. Whereas the bidding process begins with the issuance of a bid invitation package for the sealed bid process, the request for proposal is issued for professional services. The originating department should follow all of the procedures listed on pages 12 - 18 of this policy document when professional services are being bid. A pre-proposal conference may be substituted in the place of the pre-bidders conference and follows the same guidelines as explained on page 13. When seeking approval from the Village Board, a guideline should be submitted to the Board indicating the criteria used to qualify the prospective professionals. The criteria used can be past projects of comparable size, number of years in the profession, number of qualified and/or licensed staff on the project team, references of past clients, and Village staff site visits. G. Contracts After the bidding process is completed and the Village Board approves the purchase of the goods or services, which were bid, the originating department issues a purchase order and/or a contract to be executed by the successful bidder. A contract is a legal obligation of the Village and must be on terms acceptable to the Village Board. In order to make certain the contract provisions as set by Village staff and the vendor are in the best interests of the Village and are legally accurate, the department head should provide a copy of all proposed contracts to the Village Attorney for review. After review by the Village Attorney, the contract is forwarded to the Village Manager for his signature or the signature ofthe Mayor. The originally signed contract is routed to the Village Clerk for filing. The Village Clerk's office retains all original contracts for the Village of Mount Prospect. If the vendor requires an originally signed contract as well, two documents should be executed. The originating department should retain a copy of the contract for future reference. 17 CHAPTER 5 - METHODS OF PAYMENT PROCESSING Ao BiUListApprovalby the Village Board The final step in the purchasing process involves the payment of invoices for goods or services received and accepted. The Village Board generally meets on the first and third Tuesdays of each month. It is at these meetings that the bill lists are approved. The Finance Department is responsible for generating a report listing all bills to be paid. If the Village Board approves the bill list, the payments are mailed or are ready for pick-up the Wednesday following the Village Board meeting. To insure a check is cut for any given bill list (the 1 sl and 3rd Tuesday oreach month), the request must generally be submitted to the Accounts Payable Clerk no later than the Friday falling nine days priorto the board meeting date. Do Regular Purchase Orders Generally, aU purchases shall require the issuance of a regular purchase order (Exhibit?) to the vendor before an order for goods or services is fined. The exceptions are purchases processed with a blanket purchase order (see description below) and purchases totaling $500 or less. No employee shall have the authority to purchase items on the Village's behalf without first submitting a purchase requisition request and obtaining the required approvals from supervisory staff or the Village Board where applicable. C. Changes To Existing Purchase Orders After a purchase order is issued to the vendor it may become necessary to make changes to the quantity, price, shipping cost, account number, etc. When this occurs, the department submits an amended purchase order request through the purchasing software module. Sometimes because of minor price variation and/or shipping costs,the amount or the purchase order wiH not be identical to the invoice amount. Approval ofthe invoice amount wiH override the purchase order amount as long as appropriate signatures are obtained. Change orders where the original contract was for $10,000 or more, or where the change order increases the total cost to $10,000 or more, require ViUageManager and Board approvaL D. Blanket Purchase Orders Blanket Purchase Orders are intended to give employees flexibility when purchasing items for less than $1,000. Orders exceeding $1,000 shall be processed using a regular purchase order. In instances where a blanket purchase order has been issued to a vendor, it is not necessary to process a separate purchase order in advance of obtaining the goods or services. The receipt 18 and/or packing slip shall be sent to the Accounts Payable Clerk. When the invoice is received, they are attached and sent to the designated department for approval. The following is a partial list of the commodities and services that can be purchased through a blanket purchase order arrangement: . auto and truck parts batterìes (automotive, truck, flashlight and barricade) bituminous surface materials, cold patch, seal coating chlorine and phosphate forestry and agriculture supplies gasoline and diesel fuel hardware items landscaping materials lubricants lumber office supplies painting supplies sod and top soil tires, tubes and front end alignments trees unifonns welding gases . . . . . . . . . . . . . . . . E. Payment Directly from Invoices There are some bills that can be paid directly from invoices received without the issuance of a purchase order. Generally, these are for on-going expenditures where little or no choice of vendors exists. Examples include utility bills, newspaper subscription renewals, insurance payments, debt service payments, and renewal dues for professional organizations. In this case, the Accounts Payable Clerk sends the invoice to the designated department, where the appropriate authority assigns an account number and approves. F. Prep.ayments The Village will not pay for goods and services until the goods are received or the service is rendered. Exceptions: 1. Deposits on contracts approved by the Village Board. 2. Memberships and books or periodicals. 3. Payments to local, State, and Federal government entities. 19 4. Service and maintenance contracts where necessary. 5. Small orders (under $500.00) where the department head approves prepayment 6. Prepayments approved by the Director of Finance or ViHage Manager. G. Manual Checks Manual checks are interim checks issued between normal accounts payable cycles when an emergency or other extenuating circumstance as determined by the Director of Finance makes it impractical or unreasonable to wait until Village Board approval. Since the issuance of manual checks circumvent Village Board approval and are labor intensive and time consuming to issue, this method of payment shall be restricted to unique or special circumstances. All requests for manual checks must be processed by completing a check requisition form (Exhibit 8). The completed fonn shall include the vendor's name and address, the account number against which the payment is being charged, a description of the item purchased, and an explanation in the remarks section as to need for the check. The form shall also include the signature of the applicable department head. The check requisition form needs to be marked for a "manual" or "ASAP" check. Completed forms shall be submitted to the Director of Finance for approval. The Department of Finance will not issue manual checks in instances where reasonable means could have been taken to process the payment following normal payment methods. H. Petty Cash This policy sets forth. procedures for the handling of petty cash monies at the Village Hall, Police, PubHcWorks, and Fire Departments. It further establishes the procedures for reporting petty cash disbursements by department to the Department of Finance as well as reimbursements to each petty cash box. Petty cash boxes are located in the Village Manager's Office, the Finance Department, Police Department, Public Works Building, and Fire Department. Each department head is responsible for designating an individual accountable for petty cash in their possession. They are responsible for seeing that the total value of receipts and cash On hand equalthe amount of petty cash established. The Petty Cash box is subject to audit (Section 2f) and the department heads will be accountable for any non-compliance with these procedures and any shortage of funds. The following policy and procedural guidelines have been established to promote a more efficient and accountable petty cash operation. All departments within the Village are responsible for abiding by this policy. 20 1. a. b. c. d. Petty Cash Disbursements to Employees Requests for petty cash may be made to the representative responsible for administering the petty cash in each department. There is a $50 limit per petty cash request per day. Any amount above $50 must be reimbursed via a check requisition submittal through the accounts payable process. Reimbursable expenses under $50 incurred by an employee for training expenses, etc. should be reimbursed from petty cash rather than through the accounts payable process. No one is allowed to take money from petty cash without a petty cash request form (Exhibit 9) signed by the appropriate supervisor. The employee who will receive the money must also sign the petty cash request form. .. If a petty cash request fonn is submitted without a receipt (e.g. money is requested before a receipt has been obtained), the person disbursing the money will mark the receipt form for the amount given out. When the employee brings back a receipt after the money is spent, along with the change (if applicable), the proper dollar amount is recorded. The receipt will then be attached to the petty cash request form and placed in the petty cash box. .. If a receipt is submitted with the petty cash request form, the employee is reimbursed and no further action by the employee is needed. At this time, the petty cash request form is put in the petty cash box. .. All receipts must be original. If desired, copies may be made and kept by the employee, but the original is given to the respective person responsible for petty cash in each department. .. If for some reason the employee did not obtain a receipt for submittal with the petty cash request form, supervisory approval must be noted on the petty cash receipt form. AU petty cash request forms must contain the following information: .. Date . Detailed description of the expenditure .. Name ofperson(s) to receive money . Name of person authorizing receipt of money (must be a supervisory employee specifically designated by the department) .. Account number to which the expenditure will be charged and receipt 21 2. Reimbursing Each Petty Cash Box a. The persons responsible for the various. petty cash boxes not only disburse petty cash to various employees, they must reconcile the petty cash box and request petty cash reimbursements as needed. b< The amount of petty cash allotted to each department will be. determined by the Director of Finance based upon average petty cash disbursements. c. Departments shaH submit petty cash reimbursement requests on an as needed basis to the Finance Department However, reimbursement requests should generally not exceed two per month. The petty cash reimbursement request shall contain the following information: . Detailed list of account numbers . Total amount of charges for each account number . All original petty cash request forms and corresponding receipts . A completed and signed check request form d. Once the petty cash reimbursement request is reviewed and processed, the Finance Department will forward to the department head a check for petty cash reimbursement The check is then cashed at the bank and the. money is forwarded to the respective department representative to reimburse their petty cash box. e. The envelope with the petty cash request fonns and receipts is then attached to the file copy of the check that was cut for reimbursement and is stored with the accounts payable files in .the Finance Department. f. Petty Cash will be subject to periodic announced and unannounced audits to determine compliance with these procedures. Any discrepancies with compliance or cash balance shall be immediately reported to the Director of Finance. I. Credit Card Payments The Village has provided certain department heads and deputy directors with a corporate credit card for use in making purchases. Each individual is responsible for the security of the card and should not pennit its use for means other than those permitted by this policy. Credit card use shall be limited to the purchase of items under $500 (excluding payment of travel expenses) where a purchase order cannot be used (e.g. airline reservations, restaurants etc.)< Credit cards shaH not be used to circumvent the normal payment process. 22 As with all purchases made on the Víllage's behalf, goods purchased with a credit card are exempt from sales tax. Therefore, employees shaH provide the vendor with a sales tax exemption form in order to avoid being charged sales tax. When credit card invoices are received, they should be processed as soon as possible to avoid late fees and finance charges. Receipts for goods or services purchased with a credit card shall be obtained and submitted to accounts payable when requesting payment. If a receipt is not issued, a packing slip may be provided to accounts payable. Payment will not be made unless receipts (or an explanation as to why receipts are not available) are included with the credit card statement. The Finance Department shall maintain a list of the credit cards issued to each employee and shaH request that they be returned prior to termination of employment. Returned cards shall be forwarded to the Director of Finance or his/her designee and shall be canceled. J. Check Requisitions Purchase orders are the preferred method of payment . for most Village transactions. However, when purchase orders are not utilized, check requisitions (Exhibit 8) should be used for payment processing. Check requisitions require the signature of a Department head and the Director of Finance. Invoices or receipts are to be attached to check requisition forms. Check requisitions should contain the following information; name and address of vendor, description of goods or services received, amount to be paid, account number to be charged, invoice number and invoice date (where applicable) and the date the requisition was submitted. K. Prompt Payment Act The Illinois Prompt Payment Act (50 ILCS 505) provides that the appropriate local government official receiving goods or services must approve or disapprove a bill from a vendor or contractor for goods or services furnished the Village within thirty (30) days after the receipt of such bill or within thirty (30) days after the date on which the goods or services were received, whichever is later. Written notice is to be mailed to the vendor or contractor immediately if a bill is disapproved. Any bill approved for payment is to be paid within thirty (30) days after the date of approval. If payment is not made within such 30 day period, the vendor may invoice the Village for an interest penalty of 1 % of any amount approved and unpaid for each month or fraction thereof after the expiration of such 30 day period, until final payment is made. If the local government official whose approval is required for any bill fails to approve or disapprove that bill within the thirty day period provided for above, the vendor may invoice the Village for an interest penalty of 1% of the outstanding bill computed from the date sixty (60) days after the receipt of that bill or the date sixty (60) days after the goods or services are received, whichever is later. Department heads are charged with the responsibility of ensuring compliance with the approval requirement. 23 ....n~',",~,'.~ CHAPTER 6 - GLOSSARY OF TERMS A. Glossary of Terms L Addenda are written or graphic instruments issued prior to the time of bid opening, which modify or interpret the Bid Documents by additions, deletions~ clarifications, or corrections. 2. Alternate Bid is a bid that deviates from set specification and offers or proposes another way of accomplishing the same. 3. Approval means the process of Village authorization of an action prior to its execution. 4. An Award is the acceptance of a bid proposal, which results in the presentation of a purchase agreement or contract to a bidder. 5. A Bid is a complete and properly signed proposal to provide the commodities or services or designated portion thereof for the sums stated therein, submitted in acc{)rdance with the Bid Documents. 6. A Bid Bond is an insurance agreement in which a third party agrees to be liable to pay the Village a certain amount of money in the event the Bidder awarded the Contract does not execute the Contract Documents, or furnish any required Perfonnance Bond. The Bond is given to the Village atthe time of Bid submittal. 7. A Bid Deposit is a sum of money or guaranteed check deposited with and at the request of the Village guarantee that a Bidder (depositor) awarded the Contract will execute the Contract, furnish any required Performance Bond, and proceed wìth performance. The Bid Deposit is given to the Village at the time of Bid submittal and released when Performance Bond is received. 8. ABidder is an individual, firm~ or corporate entity submitting a bid (proposal). 9. Bid Documents include the advertisement or invitation to bid, instructions to bidders, the bid form, other sample bidding and contract forms, and the proposed Contract Documents including aU Addenda issued prior to receipt of bids. 10. A Capital Project is a facility construction or modification project or a road and bridge project approved by the Village Board as part of the Capital Improvement Program. I L A Change Order is a written change to the Contract signed by the contractor, the Village and, where applicable, the consultant; issued after execution of the Contract,authorizing a change in the work or an adjustment in the contract sum or the contract time. 24 ',',',',',',',',','C"""'""".,.,.,.,."",.,.,.,,,.,. 12. Commodity is an article of trade, a movable article of value, something that is bought or sold, or any movable or tangible thing that is produced or used as the subject of barter or sale. Goods, materials, supplies, and equipment are commodities. 13. A Contract to be valid and enforceable must contain four basic elements: 1) agreement (meeting of the minds) resulting from an offer and acceptance. (2) consideration, or obligation; (3) competent parties; and (4) a lawful purpose. 14. The Contract Documents consist of the owner~contractor agreement, the conditions of the Contract (general, supplementary, and other conditions), any drawings, the specifications, and all addenda issued. 15. An Emergency Purchase is a purchase of commodities or services necessitated by breakage, damage, or decay, or when the public interest would suffer by delay, which is made without following the normal purchasing procedure. 16. The Evaluation of a Bid is the process of examining a bid after opening to determine the bidder's price(s), responsibility, responsiveness to requirements, and other characteristics of the bid. 17. A Formal Bid is a bid, which must be forwarded in a sealed envelope and in conformance with a prescribed format, to be opened at a specified time. 18. Free on Board this is a shipping term that defines three things. 1. The point at which the buyer takes legal title to the goods. 2. Who is responsible for payment of freight charges. 3. Who is responsible for prosecuting claims against carriers for loss or damage. The term F.O.B. must be qualified by a name of location, such as shipping point, destination, name of city, warehouse, etc. The slated F.O.B. point is usually the location where title to the goods passes from seller to buyer. The seller is liable for transportation charges and the risks of loss or damage to the goods up to the point where title passes to the buyer. The buyer is liable for such charges and risks after passing of title. 19. An lnfonnal Bid is an unsealed competitive offer conveyed by letter, telephone, fax, or other means. 20. An Invitation for Bids is a request, verbal or written, which is made to prospective suppliers requesting the submission of a bid on commodities or services. 25 III 26. 27. 28. 29. 30. ] 21. The..LowestResponsibleBidderis the bidder. whose. bid is incompliance with the specifications in aU material respects and whose bid in. unit price, total cost of operation or value per dollar is lower. than any ofthe other bidders, and whose reputation, past performance, and business and financial capabilities are such that they are judged by the appropriate authority to be capable of satisf)fÍng the Village's needs for the specific contract. 22. A Performance Bond is a form of security executed subsequent to award by a successful Bidder that guarantees .theproper execution. of the Contract and the payment of debts to persons furnishing services or materials on account of the Contract work. The bond is provided by the Contractor prior to Contract execution. 23, Personal Services are services provided by an individual, firm or corporate entity where no Village job classification .exists for. the work which is to be performed or where the Human Resources Department has determined that.another type of appointment is not practicaL 24. Pregualification of Bidders. is the screening of potential vendors in which the Village considers such factors as financial capability, reputation, and management in order to develop a list of Responsible Bidders qualified to bid on contracts. 25. A Price Agreement is a contractual agreement in which. the Village contracts with a vendor to provide the purchaser's requirements at a predetermined price. Usually it involves a minimum number of units, orders placed directly with the vendor by the Village, and a limited duration ofthe contract (usually one year). Professional Services are those services which require specialized training and knowledge and intellectual skills such as architectural, engineering, medical, accounting, auditing, legal, real estate, consulting, and counseling services" Proposal vs. Bid the State Statute requires that competitive "bids" be taken for all matters except professional services. The "bid" may be a proposal, but the process is "bidding". If we. choose to waive the statutory "bidding" requirement, then we. consider non- competitive or selective quotes or proposals. Proprietary Items are items belonging to or contro.lledas property manufactured and sold only by the owner of the patent, formula, brand name, <or trademark associated with the product. A Responsible Bidder is a bidder whose reputation, past performance and business and financial capabilities are such that the. bidder is judged. by . the appropriate Responsible Official to be capable of satisfying the government's needs for a specific contract and who is not debaITed by the Village. A Responsive Bidder is a bidder whose bid does not materially vary from the specifications and terms set out in the Invitation for Bids. 26 31. 32. 33. 34. Sole (Single) Source - When only one supplier is able to provide the product, material, or service required by the Village. This is usually because of technology or uniqueness of product and there is not a comparable product available. Specifications mean any description of the physical, technical, or functional characteristics of a commodity, service, or construction item. It may include a description of any requirement such as inspecting, testing or preparing a commodity, service or construction item for delivery. It may also include provisions which govern various aspects of the relation of parties under the Contract. A Sub-bidder is a person or entity that submits a Bid to a Bidder for materials or labor for a portion of the work. A Unit Price is an amount stated in the Bid as a price per unit of measurement for materials or services as described in the Bid Documents or in the proposed Contract Documents. 27 CHAPTER 7 - EXHIBITS A. Exhibit I B. Exhibit 2 C. Exhibit 3 D. Exhibit 4 E. Exhibit 5 F. Exhibit 6 G. Exhibit 7 H. Exhibit 8 I. Exhibit 9 - Budget Transfer Request Form - Sales Tax Exemption Letter - Bid Invitation Package - Instructions to Bidders - Equipment and Products - Instructions to Bidders - Services and Projects - Sample Bid Recommendation Memo - Purchase Order - Check Requisition Form - Petty Cash Request Form 28 CHAPTER 7 - EXHIBITS A. Exhibit 1 B. Exhibit 2 C. Exhibit 3 D. Exhibit 4 E. Exhibit 5 F. Exhibit 6 G. Exhibit 7 H. Exhibit 8 L Exhibit 9 - Budget Transfer Request Form - Sales Tax Exemption Letter - Bid Invitation Package - Instructions to Bidders - Equipment and Products - Instructions to Bidders - Services and Projects - Sample Bid Recommendation Memo - Purchase Order - Check Requisition Form - Petty Cash Request Form 28 Exhibit 1 VILLAGE OF MOUNT PROSPECT Budget Transfer Request Form Date of Request: For Fiscal Year: Request No. (For Finance Department lIs. Only) Department: From Account Amount To Account Amount $ $ $ $ $ $ $ $ Need assistance in finding a source funds. JustificatÍon: -..- ..- ..- ..-.. _.- - ..-.. --. -..-" -.. - ..-.. -.. -" -. .-" - ..-" -.. -"-" -..-.. -.. -.. -. .-. .-.. -.. -..- -. _.. -.. -..- n- n_.. -..-..-..-.. -. .-.. - n _n_..- n - ..-"-"- ..-..-..- n_n__.- ..-.. -.. - -. -..- ..-..- n_.. -. .-.. -..-. Signatures and Approval Dept. Head 1: Dept. Head 2: Director of Finance: Comments: i\pprovednDisapproved/ Referred to Village Manager Village Manager: Comments: ApprovednDisapproved -..-.--.-_.._.._n_.._.._..-.._.._.._n_.._.._n_.._.._..-..-..-..-..-.._n_.._.._.._n_.._..-..-"-..-..-..-..-..-..-.._.._n_.._n_..-"-..-..-..-..-..-..-..-..-.._.._.._n_.._.._..-..-..-..-..-..-.._.._.._n_. Finance Dept. Data Entry Copies: Village Manager Dept. 1: Dept 2: Instructions 1. Transfers may only be made between expenditure accounts (no revenue accounts). 2. No request should be made for a transfer ofless than $100. 3. Amounts to be transferred must be rounded to the nearest dollar. 4. The total of the transfers from the "From" accounts must equal the total transfers to the "To" accounts. 5. Whenever possible, transfers should be requested between accounts of the same department. 6. The references to "Dept. Head 1" and "Dept. 1" on the front side of this fonn pertain to the department initiating the budget transfer. That is, a department requesting a transfer of funds between its own accounts or requesting a transfer of funds to its accounts ITom accounts of another department. The references to "Dept. Head 2" and "Dept. 2" relate to a department agreeing to relinquish funds to another department. If a department head is agreeing to relinquish funds to another department, the signatures of both department heads must appear on the front side of this fonn. 7. If a department head cannot identify a funding source for a requirement, the block beside "Need assistance in finding a source of funds" should be checked. In these cases, the Director of Finance will attempt to identify a source account. The requesting department should attempt to identify source accounts ITom among its own departmental accounts before asking for assistance. If neither the requesting department nor the Director of Finance can identify a source account, the Director of Finance will request a budget amendment from the Village Board if appropriate. 8. All transfers must be between accounts ofthe same fund. 9. Although transfers between more than two accounts may be requested with this fonn, separate budget transfer request forms should be used for funding requirements which are unrelated. 10. Budget transfer requests should be submitted to the Director of Finance. disapproved, a copy of the request form will be sent to all departments involved. Once approved or 11. If sufficient funds are not available in an account to make a purchase, a budget transfer should be requested before the purchase is made or a purchase order is submitted. Exhibit 2a MAYOR GcraJd L. Farley Phone: (847) 392-6000 Fax: (847) 8] 8-5336 TOD: (847) 392-6064 TRUSTEES Timothy 1. Corcoran Paul Will. Hoefert Richard M. Lohrstorfer Michae!e W. Skowron Irvana K. Wilks Michael A. Zadel Village of Mount Prospect 50 South Emerson Street Mount Prospect, Illinois 60056 VILt,AGE MANAGER Michael E. Janonis VILLAGE CLERK Velma W. Lowe RETAILERS' OCCUPATION AND SERVICE USE TAX EXEMPTION CERTIFICATE The undersigned hereby certifies that he is the Finance Director of the Village of Mount Prospect, a governmental unit of the State of Illinois, and that he is authorized to execute this certificate and that the article or articles specified in purchase orders of this governmental unit are purchased ITom you for exclusive use of the said Village of Mount Prospect in connection with the operation of the said Village of Mount Prospect. The Department of Revenue, State of Illinois, issued to the Village of Mount Prospect tax exemption identification number E9998~1475-04 pursuant to letter dated January 20,2000. It is understood that the exemption from tax in the case of sales of articles under this exemption certificate to a state, territory or political subdivision thereof, or the District of Columbia, is limited to the sale of articles purchased for their exclusive use, and it is agreed that if articles purchased tax free under this exemption certificate are used otherwise or are sold to employees or others, such fact will be reported by me to the manufacturer ofthe article or articles covered by this certificate. It is also understood that the fraudulent use of this certificate to secure exemption will subject the undersigned and all guilty parties to a fine of not more than $10,000, or to imprisonment for not more than tìve years, or both, together with costs of prosecution. David O. Erb, Director of Finance Date Exhibit 2b 1111 nol5 Department of Revenue Office of Local Government ServIces Sales Tax Exemption Section, 3-520 '01 W. Jefferson Street Springfield, IL 62702 2 i 7 782-8881 January 20, 2000 VILLAGE OF MT PROSPECT RICHARD L JESSE, FISCAL OFFICE 100 S EMERSON 51 K1 PROSPECT It 60056 Effective January 1, 2000, we have renewed your governmental exemption from payment of the Retailers' Occupation Tax, the Service Occupation Tax (both state and toea!), the Use Tax, and the Service Use Tax, as required by Illinois law. Your organization is not, however, exempt from Illinois Hotel Operators' Occupation Tax, Electricity Excise Tax, Electricity Distribution Tax, and Telecommunic8tionsExcise Tax. \ We have issued the following new tax exemption identification number: E9998-1475-04 to VILLAGE OF H1 PROSPECT of 11T PROSPECT, IL The terms and condItions governing use of your exemption number rema.in unchanged. Office of Local Government Services Illinois Department of Revenue ~ JAN 3 f 2OOJ ... ...,...".....'. ;..:':. . :';' ¡" STS-7Q (A-2/9B) Il-492-3524 10-0000458 Exhibit 3 VILLAGE OF MOUNT PROSPECT BID DOCUMENTS «Insert bid item name here in italic, bold and in caps») BID OPENING DATE: BID OPENING TIME: TABLE OF CONTENTS Bidder Introduction Lettero................... 0... Bid Notice.......................................... Proposal Fotnl...................................... Bid Certification Form............................ Bidders Reference FonTI........................... Instructions to Bidders............................. «Any other items» 1 2 3 4 5 6- MAYOR Gerald L. Farley Phone: (847) 392-6000 Fax: (847) 392-6022 TOO: (847) 392-6064 TRUSTEES Timothy J. Corcoran Paul Wm. Hocfert Richard M. Lohrstor1êr Michaele W. Skowron lrvana K. Wilks Michael A. Zadcl VILLAGE MANAGER Michac1 E. Janonis VILLAGE CLERK Velma W. Lowe Village of Mount Prospect 100 South Emerson Street Mount Prospect, Illinois 60056 (SAMPLE BIDDER INTRODUCTION LETTER) ((Date)) To Prospective Bidder: On behalf of the citizens of the Village of Mount Prospect I want to express my thanks for your interest in becoming a part of our Village bid process. I call you special attention to the Instructions to Bidders section of the bid documents. Please be sure that you read this document thoroughly and fully understand these ìnstructionsprior to the preparation of your bid. Note that the instructions call for no deviation from the bid specifications except for those deviations which are listed as such on the vendors bid detail sheet and which are expressly approved as part of the Village's acceptance of the bid, The equipment you are considering offering as part of this bid must meet the performance and specifications set forth in the bid document. Unless denoted "No Substitution", the Village's minimum required specifications may be exceeded. Remember, however, to list all deviations and provide a description of the upgraded item in the proper space provided. Final bid acceptance will be based upon that equipment which is deemed most favorable to the interests of the Village after all bids have been examined and canvassed. We encourage you to participate in our bid process and will be happy to answer any questions you may have regarding the accompanying documents. Questions with regard to specifications should be directed to «insert appropriate individuals name and telephone number). Thank you for considering submitting a bid. Sincerely, NOTICE TO BID VILLAGE OF MOUNT PROSPECT Mount Prospect, IL 60056 The Village of Mount Prospect Department of «insert department name» is soliciting bids for «insert item name here». Sealed bids will be received by the «insert tile of department director», «insert department address here», until «enter bid opening time here», local time, «enter bid opening date here», at which time they will be publicly opened and read aloud. It is the responsibility of the bidder to meet the specified opening time, and any bid not so received will be returned unopened. Bids must be identified as such on the outside of the sealed envelope. This can be done by label as may be provided or by marking the envelope "SEALED BID" and with the following information: company's name, address, bid item, date and time of opening. Specifications and complete bid documents may be obtained from the Office of the «insert title of department director here». Further information regarding this bid may be obtained by contacting « insert appropriate name and telephone number here». The Village of Mount Prospect reserves the right to waive any and all informality, or to reject any and aU bids and/or parts thereof; and to accept that bid which it deems most favorable to Mount Prospect after all bids have been examined and canvassed. By Order ofthe President and Board of Trustees of the Village of Mount Prospect. date «insert department head name)) TO BE PUBLISHED ON ,20- IN «insert name of newspaper» NOTE: THIS FORM MUST BE NOTARIZED Return with Bid VILLAGE OF MOUNT PROSPECT BID CERTIFICATION FORM RE: CERTIFICATION OF BIDDER, COMPLIANCE WITH 720 ILCS 5/33 I/We hereby certify that is not barred from bidding on (name of bidder) this contract as the result of a violation of either Article 33E-3 or Article 33E-4 of State Statute 720 ILCS 5/33. Signed: Date: Title: ---------------------------------------------------------------------------------------------------------------------------- PUBLIC ACT 85-1295 720 ILCS 5/33 Section 5/33E-3 Bid-rigging. A person commits the offense of bid-rigging when he knowingly agrees with any person who is, or but for such agreement would be, a competitor of such person concerning any bid submitted or not submitted by such person or another to a unit of State of local government when with the intent that the bid submitted or not submitted will result in the award of a contract to such person or another and he either (l) provides such person or receives from another information concerning the price or other material term or terms of the bid which would otherwise not be disclosed to a competitor in an independent non-collusive submission of bids or (2) submits a bid that is of such a price or other material term or terms that he does not intend the bid to be accepted. Bid-rigging is a Class 3 felony. Any person convicted of this offense shall be barred for 5 years from the date of conviction from bidding on any contract offered for bid by any unit of State or local government. Section 5/33E-4 Bid Rotating. A person commits the offense of bid rotating when pursuant to any collusive scheme or agreement with another, he engages in a pattern over time (which, for purposes of this Section, shaH include at least 3 contract bids within a period often years, the most recent of which occurs after the effective date of this amendatory Act of 1988) of submitting sealed bids to units of State or local government with the intent that the award of such bids rotates, or is distributed among, persons or business entities which submit bids on a substantial number of the same contracts. Bid rotating is a Class 2 felony. Any person convicted of this offense or any similar offense of any state or the United States which contains the same elements as this offense shall be permanently barred from bidding on public contracts in the State of Illinois. REFERENCES BIDDER NOTE: Bidder shall provide as many customer references as possible for services/equipment identical or as similar as possible to that which the bidder has proposed within his bid submittal. BUSINESS: ADDRESS: CONTACT PERSON: PHONE NUMBER: APPROXIMATE DATE OF SALE/SERVICE: BUSINESS: ADDRESS: CONTACT PERSON: PHONE NUMBER: APPROXIMATE DATE OF SALE/SERVICE: BUSINESS: ADDRESS: CONTACT PERSON: PHONE NUMBER: APPROXIMA TE DATE OF SALE/SERVICE: BUSINESS: ADDRESS: CONTACT PERSON: PHONE NUMBER: APPROXIMATE DATE OF SALE/SERVICE: BUSINESS: ADDRESS: CaNT ACT PERSON: PHONE NUMBER: APPROXIMATE DATE OF SALE/SERVICE: BUSINESS: ADDRESS: CONTACT PERSON: PHONE NUMBER: APPROXIMATE DATE OF SALE/SERVICE: Exhibit 4 VILLAGE OF MOUNT PROSPECT INSTRUCTIONS TO BIDDERS EQUIPMENTIPRODUCTS The general rules and conditions that follow apply to all bids requested and accepted by the Village of Mount Prospect unless otherwise specified. Bidders or their authorized representatives are expected to fully inform themselves as to the conditions, requirements, and specifications before submitting bids. Failure to do so will be at the bidder's own risk. Submitting of a bid is an assumption that vendor has familiarized himself with all conditions and intends to comply with them unless noted otherwise. 1. FORMS Bid forms are furnished by the VíHage. All bids must be submitted on the forms provided, complete and intact, properly signed in ink in the proper spaces, and submitted in a sealed envelope. All bids must be delivered to the appropriate Village representative prior to the bid opening date and time to be considered. Bids must be identified as such on the outside of the sealed envelope. This can be done by label as may be provided by the Village, or by marking the envelope "SEALED BID" and with the following information: company's name, address, item bid, date and time of opening. 2. AL TERNA TE MULTIPLE BIDS/SPECIFICA TIONS The specifications describe the equipment/product that the Village feels is necessary to meet the performance requirements of the Village. It is not the desire or the intent to eliminate or exclude any bidder from bidding because of minor deviations, alternates or changes. Bidders desiring to bid on items which deviate from these specifications, but which they believe are equivalent, are requested to submit alternate bids. However, alternate bids must be clearly indicated as such, and deviations from the applicable specifications should be plainly noted. The bid must be accompanied by complete specifications for the items offered, Any questions regarding the specifications, drawings, etc., shall be referred to that individual so referenced in the Specifications section of the Bid Document. Vendors wishing to submit a secondary bid must submit it as an alternate bid. There is to be only one bid per envelope. The Village shaH be the sole and final judge unequivocally as to whether any substitute is of equivalent or better quality. This decision is final and will not be subject to recourse by any person, firm or corporation. 3. RECEIVING OF BIDS Bids received prior to the time of opening will be securely kept, unopened. The Department Director or hislher designee, whose duty it is to open the bids, will decide when the specified time has arrived, and no bid received thereafter will be considered, No responsibility will be attached to the Village or its representatives for the premature or non-opening of a bid not properly addressed and identified, except as otherwise provided by law. 4. LATE BIDS Bids arriving after the specified time, whether sent by mail, courier, or in person, will not be accepted. These bids will either be refused or returned unopened. It is the bidder's responsibility for timely delivery regardless of the method used. Mailed bids which are delivered after the specified hour will not be accepted regardless of post marked time on the envelope. 5. BIDS BY FAX Bids must be submitted on the original forms provided by the Village completely intact as issued. Facsimile machine transmitted bids will not be accepted, nor will the Village transmit bid documents to prospective bidders by way of a facsimile machine. 6. ERROR IN BIDS When an error is made in extending total prices, the unit bid price will govern. Otherwise, the bidder is not relieved from errors in bid preparation. Erasures in bids must be explained over signature of bidder. 7. WITHDRAWAL OF BIDS A written request for the withdrawal of a bid or any part thereof may be granted if the request is received by the Director of the requesting Department prior to the specified time of opening. After the opening, the bidder cannot withdraw or cancel his bid for a period of sixty (60) calendar days, or such longer time as stated in the bid documents. 8. CONSIDERATION OF BID No bid will be accepted from or contract awarded to any person, finn or corporation that is in arrears or is in default to the Village upon any debt or contract, or that is a defaulter, as surety or otherwise, upon any obligation to the Village or had failed to perfonn faithfully any previous contract with the Village. The bidder, if requested, shaH present, within 48 hours, evidence satisfactory to the Village of performance ability and possession of necessary facilities, pecuniary resources and adequate insurance to comply with the terms of these specifications and contract document. 9. PRICES Unit prices shaH be shown for each unit on which there is a bid, and shall include aU packing, crating, freight, and shipping charges, and cost of unloading at the destination unless otherwise stated in the bid. Unit prices shaH not include any local, state or federal taxes. The Village is exempt, by law, from paying state and village retailer's occupation tax, service occupation tax, and federal excise tax. The Village will supply the successful bidder with its tax exemption number. Cash discounts will not be considered in detennining overall price, but may be used in an overall evaluation. 10. AWARD OR REJECTION The ViHage reserves the right to reject and/or award any and all bids or parts thereof and to waive fonnalities and technicalities according to the best interests of the Village. Any bid submitted win be binding for sixty (60) days subsequent to the date of the bid opening. Bidders shall make aU investigations necessary to thoroughly infonn themselves regarding the equipment or supplies to be furnished in accordance with the bido No plea of ignorance by the bidder of conditions that exist or that may hereafter exist as a result of failure or omission on the part of the bidder to make the necessary examinations and investigations will be accepted as a basis for varying the requirements of the Village of the compensation to the bidder. Any exceptions not taken by the bidder shall be assumed by the Village to be included. A contract will be awarded to the lowest responsible bidder complying with the conditions of the contract documents only when it is in the best interest ofthe ViUage to accept the bid. The Village shaH be the sole judge of compliance with the specifications and reserves the right to accept or reject any and/or all bids or parts thereof. 11. PAYMENT Payment will be made within thirty (30) days after acceptance of the equipment or supplies and bidder's compliance with aU stipulations relating to the bid/contract. 12. REQUIREMENT OF BIDDER The successful bidder shaH, within ten (10) days after notification of the award: a) enter into a contract in writing with the Village covering all matters and things as are set forth in the specifications and his bid; b) carry insurance acceptable to the Village, covering public liability, property damage and workers compensation. 13. COMPLIANCE WITH ALL LAWS An work under the contract must be executed in accordance with aU applicable federal, state and local laws, ordinances, rules and regulations. 14. CONTRACT ALTERATIONS No amendment of a contract shall be valid unless made in writing and signed by the Village President, Village Manager, or their authorized representative. 15. NOTICES All notices required by the contract shall be given in writing. 16. NON ASSIGNABILITY The contractor shaH not assign the contract, or any part thereof, to any other person, firm or corporation without the previous written consent of the Village. Such assignment shall not relieve the contractor from his obligations or change the tenDS of the contract. 17. INDEMNITY The contractor shall indemnify and save harmless the Village, its officers and employees from any and all liability, losses or damages, including attorneys fees and costs of defense, the Village may suffer as a result of claims, demands, suits, actions or proceedings of any kind or nature, including workers' compensation claims, in any way resulting from or arising out ofllie operations of the contractor under this contract, including operations of subcontractors; and the contractor shall, at his own expense, appear, defend, and pay all fees of attorneys and all costs and other expenses arising therefrom or incuITed in connection therewith; and, if any judgements shall be rendered against the Village in any such action, the contractor shall, at his own expense, satisfy and discharge same. The contractor expressly understands and agrees that any performance bond or insurance protection required by the contract, or otherwise provided by the contractor, shaH in no way limit the responsibility to indemnify, keep and save harmless and defend the Village as herein provided. 18. EQUAL EMPLOYMENT OPPORTUNITY During the performance of the contract and/or supplying of materials, equipment and supplies, bidder must be in full compliance with all provisions of the Acts ofthe General Assembly of the State of Illinois relating to employment, including equal opportunity requirements. 19. REQUIRED INSURANCE In submission of a bid, the bidder is certifying that he has all insurance coverages required by law or would normally be expected for bidder's type of business. 20. BID PERFORMANCE DEPOSIT When it is required, it will be so stated elsewhere within this bid package along with the amount required. The deposit is to be in the form of a certified check, or a bank cashiers check. AU bid performance deposit checks will be retained by the Village until the bid award is made, at which time the checks will be promptly returned to the unsuccessful bidders. The bid performance deposit check of the successful bidder will be retained until the goods have been received or completed/installed and found to be in compliance with the specification or until surety bonding requirements have been satisfied and proof of insurance coverage is provided in accordance with the Special Provisions Section of these specifications. 21. ACCEPTANCE After the acceptance and award of the bid, and upon receipt of a written purchase order executed by the proper officials of the Village, this instructions to bidders, and all other portions of the bid documents, including the specifications, will constitute part of the legal contract between the Village of Mount Prospect and the successful bidder. 22. DEFAULT The Village may terminate a contract by written notice of default to the contractor if the contractor: a. Fails to make delivery of the product within the time frame specified in the specifications, or b. Fails to make progress so as to endanger performance of the contract, or c. Fails to provide or maintain in full force and effect, the liability and indemnification coverages or performance bond as is required. lfthe Village terminates the contract, the Village may procure equipment or supplies similar to those so terminated, and the contractor shall be liable to the Village for any excess costs for similar equipment or supplies, unless the contractor provides acceptable evidence that failure to perforn1 the contract was due to causes beyond the control and without the fault or negligence of the contractor. 23. SPECIAL CONDITIONS Wherever special conditions/requirements are written into the Specifications or Special Provisions which are in conmct with conditions stated in these Instructions to Bidders, the conditions stated in the Specifications or Special Provisions/Requirements shall take precedence. 24. PERMITS AND LICENSES The successful bidder shall obtain, at his own expense, all permits and licenses that may be required to complete the contract (where applicable). 25. GENERAL GUARANTY Neither the final certificate of payment nor any provision in the contract nor partial or entire use of the equipment/product embraced in this contract by the Village or the Public shaH constitute an acceptance of work not done in accordance with the contract, or relieve the contractor of liability in respect to any express waITanties or responsibility for failure to comply with the terms of those contract documents. It is expressly agreed by the parties hereto that in the event any defects or imperfections in the materials or workmanship to be furnished by the contractor herein appear within the period of one year from the date of completion of all the work mentioned herein and acceptance thereof by the ViHage of Mount Prospect, the contractor will, upon notice from said Village (which notice may be given by letter to said contractor to the business address of the contractor shown in the proposal), repair and make good at his own cost any such defects or imperfections and replace any defective or imperfect materials or workmanship with other materials or workmanship satisfactory to said Village, and furnish all such new materials and labor as may be necessary to do so; and in the event of the failure, refusal or delay of said workmanship or materials said Village may do so or have same done by others, and said contractor and surety or sureties on his bond given for the faithful performance of this contract shall be liable to the Village of Mount Prospect for all damages and expenses occasioned by such failure, refusal or delay. 26. PREVAILING WAGES An laborers and mechanics employed by contractors and subcontractors on construction work for this project shall be paid wages at rates no less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 D.S.C. 276a-5), and shall receive overtime compensation in accordance with and subject to the provisions of the Contract Work Hours and Safety Standards Act (40 V.S.C. 327- 333), and the contractors and subcontractors shall comply with all regulations issued pursuant to these Acts and with other applicable federal laws and regulations pertaining to labor standards. The Secretary of Labor has, with respect to the labor standards specified in this Section, the 1950 (5 D.S.C. 1332-15) and Section 2 of the Act of June 13, 1934, as amended (40 V.S.C. 276c). Not less than the prevailing wage shaH be paid for labor on the work to be done as required by law. 27. BIDDERS QUALIFICATIONS All bidders must submit the following information on or before the time at which the bid is required to be submitted: a. The location of the bidder's permanent place of business. b. Evidence of ability to provide an efficient and adequate plan for executing the work. c. A list of similar projects carried out by the bidder. d. A list of projects the bidder presently has under contract. e. Any additional evidence tending to show that the bidder is adequately prepared to fulfill the contract. 28. BID CERTIFICA nON FORM All bid submittals must include a signed Bid Certification Form (copy included in Bid Documents) certifying that the bidder is in compliance with Sections 33E-3 and 33E-4 of the Illinois Criminal Code regarding bid rotating and bid-rigging. Illinois State Law Article 33E-3 and 33E-4 states that it is unlawful to participate in bid-rigging and/or bid rotating. Therefore, an bidders must certify that they are not barred from bidding on the contract as a result of a violation of State Law 33E-3 and/or 33E-4, prohibiting bid-rigging and bid rotation. It is necessary that this be done under oath. Therefore, the fonn induded with the bid submittal sheets must be notarized. 29. DEVIATIONS Unless denoted "No Substitution", the Village's minimum required specifications may be exceeded. However, vendors must list all specification deviations and provide a description anwor catalog sheet that fully describes that which they propose to furnish, in lieu of that specified. Final bid acceptance shall be based upon that bid deemed most favorable to the interests of the ViUage after all bids have been examined and canvassed. Exhibit 5 VILLAGE OF MOUNT PROSPECT INSTRUCTIONS TO BIDDERS SERVICES The general rules and conditions that follow apply to all bids requested and accepted by the Village of Mount Prospect unless otherwise specified. Bidders or their authorized representatives are expected to fuBy inform themselves as to the conditions, requirements, and specifications before submitting bids. Failure to do so will be at the bidder's own risk. Submitting of a bid is an assumption that vendor has famiHadzed himself with all conditions and intends to comply with them unless noted otherwise. 1. FORMS Bid forms are furnished by the Village. All bids must be submitted on the forms provided, complete and intact, properly signed in ink in the proper spaces, and submitted in a sealed envelope. All bids must be delivered to the appropriate Village representative prior to the bid opening date and time to be considered. Bids must be identified as such on the outside of the sealed envelope. This can be done by label as may be provided by the Village, or by marking the envelope "SEALED BID" and with the following information: company's name, address, item bid, date and time of opening. 2. AL TERNA TE MDL TIPLE BIDS/SPECIFICA nONS The specifications describe the services that the Village feels is necessary to meet the performance requirements of the Village, It is not the desire or the intent to eliminate or exclude any bidder from bidding because of minor deviations, alternates or changes. Bidders desiring to bid on services which deviate from these specifications, but which they believe are equivalent, are requested to submit alternate bids. However, alternate bids must be clearly indicated as such, and deviations from the applicable specifications should be plainly noted. The bid must be accompanied by complete specifications for the services offered. Any questions regarding the specifications, drawings, etc., shall be referred to that individual so referenced in the Specifications section of the Bid Document. Vendors wishing to submit a secondary bid must submit it as an alternate bid. There is to be only one bid per envelope. The Village shaH be the sole and final judge unequivocally as to whether any substitute is of equivalent or better quality, This decision is final and will not be subject to recourse by any person, firm or corporation. 3. RECEIVING OF BIDS Bids received prior to the time of opening will be securely kept, unopened. The Department Director or hislher designee, whose duty it is to open the bids, will decide when the specified time has arrived, and no bid received thereafter will be considered. No responsibility will be attached to the Village or its representatives for the premature or non~opening of a bid not properly addressed and identified, except as otherwise provided by law. 4. LATE BIDS Bids arriving after the specified time, whether sent by mail, courier, or in person, will not be accepted. These bids will either be refused or returned unopened. It is the bidder's responsibility for timely delivery regardless of the method used. Mailed bids which are delivered after the specified hour will not be accepted regardless of post marked time on the envelope. 5. BIDS BY FAX Bids must be submitted on the original forms provided by the Village completely intact as issued. Facsimile machine transmitted bids will not be accepted, nor will the Village transmit bid documents to prospective bidders by way of a facsimile machine. 6. ERROR IN BIDS When an error is made in extending total prices, the unit bid price will govern. Otherwise, the bidder is not relieved from errors in bid preparation. Erasures in bids must be explained over signature of bidder. 7. WITHDRAWAL OF BIDS A written request for the withdrawal of a bid or any part thereof may be granted if the request is received by the Director of the requesting Department prior to the specified time of opening. After the opening, the bidder cannot withdraw or cancel his bid for a period of sixty (60) calendar days, or such longer time as stated in the bid documents. 8. CONSIDERATION OF BID No bid will be accepted from or contract awarded to any person, finn or corporation that is in arrears or is in default to the Village upon any debt or contract, or that is a defaulter, as surety or otherwise, upon any obligation to the Village or had failed to perform faithfully any previous contract with the Village. The bidder, if requested, shaH present, within 48 hours, evidence satisfactory to the Vil1age of performance ability and possession of necessary facilities, pecuniary resources and adequate insurance to comply with the terms of these specifications and contract document. 9. PRICES Unit prices shaH be shown for each unit on which there is a bid, and shaH include all packing, crating, freight, and shipping charges, and cost of unloading at the destination unless otherwise stated in the bid. Unit prices shall not include any local, state or federal taxes. The Village is exempt, by law, from paying state and village retailer's occupation tax, service occupation tax, and federal excise tax. The Village will supply the successful bidder with its tax exemption number. Cash discounts will not be considered in determining overall price, but may be used in an overall evaluation. 10. AWARD OR REJECTION The Village reserves the right to reject and/or award any and all bids or parts thereof and to waive formalities and technicalities according to the best interests of the Village. Any bid submitted win be binding for sixty (60) days subsequent to the date of the bid opening. Bidders shall make all investigations necessary to thoroughly inform themselves regarding the equipment or supplies to be furnished in accordance with the bid. No plea of ignorance by the bidder of conditions that exist or that may hereafter exist as a result of failure or omission on the part of the bidder to make the necessary examinations and investigations will be accepted as a basis for varying the requirements of the Village of the compensation to the bidder. Any exceptions not taken by the bidder shall be assumed by the Village to be included. A contract will be awarded to the lowest responsible bidder complying with the conditions of the contract documents only when it is in the best interest of the Village to accept the bid. The Village shall be the sole judge of compliance with the specifications and reserves the right to accept or reject any and/or all bids or parts thereof. 11. PAYMENT Payment will be made within thirty (30) days after acceptance of the services rendered and bidder's compliance with all stipulations relating to the bid/contract 12. REQUIREMENT OF BIDDER The successful bidder shaH, within ten (10) days after notification ofthe award: a) enter into a contract in writing with the ViUage covering all matters and things as are set forth in the specifications and his bid; b) carry insurance acceptable to the Village, covering public liability, property damage and workers compensation. 13. COMPLIANCE WITH ALL LAWS All work under the contract must be executed in accordance with all applicable federal, state and local laws, ordinances, rules and regulations. 14. CONTRACT ALTERATIONS No amendment of a contract shaH be valid unless made in writing and signed by the ViUage President, Village Manager, or their authorized representative. 15. NOTICES All notices required by the contract shaH be given in writing. 16. NONASSIGNABILITY The contractor shall not assign the contract, or any part thereof, to any other person, firm or corporation without the previous written consent of the ViHage. Such assignment shall not relieve the contractor from his obligations or change the terms of the contract. 170 INDEMNITY The contractor shall indemnify and save harmless the Village, its officers and employees from any and aU liability, losses or damages, including attorneys fees and costs of defense, the Village may suffer as a result of claims, demands, suits, actions or proceedings of any kind or nature, including workers' c{)mpensation claims, in any way resulting from or arising out of the operations of the contractor under this contract, including operations of subcontractors; and the contractor shall, at his own expense, appear, defend, and pay all fees of attorneys and all costs and other expenses arising therefrom or incurred in connection therewith; and, if any judgements shall be rendered against the Village in any such action, the contractor shall, at his OVVl1 expense, satisfy and discharge same. The contractor expressly understands and agrees that any performance bond or insurance protection required by the contract, or otherwise provided by the contractor, shall in no way limit the responsibility to indemnify, keep and save harmless and defend the Village as herein provided. 18. EQUAL EMPLOYMENT OPPORTUNITY During the performance of the contract and/or supplying of materials, equipment and supplies, bidder must be in full compliance with aU provisions of the Acts of the General Assembly ofthe State of Illinois relating to employment, including equal opportunity requirements. 19. REQUIRED INSURANCE In submission of a bid, the bidder is certifying that he has aU insurance coverages required by law or would normally be expected for bidder's type of business. In addition, the bidder is certifying that he has at least the following insurance coverages: Tvpe of Insurance General Liability Bodily Injury Property Damage Contractual Ins. Limit! Limit! Ea. Occurrence Aggregate $1,000,000 $1,000,000 $1,000,000 $3,000,000 $3,000,000 $3,000,000 Automobile Liability Bodily Injury Property Damage $1,000,000 $1,000,000 $1,000,000 $1,000,000 Workers Compensation Employee Claims Employers Liability Statutory for Illinois $1,000,000 per accident The bidder is to grant the Village an "additional insured" status on all applicable insurance policies and provide the Village with original endorsements affecting coverage required by this clause. Said policies will not be cancelled unless the Village is provided a thirty (30) day written notice. Nothing contained in the insurance requirement shaH be construed as limiting the extend of the contractor's responsibilities for payment of damages resulting from his operations under this agreement. 20. BID PERFORMANCE DEPOSIT When it is required, it will be so stated elsewhere within this bid package along with the amount required. The deposit is to be in the form of a certified check, or a bank cashiers check. All bid performance deposit checks win be retained by the Village until the bid award is made, at which time the checks will be promptly returned to the unsuccessful bidders. The bid performance deposit check of the successful bidder will be retained until the services have been rendered or completed/installed and found to be in compliance with the specification or until surety bonding requirements have been satisfied and proof of insurance coverage is provided in accordance with the Special Provisions Section of these specifications. 21. ACCEPTANCE After the acceptance and award of the bid, and upon receipt of a written purchase order executed by the proper officials of the Village, this instructions to bidders, and all other portions of the bid documents, including the specifications, will constitute part of the legal contract between the Village of Mount Prospect and the successful bidder. 22. DEFAULT The Village may terminate a contract by written notice of default to the contractor if the contractor: a. Fails to make delivery or perform the services within the time frame specified in the specifications, or b. Fails to make progress so as to endanger perfonnance of the contract, or c. Fails to provide or maintain in full force and effect, the liability and indemnification coverages or performance bond as is required. lithe Village terminates the contract, the Village may procure services similar to those so terminated, and the contractor shall be liable to the Village for any excess costs for similar services, unless the contractor provides acceptable evidence that failure to perform the contract was due to causes beyond the control and without the fault or negligence of the contractor. 23. SPECIAL CONDITIONS Wherever special conditions/requirements are written into the Specifications or Special Provisions which are in conflict with conditions stated in these Instructions to Bidders, the conditions stated in the Specifications or Special Provisions/Requirements shall take precedence. 24, PERMITS AND LICENSES The successful bidder shall obtain, at his own expense, all permits and licenses that may be required to complete the contract (where applicable), 25. GENERAL GUARANTY Neither the final certificate of payment nor any provision in the contract nor partial or entire use of the product! improvement embraced in this contract by the Village or the Public shall constitute an acceptance of work not done in accordance with the contract, or relieve the contractor ofliability in respect to any express warranties or responsibility for failure to comply with the terms of those contract documents. It is expressly agreed by the parties hereto that in the event any defects or imperfections in the materials or workmanship to be furnished by the contractor herein appear within the period of one year from the date of completion of all the work mentioned herein and acceptance thereof by the Village of Mount Prospect, the contractor will, upon notice from said Village (which notice may be given by letter to said contractor to the business address of the contractor shown in the proposal), repair and make good at his own cost any such defects or imperfections and replace any defective or imperfect materials or workmanship with other materials or workmanship satisfactory to said Village, and furnish all such new materials and labor as may be necessary to do so; and in the event of the failure, refusal or delay of said workmanship or materials said ViHage may do so or have same done by others, and said contractor and surety or sureties on his bond given for the faithful performance of this contract shall be liable to the Village of Mount Prospect for all damages and expenses occasioned by such failure, refusal or delay. 26. PREVAILING WAGES All laborers and mechanics employed by contractors and subcontractors on construction work for this project shaH be paid wages at rates no less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-5), and shall receive overtime compensation in accordance with and subject to the provisions ofthe Contract Work Hours and Safety Standards Act (40 U.S.C 327- 333), and the contractors and subcontractors shall comply with aU regulations issued pursuant to these Acts and with other applicable federal laws and regulations pertaining to labor standards. The Secretary of Labor has, with respect to the labor standards specified in this Section, the 1950 (5 U.S.C 133Z-15) and Section 2 ofthe Act of June 13, 1934, as amended (40 US.C. 276c). Not less than the prevailing wage shaH be paid for labor on the work to be done as required by law. 27. BIDDERS QUALIFICATIONS All bidders must submit the following information on or before the time at which the bid is required to be submitted: a. The location of the bidder's permanent place of business. b. Evidence of ability to provide an efficient and adequate plan for executing the work. c. A list of similar projects carried out by the bidder. d. A list of projects the bidder presently has under contract. e. Any additional evidence tending to show that the bidder is adequately prepared to fulfill the contract. 28. BID CERTIFICATION FORM AU bid submittals must include a signed Bid Certification Form (copy included in Bid Documents) certifying that the bidder is in compliance with Sections 33E-3 and 33E-4 of the Illinois Criminal Code regarding bid rotating and bid-rigging. Illinois State Law ArticIe 33E-3 and 33E-4 states that it is unlawful to participate in bid~rigging and/or bid rotating. Therefore, all bidders must certify that they are not barred from bidding on the contract as a result of a violation of State Law 33E-3 and/or 33E-4, prohibiting bid-rigging and bid rotation. It is necessary that this be done under oath. Therefore, the form included with the bid submittal sheets must be notarized. 29. DEVIATIONS Unless denoted "No Substitution", the Village's minimum required specifications may be exceeded. However, vendors must list all specification deviations and provide a description and/or catalog sheet that fully describes that which they propose to furnish, in lieu of that specified. Final bid acceptance shall be based upon that bid deemed most favorable to the interests of the Village after all bids have been examined and canvassed. Exhibit 6 VILLAGE OF }V[OUNT PROSPECT BID RECOMMENDATION - STANDARD MEMO FORMAT TO: Village Manager FROM: Department Director DATE: SUBJECT: XYZ Program Bid Results General Bid Information On August 1,2004, at 10:00 am sealed bids were received for the XYZ Program. At this time, the sealed bids were publicly opened and read aloud. The XYZ Program involves the purchase of specific equipment to be used to improve Village property located in the downtown district. Ten contractors received invitational bids and advertising was placed in the local newspaper. Summary of Bids Received Three contractors submitted bids: ABC Improvements, Village Builders, and Community Supplies. It was determined that of the seven contractors who did not submit bids, four could not meet the deadline and three were unable to provide the goods and services being requested. Bid tabulations are as follows: Bidder Village Builders ABC Improvements Community Supplies Equipment Cost $ 7,845.00 9,430.00 10,290.00 Bid Recommendation I recommend award of the contract to Village Builders in an amount not to exceed $7,845.00. Village Builders has successfully performed work for us in the past. Plus, they have provided several satisfied municipal references for similar work. Budget Authorization There is $10,000.00 allocated in this year's budget on page 175 in account number 01-001-00-0001 for the XYZ Project. BID RECOMMENDATION œ STANDARD MEMO FORMAT Additional Information 1. Vvnen a memo is from an individual other than a department director, a director's recommendation is required. A signature line would read as follows: I concur with the above recommendation Name of Director 2. If an unusual number of contractors declines to bid, an explanation, if known, should be included. 3. For more complicated bids, a detailed table should be attached. 4. If the recommendation is not for the lowest bidder, an explanation must be provided. 5. If the amount of the bid exceeds the budget amount, the memo must outline that a limit will be imposed or whether there is a reason for exceeding a budgeted amount. VILLAGE OF MOUNT PROSPECT 100 SOUTH EMERSON STREET MOUNT PROSPECT, iLLINOIS 60056 Exhibit 7 r-- ----- ----- ----, ¡ PURCHASE"mOR~_E~_~O. 8003168 PURCHASE ORDER ¡------------------, 1" IS"~_~~ DA ~~--- 07/21/04 ISSUED lAIR-ONE' EQUIPMENT, INC. TO: 360 PRODUCTION DRIVE ¡SOUTH ELGIN, IL 60177-2637 01227 I SHIP I FIRE "DEPARTMEN-T-- TO: I: VILLAGE OF MOUNT PROSPECT 112 E. NORTHWEST HIGHWAY !MOUNT PROSPECT, IL 60056 -------- L~~_- ---~--------_--_-_M- - - --- FOR MORE INFORMATION CONTACT: FIRE DEPARTMENT TtEM. I 'I ~QJ QTY I U!M - DESCRIPTION 1 i3-MSA EVOLUTION 5000 I !THERMAL IMAGING CAMERAS ACCOUNT DISTRIBUTION: 5107701-670022 PHONE NO: 847 870-5660 UNIT PRICE 27957.00 EXTENDED PRICE 27957.00 27957.00 I --------_--"^-,_L- --__m__-----" --- .------ _~1- ___m--____n____- *CONFIRMATIONuDO NOT DUPLICATE* rHIS ORDER IS EXEMPT FROM SALES AND USE TAX. &XEMPTION NUMBER IS E9998-:475-04. TOTAL OF PURCHASE ORDER 27957.00 SEE REVERSE SIDE FOR IMPORTANT INFORMATION PLEASE REFERENCE THIS PURCHASE ORDER NUMBER AND YOUR FEDERAL TAX iD ON INVOICE Please mail invoice to: Accounts Payable Village of Mount Prospect 100 South Emerson Street Mount Prospect, iL 60056 APPROVED BY: A,/auJ ¿P. U- Director of Finance ---WN_---------"""" Exhibit 8 VILLAGE OF MOUNT PROSPECT Check Request Vendor No. Check No. Date Submitted by Department Director Account Number Descr¡ption Amount ! ¡ ! I ! I i I I , i I I I TOTAL ! Account Number Checked Funds Available Initials Approved: Director of Finance Revised 3/00 Exhibit 9 CHARGE TO ACCOUNT TOTAL J l RECEIVED BY ~ FORM 3008 APPROVED BY MADE 1N U.S.A. -----------.------------ - _n.._------_---..- - ----------------- ------. - . ---_.. - "'---""""'-..-..---....---- Mount Prospect VILLAGE OF MOUNT PROSPECT MOUNT PROSPECT, ILLINOIS INTEROFFICE MEMORANDUM ~ TO: FROM: MICHAEL E. JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE DATE: AUGUST 6, 2004 ACTUARIAL REVIEW OF SELF-INSURED PROGRAM - AUTO AND GENERAL LIABILITY SUBJECT: PURPOSE: To present to the Village Board results from an actuary analysis of the ViIlage's self insured program. BACKGROUND: The Village utilizes a multi-tier approach of self-insurance, commercia! insurance and pooled coverage to insure for auto and general liability claims. At the request of the Village Board, an actuarial firm was hired to prepare an analysis of the self-insured program. The purpose of this memorandum is to inform the Board as to the results of the actuarial analysis and report on problems occurring in administering the risk management program for the Village as it currently stands. . DISCUSSION: As was mentioned previously, the Village utilizes a multi-tier approach to insure for auto and general liability claims. The first $250,000 of each claim is self-insured by the Village. From the self-insured level up to $2,000,000, the Village purchases commercial insurance. Excess coverage above $2,000,000 is available through the Village's membership in HELP (High-Level Excess Liability Pool). At the request of the Village Board, an actuarial firm was hired to prepare a valuation of the Village's self-insured program for auto and general liability. The goal of the valuation was to determine an appropriate level of reserves for the program as is currently administered and calculate the reserve requirement were the Village to self-insure up to the point where HELP excess coverage kicks in. The Introductïon and Summary of Results sections of the actuarial report are included as Attachment 1. Following is results from the valuation. Page four of the report provides an estimate for the Village's liability (required reserve) as of April 25,2004. The reserve requirement for auto and general liability claims as currently administered is $916,279. Page five of the report displays projected reserve requirements needed for the year 2005 at the $250,000 retention as well as the proposed retention of $2,000,000. Projected required reserves for these two retention levels for 2005 is $325,200 and $469,450 respectively. To come up with the total reserve requirement at January 1, 2005 the reserve requirements for 2005 is added to the reserve calculated through April 2004. The total reserve requirement at the $250,000 retention level is estimated at $1,241,479. At the $2,000,000 retention level, the reserve requirement increases to $1,385,729. Self-Insurance Review August6,2004 Page 2 There are several methods available for funding the required reserve. Bonds could be issued to fully fund the reserve immediately or a gradual funding could occur by reallocating funds freed up by foregoing insurance premiums (if a change is made to move to the $2,000,000 retention level). The insurance broker for the Village, Nugent Consulting Group, felt the Village could afford to gradually build the reserve for these types of claims (again, if the higher retention level was selected). The Village currently has a reserve for auto and generalliabílity claims of $439,801. The request by the Board to perform the actuary valuation was prompted by difficulties incurred in managing the Village's risk management program. Volatility in the insurance market forced the Village to change insurance carriers several times over the past ten years. This made it difficult in managing claims occurring in multiple periods. For example, a single claim occurring over several years with coverage provided by several different insurers would require the Village to exhaust its self-insured retention (SIR) of $250,000 for each of the years before the insurance companies would begin covering the claim. In addition to issues related to the SIR, the autonomy to defend a claim is restricted by the wishes of the insurer, In instances where it would be economically feasible for the insurer to settle a claim, the Village, by doing so could potentially be setting precedent it would otherwise have avoided by continuing to fight the claim. Direction from the Board regarding retention levels and funding options is needed, as preparation for the upcoming year's renewal will begin shortly. RECOMMENDATION: I would like to request that this item be placed on the agenda for discussion at the August 10 Committee of the Whole meeting. ,,-f~u<fø'1;<~/ tP. 4~~ David O. Erb Director of Finance c: Finance Commission H:\ADMNlAdministralion\Dave Correspondence\acluary anaiysis self insured.doc Attachment 1 ACTUARIAL ANALYSIS OF THE VILLAGE OF MOUNT PROSPECT UNPAID CLAIM LIABILITIES AS OF APRIL 25, 2004 INTRODUCTION Milliman Inc. (Milliman) has been retained by the Village of Mount Prospect (Mount Prospect) to estimate: . The outstanding reserves as of April 25, 2004; and . The funding requirements for the 2004-2005 year. Our analysis includes auto and general liability. The Village of Mount Prospect is part of HELP (High Excess Liability Pool), which provides excess insurance to supplement its self-insurance. Mount Prospect retains $250,000 per occurrence for self-insured years 1984 through 2004. These retentions apply to auto and general liability. Beginning January 1, 2005, Mount Prospect expects to retain the first $2,000,000 per occurrence. MilliMAN - 4 - SUl\IMARY OF RESULTS The following table displays our estimates of Mount Prospect's self-insured unpaid claim liability as of April 25, 2004. Village of l\fount Prospect Net Indicated Unpaid Loss and ALAE Limited to 250,000 Retention as of April 25. 2004 Accident Auto General Total Limited to Year Liabilitv Liability Retention 1998 0 32,568 32,568 1999 0 0 0 2000 0 0 0 2001 0 127,884 127,884 2002 0 240,012 240,012 2003 28,158 226,853 255,011 2004 14,740 246,064 260,084 Total $42,898 $873,381 $916,279 The unpaid claim liability includes a provision for case reserves, expected development of case reserves, incurred but not reported (IBNR) reserves, and allocated loss adjustment expense (ALAE) reserves. In this report, the tenn "loss" includes loss and ALAE unless otherwise specified. \Ve have not estimated a provision for administrative costs and overhead costs of claim handling. The estimates in the above table are net of Mount Prospect's excess insurance protection, and are shown on an undiscounted (full value) basis. The following table displays our projected ultimate loss and ALAE for the 2005 accident year at the $250,000 retention as well as at the proposed retention of $2,000,000. MilliMAN - 5- Village of Mount Prospect Net Indicated Ultimate Loss and ALAE Accident Year 2005 Auto ¡ General ! Retention Liability ! Liability Total $250,000 $24,700 I $300,500 $325,200 $2,000,000 34,580 I 434,870 469,450 Mount Prospect has had very little loss experience to date in excess of $250,000 per claim. Therefore, we have relied on industry data to select increased limit factors in order to estimate Mount Prospect's ultimate losses at $2,000,000 limits. Mount Prospect's actual experience excess of $250,000 may be higher or lower than the excess losses indicated by the industry information. MILLIMAN Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM FROM: MICHAEL E. JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE TO: DATE: AUGUST 4,2004 2004 MID-YEAR REVIEW AND UPDATE Of THE 2005 BUDGET FORECAST SUBJECT: Each year, the Finance Department prepares for the Village Board a mid-year review of the financial status of the current year's budget and a forecast for the upcoming year. This practice provides a solid foundation for preparation of the upcoming annual budget. This memorandum is intended to supplement the June 30, 2004 Budget Revenue and Expenditure Summaries that were submitted to the Board previously. The principal focus of this memorandum is on the General Fund, since it is the main operating fund of the Village. Also discussed to a lesser degree are a few of the more material operating and capital project funds. It should be pointed out that the current estimates of revenues and expenditures for 2004 are fluid and 'T'ay change during the remaining six months of the fiscal year. 2004 MID-YEAR REVIEW GENERAL FUND The 2004 Adopted Budget reflects a planned deficit of $362,116 on revenues of $31,218,204 and expenditures of $31,580,320. The deficit can be attributed to a $270,000 transfer to cover debt service on the new Village Hall and revenue shortfalls resulting from a sluggish economy. As part of the mid-year review, we looked at aU revenue and expenditure accounts to determine if any material variances seem likely. We now expect total General Fund revenues to come in very close to the original budget at $31,185,246, only $32,958 off of what was originally projected. Expenditures are now estimated at $31 ,552,103, which is an increase of $241,783 from the original budget. The increase in expenditures were the result of $75,160 in budget amendments for carryover items and $166,623 in unexpected flood control costs due to the late Spring flooding along the Des Plaines River. After adding Mid-Year Budget Review August412004 Page 2 the $270,000 transfer to the 2003 debtserviceJund to the projected operating deficit, the fund balance is expected to drop $636,857 in 2004, compared to the $362,116 reflected in the adopted budget. Exhibit 1, attached hereto, presents a summary of our current projections of revenues and expenditures, with a comparison to budget. General Fund Revenues: General Fund revenues at June 30,2004 were $13,117,334. This accounts for 42002% of the amended budget. The current year-end estimate for revenues is almost 99.9% of the original budget. . Being below 50% atmid-year should not be a concern as receipt of several significant revenues sources by the Village lag 1-3 months. These revenue sources include sales tax (both 1 % ROT and .75% home-rule portions), income tax, utility taxes and other intergovernmental revenues. --------------------------------------------- -- -------- --------- General Fund Revenue Collections as a Percent of Annual Budget 100% 80% - I 8 60% ¡ 40% D. I I i I 20% 0% - 0"" 0'" 0'" ~ 0'" ",ø.'f .<..,i(,"f <c:!li ø'i-' i:$ ~ ¡f¡o Fo' ¡;}.~ v'f' 0'" CiS' n~",,0 ^J.,¡j -"" O~ ~ "" "j,¥ <t, .J.Ci t.($ 1.- ,~ C:J0 0<:1 ,$-° ~'r> ~." <{o$' (;0 ~ø ~0 ,'i-' ",0 q;.0 0~ :[:)-;§ tb r}~ ;¿;.~ O~ ,:.;,0 ~ ,¡;}. Revenue Type ----- ------ -- ___--_n- --- _____n___--__- ------...- --------- - -------------_u_..--- The preceding chart illustrates the percent of revenues received by the Village in several categories as of June 30th. Property tax revenues of $3,837,761 are running at 47% of budg.et. This is typical in that the first allotment of property taxes received is an estimate based on the prior year receipts while the second allotment, which come in later in the Fall, captures the levy increase approved in the currenHax year. Our estimates account for a loss of 1.5% due to tax appeals and non-payment. We expect our property tax receipts to come in at budget for the year. Mid-Year Budget Review August 4, 2004 Page 3 Revenues classified as "Other Taxes" include such sources as the food and beverage tax, real estate transfer tax, hotel/motel tax, telecommunications tax and the utility tax. New for 2004 was the addition of the .25% home-rule sales tax. In total, revenue collections from "Other Taxes" came to $2,136.342 as of June 30th, which is 36.1 % of annual budget. Again, this is a category where there is a lag in receipt of two of the more significant revenues (home-rule sales tax and telecommunications tax). The Village's telecommunications tax is running slightly below budget while the Rea! Estate Transfer Tax is expected to come in $304,000 over original budget projections. This is due to the continuing strong housing market and new development in the Downtown Redevelopment TIF District. By year-end, we expect to exceed the budgeted amount by $151,000 for this revenue category. Collections from licenses and permit fees totaled $2,160,342, or 83.7% of the $2.6 million budget. Vehicle license revenue of $996,026 is at 87.4% of budget, which is to be expected given that the deadline for the 2004/2005 vehicle sticker was May 1st. By year-end, we expect to exceed the budgeted amount by $127,000 for this revenue category . Through the first quarter, Cable television franchise fees are running higher than expected. We have collected $83,620 or 25.4% of the $330,000 budgeted in 2004. This amount accounts for only the first quarter payment due the Village. If prorated for four payments, the Village could expect to exceed the budget amount by $5,040. Intergovernmental revenues totaled $4,166,490 as of June 30th, which is 33.2% of the $12.5 million annual budget. Intergovernmental revenues in the General Fund include the local share of the state sales tax,state income tax, use tax, replacement tax and other miscellaneous state and federal grants. Sales tax collections, which make up more than 67% of the "Intergovernmental" category, are at $1,826,743. This represents 21.5% of budget. The current budget forecast is $8,150,000, $339,505 below what was originally projected. Our year-to-date collections are running 4.5% below the same period last year, but expect collections to increase moving forward as they typically do. State warrants of this revenue has seen wide fluctuations in the past four to six months which makes long-range projections very difficult. Hence, projections of future receipts have been kept conservative. Receipts from the State's distribution of the state income tax totaled $1,901,797 at June 30th. This represents 56]% of budget, however the figure is somewhat deceiving. Local governments do not receive state income tax receipts evenly throughout the year. Historically, receipts are higher during the first half of the year as taxpayers make their final tax payments in March and April. 2004 receipts are currently running 6.7% below last year's collections. We will watch this revenue closely to be certain it stays on track Mid-Year Budget Review August 4, 2004 Page 4 with our projections. Currently we are expecting $16,909 less than projected. The local share of the state use tax is expected to come in higher than projections for the year. Through June 30th, the State use Tax is 12.3% higher than the same. period for the prior year. $235$960 of the $508,000 budget has been received to date. We expect the year-end amount to be $534,433. Revenue from Fines totaled $214,083 for the first six months. This represents 40.6% of the $527,000 budgeted for the year. We expect the revenue to exceed our budgeted expectations for 2004 by $17,300 ($544,300). Investment Income totaled only $35,093 for the first six months, representing 15% of the $230,000 projected for the year. A negative variance of $90,000 is expected for the year due to continued low interest rates. Projections for the year had.ínterest rates climbing through the year, but this has notbeen the case. Miscellaneous Revenue, consisting of reimbursements and other revenues, totaled $228,085 as of June 30th. This is 51 % of the $451,650 budgeted for the year. We expect the revenue to exceed our budgeted projection for 2004 by $65,850. Due in most part to IRa revenue of $45,000 expected by year~end, but not budgeted. General fund Expenditures: The amended 2004 budget totals $31,385,480 (see Exhibit 1). As of June 30th the Village had recorded expenditures of $15,296,688 (including fund transfers of $135,000). This represents 48.1% of budget. As you would expect, at less than 2% off of the benchmark 50%, most of the departments are at or near the benchmark. Only Public Representation and Miscellaneous Expenses deviate significantly from the benchmark. Mid-Year Budget Review August 4, 2004 Page 5 The following chart illustrates the General Fund expenditures by department/program as a percentage of annual budget at June 30. I ..........---.--.---.--............. .::n=~n~ ~::~~":~:eI .--. .. . .-1 I I I í Public Representation Manager's Office Television Services E ft ... CI 0 ... D. ~ c CD E ~ ill a. «II Q Clerk's Office Finance Comm. Dev. Human Services Police Fire Public Works Misc. 0% 10% 90% 20% 30% 40% 50% Percent 60% 70% 80% Public Representation expenditures totaled $75,470 through June 30th, representing 70% of budget. The reason this program is above the 50% benchmark is that organizational memberships are typically paid in the beginning of the year. In the first half of the fiscal year membership dues totaling $31,474 were paid, compared to the annual budget of $33,000. Excluding this item, spending through June 30th falls closer to the benchmark at 58.8% Expenditures of the Village Manager's Office for the first six months totaled $928,369. This represents 50.1 % of their $1.8 million annual budget. In addition to the budget for the Manager's Office, this budget includes Legal Services, Personnel Services, Information Technology and Public Information. Expenditures overall for this area are expected to come in very close to budget. Information Technology Division and Public Information Division expenditures are currently at 44% and 42% of budget, respectively, due to the timing of operating expenditures and capital purchases. Legal expenditures are at 73% through June 30th. This is due to the negotiations that have been ongoing between the three bargaining units. We will continue to monitor this item to see if an adjustment later in the year is needed. 100% Mid-Year Budget Review August4,2004 Page 6 Expenditures of the Television Services Division came to $82,693 for the first six months of 2004. This is 48.6% of the division's annual budget of $170,262. Expenditures of the Human Services Department totaled $334,642 at June 30th, representing 4206% of budget. Police and Fire Department expenditures for the six months just ended are very close to the budget benchmark, at 49% and 47%, respectively. Public Works Department expenditures funded through the General Fund totaled $2,451,986 for the first half of the fiscal year. This represents 49.8% of the annual budget of $4,920,787. The Miscellaneous category in the above chart includes the Community and Civic Services budget program and the miscellaneous retirement pensions of two former employees. At the mid-year mark, miscellaneous expenditures of $117,254 represent 35.5% of the $332,616 budget. For the past several years, total General Fund expenditures have come in anywhere from one to three percent under budget. Although we see no reason at this point to believe 2004 will be any different, to be conservative we are generally not showing any variance from budget for General Fund expenditures as reflected in Exhibit 1. The chart below shows budget to actual expenditures since 2001. Year 2001 2002 2003 Amended Bude! $27,827,328 $28,599,479 $29,894,758 Actual. Ex .enditures $27,546,963 $28,092,917 $29,045,233 The larger variance in 2003 was due to a hiring freeze and other spending controls in response to falling revenues. REFUSE DISPOSAL FUND Revenues rece.ived to-date of $1,598.619 are at 51.8% of projection. Expenditures for the first six months totaled $1,626.,379, representing 46% of budget. MOTOR.FUEL TAX FUND Revenues of $683,510 through June 30th represent 41 % of projections. Our MFT allotments from the State are running 1 % behind of 2003. We had assumed a 1 % increase for the 2004 Budget. Expenditures totaled $978,886 at June 30th, which is 39.8% of budget. Mid-Year Budget Review August4,2004 Page 7 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND CDBG Fund expenditures totaled $167,958 to-date. This is 27.1 % of the $620,305 budgeted for the year. CDBG expenditures fall into four categories. Following is a breakdown of expenditures incurred to-date, compared to annual budget for the four categories. Expenditures Annual Percent CDBG Program Year-to-Date Budget Expended Administration $ 30,830 $ 67,714 45.5% Community Proarams 41,453 136,500 30.4 NeiQhborhood Improve. 0 140,000 0 Residential Rehab 95,875 276,091 34.7 Total $167,958 $620,305 27.1% Historically, the majority of CDBG expenditures have been incurred during the second half of the yeaL CAPITAL IMPROVEMENT FUND Revenues were projected at $452,551 for the year. Through June 30th we have received $207,197 or 45.8% of budget $112,400 of grant revenue is expected later in the year. The approved budget for this fund is $912,111. Total expenditures for the first six months were $188,579, or 20.7% of budget. Most of the capital projects and improvements budgeted for the year will be initiated during the summer months with payment occurring in the later part of the year. DOWNTOWN REDEVELOPMENT CONSTRUCTION FUND The 2004 Budget shows estimated revenues of $440,077. As of June 30th we had received $146,026. Over 99% of the revenues expected in this fund are derived from incremental property taxes. A total of $766,128 has been expended to date, which represents 43.1 % of the $1.8 million budget for 2003. $760,190 was expended for the downtown streetscape program; the remaining portion was for payment on the Northwest Electric sales tax rebate ($23,829 and other professional services ($2,109). STREET IMPROVEMENT CONSTRUCTION FUND This fund was created to account for the 1997 revenue enhancements that are earmarked for the street improvement program. Revenues of $1,500,165 were projected for 2004. Revenues actually received as of June 30th total $688,406, or 45.9% of budget. Mid-Year Budget Review August4,2004 Page 8 A total of $3,831,135 has been budgeted for street resurfacing and reconstruction. As of June 30th $1,719,808, or 44.9%, has been expended. As with the Capita! Improvement Fund, the vast majority of payouts will take place in the second half of the year. FLOOD CONTROL CONSTRUCTION FUND The only revenue expected to be collected in this fund is interest income of $15,000. To-date, $7.,689 or 51.3% of that amount has been received. A total of $202,564 (29.5%) has been spent thus far out of the $686,744 annual. budget. WATER AND SEWER FUND Revenues through June 30th total $3,717,454, representing 45.1 % of budget This is typical, as water consumption increases during the summer months. In addition, there is a two-month lag for residential billing and one-month lag for commercial properties. Expenditures are budgeted at $9,308,159 for the year. After six months, actual expenditures have totaled $3,653,005, or 39,2% of budget. Expenditures appear to be low because of capital improvements planned for later in the year. There are no material variances expected between now and the end of the year. POLICE AND FIREFIGHTERS' PENSION FUNDS Revenues in the Police and. Firefighters' Pension Funds remain strong due to market gains on equities this year. The Police Pension Fund has recorded revenues totaling 51.9% of projections. The Firefighters' Pension Fund revenues are.at 50..1 % of budget. Fixed income securities that had been carrying the pension funds during the down economic cycle have cooled considerable. A portion of the market gains in equities has been eroded by declines in the market value of these fixed income investments. 2005 FORECAST The 2004 Annual Budget includes a forecast budget for the year 2005 for each operating and capita! project funds. The purpose of this portion of this memorandum is to bring forward any material variances in revenues or expenditures now expected for the year 2005. GENERAL FUND Exhibit 2 has been prepared to compare.theorigina! forecast numbers to our most recent estimates. The original forecast budgetshows an. operating deficit of $867,764 on revenues of $32,361,224 and expenditures totaling $33,234,988. Indudingfund transfers, the total projected deficit for the Genera! Fund for 2005 is $1,672,764. Mid-Year Budget Review August4,2004 Page 9 Our more recent estimates now show that the operating deficit has turned into a surplus of $126,833. Transfers to the 2003 debt service fund totaling $805,000 are now being covered by revenue obtained from the sale of the old Village Hall. The first full year of revenue enhancements approved by the Village Board in 2003 also hit the budget in 2005. The original operating deficitwas almost entirely eliminated by the addition of these revenues back into the General Fund. These revenues were left out of the original forecast. Revenues: At this time we expect General Fund revenues for 2005 to come in $904,862 higher than what was projected twelve months ago. The forecast assumes that the overall property tax increase will be 4.8% with a portion of the increase going towards debt service on the new village hall. Sales tax receipts are expected to come in at the 2005 projection. Included in the projection is a 2.7% increase from prior year revenues plus $687,500 expected from the new Costeo store due to open in September 2004. The projection for utility taxes is expected to increase $853,112 due to reallocating the telecommunication, NI Gas and CornEd Electric utility taxes from the Street Improvement Fund to the General Fund. This action was approved by the Board in 2003 as part of the long-range financial plan of the Village. Real Estate Transfer Tax receipts have been strong since 2002 with the Village receiving over $1 million from this revenue source in each of the last two years. Much of this growth had to do with the downtown redevelopment. Although we expect 2004 to end up at over $1.3 million of the year, we have elected to scale back the projection for 2005 to account for the nearing completion of downtown redevelopment. In spite of the scaling back, the projection has been increased $101,000 from what was projected last year. Slight adjustments have been made to the Other License and Other Intergovernmental categories as this revenue has trended upward in the past year. Earnings of our investment portfolio continue to drop as investments with higher interest rates mature and are replaced at lower interest rates. At this time we expect to reduce our forecast of investment income by $90,000 to $140,000 for 2005. Expenditures: At this time we are expecting expenditures to remain consistent with the original forecast with the exception of pension contributions and IT related purchases. Mid-Year Budget Review August4,2004 Page 10 Contribution rates went down for both the Police Pension and IMRF while there was a slight increase in the rate for the Fire Pension. Interest earningsonthe investment portfolios for the Police andlMRF pensions were strong, exceeding the assumed rate while other assumptions forcatculating the contribution remained in line. This was not the case with the Fire Pension where there was a higher than expected number of retirements. In addition,. although the return on investments was at the assumed rate,!t did not exceed the assumed rate enough to have a positive impact on the contribution rate. BUDGET CALENDAR Attached as Exhibit 3 is the 2005 budget calendar as presented in the current 2004 budget document If this schedule now presents any conflicts, we should revise!! as soon as possible. YEAR 2004 BUDGET DIRECTION Finally, I have attached a copy of the New ProjectlServiceSuggestion Form (Exhibit 4). This form is intended for use by the Village Board to facilitate communication between the Board and staff concerning any new ideas they would like to see included in the 2005 proposed budget. It would be helpful if the forms couid be returned to you by September 3, 2004 so that the ideas can be incorporated in to our preHminarybudget deliberations. /") / "~ /.,., . / ¡f'ø/, ( J¡:~<-~ t (. "-~ -'-' DAVID O. ERB DIRECTOR OF FINANCE Copy: Finance Commission Members Department Directors Exhibit 1 Village of Mount Prospect, Illinois General Fund - Revenues and Expenditures 2004 EndgOfmYear Projection Budget 2004 YTD Actual 2004 Variance- 2003 Amended 01/01/04- Current Favorable Actual Budget 6130/2004 Estimate (Unfavorable) Notes Revenues: Property Taxes 7,600,505 8,164,528 3,837,761 8,164,528 0 Sales Taxes - ROT Portion 7,726,966 8,489,505 1,826,743 8,150,000 (339,505) A Sales Taxes - HMR Portion 0 1,097,926 255,330 1,065,000 (32,926) A Food and Beverage Tax 485,368 440,000 183,299 439,920 (80) Real Estate Transfer Tax 1,006,865 827,500 542.465 1,131,500 304,000 B Telecommunications Tax 1,176,100 2,211,113 514,424 2,057,700 (153,413) C Utility Taxes 1,163,059 1,160,000 551,222 1,193,733 33,733 D Other Taxes 201,367 185,100 89,602 185,100 0 Vehicle Licenses 1,116,149 1,140,000 996,026 1,135.000 (5,000) Other Licenses, Permits, Fees 1,933,820 1,441,250 1,164,316 1,573,176 131,926 E State Income Tax 3.486,711 3.353,394 1,901,797 3,336,485 (16,909) Other Intergovernmental 746,777 692,375 437,950 795,362 102.987 F Charges for Services 772,163 806,863 339,138 755,942 (50.921) G Fines and Forfeits 595.169 527,000 214,083 544,300 H,300 Investment Income 101,446 230,000 35,093 140,000 (90,000) H Reimbursements 328,185 316,650 153.974 316,650 0 Other Revenue 249,813 135,000 74,111 200.850 65,850 Total Revenues 28,690,463 31,218,204 13,117,334 31.185,246 (32,958) Expenditures Public Representation 100,878 107,874 75,470 107,874 0 Village Manager's Office 1,794,589 1,834,353 928,369 1,834,353 0 Television Services Division 160,691 170,262 82,693 170,262 o Village Clerk's Office 154,066 163,256 79,760 163,256 0 Finance Department 1,247,596 1 ,368,331 662,493 1,368.331 o Community Development Dept. 1,387,819 1,580,046 716,152 1,580,046 0 Human Services Dept. 686,968 784,867 334,642 784,867 0 Police Department 10,187,425 11,293,688 5,552,934 11,293,688 0 Fire Department 8,309,998 8,829,400 4,159,937 8,829,400 o Public Works Department 4,699,723 4,920,787 2,451,986 5,087,410 (166,623) J Community and Civic Services 275,184 278,902 90,366 278,902 0 Miscellaneous 40,296 53,714 26.886 53,714 0 Totat Expenditures 29,045,233 31,385,480 15,161.688 31,552,103 (166,623) Excess of Revenues over Expend. (354,770) (167.276) (2,044,354) (366,857) (199,581) Other Financing Sources/Uses Transfer to 2003 DIS Fund (170,000) (270,000) (135,000) (270,000) 0 Sale of Land 0 0 0 285,000 285,000 K Total Other Financing Uses (HO.OOO) (270,000) (135,OOO) 15,000 285,000 Excess of Revenues over Expend. and Other Financing Uses: (524,770) (437,276) (2,179,354) (351,857) 85,419 8/5/200410:19 AMGeneral Fund Revenues and Expenditures - 2004 Exhibit 1 Village of Mount Prospect, Illinois General Fund. Revenues and Expenditures 2004 End-of. Year Projection Notes A Based on year to date receipts. B Strong housing market along with new development in downtown redevelopment TIF district. C First year with state collecting this tax along with first year of tax increase from 4.25% tü 6%. D Sunsets .on utility taxes from Street Improvement Fund beginning October. E Higher than usual receipt of pub tic improvement inspection fees {$146,926 through 6/30 vs. bgt of $25,000. F Higher than expected receipt of replacement and use tax. H State income tax receipts are running 1% below budget through 6/30. Assuming 2-3% reduction for year. G Reduction in receipt of ambulance fees. Reduction of cable programming fees for several districts. H Lower interest rates are expected to result in a $90,000 shortfall in Investment earnings. ! Other revenues are expected to exceed projections by $45,000 due to the ceding of the private activity bond volume cap which was not budgeted for. J Emergency flood control expenses. K Sale of right-of-way on Lincoln Avenue. 8/5/200410:19 AMGeneral Fund Revenues and Expenditures - 2004 Exhibit 2 Village of Mount Prospect, Illinois General Fund- Revenues and Expenditures 2005 Forecast 2004 2005 Forecast Current Original Current Increase Percent Projections Forecast Forecast (Decrease) Change Notes Revenues: Property Taxes 8,164,528 8,536,859 8,536,859 0 0.00 A Sales Taxes - ROT Portion 8,150,000 9,056,295 9,056,295 0 0.00 B Sales Taxes - HMR Portion 1,065,000 1,152,275 1,152,275 0 0.00 C Food and Beverage Tax 439,920 448,800 448,800 0 0.00 Real Estate Transfer Tax 1,131,500 827,500 928,500 101,000 12.21 D Telecommunications Tax 2,057,700 2,211,000 2,507,442 296,442 13.41 E Utìlity Taxes 1,193,733 1,160,000 1,716,670 556,670 47.99 E Other Taxes 185,100 185,100 185,100 0 0.00 Vehicle Licenses 1,135,000 1,140,000 1,140,000 0 0.00 Other Licenses, Permits, Fees 1,573,176 1,426,250 1,450,000 23,750 1.67 F State Income Tax 3,336,485 3,453,996 3,453,996 0 0.00 Other Intergovernmental 795,362 702,375 719,375 17,000 2.42 G Charges for Services 755,942 829,874 829,874 0 0.00 Fines and Forfeits 544,300 534,000 534,000 0 0.00 Investment Income 140,000 230,000 140,000 (90,000) (39.13) H Reimbursements 316,650 323,900 323,900 0 0.00 Other Revenue 200,850 149,000 149,000 0 0.00 Total Revenues 31,185,246 32,367,224 33,272,086 904,862 2.80 Expenditures Public Representation 107,874 110,138 110,138 0 0.00 Village Manager's Office 1,834,353 1,884,855 1,928,455 43,600 2.31 J Television Services Division 170,262 178,471 178,471 0 0.00 Village Clerk's Office 163,256 172,359 172,359 0 0.00 Finance Department 1,368,331 1,495,159 1,495,159 0 0.00 Community Development Dept. 1,580,046 1,734,569 1,737,369 2,800 0.16 J Human Services Dept. 784,867 788,514 788,514 0 0.00 Police Department 11,293,688 11 ,88l, 143 11,795,788 (91,355) (0.77) K Fire Department 8,829,400 9,355,837 9,365,972 10,135 0.11 L Public Works Department 5,087,410 5,309,158 5,309,158 0 0.00 Community and Civic Services 278,902 264,156 264,156 0 0.00 Miscellaneous 53,714 54,629 54,629 0 0.00 Tota! Expenditures 31,552,103 33,234,988 33,200,168 (34,820) (0.10) Excess of Revenues over Expend. (366,857) (867,764) 71,918 939,682 Other Financing Sources/Uses Transfer to 2003 O/S Fund (270,000) (805,000) (805,000) 0 M Sale of land 285,000 a 805,000 805,000 N IMRF Pension Savings 0 0 54,915 54,915 0 Total Other Financing Uses 15,000 (805,000) 54,915 859,915 Excess of Revenues over Expend. and Other Financing Uses: (351,857) (1,672,764) 126,833 1,799,597 8/5/200410:19 AM2005 General Fund Forecast Exhibit 2 Village of Mount Prospect, Illinois General Fund-Revenues. and Expenditures 2005 Forecast Notes A 4.8% overalJ property tax hike proposed. B Sales tax receipts estimated to increase 2.7% over 2004 projected receipts (plus $687,500 for Costco) C Home Rule Sales Tax $0.25 established 1/04. 0 Revise upward to account for strong housing market, less portion attributed to Norwood development. E Sunsets on utiiity taxes from Street improvement Fund in full for 2005. F Account for increase in these revenues less abnormally high receipt of revenues from Public Impr. Inspections. G Increase in Replacement and Use Taxes received from State. H $8 million average balance @ 1.75%. I Does not assume fee for ceding volume cap is received in 2005. J Additional IT purchases not included in departmental budgets in prior years. K Reduced contribution due to favorable investment earnings l Additional contributions required as a result of higher than expected retirements. M Transfer as part of long-range funding of new Village Hall facility. N Portion of proceeds from sale of old ViUage Hall property. Balance of proceeds ($150,000) to be allocated to Capita! Improvement Fund. 0 Reduced contribution due to favorabîe investmenteamings (all General Fund Departments). 8/5/200410: 19 AM2005 General Fund Forecast Exhibit 3 2004 DATE VILLAGE OF MOUNT PROSPECT BUDGET CALENDARS 2004 and 2005 ACTION 2005 DATE 3/14/03 4/11103 5/12/03 to 5/16/03 5/23/03 6/6/03 6/26/03 7/8/03 7115/03 7/18/03 8/5/03 8/12/03 8/18/03 8/22/03 9/3/03 to 9/9/03 9/16/03 Capital Improvement Plan (CIP) Worksheets forwarded to Department Directors 3/1 0/04 Completed CIP Worksheets returned to Finance Department 4/9/04 Department CIP reviews with Village Manager and Finance Director 5/10/04 to 5/14/04 Complete Proposed CIP Amounts 5/21/04 Deliver Proposed CIP to Village Board and Finance Commission 6/4/04 Review Proposed CIP with Finance Commission 6í24/04 Committee of the Whole - CIP Review Session 7/13/04 Acceptance of Proposed CIP at Village Board Meeting 7/20/04 Budget Worksbeets forwarded to Department Directors 7/23/04 CIP available for distribution 8/3/04 Committee of the Whole - Mid-Year Budget Review and Pre-Budget Workshop 8/1 0/04 Completed Budget Worksheets returned to Finance Department 8/13/04 Revenue Estimates completed by Finance Department 8/20/04 Department Budget reviews with Village Manager and Finance Director 9/8/04 to 9/15/04 Complete Proposed Budget Amounts 9/22/04 2004 DATE 10/07/03 10/07/03 10/16/03 10/23/03 10/30/03 11/06/03 10/28/03 11/11/03 11125/03 12/02/03 12102/03 12/16/03 1/16/04 VILLAGE OF MOUNT PROSP.ECT BUDGET CALENDARS 2004 and 2005 ACTION Deliver Proposed Budget to Village Board and Finance Commission Proposed Budget available for public inspection at the Village Clerk's Office and the Mount Prospect Pubiic Library Review Proposed Budget with the Finance Commission Committee of the Whole - First Budget Hearing (7:00 pm - 10:00 pm) Overview, Village Administration, Finance & Human Services Committee of the Whole - Second Budget Hearing (7:00 pm - 10:00 pm) Police, Fire and Community Development Committee of the Whole - Third Budget Hearing (7:00 pm - 10:00 pm) Public Works Department and Non-Departmental Truth in Taxation Public Hearing First Reading of Proposed Budget Ordinance at ViHage Board Meeting Public Hearing and Second Reading of Proposed Budget Ordinance at Village Board Meeting Approved Budget available for distribution Exhibit 3 2005 DATE 10/05/04 10/05/04 10/14/04 10i21/04 10/28/04 lli04/04 10/26/04 11/9/04 11/23/04 12/07/04 12/07/04 I ! i 12/21/04 i j ~ Exhibit 4 Village of Mount Prospect, Illinois New Service I Project Suggestion Form 2005 Budget Suggested by: New Service/Project Name: Description of New Service/Project: Estimated Cost (if known): Potential Source of Funds: Please return this form to the Village Manager by September 3, 2004. This area for the use of the Village Manager Assigned to the Department of : Comments: Signature of the Village Manager MAYOR Gerald L. Farley VILLAGE MANAGER Michael E. Janonis TRUSTEES Timothy J. Corcoran Paul WID. Hoefert Richard M. Lohrstorier Michaele W. Skowron Irvalla K. Wilks Michael A. Zadel VILlAGE CLERK Velma W. Lowe Phone: (847) 392-6000 Fax: (847) 392-6022 TDD: (847) 392-6064 Village of Mount Prospect 100 South Emerson Street Mount Prospect, Illinoís 60056 COMMUNITY RELATIONS COMMISSION ORDER OF BUSINESS REGULAR MEETING Meeting Location: Public Works Facility 1700 West Central Road Mount Prospect, Illinois 60056 Meeting Date and Time: August 12, 2004 7:00 P.M. !. CALL TO ORDER II. ROLL CALL III. APPROVAL OF MINUTES July 14, 2004 OLD BUSINESS IV. V. NEW BUSINESS " CDBG 2005 Funding Applications REPORTS [Commission/staff] " Suburban Mosaic Book of the Year VI. VII. ADJOURNMENT MINUTES COMMUNITY RELATIONS COMMISSION 2ND Floor Conference Room, Public Safety Building Thursday, July 14, 2004 7:00 p.m. The meeting of the Community Relations Commission (CRC) of the Village of Mount Prospect was held Thursday, July 14, 2004 in the 2nd floor conference room of Village Hall, 100 South Emerson, Mount Prospect, Illinois. CALL TO ORDER Chairman Brennan called the meeting to order at 7: 10 p.m. ROLL CALL Present: Commissioner Parikh Commissioner Schultz Commissioner Tojbert Absent: Commissioner Muench Also in attendance: Mayor Gerald L. Farley Police Chief Richard Eddington Mr. Joe Hanafee resident Lisa Angell staff liaison APPROVAL OF MINUTES A motion to approve the June 3, 2004 meeting minutes with the following revision was moved and seconded. The minutes read, Commissioner Tolbert was listed as both in attendance and absent at the June 3rd. The minutes were corrected to read, Commissioner Tolbert was absent from the June 3rd meeting. The minutes were unanimously approved with the noted correction. OLD BUSINESS " CDBG Site Visits The Commission members indicated they would make site visits to the 2004 CDBG recipients prior to the scheduled 2005 CDBG funding applicants' presentations. The staff lJaison stated the best procedure for setting up the sJte-visit(s) would be for the Commissioners to first contact Marisa Warneke, Community Development, and then contact the agency to schedule a the time and day. Ms. Warneke can provide them the name and number of the agency contact person as well as notify the agency of the intent of the Commission member(s). NEW BUSINESS " Traffic Stop Report [In the July 14, 2004 meeting packet the Commission received a copy of Mount Prospect's Traffic Stop Report Summary from October - December 2002 and May 2000 - December 2002, and September 2003 - December 2003 and May 2000 - December 2003.] Chief Eddington provided background information on the intent and application of the Traffic Stop Report Summary. To assess the practice of "bias based enforcemenf' the state of Illinois requires law enforcement agencies to collect data for a study conducted by the Illinois Department of Transportation (lOOT). Northwestern University is doing the data analysis for the study which is expected to be publicized in 2005. The Village also shares this data which includes the drivers' Race (ethnic group) with the Federal Justice Department Chief Eddington stated he was pleased to have the opportunity to share the reports with the Commission and encouraged their comments and questions. The Commission members asked several questions regarding the data and what variables may affect the percentages. As a follow-up to their discussion on how and why this data is beneficial, a question about whether the interaction between the officer and driver could be used to promote other car safety issues. It was suggested that bi-lingual officers could help facilitate the increased use of seat belts and car seats at the time of a traffic stop. Other suggestions included an expanded community education program to reduce the number of tickets issued as a result of drivers not knowing traffic laws; bi-lingual pamphlets and visual aids. [Chief Eddington explained the car safety program that is already in pi ace at Alexian Brothers, the bi-lingual officers assist with car seat instaliation, seat belt requirements, etc.] " Chief Eddington thanked the Commission for their comments and suggestions. Chief Eddington indicated he would follow-up with Father Sonny regarding community education efforts, and development of a bi-lingual traffic safety pamphlet. Chief Eddington will continue to share the reports with the Commission. OLD BUSINESS " Affordable Housing As part of its charge t~e Community Relations Commission makes recommendations regarding the Village's Five-Year Consolidated Plan and Community Development Block Grant Funds (CDBG). The Village's new Five Year Consol1dated Plan prioritizes affordable housing. Recently though, Chairman Brennan and Mayor Farley have exchanged correspondence regarding the scope of the Commission's involvement in the area of affordable housing. Although at the time of the meeting Chairman Brennan had not received the letter, Mayor Farley was able to share his comments with the Commission members. In his remarks the Mayor touched on several social and economic factors that impact affordable housing. He also informed the Commission of recent action in the Illinois State Legislature to promulgate public policy on affordable housing that mayor may not impact Mount Prospect. And, while the Village Board and Administration have a common goal to provide affordable housing opportunities in Mount Prospect, he beHeves!t is important for the Village to have a full understanding of the State guidelines before embarking on a specific plan that mayor may not satisfy the state. Following the Mayor's comments the Commission held a lengthy discussion that allowed the members to express their thoughts on the social and economic factors of housing in general, as well as what influence the Commission should have in the Village's affordable housing policy/plan. However, as the Commission could not reach uniformity in this area no conclusion was reached at the end of the discussion. FOURTH OF JULY PARADE " Commissioner Tolbert participated in the parade. He had a sign on his van to represent the Community Relations Commission. He commented that the crowd responded with a favorable response when he rode by. He thanked the Public Works Department for the signs. REPORTS Family Issues - No report Suburban Mosaic Book of the Year Chairman Brennan asked the Mayor if the Village Board would support a Reso!ution in recognition of the Book program. Mayor Farley expressed his strong support of the program and assured the Commission a resolution would be drafted. Chairman Brennan reported that several more schools have expressed interest in participating, and there is an effort to coordinate participation among the Catholic schools. He added, Capannari's Ice Cream will host a book discussion on August 19, 2004. Commissioner Tolbert informed the members he completed his term of Governor with the Rotary, July 1. He added, the Rotary Literacy Committee continues to promote the Suburban Mosaic Book of the Year. NEXT MEETING The next meeting was scheduled for Thursday, August 12, 2004, 7:00 p.m., Public Works Facility, 1700 West Central Road. The staff liaison will contact Marisa Warneke to discuss the necessary timeline for the 2005 CDBG appHcant funding meetings. She will then coordinate the meeting dates with the Commission members. Due to schedule conflicts the Commission would like the meetings to be held in September. ADJOURNMENT There being no further business a motion to adjourn was moved and seconded. The meeting was adjourned at 8:30 p.m. Respectfully submitted, M. Lisa Angell Staff Liaison 847.870.5640 Director Glen R. Andler Water/Sewer Superintendent Roderick T. O'Donovan Deputy DIrector Sean P. Dorsey Streets/Buildings Superintendent Paul C. Bures Village Engineer Jeffrey A. Wulbecker Forestry/Grounds Superintendent Sandl'á M. Clark Solid Waste Coordinator M. Lisa Angell Vehicle/Equipment Superintendent James E. Guenther MeUNT PRCEIPECT PUBLIC WeRKS DEPARTMENT 1 'JOO W. CENTRAL ROAD, MOUNT PROSPECT, iLLINOIS 60056-2229 PHONE B47/B'J0~564C FAX 847/253-93'1'1 TDD 847/392-1235 NCTICE THE AUGUST 9, 20C4 MEETING CF THE SAFETY CCMMISSIDN HAS BEEN CANCELLED. THE NEXT REElULAR MEETING IS SCHEDULED FOR MONDAY, SEPTEMBER 13, 2DC4 AT 7:CC P.M. AN AGENDA OR CANCELLATION NCTICE WILL BE SENT PRIOR TO THIS MEETING. DATED THiS 2ND DAY OF' AUGUST, 2004. "".'.'.w.w...-...'.,.,.".,.,.,.,.,.,.,.,.,.,.,.,.~.,.w.'.'.'.' """"'.'.'.'.""-.'.'m.'.',.wm.'."""'" Village af Mount Prospect 112 E. Northwest Highway Mount Prospect. Illinois 60056 Phone 847/870-5656 BOARD OF FIRE AND POLICE COMMISSIONERS MEETING NOTICE TIME: August 10, 2004, Tuesday Police & Fire Headquarters 112 E. Northwest Highway Police Administrative Conference Room, 2nd Floor 5:30 p.m. DATE: LOCATION: AGENDA I. Approval of Minutes - July 13,2004 Open Meeting ll. Closed Session Approval of Minutes - July 13, 2004 Personnel Matters ill. Fire Department New Hire Test Update IV. Other Business MOUNT PROSPECT BOARD OF FIRE & POLICE COMMISSIONERS ~ t...tm~ Robert McKillop, Chairman :?- 3 - (j c.j Date VILLAGE CLERK NOTIFIED BY: ,~~ ý:':' ;5-0 POSTED BY: ~~ ~~ Date ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A DISABILITY NEEDS SOME ACCOMMODATION TO PARTICIPATE SHOULD CONTACT THE POLICE DEPARTMENT AT 112 E. NORTHWEST ffiGIIWAY, MOUNT PROSPECT. 847870-5656. TDD 708 392-1269 ....'.'7.."m.w,,~.~m...................,-......w.,..~............