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Home My WebLink About2. COW Minutes 09/13/2011 (Financial Workshop)J � H NESe 4 y �a �k SPECIAL JOINT MEETING OF THE VILLAGE BOARD AND FINANCE COMMISSION SEPTEMBER 13, 2011 I. CALL TO ORDER The meeting was called to order at 6:30 p.m. in the Community Center of Village Hall, 50 South Emerson Street, by Mayor Irvana Wilks. Trustees present included John Korn, Paul Hoefert, Arlene Juracek, John Matuszak, Steven Polit and Michael Zadel. Finance Commission members present included Commissioners Vincent Grochocinski, Pam Bazan, Ann Smilanic, John Kellerhals, Tom Pekras, Wayne Gardner and Don Ocwieja. Board of Fire and Police Commissioners present included George Busse, Chuck Bennett, Jim Powers and Michaele Skowron. Staff members present included Village Manager Michael Janonis, Assistant Village Manager David Strahl, Finance Director David Erb, Deputy Director Lynn Jarog, Police Chief John Dahlberg, Deputy Police Chief Tim Janowick, Police Commanders John Wagner and Mike Eterno, Police Sgt. Tim Griffin, Public Works Director Sean Dorsey, Deputy Director Jason Leib, Fire Chief John Malcolm, Deputy Fire Chief Chris Truty, IT Director Joan Middleton, Community Development Director Bill Cooney, Deputy Director Brian Simmons, Human Services Director Nancy Morgan and Deputy Director Jan Abernethy. I � d 1 le1 0 1 [0I :&TIVOI 1 *1 Village Manager Janonis provided an overview of the preliminary budget discussions based on previous discussions with the various village departments. He stated that the deficit has been reduced to $1.2 million for fiscal year 2012. He stated the focus of the discussion this evening will be on the General Fund and Property Tax Levy. He also stated that there will be some discussion regarding the Water Fund, Refuse Fund, Street and Flood Construction Fund, and the Randhurst Redevelopment Agreement. He stated the staff's goal is to present a balanced Budget and he is hoping to avoid discussions regarding staff reductions in order to balance the Budget. Finance Director David Erb provided an overview regarding the deficit. He stated the deficit is driven primarily by a reduction in revenue of approximately $161,000 and additional expenses of $83,000 which has increased the projected deficit from $977,000. He stated the 2012 Budget reflects funding of computer replacement and vehicle funds, a 2% wage increase, a projected Property Tax increase of 4.33 %, and the Health Insurance increase of 7% for the PPO and 9% for the HMO. He stated contractual services and commodities remain at the 2011 level which is the second year in a row that they have been frozen. He also stated that the deficit reduction options are limited, but do include, reduction of the capital replacement programs, reduction of a wage increase from 3% to 2 %, which would save approximately $140,000, and a Property Tax increase above 4.33 %. He stated the projected deficit for 2013 is $2.04 million and that the deficit is driven Page 1 of 1 H: \VILM \Cow\2011 \MINUTES \Joint Vb and Finance Workshop9- 13- 201 1.docx by expenses still growing faster than revenues. He provided an overview of the Property Tax Levy options and what makes up the 4.33% increase projection. He stated with a 4.33% Property Tax increase the General Fund would receive approximately a 8.7% increase, the Refuse Fund would receive a 3% increase, debt service would be flat, Police pension would decrease by 1.3 %, Fire pension would increase .8 %, with an overall General Fund impact increase of $591,000. He also provided an alternative tax option and property tax options of a 5% increase and a 7.5% increase along with the respective General Fund revenue increases. George Busse stated that he is sensitive to the quality of personnel for service delivery. He feels that the current manpower levels are not sustainable over the long term and a reduction in staff has created exposure in areas that need to be addressed. He stated that if additional staff cuts are undertaken he feels that police and fire personnel should be looked at differently than broad - based reductions. General comments from the Village Board members included the following items: • It was suggested that there is a need for a Property Tax increase to address the revenue side of the budget. • There was also general discussion regarding staffing levels in the Police and Fire departments. • There was a general discussion regarding the impact of the proposed 4.33% property tax increase. • There was general discussion regarding the impact of a 2% wage increase and the overall cost of each percentage of wage increase. • There was also a general discussion regarding the reduction in reserves and the potential impact of reserves being reduced to 20 %. WATER FUND DISCUSSION Finance Director David Erb provided a summary discussion regarding a proposed rate study for the Water Fund for the upcoming year. He stated the water rates have not kept up with the capital costs and the increase cost of water purchase. He also stated that there will be a need to discuss capital funding for the water system once Special Service Area 5 expires in approximately five years. He is recommending a rate increase for water of 5% for the coming year. I: »11I.y�1U�1�7�7�'I�IIf.Y.y[•L A Finance Director David Erb stated the reserves that have been used as costs have increased over the last several years. He is concerned about dropping below the reserve level in the fund. He stated that the single - family refuse costs are not supporting expenses. This can be addressed through direct billing and regular increases to the Property Tax Levy if desirable. He is proposing a direct bill to residents to increase to $100 per year (a $25 increase) and a 3% Property Tax increase annually devoted to refuse funding. Consensus of the Village Board was to increase the direct bill charge by $25 for a total of $100 in addition to the Property Tax increase. Committee of the Whole Page 2 of 3 9/13/11 H: \VILM \Cow \2011 \MINUTES \Joint Vb and Finance Workshop9- 13- 2011.docx STREET CONSTRUCTION FUND: Finance Director David Erb stated that revenue has not kept up with the capital costs and the Village is falling behind in the number of streets that are resurfaced due to increased commodities costs and lower available funds. He stated that there is an option to catch up on the street backlog by issuing a general obligation debt and redirecting approximately $.25 of the Home Rule sales tax from the Flood Control Fund and replacing the flood control money with a direct bill of $7.50 per month to water customers. Consensus of the Village Board was to revisit this option once a rate study has been completed and costs can be evaluated. RANDHURST REDEVELOPMENT AGREEMENT: Finance Director David Erb provided an outline of the revenue bonds and how the bonds would be repaid through increased revenue generated on the Randhurst site. III. ADJOURNMENT Meeting adjourned at 7:15 p.m. DAVID STRAHL Assistant Village Manager Committee of the Whole Page 3 of 3 9/13/11 H: \VILM \Cow \2011 \MINUTES \Joint Vb and Finance Workshop9- 13- 2011.docx