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HomeMy WebLinkAbout2c. 08/11/2015 Financial Planning Workshop Minutes FINANCIAL PLANNING WORKSHOP MINUTES JOINT MEETING with VILLAGE BOARD and FINANCE COMMISSION August 11, 2015 I. CALL TO ORDER The meeting was called to order at 6:30 p.m. in the Village Board Room of the Village Hall, 50 South Emerson Street, by Mayor Arlene Juracek. II. ROLL CALL Trustees present included Paul Hoefert, John Matuszak, Steven Polit (Arrived at 7:34 p.m.), and Colleen Saccotelli. Finance Commission members included Commission Chair Vince Grochocinski, Pam Bazan, Trisha Chokski, John Kellerhals, Don Ocwieja, Thomas Pekras and Mary Rath. Staff present included Acting Village Manager David Strahl, Public Works Director Sean Dorsey, Finance Director David Erb, Police Chief Timothy Janowick, Fire Chief John Malcolm, Human Services Deputy Director Janet Abernethy, Police Deputy Chief Timothy Griffin, Fire Deputy Chief Brian Lambel, Public Works Deputy Director Jason Leib, Water & Sewer Division Superintendent Matt Overeem, Water & Sewer Division Foreman Casey Botterman, Fire Marshal Bryan Loomis, and Administrative Analyst Alexander Bertolucci. III. CITIZENS TO BE HEARD None IV. 2014 2015 COMBINED SEWER SYSTEM EVALUATION STUDY Public Works Director Dorsey stated the combined sewer system evaluation study was performed by consulting engineer, Baxter & Woodman. He stated the purpose was to assess the structural condition of Village owned combined sewers. The pipe assessed included pipe that was not previously televised during the 2004 study and selected pipe repaired with cured-in-placed-pipe (CIPP) technology. Approximately, 209,000 feet of pipe was reviewed. He stated Baxter & Woodman utilized the Pipeline Assessment Certification Program (PACP) protocols to codify observed defects. He stated that PACP terminology differs from the nomenclature utilized in the 2004 combined sewer study; although, the prevailing logic in the grading systems are similar. He stated the grading system classified pipes in five groups that from severe structural condition to very good condition. He stated the study identified $15,460,000 worth of sewer repairs which the majority will utilize CIPP technology. He stated staff recommends continuing an accelerated rehabilitation of sewer pipes in the combined sewer area at a pace of $800,000 - $1,000,000 per year. He stated a key component to funding rehabilitation is the Sewer Infrastructure Fee ($5/month per sewer service line). This fee generates approximately $800,000 in revenue and is slated to sunset in 2016. He stated staff seeks direction from the Village Board regarding disposition of the Sewer Infrastructure Fee. 08/11/15 Committee of the Whole Page 1 of 5 General comments from the Village Board and Finance Commission members included the following items: There was a question whether if there is some point when sewer rehabilitation will stop, or will it continue annually like the road resurfacing program. It was noted that the Village has been utilizing CIPP technology since 1978 and there has not been any failures except in one instance due to faulty installation. Clarification was provided regarding the CIPP technology. The process uses a 20 mm felt liner with resin and steam or hot water to cure in place. The liner provides structural support and a seal to stop water filtration. There was a discussion regarding sewer pipes accelerated rate of degradation with age and possible structural failures. It was noted the oldest CIPP the Village has is 35 years old. There were questions regarding the possibility of lining pipes ahead of schedule. There was a question about separating the combined sewer pipe to a separate sewer and storm water system. The Metropolitan Water Reclamation District deep tunnel system was the fix in lieu of separating all of the combined sewers. There was a discussion regarding the Sewer Infrastructure Fee ($5/month per sewer service line), its scheduled sunset in 2016, and the opportunity to continue utilizing this fee to fund the sewer rehabilitation program. There was general consensus to remove the Sewer Infrastructure Fee 2016 sunset and review the Sewer Rehabilitation Program to analyze advantages of an accelerated improvement schedule to realize potential future cost savings. V. 2015 MID-YEAR BUDGET REVIEW AND 2016 PRE BUDGET WORKSHOP 2015 MID-YEAR BUDGET REVIEW Finance Director Erb provided an overview of the 2015 budget. He stated there is a budget surplus projected for 2015 as revenues are $1,479,989 and expenses are $99,749 above the amended budget. He stated the 2015 budget has experienced some notable revenue variances attributed to revenue growth from sales tax, telecommunication tax and real estate transfer tax. He stated sales tax growth of 4.6% is projected for 2015 and this is above the 2 to 3% growth initially projected. He stated that telecommunications tax revenue was trending with a deficit from the previous year; however, in the last months of 2014 this trend reversed and as a result revenue was underestimated. He stated the real estate transfer tax benefited from several larger than average transactions including the sale of Randhurst. General comments from the Village Board and Finance Commission members included the following items: There was general discussion regarding wireless phone services and how the telecommunications tax is calculated. It was noted the State audits telecommunication receipts. The Village has a reciprocal agreement with the State to view telecommunication receipts and staff can determine how particular vendors are trending. 2016 PRE BUDGET WORKSHOP Finance Director Erb stated initial department budget submittals were completed earlier than normal in response to the State budget uncertainties. He stated revenue adjustments are based on changes to 2015 projections. He stated that initial budget 08/11/15 Committee of the Whole Page 2 of 5 expenditures reflect departments tracking closely to last year budget forecast, staffing requests for public safety and capital items for public works. He provided a breakdown of General Fund expenditures by cost center (e.g. Personal Services, Contractual Services, Infrastructure/Building Improvements, etc.) and by department. He stated the preliminary 2016 General Fund Budget is estimated at a deficit of $517,319. He summarized the budget process moving forward that includes departmental budget meetings and assembly of the proposed budget document by October 9. General comments from the Village Board and Finance Commission members included the following items: There was a discussion regarding projected health insurance rates for 2016 and Affordable Care Act taxes and fees. There was a question regarding contractual services revenues for the water and parking funds. There was general discussion regarding the budget process and departments working toward reducing the preliminary deficit. GENERAL FUND RESERVES Finance Director Erb stated the V emergencies, and strengthens creditworthiness with bond rating agencies. He noted that reserve levels are determined by fund type. He stated regular growth in reserves is necessary to maintain fund balance levels and staff follows Government He provided an overview of the estimated General Fund reserves for 2015 and 2016. General comments from the Village Board and Finance Commission members included the following items: It was noted that the State continues to be about a million dollars or two months behind in remitting the Village portion of income taxes. There were general questions regarding comparable communities fund balance policies. There was a discussion on whether Village could achieve an AAA bond rating. 2015 PRELIMINARY PROPERTY TAX LEVY Finance Director Erb stated the annual property tax levy is used to pay debt service, pensions, and general operations. He summarized the historical approach to setting the annual levy that used a tentative levy increase range of 3.5% to 5.0% and the 2014 property tax levy increase of 2.48%. He stated the preliminary 2015 property tax levy totals $18,135,278 and reflects a $404,356 or 2.28% increase from 2014. He stated the 2.28% increase only includes increases to debt service, police pension, and fire pension funds. He provided an update on state legislation proposing two year property tax freeze beginning in 2017 for Cook County taxing districts. General comments from the Village Board and Finance Commission members included the following items: 08/11/15 Committee of the Whole Page 3 of 5 There was a question of how would the Village pay labor agreements annual salary increases if the increase in the general fund portion of the levy was 0%. It was noted that each 1% increase to the property tax levy results in about $175,000 to $180,000 of revenue. There was a general discussion regarding the S There was a discussion regarding the fairly imminent property tax freeze per state legislation. STAFFING FOR ADEQUATE FIRE & EMERGENCY RESPONSE (SAFER) GRANT Finance Director Erb stated the Fire Department submitted for the SAFER grant in February 2015 and was awarded the grant in July. The Village Board authorized staff to pursue this grant to address Fire Department staffing that was reduced in 2010. The SAFER grant will fund salary and benefit expenses related to six (6) full-time positions for the first two years in an amount of $1.359 million. However, the Village would fund an additional $158,396 for three firefighters to move into the lieutenant ranks to support run configuration to re-staff Engine 13. He summarized the budget impact of these positions in the next three years that total $922,188 at the end of the grant period in 2018. He provided an overview of available funding options (e.g. early hires, pre- funding, and Fire Department service revenues) to prepare for when the grant period ends in 2018 and the Village would need to fund these firefigsalary and benefit expenses. General comments from the Village Board and Finance Commission members include the following items: There were clarifications regarding grant acceptance, hiring options, requirements and measurement periods. There was general discussion regarding a funding strategy to maintain these six firefighter positions after the grant expires. It was noted the grant funds hiring of six firefighters to bring staffing back up to prior 2010 levels and if the Village accepts the grant all six firefighters are required to be hired. There were comments expressing concern with the additional million dollars required to fund the personnel expenses after the grant expires. There were questions regarding how different run configurations impact the vehicle replacement schedules for Engine 13 and the Ladder Truck. Board of Fire and Police Commission Chair Michaele Skowronstated the Commission has reviewed Fire Department staffing and supports accepting the SAFER grant. There was general consensus for the Village to accept the SAFER grant and for staff to present a resolution recognizing acceptance for the Village Board to approve at the August 18, 2015 Village Board meeting. VI. Acting Village Manager Strahl stated the Mount Prospect Family Bike Ride is this Saturday, August 15 at Melas Park. 08/11/15 Committee of the Whole Page 4 of 5 VII. ANY OTHER BUSINESS Mayor Juracek stated Chamber of Commerce is planning to extend the Irish Fest to Friday night. There are sunk costs with renting equipment for such an event and adding an additional day creates minimal additional expenses. VIII. ADJOURNMENT The meeting adjourned at 9:24 p.m. ALEXANDER BERTOLUCCI Administrative Analyst 08/11/15 Committee of the Whole Page 5 of 5