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HomeMy WebLinkAbout04/28/2015 Joint Meeting Financial Planning Workshop FINANCIAL PLANNING WORKSHOP MINUTES JOINT MEETING with VILLAGE BOARD and FINANCE COMMISSION April 28, 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 Korn, John Matuszak, Steven Polit, Richard Rogers, Michael Zadel and Trustee-Elect Colleen Saccotelli. Finance Commission members included Commission Chair Vince Grochocinski, Pam Bazan, Trisha Chokski, John Kellerhals, Don Ocwieja and Thomas Pekras. Staff present included Acting Village Manager David Strahl, Finance Director David Erb, Police Chief Timothy Janowick, Fire Chief John Malcolm, Public Works Director Sean Dorsey, Community Development Director Bill Cooney, Human Services Director Julie Kane, Finance Deputy Director Lynn Jarog, Police Deputy Chief Michael Eterno, Police Deputy Chief Timothy Griffin, Fire Battalion Chief of Training Brian Lambel, Fire Marshal Bryan Loomis, Public Works Deputy Director Jason Leib and Administrative Analyst Alexander Bertolucci. III. CITIZENS TO BE HEARD None IV. FINANCIAL PLANNING WORKSHOP 1) 2014 Year-End Results Finance Director Erb stated three amendments to the original budget were made during 2014 and the total budget reduced from $116.0 million to $113.0 million. He stated these amendments relate to carry-over items, weather events, and unexpected building repairs. He stated the General Fund balance was 27.4% at 12/31/2014 and fund balances maintained at or above policy levels (20%-30%) for all funds except for the parking system and debt service funds. 2) 2015 First Quarter Review Finance Director Erb stated there has been one amendment made to-date to adjust for an accounting change regarding Library debt payments and capital carry-over items. He stated 2015 estimates assume no reduction in revenues. He stated if the state decides to reduce the municipal Local Government Distributive Funds the impact would be felt after the State’s 2015-2016 budget becomes effective on July 1. He stated the General Fund budget reflects a deficit of $35,415; however, minor revenue adjustments based on prior years provides a revised estimate that reflects a General Fund surplus of $124,585. He stated there is insufficient history (3 months of data) to support any adjustments to expenses at this time. General comments from the Village Board members included the following items: 04/28/15 Committee of the Whole Page 1 of 4 There were questions regarding the Telecommunication Tax and how the collected amounts have spiked and dropped in the past. There was also a discussion regarding auditing the Telecommunication Tax to verify if the tax is being charged accurately. There was clarification regarding carry-over items such as the Isabella basin drainage improvements. There was a discussion regarding the 2014 adoption of modified fees, fines and charges to assist with payment of service and programs. 3) 2015 Proposed Property Tax Levy Finance Director Erb stated the annual property tax levy is allocated to pay debt services, pensions and general operations. He stated the typical approach to setting the annual levy begins with a tentative range of 3.5% to 5.0%. He stated the pension portion of the levy is set at the annual required contribution. He stated the proposed 2015 property tax levy totals $18,476,699 and reflects an increase of $745,777 or 4.21%. He stated staff requests input from the Village Board regarding the need to modify the existing annual property tax levy determination process. General comments from the Village Board members included the following items: There was a discussion regarding pension funding levels. There was general discussion regarding the state’s financial situation and the potential impacts to the Village’s budget. There were questions regarding the police and fire pension funds investment policies. There was general discussion regarding establishing a property tax levy ceiling and a new target range. There was a discussion regarding zero base budgeting. th It was noted that the Village is the 7 largest sales tax collector in the state. There was general consensus by the Village Board regarding staff creating service priorities lists in preparation for further budget discussion and if the state reduces Village shared revenues from the Local Government Distributive Fund. 4) 2016 Revised Forecast Budget Finance Director Erb stated the total village revenues are $114.2 million with an overall growth in revenue of 3.99% and expenditures are $110.5 million excluding capital improvements. The 2016 revised forecast total village budget reflects an increase of 2.5%. He stated excess of revenues over expenditures consists of surplus earnings in public safety pensions. He stated General Fund budget overall growth in revenues is 2.48% and overall growth in expenditures is 2.61%. 5) Allocation of Revenues Finance Director Erb stated the Village dedicates revenues to fund specific purposes. He stated the Village’s 1.0% Home Rule Sales Tax is divided equally as dedicated revenue sources for Flood Control, Streets Improvement Construction Fund, Capital Improvement Fund and General Fund. He provided a summary of the street funding plan and the adjustments to fees and tax rates made in 2013 to support the street funding plan. He reiterated the objective of these changes was to provide the street program with sufficient funds and to eliminate subsidizing the program with the General Fund. He stated there is significant diversity in the 04/28/15 Committee of the Whole Page 2 of 4 Village’s existing revenue matrix so no single category accounts for greater than 23% of all revenue. 6) Preliminary Capital Improvement Plan (2016-2020) Finance Director Erb stated the first draft of the Capital Improvement Plan (CIP) has been submitted by the departments. He stated the CIP totals $69.9 million with first- year projects totaling $13.3 million. He stated the CIP document has a new format that utilizes software (“Plan It”) specifically designed for capital improvement planning. 7) Discussion on Unfunded Mandates Finance Director Erb provided an overview of the unfunded mandates that impact municipal budgets. He stated relaxing of mandates and capitalizing on local savings would soften the impact of lost revenue, but savings would take a long time to be realized. Acting Village Manager David Strahl stated there is pending legislation that if approved would create more unfunded mandates. 8) Discussion on Real Estate Transfer Tax Finance Director Erb summarized the initial presentation from the February 24 Committee of the Whole meeting. He stated staff has conducted further analysis and the survey component found similar transfer stamp issuance processes throughout comparable communities. He stated the financial impact analyses of an extended full, tiered, and existing relocations rebate programs were projected based on 2014 receipts. He stated the full rebate program could reduce revenues by upto 30% annually. He stated internal processes could be modified to streamline the transfer stamp issuance process without shifting the liable party for transfer tax payment from the buyer to seller. General comments from the Village Board members included the following items: There were questions regarding Freedom of Information Act requests generated from the real estate transfer stamp process. There was general discussion regarding shifting the liable party for payment from buyer to seller and the creation of a “double taxation” scenario. There was a discussion regarding the proposed internal real estate transfer stamp issuance process improvements. There was general discussion regarding maintaining the existing relocations rebate program. There was general consensus by the Village Board regarding maintaining the buyer as the liable party for payment of the real estate transfer tax and the existing relocations rebate program. There was also general consensus regarding the implementation of staff’s recommended internal transfer stamp issuance process improvements. V. ANY OTHER BUSINESS Finance Commission Chair Vince Grochocinski stated the Finance Commission budget hearings in October are open to the public and welcomed residents to attend. 04/28/15 Committee of the Whole Page 3 of 4 VI. ADJOURNMENT The meeting adjourned at 9:40 p.m. ALEXANDER BERTOLUCCI Administrative Analyst 04/28/15 Committee of the Whole Page 4 of 4