HomeMy WebLinkAbout06/28/1990 FC minutes1
FINANCE COMMISSION
Minutes of the Meeting
June 28, 1990
I Call to Order
The meeting was called to order at 7:30 p.m. Commission members in
attendance were Richard Bachhuber, John Engel, Jim Morrison, John Mussar, Tom
Pekras, and Ann Smilanic. Also present were Finance Director David Jepson
and Assistant Finance Director Carol Widmer.
II Approval of Minutes
The minutes of the April 26, 1990 meeting were accepted as presented.
III State Income Tax and Income Tax Surcharge
Finance Director David Jepson presented an update on the amount of the State
Income Tax Surcharge the Village is expecting to receive and the possible
effects of the distribution method on the 90/91 and 91/92 budgets.
During the closing days of June 1989, a 20% State Income Tax Surcharge was
introduced and adopted by the State Legislature. State Representative David
Harris stated in a memo to Mount Prospect Village Officials that the Illinois
Economic and Fiscal Commission estimated the Village would receive a total
of $3,354,220 over a two year period.
The Village Board decided that the money should be used for a one-time
capital project such as a new public safety building, street reconstruction
or flood control. Accordingly, the 1990/91 budget did not include any
specific expenditures for these funds.
At the time the State Income Tax Surcharge was passed, the Village did not
receive any information as to how the funds would be distributed. The first
payment was received in August of 1989 and the distribution (regular state
income tax & surcharge) was recorded exactly as the funds were indicated on
the distribution form from the State. As the Village continued to receive
these funds, the State Income Tax receipts were considerably higher than they
had been during the previous year, but large variations had been experienced
in the past.
Based on the first seven months of the 89/90 fiscal year State Income Tax
receipts were $919,457 compared to $788,023 for the same seven months in 1988
for an overall increase of 16.7%. Based on this information, estimates for
State Income Tax for the 89/90 and 90/91 were raised. Over the 24 month
period the Surcharge
total $3,739,000 and
$3,354,000 initially
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is in effect it is estimated the State Income Tax will
the Surcharge will amount to $2,647,000 rather than the
reported.
An explanation of the distribution of the Income Tax Surcharge was finally
received from the State. The State is including the surcharge in the
computation of the regular 1/12 distribution of Income Tax monies. The
effect of the distribution method used by the State has resulted in an
increase in the amount of State Income Tax by 20%
Based on this information, the revised 24 month total for State Income Tax
would be $3,116,000 and for the Income Tax Surcharge it would be $3,270,000
rather than the $2,647,000 based upon the distribution method used by the
State of Illinois.
The Village Board was presented with three options:
1. Record the Surcharge as reported by the State of Illinois and allocate
approximately $2,647,000 for Capital Projects. -
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2. Adjust the Surcharge and provide approximately $3,270,000 for Capital
Projects.
3. Adjust the Surcharge to a figure between $2,647,000 and $3,270,000 and
use that amount for Capital Projects.
If the Village Board adopted option 2, available operating funds for the
91/92 budget could be reduced by up to $370,000. David Jepson recommended
that the Village Board wait until the 6 month budget review of the 90/91
fiscal year to determine whether other funds may be available to make-up this
potential shortfall. The Village Board agreed with that recommendation.
IV David Jepson reviewed the progress in the plans for a new Public Safety
Facility. The first step that was taken was to have the engineering firm of
Donohue present basic estimates on the costs of correcting deficiencies in
the current building, remodeling, separating the police and fire departments,
etc. After the Village Board considered various options and locations, they
decided to consider building a new structure with underground parking on the
site of the current Public Safety Building. As the next step in this
process, the Village Board recently approved the preparation of a Schematic
Design Report. This report, which will include more accurate cost
projections, will be presented to the Village Board at the end of July in
order to be able to respond to a referendum question to be put on the
November ballot.
Mr. Jepson explained that two major bond issues will be retired in the next
few years, one in 1992 and another in 1993. If the Public Safety Building
is approved, the new issue will be structured to fit in with the retiring
issues.
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Plans would include relocating the Police and Fire Departments to the old
Public Works building on Pine Street during the approximately 15 months it
will take to complete.the new structure.
V Finance Director's Report
Mr. Jepson discussed the Budget Amendment for the Fiscal Year Ended April 30,
1990. Whenever monies are expended in excess of the amount budgeted at the
fund level, a budget amendment is required. Four funds were overexpended
and required an amendment. They are:
Illinois Municipal Retirement Fund. The Village's IMRF contribution rate
increased from 8.76% to 10.30% in January 1990. Total amendment of
$10,000.
Benefit Trust #2. This fund was overexpended due to a required
reimbursement to the Fire Pension Fund for March and April 1989 benefits
paid to Paul Watkins. Total amendment of $3,000.
Risk Management Fund. This fund is overexpended due to higher reserves
established by the Village's Insurance Administrator for claims incurred
prior to January 1, 1990. Total amendment of $160,000.
Debt Service Funds. The amounts overexpended represent higher bank fees
than had been anticipated. Total amendment of $500.
The total amendments amounted to $173,500.
VI Ad,iournment
The next meeting will be July 26, 1990.
The meeting was adjourned at 9:00 p.m.
Respectfully Submitted,
Carol Widmer, Assistant Finance Director
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