HomeMy WebLinkAbout02/07/1991 FC minutesFINANCE COMMISSION
Minutes of the Meeting
February 7, 1991
I Call to Order
The meeting was called to order at 7:35 p.m. Commission members in attendance were
Richard Bachhuber, Paul Davies, John Engel, Newt Hallman, Vince Grochocinski, Jim
Morrison, Tom Pekras, and Ann Smilanic. Also present were Village Trustee George
Van Geem, Village Manager John Dixon, Finance Director David Jepson, Assistant
Finance Director Carol Widmer, two Village residents and one member of the press.
II ARyroval of Minutes
The minutes of the January 10, 1991 meeting were accepted as presented.
III 1991/92 Budget
Village Manager John Dixon presented an overview of the 1991/92 Budget. Mr. Dixon
stressed that the Village of Mount Prospect continues to provide quality public
service at a very reasonable cost to the residents. The services provided by the
Village of Mount Prospect are ranked in the annual Park Ridge Survey of 19
Comparable Municipalities as one of the most cost-effective in the entire northwest
suburban area.
In the last few years the Village has had an unusually good revenue picture,
however, we have experienced a leveling off of the growth in revenues and as a
result, there are several recommended additions to the revenue base in 1991/92.
The total Budget Revenues for 1991/92 are expected to increase from $42,231,280 to
$43,172,455 for an increase of $941,175, or 2.2%. The overall increase can be
attributed to the new revenue sources along with some decreases of existing revenues
and an additional $1.4 million in the sale of bonds. One revenue change being
recommended is the increase of parking fines from $10.00 to $20.00, another area
of additional revenue being recommended is a 3% Hotel/Motel tax. This revenue could
be used to offset some of the costs of community activities. It is also proposed
that the Emergency Ambulance Fee be expanded to include residents as well as non-
residents to help compensate for that period of time that an ambulance is out of
service. Another recommended revenue change is an increase in the combined water
and sewer rate from $2.50 to $2.75 per 1,000 gallons. Since 1984 the combined water
and sewer rate has only been increased twice. It had been anticipated that the rate
would be increased on May 1, 1990, however, a Build Illinois Grant put off the need
for that increase.
In the area of expenditures, the only changes in personnel for 1991/92 is the
transition of a part-time secretary in Cable to full-time, the addition of a part-
time production assistant also in Cable and part-time clerical help in Human
Services. Two seasonal and one intern position in Public Works have been
eliminated.
It has been recommended that the responsibilities of the Cable Division be increased
to include the Village Newsletter, news releases and communications and in
recognition of those additional responsibilities the division be renamed the
Communications Division.
In the Street Division of Public Works there is a recommendation to reduce
expenditures for street improvements by $250,000 from the general fund this year.
A total of $1.25 million has been allocated for street projects rather than $1.5
million as in the 1990/91 budget. In the Water Division of Public Works the
benefits of the program of replacement of water mains and sewer replacements will
allow a reduction in those expenditures from $549,000 to $215,000 this year. Also,
the $275,000 upgrade and painting of the downtown water tower has been deferred
because of other needs in the Water Fund.
The 1991/92 budget is an ambitious budget and as the Village of Mount Prospect moves
through its 75th Anniversary, this budget will continue to provide outstanding
services at reasonable costs.
Revenues
David Jepson discussed the budget document itself. He stressed that the most
important administrative function is preparing and adopting the fiscal budget.
When adopted, the budget becomes the authorization to spend money.
David Jepson reviewed the Budget Summary of Available Fund Balances. He stressed
the importance of adequate fund balances in order to provide operating revenue for
the Village as well as to show fiscal health to the bond rating agencies. The goal
in the general fund is to have a fund balance as of April 30, 1992 of 15% of
expenditures which is approximately two months' operating revenue for the Village.
Dave also pointed out a new chart called "Where Property Taxes Go" which shows that
out of a total tax rate of $8.949 the Village of Mount Prospect realizes 10.3% of
that amount as compared to 13.2% for Cook County and 57.7% for education.
Another new chart is the one entitled "How Property Tax Dollars are Used." This
chart shows a dollar bill broken into segments representing Village functions.
Public Safety, which is made up of police and fire protection and their pension
costs, account for 47¢ of each dollar. Refuse disposal costs take 24¢ of each
dollar. Public improvements which include equipment replacement, sewer improve-
ments, Village Hall, Library, Public Works building and the proposed Police and Fire
building take 20¢ of each dollar and Village pension costs (other than police and
fire) take the remaining 9¢ of each dollar.
Dave then went on to review the significant revenue increases and decreases for the
proposed 1991/92 budget.
Revenues in the 1991/92 budget are expected to be $43,172,455 compared to
$42,231,280 in 1990/91, an increase of 2.2%. Among the significant increases and
decreases in expected revenues for 1991/92, sales tax revenues are expected to
increase $825,000 including the addition of a 1/4% home rule Sales Tax. The tax
is expected to become effective September 1, 1991 and will be used to fund flood
control projects. The increase of $470,500 in Service Charges includes a 10%
increase in water and sewer rates and the addition of an Emergency Ambulance
Transport fee for all persons transported rather than just non-residents.
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The decrease of $1,791,795 in Intergovernmental Revenue reflects the sunset
provision for the State Income Tax Surcharge as of June 30, 1991 of $1,235,000 along
with a reduction of $237,000 in Community Development Block Grant Funds and the
elimination of a $392,000 Build Illinois grant. Licenses/Permits/Fees revenue and
Other Revenue also reflect expected decreases.
Village Administration
John Dixon presented the proposed 1991/92 Village Manager's Budget of $452,445 which
represents a $16,535 decrease from the 1990/91 Budget of $468,950. The decrease
is attributed primarily to lower legal expenses. Two cases have been concluded and
less litigation is expected this year.
The Cable Division has been renamed the Communications Division in recognition of
a proposed increase in responsibilities. This Division will oversee all outside
communications to residents, news media, cable, etc. as well as overseeing the Cable
Franchise Agreement. Also, maintenance of the Village telephone system has been
transferred to the Communications Division. It is proposed that the Cable TV
Administrator be given the title of Communications Administrator and the production
assistant be named Cable Production Coordinator. A part-time secretarial position
has been changed to a full-time position to assist in these new responsibilities.
In the Village Clerk's office the position of the Assistant to the Village Clerk
has been changed to Deputy Village Clerk in order to fulfil legal requirements when
substituting for the Clerk at meetings.
Finance Department
Finance Director David Jepson presented the proposed 1991/92 Budget. The proposed
budget of $943,230 indicates an increase of $72,200 over the 1990/91 Budget of
$871,030. Contractual Services will account for $40,880 of that increase as shown
by comparing the 1990/91 budget of $332,700 and the proposed 1991/92 budget of
$373,580. Liability and property insurance costs will increase $26,150 and $5,400
can be attributed to medical insurance increases.
No additional personnel are requested for the Finance Department. With the
retirement of the Account Clerk who was responsible for payroll, however, we are
proposing that position be replaced with a degreed accountant to add additional
accounting strength to the department.
The Risk Management Program of the Finance Department is used to account for the
Village's Self -Insurance Program. Total insurance costs are expected to be
$2,125,000 in 1991/92 compared to budgeted costs of $1,916,000 in 1990/91, an
overall 11% increase. Medical claims are expected to be $1,150,000, general claims
are budgeted at $300,000 and other miscellaneous claims at $46,000. General
insurance premiums for 1991/92 are expected to be $302,500 and medical and life
insurance is expected to be $246,000. Comparable costs for insurance premiums in
1990/91 are $246,000 and $199,000 respectively.
Dave Jepson said the Village will continue to monitor all insurance costs and
exercise control wherever anuronriate.
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There were a number of questions and discussion by the Commissioners during the meeting
regarding the information presented. The Commissioners agreed that they would wait
until all of the presentations :ave been made and then make their recommendation to the
Village Board. Commissioner Hallman asked that the minutes include his concern over the
amount of resources allocated to the Cable TV operation.
The next meeting is scheduled for February 21, 1991, at which time the proposed 1991/92
budgets for Planning and Zoning, Public Works and Inspection Services will be presented.
The meeting was adjourned at 10:20 p.m.
CLW/sm
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Respectfully submitted,
Carol Widmer
Assistant Finance Director