HomeMy WebLinkAbout03/13/1993 FC minutesMinutes
BUDGET WORKSHOP
March 13, 1993
I Call to Order
The meeting was called to order at 9:15 a.m. by Mayor Gerald L. Farley. Trustees present were
George Clowes, Tim Corcoran, Paul Hoefert and Irvana Wilks. Trustees Mark Busse and Leo
Floros were absent. Also present were Village Manager Michael E. Janonis, Finance Director David
Jepson, Assistant Finance Director Carol Widmer, Inspection Services Director Chuck Bencic, and
Environmental Health Coordinator Bob Roels. Additionally, Richard Bachhuber, Michelle Skowron,
Angela Volpe and three members of the press were in attendance.
H 1993/94 Budget Overview
Mayor Farley opened the meeting by stating that the discussion of the proposed budget is a topic
of major significance for the Village Board.
Village Manager Michael Janonis explained that staff was taking a new approach in presenting the
1993/94 Budget. The goal is to present an overview at the first meeting and to focus on
departmental budgets at the next meeting. The overview will direct attention to policy issues that
should be addressed and provide insights into the revenue sources expected to finance the proposed
budget. Additionally, the format has been structured in such a manner to facilitate discussion rather
than as a formal presentation.
Mr. Janonis stated that the process actually started Thursday, March 11, 1993, with an opening
presentation to the Finance Commission. The Commissioners will submit their recommendations to
the Village Board after their next meeting on March 18, 1993. Mr. Janonis added that although
groups like the Finance Commission often work in anonymity, their feedback and comments from
residents is what makes the process work.
Mr. Janonis said that although he had been through previous budget presentations, this was his first
as a Village Manager. He then presented some of his thoughts regarding government and the budget
process. He stated that government is necessary and that it can be positive. He pointed out that
there are some things only government can do for a community, but there are other things that
government should not do. At the local level, every action has an impact on residents. He added
that it is an awesome responsibility and that it is a new challenge each day.
The annual budget is a reflection of community values - its hopes, its desires, its vision for the
future. The budget is a very important task because it not only becomes the Village's fiscal plan,
but it also becomes an authorization to expend funds. Mount Prospect has been a stable community
and this is reflected in increasing property values and a reasonable tax rate. This position is due to
the input of the Board and each person who makes up the Village organization. The organization,
overall, has done a magnificent job, but we absolutely can do better. The ability to respond to the
"big" picture will help to ensure our success or failure in the future.
The total budget for 1993/94, excluding the Library, is $46,535,620, up 2.68% from 1992/93. The
General Fund portion representing most Village services is up 3.2%. This is consistent with the
increase in the consumer price index (CPI) for the last 12 months of about 3.0%. Mr. Janonis stated
that a summary of the service areas can be found on pages 2 and 3 of the budget and that these pages
summarize the 1993/94 budget picture.
Mr. Janonis pointed out that the 1993/94 budget is a "transition" budget. It includes a continuation
of the Capital Improvement Programs but there are no new initiatives and little growth. Total
staffing is down three positions; however, the Village Manager is recommending that three new
police officer positions be added. The three new positions would be funded for 1993/94 from a one-
time payment received from the State of Illinois.
Mr. Janonis affirmed that the Village is in a strong financial position and the 1993/94 budget
maintains that position. However, he pointed out that the revenue/expenditure imbalance needs to
be addressed. Revenues are increasing modestly while fixed costs and mandates have caused
expenditures to grow at a faster rate. He cited the increase in refuse disposal costs of 6.5 %; medical
insurance costs up by some 19%; pension costs up by $.25 million; and increases for workers' comp
and other insurance. Mandates have increased costs for recycling, yard waste, JULIE, water testing,
EPA and OSHA requirements, ADA, the Family Leave Bill and the Trip Reduction Act.
Mr. Jannis concluded by stating that the Governor has recommended the elimination of the Income
Tax Surcharge for municipalities and the establishment of tax caps for property taxes. He said that
reducing shared revenues, mandating costs for local government and then imposing tax caps is not
in the spirit of good government.
Finance Director David Jepson stated that the Village expects to finance the 1993/94 budget with
revenues of $41,646,155 plus available fund balances of $4,889,465. Total revenues, net of bond
proceeds, are expected to be up $485,870 or 1.2% higher than 1992/93. The revenue projections
assume an improving economic climate and an increase of 5% in water rates, but no new revenue
sources are included in the proposed budget. Fund balances are expected to be drawn -down
$330,000 in the General Fund, $650,000 in the Water Fund, and some $5.4 million in the Capital
Projects Funds. These decreases along with increases in the Pension Funds and Debt Service Funds
account for the net reduction of $4,889,465 in fund balances.
Mr. Jepson stated that although property tax receipts are expected to increase 7.46%, the increase
in the 1993 tax levy is only 5 %. The receipts in the 1993/94 budget are based on receiving 53 % of
the 1992 tax levy and 47% of the 1993 levy. Sales taxes are expected to increase 4% and the State
Income Tax by 3 %. On the other hand, Licenses, Permits, and Fees are expected to be down 3 %,
Investment Income down 2% and Other Revenue down by 19%.
The Village is expecting to receive $400,000 in State Income Tax Surcharge funds in the 1993/94
fiscal year from monies collected by the State for the tax imposed prior to June 30, 1993. An
extension of the tax for municipalities is not anticipated in the budget.
Mr. Jepson said that the draw down of the fund balances was based on the plan presented to the
Board during the Mount Prospect 2000 discussions. Although the fund balances would be reduced,
the General Fund and the Water Fund would each have balances at the end of the budget year of
$2.5 million dollars. He said the balance in Motor Fuel Tax Fund would be about $430,000 and the
Capital Projects Funds' balances would be down to about $220,000 in anticipation of the completion
of each of the scheduled projects. The balances in the Internal Service Funds, the Debt Service
Funds and the Pension Funds are restricted amounts and can only be used for the purpose for which
the funds were established.
Village Manager Janonis summarized by stating that the 1993/94 transition budget is a result of the
Mount Prospect 2000 discussions. Those discussions focused on the revenue/spending imbalance and
resulted in some fundamental changes in the Mount Prospect budget process. It was brought out that
staff s responsibility is to hold down costs and to maximize service levels. The Board's
responsibility is to identify services to be provided and the means of financing those services.
As a result of the direction of the Village Board in those discussions, "targets" were established and
department directors were given the maximum amount of their respective 1993/94 budgets. The
department directors were then asked to submit their budget requests within the established targets.
The targets were established using known costs for existing obligations such as medical insurance,
vehicle lease payments, bargained salary increases, and other fixed costs. For all non -bargaining
group employees 3% was included for salary increases. The preparation of the proposed 1993/94
budget was driven by the direction given in November and December 1992.
Mr. Janonis then reviewed the results of the Park Ridge Survey which shows the Village with the
lowest cost per capita of the 18 municipalities surveyed. He also stated that the expected property
tax rate for 1993 is about 13% lower than the 1983 rate and the rate has been relatively unchanged
for the last five years. He pointed out that the Village receives 10 to 12% of the total property tax
bill and that out of each tax dollar the Village receives, 62.5C goes for police and fire protection,
25.40 for refuse disposal and 12.1G for public improvements.
Mr. Janonis concluded by saying that 1993/94 is a transition budget - a watershed year. He expects
a number of meetings between the Board and staff and with citizen focus groups to establish a long-
term plan for the Village.
During the discussion that followed, the Mayor and Trustees agreed that Resident Focus Groups and
other forms of resident input were important to the Board. Additionally, it was necessary to review
how services are provided and the results of the services provided.
Mayor Farley stated that the next budget workshop would be held on Saturday, March 20, 1993 at
9:00 a.m.
The meeting adjourned at 12:00.
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Respectfully submitted,
David C. Jepson, Finance Director