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HomeMy WebLinkAbout02/17/1994 FC minutesFINANCE COMMISSION Minutes of the Meeting February 17, 1994 /Kevised The meeting was called to order at 7:30 p.m. Present were Chairman Richard Bachhuber, Commissioners John Engel, Newt Hallman, James Morrison, Ann Smilanic, and Earl Sutter. Also present were Village Manager Michael Jannis, Finance Director David Jepson, and Assistant Finance Director Carol Widmer, one resident and one member of the press. Commissioner Tom Pekras arrived at 8:00 p.m. Finance Commission member Vince Grochocinski was absent. The minutes of the December 2, 1993 meeting were accepted as presented. Finance Commissioner Newt Hallman distributed an article regarding unleaded gas to members of the Finance Commission. Budget Overview Village Manager Mike Janonis began his remarks by observing that this was the second year he was presenting a budget to the members of the Finance Commission. Mr. Janonis stressed the importance of the objective viewpoint the Finance Commission brings to the budget process and expressed his appreciation for their thoughts and recommendations. Mr. Janonis reflected that the budget is both a business plan and a roadmap to providing services to all Mount Prospect residents, businesses and their employees and is a reflection of a community's values. The 1994/95 fiscal year, in Mr. Janonis' opinion, is a watershed year and the decisions made regarding this budget will have a profound impact on the future of Mount Prospect and set the basic direction of the Village for years to come. Mr. Janonis noted that the Village is in a strong position with a good revenue base, a good mix of residential and commercial areas, and conservative fiscal management. However, urban issues such as crime, societal problems, and maintenance are beginning to make inroads in many suburban areas including Mount Prospect. Last year discussions were held under the heading of "Mount Prospect 2000 - A Vision for the Future." Mount Prospect 2000 represents a long-range approach to municipal governance that attempts to address or enhance four areas: long-range strategic planning, multi-year revenue/spend- ing plans, incentive or performance budgeting and enhanced Board/Staff partnership. As part of that long-range concept, Staff and the Village Board undertook a comprehensive review of Village operations. The review looked at departmental operations, policies, service levels and staffing. It was determined once again that the Village does more with less. The Village's Vehicle Replacement Policy also came under review and confirmed that the Village is netting a reasonable return on our capital equipment investment. A number of other steps were taken during 1993/94 to begin to put the Mount Prospect 2000 concept into action including major changes to the employee health insurance program which resulted in first- year savings of $224,000; negotiation of Police and Public Works Labor contracts that provide for future wage increases in line with the anticipated rate of inflation; qualified several flood control projects for the IEPA low interest loan program which will save the Village $78,000 annually and $1,560,000 in interest payments over the next twenty years, and completed the new Police and Fire Building on time and under budget. Additionally, possibly the most significant accomplishment of the 1993-94 fiscal year was the signing of a Redevelopment Agreement with Mount Prospect Clocktower. Joint Venture for the redevelopment of the Pine/Wille block in our Central Business District. This should serve as the spark that will see a revitalization of the downtown area. All of the actions taken during 1993/94 contributed significantly toward achieving the goals of increasing property values, protecting quality of life and controlling the cost of government. Mr. Janonis directed the Finance Commission members attention to the just released 1994 Park Ridge Survey which again confirms that Mount Prospect residents receive a full -range of high-quality services at the lowest per capita cost in the Northwest suburban area. This survey measures the same type of services in all 18 participating communities. Mount Prospect at $686 per capita is 18 out of 18 communities. The cost per capita for the other 17 communities range from $1,454 in Lake Forest to $730 for Park Ridge, which is number 17. Mr. Janonis discussed the 1994/95 proposed budget. This budget is designed to maintain existing levels of core services, provide for initiatives designed to directly address growing urban issued and provide additional dollars for road resurfacing and reconstruction. In order to provide the funding necessary to achieve the goals set out above and to address the deficit problem identified in August 1992, the Village Board voted to increase revenues of $1,655,000 in 1994/95 and $2,650,000 annually thereafter. This means an average increase of $109 in total taxes for single-family homeowners, $101 for tenants of multi -family units and approximately $825 for businesses. Mr. Janonis highlighted some of the planned expenditures in several areas. General Fund General Fund expenditures for 1994/95 are expected to be $20 million. This is a 2.6% increase in the General Fund for existing services and with new services the increase will be 5.9%. Proposed new Services include three police officers, a housing inspector, a change in status from part-time to full-time for the Bi -Lingual Social Worker, Visions' programs, expanded road resurfacing, a traffic engineer, permanent funding for the Historical Society and the Property Tax Rebate Program. These services total some $633,500. Water Fund The Water Fund is in a very strong condition especially if the $650,000 equity transfer contemplated in the 1993/94 Budget can be deferred. Instead of a 5 % increase in water and sewer rates as originally anticipated, staff is recommending a 3% increase for 1994/95. Visions Programming The 1994/95 proposed budget includes $20,000 for promising programs, grants or assistance to continue the work of the interdepartment Visions Group to address the "Urban" problems discussed earlier. 2 Coital Improvements The road maintenance program includes a total of $1.3 million to be spent on road resurfacing in 1994/95. This is a 33% increase in spending and will allow between seven and nine miles of Village roads to be resurfaced. Through the sale of bonds, it is anticipated that approximately $3 million in reconstruction projects will be undertaken this year. Linneman Road and another three miles of reconstruction projects are scheduled for resurfacing this year. Rehabilitation of the Village Hall is scheduled to be financed by $1 million in the sales proceeds from the Pine/Wille block. This building, built in 1960, and acquired by the Village in 1974 is in need of major repairs and/or replacement of critical components such as the roof, HVAC system, windows, plumbing, and electrical systems. It is anticipated that this will be a multi-year project. Also included in the budget is a provision for a Traffic Engineer. The impact of traffic on the Village has become an extremely critical issue and Mr. Jannis stated that the Village needs to make certain that regional road projects such as the Strategic Regional Arterial Routes identified by MOT do not adversely impact Village residents. Commissioners Newt Hallman and Ann Smilanic asked why the Village didn't request the members of the Finance Commission to review new revenue sources and make a recommendation. Mr. Jepson noted that discussions regarding the revenue problem had taken place with the Finance Commission over the past 18 months but that action had to be taken at that time in order to file the tax levy and meet other obligations on a timely basis. Budget Revenues Finance Director David Jepson presented the revenue section of the proposed 1994/95 budget. Total resources for all Village funds, excluding the Library Fund, in 1994/95 will consist of $43,621,465 in revenues and $3,656,920 in available fund balances for a total of $47,278,385. An estimated $1,655,000 of new revenues are expected in the 1994/95 fiscal year as a result of the addition of a 2% tax on gas, electric, and telecommunications, an increase of 1/4C in the Home Rule Sales Tax, and an increase from $20 to $30 in the local village license fee. These revenues were added or increased by the Village Board in 1994 to help diversify the Village's revenue base and to overcome a revenue/expenditure imbalance. In addition, it is anticipated that the water and sewer rate will increase 3 %. The pie chart on page 4 of the budget shows the types of revenues that will be used to finance the budge L Tax revenues in the amount of $19,909,550, including Property Tax, Sales Tax, Home Rule Saks Tax, Food do Beverage Tax, Real Estate Transfer Tax and Utility Tax account for 46% of total Village Revenues. Service charges of $9,021,200 including Water & Sewer Fees, Refuse Disposal Fees and Internal Service fees for insurance and vehicle funds are the next largest source of revenue. Investment income is estimated to be $3,779,515 in 1994/94, a 4.0% decrease from the $3,935,400 budgeted in 1993/94. Commissioner Ann Smilanic noted that over the last year the Village lost four major sales tax producers but a 4% increase in Sales tax revenue is anticipated in the next fiscal year. Mr. Jepson responded that there is strong interest on the part of some major retailers to locate within the Village as well as signs that the economy is improving. On this basis, he believes this is a reasonable increase. 3 Villaae Administration Manager Mike Jannis discussed the proposed 1994/95 budget for Village administration which consists of the budgets for the Mayor and the Hoard of Trustees and the Village Manager's Office which also includes the Communications Division and the Village Clerk's Office. The 1994/95 proposed budget for the Mayor and the Board of Trustees is $681945 as opposed to $76,715 in 1993/94, a decrease of 10.13 %. Contractual services are down almost 16 % due to reductions of $4,750 in organizational memberships and a reduction in Special Projects from $10,000 to $7,500. In the Village Manager's Office, Village Administration budget increased from $431,345 in 1993/94 to $441,395 in 1994/95, an overall increase of 2.33%. Communications Division is down 1.45% or $245,445 in 1994/95 as opposed to $249,045 in 1993/94. The Village Clerk's budget will increase from $167,300 to $179,350, an increase of $12,050 or 7.20%. The increase is due mainly to an increase of $3,600 for producing the Village Newsletter and an increase of $5,750 in the provision for Compensated Absences due to vesting of sick leave by a 20 -year employee. Finance Department Mr. Jepson stated that the proposed 1994/95 budget for the Finance Department will decrease from $1,018,875 in 1993/94 to $957,695, a 6% reduction. This reduction is mainly due to the amount required for the Village's insurance program. The contribution required for 1994/95 will be $171,500 or $68,500 less than in 1993/94. The Finance Department has included a provision for an intern (a temporary position)to assist in implementing the planned conversion to a new unix computer system which is also included in the proposed 1994/95 budget under the Capital Improvements section. The meeting was adjourned at 10:55 p.m. The next meeting is scheduled for March 3, 1994 at 7:OO,p.m. Respectfully submitted, � w4� Carol L. Widmer, Assistant Finance Director 4 LIST OF CHALLENGES In a presentation before the Village Board of Trustees last fall Chief Ronald W. Pavlock identified the challenges on the following list as those which would most affect the allocation and distribution of police resources in the coming years. 1. The challenge of policing in an ethnically and culturally diverse community. 2. The challenge of policing in an aging community. 3. The challenge of effectively addressing youth problems. 4. The challenge of meeting specialized enforcement needs. 5. The challenge of developing cost effective ways of meeting policing requirements including the possibility of civilianizing some functions or eliminating some nonessential services. 6. The challenge of maintaining a highly trained, motivated, and self- sufficient work force. 7. The challenge of identifying and implementing the correct new technology. 8. The challenge of developing effective community oriented policing programs and initiatives. 9. The challenge of complying with accreditation standards in a dynamic and evolving law enforcement environment.