HomeMy WebLinkAbout11/10/1994 FC minutesMinutes of the Meeting
November 10, 1994
The meeting was called to order at 7:07 p.m. Those present included Chairman Richard Bachhuber,
Commission Members John Engel, Joe Btchingham, Vince Grochocinski, and Ann Smilanic. Also
present were Finanw Director David Jepson and Assistant Finance Director Carol Widmer.
Commission members Newt Hallman, Jim Morrison and Tom Peluas were absent.
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The minutes of July 28 and September 29 were accepted as presented.
Finance Director David Jepson reviewed for the Finance Commission the process the Village goes
through at the six-month review. At that time, each revenue and expenditure item is reviewed and
a projection is prepared as to the balance at the end of the fiscal year. The review of 1994/95
revenues revealed that sales tax continues to be a major concern for the Village. Sales Tax revenues
for 1994/95 will be approximately $5,650,000 which is $200,000 less than the budgeted amount.
Also, the revenue for licenses, permits and fees are expected to be about $75,000 less than the
amount budgeted. One of the important outcomes of this review is an estimate of the cash balances
that will be available to start the next fiscal year.
The next Village budget will be a transition budget. This eight-month budget will cover the period
May 1, 1995 to December 31, 1995. The 1996 Budget will be a calendar year budget. There are
several advantages to the Village to have the fiscal year correspond to a calendar year. Currently
property taxes in Cook County are payable in March and September and so the second installment
of one year and the first installment of the next year finance Village activities. Ibis is not easy to
understand or administer. Also, the property tax levy must be adopted in December while the
budget is not approved until April. Beginning in 1996 the budget and the tax levy to finance that
budget will be approved at the same time.
Another advantage to the Village is in the timing of construction projects. Currently bids for such
projects are received in Spring and Summer after the projects are approved in the budget. This is
late for the construction season. With a budget in place in January, construction bids can be
obtained earlier and it is hoped then will be a savings to the Village.
There is also a legal requirement for the Village as part of its commitment to SWANCC (Solid
Waste Agency of Northern Cook County) to have the tax levy in place prior to the budget. The
agreement states that if a municipality finances its payments to SWANCC through property taxes,
those taxes must be levied prior to the start of the fiscal year. Currently the 1993 tax levy finances
both parts of the 1993/94 budget year and a portion of the 1994/95 budget year. When the Village
goes to a calendar year budget the 1995 tax levy will finance 1996 budget year and the Village will
be in compliance with the SWANCC agreement.
It is estimated that the 1994/95 fiscal year will result in a surplus of revenues over expenditures of
$6,670 in the Genial Fund. Projections for the short budget year indicate a shortfall of $495,000
in the General Fund with revenues projected at $13,785,000 and expenditures projected at
$14,2800000. This is due to the timing of property tax receipts and some twelve month expenditures
which fall within that eight-month period. The 1996 projected General Fund budget will result in
a surplus of $122,450 with revenues projected at $21,786,850 and expenditures projected at
$21,664,400.
Mr. Jepson presented some background regarding the Village's fiscal position. Over the past
several years the Village has experienced several problems, including no revenue growth in the
General Fund. In fact, sales tax and permit revenue have declined. The Village Board has imposed
a 5% limit to property tax increases and property taxes are applied first to the Village's general
obligation bonds, Police and Fire pension obligations, Refuse Disposal Fund, and lastly to the
General Fund. As expenditures for debt, pensions and refuse disposal have increased the General
Fund has received less property tax revenue. A projected shortfall in 1993 and 1994 were covered
in a variety of ways including expenditure reductions, a hiring f eze, drawing down the fund
balance, and a transfer from the Water Fund. The Village Board took positive action to resolve
some revenue problems last year by providing some new and diversified revenues such as a utility
tax and an increase in the Home Rule sales tax. These actions coupled with a very favorable refuse
contract has enabled the Village Board to limit the increase in property taxes to 2.7% for _1993 and
2.8 % for 1994. Mr. Jepson reported that the new revenue sources have given the Village flexibility
not available before and by diversifying revenues the Village will not be hurt by a tax cap if it is
imposed in Cook County.
The next meeting is scheduled for December 1, 1994.
The meeting was adjourned at 9:12 p.m.
Respectfully submitted,
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Carol L. Widmer, Assistant Finance Director
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