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HomeMy WebLinkAboutFC Minutes 05/25/2017mmtart 11'"Wpw FINANCE COMMITTEE Minutes of the Meeting May 25, 2017 Village Hall - 50 South Emerson First Floor Community Center CALL TO ORDER — ROLL CALL The meeting was called to order at 7:07 p.m. by Chairperson John Kellerhals. Commissioners present included Pam Bazan, Trisha Chokshi, Vince Grochocinski, Don Ocwieja, and Thomas Pekras. Staff present included Finance Deputy Director Lynn Jarog and Administrative Analyst Alexander Bertolucci. II. APPROVAL MINUTES a. March 20, 2017 — Motion made by Commissioner Grochocinski seconded by Commissioner Chokshi. Minutes were approved. III. CITIZENS TO BE HEARD None IV. OLD BUSINESS Water Rate Study Discussion Finance Deputy Director Lynn Jarog stated that Finance Director David Erb and Public Works Director Sean Dorsey will meet with Chair Kellerhals mid-June and the Finance Commission's recommendation would be presented in July to the Village Board. The Water Rate Study will also be on the Finance Commission's June Meeting Agenda. V. NEW BUSINESS 1 st Quarter Review and Preliminary 2017 Property Tax Levy 2016 Year -End Results: Finance Deputy Director Jarog summarized the 2016 Year -End Results. The results for the 2016 budget were positive due to measured, but steady growth in revenue and savings from budget in all but two expense categories, debt service and transfers. The only significant decrease in revenue occurred in the Reimbursement category. Additionally, during 2016 two existing bond issues were refunded that resulted in approximately $275,000 in interest savings annually. She stated the total expenditures for the 2016 budget were $130,491,997, an increase of $20.0 million from the prior year. The increase is primarily due to the issuance of $20.0 million of refunding bonds. The total spending on capital during the year was $13.7 million versus $19.8 million spent the year earlier. The following responses from staff were provided to questions from the Finance Commission: • Investment income includes both dividends and market value. The Village recently reviewed changing the responsible party for Real Estate Transfer Tax payment from the buyer to the seller; however, the logistics of the switch makes it impractical to pursue. 2017 First Quarter Review: Finance Deputy Director Jarog presented the 2017 First Quarter Review. She stated the total approved budget for 2017 was $112,764,841 which was a decrease of 12.4% from Finance Commission Page 1 of 3 05/25/17 the final 2016 amended budget. The large decrease in 2017 is due to the issuance of two refunding bond issues done in 2016. No additional adjustments have been made to the revenue projected for 2017 as the current budgeted amount are in line with prior year actuals and we have only 3 months of activity to -date. Ms. Jarog also stated that total expenditures budgeted for 2017 are $116,078,479, a decrease of $14.4 million from the prior year. The Capital Budget increased $3.1 million or 23% from the prior year and totals $16,852,402. Ongoing projects such as street improvement, flood control and water system improvements are included in this total. Increase is due to various infrastructure improvements throughout the village. The 2017 General Fund amended budget is showing a deficit of $81,243 on revenues of $53,331,595 and expenses of $53,412,838. Budget amendments in this fund totaled $81,243 were approved by the Village Board in April. The amendments impacted various commodity, contractual service and capital accounts. If a surplus in the General Fund is realized, the funds could be used to further strengthen our fund balance (reserves) in anticipation of a loss of revenue or to make capital transfer in support of some larger projects in need of completion. The following responses from staff were provided to questions from the Finance Commission: The State is currently not withholding disbursements beyond the expected timeframe for the Village to receive payments. Sales Tax revenue is looking good; revenues figures are not included in the 1St Quarter review due to timing of payments. 2018 Forecast Budget — 1 St Quarter: Finance Deputy Director Jarog reviewed the 2018 Forecast Budget that is currently showing total projected revenues of $118,718,297 and total projected expenditures of $115,774,173. Increases in the charges for service, investment income, and other revenue categories attributed to the overall growth in revenue. The increase in the property tax levy included in the 2018 budget is 3.2%; however, this is only a placeholder and is intended as a stepping off point for discussion. Other factors that will impact the 2018 budget are actuarial valuations showing greater than 7.0% increases for both police and fire pensions and outcomes of the State approving or not approving a budget for the two past fiscal years and the upcoming fiscal year. The following responses from staff were provided to questions from the Finance Commission: • Property Taxes decrease in 2018 because Special Service Area #5 expires after 2017. • Depending on the outcome with the State's budget there is the potential for significant impacts to the Village's budget. 2017 Property Tax Levy: Finance Deputy Director Jarog provided an overview of the preliminary 2017 property tax levy. The preliminary Corporate Levy for 2017 for receipt in 2018 totals $19,087,265. This represents an increase of $359,959 or 1.92%. This levy was prepared using the final actuary figures for the required pension contributions. The public safety portion is held flat while the debt service portion of the levy increases $108,574 or 4.7%. The Finance Commission Page 2 of 3 05/25/17 portion of the levy for police and fire pension contributions increased $251,385 or 3.9%. Ms. Jarog also reviewed the history of the public safety pension levy. 2017 is the final year for the special service area levy and there is no increase to the levy from the prior year. The following responses from staff were provided to questions from the Finance Commission: The overall funding level for police and fire pension funds have decreased due to a number of contributing factors that include more employees retiring and changes to recent updates actuarial tables. The Village funds pensions at 100% of the annual required contribution while state legislation only requires 80% funding. The Village's new actuary has more options and different models to help address the pension funding challenge. These will be applied next year for the 2019 budget as the 2018 actuarial numbers are already established. VI. ANY OTHER BUSINESS Deputy Director Jarog informed the Commission that the Space Needs Analysis for the Public Safety Building (112 E. Northwest Highway) will be distributed soon for review. There was a general discussion regarding efficiency for generating revenue and the Village's vehicle sticker program. Staff will provide an analysis of the vehicle sticker program for future discussion. VII. CHAIRMAN'S REPORT None VIII. FINANCE DIRECTOR'S REPORT None IX. NEXT MEETING Thursday, June 22, 2017 at 7:00 p.m. in First Floor Community Center, Village Hall, 50 S. Emerson Street. X. ADJOURNMENT Motion made by Commissioner Pekras seconded by Commissioner Grochocinski. The meeting adjourned at 8:55 p.m. Alexander Bertolucci Administrative Analyst Finance Commission Page 3 of 3 05/25/17