HomeMy WebLinkAbout8.1 2018 First Quarter Review
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Agenda Item Details
MeetingJun 05, 2018 - REGULAR MEETING OF THE MOUNT PROSPECT VILLAGE BOARD - 7:00 p.m.
Category8. VILLAGE MANAGER'S REPORT
Subject8.1 2018 First Quarter Review
AccessPublic
TypeAction
Preferred DateJun 05, 2018
Absolute DateJun 05, 2018
Fiscal ImpactNo
BudgetedNo
Recommended ActionAccept the 2018 First Quarter Review.
Public Content
Information
Each year the Finance Department prepares a first-quarter review that includes a wrap-up of the prior year's activity
and insight into early trends for the current fiscal year. The Department also prepares a mid-year review of the
financial status of the current year's budget and a forecast for the upcoming year. This practice, done in conjunction
with the Village Strategic Plan, provides a solid foundation for preparation of the upcoming annual budget.
Provided for your review is the 2018 First Quarter Review. Included in the report is a summary of the year-end results
for 2017, a first-quarter look at the 2018 financials through March and a discussion of the preliminary 2018 property
tax levy. Discussion before the Village Board and Finance Commission will provide direction for staff in developing the
Village budget for 2019. Please note that the information provided on the preliminary 2018 property tax levy is not
intended to be final, only offer a stepping-off point for discussion. A final recommendation and public hearing on the
2018 property tax levy will take place in November.
Village staff will be on hand to provide a detailed presentation on the information.
Alternatives
1. Accept the 2018 first quarter review.
2. Action at discretion of Village Board.
Staff Recommendation
Staff recommends the Village Board accept the 2018 first quarter report
Complete Report - 2018 1Q Review.pdf (4,240 KB)1Q 2018 Presentation (002) (002).pdf (62 KB)
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V ILLAGE OF
M OUNT P ROSPECT, I LLINOIS
2018 F IRST Q UARTER R EVIEW
2017-2018 B UDGET R EVIEW AND
2018 P RELIMINARY P ROPERTY T AX L EVY
May 25, 2018
2018 F IRST Q UARTER R EVIEW
2017-2018 B UDGET R EVIEW AND
2018 P RELIMINARY P ROPERTY T AX L EVY
T ABLE OF C ONTENTS
2017 Y EAR-E ND R ESULTS P AGE 1
2018 F IRST Q UARTER R EVIEW P AGE 9
2018 P RELIMINARY P ROPERTY P AGE 16
T AX L EVY
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Budget to Actual
Variance-
ActualBudgetActual
Favorable
2%6%.5%3 !.$ /4(%2 3/52#%3 201620172017(Unfavorable)
Property Taxes 22,369,416 20,367,000 19,910,491( 456,509)
Other Taxes 13,983,864 14,662,592 13,801,151( 861,441)
Licenses, Permits & Fees 3,096,997 3,095,000 3,084,102 (10,898)
Intergovernmental Revenue 27,618,345 29,785,558 29,701,372 (84,186)
Charges for Services 29,550,468 30,074,981 29,619,883( 455,098)
Fines & Forfeits 692,159 641,100 634,031 (7,069)
Investment Income 7,535,657 19,427,100 18,815,929( 611,171)
Reimbursements 622,207 288,000 322,459 34,459
Other Revenue 9,747,897 12,271,005 11,240,122 (1,030,883)
Total Revenues & Other Sources 115,217,010 130,612,336 127,129,540 (3,482,796)
EXPENDITURES
Operating Budget 70,368,563 71,895,536 69,464,062 2,431,474
Community Investment Program (a) 12,579,962 17,975,871 10,004,266 7,971,605
Debt Management 23,834,375 4,922,013 5,047,249 ( 125,236)
Pension Systems Budget 10,013,722 10,672,501 10,620,978 51,523
Internal Services Budget 9,705,685 10,586,243 10,779,150( 192,907)
Special Revenue Funds 2,218,788 1,721,000 1,458,790 262,210
Total Expenditures 128,721,095 117,773,164 107,374,495 10,398,669
Excess (Deficiency) of Revenues &
Other Sources Over Expenditures (13,504,085) 12,839,172 19,755,045 6,915,873
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Bond Proceeds 18,857,839 -4 ,930,835 4,930,835
Gain/Loss on Disposition of Assets 44,975 1,270,000 88,338 (1,181,662)
Transfers In 1,637,926 600,000 600,000 -
Transfers Out (1,637,926)( 600,000)( 600,000) -
Total Other Financing Sources 18,902,814 1,270,000 5,019,173 3,749,173
Excess (Deficiency) of Revenues & Other
Sources Over Exp and Other Financing Sources 5,398,729 14,109,172 24,774,218 10,665,046
(a)Budget 2017 and Actual 2017 amounts include Property Acquisition expense of $503,473.
1
2017 Year-End Results
Total Village Revenues and Expenditures - Results for the 2017 budget were positive due to revenues and
other financing sources coming in slightly above budget while expenditures and other financing uses came
in below budget in all but two expense categories, debt service and internal service. Please refer to the
table on the preceding page to follow along with this narrative.
strategic plan directed a majority of the activities in 2017. Below is a list of the more
significant accomplishments that address various goals identified for the year.
Golf Plaza II Opening of KD Market and redevelopment of site.
Levee 37 Plan Completed engineering study, next steps include design engineering.
Water/Sewer Rate Study Completed comprehensive rate study, implemented capital plan.
Elk Grove Rural Fire Protection District Ongoing development of agreement to allow
uninterrupted fire protection service.
Busse Triangle Development Preliminary PUD approval of site. Expedited permitting process.
Annexation Initiative Continued annexation strategy with UAL property and Birch Manor.
Police Succession Plan Initial steps taken include hiring new Police Chief, build strategy for filling
leadership and front-line positions open due to retirements.
A more comprehensive workup of the Villages Strategic Plan can be found in the 2018 Annual Budget
document.
There were no significant weather events during 2017 that impacted Village expenditures. A generally
milder than usual winter provided savings in personnel, commodity and contractual service expense
categories. While the mild winter provided relief to various snow removal related accounts, revenue from
utility taxes was down offsetting much of the savings. Continued uncertainty at the State level has led to
the village maintaining a multi-step contingency plan in the event of significant revenue loss from actions
down in Springfield.
Year-end results from 2017 show total revenues of $127,129,540. This represents an increase of $11.9
million, or 10.3% from the prior year. While total revenues were up over the prior year, they fell short of
budget by $3.4 million.
There was a short list of revenue sources that fell below budget with any significance in 2017. Credits due
for prior year property tax levies and timing issues for receipt of TIF District taxes contributed to the
shortfall in overall property taxes. These amounts were $165,000 and $275,000 respectively. The Home
Rule Sales Tax fell short of budget by $326,000 and Utility Taxes, due to a very mild weather pattern, fell
short of budget by $274,000. These two revenue items are classified as Other Taxes. The budget for Other
Taxes was $14.6 million where actual receipts in this category were $13.8 million. The shortfall in Charges
for Service totaled $455,000 is almost entirely made up of a shortfall in billed water usage. Investment
income generated from pension fund activity came in short by $611,000 due to adjustments for realized
and unrealized losses at year end. While there was a shortfall from budget in investment income, overall
investment growth from the prior year was over $11.2 million. Lastly, the shortfall in other revenue is due
to the discontinuing of refuse sticker sales ($205,000) and a delayed sale of property ($570,000).
Other Financing Sources includes bond proceeds, gains on the sale of assets, and transfers in. During 2017,
bond proceeds of $4.9 million were received in support of TIF related projects. Additionally, $88,338 was
2
2017 Year-End Results
received for the sale of assets and $600,000 was a transfer from the General Fund to the Capital
Improvement Fund.
Included below is a pie chart illustrating contributions to total village revenues by major revenue category.
1.Excludes Other Financing Sources and Uses
Total expenditures and other financing uses for 2017 were $107,974,495, and includes a $600K transfer
to the Capital Improvement Fund. This is a decrease of $22.4 million from the prior year. The decrease is
primarily due to the payment of $20.0 million of refunding bonds mentioned previously.
Total village expenditures were below the 2017 budget by $10.4 million. Savings for the year were seen
in the operating and CIP budgets. Operating budget expenditures came in below budget by $2.4 million.
Included in the operating budget are expenses for Village Administration, Finance, Community
Development, Police and Fire, and Public Works (including refuse collection and water/sewer operations).
Operating budgets for all departments came in below budget with the largest savings coming from the
Public Works and Police Departments.
Total Community Investment Program spending during the year totaled $10.0 million. This was $8.0
million below the $18.0 annual budget. Several large-scale projects were deferred to 2018 creating the
significant variance from budget. Some of these projects include water and sanitary sewer system
improvements, pedestrian crossing and corridor improvements, flood control and detention projects and
street lighting projects. Slight variances, both positive and negative, were seen in the debt, pension,
internal service and special revenue categories.
3
2017 Year-End Results
Included below is a pie chart illustrating total village expenditures by major revenue category.
1.Excludes Other Financing Sources and Uses
4
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Budget to Actual
Variance-
ActualBudgetActual
Favorable
2%6%.5%3 !.$ /4(%2 3/52#%3 201620172017(Unfavorable)
Property Taxes 16,025,397 16,278,000 16,112,040 (165,960)
Other Taxes 7,929,506 8,368,500 7,947,170 (421,330)
Licenses, Permits & Fees 1,423,610 1,407,000 1,416,127 9,127
Intergovernmental Revenue 23,681,035 25,584,540 25,986,586 402,046
Charges for Services 1,466,216 1,289,255 1,234,665 (54,590)
Fines & Forfeits 428,935 461,000 425,439 (35,561)
Investment Income 49,203 151,000 132,925 (18,075)
Reimbursements 229,692 223,500 178,007 (45,493)
Other Revenue 317,929 337,300 369,004 31,704
Total Revenues & Other Sources 51,551,523 54,100,095 53,801,963 (298,132)
EXPENDITURES
Operating
Public Representation 640,462 796,972 719,947 77,025
Village Administration 4,002,255 4,108,872 4,092,007 16,865
Finance Department 1,972,522 2,570,392 2,466,917 103,475
Community Development Department 2,223,280 2,441,991 2,403,808 38,183
Human Services Department 1,110,589 1,155,389 1,117,712 37,677
Police Department 17,067,108 18,229,821 17,823,167 406,654
Fire Department 14,473,299 15,585,380 15,512,511 72,869
Public Works 6,748,841 7,206,239 6,818,583 387,656
Non-Operating
Community Investment Program (a) 562,525 1,815,524 1,485,909 329,615
Miscellaneous Pensions 46,615 46,781 46,780 1
Total Expenditures 48,847,496 53,957,361 52,487,341 1,470,020
Excess (Deficiency) of Revenues &
Other Sources Over Expenditures 2,704,027 142,734 1,314,622 1,171,888
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Sale of Property - 570,000 - (570,000)
Transfers Out (1,240,625) (600,000) (600,000) -
Total Other Financing Uses (1,240,625) (30,000) (600,000) (570,000)
Excess (Deficiency) of Revenues & Other
Sources Over Exp and Other Financing Uses 1,463,402 112,734 714,622 601,888
(a) Budget 2017 and Actual 2017 amounts include Property Acquisition expense of $503,473.
5
2017 Year-End Results
General Fund The 2017 General Fund Budget shows a surplus of $714,622 on revenues and other
financing sources of $53,801,963 and expenditures and other financing uses of $53,087,341. Included in
the expenditure total is a transfer out to the Capital Improvement Fund of $600,000. General Fund
revenues came in slightly below the amended budget by $298,132 while expenses came in $1,470,020, or
2.7% UNDER the amended budget. The Village has typically come in one to two-percent under budget on
an annual basis. This is due to departments not being compelled to spend their entire budget by year-
end.
Year-end results from the 2017 Budget show total General Fund revenues of $53,801,963. This represents
an increase of $2.3 million, or 4.4% from the prior year. Significant revenue growth over the prior year
was seen in the intergovernmental revenue category. Intergovernmental revenue grew by $2.3 million
primarily as a result of growth in sales taxes totaling $2.2 million. Modest changes, both up and down,
were realized in the other General Fund revenue categories.
General Fund revenues were below the amended 2017 budget by $298,132. Positive variances in
intergovernmental revenues were offset by a shortfall in other taxes. There were no other significant
variances from budget to note.
Included below is a pie chart illustrating contributions to General Fund revenues broken out by major
revenue category.
Total expenditures for the 2017 General Fund budget were $53,087,341, an increase of $4.2 million, or
8.7% from the prior year. Growth from the prior year was primarily from commodity, contractual and
capital costs.
General Fund expenditures were below the 2017 amended budget by $1.5 million. All departmental
budgets came in below budget. Departments that saw significant savings in 2017 include Police, Public
Works and Finance.
6
2017 Year-End Results
The following pie chart illustrates a breakdown of General Fund expenses.
All of the Departments were at or below the benchmark of 50% at mid-year and finished the year under
their amended budget. The following chart illustrates General Fund expenditures as a percentage of the
annual budget at December 31.
% of Budget Utilized
75%80%85%90%95%100%
Public Representation
Village Manager's Office
Finance Department
Community Development
Human Services
Police Department
Fire Department
Public Works Department
CIP
Misc Pensions
7
2017 Year-End Results
As mentioned earlier, total General Fund expenditures have come in anywhere from one to two percent
under budget with few exceptions. The chart below shows budget to actual expenditures since 2013.
Savings have been used to offset shortfalls in revenue, reduce or eliminate a programmed budget deficit
or cover unanticipated expenditures that may occur during the year. If neither of these conditions exists,
the savings go toward maintaining the General Fund fund balance. The savings to the 2017 General Fund
budget was $1,470,020 or 2.7%.
Year Amended Budget Actual Expenditures Variance
2013 $45,693,626 $44,713,148 (2.15%)
2014 $47,396,714 $46,320,040 (2.27%)
2015 $47,640,383 $45,663,986 (4.15%)
2016 $50,635,442 $48,847,491 (3.53%)
Including the projected surplus in the General Fund for 2017, reserves to begin 2018 are $19,399,153.
These reserves represent a fund balance level of 35.4%. The target benchmark for reserves in the General
Fund according to the Village fund balance policy is 20.0% to 30.0%.
8
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Budget to
Estimate
Current
YTD Actual Variance -
Estimate
ActualBudget
1/1/18 - Favorable
201720182018
2%6%.5%3 !.$ /4(%2 3/52#%3 3/31/18 (Unfavorable)
Property Taxes 19,910,491 19,173,953 9,920,146 19,173,953 -
Other Taxes 13,801,151 13,980,518 2,358,207 13,980,518 -
Licenses, Permits & Fees 3,084,102 3,087,000 1,007,501 3,087,000 -
Intergovernmental Revenue 29,701,372 28,695,676 5,201,742 28,695,676 -
Charges for Services 29,619,883 31,320,374 7,215,751 31,320,374 -
Fines & Forfeits 634,031 654,300 142,192 654,300 -
Investment Income 18,815,929 10,654,300 298,124 10,654,300 -
Reimbursements 322,459 255,900 57,011 255,900 -
Other Revenue 11,240,122 10,652,828 4,378,843 10,652,828 -
Total Revenues & Other Sources 127,129,540 118,474,849 30,579,517 118,474,849 -
EXPENDITURES
Operating Budget 69,464,062 72,534,671 16,572,581 72,534,671 -
Community Investment Program 10,004,266 21,072,546 269,074 21,072,546 -
Debt Management 5,047,249 5,495,937 2,835 5,495,937 -
Pension Systems Budget 10,620,978 11,031,315 2,743,955 11,031,315 -
Internal Services Budget 10,779,150 10,639,548 3,974,667 10,639,548 -
Special Revenue Funds 1,458,790 4,673,000 56,817 4,673,000 -
Total Expenditures 107,374,495 125,447,017 23,619,929 125,447,017 -
Excess (Deficiency) of Revenues &
Other Sources Over Expenditures 19,755,045 (6,972,168) 6,959,588 (6,972,168) -
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Bond Proceeds 4,930,835 5,000,000 - 5,000,000 -
Gain/Loss on Disposition of Property 88,338 1,665,000 53,311 1,665,000 -
Transfers In 600,000 750,000 - 750,000 -
Transfers Out (600,000) (750,000) - (750,000) -
Total Other Financing Sources 5,019,173 6,665,000 53,311 6,665,000 -
Excess (Deficiency) of Revenues & Other
Sources Over Exp and Other Financing Sources 24,774,218 (307,168) 7,012,899 (307,168) -
(a)Actual 2017 amount includes Property Acquisition expense of $503,473.
9
ЋЉЊБ CźƩƭƷ vǒğƩƷĻƩ wĻǝźĻǞ
ƚƷğƌ źƌƌğŭĻ wĻǝĻƓǒĻƭ ğƓķ 9ǣƦĻƓķźƷǒƩĻƭ The total approved budget for expenditures 2018 was $123,691,763.
This was an increase of $5.3 million or 4.5% from the final 2017 amended budget. In March 2018, the first budget
amendment for 2018 was approved by the Village Board. The amendment consisted primarily of capital projects
deferred from the prior year. The current 2018 budget of $126,197,017 now reflects an increase of 6.6% from the
prior year.
ƚƷğƌ źƌƌğŭĻ 9ǣƦĻƓķźƷǒƩĻƭ
The total Village budget for 2018 shows a deficit of $307,168 on revenues and other financing sources of
$125,889,849 and expenditures and other financing uses of $126,197,017
Total revenues budgeted for 2018 are $118,474,849. This represents a decrease of $8.7 million, or 6.8% from the
prior year. The large decrease in 2018 is due to lower projected investment earnings in the police and fire pension
funds and a reduction in income taxes accounted for in intergovernmental revenue. The budget for 2018 built in
increases to the water rate (9%) and sewer rate (5%) accounting for the increase to Charges for Service revenue
category. Below is a pie chart illustrating the total village budget for revenue by major category.
1.Excludes Other Financing Sources and Uses
10
ЋЉЊБ CźƩƭƷ vǒğƩƷĻƩ wĻǝźĻǞ
Receipts through the first quarter are tracking budget. First installment property taxes received during February
and March total $9.9 million. This represents approximately fifty-five percent of the annual corporate levy.
Property taxes related to the TIF district and township are expected later in the year. Charges for service include
ambulance billing, refuse collection and water/sewer utility billing. First-quarter receipts for this revenue category
are $7.2 million, or 23.0% of budget. Although this revenue is slightly below the 25% benchmark receipts will pick
up during the summer months when higher utility billings are experienced. Also, there is a one month lag to
ambulance billing that contributed to the variance.
The intergovernmental revenue category consists of sales and income taxes, use and replacement taxes, grants
and state reimbursements. The total amount projected to be received in 2018 was $28.7 million. To-date, the
Village has received $5.2 million or 18.1%. This is not concerning as there is a three-month delay in receiving sales
taxes, this categories largest revenue source. In addition, state reimbursements and other intergovernmental
revenues are typically not received until later in the year. There is a significant shortfall in year-to-date receipts
for investment income. First-quarter volatility in the market is driving the lower returns. It could be reasonably
expected that a market correction was due. That appears to have been the case. The pension portfolios are
diversified and well positioned to weather the correction. No additional adjustments are expected to be made to
the revenue projected for 2018 as the current budgeted amounts are in line with prior year actuals and we have
only 3 months of activity to-date.
Included below is a pie chart illustrating total village expenditures by major category.
1.Excludes Other Financing Sources and Uses
Total expenditures budgeted for 2018 are $126,197,017, an increase of $18.2 million from the prior year. Included
in this total is a $750K transfer to the Capital Improvement Fund. The largest increase from actual expenditures
for 2017 is in spending on capital projects. The community Investment Program has $21.1 million budgeted for
2018 where only $10.0 was spent in the prior year. Carry-over projects account for the large swing in the capital
budget from last year to this. The Operating Budget also saw an increase from the prior year, just not as significant.
The 2018 operating budget totals $72.5 million, an increase of $3.0 million or 4.3% from the prior year. Included
in the operating budget is a 2.0% wage increase for all non-union employees and collectively bargained groups.
Personal service costs in 2018 are estimated to be $46,549,011, an increase of $1.3 million, or 2.8% from 2017.
Spending to-date in the Pension and Internal Service budgets are tracking as expected. This is true also for the CIP,
Debt and Special Revenue budgets. Expenditures in these budget are typically expected in the second and third
quarter of the year.
11
ЋЉЊБ CźƩƭƷ vǒğƩƷĻƩ wĻǝźĻǞ
No changes are being made to the 2018 budget from the current estimate as there has not been significant
variances after three months to justify a change. A budget amendment is expected during the second quarter for
budgets related to the police and fire relocation and for TIF redevelopment. Those amendments will be part of
the mid-year financial review to be presented later this summer.
Please note these figures assume no reduction in revenue as a result of budget legislation being made in
Springfield. There is a continued fear that the state will reduce revenues for the state income tax, use tax and
other shared revenues.
This information was included in the 2017 1Q review, but worth mentioning again. The village maintains a multi-
step contingency plan that can be implemented if the Village were to experience a decline in revenues resulting
from action taken in Springfield. The multi-step plan provides for increasing levels of response to loss of revenue
depending upon the timing and severity of cuts imposed by the State. A listing of the steps taken in response to
revenue loss, in order of least to most significant, are:
1.Eliminate or defer capital projects/purchases.
2.Reduce funding (lease payments) of computer and vehicle replacement programs.
3.Institute a freeze or reduction in commodity, contractual service and supply accounts, where possible.
4.Review catalog of programs and services provided by the village.
5.Review of staffing levels.
The Finance Department will continue to review budgeted revenues monthly and report back to the Village Board
and Finance Commission if a significant decline is realized.
12
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Budget to
Estimate
Current
YTD Actual Variance -
Estimate
ActualBudget
1/1/18 - Favorable
201720182018
2%6%.5%3 !.$ /4(%2 3/52#%3 3/31/18 (Unfavorable)
Property Taxes 16,112,040 16,540,000 8,781,008 16,540,000 -
Other Taxes 7,947,170 8,210,000 1,370,068 8,210,000 -
Licenses, Permits & Fees 1,416,127 1,417,000 331,683 1,417,000 -
Intergovernmental Revenue 25,986,586 24,883,860 4,897,438 24,883,860 -
Charges for Services 1,234,665 1,305,000 146,413 1,305,000 -
Fines & Forfeits 425,439 437,000 98,717 437,000 -
Investment Income 132,925 205,000 63,495 205,000 -
Reimbursements 178,007 218,900 49,099 218,900 -
Other Revenue 369,004 251,500 262,570 251,500 -
Total Revenues & Other Sources 53,801,963 53,468,260 16,000,491 53,468,260 -
EXPENDITURES
Operating
Public Representation 719,947 773,873 127,072 773,873 -
Village Administration 4,092,007 4,163,926 894,378 4,163,926 -
Finance Department 2,466,917 2,638,570 407,095 2,638,570 -
Community Development Department 2,403,808 2,793,443 535,015 2,793,443 -
Human Services Department 1,117,712 1,246,498 270,004 1,246,498 -
Police Department 17,823,167 18,584,620 5,053,427 18,584,620 -
Fire Department 15,512,511 15,518,129 4,124,165 15,518,129 -
Public Works 6,818,583 7,261,289 1,520,616 7,261,289 -
Non-Operating
Community Investment Program (a) 1,485,909 1,225,138 49,771 1,225,138 -
Miscellaneous Pensions 46,780 46,950 1,455 46,950 -
Total Expenditures 52,487,341 54,252,436 12,982,998 54,252,436 -
Excess (Deficiency) of Revenues &
Other Sources Over Expenditures 1,314,622 (784,176) 3,017,493 (784,176) -
/4(%2 &).!.#).' 3/52#%3ȝ53%3
Transfers Out (600,000) (750,000) - (750,000) -
Total Other Financing Uses (600,000) (750,000) - (750,000) -
Excess (Deficiency) of Revenues & Other
Sources Over Exp and Other Financing Uses 714,622 (1,534,176) 3,017,493 (1,534,176) -
(a) Actual 2017 amount includes Property Acquisition expense of $503,473.
13
ЋЉЊБ CźƩƭƷ vǒğƩƷĻƩ wĻǝźĻǞ
DĻƓĻƩğƌ CǒƓķ The 2018 General Fund amended budget is showing a deficit of $1.5 million on revenue of
$53,468,260 and expenses of $55,002,436 (including a $750K capital transfer). As of March 31, the General Fund
had recorded expenditures of $12,982,998. This represents 23.6% of the budget and is in line with spending
through a quarter year period. The current estimate of revenues in 2018 is expected to come in at the budgeted
amount. As such, the deficit expected at year-end in the General Fund remains at $1.5 million. Please note that
the deficit is a planned draw down of reserves in support of a capital transfer and property tax subsidy. The total
amount of the planned draw down is $1.4 million. Excluding the draw down, the deficit is $154,175. Included
below is a pie chart estimating General Fund revenues broken out by major revenue category.
The amended 2018 General Fund budget for expenses is $55,002,436. Budget amendments in this fund totaled
$187,018 were approved by the Village Board in March. The amendments impacted various commodity and
contractual service accounts. No changes were made to any expense category for the 2018 General Fund budget
for this first quarter analysis. The following pie chart illustrates a breakdown of estimated General Fund expenses
broken out by major category.
ЋЉЊБ 9ƭƷźƒğƷĻķ 9ǣƦĻƓķźƷǒƩĻƭ
January 1 - December 31, 2018
Public
Representation
Public Representation 773,873
Transfers Our
Village
Community
Finance
Administration
CIP and Other
Village Administration 4,163,926 Devel
Public Works Human Services
Finance 2,638,570
Community Devel 2,793,443
Human Services 1,246,498
Police Dept 18,584,620
Fire Dept 15,518,129
Public Works 7,261,289
CIP and Other 1,272,088
Police Dept
Fire Dept
Transfers Our 750,000
Village Expenditures55,002,436
14
ЋЉЊБ CźƩƭƷ vǒğƩƷĻƩ wĻǝźĻǞ
As was mentioned previously, the General Fund typically experiences a saving from budget of between one and
two percent. Any savings will work to reduce the deficit and if the savings are more significant, the funds could
be used to further strengthen our fund balance (reserves) in preparation for the possible loss of revenue or to
make future capital transfers in support of some larger projects in need of completion.
15
Village of Mount Prospect
Mount Prospect, Illinois
INTEROFFICE MEMORANDUM
TO: VILLAGE PRESIDENT AND BOARD OF TRUSTEES
FINANCE COMMISSION
FROM: FINANCE DIRECTOR
DATE: MAY 24, 2018
SUBJECT: PRELIMINARY 2018 PROPERTY TAX LEVY
The Forecast Budget for 2019 included a projected amount for property taxes to be derived from the 2018
levy. Included with this memo for your review is the forecast 2018 levy, and a revised projected levy for
2018 after adjusting for required pension contributions. Also included for reference are the final 2017 levy
and a levy history for the period 2002 - 2017. Below are a few points on each of these items to help
facilitate discussion. For discussion purposes, the Corporate Levy is the tax levy that includes allocations
for public safety, debt service and police and fire pensions. Please note that while the forecast levy was
included as part of the 2019 Forecast Budget, it is by no means final. It is only presented as a stepping
off point for budget discussion purposes.
Reserves in the General Fund are being used to subsidize the levy for public safety pensions. This subsidy
became necessary when actuarial results from 2015 returned excessive increases to the annual funding
of pension. The subsidy will allow for the increase to be added more gradually. The period of the subsidy
is 2016-2019. The amount of reserves committed to the 2018 levy is $420,000. The commitment in final
year of the subsidy, levy year 2019, is $210,000.
Final 2017 Levy (Exhibit I)
Corporate Levy - The total extended levy for 2017 was $19,087,264. This represented an increase of
$359,960, or 1.92% from the prior year. The levy is set for the purpose of funding public safety (police
and fire protection), debt service, police and fire pensions. The public safety portion of the levy did not
increase while the debt service portion of the levy increased $108,575 or 4.7%. The portion of the levy for
police and fire pension contributions increased $251,385, or 4.1%. Increases to the tax levies for 2012
through 2016 are shown below.
2012 3.95%
2013 5.00%
2014 2.48%
2015 3.28%
2016 2.27%
Special Service Area #5 Levy The total extended levy for 2017 was $1,545,773. There was no increase
in the special service levy from the prior year. The final year of the SSA #5 levy is 2017.
16
Preliminary 2018 Property Tax Levy
May 24, 2018
Page 2 of 2
Forecast 2018 Levy (Exhibit II)
Corporate Levy - The forecast levy for 2018 for receipt in 2019 totals $19,836,408. This represented an
increase of $749,143 or 3.92% from the prior year. This levy was prepared using an estimated
contribution amounts for the annual pension contribution. The public safety portion of the levy is held
flat while the debt service portion of the levy increases $40,701 or 1.7%. The portion of the levy for police
and fire pension contributions increased $708,442 or 11.0%. It is important to note that the levy for the
Series 2017 AND Series 2018 Bonds is being fully abated using money from the TIF and Water and Sewer
Funds.
Special Service Area #5 Levy This special service area property tax is no longer levied.
Revised Projected 2018 Levy (Exhibit III)
Corporate Levy - The projected levy for 2018 for receipt in 2019 totals $19,405,016. This represented an
increase of $317,751 or 1.66% from the prior year. This levy was prepared using the actuarial determined
contribution amounts for the annual pension contribution. The public safety portion is held flat while the
debt service portion of the levy increases $40,701 or 1.7%. The portion of the levy for police and fire
pension contributions increased $277,050 or 4.3%. It is important to note that the levy for both the Series
2017 AND Series 2018 Bonds are being fully abated using money from the TIF and Water and Sewer
Funds.
Public Safety Pension Levy History (Exhibit IV)
A table covering calendar years 2002 - 2017 of the public safety contribution and funding levels is included
with this memo. The table includes the ARC (annual required contribution) for the police and fire
pensions, percent change from year-to-year and funding level. The five-year increase (2012-2017) in
required contributions for police and fire are 26.03% and 39.05% respectively. The average annual
increase over the same period is 5.21% for the police pension and 7.81% for the fire pension.
In spite of the increasing level of contributions, the overall funding level of both the police and fire pension
funds has fallen from over 75% funded in 2002 to 60% or below for year-ending 2017. While funding the
pensions at the ARC has placed stress on the annual property tax levy and General Fund, the Village is
committed to proper funding in the current period not
In response to comments from Standard & Poors, the Villages bond rating agency, a policy
recommendation will be brought to the Village Board which will formalize the process followed for
funding our public safety pensions. This policy discussion will take place during the budget process for
2019. As mentioned at the start of this memo, this information should provide a good stepping-off point
for discussion. A more detailed presentation on the proposed property tax levy for 2018 will be made at
the June 5 Village Board Meeting.
David O. Erb
Finance Director
17
9IL.L L
VILLAGE OF MOUNT PROSPECT AND THE
MOUNT PROSPECT PUBLIC LIBRARY
2017 PROPERTY TAX LEVY - FINAL
2%
NetProvisionTotal
2017Subsidy/2017Loss and2017
LevyAbatementLevyCostsExtension
VILLAGE OF MOUNT PROSPECT
Police Protection4,933,77304,933,77398,6755,032,448
Fire Protection5,107,77305,107,773102,1555,209,928
Police Pension Fund3,601,216293,5003,307,71666,1543,373,870
Firefighters' Pension Fund3,320,940336,5002,984,44059,6893,044,129
Debt Service Funds
Series 200924,000024,00048024,480
Series 2009B381,6750381,6757,634389,309
Series 2009C222,65542,000180,6553,613184,268
Series 2011B792,0780792,07815,842807,920
Series 201254,095054,0951,08255,177
Series 2013369,956369,956000
Series 2014557,4000557,40011,148568,548
Series 2016389,4000389,4007,788397,188
Series 2017282,363282,363000
Total Village20,037,3241,324,31918,713,005374,26019,087,265
MOUNT PROSPECT PUBLIC LIBRARY
Library Operations9,568,40609,568,406191,3689,759,774
Library Debt Service1,576,15001,576,15031,5231,607,673
Total Library11,144,556011,144,556222,89111,367,447
TOTAL - VILLAGE OF MOUNT PROSPECT
AND PUBLIC LIBRARY31,181,8801,324,31929,857,561597,15130,454,712
SPECIAL SERVICE AREA NO. 51,515,46401,515,46430,3091,545,773
20162017
Total Levy Amount18,727,30519,087,265
Increase Over Prior Year359,9601.92%
18
9IL.L LL
VILLAGE OF MOUNT PROSPECT AND THE
MOUNT PROSPECT PUBLIC LIBRARY
2018 TAX LEVY - FORECAST
2%
NetProvisionTotal
2018Subsidy/2018Loss and2018
LevyAbatementLevyCostsExtension
VILLAGE OF MOUNT PROSPECT
Police Protection4,933,77304,933,77398,6755,032,448
Fire Protection5,107,77305,107,773102,1555,209,928
Police Pension Fund3,853,301195,0003,658,30173,1663,731,467
Firefighters' Pension Fund3,553,406225,0003,328,40666,5683,394,974
Debt Service Funds
Series 200924,000024,00048024,480
Series 2009B380,1250380,1257,603387,728
Series 2009C243,38042,000201,3804,028205,408
Series 2011B793,5560793,55615,871809,427
Series 201254,095054,0951,08255,177
Series 2013369,956369,956000
Series 2014700,2500700,25014,005714,255
Series 2016265,8000265,8005,316271,116
Series 2017286,131286,131000
Series 2018570,319570,319000
Total Village21,135,8651,688,40619,447,459388,94919,836,408
MOUNT PROSPECT PUBLIC LIBRARY
Library Operations00000
Library Debt Service00000
Total Library00000
TOTAL - VILLAGE OF MOUNT PROSPECT
AND PUBLIC LIBRARY21,135,8651,688,40619,447,459388,94919,836,408
20172018
Total Levy Amount19,087,26519,836,408
Increase Over Prior Year749,1433.92%
19
9IL.L LLL
VILLAGE OF MOUNT PROSPECT AND THE
MOUNT PROSPECT PUBLIC LIBRARY
2018 TAX LEVY - PROJECTED
2%
NetProvisionTotal
2018Subsidy/2018Loss and2018
LevyAbatementLevyCostsExtension
VILLAGE OF MOUNT PROSPECT
Police Protection4,933,77304,933,77398,6755,032,448
Fire Protection5,107,77305,107,773102,1555,209,928
Police Pension Fund3,607,934195,0003,412,93468,2593,481,193
Firefighters' Pension Fund3,375,839225,0003,150,83963,0173,213,856
Debt Service Funds
Series 200924,000024,00048024,480
Series 2009B380,1250380,1257,603387,728
Series 2009C243,38042,000201,3804,028205,408
Series 2011B793,5560793,55615,871809,427
Series 201254,095054,0951,08255,177
Series 2013369,956369,956000
Series 2014700,2500700,25014,005714,255
Series 2016265,8000265,8005,316271,116
Series 2017286,131286,131000
Series 2018570,319570,319000
Total Village19,856,481831,95619,024,525380,49119,405,016
MOUNT PROSPECT PUBLIC LIBRARY
Library Operations00000
Library Debt Service00000
Total Library00000
TOTAL - VILLAGE OF MOUNT PROSPECT
AND PUBLIC LIBRARY19,856,481831,95619,024,525380,49119,405,016
20172018
Total Levy Amount19,087,26519,405,016
Increase Over Prior Year317,7511.66%
20
EXHIBIT IV
VILLAGE OF MOUNT PROSPECT
ANNUAL PENSION CONTRIBUTIONS AND FUNDING LEVEL
2002 - 2017
ARC = Annual Required Contribution
% Change% Change
Police ARCin ARCPolice % FundedFire ARCin ARCFire % Funded
20021,062,739 -75.30%1,059,381 -80.10%
20031,077,6451.40%77.50%1,175,13510.93%78.80%
20041,246,95415.71%74.50%1,159,480-1.33%78.80%
20051,333,2836.92%74.10%1,302,01112.29%76.40%
20061,408,4235.64%75.40%1,389,8336.75%76.70%
20071,515,6727.61%75.50%1,414,1101.75%78.20%
20082,208,17445.69%58.90%1,925,11036.14%63.90%
20092,467,52711.75%60.60%2,140,66411.20%65.00%
20102,484,8590.70%59.30%2,224,1223.90%63.40%
20112,631,8115.91%59.20%2,323,6094.47%63.30%
20122,922,97911.06%58.10%2,468,5546.24%63.20%
20132,909,868-0.45%59.90%2,526,1012.33%64.20%
20143,204,36310.12%57.90%2,589,5992.51%63.00%
20153,817,57919.14%54.60%3,206,18623.81%58.00%
20163,601,216-5.67%57.90%3,320,9403.58%59.30%
20173,607,9340.19%60.60%3,375,8391.65%60.70%
5-Year Increase (2011-2016)26.03%39.05%
5-Year Average Annual Increase5.21%7.81%
Annual Contribution and Funding Level
$8.090.0%
80.0%
$7.0
70.0%
$6.0
60.0%
$5.0
50.0%
$4.0
40.0%
$3.0
30.0%
$2.0
Funding Level (%)
20.0%
$1.0
10.0%
$0.00.0%
Annual Required Contribution (in millions)
Police ARCFire ARCPolice % FundedFire % Funded
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