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HomeMy WebLinkAboutFC Minutes 10/18/2018 FINANCE COMMITTEE Minutes of the Meeting October 18, 2018 st 1 Floor Community Center 50 S. Emerson St. I. CALL TO ORDER ROLL CALL The meeting was called to order at 6:05 p.m. by Chairperson John Kellerhals. Commissioners present included Vince Grochocinski, Thomas Pekras and Mary Rath. Staff present included Village Manager Michael Cassady, Director of Finance David Erb, Deputy Director of Finance Lynn Jarog, Chief Technology and Innovation Officer Andrew Schaeffer, Director of Building & Inspection Services William Schroeder, Deputy Director of Building & Inspection Services Mark Rysavy, Director of Community Development William Cooney, Fire Chief Brian Lambel, Director of Human Services Julie Kane, Deputy Director of Human Services Esther Martinez, Police Chief John Koziol, Deputy Police Chief Michael Eterno, Deputy Police Chief Timothy Griffin, Director of Public Works Sean Dorsey, Deputy Director of Public Works Jason Leib, Human Resources Coordinator Heidi Neu, Human Resources Generalist Ryan Kast and Management Analyst Alexander Bertolucci. II. APPROVAL MINUTES August 23, 2018 Approval of meeting minutes deferred. III. CITIZENS TO BE HEARD None. IV.OLD BUSINESS None. V. NEW BUSINESS Review of the Proposed 2019 Village Budget i) Budget Overview Director of Finance David Erb stated 2019 total budgeted revenues ($145.2 million) increased 15% from 2018 amended budget due to transfers and bond proceeds which increased from the prior year. The proposed corporate levy increase is 1.66% which is the lowest percent increase since 2010. Mr. Erb reviewed charges for services and noted that for a third year there is no increase in the direct charge for refuse that had a $15 increase programed. He stated the Village revenues are still impacted by State actions including Local Government Distributive Fund reduction ($263,000), Sales Tax Administrative Fee ($82,000) and Personal Property Replacement Tax reduction ($62,000). Mr. Erb stated total proposed expenditures ($162.3 million) increased 28.6% from the 2018 amended budget due in part to transfers to support the capital program and debt service. He highlighted the financial stewardship to control the operating budget increase to 1.9% from the 2018 amended budget. He stated the Pension Systems budget increased 10.4% because of a large number of retirements during 2018. Other changes to expenditures include a reallocation of some positions salaries among departments to more accurately reflect true department costs, authorized positions for full- 10/18/18 Finance Commission Page 1 of 6 time decreased by one, a salary pool of 3% for cost of living adjustments, and the Illinois Municipal Retirement Fund (IMRF) contribution rate drops from 10.76% to 8.77%. 2019 budget ($10.2 million). It includes redevelopment and maintenance related expenses. He stated the proposed Village budget expects an increase in General Fund revenues for 2019 with a 5.5% growth from the amended 2018 budget while expenses increased 4.1% from 2018 amended budget. He explained the planned drawdown of reserves totaling $808,567 and the continuation of a four year subsidy to support the pension levy in calendar year 2019 and 2020. He also reviewed reserve levels in the General Fund. Mr. Erb presented highlights from the 2020 Forecast Budget. The 2020 General Fund budget reflects a surplus of $385,280 as presented and includes a property tax subsidy and capital transfers totaling $1,721,000. He reviewed the proposed 2018 tax levy and its assumptions. The pension levy will be abated with a General Fund subsidy of $420,000 and the debt service levy will be abated using alternative revenue sources totaling $1.4 million. He also shared how a 1.66% property tax levy increase would impact a home with a property value of $350,000 equaling an additional $18 to the property tax bill. The following responses from staff were provided to questions from the Finance Commission: Personnel was reallocated within the budget to where they should be charged to refined department budget figures. These changes were prompted by reviewing positions after recent retirements and a true up of past practice within the Enterprise Resource Planning system. Budget reserved 3% for salary increases but cost of living adjustments will be replaced with merit based increases evaluated on meeting goals. 2019 Union increases are 2.35% for patrol & sergeants, 2% for public works and 2.66% for fire; however, fire negotiations are not completed. IMRF is guided by state statute but is totally independent from the state. It is collectively funded at 98%. The Village saved about $400,000 over the life of the bond for constructing the new Police and Fire HQs. The TIF District is in year two of its 23 year term. The Equalized Access Value (EAV) multiplier increased which generates additional taxes. The Village assess a dollar value. ii) Departmental Presentations 1) Public Representation/Village Administration Management Analyst Alexander Bertolucci provided an overview of Public Communications Divisions budgets. Public Representation budget decreased by 28.4% ($219,990) due to the reallocation of salaries and benefits of several employees that support community events to their respective departments. The reallocation moved Public 10/18/18 Finance Commission Page 2 of 6 Works overtime costs for community events like the Block Party, Irish Fest, Fridays on the Green, and etc. back to the department for improved presentation of department costs. He stated the Village Administration budget decreased 6% or $248,876. Legal Services budget was reduced in part to the litigation settlement with District 214 and the IT budget - time positions by one. He provided an overview of 2019 goals. A 2019 goal is to add a part-time Human Resources position and Human Resources Coordinator Heidi Neu presented the justification for the new position. She stated industry current human resources staff to employee ratio is 0.63 while comparable communities average 0.87. She stated that adding a part- 0.78 and will allow the division to achieve the aforementioned goals. Chief Technology and Innovation Officer Andrew Schaeffer stated the Information Technology Division Budget decreased 11.7% ($179,520) from the prior year. He provided an overview of 2019 goals. The following responses from staff were provided to questions from the Finance Commission: t due to the reallocation of expenditures from Public Representation related to the Executive Assistant to the Village Management and community events the position supports. Video Gaming revenues to the Village are estimated to be $200,000 annually. The request to add a part-time human resource position is a fiscally conservative solution to create some extra bandwidth within the Human Resource Division. The part-time human resource qualifications would include an gree and previous human resources experience. 30 to 40 users are already on Windows 10. 2) Finance/Non-Departmental Budgets Director of Finance David Erb presented an overview of the Finance Department 2019 Budget. He stated personal services/employee benefits decreased $10,839 from savings in medical insurance and IMRF contributions. Other expenditures increased $255,200 related to payments made to Elk Grove Rural Fire Protection District (EGRFPD) per state mandate. Also, allocation for Liability Insurance increased $164,339 and Finance absorbs this cost for the General Fund. Savings are expected moving forward. He highlighted several 2018 accomplishments and 2019 goals. Director of Finance David Erb summarized the non-departmental budgets of Debt Service, Risk Management, Business District and Pension Funds. The total budget for Debt Service in 2019 is $7,842,226. Debt follows repayment schedules established at time of issuance and there is significant support from Prospect and Main TIF and Water/Sewer Funds. He stated $2,434,000 is paid through property taxes and while the debt service budget increased 42.7% from the prior year the debt service portion of the property tax levy will not increase. He stated Risk Management increased 6.9% from 2018 and this includes medical coverages and the liability/workers compensation program. He provided an overview of the Randhurst Village Business District budget that totals $1,525,000 for 2019. He stated total budget for pension expenses in 2019 is $12.2 million, an increase of 10/18/18 Finance Commission Page 3 of 6 10.4% from the prior year due to the retirements during 2018. Pension benefits account for $11.8 million of the total budget. The following responses from staff were provided to questions from the Finance Commission: Accelerated EGRFPD payment schedule has no benefit but payments would be completed a little quicker and assists EGRFPD with their structural deficit. Largest contractual service component is bank fees. Everyone wants to pay with credit cards and online so these expenses will continue to increase. Staff will be reviewing the vehicle sticker program as part of a comprehensive review of street funding. Vehicle stickers generate $1.5 million in revenue which is used for street resurfacing. Starting July 1, 2018 the Village the Intergovernmental Risk Management Agency (IRMA) and they will review claims and determine best options to minimize claims run off costs. The Village is no longer with the High Level Excess Liability Pool. 3) CD Economic Development/Planning and Zoning Director of Community Development William Cooney presented the Economic Development and Planning and Zoning 2019 Budget. 2019 major budget impacts are the elimination of Citizenserve startup costs, employee benefits decreasing by more than $30,000 and other accounts increasing 2%. He noted the annual Community Development Block Grant continues to be reduced by U.S. Department of Housing and Urban Development (HUD) and the Economic Development and Planning and Zoning budget includes several Community Investment Program projects related to downtown pedestrian and corridor improvements. He provided an overview of 2019 Goals. The following responses from staff were provided to questions from the Finance Commission: Illinois Department of Transportation approved a streetlight signal United Airlines has already been annexed into the Village. Chair Kellerhals called for a short recess. 4) CD Building and Inspectional Services budget decreased 0.2% ($3,188). The department further minimized third party services and cloud based services decreased due to the elimination of Citizenserve startup costs. He showed the mapping capability of Citizenserve with 2018 permit and code enforcement The following responses from staff were provided to questions from the Finance Commission: Property maintenance service requests are reported by residents or violations are observed by staff. Staff is working to make license renewals an online process with the help of Citizenserve. The Department is managing inspections well and was realigned to be ready for growth. 10/18/18 Finance Commission Page 4 of 6 5) Human Services Director of Human Services Julie Kane reviewed 2018 statistics to date which totals 7,417 service units. She provided an overview of the annual budget which decreased 6.5% ($81,266) for 2019 as a result of reductions in wages and benefits not related to the aforementioned reallocation of some personnel salaries. She provided an overview of the The following responses from staff were provided to questions from the Finance Commission: A service unit could be court advocacy, food pantry pickup, financial assistance, medical lending closet pickup, etc. One visit to Human Services could include multiple service units. The Community Connections Center utility account was previously underfunded. Demand for services at the Community Connections Center has remained relatively constant. 6) Police increased 1.1% ($213,670) with wages and benefits almost remaining flat since several senior employees retired in 2018. He stated major budget impacts include employee testing and training. A significant corresponding cost is the overtime incurred from hire backs which are needed to fill shifts while new hires are at Police Academy. Additionally, vehicle purchase payments were adjusted to better account for actual cost experience 7) Fire Fire Chief Brian Lambel presented the Fire Depa increasing 3.2% ($213,670). He reviewed major budget impacts for each program area. The department is implementing more citizen CPR training and the price of American The hose and appliances account increased based on the recent annexations on the south end of the Village. Professional services increased since pressure testing hoses is now contracted to a third party. Emergency Preparedness increased to purchase right sized emergency equipment for employee go (emergency) kits and clothing supplies for Community Emergency Response The following responses from staff were provided to questions from the Finance Commission: A firefighter recruitment test was completed in 2018 and remaining funds are used to conduct a lieutenant test. Contractual Services accounts include money charged back to the department to support internal services. Costs are allocated to the department and that is how the full cost of service is captured. $500,000 more is being dedicated to pensions than state statute requires. Reviewed the Fire HQ extended apparatus bay design. The new Fire HQ is built with the future in mind, has capacity for additional firefighters and room onsite to expand. 8) Public Works 10/18/18 Finance Commission Page 5 of 6 budget and changes from the prior year. Overall the Public Works budget increased 3.6%. Personal Services and Employee Benefits increased due to the reallocation of salaries and benefits from other departments or divisions within Public Works. The department will be making more frequent adjustments to vehicle lease payments to support increases in Strategic Plan Goals. The following responses from staff were provided to questions from the Finance Commission: Vehicle lease payment shortages are made up over the life of the next vehicle. A few Public Works divisions were consolidated. Refuse was a division but it is a program. The refuse program costs are now within the Administration Division budget. Parking was a separate fund but now it is in the Street Division. A grant will not reimburse the Village for Phase 1 engineering for Rand Rd/Central Rd/Mount Prospect Rd intersection. Illinois Department of Transportation would not have completed Phase 1 engineering either. Relocating the Police and Fire HQ may change traffic volume at Rand Rd/Main St/Kensington Rd intersection but it would also reduce the Opticom interrupts at downtown intersections which would be an improvement. On target for street resurfacing miles. Cost of materials increase annually and revenues have maintained relatively flat. Have not yet received formal notice about joint road salt purchase. Anticipating an increase in price. The Village on average uses 450 tons of salt per winter. Salt brine maker would be a 2019 Community Investment Plan purchase. VI. None. VII. None. VIII. OTHER BUSINESS None. IX.NEXT MEETING Motion made by Commissioner Chokshi seconded by Commissioner Rath to move the next meeting to Thursday, November 2, 2017 at 7:00 p.m. at Village Hall. X. ADJOURNMENT Motion made by Commissioner Grochocinski seconded by Commissioner Chokshi. The meeting adjourned at 9:25 p.m. Alexander Bertolucci Management Analyst 10/18/18 Finance Commission Page 6 of 6