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HomeMy WebLinkAbout05/26/2005 FC minutes FINANCE COMMISSION DRAFT MINUTES OF THE MEETING MAY 26, 2005 VILLAGE HALL BUILDING DRAFT I. CALL TO ORDER The meeting was called to order at 7 :02 p.m. Those present included Chairman Charles Bennett and Commissioners Vince Grochocinski, John Kellerhals, Rich Micelli, Tom Pekras, Ann Smilanic and Lee Williams. Also present were Director of Finance David Brb, Deputy Director of Finance Carol Widmer and Finance Administrative Assistant Lisa Burkemper. Also present at the beginning of the meeting was former Chairman and newly appointed Trustee John Kom. Trustee John Kom wished the Finance Commission well and thanked them for their time and efforts. Chairman Charles Bennett also thanked John for serving as the Chairperson and for his job well done and all the years of dedication to the commission. Chairman Bennett also added that the commission was looking forward to working with the Village Board and its new members. II. APPROVAL OF MINUTES Commissioner Vince Grochocinski motioned to approve the minutes of April 28, 2005 with a corrected typographical error. Commissioner Ann Smilanic seconded the motion and the minutes were accepted as corrected. Commissioner John Kellerhals abstained. III. CONTINUED DISCUSSION REGARDING REVENUE ALTERNATIVES Water and Sewer Director of Finance David Brb began the discussion by reviewing the JAW A member survey that was provided to the commissioners in their packet. Commissioner Rich Micelli asked why the surrounding communities of Des Plaines and Arlington Heights were not included in the survey. Mr. Brb stated that these communities are not members of JAW A. Commissioner Lee Williams asked if the village was able to adequately cover costs by increasing the water rate by 4% each year. Mr. Brb stated that the 4% increase does not cover costs. Commissioner Rich Micelli asked how much money would be generated if the sewer rate were doubled and a service fee were added to water bills. Mr. Brb stated that approximately $1.2 million would be generated per year. Commissioner Ann Smilanic wanted to add that the village can justifY adding a service charge since money is spent on the following: 1) purchase of meters, 2) performance of summer reads with the help ofHBK, 3) maintenance on meters and also on 4) accounting costs associated with posting readings and payments and printing and processing bills. Commissioner Smilanic also added that the fee would allow the village to generate money without issuing debt. Director of Finance David Brb further summarized the water/sewer rate calculation handout that was distributed at last months meeting. Mr. Brb stated that in order to bring rates up to a balanced level the yearly increase would have to be approximately 5 - 5.5% instead of the 4% increase that has been previously implemented. Chairman Charles Bennett wanted to add that a service charge would be best explained to the residents by stating the money is needed to fund capital projects. Chairman Bennett also added that he is in favor of the service charge but is not sure how much the charge should be. Commissioner Ann Smilanic asked where the deficit is being made up since the 4% yearly increase was not sufficient to cover costs. Mr. Brb stated that the balance was being taken from the water and sewer fund. Director of Finance David Erb noted that by the end of2005 there would be approximately a $3.5 million balance in the water and sewer fund. Mr. Erb further stated that according to policy at minimum there should be approximately $2.8 million in reserve. Commissioner Lee Williams asked what the timing would be if a customer charge were to be implemented. Mr. Erb stated that logically it would probably be January l. Commissioner Ann Smilanic added that she thought it should be implemented as soon as possible. Mr. Erb said that it could be done earlier depending on when it could be approved by the village board. Chairman Charles Bennett asked if there were a consensus among the members as to what the service charge should be. Commissioners Rich Micelli and John Kellerhals agreed $5.00 would be acceptable. Commissioner John Kellerhals asked about the possibility of drawing down the water and sewer fund balance in addition to implementing a service charge. Commissioner Vince Grochocinski stated he liked this concept. Commissioner Kellerhals added that it might be helpful to provide the village board several scenarios to consider in presenting possible solutions for the water and sewer deficit. Director of Finance David Erb summarized the various scenarios that could be presented to the board. The following is a list of the items that can be discussed: 1. Implementing a $5.00 service charge fee 2. Drawing down fund balance in the water and sewer fund 3. AdjustinglIncreasing the yearly rate increase for water and sewer 4. Adjusting the levy amount of the Special Service Area 5. Issuing bonds for a lower amount and for a short time period Chairman Charles Bennett asked how soon the commission would need to be able to present a recommendation to the board. Mr. Erb stated that the commission could discuss the items at their June meeting and possibly present something to the board in early July. Commissioner John Kellerhals suggested that if the village has been increasing the water/sewer rate by only 4% per year for the last few years the commission should in their discussions/recommendations provide the board figures on what is actually being spent each year and at what rate to show why the 4% increase is not enough to keep up with costs. General- Revenue Altematives and Summary of Altematives and Ambulance Fee Discussion Chairman Charles Bennett began the discussion by handing out a document outlining his recommendations regarding revenue enhancements for discussion purposes. The items outlined were gradually shifting the entire burden of the police and fire pensions to the property tax levy, implementing a new ambulance billing program, increasing the motor fuel tax by 1 cent per gallon, and increasing the utility and gas taxes by 1 % each. Finance Director David Erb handed out results of an ambulance survey that provided a breakdown between billing residents and non-residents as well as billing for basic life support versus advanced life support services. Mr. Erb stated this information would be valuable in helping the commission fine tune their recommendations. Chairman Bennett asked the commission if as a whole they would like to recommend an ambulance fee increase as well as implement a fee for residents. Commissioner Vince Grochocinski stated he agreed with increasing fees. Commissioner John Kellerhals stated he felt uncomfortable with implementing a fee that might deter someone from calling an ambulance because they don't want to incur the charge. Commissioner Ann Smilanic stated that in the past she has been against implementing a fee for residents. Commissioner Tom Pekras agrees with Commissioner Kellerhals to an extent and is concemed with how people would make bad decisions and not call an ambulance because they can't or won't pay the fee. 2 Commissioners Grochocinski, Pekras and Kellerhals all agreed with increasing the motor fuel tax rate by 1 cent per gallon. Commissioner Ann Smilanic was in favor of eliminating the vehicle sticker and increasing utility taxes to try and offset the lost revenue. Commissioner Rich Micelli asked if when looking at revenue altematives do we want to balance the budget or try to create a surplus. Mr. Erb stated that the village wants to maintain fund balance and would also like to find a funding source for CIP projects. Commissioner Vince Grochocinski and Lee Williams both expressed interest in increasing the vehicle sticker fee. Chairman Charles Bennett finished the discussion by suggesting the commission try and make a recommendation to the board after their meeting in June. Therefore, members should think about what they want to recommend as revenue altematives for discussion at the June meeting. IV. OTHER BUSINESS There was nothing to report. V. CHAIRMAN'S REpORT There was nothing to report. VI. FINANCE DIRECTOR'S REpORT Director of Finance David Erb stated that the 2004 audit is currently being finalized and that the completed report would be available on June 22. VII. NEXT MEETING: JUNE 22, 2005 There was a discussion among the members to change the June 23, 2005 meeting to June 22 because of a conflict in schedules. Commissioner Tom Pekras motioned to move the June 23, 2005 meeting to June 22, 2005. Commissioner John Kellerhals seconded the motion and the motion carried. Commissioner Ann Smilanic motioned to adjoum which Commissioner Tom Pekras seconded. The meeting was adjoumed at 9:46 p.m. Respectfully submitted, Lisa Burkemper Administrative Assistant Finance Department **Please note that after the May meeting it was decided that the next meeting rescheduled for June 22 would again be rescheduled for June 30, 2005 at 6:00pm. ** 3