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Home My WebLink AboutCOW Agenda Packet 03/27/2007 COMMITTEE OF THE WHOLE AGENDA Meeting Location: Mount Prospect Village Hall 50 South Emerson Street Meeting Date and Time: Tuesday, March 27, 2007 7:00 p.m. I. CALL TO ORDER - ROLL CALL Mayor Irvana K. Wilks Trustee Timothy Corcoran Trustee Richard Lohrstorfer Trustee Paul Hoefert Trustee Michaele Skowron Trustee John Korn Trustee Michael Zadel II. ACCEPTANCE OF MINUTES OF MARCH 13,2007 III. CITIZENS TO BE HEARD IV. 2007 CAPITAL IMPROVEMENT PROJECT OVERVIEW As the construction season approaches, Mount Prospect will undertake its annual Capital Improvement Program (CIP). This year's projects include improvements to the Village's streets, sidewalk, watermain sewers, and traffic signals. This work represents the necessary upkeep of our critical infrastructure. Village Engineer Jeff Wulbecker will provide his annual CIP overview. V. FLOODPLAIN ORDINANCE MODIFICATIONS Periodically changes to the Village's Floodplain Regulations are required to stay compliant with the National Flood Insurance Program. Staff will present current revisions that are required now and future revisions that will be necessary within the next year. The trigger for these changes is revisions to the maps that are used to regulate the floodplain areas. Recent changes to these maps will require immediate action from the Board. Future revisions to the floodplain maps for all of Cook County are anticipated within the next year and will prompt code modifications when they become effective. Staff has taken this opportunity to review our entire code and will recommend additional changes to the code at the time of these future revisions. NO TE: ANY INDIVIDUAL WHO WOULD LIKE TO A TTEND THIS MEETING BUT BECAUSE OF A DISABILITY NEEDS SOME ACCOMMODA rlON TO PARTlCIPA TE, SHOULD CONTACT THE VILLAGE MANAGER'S OFFICE AT 50 SOUTH EMERSON, MOUNT PROSPECT, ILLINOIS 60056, 847/392-6000, EXTENSION 5327, TDD #847/392-6064. VI. E-PAY OPTIONS The Village currently allows payment of utility bills through a bank lockbox (by mail) or at the front counter at Village Hall. There are also two night-drop boxes available for customers to leave payments after regular business hours. Increasingly, the Finance Department is receiving requests from customers asking for the ability to make payments over the internet or have the payment taken directly from a checking or savings account. The Chase Pay Connexion program being presented offers our utility customers the ability to pay for service 24/7 from any computer with access to the internet. The user can make a one-time payment or become a registered user which provides additional benefits. In addition to the e-pay alternative, a companion program is recommended that will automatically debit a customers account on the bill due date. Providing additional alternatives to the existing payment options for Mount Prospect utility customers has multiple benefits. Improved customer service is achieved by allowing the customer to make a payment by a method and at a time most convenient. The Village benefits by improved work processing and increased cash flow by removing the collection float. Staff will make a presentation on the e-pay programs and will be on hand to answer questions and facilitate discussion. VII. POLlCEIFIRE PENSION FUND ANALYSIS In February 2007, the Illinois Municipal League (IML) released a study on the funding status of the Downstate and Suburban Police, Fire and IMRF pension systems. The study was done in response to concerns regarding the fiscal condition of the downstate and suburban funds and how ongoing benefits will be funded. Included in the aggregate results of the study are each of the state's local police and fire funds. In addition, the study reviewed individual police and fire pension funds for impact to their respective tax levies. The study also included an analysis of the consolidated state-wide IMRF pension fund. Results indicate that the fiscal condition of the IMRF pension is strong. As such, the main focus of this discussion will be on the police and fire pensions. The IML study analyzed all of the downstate police and fire pension funds over a 17 -year period from 1987 to 2004. The source of the data is from the Illinois Department of Financial and Professional Regulation (IDFPR). Results ofthe study were published in a 53-page report entitled Fiscal Analysis of the Downstate Police, Fire and IMRF Pension Systems. In addition to the 53-page report, the IML prepared two separate documents that report the Key Findings of the study and provide a brief Fiscal Analysis. Staff will be on hand to discuss the results of the study and to answer questions and facilitate discussion. Staff will also report on the condition of the Village's police and fire pensions. VIII. VILLAGE MANAGERS REPORT . STATUS IX. ANY OTHER BUSINESS X. ADJOURNMENT MAYOR Irvana K. Wilks Mount Prospect TRUSTEES Timothy J. Corcoran Paul Wm. Hoefert A. John Kom Richard M. Lohrstorfer Michaele W. Skowron Michael A. Zadel Phone: (847)392-6000 Fax: (847)392-6022 TDD: (847) 392-6064 VILLAGE MANAGER Michael E. Janonis VILLAGE CLERK M. Lisa Angell Village of Mount Prospect 50 South Emerson Street Mount Prospect, Illinois 60056 o R D E R OF BUS I N E S S SPECIAL MEETING Meeting Location: Mount Prospect Village Hall 50 South Emerson Street Mount Prospect, Illinois 60056 Meeting Date and Time: Tuesday March 27, 2007 6:00 P.M. I. CALL TO ORDER II. ROLL CALL Mayor Irvana K. Wilks Trustee Timothy Corcoran Trustee Richard Lohrstorfer Trustee Paul Hoefert Trustee Michaele Skowron Trustee A. John Korn Trustee Michael Zadel III. CLOSED SESSION PERSONNEL 5 ILCS 120/2 (c) (1) - The appointment, employment, compensation, discipline, performance, or dismissal of specific employees of the public body, including hearing testimony on a complaint lodged against an employee to determine its validity. IV. ADJOURNMENT ***** ANY INDIVIDUAL WITH A DISABILITY WHO WOULD LIKE TO ATTEND THIS MEETING SHOULD CONTACT THE VILLAGE MANAGER'S OFFICE AT 50 SOUTH EMERSON STREET, 847/392-6000, TDD 847/392-6064. COMMITTEE OF THEWHOLE MINUTES MARCH 13, 2007 I. CALL TO ORDER The meeting was called to order at 7:10 p.m., in the Village Board Room of Village Hall, 50 South Emerson Street, by Mayor Irvana Wilks. Present at the meeting were: Trustees Timothy Corcoran, Paul Hoefert, John Korn, Richard Lohrstorfer, Michaele Skowron and Michael Zade!. Staff members present included: Village Manager Michael Janonis, Assistant Village Manager David Strahl, Public Works Director Glen Andler, Public Works Deputy Director Sean Dorsey, GIS Analyst Greg Nichols, Public Works Administrative Superintendent Jason Leib, Public Works Forestry Superintendent Sandy Clark and Forestry Technician David Hull. II. MINUTES Approval of Minutes of February 27, 2007. Motion made by Trustee Korn and seconded by Trustee Hoefert. Minutes were approved. III. CITIZENS TO BE HEARD None IV. GIS/PV WEB/HANSEN DEMONSTRATION Village Manager Janonis stated that this presentation was to show the Board and public, the use of technology for mapping and Public Works functions, and to highlight the progress of the use of GIS technology. Deputy Public Works Director Sean Dorsey provided information regarding the GIS system whereby GIS can by defined as an electronic map connected to a database to allow questions to be asked of the database and the results displayed graphically. There are currently over fifty-eight different layers of information on the GIS system. He stated Public Works is using the GIS location information for all the utility locations and for consolidating information from different departments. He stated they use Cook County information wherever possible; however, it does tend to be a little dated which requires some consolidation by Village staff. GIS Analyst Greg Nichols highlighted the PVWEB which allows for typical computer users to utilize GIS information without all the knowledge and training required of GIS operators. Deputy Public Works Director Sean Dorsey highlighted the Hansen System which is a relational database connected to the GIS system. Public Works utilizes the Hansen system extensively for tracking customer service requests. He also provided examples of the various maps showing the use of GIS technology information and the Hansen system for tracking customer service requests and asset management work orders. He highlighted the added value of tracking all work orders and costs associated with each work order. General comments from the Village Board members included the following items. Several Trustees commented on the value of the process that Public Works has undertaken to utilize this information. There was also the discussion regarding the upcoming fly over update for the various structures that have changed since the previous fly over. V. EMERALD ASH BORER UPDATE Forestry Superintendent Sandy Clark provided an update regarding the Emerald Ash Borer and the events that have transpired since August of 2006. She stated the Borer has been found in Kane and Cook Counties. She stated the Village currently has 4,348 Ash trees plus approximately another 4,000 on private property. She estimates the potential removal cost at $1.8 million and the potential replanting costs of $1.5 million. She also stated the opportunity for insecticide treatments would cost approximately $455,000 annually. She added the season for the Emerald Ash Borer would be May through August which includes the immergence and mating of the insects. She also stated the Illinois Department of Agriculture may require Ash trees to be removed within '!h mile of the infected area and removed at the State expense. She said the quarantine area in Cook County within the '!h mile radius does not incorporate any of Mount Prospect as yet. She also suggested the Village Board consider signing the compliance agreement from the Department of Agriculture which commits the Village to tasks that are actually already being undertaken currently. She said there still is a need for marshalling areas for Ash disposal which have yet to be set up. She also requests the Village Board to consider continuing the reward program for finding an Emerald Ash Borer within the community. She added that once the Emerald Ash Borer is identified within the community there will be a need to return to the Board for possible funding requests to eradicate Ash trees. Consensus of the Village Board was to sign the compliance agreement with the Illinois Department of Agriculture at the next available Board meeting. Village Board also approved the continuation of the $500.00 reward for identification of the Emerald Ash Borer within the community. Village Manager Janonis stated the Village Board may want to consider earmarking some funds in the upcoming CIP as seed money for possible tree removal for Emerald Ash Borers. VI. VILLAGE MANAGER'S REPORT None VII. ANY OTHER BUSINESS None VIII. ADJOURNMENT Meeting adjourned at 8:55 pm. :-0~~ DAVID STRAHL Assistant Village Manager 2 Mount Prospect Mount Prospect Public Works Department INTEROFFICE MEMORANDUM TO: VILLAGE MANAGER MICHAEL E. JANONIS FROM: VILLAGE ENGINEER DATE: MARCH 21, 2007 SUBJECT: 2007 CONSTRUCTION PROJECTS MARCH 27TH COMMITTEE OF THE WHOLE MEETING The construction season is soon to be upon us and for your information I have compiled a list and corresponding map of the public construction projects that have been scheduled for this year. I have attached copies for your use. The map depicts these Village projects: . Street Resurfacing (highlighted in red) . Other Village Projects (highlighted in blue) The map also depicts the following projects by other agencies (highlighted in green): . Levee 37 Project by the Army Corps of Engineers No other agencies have scheduled any projects in Mount Prospect for this year. I will be at the March 27th meeting to provide a brief summary of each project and to answers any questions. ~~ Cc: Glen R. Andler, Public Works Director X: Engineering\Projectsl\2007 constprojectmm "'..... ... .....n.. P......... .007 C.n.....uC:tloa p~ LI.... FEBRUARY 8, 2007 VILLAGE PROJECTS 1. 2007 STREET RESURFACING PROGRAM Work: 25 streets / 5.1 miles of intermittent curb repair and asphalt resurfacing at various locations throughout the Village. See attached list. $2,700,000 Arrow Road Construction Start work / April 2007 Cost: Contractor: Schedule: Completion / September 2007 2. LiNNEMAN ROAD IMPROVEMENTS (Algonquin Road to Dempster Street) Work: Pavement widening, installation of curb and gutter, storm sewer, street lights and resurfacing of Linneman Road in conjunction with Briarwood Development. Developer will pay for section in front of their development. Village will use CDBG funds and general funds to pay for northern 600' of improvements. $200,000 Undetermined / Developer Bid Opening Spring Start work / April 2007 Completion / June 2007 Cost: Contractor: Schedule: 3. STREETSCAPE Location: Work: Cost: Contractor: Schedule: Emerson Street from Northwest Highway to Central Road Busse Avenue from Emerson Street to Main Street Parkway landscaping and planters, brick sidewalk improvements, street lights and pedestrian lights. $700,000 Undetermined Start work / April 2007 Completion / July 2007 4. 2007 SIDEWALK IMPROVEMENT PROGRAMS (Various locations throughout the Village) Work: Share/Cost Sidewalk Replacement and New Sidewalk Installation Programs. Cost: $125,000 Contractor: Undetermined / Bid Opening May 7th Schedule: Start work / June 2007 Completion / September 2007 5. PROSPECT MEADOWS WATERMAIN REPLACEMENT PHASE /I (Prospect Meadows Subdivision) Work: Replace existing 4" watermain with new 8" watermain, install new water service lines and fire hydrants. $560,000 J. Congdon Sewer Service, Inc. Start work / March 2007 Cost: Contractor: Schedule: Completion / June 2007 6. COMBINED SEWER REPAIR PROGRAM (Various locations throughout the Village) Work: Categories 4 & 3 sewer point repairs and cured in place lining of existing combined sewers. $1,000,000 Undetermined Start work / April 2007 Cost: Contractor: Schedule: Completion / November 2007 7. TRAFFIC SIGNAL IMPROVEMENT PROGRAM (Various Locations) Work: Installation of pedestrian crossing signals. Cost: $50,000 Contractor: Meade Electric Schedule: Start work / September 2007 Completion / October 2007 ARMY CORPS OF ENGINEERS PROJECTS 8. LEVEE 37/ US ARMY CORPS OF ENGINEERS, PHASE I (North of Palatine Road I west of River Road) Work: Construct wall along the north side of Palatine Road to prevent flood water from flowing around Phase II levee wall on River Road when completed. Undetermined Undetermined / Bid Opening Summer 2007 (tentative) Start work / Fall 2007 (tentative) Completion I Winter 2007 (tentative) Cost: Contractor: Schedule: 9. LEVEE 37/ US ARMY CORPS OF ENGINEERS, PHASE /I (Along River Road from Euclid to Palatine) Work: Construct levee wall and pump stations along the west side of River Road and Milwaukee Avenue to protect subdivisions west of Des Plaines River. Undetermined Undetermined I Bid Opening date not set yet, Start work I undetermined Completion I undetermined Cost: Contractor: Schedule: .2- STREET BUSSE A V CANDOTA AV CHOLO LN CORKTREE LN COUNCIL TR ELM ST ELMHURST A V EMERSON ST EVERGREEN A V GREENWOOD DR HENRY ST KINGSTON CT LARKDALE LN LOUIS ST MAPLE ST ORIOLE LN PHEASANT TR PROSPECT A V REDWOOD A V SCHOOL ST SMALL LN SUNSET RD THAYER ST WAPELLA A V YATES LN 2007 Street Resurfacing Program Street List FROM MAIN ST LINCOLN ST HOPI LN COLUMBINE DR ELMHURST RD CENTRAL RD LARKDALE LN NW HWY LOUIS ST SYCAMORE LN MAIN ST FEEHANVILLE DR FORESTAV THA YER ST THA YER ST FORESTAV CITY LIMIT MAPLE ST DEMPSTER ST NW HWY STRA TON LN NAWATAAV ELMHURST A V EVERGREEN A V EMMERSON LN TO ELM ST BUSSE A V BURNING BUSH LN PEARTREE LN EMERSON ST ISABELLA ST BOB 0 LINK RD CENTRAL RD GEORGE ST WOLF RD MAPLE ST CUL DE SAC PROSPECT MANOR RAND RD GREGORYST PROSPECT MANOR TAMARACK DR MT PROSPECT RD COTTONWOOD LN EVERGREEN A V STEVENSON LN CAN DOTA AV PINE ST BUSSE A V LOWDEN LN - 3 - THE VILLAGE OF MOUNT PROSPECT 2007 CONSTRUCTION MAP 5 ~ r.~ ~ oJ I!l() Oa. 8 - ,.' r I J ) tJ^ 'Y( J I --l II ~ ~ . 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L-. .- ""'11)- '" 1.1 171'1 @. 2007 Construction Project Map Legend Village Projects 1) Street Resurfacing Program (See List) 2) Linneman Road Improvements (Algonquin Road to Dempster Street) 3) Streetscape (Emerson Street from Northwest Highway to Central Road) (Busse Avenue from Emerson Street to Main Street) 4) 2007 Sidewalk Improvement Program (Various Locations) "'- ci _ __..----~-51 I r 5) Prospect Meadows Watermain Replacement Phase II 6) Combined Sewer Repair Program (Various Locations) 7) Traffic Signal Improvement Program (Various Locations) Army Corps of Engineers Projects 8) Levy 37 Phase I 9) Levy 37 Phase II Mount Prospect Public Works Department INTEROFFICE MEMORANDUM TO: VILLAGE MANAGER MICHAEL E. JANONIS FROM: VILLAGE ENGINEER DATE: MARCH 23, 2007 SUBJECT: FLOODPLAIN ORDINANCE MODIFICATIONS MARCH 27TH COMMITTEE OFTHE WHOLE MEETING BACKGROUND The National Flood Insurance Program (NFIP) requires that communities enact and enforce Floodplain Regulations in order to be eligible to participate in and receive the benefits of the NFIP. Mount Prospect accomplished this in 1977 by adopting Chapter 22 of the Village Ordinances entitled Floodplain Regulations. Periodically these regulations require modifications for various reasons. Ordinance amendments were approved by the Village in 1987, 1992 and most recently in 2000 when new Flood Insurance Rate Maps (FIRM) were prepared by the Federal Emergency Management Agency (FEMA). These regulations specify that the regulated floodplain areas are those depicted on the FIRM maps. Because of the size of the maps, the FIRM maps for Cook County cannot be shown on one continuous map, but are shown on numerous panels. Portions of Mount Prospect are located on 11 of the Cook County panels. To avoid confusion when maps are modified, FEMA requires that our code reference the effective date of the most current map. CURRENT REQUIRED MODIFICATIONS DUE TO MAP CHANGES Recently changes were made to the floodplain delineation for the Wheeling Drainage Ditch on the appropriate FIRM panels. These changes do not affect the status of any property within Mount Prospect. However, since two of the map panels do include portions of the Village of Mount Prospect, we must change our ordinance to adopt the new maps and reflect the new effective date for the maps. This needs to be accomplished prior to the effective date of the maps which is April 16, 2007, so this will be brought forward for Board consideration at the April 2nd Village Board Meeting. I recommend that the second reading be waived so that this item can be approved prior to April 16th . Attached is marked up copies of the code with the revisions. FUTURE MODIFICATIONS DUE TO MAP CHANGES FEMA and the Illinois Department of Natural Resources (IDNR) are in the process of updating the FIRM maps for all of Cook County. The revised maps will more Page 2 ... Floodplain Ordinance Modifications March 23, 2007 accurately depict the floodplain areas for all communities including Mount Prospect. New flood studies have been performed and the maps have been overlaid onto aerial maps and have been improved using better. contour maps to more accurately delineate the floodplain areas. The preliminary maps were received by the Village two weeks ago. FEMA and IDNR will hold open houses for local government officials and for the public at large to view and comment on the maps. Similar to the process prior to adoption of the FIRM for the Des Plaines River in 2000, there will be a period of review and appeal for communities to provide input into the process. After all comments and appeals are resolved, the maps will be effective. While it is difficult at this point to determine how long it will take to resolve all appeals, it is anticipated that the maps will become effective within the. next year. Prior to their effective date, it will be necessary for the Village to again modify the Floodplain Regulations to adopt the new date of the maps. Village staff will review the maps and the studies and prepare a response during the comment period. FUTURE MODIFICATIONS DUE TO FEMA / IDNR RECOMMENDATIONS Since mandatory changes to our Floodplain Regulations will be required because of the new mapping, we have taken this opportunity to review our entire floodplain code with IDNR and additional modifications to the Floodplain Ordinance are recommended. The changes include housekeeping items such as updating the code to reflect name changes of certain agencies, new definitions and revisions to existing definitions and improvements to the code that have resolved issues that have surfaced enforcing the current code. I anticipate that these changes will be brought to the Board for approval at the same time as the Cook County map changes. I will be at the March 27th Committee of the Whole meeting to provide a brief description of the modifications and to answers any questions. ~~ Cc: Glen R. Andler, Public Works Director H: Engi neeri ng\Drai nage\Ordinance\C hapterZ2\2007Modifications\COW3 - 2 7 -07 Mm CURRENT REQUIRED FLOODPLAIN REGULATION MODIFICATIONS 22.102: DEFINITIONS: FLOODPLAIN: That land typically adjacent to a body of water with ground surface elevations at or below the base flood or the 100-year frequency flood elevation. Floodplains may also include detached special flood hazard areas, ponding areas, etc. The floodplain is also known as the SFHA. The floodplains are those lands within the jurisdiction of the village that are subject to inundation by the base flood or 100-year frequency flood. The SFHAs of the village are generally identified as such on the FIRM of the village prepared by the federal emergency management agency (or the u.s. department of housing and urban development) and dated No'.'ember 6, 2000. The SFHAs of the village are generally identified as such for the Des Plaines River on the countywide Flood Insurance Rate Map of Cook County_prepared by FEMA on Map Number 170129 C panel 0207G dated April 16, 2007 and panel 0209F dated November 6, 2000. The SFHAs of the Village are also generally identified as such for Feehanville Ditch, Higgins Creek, McDonald Creek, McDonald Creek Tributary B and Weller Creek on the Cook County Flood Insurance Rate Map prepared by FEMA on Map Number 170129 C panel(s) 0202F, 0204F, 0208F, 0209F, 0211F, 0212F, 0214F and 0216F dated November 6, 2000. The SFHAs of those parts of unincorporated Cook County that are within the extraterritorial jurisdiction of the village or that may be annexed into the village are generally identified as such on panel number 0209F, 0212F and 0214F the countywide flood insurance rate map prepared for Cook County by as FEMA federal emergency management agency (or the U.S. department of housing and urban development) and dated November 6, 2000. REGULATORY FLOODWAY: The channel, including on stream lakes and that portion of the floodplain adjacent to a stream or watercourse, as designated by IDNR/OWR, which is needed to store and convey the existing and anticipated future 100-year frequency flood discharge with no more than a one-tenth foot (0.1') increase in stage due to the loss of flood conveyance or storage, and no more than a ten percent (10%) increase in velocity. Regulatory flood'Nays are designated on the FIRM prepared by FEMA and dated November 6, 2000. The floodways are designated for the Des Plaines River on the countywide Flood Insurance Rate Map of Cook County_prepared by FEMA on Map Number 170129 C panel 0207G dated April 16, 2007. The floodways are designated for Feehanville Ditch, McDonald Creek, McDonald Creek Tributary B and Weller Creek on the Cook County Flood Insurance Rate Map prepared by FEMA on Map Number 170129 C panel(s) 0208F, 0209F, 0212F and 0216F dated November 6, 2000. When two floodway maps exist for a waterway, the more restrictive floodway limit shall prevail. To locate the regulatory floodway boundary on any site, the regulatory floodway boundary should be scaled off the regulatory floodway map and located on the site plan using reference points common to both maps. Where interpretation is needed to determine the exact location of the regulatory floodway boundary, IDNR/OWR should be contacted for any interpretation. 22.105: BASE FLOOD ELEVATION: A. The base flood or 100-year frequency flood elevation for the SFHAs of Des Plaines River and Weller, Higgins, McDonald Creeks, McDonald Creek Tributary Band Feehanville Ditch shall be as delineated on the 100-year flood profiles in the flood insurance study of the village prepared by FEMA and dated April 16, 2007 or November 6, 2000 February 2, 1982, and such amendments to such study and maps as may be prepared from time to time. B. The base flood or 1 OO-year frequency flood elevation for the SFHAs of those parts of unincorporated Cook County that are within the extraterritorial jurisdiction of the village or that may be annexed into the village shall be as delineated on the 100- year flood profiles in the flood insurance study of Cook County prepared by FEMA and dated April 16, 2007 or November 6, 2000, December 1, 1981, and such amendments or revisions to such study and maps as may be prepared from time to time. , " Mount Prospect Village of Mount Prospect Mount Prospect, Illinois ~ INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: DIRECTOR OF FINANCE DATE: MARCH 21,2007 SUBJECT: ELECTRONIC PAYMENT OF UTILITY BILLS PURPOSE: To present to the Board information on the use of electronic remittance and ACH direct debit in the payment of utility bills by Mount Prospect customers. BACKGROUND: The Village currently allows payment of utility bills through a bank lockbox or at the front counter at Village Hall. There are also two night-drop boxes available for customers to leave payments after regular business hours. Increasingly, the Finance Department is receiving requests from customers asking for the ability to make payments over the internet or have the payment taken directly from a checking or savings account. Information on various e-payment delivery options were presented to the Village Board in March 2005. No action was taken at that time. I have included a copy of the original correspondence that was sent out regarding e-payments as Attachment 1. DISCUSSION; Providing an alternative to the existing payment options for Mount Prospect utility customers has multiple benefits. Improved customer service is achieved by allowing the customer to make a payment by a method and at a time most convenient to the payor. The Village benefits through improved work processing and increased cash flow by removing the collection float. There were three options for e-payment presented to the Board for consideration in March 2005. These three options were; 1) E-Pay Service Program through the State of Illinois Treasurer's Office, 2) E-Pay Services provided through Chase (formerly Bank One), or 3) Electronic Bill Payment and Presentation (EBPP) services provided by a full-service provider. At that time, the cost of implementation for the EBPP service was felt to be too costly and the proprietary program bound the Village to the service provider. The other e- pay service programs provided through the State and Chase Bank did not offer the range of service to our customers that would encourage adoption and use. Although there have Electronic Payment of Utility Bills March 21, 2007 Page 2 been no changes in the cost or programming for either the EBPP or State of Illinois programs, there have been significant improvements to the e-payments service provided by Chase Bank. The Chase Pay Connexion program offers our utility customers the ability to pay for service 24/7 from any computer with access to the internet. The user can make a one-time payment or become a registered user which provides additional benefits. As a registered user with the payment system, you are able to access your account immediately to make payments. On future visits to the site the user can review pending payments and payment history, manage accounts and update their customer profile and password. Attachment 2 includes a number of screen shots a user would view while utilizing the Pay Connexion program. There is a convenience fee paid by the user to Chase for utilizing the e-pay system. Utility payments made by credit or debit card will be assessed a flat fee of $2.95. Visa, MasterCard, Discover and American Express are all accepted. The fee for e-check payments is $0.50. The e-pay program resides on the Chase IT system, but is transparent to the user. Access to the program is through a link on the Village website. No additional programming is needed. Real time payment confirmations are available to notify that a payment has been made. In addition, the Village is able to access payment information immediately, which is helpful when reviewing accounts with a customer. A data entry field can also be programmed to allow for customers to provide their meter reads rather than reporting them via phone or email. When the Chase e-pay program was first brought to the Board for consideration, there were initial setup and monthly costs along with a per transaction fee, all charged to the Village. As the program is presented today, there is no setup or monthly costs. The fee to the Village for ACH transactions is just $0.08 per item. A companion program to electronic bill payment via the internet is an ACH direct debit from a customer's checking or savings account. This service will automatically debit a customers account on the due date, thus allowing the customer to avoid late fees. Set up of this service is at no cost to the Village. Our existing software program has the capability to create the ACH file that can be processed by the bank. The process for signing up for this service is simple. The customer fills out a one-page authorization form allowing the Village to initiate an automatic deduction from a bank account for payment of their utility bill. The authorization will undergo a "pre-notification" process where a test transaction (zero dollar amount) is created and used to verify the accuracy of the account information provided. Any errors in the pre-notification process will be brought to the attention of the customer and they will be asked to confirm that the / Electronic Payment of Utility Bills March 21 , 2007 Page 3 information is correct. The testing process takes approximately 10 days. The customer is notified when the automatic withdrawal is scheduled to begin. There is no fee for using this service and service can be discontinued at any time. Attachment 3 is a sample form that could be used to establish a direct debit of an account. As I mentioned in my earlier memo, people are becoming accustomed to the convenience of on-line payments of bills and feeling secure with direct debiting of accounts. Implementing an e-pay program to supplement current payment alternatives will allow the Village to meet the growing needs of the community at a relatively low cost while improving internal processes. RECOMMENDATION: I recommend the Village Board authorize staff to pursue the implementation of an electronic bill payment and direct debit program for the Village's utility customers. d~~J&..~ DAVID O. ERB DIRECTOR OF FINANCE DOE! H;IADMNlAdministralionlDave CorrespondenceI3-27-07 COWIE-Payment of Utility Bills 3-21-2007.doc - Attachment 1 Mount Prospect INTEROFFICE MEMORANDUM Village of Mount Prospect Mount Prospect, Dlinois TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: DIRECTOR OF FINANCE DATE: MARCH 17, 2005 SUBJECT: ELECTRONIC PAYMENT AND PRESENTATION OF WATER BILLS PURPOSE: This memorandum presents information on the implementation of an electronic remittance or e-pay option for the payment of water bills via the Internet. BACKGROUND: Residents and commercial property owners currently have the ability to pay their water bills through the Village's bank lockbox or at the front counter at Village Hall. Although these options for payment continue to work well for the Village, the Finance Department regularly receives requests from water billing customers to provide additional alternatives for making payment. One option that is becoming more common for governmental entities is electronic remittance, or e-paymentsvia the Internet. DISCUSSION: In an attempt to meet the expanding needs of its residential and commercial water billing customers, the Finance Department began to look into the possibility of offering other payment alternatives to the methods currently available. It was felt that the Village could take advantage of an already useful informational tool, the Village's website. More and more, people are using the Internet as a tool to pay other monthly bills (credit card, utility etc.). There are existing alternatives available that could be implemented fairly easily to address this growing trend. Consolidated bill payers such as eBilIPay, paytrust and Checkfree are not included in this analysis as they do not offer the data exchange needs of the Village (payment remittance file). The three primary types of service providers currently offering programs to facilitate these types of payments; 1) E-Pay Service Program through the State of Illinois Treasurer's Office, 2) E-Pay services provided through a financial institution, or 3) Electronic Bill Payment and Presentation (EBPP) service provided by a full-service vendor. Each option provides a different level of service and associated ~ost. The. following is a discussion on the advantages and disadvantages by selecting one of these methods and cost of providing this service. Exhibit One provides a summary of advantages and disadvantages as well as expected costs for providing the service. - Electronic Bill Payment and Presentation for Water Bills March 17, 2005 Page 2 The E-pay Service Program offered through the State of Illinois Treasurer's Office is something new that has recently became available in the past few years. This free service allows Village's to offer citizens the ability to pay for services 24n from any computer hooked up to the Internet. The program resides on the State of Illinois system, but is transparent to the user. The user needs only to enter basic account information (account number, service address) and payment amount. There is a convenience fee charged to the user for using this system that is paid to the State. The minimum fee is $1.00 and it takes 2-3 business days for payment to be posted to the users water billing account. One advantage to utilizing E-Pay from the State of Illinois is its ease of use. The program also comes to the Village at no cost. Disadvantages are that it is limited in the information it can provide to the user, does not permit the entering of meter reads (Village would still have to develop a system to enter reads manually) and there is a service fee attached to every transaction. Also, the Village cannot access the payment information until it receives the remittance file the next day. E-Pay services provided through a financial institution are similar to those provided in the State of Illinois program, but can provide additional account information to the user. Again the program resides off the Village's system, but remains transparent to the user. .Additional benefits to the user are the ability to make immediate one-time payments or recurring scheduled payments. The user also has access to limited account information (payment history). There are also some additional benefits to the Village. Real-time payment confirmations are available to notify that a payment has been made. A data entry field can be set up to allow for customers to enter their meter reads eliminating the need for a staff person to enter the information. Also, the Village is able to access payment information 24/7 rather than having to wait until the next day. This option also has its shortcomings. Only limited account information is available to the user. Administration of the site is made more difficult as only the financial institution can perform modifications to the system. There is also a setup, monthly maintenance and payment processing fee for providing this service.- The cost of implementation is $3,500. There is also minimum monthly charge of $500. The cost per transaction fee of $0.50 is in addition to the minimum monthly charge. The EBPP solution is the most comprehensive program fqr both the user and the Village. As with the other types of service providers, this program resides off the Village's system, but remains transparent to the user. Not only are users able to make a payment on their account, they also can check billing, payment and water usage history. Users can also opt to receive their bill electronically, continue to receive a paper bill, or both. Recurring payments can be set up with parameters on the minimum and maximum payment amount that will be accepted. Althou9h the system is robust, it is very easy to navigate with transactions completed in as few as four steps. This program will also allow for a data entry field to be set up to allow for customers to enter their meter reads. Another unique feature is the ability to pay for two or more accounts in a single transaction. This is Electronic Bill Payment and Presentation for Water Bills March 17, 2005 Page 3 especially helpful for those who own or manage multiple properties such as apartment buildings or commercial properties. There appears to be no disadvantages to the user by going with this program. The program currently being considered to provide this service can also expand to receive other Village payments such as vehicle stickers, parking tickets and other miscellaneous fees. The initial cost of setup for the EBPP is higher as would be expected for the more comprehensive program. The monthly maintenance and processing fee for providing this service is similar to that of the e.:.pay services program provided through the financial institution. I have included an article published in GFOA Public Investorand IGFOA Leader publications that provides additional information on delivering EBPP to customers. The EBPP program being considered is provided by Third Millennium Associates (TMA). TMA currently provides water billing services for the Village and its e-pay program is a perfect extension to an existing service. The cost of implementation is $22,500. There is also an annual software maintenance fee after the first year of $2,200 and a minimum monthly server charge of $500. The cost per transaction fee of $0.27 is applied towards the minimum monthly charge. Although the initial implementation charge is higher than the other alternatives, this program best meets the desired service needs of the Village into the future. As people have grown accustomed to the convenience of online commercial services, they are beginning to expect to be able to transact business electronically with governments as well. Implementing an e-pay program will allow the Village to meet the growing needs of the community at a relatively low cost to the Village. RECOMMENDATION: I recommend the Village Board authorize staff to pursue the implementation of an electronic bill payment and presentation program for the Village's water billing customers. DAVID O. ERB DIRECTOR OF FINANCE DOEI EXHIBIT ONE Village of Mount Prospect, Illinois E-payment Options for Water Billing Customers Summary of Advantages, Disadvantages and Costs State of illinois E-Pav Banklna E-Pav Third Millennium EBPP Advantages Customer ease of use Customer ease of use Customer ease of use No cost to Village One-time or reoccurring One-time or reoccurring. payments payments Payment history Information Expanded account information to include billing, payment and water usage history Expanded capabilities to accept other Village payments Multiple account payment by a single user Disadvantages No account information other Limited account information Cost for initial setup and than payment amount due ongoing maintenancel user fee Does not permit the entering Cost for initial setup and of a meter read ongoing maintenancel user fee Mandatory service fee charged to user Costs None $3,500 setup $22,500 setup $500 monthly fee $500 monthly fee $0.50 per payment $0.27 per payment processing fee processing fee (first applied to monthly minimum) ~.. Delivering Electronic Bill Presentment and Payment to Customers By LInce Leader In the past several years, e-com- merce and e-government have evolved from conceptual white papers to implementation and now to a routine expectation among citi- zens. Perhaps no where is the expec- tation for online service greater than at the treasurer's office, where trans- actions such as utility bill payment are increasingly made online. Payment processing is one of the most time- and labor-intensive activ- ities in government. Governments understand that they would save a lot of money-both in terms of reduced costs and collection float- if all of their customers were to pay their utility and tax bills over the Internet. Electronic bill presentment and payment, or EBPP, refers to the electronic delivery of billing state- ments to customers and the elec- tronic initiation of payment by those customers. The purpose of this arti- cle is to familiarize finance officers with the mechanics of EBPP so that they can evaluate its desirability and feasibility for their jurisdictions, examine the two leading models, and review the payment options. EBPP Delivery Models. Like most other technology offerings, electronic bill presentment and pay- ment comes in a variety of shapes and sizes. These variations can be categorized into two major EBPP delivery models-the biller-direct model and the consolidation model. (See Rxhibit 1.) BiJ/er-Dire&t. The biller-direct model is so named because there are no intermediaries between the biller and the customer. (Even though bill translation and formatting and Web site hosting are sometimes out- sourced, the bill originates from the biller and payment is made direcdy to the biller.). This model offers the maximum level of control over bill presentment and payment, including security and user friendliness. Customers who are signed up for EBPP are notified bye-mail when a bill is pending. To execute a transac- tion, the customer simply opens the e-mail and selects "pay bill." One variation of the biller-direct model is to e-mail an electronic ver- sion of the billing statement to the customer-not just notification that the bill is available for viewing and payment. The customer simply opens the message to see the e-mail version of the bill. Clicking on a button in the bill takes the user to a full version of the bill or direcdy to payment of the bill, where payment options can be selected and execut- ed. Because of the graphics and links inherent in this delivery mecha- nism, customers must have modem Internet browsers to take full advan- tage of it. Designing, hosting, and maintaining an EBPP system is expensive. The cost of an EBPP system ranges from $40,000 to $100,000. For con- sumers, the biller-direct model is a free (usually) and convenient way of paying bills that spares them the costs of writing and mailing checks. The drawback is that consumers must visit the Web sites of each of their service providers to enroll for EBPP service. Consolidation. In the consolidation model, the biller sends customer account information to a bill consol- idator, which collects bills from mul- tiple billers and aggregates them for the consumer on a central Web site. Although some bill consolidators present bills on their own Web sites, most go through a consumer service provider-usually an Internet search continued on page 5 .................................................................................................................................... Electronic - ,'ontinued from page 1 engine or a financial institution. (For additional information, see "Electronic Bill Presentment and Payment Is ItJust a Click Away?" Economic Perspectives ~ no. 4 (2001): 2-16.) The obvious advan- tage to this model IS that customers can pay all of their bills through a single Web site instead of having to visit separate sites for each individ- ual service provider. However, con- sumers usually pay a price for this conventence. Unlike the biller-direct method, consolidation does not require the biller to invest in expensive hard- ware and software to electronically bill customers. However, the biller must pay a fee to the bill consolida- tor for providing the portal for elec- tronic bill presentment and pay- ment. This fee typically amounts to 10 to 15 cents per transaction. Billers aren't the only ones who pay for the convenience of EBPP under the consolidation model. Popular providers like USPS eBillPay, Pay trust, Yahoo! Bill Pay, and CheckFree usually charge a flat fee of $5 to $10 per month and/or 10 to 20 cents per transaction. Many consumers still are not willing to pay for the convenience of EBPP. There are other drawbacks. Many consolidators remit customer pay- ments to billers by mailing paper checks. In addition to the float inherent to this method of pay- ment, the checks sometimes do not include account numbers, which can cause problems in updating cus- tomer accounts. In the consolidation model, the biller surrenders control over the bill delivery process to a third party. The exchange of billing informa- tion between the biller and the con- solidator heightens consumer con- cerns about privacy and security and biller concerns about data accu- racy. Universal acceptance of a common data exchange standard may eventually allay these concerns and lead to more widespread use of . Exhibit 1 Biller-Direct Model VS. Consolidation Model Biller~DireCt MOder .' Advantages: · Billerj::oiitrol of the ,bill delivE1rY proce$l>... , . . '. '.""'''''' . · Solidrep6ningcapabilities . .ReliabilitYofe~ma.i1 as'a delivery .' mechanism.. · No fees for the consumer. .. · No postage or check writing costs · Better ciJstomer ser-Jice :than ttijrd parties. . · C6nsumersare' more comfortable. .. . . with established service providers tharfwith unknown third parties .. ':.CorisoUdatlon"Model Advantages;' . ;~i~.;;~~j .' options'i;lot suPPOrted. ~ir~~~Y'by iD.(:I.i{, .... .....;fu;tf:i~~~i1#i~,~:" ~...~.~., . . . . . . ?~~~~~S~; h~ and mai~ir~7~~"~~Q9~~~" · Consumers mqst vi.silrpultiple Web ., Lack;..q(~univei$~f:o.id~:i3~~ariger.~': sites toyiew and pay their bills ..: '..sta~d~li'd.: ':. 'd. ~, . , .' .. . A single billei" may nofoffer all' of the . i,PerCeived 'privacy/seCUritY flaws. - .:.' '. : paYll1ent optiolJs.d~~i..:~ by'c,o.n"', " '. ~:,9.yi;n~~~~mE(~nr~!.Iro~~,t prdcecilires' sumeis '. . '., Frag"!~nted ,i::ustO!l1~~ selVi-c,e'" ::--= -:-::-: · CO!1Sllmers may pay a feejor'online' . . bi!rp~yment':~' ..r.',,'.r'.,. .. . . . . '. . : '. '-.', ", . ...... '. ".' .. Sotirce:.A.Al1dr~ff,. L. ,Binri16eller. ~:~!'!!19CD.:O: :ge@..s:QIjl!.~@iQrti; T.GTe$.i~J~ia;'ano E;9reEfrl;""::;:"'" .Electrorik:'BiH~resentriJ.~nt &)d Paymeni: Is II.J.ust aplicl(~wii0'J=..cRiiQmiP.eerspiiciives.xxv.no. 4, .... (2001):2~16.;.::' ... ... ..:.... . .'...":.:.:::.:::::"...,,'.....::-..'~.:.:::;.'.~...::;. the consolidation model. Payment Options for EBPP Enrollment. Because of the secu- rity concerns and high fees, few governments are using a variation of the consolidation model. As such, the balance of this article assumes a preference for the biller- direct model. As they contemplate electronic bill presentment and pay- ment, one the most important issues governments need to consid- er are the payment options (other issues not covered here are priva- cy/security and user-friendliness). The payment options used by cus- tomers in an EBPP environment are essentially the same as those used in a paper-based billing process. In the biller-direct model, the four main payment options are ACH, credit card, debit card, and electronic check. The more pay- ment options available to cus- tomers, the more likely they are to migrate to electronic payments. Through electronic presentment, 5 billers can even encourage cus- tomers to use the most cost-effec- tive payment option. For example, a government could elect to have the ACH option presented first- before the main payment selection page. ACH is the most common electron- ic payment option. ACH typically involves a customer authorizing a biller to debit his or her bank account on a recurring basis. Electronic checks are a variation of ACH in which a customer provides his or her bank routing and account number online to electronically pay bills. Historically, many customers have been reluctant to sign up for ACH direct debit payments for fear of losing control over the timing and amount of their payments. The introduction of electronic checks and other one-time debit payments should make ACH a more attractive alternative for electronic payers. While ACH is the most common electronic payment option offered ,'ontinlled 011 page 6 .................................................................................................................................... .. Electronic - continued from page 5 by billers, credit cards are the most popular among online conswners. Credit cards offer conswners maxi- mwn control over the timing and amount of their payments. However, credit cards are a more cosdy payment alternative for gov- ernments than ACH or debit cards because of the processing fees mer- chants must pay the credit card companies, These fees are generally 2.5 percent to 3 percent of each transaction. Some governments charge consumers a "convenience fee" to recover their costs, but these fees can be a barrier to EBPP adop- tion. ~ Lam'e Leader is general manager of Third Millennium AssodateJ: He can he rea,'hed at 312/461-0006. 6 - Consumer Web Payments Attachment 2 Page 1 of 1 ...:'- -' '?::. Government e-Payments ,// ~ , ,,' ,/ . ., A About Us A Press Room A Community A Govei"llance A Ethics 8< Diversity A Pl"Ocull"en'lent Government Payments "'take Payment Single Product "'take Payment Select a Product Make Payment Pay Without Registering uSearch-- ~~~~: ,_~I~:~:'~~~i~ Consumer Web Payments Page 1 of 1 , . /.l'/ ! x-/ Government e-Payments ~., ~ ,'j // ~ 1 [j-P~IV.L\CY] fOcUSTOMER SERvICE11Cf,J HELPl WEXill ff'P~frir"me'!itofltfMi'E1~/ar'onrerp.a ~m'ent;:S" S'tent:"::". . ...: . . . ;. ~~l~ _~ ...\...._I~.~... <--It;.. ",'.1 . ,....,.:1. ~"" <10 .. .J ~ _,...,.. l.:~ y;.., ..._~ .~ ,.~y" ". . - ,t",_.. ,I I,. , . u.~ 10. 112345678 ~l Password: r***1 I I~~l , , I [ I L_._______._..__.____. REGISTERED USER LOG IN If you have already registered with the payment system, you may log in now, Enter your User ID and Password, then click Log In. forgot password I JPMorgan 0 I 11m1~,d If you have not yet registered with the payment system, you may do so now. Registering lets you make payments, view payment history, and securely store your account information. Registration is easy and secure and you only need to do it once. To get started, click Register. I;oo~~ I click Payment Inquiry to view information on a previously submitted payment, or Log In above if you're a Registered User. l.n~~j,mJ:~~:f1 If you wish to pay without registering, you may click Pay without Registering to continue. t___.~__._._.__ i I .~ ((;:i "2002 .. 2005 JPf.tic,r<;l.3n Ch.s::.e 2,.::nk., N,.A.. e,rol,',lser F.:2I]ljjrern~nt$ Consumer Web Payments Page 1 of 1 , ,,-::::' / , Government e-Payments f '<: /' . liiPIii~cTI 10 CUSTl)MER SERVICEl ~LP115i' EXIT j 1!t~"='Ir:1ft'''~r.~~",.).""~,,,<,:,-;<i''J-tt~'].fl t~~.... i"''- '1~1-:"f;;ITl _1--11,;: . t_. '1 ~,., l r I I I' ' , - lA'.iW.~~,!lI.~€tm~J1iI~t:!"Q tl.e",.~.;tfu~Ij;. ~' ;8:" '\,.L , ,- _.~l _ _.:",:' ,i h ~'" " ~): \ -" , -: <".' : , Bold fields are required PAYOR IDENTIFICATION Billing Account Number: labc User 10: IJSmith Password: I...... Re-Enter Password: I...... 6 -12 characters 4-16 digits, must be numeric PAYOR PROFILE I JPMorgan 0 I First Name: IJason Last Name: Ismith Company Name: IBusiness .com Street Address 1: 1300 S Riverside Street Address 2: City: IChicago State: IllIinois Zip Code: 160606 - ~ ..:..I E-mail Address:IJason.Smith@Business.com Phone Number: f3'12 - f5"55" - rssss Shared Secret Question: Iln what city were you born? Shared Secret Answer: IChicago i i i i I I I 1l':~""'f[1 I ,:M~~ I ! ~tmNP' r~~~ I """,'',___,_,,,,,___,,______,,'.________,_____,___________________________,__________,--1 @) 2002 - :~~'005 JPf',').::.r(.).;;-j Ch.3::.e F.:>.~nk.. N..;':\, e.ro:pser F.:'2(!lJit"\:.'m;~nt:E' ~ ~ Consumer Web Payments Page 1 of1 ~// Government e-PaYlnents ~ ~ .,:"'"--:- lfSLPRIV Acv:1 FOClJSTOFY1ER SERVII~ l~J HEU1 Ff. Exrrl !ill!),~;;;:~"G'Willt~~p-!flI""~'l"11.~':r..",.~.~I-"\:i-'- m;", ,. .,- I " '" ., . ., -, ~lli:llililaJsg.~~,.:.R~.Y.!!t~I!t![iiaP,X9;~Mjj:Lt!f...:tl'2lfl,;..^:. ':...,,),:...~", J_' .",.' ..'. '..' ..".: .~, ._~. PAYMENT TYPE SELECTION Please choose a payment type: r. Single Payment r Recurring Payment PAYMENT METIiOD SELECTION Please choose a payment method: I JPMorgan 0 I r. eCheck I i i ! L._. r Credit/Debit Card I,~~~fl I~~."~.""""""I ~!~, (2) 2D02 - 2005 JPj,,'ici'I;l.:;,n Ch.::iS2 e,.::::nk.. j'..!,.A., ~,rot,',l:::E:r F:E:Quirernents Consumer Web Payments Page 1 of 1 .-1/ Government e-Payments ~ ..;- ~' -...--.--.--.-,.-- --~ -------....-.,.. j i ; _~1.'Ol_~~~_a!.~~~_~~___._J - ,~"'~i!r!!?r!~~"l!....,lfil!'~~ .~...,."..-"";:;:m'f;t~~ "'<r", """:'. t." . ll!!lG.i.rs'~K~!4..~.!l!l;~,Y_OO~Jl!itjtP.X_9.ijygml.t~Ili:""""-'_~' !..:,..;",:).,f,~:Jt,]" _ - ". _ r.. .-. -" --~- '. :.......-" ---..-: [~J p~IYAj::yl FO,CU$TOMER SERVICE Bold fields required - PAYMENT INFORMATION iinl'~,l:: '~K~,'I p"'; :"f'.;(~~ ~~~~.~r:n!"g, ~y.~~~!, ,.: Amount Due: $350.00 Payment Amount: 1$350.00 Payment Method: eCheck -........ .. ..' - .' -..--........ . L., ,.. . ," Due Date: Dec-O 1-2005 Scheduled Payment Date: I Nav ~ 129 .-:..112005 '..:J I JPMorgan 0 I PAYMENT DETAILS Choice Value: I Value A Collect Value (numeric): 12 Pass Value: 98765 ..J [CCOUNT SELECTION please select an account: I Checking. 1234 ..:J This payment may be assessed a convenience fee. The fee amount \'lill display on the payment verification screen. You will have the opporl:unity to cancel this payment before the fee is charged. L_________________u_______ I,.'~~'l I~I - (Si 20Ci2 - :2005 JPi','lcrl;l.an Ch.3se e..ank.. N,.A.. t,r::.!",l~::: t; ( P e qlJ ir~ m t? ilts Consumer Web Payments - Page 1 of 1 /-- .-;?-- . Government e-PaymeIlts ~ ~ ,"'1 -/ '-~~k~-~:~~~~-;;~-----l ____ ___ .__.__~__._.....__...__i - 1- I JPMorgan 0 I U~J PRllJA4~ ~ CUSTOMER SERViCEl r~JHELPl [1 EXITJ ~ i I Bold fields are required i This payment is scheduled to be made after the due date. This payment will be late. I i I I ! I j I i I I I , I ! i I I i I I i i ; i I i i I ! i I For your own protection, you are required to re-enter your login password (Registered) below before choosing Confirm. ...__.~_.._.-._.-_._-_._-_._-_.._--_._-----_..-._.._-.-.-------.-----.--------- Your Payment Detail Payment Amount: $350.00 Conllenience Fee: $1.50 $351.50 Nov-29-2005 Total Amount: Scheduled Payment Date: Amount Due: $350.00 Dec-O 1-2005 Yalue A Payment Due Date: Choice Value: Collect Value (numeric): 2 Pass Value: 98765 .-....-.-.......--.--...-...-..--...----..-..-.-.--.-.---_._--_...._._-.--_..~._-_.._----_.._._._---_.__._....-.-.---..--.-----..--...-- Your Account Detail Account Nickname: Checking Routing Transit Number: 071000013 Account Number: XXXXXXXXXXXXX1234 Account Type: Checking Account Category: Consumer Email Address:Jason.Smith@Business.com Send me an email confirmation: ~ Re-Enter Password; \........ Terms And Conditions PLEASE READ AND APPROVE THE FOLLOWING AUTHORIZATION By clicking "I Accepf', I authorize the payee to electronically debit my bank accountfor the amount (s) and at the frequency and date set forth above. If this is a single payment, this authorization is valid for this transaction only. If this is a recurring payment, this authorization is to remain in full force and effect until I noti1Y my bank or noti1Y the payee of its termination by canceling any pending payments and recurring payment instructions within this system at least three banking days before my account is scheduled to be debited. If a convenience fee is added to the transaction, I understand that the convenience fee displayed will be included in the total payment amount. In the event that a payment is returned for insufficient funds, I authorize the payee to electronically debit my bank account for the original amount of the transaction, as well as a returned item fee, up to the maximum amount allowed by law. ""'''''''''''''/''\1''\'''' - . Page 1 of 1 Consumer Web Payments > .... ./~ ./ 'I, -?/ Government e-PaymeIlts r ~ , . .// " t>1ake Payments 1!lii!Ng,'1a~'h'lle:'n~~"+Qlffffif"Wirollw. !iICo1iu~ij,tf'i\i;':',\i',I':J,~,~.I' i(;":' ! ;'" I! . [ :'.\ ' '",,' lJIl'.,,~u ,y",.,. .__~=_. _~. .9!... ._._ .!iiJ'J.,Jj, ,.",.BH.A.~ ~ ,,. b.', 1 Lh,,'f, '. ..j. I. . . . , [if.!] P~IVA4~iJ [tj"'CUSTOMER SERVICE'] f@J HELPll f EXIT] -........ . . - . ~. . ." . - This text can be customized to display a message to payers after making a payment tJP!~~trrih"- B~l ~~iits~ ~h~.,..' I.. IlH:t 9 vtt.Y J"" ~ j l~'1 ~i please keep a record of your Confim"lation Number, or print this page for your records. - Confirmation Number: ONEONEOOOOO 1878 I JPMorgan 0 I Your pavment Detail Payment Amount: $350.00 Convenience Fee: $1.50 Total Amount: $351.50 Scheduled Payment Date: Nov-29-2005 Amount Due: $350.00 Payment Due Date: Dec-O 1-2005 Choice Value: Value A Coiled Value (numeric): 2 Pass Value: 98765 Your Account Detail Account Nickname: Checking Routing Transit Number: 071000013 Account Number: XXXXXXXXXXXXX 1234 Account Type: Checking Account Category: Consumer Email Address:Jason.Smith@Business.com I~Mr"'~~."'m\l':'~""I~."~1 !',"':~',~','\ ,I .. _.'., I ". .. . " ." ;~~f.~_~ (s) 200~:-~ - 2005 JPf'.'jorl~.;.n Ch.~se e..=.ink., r~,,~.. e.r(II,I,Is:er f;;~8IJujr~m8nl:S I Attachment 3 .' Announcina Villaae of Mount Prospect Direct Debit Proaram Mount Prospect is now offering a new payment option for your Water/Sewer and Refuse utility bill. You may now opt to pay through direct debit of your checking or savings account. The funds will be withdrawn on the due date, thus avoiding late fees. The process is simple. Please complete the authorization agreement below, sian and attach a voided check. Please return the completed form with appropriate attachments to: Village of Mount Prospect 50 S. Emerson Street Mount Prospect, Illinois 60056 ATTN: FINANCE DEPARTMENT I hereby authorize the Village of Mount Prospect and the financial institution designated herein, to initiate automatic deductions by direct debit to my bank account indicated below, in payment of my utility bill. I understand the automatic withdrawal of the amount billed will be debIted (withdrawn) on the billina due date as indicated on the bill received. I hereby agree to have such funds available on said due date as specified in this agreement. This authority will remain in effect until the Village of Mount Prospect has received written notification at least ten (10) days prior to the date of termination of this agreement. Please read the other side of this notice for further information. Customer Name (as it appears on bill) Service Address City, State, Zip Mailing Address (if different) City, State, Zip Daytime Phone Number Financial Institution Name and Address City, State, Zip Bank Phone Number Bank Transit Routing Number (ABA) Please Circle: Checking or Savings Account Number Authorized Signature Please remember to siqn and attach a voided check to this authorization form. , Initial Payment Once your completed enrollment form is received it will undergo a "pre-notification" process where a test transaction (zero dollar amount) is created and used to verify the accuracy of the account information provided. Should the pre-notification test fail (incorrect account number or bank transit routing number) you will be notified and asked to provide the correct information prior to commencing automatic payments. Each pre-notification test takes approximately ten (10) working days to complete. You will know when automatic direct debit payments are scheduled to begin when you receive your utility bill and it indicates "Direct Debit Pay". Please continue to make payments until that time. Record of Payments Your monthly bank statement will indicate the amount and date of your automatic transfer. If a question arises regarding your transfer or if the amount differs from your bill, you must notify us and your financial institution within sixty (60) days of the date of the questioned statement. Your financial institution will advise you of your rights concerning the error. Availability of Funds You are responsible for having enough money in the designated account on your payment date. As with checks returned for non-sufficient funds, there is a $20.00 NSF charge on all returned items. Pirect Debit Pay will be canceled if two payments are returned within a twelve (12) month period. Payment Date The determined amount will be transferred from your bank account on the due date listed on the utility bill. If the due date falls on a weekend or holiday, your account will be debited on the following business day. Termination! Account Closure Your service will remain in effect unless we receive written notice from you ten (10) days prior to the next scheduled billing date or until your service is terminated. Additionally, you must provide the same notice if you have closed your account. Questions If you have any questions concerning this program, please contact the Finance Department at (847) 392-6000. Mount Prospect Village of Mount Prospect Mount Prospect, Illinois ~ INTEROFFICE MEMORANDUM FROM: MICHAEL E. JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE TO: DATE: MARCH 20, 2007 SUBJECT: ANALYSIS OF THE VILLAGE'S POLICE, FIRE AND IMRF PENSION FUNDS In February 2007, the Illinois Municipal League (IML) released a study on the funding status of the Downstate and Suburban Police, Fire and IMRF pension systems. The study was done in response to concerns regarding the fiscal condition of the downstate and suburban funds and how ongoing benefits will be funded. Included in the aggregate results of the study are each of the state's local police and fire funds. In addition, the study reviewed individual police and fire pension funds for impact to their respective tax levies. The study also included an analysis of the consolidated state-wide IMRF pension fund. Results indicate that the fiscal condition of the IMRF pension is strong. As such, the main focus of this memo will be on the police and fire pensions. This memo will provide a summary of results of the IML study along with a more in-depth analysis of the Village of Mount Prospect's three employee pension funds. Results of the study were published in a 53-page report entitled Fiscal Analysis of the Downstate Police, Fire and IMRF Pension Systems. In addition to the 53-page report, the IML prepared two separate documents that report the Key Findings of the study and provide a brief Fiscal Analysis. I have included these two documents with this memo. The complete report is available on the IML website at www.iml.org. Much of the information included in this memo was pulled from these IML reports. In order to better understand the results of the study I have included a brief definition of each of the components of an actuarial review. Accrued Liability - represents those liabilities, both current and prospective, that are to be covered by the fund's assets. Unfunded Liability - represent that portion of the accrued liability not covered by a fund's assets. Funded Ratio - the ratio of assets to accrued liability Police and Firefighter Pension Fund Analysis March 20, 2007 Page 2 Property Tax Levy as Percent of Payroll - measure of the relationship between the amount taxpayers are asked to pay for police and fire pensions and the total cost of salaries to staff a department. IML Aaareaate Fund Summary As mentioned previously, the IML study analyzed all of the downstate and suburban police and fire pension funds over a 17 -year period from 1987 to 2004. The source of the data is from the Illinois Department of Financial and Professional Regulation (IDFPR). Each pension fund is required by statute to submit a report annually to the IDFPR reporting on the fiscal condition of the fund. In reviewing the results of the aggregate study for both the police and fire pension funds, the overall funded ratio remained relatively stable from 1987 to 2000 at 74% (police) and 76% (fire). This trend can be seen in the graphs for aggregate funded levels on page 2 of the Key Findings report. Significant decreases in the aggregate funded ratios are seen after 2000 with the police ratio declining from 74.1 % in 2000 to 62.4% in 2004 while the fire ratio declines from 76.6% to 65.9% during that same period. As the funded ratio decreased during this four-year period, the unfunded liability in actual dollars increased significantly. From 2000 to 2004, the aggregate unfunded liability for the police funds increased from $1.2 billion to $2.3 billion. During the same period, the aggregate unfunded liability for the fire pension funds increased from $820 million to $1.4 billion. The graphs indicating the trend in the unfunded liability can be found on page 1 of the Key Findings report. The IML study compared the unfunded liability for the locally funded police and fire pension funds to the state-funded Teachers Retirement System (TRS) and State Employees Retirement System (SERS). On a per-participant basis, the unfunded liability for police and fire members is $179,958 and $176,845 respectively. In comparison, the unfunded liability forTRS members is $122,969 and for SERS members is $119,687. Although the unfunded balances for the TRS and SERS are much greater at $19.4 billion and $8.5 billion respectively, there is a much higher burden on local taxpayers to cover the police and fire pensions before each public safety employee retires. The graph showing the comparison of the four pension systems can be found on page 1 of the Key Findings report. IML Individual Fund Summary To determine the impact to the local property tax levy for changes in the funded ratio and unfunded liability, 59 individual police and fire pension funds were further analyzed. The IML obtained the recommended tax levy and other pension fund data from the IDFPR for each of the 34 police and 25 fire pension funds included in this study. The overall trend for the individual funds closely followed the trend for the aggregate study in terms of funded ratio and unfunded liability over the 17-year period. The IDFPR recommended tax levy for the police funds in 2000 was nearly the same as it was in 1987 (20.8% of payroll). Between 2001 and 2004 the IDFPR recommendation grew 1:\Pensions\lML Fiscal Analysis Summary.doc Police and Firefighter Pension Fund Analysis March 20, 2007 Page 3 to 28% of payroll. The recommendation for fire pension funds actually decreased from 1987 to 2000 from 28.4% to 24.2%, but by 2004, the recommendation from the IDFPR had increased to 33.7% of payroll. The graphs indicating the trend in the tax levy can be found on page 3 of the Key Findings report. IML Study on Illinois Municipal Retirement Fund (IMRF) The IMRF defined benefit pension fund was established to provide pension, disability and survivor benefits to eligible general municipal employees. All municipalities with a population over 5,000 are required to offer this retirement benefit. Unlike the downstate and suburban police and fire pension funds that are included in this study, the IMRF is a consolidated state-wide fund. There are several key differences in the IMRF benefit levels from those for the downstate and suburban pensions. First, an IMRF employee is required to work 40 years to reach the maximum pension of 75%. Police and fire personnel require only 30 years to reach the same maximum. Second, full retirement benefits are not available to employees covered by IMRF until age 55 with 35 years of service or age 60 with 8 years of service. Police and fire personnel can begin receiving a pension at age 50 with 20 years of service. Finally, an IMRF pension is calculated based on an employee's highest 48 consecutive month average earnings over the last 10 years of service while a police and fire pension is calculated based on his final rate of pay. Like the downstate police and fire pensions, the primary funding source for IMRF pensions is the property tax, although municipalities have the option to use other local revenue sources. The employer contribution is an actuarially determined amount calculated by IMRF according to statutory guidelines. The current funded ratio for the state-wide IMRF pension fund is 95.6%. Its annual required contribution as a percent of payroll is approximately 15.5%. The employee contribution rate is fixed by statute at 4.5% of salary. For the Village of Mount Prospect, the IMRF pension has a funded ratio of 92.9% with an unfunded liability of $2.3 million. The employer contribution as a percent of payroll is 18.5%. Mount Prospect Pension Fund Summary State statutes permit municipalities and other taxing bodies responsible for levying taxes for police or fire pension funds to utilize an independent actuary in determining the levy amount. Since 1985 the Village has hired an independent actuary to prepare a comparative actuarial valuation and determine the recommended levy amount. Although levy information is provided with the annual actuary from the IDFPR, the Village utilizes an independent actuary because the assumptions used more closely reflect the experience of our two pension funds. 1:\Pensions\IML Fiscal Analysis Summary.doc Police and Firefighter Pension Fund Analysis March 20, 2007 Page 4 Included with this memo are results of the independent actuarial valuations for the Village dating back to 1996. The valuations completed for the years 1996 to 1998 were prepared by Goldstein and Associates. The valuations from 1999 to present were prepared by the Village's current independent actuary, Timothy W. Sharpe. Tables 1 and 2 show the ten-year actuary history for the Village's police and fire pension funds. The data listed in the tables are the same measures used in the IML study and include unfunded liability, funded ratio, employer contribution (tax levy) and levy as percent of payroll. Also included in the two Tables are comparative numbers from the IDFPR valuation for years 2003 thru 2005. Bar graphs accompany the tables to provide a visual for the considerable decline in the funding levels of our Village pension funds. The unfunded liability for the police pension fund went from $1.3 million in 1996 to over $13.0 million in 2005. Similarly, the funded ratio dropped from 94.9% to 74.1 % during the same period. As a result ofthe increasing unfunded liability, the employer's recommended contribution (tax levy) increased from $610,470 in 1996 to over $1.3 million in 2005. This is an increase of 118% over the ten-year period. The levy as a percent of payroll increased from 15.58% in 1996 to 22.04% in 2005. Comparative numbers from the IDFPR valuation show an even more concerning position with the unfunded liability reaching to $22.0 million in 2005 and an annual recommended contribution of over $1.8 million. The unfunded liability for the fire pension fund in 1996 was actually a surplus of $1.1 million. Over the ten-year period from 1996 to 2005, the surplus evaporated and by 2005 the unfunded liability grew to $11.7 million. Similarly, the funded ratio dropped from 104.2% to 76.4% during the same period. As a result of the increasing unfunded liability, the employer's recommended contribution (tax levy) increased from $509,805 in 1996 to over $1.3 million in 2005. This is an increase of 155% over the ten-year period. The levy as a percent of payroll increased from 13.52% in 1996 to 25.55% in 2005. Comparative numbers from the IDFPR valuation also show a more concerning position with the unfunded liability reaching to $18.5 million in 2005 and an annual recommended contribution of almost $1.9 million. Sources of Pension Fundina Downstate and suburban pensions receive funding from three sources: employee contributions, employer contributions and interest earnings on the pension fund portfolio of investments. Police employee contributions were set at 9% of salary through 2000 when the amount was increased to 9.91 %. Firefighter contributions were set at 8.25% of salary until 2003 when the amount increased to 9.46%. In the aggregate, employer contributions, consisting primarily of the property tax levy that had been averaging between 19% (police) and 24% (fire) of payroll through 1999 have grown to 28% and 33% respectively by 2004. Tax caps imposed in 1991 strictly limit the amount of funding that can be raised through property taxes. As such, some non-home 1:\Pensions\IML Fiscal Analysis Summary. doc Police and Firefighter Pension Fund Analysis March 20,2007 Page 5 rule communities are limited in their ability to fund these pension increases. As a home rule municipality, Mount Prospect is not limited in its ability to levy property taxes for pension purposes. Interest earnings are the third source of funding for police and fire pension funds. The IDFPR uses an assumed rate of 7% when calculating the accrued liability. Between the years of 1987 and 2004 the average return for this period was 7.91 %. This return assumes pension funds were fully diversified into equities at a level permitted by state statute. The 10-year return (1996-2005) for the Mount Prospect police and fire pension funds were 6.61 % and 5.95% respectively. The returns for the Village's pension funds came in lower than the IML estimate as Mount Prospect was not fully diversified in equities to the level permitted when legally able to do so. The pension Board's took a more conservative approach preferring to gradually increase the investment in equities over a period of time. Benefit Chanaes Since 2000, there have been three significant legislative changes to the downstate and suburban pensions that have increased benefits for police and fire personnel. The first legislation passed in 2000 included increases to minimum pensions for police and fire retirees and modifications for determining benefit amounts (fire). Chief among them was the reduction in the number of years required for a firefighter to obtain a full 75% pension from 35 years to 30 years. This provision was immediately available to firefighters and allowed a number of them to collect full benefits before benefits were fully funded. Similar legislation in 2001 was passed for police personnel that allowed the same early retirement provision. The third piece of legislation passed in 2005 provides for increases to various survivor and dependent pensions retroactively to 2004 and permits transfers of creditable service from IMRF to the pension. This legislation was enacted only for fire personnel. The estimated increase to pension costs as a result of the benefit increases in 2000 and 2001 for police pensions was 2.22%. Of this amount, the employer funded approximately 1.31 %. The estimated increase to pension costs as a result of the benefit increases in 2000 and 2005 for fire pensions was an even greater 7.14%. Of this amount, the employer funded approximately 5.94%. Fundina Reauirement - Villaae of Mount Prospect State statutes require all downstate and suburban pension funds to be 100% funded by 2033. State funded plans (TRS and SERS) have a mandate to improve their funded ratio to 90% by 2045. Currently, the annual employer contribution to the pension funds for the Village of Mount Prospect includes an amount for the normal cost and an amount to amortize the unfunded accrued liability. The normal cost is the annual amount needed to fund a pension plan that has a funded ratio of 100%. The combined tax levy requirement for 2006 for both the police and fire pension is $2,635,294. Of this amount, $1,192,801 or 45.3% is to amortize the unfunded liability. In order to meet the mandate of 100% funding 1:\Pensions\IML Fiscal Analysis Summary.doc Police and Firefighter Pension Fund Analysis March 20, 2007 Page 6 by 2033 without continuing to experience the dramatic increases in the annual tax levy, future benefit increases should cease. One new benefit that is being considered is a Deferred Retirement Option Plan (DROP) that allows police and fire employees that are eligible for retirement to work an additional five years at full pay and benefits while they receive a pension. The pension is deposited into a DROP account which accrues interest and is paid out as a lump sum or annuity at the end of the five years. The estimated cost to the Village of Mount Prospect by adding this benefit is 5.08% as a percent of payroll. The tax levy requirement would increase 21.5% from $2.6 million to $3.2 million. The funded level for the police and fire pension funds would fall from 74.1 % and 76.4% to 69.3% and 71.8% respectively. It is estimated that the impact to other police and fire pension funds by adding this benefit is 2% percent of payroll and would require a 10% increase in the tax levy. It is understandable why municipalities as well as the IML and other COG's oppose this legislation. In closing, I would like to say that the results of the IML study reveal the critical fiscal condition in which many of the downstate and suburban police and fire pensions are in and the incredible burden placed on local taxpayers to fund ongoing benefits. On the other hand, the fiscal condition of the consolidated IMRF pension fund does not warrant the same level of concern. A review of the actuarial results show Mount Prospect's police and fire pension funds to be slightly better than those reported by the IDFPR, however, there is still cause for concern. I will continue to review the actuarial calculations on an annual basis and report back to the Village Board on the results. Please review this information and let me know if you have any questions. I am prepared to present on this subject at the next Committee of the Whole meeting. Thanks. &~~./ &. ec:;,. DAVID O. ERB DIRECTOR OF FINANCE 1:\Pensions\IML Fiscal Analysis Summary.doc KEY FINDINGS from "Fiscal Analysis of the Downstate Police, Fire and IMRF Pension Systems" ILLINOIS MUNICIPAL LEAGUE PO Box 5180 Springfield, IL 62705-5180 Phone: 217-525-1220 .. Fax: 217-525-7438 www.iml.org February, 2007 I~I ~ KEY FINDINGS FROM "FISCAL ANALYSIS OF THE DOWNSTATE POLICE, FIRE AND IMRF PENSION SYSTEMS" AGGREGATE DEBT WORSE THAN MOST STATE-FUNDED SYSTEMS . The non-Chicago municipal police and fire pension funds are carrying more debt (in the form of unfunded liability) per active employee than the widely reported debt within the Teachers Retirement System (TRS) and State Employees Retirement System (SERS). $180.000 $110.000 $160.000 $150.000 $140.000 $130.000 $120.000 $110.000 $100.000 . Police 1$119,9581 . Fire 1$116,8451 DTRS 1$122,9691 o SERS 1$119,6811 . The non-Chicago municipal police pension debt grew six-times between 1987-2004, from $400 million to $2.3 billion. This represents a debt growth of 500%. DOWNSTATE POLICE (ARTICLE 3) UNFUNDED LIABILITY - (1987-2004) 2.50 "e. "e. 0:: .. ,.:: Lj[ r::; "e. ,.:. - - '- - - ~~~8~~~~~~~~~~~~~~ 2.00 1.50 '" 0:: ~ c:i 1.00 0..50 0.00 . The non-Chicago municipal fire pension debt grew four and-a-ha1ftimes between 1987-2004, from $310 million to $1.4 billion. This represents a debt growth of352%. DOWNSTATE FIRE (ARTICLE 4) UNFUNDED LIABILITY - (1987-2004) 1.2 1.6 '" ::: a 0.8 i:O 0.6 0.4 0.2 0 ::0 ::0 ::0 ::0 ::0 ::0 ::0 ::0 ::0 ::0 \0 \0 \0 .., .., .., .., .., 0 0 0 0 0 00 00 00 \0 :::: \0 \0 \0 \0 \0 \0 \0 \0 0 0 0 0 0 '-I 00 \0 0 .., .... .j:o. V> '" '-I 00 \0 0 - .., .... .j:o. 1 AGGREGATE FUNDED LEVELS DROPPING . The non-Chicago municipal police pension funded levels have declined from 72.7% funded in 1987 to 62.4% funded in 2004. DOWNSTATE POLICE (ARTICLE 3) FUNDED RATIO - (1987-2004) 55% ,c. .:: ,c. ,c. re- .... - a D- - .:: D- - D- - D- - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 00 00 00 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 0 0 0 0 ~ 00 ~ 0 ~ ~ ~ ~ ~ ~ 00 ~ 0 N W ~ 80% 75% 70% 65% 60% 50% . The non-Chicago municipal fire pension funded levels have declined from 73.33% in 1987 to 65.90% in 2004. DOWNSTATE FIRE (ARTICLE 4) FUNDED RATIO - (1987-2004) 60% 55% 50% G G G G - G G G - G G G G tv tv tv tv tv \0 \0 0 0 0 0 0 00 00 00 \0 ~ \0 \0 \0 \0 \0 \0 \0 \0 0 8 0 0 0 -.l 00 \0 0 N W ... v. '" -.l 00 \0 0 N W ... 80% 75% 70% 65% 2 EMPLOYER CONTRIBUTIONS FROM TAXES INCREASING . Thirty-Four Non-Chicago Police Pension Funds The suggested employer contribution, or the tax levy for pensions as a percentage of the overall police personnel budget, increased from 19% to 28% over the last 5 years alone. POLICE - TAX LEVY AS A % OF PAYROLL 35.00% 25.00% 2000 PoUee Pension Bill . Est. Cost 2.22% of Payroll 30.00% 20.00% ---, -- --- 15.00% " /" ...........- 10.00% 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1999 2000 2001 2002 2003 2004 . Twenty-Five Non-Chicago Fire Pension Funds The suggested employer contribution, or the tax levy for pensions as a percentage of the overall fire per- sonnel budget, increased from 24.24% to 33.67% over the last 4 years alone. FIRE - TAX LEVY AS A % OF PAYROLL 25.00% 1999 Fire Pension Bill. Est. Cost 1.51% of Payroll I--FI'. 1 - -IMRF&SS 35.00% 30.00% 20.00% ~..... -~---, 15.00% , , .......~ --..- " ",,"' " /" ...........- 10.00% 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1999 2000 2001 2002 2003 2004 3 FISCAL ANALYSIS OF DOWNSTATE AND SUBURBAN POLICE, FIRE AND IMRF PENSION SYSTEMS While much has been studied and written about the fiscal concerns involving pensions provided by Illinois statutes to government employees, little if anything has been reported about the downstate/suburban police and fire funds. The size of each fund and number of employees vary greatly from city to city. Overall there are 343 local police funds with 12,550 employees and 278 local fire funds with 7,903 active employees. By comparison, larger state funds like the State Employees Retirement System and Teachers Retirement System have 70,621 and 157,785 active employees respectively. All of these number are as of the 2004 reporting period and are available from the Illinois Department of Financial and Professional Regulation (IDFPR). A year ago, the Illinois Municipal League's Managers Committee requested that the Municipal League examine those funds and issue a report in an attempt to fill that void. The report also includes a cursory look at the IMRF pension fund. A copy of the report has been mailed to cities over 5,000 in population. The documents can be downloaded in Adobe pdf format by clicking on the following links: Key Findings Fiscal Analysis This new report, Fiscal Analysis of the Downstate Police, Fire and IMRF Pension Systems, is the first-ever analysis of its kind. The 53-page study finds that: . Downstate police and fire pension funds may not have sufficient dollars to cover the promises made to police officers, firefighters and their families. . As of 2004, the unfunded liability of the downstate police retirement system was $2.3 billion, or $179,958 per active employee. . Unfunded liability of the downstate fire pension system was $1.4 billion, or $176,845 per active employee. . The pension debt is very high and continues to grow. . Funding levels for each pension system are being drawn down rapidly. AGGREGATE DEBT WORSE THAN MOST STATE.FUNDED SYSTEMS . The non-Chicago municipal police and fire pension funds are carrying more debt (in the form of unfunded liability) per active employee than the widely reported debt within the Teachers Retirement System (TRS) and State Employees Retirement System (SERS). S180.000 S110.000 Sl60.000 S150.000 S140.000 S130.000 S120.000 Sl10.000 S100.000 Note: IMRF's per active unfunded liability is $6,578 with 168,536 active employees. The Illinois Municipal League believes each municipality's data on police and fire pension funds should be reviewed in light of this study. Please look at the following documents: 1) Illinois Department of Financial & Professional Regulation Annual Statement (filed by pension fund) 2) Annual budget for contribution amounts to the Police and Fire Pension Funds 3) Audit report on Police and Fire Pension Funds 4) Actuarial reports prepared for the Police and Fire Pension Funds If, after reviewing the Key Findings and Fiscal Analysis reports and your municipality's data, these trends cause concern, please share your story with the IML and State Legislators in the General Assembly . Police lSl19.9581 . RrelSl16.845] DTIlSlS122.9691 o SBlS lS119.681] Table 1 Village of Mount Prospect Police Pension Fund Actuarial Results - 1996 to 2005 Actuary Calculation Prepared by TWS Unfunded Liability Funded Employer Levy as % (Surplus) Ratio Contribution of Payroll 1996 1,315,366 94.90% 610,470 15.58% 1997 1,293,207 95.40% 629,536 15.52% 1998 2,440,031 92.10% 583,037 13.96% 1999 4,535,623 86.40% 708,906 16.37% 2000 4,714,577 86.80% 746,579 15.76% 2001 6,817,484 82.20% 876,003 17.96% 2002 10,142,330 75.30% 1,062,739 20.45% 2003 9,758,113 77 .50% 1,077,645 19.84% 2004 12,221,277 74.50% 1,246,954 22.07% 2005 13,049,354 74.10% 1,333,283 22.04% Actuarial Calculation Prepared by IDFPR Unfunded Liability Funded Employer Levy as % (Surplus) Ratio Contribution of Payroll 1996 n/a n/a n/a n/a 1997 n/a n/a n/a n/a 1998 n/a n/a n/a n/a 1999 7,847,632 79.57% 921,733 21.55% 2000 10,722,410 74.34% 1,115,767 23.56% 2001 13,363,374 70.04% 1,254,231 25.71% 2002 n/a n/a n/a n/a 2003 17,710,817 65.18% 1,545,001 28.44% 2004 20,944,116 62.71% 1,738,527 30.78% 2005 22,030,720 62.86% 1,872,224 30.95% -c c ::::J1t') LLO CO ON f/) I ceo (1)0) 0..0) (1)"r"" (,) ~ .- - - .- 0= 0...Q m - .- (,)...J (1)-C Q.(1) f/)-C e c 0.. ::::J .... - C c;:) ::::J o :!: L!') N o N 0:: a.. l.L. o . C/) S f- . L!') .,.... o .,.... L!') su O!l I! 11\I 900Z 1700Z f;OOZ ZOOZ ~OOZ OOOZ 666~ B66~ L66~ 966~ 110.00% 100.00% 90.00% -- 80.00% 70.00% -- 60.00% 50.00% Mount Prospect Police Pension Fund Funded Ratio 1996 - 2005 I_TWS _IDFPR I 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2,000 1,800 1,600 ~ 1,200 l: co Ul ~ o .s:: I- Mount Prospect Police Pension Fund Employer Contribution (Tax Levy) 1996 - 2005 1 ,400 I_TWS .IDFPR I 1,000 800 600 -- 400 -- 200 1996 1997 1998 1999 2000 2003 2004 2005 2001 2002 35.00% 30.00% 25.00% 20.00% 15.00% -- 10.00% -- 5.00% -- Mount Prospect Police Pension Fund Levy as % of Payroll 1996 - 2005 0.00% I_TWS _IDFPR I 1996 1998 1999 2001 2002 2003 2005 2004 2000 1997 Table 2 Village of Mount Prospect Fire Pension Fund Actuarial Results - 1996 to 2005 Actuary Calculation Prepared by TWS Unfunded Liability Funded Employer Levy as % (Surplus) Ratio Contribution of Payroll 1996 (1,096,776) 104.20% 509,805 13.52% 1997 (874,553) 103.10% 525,314 13.89% 1998 1,826,878 94.40% 575,184 14.99% 1999 4,542,207 86.90% 751,108 19.39% 2000 5,126,868 86.40% 826,905 20.00% 2001 6,055,686 84.50% 925,943 20.88% 2002 8,263,300 80.10% 1,059,381 22.98% 2003 9,425,684 78.80% 1,175,135 24.38% 2004 9,884,559 78.80% 1,159,480 23.36% 2005 11,733,852 76.40% 1,302,011 25.55% Actuarial Calculation Prepared by IDFPR Unfunded Liability Funded Employer Levy as % (Surplus) Ratio Contribution of Payroll 1996 n/a n/a n/a n/a 1997 n/a n/a n/a n/a 1998 n/a n/a n/a n/a 1999 8,246,894 79.37% 1 ,117,274 28.84% 2000 9,640,068 77 .01 % 1,207,382 30.22% 2001 12,311,884 72.64% 1,416,948 31.95% 2002 n/a n/a n/a n/a 2003 16,152,468 68.16% 1,690,502 35.07% 2004 16,942,974 68.16% 1,774,570 35.75% 2005 18,545,381 67.26% 1,898,845 37.27% "0 s::::: :J LL. S:::::Lt') .2 0 eno S:::::N (1) I Q..c.o . 0) ~O) (1)or- - :>,. .s:::::_ 0)= ~:c (1) C'lS ~ .- ii:...J -"0 o (1) (1)"O Q.s::::: en :J 0.... ~ s::::: Q..::> - s::::: :J o ::i!: o N L{') a: c.. LL o . (j) ~ l- . 6~ 6~ o L{') SUO! II! 11\I - L{') - 110.00% 100.00% -- 90.00% -- 80.00% -- 70.00% -- 60.00% -- 50.00% Mount Prospect Firefighters' Pension Fund Funded Ratio 1996 - 2005 I_TWS _IDFPR I 1996 1997 1998 1999 2000 2001 2002 2003 2005 2004 2,000 1,800 ~ 1,200 c: CIl III ::l o ~ I- Mount Prospect Firefighters' Pension Fund Employer Contribution (Tax Levy) 1996 - 2005 1,600 I_TWS .IDFPR I 1 ,400 1,000 800 600 400 -- 200 1996 1997 1998 1999 2001 2003 2005 2000 2002 2004 Mount Prospect Firefighters' Pension Fund Levy as % of Payroll 1996 - 2005 15.00% 0.00% 40.00% 35.00% 30.00% 25.00% 20.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Village of Mount Prospect BOARD OF FIRE AND POLICE COMMISSIONERS Phone 847/870-5656 112 E. Northwest Highway Mount Prospect, Illinois 60056 MEETING NOTICE TIME: March 26, 2007, Monday Police & Fire Headquarters 112 E. Northwest Highway Police/Fire Training Room 5:00 p.m. DATE: LOCATION: AGENDA Disciplinary Hearing, MOUNT PROSPECT BOARD OF FIRE & POLICE COMMISSIONERS ~~Krm~ ROBERT McKILLOP, Chairman 3/':< 3/01 Date VILLAGE CLERK. NOTIFIED BY: 0<2 UJ.-t.< ~ ..3/~3) -; . Date: POSTEDBY~doA#c\f( QQ Date ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A DISABILITY NEEDS SOME ACCOMMODATION TO P ARTICIP ATE SHOULD CONTACT THE POLICE DEPARTMENT AT 112 E. NORTHWEST HIGHWAY, MOUNT PROSPECT. 847 870-5656. TOO 847 392-1269