HomeMy WebLinkAboutCOW Agenda Packet 08/14/2007
COMMITTEE OF THE WHOLE
AGENDA
Meeting Location:
Mount Prospect Village Hall
50 South Emerson Street
Meeting Date and Time:
Tuesday,August14,2007
7:00 p.m.
I. CALL TO ORDER - ROLL CALL
Mayor Irvana K. Wilks
Trustee Timothy Corcoran Trustee John Korn
Trustee Paul Hoefert Trustee Richard Lohrstorfer
Trustee Arlene Juracek Trustee Michael Zadel
II. ACCEPTANCE OF MINUTES OF COMMITTEE OF THE WHOLE MEETING OF JULY 24, 2007
III. CITIZENS TO BE HEARD
IV. 2007 MID-YEAR REVIEW AND UPDATE OF THE 2008 BUDGET FORECAST
Each year, the Village Board engages in a mid-year review of the current budget as a means of
monitoring the revenue and expenditure levels contained therein. In addition, the Village Board also
engages in a pre-budget workshop, specifically designed to look forward to the upcoming budget year
with the idea of setting fiscal parameters and giving staff direction for preparation of next year's
budget.
With the close of June financial activity, staff is in position to present mid-year financial data for 2007
as well as review the 2008 forecast budget. Except for the declining housing market, the Village
continues to feel the effect of an improving economy. State shared revenues such as Income, Use,
and Replacement taxes are up from the prior year. Sales taxes are also up from the prior year and
are expected to exceed current year projections. The Real Estate Transfer Tax has been negatively
impacted by the downturn in the housing market. The balance of general revenues are at or above
budget projections. We expect the General Fund to end 2007 with a surplus of $387,442. This is
based on projected revenues of $38,580,426 and projected expenditures of $38,192,984. The
Village's 2008 budget forecast for the General Fund shows a slight deficit of $239,286. It is expected
that this deficit will be reduced during the budget process for 2008. Discussion will also focus on
significant items in other Village Funds.
Staff has prepared a comprehensive memorandum detailing the Village's financial condition for both
the balance of 2007 and forecast of 2008. Staff will also share its current budget preparation strategy
and look to the Village Board for direction regarding the upcoming budget. Appropriate staff will be on
hand to answer questions and facilitate discussion
NOTE: ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A
DISABILITY NEEDS SOME ACCOMMODATION TO PARTICIPATE, SHOULD CONTACT THE
VILLAGE MANAGER'S OFFICE AT 50 SOUTH EMERSON, MOUNT PROSPECT, ILLINOIS 60056,
847/392-600 EXTENSION 5327, TDD #847/392-6064
2
V. FUND BALANCE POLICY
In 1999 the Village Board adopted a resolution establishing a fund balance/reserve policy for the
Village of Mount Prospect. The policy established reserve levels for all general, special revenue, debt
service, enterprise, internal service and trust funds managed by the Village. General guidance on
utilization of reserves was included at that time as well.
Over the past six years fund balances for many operating and capital funds have fluctuated greatly as
a result of the economic downturn and subsequent recovery. While the overall fiscal condition of the
Village remained strong throughout this time, it became clear that additional direction as to the
management of fund balance would be beneficial for the Village Board and staff. Reserve levels for
each major fund and fund type are included in the updated policy. These reserve levels did not
change from what they were originally set at in 1999. Expanded upon in the updated policy are
detailed action steps for when reserves fall below or exceed the recommended level. Of primary
importance are the General and Capital Improvement Funds. The General Fund is the Village's main
operating fund while the Capital Improvement Fund has been dependent upon operating transfers to
support ongoing capital project requests.
Included in this packet is a draft fund balance policy which builds off of the existing policy and an
analysis of fund balances estimated for December 2007. Staff will present recommendations for the
comprehensive fund balance policy and will be available to answer questions and facilitate discussion.
VI. PERMANENT FUNDING SOURCE FOR CAPITAL PROJECTS
Prior to 2002, the Village transferred surplus funds annually from the General Fund to the Capital
Improvement Fund to support mid-range capital projects. Mid-range projects paid for from the Capital
Improvement Fund are those too costly to be paid for out of the operating budget, but not of sufficient
size to warrant or justify the cost of a bond issue. Since it does not appear that annual transfers from
the General Fund will resume and considering existing fund balance in the Capital Improvement Fund
is almost depleted, a permanent funding source is needed. It is estimated that between $750,000 and
$1 million of annual funding is required to support mid-range capital projects of the Village. The need
for a permanent revenue source had first been brought before the Village Board and Finance
Commission during 2006 budget process.
Staff has included in the agenda packet a comprehensive memo providing alternatives for the
permanent funding source for capital projects. Staff has prepared a presentation to discuss these
alternatives and will be available to answer questions and facilitate discussion.
VII. MARKETING PLAN PROPOSAL
As the redevelopment of Downtown Mount Prospect progresses and plans for changes at Randhurst
Shopping Center take shape, the Village is poised to enter a new era of community vitality. The need
is greater than ever for the Village of Mount Prospect to establish itself as an attractive, exciting and
vibrant community for both businesses and consumers.
To maximize Village resources and staff effectiveness, an interdepartmental marketing plan is
proposed. A marketing plan would draw efforts together to create materials with a cohesive message
and image in a professional and attractive package. To take advantage of these exciting changes, the
Village's assets should be identified and capitalized on so that once new developments are in place
new and existing businesses can be promoted to a larger customer base.
It is the recommendation of staff that a Marketing Plan for the Village be developed. The time to take
action is now so that the marketing plan is in place over the next few years as redevelopment projects
come on line. These elements should be included in the budget planning cycle for 2008 and beyond.
Staff will be on hand to answer questions and facilitate discussion.
VIII. ANY OTHER BUSINESS
IX. ADJOURNMENT
MINUTES
COMMITTEE OF THE WHOLE
JULY 24,2007
I. CALL TO ORDER
The meeting was called to order at 7:16 p.m., in the Village Board room of the Mount
Prospect Village Hall, 50 South Emerson Street, by Mayor Irvana Wilks. Present: Trustees
Timothy Corcoran, Arlene Juracek, John Korn, Richard Lohrstorfer and Michael Zadel.
Absent: Trustee Paul Hoefert
Staff members present: Village Manager Michael Janonis, Finance Director Dave Erb,
Deputy Finance Director Carol Widmer, Deputy Community Development Director Ellen
Divita, Deputy Fire Chief John Malcolm, Battalion Chief Chris Truty, Fire Marshal Paul
Valentine, Police Chief John Dahlberg, Police Commander Tim Janowick, Police Technology
Coordinator Steve Burrell, Public Works Director Glen Andler, Public Works Deputy Director
Sean Dorsey, Information Technology Director Joan Middleton and Village Clerk Lisa Angell.
Mayor Wilks stated there would be no Closed Session as listed on the Agenda; Land
Acquisiton.
II. APPROVAL OF MINUTES
· May 8, 2007 Meeting Minutes.
Motion made by Trustee Zadel and seconded by Trustee Korn. Trustees Corcoran and
Juracek abstained. Minutes were approved.
. July 10, 2007 - meeting cancelled due to lack of a quorum
comments from residents under Citizens to be Heard - matter of record
III. CITIZENS TO BE HEARD
Representatives from the Mount Prospect Historical Society, Ms. Marilyn Genther, President
and Mr. Gavin Kleespies, Executive Director asked the Village Board to consider their request
for financial assistance to complete the relocation of Central Schoolhouse.
Village Manager Janonis stated the request would be an item for discussion at the August 14,
2007 Committee of the Whole; Ms. Genther and Mr. Kleespies will attend.
IV. 2008-2012 CAPITAL IMPROVEMENTS PLAN DISCUSSION
Finance Director Dave Erb presented a general overview of the 2008-2012 Capital
Improvements Plan (CIP) stating the CIP provides a comprehensive view of the Village's
capital needs for consecutive five-year windows. The proposed 2008-2012 CIP is generally
comprised of projects that involve the purchase or construction of long-lived, tangible assets at
a cost of $25,000 or more. The total cost of all requests for all years included in the plan is
approximately $58.1 million. Of the $58.1 million of project requests included in the proposed
CIP, $38.8 million, or 66.7%, is for the continuation of established projects including
approximately $14.9 million for street resurfacing.
2008 projects requests included in the CI P amount to $22.6 million; $11.7 million for Fire
Station 14, Public Works expansion and Emergency Operations Center projects. The
remaining $9.1 million is for the continuation of established projects. Mr. Erb also noted that
approximately $3.7 million in capital projects to be paid from the Capital Improvements Fund,
scheduled between 2002 and 2007 have been deferred to out years due to the lack of a
permanent funding sources for such projects.
Page 2/3
COW 7/24/07
Village Manager Michael Janonis stated staff will make presentations on departmental projects
included in the five (5) year plan. He also provided additional information on the following
items:
1. Fire Station 14, Public Works Expansion and Emergency Operations Center
Project on hold until location for Fire Station 14 finalized.
2. Funds that support mid-level capital projects are expected to be depleted by 2008.
Discussion of future funding for Capital Improvements will be part of the mid-year
budget discussion at the August 14, 2007 Committee of the Whole meeting.
Village's surplus fund is above 25%; may be possible to use surplus funds as
seed money for new Fire Station #14 or new phone system.
Deputy Community Development Director Ellen Divita presented the three (3) CIP requests
for the Community Development Department. (1) Downtown Redevelopment - including
Fa<;ade and Buildout programs. (2) Corridor Improvements - new entranceway feature and
(3) Streetscape program - continuation of streetscape improvements including new
developments in the downtown area.
Police Chief John Dahlberg identified four (4) proposed projects: (1) Range Firing Control-
replace antiquated system (2) Patrol Vehicle Citation Interface - increase efficiency and
(3) Furniture Replacement (4) Electronic Access System - integrate building access and
security.
General comments from the Village Board included discussion of the benefits of the Patrol
Vehicle Citation Interface and utilization of Firing Range; enhanced training of police officers.
Deputy Fire Chief John Malcolm presented the Fire Department's proposed Capital
Improvement Plan which included (1) New Fire Station 14/Public Works Expansion
(2) Emergency Operations Center (EOC) - relocation/enhancements (3) Bunker Gear
Lockers (4) Fire Hose replacement (5) Video Conferencing Equipment (6) Training
Facility (7) Breathing Air Compressor - replacement and (8) Village Warning Sirens -
replacement.
Deputy Fire Chief Malcolm responded to comments and questions from the Village Board
regarding EOC and Training Center; locations are not finalized; looking at locations that
provide adequate space and maximize long-term use and effectiveness.
Public Works Director Glen Andler stated the Public Works Department currently has 32 on-
going or repeat CIP projects. Mr. Andler identified six (6) new projects proposed for the
2008-2012 CIP. (1) Flood Control - including storm water improvements in Prospect
Meadows (2) Neighborhood Traffic Program - anticipate completion of all 18 neighborhood
traffic zones by 2010 (3) Civic Events Sign - replacement (4) Streetlight Improvements -
Prospect Avenue between Emerson Street and Pine Street (5) Emerald Ash Borer (EAB)
- 10 year program to mitigate impact of EAB (6) Kensington Improvements - project
contingent upon funding from lOOT in conjunction with jurisdictional transfer and (7) Wolf
Road Improvements - project jointly funded by local, county and federal governments.
General comments from the Village Board included: expansion of the Public Works facility
and other needs associated with emergency preparedness; use of bio-diesel fuel; and street
light improvements. In response to a question regarding the Village's creek cleaning
program, Mr. Andler stated the Village's cleaning cycle has proven beneficial in many ways
including the Village's Flood Insurance rating.
Page 3/3
COW 7/24/07
Village Manager Janonis presented Administration's proposed CIP requests. (1)
Replacement of Village Phone System - Phone system for all public buildings; reliable
system during disasters is critical component of emergency disaster planning. (2) Parking
Deck Surveillance (3) Village Hall (a) front entrance enhancements (b) modest fitness
facility and (4) Video Conferencing System.
Information Technology Director Joan Middleton reviewed CIP requests related to
departmental upgrades and new programs including: Fire Department - software for
emergency vehicles - communicate Hazmat info; Community Development - Black bear
software - laptops for inspectors; Finance - GEMS replacement, intrusion protection software
and other emergency related protections.
In summarizing the proposed CIP Mr. Erb referred to the memo from Finance Commission
Chair, Mr. Chuck Bennett. The Finance Commission identified Fire Station 14 as one of the
most critical Capital Improvement needs and recommended the Village take the necessary
measures to move ahead with this project. The Commission further recommended the
Village Board consider raising the home rule sales tax 0.25% to generate a continuing source
of funding for capital improvements.
The Village Board shared additional comments regarding the Village's need to respond to
emergency situations. Ability to be self-sufficient and operate efficiently to meet community
needs; full range disaster planning and training; reliable back-up power sources and other
resources.
Finance Commission member Ms. Ann Smilanic stated that due to the proposed cost for Fire
Station #14 she can no longer support this project. While she recognizes the need she finds
the cost unacceptable.
Village Manager Janonis stated the proposed cost is inclusive of Fire Station #14, Public
Works expansion, and the Emergency Operations Center as well as a facilities study to
address long-term needs of all municipal buildings. He stated that the cost of the project was
an estimate and could come down as the project proceeds. And, while the estimate may be
on the high side under estimating the potential cost for the comprehensive project at this point
could be detrimental in the long-term. He again noted that the cost of the project was an
estimate and could come down as the project proceeds.
Mayor Wilks thanked Ms. Similanic and the Finance Commission for their valuable input and
service to the community.
V. VILLAGE MANAGER'S REPORT
Village Manager Janonis noted the annual Block Party would be held Saturday, June 28th.
The very popular summer event features free entertainment and a number of food/beverage
vendors.
VI. ANY OTHER BUSINESS
None.
VII. ADJOURN
Trustee Corcoran, seconded by Trustee Juracek, moved to adjourn the meeting. The meeting
was adjourned by a verbal vote at 9:10 p.m.
Respectfully submitted,
M. Lisa Angell
Village Clerk
Mount Prospect
INTEROFFICE MEMORANDUM
Village of Mount Prospect
Mount Prospect, Illinois
TO: VILLAGE PRESIDENT AND BOARD OF TRUSTEES
FINANCE COMMISSION MEMBERS
FROM: DIRECTOR OF FINANCE
DATE: AUGUST 7,2007
SUBJECT: 2007 MID-YEAR REVIEW AND UPDATE OF THE 2008 BUDGET
FORECAST
Each year, the Finance Department prepares for the Village Board and Finance
Commission a mid-year review of the financial status of the current year's budget and a
forecast for the upcoming year. This practice provides a solid foundation for preparation of
the upcoming annual budget. For 2007, the Finance Department also presented before a
workshop that included the Village Board and Finance Commission a 1 st quarter review that
allowed for a wrap-up of the prior year's activity and insight into early trends for the current
fiscal year.
This memorandum is intended to supplement the June 30, 2007 Budget Revenue and
Expenditure Summaries that were submitted to the Board and Commission previously. The
principal focus of this memorandum is on the General Fund, since it is the main operating
fund of the Village. Also discussed to a lesser degree are a few of the more material
operating and capital project funds.
It should be pointed out that the current estimates of revenues and expenditures for 2007
are fluid and may change during the remaining six months of the fiscal year.
2007 MID-YEAR REVIEW
GENERAL FUND
The 2007 Adopted budget reflected a planned surplus of $414,932 on revenues of
$35,785,983 and expenditures of $35,371,051. The surplus was attributed to a steadily
improving economy resulting in stronger growth in existing revenues for most categories
and controlled spending on operations across the departments.
The General Fund budget was amended in April to account for carry-over items from the
prior year's budget. Revenues were adjusted to reflect property taxes allocated for pension
purposes. There was also a corresponding adjustment to the pension fund expense with
Mid-Year Budget Review
August 7, 2007
Page 2
the net effect on the General Fund budget being zero. Additional adjustments to General
Fund expenses were made in other areas totaling $187,693 bringing total General Fund
expenditures to $38,192,984. After these changes, the amended budget now reflects a
surplus of $227,239.
As part of the mid-year review, we looked at all revenue and expenditure accounts to
determine if any material variances were likely. We now expect total General Fund
revenues to come in at $38,580,426. This is an increase of $160,203 over the amended
budget. Total expenditures remain at $38,192,984. After considering the changes to
revenues and expenditures the projected surplus at the end of 2007 will be $387,442.
Exhibit 1 presents a summary of our current projections of revenues and expenditures, with
a comparison to the amended budget.
General Fund Revenues:
General Fund revenues at June 30, 2007 were $16,464,645. This accounts for 42.9% of
the amended budget. Being below 50% at mid-year should not be a concern as receipt of
several significant revenue sources by the Village lag one to three months. These revenue
sources include sales tax, income tax, utility taxes and other intergovernmental revenues.
General Fund Revenue Collections as a
Percent of Annual Budget
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Revenue Type
The preceding chart illustrates the percent of revenues received by the Village in several
categories as of June 30th. The current year-end estimate for revenues is over 0.4% above
the amended budget.
Mid-Year Budget Review
August 7, 2007
Page 3
Property tax revenues (for both the general and pension allocation) of $4,788,782 are
running at 47.7% of budget. This is typical in that the first allotment of property taxes
received is an estimate based on the prior year receipts while the second allotment, which
comes in later in the year, captures the levy increase approved in the current tax year. Our
year-end estimates equal the amended budget amount. The actual year-end surplus could
be negatively impacted by potential appeals and non-payment of taxes. The Village
historically has added 2% for loss and cost to the annual levy to make up for the expected
shortfall. In recent years though, the shortfall has been closer to 3%. The Village may
want to consider increasing the loss and cost amount if the trend continues.
Revenues classified as "Other Taxes" include such sources as the one-quarter cent home-
rule sales tax, food and beverage tax, real estate transfer tax, hotel/motel tax,
telecommunications tax and the electric and gas utility taxes. In total, revenue collections
from "Other Taxes" came to $2,590,633 as of June 30th, which is 30.7% of annual budget.
Again, this is a category where there is a lag in receipt of two of the more significant
revenues (home-rule sales tax and telecommunications tax).
The Village's telecommunications tax is running 11 % below budget and the Real Estate
Transfer Tax is expected to come in $631,000 under original budget projections. The
decline in the telecommunications tax is due to a move by the customer to new digital
equipment not covered by the tax such as cable/DSL service, in addition to internet phone
service. The drop in the transfer tax is due to the declining housing market. By year-end,
we expect to fall short of the budgeted amount by $987,000 for other taxes.
Collections from licenses and permit fees totaled $2,245,401, or 76.5% of the $2.9
million budget. Vehicle license revenue of $1,224,102 is at 88.4% of budget, which is
expected given the timing for selling the 2007/2008 vehicle sticker. Due to some stronger
than expected growth in general for licenses and permits we expect to exceed the
budgeted amount by $189,750 for this revenue category.
Intergovernmental revenues totaled $5,319,468 as of June 30th, which is 37.6% of the
$14.2 million annual budget. Intergovernmental revenues in the General Fund include the
local share of the state sales tax, state income tax, use tax, replacement tax and other
miscellaneous state and federal grants.
Sales tax collections, which make up more than 60% of the "Intergovernmental" category,
are at $1,941,326. This represents 22.8% of budget. The current budget forecast is
$8,850,000. Our year-to-date collections are running slightly above the same period last
year. I had originally anticipated 3% growth in this important revenue source. Since we
only have 3 months of data for the year, it is too early to determine the year-end projections
accurately. Based on where we are at as compared to last year and 2006 sales tax totals I
have increased the budget by $339,000 for 2007.
Mid-Year Budget Review
August7,2007
Page 4
Receipts from the State's distribution of the state income tax totaled $2,862,597 at June
30th. This represents an increase of 10.4% over the prior year. Strong growth in corporate
and personal income accounted for the increase from the prior year. The per capita
amount for 2007 is calculated at $86.91. Future year's increases as estimated by the
Illinois Municipal League are expected to be approximately 4%. Currently we are expecting
$366,000 over what was projected for 2007.
The local share of the state use tax is expected to come at projection for the year.
$294,465 of the $710,000 budget has been received to date. There is a one-month lag in
the receipt of the use tax. The Personal Property Replacement Tax is currently running
16.0% higher than the prior year. Year-end projections for this revenue source are
projected to exceed budget by $37,000.
Revenue from Fines totaled $237,168 for the first six months. This represents 44.7% of
the $531 ,000 budgeted for the year. We expect this revenue to come in at budget for 2007.
Circuit court fines lag the 50% benchmark at June 30th as there is a two-month delay in
receiving this money from Cook County.
Investment income totaled $261,337 for the first six months, representing 65.8% of the
$397,000 projected for the year. Higher rates paid for short-term investments in addition to
a growing fund balance have resulted in the increase in this revenue source. In the past
three years revenue from investment earnings has grown from $177,000 in 2005 to an
estimated $525,000 in 2007 reinforcing the benefits of maintaining strong fund balances.
Other Revenue, consisting of reimbursements and other revenues, totaled $176,403 as of
June 30th. This is 51.2% of the $344,840 budgeted for the year. We expect these
revenues to slightly exceed our projections for 2007 by $11,660 as reimbursements are
coming in higher than expected.
General Fund Expenditures:
The amended 2007 budget totals $38,192,984. As of June 30th the Village had recorded
expenditures of $17,479,797. This represents 45.8% of budget.
As you would expect, at less than 5% off of the benchmark 50%, most of the departments
are at or near the benchmark. Only Public Representation, Village Manager's Office and
Miscellaneous Expenses (which include community & civic services and general pension
expense) deviate significantly from the benchmark.
Mid-Year Budget Review
August 7, 2007
Page 5
The following chart illustrates the General Fund expenditures by department/program as a
percentage of annual budget at June 30.
General Fund Expenditures
as a Percent of Annual Budget
Public Representation
Manager's Office
Television Services
c Clerk's Office
E
8' Finance
..
~ Comm. Dav.
Ql
E
t: ttJman Services
l:l
Ql Police
C
Fire
Public Works
Misc.
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percent
Public Representation expenditures totaled $88,260 through June 30th, representing
68.8% of budget. The reason this program is above the 50% benchmark is that
organizational memberships are typically paid in the beginning of the year. In the first half
of the fiscal year membership dues totaling $38,478 were paid, compared to the annual
budget of $37,250. Auditing Services is another item that is paid almost in its entirety in the
first half of the year. Excluding these two items, spending through June 30th falls to just
below the benchmark to 49.1 %
Expenditures of the Village Manager's Office for the first six months totaled $1,019,555.
This represents 40.9% of their $2.5 million annual budget. In addition to the budgetfor the
Manager's Office, this budget includes Legal Services, Personnel Services, Information
Technology and Public Information. Expenditures for the Legal Division budget is below
the benchmark at 31.9% as general counsel charges are expected to be expended later in
the year.
The Miscellaneous category in the above chart includes the Community and Civic
Services budget program and the miscellaneous retirement pensions of two former
employees. At the mid-year mark, miscellaneous expenditures of $101,459 represent
25.5% of the $397,388 budget. This shortfall from the benchmark is due to the timing of
events such as the July 4th and winter parades.
Mid-Year Budget Review
August 7, 2007
Page 6
For the past several years, total General Fund expenditures have come in anywhere from
one to three percent under budget. Although we see no reason at this point to believe
2007 will be any different, to be conservative we have not reflected this variance in the
budget for General Fund expenditures. The chart below shows budget to actual
expenditures since 2002. A 1 % savings in expenditures for 2007 returns over $380,000 to
fund balance.
Year
2002
2003
2004
2005
2006
Amended Bud et
$28,599,479
$29,894,758
$32,045,716
$34,269,738
$36,908,387
Actual. Ex enditures
$28,092,917
$29,045,233
$31,835,052
$33,625,909
$36,282,681
Additional discussion on several other operating and capital funds worth noting include
the Capital Improvement Fund, Street Improvement Fund, Flood control construction
Fund, Water and Sewer Fund, Risk Management Fund and the Village Parking Funds.
CAPITAL IMPROVEMENT FUND
Revenues were projected at $262,800 for 2007. This revenue comes exclusively from
interest earnings from fund balance, grants and miscellaneous developer donations.
Through June 30th we have received $37,434 or 14.2% of budget. We have not received
word whether grant Monies applied for will be awarded to the Village. If the grants are not
awarded, the corresponding project for which the grant supports will not be undertaken.
The amended budget for this fund is $1 ,026,993. Total expenditures for the first six months
were $204,173, or 19.9% of budget. As in past years, most of the capital projects and
improvements budgeted for the year will be initiated during the summer months with
payment occurring in the later part of the year.
If all projects planned for 2007 are completed, the Capital Improvement Fund is expected to
have just $128,000 in reserves at December 31,2007. There are $1.7 million in projects
proposed for 2008 that are to be paid out of this fund. All of these projects will need to
be deferred if no permanent funding source is identified.
STREET IMPROVEMENT CONSTRUCTION FUND
This fund was created to account for the 1997 revenue enhancements that are earmarked
for the street improvement program. Revenues of $1,711,100 were projected for 2007.
Revenues actually received as of June 30th total $486,398, or 28.4% of budget. The entire
amount of the one-quarter cent home rule sales tax earmarked for street improvement will
be allocated to the street improvement construction fund. Up until 2005, a portion of the tax
had been used to pay of debt service for street construction bonds. We expect revenues to
meet our budgeted projection for 2007.
Mid-Year Budget Review
August 7, 2007
Page 7
A total of $1,867,907 has been budgeted for street resurfacing and reconstruction. As of
June 30th $136,824, or 7.3%, has been expended. The balance of the street resurfacing
program will be competed during the second half of the year.
FLOOD CONTROL CONSTRUCTION FUND
The only revenue expected to be collected in this fund is interest income of $32,000. To-
date, $16,412 has been received. Additional revenue sources to support expenditures in
this fund are not expected until 2010. This is the expected date when a portion of the home
rule sales tax becomes available as a big portion of the debt service requirements related
to flood control projects falls off.
Just $6,025 has been spent thus far out of the $244,000 annual budget. Only projects of
higher priority are being done since we will be drawing down on fund balance to pay for the
projects. Any project not deemed high priority has been deferred until after 2009 when
additional monies become available. Projects included in the 2007 budget include creek
bank tree trimming and stabilization and Levee 37. The Levee 37 project is currently
slotted for 2010, but can be accelerated based on project readiness.
WA TER AND SEWER FUND
Revenues through June 30th total $5,203,702, representing 46.7% of the $11,149,100
budget. This is typical, as water consumption increases during the summer months. In
addition, there is a two-month lag for residential billing and one-month lag for commercial
properties.
Expenditures are budgeted at $11,675,919 for the year. After six months, actual
expenditures have totaled $4,045,431, or 34.6% of budget. Expenditures appear to be low
because of capital improvements planned for later in the year. There are no material
variances expected between now and the end of the year.
RISK MANAGEMENT FUND
Revenues were budgeted at $6,4 73,939 for the year. Through June 30th we have received
$3,290,993 or 50.8% of budget. We expect to meet revenue estimates for year-end.
The approved expenditure budget for this fund is $6,585,214. Total expenditures for the
first six months were $3,353,198, or 51.0% of budget. Expenditures for Liability claims are
at the 50% benchmark. On the other hand, Workers' Compensation claims are nearly at
budget for 2007. Expenditures related to health insurance are under the benchmark at
48.4%. If no other extraordinary events occur through the end of the year, we should end
up at budget for 2007.
Over the past three years fund balance for the Risk Management Fund has grown from
$280,631 at December 31,2003 to $1.7 million at December 31,2006. This is the result of
excellent medical claims experience and foregoing the liability insurance premium by
Mid-Year Budget Review
August 7, 2007
Page 8
electing to self insure for this coverage. Although we no longer pay a premium, we
continue to budget for the expense using the unspent funds to build fund balance.
VILLAGE PARKING FUNDS
The Village maintains two parking funds to track revenues and expenditures for Village
owned lots separate from those lots leased through an agreement with Metra.
The Village Parking System Fund supports the maintenance of the parking decks at
Village Hall and Police and Fire Station #13 as well as the parking lots at public works and
fire stations #12 and #14. Revenue to support these expenses comes from annual leasing
and daily parking fees from the Maple and Wille Streets lots.
The Parking System Revenue Fund supports the maintenance of the various Metra
parking lots. Revenues to support these expenses come from daily parking fees. As part
of the land lease agreement, the Village is required to share 1/3 of the daily parking fee
generated by these lots.
At this time neither parking fund is able to support operations from daily parking fees alone.
A drawing down on existing fund balance has subsidized their operation. An additional
revenue source will be needed to cover ongoing maintenance after 2007 as surplus funds
will be depleted.
2008 FORECAST
The 2007 Annual Budget includes a forecast budget for the year 2008 for each operating
and capital project funds. The purpose of this portion of this memorandum is to bring
forward any material variances in revenues/expenditures now expected for the year 2008.
GENERAL FUND
Exhibit 2 has been prepared to compare the original forecast numbers to our most recent
estimates. The original forecast budget shows an operating deficit of $373,362 on
revenues of $39,475,586 and expenditures totaling $39,848,948. Our more recent
estimates now show that the deficit has decreased to $239,486. Increases to several state
shared revenues and sales tax as well as a reduction in the employer contribution to IMRF
account for the change.
Mid-Year Budget Review
August 7, 2007
Page 9
General Fund Revenues:
At this time we expect General Fund revenues for 2008 to come in $46,000 higher than
what was projected twelve months ago.
Sales tax receipts are expected to come in above the original 2008 forecast. Overall sales
tax growth impacting 2007 estimates was the result of a steadily improving economy. I
have projected an increase of 2% from the 2007 estimate to account for normal growth.
Real Estate Transfer Tax receipts have been strong since 2002 with the Village receiving
over $1 million from this revenue source in each of the last four years. Much of this growth
had to do with the downtown redevelopment and strong housing market. Beginning in
2006, the Village began to see a decline in this revenue due to a cooling of the housing
market. The downward trend is expected to continue into 2008. As a result the forecast for
2008 was reduced $631,000 to $700,000.
Intergovernmental revenues remain strong. Income and Use taxes are expected to come
in $340,000 higher than the original forecast.
General Fund Expenditures:
At this time we are expecting expenditures to remain consistent with the original forecast
with the exception of expenses related to employer IMRF contributions. The employer rate
for 2008 will be 8.81 %. This is approximately 125 basis points lower than the 10.03% that
was estimated. The savings as a result of this lower rate are about $89,000.
Other Impacts to the 2008 Budget
Capital improvement projects expected to have a significant impact on the 2008 budget
include the construction of a new Fire Station #14, expansion of the Public Works Facility
and construction of an Emergency Operations Center. Funding for these companion
projects is expected to come from surplus funds on hand and bond proceeds of
approximately $10 million. It is anticipated that the bonds will be issued as bank qualified,
tax exempt debt which provides tax breaks to the purchaser and lower rates for the Village
reducing the amount of interest to be paid over the life of the bond.
Repayment of the bonds is anticipated to be through the property tax levy. The current 20-
year tax exempt rate is 4.51 %. The range of exempt rates in 2007 for a 20-year issue is
between 4.03% and 4.71 %. Using an interest rate of 4.75% and a repayment schedule of
20 years, the annual debt service requirement is $785,000. If added to the 2007 tax levy,
the levy increases from 4.52% to 10.45%. The impact of the additional debt service on the
property owner can be minimized by utilizing surplus funds on hand to abate a portion of
the levy in the early years or adjusting other areas of the property tax levy. This matter can
be discussed further during the budget process for 2008.
Mid-Year Budget Review
August 7, 2007
Page 10
BUDGET CALENDAR
Attached as Exhibit 3 is the 2008 budget calendar as presented in the current 2007 budget
document. If this schedule now presents any conflicts, we should revise it as soon as
possible.
v~~.~.
DAVID O. ERB
DIRECTOR OF FINANCE
Copy: Village Manager
Assistant Village Manager
Department Directors
Exhibit 1
Village of Mount Prospect, Illinois
General Fund. Revenues and Expenditures
2007 Mid-Year Review
Budget
2007 YTD Actual 2007 Variance-
2006 Amended 01/01/07- Current Favorable
Actual Budget 6/30/2007 Estimate (Unfavorable)
Revenues:
Property Taxes - General 7,206,224 7,416,686 3,567,887 7,416,686 0
Property Taxes - Pensions 2,441,916 2,634,240 1,220,895 2,634,240 0
Sales Taxes - ROT Portion 8,824,103 8,511,000 1,941,326 8,850,000 339,000 A
Sales Taxes - HMR Portion 1,298,837 1,360,000 304,446 1,360,000 0
Food and Beverage Tax 621,240 775,000 304,947 775,000 0
Real Estate Transfer Tax 1,082,498 1,331,000 338,445 700,000 (631,000) B
Telecommunications Tax 2,471,590 2,800,000 649,733 2,500,000 (300,000) C
Other Utility Taxes 1,888,004 2,018,000 921,434 1,945,000 (73,000)
Other Taxes 177,624 163,000 71,628 180,000 17,000
Vehicle Licenses 1,379,430 1,385,000 1,224,102 1,405,000 20,000
Other Licenses, Permits, Fees 1,837,551 1,550,250 1,021,299 1,720,000 169,750 D
State Income Tax 4,606,804 4,524,000 2,862,597 4,890,000 366,000 E
Other Intergovernmental 1,142,361 1,127,700 515,545 1,167,000 39,300
Charges for Services 1,186,990 1,551,507 845,453 1,625,000 73,493
Fines and Forfeits 521,473 531,000 237,168 531,000 0
Investment Income 474,141 397,000 261,337 525,000 128,000 F
Other Revenue 412,584 344,840 176,403 356,500 11,660
Total Revenues 37,573,368 38,420,223 16,464,645 38,580,426 160,203
Expenditures
Public Representation 116,279 128,280 88,260 128,280 0
Village Manager's Office 2,110,666 2,492,310 1,019,555 2,492,310 0
Television Services Division 174,164 178,567 74,594 178,567 0
Village Clerk's Office 195,420 205,188 94,482 205,188 0
Finance Department 1,676,744 1,726,380 845,076 1,726,380 0
Community Development Dept. 1,781,490 2,045,734 915,355 2,045,734 0
Human Services Dept. 728,013 756,007 339,442 756,007 0
Police Department 12,453,237 13,548,976 6,296,653 13,548,976 0
Fire Department 9,919,363 10,398,589 4,891,783 10,398,589 0
Public Works Department 5,506,274 6,315,570 2,813,138 6,315,570 0
Community and Civic Services 333,147 352,850 79,192 352,850 0
Miscellaneous 43,609 44,533 22,267 44,533 0
Total Expenditures 35,038,406 38,192,984 17,479,797 38,192,984 0
Excess of Revenues over Expend. 2,534,963 227,239 (1,015,152) 387,442 160,203
Other Financing Sources/Uses
Transfer to 2003 D/S Fund (315,000) 0 0 0 0
Transfer to VH Const. Fund (892,827) 0 0 0 0
Sale of Land 0 0 0 0 0
Total Other Financing Uses (1,207,827) 0 0 0 0
Excess of Revenues over Expend.
and Other Financing Uses: 1,327,136 227,239 (1,015,152) 387,442 160,203
Exhibit 1
Village of Mount Prospect, Illinois
General Fund - Revenues and Expenditures
2007 Mid-Year Review
Notes
A Based on prior year receipts. Projecting slight growth during 2007.
B Transfer tax in 2006 fell $426,000 from its high in of $1,515,00 in 2005. Trend showing continuing decline
through 2007 due to slowdown in housing market.
C Declining revenues as customers move from traditional service providers to new digital equipment not covered
by the utility tax.
D Receipts from Ambulance Transport fees higher than expected.
E Income taxes are up 10.4% through June. The IML estimates the income tax will increase 4.0% from the
prior year.
F Higher returns in market and larger surplus balances to invest.
Exhibit 2
Village of Mount Prospect, Illinois
General Fund - Revenues and Expenditures
2008 Forecast - Mid-Year Review
2007 2008 Forecast
Current Original Current Increase Percent
Projections Forecast Forecast (Decrease) Change
Revenues:
Property Taxes - General 7,416,686 7,691,999 7,691,999 0 0.00
Property Taxes - Pensions 2,634,240 2,897,663 2,897,663
Sales Taxes - ROT Portion 8,850,000 8,766,000 9,027,000 261,000 2.98 A
Sales Taxes - HMR Portion 1,360,000 1,400,000 1,370,000 (30,000) (2.14 )
Food and Beverage Tax 775,000 798,000 798,000 0 0.00
Real Estate Transfer Tax 700,000 1,331,000 700,000 (631,000) (47.41 ) B
Telecommunications Tax 2,500,000 2,800,000 2,500,000 (300,000) (10.71 ) C
Utility Taxes 1,945,000 2,018,000 2,005,000 (13,000) (0.64)
Other Taxes 180,000 164,500 185,000 20,500 12.46
Vehicle Licenses 1,405,000 1,385,000 1,425,000 40,000 2.89
Other Licenses, Permits, Fees 1,720,000 1,550,250 1,720,000 170,000 10.97 D
State Income Tax 4,890,000 4,660,000 4,970,000 310,000 6.65 E
Other Intergovernmental 1,167,000 1,160,200 1,190,000 30,000 2.59
Charges for Services 1,625,000 1,577,634 1,625,000 47,500 3.01
Fines and Forfeits 531,000 531,000 531,000 0 0.00
Investment Income 525,000 397,000 525,000 128,000 32.24 F
Other Revenue 356,500 347,340 360,000 13,000 3.74
Total Revenues 38,580,426 39,475,586 39,520,662 46,000 0.12
Expenditures
Public Representation 128,280 131,991 131,991 0 0.00
Village Manager's Office 2,492,310 2,479,090 2,479,090 0 0.00
Television Services Division 178,567 189,014 189,014 0 0.00
Village Clerk's Office 205,188 210,680 210,680 0 0.00
Finance Department 1,726,380 1,792,259 1,792,259 0 0.00
Community Development Dept. 2,045,734 2,125,462 2,125,462 0 0.00
Human Services Dept. 756,007 795,734 795,734 0 0.00
Police Department 13,548,976 14,218,179 14,218,179 0 0.00
Fire Department 10,398,589 11,003,307 11,003,307 0 0.00
Public Works Department 6,315,570 6,497,393 6,497,393 0 0.00
Community and Civic Services 352,850 360,379 360,379 0 0.00
Miscellaneous 44,533 45,460 45,460 0 0.00
Total Expenditures 38,192,984 39,848,948 39,848,948 0 0.00
Excess of Revenues over Expend. 387,442 (373,362) (328,286) 46,000
Other Financing Sources/Uses
Adjustment to IMRF Expense 0 0 89,000 0 G
Total Other Financing Uses 0 0 89,000 0
Excess of Revenues over Expend.
and Other Financing Uses: 387,442 (373,362) (239,286) 46,000
Exhibit 2
Village of Mount Prospect, Illinois
General Fund - Revenues and Expenditures
2008 Forecast - Mid-Year Review
Notes
A Projection based on estimates for 2007. 2% growth anticipated.
B Slowdown in housing market. Projection based on 2007 estimates.
C No growth expected from 2007.
o Higher than expected revenues from category as a whole. No single source contributed to increase.
E State shared revenues continue to remain strong. 2% growth anticipated.
F Higher level of surplus funds to invest and higher rates of return in the market from what were projected.
G IMRF notified the Village that the employer rate for 2008 will decrease 125 basis points from 2007.
VILLAGE OF MOUNT PROSPECT Exhibit 3
BUDGET CALENDARS
2007 and 2008
2007 2008
DATE ACTION DATE
Capital Improvement Plan (CIP) Worksheets forwarded to Department
3/8/06 Directors 3/9/07
4/7/06 Completed CIP Worksheets returned to Finance Department 4/6/07
5/15/06 Department CIP reviews with Village Manger and Finance Director 5/14/07
to 5/19/06 to 5/18/07
5/20/06 Long-Range Financial Planning Workshop (Saturday) 5/19/07
5/26/06 Complete Proposed CIP Amounts 5/25/07
6/9/06 Deliver Proposed CIP to Village Board and Finance Commission 6/8/07
6/22/06 Review Proposed CIP with Finance Commission 6/28/07
7/11/06 Committee of the Whole - CIP Review Session 7/10/07
7/18/06 Acceptance of Proposed CIP at Village Board Meeting 7/17/07
7/21/06 Budget Worksheets forwarded to Department Directors 7120/07
Committee of the Whole - Mid-Year Budget Review and Pre-Budget
8/8/06 Workshop 8/14/07
8/11106 CIP available for distribution 8/10/07
8/11/06 Completed Budget Worksheets returned to Finance Department 8/10/07
8/11/06 Revenue Estimates completed by Finance Department 8/10/07
9/11/06 Department Budget reviews with Village Manager and Finance Director 9/4/07
to 9/15/06 to 9/7/07
9/22/06 Complete Proposed Budget Amounts 9/14/07
VILLAGE OF MOUNT PROSPECT
BUDGET CALENDARS
2007 and 2008
Exhibit 3
2007
DATE
ACTION
2008
DATE
10/13/06
Deliver Proposed Budget to Village Board and Finance Commission
10/5/07
10/13/06
Proposed Budget available for public inspection at the Village Clerk's
Office and the Mount Prospect Public Library
10/5/07
10/19/06
10/25/06
11/2/06
Review of Proposed Budget with the Finance Commission
10/11/07
10/18/07
10/25/07
10/24/06 Committee of the Whole - First Budget Hearing (7:00pm - 1O:00pm) 10/23/07
Overview, Departmental Presentations
11/14/06 Committee of the Whole - Second Budget Hearing (7:00pm - 10:00pm) 11/13/07
Departmental Presentations
Committee of the Whole - Third Budget Hearing (7:00pm - 10:00pm)
11/28/06 (If Necessary) 11/27/07
12/5/06 Truth in Taxation Public Hearing 12/4/07
12/5/06 First Reading of Proposed Budget Ordinance at Village Board Meeting 12/4/07
12/19/06 Public Hearing and Second Reading of Proposed Budget Ordinance at 12/18/07
Village Board Meeting
1/19/07 Approved Budget available for distribution 1/18/08
Mount Prospect
INTEROFFICE MEMORANDUM
Village of Mount Prospect
Mount Prospect, Illinois
TO: MICHAEL E. JANONIS, VILLAGE MANAGER
FROM: DIRECTOR OF FINANCE
DATE: AUGUST 8, 2007
SUBJECT: FUND BALANCE POLICY
PURPOSE:
To present for the Board's consideration an updated fund balance policy that provides further
direction for managing surplus funds of the Village.
BACKGROUND:
On September 7, 1999 the Village Board adopted Resolution No. 43-99 establishing a fund
balance/reserve policy for the Village of Mount Prospect. The policy increased the targeted fund
balance level of the General Fund from 16.5% to 25%. The policy also established reserve levels
for all other special revenue, debt service, enterprise, internal service and trust funds managed by
the Village. General guidance on utilization of reserves was included at that time as well.
DISCUSSION:
Over the past six years fund balances for many operating and capital funds have fluctuated greatly
as a result of the economic downturn and subsequent recovery. While the overall fiscal condition of
the Village remained strong throughout this time, it became clear that additional direction as to the
management of fund balance would be beneficial for the Village Board and staff. Attached for your
consideration is a draft of the proposed Fund Balance Reserve Policy (Exhibit 1).
Reserve levels for each major fund and fund type are included in the proposed policy. These
reserve levels did not change from what they were originally set at in 1999. Expanded upon in the
updated policy are detailed action steps for when reserves exceed or fall below the recommended
level. Of primary importance are the action steps for the General and Capital Improvement Funds.
The General Fund is the Village's main operating fund while the Capital Improvement Fund has
been dependent upon operating transfers from the General Fund to support ongoing capital project
requests.
Fund balances projected for December 31, 2007 indicate that many of the funds now meet the
minimum fund balance level set forth in the updated policy. Exhibit 2 shows the actual fund balance
level for each of the Village's operating and capital funds. Also included in the table are the
forecast budget for 2008, recommended fund balance amount and variance. Below is a summary
of the reserve balances.
The General Fund has benefited from steadily growing revenues and prudent spending by the
departments. Currently, there is $2.2 million in surplus reserves above the minimum recommended
Fund Balance Policy
August 8, 2007
Page 2
level. According to the updated policy surplus reserves could be used for a one-time expense,
transferred to another operating or capital fund to cover expenditures or transferred to the Capital
Improvements Fund to support future capital projects. Projects currently being considered include a
new phone system for Village Hall and construction of station #14. The surplus funds in the
General Fund can be used to support all or a portion of the costs related to these projects.
The Refuse Disposal Fund currently has $1.1 million in surplus funds above the minimum
recommended level. Prior to 2004, this fund had been operating at a deficit and drawing down on
fund balance until the implementation of a single family refuse fee. Now that there are sufficient
funds on an annual basis to support operations these surplus funds can be used to support ongoing
operations, reduce the property taxes for that portion of the levy or defer future rate increases.
Expenditures in the Motor Fuel Tax Fund are supported primarily by state shared revenues. Over
the past several years this revenue source has been flat with minimal growth expected over the
next couple years. To support ongoing road work, fund balances have been intentionally drawn
down in this Fund while a larger portion of the cost of the projects has been allocated to the Street
Improvement Construction Fund. Currently, the fund balance for the Motor Fuel Tax Fund is
$108,000 below the recommended minimum level. Future budgets will be prepared to bring this
fund balance up to the appropriate funding level.
Collectively, fund balance for the Debt Service Funds falls below the minimum recommended level
by $1.9 million. Although this appears to be a significant amount there is no cause for alarm. There
are two factors that contribute to the deficiency. First, there is a large final payment due in 2008
that is covered by alternative revenues. By the time the payment is due there will be sufficient
funds on hand to cover the obligation. After this final payment is made, the minimum reserve level
drops to $589,000 for the following year. Second, fund balance for debt service is at its lowest point
at year end as a majority of principal and interest payments are made in December. Reserves will
grow over the five months to follow to sufficiently cover the next payment date set for June.
At year end 2007, there will be an estimated $128,000 in reserves in the Capital Improvement Fund.
Reserves in this Fund are expected to be depleted in early 2008 if no permanent funding source is
found. The annual transfer from the General Fund had been discontinued several years ago when
funds became limited due to the downturn in the economy. Projects supported by this Fund have
been continually deferred, funding only those of highest importance. The minimum balance
required by the policy is $1 million. If a permanent funding source is identified a portion of the
proceeds could be used to return the reserves to the minimum level over a period of several years
while using the balance to fund ongoing capital project needs.
The Water and Sewer Fund currently has $179,000 in surplus fund balance. This fund also had
been drawing down on fund balance until rates were adjusted in 2005. Annual rate increases are
now sufficient to support ongoing operations and meet capital needs into the future. It is
recommended to retain the surplus in the Water and Sewer Fund to support ongoing operations.
Both parking funds show a deficit in their minimum recommended level for fund balance. Although
the deficit appears small, it is actually large in relation to the size of their annual budget. Annual
revenue from parking fees is not sufficient to cover annual operations or fund capital improvements.
Additional funding is needed from either increased fees or other revenue source to maintain the
budgets for these two funds.
Fund Balance Policy
August 8, 2007
Page 3
The fund balance in the Risk Management Fund currently falls slightly below the recommended
minimum level by $35,000. If you recall, the Finance Department conducted an actuarial review in
2004 and again in 2006 to determine an appropriate reserve level for this fund. In 2004, fund
balance in this fund was just over $200,000, low for a budget of almost $6 million. Based on the
results of the review it was determined that the recommended fund balance should be a function of
the unpaid claims liability for auto and general liability claims, self-insured retention level and
workers' compensation budget. To help grow fund balance, the Village continued to budget monies
for general liability insurance premiums although no coverage was required with the decision to
self-insure. The estimated fund balance for risk management at the end of 2007 will be $1.7
million. The Village may be at a point where the budget for the general liability insurance premium
can be eliminated.
It is important to note that although fund balances are designated for specific purposes such as
vehicle replacement or capital projects, all these funds with the exception of special revenue, debt
service and pension funds are available to the Village in the event of a catastrophic emergency.
The total amount of unrestricted funds that are available for Village use is $27,843,931.
Overall, the fiscal condition of the Village is strong. There are sufficient reserves in the Village's
main operating funds to offset significant economic downturns or revenue shortfalls, provide for
unforeseen expenditures related to emergencies, provide for daily cash flow needs and maintain or
improve the Village's bond rating. The updated policy is intended to assist the Village in the
management of its reserves and provide guidelines for accomplishing its financial goals and
objectives. The updated policy will also point out any deficiencies in reserves and provide for a
course of action to improve them within a reasonable amount of time.
RECOMMENDATION:
It is recommended the Village Board approve the attached fund balance policy to help guide
management decisions regarding surplus Village funds.
J~tP. ~
DAVID O. ERB
DIRECTOR OF FINANCE
Exhibit 1
DRAFT
DRAFT
Fund Balance Reserve Policy
Village of Mount Prospect
I. Purpose: The purpose of this policy is to establish guidelines in providing for an unrestricted
reserve balance in the Village's General Fund as well as other operating and capital funds.
II. Policy Considerations: Adequate fund balance is necessary to provide for operational stability
and to provide for needs caused by unforeseen events. Additional benefits of maintaining a
strong fund balance include higher interest earnings to support the annual budget and the
maintenance and potential upgrade to the Village's bond rating. This policy provides for a
minimum amount of unreserved fund balance the General Fund and other funds should maintain.
As with other financial polices established by the Village, the fund balance policy will use
recommended practices from the Government Finance Officers Association as a guide. All fund
balances will be reviewed annually during the budget process.
III. General Policy: Unreserved and reserved fund balances are established for the following funds:
a. General Fund:
i. Fund balance shall be maintained at a level equal to 25% of the subsequent
fiscal year's expenditures.
ii. Should the unreserved fund balance drop below the 25% level, notification will be
given to the Village Board and a plan developed to return the balance to the
minimum level within a reasonable period of time.
iii. Planned drawdown of fund balance below the 25% level will be permitted for
operational purposes to cover extraordinary expenditures or bridge a revenue
shortfall. Reductions in fund balance are meant to be short term only and must
be resolved through the implementation of a new permanent revenue source or
reduction in expenditure levels.
iv. Surplus fund balance above the 25% level may be transferred to another
operating or capital fund to cover expenditures. Any fund balance not transferred
for the purpose of funding an operational shortfall or one-time expense, must be
transferred to the Capital Improvement Fund to support future capital projects.
b. Capital Improvement Fund
i. Fund balance shall be maintained at 50% of the five-year average for capital
expenditures supported by this fund to a maximum of $1 million.
ii. Should the fund balance drop below the minimum level, notification will be given
to the Village Board and a plan developed to return the balance to the minimum
level within a reasonable period of time.
iii. Planned drawdown of fund balance below the minimum level will be permitted to
cover extraordinary expenditures or high cost projects that occur infrequently.
iv. Surplus fund balance above the minimum level can be used to support ongoing
capital projects, transferred to support projects in other capital funds or
transferred to other funds as designated by the Village Board.
v. Fund balance may be permitted to grow beyond the minimum level to cover
anticipated high-cost projects in future years.
DRA~T
Exhibit 1
DRA~T
c. Debt Service Funds
i. Fund balance for debt service funds supported by property taxes shall be
maintained at a level equal to the amount of the next interest payment.
ii. Fund balance for debt service funds supported by alternative revenues shall be
maintained at a level equal to 50% of the next year's principal and interest
payment.
iii. Should fund balance drop below the minimum level, notification will be given to
the Village Board and a plan developed to return the balance to the minimum
level within a reasonable period of time.
iv. Planned draw down of fund balance for debt service funds is permitted only to
account for fluctuations in the bond repayment schedule.
v. Surplus fund balance above the minimum level can be used to reduce the Debt
Service portion of the property tax levy or the amount of alternative revenues
needed to meet the current years budgeted expenditures.
d. Water and Sewer Fund
i. Fund balance for water and sewer purposes shall consist of cash and investment
balances.
ii. The cash and investment balance shall be maintained at a level equal to 33% of
subsequent fiscal year's expenditures.
iii. Should the cash and investment balance drop below the 33% level, notification
will be given to the Village Board and a plan developed to return the balance to
the minimum level within a reasonable period of time.
iv. Planned drawdown of the cash and investment balance below the 33% level will
be permitted for operational purposes to cover extraordinary expenditures or
bridge a revenue shortfall. Reductions in the balance are meant to be short term
only and must be resolved through a fee adjustment dictated by a water and
sewer rate study, implementation of a new permanent revenue source or
reduction in expenditure levels.
v. Surplus cash and investment balances above the 33% level can be used to
support ongoing water and sewer capital projects or to defer or decrease future
rate increases.
e. Risk Management Fund
i. Fund balance shall be maintained at a level equal to unpaid claims liability (as
prepared by enrolled actuary), plus 50% of the self-insured retention level for
auto and general liability claims, plus 50% of the subsequent fiscal year's
expenditures for workers' compensation claims.
ii. Should the unreserved fund balance drop below the minimum level, notification
will be given to the Village Board and a plan developed to return the balance to
the minimum level within a reasonable period of time.
iii. Planned drawdown of fund balance below the minimum level will be permitted for
operational purposes to cover extraordinary expenditures or to reduce the impact
of increasing premiums or claims experience from health, workers' compensation
or liability coverages. Reductions in the fund balance are meant to be short term
only and must be resolved through rate adjustments, implementation of a new
permanent revenue source or reduction in expenditure levels.
iv. Surplus fund balance above the minimum level may be used to defer or reduce
payments needed to support risk management operations.
Exhibit 1
DRAFT DRAFT
f. Internal Service Funds, Excluding Risk Management (Vehicle Maintenance, Vehicle
Replacement, Computer Replacement)
i. Fund balance shall be maintained at a level sufficient for the ongoing
maintenance of computer and motor vehicle machinery and equipment. Fund
balances shall also support the replacement of machinery and equipment
according to its designated replacement schedule.
ii. Should fund balance drop below the minimum level, notification will be given to
the Village Board and lease payments by the departments will be adjusted to
return balances to the minimum level within a reasonable period of time.
iii. Surplus fund balance above the minimum level can be used to reduce future
lease payments.
g. Refuse Disposal Fund
i. Fund balance shall be maintained at a level equal to 25% of subsequent fiscal
year's expenditures.
ii. Should the fund balance drop below the minimum level, notification will be given
to the Village Board and a plan developed to return the balance to the minimum
level within a reasonable period of time.
iii. Planned drawdown of fund balance below the 25% level will be permitted for
operational purposes or to cover extraordinary expenditures. Reductions in the
fund balance are meant to be short term only and must be resolved through rate
adjustments or reduction in expenditure levels.
iv. Surplus fund balance above the 25% level can be used to support ongoing
operations, reduce that portion of the property tax levy or defer future rate
increases.
h. Parking Funds
i. Fund balance shall be maintained at a level equal to 25% of subsequent fiscal
year's operating expenditures plus, adequate funds to complete all projects in the
most recent Capital Improvement Plan for the year they are budgeted.
ii. Should the unreserved fund balance drop below the minimum level, notification
will be given to the Village Board and a plan developed to return the balance to
the minimum level within a reasonable period of time. Capital projects planned
for the year may need to be scaled back or deferred until a funding source is
identified.
iii. Planned drawdown of fund balance below the 25% level will be permitted for
operational purposes to cover extraordinary expenditures or bridge a revenue
shortfall. Reductions in the fund balance are meant to be short term only and
must be resolved through rate adjustments or reduction in expenditure levels.
iv. Surplus fund balance above the 25% level can be used to support ongoing
parking capital projects or to defer future rate increases.
i. Motor Fuel Fund
i. Fund balance shall be maintained at a level equal to 25% of subsequent fiscal
year's expenditures.
ii. Should the fund balance drop below the minimum level, notification will be given
to the Village Board and a plan developed to return the balance to the minimum
level within a reasonable period of time. Some capital projects planned for the
year may need to be scaled back or deferred until additional funding becomes
available.
iii. Planned drawdown of fund balance below the 25% level will be permitted to
cover extraordinary expenditures or bridge a revenue shortfall. Reductions in the
fund balance are meant to be short term only and must be resolved through a
reduction in expenditure levels.
iv. Surplus fund balance above the 25% level can be used to support ongoing
capital projects.
Exhibit 1
DRAFT DRAFT
j. Pension Fund
i. The fund balance shall be adequate to fully fund the Police and Firefighter
Pension Funds by the date required by state statute. An annual actuarial study
will be performed to determine the appropriate level of funding.
k. All Other Funds
i. All other funds are used primarily for capital improvements or special revenue
purposes. These balances will be reviewed annually to determine their
adequacy for the expenditures scheduled.
Exhibit 2
Village of Mount Prospect
Estimated Fund Balances @ 12/31/2007
Estimated Fund Forecast Recommended Recommended
Balance 2008 Budqet Balance % Balance $ Variance
General Fund 12,194,510 39,848,948 25% 9,962,237 2,232,273
Special Revenue Funds
Refuse Disposal Fund 2,115,831 4,195,608 25% 1,048,902 1,066,929
Motor Fuel Tax Fund 436,443 2,179,086 25% 544,772 (108,329)
Local Law Enforcement Block Grant Fund 163 1,000 (A)
Community Development Block Grant Fund 458,546 (A)
Asset Seizure Fund 76,369 1,000 (A)
DEA Shared Funds 50,993 1,000 (A)
DUI Fine Fund 55,124 1,000 (A)
Foreign Fire Tax Board Fund 94,033 10,000 (A)
Debt Service Funds 156,369 4,649,553 (B) 1,978,620 (1,822,251 )
Capital Proiects
Capital Improvement Fund 128,000 2,440,700 (C) 1,000,000 (872,000)
Downtown Redevelopment Const Fund 920,625 1,492,400 (A)
Street Improvement Const Fund 985,601 2,187,560 (A)
Flood Control Construction Fund 564,397 700,000 (A)
Enterprise Funds
Water & Sewer Fund 3,928,658 11,362,492 33% 3,749,622 179,036
Village Parking System Fund 27,012 203,332 (0) 107,083 (80,071 )
Parking System Revenue Fund (169,715) 145,610 (0) 36,403 (206,118)
Internal Services Funds
Vehicle Maintenance Fund 553,246 1,673,551 (E) 553,246
Vehicle Replacement Fund 6,352,890 1,014,200 (E) 6,352,890
Computer Replacement Fund 642,182 141,200 (E) 642,182
Risk Management Fund 1,716,525 6,966,342 (F) 1,751,250 (34,725)
Trust & Aqencv Funds
Police Pension Fund 41,745,014 2,465,133 (G) 41,745,014
Firemen's Pension Fund 41,632,217 2,627,958 (G) 41,632,217
Total Fund Balance 114,206,487 84,766,219 111,104,437 354,745
Total Fund Balance, Unrestricted 27,843,931
(excludes special revenue, debt service and pension funds)
Notes:
(A) No specific fund balance designated. These balances will be reviewed annually to determine their adequacy for the expenditures scheduled.
(B) Fund balance varies based on source of funds used to make debt service payments. Recommended amount falls to $589,501 for 2008 as
some of the debt service supported by alternative revenues is paid off.
(C) Fund balance equal to 50% of the five-year average for capital expenditures supported by this fund, to a maximum of $1 ,000,000. The average
annual expenditures over the five-year period is approximately $1.8 million.
(0) Fund balance shall be equal to 25% of operating expenditures for the subsequent year plus funds to complete scheduled capital projects.
(E) Fund balance should be sufficient to support ongoing maintenance and support replacements according to designated replacement schedule.
(F) Fund balance minimum level based on unpaid claims liability, self-insured retention level and workers' compensation budget.
(G) Fund balance shall be adequate to fully fund police and fire pensions by date required by statute. Both funds currently funded at approximately
75% according to the most recent actuarial study.
Mount Prospect
Village of Mount Prospect
Mount Prospect, Illinois
~
INTEROFFICE MEMORANDUM
TO: MICHAEL E. JANONIS, VILLAGE MANAGER
FROM: DIRECTOR OF FINANCE
DATE: AUGUST 9, 2007
SUBJECT: PERMANENT FUNDING SOURCE FOR CAPITAL PROJECTS
PURPOSE:
To present to the Village Board alternatives for a permanent funding source for capital projects.
BACKGROUND:
Prior to 2002, the Village transferred surplus funds annually from the General Fund to the Capital
Improvement Fund to support mid-range capital projects. Mid-range projects paid for from the Capital
Improvement Fund are those too costly to be paid for out of the operating budget, but not of sufficient size
to warrant or justify the cost of a bond issue. Since it does not appear that annual transfers from the
General Fund will resume and considering existing fund balance in the Capital Improvement Fund is almost
depleted, a permanent funding source is needed. The need for a permanent revenue source had first been
brought before the Village Board and Finance Commission during the 2006 budget process.
DISCUSSION:
It is estimated that between $750,000 and $1 million of annual funding is required to support mid-range
capital projects of the Village. Only through a property tax increase or an addition to the home rule sales
tax can the Village generate sufficient funds to meet this annual funding need. The impact of implementing
either one of these tax increases is provided below.
Property Tax: The Village levy proposed for 2007 is $14.1 million. Based on the 2006 levy extension the
percent increase from the prior year is 4.52%. The 2007 levy assumes a 3.75% increase to the general
levy, 3% increase to the refuse levy and a 10% increase to each of the police and fire pension levies. The
levy for debt service is relatively flat and is based on the repayment schedule of the outstanding bonds.
In order to generate the estimated $750,000 to $1 million via the property tax, the levy would need to
increase from 4.52% to 10.20% and 12.10% respectively. The impact to the typical homeowner with a
home valued at $300,000 and an assessed value of $28,800 is illustrated below. Please note the taxes
shown here only reflect the Village portion of the tax bill.
Estimated Increase from
% Increase Current Tax Bill Tax Bill Current Tax Bill
$613.00
4.52% $641.00 $28.00
10.20% $676.00 $63.00
12.10% $687.00 $74.00
Permanent Funding Source for Capital Projects
August 9, 2007
Page 2
Home Rule Sales Tax: The current home rule sales tax rate assessed by the Village is set at .75%.
Revenue received from this tax is split evenly between the General Fund, Street Improvement Fund and
Flood Control Fund. This rate was last increased in 2004. A quarter percent increase to the home rule
sales tax will generate approximately $1.3 million annually.
The City of Naperville completed a study in September 2006 comparing individual and cumulative tax rates
for 35 communities in the collar counties. Included in the study were the current home rule sales tax rates
assessed by each municipality in the study. All but eight of the municipalities assessed a home rule tax.
17 municipalities are currently charging one percent or higher. Included in those communities are
Schaumburg, Rolling Meadows, Hoffman Estates, Elk Grove Village, Park Ridge and Des Plaines.
Attached please find a report from the State of Illinois listing the home rule tax rates of all home rule units of
local government throughout the state (Exhibit 1).
There are several advantages to going with an additional home rule sales tax over an increased property
tax. First, the burden of the tax is not borne solely on Mount Prospect residents. There are a number of
retail businesses that draw shoppers from outside of the community. Second, increasing the rate to 1
percent keeps our rate in line with those of other communities. We would not expect to see businesses
leaving Mount Prospect for other communities as a result of the rate increase. Finally, increasing property
taxes to the extent required could possibly cause a hardship among property owners, both residential and
commercial. This is especially important in light of the funding needs for constructing fire station
#14 and the other companion projects.
During the budget process for 2007 and again at their mid-year budget review, the Finance Commission put
forth their recommendation for a permanent funding source for capital projects. After looking at a number
of alternatives, the Commission recommended the home rule sales tax rate be increased one-quarter
percent from .75% to 1.0%. Reasoning of the Commission members for the tax increase included:
1) Surrounding communities are considering or are already at one percent.
2) Burden of the tax not solely on residents.
3) Amount of revenue to be realized by the rate increase.
As mentioned earlier, a quarter percent increase in the rate would generate $1.3 million annually. If the
Village Board were to elect to implement the additional quarter percent sales tax, new revenue up to $1
million could be directed towards funding capital projects while the balance could be used to build up fund
balances in the Capital Improvement Fund and other funds with reserve deficiencies. Exhibit 2 illustrates
how revenue from the new tax could be initially allocated. After minimum reserve levels have been
reached, surplus funds above what is needed for capital projects could be used to support other areas of
Village operation.
Permanent Funding Source for Capital Projects
August 9,2007
Page 3
In order to put the new tax rate in effect for January 1, 2008, an ordinance is required to discontinue the old
tax rate and establish the new tax rate. The Village is required to approve both a Home Rule Service
Occupation Tax ordinance and a Home Rule Retailers Occupation Tax ordinance. Both must impose the
same rate of tax. Once the ordinances have been adopted and a certified copy filed with the Illinois
Department of Revenue, they will administer and enforce the rate that is charged. The deadline for filing
the ordinance with the Department of Revenue is on or before October 1,2007.
RECOMMENDATION:
It is recommended the Village Board authorize staff to prepare the appropriate home rule sales tax
ordinance for approval at the August 21st Village Board Meeting.
J~c:P, ~.
DAVID O. ERB
DIRECTOR OF FINANCE
Exhibit 1
Sales Tax Rates in Home Rule Units of Local Government
The following table outlines the sales tax rates for general merchandise current as of July 1,2007, for each of the
home rule units in Illinois that impose home rule sales tax. You will find the combined rate preprinted on your Forms
8T-1 and 8T-2 for each reporting period. These rates are subject to change January 1 and July 1 of each year.
Home Rule
Sales Tax Rate
Current as of 7/1/2007
Ad~QJL .
AI.9onQ.uin.(I~...aJLel
AlgonquJn (McHenry)
.Q].5% .
AIJQIL
ArlingtQnHeight~L..
AULQraLQuJ>ageL. .
A_YLOra lK.aJ1.eL ~n.
AULOra lK.end.aJI)._.
AULOra (WilIL.
.B.edford_earIL
B.elle'liJ1~L
...S.ellwQQJL
.. 0.75_"IQ.
..J.25%
Sarkeley
.6erwyrL...
BLoomingdale.
6IoQJl1ingtoD_
EQl1ngbroQk (Dl.lPa-ge)
SQlLngbrQQkM.1UL... .._
EWdgeYiew ..
6 uffal o_GrO'le (CQo_k)..
6 uffalp_GIQveJl.ake)
aurn.ank...
61.1rnham
Caho1<ja
CalumaLClty
Calumet Park ..
Carbondale
0.50%
1.00%
...CaroJ.S.treaJl1....__..
CaIQentersville
CarteLville _ . _n u_
ChampaJgn__._.._ . ____
.Cha.nnal1JlD_CGruJ1dy) ..
.Cha.onahQn(WilI)
Chanute.fjeld
ChlcagojCpo.kL~._~.
.Chicago.(QuPageL
CblcagQ Heights..
ChicagQBidge..
Christopher.
1.25Q,IQ~___ ..
.1.00%
1.25%.
J.OO%
*
Cook County imposes a 0.75% county home rule sales tax. For unincorporated areas in Cook County, the ST-1/ST-2
combined rate remains at 7.75%. For home rule municipalities within Cook County that impose home rule sales tax, the
ST-1/ST-2 combined rate varies (see the entries for each municipality).
Page 103
Sales Tax Rates in Home Rule Units of Local Government
The following table outlines the sales tax rates for general merchandise current as of July 1,2007, for each of the
home rule units in Illinois that impose home rule sales tax. You will find the combined rate preprinted on your Forms
ST-1 and ST-2 for each reporting period. These rates are subject to change January 1 and July 1 of each year.
Home Rule
Sales Tax Rate
Current as of 711/2007
*O,Th%
1.25%
0,25%
1,00%.
1.25%
0.75%
1 .50.oLQ
0.50%
0.50~%
1.25%
1.00%
0.50%
0.50%
1.50%
_ 1. 50"Lo~~
1.50%~
0,50%
. .1,50%
.. ~Q.750!Q
~0.75%
. ..1.00%
1.00%
0,25%
. ~0,25%~...
1.00%
~_1.00%
1.00%
... _0.75%
0.5Q%
.0.50% .
1.00%
0.50%
. _ _ 1.00%_
0.75%
0,50%
.1.50%~
0.50%
0.50%
. ..~0.5Q%
1.00% .
1.25%
1.00%
1.25."Lo..
CookCouo1y_(Coul1tywide)
Coul11ryClubHills
Coul1tryside~
CIaiD'iiJIe
Danville
Dar.ien~ .
Decatur
Deerfield(Cook)
Deerfield (Lake)
DeKalb
DesPlail1es
Dolton
Downers Grove~
DuQuoin
EasLDUDdee(C~Qo.k)
East .DuDdee.(Kane)
EasLHazel CresL.~
EasLSt Louis
Elgin (Cook)
Elgin (Kane) ._______~
Elk Grov.e VlllagejCook)
Elk G.ro.v.eVillagejDuPageL.
Elmhurst (Cook)
Elmhurst (DuEage)
ElmwoodEark
Elwood ..
Evanston
Evergreen Park
Ealrview Heights
Elora
Forest View
Freeport
Galesburg
Glendale Heights
Glenvlew.(Cook)
Granite City
Gurnee
Hanover Park (Cook)
Hanover Eark(DuEage)
Harvey
Harwood Heights
Hazel Crest
Herrin.
Cook County imposes a 0.75% county home rule sales tax. For unincorporated areas in Cook County, the ST-1/ST-2
combined rate remains at 7.75%. For home rule municipalities within Cook County that impose home rule sales tax, the
ST-1/ST-2 combined rate varies (see the entries for each municipality).
Page 104
Sales Tax Rates in Home Rule Units of Local Government
The following table outlines the sales tax rates for general merchandise current as of July 1,2007, for each of the
home rule units in Illinois that impose home rule sales tax. You will find the combined rate preprinted on your Forms
8T-1 and 8T-2 for each reporting period. These rates are subject to change January 1 and July 1 of each year.
Home Rule
Sales Tax Rate
Current as of 711/2007
1.00%
1.50%
1.00%
1.00%
1.00%
0.75%
1.25%
1.25%
1.00%
0.50%
0.50%
0.50%
1.00%
1.25%
1.00%
0.25%
1.00%
1.00%
1.00%
1.00%
1.00%
0.75%
1.00%
1.00%
1.00%
0.75%
1.00%
1.25%
1.25%
0.75%
1.00%
1.00%
0.50%
1.00%
1.00%
0.75%
0.75%
1.00%
1.00%
1.00%
1.00%
1.25%
1.25%
tl~9_~lar1dflCirk (LakE3)
tli9h",,()()(j
Hillside
Hoffman Estates
HoffrnCin. EstatE3s (I<(ine)
Jacksonville
~~liE3t. (1<E3r1. ~ all).
JoliE3t ~VVill)
Lake Bluff
Lake Forest
Lake in the Hills
~ar1sing
Lincolnwood
Marion
Markham (Cook)
~^' ^ .. ... ~^^~~
Mascoutah
McCook
Moline
Monee
Monmouth
Morton Grove
Mount Prospect
________....____ __....-_.__.._n......._...._._
Mount Vernon
Mundelein
Murphxsboro
Nauvoo
Niles
Normal
Norridge
Northbrook
u____ .............__._.______._._____.._
t-JC)rth)ake (qoC)k)
Northl(ike([).LJ~ag_~L
Oak Lawn
Oak Park
Oakbrook Terrace
Orland Park(c;ool<)_.
Orland Park (VVill)
Palatine
Park
Park i={idge
Park Ridge Man()r
Pekin (Peoria)
Pekin (Tazewell)
Cook County imposes a 0.75% county home rule sales tax. For unincorporated areas in Cook County, the ST-1/ST-2
combined rate remains at 7.75%. For home rule municipalities within Cook County that impose home rule sales tax, the
ST-1/ST-2 combined rate varies (see the entries for each municipality).
*
Page 105
Sales Tax Rates in Home Rule Units of Local Government
The following table outlines the sales tax rates for general merchandise current as of July 1,2007, for each of the
home rule units in Illinois that impose home rule sales tax. You will find the combined rate preprinted on your Forms
ST-1 and ST-2 for each reporting period. These rates are subject to change January 1 and July 1 of each year.
Home Rule
Sales Tax Rate
Current as of 711/2007
1.50%
1.00%
1,00%
1.0~0%
O.~O%
1.~0%
1.QO%
0.7~%
1,QO%
Ee9da
e~Qr@Jielgb1~WElPriaJ ..
P~QriaJ::I~[ght~.(Ia~eWElII)
p~QriatL~t~.(W9~Q.ctlQB:t)
PQ$ElQJC:::Q.QIs)
Ql.Jillc:Y
Rant@1 . ~
RQc:1s L$lamL .~....
RQIliQ9...Meadpy.'~~
RQ/TIeQyiUe _~ .
RQ~emQJlJlkQ9Jst..
RQund L..ake .f3..e.ach.
$c:baJlmb.l.Jrg~(c:::ool<)
$c:.IJ.a.lJmtl.lJrgJOJ.JPagEl)
$c:hill~r Pilii<
$~$~er
$b~rmaQ.
$I<Ql<iEl~__~___~
$Ql.Jthl3.arringtQD.
$QJ.JthJ:iQj@m:l.
$Rdngfi~~___.....~
$t, .c:::harLe~J[)J.J Pa,9E1) .
$t, c:::ba,rlE1~L~anEl)
$tlc:~lmey ~..__~__...
StoDEl_Park
$treamwood
$yca,mQrEl~ . .
IiUQQ_(Y:ermiJiQQL ...
1.00%
1 ,QOo,lo
0.75%
1.00%
Q.50%
1.000;0
1.00%
.0.50%.
1.00%
1.00%
... . LOO%__
1.50%
0.75%
U nil,ler~ity.P.ari<lC:::QQI< L..
U nlY.er~ityJ).arl<{WUQ
UrOi3.na
Warr.eDl,lillsL_
W.aA.IlLngtQQ
Wats~l<a
Wa.uk~gcm .
We~LOl.JQdee
VVEl.~Eran1<101L
Wb~ElatQn~__~_
Wtleelin.9iC:::PQl<l
\^llJe~lil}9.1L..akeL
WiLmette
V'i9QQ.rlc:t9.e.JQoo.l<L
WQQc:till:l.9~l o uE.ag e) ....
WQQQriqge (vvUI)
0.50%
1.00%
.1.00%
1.25%
1.25%
1.25%
1.00%
._. :1.00% ~
Q.~Q%
0.50%
Page 106
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Exhibit 2
Village of Mount Prospect
Allocation of Proposed Home Rule Sales Tax
Year One
Year Two
Year Three
Year Four
. Fund Balance - Parking System I
Revenue Fund
o Fund Balance - Village Parking ,
I
System Fund i
o Fund Balance - Capital
Improvements Fund
o Capital Project Funding
Year One Year Two Year Three Year Four
Capital Project Funding 1,000,000 1,000,000 1,000,000 1,000,000
Fund Balance - Capital Improvements Fund 226,000 253,000 325,000 353,000
Fund Balance - Village Parking System Fund 45,000 45,000
Fund Balance - Parking System Revenue Fund 55,000 55,000 55,000 55,000
1,326,000 1,353,000 1,380,000 1,408,000
INTEROFFICE MEMORANDUM
Mount Prospect
Village of Mount Prospect
Mount Prospect, Illinois
TO:
VILLAGE MANAGER MICHAEL E. JANONIS
FROM:
PUBLIC INFORMATION OFFICER
DATE:
AUGUST 10, 2007
SUBJECT:
MARKETING PLAN PROPOSAL
BackQround
As the redevelopment of Downtown Mount Prospect progresses and plans for changes at
Randhurst Shopping Center take shape, the Village is poised to enter a new era of community
vitality. The need is greater than ever for the Village of Mount Prospect to establish itself as an
attractive, exciting and vibrant community for both businesses and consumers.
Discussion
To maximize Village resources and staff effectiveness, an interdepartmental marketing plan is
proposed. A marketing plan would draw efforts together to create materials with a cohesive
message and image in a professional and attractive package.
To take advantage of these exciting changes, the Village's assets should be identified and
capitalized on so that once new developments are in place, new and existing businesses can be
promoted to a larger customer base.
Recommendation
It is the recommendation of staff that a Marketing Plan for the Village be developed. Attached,
please find an outline and summary proposal for a Marketing Plan. The time to take action is now
so that the marketing plan is in place over the next few years as redevelopment projects come on
line. These elements should be included in the budget planning cycle for 2008 and beyond.
Staff proposes embarking on the initial step, developing a brand identity, in the remainder of 2007
so materials can be developed and momentum gained for the project. Thank you for your
consideration.
./
Maura EI Metennani
Public Information Officer
VILLAGE OF MOUNT PROSPECT
MARKETING PLAN PROPOSAL AND SUMMARY
BACKGROUND
The Village of Mount Prospect has seen considerable growth and redevelopment throughout the Village in
recent years, and anticipates further development to come. With these changes, there is a need to promote
what the Village has to offer during this exciting time. This is the time to be proactive and initiate
marketing efforts, to both businesses and consumers so that once new developments are in place, we can
help to promote new and existing businesses to a larger customer base. We need to identify and capitalize
on the community's assets.
Staff has identified five core locations that would benefit from a coordinated marketing effort:
. Downtown Mount Prospect
. Randhurst Shopping Center
. Kensington Business Center (KBC)
. South Mount Prospect Commercial District
. South Mount Prospect Industrial District
SITUATIONAL ANALYSIS
A situational analysis is necessary in order to evaluate: Where we are? Who do we need to target? What best
practices exist to reach them? Tactics to answer these questions include:
. Conduct a retail market analysis to determine current retail climate in Mount Prospect, identify
trends, and pinpoint the best options for moving forward relative to our potential customer base;
. Village Board participate in Metropolitan Planning Council (MPC) retail planning workshop to
help set realistic expectations for retail development in the Village;
. Conduct informational interviews with Mayor and Village Board, EDC, Chamber, DMA,
residents and other stakeholders.
GUIDING PRINCIPLES
. Maintain a unique identity.
. Identify and enhance Village niches.
. Maintain consistent, cohesive message throughout materials.
Page 1
Village of Mount Prospect Marketing Plan Proposal
August 3, 2007
TARGET AUDIENCES
1. Businesses
. Downtown - focus on small independent owners
. Randhurst - focus on larger national chains
. South Commercial District - focus on ethnic businesses
. Industrial Districts - focus on international potential in KBC and South Mount Prospect
. Commercial Real Estate/Developers
2. Consumers - Internal and External
. Educating them about what is here, and spread enthusiasm about what is coming.
. Keeping Mount Prospect on their mind, reminding them what is here.
3. Media - Local and Regional
. Work with businesses to help promote their stories.
. Look at what is happening in Mount Prospect in the regional context
GOALS
Efforts must be made to:
1) Promote new developments to businesses, encouraging them to locate in Mount Prospect, and
2) Develop a continual marketing program for existing businesses in order to attract customers.
OBJECTIVES
. Create brand/image that can be used in variety of media: print, web, collateral pieces, ete.
. Create economic development marketing materials to reach target audiences.
. Develop uniform guidelines for Village materials to ensure that production is centralized, and
standardized, and translated, when necessary.
Page 2
Village of Mount Prospect Marketing Plan Proposal
August 3, 2007
CURRENT MARKETING/COMMUNICATION EFFORTS
1. For Business Audience
. Retail Consultant
. Chamber of Commerce
- State of the Village report annually
- Attend Chamber meetings/events
- Attend business after hours
. Downtown Merchants' Association
- Staff participation and Support
. Publications
- Business Resource Guide
- Restaurant Start-Up Guide
- Building Division materials/ brochures
. Web Site
- Business Section of Web Site
· Available Properties
· Demographics
· Plans and Maps, ete.
. Assistance
- Fa<;:ade Improvement Program
- Build-Out Program
2. For Resident Audience
. Newsletter
. Web Site
. Press Releases
. MPTV
. New Resident Packets
. Guide to the Village of Mount Prospect
. Department Open Houses - Fire & PW
. Coffee with Council
Page 3
Village of Mount Prospect Marketing Plan Proposal
August 3, 2007
CURRENT MARKETING/COMMUNICATION EFFORTS
3. Special Events
Event
Celestial Celebration
Art & Fitness Walk
Farmers' Market
Memorial Day Parade
Car Show
Fine Arts Festival
Concerts in Lions Park
Movies in the Park
Lions Village Fair
Fireworks
4th of July Parade
Downtown Block Party
Do-lt-Yourself Sousa
National Night Out
Family Bike Ride
Fall Festival
Winter Festival Parade
Christmas Housewalk
Teddy Bear Walk
Friendship Park Open House
Month
February
April
April-October
May
May-September
June
June - July
June-August
July
July
July
July
July
August
September
October
December
December
December
December
Organizer
Special Events Commission
Downtown Merchants
Lions Club
WW/American Legion
Downtown Merchants
Special Events Commission
Park District
Park Districts, Capannari's
Lions Club
Lions Club, Village
Special Events Commission
Village, Chamber
Special Events Commission
Police Department, Park District
Special Events Commission
Downtown Merchants
Village
Historical Society
Library
Park District
Page 4
Village of Mount Prospect Marketing Plan Proposal
August 3, 2007
PROPOSED MARKETING INITIATIVES
2007
. Develop Branding - Phase I (Brand Strategy, Brand Research)
. Economic Development Marketing Folder/Publication
. Explore MPC offer to conduct Retail 1-2-3 for VB (workshop?)
2008
. Develop Branding - Phase II (Logo Development)
. Conduct Market Analysis
. Update CD Display Booth - Display at ICSC
. Institute Quarterly Business E-Newsletter
. Event Calendar (Summer and Winter)
. Develop Industrial Marketing Materials
. Re-initiate streetscape in downtown
Planters
Banners
Wayfinding signs
Kiosks (boards)
Bus shelters
. Blues Festival Event in September
. French Market (with Lions Club)
. DMA Sidewalk Sale in conjunction with Block Party
. Initiate Mount Prospect Pride Program (new location each month)
. Develop Self-Guided audio walking tour (MPHS)
2009
. Retail Directory
. Continue 2008 efforts:
Event Calendars
E-Newsletter
Streetscape
. Look into evaluation of efforts to date
Page 5
Village of Mount Prospect Marketing Plan Proposal
August 3, 2007
BUDGET ESTIMATES
FISCAL YEAR 2007
Develop Branding - Phase I $5,000
ED Marketing Folder/Publication (Qty: 1,000) $5,000
MPC Retail 1-2-3 for Village Board No cost
TOTAL 2007: $10,000
FISCAL YEAR 2008
Conduct Market Analysis* $20,000
Develop Branding - Phase II $5,000
Update CD Display Booth - Display at ICSC** $4,000
Industrial Marketing materials $3,000
Quarterly Business E-Newsletter No cost
Summer and Holiday Event Calendars $4,000
Streetscape** TBD
Blues Event TBD
Mount Prospect Pride Program No cost
Audio Walking Tour TBD
PRELIMINARY TOTAL 2008: $36,000
FISCAL YEAR 2009
Retail Directory $25,000
Quarterly Business E-Newsletter No cost
Event Calendar & Holiday Mailer $4,000
S treetsca pe * * TBD
PRELIMINARY TOTAL 2009: $29,000
* Staff is exploring possible grant funding options.
** Funds currently budgeted for these items.
Page 6
MAYOR
Irvana K. Wilks VILLAGE MANAGER
Michael E. Janonis
TRUSTEES
Village of Mount Prospect
Timothy J. Corcoran VILLAGE CLERK
A. Lisa Angell
Paul Wm. Hoefert
A. John Korn
Community Development Department
Richard M. Lohrstorfer Phone: 847/818-5328
Fax: 847/818-5329
Michaele W. Skowron
50 South Emerson Street Mount Prospect, Illinois 60056
Michael A. ZadelTDD: 847/392-6064
AGENDA
ECONOMIC DEVELOPMENT COMMISSION
MEETING LOCATION: MEETING DATE & TIME:
rd
3 Floor Executive Conference RoomThursday
Village Hall August 16, 2007
50 South Emerson Street 8:00 a.m.
Mount Prospect, IL 60056
I.
CALL TO ORDER
II.
ROLL CALL
III. APPROVAL OF MINUTES – June 21, 2007 meeting
IV. OLD BUSINESS
A. Development Update
B. Promotional Videos
C. Commercial Garbage Contract
V. NEW BUSINESS
A. Annual Business Breakfast – October 18th
VI. CHAIRMAN’S REPORT
VII. ADJOURNMENT
Any individual who would like to attend this meeting, but because of a disability needs some
accommodation to participate, should contact the Community Development Department at 50 S.
Emerson, Mount Prospect, IL 60056, 847-392-6000, Ext. 5328, TDD #847-392-6014
C:\Documents and Settings\kdewis\Local Settings\Temporary Internet Files\OLK6B\8-16-07 EDC agenda (2).doc
MAYOR VILLAGE MANAGER
Irvana K. Wilks Michael E. Janonis
TRUSTEES VILLAGE CLERK
Village of Mount Prospect
Timothy J. Corcoran M. Lisa Angell
Paul Wm. Hoefert
A. John Korn
Community Development Department
Richard M. Lohrstorfer Phone: 847/818-5328
Michaele Skowron Fax: 847/818-5329
50 South Emerson Street Mount Prospect, Illinois 60056
Michael A. ZadelTDD: 847/392-6064
MINUTES
ECONOMIC DEVELOPMENT COMMISSION
Executive Conference Room, Village Hall
Thursday, June 21, 2007
8:00 a.m.
The meeting of the Economic Development Commission (EDC) of the Village of Mount
Prospect was held on Thursday April 19, 2007 in the third floor Executive Conference
Room in the Village Hall, 50 South Emerson Street, Mount Prospect, Illinois.
CALL TO ORDER
Chairman David Lindgren called the meeting to order at 8:00 a.m. Commissioners Tom
Castagnoli, Bruce Gillilan Skip Robertson, and Ben Trapani, were present. Commissioner
Ken Fritz was absent. Also present were Bill Cooney, Director of Community
Development, Jim Uszler, Executive Director of the Chamber of Commerce and
prospective members Tom Lowe and Cindy Higden.
APPROVAL OF MINUTES
The minutes of the April 19, 2007 meeting were reviewed and approved unanimously.
OLD BUSINESS
Development Update
Mr. Cooney provided an update of economic development projects throughout the Village.
He provided details on the status of the Opus and Alter industrial developments on the
south side of the Village. In addition he updated the Commission on various downtown
projects.
Commissioner Castagnoli provided a brief update on activity on Randhurst. He stated that
progress continues on plans for the redevelopment of the Mall portion of the property. A
lifestyle concept was most likely.
Commissioner Gillilan inquired about the status of a commercial garbage program. Mr.
Cooney stated that the Public Works staff was currently negotiating with the current waste
provider and that they hoped to complete these negotiations by the end of August. The
Commission asked for an update on this matter at the next meeting.
Promotional Videos
Mr. Cooney stated that he was working on scripts for several short promotional videos that
would be available on the Village website. He planned on providing the Commission with
drafts at the next meeting.
conomic Development Commission
June 21, 2007 Minutes
Page 2
NEW BUSINESS
2007 Budget
Mr. Cooney distributed a budget spreadsheet detailing year to date expenditures. The
Commission discussed how they would like to spend the remaining economic development
funds for 2007. Budget items included the upcoming business breakfast, the promotional
video and marketing the Kensington Business Center.
CHAIRMAN’S REPORT
Chairman Lindgren stated that the Commission is committed to the July 14, 2007
Downtown Merchants Cruise Night. Commissioners Castagnoli and Gillilan indicated that
they would represent the Commission that evening.
Chairman Lindgren reminded the Commission that they would be conducting Business
Retention Visits on July 19, 2007. All members present indicated that they planned on
participating.
ADJOURNMENT
The meeting was adjourned at 9:00 a.m.
Respectfully submitted,
William J. Cooney, Jr., AICP
Director of Community Development
C:\Documents and Settings\kdewis\Local Settings\Temporary Internet Files\OLK6B\June 21.doc
Village of Mount Prospect
BOARD OF FIRE AND POLICE COMMISSIONERS
Phone
847/870-5656
11 2 E. Northwest Highway Mount Prospect. Illinois 60056
MEETING NOTICE
TIME:
August 15,2007, Wednesday
Police & Fire Headquarters
112 E. Northwest Highway
Fire Department Conference Room, 2nd Floor
5:30 p.m.
DATE:
LOCATION:
AGENDA
I. Approval of Minutes
· July 16,2007, Open Meeting
II. Closed Session
· Minutes, July 16, 17, & 18,2007
. 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.
III. Approve Police Officer Eligibility Register II
IV. Fire Department Update
V. Police Department Update
· Sergeants Test
VI. Review the Proposed BOFPC Rules & Regulations Revisions
VII. Other Business
MOUNT PROSPECT BOARD OF
FIRE & POLICE COMMISSIONERS
rR~~/m~
Robert McKillop, Chairman
r/9.!a1
Date
VILLAGE CLERK NOTIFIED BY: AtY-9J ~
Date:
/l / /7
POSTED BY: -'l~1/-4,..., Q CC {
Date
ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A
DISABILITY NEEDS SOME ACCOMMODATION TO PARTICIPATE SHOULD CONTACT THE
POLICE DEPARTMENT AT 112 E. NORTHWEST HIGHWAY, MOUNT PROSPECT.
847870-5656. TDD 847 392-1269