HomeMy WebLinkAbout4.1 2023 BUDGET AND COMMUNITY INVESTMENT PLAN - JOINT VILLAGE BOARD AND FINANCE COMMISSION WORKSHOPMr�GauC �'d'+rt;�iect
Item Cover Page
Subject 2023 BUDGET AND COMMUNITYINVESTMENT
L - JOINT VILLAGEFINANCE
COMMISSION
Meeting October 11, 2022 - COMMITTEE OF THE WHOLE -
Fiscal Impact
Dollar Amount
Budget Source
Category DISCUSSION ITEMS
Type Discussion Item
Information
This Joint Workshop with the Village Board and the Finance Commission will be
held for a review of the overall proposed 2023 Budget and Five -Year Community
Investment Plan (CIP). The spending plan being presented is a responsible and
transparent financial plan that incorporates key policies and priorities established
by the Mayor, Board of Trustees and Finance Commission.
The budget for 2023 expenditures totals $148,201,054, a decrease of $13.2
million, or 8.2% from the amended 2022 budget. Decrease in spending is mainly
attributable to the return to a more normal capital improvement plan totaling
$28.4 million. FY 2022 included many one-time grant funded capital projects,
which are not expected to reoccur in the FY 2023. Along with that, the total debt
service payments for FY 2023 will be $7.6 million, a decrease of $1.1 million
compared to 2022 debt service schedule. The below table summarizes FY 2023
budget in comparison with FY 2022 budget and reflects associated variances.
Expenditure Category
2023 Budget', 2022
Increase /
Percent
Budget
(Decrease)
Change
Village Operating Budget
85,748,486 79,395,151
6,353,335
8.0%
Community Investment Plan
28,444,521 50,762,784
(22,318,263)
-44.0%
1
Debt Service
7,620,325 8,707,111
(1,086,786)
-12.5%
Internal Service Fund
12,552,222 11,979,095
573,127
4.8%
Special Revenue Business
10.6%
Dist.
1,421,500 1,285,500
136,000
Special Revenue TIF
1,064,000 737,000
327,000
44.4%
Inter -fund Transfers
11,350,000 8,525,000
2,825,000
33.1%
Total Expenditures
148,201,054161,391,641
(13,190,587)
-8.2%
The Village has carefully evaluated its personnel levels and will be adding a few
key positions starting in FY 2023. The Village will be increasing its total full-time
equivalent positions from 324.8 to 328.9. Staff is proposing the hiring of two new
building maintenance personnel for Public Works which will allow the department
to serve the needs of newly added public facilities, including two new public safety
buildings. The Village will also be adding a full time Director of Marketing and
Public Relations in the Village Manager's Office to support communications efforts;
the part-time branding coordinator position will be eliminated. The Human
Services department also is requesting a part-time Senior Activities Coordinator
position, which is proposed in the 2023 budget herewith. This position will allow
for continued and expanded programming for area seniors, addressing a common
request of the community. All of the newly added positions will allow the Village to
improve its customer service levels and the Administration believes the step will
allow the Village to regain some of its lost capacity from 2008-2010.
The Village has seen a significant growth in its intergovernmental revenues
including Sales Tax, Income Tax, Personal Property Replacement Tax and Home -
Rule Sales Tax. Recently captured growth in the Village population as well as
robust and thriving local economy has allowed the Village to lift its revenue base.
After gaining needed confidence, it is concluded that the recently captured growth
in the Village's revenue base is sustainable into the future. The added revenue
base will allow the Village to achieve a zero percent property tax levy increase for
third year in a row (combined with the Mount Prospect Library). In order to
achieve a zero percent tax levy increase (Village and Library combined), the
Village will be abating $750,000 from the Police and Fire Pension levies and
additionally $1,444,250 will be abated in the debt service levy for the Series
2018B Bonds (issued for Police and Fire Headquarters projects).
Additionally, with the proposed budget herewith, Village Administration is
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proposing a one-year suspension of the Village Vehicle Sticker Program. Currently,
a passenger vehicle sticker costs $45 per sticker. The Village collects around $1.3
million in net revenue by running the vehicle sticker program. The collected
amounts are earmarked for the Street Construction related activities. At this time,
the Village staff believes that there is enough intergovernmental revenues
collected through income tax, sales tax, and personal property replacement tax,
which allows the Village to replace the revenues from the vehicle sticker program.
Though, the Village has seen a great growth in the intergovernmental revenues,
the current market condition is uncertain. The current national inflation rate
(8.3%) is very high and worrisome, hence the proposed suspension and not
elimination of the vehicle sticker program. After a careful evaluation, the Village
may reinitiate the Vehicle Sticker or similar program in 2024 or eliminate the
vehicle sticker requirement for all future years in late 2023 (for FY 2024 budget).
The operating budget will see an increase of $6.4 million or 8.0% from the 2022
Budget. Increased pension contribution, cost of living adjustments for personnel
as well as inflationary adjustment to the contracted services are the main reason
for an increase in the operating budget. The 5 -year Community Investment Plan
(CIP) includes spending for the year 2023 totaling $28.4 million. The total CIP
spending will be $22.3 million less compared to 2022 amended budget. The total
debt service payments for FY 2023 will be $7.6 million. The Internal Service Fund
expenditures total at $12.5 million, an increase of $573,127 compared to FY 2022
amended budget. The plan also includes inter -fund transfer outs totaling
$11,350,000 for FY 2023 of which,
• $5.3 million will be transferred from the General Fund to Water/Sewer Fund
for an emergency interconnect project with Northwest Water Commission,
• $1.9 million will be transferred from the General Fund to the Street
Construction Fund,
• $750,000 will be transferred to the Pension Stabilization Fund,
. $1,400,000 will be transferred to the Debt Service Fund to abate the bond
series 2018B debt service levy, and
• $1,000,000 will be transferred to the Capital Improvement Fund and the
Flood Control Construction Fund (each).
Most of these transfers will allow the Village to carry out many crucial capital
projects identified in the Community Investment Plan.
The 2023 revenue budget totals $143,151,313, a decrease of $11,728,779 or
7.6%. FY 2022 includes various one-time grant revenues including the American
Rescue Plan, Surface Transportation Program Grant (STP), Congestion Mitigation
and Air Quality Grant (CMAQ), and a few other one-time grants, which are not
expected to reoccur in FY 2023.
KI
Revenue Category
2023
2022
Increase / Percentage
Budget
Budget
(Decrease)
Change
Property Taxes
22,393,921
20,873,259
1,520,662
7.3%
Other Taxes
13,743,156
13,304,500
438,656
3.3%
Intergovernmental Revenue
49,689,008
54,713,145
(5,024,137)
-9.2%
Licenses, Permits & Fees
1,959,500
3,008,000
(1,048,500)
-34.90/0
Charges For Services
40,837,772
38,333,258
2,504,514
6.5%
Fines & Forfeits
530,140
541,000
(10,860)
-2.0%
Investment Income
278,266
118,070
160,196'
135.7%
Other Revenue
2,166,550
2,261,860
(95,310)
-4.2%
Reimbursements
203,000
397,000
(194,000)',
-48.9%
Total Reoccurring Revenues
131,801,313
133,550,092
(1,748,779)
-1.3%
Other Financing Sources
11,350,000
21,330,000
(9,980,000)',
-46.8%
Total Revenues
143,151,313
154,880,092 (11,728,779)
-7.60/o
The preceding table summarizes the totals for each type of revenue and other
financing categories and indicates the increase or decrease for 2023 relative to
the 2022 Budget. Total revenues and other financing sources in 2022 for all
Village funds are expected to be $143,151,313 compared to the amended 2022
budget of $154,880,092.
Total reccurring revenues for 2023 are estimated at $131,801,313, a decrease
of 1.3% from 2022. FY 2022 included several one-time grant revenues including
the American Rescue Plan. Such grant revenues are not expected in FY 2023,
resulting in an overall decrease in the intergovernmental revenues. The
intergovernmental revenues are showing largest amount of growth, especially in
the state sales tax, income tax and home -rule sales tax.
Total transfers and other financing sources for 2023 are expected to be
$11,350,000, which is a decrease of $9,980,000, or 46.8% from 2022. Decrease
in the Other Financing Sources are attributable to a planned bond issuance in FY
2022, while there is no bond issuance expected in FY 2023.
4
The General Fund operating expenses are budgeted at $63.5 million, an increase
of $4.2 million from the amended 2022 budget of $59.3 million. Of the $4.2
million, $1.5 million is added to the contractual services for inflationary
adjustments. Police and Fire Pension costs are increasing by $2.1 million. Of this
amount, the General Fund will bear the burden totaling $1.4 million and the
remaining $750,000 will be funded from the Pension Stabilization Fund. The
increased personnel headcounts, as well as cost of living adjustments, are
increasing Personnel Service costs from $31.3 million to $32.8 million, an increase
of $1.6 million or 5.0% compared to the amended 2022 budget.
The financial position of the Village remains very strong. Reserve levels in recent
times have continued to exceed expectations as a result of revenue growth and
responsible spending plans. The Village's General Fund is estimated to have a fund
balance of $35.3 million, which equates to 46% of the 2023 annual budget. It is
important to note that not all the fund balance is in liquid form. Some portion of
the fund balance is occupied by accounts receivables and it is not available
immediately. The accounting fund balance at 46% may equate to a 30% to 33%
in liquid cash balance. The Village's fund balance policy calls for the General Fund
to maintain a reserve level of between 20.0% and 30.0%. Strong reserves and
annual budgets that are balanced are two factors contributing to the strong bond
rating assigned to Village debt.
The CIP for 2023-2027 totals at $150,849,542. Of this amount, $28,444,521 will
be invested in 2023. CIP plan is posted on the Village Website.
Program
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
Total
Water System
10,600,000
6,350,000
7,970,000
7,385,000
8,010,000
40,315,OOC
Sanitary System
1,680,000
1,875,000
1,000,000
1,000,000
1,000,000
6,555,000
Flood Control and
Related Projects
760,000
825,000
575,000
475,000
475,000
3,110,000
Storm Sewer
3,153,000
2,503,000
1,105,000
800,000
800,000
8,361,000
Street Construction
1,796,000
13,480,000
910,000
466,000
400,000
17,052,OOC
Resurfacing/Curbs &6,943,631
8,522,507
16,071,812
10,192,513
11,383,075
53,113,53E
Gutters
Improvement to
Public Buildings
6881500
1,710,000
431,000
3,891,500
375,000
7,096,000
Computer
Hardware/Software
511,000
223,000
500,500
218,000
204,000
1,656,500
Vehicles/Automotive
1,295,000
3 784 000
1,079,000
1 336 000
1,282,000
8 776 000
Equipment'
Non -Automotive
274,000
1,475,000
-
-
115,000
1,864,000
Equipment
Miscellaneous
743,390
544,350
549,237
554,221
559,306
12,950,504
Grand Total
28,444,52141,291,857
30,191,549
26,318,234
24,603,381
150,849,5
5
The budget presentation for 2023 Operating Budget and CIP will be held on
October 11, 2022. The first reading of the property tax levy and budget will be
held on October 18, 2022. The second reading and final approval will held on
November 1, 2022. Public hearings will be held on these dates to provide
additional opportunities for discussion and public input.
The 2023 preliminary budget and CIP can be accessed by clicking below link.
Copies are also available at the Mount Prospect Library, 10 S. Emerson Street and
Village Clerk's Office, 50 S. Emerson Street. The Proposed 2023 Budget as well as
previous years' adopted budgets are also available online at
mountprospect.org/budget.
Alternatives
1. Village Board and Finance Commission Discussion on the 2023 Budget and
Community Investment Plan.
2. Action at the discretion of the Village Board.
Staff Recommendation
Village Board and Finance Commission Discussion on the 2023 Budget and
Community Investment Plan
ATTACHMENTS:
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