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HomeMy WebLinkAbout07/28/2022 FC MinutesFINANCE COMMISSION — REGULAR MEETINGrrar+n,xcr MINUTES Thursday, July 28, 2022 Executive Conference Room — V Floor, Village Hall Mount Prospect, IL 60056 Call to Order Meeting called to order at 7:00 p.m. Commission members present: Kenneth Arndt, Pam Bazan, Yulia Bjekic, Trisha Chokshi, Vince Grochocinski and William Grossi. Commission members absent: Don Ocwieja Staff present: Director of Finance Amit Thakkar, Deputy Director of Finance Jennifer Fitzgerald and Assistant to the Village Manager Alexander Bertolucci. II. Approval of Minutes a. Motion by William Grossi seconded by Yulia Bjekic to approve the minutes of the Finance Commission regular meeting of June 23, 2022. Chair Chokshi called a voice vote. Motion Passed unanimously. III. Citizens to be Heard None IV. Old Business a) Vehicle Sticker Review Director of Finance Amit Thakkar reviewed the costs and revenues of the Vehicle Sticker Program - net result is $1.170 million dollars for 2022. The Vehicle Sticker Program provides a reliable revenue source that supports the street resurfacing projects. He stated the senior discount changed this year from allowing one discount per household to one discount per senior. Staff completed a survey of 74 towns. 43 Cook County towns responded and only nine did not have vehicle stickers. The average price is $45.35 including Chicago and $40.47 excluding Chicago. He provided an overview of Evanston's wheel tax and how it's enforced through license plate readers. Mr. Thakkar reviewed revenues outperformances for fiscal year 2022, which include sales tax, home rule sales tax, income tax, use tax and personal property replacement tax. Staff is projecting a $7.8 million revenue surplus for 2022 and we had an $8.5 million surplus in 2021. He shared a 2022 Surplus Use Proposal that applies $5.550 million towards Pension Levy Abatement (Approved) - $750,000, Flood Control Transfer - $500,000, Police and Fire HQ Debt Service Levy Abatement - $1.4 million, 2023 — Vehicle Sticker Suspension - $1.4 million, and Replacing Home Rule Sales Tax in General Fund - $1.5 million. Mr. Thakkar explained there is some level of confidence the revenue outperformances are stable and will continue. Staff is proposing to suspend the Vehicle Sticker Program in 2023 and then reevaluate in 2024. Finance Commission Page 1 of 4 7/28/2022 Mr. Thakkar provided additional information in response to questions and comments from the Finance Commission: • The revenue surplus is $7.8 million, the Surplus Use Proposal totals $5.5 million, and some funds are saved for inflationary adjustments • Village added some of the 2021 surplus to reserves • Village streets are on a 20 -year street resurfacing program • Evanston has a good enforcement program • Property taxes were not increased in the last two years • Village's property tax levy will see an increase, but the Library's property tax levy will have decrease. Net increase is about 6%. The property tax levy should come out at about 0% • The goal is to fully fund police and fire pensions by 2040. The Village is funding to meet this target, but the funding schedule has an upward ramp in coming years • Suspending the Vehicle Sticker Program is simple way to provide residents some financial relief. The Finance Commission discussed the following considerations for suspending the Vehicle Sticker Program in 2023: • Once the vehicle sticker is suspended, it is eliminated because it will be too challenging to reinstate • Massive financial uncertainty on the horizon • The cost to administer the Vehicle Sticker Program is 7%, it is the most costly revenue source we have, but it is a small amount. The revenue is much greater than the cost. • If the program is eliminated, then how is revenue replaced when funding is needed. Will the street resurfacing program be able to keep its 20 years resurfacing target? • Give the revenue surplus back to the people who are paying the bills • Allocate the sales tax surplus, a variable revenue source, to unfunded capital projects instead of suspending the vehicle sticker revenue • Modernize the program instead of eliminating it The Commission is not in favor of suspending, eliminating or reducing the fee amounts of the vehicle sticker program. Motion by William Grossi seconded by Kenneth Arndt to concurred with staff recommendation to suspend the Vehicle Sticker Program for fiscal year 2023. Chair Chokshi called a voice vote. Motion failed unanimously. Motion by Trisha Chokshi seconded by Kenneth Arndt to direct staff to look into alternative methods for making the Vehicle Sticker Program more efficient. Chair Chokshi called a voice vote. Motion approved unanimously. Finance Commission Page 2 of 4 7/28/2022 V. New Business a) Intergovernmental Revenues The discussion on Intergovernmental Revenues was included in the Vehicle Sticker Review. b) Flood Control/Storm Sewer Fees Mr. Thakkar reviewed the proposal from staff to reallocate a quarter percent of the home rule sales tax allocation from the General Fund and dedicate the amount to the Capital Improvement, Street Construction and Flood Control Funds. Mr. Thakkar provided additional information in response to questions and comments from the Finance Commission: • Commission may propose a transfer from the General Fund • Need to keep a 25% fund balance, transfer $500,000 to be in compliance • Transfers create more accounting entries compared to a reallocation • Auditor would accept if progress is made towards building the fund balance up • Lower fund balances would negatively reflect on credit reviews • There is reasoning for the fund balance amount • Storm sewers covers the whole town Motion by William Grossi seconded Yulia Bjekic to do a one-time transfer $1.5 million from General Fund to the three capital funds for 2023 and not reallocate the home rule sales tax. Chair Chokshi called a voice vote. Motion approved unanimously. Motion by Pam Bazan seconded Yulia Bjekic to transfer $500,000 from the General Fund to the Flood Control Fund. Chair Chokshi called a voice vote. Motion approved unanimously. c) Fund Balance Policy Mr. Thakkar gave an overview of the current Fund Balance Policy that has a range from 20% to 30% with a target of 25%. A 25% fund balance is about 16-17% of spendable fund balance on hand, which is less than two months operating costs. Staff will be recommending the Village maintain a spendable fund balance of 25% so the total fund balance needs to be between 30% and 40%. This discussion may be part of the 2023 work plan. Mr. Thakkar provided additional information in response to questions and comments from the Finance Commission: • Fund balance could be restricted, spendable, committed, or unrestricted. Staff is trying to refine the Fund Balance Policy and make it more appropriate for the time Finance Commission Page 3 of 4 7/28/2022 • Credit ratings agencies look at the unrestricted fund balance and cash on hand VI. Any Other Business None VII. Chairperson Report None VIII. Finance Director's Report a. Monthly Report - None. XI. Next Meeting: Finance Commission — Second Quarter Review Motion by Trisha Chokshi seconded by Yulia Bjekic to call a special meeting on August 17 at 7 p.m. for the Second Quarter Review IX. Adjournment: Motion by Kenneth Arndt seconded by William Grossi to adjourn the meeting. Chair Chokshi called a voice vote. Motion Carried unanimously. The meeting adjourned at 8:34 pm. Alexander Bertolucci Assistant to the Village Manager Finance Commission Page 4 of 4 7/28/2022