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HomeMy WebLinkAbout04/29/2008 COW minutes FINANCIAL PLANNING WORKSHOP DRAFT MINUTES OF THE MEETING ApRIL 29, 2008 VILLAGE HALL BUILDING DRAFT 1. CALL TO ORDER The meeting was called to order at 6:29 p.m. by Mayor Irvana Wilks. Village Board members present at the meeting were: Paul Hoefert, Arlene Juracek, John Kom, Richard Lohrstorfer and Michael Zadel. Finance Commission members present at the meeting were: Chairman Charles Bennett and Commissioners Wayne Gardner, Vince Grochocinski, John Kellerhals, Don Ocwieja, Tom Pekras and Ann Smilanic. Staff members present were: Assistant Village Manager Dave Strahl, Director of Finance David Erb, Deputy Director of Finance Lynn Jarog, Finance Administrative Assistant Lisa Burkemper, Director of Human Services Nancy Morgan, Chief of Police John Dahlberg, Fire Chief Mike Figolah, Director of Community Development Bill Cooney, Deputy Director of Community Development Brian Simmons, Director of Public Works Glen Andler and Deputy Director of Public Works Sean Dorsey. II. ROLL CALL Roll call was taken by Mayor Irvana Wilks for the members ofthe Village Board and Finance Commission. III. FINANCIAL PLANNING WORKSHOP Director of Finance David Erb began the meeting with a brief outline ofthe agenda and provided an outline of the materials presented in the Long Range Financial Planning Workshop binder that was distributed to the Village Board, Finance Commission and various staff members. Mr. Erb first discussed 2007 year end results. Mr. Erb reported that as of 12/31/07 the general fund had a surplus of$I,017,347 and a fund balance of32%. Mr. Erb then discussed the first quarter of2008 and advised that the current projected deficit at year end is expected to be $1,061,303 and fund balance is expected to drop to 28.6%. Part ofthe deficit is made up of the $339,803 transfer to the CIP to pay for the new telephone system and approximately $106,000 in carry over items from the 2007 budget. Mr. Erb briefly discussed the 2009 forecast budget and advised that the projections were made assuming very conservative growth. The 2009 forecast shows a deficit of$907,727 and an estimated fund balance of25.23%. Director of Finance David Erb added that the deficit projected for 2008 will be monitored throughout the year. Additional action regarding cost cutting will be considered if the financial condition of the Fund does not improve. The deficit forecast for 2009 will be addressed during the budget process in the Fall of2008. Finance Commission member John Kellerhals asked what the decrease in sales tax revenue is contributed to. Director of Finance David Erb advised the decline is due to general economic conditions. Trustee Paul Hoefert asked whether any of the planned redevelopment was considered in the projections. Finance Director David Erb stated that the redevelopment was not included in any ofthe projections. Trustee Michael Zadel asked if the rising fuel prices will have an impact on the Public Works budget. Director of Public Works Glen Andler advised that the fuel budget will certainly be over budget; however, this line item is a small portion of Public Works overall budget. Trustee Arlene Juracek discussed a challenge she would like put out to Village Staff to cut costs from the budget to offset an increase in the tax levy (approx. $300,000). Trustee Juracek stated that staff should try to come up with ways to cut in other places to make up the money needed to not increase the tax levy. Director of Finance David Erb gave examples of staff cuts made in 2004 amounting to $500,000 and also mentioned that during that year any vacant positions were held open to cut costs. Director of Finance David Erb began the discussion on the five-year Capital Improvements Plan by stating that $58.8 million would be needed to complete all the projects listed in the five-year CIP plan. Mr. Erb added that the CIP projects funded by TIP monies or the water fund are fully supported; however, this is not the case for projects funded through state motor fuel or home rule sales taxes. Director of Finance David Erb mentioned the new Fire Station 14 and the two companion projects and noted with the exception of these projects Public Works projects make up the bulk of money in the CIP requests. Finance Commission member John Kellerhals stated that he wanted to discuss the public works expansion and the Emergency Operations Center as proposed in the CIP as he questions the justification of these projects. Several trustees stated that this meeting is not the proper place to discuss these items and stressed that these topics have been discussed previously at Village Board and Committee ofthe Whole meetings. Mayor Wilks stated that the Village Board has elected to move forward with the Fire Station and companion projects. Finance Commission Chairman Charles Bennett added that the role ofthe Finance Commission is not to set policy but to discuss financial aspects with respect to identifying funding alternatives for projects that are approved by the Board and Mayor. Director of Finance David Erb outlined the contents of the five year forecast as it includes most major operating and capital budgets. Mr. Erb also mentioned that significant revenue sources are broken out. Trustee Arlene Juracek suggested that staff could prepare best case, worst case and mid line budgets, in having these various budgets in hand they would be able to react more effectively if something drastic happens in one area of revenue. Assistant Village Manager Dave Strahl added that the current financial software would not allow for this kind ofbudgeting and preparing three separate budgets would be extremely labor intensive. Mr. Erb noted that within the next few years the Finance Department will be purchasing new financial software and that this concept could be considered at that time. Director of Finance David Erb advised that the cost of water purchased from the City of Chicago will increase 15% per year for the next three years. Finance prepared a water rate study because of these increases. In preparing the study the Village learned that the Village's water cooperative Joint Action Water Agency (JAW A) was able to make adjustments to their annual budget so the overall impact to the Village would be considerably less than the 15% increase. The study results showed that a projected rate increase of 4% for the next three years will be able to support ongoing operations of the Water and Sewer Fund. Director of Finance David Erb provided an outline of the work done with FEMA in order to apply for reimbursement of storm-related expenses. Various departments worked extremely hard gathering information and preparing worksheets for submittal to FEMA. Mr. Erb recognized Public Works, especially Deputy Director Sean Dorsey and Forestry Superintendent Sandy Clark. FEMA deemed $905,617 eligible for reimbursement from the total hard costs of$957,264. The Village received $698,325 in reimbursements. The Village expects to receive an additional $19,112 in administrative allowances after the final audit is prepared at FEMA. Mr. Erb stated that the revenue received from FEMA was included in the 2007 budget. 2 IV. ADJOURNMENT Mayor Irvana Wilks thanked the Finance Commission for their contributions and stated that the Board respects the roll the Finance Commission plays with respect to the budget process and appreciates the work that is done by the Commission and all recommendations presented to the Board are given consideration. Trustee Paul Hoefert motioned to adjourn which Trustee Arlene Juracek seconded. The meeting was adjourned at 8:29 pm. Respectfully submitted, cRu~~ ~~/~'^-f-t1L Lisa Burkemper Administrative Assistant Finance Department 3