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HomeMy WebLinkAbout10/29/2008 FC minutes FINANCE COMMISSION MINUTES OF THE MEETING OCTOBER 29, 2008 1 ST FLOOR COMMUNITY CENTER I. CALL TO ORDER The Finance Commission meeting was called to order at 7:05 p.m. Those present included Chairman Vince Grochocinski and Commissioners Pam Bazan, Tom Pekras, Ann Smilanic, John Kellerhals, Wayne Gardner and Don Ocwieja. Village staff was not present at the meeting. II. ApPROV AL OF MINUTES A motion to approve the minutes of the meeting of October 9, 2008 was made by Commissioner Pekras and seconded by Commissioner Smilanic, and the minutes were accepted as presented. A motion to approve the minutes of the meeting of October 16, 2008 was made by Commissioner Pekras and seconded by Commissioner Smilanic, and the minutes were accepted as presented. The minutes of October 23, 2008 were deferred. III. 2009 VILLAGE BUDGET DISCUSSION The following items from the various budget meetings will be commented upon by the Chairman in his report to the Village Board: Although the Village's current financial condition is strong, the U.S. economy is tipping toward a technical recession with increasing unemployment and unprecedented financial turmoil in the stock markets. The Commission members urge the Village Board to undertake some level of preplanning for a contingency budget in the event that shortfalls in revenue develop. As the budget reflects a small increase in sales tax and state income tax from the 2008 budget, the Commission would like to have a contingency plan in place should these figures actually decrease. As discussed, the plan should assume a 10% to 20% decrease in sales and income tax revenues or approximately $2 - $3 million. Another area of concern as a contingency is the Police and Fire Pension plans. These investments have taken a substantial hit in the markets. If the values of these plans do not rebound in the next few years, the funding required to make up for these costs could bring substantial pressure on the real estate tax levies, which in turn put pressure on the general fund levies. The following items were discussed as possible contingency planning topics: There was a discussion regarding deferring the $900,000 purchase of the Tower Truck. Given that the old engine could have a value of approximately $250,000, the Commission felt that an engine with such a high value surely indicates that its useful life could be extended by at least a year or two. The Commission would recommend that a cost benefit analysis be prepared to support the need to replace this vehicle. There was a discussion related to the purchase of several fixed in place generators for the sites of standby water wells. The cost for each of these generators is approximately $500,000. The generators would only be needed in the event the City of Chicago water supplies are interrupted and the power supplies to the pumps at the wells are also eliminated. The Commission feels that the extreme unlikelihood of these twin disasters occurring makes the spending of this money unnecessary. In addition, the storms of the summer of 2008 shut down the power to the sewage waste lifting stations, and with no way to power these pumps the raw sewage flowed into resident's basements. Therefore, the Commission recommends that at a minimum the purchase of the fixed generators for the water supply be postponed and the money be spent to secure emergency power options for the sewage lift stations. Another area of contingency planning discussed is to view the general fund balance as the source of covering the temporary decreases in revenues. The fund balances of a few years ago were significantly lower in actual and percentage terms and several funds were nonexistent or had no identified revenue sources. The Village has taxed its residents significant amounts to build these fund balances. One of the functions of these funds is to cover unanticipated changes in financial developments, and decreases in fund balances can be made whole over time. The revenue streams of the Village are relatively constant when compared to other taxing bodies and revenue sources are also rather consistent and not particularly subject to longer term disruptions. Short term decreases in fund balances to maintain Village services should not be viewed as a dire situation. The Commission expressed support for the new marketing plan as outlined in the budget and also the increase in downtown festivals. The Commission also reiterated their recommendation to review the fee structure for inspections, especially re-inspections due to violations. Lastly, the Commission discussed its support of the need for a new fire station 14. Also mentioned was that the administration is employing numerous good planning ideas to keep the cost of the new station at a minimum. The Commission also mentioned that their lack of support for the Emergency Operations Center has not changed, however they were pleased to hear that the hardened nature of the building will be in line with reasonable risk assessments. IV. CHAIRMAN'S REpORT There was nothing to report. V. FINANCE DIRECTOR'S REpORT There was nothing to report. VI. OTHER BUSINESS There was nothing to report. VII. NEXT MEETING: THURSDAY, DECEMBER 4, 2008 (TENTATIVE) There being no further business to come before the Finance Commission, Commissioner Bazan motioned to adjourn which was seconded by Commissioner Pekras. The motion passed and the meeting was adjourned at 8:45 p.m. Respectively submitted, Vincent Grochocinski Chairman, Finance Commission