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HomeMy WebLinkAbout4. FC Minutes 07/26/2012FINANCE COMMISSION Minutes of the Meeting July 26, 2012 I" Floor Community Center Village Hall L Call to Order The meeting was called to order at 7:20 p.m. Those present included Chairman Vince Grochocinski and Commissioners, Pam Bazan, Tom Pekras and Ann Smilanic. Commissioners Wayne Gardner, John Kellerhals, and Don Ocwieja were absent. Also present was Finance Director David Erb. II. Approval of Minutes May 23, 2012 - Minutes of the meeting were reviewed. Commissioner Pekras motioned to approve the minutes. Commissioner Bazan seconded the motion and the minutes were approved. July 23, 2012 - Minutes of the meeting were reviewed and amended to include the results of the vote taken at the meeting. Commissioner Bazan motioned to approve the minutes. Commissioner Pekras seconded the motion and the minutes were approved as amended. III. Citizens to be Heard There were no citizens to be heard. IV. Old Business Capital Projects Funding Alternatives - Building on the discussions during prior meetings, where all members of the commission were present, Financial Director Erb presented a summary of these discussions and the general agreements of the commission members in order to facilitate continued discussions. The funding discussions considered the following 1. Street improvement projects 2. Flood control projects 3. Emerald Ash Bore (EAB) 4. Automated meter reading 5. Randhurst incentive funding The principles governing the Commission's search for funding sources were 1. Funding sources should reflect direct association with use of the funds as far as possible. 2. Sources of funds should distinguish between on -going needs as distinct from periodic needs, i.e., street resurfacing is on -going each year while flood control activities are periodic projects. 3. Incurring debt should be used sparingly to protect the Village credit rating. 4. Sales taxes should not be increased. Earlier discussions by the Commission recognized the following 1. Randhurst incentive funding requires issuing targeted debt with specifics understood following ideas expressed when negotiating the original agreements. 2. The EAB cost for removal and replacement of Village trees should be funded from current sources, some grant assistance and homeowner participation in replacing their parkway trees. 3. Automated water meter reading costs should be included in the calculation of water usage rates as has already begun. It was agreed that the on -going street improvement needs should take priority over the flood control issues, but not to the complete exclusion of certain of the anticipated flood prevention projects. The Commission considered circumstances regarding the street improvement needs etc. 1. The 10 miles of backlogged street resurfacing would cost in excess of $5 million if it were to be resolved in a single project, and as long as the backlogged inventory is rotated to prevent the roads going into reconstruction mode, there is no pressing need to have such a catch up project. 2. The funding needs are continual and must prevent the backlog from growing to the extent that reconstruction is then needed. 3. The practice of using funds intended for resurfacing to handle other road related projects while using only left over funds for resurfacing to the extent available should be discouraged. 4. Combining for display purposes only the Street Improvement Constriction Fund (SICF) and the Motor Fuel Tax Fund (MFTF), since both are used to resurface roads, the additional funds needed are estimated at $1.5 million per year. 5. The current funding sources for the SICF and MFTF are: State allocation of motor fuel taxes; home rile tax of $.02 cents per gallon; and '/4 cent of the home rile sales tax. 6. The Commission agreed upon the following funding sources and amounts: a. Add $.03 cents to the local motor fuel tax (from $0.02 to $0.05). Yields $510,000 b. Increase the basic vehicle sticker $14 from $36 to $50. Yields $540,000. c. Divert the surplus from the '/4 cent home rile sales tax now funding the flood control projects and debt payments to the SICF. Yields start at $250,000 the first year and increases to $1.4 million per year over several years. On -going flood projects would still be funded from this sales tax while project type sewer work is fund by issuing debt. The flood control study was reviewed it was decided to fund the $14.4 million in public improvements via the issuance of debt. Note that the one major project already in the Capital Improvement Plan is duplicated in the $14.4 million and is thus eliminated from the need to use the home rile sales tax to handle the funding. 2 The debt issued for the flood projects should be repaid via the use of two special service areas which will either include or exclude the area not served by Village water and sanitary sewers. The impact on real estate taxes will be minimize by the fact that Special Service Area 5 debt is expiring soon and will be replaced by the new debt being recommended. Private improvements such as overhead sewers, backup prevention devices, disconnection of foundation drains etc. would not include any public subsidies. Instead, a funding source would be created by increasing the monthly Sewer Constriction fee from $5 to $7 per month. Funds generated from this additional tax total $320,000 per year which would be used to fund low interest loans to residents who certify that they have had water in their home subsequent to and including the date of last year's flooding. The resident would pay 1/3 of the cost up front and the Village would loan the other 2/3 with the loan to be repaid no later than the sale of the home. Home owners would be urged to take self serving actions such as stand pipes, backup battery powered sump pumps, wall crack sealing and flood and water backup insurance which are not included in this loan program. The Village should prepare pamphlets on this subject and have a list of licensed contractors available. Commission Pekras made a motion to make the above recommendations to the Village Board of Trustees. Commissioner Bazan seconded the motion and the motion passed unanimously. Note that Commissioners not present at this meeting where in general agreement with these conclusion as expressed in prior meetings. Commissioner Kellerhals did not favor the increase to the cost of the vehicle sticker. He did though recommend a $0.05 cent increase to the Village gasoline tax. V. New Business Mid -year Budget Review - Finance Director Dave Erb presented the results of the comparison of six months of actual receipts and disbursements for 2012 to the budget and the impacts on the full year results and the forecast budget for 2013. Overall, revenues are projected to come in over budget by $404,000 while expenditures increased slightly by $186,914. If the projections hold through the end of the year the surplus of $122,342 will go towards maintaining the General Fund fund balance. Annual Audit 2010 Review - Finance Director Dave Erb presented the results of the 2010 audit and related auditor comments and management letters. No concerns of great magnitude were noted. The auditor gave the village audit a clean opinion for its financials as of December 31, 2011. VI. Other Business There was no other business. VII. Chairman's Report There was nothing to report. 3 VIII. Finance Director's Report There was nothing to report. IX. Next Meeting: Au ist 23, 2012 Commissioner Pekras motioned to give the Chairman authorization to cancel this meeting depending on the business to be discussed. Commissioner Bazan seconded the motion and the motion carried. X. Adjournment Commissioner Smilanic motioned to adjourn. Commissioner Tom Pekras seconded the motion which passed. The meeting was adjourned at 9:15 p.m. Respectfully Submitted, Vince Grochocinski