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HomeMy WebLinkAbout11/26/1991 COW minutes Minutes COMMITTEE OF THE WHOLE November 26, 1991 I Roll Call · The meeting was called to order at 7:38 p m by Mayor Gerald L. Farley. Trustees present were Mark Busse, George Clowes, Tim Corcoran, Leo Floros, Paul Hoefert, and Irvana Wdks. Also present were Village Manager Johd F. Dixon, Finance Director David C. Jepson, and Assistant Finance Director Carol W~dmer. Addlt~onally, there were two members of the news medm and five Vdlage resxdents present II Minutes The Committee of the Whole Minutes of November 12, 1991 were accepted and filed III Citizens To Be Heard Dennis Schachner of 202 East Berkshire introduced himself and stated that he works for Telecom Services Group, Ltd. Mr. Schachner said that his finn recently submitted a proposal to the Village to provide telephone consulting services for the new Pohce and Fire Building. He added that he understood that their proposal was the lowest submitted, and he wanted to assure the Village Board that they could do the work for the amount proposed. Mayor Farley said he would request a report from the Village Staff on this matter. IV Discussion of Property. Tax Requirements and General Fund Revenues and Expenditures Finance Director David Jepson reviewed a report with the Committee which compared tax levies and General Fund revenues and expenditures for the last five years with projected amounts for the next five years. Mr. Jepson stated that this report was prepared as a follow- up to the discussion of the 1991 tax levy on November 12, 1991. He explained that because property taxes are only one source of the revenues which finance general Village services, the tax levy should be d~scussed in relation to all General Fund revenues and General Fund Expenditures. Mx. Jepson also stated that one of the reasons for the discussion was to provide the Village Board with an oppormmty to give input to the upcoming 1992/93 budget. Mr. Jepson stated that property taxes increased 52.1% from 1986 - 1990, and that they were projected to increase 27.1% from 1991 - 1996. The reason for the decrease over the next five years is due to the specific direction of the Vdlage Board to reduce the tax levies. The 1991 ~,, levy is expected to increase 4% and the next four levies by 9.1%, 4.7%, 5.6%, and 2% ' respectively. A separate analysis was also made to see what the effect would be if the 4% increase for 1991 would be ehminated Mr. Jepson stated that if the 1991 levy did not increase over the 1990 levy and the 1992 levy would be the same as projected, the increase in the tax levy from 1991 to 1992 would be 13.4% In regard to General Fund revenues, Mr. Jepson stated that total revenues had increased 41 6% over the past five years but are only expected to mcrease 20 7% over the next five years. He mentioned that one of the primary reasons for this difference is that during the past five years the Real Estate Transfer Tax, the Food and Beverage Tax, and the Hotel/Motel Tax were added to the revenue base. These three sources account for $1,050,000 per year. In addition, property taxes, sales taxes, state income tax, and permits and licenses are not expected to increase over the next five years at the same rate as the last five years. Mr. Jepson added that property taxes are expected to increase 5% per year over the next five years, sales taxes and state income tax are estimated at 4%, wah no increase anticipated in the level of permit related revenues. However, licenses are expected to increase $350,000 in 94/95 due to a suggested increase in the vehicle license fee General Fund expenditures increased 46 8% during the previous five years and are expected to increase 26.8% during the next five years Mr. Jepson pointed out that the 26 8% is based on an assumption of a general increase of 6% in 92/93 and 5% per year in 93/94 - 96/97. He stated that because expenditures are increasing faster than revenues, the projected expenditures do not include any provision for street resurfacmg projects from General Fund monies. He also said that based on the projections, it appears expenditures will exceed revenues by over $1 million in 96/97. Mr. Jepson concluded by saying that the Vdiage has been affected by current economic conditions but we have weathered the storm better than many other governmental entitles. He emphasized that revenue increases are not keeping up with expenditure increases and the trend indmates that existing revenue sources will not continue to support the exist~n~ level of Village services. He said that under these circumstances, he would not recommend reducing the proposed 1991 tax levy to the 1990 level. Village Manager John Dixon said that the Village is in a very sinular position to where it was in 1987 when it was facing double d~git increases for property taxes. He sand that as m 1987 the Staff is willing to look at alternate revenue sources to provide more revenues. He added that efforts have been made to keep expenditures down m the General Fund and a number of reductions have been made. However, because salaries make up 80% of the cost of general services it is difficult to reduce expenditures wathout cutting services. He also said that when the economy turns down, the Village has a greater demand for servaces. He stated that a community is known by the servaces it provides, and the quality of service~ provided by the Village is what makes Mount Prospect the outstanding community that it is. Trustee CIowes commended the former Mayor and Trustees for their efforts to control costs for Village services. He cited the Park R~dge survey which consistently has shown Mount Prospect with the lowest costs per capita of any of the mumclpalities surveyed. He said he agreed with the Village Manager that we are in a similar positxon to where we were in 1987, but he did not agree with the solution. He said that the chmate is dxfferent today than in 1987 and that the Village should live within its existing revenue sources. Trustee Clowes sand we should look at the dehvery of services and come up wath ways to provide the services vath fewer people. 2 Trustee Clowes said he was concerned with the sharp increase in the tax levy for IMRF pensions. Because this is a mandated expenditure he asked if the Northwest Municipal Conference could take this up as a legislative issue. Trustee Clowes added he was not proposing to reduce the General Fund tax levy or capital expenditures, but to simply reduce the levy for Capital Improvements and to replace it with State Income Tax Surcharge revenues. He mentioned this would amount to a reduction of about $280,000, and he &d not think it would seriously impact the Vdlage. Trustee Clowes also said that for a longer-term solution the Village needed to control costs better. He mentioned that overtime should be restricted for emergency purposes when it is expected to exceed the budgeted amount. He said that in regard to direction to the Staff he was opposed to a Telecommunications Tax but that he supported going from two cans to one can for refuse pick-up when enough data is available. Also, he said he would support a future vehicle license fee increase Trustee Corcoran said he agreed that the 1/4~ State Income Tax Surcharge would be temporary and the Village should not count on these funds after June 30, 1993. He added that he did not want to see the property tax levy jumping up and down He preferred to designate a single-digit percentage increase in the 3 to 4% range and stick with it. Trustee Corcoran said the Village should limit expenditures and then look at the revenues. If revenues fall short we must spend less. Trustee Corcoran stated that we cannot overlook infrastructure n~eds and only cut capital expenditures if there is a revenue shortfall. He said if we cut back now it will cost more later. If expenditures must be reduced, the Village must look at the number of employees. However, he cautioned that if we lose employees we will lose services. Trustee Corcoran said he supported the proposed 1991 tax levy and that he would like to discuss user fees at a future Comrmttee of the Whole meeting. Trustee Wilks said she supported ~he proposed 4% increase for the 1991 tax levy. She also thought it would be a disservice if the Board would force expenditure cuts on the various departments. She said she would like to hear from the department directors before addressing the overtime issue. Trustee Wilks also said she would like to see some rate studies to deterrmne ff the Village is recovering its costs from various fees. She added that the Village should continue the resurfacmg program at its current level and that the Village must learn to do more with less. Trustee Hoefert said he agrees that we must look at the expense side first and we must learn how we can do our jobs better. He smd it was paramount that the Village have a stable tax rate and that h'e supported the proposed 1991 tax levy. Trustee Hoefert also said he would like to get input from the department directors. Trustee Hoefert added that we should get a handle on the costs behind the fees we are charging. Also, he stated that other than in the area of hfe safety we must look at the number of employees Trustee Hoefert also said that the only way he would support direct billing for refuse disposal would be for a corresponding decrease in the tax levy. 3 Trustee Floros stated he supported the proposed 1991 tax levy. He said that a 4% increase was reasonable and the Village's record of fiscal responsibility speaks for ~tself. Trustee Floros added that if the department d~rectors were consulted he is sure that they would ask for more personnel rather than come up wath reductions. He said It ~s eas~er to talk about staff reductions than it is to actually do it. Trustee Busse stated that he thought we needed a plan spelhng out where we want to go and that we should have input from the department directors. He said he was concerned that if personnel were reduced services would be cut and that he did not want to jeopardize current services. He added that Village employees are doing a good job as evidenced by the Park Ridge survey and that they get the job done m a cost effective way. Trustee Busse said he would also hke to see a continuation of the street resurfac~ng program Also, he said that he would hke to see recommendations from the Finance Comnussion. Mayor Farley said the budget process should follow the same pattern as prior years with Staff requests reviewed by the Finance Commission prior to presentation to the Village Board. He said one of the disappointing aspects th~s year was the additional overtime that ~s needed. He smd he understood we use overtime to control the number of employees but greater control should be exercised. He said the Village Board should be kept appraised when changes occur. Mayor Farley said he supported the 1991 tax levy as proposed and that he would like to see the 1992 levy kept at a sirmlar level of increase. v Village Manager Dixon said that a construction trailer has been moved on to the site of the new Police and Fire Building and building actiwty should start soon VI Other Business Trustee Wilks noted that two commission members were retinng and she asked if all retiring comrmssmn members could be formally recognized at a Village Board meeting. Mayor Farley agreed and said that an appropriate Ceruf~cate of Appreclatmn would be developed. Trustee Wilks also said she was very pleased with the hohday decorations that had been put up. VII A~ournment There being no further business the meeting adjourned at 10.00 p.m. Respectfully Submitted David C. Jepson, Finance Dtrector ~ 4