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Home My WebLink About4. Street Funding Plan 10/08/2013Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS FROM: FINANCE DIRECTOR DATE: OCTOBER 3, 2013 SUBJECT: STREET FUNDING PLAN - UPDATE At a joint meeting of the Village Board and Finance Commission held on July 9, 2013, the Finance Commission presented a recommended funding plan for the street resurfacing program. After considerable discussion the Village Board asked the Finance Commission to look into alternatives for revising the funding plan. The original funding plan called for the following: • Reallocation of property tax levies between the General and Refuse Funds • Increase in the direct charge for refuse collection of $143.00 (from $100 to $243) • Increase in the local motor fuel tax of $0.03 (from $0.02 to $0.05) • Increase in vehicle sticker fees of approximately $9.00(from $36 to $45) At the August 13, 2013 mid -year budget review the Finance Commission and staff presented the revised funding plan to the Village Board. Revisions to the plan included the use of available fund balance and step increases to user fees and taxes over a five -year period. Materials passed out previously on the revised funding plan are included as Attachment I. The plan accomplishes the goal of funding the ongoing street program, but does not address the backlog of street resurfacing. Before considering the revised plan Village Board members asked the Finance Commission to determine the impact of issuing bonds to address the street resurfacing backlog. The Finance Commission met in September to discuss debt funding options and has developed two scenarios for repayment of principal and interest. The first scenario is a straight add of the total annual debt service payment to the property tax levy. This option would increase the 2013 levy from 5.0% to 8.9% in the fist year. Subsequent increases to the levy would fall back down to the 3.5 % -5.0% range established by the Board. Street Funding Plan — Update Page 2 of 2 October 3, 2013 The second scenario is a hybrid of the revised plan that adds a smaller tax levy increase to an increase in the refuse collection fee generating the necessary funds for debt repayment. This option will increase the 2013 tax levy from 5.0% to 6.0% and increase the direct charge for refuse collection from $100.00 to $243.00. Fee and tax increases from the revised plan for the local motor fuel tax and vehicle sticker fee are not considered in the hybrid plan. Reserves from the Street Fund are utilized in year one to fully fund the annual resurfacing program. The hybrid plan will address the backlog of street resurfacing and generates an additional $1.4 million towards the annual street program. Attachment II illustrates the impact to the various funds as a result of implementing the hybrid funding plan. Finance Commission Chair, Vince Grochocinski, and Village staff will be on hand to make a more detailed presentation of the new street funding options and to answer questions and facilitate discussion. David O. Erb Finance Director WADMN \Administrative Assistant \FINANCE COMM \2013 \Street Funding Plan w -Debt Service.docx Attachment I Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: FINANCE COMMISSION MEMBERS FROM: FINANCE DIRECTOR DATE: JULY 25, 2013 SUBJECT: REVISED STREET FUNDING PLAN At the joint meeting of the Village Board and Finance Commission on July 9, the Finance Commission presented a recommended funding plan for ongoing street maintenance. After considerable discussion the Village Board asked the Finance Commission to look into alternatives for revising the funding plan. The original funding plan called for the following: • Reallocation of property tax levies between the General and Refuse Funds • Increase in the direct charge for refuse collection of $143.00 • Increase in the local motor fuel tax of $0.03 • Increase in vehicle sticker fees of approximately $9.00 On July 11, the Finance Commission Chair met with staff to discuss possible revisions to the funding plan. Items considered included the use of available fund balance and step increases to the changes in planned fees and charges. Attached is a draft of the revisions made to be discussed at the July 25 Finance Commission meeting. Available fund balances from the Street and Refuse Funds were used along with gradual increases to the various taxes and fees over a five -year period. These revisions accomplish the goal of funding the ongoing street program into the future, but do not address the backlog of street resurfacing (now estimated at 11 miles). Staff will be on hand at the July 25 meeting to make a presentation and facilitate discussion. Please let me know if you have any questions. David O. Erb Finance Director WADMN\Administrative Assistant \FINANCE COMM \2013 \Revised Street Funding Plan.docx 1 of 2 Village of Mount Prospect Finance Commission Street Fund Funding Recommendation - July 2013 General Refuse Street Const. Fund Fund Fund Total 2013 2014 2015 Current Funding - Vehicle Stickers 1,385,000 - _ 1,385,000 Property Tax - 1,856,000 - 1,856,000 Refuse Direct Charge - 1,275,000 - 1,275,000 Property Tax 1,385,000 3,131,000 - 4,516,000 Year One - Vehicle Stickers (A) 692,500 - 692,500 1,385,000 Property Tax (B) 692,500 1,163,500 - 1,856,000 Refuse Direct Charge - 1,275,000 - 1,275,000 Fund Balance (Streets) (C) 600,000 600,000 Refuse Direct Charge Increase -yr. 1 (D) - 650,000 - 650,000 650,000 1,385,000 3,088,500 1,292,500 5,766,000 (A & B) Reallocate one -half of vehicle sticker revenue from General Fund to Street Improvement Construction Fund. Reallocate portion of refuse collection tax levy to General Fund. (C) Utilize fund balance in the Street Improvement Construction Fund. (D) Increase direct charge for refuse by $50.00 from $100.00 to $150.00. Year Two - Vehicle Stickers (E) - 1,385,000 1,385,000 Property Tax (F) 1,385,000 471,000 1,856,000 Refuse Direct Charge - 1,275,000 1,275,000 Refuse Direct Charge Increase -yr. 1 - 650,000 - 650,000 Fund Balance (Refuse) (G) - 692,500 - 692,500 Local MFT Increase (H) - 340,000 340,000 Vehicle Sticker Increase (I) - - 350,000 350,000 1,385,000 3,088,500 2,075,000 6,548,500 (E & F) Reallocate balance of vehicle sticker revenue from General Fund to Street Improvement Construction Fund. Reallocate portion of refuse collection tax levy to General Fund. (G) Utilize fund balance in the Refuse Fund. (H & 1) Increase local MFT $0.02 from $0.02 to $0.04. Increase in vehicle sticker across all license types to generate $350,000. Senior discount remains in place. 10/3/2013 H: \ADMN \Administrative Assistant \FINANCE COMM \2013 \Reallocation of Revenues.xlsx Village of Mount Prospect Finance Commission Street Fund Funding Recommendation - July 2013 2016 2017 2018 2of2 General Refuse Street Const. Fund Fund Fund Total Year Three Vehicle Stickers - 1,385,000 1,385,000 Property Tax 1,385,000 471,000 - 1,856,000 Refuse Direct Charge - 1,275,000 - 1,275,000 Refuse Direct Charge Increase -yr. 1 650,000 - 650,000 Refuse Direct Charge Increase -yr. 3 (J) - 650,000 w 650,000 Local MFT Increase - 340,000 340,000 Vehicle Sticker Increase - - 350,000 350,000 1,385,000 3,046,000 2,075,000 6,506,000 (J) Increase direct charge for refuse by $50.00 from $150.00 to $200.00. Year Four Vehicle Stickers - 1,385,000 1,385,000 Property Tax (K) 1,385,000 - - 1,385,000 Refuse Direct Charge - 1,275,000 - 1,275,000 Refuse Direct Charge Increase -yr. 1 - 650,000 - 650,000 Refuse Direct Charge Increase -yr. 3 - 650,000 - 650,000 Fund Balance (Refuse) (L) - 471,000 - 471,000 Local MFT Increase - - 340,000 340,000 Vehicle Sticker Increase - - 350,000 350,000 1,385,000 3,046,000 2,075,000 6,506,000 (K & L) Eliminate balance of refuse collection tax levy. Utilize fund balance in the refuse fund. Year Five Vehicle Stickers - - 1,385,000 1,385,000 Property Tax 1,385,000 1,385,000 Refuse Direct Charge - 1,275,000 - 1,275,000 Refuse Direct Charge Increase -yr, 1 650,000 - 650,000 Refuse Direct Charge Increase -yr. 3 - 650,000 - 650,000 Refuse Direct Charge Increase -yr. 5 (M) - 471,000 - 471,000 Local MFT Increase - - 340,000 340,000 Vehicle Sticker Increase - - 350,000 350,000 1,385,000 3,046,000 2,075,000 6,506,000 (M) Increase direct charge for refuse by $36.00 from $200.00 to $236.00. 10/3/2013 H: \ADMN \Administrative Assistant \FINANCE COMM \2013 \Reallocation of Revenues.xlsx Attachment II Village of Mount Prospect Finance Commission Street Program Funding Scenario #2 General Refuse Street Const. Debt Fund Fund Fund Service Total 2013 2014 Current Funding - Vehicle Stickers 1,385,000 1,385,000 Property Tax 1,856,000 1,856,000 Refuse Direct Charge- Existing - 1,275,000 - 1,275,000 1,385,000 3,131,000 - 4,516,000 Year One - Vehicle Stickers (A) 1,385,000 1,385,000 Property Tax (B) 1,385,000 471,000 1,856,000 Refuse Direct Charge- Existing 1,275,000 1,275,000 Fund Balance- Streets (C) - 600,000 600,000 Refuse Direct Charge -New (D) - 1,856,000 - 1,856,000 1,385,000 3,131,000 1,985,000 471,000 6,972,000 (A & B) Reallocate vehicle sticker revenue from General Fund to Street Improvement Construction Fund. Reallocate portion of refuse collection tax levy to General Fund and to cover debt service for Street Program backlog. (C) Utilize fund balance in the Street Improvement Construction Fund. (D) Increase direct charge for refuse by $143.00 from $100.00 to $243.00. 2015 Year Two - Vehicle Stickers 1,385,000 1,385,000 Property Tax 1,385,000 - 471,000 1,856,000 Refuse Direct Charge 1,275,000 1,275,000 Refuse Direct Charge -New - 1,856,000 - 1,856,000 1,385,000 3,131,000 1,385,000 471,000 6,372,000 10/3/2013 H: \ADMN \Administrative Assistant \FINANCE COMM \2013 \Reallocation of Revenues.xlsx Financial Planning Workshop April 23, 2013 Joint Meeting with Village Board and Finance Commission 1s' Floor Community Center Village Hall 50 S. Emerson Street Call to Order Mayor Wilks called the meeting to order at 6:40 p.m. Trustees present included John Matuszak, Steven Polit, Paul Hoefert, Arlene Juracek, John Korn and Michael Zadel. Finance commission members present included Vince Grochocinski, Chair and Commissioners Pam Bazan, John Kellerhals, Tom Pekras and Don Ocwieja. Staff present included Village Manager Michael Janonis, Assistant Village Manager David Strahl, Finance Director David Erb, Deputy Finance Director Lynn Jarog, Police Chief Michael Semkiu, Deputy Police Chief Tim Janowick, Deputy Police Chief John Wagner, Police Commander Mike Eterno, Community Development Director Bill Cooney, Public Works Director Sean Dorsey, Deputy Public Works Director Jason Leib, Fire Chief John Malcolm, and Human Services Director Nancy Morgan. Motion made by Trustee Polit second by Trustee Korn to add a Closed Session for litigation and personnel to the agenda. Motion was approved. Motion made by Trustee Korn second by Trustee Hoefert to add Citizens to be Heard to the agenda. Motion was approved. Citizens to be Heard There were no citizens to be heard. III. Financial Planning Workshop Before starting with scheduled agenda items Public Works Director Dorsey provided a short presentation on flood fighting efforts over the past week at Levee 37 and throughout the Village. General discussion followed. 1) 2012 Year -End Results Finance Director Erb provided an overview of the Village's financial position at the close of budget year 2012. Erb stated the budget as amended projected a surplus of $727,395. Actual surplus came in at $759,456. Erb highlighted some revenue growth in one -time receipts items in addition to some extraordinary expense items. He said the General Fund fund balance as of the end of 2012 was 26.1 %. 2) 2013 First Quarter Review Finance Director Erb stated the current 2013 year -end estimate projects a surplus of $160,150. Revenues are projected to come in over budget by $171,000 while expenditures were increased $10,850. General Fund fund balance at the end of 2013 is projected to be 25.5 %. 3) 2014 Revised Forecast Budget Finance Director Erb stated that the original forecast budget for 2014 projected a deficit of $323,900. Current estimates show the projected deficit falling to $258,400. Adjustments to some revenues accounted for the drop in projected deficit. Revenue growth for 2014 is 2.7% while expenditures are estimated to grow by 3.7 %. Erb stated he feels the revenues as projected are fairly stable. Expense projections include a 2% increase and similar growth in commodity /contractual service accounts. Based on the current budget projections for 2014, the General Fund fund balance will be 24.2% at the end of 2014. 4) 2013 Proposed Property Tax Levy Erb provided a review of the proposed property tax levy for 2013. The 2013 levy is projected to increase 4.74% generating $17.3 million. Assumptions used for the 2013 levy included a 4.7% increase for the general portion, 3.0% increase for the refuse portion, 0.2% increase for the debt service portion and 7.0% increase for the police and fire pension portions. He also provided a summary of the growth in property taxes over the last ten years. 5) Preliminary Capital Improvement Plan (CIP) /Five -Year Forecast (2014-2013 Erb stated the first draft of the CIP has been submitted by the departments totaling $59.3 million. He stated the projects will be budgeted only to the extent there is funding available. Extra attention will be paid to flood control and street program to identify funding sources to support these two programs. He also stated there are several shortfalls in some of the funds that should be addressed. Significant revenue sources are broken out in the forecast. 6) Other Issues Impacting the Village Erb stated that there were a number of items brought forth to the Village Board and Finance Commission at the 2012 Financial Planning Workshop that are currently being addressed within the existing budget resources. These issues include the emerald ash borer, Randhurst redevelopment agreement and the automated meter reading system. Other items that remain include funding for the street resurfacing program and flood control for public and private improvements. Erb presented a recommended funding plan prepared by the Finance Commission to address the annual funding requirement of the street program and funding needed to support projects recommended by the comprehensive stormwater study. Currently there is a need for additional funding for streets of $2.2 million annually in order to not fall further behind. The FC plan does not address the existing backlog. The following were the Finance Commission recommendations for additional revenues to support the street program. Increase local motor fuel tax from $0.02 to $0.05 Increase vehicle sticker fee from $36.00 to $45.00. At this point all vehicle sticker fees would be reallocated from the General Fund into the Street Improvement Fund. The refuse portion of the property tax levy would be reallocated to the General Fund. The overall tax levy would be reduced approximately $500,000 as a result of this reallocation. Lastly, the annual direct charge for refuse would increase from $100.00 to $226.00 to support refuse collection. To address the recommended public improvements generated from the flood study the Finance Commission recommends issuing bonds that will be supported by existing revenues. Funding to support private improvements would be through a revolving fund with seed money coming from an increase in the sewer construction fee from $5.00 to $7.00 per month. The revolving fund would be paid back by the homeowner through a loan of 50% of the construction value with 50% of the resident contributed for the improvement. Loan could be paid back over time or at the time of the home sale. Consensus of the village board was to request finance commission review the concept further to route refine the options available for private flood control funding and the methods for managing that funding and repayment. IV. Any Other Business There was no other business V. Adjournment There was a motion by Trustee Zadel and second by Trustee Korn to adjourn. Motion passed and the meeting was adjourned at 8:45 p.m. FINANCE COMMISSION Minutes of the Meeting June 27, 2013 1 s1 Floor Community Center Village Hall 50 S. Emerson Street I. Call to Order The meeting was called to order at 7:OOp.m. Those present included Chairman Vince Grochocinski and Commissioners Pam Bazan, Wayne Gardner, James Gregory, Tom Pekras and Don Ocwieja. Finance Director David Erb was also in attendance. Finance Director Erb introduced James Gregory as the newest member of the Finance Commission. Commissioner Gregory is filling the vacancy left by the passing of Ann Smilanic. II. Approval of Minutes a. May 23, 2013- Commissioner Pekras moved to approve the minutes and Commissioner Bazan seconded the motion. The Minutes were approved. III. Citizens to be Heard There were not any citizens to be heard. IV. Old Business There was a discussion of the July 9 Joint Workshop with the Village Board. The 2014 Capital Improvement Plan will be presented and discussed. There was further discussion of how to fund streets and sewer maintenance and improvements. Finance Director Erb stated that an additional $2 per bill sewer fee would provide $325,000 to loan to residents. This might allow for the installation of overhead sewers for 15 to 20 houses a year. There will not be any grants. After some discussion Commissioner Pekras moved to proceed with the public portion of the sewer project and defer the private portion. Commissioner Bazan seconded the motion. The motion was approved. There was additional discussion concerning funding for streets. Commissioner Bazan moved to reallocate property taxes, reduce the tax levy, increase the motor fuel tax, increase the refuse collection fee and increase the vehicle tax. Commissioner Pekras seconded the motion. The motion was approved. Finance Director Erb presented information on Property Tax Rate 6B an economic development tool. The use of this rate will be discussed at the Joint Workshop. 1 V. New Business Commissioner Wayne Gardner announced that due to family and other obligations he is stepping down and this is his last meeting. The members of the Finance Commission and Finance Director thanked Commissioner Gardner for his seven years of dedicated and thoughtful service. VI. Any Other Business There was no other business VII. Chairman's Report There was no Chairman's Report VIII. Finance Director's Report There was no Finance Director's Report. IX. Next Meeting The next meeting will be the July 9 Joint Board Meeting with the village trustees. X. Adjournment Commissioner Gardner motioned to adjourn the meeting. Commissioner Bazan seconded the motion. The meeting was adjourned at 9:20 P.M. Respectfully Submitted, Don Ocwieja 2 FINANCE COMMISSION Minutes of the Meeting July 25, 2013 1" Floor Community Center Village Hall 50 S. Emerson Street I. Call to Order The meeting was called to order at 7:10p.m. Those present included Chairman Vince Grochocinski and Commissioners Pam Bazan, James Gregory, John Kellerhals, Tom Pekras and Don Ocwieja. Finance Director David Erb was also in attendance. II. App roval of Minutes There were not any minutes to approve. IIt. Citizens to be Heard There were not any citizens to be heard. IV. Old Business There was a discussion of funding alternatives for planned capital projects. Revisions were made to the Street Program funding plan. Chair Grochocinski will present Finance Commission recommendation to the Village Board at the August 13 COW meeting. V. New Business Commissioner Tom Pekras was congratulated and thanked for 30 years of dedicated service to Mount Prospect and the Finance Commission. The meeting schedule was discussed for the upcoming departmental budget review. There was a brief discussion of the of the Revised Street Funding memo. Commissioner Kellerhals moved to accept the revised plan and Commissioner Pekras seconded the motion. The revised plan was approved. VI. Any Other Business There was no other business VII. Chairman's Report There was no Chairman's Report VIII. Finance_ D irector's Report There was no Finance Director's Report. 1 IX. Next Meeting The August 22, 2013 meeting is cancelled. The next meeting will be September 26, 2013 at Village Hall. X. Adjournment Commissioner Kellerhals motioned to adjourn the meeting. Commissioner Gregory seconded the motion. The meeting was adjourned at 9:20 P.M. Respectfully Submitted, Don Ocwieja OA