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HomeMy WebLinkAbout2008-10-30 Budget MinutesMINUTES OF A BUDGET WORKSHOP MEETING OF 'PHE BOARD OF TRUSTEES, HELD ON OCTOBER 30, 2008, IN THE TRUSTEE'S CONFERENCE ROOM RICHARD T. FLICKINGER MUNICIPAL CENTER 6101 CAPULINA AVENUE, MORTON GROVE, ILLINOIS 60053 Pursuant to proper notice in accordance with the Open Meetings Act, the Budget Workshop was called to order at 7:00 pm by Mayor Richard I~~ier. Cierlc Fritzshall called the roll. In attendance were: Elected Officials: President Richard Krier, Trustees Georgianne Brunner, Roy Kogstad, Sheldon Marcus, Rita Minx, Dan Staackmann, John Thill, and Clerk Carol A. Fritzshall Absent: None Village Staff: Police Chief Paul L. Tasch, IT Administrator Boyle Wong, Commrmity and Economic Development Director Biil Neuendorf, Building Commissioner Ed Hildebrandt, Assistant Finance Director Ryan Home, Public Works Director Andy DeMonte, Superintendent Joseph Dahm, Superintendent Paul Tasch, Fire Chief Tom Friel, Family and Senior Services Director Jackie Walker O'Keefe, Finance Director Daniela Partipilo, Village Administrator Joseph F. Wade, Corporation Counsel Teresa Hoffinail Liston Also Present: Several members of the public Mayor Krier thanked everyone for coming and introduced Village Administrator Joseph F. Wade. Mr. Wade stated the two other workshops were held to present departmental budgets. This budget workshop is intended to review various areas of various policy points He stated these meetings will be televised and staff is working on putting each workshop on cable tv as well transcribe them to written minutes He that~rked everyone for coming this evening. Tnistee Kogstad stated he wanted to make a presentation this evening concerning the 2009 budget document. He wanted to review the budget and stated he felt there were many inconsistencies which make it difficult for him, as an erected official, to issue an opinion on this budget doemnent. Trustee Kogstad stated he has found various inconsistencies and problems with the budget document, and has made recommendations and suggestions to improve the doemnent. Some Board members voiced disappointment Trustee Kogstad had not provided tt-iern with handouts before dais presentation and insisted copies be provided so they could foiiow along with his presentation. A document was copied from the computer and handed out to the Board. Mayor Krier expressed concern that no one had the opportunity to review this presentation ahead of time as is afforded. to Mr. Kogstad and all other Board members with. all Village documents. Trustee Kogstad then began his presentation by stating The budget compares a lot of numbers. He feels the budget inconsistencies start in the X007 Adopted Budget when he compares that document with the audited document for the same time period. Following a brief discussion, the Finance Director insri-ucted several copies of the audit be brought up from the Finance DeparCment and provided to the Board for their use. Trustee Kogstad stated there needs to be a beginning point when preparing a budget document and with the aanount of differentials that is difficult. Ms. Partipilo explained the audit document takes tral~rsfers from other funds to the General Fund or from the General Fund to the other fiords and reduces expenditures by the type of program; i.e., water/sewer fund -those expenses are reduced by the amount of the transfer made to other funds. Those amounts should equal out at the conclusion and the audit for that particular year. She went on to state there will be subtractions from the amount originally budgeted and there needs to be a record of each reduction and expenditure. The budget document, itself, is a spending document and therefore fluid. There will always be a differential between the two documents because the budget is a working document. Trustee Kogstad stated the numbers don't match between the two documents when he compares the finalised 2007 budget document with the audit report. Ms. Partipilo stated the numbers could be different because there are imbedded formulas within the document that could, in fact, be incorrect causing that particular differential. The Board tried to understand the comparisons as Trustee Kogstad explained them. Trustee Minx tried to clarify what Trustee Kogstad was presenting so the audience, as well as the Board were able to understand what points Trustee Kogstad was making. It is understood expenditures and revenues should equal out at the end of the year. Mayor Krier stated, that is why an auditor is hired each year, so a comparison is made and all monies are accounted for. Trustee Brumler was concerned staff was not prepared to answer all the questions set forth in this meeting. She was also concerned Trustee Kogstad was pointing out that staff was doing Krier expressed concern this discussion is giving residents the idea they were paying too much in taxes, when in fact the Village has deferred repairs to roadways and obtaining new important apparatus because there are not sufficient fiords. Trustee Kogstad then proceeded with this presentation. He explained his methodology for measuring cash, the fund balance and net assets which he felt had changed and were not reflected property. There was concern Trustee Kogstad was not planning for unexpected events such as this year's escalating gas prices and the dramatic increase in the, cost of salt for the winter snow season. Trustee Kogstad pointed out the proj ections were incorrect when the budget was prepared and consequently there have been many overages. A discussion ensued on revenues vs expenditures. The Board also discussed Trustee Kogstad's inference that the Budget was "screwed up" because a decision was made not to purchase or spend all the budgeted items. After continued discussion on pros and cons of srupiuses, Trustee Marcus fett it is how you look at the figures contained within the budget and how you compare those numbers when preparing next year's budget that is important. Discussion then moved to 2009 Budget Projections. It was stated staff does calculate on the conservative side rather than over expend on what revenue will be for the coming year. Trustee Minx stated if you spend more than you take in you will evenhrally end up with a year where you have no money and then where will you get it from if you do not have any reserves or underestimates for that year. She felt various unexpected events, such as the storm in September, are not being taken into account with Trustee Kogstad's various presentations and number differences this evening. Trustee Brunner stated nothing in the 2009 Budget will be exact at this time. This document is intended to be a best guess estimate as prepared by staff and reviewed by this Board. Trustee Kogstad then made his 2009 budget recommendations: • Compare Yhis budget using nine months of actual numbers, not six. • Staff should do better forecasting of revenue trends. • The Village should freeze discretionary spending by spending only what is necessary such as police and fire services, road improvements, etc. • The Board should have the opportanity to review "all" capital expenditures. The Board sho~!ld decide what is necessary to i_e~ave in the budget, not staff. Several Board members felt this was micro-managing the professional staff. • Trustee Kogstad would like to remove reserves azld have no contingency reserve. Trustee Kogstad would like to have quarterly budget review sessions to avoid overspending by various departments. He feels monies can be Transferred fi-om other funds to the General Fund when the need arises and he outlined his suggestions as they pertained to the various funds. This year, Trustee Kogstad estimated $850,000 in additional monies were available for the General Fund and could help balance the ~3 million shortfall. He then went on to explain his ideas to present a fund balance analysis. Trustee Minx felt this analysis was flawed because he is using a "Mastercard to pay a Visa bill" methodology. She feels staff has been working with the entire document and not taking snapshots and pulling out random numbers to create a specific scenario to suit a particular agenda. GO bonds as suggested by Trustee Kogstad should not betaken out to payout the General Fund. This may be legal but is this the best thing for the Village? Mr. Kogstad then presented his reasons for reducing the property tax rate. • He stated residents have received a 28% increase in their Village taxes over the last three years. He stated there is a "windfall tax" and residents are hurting. He felt the CPI went up 30%. He also felt the Village could have paid some bills and deferred others. He felt a capital plan is needed to give back part of the 20% increase residents have received in their taxes. The Mayor stated the V iltage portion of his tax bill figures out to X60 per month. He did not believe that was a great deal of money considering the fine services he receives which include police protection, ~fre/paramedic services, fresh water, and sewage, not to mention street repairs and snowplowing. Trustee Kogstad felt services could be obtained for 10% or 15% rather than 28%. Trustee Minx reminded the Board that the Village is paying more than $1 million more in pension allocations than would have been necessary if the previous administration had allocated the appropriate monies ten years ago. She hoped Trustee Kogstad was not saying we should not fund the pension ftmds? This would put them in a precarious position and funding would become even more difficult in the fuhire. Trustee Kogstad felt basic services should be provided to residents such as police, fire, and public works. However the Village should take a serious look to what extent we should provide those services. He also suggested possibly some employees should be furloughed. Mayor Krier asked if Trustee Kogstad had discussed this with the various Department Directors? Had he inquired on whether they felt they had excess employees and whether he has a plan on how to cut staff without cutting services? Trustee Kogstad stated this is only a suggestion on how the Village could move forward and manage its funding and service levels. Mayor Krier asked staff and the Board whether there were any areas where these cuts could be made? There was no response. Tnistee Kogstad also stated health insurance should be looked at as a way to also save money. Mayor Krier expressed concern that Trustee Kogstad is not making appropriate suggestions on how to help or con-ect a particular problem or situation in the budget but rather "points fingers" with no ultimate resolve. Trustee Minx stated our snowplowlug is exceptional. She believes the residents want this type of service. Should we eliminate snowplowing or now plow until there is six inches on the ground? Where do we cut? Do we not have leaf pickup? Do we not have ambulance services? Do we not provide any emergency response? What does "minimum service mean? She asked Trustee Kogstad what does minimum standards in Morton Grove mean to you? He had no response. Trustee Minx asked is this where Morton Grove wants to be? Trustee Kogstad feels the Village should reduce spending to sustainable levels and reduce the excessive fund balance in the process. Trustee Marcus felt flee purpose of the overall budget discussion and these workshops is to deterniine where the tax levy should be in order to provide the appropriate services to the residents for their safety and wellbeing. Trustee Marcus stated he would like to see a clarification from staff on the items discussed earlier in Mr. Kogstad's presentation. He would like to have another meeting to hear from staff. Trustee Brunner stated she would also tike to further discuss the pension differentials between the state's report and the actuary. Mayor Krier stated that would be approximately $50,000. Either amount is acceptable by law. However, what should be considered is the additional possibility of a downturn and resultant additional payment to the pension funds. Trustee Brunner asked that this item be on the next workshop agenda. No Board member was wIlling to vote on this matter at tlris time. The Board then discussed and discussed an additional meeting would be held on November 5, 2008, at 7:00 pm. Mayor Krier called for any resident comments: A woman in the audience stated there would be no cost savings if snowplowing was cut back since there would be more accidents and consequently more police calls. Mr. Eric Poders wanted to know when the minutes would be ready from these various workshops. He also wanted to laiow when the videos would be made available. Mayor Krier stated staff is working on preparing the minutes as well as the videos, but it does take time. We have minimal staff and they are working as quickly as possible. There being no further business, Trustee Minx moved to adjourn the budget workshop. The motion was seconded by Trustee Marcus and approved unanimously pursuant to a voice vote at 9:58 pm. ~~ ~~~ ~~ ~~ Mmu~tes by: Carol A:°'Fritzshalf Village Clerk