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HomeMy WebLinkAbout2008-11-05 MinutesMINUTES OR A BUDGET WORKSHOP MEETING OF THE BOARD OF TR[7STEES, HELD ON NOVEMBER 5, 2008, _. IN THE TRUSTEE'S CONFERENCE ROOM RICHARD T. FLICKINGER MUN[CIPAL 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 1Vlayor Richard Krier. Clerk Fritzshall called the roll. In attendance were: Elected Officials: President Richard Krier, Trustees Georgianne Brunner, Sheldon Marcus, Rita Minx, Dan Staackmann, John ThilI, and Clerk Carol A. Fritzshall Absent: Trustee Roy Kogstad Village Staff:" Police Chief Paul L. Tasch, IT Administrator Boyle Wong, Comn~anity and Economic Development Director Bill Neuendorf, Building Commissioner Ed Hildebrandt, Assistant Finance Director Ryan Horne, Public Works Director Andy DeMonte, Chief Tom Friel, Family and Senior Services Director Jackie Walker O'Keefe, finance Director Daniela Partipilo, Village Administrator .ioseph F. Wade, Corporation Counsel Teresa Hoffman Liston Also Present: Several members of the public Mayor Krier thanked everyone for attending this meeting. I-Ie then introduced Village Administrator 3oseph F. Wade. Mr. Wade thanked Trustee Kogstad for bringing several topics up for discussion at the last meeting. It is hoped staff will be able to successfully answer those questions and concerns. He also pointed out staff is diligent when it comes Co preparing the budget and always keeps in mind the taxpayers and the economy. He also noted the Village has won the GFOA award for excellence in financial reporting for many years. Less than 5% of governmental milts receive this prestigious award. Village Administrator Wade outlined some of the areas to be discussed this evening: • How does the Village predict and judge expenditures for the purchase of salt for the snowplowing season? Mr. DeMonte and the Finance Department wilt hopefully clarify this process. • Trustee Kogstad inquired about inventory controls and the encumbrances of the accounting in the Village. The Finance Department will advise the Village Board as to these practices. • While Trustee Kogstad did find some mistakes in this budget document, it should be noted hundreds of revenue and expenses are entered to create the budget, and when numbers are taken and prepared in an alternate program (excel) to create the budget it is difficult not to have an error. Administrator Wade stated projecting revenues and expenditures takes diligence on the part of staff as flrey review the historical data.. On a whole, the budget's revenues have been within 96% of those projected and expenditures have been witlvn 99%. The Finance Department will be reviewing the budget document for the Board and hopefully clarify any misconceptions. • The application and use of fund balances wilt also be discussed. Mr. Wade stated at the end of the meeting the Village Board went over many different funds. Having $1.5 million in the Water Fund is not a lot considering the Village's impending obligations such as the Dempster Street Corridor, and the painting of two water towers. Mr. Wade reiterated these are both expensive endeavors. • A review of the Water Fund and whether there are adequate funds available will be reviewed. • As previously noted, the streets in the Village are in a declining condition. The major concern is how are these streets going to be updated and maintained. It has been previously estimated the Village needs to be setting aside $l.4 million to maintain and keep up with this encroaching problem each year. Village Admi!iistrator Wade stated all the Department Directors are at this aneeting to answer any questions the Village Board may have; Assistant Finance Director Ryan Horne and Finance Director Daniela Partipilo were then invited to discuss the budget document and financial issues. Mr. Wade stated Mr. Horne was hired a little over a year ago; he has 13 years of overall experience in the accounting Feld. Ms. Partipilo admitted there were a few errors contained within the budget document. She stated it is difficult to h•ansfer data and formulas from the Springbrook program to the Excel spreadsheets the Board reviews in the prepared Proposed Budget document. She stated the raw data that comes from the Springbrook program is correct and therefore matches the audit report. She believes there were some entry errors when transferring the data to Excel but reiterated the data is correct in Springbrook. Assistant Finance Director Ryan Horn then guided the Board through the fund balance and accounting practices used by the Village. He made comparisons to help the Village Board understand how the budget relates to the various funds. Mr. Horne stated budgeting is simply financial forecasting. There is no way to exactly predict what revenues and expenditures will be for any given year, however with the help of the Department Directors, educated estimates are made and as previously stated by Mr. Wade, the Village does come very close to those guesstimates. The question was raised as to whether the Village should account for the inventory it has such as salt? It is hard to predict what amounC will be used in a particular season. The Village can estimate how much salt will be used for a given snowstorm but it is difficult to predict how long the season will last and whether additional purchases will be required and how much will remain at the end of that season. He stated accounting is a practice, a guesstimate since there can be a great disparity from ] 2 months ago when purchases were made. Currently, aC the end of the year, accounting adjustments at•e made. By Aprii of the following year those figures are given to the auditors so they can do their comparisons and prepare their report. Springbrook is a good repository for the Village's data; however the documents created appear to be difficult for the general public to understand. Currently, other software packages are available but the Village believes Springbrook provides the services needed and uses the resources of the Village in a reasonable mariner. To make a change at this time would be expensive when training, maintenance and implementatiar are taken into consideration. Mr. Horn stated he believed the Village is doing the best with the resources available. Finance Director Partipilo stated from the time the budget preparations begin until the time the audit is received is between 18 to 21 months. She stated there have been many changes in the economy during the time period and as the 2009 budget document is prepared it is important to remember [here have been many changes. She stated they look at projections and do comparisons. The average budget revenue projections have been within 7% of variance with expenditures showing 2%. The Village has historically taken a conservative approach when projecting revenues, which she believes is a good practice. Some budget amendments may be required once the document is approved if revenues are not great enough to cover the expenses of a particular fund. T'he Finance Department prepares a warrant list for every Village Board meeting to show the Board the Village's expenses on a continual basis. The Board also receives memorandums that update them on projects having problems and subsequent overruns. She stated overages do happen on occasion; however departments continue to hold the lice and watch expenses. Fund balances are retained in some funds; however it should be noted some of those funds are not available to the General Fund because of resd~ictions such as the Motor Fuel Pund; and the Commuter Parking Fnrd. Village Adminish•ator Wade stated the credit market for municipalities is terrible and has been affected by the world markets. He stated there is fund balance available but it should also be noted there are infrastructure needs that must be addressed in the future. It is easy Co draw down the fund balance in the Enterprise Fund; however $I million dollars needs to be added each year (which has not been done) to maintain an amount necessary to provide the funds for infrastructure improvements. Pina~lce Director Pai~fipilo noted the Village had a good capital project year in 2007. Many streets were improved that were in very poor condition. In 2008, more money was spent on capital projects; however in 2009 the drawdown is being used for general operations and not capital improvements. Community and Economic Development Director Bill Neuendorf then discussed the Waukegan Road 1"IF Fund. I Ie stated that fund is also separate from the General Fund and is governed by state statute. It was created in 1995 and will expire in 2018. Municipal bonds were issued to bring businesses and changes to that district. Cun~ently monies are being paid back to the General Fund that were loaned to this TIF Fund. It is hoped that debt can be repaid early; however revenues need to increase before that can happen. Currently Produce World is looking at moving into the TIF area and building a much larger store, and. it is anticipated some monies received should be able to help repay the outstanding loan. His recommendation is to make the improvements to Churchill Street so this project can become a viable entity in the TIF and free up the Dempster/Waukegan northwest corner for an adclitional revenue generating business. He stated the Village is continuing to seek out other businesses for this District. Trustee Marcus expressed concern on whether monies would ever be available to pay back the debt owed to the General Pund. Mr. Neuendorf felt the monies would be available if the current monies being generated by the fwid are not paid to the General Fund at this time. Public Works Director Andy DeMonte was introduced and stated there are 31 miles of roadway that need to be updated in the Village. He has forwarded a memorandum to the Board concerning the conditions of the va~•ious streets. He also stated there should be 5,000 feet of watennain replaced each year. He reminded the Village Board the Village has an aging system and it is important to keep up with these repairs. The Mayor then asked if there were any comments from the audience. There were none Village Administrator Wade stated the Budget Ordinance will be prepared for the Novernber 24, 2008, Village Board meeting. He asked if the Board would like anything added or deleted from that document. The Village Board had no comments. The Village Board asked Finance Director Pai•tipilo for copies of the pages that were changed in the proposed budget docwnent. They expressed concern about the correctness of the copies and wanted to make sure the Finance Department had time to make the corrections. Mayor Krier then asked if there was a problem with passing a 2% levy increase and if possible to have a consensus of the Village Board this evening. It was determined i f it was not passed it would impact the Village's operating budget by $180,000. If a I% levy increase is passed the Village would receive an additional approximately $93,000. If the Village Board chooses to not n~erease its levy for this year the shortfall would be $200,000 more than originally budgeted. Several Village Board members felt it was the responsible dung to do this year to have no levy increase. Trustee Brurmer expressed concern there would not be anything available if the Village were to experience an extraordinary event. The Village Board generally expressed concern about having taxes raised considering the recent reassessment. With foreclosures and vacancies at all ail time high, the burden has been shifted to the taxpayers. Tnistee Marcus felt next year would be a tough economic year and his responsibility is to the taxpayers of the Village. Since there is money to retain services he felt the levy should remain the same. Trustee Minx expressedher concerns that if no levy is assessed there could be repercussions in the 2010 budget. The drawdown on the fund balance does have rippling effects and there are areas of the budget that will need to be looked at. Trustee Staackmann also stated a lot of people are hurting and more businesses are closing. He does not see how the levy can be raised. It is the right turd moral thing to do to keep the levy at 0% increase. The line needs to be held aild the Village Board needs to find a way not to increase taxes at this time. Trustee Brunner was concerned about the end result. Eating up reserves is nova good thing and she disagreed with the other board members about not passing a tax levy increase for this year. Trustee Staackmann felt as long as the Village was not tufting vital services that a 0% increase was appropriate. He felt if necessary, other things could be cut Trustee Brunner reminded the Village Board of the unforeseen incidents that happened last year such as the dramatic increase in salt prices and the huge September storm which required extensive garbage and waste removal. Trustee Staackmaim stated fllc reserves are at 25% and there is money. Trustee Thill felt the psychological impact on the community would be beneficial. Trustee Marcus felt this was a good conversation and if the economy was better he believes they would not be having this discussion. He feels stirongly the levy should be held for the coming year as long as the Village can continue to provide services and programs without disruption. Following the discussion, Mayor Krier stated there will be a 0% increase in the levy for this year. He stated he believes the Village Board has the citizens of the Village at heart. The Village Board then expressed concern over the Library's requested 6.2% tax levy increase. Corporation Counsel was asked for her opinion on whether the Village had a right to ask the Library to hold down its requested levy. Corporation Counsel stated the library cannot pass a levy without the Village Board's vote. Trustee Staackmann wanted to know why they want a 6.2% increase and felt they should also hold the line for Lhis year. Mayor Krier stated he would like to write the Library and ask them why they want to pass such a large increase and at the same time inform them the Village will have no levy increase. It was suggested the Library Board appear at the November 24, 2008 Village Board meeting. The Village Board then asked for documentation on why the Library is requesting a 6.2% increase in their tax levy. A correspondence will be prepared immediately by Mayor Krier. 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 9:24 pm. ~~~ ,~ Minutes by: Carol A. shall Village Clerk