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Minutes - 07/23/2007 - Committee of the WholeMINUTES OF THE JULY 231 2007 COMMITTEE OF THE WHOLE MEETING OF THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK APPROVED AS WRITTEN BY VILLAGE BOARD ON AUGUST 14, 2007. 1. CALL TO ORDER: The Committee of the Whole Meeting of the Village Board of Trustees was called to order by President Craig in the Samuel E. Dean Board Room of the Butler Government Center at 7:30 p.m. The Pledge of Allegiance was given 2. ROLL CALL: Village Clerk Charlotte Pruss called the roll with the following persons PRESENT: President John W. Craig, Trustees James Carson, Jeffrey J. Kennedy, Kathryn F. Manofsky, Moin Saiyed, Robert G. Sanford and Gerald Wolin. ABSENT: None. IN ATTENDANCE: David Niemeyer, Acting Village Manager; James Bodony, Fire Chief, Robert L. Kallien, Jr., Director of Community Development; Bruce F. Kapff, Director of Information Services & Purchasing; Darrell J. Langlois, Finance Director; Michael J. Meranda, Public Works Director and Nelson Patras, Bath & Tennis Club Operations Manager. 3. CAPITAL IMPROVEMENT PROGRAM REVIEW AND CONSIDERATION Trustee Manofsky commented that she had asked to have this meeting because she felt that the prioritization of capital projects should be done in a meeting with all trustees present and staff. Finance Director Langlois indicated that the General Fund was financially healthy. He added that the six month reserve is $10.3 million and felt that the Village would end the year significantly above the six month reserve budgeted for 2007. He described the budget process indicating that Department Directors project their operating expenses and then after figuring the operating expenses compared to the six month reserve capital projects are then prioritized. He felt that the Board discussion at this meeting would provide staff with information about which projects were important to the Board. When funds available was determined, the projects would be pared to fit the dollars available. Trustee Carson asked whether Oak Brook's six month reserve was consistent with other municipality reserve levels. Finance Director Langlois responded that Oak Brook's reserve would be considered high even for a conservative plan. He added that the manner in which Oak Brook figured their reserve was a six month cash balance, not a COMMITTEE -OF- THE -WHOLE Minutes Page 1 of 6 JULY 23, 2007 fund balance. Essentially this offered in actuality a nine -month reserve which is high. Acting Village Manager Niemeyer added that it was a higher level than other municipalities, he felt that because of the reliance on sales tax as revenue, which fluctuates, it was a good idea to maintain a higher reserve. Trustee Kennedy agreed that since the Village had no real estate tax revenue which was a more reliable source of revenue, it was important to maintain a larger reserve. Finance Director Darrell Langlois provided an overview of the topic indicating that in preparation for the 2008 Budget, Trustee Manofsky had requested a Committee of the Whole meeting in order to prioritize projects for inclusion in the 2008 Budget. The Water Fund projects were prioritized during the water rate study and will be re- prioritized when this is updated in the near future due to the rate reduction and rebate by the DuPage Water Commission. The projects and issues currently being considered for the three primary tax supported funds of the Village are explained. General Corporate Fund The listing of projects for the General Corporate Fund has been prepared based on data submitted during the 2007 Budget and Five -Year Financial Plan process and has been updated based on a preliminary inquiry of the operating Departments. Other than changing years for a few items from the last Five -Year Financial Plan, staff has not attempted to prioritize projects beyond where they were slotted last year. Individual projects over $25,000 have been listed, and for purposes of this discussion, increases in staffing are not included. I.T. Implementation: As the Village and Sports Core Financial Systems Upgrade projects will be well underway, the $143,000 budgeted for 2008 for these two projects must be included as a high priority item. Some of the major I.T. projects are individually listed here in addition to a large annual outlay for a number of projects that are individually below $25,000. Outside of the financial systems project, VMWare implementation, and Microsoft Office Suite Upgrade are priorities. What normally happens is staff provides a long list of needed projects and a dollar amount was set aside for these types of projects. From there the list is prioritized as the year goes along. A dollar amount below $139,500 listed will be established and projects up to that amount will be selected. Wireless Broadband Mesh Project: At this point in the process staff does not have an estimated cost. What we do know is that pursuant to the settlement agreement entered into regarding the Primeco class action lawsuit, the Village must spend $153,271 on a "Cy Pres" project that provides benefit for the general public that has not otherwise been funded. Initial indications are this would be a good project to designate for this purpose. If the Board concurs to designate this as the Cy Pres project, we have included $150,000 in the 2008 column and this must be a high priority project. If a different project is selected, that project will be substituted as the Cy Pres project. It should be COMMITTEE -OF- THE -WHOLE Minutes Page 2 of 6 JULY 23, 2007 noted that the cost for implementing this project will likely far exceed the $150,000 included, so a detailed discussion regarding the Village's prioritization of this project beyond the $150,000 CY Pres amount will be necessary. Old Butler School: The costs of maintaining the Old Butler School have been broken down into two components. The first is the Village obligation to maintain the structure in order to allow for occupancy of the building. Given that the Historical Society is anxious to re- occupy the building, these costs should be a high priority item. The second set of costs is approximately $300,000 in order to enhance the building in order to make it a museum. For example, there is a huge difference in the cost of painting the windows (Village obligation to maintain building) as compared to replacing windows (Historical Society plans). A discussion as to the Village's level of financial commitment beyond minimum maintenance is necessary. It should be noted that unless these items are a very high priority, funding any enhancements will likely be several years away due to the large number of projects on the list. Public Work Roof. This project has been deferred many times in the last several years and per Mike Meranda if funding can not be found it could be deferred one more year. Due to the large number of projects included on the list it has tentatively been put into the budget for 2009. The current roof was installed in 1982 and has been repaired numerous times, and the HVAC units on top of the roof fail to meet the Village Code requirements since they are not properly screened (screening the HVAC units is part of the project cost). Library HVAC Screening: This project was included in the 2007 Budget for $58,000 but actual bids for the project were significantly over this amount. The budget for this project has now been increased to $124,000 based on the bids received. Although the Board could elect to defer this project, there are safety issues involved with the installation of a catwalk in order to allow Public Works maintenance access. Village Hall HVAC Screening: The costs are separated out for two portions of this project - $57,500 to screen the roof -top gun range ventilation unit and $240,000 to relocate and bury the ground HVAC units. East Side Entrance Improvements: $250,000 has been included in 2009 and 2010 to improve the east entrance to the Village Hall but obviously much of this cost is dependent on burial of the HVAC units and whether the Board wishes to return the Village Hall east side entrance as the "main" entrance. Restore Equipment Replacement Charge to Full Funding: In order to balance the budget and maintain the six month reserve requirement, the Village has periodically under funded the General Corporate Fund portion of the equipment replacement fund chargeback in order to avoid increasing taxes or deferring other essential projects. In 2003 and 2004, the Village did not fund any General Fund share of this charge, and COMMITTEE -OF- THE -WHOLE Minutes Page 3 of 6 JULY 23, 2007 during the 2007 Budget it was decided to limit the contribution to $300,000, which is approximately $225,000 below what would normally be required. As of this writing the Equipment Replacement Fund has a cash balance in excess of $3 million. That being said, there are significant outlays coming up in the Five -Year Financial Plan, notably replacement of the Fire Department's ladder truck in 2010 for approximately $1 million. By no means have the actions in 2003, 2004, and 2006 jeopardized the long term financial health of this fund, as there are often other priorities more pressing than saving money for equipment many years down the road. However, altering the normal schedule too many times or in order to fund non - essential projects will have a negative long -term effect on this fund. How the Village funds this item has a direct impact on the amount available for other items, and this must be prioritized along with the capital projects being discussed. Funding General Corporate Fund Projects: The 2007 Budget includes $700,000 for capital- related items, and the amount available in future years can vary widely depending on favorable operating results in 2007, the six month reserve level for 2008, etc. It is safe to say that the Village can not fund anywhere near the $2.1 million included on the 2008 list, and the problem only gets worse if the Board elects to move 2009 projects forward. Normal revenue growth, budget surpluses from 2007, tax increases (a I% increase in the telecommunication tax has been proposed in the past but has not been enacted), grant funding, or issuing debt would increase the amount available for these projects. It should be noted that although the Village recently approved an increase of 0.25% in the non -home rule sales tax rate, none of the projects on this list meet the statutory definition of "infrastructure" and thus the new revenue is not available for these items. Hotel/Motel Tax Fund Trustee Kennedy reminded the Board that the hotel /motel tax is dedicated money that can only be used to promote tourism. Funds may be used for capital improvements but only for beautification within the Hotel Beautification District. During the 2007 budget is was decided to increase the hotel /motel tax from 1% to 3% in order to fund beautification in the newly created Hotel Beautification District. In the 2007 Budget, $500,000 has been included for Hotel Beautification District and $750,000 for each year thereafter. There is a separate process underway to prioritize these improvements, which will then come before the Village Board for its consideration. It should be noted that if the beautification committee recommends improvements that are geographically outside of the Hotel Beautification District, either Infrastructure Fund funding (if it can be linked to the statutory definitions of infrastructure) or General Fund funding will be required. As of now there have been no amounts in the Five -Year COMMITTEE -OF- THE -WHOLE Minutes Page 4 of 6 JULY 23, 2007 Financial Plan that fund beautification outside of those in the Hotel Beautification District. Infrastructure Fund Trustee Kennedy reminded the Board again that the non -home rule sales tax can only be used for certain, defined infrastructure improvements such as roads, streets, traffic etc. At the July 10, 2007 meeting the Village Board approved increasing the non -home rule sales tax by 0.25% in order to generate additional revenue for infrastructure projects and expenditures. Eventually this will generate approximately $2.6 million annually in additional revenue for the Village. In 2008 we expect to receive 9 months of the new revenue with the full amount of $2.6 million expected in 2009. The new revenue is expected to be used for repayment of the Village's obligation for the 22nd Street/I -88 Bridge project, improvements resulting from the Oak Brook Areas Revitalization Plan and implementation of a G.I.S. system. Additional commercial infrastructure - related projects are also possible. The Village has made an initial five -year repayment proposal to the Illinois State Toll Highway Authority for the bridge project and are waiting for their response. If the current proposal is accepted, approximately $1 to $ 1.2 million would be available annually for these other items. Until we have a definitive answer from the ISTHA regarding payment for the bridge project and the Revitalization Plan is completed, it is impossible to prioritize other projects until these major issues have been resolved. Trustee Manofsky asked about the WiFi project. She expressed her concern that the program suggested was being delayed by the hiring of a consultant. Purchasing Director Kapff indicated that the process was to assure the Board that they are fully aware of options available. Trustee Carson agreed that this process should be followed. Trustee Manofsky also asked about the GIS project and commented that the Board was not aware of this project. Director Kapff responded that it had never been listed on a capital project list, because the issue was one of personnel, not necessarily the technology. He described the benefits of the program. Finance Director Langlois suggested that additional funds for personnel for the project could be used from the infrastructure fund. Trustees Saiyed and Wolin agreed that this was an important project. Finance Director Langlois indicated that he would pursue a legal opinion on whether the non -home rule sales tax could be expended for this project. Trustee Kennedy expressed his opinion that the Board should set policy and not necessarily itemize specific projects. He provided suggestions. Trustee Manofsky agreed to some extent, but felt that the Board should be aware of specific projects. Trustee Wolin agreed and suggested that each Department Director COMMITTEE -OF- THE -WHOLE Minutes Page 5 of 6 JULY 23, 2007 provide a list of prioritized projects for the Board's review. Discussion ensued about various projects and individual trustees' priorities Discussion ensued regarding the philosophy of borrowing funds for major capital projects such as the bridge over 22nd Street and water projects. Consensus was that borrowing was an option. Trustee Manofsky also brought up the issue of the Bath & Tennis Club swimming pool which is very old and the Village has not set aside money for repair or replacement. She suggested that the Park District might look at building an outdoor pool if there was no competition with the Bath & Tennis Club. Trustee Kennedy also commented that within the Infrastructure Fund the Village should be considering improving traffic signals which would improve traffic movement. There is a problem with north York Road, and he felt that when the Elmhurst Hospital is completed it would only get worse. He also added that the Beautification Project should also begin prioritization. Trustee Saiyed suggested improving revenue by moving forward with the Revitalization Task Force and luring more business to Oak Brook. 4. ADJOURNMENT: Motion by Trustee Kennedy, seconded by Trustee Carson, to adjourn the Committee -of- the -Whole Meeting at 8:48 p.m. VOICE VOTE: Motion carried. ATTEST: /s/ Charlotte K. Pruss Charlotte K. Pruss Village Clerk cow COMMITTEE -OF- THE -WHOLE Minutes Page 6 of 6 JULY 23, 2007