S-1454 - 03/22/2016 - BUDGET - Ordinances Supporting Documents ITEM 6.C. 1)
BOARD OF TRUSTEES MEETING
VILLAGE of SAMUEL E. DEAN BOARD ROOM
OAK B R K BUTLER GOVERNMENT CENTER
c92- �
1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
March 22, 2016
SUBJECT: Transfers Among Budget Line Items
FROM: Sharon Dangles, Assistant Village Manager/Finance Director on
ou
BUDGET SOURCE/BUDGET IMPACT: Effects Numerous Budget Programs
RECOMMENDED MOTION: I move that the Village Board approve Ordinance S-1454,
"An Ordinance Authorizing Transfers Among Budget Line Items" for the year ended
December 31, 2015.
Background/History:
During the course of a year, there are numerous situations that may arise that cause an account,
program, or even a fund to exceed its budget. When this occurs, State statutes provide that the
corporate authorities may make transfers from "one corporate object or purpose to another
corporate object or purpose". Additionally, statutes provide that the corporate authorities may
delegate authority to heads of municipal departments to "delete, add to, change, or create sub-
classes within object classes budgeted previously to the department with the approval of the
budget officer or executive officer of the municipality". The Village has defined a corporate
object or purpose to be an individual program or fund. Sub-classes within object classes have
been defined as accounts and categories within a budget program.
Now that all of the year-end accounting adjustments have been made, several budget
accounts, categories, and programs have been determined to have ended 2015 over budget.
The Village Board's policy on Finance, Taxation, and Budget, prepared based on the
previously mentioned statutes, outlines the following procedures for budget administration
and how these variances are to be addressed:
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1. That the Budget Officer, with the approval of the Village Manager, may
authorize transfers of budgeted funds between accounts or between account
categories within a single budget program.
2. That any transfer of budgeted funds from one budget program to another shall
be subject to approval by the Board of Trustees upon the recommendation of the
Village Manager.
3. That any transfer from contingency shall be subject to approval by the Board
of Trustees upon the recommendation of the Village Manager.
4. That any increase in the total appropriation within any fund shall be subject to
approval by the Board of Trustees upon the recommendation of the Village
Manager.
In order to make as few changes to the originally adopted budget as possible, formal
budgetary control has been established at the category level, i.e. personnel, materials and
supplies, operation and contractual, and capital. For example, if staff turnover created a
need for overtime, this may lead to the overtime account going over budget. However,
this would likely be offset by an under budget salary account. By not doing budget
transfers for these types of situations we preserve the original budget as the basis for
evaluating our actual performance versus expected performance.
Through Budget Year 2002, staff approved an extensive listing of budget transfers
administratively due to budget variances in account categories within a single budget
program as provided for under Procedure #1. In practice, these transfers were only
reflected in the Village's audit report-our accounting records were never adjusted for any
budget transfers in order to maintain proper original budget/actual comparison data.
With the new reporting requirements associated with GASB Statement#34, the Village is
now required to publish original budget amounts in addition to revised budget amounts in
its audit report. This requirement reduces the value of these administrative transfers
required under option #1. After consultation with the Village's auditors, in Budget Year
2003 and thereafter only program-to-program transfers and additional fund
appropriations are recorded. These transfers are required since this is the level of legal
control where budget compliance is measured.
In addition to the budget transfers required under the Village's Financial Policy
ordinance, during 2004 the Village Board began requiring budget transfers during the
year when an individual line item account exceeded budget by more than 10%. This
policy was revised in October, 2006 by eliminating the 10% threshold and instead
requiring line item transfers when an account exceeds its budget by $2,500 in a material
and supply, operation and contractual or capital account (6000 to 9000 account series) or
$10,000 in a personnel series account (5000 account series). Many of these transfers
have already been approved by the Village Board and have been posted to the accounting
system; thus,these transfers are not reflected here.
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Please note that all transfers are only for the amounts necessary to offset the individual
program budget variances, and in most cases the transfer is done only to the individual
line item that has the largest variance. In most cases it is several accounts that would
cause a program to exceed its budget. Also, in some cases the variance in a particular
line item may be greater than the amount of the transfer, with offsets found in other line
items within the budget program. After these transfers are made, numerous line-items
and categories will remain over budget; however, each program in total will be within
budget.
Program Transfers
The General Corporate Fund ended the year with an increase in fund balance (unaudited)
of $971,737. The total revenues were $22.9 million with total expenditures of $22
million. There are numerous situations that occur during the year which may cause a
particular line item to go over the annual budget. The following is a brief explanation of
the causes of program transfers that exceed $10,000:
Program 121 —Legal: Account 121-76350 (Litigation Settlement) is over budget in total
by$180,000 due to a settlement payment of$190,000.
Program 132—Human Resources: Account 132-76600 (Police & Fire Testing) is over
budget in total by $23,315 due to the 2014 Police Sergeant's promotional process
concluding in early 2015 and additional costs for the Police Commander and Patrol
testing processes.
Program 134—Risk Management: Account 134-70100 (Liability Insurance) is over
budget by $11,975 due to higher than expected deductibles.
Program 141 —Purchasinz Account 141-50000 (Salaries Full-Time) is over budget by
$14,530 due to a change in payroll allocations.
Program 271 —Interfund Transfers: Account 271-80250 (Interfund Loan) is over budget
by $66,000 due to a year-end transfer to the Sports Core for operations.
Program 321 —Buildings & Grounds: Account 321-72300 (Maint. Other Equipment) is
over budget by $15,565 due to emergency heating and cooling repairs at various
locations.
Program 621 -Police Field Services: Account 621-50330 (Sal-Overtime-Spec Detail) is
over budget by $20,790 due to an increase in billed police services. This service is billed
and reimbursed to the Village.
Program 700—Fire Rescue &EMS Operations: Account 700-50000 (Salaries Full-
Time) is over budget by $26,370 due to the payout of accrued benefits for a retired
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employee. Account 700-51300 (Fire Pension) is over budget by $85,150 due to actuarial
calculations approved by the Board.
Program 921 —Code Enforcement: Account 921-50000 (Salaries Full-Time) is over
budget by $11,050 due to general raises, longevity, and compensatory time buyout.
Program 171 —Hotel/Motel Tax: Account 171-73600 (Promotional) is over budget by
$44,820 due to an increase in quarterly membership dues.
Program 362—Streets & Traffic Maint.: Account 362-71500 (Maint. Svc-Traffic
Control) is over budget by $27,620 due to an increase in maintenance costs.
Program 351 —Water Operations: Account 351-65000 (General Equipment) is over
budget by $136,625 due to the replacement of water meters and MTV's. Account 351-
74300 (DWC Oper. &Maint. Costs) is over budget by $708,265 due to water purchased
being higher than expected from budget.
Program 451 —Water System Improvements: Account 451-91000 (Water Distribution
Improv.) is over budget by $10,030 due to capital improvements being higher than
anticipated.
Program 811 —Sports Core General Operations: Account 811-50000 (Salaries Full-
Time) is over budget by $13,485 due to a change in payroll allocations. Account 811-
65000 (General Equipment) is over budget by $20,730 due to Bath and Tennis Clubhouse
renovations.
Program 812—Swimming Operations: Account 812-72800 (Maint. Services-Swimming)
is over budget by $24,410 due to pool repairs and improvements.
Proy,ram 815 —Polo: Account 815-72600 (Rentals) is over budget by $14,150 due to
rental fees for tents,tables, chairs, and bleachers being higher than anticipated. Account
815-76900 (Reception/Entertainment) is over budget by $17,115 due to the Polo
Appreciation Dinner.
Program 821 —Clubhouse F&B Operations: Account 821-65000 (General Equipment) is
over budget by $10,520 due to new tables, chairs, and carts purchased. Account 821-
72200 (Maintenance Buildings) is over budget by $62,280 due to a new roof,painting,
and emergency HVAC repairs.
Program 822—Poolside Grill Food&Beverage: Account 822-99010 (Overhead Charge)
is over budget by $17,060 due to an increase in overhead allocation.
Program 831 —Golf Club General Operations: Account 831-63000 (Cost of Sales) is
over budget by $54,050 due to increased pro-shop sales.
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Program 834—Golf Course Maintenance: Account 834-72300 (Maint. Other Equipment)
is over budget by $19,135 due to a sprinkler compressor replacement and other
miscellaneous items.
Program 133 —Employee Benefits: Account 133-70300 (Specific Premium) is over
budget by $37,750 due to higher than expected premiums. Account 133-70800 (Health
Claims) is over budget by $77,025 due to higher than expected PPO claims.
Program 341 —Garage Operations: Account 341-50000 (Salaries Full-Time) is over
budget by $14,320 due to the payout of accrued benefits for a retired employee. Account
341-71600 (Maintenance Vehicles) is over budget by $13,525 due to parts cost being
higher than anticipated.
Budget Amendments
Water Fund—Account 351-74300 (DWC Oper. &Maint. Costs) was increased$656,840
due to water purchased being higher than expected from budget. Account 351-71800
(Maint.—Pumping Station) was increased $36,745 due to a generator and fuel tank
replacement.
Self Insurance Fund—Account 133-70800 (Health Claims)was increased $42,195 due to
higher than expected PPO claims.
Equipment Replacement—Account 342-65000 (General Equipment) was increased
$9,890 due to miscellaneous non-capital costs being higher than expected.
Recommendation:
Staff recommends the Village Board approve Ordinance S-1454, "An Ordinance
Authorizing Transfers Among Budget Line Items" for the year ended December 31,
2015.
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ORDINANCE 2016-BU-EX-S-1454
AN ORDINANCE AUTHORIZING TRANSFERS
AMONG BUDGET LINE ITEMS
WHEREAS, the Village Manager has recommended certain transfers among budget line items in
the Annual Budget Ordinance passed for the fiscal year beginning January 1, 2015 and ending December
31, 2015 and certain transfers of sums of money in said Budget Ordinance from one object or purpose to
another object or purpose; and
WHEREAS, the Village President and Board of Trustees concur with and approve of the Village
Manager's recommendations.
NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS that the following
transfers are hereby authorized:
Section 1: The recitals above are hereby incorporated into and made a part of this ordinance.
Section 2: In the attached schedule, attached as "Exhibit A", the amounts shown in the column
titled "Transferred From" represent unexpended balances. The total of said amounts are hereby
transferred to the various items specified in the "Transferred To" column immediately opposite the items
specified in the"Transferred From"column.
Section 3: The Water Fund budget is amended by increasing the amount in account 351-74300,
"DuPage Water Commission Costs", by $656,840 and account 351-71800. "Maintenance Pumping
Station", by$36,745, which increase shall be funded by this Fund's fund balance.
Section 4: The Self Insurance Fund budget is amended by increasing the amount in account
133-70800, "Health Claims", by$42,195, which increase shall be funded by this Fund's fund balance.
Section 5: The Equipment Replacement Fund budget is amended by increasing the amount in
account 342-65000, "General Equipment", by $9,890, which increase shall be funded by this Fund's fund
balance.
Section 6: This ordinance shall be in full force and effect from and after its passage and approval
as required by law.
Section 7: All ordinances or parts thereof in conflict with the provisions of this ordinance be and
the same are hereby repealed to the extent of such conflict.
[SIGNATURE PAGE FOLLOWS]
Ordinance 2016-BU-EX1-S-1454
Authorizing Transfers Among Budget
Line Items Page 2 of 2
APPROVED THIS 22nd day of March, 2016.
Gopal G. Lalmalani
Village President
PASSED THIS 22nd day of March, 2016.
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk