S-1034 - 04/08/2003 - BUDGET - Ordinances Supporting DocumentsQ�F p F OAk
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x� VILLAGE OF OAK BROOK
CO3 Nit Village Board Transmittal Memorandum
Date: March 29, 2003
To: Village President and Board of Trustees
From: Darrell Langlois
Recommendation: That the Village Board approve the attached ordinance
authorizing transfers among budget line items for the year
ended December 31, 2002.
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 ". In consultation with the Village Attorney, we have 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 2002 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:
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 contin ency 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.
2002YEBUDTRF2 doc
Budget Transfers
March 29, 2003
Page 2
In order to make as few changes to the 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 underbudget 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.
After the budget transfers were made administratively as authorized in item #1 (a copy of
these transfers was distributed on April 4, 2003), some individual programs remained over
budget. The schedule attached to the ordinance provides the necessary transfers between
budget programs so that each category in every program is within budget. Please note that
while some over - budget line items will remain, each account category will be within
budget.
Program Transfers
The following is a brief explanation of the causes of some of the more material budget
transfers:
Program 121 - Legal This variance is due primarily to the cost of outside legal services.
Program 181- Community Events: For budget purposes, the amount budgeted for Autumn
Fest is set at $20,000, which is based "net" of revenues received. For accounting purposes,
we are required to "gross up" the expenses and record the revenue in a separate revenue
account with no budget amount. In 2002 expenses for the event were $27,366, which
caused this program to go over budget. Revenues from the event were $ 15,709. Thus, on a
"net" basis, the event more than met its financial target.
Program 425- Library Building Project: The funding of this project comes from the
General Corporate Fund, the Library operating budget, and the Library Foundation. For
budget purposes, the General Corporate Fund share is budgeted "net" of the donations
expected from the Library Foundation (there is no budgeted revenue amount for
"donations "). Due to the shortfall in the Library Foundation's fundraising goal, the
General Corporate Fund's share will be increased; thus, this program exceed budget in
2002.
Program 426 - Municipal Complex Project: During 2002, this program exceeded its budget
by $1,220,609. There are two primary causes of this variance. First, payments on the
project occurred faster than was budgeted. As the 2002 budget for this project (not the
total project budget, which spans three fiscal years) was set in the fall of 2001, forecasting
the exact timing of the payments is very difficult. Second, as required under generally
accepted accounting principles, accounting recognition of the full amount of contract
retainage on the project, approximately $539,000 as of 12/31/2002, is required even though
the funds have not been disbursed. Both of these causes are strictly timing related. To
date, the entire project budget has been increased approximately $200,000 to $9.9 million.
2002YEBUDTRF2 doc
Budget Transfers
March 29, 2003
Page 3
The variances in programs 425- Library Building Project and 426 - Municipal Complex
Project caused the General Corporate Fund to exceed its total budget by approximately
$430,000. Staff was able to solve the variance in program 425- Library Building Project
solely by transferring from other line items in other programs. However, there are not
enough funds in the remaining line items in other programs to completely offset the
variance in program 426- Municpal Complex. Thus, the variance in this program must be
addressed by a combination of line item transfers as well as an increase in total
appropriation for the Fund.
After all other transfers were completed, it is recommended that the remaining General
Corporate Fund accounts with unexpended balances over $5,000 be transferred to program
426 - Municipal Complex Project. As you can see, this involves transferring $620,000 from
44 different general ledger accounts. Staff recommends a $5,000 threshold since a lower
amount would result in over 100 more transfers and at the end an increase in total Fund
appropriation will still be required. Once these transfers are completed, $600,700
additionally is required in order to for this program to be in compliance with the Board's
budget administration policy. It is recommended that this be done by an increase of
$600,700 in the total Fund appropriation.
Program 621- Police Field Services: This variance is due to a staff allocation issue between
Police Department programs. For the entire Police Department, full -time salaries were
under budget by approximately $41,000.
Program 700 -Fire and EMS General Salaries: The overtime variance is due to several
extended sick leave and worker's compensation cases requiring overtime to meet staffing
levels. Fire Pension is over budget due to the actual contribution of 19.6% of salary
exceeding the budgeted amount of 18.0 %.
Program 362 - Traffic & Lighting Maintenance (Infrastructure Fund) This variance is due
to an extensive street light repair project on 22 °d Street authorized by the Village Board
that was not budgeted.
Fund Appropriation Amendments
As mentioned previously, due to variances in Program 425- Library Building Project and
Program 426- Municpal Complex Project, it is recommended that the total appropriation for
the General Corporate Fund be increased by $600,700. It should be noted that if you
eliminate the negative variances in the building programs, the remainder of the General
Corporate Fund (commonly referred to as the "operating budget ") was under budget by
$1.1 million.
2002YEBUDTRF2 doc
Budget Transfers
March 29, 2003
Page 4
It is recommended that the total appropriation for the Garage Fund be increased by $37,915
due to several significant repairs of Fire Department equipment and apparatus that were not
budgeted.
The total appropriation for the Police Pension Fund is to be increased by $96,915. The
primary cause of the increase is that a nine -year police officer left Village employment and
took a position with another police department. As allowed under state statutes, he elected
to transfer his service credit the new department. This requires transfer of the accumulated
contributions of the officer, interest on the contributions (a normal refund does not include
interest), and the required Village matching of both the contributions and interest. The
service credit transfer is rare (this was the first for Oak Brook) since there is usually a
significant actuarial shortfall that the transferring officer is required pay. For this reason
we do not budget for these potential events and instead would adjust the budget
accordingly if one was to occur.
Any budget transfer done administratively or as approved by the Village Board, as well as
any increases in total appropriation, are reflected only in the Village's audited financial
statements in order to document compliance with the budget statutes. Our working
financial records, as well as any reporting done in the Village's budget, are based on the
original budget in order to compare actual results with what was originally expected.
Please feel free to contact me if you should have any comments or questions.
2002YEBUDTRF2 doc
5 A. APPROVAL OF BILLS - $233,295.22
Significant items included above:
1) J & R Asphalt — Payout #3 - $ 7,600.40 - Municipal Complex - Paving
Proj ect
2) Comcast - $10,660.46 — Sports Core /Westchester Park Subdivision
B APPROVAL OF PAYROLL FOR PAY PERIOD ENDING MARCH 29
2003 - $592,957 85
C. CHANGE ORDERS • None
D REFERRALS. None
E. AUTHORIZATION TO SEEK BIDS OR PROPOSALS OR NEGOTIATE
CONTRACTS: None
6. ITEMS REMOVED FROM CONSENT AGENDA: None.
7 BOARD & COMMISSION RECOMMENDATIONS
APV BLS-
$233,29522
APV PYRL -
$592,957 85
RMVD C AGNDA
BD /COMM RECOM
A. REMOVE FROM THE TABLE — COVINGTON COURT COMMUNITY COVINGTN CT
ASSOCIATION — VACATION OF BICYCLE PATH EASEMENT — Bc � L PATH o sE
REQUEST FOR WITHDRAWAL OF PETITION
Motion by Trustee Savino, seconded by Trustee Caleel, to remove from the
table the recommendation relative to the Covington Court Community
Association — Vacation of Bicycle Path Easement. VOICE VOTE: Motion
carried.
The Covington Court Community Association has withdrawn its request to
vacate /relocate a portion of the bicycle easement running along lots 21 -25.
It is their intention in the future, to apply for a permit to install a fence in
accordance with Village Code. No further action is required.
8. ACTIVE AGENDA (Items for Final Action): ACTIVE AGENDA
A CONFIRMATION OF APPOINTMENTS: None
B ORDINANCES & RESOLUTIONS OR.D /RES
ORDINANCE 2003 -BU -EX 1 -S -1034, "AN ORDINANCE ORD 03- BV -ExI -S-
1034 - AUTH
AUTHORIZING TRANSFERS AMONG BUDGET LINE ITEMS" TRNSFRS AMNG
BUDC LN ITEMS
VILLAGE OF OAK BROOK Minutes
Page 2 of 14 April 8, 2003
8 B. 1) Dunng the course of a year, there are numerous situations that may anse
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 ". In
consultation with the Village Attorney, staff 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.
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:
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 contin ency 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.
The following is a brief explanation of the causes of some of the more
material budget transfers:
Program 121- Legal: This variance is due primarily to the cost of
outside legal services
Program 181- Community Events: For budget purposes, the amount
budgeted for Autumn Fest is set at $20,000, which is based "net" of
revenues received.
VILLAGE OF OAK BROOK Minutes Page 3 of 14 April 8, 2003
F.,
8 B 1) For accounting purposes, we are required to "gross up" the expenses and
record the revenue in a separate revenue account with no budget
amount In 2002 expenses for the event were $27,366, which caused
this program to go over budget. Revenues from the event were $15,709
Thus, on a "net" basis, the event more than met its financial target.
Program 425 - Library Building_ Project: The funding of this project
comes from the General Corporate Fund, the Library operating budget,
and the Library Foundation. For budget purposes, the General
Corporate Fund share is budgeted "net" of the donations expected from
the Library Foundation (there is no budgeted revenue ampunt for
"donations "). Due to the shortfall in the Library Foundation's
fundraising goal, the General Corporate Fund's share will be increased;
thus, this program exceeded budget in 2002.
Program 426 - Municipal Complex Project: During 2002, this program
exceeded its budget by $1,220,609. There are two primary causes of
this variance. First, payments on the project occurred faster than was
budgeted. As the 2002 budget for this project (not the total project
budget, which spans three fiscal years) was set in the fall of 2001,
forecasting the exact timing of the payments is very difficult. Second,
as required under generally accepted accounting principles, accounting
recognition of the full amount of contract retainage on the project,
approximately $539,000 as of 12/31/2002, is required even though the
funds have not been disbursed. Both of these causes are strictly timing
related. To date, the entire project budget has been increased
approximately $200,000 to $9.9 million.
The variances in programs 425- Library Building Project and 426 -
Municipal Complex Project caused the General Corporate Fund to
exceed its total budget by approximately $430,000. Staff was able to
solve the variance in program 425- Library Building Project solely by
transferring from other line items in other programs However, there
are not enough funds in the remaining line items in other programs to
completely offset the variance in program 426- Mumcpal Complex.
Thus, the variance in this program must be addressed by a combination
of line item transfers as well as an increase in total appropriation for the
Fund.
After all other transfers were completed, it is recommended that the
remaining General Corporate Fund accounts with unexpended balances
over $5,000 be transferred to program 426 - Municipal Complex Project.
VILLAGE OF OAK BROOK Minutes Page 4 of 14 April 8, 2003
lz�-
8 B 1) This involves transferring $620,000 from 44 different general ledger
accounts. Staff recommends a $5,000 threshold since a lower amount
would result in over 100 more transfers and at the end an increase in
total Fund appropriation will still be required. Once these transfers are
completed, $600,700 additionally is required in order for this program to
be in compliance with the Board's budget administration policy. It is
recommended that this be done by an increase of $600,700 in the total
Fund appropriation
Program 621 - Police Field Services. This variance is due to a staff
allocation issue between Police Department programs. For the entire
Police Department, full -time salaries were under budget by
approximately $41,000.
Program 700 -Fire and EMS General Salaries: The overtime variance is
due to several extended sick leave and worker's compensation cases
requiring overtime to meet staffing levels. Fire Pension is over budget
due to the actual contribution of 19.6% of salary exceeding the budgeted
amount of 18.0 %.
Program 362 - Traffic & Lighting Maintenance (Infrastructure Fund):
This variance is due to an extensive street light repair project on 22nd
Street authorized by the Village Board that was not budgeted.
Due to variances in Program 425- Library Building Project and Program
426 - Municpal Complex Project, it is recommended that the total
rappropriation for the General Corporate Fund be increased by $600,700.
This amount is $170,011 more than the amount the General Corporate
Fund was actually over budget. This variance of $170,011 is found in
the unexpended balances of well over 100 line items below the $5,000
threshold noted under Program 426. Since an increase in the total
appropriation would still be required under any scenario, the higher
amount is recommended in order to avoid the confusion and
administration of over 100 additional transfers. It should be noted that
if you eliminate the negative variances in the building programs, the
remainder of the General Corporate Fund (commonly referred to as the
"operating budget ") was under budget by $1 1 million
It is recommended that the total appropriation for the Garage Fund be
increased by $37,915 due to several significant repairs of Fire
Department equipment and apparatus that were not budgeted.
VILLAGE OF OAK BROOK Minutes Page 5 of 14 April 8, 2003
A,
8 B. 1) The total appropriation for the Police Pension Fund is to be Increased by
$96,915. The primary cause of the increase is that a nine -year police
officer left Village employment and took a position with another police
department. As allowed under State statutes, he elected to transfer his
service credit to the new department. This requires transfer of the
accumulated contributions of the officer, interest on the contributions (a
normal refund does not include interest), and the required Village
matching of both the contributions and interest. The service credit
transfer is rare (this was the first for Oak Brook) since there is usually a
significant actuarial shortfall that the transferring officer is required to
pay. For this reason we do not budget for these potential events and
instead would adjust the budget accordingly if one was to occur.
Trustee Konn inquired of the $84,675 cost in overtime in the Fire
Department. Chief Jarvis explained that two employees have been off
of work for an extended period of time and staff has had to cover their
hours. Trustee Korin asked if contract paramedics could be used to
lessen the cost of overtime. Manager Boehm stated that staff will
review this further as the Village is in contract negotiations with the
firefighters at this time.
Motion by Trustee Caleel, seconded by Trustee Korin, that the Village
Board approve Ordinance 2003 -BU -EX 1 -S -1034, "An Ordinance
Authorizing Transfers Among Budget Line Items" authorizing transfers
among budget line items for the year ended December 31, 2002_ ROLL
CALL VOTE.
Ayes: 6 - Trustees Aktipis, Caleel, Craig, Konn, Miologos and Savino
Nays: 0 -None
Absent: 0 - None. Motion carried.
2) RESOLUTION 2003 -TX- PRPTY -EXP -R -840 "A RESOLUTION US 03- TX- PRPTY-
AUTHORIZING THE SALE OF SURPLUS PUBLIC REAL ESTATE SLP PUB R EL (Lt �I
(LOTS 1 & 2 OF THE SPORTS CORE /WESTCHESTER PARK & 2 SPTS
SUBDIVISION)" CR/WSTCHSTR PK
SUB)
The Resolution declares Lots 1 and 2 in the Sports Core /Westchester
Park Subdivision as surplus public real estate. This Resolution provides
that the Village will receive sealed offers to purchase each of these lots
at not less than the appraised value, which is $660,000.00 for Lot 1 and
$560,000.00 for Lot 2.
VILLAGE OF OAK BROOK Minutes
M,
Page 6 of 14 Apnl 8, 2003
ORDINANCE 2003- BU- EX1 -S- 1034
AN ORDINANCE AUTHORIZING TRANSFERS AMONG BUDGET LINE ITEMS
BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF
OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows.
Section 1 That on recommendation of the Village Manager of the Village of Oak Brook (which
recommendation is hereby approved) and in compliance with the provisions of the law in such case made
and provided, certain transfers among budget line items made in and by the Annual Budget Ordinance of
the Village of Oak Brook passed for the fiscal year beginning January 1, 2002 and ending December 31,
2002, and certain transfers of sums of money in said Budget Ordinance from one object or purpose to
another object or purpose, be and the same is hereby authorized as specified and indicated in Section 2
of this Ordinance
Section 2- That in the attached schedule, 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. That the General Corporate Fund budget is amended by increasing the amount
budgeted in account 426 -9030, "New Structures ", by $600,700, the increase which shall be funded by this
Fund's fund balance
Section 4: That the Garage Fund budget is amended by increasing the amount budgeted in
account 341 -7160, "Maintenance Vehicles ", by $37,915, the increase which shall be funded by this Fund's
fund balance
Section 5: That the Police Pension Fund budget is amended by increasing the amount budgeted
in account 291 -5320, "Pension Refunds ", by $92,215, account 291 -6910, "Miscellaneous ", by $1,305, and
account 291 -7700, "Other Services ", by $3,395, the increases which shall be funded by this Fund's fund
balance
Section 6 That this ordinance shall be in full force and effect from and after passage and approval
pursuant to law
PASSED THIS 8th day of April, 2003
Ayes. Trustees Aktipis, Caleel, Craig, Korin, Miologos and Savino
Nays
None
Absent None
Abstain None
APPROVED THIS 8th day of April, 2003
f
Village President
J� "•jh i+ a � I
,,.- ATTF -ST
e^;�g�: erg,
rju�°oa�ed as to Form.
MIMMM-122-
illage Attorney
WORDDOUS -ORDS /Budget Line 2003
Ordinance 2003- BU- EX1 -S- 1034
Budget Line Item Transfers,
Page 2
Published
Date Paper
Not Published Xx