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Minutes - 12/02/2000 - Board of TrusteesVILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes December 2, 2000 UNOFFICIAL UNTIL APPROVED AS WRITTEN X OR AS AMENDED BY VILLAGE BOARD ON December 12, 2000. 1. MEETING CALL: The 2001 Budget Workshop was called to order by President Bushy in the Samuel E. Dean Board Room of the Village Commons at 9:00 a.m. Pledge of Allegiance was given. 2. ROLL CALL: The following were in attendance of the meeting: PRESENT: President Bushy, Trustees, Kenny, McInerney and Savino. ABSENT: Trustees Butler, Caleel and Craig. IN ATTENDANCE: Stephen B. Veitch, Village Manager; Michael A. Crotty, Assistant Village Manager; Dale L. Durfey, Jr.; Village Engineer; Debra Jarvis, Fire Chief, Bruce Kapff, Director of Information Services & Purchasing; Robert L. Kallien, Jr., Director of Community Development; Darrell J. Langlois, Finance Director /Treasurer; Ruth A. Martin, Library Director; Michael J. Meranda, Public Works Director; Allen W. Pisarek, Police Chief, Bonnie Sartore, Bath & Tennis Club Manager and Trey VanDyke, Golf Club Manager. 3. 2001 BUDGET WORKSHOP: President Bushy emphasized the Village Board's appreciation to the Finance Director Langlois, Alice Filinovich, Pat Finaldi, Joyce Resh and Sandy Schmidt who participated in the planning and preparation of the Village of Oak Brook's Proposed 2001 Municipal Budget. The proposed 2001 Village Budget was circulated to the Village Board on November 17, 2000 and placed on file for public view on November 20, 2000 at the Oak Brook Public Library and Village Hall. A Public Hearing is scheduled for 7:15 p.m. on Tuesday, December 12, 2000. Village Manager Veitch gave an overview of the proposed budget. The 2001 Budget continues the methodology, called "results budgeting ", that has been used in Oak Brook since 1995. The results budgeting methodology combines traditional program budgeting and line item control with a management by objectives system. Coupled with the Five -Year Financial Plan, this approach provides the Village with a management system that goes beyond traditional budgeting to become a directional mechanism for accomplishment of the results desired by the Village Board and the community. Long range policy VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 1 of 8 December 2, 2000 Qi results desired by the Village Board and the community. Long range policy guidance for the budget process is drawn from the Mission and Vision statements first adopted by the Board in 1995. They are reviewed annually and were last formally re- adopted by the Village Board on August 24, 1999. Short range policy guidance is provided each year by the Village Board through its establishment of Village Board Objectives, which form the core of the 136 Program Objectives arrayed through 74 "Budget Programs" in the 2001 Budget. Ordinance 1999 -FI -S -957, the Village Board's policy ordinance on Finance, Taxation and Budget, provides both long and short range guidance to the budget process through the fundamental policies embodied therein. The policy ordinance, as well as other policy decisions of the Village Board, directs the Village to: • Operate the Village without a general real estate tax. • Accumulate cash reserves in advance of major capital projects (utilizing long term debt very judicially and only in order to meet financial goals and policies of the Board). • Maintain a cash balance of at least six months operating expenditures in the General Corporate Fund. • Annually test the incremental growth in General Corporate Fund operating expenditures against the incremental growth in revenues, striving to hold expenditure growth within the limits of new revenues. • Operate enterprise activities on a self - supporting basis. • Annually review the need for and uses of the utility tax on natural gas and electric service. The 2001 Municipal Budget provides for both maintenance and continued enhancement of the high levels of public service that the community expects from the Village of Oak Brook and adheres to the principles and policies embodied in the Mission Statement and listed above. The Budget does not rely on a general property tax. Major capital projects are funded with minimal use of long term debt, drawing down reserves that were accumulated for those purposes while exceeding the mandated minimum cash balances. Enterprise funds are budgeted to operate in accordance with the governing policy. The utility tax on natural gas and electric service has been reviewed in connection with the Five -Year Financial Plan and has been re- established for 2001 at 3 percent, two percent below the statutory maximum rate. The utility tax on local and intrastate telephone service was repealed as of December 31, 1999. In lieu thereof, a two - percent telecommunications tax was instituted VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 2 of 8 December 2, 2000 [J effective January 1, 2000 to assist in funding the operating and capital needs of the General Corporate Fund. Incremental expenditures in the General Corporate Fund exceed incremental revenues. This is due principally to staffing increases in the Police and Fire Departments programmed in accord with the 2001 -2005 Five -Year Financial Plan. These additions, scheduled for the second quarter of the year, will be subject to review based on revenue trends, particularly in the sales tax. The Five -Year Financial Plan contemplates a 1% increase in the telecommunications tax in 2002 in order to fund public safety expenditures (primarily personnel) in a manner consistent with Village Board financial policy. The total budget for operating and capital expenditures (excluding non - operating and interfund activities) is $38,459,830, an increase of $7,658,210, or 24.86 percent from the comparable figure in the 2000 budget. This very substantial increase is due to capital outlays (most notably for construction of the Municipal Complex Project), additional public safety personnel and the increasing costs of health insurance and state - mandated pension benefits. The total expenditure budget for 2001 is $45,277,475 on total revenues of $43,085,630, an increase of $9,171,855 or 25.40 percent from the comparable figure in the 2000 budget. Total unrestricted cash balances (i.e., excluding pension funds) are budgeted to decrease approximately $4,420,000 from the estimated January 1, 2001 balances. The decrease in cash balances is due primarily to outlays for major capital projects including the new Library and the Municipal Complex Project. Revenue from the 1 percent share of the Retailers Occupation Tax (a.k.a. General Sales Tax) of $11,255,000, is based on a revised 2000 estimate of $10,800,000 and modest growth assumptions: Growth in "same store" sales of 3.5 percent, phasing in and out of significant sales tax payers, and no sales tax growth assumed in the office sector. Recent trends indicate healthy performance in "same store" and new retail store sales, coupled with real declines in the office sector, leading to a decline from 1999 actual receipts to estimated 2000 receipts of 2.75 percent. The total 2001 operating budget is $24,391,555. This is an increase of 9.29 percent over the comparable figure from the 2000 budget. The 2000 operating budget continues a number of initiatives aimed at strengthening public safety services. In order to accomplish these objectives the 2001 budget, like the 2000 budget, includes a substantial number of new personnel. VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 3 of 8 December 2, 2000 a Street Improvements 2001 will be another year of major investment in the Village's roadway infrastructure, with over $2.7 million budgeted for paving, crack sealing, pavement rejuvenation and pavement marking. The 2001 paving project will be highlighted by a major project in the Timber Trails/Merry Lane neighborhood involving massive drainage work as well as street resurfacing and installation of concrete roadway shoulders. The following paragraphs summarize the most significant features of the operating budget of each department. Department 1 - Legislative and General Management This department involves a wide variety of general -scope functions including the operations of the Village Board and the offices of the Village Clerk, Village Manager and Village Attorney. The Human Resources, Employee Benefits, Risk Management, General Services, Purchasing, Information Services, Village Communications Center and Emergency Management budgets are located in this department as well. In terms of staffing, the Village Clerk has requested a part-time clerk to assist in the electronic storage of records. The most apparent feature of the 2001 budget for these functions is the reinstatement of the contribution to IRMA for 2001. The contribution did not appear in the 2000 budget due to the availability of member reserve funds at IRMA to cover the Village's annual contribution. It has since been determined that the proper accounting treatment for the contribution requires that it be expensed and that offsetting revenue from the excess member reserve also be recorded. Therefore, two year's surplus reserves have been reflected as revenue in 2000, the 2000 contribution has been reflected as an expense in the 2000 estimate (without a corresponding budget amount) and the 2001 contribution is budgeted as an expense in 2001. Department 2 - Financial Services This department includes all functions related to the Village's financial management activities, including the Police and Firefighters' Pension Funds. The Installment Contract Debt Service Program (281) is a new program in this department, which is responsible for payment of principal and interest on the installment contract for the Municipal Complex Project. In terms of staffing, the only addition is in the water billing function, where a part time account clerk position is added. Funding for the position comes from the Water Fund, through its annual transfer to the General Corporate Fund for administrative services received by the water utility. Finance Director Langlois explained the new mandated accounting procedures to the Village Board. VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 4 of 8 December 2, 2000 M Department 3 - Public Works This department has charge of maintenance of the Village's physical infrastructure consisting of buildings, streets, pathways, trees and vehicular equipment. The department also is responsible for operation of the water utility. There is one additional position in this department in 2001, a previously anticipated increase in the building services area. This position reinstates a similar position eliminated several years ago. With additional responsibilities associated with completion of the Library and Municipal Complex Projects, re- establishment of this position has been contemplated for some time. The budget also includes funds to purchase all materials associated with the three - year program to upgrade and replace street name signs throughout the Village. The Village Board discussed the cost of the leaf pickup program estimated at $125,000. Public Works Director Meranda indicated the Village may only have three years remaining with the present arrangements to remove the leaves for the Village. Alternative methods discussed were coordination of an aggressive composting program for residents or the waste haulers removing the leaves at the residents' expense. Trustee McInerney recommended consideration of educating residents in alternative methods of leaf disposal. President Bushy suggested the Village Board may wish to address this issue in a policy discussion of how long to continue this program. Trustee Kenny asked to address this in the Village newsletter along with the new accounting procedures. Trustee McInerney stated that residents have commented to him on the beautification of the median trees in the Village streets and public right -of- ways. Trustee Savino inquired if the Landscape Architect for the Village could address adding landscape structures to the median areas in the Village. Department 4 - Engineering This budget covers all operations of the Engineering Department and the office of the Village Engineer. The program budgets for the majority of the Village's capital improvement programs are found in this section as well. There are no significant changes in the operating budget for this department in 2001. The 2000 budget included the addition, in mid -year, of an Engineering Technician. This addition was predicated on the assumption that the explosion of activity by telecommunications service providers and others working in the public right -of -way would continue, as it has, and result in a need to add staff in order to avoid serious diminution of service from the Engineering Department to Village residents and businesses. The addition was also related to a long - planned project to create accurate maps ( "atlases ") of utilities in the VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 5 of 8 December 2, 2000 N Village. Filling the position has proven to be difficult, but it remains in the budget and efforts continue to locate the appropriate candidate. Department 5 - Library The most significant features of the 2001 budget for the Oak Brook Public Library are once again related to preparations for and execution of the move into a new facility, planned for very late in the year. Many of these expenditures are of a one -time nature. No significant personnel changes are reflected beyond some increases in hours for part-time staff, but addition of 2.5 full -time equivalents is budgeted for the fourth quarter based on the construction schedule. These changes are consistent with the 2001 -2005 Five -Year Financial Plan. Library Director Martin indicated that the library will be closed for approximately four weeks in the conversion to the new library. Department 6 - Police The 2001 budget for the Oak Brook Police Department reflects the first increase in personnel for patrol duties in several years (patrol strength has increased by only four officers since 1980). The budget reflects addition of three police officers in the second quarter of 2001 conditioned on an update of the statistical staffing analysis that is completed periodically to quantify the degree of need for additional personnel, and subject to an assessment of revenue status as noted earlier. Anticipated increases in State mandated pension benefits, for which the Village does not levy property taxes, are also reflected for the Police Department budget. Department 7 - Fire The 2000 budget for the Oak Brook Fire Department marked the start of implementation of recommendations from a staffing study completed in 1999. The staffing study grew out of several 1999 program objectives in the Fire Department and discussions within the community on the issue of department staffing. 4.5 full -time equivalent personnel were added in the 2000 budget, including two Firefighter/Paramedic positions (plus one additional Firefighter /Paramedic under the contract with Paramedic Services of Illinois) as the first step toward reaching the three- person engine /two - person truck staffing standard. The 2001 budget includes the second phase of this program, three more Firefighter/Paramedic positions in the second quarter of the year, subject to an assessment of revenue status as noted above. The budget also includes resources to upgrade a second engine to handle treatment of advanced life support (ALS) patients. Finally, the overall cost of operating the Fire Department continues to be affected dramatically by increases in State mandated pension benefits. Department 8 - Sports Core The highlight of the 2001 budget for the Oak Brook Sports Core is the completion of renovations to the Bath & Tennis VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 6 of 8 December 2, 2000 ON Clubhouse. The purpose of the project is to modernize and expand the facility to enhance the opportunities for success in the food and beverage operation. All food and beverage operations at the Sports Core were consolidated into one division and one budget program (821) in 2000. The concept is to market Sports Core food and beverage services at all venues (Bath & Tennis Club, Golf Club, poolside, open fields, off -site catering) in a coordinated manner under the unified direction of a Food and Beverage Manager. The renovations will add substantial space and flexibility to the facility and are anticipated to make a material difference in our operations as the Golf Clubhouse renovations did in 2000. President Bushy commented of residents' delight with the improvements of the golf course. Trustee Kenny inquired if a new brochure could be developed with the renovated Bath & Tennis Clubhouse. The Bath & Tennis Club Manager Sartore explained that staff is developing a new brochure of the various recreational facilities and a history of the Sports Core property. President Bushy asked the Village Board if it should be sent to all residents. Trustee Kenny suggested using it as a tool for catering and those that have used it previously. Trustee McInerney offered it may be helpful to have a general mailing for the new opening of the facility. Department 9 - Community Development This department was established in 2000 as a department separate from the Fire Department. The 2001 budget contains no substantial changes from 2000. Trustee Savino suggested that staff may need to be more conservative in the projected sales tax revenue as it continues to remain flat over the years. Village Manager Veitch agreed and also noted the decline in the office sector of the Village. Trustee McInerney noted that the legislators in Washington, D.C. do not realize target pricing of Internet companies and that consumers are not protected from this. President Bushy also commented that Internet companies are able to move to areas with low sales tax to their benefit. She noted that Congress does not understand that local government is required to provide public services and without sales tax revenue funding these services, they will have to diminish. Village Manager Veitch reported that Trustee Caleel had expressed concerns about taking on too much additional personnel cost too soon and is also concerned with managing the Village's long term debt to meet its obligations without creating an impact on the Village. VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 7 of 8 December 2, 2000 I 4. ADJOURNMENT: Motion by Trustee McInerney, seconded by Trustee Kenny, to adjourn the 2001 Budget Workshop at 11:45 a.m. VOICE VOTE. Motion carried. ATTEST: C�� 1z & Linda K. Gonnella, CMC Village Clerk 2001 BudW rkshpMin VILLAGE OF OAK BROOK 2001 BUDGET WORKSHOP Minutes Page 8 of 8 December 2, 2000 I