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
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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
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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.
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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.
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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
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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
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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.
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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
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