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Minutes - 12/06/2008 - Board of TrusteesMINUTES OF THE DECEMBER 6, 2008 SPECIAL MEETING OF THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK APPROVED AS WRITTEN OR AS AMENDED ON APRIL 14, 2009. 1. CALL TO ORDER The Special 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 9:05 a.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, Village Manager; Blaine Wing, Assistant Village Manager; Robert L. Kallien, Jr., Director of Community Development; Dale L. Durfey, Jr., Village Engineer; Sharon Dangles, Acting Finance Director; James Bodony, Fire Chief; Thomas McEllin, Deputy Fire Chief, Margaret Klinkow Hartmann, Library Director; Michael Hullihan, Public Works Director; Thomas Sheahan, Chief of Police, Nelson Patras, Food & Beverage Manager and James Fox, IS Department. 3. 2009 BUDGET WORKSHOP A. DISCUSSION OF 2009 BUDGET AND 2009 -2013 FIVE -YEAR FINANCIAL PLAN Village Manager David Niemeyer indicated that he and Finance Director Darrell Langlois would be providing an overview of the proposed 2009 Budget and that after their presentation there would be an opportunity for resident comments up to five minutes per individual and then the Board would provide discussion and input He also reminded residents that there was a Public Hearing scheduled for 7.15 on Tuesday, December 9 for additional input. Manager Niemeyer commented that this had been a challenging budget process due to the economy. He added that the budget process had been started in June where staff had a workshop to do brainstorming for ideas for expenditure reductions and revenue ideas to improve the 2009 budget. It also produced an opportunity to reorganize and realign the operations to make it leaner to fit with the parameters of the current fiscal situation. He announced that significant cuts in the operating budget had been made by eliminating positions and combining services and department functions. VILLAGE OF OAK BROOK Minutes Page 1 of 15 SPECIAL MEETING DECEMBER 6, 2008 3 A. Finance Director Langlois remarked that the Village had begun to notice a slow down turn in sales tax revenue toward the end of 2007. He added that the sales tax collections are projected to be $1.4 million below budget (General Fund and Infrastructure Fund). He noted that 1/2% of the 1 1/2 % of the sales tax collected is by State Statute dedicated to the Infrastructure Fund, the remaining 1% goes into the General Fund. He reported that due to the reduction in construction activity because of the economy collections from license and permits is reduced by $144,000. He added that other impacts as a result of the economy include interest earnings projected to be $225,000 below budget, increased fuel and maintenance costs, Police and Firefighters Pension Funds contributions have been impacted by market value declines of $7.8 million and costs of the 2008 flood event to the Golf Course. Director Langlois reported on the responses during 2008 to the downturn in the economy which included senior staff "Brain Storming" sessions to consider new revenue and expense reduction strategies; individual meetings with Trustees to build consensus on 2009 Budget approach; limited spending to essential items deferred a number of capital items and other items; implemented Early Retirement Program in order to reduce personnel costs for 2009 and thereafter, increased Telecommunications Tax from 5% to 6 %; increased non -union employee contributions, increased deductibles, and began offering an HMO option- changes are still being negotiated with unions; created a staff /trustee committee to review the Village's Salary Plan and performance review system (still on- going) and initiated a Village -wide Strategic Planning process. Finance Langlois indicated that the important factor for the 2009 budget was to fix the Operating Budget which meant staffing. He reported that the Early Retirement Program enticed eight individuals to retire, of which five will not be replaced in the 2009 budget. For the 2009 budget the challenges include a sales tax trend expected to continue at current levels; historically low interest rates will effect investment returns in nearly every Village Fund; 2008 reduction in funded percentage for the pension funds due to market value declines will result in significantly larger Village contributions; re- evaluating pension actuarial assumptions (primarily mortality and investment return) could further reduce funded percentages and increase contribution requirements; elevated fuel cost and vehicle repairs are expected to continue and the desire to increase amounts spent on Forestry program expenditures by $200,000 annually for a contract forester and Gypsy Moth and Emerald Ash Borer control; the cost of water purchased from the DuPage Water Commission is expected to increase considerably due to rate increases imposed by the City of Chicago and the cost of liability insurance is expected to increase by $233,600 due to increases in our experience modifier and that the Village will VILLAGE OF OAK BROOK Minutes Page 2 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. not be receiving an interest income credit due to investment losses sustained by IRMA. Director Langlois went on to explain the responses to the challenges for the 2009 Budget which included reorganization of Village Departments, elimination of several positions, and deferring replacement of two positions beyond 2009 resulting in a reduction of 6.0 full time employees; to the extent possible significantly limiting expenditure growth in individual line items and in a large number of line item accounts actually reducing the 2009 budget, for example, overall travel and training are being reduced by $43,000, the Library materials budgets are being reduced $26,000; re- evaluating the necessity and replacement timing for every Village owned vehicle; limiting the General Corporate Fund contribution to the Equipment Replacement Fund to $400,000 which is $174,000 below what would normally be required; further expected increases in employee cost - sharing of health insurance; deferring a large number of capital project requests to 2010 and thereafter; initiating new fees for Police Department towing administration and call back Fire Prevention inspections; proposed updating of fee schedules for most licenses, permits and charges for service, such as ambulance fees, building permits, liquor licenses and proposed increase in the ten- tiered electricity tax and elimination of Sports Core Fund subsidies. Director Langlois indicated that he would go through each individual fund within the budget which would help explain the basic assumptions and the detail of the summarized figures. Personnel Costs: • Budgeted cost of living increase of 3 %, which is below recent contract settlements in neighboring communities. • Health Insurance costs have moderated and in fact are going down due partially to increased employee cost sharing. • Police and Firefighters' Pension costs are budgeted to increase by $350,000. • IMRF costs are not expected to increase until 2011. General Corporate Fund: • Most impacted by general economy • Budget supports all Police, Fire, Finance, General Management, and Community Development Department Expenditures Revenue Highlights: • Total revenues of $20,851,150 which is an increase of $1,074,055 or 5.4% over 2008 estimate and $69,550 of 0.3% over 2008 Budget. • Sales tax revenue for 2009 of $11.5 million, which is $350,000 or 3% above 2008 estimate and $650,000 below 2008 Budget. • Telecommunications tax increase from 5% to 6 %- $340,000 additional VILLAGE OF OAK BROOK Minutes Page 3 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. revenue in 2009 and $500,000 in 2010 and thereafter. • Increase electricity tax to State maximum rates - $130,000 additional revenue in 2009 and $175,000 in 2010 and thereafter. • New towing administration fee - $75,000 annually. • New fee for fire inspections - $60,000 annually. • Interest Income of $190,000, which is a decrease of $310,000 from the 2008 Budget. • Licenses and Permit Fees projected to be $145,000 under budget for 2008. Numerous fee increases are projected for 2009 in order to increase revenues. • Minor increases in State shared revenues based on Illinois Municipal League data - impact of the economy on these revenues is still unknown. Expenditure Highlights: • Total expenditures of $21,424,670, which is an increase of $93,995 or 0.44% over 2008 Budget. • Reduction of 5.0 FTE through retirement. • 3 permanent reductions -the Purchasing /Information Services Director, one Building Inspector, and one Secretary • 2 temporary reductions - Investigations Sergeant and one Patrol Officer • Elimination of the part time Police Accreditation Manager on July 1, 2009. • Continue to leave Administration Assistant position in VM office vacant through 2009. • Total full -time salary budget of $9,726,610, which is an increase of only $5,700 or 0.05% over 2008 Budget. • Total over -time budget of $772,950, which is a reduction of $108,730 or 12.3% from 2008. • Includes early retirement costs of $75,845 for 2008 and $114,900 for 2009. • Police and Firefighters' Pension Fund contributions of $1,576,580, an increase of $350,980 or 28.6 %. Very rough estimate, actual could be much higher. • Reduced Health Insurance costs of $277,205 or 16 %. • Overall 2009 budget reduction in training of $37,565 or 18 %. • Total personnel costs of $15,322,605, which is an increase of $131,310 or 0.86% over 2008 Budget. This includes pension increases and cost of ERI • Amount budgeted for Library materials and subscriptions has decreased by $26,175 or 15.5 %. • Total reduction in all material and supply accounts of $26,290 or 4.2 %. • Increased cost of liability insurance of $148,400 or 21.7% • Decrease in telecommunications services of $51,300 or 25.6% from 2008 Budget. • Increased cost of utilities by $28,305 or 23.4 %. • Increase in total legal costs from $435,000 in 2008 to $500,000 in 2009 due to ongoing litigation. • $200,000 in new costs for a contract forester, Gypsy Moth control, and VILLAGE OF OAK BROOK Minutes Page 4 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. Emerald Ash Borer eradication. • $400,000 in funding for the Equipment Replacement Fund. • A budget of $120,000 is included to continue with the Independence Day /Taste of Oak Brook event. This amount is budgeted to be offset by $100,000 in revenue, of which a $50,000 contribution from Mc Donald's is known at this time. • Cash flow savings of $76,600 are projected by refinancing the installment contract for the Municipal Complex and extending the remaining tern by three years. • Savings on mosquito abatement of $18,845 or 22% are projected due to bringing part of the program in- house. • Increasing contribution to the Chamber's Economic Development Marketing Program from $12,500 to $30,000. Hotel/Motel Tax Fund: This Fund is used to account for revenues and expenditures related to the Village's 3% hotel tax on overnight stays in the Village. Use of revenues is restricted by State law. Revenue Highlights: • Total revenues are projected at $1,270,000, an increase of $20,000 or 1.6% over 2008. • Tax revenue is designated by Village Board policy -1% of the 3% rate is designated for hotel marketing expenses, 2% of the 3% rate is designated for beautification expenses in the Hotel Beautification District. Expenditure Highlights: • Total expenditures of $2,296,400, an increase of $576,400 or 25% over 2008 Budget. • 20% of the 1% hotel marketing share ($80,000) is paid to the Du Page Convention and Visitors Bureau. • $325,000 budgeted for 2009 marketing expenses of the Hotel Tax Committee. • $1.8 million budgeted for beautification expenditures. Motor Fuel Tax Fund: Fund is used to account for per capita State Motor Fuel Tax distributions. Use of funds restricted by State law. Revenue Highlights: • Motor Fuel Tax revenue of $230,000, a decrease of $24,000 or 9.4% from 2008 Budget due to decreased state -wide fuel consumption. Expenditure Highlights: • No 2009 expenditures budgeted. Funds are being saved to be used to partially fund the roadway paving program in 2011. VILLAGE OF OAK BROOK Minutes Page 5 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. Foreign Fire Insurance Tax Fund: Fund is used to account for the Village tax on fire insurance policies on corporations not incorporated in Illinois. Funds are restricted by state law to purchase items that benefit the Oak Brook Fire Department. Funds are held and controlled by separate board elected by Fire Department employees. Revenue Highlights: • Foreign Fire Insurance Revenues are budgeted at $55,350, the same as the 2008 actual amount and $17,990 or 47.5% over the 2008 Budget. Expenditure Highlights: • Expenditures are budgeted at $46,500 as programmed by the Foreign Fire Insurance Tax Board, an increase of $2,200 over 2008 Budget. Infrastructure Fund: Fund is used to account for the Village's 0.50% non -home rule sales tax. Revenues are restricted for use on infrastructure as defined in State statutes. Most Public Works, Engineering, and infrastructure expenditures are accounted for in this fund. Revenue Highlights: • Total revenues budgeted at $5,653,345, an increase of $458,355 or 8.8% from 2008 Budget. • 2008 estimated revenue from non -home rule sales tax is projected at $4,325,000, which is $400,000 below 2008 Budget. • For 2009, sales tax revenue is projected at $5.2 million due to full year collection at the higher 0.50% rate. • 2009 Budget includes $354,800 in transfers from General Fund and Water Fund to reimburse part of Public Works management cost. Expenditure Highlights: • Total Expenditures of $6,315,890, an increase of $912,255 or 16.9% from 2008. • 2009 Budget includes $2.2 million in payments to the Tollway for installments for the Village's share of the 22nd Steet /I -88 Bridge Project (total Infrastructure Fund share expected to be approximately $7 million). • 2009 Budget includes $762,500 to resume the annual paving program, which was suspended in 2008 in order to save funds for the bridge project. • 2009 paving program includes funds for the Bath and Tennis Club parking lot. • 2009 Budget includes funds to begin new Geographic Information Systems Program (GIS). • Full -time staffing is budgeted to be reduced by 1.0 FTE due to changing to a consortium approach for GIS. • Total personnel costs for 2009 are budgeted at $1,630,795, a reduction of $84,810 or 4.9% from 2008. VILLAGE OF OAK BROOK Minutes Page 6 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. Promenade Special Tax Allocation Fund: Fund is used to account for revenues and expenditures of the Village's Tax Increment Financing (TIF) District. Revenue Highlights: • Total revenue of $280,600, and increase of $164,600 over 2008 Budget. • Revenue comes from 100% of the incremental real estate taxes and a transfer from the General Fund and Infrastructure Fund equal to 20% of the sales tax collections. Expenditure Highlights • Total expenditures of $278,300, an increase of $263,000 over 2008 Budget. • Interest payments of $275,000 on the Village's limited obligation TIF notes totaling $4.25 million. • Increment is not yet generating enough revenue to begin repaying principal. Water Fund: Fund is used to account for revenues and expenditures related to the water utility. Revenue Highlights: • Total revenue of $5,040,000, an increase of $1,500 over 2009. • 2008 results include 2 extraordinary items -sale of a portion of the water system to the City of Elmhurst for $350,000 and proceeds from settlement of a lawsuit of $172,095. • Recommend increasing 2009 water rate from $3.15/1,000 gallons to $3.45/1,000 gallons due to a 3% increase in the base rate and passing on the first of 3 increases from the Du Page Water Commission due to an increase in the City of Chicago rate. • Similar increases for the next two years will be required in order to stay on target with the 2005 and 2007 water rate studies. Expenditure Highlights: • Total expenditures of $6,421,275, an increase of $288,185 or 4.7 %. • Total personnel costs of $698,775, a decrease of $14,235 • The 2009 Budget includes an increase of approximately $445,000 due to an October, 2008 increase of $0.20 in the water rate and a second increase of $0.23 expected on May 1, 2009. • Capital budget of $2,183,800 of which $1.2 million in projects have been deferred from 2008. Sports Core Fund: Fund is used to account for all revenues and expenses related to the Sports Core. VILLAGE OF OAK BROOK Minutes Page 7 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. Revenue Highlights: • 2008 revenues projected to be approximately $300,000 below budget due primarily to the September, 2008 flood event. • Total revenues for 2009 are budgeted at $4,017,775, a decrease of $33,915. • Transfer from General Fund of approximately $100,000 per year has been eliminated. • Most of Polo revenues have been removed due to proposed outsourcing. • Some Food & Beverage categories have been reduced due to new minimum pricing policies designed to reduce the number of unprofitable events. • All Golf and Bath & Tennis Club membership fees are proposed to increase, as well as eliminating the "early bird" discount and to resume the $50 fee for resident social memberships. • Most other fees are scheduled to increase. Expenditure Highlights: • Total budget for 2009 is $3,949,080, a reduction of $244,820 or 5.8% from the 2008 Budget. • Full -time staffing levels are maintained but reorganized; most significant change is reclassifying the Golf Club Manager to Sports Core Director. • Total personnel costs of $1,966,700, which is a reduction of $82,795 or 4 %. • Much of the personnel reduction is in part-time staffing. • Materials and supplies budget has decreased by $1,690 • Liability Insurance costs have increased by $55,000. • The budget for rentals has been reduced from $84,495 to $27,800 due primarily to completion of the golf cart lease. • The 2009 Budget assumes complete outsourcing (both revenues and expenditures) of Polo. • The 2009 capital budget is $111,000, which includes improvements to the tennis courts and tennis pro shop. • Most golf surcharge funds were depleted in 2008 due to the flood, which will delay some projected golf course improvements for a number of years. Self Insurance Fund: Fund is used to account for the actual cost of employee benefits, most of which are provided on a self - insured basis. Revenue Highlights: • Total budgeted revenues of $2,882,700, a decrease of $102,700 or 3 44 %. • Revenue comes from equivalent premium estimates charged to Village operating departments, park district, and retirees (100% participant paid). • Equivalent premiums were reduced on July 1, 2008. • Expect continued cost shifting between Village /Employee. Expenditure Highlights: • Total expenditures of $2,880,000, a reduction of $53,420. • Health claims have moderated considerably over the last two years. VILLAGE OF OAK BROOK Minutes Page 8 of 15 SPECIAL MEETING DECEMBER 6, 2008 3 . • Began offering HMO alternative on July 1, 2008. Garage Fund: Fund is used for the costs of operation and maintenance of the vehicle fleet. Revenue Highlights: • Charges to user departments are budgeted at $800,000, an increase of $160,000. • In 2008 charges to departments were increased during the year due to increased fuel and repair costs depleting cash balance. Expenditure Highlights: • 2009 Budget increase of $123,955 or 21%. • Significant cost increase of $64,460 for fuel and $50,325 for repairs. • Fuel costs have moderated considerably over the last 90 days. Equipment Replacement Fund: Fund is used to set aside funds for vehicle equipment purchases. Current cash balance of $3.6 million is unrestricted and is sufficient to fund expected replacements through 2013 with no additional General Fund Contributions. Revenue Highlights: • Total revenues are budgeted at $684,270, a decrease of $55,885 due to lower investment yields. • General Fund contribution set at $400,000, the same as 2008 and $174,000 below normal requirements. • Contributions are discretionary. Expenditure Highlights: • Total 2009 budget of $750,610, a reduction of $405,880 from 2008. • Several large Public Works equipment items have been deferred from 2008 to 2009. • Large Fire Department ladder truck purchase (almost $1 million) scheduled for 2010. • Program has been reviewed resulting in elimination of one vehicle and deferral in a number of others. Police Pension Fund Fund is used to account for contributions, investment earnings, and pension benefits of sworn Oak Brook police officers. Revenue Highlights: • 2008 negative investment return of $4.5 million currently projected. • Significantly higher Village contributions will be required. • A 2009 Budget assumption for the Village's contribution equal to 24% of payroll, which is an increase of 29% over 2008. VILLAGE OF OAK BROOK Minutes Page 9 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. • Actual contribution will not be known until the end of first quarter after the actuarial study. • Review of actuarial assumptions will likely be required, which could result in even higher required contributions. Expenditures: • Total expenditure budget of $1 ,819,775, an increase of $137,980 over 2008 due to new retirements. • As retirement pensions are categorized under personnel, these increases distort some of the budget changes elsewhere in the budget. Firefighters' Pension Fund: Revenue Highlights: • 2008 negative investment return of $3.3 million currently projected. • Significantly higher Village contributions will be required. • A 2009 Budget assumption for the Village's contribution equal to 30% of payroll, which is an increase of 25% over 2008. • Actual contribution will not be known until the end of first quarter after the actuarial study. • Review of actuarial assumptions will likely be required, which could result in even higher required contributions. Expenditures: • Total expenditure budget of $1,783,600, an increase of $214,750 over 2008 due to new retirements. • As retirement pensions are categorized under personnel, these increases distort some of the budget changes elsewhere in the budget EXPENDITURES BY CATEGORY Expenditures 2008 2009 % of Budget Personnel $ 22,971.835 $ 23,273,630 47.81% Materials & Supplies 2,013,170 2,13 3,125 4.38% Operational and Contractual 13,293,345 14,752,810 30.31% Miscellaneous 1,505,920 1,499,930 3 08% Capital 6,984,460 7,018,720 14.42% Total $ 46,768,730 $ 48,678,215 Finance Director Langlois answered the issue regarding why the budget was increasing by $1.9 million with all of the proposed reductions and loss of revenues by indicating the reasons which included a Contract forester for Gypsy Moth/Emerald Ash Borer control ($200,000); increased cost of water purchased from the DuPage Water Commission ($445,000); resuming the roadway maintenance programs ($988,900); increase in beautification expenditures ($550,000); increases in pension benefits ($353,000); early retirement incentive VILLAGE OF OAK BROOK Minutes Page 10 of 15 SPECIAL MEETING DECEMBER 6, 2008 3.A. costs ($114,900); increased fuel and repair costs ($115,000- actual budget impact is double); increased insurance costs ($233,600); beginning of debt service payments on the TIF District ($275,000). He also reported that Oak Brook has had previous General Fund Revenue Issues which included 1999 sales tax revenue of $11,049,834; tWO major office sector payers relocated during 2000 -2001 at a time when the Library and Municipal Complex were under construction; low sales tax years of $9.6 million in 2001 and 2002. Steps taken were increased utility taxes, delayed equipment purchases, reduced and in some years eliminated equipment replacement funding; adopted budgets that were below the six month reserve in 2003, 2004 and 2005 which brought the reserves down to approximately 5.5 months. The actual cash balance in 2004 ended the year at $7.1 million, which was 5.07 months and $1.25 million below the six month reserve at that time. The six month reserve was restored in 2006 with passage of the non -home rule sales tax. Director Langlois explained the policy of the six month cash reserve indicating that it had been increased to six months by a Village Financial Policy Ordinance in 1999. He added that it also changed to Cash vs. Fund Balance as a measure. It added $2.3 million to the reserve and was designed to serve as a "Rainy Day Fund ". He added that in 2002 the Government Finance Officers Association recommended "to maintain unreserved fund balance in the General Fund of no less than five to 15 percent of regular general fiend operating revenues, or of no less than one to two months of regular general fund operating expenditures." He reported that a survey of 13 other communities indicated Oak Brook's reserve policy is by far the most conservative. However, the policy has served the Village well in that the reserve has provided a cushion during difficult economic times and provides investment income to help fund operations. Director Langlois reported that the end of the year cash balance is projected to be $8.9 million, a decrease of $935,100 from 12/31/07. He added, however, that the decline in cash is not due to ongoing operating costs but is impacted by delays in receiving new revenue sources, costs associated with the ERI program that will result in savings later; capital projects; new programs that do not have a revenue source (Gypsy Moth/Emerald Ash Borer) and discretionary contributions to the Equipment Replacement Fund. Director Langlois indicated that it was a Village Board policy question as to whether any of these items warrant the use of reserves but also added that by any standard the financial position of the Village remained very, very strong. VILLAGE OF OAK BROOK Minutes Page 11 of 15 SPECIAL MEETING DECEMBER 6, 2008 3.A. He added that this was a budget plan that had a number of variables based on the economy and that it would have to be monitored monthly to determine if it would need to be modified based on revenues. He also indicated that looking at 2010 after all of the expenses and the reductions are fully implemented and with normal inflationary increases in revenues the situation should look better in 2010. President Craig thanked staff for the long hours of preparation of the budget. Village Manager Niemeyer also thanked staff for their input in cost reductions and revenue fee suggestions. He felt this was a fiscally sound budget in difficult economic times. He commented that a year ago staff was lean, but with the current reductions staff will be very lean. He felt that further cuts in the budget would have to include service cuts and outsourcing or consolidating services. He added that the Strategic Plan the Village was working toward provided input from residents as to how they wanted to see issues addressed in the future. He hoped that the lengthy detailed description by Finance Director Langlois would help to clear up the misconceptions that have been portrayed. He added that concerns had been expressed about the size of the budget for a municipality the size of Oak Brook. He reminded residents that although the population was just under 9,000 it also served a daytime population of 100,000. He added that the Village also provided a lot of extra services such as a Library, Golf Course, Sports Core. He felt that Oak Brook residents receive good services with a lean operation and no municipal property taxes. He suggested that in order to reduce the amount of reserves used for the 2009 budget, that for a two year period no contributions be made to the Equipment Replacement Fund which is used to replace equipment and vehicles as necessary. B. RESIDENT /VISITOR COMMENT Resident George Klein addressed the Board concerning two issues. He expressed concern that even though staff recognized the decline in revenues in April that the year is ending with a $600,000 deficit. He also felt that basing the 2009 sales tax revenue estimates at the same amount as the 2008 revenues is not appropriate. He felt that revenue estimates should be reduced based on the economy. Resident Tim Mlsna addressed the Board indicating he felt the budget should be balanced and that the assumptions of revenue were inappropriate. Resident Constantine Zinos addressed the Board also indicating he felt the Board should approve only a balanced budget since revenues were flat and expenses continue to rise. VILLAGE OF OAK BROOK Minutes Page 12 of 15 SPECIAL MEETING DECEMBER 6, 2008 3. B. Resident Al Knuth addressed the Board concurring with the previous speakers regarding a balanced budget. He also expressed concern about the loss of businesses in the Village. He felt the need to bring in businesses to increase revenues. Resident John Craig addressed the Board regarding the Hotel /Motel Tax. He suggested using those funds for incentive coupons for discounts to Oak Brook restaurants when they could show proof that they shopped in Oakbrook Center. President Craig announced a five minute recess at 10:33 a.m. President Craig reconvened the meeting at 10:47 a.m. C. BOARD DIRECTION TO STAFF Trustee Wolin asked Manager Niemeyer to clarify the issue of contributions to the Equipment Replacement Fund. Manager Niemeyer responded that the recommendation was not to contribute the $400,000 from the General Fund to this Fund for two years which would save $800,000 because there was currently enough in the Equipment Replacement Fund to support expected replacements through 2013. Trustee Wolin addressed resident comments regarding sales tax projections. The assumption of the current proposed budget was one of a 3% increase in sales tax revenues. He agreed that this was not realistic and felt that at least a flat rate should be assumed. This would project a $330,000 deficit to deal with. Trustee Wolin also addressed the Home Rule issue that was a concern of resident Zinos. He indicated that it was an issue that needed to be dealt with not in relation to the authority of a Board to institute a property tax, but because of State Statute restrictions of uses of revenues (other than property tax). There are areas where there are substantial funds, but none of those funds can be used for operating expenses as a result of restrictions on non -home rule municipalities.. Trustee Wolin asked if due to lowered interest rates was there a possibility to refinance the TIF financing. Finance Director Langlois responded that he did not believe that would be possible until it was determined what the sustained revenue sources would be and that was at least two or three years away since the Promenade was not fully occupied. Trustee Wolin suggested that the $900,000 for roadwork be looked at and possibly postponed. He also asked the Fire and Police Departments to look at costs of outsourcing of the Communication Center. VILLAGE OF OAK BROOK Minutes Page 13 of 15 SPECIAL MEETING DECEMBER 6, 2008 Trustee Sanford also addressed concerns for the estimated revenues, but also felt that the Promenade increases should be taken into consideration. He addressed resident concerns regarding expenditures in the revitalization area. He indicated that the Revitalization Task Force was put together to evaluate the commercial area and take proactive action to bring businesses into Oak Brook. He itemized current new business activity. Trustee Kennedy also thanked staff for their work on the budget. He felt most of the budgets were very conservative, but the General Fund was a concern regarding the deficit. However, he did feel that he did not see the ability to make many more cuts. He agreed that contributions could be cut to the Equipment Replacement Fund which would reduce the deficit by $400,000. He also felt that reducing personnel increases would help to reduce the deficit even more. He did agree with the protection of trees through pest control even if that meant dipping into reserves. He also asked several specific questions regarding the water SCADA system and rejuvenation plans for several streets for information purposes. He also asked about a $35,000 projection for an IDOT project and whether he felt it would happen in 2009. Engineer Durfey responded that it was part of a sidewalk replacement due to the widening of 22'd Street and he did feel it would happen in 2009. Trustee Carson indicated that staff spent several hours with him going over the budget and he thanked them for their input and their effort in preparing the budget. His strongest opinion was that the Village should have a balanced budget but that with the uncertainty of the economy it was difficult. He asked staff to continue to work at creating a balanced budget. Trustee Saiyed suggested keeping the beautification funds in reserve even though they cannot be used for the General Fund. Discussion ensued regarding how to reduce the budget if revenue projections were assumed to be flat. Finance Director Langlois suggested that some of it would come from delaying capital projects. Consensus was to keep sales tax revenue projections flat, not contribute to the Equipment Replacement Fund, but the pest control expenses could be offset by reserve funds. That would bring the deficit down to approximately $300,000 and that could be reduced by additional cuts that might affect services. VILLAGE OF OAK BROOK Minutes Page 14 of 15 SPECIAL MEETING DECEMBER 6, 2008 4. ADJOURN TO CLOSED MEETING to consider the appointment, employment, compensation, discipline, performance, or dismissal of specific employees of the public body or legal counsel for the public body, including hearing testimony on a complaint lodged against an employee of the public body or against legal counsel for the public body to determine its validity (2c 1). Motion by Trustee Kennedy, seconded by Trustee Sanford, to adjourn to Closed Meeting to consider the appointment, employment, compensation, discipline, performance, or dismissal of specific employees of the public body or legal counsel for the public body, including hearing testimony on a complaint lodged against an employee of the public body or against legal counsel for the public body to determine its validity. ROLL CALL VOTE: Ayes: 6 - Trustees Carson, Kennedy, Manofsky, Saiyed, Sanford and Wolin. Nays. 0 - None. Absent: 0 - None. Motion carried. The meeting was adjourned to Closed Meeting at 11:36 a.m. 5. RECONVENE /ADJOURNMENT Motion by Trustee Wolin, seconded by Trustee Manofsky, to adjourn the Special Meeting of the Board of Trustees at 12:27 p.m. VOICE VOTE: Motion carried. ATTEST: /s/ Charlotte K. Pruss Charlotte K. Pruss Village Clerk VILLAGE OF OAK BROOK Minutes Page 15 of 15 SPECIAL MEETING DECEMBER 6, 2008