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2021 Budget In Brief Village of Oak Brook, Illinois Budget In Brief For the Fiscal Year January 1, 2021 to December 31, 2021 2 Budget Message Village of Oak Brook Residents and Businesses: We are pleased to provide the Village’s budget-in-brief document. This document presents a high level summary of the Village’s 2021 budget that some users may find easier to read and understand. The full budget document is over 300 pages in length and details nearly $63 million in spending. The full 2021 budget, along with many other useful financial reports, can be found on the Village’s website for viewing. The development of the 2021 budget is the product of collaboratfve efforts by Village staff, the Board of Trustees, and the public. The Village budget process spans five months and undergoes extensive review and revision. The Village Board holds two budget workshops that are open to the public to review the proposed budget. These workshops provide the Board of Trustees, as well as residents, an opportunity to provide staff feedback on goals and the directfon of Village services. The Village strives to create a fiscally responsible budget that maintains Oak Brook’s financial health in both the short-term and long-term. We hope you find this budget-in-brief document both informatfve and useful. We encourage those that want to learn more about the budget to view the full 2021 budget document or attend future budget workshops. If you have any questfons concerning the annual budget process, or would like to offer any ideas or suggestfons for improvement, please contact Village Finance Director Jason Paprocki at jpaprocki@oak-brook.org or (630) 368-5070. Respectiully, Gopal Lalmalani Village President Table of Contents Budget Message 2 Village Profile 3 Village Leadership 4 Budget Process 5 Basis of Budgetfng 6 Budget Overview 7 Revenue Overview 8 Sales Tax 9 Expenditure Overview 10 Personnel and Staffing 11 Capital Projects 12 General Fund 13 3 Village Profile The Village was incorporated February 21, 1958 by Paul Butler. Oak Brook is a community where impressive corporate and retail centers, beautfful homes, lush parks, and forest combine to make a dynamic and invitfng atmosphere. Oak Brook also offers an exceptfonal variety of actfvitfes to appeal to a broad range of interests which include; polo matches at the Oak Brook Polo Grounds; a 18-hole championship Golf Club; Bath and Tennis Club facilitfes including a swimming pool, diving pool, tennis courts, and an event venue. The Village of Oak Brook is located about 15 miles west of the Chicago Loop, near the geographic center of the seven-county Chicago metropolitan area. Excellent transportatfon links are provided to all parts of the greater metropolitan area by a network of tollways and Federal and State highways which pass through or near the Village. The Oak Brook area is generally bounded on the north by the communitfes of Lombard, Villa Park, Elmhurst and Oakbrook Terrace and on the south by Downers Grove, Westmont, Clarendon Hills and Hinsdale. The Village places a great emphasis on interactfng with local businesses, both existfng and potentfal. A large portfon of the Village’s revenue stream is derived from sales tax, which is crucial to the Village’s General Fund operatfng budget. The Village is committed to upholding its mission, vision, and values through the six key goals outlined below: Mission The Village of Oak Brook will provide the community with excellent local government services and the best educatfonal opportunitfes that meet the needs of its citfzens and are delivered in a professional, responsive, and fiscally responsible manner. Vision Our shared vision for Oak Brook is a place of quality and natural beauty that offers an excellent residentfal and business environment along with award winning schools with an unparalleled commitment to excellence. Values  Integrity  Teamwork  Customer Satfsfactfon  Quality of Life  Financial Accountability  Communicatfon 4 Village Leadership The Village of Oak Brook operates under the Village form of government and is governed by our elected Village President and a six-member Board of Trustees—each elected at large for a four-year term of office. The Village Clerk is elected for a four-year term, attends meetfngs of the Village Board, keeps its minutes, and is the official custodian of Village records. Electfons are held biennially, during odd-numbered years, on the first Tuesday in April. The day-to-day operatfons of the Village are handled by the Village Manager, a trained professional with experience in municipal government. The manager is appointed by the Village Board, which consists of the President and six Trustees, who are elected at large. The Board sets policy for the Village, adopts ordinances and resolutfons, approves the five-year financial plan, annual budget and approves all expenditures or disbursements. The Village is a non-home rule municipality as defined by the Illinois Constftutfon. From left to right: Trustee Asif Yusuf, Trustee Moin Saiyed, Trustee Philip Cuevas, Village Clerk Charlotte Pruss, Village Attorney Michael Castaldo, President Gopal Lalmalani, Village Manager Riccardo Ginex, Trustee John Baar, Trustee Michael Manzo, Trustee Edward Tiesenga. Management Team Village Manager Riccardo Ginex Police Chief Public Works James Kruger Doug Patchin Fire Chief Library Barry Liss Jacob Post Information Technology Golf Course James Fox Sean Creed Development Services Finance Tony Budzikowski Jason Paprocki Human Resources Kathryn Vonachen 5 Budget Process The Village of Oak Brook’s budget process involves the President and Board of Trustees, Village Manager, Finance Director, department directors, and others throughout the organizatfon, each performing a critfcal role in the development of the budget for the upcoming year. The preparatfon of the budget takes place during the months of August – October. Budget workshops are then conducted in November to review the proposed budget and receive feedback from the Board and public. A public hearing and adoptfon of the final budget takes place at first regular board meetfng in December. The final budget is made available for public inspectfon at least ten (10) days prior to its passage. Notfficatfon of the public hearing is published in a local newspaper. Pending the results of the public hearing, the budget is then legally adopted through the passage of a budget ordinance. This ordinance authorizes the appropriatfon of the budgeted amounts to pay all necessary expenses. The development, implementatfon, monitoring and review of the Village’s budget are part of a comprehensive process that occurs throughout the year. The Finance Department monitors the Village’s revenues and expenditures on a contfnual basis to discuss and resolve any significant variances within each program. Budgetary control is established at the category (i.e., object account series) level. The Finance Director (Budget Officer) may authorize transfers of budgeted funds between account categories within a single budget program with the approval of the Village Manager. Transfers of budgeted funds from one budget program to another, any increase in the total appropriatfon within any fund, any individual line item transfer as a result of a budget variance in excess of $10,000 for a personnel series account or $2,500 in any other account, and all expenditures from budgeted contfngency amounts are subject to the approval of the Village Board. The Village strives to create an informatfve budget document each year. The budget document has been submitted to the Government Finance Officers Associatfon (GFOA) for its Distfnguished Budget Presentatfon Award the past seven years. Each of these years, the Village’s annual budget has received this award. We believe the 2021 Budget contfnues to meet the standards set forth by the GFOA and antfcipate this document will receive the budget award. Any comments received by the GFOA will be reviewed and utflized to help enhance future budget documents. Date July 8, 2020 Budget templates available to departments July 14, 2020 Budget presentation and direction from Village Board July 31, 2020 Capital requests due to Public Works and IT August 10-14, 2020 Building walkthroughs for capital requests (as necessary) August 28, 2020 Draft department budgets due September 1 - September 18, 2020 Departmental budget review meetings September 21 - October 9, 2020 Preparation and printing of 2021 Proposed Budget document October 14, 2020 Send draft 2021 Proposed Budget to printer November 10 and 17, 2020 Village Board budget workshops (Samuel E. Dean Board Room) November 27, 2020 Publication of public hearing notice for the 2021 Annual Budget December 8, 2020 Public hearing on the 2021 Annual Budget December 8, 2020 Village Board adoption of the 2021 Annual Budget March 31, 2021 Submit budget to GFOA for award Step 2021 BUDGET SCHEDULE 6 Basis of Budgetfng The annual budget is prepared and presented on a cash basis. Under the cash basis, transactfons are recognized only when cash is increased or decreased. This results in a document that is more easily understood and more useful to the general public. This basis of budget reportfng differs from the basis used for the Village’s Comprehensive Annual Financial Report (CAFR). The CAFR uses both the modified accrual basis (governmental funds) and the accrual basis (proprietary funds). Under the modified accrual basis, revenues are recorded when they are measure and available regardless of when received and expenditures are recognized when a liability is incurred regardless of when paid. Under the accrual basis, revenues and additfons are recorded when earned and expenses and deductfons are recorded at the tfme liabilitfes are incurred. The budget consists of two different fund categories: governmental funds and proprietary funds. Governmental funds are used to account for all or most of a government’s general actfvitfes, including the collectfon and disbursement of earmarked monies (special revenue funds), and the acquisitfon or constructfon of general capital assets (capital projects funds). The General Fund is used to account for all actfvitfes of the general government not accounted for in another fund. Governmental funds focus on near-term inflows and outilows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. Proprietary funds are used to account for actfvitfes similar to those found in the private sector, where determinatfon of net income is necessary or useful for sound financial administratfon. Goods or services from such actfvitfes can be provided either to outside partfes (enterprise funds) or to other departments or agencies primarily within the government (internal service funds). Depcreciation Budget = Not recognized CAFR -Not recognized (governmental funds) or recorded as expense (proprietary funds) Capital Expenditures Budget = Recognized as expenditure CAFR -Recognized as expenditure (governmental funds) or increase in assets (proprietary funds) Expenditure Recognition Budget = When liability is paid CAFR -When liability is incurred Revenue Recognition Budget = When cash is received CAFR = When revenues are measureable and available (governmental funds) or when earned (proprietary funds). 7 Budget Overview The Village strives to create a balanced General Fund budget each year. A balanced budget is defined as an individual fund budget where projected revenues are equal to or exceed projected expenditures for the year. Some individual fund budgets may or may not be balanced, depending on the availability and appropriateness of utflizing cash reserves. Certain funds often accumulate money over multfple years to expend on a larger item down the road. Because of this, it may appear that a fund has an unbalanced budget for the year. The Village has a policy of maintaining a cash reserve balance in the General Fund of six (6) months of operatfng expenditures. The projected General Fund cash reserve balance at 12/31/21 is $24.0 million, or 13.0 months. Explanation of major changes in cash: Motor Fuel Tax Fund - Reserve equity transfer of $1,300,000 to the Infrastructure Fund to for roadway improvements. Infrastructure Fund - $8,956,170 in budgeted capital projects, including the York Road/Harger Road Intersectfon and Bike Path and Windsor Bridge/Street widening. Water Fund - $8,103,750 in budgeted capital projects, including water tower paintfng, water main replacements, and software upgrades. Equipment Replacement Fund - Use of equity reserve balance to fund vehicle purchases and lease charges. Projected 2021 2021 2021 Projected Cash Balance Budgeted Budgeted Change in Cash Balance Fund 1/1/2021 Revenues Expenditures Cash 12/31/2021 General Fund $23,063,797 $24,412,060 $23,458,505 $953,555 $24,017,352 Special Revenue Funds Hotel Tax Fund 4,729,483 462,000 628,030 (166,030) 4,563,453 Motor Fuel Tax Fund 852,462 467,175 1,300,000 (832,825) 19,637 Capital Projects Funds Infrastructure Fund 5,844,560 7,106,340 12,657,150 (5,550,810) 293,750 Promenade TIF Fund 251,019 476,000 470,350 5,650 256,669 Enterprise Funds Water Fund 6,402,692 10,905,000 14,852,190 (3,947,190) 2,455,502 Sports Core Fund 291,481 3,808,800 4,038,375 (229,575) 61,906 Golf Surcharge Fund 97,044 116,000 200,000 (84,000) 13,044 Internal Service Funds Self-Insurance Fund 297,145 3,700,650 3,681,250 19,400 316,545 Garage Fund 299,603 611,055 761,070 (150,015) 149,588 Equipment Replacement Fund 983,742 352,635 803,905 (451,270) 532,472 Total All Funds $43,113,028 $52,417,715 $62,850,825 ($10,433,110) $32,679,918 8 Revenue Overview 2021 Category Budget General Sales Tax $11,935,995 Non-Home Rule Sales Tax 5,333,500 Real Estate Taxes (TIF) 400,000 Utflity/Telecommunicatfons Tax 5,995,000 Other Taxes 2,025,600 Charges For Services 5,933,880 Interest 454,700 Other Revenues 3,543,515 Interfund Revenues 2,665,525 Water Sales & Services 10,780,000 Sports Core User Fees 3,235,000 Golf Surcharge 115,000 Total Revenues $52,417,715 What are the Village’s major revenue sources?  Sales Tax — The largest portfon of the Village’s revenue relates to its commercial developments. Sales Tax and Non-Home Rule Sales Tax revenue accounts for approximately 33% of the Village’s total revenues. Of the $11.9 million the Village collects annually, nearly 50% relates to the Oak Brook Center mall.  Utility/Telecommunications Tax — this revenue consists of receipts from ComEd, Nicor, and the State of Illinois. The Village imposes a 5.0% utflity tax on electricity and natural gas. There is also a 6.0% charge on telecommunicatfon charges within the Village.  Other Taxes — this is comprised of receipts related to: income tax, use tax, personal property replacement tax, road and bridge tax, hotel tax, and motor fuel tax.  Charges for Services — this is made up of a number of different items: inspectfon fees, ambulance transport fees, police special detail fees, internal service charges, and many more.  Other Revenues — One of the largest sources of the Other category relates to licenses and permits. Building permits makes up the largest individual source from this category. The Village has seen an uptfck in development over the past few years which has resulted in an increase in permit fees.  Water Sales & Services — these revenues fund the delivery of water to residents and maintenance of the Village’s water system. Water rates are budgeted to increase 4.0% effectfve January 1, 2021.  Sports Core User Fees — includes memberships, swimming and tennis program fees, golf greens fees, golf driving range fees, golf and swim lesson fees, and other miscellaneous items related to operatfng the Sports Core. Further detail on the Village’s revenue sources by individual fund can be found in the full 2021 Annual Budget document. A copy can be found on the Village’s website at www.oak-brook.org/304/Financial-Documents. 9 Sales Tax Sales Tax revenue is largest revenue source in the Village’s General Fund and Infrastructure Fund. The amount of sales tax generated by Village businesses allows the Village to operate without a real estate tax levy. The Village does receive a small amount of real estate tax revenue for the Promenade TIF district, but this money is used exclusively to repay TIF bondholders. The sales tax rate charged within the Village is 7.50%. Of this rate, the Village directly receives 1.50%. The 1.50% is further broken down into two portfons: 1.00% is the local portfon that goes into the General Fund to fund general operatfons (public safety, public works, library, development services, and administratfon) and 0.50% is the non-home rule portfon that goes into the Infrastructure Fund to fund roadway improvements. Also, the Promenade TIF Fund receives a portfon of sales tax revenue to be used to repay bondholders in accordance with the redevelopment agreement. Of all the sales tax and non-home rule sales tax collected from stores within the Promenade shopping center, 20% of this amount is recorded in the Promenade TIF Fund. The General Fund’s portfon of sales tax is projected to be $11.9 million in 2021, which is a decrease of 5.1% from the 2020 budget. The Infrastructure Fund’s non-home rule sales tax is projected to be $5.3 million in 2021, which is a decrease of 5.0% from the 2020 budget. Of the Village’s total sales tax revenue, nearly 50% comes from businesses located within Oakbrook Center mall. Oakbrook Center contfnues to be one of the areas most popular malls and offers numerous retail, dining, and entertainment optfons. A few of the Village’s top sales tax generators in 2020 were:  Ahead Inc.  Apple  Carvana  Costco  Louis Vuitton  Macy’s  Neiman Marcus  Nordstrom  Peloton Interactfve  Room & Board These 10 taxpayers accounted for nearly 54% of the Village’s total sales tax revenue in 2020. The Village contfnues to work on attractfng new businesses to strengthen its sales tax base and contfnue operatfons without a real estate tax levy. 10 Expenditure Overview What are the Village’s major expenditures?  Personnel — This is the cost of compensatfng Village employees. This includes salaries, overtfme, payroll taxes, pension contributfons, health insurance, tuitfon reimbursement, training, and other miscellaneous items. Personnel typically accounts for the largest portfon of the Village’s General Fund operatfng budget.  Materials & Supplies — This category consists of commoditfes used in the Village’s various operatfons. Major items within this category include postage, subscriptfons & publicatfons, gas & oil, tools & hardware, general office supplies, maintenance supplies, general equipment, and copying costs.  Operation & Contractual — This category consists of contracted services. Major items include liability insurance premiums, health insurance premiums, utflitfes, attorney fees, DuPage Water Commission water purchases, leaf disposal, bank fees, and other professional services.  Other Expenditures — This category is used for items such as interfund transfers and reimbursements to other funds. Interfund transfers are one-tfme transfers of cash between funds that are not expected to be repaid. Reimbursements to other funds are the repayment of goods and services between funds. Reimbursements are often tfme used to repay funds for staff tfme (ex. An employee of the General Fund works on Sports Core Fund dutfes, the Sports Core would pay back the General Fund for tfme used).  Capital — This category relates to the purchase or constructfon of building improvements, equipment, Village roadways, water mains, and vehicles. Historically, the Village’s largest expenditure category has been personnel, followed by capital outlay. A further breakdown of personnel expenditures is presented on page 11 and capital projects is presented on page 12. 2021 Category Budget Personnel $22,922,120 Materials & Supplies 1,651,840 Operatfon & Contractual 15,922,565 Other Expenditures 3,103,025 Capital 19,251,275 Total Expenditures $62,850,825 Further detail on the Village’s expenditure sources by individual fund can be found in the full 2021 Annual Budget document. A copy can be found on the Village’s website at www.oak-brook.org/304/Financial-Documents. 11 Personnel and Staffing Approximately $22.9 million, or nearly 37%, of the Village’s $62.9 million budget consists of personnel costs. The General Fund (the Village’s main operatfng fund) budget consists of $18.8 million in personnel costs, which is 80% of its total annual budget. Budgeted personnel primarily consists of salaries, pension contributfons, payroll taxes, and health insurance expenses. The 2021 budget makes a number of assumptfons related to personnel costs:  Salary increases assumed at 0% for union and non- union employees.  Union employees moving through grade receive a step or merit adjustment.  Public safety pension contributfons budgeted based on actuarial projectfons for 2021.  IMRF (non police and fire employees) pension contributfons budgeted at 11.87% of salary.  Health insurance budgeted to increase 5% effectfve July 1, 2021. Head count levels in the budget are tracked using full-tfme equivalent (FTE) employees. FTE’s are based on a 2,080 hour annual work schedule (40 hours per week). For example, a full- tfme employee is displayed as 1.00 FTE whereas a part-tfme employee working 18 hours per week is displayed as 0.45 FTE. The Village utflizes many part-tfme and seasonal positfons to help staff the various functfons of the Village. The 2021 budget includes 175.3 FTE positfons. This is a decrease of 13.0 FTE positfons from the 2020 budget. The decrease in FTE’s in 2021 primarily relates to the reductfon of nine contractual paramedics and the eliminatfon of various part-tfme positfons. Historically, the Village has been able to maintain or reduce head count levels over the past few years while stfll providing excellent service. Fluctuatfons between years generally relate to increases or decreases in projected part-tfme and seasonal employee hours. 2021 Category Budget Full-Time Salaries $12,318,980 Part-Time Salaries 549,365 Seasonal Salaries 560,595 Commissions 50,500 Overtfme 1,147,130 Tuitfon Reimbursement 10,000 Bonus Pool 9,000 Fire Pension 2,203,790 Police Pension 2,186,100 IMRF Pension 651,615 Health Insurance 2,284,600 F.I.C.A. 613,785 Other 336,660 Total Personnel Budget $22,922,120 2021 Department FTE Count Administratfon 8.15 Finance 5.70 Public Works 22.08 Library 10.80 Police 49.50 Fire 36.65 Sports Core 3.25 Development Services 10.19 Total 2020 FTE Budget 175.32 12 Capital Projects During each budget process, Village staff members conduct facility walkthroughs to prioritfze upcoming capital needs. Capital items are considered expenditures to buy, improve, or maintain an asset with a cost greater than $5,000. Common capital prioritfes (in general order of importance) are: 1. Life safety 2. Preventatfve maintenance 3. Operatfng cost reductfon 4. Basic comfort 5. Aesthetfc improvement The Public Works department maintains a five-year capital plan by fund for Village owned facilitfes and equipment. Each year, departments submit capital requests and provide feedback on the priority of tfming for those requests. The Public Works department works with the Finance department to determine how revenue estfmates align with capital expenditure requests. Although capital requests are tentatfvely planned for the next five years, only the projects scheduled to happen in the first year of the plan are budgeted for. Future capital plans are subject to change during future budget processes as available resources are determined. The Village makes every effort to meet its capital needs each year. If available resources are not sufficient to pay for capital spending, the Village determines if a project can be delayed untfl future years. The cost of a project is weighed against the impact that doing nothing would have on public safety and services. The cost of not funding capital needs on schedule often lead to increased maintenance costs and staff tfme in the future. Additfonally, capital projects are evaluated based on any additfonal costs that would be added to future budgets. Major 2021 capital projects include:  Windsor Bridge/Street—$3,600,000  York/Harger Road—$2,866,030  Water Mains (Brook Forest) - $2,755,000 2021 Fund Budget General Fund $452,300 Hotel Tax Fund 250,000 Infrastructure Fund 8,956,170 Water Fund 8,103,750 Sports Core 1,125,380 Garage 20,000 Equipment Replacement 343,675 Total Capital Budget $19,251,275 Windsor Bridge/Street York/Harger Road Water Mains 13 General Fund The General Fund serves as the Village’s main operatfng fund. This fund is comprised of core services to the Village, including police and fire protectfon, forestry, buildings and grounds maintenance, mosquito control, library, building and code enforcement, planning, zoning, economic development, legal, finance, informatfon technology, and general administratfon. Approximately 48.6% of the funding for these services comes from General Sales Tax revenue. Other significant sources of revenue include: State Income Tax, Utflity/Telecommunicatfons Tax, Building Permits, and Ambulance Fees. These significant revenue sources alone account for $21.0 million of the FY21 revenue budget of $24.4 million, or 86.2% of budgeted revenues. Revenues are placed into five major categories: Intergovernmental (payments from other governmental units, such as sales tax), Licenses and Permits, Charges for Services, Other (Miscellaneous) Revenues, and Interfund Revenues (transactfons between Village funds). Department 2020 Budget 2021 Budget Change Legislatfve & General Management $2,556,835 $2,498,625 ($58,210) Financial Services 1,844,225 976,245 (867,980) Public Works 893,055 948,860 55,805 Engineering & Capital Projects 411,500 209,000 (202,500) Library 994,410 943,405 (51,005) Police 9,493,905 9,213,585 (280,320) Fire 8,298,370 7,576,045 (722,325) Development Services 1,039,550 1,092,740 53,190 Total Expenditures $25,531,850 $23,458,505 ($2,073,345) General Fund FY21 budgeted spend by category is: Category 2020 Budget 2021 Budget Change Personnel $19,160,220 $18,842,080 ($318,140) Materials & Supplies 539,170 551,030 11,860 Operatfon & Contractual 4,071,660 3,397,210 (674,450) Other Expenditures 1,072,770 215,885 (856,885) Capital Outlay 688,030 452,300 (235,730) Total Expenditures $25,531,850 $23,458,505 ($2,073,345) The General Fund consists of eight different departments with various programs within. FY21 budgeted spend by department is: