Loading...
S-1066 - 03/23/2004 - BUDGET - Ordinances Supporting Documentss4 / 4 VILLAGE OF OAK BROOK Village Board Transmittal Memorandum Date: March 18, 2004 To: Village President and Board of Trustees From: Darrell Langlois r Recommendation: I move that the Village Board approve the attached ordinance authorizing transfers among budget line items for the year ended December 31, 2003. During the course of a year, there are numerous situations that may arise that cause an account, program, or even a fund to exceed its budget. When this occurs, State statutes provide that the corporate authorities may make transfers from "one corporate object or purpose to another corporate object or purpose ". Additionally, statutes provide that the corporate authorities may delegate authority to heads of municipal departments to "delete, add to, change, or create sub - classes within object classes budgeted previously to the department with the approval of the budget officer or executive officer of the municipality". The Village has defined a corporate object or purpose to be an individual program or fund. Sub - classes within object classes have been defined as accounts and categories within a budget program. Now that all of the year -end accounting adjustments have been made, several budget accounts, categories, and programs have been determined to have ended 2003 over budget. The Village Board's policy on Finance, Taxation, and Budget, prepared based on the previously mentioned statutes, outlines the following procedures for budget administration and how these variances are to be addressed: 1. That the Budget Officer, with the approval of the Village Manager, may authorize transfers of budgeted funds between accounts or between account categories within a single get program. 2. That any transfer of budgeted funds from one budget program to another shall be subject to approval by the Board of Trustees upon the recommendation of the Village Manager. 3. That any transfer from contingency shall be subject to approval by the Board of Trustees upon the recommendation of the Village Manager. 4. That any increase in the total appropriation within any fund shall be subject to approval by the Board of Trustees upon the recommendation of the Village Manager. 2003YEBUDTRF doc Budget Transfers March 18, 2004 Page 2 In order to make as few changes to the originally adopted budget as possible, formal budgetary control has been established at the category level, i.e. personnel, materials and supplies, operation and contractual, and capital. For example, if staff turnover created a need for overtime, this may lead to the overtime account going over budget. However, this would likely be offset by an underbudget salary account. By not doing budget transfers for these types of situations we preserve the original budget as the basis for evaluating our actual performance versus expected performance. In prior years, staff approved an extensive listing of budget transfers administratively due to budget variances in account categories within a single budget program as provided for under Procedure #1. In practice, these transfers were only reflected in the Village's audit report-our accounting records are never adjusted for any budget transfers in order to maintain proper budget /actual comparison data. With the new reporting requirements associated with GASB Statement #34, the Village is now required to publish original budget amounts in addition to revised budget amounts in its audit report. This new requirement reduces the value of these administrative transfers required under option #l. After consultation with the Village's auditors, it is staff's recommendation that only program -to- program transfers and additional fund appropriations be recorded this year. These transfers are required since this is the level of legal control where budget compliance is measured. The schedule attached to the ordinance provides the necessary transfers between budget programs so that each program is within budget. Please note that all transfers are only for the amounts necessary to offset the individual program budget variances, and in most cases the transfer is done only to the individual line item that has the largest variance. In most cases it is several accounts that would cause a program to exceed its budget. Also, in some cases the variance in a particular line item may be greater than the amount of the transfer, with offsets found in other line items within the budget program. After these transfers are made, numerous line -items and categories will remain over budget; however, each program in total will be within budget. Program Transfers The following is a brief explanation of the causes of program transfers that exceed $25,000: Program 134 -Risk Management: The IRMA premium was over budget due to the hardening of the reinsurance markets. Although some increase was budgeted for, the actual premium was higher than the amounts used for budget preparation. Program 161 - Village Communications Center: The final payment for the new communications center equipment was not budgeted for in 2003 (for budget purposes it was assumed to be completed in 2002) and overtime was over budget due to staff vacancies and training associated with three new employees. 2003YEBUDTRF doc Budget Transfers March 18, 2004 Page 3 Program 621- Police Field Services: This large variance is due to (1) two additional authorized positions charged to this program instead of Program 632 - Police Investigations due to delays in filling the two tactical officer positions (these authorized positions will be redirected to form a new traffic unit in 2004), and (2) the costs associated with two years of increases for bargaining unit members (consistent with past practice increases were not included in the 2003 budget). Program 700 -Fire and EMS General Salaries: The overtime variance is due to several extended sick leave and worker's compensation cases involving seven department employees requiring overtime to meet minimum staffing levels as well as overtime caused by the vacancy in the Fire Chief position. Program 351 -Water Operations: At the time the 2003 budget was prepared it was assumed that more of the automated meter reading project would take place in 2002 than actually occurred. This timing issue caused these costs to carry over to 2003. For both years combined this project is under budget. Fund Appropriation Amendments In 2003 the following four funds exceeded the total fund appropriation: Foreign Fire Insurance Tax Fund Garage Fund Police Pension Fund Firefighters' Pension Fund In each case these funds only have one budget program; thus, to solve a budget variance an increase in the total fund appropriation is required. In the case of the Foreign Fire Insurance Tax Fund, this Board authorized additional purchases that were not originally budgeted for (the Village Board does not control use of these funds). In the other three funds, the transfers necessitated by the cost of vehicle maintenance and pension benefits and refunds is not entirely predictable and variances may occur that are beyond the Village's control. Please feel free to contact me if you should have any comments or questions. 2003YEBLTDTRF doc 'i 8. C 2) Motion by Trustee Miologos, seconded by Trustee Korin, that the Village Board approve a negotiated three -year contract, subject to staff review, to Clarke Environmental Mosquito Management, Inc., Roselle, Illinois for a lump sum cost of $79,620 for 2004, 5% increase for years 2005 and 2006, and for unit costs. ROLL CALL VOTE: Ayes: 5 - Trustees Aktipis, Craig, Korin, Miologos and Yusuf. Nays: 0 - None. Absent: l - Trustee Caleel. Motion carved. President Quinlan announced that the Village Board's closed meeting has been canceled due to a lack of new information. 9. NEW BUSINESS: A. CONFIRMATION OF APPOINTMENTS - None. F B ORDINANCES & RESOLUTIONS 1) ORDINANCE 2004- TX -S -G -744, "AN ORDINANCE IMPOSING MUNICIPAL RETAILERS' OCCUPATION TAX AND SERVICE OCCUPATION TAX AND AMENDING TITLE 5 OF THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK, ILLINOIS WITH RESPECT THERETO" This matter was placed on the March 16, 2004 Primary Election Ballot as a referendum question. The voters of the Village overwhelmingly approved the taxes. The revenue generated from the tax will significantly impact the Village budget in years to come. The tax will be collected and enforced by the Illinois Department of Revenue beginning July 1, 2004. Motion by Trustee Yusuf, seconded by Trustee Konn, to pass Ordinance 2004 - TX -S -G -744 imposing a Non -Home Rule Municipal Retailers' Occupation Tax and Non -Home Rule Municipal Service Occupation Tax in the amount of 1/4 of I% and amending the Village Code to reflect the same. ROLL CALL VOTE: Ayes: 5 - Trustees Aktipis, Craig, Konn, Miologos and Yusuf Nays: 0 - None. Absent: l - Trustee Caleel. Motion carried ORDINANCE 2004- BU -EXl -S -1066, "AN TRANSFERS AMONG BUDGET LINE ITEMS" ANCE AUTH( During the course of a year, there are numerous situations that may anse that cause an account, program, or even a fund to exceed its budget. When this occurs, State statutes provide that the corporate authorities may make transfers from "one corporate object or purpose to another corporate object or purpose ". VILLAGE OF OAK BROOK Minutes Page 4 of 10 March 23, 2004 9 B. 2) Additionally, statutes provide that the corporate authorities may delegate authority to heads of municipal departments to "delete, add to, change, or create sub - classes within object classes budgeted previously to the department with the approval of the budget officer or executive officer of the municipality ". The Village has defined a corporate object or purpose to be an individual program or fund Sub- classes within object classes have been defined as accounts and categories within a budget program. Now that all of the year -end accounting adjustments have been made, several budget accounts, categories, and programs have been determined to have ended 2003 over budget. The Village Board's policy on Finance, Taxation, and Budget, prepared based on the previously mentioned statutes, outlines the following procedures for budget administration and how these variances are to be addressed 1. That the Budget Officer, with the approval of the Village Manager, may authorize transfers of budgeted funds between accounts or between account categories within a single budget program. 2. That any transfer of budgeted funds from one budget program to another shall be subject to approval by the Board of Trustees upon the recommendation of the Village Manager 3. That any transfer from contingency shall be subject to approval by the Board of Trustees upon the recommendation of the Village Manager. 4. That any increase in the total appropriation within any fund shall be subject to approval by the Board of Trustees upon the recommendation of the Village Manager. In prior years, staff approved an extensive listing of budget transfers administratively due to budget variances in account categories within a single budget program as provided for under Procedure #1. In practice, these transfers were only reflected in the Village's audit report -our accounting records are never adjusted for any budget transfers in order to maintain proper budget /actual comparison data. With the new reporting requirements associated with GASB Statement #34, the Village is now required to publish original budget amounts in addition to revised budget amounts in its audit report. This new requirement reduces the value of these administrative transfers required under option #1. After consultation with the Village's auditors, it is staff's , recommendation that only program -to- program transfers and additional fund appropriations be recorded this year These transfers are required since this is the level of legal control where budget compliance is measured. VILLAGE OF OAK BROOK Minutes OF Page 5 of 10 March 23, 2004 9 B. 2) The schedule attached to the ordinance provides the necessary transfers between budget programs so that each program is within budget. All transfers are only for the amounts necessary to offset the individual program budget variances, and in most cases the transfer is done only to the individual line item that has the largest variance In most cases it is several accounts that would cause a program to exceed its budget. Also, in some cases the variance in a particular line item may be greater than the amount of the transfer, with offsets found in other line items within the budget program. After these transfers are made, numerous line -items and categories will remain over budget; however, each program in total will be within budget. The following is a brief explanation of the causes of program transfers that exceed $25,000: Program 134 -Risk Management: The IRMA premium was over budget due to the hardening of the reinsurance markets. Although some increase was budgeted for, the actual premium was higher than the amounts used for budget preparation. Program 161- Village Communications Center- The final payment for the new communications center equipment was not budgeted in 2003 (for budget purposes it was assumed to be completed in 2002) and overtime was over budget due to staff vacancies and training associated with three new employees. Program 621 - Police Field Services: This large variance is due to (1) two additional authorized positions charged to this program instead of Program 632 - Police Investigations due to delays in filling the two tactical officer positions (these authorized positions will be redirected to form a new traffic unit in 2004), and (2) the costs associated with two years of increases for bargaining unit members (consistent with past practice increases were not included in the 2003 budget). Program 700 -Fire and EMS General Salaries: The overtime variance is due to several extended sick leave and worker's compensation cases involving seven department employees requiring overtime to meet minimum staffing levels as well as overtime caused by the vacancy in the Fire Chief position. Program 351 -Water Operations: At the time the 2003 budget was prepared it was assumed that more of the automated meter reading project would take place in 2002 than actually occurred. This timing issue caused these costs to carry over to 2003. For both years combined this project is under budget. In 2003 the following four funds exceeded the total fund appropriation. Foreign Fire Insurance Tax Fund Garage Fund Police Pension Fund Firefighters' Pension Fund VILLAGE OF OAK BROOK Minutes Page 6 of 10 March 23, 2004 19 x v 9. B 2) In each case these funds only have one budget program; thus, to solve a budget variance an increase in the total fund appropriation is required In the case of the Foreign Fire Insurance Tax Fund, this Board authorized additional purchases that were not originally budgeted for (the Village Board does not control use of these funds). In the other three funds, the transfers necessitated by the cost of vehicle maintenance and pension benefits and refunds is not entirely predictable and variances may occur that are beyond the Village's control. Trustee Konn noted two segments that are extremely high and voiced her concern that budgeting should be more on target and by transferring funds doesn't make it accountable. She stated accountability needs to be made and asked that department directors meet their budget. Trustee Miologos agreed with Trustee Konn that in ordinance form the departments meet their budget. If a department's budget is over 5% they should come before the Village Board for approval. President Quinlan suggested that the budget process is managed by the Village Manager and any large variance would be presented to the Village Board Manager Boehm explained that a record is made of when departments are over budget and the Village is meeting State statute in this type of accounting procedures and that staff is aware that the Board oversees the budget. President Quinlan explained that the adjustments are required to meet audit standards and he noted that those departments that are over budget will need to explain what has occurred Trustee Aktipis stated the Village Manager is doing a very responsible fob to ensure that the departments are operating correctly. Motion by Trustee Yusuf, seconded by Trustee Konn, to pass Ordinance 2004 - BU-EX 1 -S -1066, "An Ordinance Authorizing Transfers Among Budget Line Items which authorizes transfers among budget line items for the year ended December 31, 2003." ROLL CALL VOTE: Ayes: 5 - Trustees Aktipis, Craig, Konn, Miologos and Yusuf. Nays • 0 - None. Absent:I - Trustee Caleel. Motion carved. 3) ORDINANCE 2004 -TC- DUI -G -745, "AN ORDINANCE AMENDING TITLE 7, CHAPTER 1 (MOTOR VEHICLES AND TRAFFIC) OF THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK, ILLINOIS (DUI PROSECUTION)" By adopting the driving under the influence provisions of the Illinois Vehicle Code and the fine and penalty provisions of the Vehicle Code, the Village can prosecute those and related provisions of the Vehicle Code under Village Ordinance and thereby control the enforcement process and generate fines and penalties for the Village's general fund. It is estimated that in the first year of this program, the net benefit to the Village's general fund could be in the range of $50,000. VILLAGE OF OAK BROOK Minutes Page 7 of 10 March 23, 2004 EVA ORDINANCE 2004- BU -EX1 -S -1066 AN ORDINANCE AUTHORIZING TRANSFERS AMONG BUDGET LINE ITEMS WHEREAS, the Village Manager has recommended certain transfers among budget line items in the Annual Budget Ordinance passed for the fiscal year beginning January 1, 2003 and ending December 31, 2003, and certain transfers of sums of money in said Budget Ordinance from one object or purpose to another object or purpose; and WHEREAS, the Village Manager and Board of Trustees concur with and approve of the Village Manager's recommendations NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS that the following transfers are hereby authorized Section 1. The recitals above are hereby incorporated into and made a part of this ordinance Section 2 In the attached schedule, attached as "Exhibit A ", the amounts shown in the column titled "Transferred From" represent unexpended balances The total of said amounts are hereby transferred to the various items specified in the "Transferred To" column immediately opposite the items specified in the "Transferred From" column Section 3 The Foreign Fire Insurance Tax Fund budget is amended by increasing the amount budgeted in account 729 -7630, "Legal Services ", by $3,600, the increase which shall be funded by this Fund's fund balance Section 4 The Garage Fund budget is amended by increasing the amount budgeted in account 341 -7160, "Maintenance Vehicles ", by $15,600, the increase which shall be funded by this Fund's fund balance Section 5 The Police Pension Fund budget is amended by increasing the amount budgeted in account 291 -5310, "Pension Benefits ", by $14,100, the increases which shall be funded by this Fund's fund balance Section 6 The Firefighters' Pension Fund budget is amended by increasing the amount budgeted in account 292 -5320, "Pension Refunds ", by $8,100, the increases which shall be funded by this Fund's fund balance. Section 7 This ordinance shall be in full force and effect from and after its passage and approval as required by law Section 8 All ordinances or parts thereof in conflict with the provisions of this ordinance be and the same are hereby repealed to the extent of such conflict APPROVED THIS 23d day of March , 2004 Ordinance 2004- BU -EX1 -S -1066 Budget Line Item Transfers, Page 2 PASSED THIS 23'd day of March , 2004 Ayes: Trustee Aktipis, Craig, Korin, Miologos and Yusuf Nays None Absent' T istee al eel ATTE,5T— r� a `r7) b '1 'if ��.{'.�i• r° w` F�r',y} � q� � M.Y lf�,7}yj ��� 0 �.b.� c � i•kFn,� h(,� �` � J fib., \�,tf a _a iJ �y.•'