S-1011 - 03/26/2002 - BUDGET - Ordinances Supporting DocumentsVILLAGE OF OAK BROOK - e' W-0
Village Board Transmittal Memorandum
Date: March 12, 2002
To: Village President and Board of Trustees
From: Darrell Langlois
Recommendation: That the Village Board approve the attached ordinance
authorizing transfers among budget line items for the year
ended December 31, 2001.
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 ". In consultation with the Village Attorney, we have 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 2001 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.
2001 YEBUDTRF doc
Budget Transfers
March 12, 2002
Page 2
In order to make as few changes to the 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.
After the budget transfers were made administratively as authorized in item #1 (a copy of
these transfers was distributed on March 22, 2002), some individual' programs remained
over budget. The schedule attached to the ordinance provides the necessary transfers
between budget programs so that each category in every program is within budget. Please
note that while some over - budget line items will remain, each account category will be
within budget.
Program Transfers
The following is a brief explanation of the causes of some of the more material budget
transfers:
Program 134 -Risk Management: This variance is due primarily to the experience modifier
used by IRMA in calculating the Village's annual contribution exceeding the budget
projection for this item.
Program 181- Community Events: For budget purposes, the amount budgeted for Autumn
Fest is set at $20,000, which is based "net" of revenues received. For accounting purposes,
we are required to "gross up" the expenses and record the revenue in a separate revenue
account with no budget amount. In 2001 expenses for the event were $28,599, which
caused this program to go over budget. Revenues from the event were $15,879. Thus, on a
"net" basis, the event more than met its financial target.
Program 271 - Interfund Transfers: This variance is due to the decision to not renew the
note with Oak Brook Bank for the final year of the tennis dome borrowing, which resulted
in accelerating the 2002 principal payments to 2001. Since the debt service payments are
funded by the General Corporate Fund via an operating transfer, the amount needed to pay
off the balance caused the transfer line tem to go over budget.
Program 281- Installment Contract Debt Service: When the 2001 Budget was prepared, it
was anticipated that the installment contract certificates issued for the Municipal Complex
Project would be issued in early 2001. Since these debt instruments typically pay interest
semiannually and principal annually, it was anticipated that the first principal payment
would not be made until early 2002. However, while we in fact did not receive the
proceeds until 2001, the debt issue was dated December 1, 2000 in order to coincide with
the Bath and Tennis Clubhouse installment contract certificates. This resulted in the first
principal installment being due on December 1, 2001, which was not budgeted for.
2001 YEBUDTRF doc
Budget Transfers
March 12, 2002
Page 3
Program 425 - Library Building Project: As you are aware, the funding of this project
comes from the General Corporate Fund, the Infrastructure Fund, the Library operating
budget, and the Library Foundation. For budget purposes, the General Corporate Fund
share is budgeted "net" of the donations expected from the Library Foundation (there is no
budgeted revenue amount for "donations "). Consistent with generally accepted accounting
principles, the accounting treatment is that donations are recorded as revenues and all
payments to Harbour Contractors (including those in excess of the General Corporate Fund
commitment of $4.2 million) are recorded as expenditures. These differences cause a
budget/actual variance, which is remedied through this transfer.
Program 811 -Bath & Tennis General Operations: The increase in the UWA experience
modifier, unbudgeted unemployment claims, the cost of new brochures exceeding budget,
the need to rent portable restrooms due to the locker rooms not be available for part of the
summer, and a request by the auditors that we modify our policy regarding the accrual of
some compensated absences are some of the more significant variances in this program.
Proram 814 - Tennis Operation- Indoor: The payment of some 2000 expenses early in 2001
(most significantly natural gas) and not renewing the tennis dome note with Oak Brook
Bank (see Program 271) caused this program to exceed its budget.
Program 821 -Food & Beverage Operations: The costs (mostly payroll and rentals)
associated with operating out of the golf club kitchen and staging and serving food at the
Bath and Tennis Club clubhouse is a significant cause of the variances in this program.
Food cost is over budget partially due to food that was disposed of during the construction
period. The most significant variance is due to the requirement that the Village call
$630,000 of the installment contract certificates issued for the addition to the Bath and
Tennis Club clubhouse upon receipt of the proceeds from the sale of land on 31St Street.
Fund Appropriation Amendments
During 2001 there were no funds that exceeded its budget in total.
Please feel free to contact me if you should have any comments or questions.
2001 YEBUDTRF doc
8. B. 3) RESOLUTION 2002- MMC -LP -R -804, "A RESOLUTION 2002- MMC -LP -R -804
ADOPT ADOPTING THE 2002 METROPOLITAN MAYORS CAUCUS PRj RITI SMC LEG
LEGISLATIVE PRIORITIES"
4)
This resolution adopts the positions advanced by the Metropolitan
Mayors Caucus on legislative proposals in the Illinois General
Assembly for the Spring 2002 session and as expressed by the Caucus in
its 2002 Legislative Priorities. At the last meeting the Village Board
discussed the reasons for adopting these priorities and directed the
Village Attorney to draft the necessary resolution for Board approval.
Motion by Trustee Miologos, seconded by Trustee Craig, to approve
Resolution 2002- MMC -LP -R -804, "A Resolution Adopting the 2002
Metropolitan Mayors Caucus Legislative Priorities." ROLL CALL
VOTE:
Ayes: 4 - Trustees Craig, Korin, Miologos and Savino.
Nays: 0 - None.
Absent: 1 - Trustee Caleel. Motion carried.
AUTHORIZING TRANSFERS AMONG BUDGET LINE ITEMS"
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 ". In
consultation with the Village Attorney, staff 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 end 2001 over budget.
VILLAGE OF OAK BROOK Minutes
4�
Page 6 of 11 March 26, 2002
2002 -BU -Ex I -S -101 I
AUTH TRAN BURG
LINE ITEMS
8. B. 4) 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
ro .
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.
Finance Director Langlois and Village Manager Veitch fielded
questions related to the transfers.
Motion by Trustee Savino, seconded by Trustee Craig, to approve
Ordinance 2002 -BU -EXI -S -1011, "An Ordinance Authorizing
Transfers Among Budget Line Items." ROLL CALL VOTE:
Ayes: 4 - Trustees Craig, Korin, Miologos and Savino.
Nays: 0 - None.
Absent: 1 - Trustee Caleel. Motion carried.
S) ORDINANCE 2002 -LY -EXI -S -1010 "AN ORDINANCE ADOPTING 2002- LY -ExI -s -1010
THE LIBRARY MEETING ROOM POLICY" ADPT LIB MTG RM
POLICY
The ordinance adopts the Library Meeting Room Use Policy, which the
Village Board reviewed at their last meeting. At the last meeting the
Village Board directed the Village Attorney to draft the necessary
ordinance for Board approval.
VILLAGE OF OAK BROOK Minutes Page 7 of 11 March 26, 2002
ORDINANCE 2002- BU- EX1 -S- 1011
AN ORDINANCE AUTHORIZING TRANSFERS AMONG BUDGET LINE ITEMS
BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF
OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows:
Section 1: That on recommendation of the Village Manager of the Village of Oak Brook (which
recommendation is hereby approved) and in compliance with the provisions of the law in such case made
and provided, certain transfers among budget line items made in and by the Annual Budget Ordinance of
the Village of Oak Brook passed December 12, 2001 for the fiscal year beginning January 1, 2001 and
ending December 31, 2001, and certain transfers of sums of money in said Budget Ordinance from one
object or purpose to another object or purpose, be and the same is hereby authorized as specified and
indicated in Section 2 of this Ordinance.
Section 2: That in the attached schedule, 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: That this ordinance shall be in full force and effect from and after passage and approval
pursuant to law.
PASSED THIS AU /
f March, 2 2
day 00 o .
Ayes: Trustees Craig, Korin, Miologos and Savino
Nays:
None
Absent: Trustee Caleel
Abstain: None
APPROVED THIS �G day of March, 2002.
ATTEST:
Village Clerk
Approved as to orm:
Village Attorney
Village President'
QG� p F 044. 6
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