S-1236 - 06/10/2008 - BUDGET - Ordinances Supporting DocumentsITIM 10.11.2 )
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AGENDA ITEM
Regular Board of Trustees Meeting
of
June 10, 2008
SUBJECT: Budget Amendment
FROM: Darrell Langlois W/
BUDGET SOURCE/BUDGET IMPACT: Several Budget Programs
RECOMMENDED MOTION: I move that the Village Board adopt Ordinance 2008 -BU -S-
1236, "An Ordinance Amending the 2008 Budget ".
Background/History:
The Garage Fund is one of three internal service funds utilized b the Village. There is only one
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budget program in this fund, Program 341- Garage Operations. This program is used to account
for all of the costs associated with the operation and maintenance of the Village's vehicular fleet.
For 2008, the total budget for this program is $588,160 of which fuel, parts, and outside repairs
amount to $324,860 or 55% of the total. As an internal service fund, the total program costs are
charged back to 21 budget programs in the General Corporate Fund, Infrastructure Fund, and
Water Fund.
As the Board is well aware, in the last 18 -24 months there has been significant escalation in the
price of fuel. In addition, the Village has encountered a rise in the numbers of large repairs. In
the recently completed 2007 year, these two factors resulted in nearly depleting the fund balance
of the Garage Fund, and for 2008 the amount charged back to the operating departments was
increased by $87,400 due to the increased costs.
From the time the 2008 Budget was completed until now we have experienced continued
increases in the price of fuel as well a several additional major repairs. Attached is a
memorandum from Mike Meranda on this subject, and based on current pricing he expects the
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Last saved by Default J \2008budget \garageamendment doc
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line item for gas and oil to exceed budget by $104,000 and the account for vehicle maintenance
to exceed budget by $65,000. Thus, the total expected budget variance is $169,000.
The "mechanics" of adjusting the budget in this case are a little complicated and has to be done
in two parts. In most cases, in order to address a budget variance funds are transferred from one
account or program to another. These transfers, however, are limited to accounts and programs
within a single fund. As previously mentioned, since Program 341 - Garage Operations is the
only budget program in the Garage Fund, there are no other budget program to transfer funds
from. Thus, the first part of the adjustment requires adoption of the attached ordinance
amending the 2008 Budget by increasing the spending authority in account 341 - 6030 -Gas & Oil
by $104,000 to $309,460 and account 341 - 7160 - Maitenance Vehicles by $65,000 to $184,400.
As previously noted, the fund balance in this program has been depleted and 2008 chargebacks
to the operating departments are not sufficient to accommodate these additional expenditures.
Thus, in order to fund an additional $169,000 of expenditures, the second adjustment requires
increasing the budget amount for the chargebacks to the using departments. The adjustment
required is based on fuel usage and maintenance history and is allocated in the following
manner:
Police (General Fund) $55,000
Fire(General Fund) $34,000
Public Works (Water Fund) $185000
Public Works (Infrastructure Fund) $623000
On the consent agenda for this meeting are four separate budget transfer forms that transfer funds
to the various Vehicle Operation & Maintenance accounts. These are line item transfers and do
not increase budget authorized spending in any of the funds noted above. I want to emphasize,
however, that by doing these budget transfers the high costs of these two items are impacting the
operating departments and funds of the Village in that in order to fund these transfers staff has
had to re- prioritize projects and take funds from alternative items. If the attached ordinance is
approved, an additional $169,000 will be transferred to the Garage Fund.
Recommendation:
I recommend that the Village Board adopt Ordinance 2008 -BU -S -1236, "An Ordinance
Amending the 2008 Budget ".
Last saved by Default J \2008budget \garageamendment doc
Last printed 6/5/2008 2 48 PM
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VILLAGE OF OAK BROOK
Interoffice Memorandum
DATE: 5/21/08
MEMO TO: Darrell Langlois, Finance Director
FROM: Michael J Meranda, Public Works Director
SUBJECT: Garage Fund — Garage Operations
In reviewing year -to -date Garage expenses, and assuming no relief from exorbitant fuel prices, we are
projecting that the Garage Fund will be over - budget by approximately $169,000 for the fiscal 2008
budget. The major reason for this comes from two line -item accounts that makeup approximately 55% of
the $588,160 FY -08 Garage budget.
The first line -item account is Gas & Oil We budgeted $205,460 for the year or a 20% increase over the
2007 budget However, the spiraling fuel prices that we started to experience late last year, have not
subsided which have rendered our assumptions totally inadequate Based upon present pricing, our total
fuel cost could easily reach, if not exceed, $310,000, or $104,000 over - budget.
[Note, we paid $1.94 for diesel and $] 81 for unleaded in January of 2007 This past January, we paid
$2 70 for diesel and $2 60 for unleaded In April, it had increased to $3 75 for diesel and $3 32 for
unleaded or 95% and 83% respectively over a 15 month period See attached chart]
The second line -item account is Maintenance of Vehicles. We budgeted $119,400 for the year or 9 5%
over the FY -07. Unfortunately, and for the following reasons, this line item account is projected to come
in $65,000 over budget. Three major items have caused this projected overage. 1 ) Approximately
$22,000 in unanticipated repairs on 3 fire department units ranging from engine repair to
electronic /electrical repairs; 2.) $8,000 for additional snowplow blades and another $13,000 in additional
vehicle /equipment repair (truck springs, plow repairs, brakes) directly attributable to this past harsh
winter, and 3.) $22,000 for a major transmission rebuild on the Street Dept.'s front -end loader that has
yet to be undertaken as the issue is being discussed with the manufacturer in hopes of reducing the cost
In sum, both line -items account for a projected overage of $169,000 in the Garage Fund
cc: Dave Niemeyer, Village Manager
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ORDINANCE 2008 -BU -S -1236
AN ORDINANCE AMENDING THE 2008 BUDGET
WHEREAS, on December 11, 2007 the Village Board approved Ordinance 2007- BU -EX3 -S -1218,
"An Ordinance Adopting the Budget for the Village of Oak Brook for 2008," and
WHEREAS, the since the approval of the 2008 Budget, the Village has encountered unanticipated
increases in the cost of fuel and several significant vehicle repairs; and
WHEREAS, due to these unanticipated costs an amendment to the 2008 Budget is required
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 The Garage Fund budget is amended by increasing the amount budgeted in account
341 -6030, "Gas and Oil ", by $104,000, and in account 341 -7160, "Maintenance Vehicles ", by $65,000,
both increases shall be funded increased internal service charges
Section 3 This ordinance shall be in full force and effect from and after its passage and approval
as required by law
Section 4 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 10th day of June, 2008
PASSED THIS 10th day of June, 2008
Ayes
Nays
Absent
John W Craig
Village President
ATTEST
Charlotte K Pruss
Village Clerk