S-1619 - 03/23/2021 - BUDGET - Ordinances Supporting Documents ITEM 6.13.3
BOARD OF TRUSTEES MEETING
vi1.1.A6E of SAMUEL E. DEAN BOARD ROOM
OAK B R92. K BUTLER GOVERNMENT CENTER
1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
March 23, 2021
SUBJECT: Amendments and Transfers Among Budget Line Items
FROM: Jason Paprocki, Finance Director
BUDGET SOURCE/BUDGET IMPACT: Effects Numerous Budget Programs
RECOMMENDED MOTION: I move that the Village Board approve Ordinance 2021-
BU-AMEND-ND-S-1619, "An Ordinance Authorizing Amendments and Transfers Among
Budget Line Items" for the year ended December 31, 2020.
Backeround/History:
During the course of a year, numerous situations may arise that can 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 and programs have been determined to have ended 2020 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.
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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 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 under budget 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.
Through Budget Year 2002,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 were never adjusted for any
budget transfers in order to maintain proper original 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 requirement reduces the value of these administrative transfers
required under option#1. After consultation with the Village's auditors,in Budget Year
2003 and thereafter only program-to-program transfers and additional fund
appropriations are recorded. These transfers are required since this is the level of legal
control where budget compliance is measured.
In addition to the budget transfers required under the Village's Financial Policy
ordinance,during 2004 the Village Board began requiring budget transfers during the
year when an individual line item account exceeded budget by more than 10%. This
policy was revised in October,2006 by eliminating the 10%threshold and instead
requiring line item transfers when an account exceeds its budget by$2,500 in a material
and supply,operation and contractual,or capital account(60000 to 90000 account series)
or$10,000 in a personnel series account(50000 account series). Many of these transfers
have already been approved by the Village Board and have been posted to the accounting
system;thus,these transfers are not reflected here.
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
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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 General Corporate Fund ended 2020 with an increase in fund balance(unaudited)of
$3.1 million. The total revenues were$25.6 million with total expenditures and transfers
out of$22.5 million.
There are numerous situations that occur during the year which may cause a particular
line item to go over the annual budget.The following is a brief explanation of the causes
of individual account transfers that exceed$10,000:
Program 121—Legal: Account 121-76320(Village Prosecutor)is over budget in total by
$29,570 due to ongoing litigation. Account 121-76360(Labor Attorney)is over budget
in total by$79,295 due to ongoing personnel issues.
Program 132—Human Resources: Account 132-52100(Physical Examinations)is over
budget in total by$21,375 due to increased health screenings.
Program 321—Buildings&Grounds: Account 321-60800(COVID-19 Supplies)is over
budget in total by$26,720 due to a unbudgeted supplies related to the pandemic.
Account 321-72200(Maintenance Buildings)is over budget in total by$39,130 due to
emergency HVAC work and roof repairs.
Program 621—Police Field Services: Account 621-50330(Salaries Overtime-Special
Detail)is over budget in total by$22,445 due to an increase in billed police special
service hours. Account 621-90100(New Equipment)is over budget in total by$23,460
due to additional body work cameras purchased and the installation cost of a license plate
reading system that was budgeted in 2019.
Program 634—Support Services Records: Account 634-50000(Salaries Full-Time)is
over budget in total by$33,810 due to the creation of one full time position by
eliminating three part-time positions.
Proyram 700—Fire,Rescue.&EMS Operations: Account 700-50300(Salaries
Overtime)is over budget in total by$163,705 due to an increase in staffing needed to
cover for injuries and illnesses.
Program 921—Code Enforcement: Account 921-77000(Other Services)is over budget
in total by$135,805 due to outsourced plan reviews used after an employee retirement.
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Program 364—Drainage Management: Account 364-71900 (Maint.-Storm Sewer) is
over budget in total by$10,200 due to emergency storm sewer repairs. Account 364-
90800 (Drainage Improvement)is over budget by$284,835 due to the timing of the Salt
Storage Building payments.
Program 351 —Water Operations: Account 351-54050 (Unemployment Compensation)
is over budget in total by$13,990 due to employee turnover. Account 351-17510
(General Equipment)is over budget in total by$17,510 due to purchasing stock water
meters. Account 351-7700 (Other Services) is over budget in total by$104,110 due
planning for the potential sale of the non-corporate water system.
Program 451 —Water System Improvements: Account 451-65000 (General Equipment)
is over budget in total by$21,860 due to the annual Sensus system support.
Program 811 —Sports Core General Operations: Account 811-76800 (Tree Services)is
over budget in total by$30,000 due to buckthorn removal services. Account 811-77000
(Other Services) is over budget in total by$59,535 due to a reclassification of OSLAD
Grant planning.
Program 823 —Golf Food &Beverage: Account 823-50200(Salaries Seasonal) is over
budget in total by$39,165 due to additional staffing needed for the lounge renovation.
Account 823-50300(Overtime) is over budget in total by$12,700 due to additional
staffing needed for the lounge renovation. Account 823-63200(Food Cost)is over
budget in total by$20,190 due to additional food sales from the lounge renovation.
Account 823-63250 (Beverage/Liquor Cost) is over budget in total by$19,235 due to
additional drink sales from the lounge renovation.
Program 831 —Golf Club General Operations: Account 831-54050 (Unemployment
Insurance) is over budget in total by$11,110 due to the spring closure. Account 831-
62300 (Building Maint. Supplies) is over budget in total by$11,960 due to the lounge
renovation project. Account 831-65000 (General Equipment) is over budget in total by
$81,970 due to the purchase of golf lounge furniture. Account 831-73700(Bank Service
Fees)is over budget in total by$23,725 due to increased credit card processing.
Program 832—Golf Club General Operations: Account 832-50500 (Commissions) is
over budget in total by$11,225 due to an increase in golf lessons.
Program 834—Golf Course Maintenance: Account 834-54050 (Unemployment
Compensation) is over budget in total by$14,865 due to an increase in offseason claims.
Account 834-61800 (Chemicals)is over budget in total by$16,505 due to an increase in
fertilizers and herbicides. Account 834-72000 (Maint. Roads & Paths)is over budget in
total by$18,485 due to additional cart path paving. Account 834-72300(Maint. Other
Equipment)is over budget in total by$13,240 due to an increase in parts.
Program 133 —Employee Benefits: Account 133-70300(Specific Premium)is over
budget in total by$23,965 due to increases in premiums greater than budgeted. Account
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133-70340 (HMO Premiums)is over budget in total by$12,735 due to increases in HMO
enrollments. Account 133-77000(Other Services) is over budget in total by$25,095 due
to increases in HSA enrollments.
Program 341 —Garage Operations: Account 341-71600(Maintenance Vehicles) is over
budget in total by$14,320 due to general increases in vehicle costs.
Program 342—Equipment Replacement: Account 342-73200(Licenses & Fees)is over
budget in total by$14,220 due to fees associated with new lease setups. Account 342-
80100 (Interest Expense) is over budget in total by$16,525 due to interest costs on leased
vehicles.
Budget Amendments
In addition, to budget transfers noted above, the expenditure budget for the following
accounts are being increased for 2020:
Promenade TIF Fund—Account 283-77000 (Other Services) was increased $415 due to
increased TIF report fees and account 283-80700 (Debt Principal)was increased $25,000
due to additional note principal payments.
Self Insurance Fund—Account 133-70340 (HMO Premiums) was increased $33,065 due
to additional enrollments in the HMO plan in 2020 and account 133-70800 (Health
Claims)was increased $2,143,425 due to an unexpected increase in PPO medical claims
that are offset by a stop loss adjustment.
Recommendation:
Staff recommends the Village Board approve Ordinance 2021-BU-AMEND-ND-S-1619,
"An Ordinance Authorizing Amendments and Transfers Among Budget Line Items" for
the year ended December 31, 2020.
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