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MINUTES OF BUDGET HEARING #5
OF THE GURNEE VILLAGE BOARD
GURNEE VILLAGE HALL
APRIL 4, 2011
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Call to Order
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Mayor Kovarik called Budget Hearing #5 to order at 6:31 p.m.
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Other Officials in Attendance
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James T. Hayner, Village Administrator; Patrick Muetz, Assistant to Administrator; David Ziegler, Community Development Director; Diane Lembesis, Finance Director; Christine Palmieri, Director of Human Resources; Chris Velkover, Information Systems Director; Tom Rigwood, Director of Public Works; Fred Friedl, Fire Chief
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Roll Call
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PRESENT: 4- Balmes, Morris, Schwarz, Ross
ABSENT: 2- Garner, Jacobs
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Trustee Jacobs arrives 7:35PM
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Wrap-up Session
Mr. Hayner presented the following Power Point presentation to the Board.
Budget Process
• A series of Budget Hearings were held during March.
• Wrap-up session this evening includes amendments to the budget proposal.
• New fiscal year begins May 1st.
FY 10/11 General Fund Revenue Revisions:
The net effect of the revisions is to decrease projected FY 2010/11 revenues by $98,637.
21 line items were increased and 10 line items were decreased.
By refining the revenue forecasts, the projection is now more conservative.
Major Changes Included:
• Increase Use Tax from $386,500 to $415,000 [+$28,500].
• Decrease Hotel Tax from $1,235,000 to $1,150,000.
• Decrease Resort Tax From $255,000 to $235,000.
• Decrease Food & Beverage Tax from $1,575,000 to $1,500,000.
• Increase Building Permit Income from $450,000 to $525,000 [+$75,000].
• Decrease Red Light Enforcement from $1,575,400 to $1,500,000 [-$75,400].
• Decrease Interest Income from $77,500 to $52,000 [-$25,200].
FY 2010/11 Expenditure Revisions (All Funds)
Each Department Head carefully reviewed forecasted FY 2010/11 expenditures. Overall, there was decrease of $314,616.
Reduced forecasted Employee Medical Insurance expense to more closely align with anticipated actual.
Reduced Community Development Legal Expenses by $125,000 due to expected Reimbursement.
Increased the 2010/11 forecast for payments to automobile dealers and Gurnee Mills for economic incentive agreements to reflect actual disbursements.
MFT Fund:
• Changed Washington Street Construction to $377,000.
• Reduced Street Resurfacing from $750,000 to $705,000.
Capital Fund:
• Increased Flood Plain Land Purchase from $150,000 to $175,507
• Increased Washington Street Construction from $0 to $138,724
Utility Fund:
• Decreased Utility Improvements from $35,200 to $25,130
• Increased Engineering Studies from $10,000 to $13,350
• Increased Ejector Pump Installation from $2,500 to $7,500
Transfer to Capital Fund:
• FY 2010/11 General Fund Forecasted Expenditures are expected to end the year $607,508 (2%) over FY 2010/11 Budgeted Expenditures.
• Over Budget because Forecast includes $1.7 million transfer to Capital Fund. Without transfer, General Fund would be $1,092,492 (3.4%) under budget.
FY 2011/12 Revenue Revisions (All Funds):
The net effect of the revisions is to decrease FY 2011/12 budgeted revenue by $10,833.
22 line items were increased and 10 line items were decreased.
This budget refinement makes the forecast more conservative.
Changes were:
• Increasing the Use Tax from $399,600 to $431,000
• Decreasing the Hotel Tax from $1,275,000 to $1,250,000
• Decreasing the Resort Tax from $265,000 to $255,000
• Decreasing the Telecommunications Franchise Tax from $1,300,000 to $1,225,000
• Decreasing State Income Tax from $2,450,000 to $2,400,000
• Increasing FEMA Reimbursement for Snow Removal related to the February 2, 2011 blizzard from $0 to $100,000.
• Decreasing Red Light Enforcement from $1,525,000 to $1,475,000
• Decreasing MFT Income from $801,000 to $745,000
• Decrease contribution income by $20,000 because we will not receive tree grant.
• Increase contribution income by $26,667 because the $40,000 cost of the marketing campaign will be split 3 ways with the Park District, Lake County Tourism & Convention Bureau & Village of Gurnee.
FY 2011/12 Expenditure Revisions (All Funds):
General Fund:
• Added $100,000 to Fight Emerald Ash Borer.
General and Utility Funds:
• Increased fuel costs by $97,950 due to rising fuel prices.
MFT Fund:
• Proposed FY 2011/12 budget figures were revised based on year-to-date actuals. In many cases, unspent funding was carried forward to cover invoices which have not yet been received.
• Increased Engineering Consultant from $60,000 to $120,000
• Increased Cemetery Road Construction from $200,000 to $600,000
Capital Fund:
• Increased Cemetery Road Engineering from $110,000 to $180,000
• Increased Cemetery Road Construction from $1.1 Million to $1.4 Million.
• Reduced 2 unmarked squad cars for a savings of $46,000
Insurance Correction:
Insurance (MICA) Coverage Error
Workers Compensation Coverage – Per Claim
• Self Insured Retention (Deductible) is $400,000 per Claim
• The $400,000 is paid from the MICA Pool Loss Fund.
• All claims subject to $8.8 million aggregate retention. Then Reinsurance pays for claims.
• Error: Only First $150,000 is applied to loss limit. Therefore, the portion of each claim that falls between $150,000 and $400,000 while paid by the MICA pool is not subject to aggregate insurance recovery.
• Broker is working to correct mistake, but FY 11/12 Insurance cost is expected to increase 15% ($180,000).
Mayor Kovarik asked if MICA is the only choice for insurance or can the Village send it out to bid.
Mr. Hayner briefly explained stating we can do that but we have to give MICA a one year notice.
FY 11/12 Budget Highlights:
• No Tax Increases
• Full Time Equivalent Decrease in Headcount, But Re-Allocation of Personnel
• Long-term Initiatives of Engaging our Residents, Preserving our Neighborhoods, and Advancing our Services Continues
• Fund Balance and Bond Rating Preserved
General Fund Revenue:
Staff is projecting a $1.3 million revenue increase in FY 2011/12 compared to FY 2010/11 forecasted revenue.
The projected increase will come primarily from sales taxes ($300,000), Amusement Taxes ($24,645), Hotel & Resort Taxes ($150,000), and Telecommunication Taxes ($365,000).
The Telecommunication Tax is a confusing comparison because FY 2011/12 represents 12 months of income, whereas FY 2010/11 represents 7 months of income at the 6% rate.
Staff is recommending a permit surcharge based on the cost of the permit. The surcharge would average 5% of the current permit fee and would pay for new building permit software.
Benefits of the new software include increased efficiency in receipting, reviewing, and processing permit applications. The software would eliminate many of the manual steps that currently occur in the permit processing, inspection, and approval process. Staff will be bringing an Ordinance Change to the Municipal Code for Trustee Approval on April 18th.
Heritage Woods will pay an Urban Forestry Impact Fee ($75,000) for tree removal. That amount will go toward the Emerald Ash Borer program.
Notable increases in the Intergovernmental Category include more Traffic & Seat Belt Grants (from $20,800 to $43,000) for an increase of $22,200 and an $80,835 increase from the Warren Waukegan Fire Protection District.
General Fund Budget:
As proposed, the General Fund is estimated to have revenue of $34.6 million and expenditures of $34.2 million. This results in a surplus of $400,000 for FY 11/12 which will be added to the unrestricted cash balance, bringing it to $22.3 million.
Per the Village’s General Fund Balance Policy, we must retain 35% of the prior year’s expenditures. The April 30, 2012 projected fund balance is estimated to be at 65% of the prior year’s expenditures.
FY 2011/12 Capital Improvement Program:
FY 2011/12 Capital Projects total $5,890,000.
Capital Fund:
• $1.6 Million for Cemetery Road & Washington Street
• $200 Thousand for Land Acquisition
• $330 Thousand for Storm Water Detention
• $500 Thousand for Public Works Vehicles
• $125 Thousand for Building Improvements to the Fire Stations
MFT:
• $1.5 Million for Street Patching and Resurfacing
• $80 Thousand for Crack Filling and Striping
• $720 Thousand for construction and engineering oversight associated with the Cemetery Road Reconstruction.
Utility Fund:
• $175 Thousand for Public Works Vehicles
• $140 Thousand for Route 41/132 Interchange Improvements
Funding of FY11/12 Capital Projects
• The $2.9 million beginning balance includes the $1.7 million transfer from the General Fund in FY 2010/11.
• In FY 2011/12, we will make a $330 Thousand Transfer from Impact Fund to the Capital Fund.
• In FY 2011/12, we expect to receive a $70 Thousand Fire Grant to help fund a Capital Project.
• All Capital Projects are described in detail in the budget book.
Questions or Comments?
Mayor Kovarik stated that this is the comprehensive budget except for the Emerald Ash Borer program. Mr. Hayner said that the staff’s proposal for the Emerald Ash Borer program would be presented at April’s Committee of the Whole Meeting.
Trustee Ross asked if there was any difference between the line item budget at their desk and the one the trustees received previously. My. Hayner explained the difference in the Capital Fund.
Trustee Ross asked why the amount allotted for “Gurnee’s Got It!” decreased. Mr. Hayner explained that the new contract was for a smaller amount than the previous campaign.
It was moved by Trustee Jacobs, seconded by Trustee Schwarz to adjourn the meeting.
Voice Vote: ALL AYE: Motion Carried.
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Adjournment
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Mayor Kovarik adjourned the meeting at 6:52 p.m.
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Andrew Harris,
Village Clerk
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