THE
FINANCE=
COMMITTEE
MEETING=
MINUTES
MARCH 2=
2, 2005
7:30 P.=
M.
Meeting was called to orde= r at 7:30 P.M. by Mr. Samz.
Attend= ing: = Stephen Dugan
Doug Samz, Chairperson
&nb= sp; = ; &= nbsp; Bob Sarley
&nb= sp; = ; &= nbsp; Bob Gerry
&nb= sp; = ; &= nbsp; Tim McCue
&nb= sp; = ; &= nbsp; Jim Silvers, Trustee
Absent: Ray Perry
Also
Attending: Russell Benford, Village Administrator
Donna Lo=
baito,
&nb= sp; = ; &= nbsp; Marilyn McGuan, Village Treasurer
&nb= sp; = ; &= nbsp; Tom Fitzpatrick, Public Works Director
&nb= sp; = &n= bsp; Jennifer Paulus, Interim Police Chief
II. =
;
None t= his month.
III. =
;
APPROVAL OF THE MINUTES FROM THE DECEMBER 1=
3,
2004 MEETING
A motion was made by Mr. G= erry to approve the December 13, 2004 minutes.&nb= sp; Seconded by Mr. McCue.
Mr. McCue asked if Ms. McM= ahon had made the four corrections to the audit that the Finance Committee had recommended. Mr. Samz responded that she had not. Those corrections consisted of:
1. Corrections made to the discussion in the audit about the Police Pension Fund.
2. Verification and probable correction to the unfounded liability in the Police Pension F= und.
3. Include in the management letter a suggestion to establish a bad debt reserve for = Taubman, and
4. Comments that $1 million of fund balance is restricted to the Park Fund.
Mr. S= amz also added that the audit should reflect an IMRF disclosure.
Mr. S= amz made one correction to the minutes on page 2, last sentence of the fifth paragraph. The liability las= t year was $400,000, not $200,000.
The Finance Committee requ= ested that Ms. McMahon be sent a letter informing her that she will be paid when= the requested changes are made to the audit.
On a voice vote, the motio= n carried unanimously.
&nb= sp;
IV. =
;
NEW BUSINESS
A. Consideration
Of The Annual Budget For The Village Of Hawthorn Woods, Lake County, Illin=
ois
For The Fiscal Year Commending May 1, 2005 And Ending April 30, 2006
Administrator Benford rev= iewed the highlights of the proposed Annual Budget.= He commented that this is the first draft.
Revenue highlights include:
· An increase in projected General Fund Reven= ue of $384,239. The primary reason= s for the increase in projected revenue are projected increases in Engineering R= eview Fees, Plan Review Fees, Subdivision Annexation Fees and Donations resultin= g from increased development activity.
·
The addition of a Sewer Fund revenue
account. The
· Parks and Recreation revenue of $292,282 is anticipated. The primary rev= enue source is developer donations in the amount of $249,282.
·
An increase in Police Pension Fund revenue =
from
$152,403 to $166,733. The
· Each of the three Special Service Area Funds show anticipated revenues of approximately $301,305. The primary source of the revenue= is property tax receipts, which will be used to repay the bond principal and interest generated from the $10.6 million bond issuance. The three Special Service Area Fu= nds will generate revenue of $903,915 in fiscal year 05-06.
· General Fund revenue of $4,782,182.
· Total revenue of $6,555,097.
Expenditure highlights include:
· An administration salary expenditure of $380,667. This figure repres= ents salary increases and the addition of one full-time employee to facilitate economic development initiatives within the Village.
· An increase in insurance costs from $148,82= 2 to $193,575. The addition of one full-time administration employee, two full-time police officers and one full-time laborer has contributed to the significant increase in insurance costs.
· The addition of an Elected Officials account. The account represe= nts salaries of the Village President and three Trustees as well as insurance,= retirement benefits, travel expenses and training for the elected officials of the Village. The total projected expenditures for the Elected Officials is $83,760.
· Police Department salary expenditure of $893,429, a $108,590 increase over FY 04-05 estimated expenditures. This figure includes the addition= of two full-time officers and the replacement of one full-time officer.
· The funding of the Police Pension from gene= ral fund revenue. The Village obligation for FY 05-06 is $113,473.
· The replacement of three squad cars valued = at $58,050.
· Expenditures for Planning and Zoning servic= es include $693,190 for engineering services, $83,186 for plan review service= s and $100,000 for legal services.
· The Building and Grounds account includes $12,000 for the maintenance of Village Hall, the Police Department and the Public Works building.
·
The Building and Grounds account includes t=
he
allocation of $12,000 for the 4th of July fireworks display.
· Due to the outbreak of the West Nile Virus,= the Building and Grounds account includes the allocation of $48,055 for mosqui= to control.
· The Building and Grounds account includes t= he allocation of $37,618 for technology including workstation additions for n= ew employees, the computer maintenance contract with Computer Help Key in the amount of $12,000, replacement of the bridge between Village Hall and the Public Works building in the amount of $4,500, and the acquisition of a document management system in the amount of $10,000.
· A Public Works salary expenditure of $446,363. This figure repres= ents the addition of one full-time laborer and salary increases.
· The allocation of $266,500 for road mainten= ance, which includes $200,000 from the General Fund for road repair. This $200,000 is the Village contr= ibution to the 05-06 SSA road repair project.&nbs= p;
· The Parks and Recreation Department budget includes $1,000,000 for the construction of the new park that was donated = to the Village in conjunction with the annexation and development of the Hawt= horn Woods Country Club. The fund= ing for the construction of the park was provided by a $1 million donation by the developer of the Hawthorn Woods Country Club.
· The expenditure of approximately $1 million= in each of the three Special Service Area Funds. The combination of bond proceeds = and general fund revenue will fund approximately $3 million in road repairs.
· General Fund expenditures of $4,448,451.
· Total expenditures of $9,267,706.
RECOMMENDATIONS
Proposed Gener=
al Fund
revenues exceed expenditures by $333,731; however, significant cuts must be
made to the proposed FY 05-06 budget.&nbs=
p;
The financing plan for the Special Service Area project indicates t=
hat
the Village must put aside $835,000 per year in order to complete the SSA =
project
in seven years. That goal wa=
s not
reached in FY 04-05 and the proposed FY 05-06 budget does not meet that
goal. In order to reach the
$835,000 goal, $501,269 must be cut from the General Fund expenditures.
The Finance Committee discussed the fact tha= t the Village Board is not earmarking $835,000 annually towards the SSA expenses. Administrator Benf= ord commented that last fiscal year, the Village was off by $600,000, and that= this year, the $835,000 is being used by the General Fund. He further stated that several anticipated developments did not go through last year, specifically, Kempe= r and Gilmer Estates.
Mr. McCue expressed conce=
rn once
again this year about the Village using one-time donations for ongoing
operational expenses. He is =
also
concerned about the Village’s ability to complete the SSA project.
Mr. Dugan suggested the V= illage consider tapping into the reserve funds.&= nbsp;
Trustee Silvers commented= that he has worked with staff on the SSA Financial Model, however he was called ou= t of the country, and the updated report is forthcoming.
Mr. Dugan asked Administr= ator Benford to provide the Technology Committee with its own account numbers.<= span style=3D'mso-spacerun:yes'> Administrator Benford will have it broken out for the next meeting.
The Committee asked why t= he Elected Officials health insurance was so high. The Committee is not in favor of = the Village being the primary insurance carrier for the elected officials. They were not aware of all the additional expenses that would be involved with compensating elected officials. They commented th= at if the Village is facing a deficit, the Village Board should not be taking he= alth insurance. Mr. McCue comment= ed that he is not opposed to compensating the elected officials and suggested that= the Village increase their per diem pay and do away with health insurance.
The Committee asked Chief= Paulus about her request to finance three cars.&= nbsp; Chief Paulus stated that three cars are in need of being replaced.<= span style=3D'mso-spacerun:yes'> She found a three year loan that = would cost the Village $2,000 per month, or $24,000 annually to finance all three cars, which financially would be better for the Village than spending over $70,000 this year to purchase the three cars.
Administrator Benford com= mented that the Village incurred $75,000 in legal expensed with the Kemper lawsuit, however, this move has ensured the Village approximately $430,000 in future connection fee revenue. He was unsure as to when the Vill= age would see this revenue, but it is forthcoming. He also stated the same scenario = is true with the legal cost the Village incurred with the Ivanhoe property. Mr. Dugan suggested that the rese= rve funds be used to cover legal expenses these situations. Mr. Dugan asked Administrator Ben= ford to change the footnote at the bottom of page 8, Planning and Zoning, to refle= ct that not all expenses are reimbursable.&n= bsp; Trustee Silvers stated that when the Village Board is in Executive Session discussing potential litigation, they should question the anticipa= ted legal expenses.
Mr. Dugan asked the quest=
ion as to
whether it would be more cost efficient to utilize Lake County SheriffR=
17;s
Department for police protection.
Chief Paulus commented that she does not believe the community would
want to be serviced by
The dispatching contract =
was
discussed. The Village is in=
the
last year of a three-year contract.
Chief Paulus will look into obtaining dispatching services from Wau=
conda
and
Mr. Gerry asked what prio= rity ranking the Village would place on the proposed hiring of additional staff. Administrator Benford= stated first priority would be for police officers, due to safety reasons, then a maintenance employee for Public Works and lastly an Economic Development employee. Trustee Silvers st= ated the Village needs an Economic Development staff member to address the need= for a financial plan.
The Committee discussed t= he need for a long-term financial plan. Trustee Silvers stated the Village Board is not going to draft a financial plan, therefore, the work will have t= o be completed by the Finance Committee with the assistance of the department heads. Mr. McCue disagreed w= ith developing a three-year plan due to the fact that it is very difficult to = know what developments may happen. Mr. Gerry stated that he believes the Finance Committee would be willing to pr= epare a three-year plan if they had confidence that it was something the Village Board would utilize.
Mr. Gerry asked if the pr= oposed salaries were consistent with the salary/benefit plan from a year ago. Administrator Benford responded y= es, and that the Village did not lose any employees this year.
The Finance Committee str= ongly reiterated that $835,000 earmarked for the SSA project should be used for = just that.
Administrator Benford com= mented that personnel are the largest expense item in the budget. He will cut the proposed addition= al personnel from the budget and ask department heads to make additional cuts= .
Mr. McCue commented that = he believes the interest revenue being budgeted is too low. He also asked why MFT money is be= ing received, but not used. Administrator Benford responded that the funds are in reserve to be= used in the future.
Mr. Gerry proposed the Vi= llage looking into a revenue increase via a referendum. Trustee Silvers stated the Villag= e Board would not support this move.
B. Quarterly
Revenue and Expenditure Report – Third Quarter
Mr. Dugan asked that restricted fund be brok= en out from the unrestricted funds.
The Committee discussed a= gain the benefits of establishing a three-year financial plan. Mr. Samz asked the Committee to consider for next meeting what kind of involvement they a= nd the department heads will have in developing this plan.
On a motion by Mr. Gerry,= seconded by Mr. McCue, the Finance Committee adjourned at 9:35 p.m.
Respectfully submitted,
____________________________ &= nbsp; &nb= sp; ___________________________
Doug Samz, Chairperson