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October 20, 2007 - Budget Review

Mayor Ron Sandack welcomed Council, staff and visitors to the budget review session at 8:33 a.m. in the Conference Room at the Public Works Facility, 5101 Walnut Avenue.

Present: Mayor Ron Sandack; Commissioners Marilyn Schnell, Martin Tully; Sean Durkin, William Waldack, Geoff Neustadt, Bruce Beckman

Absent: None

Residents: Gordon Goodman, 5834 Middaugh; Christine Fregeau, 1918 Elmore Avenue; Bill Wrobel, 7800 Queens Court; Therese Haley, 5505 Stonewall; Mark Thoman, 1109 61st Street; Greg Bedalov, 2001 Butterfield; Alice Strelau, 5611 Brookbank; Frank Falesch, 820 Prairie

Staff: Village Manager Cara Pavlicek; Village Attorney Enza Petrarca; Deputy Village Manager Dave Fieldman; Assistant Village Manager Mike Baker; Director of Human Resources Wes Morgan; Director of Community Development Tom Dabareiner; Director of Communications Doug Kozlowski; Interim Director of Public Works Robin Weaver; Assistant Director of Public Works Stan Balicki; Assistant Director of Public Works Mike Millette; Fire Chief Phil Ruscetti; Police Chief Bob Porter; Director of Counseling and Social Services Andy Matejcak; Director of Financial Services Judy Buttny; Acting Accounting Manager Steve Sanderson; Director of Information Services Liangfu Wu; Director of Tourism & Events Mary Scalzetti; Management Analyst Megan Bourke; Management Intern Naz Yetgen; Village Clerk April Holden

Mayor Sandack welcomed the residents to the Workshop meeting of the 2008 municipal budget. He asked for public comments.

Public Comments

1. Gordon Goodman , 5834 Middaugh, said allowing for public comments at the beginning and end of this meeting is good. He asked if public comments would be permitted during the course of the meeting.

Mayor Sandack said the public is welcome to comment during the meeting.

Dr. Goodman congratulated the Village on providing a much better estimate of income and expenses than in past years.

Dr. Goodman said he has three topics: 1) Lyman Woods – Dr. Goodman referred to unfunded items in the budget and noted that improvements in Lyman Woods for a one-time expense of $250,000 are one of the items currently unfunded. He said this is the 20th anniversary of the purchase of Lyman Woods and provided history on the acquisition. The last time the Village put money into this was when it was purchased 20 years ago. He asked that this item be given serious consideration and suggested that the Village either fund this or sell it to the Park District for $1.00.

Mayor Sandack agreed that this should be resolved.

2. Alice Strelau , 5611 Brookbank, said the budget process started in the summer with the Citizens Summit. The focus was on stormwater and infrastructure. She thanked the Council for the opportunity to participate.

Village Manager Cara Pavlicek said the summary of the Citizens Summit should be available shortly.

3. Chris Fregeau , 1918 Elmore, said she appreciates this format. She asked the Council to revisit the Community Investment Program (CIP) for the sidewalk program with respect to adding the annual escalator cost and developer contributions into the account. She reiterated the importance of public works and the director’s position.

4. Bill Wrobel , 7800 Queens Court, reminded the Council of the importance of public safety and the need for the budget to support it. He noted there are many facets of public safety.

5. Gordon Goodman , said Heritage Festival was outstandingly successful this year. He spoke in favor of continuing the special concert on Thursday night. He said this is a policy question more than a financial question as it impacts the cash reserves. He referenced the cash reserve policy and the amounts detailed in the budget.

Dr. Goodman then spoke about the Blodgett House. He said the 1846 Blodgett House on the Move group is working with the Park District. They have raised over $85,000 toward moving the house; $50,000 came in connection with the Thursday night concert. He said it is important to continue to generate money as the Park District expects them to pay for all the expenses incurred in moving the house, which will cost $700,000.00. The Village contributed about $30,000 toward the cost of the concert and is a major financial contributor. He said he favors the amount of $50,000 in the 2008 budget. He asked that the 1846 Blodgett House on the Move group be allowed to run next year’s Thursday night concert in connection with Heritage Festival. He said the Park District will vote on November 1 with respect to providing space for the house. He referenced Commissioner Tully’s supportive comments. He asked for $25,000 of direct support and to share the public safety costs. He said he believes the Village has the commitment and the resources for this project.

Overview of Proposed Changes in the General Fund FY08 Budget

Manager Pavlicek reviewed the general fund revenue summary. She said the figures will be revised before the public hearing. She reviewed general fund expenses:

  • 75% of the general fund expenses are for police, fire and public works
  • Wage increases are proposed at 3%
  • Council discussed the organizational chart as presented
  • The budget includes the addition of a part-time Document Management System technician. There was discussion regarding making this a temporary position and contracting this position out either in FY08 or in the future.
  • Funds are included for recognition of volunteer Board & Commission members as well as staff
  • Staffing for the Finance, Information Services, Counseling & Social Services, and Building Services departments were reviewed
  • Organizational improvements with respect to Community Development and Public Works were reviewed. Two staff engineers will be shifted from the Stormwater Department in Public Works to Community Development. A Code Enforcement position will be eliminated. Mike Millette, Assistant Director, Public Works, will be the Stormwater Administrator for the Village. Council discussed the workload assigned to the Assistant Director, Public Works.
  • A part-time position has been added to the Police and Fire Departments
  • Council asked for an explanation for the reduced amount of grant revenue in the general fund FY07 estimates

Unfunded Items

The Manager reviewed the unfunded items. She noted there is support for these items, but they did not support a balanced budget. Council reviewed the unfunded items:

  • Funding for initiation of the Total Community Development (TCD) process
  • Architectural design services for Village Hall/Police Station
  • Replacement of existing Community Events signs
  • Start removal and replacement in FY08 of Ash trees located on Village property in select areas
  • Development of a Downers Grove brand
  • Contract for Digital Media Archiving Software
  • Funding increase for entertainment costs of contract vendors at Heritage Festival
  • Institutionalize the “Thursday” night concert at Heritage Festival
  • Lyman Woods improvements
  • 1846 Blodgett House on the Move funding request
  • Installation of an independent Village operated downtown WiFi system

Council questions included the following:

  • The breakdown of costs for TCD
  • Funding for the construction work associated with the facility needs recommendations
  • The projected on-going maintenance costs for the current civic center facilities
  • The cost of not doing anything with respect to the civic center facilities
  • The options for use of a portion of the site on which the current civic center facilities are located
  • The ability to spread the facility design costs over two fiscal years

Council members discussed funding for the various projects. Discussion included the need for a financial plan. Timing, use of cash reserves, existing revenue streams, use of general obligation bonds and other financial instruments need to be explored. Concern was expressed as to the number of tax increases in one year. The Mayor suggested integrating the tools of the strategic plan and the budget in order to see high priorities and associated costs in one document. He said stormwater and infrastructure top the list of priorities. The cost of and implications of delaying a decision on the Village Hall/Police Station construction was discussed.

Alice Strelau , 5611 Brookbank, noted that many projects need to be done. The Council needs to figure out where funds are going to come from. These are capital expenditures paid for over a period of time. They need a dedicated source of funding.

Bill Wrobel , 7800 Queens Court, recommended that there be a referendum to share the responsibility for some of the decisions that need to be made. As a taxpayer, he would like to sign off on these decisions.

Mark Thoman , 1109 61st Street, said he would like to see the facilities rolled into the TCD process. He said very few residents have any concerns about municipal facilities. In order to move this forward, it must be sold to the public.

The Mayor said Council will return to these items as they progress through the budget.

Risk Management Fund, Health Fund, Pension Funds, Equipment Replacement Fund and Fleet Services Fund

Judy Buttny , Finance Director, reviewed the funds. She noted that the Fire Pension fund elected to lower their levy from that projected by staff.

Stormwater Improvement Fund, Capital Fund and Water Fund

Dave Fieldman , Deputy Village Manager, reviewed the capital improvement planning process. He noted that stormwater projects will be referred to the Stormwater & Flood Plain Oversight Committee.

Robin Weaver , Interim Director, Public Works, discussed the Watershed Infrastructure Improvement Plan (WIIP). Fourteen projects have been identified for FY08 . She reviewed the criteria for prioritizing the projects.

Mike Millette , Assistant Director, Public Works, reviewed the 14 projects and associated costs. He noted that many of the projects are multi-year projects.

Council discussion centered on some of the specifics of the identified projects and the number of projects, including funding strategies, benefits, staffing, and ability to handle the number of projects identified. Further discussion included the use of consultants, expectations, workload, multi-year commitments, multiple projects, and the need for regular updates on the status of capital projects.

Council questions included:

  • The number of stormwater projects that can reasonably be accomplished in FY08 if funding were available
  • The ability of staff to provide regular updates on capital projects
  • Reduction in Sanitary District rates over the summer as a result in watering

Alice Strelau , 5611 Brookbank, expressed concern that she does not understand the direction given and cannot follow the process. She noted that the Council will need to manage expectations.

The Manager reviewed the Stormwater Improvement fund. She noted that the study by Clark-Dietz, Inc. recommended stormwater maintenance personnel, but not stormwater engineers. She reviewed the following funding options for stormwater improvements:

  • Property tax increase – increase of the property tax rate by approximately $0.11
  • Increase the Home Rule sales tax rate by ¼ cent
  • Allocate capital fees collected via water sales
  • Detention variance fees

Council discussed the revenue suggestions and asked for information about different property tax rates.

The Mayor noted that citizens are expecting resolution of stormwater issues. He agreed with the dedicated funding sources and said property taxes are a dedicated revenue source. He suggested tying tax collections to bond payments. There is an argument that our taxes have been artificially low.

Bill Wrobel , 7800 Queens Court, noted that Hinsdale is addressing stormwater and is discussing a referendum in connection with it. He noted that real estate assessments are dropping.

The Mayor said a financial advisor may help put together a financing package to accelerate and fund projects. He would like to get as much done in FY08 as possible.

Mike Baker , Assistant Village Manager, reviewed the Capital Projects Fund and distributed the Community Investment Program (CIP) document to the Council. Expenses will exceed revenue in future years. Staff is trying to catch up on projects deferred in past years. Staff recommends that the Village increase revenues in the fund by increasing the telecommunications tax by 1% from the current level of 5%. Council noted that telecommunication revenues are variable, making the tax inconsistent. Council requested information regarding the history of telecommunications tax revenues and an indication of the stability of this revenue source.

At this time, Mayor Sandack and Commissioner Tully left the meeting.

Regarding sidewalks, staff discussed the matrix, level of funding, coordination with other projects and neighborhood infrastructure plans. The sidewalk segments were reviewed and it was noted that nothing has been deferred.

Chris Fregeau , 1918 Elmore, said the Village has found a way to fund stormwater, but cannot find funds for sidewalks on a consistent basis. The Village goes one step forward and two steps back year after year. There are still 30 miles of sidewalk needed in the Village. Installing a mile of sidewalk each year will not allow the Village to finish this in five years. She asked that funds be added to this program. She also asked about the annual cost escalator and developer contributions.

Council recommended starting now on the engineering for the 2009 sidewalk program, and raising the telecommunications tax by 1% as proposed by staff.

Motor Fuel Tax Fund, Municipal Buildings Fund, and Debt Service Funds

Mr. Baker discussed the motor fuel tax fund and municipal building fund.

Ms. Buttny reviewed the debt service funds. She noted that the Village maintains a AA+ bond rating with a stable outlook. She explained that the Village’s debt ratio is 2.61%; 2% is considered low and 5-6% is considered moderate. The downtown TIF property tax increment is not projected to be enough to pay the debt service payments.

Downtown Redevelopment TIF Fund, Ogden TIF Fund, Sales Tax Rebate Agreements Fund

Mr. Fieldman reviewed these funds. With respect to the downtown redevelopment TIF fund, he noted that the value of all of the properties located within the district has increased from $16.5 million in 1996 to $37.62 million in 2006 equalized assessed valuation. He reviewed past and current redevelopment activities and projects. He then discussed activities proposed in the FY08 budget including a façade improvement program, an alley improvement program, and the creation of a design guideline or pattern book to guide the design elements of the façade and alley improvement programs. Council discussed the guideline suggestion and noted the need for broad guidelines.

Mr. Fieldman said two redevelopment agreements for the parcel at Main and Maple have failed. Staff recommends this parcel be a parking lot. He noted that a park may not be a suitable gateway for the downtown and that, further, the downtown merchants continually ask for more parking. Council discussed use of the parcel at Main and Maple. It was noted that the land is Village owned and, therefore, the Village could decide the future of the parcel.

In response to Council concerns about downtown development, Mr. Fieldman commented that both the Economic Development Corporation and the Downtown Management receive funding from the Village. He said he expects to see activity in Acadia on the Green in the near future. It was suggested that downtown issues be scheduled as an item on a future Council Workshop agenda, and that the EDC and Downtown Management be invited to report to Council on a regular basis.

Frank Falesch , 820 Prairie, discussed TIF taxes and the return on the investment on Acadia on the Green.

Mr. Thoman asked for details about the Main and Maple parcel.

Regarding the Ogden Avenue TIF , Mr. Fieldman said the value of all of the properties located within the district has increased from $29.32 million in 2000 to $42.44 million in 2006 equalized assessed valuation. He reviewed the key projects as well as specific goals and actions for FY08 to continue to spur redevelopment. A question was asked regarding maintenance responsibilities for landscaping on the Jewel/Osco property.

Mr. Thoman asked about the payment to District 58. Staff responded that this payment can be found in the general fund.

Mr. Fieldman reviewed the sales tax incentives fund. The Village has entered into sales tax rebate agreements with five businesses.

Foreign Fire Insurance Fund and Real Estate Fund

With respect to the Foreign Fire Insurance fund, expenditures are determined by a Foreign Fire Board elected by employees of the Fire Department pursuant to State Statute.

The Real Estate fund has revenues and expenses associated with tenant rental and maintenance of the commercial property located at 5117 Main Street (Mad Potter building). It is anticipated that this property will be sold to New England Builders as part of the Acadia on the Green Redevelopment Project in FY08 .

Transportation Fund

The Manager provided background and reviewed this fund. She noted that the Village’s request for buses was recently approved by the PACE Board of Directors. Commissioner Durkin noted that the ending fund balance for FY2012 is $2.1 million in debt. He said this is unacceptable and asked as to the long-term plans to eliminate the deficit. He said no maintenance costs are addressed in this fund.

The Manager said the Fleet Services fund has the maintenance expenses. Commissioner Waldack noted that this is an entire system and not just commuter buses.

Mr. Falesch said he supports the bus system, but noted that ridership is low. He asked about bus routes.

Parking Fund

The Manager said this fund revolves around the commuter parking lots. Council discussed the Metra agreement and asked what percent of the total parking fund revenues are related to this agreement. Commissioner Waldack noted that he would like to see this fund as part of the Transportation fund.

Adjournment

The Manager said the budget review will continue on Tuesday, October 23, 2007, following the Council Workshop meeting. She reminded the audience that the next Coffee With The Council will be held on Saturday, November 3, 2007 with an informal budget presentation to allow for further dialogue and conversation.

There being no further discussion, the meeting was adjourned at 2:49 p.m.

April K. Holden Village Clerk