2014-07-28 - Village Board Committee of the Whole - Agenda Packet VILLAGE OF VILLAGE OF
St?uffalo
BUFFALO GROVEPAP VV 6rouc
—
Fifty Raupp Blvd
Buffalo Grove,IL 60089-2196
Phone 847-459-2500
Fax 847-459-0332
Village Clerk
Janet M.Sirabian
STATE OF ILLINOIS ) ss.
COUNTY OF COOK )
CERTIFICATE
I,Janet M. Sirabian, certify that I am the duly elected and acting Village Clerk of the Village of
Buffalo Grove, Cook and Lake Counties, Illinois. I further certify that the attached meeting
notice and agenda were posted inside the Agenda Board located outside the front door of the
Buffalo Grove Village Hall, 50 Raupp Boulevard, Buffalo Grove, Illinois at 11:00, A.M. on Friday,
July 25, 2014 and thereafter were continuously viewable from the outside until said meeting
and further were posted on the Village of Buffalo Grove's website for the purpose of
compliance with the Open Meetings Act.
Dated at Buffalo Grove, Illinois, this 25th day of July, 2014.
•
Vill a Clerk
•
.1/)
By
VILLAGE OF Meetingof the Village of Buffalo Grove Fifty RaGrove d
't�ffalo g Buffalo Grove, IL 60089-2100
. Grouc Board of Trustees Phone:847-459-2500
Committee of the Whole
` July 28, 2014 at 6:30 PM
1. Welcome
2. Discussion
A. Strategic Plan Update
B. Six-Month Financials
C. Five Year General Fund Operating Forecast
D.Administrative Adjudication
E. 2015 Compensation Program
F. 20-Year Water Proforma - Annual Update
G. E-Services
H. Economic Development Plan
I. Water Service Repairs/Replacement
J. Audit: Management Comments
3. Executive Session
None.
4. Adjournment
The Village of Buffalo Grove, in compliance with the Americans with Disabilities Act requests that
persons with disabilities, who require certain accommodations to allow them to observe and/or participate
in this meeting or have questions about the accessibility of the meeting or facilities contact the ADA
Coordinator at 459-2525 to allow the Village to make reasonable accommodations for those persons
Village Board of Trustees-Agenda .m" Page 1
Meeting of the Village of Buffalo Grove Fifty Raupp Blvd
Buffalo Grove, I L 60089-2100
Board of Trustees Phone:847-459-2500
Committee of the Whole
July 28, 2014 at 6:30 PM
1. Welcome
2. Discussion
A. Strategic Plan Update [GO TO]
B. Six-Month Financials [GO TO]
C. Five Year General Fund Operating Forecast [GO TO]
D. Administrative Adjudication [GO TO]
E. 2015 Compensation Program [GO TO]
F. 20-Year Water Proforma-Annual Update [GO TO]
G. E-Services [GO TO]
H. Economic Development Plan [GO TO]
I. Water Service Repairs/Replacement [GO TO]
J. Audit: Management Comments [GO TO]
3. Executive Session
4. Adjournment
The Village of Buffalo Grove,in compliance with the Americans with Disabilities Act,requests that persons with disabilities, who require certain
accommodations to allow them to observe and/or participate in this meeting or have questions about the accessibility of the meeting or facilities, contact
the ADA Coordinator at 459-2525 to allow the Village to make reasonable accommodations for those persons.
Strategic Plan Update 2-A
Overview
At the December 17, 2012 Village Board meeting, the Board adopted a 5-year strategic plan that
was developed through a one-year process of data collection, employee focus groups, Village Board
member input, community feedback and analysis. The plan centers on five strategic priorities:
Service Optimization, Organizational Culture, Revenue Growth, Infrastructure Sustainability and
Economic Development.
As a part of the 2014 budget process, staff developed the 2014 work plan in order to track
progress of and successfully complete the goals in year two of the plan. Attached is a report on
the progress of the strategic plan for actions to be completed in 2014.
Attachments
Strategic Plan Progress Update-6-21-14.pdf
Trustee Liaison Staff Contact
President Braiman Jennifer I Maltas,
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MEMORANDUM
TO: Village President& Board of Trustees
FROM: Jennifer Maltas, Deputy Village Manager
DATE: July 28, 2014
RE: Strategic Plan Progress
Introduction
At the December 17, 2012 Village Board meeting, the Board adopted a 5-year strategic plan that
was developed through a one-year process of data collection, employee focus groups, Village
Board member input, community feedback, and analysis. The plan centers on five strategic
priorities: Service Optimization, Organizational Culture, Revenue Growth, Infrastructure
Sustainability and Economic Development.
As a part of the 2014 budget process, staff developed the 2014 work plan in order to track
progress of and successfully complete the goals in year two of the plan. Below you will find a
report on the progress of the strategic plan for actions to be completed in 2014.
Service Optimization
Goal: Identify and map out a phased in approach to all online services (including funding
options).
Status: A presentation will be given at the July 281h Committee of the Whole meeting that maps
out staff s strategy to deploy online services. With the recent purchase of the New World
Systems Community Development module, the Village will soon have several services available
through their e-suite program including the ability to pay for licenses online and request
inspections. Licensing will go live in November of this year, with the full suite of the
Community Development module going live in March of 2015.
Goal: Develop Metadata standards and integration points to allow centralized access to service
requests and follow-up.
Status: This goal is in progress and has been discussed as we move away from Lotus Notes and
transition to other programs. Many discussions have occurred surrounding how we host our data
such that the various technology systems we have can integrate with each other. The acquisition
of GIS last year was important to this goal as we move towards using GIS as our centralized
address database. Currently, staff is working on the deployment of public works work order
fulfillment and community development licensing, permitting and adjudication processes. The
next step of this process will be the development of a customer service dashboard.
- 1 -
Goal: Develop an inter-departmental clerical resources training pool by rotating clerical staff
into other positions.
Status: Staff oversaw the construction of a merged customer service area on the first floor of
Village Hall that went operational in May. The main Village number, OVM number, Building &
Zoning number, and Finance number all ring to the same area and staff is working together to
answer the calls. With staff on the same floor, they are beginning to learn more about the
customer service calls each department receives. Additional clerical staff members were planned
to move into different departments; however, two staff members left for other opportunities. At
this time, staff is recruiting one full-time administrative assistant for Building & Zoning and one
part-time clerk for Engineering to replace two full-time and two part-time positions. The job
description has been revised to include rotation and cross-training specifically. All clerical
positions will be advertised as such moving forward. Many of the candidates who were
interviewed for the positions said the opportunity to move to different departments and learn
more is what appealed to them about the job.
Goal: Develop recommendations to align revenues by source using the core services template.
Status: This project is scheduled for fourth quarter of 2014.
Goal: Develop a customer satisfaction survey that analyzes all Village services. Complete
survey and review with the Village Board.
Status: This project is scheduled for fourth quarter of 2014.
Goal: Catalog existing assets in a database format and review for possible use by other
departments. Based upon department director input, appropriate charges for use of assets is
established and appended to the database.
Status: The Director of Public Works has been meeting with key staff to begin discussions on
this process. The initial meeting was held last month where discussions took place regarding
what assets each department had and what would make sense for asset sharing. Additionally, in
the 2015 budget, the Village Board should expect to see chargebacks in each department for each
department's fleet, IT, and building maintenance expenses.
Goal: Current work order, staffing utilization, equipment utilization, and service level
expectation targets are defined (time to complete, satisfaction rating, cost to complete, etc.).
Complete Public Works Listing in 2014.
Status: Staff has had initial meetings to discuss this process and what information needs to be
collected. Public Works is currently working on pulling the data together and initial drafts will
be reviewed with the Manager's Office in late August with a potential draft to the Village Board
at the September Committee of the Whole meeting.
- 2 -
Organizational Culture
Goal: Explore technology consortia for opportunities to leverage technology assets and gain
highly-skilled support services. (Support Services/Hardware)
Status: The Village entered into an agreement with InterDev, LLC in January and the new IT
provider mobilized in late March. At this time, staff from each of the participating communities
is developing the structure and the by-laws of the new IT Consortium. The current members
have decided not to push for growth until the Consortium by-laws are set. Discussions regarding
sharing servers and hardware have already begun.
Goal: Complete a fiscally constrained Technology Plan including customer service metrics,
training and application platforms for the next five years.
Status: With the transition to the IT Consortium, this goal is currently on hold. At this time,
InterDev staff is working closely with Village staff to identify immediate IT needs. Once this
work stabilizes, staff will begin to work with InterDev staff and the Consortium members on a 5-
year plan.
Goal: Establish subject matter experts for software and programs, such as Wrike and Pub
Works.
Status: Similar to the above goal, this project is on hold until the Village's immediate IT needs
are identified and resolved.
Goal: Work with IPBC to evaluate data and trends to help target problem areas. Work with the
Wellness Committee to establish an employee Health and Wellness Program and provide for
participation incentives. Deploy program by January 1, 2015.
Status: This goal is ongoing. The Wellness Committee has been active and is working on the
development of the formal program. Staff is in the process of working with IPBC and its'
consultants to identify opportunities for improvements based on trends. The wellness screening
program is underway and will wrap up in August.
Goal: Fully implement a new electronic performance evaluation system.
Status: Staff evaluated several performance evaluation systems and the Village has signed a
contract with a provider called NEOGov. The implementation process will start in the next
month with the software going live by January 1, 2015.
Goal: Identify and deploy scheduling software for the Public Works Department that integrates
with New World.
Status: Public Works has identified software called VCS to use for scheduling. VCS is currently
used by both Police and Fire and integrates into New World Systems. Implementation of the
software is currently ongoing and will be complete by the end of the year. Village Hall staff will
also be using this software.
- 3 -
Goal: Develop an annual comprehensive training, development, and communications plan for
employees that includes a Village-wide "Existing Employee Orientation" and leadership
development program for supervisors.
Status: Staff is working on the plan currently. A focus group of employees from each
department was held to get feedback on what types of recognition and communication was
meaningful to them. The feedback from this group will be included in the plan. Additionally,
the plan will include the existing employee orientation which will be complete in October of this
year. The leadership development program will be complete in February of 2015.
Revenue Growth
Goal: Identify and outline the services the Village provides broken down by departmental
function and operating funds.
Status: This is a fourth quarter goal.
Goal: Rewrite village contract and RFP templates to include automated clearing house payment
options.
Status: The contract language is complete and the form needed to set up the Village's
contractors on automated clearing house payments was mailed earlier this year. As new
contracts are signed, the new contract language will be incorporated into all contracts. This goal
is substantially complete.
Goal: Prepare a strategy for the support and lobby of legislators to tax Internet sales that will
allow for the Village to capture true sales.
Status: This goal is ongoing. President Braiman and Village Manager Bragg met with
Congressman Schneider earlier this year to discuss a variety of topics that impact Buffalo Grove.
The Congressman was made aware of the Village's desire to see Internet sales taxed. The
Marketplace Fairness Act has stalled in Congress. There is no expected action on this bill before
2015.
Goal: Analyze collections and find opportunities for improved collection in all revenue
categories, including the state debt collection program. Put together a formal plan ready for
implementation by January 1, 2015.I
Status: The State Debt Collection Program was approved by the Village Board earlier this year.
A full plan for improved collection in all revenue categories is scheduled to be completed fourth
quarter. Utility account audits are near completion.
Goal: S% increase of customers one pay by January 1, 2015
Status: Two inserts were included this year in water bills explaining the e-pay option. In
addition, this option is mentioned to customers when they call with questions. The final increase
in customers on e-pay will be reported at the end of the year.
Goal: Re-align the chart of accounts to reflect the prioritization of core services.
- 4 -
Status: This is a fourth quarter goal.
Goal: Implement administrative adjudication prior to January 1, 2015
Status: Staff will provide a full update on the administrative adjudication process at the July 28th
Committee of the Whole meeting. Administrative adjudication is on track to be implemented
prior to January 1, 2015.
Economic Development
Goal: Improve and simples the development review process and procedures through a thorough
evaluation.
Status: This goal is complete. The changes to the development review process that were
previously discussed with the Village Board were converted into ordinance form and approved
by the Village Board at the June 16th Village Board meeting. The first meeting of the Planning
& Zoning Commission was held on July 16th. Prior to the meeting, the Commission was
provided training on the new process and their role.
Goal: Develop a comprehensive economic development program for the Village and present to
the Village Board for comments by January 1, 2015. Present fully developed Business
Ambassador Program to Village Board for adoption.
Status: An outline of the economic development plan will be provided to the Village Board on
July 28th. Staff s intention is to have a draft plan to the Village Board in September.
Infrastructure Sustainability
Goal: Evaluate the applicability of a Storm Water Utility Fee.
Status: Since the last presentation to the Village Board a flyover of Buffalo Grove was
completed and the information collected by the flyover will be converted into data that will allow
the Village to identify the impervious service area for each parcel in the Village. The data will
be available in the fourth quarter of this year. After the data is received, staff will use the data to
complete several storm water utility fee funding options which will be presented to the Village
Board in the first quarter of 2015.
Goal: Establish draft guidelines for new and existing Village buildings and sites. Present
Proposal to the Environmental Committee and Village Board.
Status: As a part of the performance contract with Siemens, the Village receives free
environmental consulting services. Staff has met with Siemens and asked them to provide a
proposal with draft guidelines for new and existing buildings. This goal may be complete in
2014 depending on the approval of a performance contract and related projects.
Conclusion
Overall, staff is on target with almost all of the goals set forth in the strategic plan. Some goals
have been moved further out in the year, but the vast majority of goals will be complete by the
end of 2014. Some goals have been reprioritized based on budget needs or staff availability. Staff
will be meeting over the next two months to develop the final work plan for 2015.
- 5 -
Six-Month Financials 2-B
Overview
Attached is the six-month financial review and summary of all funds, revenues and expenditures.
Attachments
2014 6 month Narrative w charts.pdf
Trustee Liaison Staff Contact
Trustee Ottenheimer Andrew Brown,
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I,in0 GROVE
TO: Dane C. Bragg, Village Manager
FROM: Andrew Brown, Deputy Director of Finance
DATE: July 22, 2014
RE: FY 2014 BUDGET— SIX MONTH STATUS UPDATE
The purpose of the six month report is to summarize the operational, administrative, and
substantive activities undertaken by the Village as of June 30th, 2014. This report keeps the
Village Board, Village Manager, and Department Heads informed on year-to-date fiscal
performance. All tables shown below display the current year, prior year, and comparative data.
Any department specific data can be made available by request.
The Village adopted a 2014 Budget to spend $63,079,012 which would be offset by $66,565,701
in revenue.
An overall review shows revenue exceeding target at 54.1 percent for the first half of the year.
Expenditures are coming in at 43.1 percent, which is higher than 2013 by 2.1 percent, or $1.2
million dollars. Expenditures are trending on budget, as adopted, for 2014. Revenues are
trending upwards of two percent, in total, over the budgeted amounts.
Intuitively, one would expect that at the mid-point of the fiscal year both revenues and expenses
would be at the 50 percent mark. Revenues typically hover near or above the 50 percent mark
with some variation due to the receipt of property tax payments, while expenses traditionally lag
the 50 percent mark due to the timing of invoices and payroll, December debt service payments,
and the phasing of construction and contractual payments. Many of the annual staffing
(overtime) costs do not come fully due until the 3r and 4fh quarters, likewise payments for
summer construction projects do not typically occur until later in the year.
GENERAL FUND REVENUE HIGHLIGHTS
General Fund Revenues are currently 53.4 percent of budget, which is the same percentage at the
midpoint of 2013. In terms of dollars, general fund revenues are outperforming the prior year by
almost 1.9 million dollars, which is 10 percent higher than 2013's midyear revenues. Almost
$800,000 of the increase in revenue from 2013 to 2014 is that the IMRF levy is now part of the
general fund.
The table below reflects the General Fund revenue by category as of June 30th 2014.
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Property Taxes 13,696,988 6,981,555 51.0% 6,081,421 50.6% 14.8% 4.0% 900,134
Base Sales Tax 4,536,144 2,402,244 53.0% 2,256,375 49.8% 6.5% 2.0% 145,869
Home Rule Sales Taxes 3,148,346 1,701,965 54.1% 1,593,481 50.8% 6.8% 2.0% 108,484
Income Taxes 4,747,200 2,660,262 56.0% 2,620,735 63.6% 1.5% 2.0% 39,527
Utility Use Taxes-Electricity 1,626,900 808,538 49.7% 748,217 46.2% 8.1% 0.0% 60,321
Utility Use Taxes-Natural Gas 1,000,000 858,203 85.8% 820,419 86.5% 4.6% 0.0% 37,784
Telecomm/Excise Taxes 1,982,650 951,074 48.0% 991,316 50.3% -4.1% 0.0% (40,242)
Fines and Fee's 1,770,275 818,171 46.2% 678,943 53.8% 20.5% 2.0% 139,228
RE transfer Tax 700,000 408,309 58.3% 342,782 65.3% 19.1% 4.0% 65,527
Food and Beverage Tax 732,360 363,326 49.6% 353,108 47.6% 2.9% 2.0% 10,218
Hotel/Motel Tax 128,750 100,127 77.8%
Development Fees& 699,250 487,205 69.7% 404,591 62.6% 20.4% 2.0% 82,614
Permits
Business&Liquor Licensing 294,450 159,037 54.0% 166,715 59.5% -4.6% 0.0% (7,678)
Interest Income 78,000 15,845 20.3% 22,086 21.4% -28.3% 2.5% (6,241)
Operating Transfers 827,500 382,500 46.2% 382,500 50.0% 0.0% 0.0% -
AII other Revenue 1,526,184 940,435 61.6% 692,885 51.6% 35.7% 0.0% 247,550
Total 37,494,997 20,038,797 53.4% 18,155,574 53.4% 10.4% 1,883,223
❖ Property Taxes- 51.0%
Revenue to date represents the first installments of the 2013 levy extensions for both
Lake and Cook Counties. This revenue stream is directly attributed to the Counties,
Lake and Cook, ability to control property tax billing and its timeliness. In years past
when bill distribution has been delayed, by default, collections are delayed as well.
This leads to the distributions from the counties to be delayed. Historically, the
Village of Buffalo Grove collects over 99 percent of taxes levied and it is anticipated
that 2014 budget estimates will be realized by year-end.
❖ Sales Tax (Combined Base and Home Rule)-53.4%
Sales tax receipts are up for both, Base and Home Rule, 6.5 percent and 6.8 percent
respectively, compared to FY 2013. Combined they have brought in over an
additional $250,000 in FY 2014. The addition of Garden Fresh Market and
Mariano's should bolster these figures going in to the second half of the year, as the
three Dominick's locations in the Village were closed the fourth quarter of 2013.
❖ Income Tax-56.7%
Per capita distribution is $54.99 compared to $63.25 at the same point a year ago
netting $338,849 less. Corporate earnings and unemployment continue to level off as
the U.S. economy continues to right itself. The discrepancy in collections can be
directly traced to the state of Illinois catching up on previous years shortfall in timely
distributions, for example the FY 2013 amount includes seven distributions in the
first six months, FY 2014 only recognizes six distributions in the first six months of
this year.
❖ Utility Use Taxes (Electricity& Natural Gas)—49.7% / 85.8%
Compared to last year, the midpoint results are lower than expectations. Electricity
Use Tax is under the benchmark but will rebound with higher summer usage months
in the second half of the year. Natural gas use tax is skewed due to higher usage
months in the first half of the fiscal year. The extremely cold winter combined with
the unseasonably cold spring has resulted in an increase from last year of $37,784.
The Utility Use Tax volatility is directly related to the weather conditions. When
residents experience more extreme temperatures the utility usage reflects that,just as
mild temperatures lead to reduced utility usage. It is anticipated that Natural Gas will
come in over budgeted estimates. Electricity Use revenues are projected to be at 100
percent of budget, even with cooler than average summer temps.
❖ Telecommunications/Excise Tax—48.0%
Telecommunications tax is collected by the state at a rate of six percent and
distributed back to the Village. This revenue is down two percent from FY 2013, and
qualifies as a line item that may need to be monitored going forward. The market has
become more competitive leading to reduced rates for service plans as well as the
elimination of most land lines due to the still growing popularity and capability of
mobile devices.
❖ Fines and Fees—46.2%
The collection of fines and fees are trending below budgeted amounts for FY 2014.
The Village will be implementing, in the 3rd quarter 2014, a debt recovery program
facilitated by the state of Illinois that garnishes funds due to the Village of Buffalo
Grove from individual state tax return refunds. This program is offered to the Village
at no cost. In addition, the Village Board is pursuing an administrative adjudication
program to streamline the hearing process and capture additional local revenue for
2015.
❖ Real Estate Transfer Tax—58.3%
Real Estate Transfer Tax is performing well for 2014. One third of the revenue is
related to the Riverwalk property which was sold for over $45 million and yielded the
village over $135,000. The Village's position is improving as traditional housing
sales continue to grow, coupled with the opportunity of capturing the transfer tax on
commercial properties.
❖ Prepared Food and Beverage Tax—49.6%
The one percent Prepared Food and Beverage Tax has provided the Village a source
of revenue that has continued to grow more than $10,000 from FY 2013 at the
midpoint of 2014. This revenue is trending to out perform the budgeted amount with
the introduction of Garden Fresh Market in March and Mariano's in May 2014.
❖ Development Fees and Permits—69.7%
Another indicator that Buffalo Grove is experiencing growth within the community is
the Development Fees and Permits. Over $327,000 of the $487,205 is directly related
to fees and permits for the building of or investment in residential and commercial
property. This revenue is up over $82,000 over FY 2013 and it is trending to meet or
exceed budgeted amounts. The Easthaven subdivision is expected to remain active
throughout 2014 and into 2015, stimulating fee and permit revenue for new home
construction.
❖ Interest Income—20.3%
Much of this revenue is not realized until the close of the fiscal year through the
accrual of unamortized income. Revenue is comparable to last year's total at this
point. The remainder of investments held by the Village is limited in duration by
state statute and cannot be invested in any equities or separately held stocks. Yields
on current assets range from around 0.5 percent to 2 percent for CDs, and about 0.1-
0.4 percent for money markets. The Village is taking advantage of highly rated
agency "Step Bonds" that provide a coupon payment once or twice a year, depending
on structure. The principal is tied up for multiple years but the benefits of higher
interest rate payments have proved to be a valuable method. At this point it appears
the Federal Open Market Committee (FOMC) will not increase Federal Funds Rates
(Village's short term investments are tied to this rate)until FY 2015 or later.
❖ Operating Transfers and Other Revenues— 56.2%
These Miscellaneous and intra fund revenues are trending to Budget. The major
contributors are Cable Franchise Fee's, 40 percent of collections, and Grants, 12
percent of collections.
WATER AND SEWER FUND REVENUE HIGHLIGHTS
The table below reflects the Water and Sewer Fund revenue by category as of June 30 ', 2014.
Sales of Water 9,997,774 3,166,606 31.7% 3,065,310 34.0% 3.3% 101,296
Development Fee's and 42,000 5,293 12.6% 35,030 91.0% -84.9% (29,737)
Permits
Interest Income 17,250 2,974 17.2% 6,078 23.9% -51.1% (3,104)
All other Revenue 1,437,388 155,618 10.8% 4,950 0.5% 3043.8% 150,668
Total 11,494,412 3,330,491 29.0% 3,111,368 30.7% 7.0% 219,123
❖ Sales of Water—31.7%
Revenue earned at mid-year, as anticipated, trails the benchmark due to the timing
and accrual of water sales and sanitary sewer treatment fees to be received in the
second half of the fiscal period. The consumption for the June (for Cook County
residents) and May-June billing cycles (Lake County residents and commercial
consumers) were billed June 30, thus that revenue will be captured in the second half
of this year. Currently, FY 2014 is out performing FY 2013 by 3.3 percent, or
$101,000. The Water fund is trending, percent to budget, similar to prior years and as
consumption continues to be the driving force of the Water funds success, it is
anticipated that usage will increase as we approach the hotter part of the year. This
increase should positively impact this enterprise fund. Water revenues will trend
closer to budget in the second half of the year.
GOLF ENTERPRISE NUE HIGHLIGI-ITS
The table below reflects the Buffalo Grove Golf Club Fund revenue by category as of June 30th,
2014.
Greens Fees 685,000 253,812 37.1% 247,354 34.1% 2.6% 6,458
Power Cart Rental 167,500 64,919 38.8% 63,057 36.0% 3.0% 1,862
Driving Range 60,000 26,408 44.0% 23,891 36.8% 10.5% 2,517
Memberships 64,000 56,833 88.8% 60,809 76.0% -6.5% (3,976)
Merchandise Sales 68,000 24,336 35.8% 20,313 29.0% 19.8% 4,023
Rent&Utility Reimbursement 83,000 23,601 28.4% 20,540 25.0% 14.9% 3,061
All Other Revenue 74,600 5,726 7.7% 6,197 43.6% -7.6% (471)
Total 1,202,100 455,635 37.9% 442,161 36.5% 3.0% 13,474
Buffalo Grove Golf Club
The Buffalo Grove Golf Club is operating at 37.9 percent. In dollars, the club is out performing
FY 2013 by over $13,000, or 3 percent. Revenues at the golf course tend to be less than the 50
percent benchmark as the strong play months are July and August. This year started with an
extended winter and followed with heavy bouts of rain that has not provided an ideal start for the
club. The club experienced a similar start to the 2013 season as well, but this year their greens
fees are up 2.6 percent over FY 2013. It is very hard to make up lost rounds later in the year,
which will make it challenging for the golf club to reach its revenue projections this year.
The table below reflects the Arboretum Golf Club Fund revenue by category as of June 30 '
2014.
��NNNNNNNNNNNNNffNNNNNNNN � NNNNNNNNN �N � NNNNN iN INf � N � � N�" '�
Greens Fees 760,000 300,066 39.5% 336,375 41.3% -10.8% (36,309)
Power Cart Rental 180,000 74,632 41.5% 73,716 36.9% 1.2% 916
Memberships 40,500 51,670 127.6% 37,800 108.0% 36.7% 13,870
Merchandise Sales 50,000 21,808 43.6% 16,551 27.6% 31.8% 5,257
Rent&Utility Reimbursement 80,000 33,224 41.5% 33,914 42.4% -2.0% (690)
Operating Transfer - - 0.0% - 0.0% -
AII Other Revenue 47,900 37,530 78.4% 4,989 60.5% 652.2% 32,541
Total 1,158,400 518,930 44.8% 503,345 41.2% 3.1% 15,585
Arboretum Golf Club
The Arboretum Golf Club is operating at 44.8 percent to budget in 2014. In dollars, the club is
out performing FY 2013 by over $15,500, or 3.1 percent. Memberships are up 36.7 percent
compared to FY 2013 and have exceeded the 2014 budget amount by 27.6 percent. Greens Fees
have not fared as well, down over 10.8 percent from what was collected in FY 2013. The
increase in memberships is currently only able to cover a third of the decrease in greens fees.
The catch up in rent and utilities from FY 2013 is the driver of the "Other Revenue" increase.
That revenue stream should out perform expectations.
ALL OTHER FUND'S REVENUE HIGHLIGHTS
The remaining funds have been itemized by fund total below. The Total Village Revenue is
represented in the last line of the table below. Details for each fund is footed below the chart.
����������nnn��ffn�������lllllllllllllllllllllllllllllllllllllllllllllllllllllllll�i RR��MMMMMIIIIIIIIIIII��I IIIIIIIIIIIIIIIIIIIIIIII� �����IIVIIIIIIIII�N IR�IIIIIIIIIIIIIIIII�� I' h�llllllllllllllll� ��IIIIIIIIIIIIIIIIIIIIIIIIIII�Y 'MIIIIIIIIIIIIIIIIIIIII
IMRF(1) - - 0.0% 807,630 50.5% -100.0% (807,630)
Parking Lot(2) 176,100 89,130 50.6% 66,232 41.6% 34.6% 22,898
Motor Fuel Tax(3) 1,817,252 1,082,297 59.6% 766,003 64.5% 41.3% 316,294
Capital Projects-Facilities(4) 2,163,404 - 0.0% - 0.0% -
Capital Projects-Streets 113,000 1,985,000 1756.6% 299,818 299817.0% 562.1% 1,685,182
Debt Service(5) 1,081,513 454,141 42.0% 457,314 34.2% -0.7% (3,173)
Police Pension(6) 4,439,846 3,945,782 88.9% 1,592,328 39.6% 147.8% 2,353,454
Fire Pension(6) 4,404,677 3,357,675 76.2% 1,521,974 40.5% 120.6% 1,835,701
Refuse(7) 1,020,000 599,619 58.8% 442,740 42.5% 35.4% 156,879
School&Park Donation - 7,728 N/A N/A N/A N/A N/A
Health Ins - 176,569 N/A N/A N/A N/A N/A
Total 15,215,792 11,697,941 76.9% 5,954,039 40.5% 96.5% 5,743,902
Total Village Revenue(8) 66,565,701 36,041,793 54.1% 28,166,487 46.5% 28.0% 7,875,306
(1) The IMRF has been budgeted at the department level as well as expensed there.
(2) The Parking Lot Fund is trending to budget and collections are up 30 percent from
FY 2013 collections.
(3) The Motor Fuel Tax fund is expected to outperform budget assumptions for FY 2014
as it is currently 59.6 percent. The increase is directly related to an installment the
Village received from the state for the Illinois Jobs Now Program.
(4) Capital Projects Facilities has not generated any revenue because the interfund
transfer for the EAB project is yet to be disbursed.
(5) Debt Service is levied based on the amount shown on the Village's Debt Service
schedule and is collected per Cook and Lake County distributions. Please see the
"Property Tax" description in the General Fund.
(6) Police and Fire Pension are levied by the Village, per the actuarial evaluation
contracted by the Village. These amounts represent the fair market value of all the
pension fund assets and investments. These numbers fluctuate with the market. The
Pension Boards both have an independent accounting firm and investment manager to
invest assets and maintain their activities.
(7) Refuse collections are trending greater than budgeted and are showing a surplus of 15
percent over the FY 2013 collections.
(8) Certain revenue, such as interfund transfers, generally are not posted until the second
half of the year. These transfers are made on an as needed basis.
Currently, including all categories, the Village is 54.1 percent to budget for revenues, and has
collected $7.88 million more revenue in FY 2014 than FY 2013. If the Police and Fire Pension
amounts are removed from the Budget and Actual categories, it provides a clearer view of
dollars that are under direct control of the Village, which gives a more transparent view of the
current fiscal year's performance. That being said, deducting pension revenues from the totals,
the Village collected $28.7 million which is 49.8 percent to budget. Apply that concept to FY
2013 revenues and the Village collected $25.1 million. The Village has generated an additional
$3.6 million dollars more in 2014 than 2013, which calculates to an increase in revenue of 14.1
percent. The macro outlook for the Village is positive for FY 2014. The Village has built a
stable foundation for revenues that will bode well for the second half of 2014 and into future
fiscal years. The Finance department will continue to review all revenue categories closely in an
effort to maximize and enhance revenue as those opportunities present themselves.
GENERAL FUND EXPENDITURE REVIEW
Expenditures to date total $18,732,838 or 50.0 percent of the approved budget. This compares to
$15,348,107 or 45.2 percent in FY 2013. The following chart depicts expenditure performance.
� NNNNNNNNNNNNNNNNNNNNNNNNN�I NNNNI � Nfi �NNNNf�I �NNNNf�I ' I� � � NN
Personal Services 18,635,095 8,712,035 46.8% 8,773,672 46.2% -0.7% 3.0% (61,638)
Personal Benefits 10,211,169 4,529,464 44.4% 1,827,846 45.0% 147.8% 5.0% 2,701,618
Operating Expenses 1,927,344 820,611 42.6% 893,371 48.2% -8.1% 2.4% (72,760)
Insurance 878,790 667,515 76.0% 446,033 96.0% 49.7% 4.0% 221,482
Legal Services 389,650 140,449 36.0% 146,564 37.7% -4.2% 2.0% (6,115)
Committees&Commissions 92,850 15,279 16.5% 11,291 13.0% 35.3% 0.0% 3,988
Commodities 269,245 212,655 79.0% 203,025 71.2% 4.7% 2.4% 9,630
Maintenance&Repair-Facilities 146,050 373,201 255.5% 256,311 42.7% 45.6% 2.4% 116,890
Maintenance&Repair-Other 873,864 15,780 1.8% 24,840 26.1% -36.5% 2.4% (9,060)
Maintenance&Repair-Vehicle 669,966 408,639 61.0% 315,262 47.9% 29.6% 2.4% 93,377
Capital Improvement-Facilities 182,290 42,054 23.1% 9,061 3.8% 364.1% 2.4% 32,993
Capital Equipment 925,874 162,968 17.6% 235,753 45.4% -30.9% 2.4% (72,785)
Operating Transfer 1,969,074 2,538,440 128.9% 2,130,221 41.7% 19.2% 0.0% 408,219
All Other Expenses 308,922 93,748 30.3% 74,857 11.5% 25.2% 1.5% 18,891
Total37,480,183 18,732,838 50.0% 15,348,107 45.2% 22.1% 3,384,731
Personal Services / Personal Benefits -46.8% /44.4%
Personal Services is the single largest expense account category budgeted by the Village. In
terms of total budget, Personal Services and Benefits account for nearly 77 percent of
expenditures in the General Fund. From a comparative standpoint, the Village has paid $61,638
less in FY 2014 than in FY 2013 even after a two percent general wage adjustment. The Village
is budgeting employee insurance at the department level, instead of the self insurance fund. This
same technique is being utilized for the Village's portion of pension contributions. This type of
budgeting gets the Village closer to program based budgeting. That being the case, the
comparative data from 2013 to 2014 for this category is skewed.
❖ The Departments are doing well managing Operating Expenditures, as they are down
over $72,000 collectively from FY 2013. The expenditures are trending at 42.6 percent
❖ and, barring any major issues, Operating Expenditures should finish below budget.
❖ The Maintenance and Repair line items collectively are trending at 47.2 percent, even
though individually "Facilities" is far exceeding its budget and "Other" has barely
incurred and expenditures.
❖ Operating transfers are up due to transfers made to the Police and Fire Pension funds in
total of$2.1 million.
❖ Insurance is skewed higher as the annual general liability/worker comp premium is paid
every January.
W ATER AND SEWER FUND EXPENDITURE REVIEW
The table below reflects the Water and Sewer Fund expenditures by category as of June 301h,
2014.
i flflNNNNNNNNNNNNNNNNNNN N � P�flflflflflflfl I fl�flNNNNNNNN 4R ' �N
NIA NNNNNNNNNN � �fl NNNN ail flflflflfl �N IIIIIIII �i RRNNN � �IIII ����IIIIIIII
Personal Services 944,130 441,035 46.7% 428,074 45.8% 3.0% 12,961
Personal Benefits 454,846 185,533 40.8% 90,577 19.5% 104.8% 94,956
Operating Expenses 1,985,115 864,398 43.5% 54,218 33.4% 1494.3% 810,180
Insurance 106,847 78,161 73.2% 171,590 98.6% -54.4% (93,429)
Commodities 3,594,839 753,000 20.9% 1,054,287 29.3% -28.6% (301,287)
Maintenance&Repair-Facilities 75,000 - 0.0% - 0.0% N/A
Maintenance&Repair- 69,000 21,519 31.2% 46,234 52.4% -53.5% (24,715)
Water/Sewer
Maintenance&Repair-Other 51,862 602 1.2% - 0.0% N/A 602
Maintenance&Repair-Vehicle 108,390 39,435 36.4% 40,460 35.9% -2.5% (1,025)
Capital Project-Water 3,350,800 201,746 6.0% 200,358 10.1% 0.7% 1,388
Capital Equipment 92,994 46,809 50.3% 40,150 48.3% 16.6% 6,659
Debt Service 6,010 - 0.0% 220,082 46.5% -100.0% (220,082)
Operating Transfer 945,000 382,500 40.5% 382,500 40.5% 0.0%All Other Expenses - 70 0.0% 613,557 44.4% -100.0% (613,487)
Total11,784,833 3,014,807 25.6% 3,342,087 31.8% -9.8% (327,280)
There are no major variances in the Water& Sewer Fund. Insurance is skewed due to the annual
general liability/workers comp premium paid in January.
HER FUND EXPENDrrURE REVIEW
The table below reflects the Buffalo Grove Golf Fund expenditures by category as of June 30th,
2014.
1N flIIIIIIIIIIIIIIY N � NNflI P�flflflflflflflfl i� flI flflNNNNNNN 4R ' ��IY
Personal�Services flflflflflflflflflllllll 515,225 �I fl 207,064 � 0.2%flflflflfl I�N 191,640IIIIIIII �i4,4flflNN� N 8.0°II� 15,424
Personal Benefits 197,413 63,007 31.9% 22,402 12.6% 181.3% 40,605
Operating Expenses 146,850 71,752 48.9% 87,322 60.6% -17.8% (15,570)
Insurance 25,361 12,766 50.3% 10,000 92.6% 27.7% 2,766
Commodities 130,000 78,430 60.3% 69,583 53.5% 12.7% 8,847
Maintenance&Repair-Facilities 60,000 30,028 50.0% 27,763 41.4% 8.2% 2,265
Maintenance&Repair-Other 30,000 4,495 15.0% 6,993 23.3% -35.7% (2,498)
Maintenance&Repair-Vehicle 27,000 8,130 30.1% 9,883 32.9% -17.7% (1,753)
Capital Project-Facilities 37,000 2,062 5.6% 12,210 33.0% -83.1% (10,148)
Capital Equipment 32,000 5,500 17.2% - 0.0% N/A 5,500
Operating Transfer - - 0.0% - 0.0% N/A -
AII Other Expenses 500 406 81.3% - 0.0% N/A 406
Total 1,201,349 483,640 40.3% 437,796 36.1% 10.5% 45,844
The table below reflects the Arboretum Golf Fund expenditures by category as of June 301h,
2014.
Personal Services 496,534 177,952 35.8% 207,855 35.7% -14.4% (29,903)
Personal Benefits 170,581 58,167 34.1% 26,002 15.2% 123.7% 32,165
Operating Expenses 159,950 79,589 49.8% 77,869 43.7% 2.2% 1,720
Insurance 25,360 23,089 91.0% 10,000 92.6% 130.9% 13,089
Commodities 162,500 74,664 45.9% 93,693 58.4% -20.3% (19,029)
Maintenance&Repair-Facilities 50,000 26,489 53.0% 28,103 49.3% -5.7% (1,614)
Maintenance&Repair-Other 14,000 8,709 62.2% 6,313 39.5% 37.9% 2,396
Maintenance&Repair-Vehicle 20,000 6,160 30.8% 6,580 32.9% -6.4% (420)
Capital Project-Facilities 25,475 3,515 13.8% 9,482 36.5% -62.9% (5,967)
Capital Equipment 30,200 41,703 138.1% 134 0.0% 31021.3% 41,569
Operating Transfer - - 0.0% - 0.0% N/A -
AII Other Expenses 500 406 81.1% 103 20.6% 293.9% 303
Total 1,155,100 500,443 43.3% 466,134 38.1% 7.4% 34,309
Arboretum Golf Club
In June the golf club incurred a capital improvement expenditure (repair to the boiler) that
exceeded the amount in reserve, resulting in capital equipment exceeding budget. There are no
notable variances that have not been previously addressed in other funds, to report within the
remaining funds.
The following charts provide the snapshot of budget performance to date for all Other Village
Funds and the last row identifies Total Village Expenditures for the six month period.
IMRF (1 ) 0.0% 982,223II�111111117.7����� � _10 � (982,236)
Parking Lot 233,418 65,569 28.1% 16,971 10.8% 286.4% 48,598
Motor Fuel Tax 2,250,000 85,443 3.8% 2,117,896 55.9% -96.0% (2,032,453)
Capital Projects Facilities 2,163,404 579,667 26.8% 364,781 24.4% 58.9% 214,886
Capital Projects Streets 113,000 646,735 572.3% 272,187 21.7% 137.6% 374,548
Debt Service 1,106,013 155,756 14.1% 216,557 9.7% -28.1% (60,801)
Police Pension 2,741,881 1,394,642 50.9% 1,194,507 50.0% 16.8% 200,135
Fire Pension 1,863,831 1,045,039 56.1% 837,034 50.0% 24.9% 208,005
Refuse 986,000 412,361 41.8% 372,304 34.8% 10.8% 40,057
Retiree Health Savings - 30,948 N/A N/A N/A N/A N/A
School&Park Donation - 18,086 N/A N/A N/A N/A N/A
Total 11,457,547 4,434,232 38.7% 6,374,460 43.9% -30.4% (1,940,228)
Total Village Expenditures 63,079,012 27,165,960 43.1% 25,968,584 41.0% 4.6% 1,197,376
FUND COMPARRISONEXPENDITURE REVIEW
The table below reflects all Fund revenues, expenditures, and surplus/deficit as of June 30th,
2014.
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11'���IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NNNNNNNNNNhhhhnnnnnnnn����lf IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII �������IIIIIIIIIIIIIIIIIIIIIIII �1 � �������IIIIIIIII�
General 20,038,796.50 18,732,838.06 1,305,958.44
Water&Sewer 3,330,491.22 3,014,807.28 315,683.94
BGGC 455,635.40 483,640.43 (28,005.03)
AGC 518,929.66 500,442.66 18,487.00
IMRF - (12.74) 12.74
Parking Lot 89,129.63 65,569.16 23,560.47
Motor Fuel Tax 1,082,296.83 85,442.67 996,854.16
Capital Projects 579,666.83 (579,666.83)
Capital Projects Streets 1,985,000.00 646,734.75 1,338,265.25
Debt Service 454,140.53 155,756.00 298,384.53
Police Pension 3,945,781.95 1,394,641.65 2,551,140.30
Fire Pension 3,357,674.90 1,045,038.78 2,312,636.12
Refuse 599,619.25 412,360.53 187,258.72
School&Park Donation 7,728.33 18,086.22 (10,357.89)
Health Ins 176,569.10 - 176,569.10
Retiree Health Savings - 30,947.87 (30,947.87)
Total 36,041,793.30 27,165,960.15 8,875,833.15
Department Directors have done a commendable job managing their respective budgets through
the first half of the year and will continue to implement cost containment measures within their
respective budgets throughout the remainder of the fiscal year and into FY 2015.
Issues that will likely surface during the last half of the year include:
• Probable Inter-fund subsidy transfers to golf depending on the level of play during the
second half of the fiscal year.
• Overtime costs due to absences, injuries and vacant positions in the Fire Department.
Five Year General Fund Operating Forecast 2-C
Overview
Attached is the Five Year General Fund Operating Forecast covering fiscal years 2015-2019.
Attachments
Five Year Forecast 2015-19.pdf
Trustee Liaison Staff Contact
Trustee Ottenheimer Scott D Anderson,
....Tues�d.a............J.u.1.........Y 29, 2014
........................................................................................................................D.��s�cu�s�s.�.o.n...._...Ite.m....�....�._�........................................................................................................................................................
Y,
yyyy k
'° "' Village of Buffalo Grove
Five Year General Fund Operating Forecast
FY 2015-2019
VILILAGE OF
1`311JWFALO GROVE
Purpose
The goal of the Five-Year Operating Forecast is to assess the Village's ability over the next five years
to continue current service levels based on projected revenue growth, evaluate future sustainability
by aligning operating revenues and expenditures, and ensure proper funding of reserves for
vehicles, buildings and technology. The assessment analyzes the capacity to fund capital projects
and also restore unassigned fund balance reserves to ultimately reach a balance that will cover four
and a half months of expenditures (35%).
It is important to stress that this forecast is not a budget. It does not dictate expenditure decisions;
rather it identifies the need to prioritize allocations of Village
resources.As part of the process,the Village is working on aligning
core revenues with core services. The revenues that are less The intent of the Five
dependable, as they are subject to market or economic risk, will year Operating
Forecast is to evaluate
support less essential services. resource allocations to
ensure the proper
funding levels for
As a governmental entity, changes in strategy that involve service services,CaPitall,
infrastructure and
delivery are slow and methodical. The forecast provides a picture tilaintaining reserves,
of the Village's fiscal health based on numerous assumptions over
the next five years. The Five-Year Financial Forecast is a planning ...........................................................................................................................................................................................................................................................................................................
tool and should be considered fluid in its construction. As new significant data or trends emerge
the document will be revised, at minimum, on an annual basis. This document should be viewed in
conjunction with the annual Village Budget in order to make specific policy and spending
recommendations.
Financial Focus and Methodologies
The General Fund is the main operating fund and accounts for the core services provided by the
Village including public safety (police & fire), public works, building & zoning, and administration.
All major discretionary revenues such as property tax, sales tax, income tax, telecommunication,
and utility use tax are accounted for within the General Fund. For purposes of the analysis, final
1
audited 2013 expenditures set the baseline for analysis and are inflated or adjusted accordingly
based upon changing service needs and known changes that were incorporated in the FY 2014
Budget. The General Fund is the primary focus of the forecast as it represents about 60 percent of
the total Village Budget. The second largest Village Fund is the Water and Sewer Fund accounting
for 19 percent of the total budget. A Twenty-Year funding analysis is completed annually for that
enterprise activity
In the absence of any known service level modifications, the forecast assumes the continuation of
current service levels and the costs projected over five years. Revenues are estimated based on
anticipated growth patterns and does not consider increases in revenues generated by new fees or
increases in fees and charges beyond what is prescribed by current ordinance.
In the development of a long-term financial forecast, the Village reviews external and internal
factors that could impact the either the collection of revenue or the price of acquiring goods or
providing services. Evaluating how the regional impact of the national economy (macro) influences
the local economy(micro) is an important step in the process.
The national economy affects both state and local economies, although this impact varies by
jurisdiction and may actually have an inverse effect on a community. Some of the economic
indicators the Village uses in financial analysis include; inflation, stock market returns,
employment, housing starts,vehicle sales,interest rates,and manufacturing activity.
ECONOMIC INDICATORS
Inflation - As inflation goes up, the cost of goods sold go up, increasing retail sales tax revenue. As
prices rise, so will business income tax receipts. Conversely, the Village will have to pay more for
goods and services. The Village uses the Illinois Municipal Price Index (MPI) as the primary
inflation metric. The MPI is an amalgam of price indices based on types and goods purchased by
Illinois Municipalities. The MPI is 2.19 percent. The most recent (May 2014) Consumer Price Index
is at 1.7 percent, Producer Price Index is 2.11 percent and Construction Cost index is 2.64 percent.
Stock Market Returns - Stock market returns are a leading indicator and will change before the
economy changes. Approximately 50 percent of all Village pension funds are invested in equities
2
and/or individual stocks. The performance of the stock market is a significant factor in determining
the growth of the property tax levy for pensions.
Employment - Retail and vehicle sales tend to have inverse relationships with the unemployment
rate. Sales tend to move in the opposite direction of the unemployment rate. Chronic
unemployment often spills over into the residential real estate market resulting in lost real estate
transfer tax revenue. The current national unemployment rate (May 2014) is 6.3 percent, the state
rate is 7.5 percent and the local rate is 5.4 percent.
Housing starts - This indicator provides a sense of the overall demand for housing, which can be
indicative of local housing activity. Data maintained by local realtor groups is useful in projecting
the future of market recoveries.
Vehicle sales - sales and use tax revenues tend to fall with vehicle sales, which are heavily
dependent upon both employment and interest rates. However, if increases in new vehicles are
expected to reduce the value of used vehicles, the sales and use tax base can actually decline if the
depreciation of used vehicles is not equally offset by the value of new vehicles.
Interest rates - the interest rate impacts the Village's revenues in several ways. First, investment
income will be affected by interest rates. Second, the availability and cost of capital directly affects
business expansion and retail purchases. As credit is extended and/or rates are lowered, revolving
purchases may increase, thereby increasing development plans and retail sales and, by extension,
sales tax and business licenses revenues.
Manufacturing activity - If a Village has a large manufacturing sector, the ISM (Institute of Supply
Management Index) becomes a significant factor in revenue analysis and forecasting.
Manufacturers respond to the demand for their products by increasing production and building up
inventories to meet the demand. The increased production often requires new workers which
lowers unemployment figures and can stimulate the local economy.
Overview of Fi l Year 2014
Over the last five years, the Village has moved though three distinct financial cycles in responding
to the economic downturn. The strategy in the FY 20010-2011 budgets was to protect public
3
services/programs and staffing levels through deficit spending drawing upon prior period fund
balance. FY 2011-2012 strategies involved reducing staffing though attrition by leveraging an
employer sponsored retirement incentive program and creating a Tier 11 compensation program to
lower starting wages. Those actions plus reduced capital project spending and a continued
moratorium on capital reserve funding successfully eliminated budget deficits.
Beginning in FY 2014 and continuing through the next five years is a continued effort to evaluate
and consolidate service to improve work flow efficiencies, appropriately fund all capital reserves
and increase the resources allocated to infrastructure maintenance. Over the next five years, the
Village will be moving towards program based budgeting. The result of the change is that budgets
will be developed around cost centers. As a result of these efforts, the Village's unassigned General
Fund balance available for asset maintenance and replacement increased by $2.5 million or 25
percent from FY 2011 to FY 2013.
Factors that are to be considered moving into the next five year update include;
• Impact of the real estate market. The impact of declining property values in tandem with
incorrect assumptions that property taxes will move in similar fashion is making it difficult
to grow the tax levy to support general operations.
• State of Illinois budget crisis. As the State of Illinois continues to address perennial budget
shortfalls, distributions to municipalities out of the Local Government Distributive Fund
continue to be at risk.
• Impact of Employer Pension Costs. The tax levies for the three pension systems account for
40 percent of the property tax levy.Additional pressure on the tax levy to support growing
pension costs will impact the ability to increase taxes for core services.
• Health Care Cost and the Patient Protection Affordable Care Act. The Village is currently on
track to attain "Cadillac Tax" status in 2017. The Village will continue to promote wellness
initiatives as a means of controlling health care costs.
• Commercial/Retail Development. The economy's impact on existing sales tax generators as
well as development or redevelopment of Dundee, Milwaukee Road corridors and Lake
Cook Corridors.
• Infrastructure. The ability to keep pace with the maintenance needs of Village owned assets
continues to be a significant financial challenge. A new reserve account for facilities was
added in FY 2014.
4
Forecast Assumptions
The following is forecasted revenues and expenditures for the next five years. The column on the
far right is an inflation index(if warranted).
General Fund Revenues Projected
2015 2016 2017 2018 2019 Growth
Property Taxes 14,107,898 ,,,, ,,,, ,,,,
14,531,135 14,967,069 15,416,081 15,878,563 1.03
Income&Use Taxes 4,889,6165,036,3045,187,3945,343,015 II 5,503,306 1.03....
State Sales Tax 4,626,867 4,719,404 4,813,792 4,910,068 5,008,270 1.02
....................................................................� �����......................... ............................... ....
Home Rule Sales Tax 3,211,313 3,275,539 3,341,050 3,407,871 3,476,028 1.02
Real Estate Transfer Tax 721000 742630 764,909 787856 ., , J . , 811,492 1.03
...........................................................
Telecommunications Tax 1,903,344 1 903"344 1 903 344 1,903,344 1,903,344 1.00
Prepared Food an Beverag
e Tax 754,800 769,896 785,294 801,000 817,020 1.02
Utility Tax-Electric/Natural Gas 2,626,9002,626,9002,626,9002,626,900 II 2,626,900 1.00....
Licenses 270,800 270,800 270,800 270,800 270,
800 1.00
Building Revenue&Fees 706,243 713,305 720,438 727,642 734,919 1.01
Intergovernmental Revenue-Local 265,643 270,956 276,375 281,902 287,540 1.02
Fines&Fees-Police&Fire 1,805,681 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1!,841 794. 1,878630 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1,,,916203,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1„954,,,527 1.02
827,500827, 827,50 ,50 827'500 1.00
Operating Transfers 500 0
....... A.....................................................................A......................................
827 0 Miscellaneous Revenue 1,505,360 1,505,360 1,505,360 1,505,360 1,505,360 1.00
Total Revenues 38,222,963.12 39,034,867.01 39,868,853.92 40,725,542.25 41,605,568.11
Annual Increase 1.9% 2.1% 2.1% 2.1% 2.2%
General Fund Expenditures Projected
2015 2016 2017 2018 2019
Personal Services 19,660,025 20,446,426 21,264,283 22,114,855 22,999,449 1.04
Personal Benefits 10,415,392 10,623,700 10,836,174 11,052,898 11,273,956 1.02
Operating Expenses 1,965,891 � 2,005,209 2,045,313 � 2,086,219 2,127,944 1.02
Insurance 1,000,000 1,040,000 1,081,600 1,124,864 1,169,859 1.04
Legal Services 397,443 405,392 413,500 421,770 430,205 1.02
Commodities �( 275 707,,,' 281,772 287 971,,,' 294,307 300,782 1.022
Maintenance&Repairs 1,730,437 1,768,507 1,807,414 1,847,177 1,887,815 1.022
Capital Outlay 519,952 531,391 543,082 555,030 567 240 1.022
p Y
All Other Expenses 313,556 318,259 323,033 327,879 332,797 1.015
Total Expenditures
nd' 36,278,404 37,420,657 38,602,370 39,824,997 41,090,045
Operating Surplus/(Deficit) 1,944,559 1 1,614,210 1 1,266,484 1 900,545 1 515,523
Annual Increase 3.2% 3.15o 3.2% 3.2% 3.2%
General Fund Transfers Proje
cted
2015 1 2016 2017 1 2018 1 2019
Capital Reserve-Vehicles 600,000 600,000 600,000 600,000 600,000
Capital Reserve-Facilities 175,000 150,000 150,000 150,000 150,000
Capital Reserve-Technology 75,000 75,000 75,000 75,000 75,000
Motor Fuel Tax �( 642,263 655,108 668,210 681,574 695,206
Golf Enterprise Subsidy 50,000 50,000 50,000 25,000 25,000
Capital Improvement Plan 383,247 303,717 334,490 322,490 350,000
Total Transfers 1,925,510 1,833,825 1,877,700 1,854,064 1,895,206
Total Fund Surplus/(Deficit) 19,050 1 (�a1'r(:p .�, '� 61.1,216 9'33,'31.9 1,379,6831
5
The forecast provides two levels of analysis. The first level is to show where the General Fund is
positioned from an operational standpoint. The highlighted row designed as Operating Surplus/
(Deficit)weighs short term sustainability in measuring how operating revenues meet the day to day
obligations of the fund. In all five years of the forecast, revenues will support current services.
The second level of the analysis includes transfers for capital projects, reserves and enterprise
subsidies. Long term sustainability is measured through the Village's ability to invest in
infrastructure including funding reserves for vehicles, buildings, equipment, technology, streets
(though Motor Fuel Tax), and projects in the Capital Improvement Plan. Commitments to long term
capital programs are identified under "General Fund Transfers - Projected". Included in the
spending category are subsidy transfers to the golf enterprise. These transfers eliminate anticipated
negative cash positions at both courses at the end of the year. After including these transfers, the
total fund surplus at the end of FY 2015 is estimated to be $19,050. Beginning in FY 2016, the
General Fund will be in deficit. That deficit grows to just over $1.38 million by the end of the five
year projection.
One of the financial indices the bond rating houses (Standard & Poors and Moody's Investor
Services) cite as the reason for the current AAA bond rating is the low level of debt. The current
budgeting strategy is to try and fully fund capital reserve programs in order to remain on a pay-as-
you-go basis of capital asset financing. If reserve amounts are depleted, or inadequately funded,
staff will need to consider debt financing for future expenditures,
A commitment to properly funding capital will require either a significant revenue enhancement, a
reduction in services, or a combination of both. The impact of doing nothing has severe
consequences on the Village's reserves.
General Fund Reserves
The General Fund Fund Balance Reserve Policy sets forth a minimum unassigned reserve level of 25
percent of the subsequent year's budget (less pension and capital funding transfers). Within the
adopted Strategic Priorities is a goal of reestablishing a 35 percent threshold by the end of FY 2016.
It is important to maintain a strong reserve level for several reasons, (1) it provides more time to
react and respond to revenue threats created by economic turbulence, (2) it helps to better
6
withstand any unfunded legislative mandates that will create additional expenditure obligations
without a corresponding revenue, and (3) to fund unforeseen infrastructure/capital asset costs.
Spending down of prior period reserve balances allows the Village time to reallocate resources
within the budget and restructure service levels to react to the situation.After drawing down on the
balance to respond to emergency conditions, it is important to rebuild those reserves in order to
remain flexible to respond to the next threat.
The following chart provides a history of fund balance reserves and includes estimates for the
current fiscal year and the five forecasted years using the assumptions in the financial forecast.
Unassigned Fund Balance General Fund
$25,000,000
$20,000,000
$15,000,000 ,
$10,000,000 �IIIIIII�IIIIII �IIIII�IIII�IIII�IIII�IVI�IIII�IIII�IIII�III�IIII�IIIIIIUu
$5,000,000
$0
02-03 03-04 04-05 05-06 06-07 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
pro pro pro pro pro
"' Unassigned Fund Balance �uuuuuuuuuuuuuuuuuuuu�Policy Minimum Fund Balance
The red line on the graph represents the fund balance policy minimum of 25 percent less pension
and capital transfers. In FY 2016 the policy minimum is adjusted to 35 percent to be consistent with
Village Strategic Priorities. At the conclusion of the last audited fiscal year (2013) unassigned fund
balance represents 34.33 percent of the operating expenses of the FY 2014 Budget. Based upon the
five year analysis, if all transfers for capital, reserves, and golf subsidies are made the 35 percent
target will not be attained over the next five years.
Revenue Review
Approximately 86 percent of all General Fund revenue is generated from seven revenue sources
including property tax, combined sales tax including prepared food and beverage, income and use
tax,telecommunications tax, utility(natural gas&electricity) use tax and real estate transfer tax.
7
Almost half of the Village's major revenue sources are elastic. Elastic revenues are those sources
that tend to fluctuate with the economy.A balance between elastic and inelastic revenue is desired
as a hedge against market volatility. General Fund revenues considered to be elastic include: sales
and use taxes, income taxes, telecommunications tax, real estate transfer tax, building revenue and
fees, and investment income. The property tax is an example of a non-elastic source of revenue as
collections are stable and predictable.
The following is a summary of significant Village revenue sources.
PROPERTY TAX
Growth in the corporate property tax levy is tied to the Municipal Cost Index (MCI). The MCI is an
amalgam of several key inflationary indices including the Producer Price Index (PPI), Employment
Cost Index (ECI), and the Consumer Price Index-Urban (CPI-U). The MCI weights the indices
accordingly based on how a typical municipality spends its resources.
The Police and Firefighter Pension Funds levies are calculated by an independent actuary. The
pension levies are pass-through revenues that will have a corresponding expenditure. Beginning in
FY 2014, the pension levies for the Illinois Municipal Retirement Fund and Social
Security/Medicare have been added to the General Fund.
A continuing concern with property taxes is the lack of growth in the property tax base. Assessed
value declines began in 2010 (6.47%). Subsequent the following declines have taken place - 2011
(6.48%), 2012 (5.87%) and the most recent, 2013 (3.72% estimated). Because the Village levies a
dollar amount, a uniform change across all property classifications has no financial impact to tax
payers. This dynamic has not materialized as commercial/industrial properties have been more
successful contesting and decreasing their property values. Any aggregate decrease that exceeds
the county average decrease results in a greater share of the tax burden shifted to residential
properties.
Listed below is a history of equalized assessed valuations since 2003.
8
Equalized Assessed Valuation
2,000,000,000
1,800,000,000
1,600,000,000
i
1,400,000,000 i
1,200,000,000 U
1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Cook County Total EAV � Lake Couty
Future ability to raise property tax revenue to support General Fund operations will be challenging
as the corporate levy must compete for tax dollars with pension and debt service levies. In 2003,
levies for pensions accounted for 32.1 percent of the tax extension. In the most recent tax year
(2013), pensions represent 40 percent of property tax as illustrated below. The corporate levy,
which funds core General Fund services, has been stagnant until the current year. There was a 3
percent increase in the 2013 levy. The large increase in 2007 was due to the elimination of the
Village Vehicle Sticker Program.Those revenues were shifted to the property tax with a net revenue
grow of zero.
Components of Tax Levy
16,000,000
14,000,000
12,000,000
y rlkd Debt Service
Fire Pension
8,000,000
LA Police Pension
6,000,000 W IMRF/FICA
4,000,000 0 Corporate
2,000,000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
9
SALES TAX
Inflation sets the growth baseline for both the base (2%) and home rule sales taxes (2%).
Combined, this is the second largest revenue source for the Village. The base sales tax revenue is
directly related to the dollar value of sales made within the Village. Home rule sales tax applies to
the same transactions as the base sales tax except in the following transactions, food for human
consumption off the premises where sold (groceries), prescription and non-prescription medicines
and tangible personal property that is titled with an agency of the State of Illinois.
The assumption for the five year analysis is that the retail mix will remain substantially similar to
what is present today. The only variable not accounted for is the change in ownership at two of the
three former Dominick's Food Stores. It is too early to measure the sales tax performance at the
Mariano's and Garden Fresh stores.
The forecast applied to both base and home rule sales tax produces the following;
State Sales Tax History
$6,000,000
$5,000,000 '
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$p
2006 2007 2008 2009 2010 2011 2012 2013 2014 est.2015 pro.
Home Rule Sales Tax History
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$p
2006 2007 2008 2009 2010 2011 2012 2013 2014 est.2015 pro.
10
INCOME TAX
The Illinois Income Tax is imposed on every individual, corporation, trust, and estate earning or
receiving income. The tax is calculated by multiplying net income by a flat rate. The current rate is
five percent of net income. The rate is set to revert to 3.75 percent from January 1, 2015 to
December 31, 2024. The rate will then reduce to 3.25 percent starting on January 1, 2025. The
formula for distribution for local governments was 10 percent of the revenue, allocated on a per
capita basis, when the rate was 3 percent. When the state rate increased to 5 percent, the increase
was not included in the distribution making the effective per capita distribution to municipalities
six percent.
The Village's unemployment rate as of May 2014 is 5.4 percent, Cook County is 7.9, Lake County is
6.7 percent, and the State of Illinois is 7.5 percent. Revenues generated by income and use taxes
have surpassed the peak set in FY 2008. The growth in revenue is due to improving corporate
earnings, recovery in employment, and tax changes to increase total net income. The forecast
accounts for 3 percent growth each year through the duration of the forecast. The chart below
shows the performance of the revenue since FY 2006.
Income & Use Tax Revenue History
$6,000,000
$5,000,000
$4,000,000 .. .m
$3,000,000
$2,000,000
$1,000,000
$p
2006 2007 2008 2009 2010 2011 2012 2013 2014 est 2015 pro
PREPARED FOOD AND BEVERAGE TAX
This tax (1%) was adopted in 2008 and is levied on the purchase of prepared food for immediate
consumption and the sale of liquor. Similar to sales tax, inflationary growth is the central driver of
11
revenue increases with five year increases projected at 2 percent annually. There are 112
establishments that charge and remit this tax to the Village. The following chart shows the growth
of the revenue since inception. The revenue drop in FY 2014 is due to the Dominick's closing.
Prepared Food and Beverage Tax
$775,000
$755,000
$735,000
$715,000
r.
$695,000 .:'rv�;m;:"��.......................
$675,000
$655,000
$635,000
$615,000
2008 2009 2010 2011 2012 2013 2014 est 2015 pro
TELECOMMUNICATIONS TAX
This tax levied at 6 percent on all types of telecommunications except for digital subscriber lines
(DSL) purchased, used, or sold by a provider of internet service (effective July 1, 2008). The
exemption of DSL service has made a significant impact on collections. Recent legislation has also
mandated that data packages no longer be bundled with all other telecommunications billing for
the sake of taxation. Those services have been exempted. This revenue is down almost 26 percent
from the peak in FY 2007. The forecast calls for a continued decline in 2015 then flat over the
remainder of the plan.
Telecommunication Tax History
3,000,000
2,500,000
2,000,000
1t500,000
1,000,000
500,000
L-0 2006 2007 2008 2009 2010 2011 2012 2013 2014 pro 2015 est
12
UTILITY USE TAX (NATURAL GAS&.ELECTRICITY)
Natural gas and electricity charges are based on consumption and will fluctuate with seasonal
demands. The Village is charging the highest statutory rate. No growth is projected over the next
five years.Any new growth will be predicated on adding square footage to houses or buildings.
REAL ESTATE TRANSFER TAX
Real estate transfer tax is collected at the rate of$3 per $1,000 of sales consideration. This revenue
reached a peak in 2005 at$1.3 million. There has been a recovery in sales since the market reached
a bottom in FY 2012. Traditional sales are increasing as well as the number of high value
commercial transactions.
Real Estate Transfer Tax
1,200,000
1,000,000
800,000
600,000
400,000
200,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 est 2015 pro
Expenditure Review
The average annual increase in expenditures over the next five years is 3.2 percent. In each of the
next five years, wages and benefits account for about 78.7 percent of all expenditures. The next
largest expenditure account group is for operating expenditures (5.1 percent). For FY 2015 the
distribution of General Fund expenditures is shown in the table below.
13
1% FY 2015 Expenditure Distribution
Personal Services
2%2% 0% 1%
1% IH Personal Benefits
1% � Operating Expenses
W Insurance&Legal
Commodities
Maintenance&Repairs
W Capital Outlay
All Other Expenses
iw Capital Reserve Transfers
/ 0 Motor Fuel Tax
Golf Enterprise Subsidy
*Capital Improvement Plan
PERSONAL SERVICES
Wages are anticipated to increase by a factor of 4 percent each year. The wage forecast anticipates
the general wage increases plus merit based pay range adjustments. The forecast does not
anticipate another Voluntary Separation Incentive (VSI) during the review period. If one is offered,
the forecast will need to be adjusted to reflect as the impact of retirements, the effect of any service
realignments, and any hiring decisions become more evident.
Personnel levels have decreased significantly since 2010 as a result of the Village's previous VSI
programs combined with reorganization strategies. Full time staffing is at 218 employees or 10.8
percent less than staffing levels four years ago. The chart below shows the financial impact of the
efforts to reorganize Village operations. The data includes all employees spanning the General,
Water and Golf Funds.
Wage Growth -All Funds
$22,000,000
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
14
A major initiative in FY 2014 is to establish a pay for performance system that will allow employees
to move through their pay ranges. With the proliferation of retirements, one of the budget savings
strategies has been to replace employees with lower salaried employees. Although, the savings are
realized immediately,there needs to be a tool to move employees through the pay scale.
PERSONAL BENEFITS
The largest single expenditure within Personal Benefits is for health insurance. The Village is a
member of the Intergovernmental Professional Benefits Cooperative (IPBC). As a member of IPBC,
the Village is better able to stabilize medical costs through risk pooling and provide for a
mechanism to help establish positive cash flow and rebuild reserves. The forecast calls for two
percent growth each year in premium expenses. The benefits of pooling health insurance risk is
paying back immediate dividends as the national medical trend for health insurance costs is 6.8
percent.
Over the five year projection,the employees' contribution is set to cap at 15 percent of the premium
in FY 2016. Continued efforts will be made to maintain costs. A renewed emphasis on wellness
programs and evaluating data will be critical in the next few years to help stabilize experience.
Staff will be actively working with the IPBC to manage tax implications of the Patient Protection and
Affordability Care Act The Village's plan will be subject to the `Cadillac Tax' in FY 2017 whereby
any premium expenses that exceed the mandated threshold will be subject to a 40 percent tax.
Beginning in FY 2014, employer pensions obligations for police and firefighters are classified under
Personal Benefits instead of all other expenses and the Illinois Municipal Retirement Fund has been
closed. Employer pension costs have been assigned to each operating department budget. The
intent of the change was to better represent the true cost of providing a specific service. Employer
pension obligations are anticipated to be $5.9 million in 2015 or 15.6 percent of the General Fund
Budget.
INSURANCE
Within the Insurance category is the premium paid to the Intergovernmental Risk Management
Pool (IRMA) for general liability and workers' compensation coverage. The deductible was lowered
15
in FY 2014 from $50,000 to $25,000 due to the recent proliferation of worker's compensation
claims. The forecast assumes growth of 2 percent.
COMMODITIES
The single largest expenditure within the Commodity account group is for purchase of salt for the
snow and ice control program. The forecast calls for increases of 2.2 percent per annum. Staff
continues to seek innovative ways to reduce commodity costs, such as bulk electric procurement,
and utilizing centralized purchasing to leverage the Village's buying power.
MAINTENANCE &.REPAIR- FACILITIES
Expenditure growth in this account group is estimated to be 2.2 percent per year. Included in these
expenditures are costs related to the maintenance and repair of sidewalks and bike paths, street
patching,street lights,building facilities,and parkway trees.
General Fund 1'ransfers
Included in the transfers are $4.15 million for vehicles, technology, and building reserves over the
next five years. $3.34 million is allocated for transfer to the Motor Fuel Tax Fund to supplement
state funding for road repairs. The annual transfer to the Motor Fuel Tax Fund, in conjunction with
state allocation, only covers about 50 percent of the streets identified for improvement in a given
year. In FY 2012, $6 million in bonds were issued to expedite the maintenance program. Given the
current and continued level of funding, it should be anticipated that another debt issuance for
streets will be present in the out years of the forecast. At the end of FY 2015, staff will present
recommendation on the $6 million line of credit for tree replacement. The line of credit will either
need terms renegotiated or a take out financing will be structured.
There is an estimated equity transfer to the Golf Enterprise of $200,000 over five years. The
following transfers have been made over the last seven years. Nearly $2.6 million in equity
transfers have been made to the golf courses since 2006. The intent of an Enterprise Fund is to
cover its expenditures with user fees. There was significant improvement in FY 2013 due to staffing
realignments,better inventory purchasing and a slight rebound in play.
16
2013 $74,188
2009 $400,000
2007 $205,141
Total $2,602,430
The Five Year Financial Forecast calls for a cumulative five year deficit of $3.15 million over the
review period. Given the relatively stagnant revenues and growing infrastructure needs this deficit
is not unexpected. Future funding strategies will need to address shortfalls on either or both sides
of the ledger. On the expenditure side,there is little ability to reduce significant operating costs that
are not wage and benefit driven.Those efforts have taken place over the last four years.
While efforts will continue to focus on how to deliver the same high level of services at lower unit
costs, staff recognizes that revenues will also need to be reviewed. Every opportunity to grow the
sales tax base should be considered. Staff must ensure that revenues are reviewed for adequacy
(fees), efficiency (collections), and efficacy (diversified). New revenue sources should be
researched,discussed,and if warranted, presented to the Village Board for consideration.
This report will be used as a guide for the development of the FY 2015 Budget and will help shape
the discussion about how the Village adapts to the current and future financial landscape. Staff
seeks further input from the Village Board on the operating forecast.
17
Administrative Adjudication 2-D
Overview
Staff will provide an update on the implementation of the Village's administrative adjudication program.
Attachments
Admin Ad j July COW Final 3.pdf
Trustee Liaison Staff Contact
Trustee Trilling Evan C Michel,Finance&GS
....Tuesd.a............J.u.1.........Y 29, 2014
........................................................................................................................D.'scuss.'.o.n...._...Ite.m........2._D........................................................................................................................................................
Y,
VIUL,ACI'�'E OF
MEMORANDUM
DATE: July 23, 2014
TO: President Jeffrey Braiman and Trustees
FROM: Steven Casstevens, Chief of Police
Evan C. Michel, Public Safety Management Analyst
SUBJECT: Administrative Adjudication Update
Introduction
Administrative Adjudication was established as one of the 2014 goals for the Village and the
Police Department. These Administrative Hearings allow for the settlement of a wide range
of municipal ordinance violations. The municipality benefits from this process though
expedited resolutions, reduced litigation expenses, and increased fine recovery. The Village
approved an ordinance establishing Local Adjudication in 2004 (Ord. No. 2004-46). The
Board also passed a local ordinance adjudicating Administrative Vehicle Tows in 2004 (Ord.
No. 2004-45). However, this ordinance was specific to vehicle impounding and did not
address the adjudication of parking or other ordinance violations. A full Administrative
Adjudication program provides substantial benefit to the residents and Village of Buffalo
Grove. For the citizens of the Village, it provides a locally controlled, less expensive and
more convenient method for the resolution of municipal violations. The Village likewise,
benefits from the increased recovery of fines and fees, reduced off-site time for officers and
staff to attend hearings, and expedited problem resolution for many lesser-impact violations.
The transition from exclusively adjudicating administrative vehicle tows, to adjudicating
parking tickets, ordinance violations, non-moving traffic violations and various building and
zoning violations is well underway. There are multiple ongoing tasks, including:
• Selection of a Hearing Officer
• Adjudication Ticket Creation
• Implementation of Specialized Software
• Formulation of a Marketing/Public Education Plan
• Updating the Fee and Fine Schedule
• Adoption of an Updated Ordinance
Selection of a Hearing Officer
The Village Code allows the Village Manager to appoint a Hearing Officer. Buffalo Grove
currently utilizes the services of Melissa Wach to hear Administrative Tow cases. Due to the
expanded scope of a Full Administrative Adjudication program, a second/back-up Hearing
Officer is necessary. Staff attended fifteen other municipalities' adjudications to observe
hearing officers in action. Likewise, Chief Casstevens conferred with others in the field to
gather best practices. The results of this research yielded many qualified officers. David
Eterno, the current Hearing Officer for Lincolnwood, Cary, Des Plaines, as well as many
Page 1 of 12
other surrounding suburbs, was selected to backup Ms. Wach. Village Counsel is presently
drafting a new contract for Mrs. Wach and Mr. Eterno, which would be executed upon
approval of the expanded administrative adjudication program by the Board.
Adjudication Ticket Creation
Village staff is currently working in conjunction with our ticket vendor to develop a new
Adjudication Ticket. Presently, the Village issues unique tickets for parking, nonmoving
traffic, and local ordinance violations. This proposed ticket will stream line the adjudication
process and will utilize one ticket format for all violations enumerated in the updated village
ordinance.
Implementation of Specialized Software
Staff met with several software vendors that specialize in Adjudication Software; however,
the costs of these programs were prohibitive. The New World Community Development
Module, currently being implemented by the Building and Zoning Department, has the
functionality needed to facilitate the adjudication system. Managing the adjudication program
through the Community Development Module allows for easy integration with the current
financial system. Staff is building the preliminary databases of offenses and fines.
Customized finding reports, hearing dockets, notification forms, and analytic tools will be
developed in conjunction with the database construction process. The Police Records staff,
who will be responsible for processing the new Adjudication Ticket information, will be
given an in person demonstration by a New World Application Specialist in early August.
Formulation of a Marketing/Public Education Plan
The program will be announced through an in-depth article in the November/ December
Village News. New pages will be created on the Village's as well as the police department's
website. These pages will include a schedule of hearing dates and answers to commonly
asked questions. These initiatives will be supplemented with an informational brochure,
which will be located at both Village Hall and the Police Station.
Updating the Fee and Fine Schedule
The current Fee and Fine schedule does not include some of the new violations to be
adjudicated. The Northwest Municipal Conference performed a survey of its members to
gather the fines associated with these violations. The results of this survey served as the basis
for the recommended minimum fines. Violators have the ability to pay the minimum fine
within fourteen days of first receiving a Notice of Violation, or choose to attend the Hearing.
The fine escalates if no action is taken by the violator within the initial fourteen-day period.
If no action is taken by the violator before the scheduled hearing, and the violator does not
show at the hearing, the Hearing Officer will enter a Default Judgment against the violator.
Due to the nature of certain offenses, a violator will be required to appear at a hearing. The
offenses include:
• Alcohol underage/possession/consumption/sale
• Sale/delivery of tobacco products to a minor
• Possession of tobacco products by minor
• Trespass
• Damage to Village property
• Graffiti
• Theft
• Curfew
Page 2 of 12
• Truancy
• Air rifle, BB gun, Gun Discharge
• Disorderly Conduct
• Any violation by a minor
The Finance Department has submitted the required documentation to the State Comptroller's
Office for inclusion in the Local Debt Recovery Program. Staff is now waiting on the State to
activate the program. If a violator fails to pay the balance of their fine within thirty days of
their hearing, they will be automatically entered into this program to expedite collection of
fines due. A proposed Fee and Fine Schedule is attached.
Adoption of an Updated Ordinance
The Village currently has two ordinances pertaining to Administrative Adjudication: Ord. No.
2004-46, which established Local Adjudication in 2004 and Ord. No. 2004-45, which allows
for Administrative Vehicle Tows. Counsel is presently reviewing the relevant sections of the
Buffalo Grove Municipal Code to include provisions for the adjudication of additional
violations
Summar of Pen
din Actions
Adoption of an Present the Board of Trustees with an ordinance that
Updated reflects the expanded scope of the hearing system and a September
Ordinance Table of Offenses that will be adjudicated
Update Fee and Update the current Fee and Fine Schedule to reflect the September
Fine Schedule expanded scope of the program
Create Create a ticket that will be issued for all violations
Adjudication November
Tickets detailed in the revised ordinance
Formulation of publish an article in the Village News,pages on the October thru
a Marketing
Plan website, and informational brochures January
Selection of a Contract and appoint Hearing Officers, execute November
Hearing Officer agreement for services
Implementation Records staff will be trained on the program once the
of Specialized necessary database and documents are built November
Software
Test Hearing Preform a dry run of a hearing to ensure the process is December
Process ready to go live
Hold First Hold hearing to adjudicate all outstanding Adjudication January 2015
Hearing Tickets
Page 3 of 12
3.52.020 Failure to Pay Daily $25 $25 $50 $25
Parking Fee- Metra
Resident Parking
3.52.040 Only Violation- $25 $25 $50 $25
Metra
Failure to Pay Daily
3.52.055 Parking Fee- $25 $25 $50 $25
Township
ins I
Alcohol
5.20.190 underage/possession/ N/A $75
consumption/sale
Soliciting without a
5.24.020 N/A $50 $75 $50
permit
Soliciting where
5.24.080 posted "No N/A $50 $75 $50
Soliciting"
5.24.090 Soliciting—failure to N/A $50 $75 $50
leave when requested
Soliciting in violation
5.24.100 of soliciting N/A $50 $75 $50
hours/days
Sale/delivery of
5.32.090 tobacco products to a N/A $75
minor
Possession of
5.32.105 tobacco products by $25 $50
minor
Page 4 of 12
Violation of Hours of
5.40.040 Operation N/A $75 $100 $75
requirements
No Rabies
6.12.010 Vaccination -1st $50 $50 $75 $50
Violation
No Rabies
6.12.010 Vaccination -2nd $75 $75 $100 $75
Violation
No Rabies
6.12.010 Vaccination -3rd $100 $100 $150 $100
Violation
6.12.020 No Dog or Cat $100 $100 $150 $100
License
Failure to Remove
6.12.060 Excrement-1st $50 $50 $75 $50
Violation
Failure to Remove
6.12.060 Excrement-2nd $75 $75 $100 $75
Violation
Failure to Remove
6.12.060 Excrement-3rd $100 $100 $150 $100
Violation
6.12.070 Dog or Cat at Large - $50 $50 $75 $50
1 st Violation
6.12.070 Dog or Cat at Large - $75 $75 $100 $75
2nd Violation
6.12.070 Dog or Cat at Large - $100 $100 $150 $100
3rd Violation
Excessive Number of
6.12.080 Animals -1st $50 $50 $75 $50
Violation
Excessive Number of
6.12.080 Animals -2nd $75 $75 $100 $75
Violation
Excessive Number of
6.12.080 Animals -3rd $100 $100 $150 $100
Violation
6.12.090 Prohibited Animal - $50 $50 $75 $50
1 st Violation
6.12.090 Prohibited Animal - $75 $75 $100 $75
2nd Violation
6.12.090 Prohibited Animal - $100 $100 $150 $100
3rd Violation
Found to be
6.12.120 potentially dangerous N/A $75 $100 $75
animal
Page 5 of 12
Excessive Dog
6.12.150.13 Barking -1st $50 $50 $75 $50
Violation
Excessive Dog
6.12.150.13 Barking -2nd $75 $75 $100 $75
Violation
Excessive Dog
6.12.150.13 Barking -3rd $100 $100 $150 $100
Violation
8.20.020 Lack of required N/A $50 $75 $50
refuse service
8.20.030 Littering N/A $100 $150 $100
8.20.070 Garbage-Out Too $20 $25 $50 $25
Early
8.20.090 Garbage-Unsecured $20 $25 $50 $25
8.20.100 Illegal $20 $50 $100 $50
Dumping/Burning
Stagnant water
8.24.020 creating mosquito N/A $50 $75 $50
nuisance
8.24.060 Pest infestation— N/A $50 $75 $50
Insects
8.24.070 Pest infestation— N/A $50 $75 $50
Rodents
8.24.110 Improper feeding of N/A $50 $75 $50
wildlife
8.32.010 weeds in Excess of $50 $50 $75 $50
12 Inches
8.32.010.13 Grass in Excess of 6 $50 $50 $75 $50
Inches
9.04.020 No Valid Alarm $20 $25 $50 $25
Permit
Possession of
9.16.020 Cannabis (under 10 N/A $200 $300 $200
grams)
Possession/sale of
9.17.020 d N/A $100 $200 $100
rug paraphernalia
Page 6 of 12
I ME
9.28.010 Disorderly conduct N/A $100
9.28.010.0 Possession of N/A $50 $75 $50
fireworks
Public Nuisance
9.28.025 Assemblage/Social N/A $100 $150 $100
Host
9.32.020 Smoking in Enclosed $50 $50 $75 $50
Public Place
9.32.030 Smoking in Place of $50 $50 $75 $50
Employment
9.32.040 Smoking in Open Air $50 $50 $75 $50
Dining Area
9.32.050 Smoking at Entrance $50 $50 $75 $50
Im Is=
9.38.020 Noise Prohibited N/A $75 $125 $75
9.38.030 Noise within a multi- N/A $100 $200 $100
family structure
Construction
9.38.037 regulations —hours N/A $75 $100 $75
of work
INN 1111
9.48.020 Trespass $60 $75
9.48.030A Damage to Village N/A $75
property
9.48.040 Graffiti N/A $75
9.52.020 Theft N/A $150
9.68.010 Curfew N/A $75
=9.70.010 Truancy N/A $75
9.80.010 Air rifle/BB gun/Gun N/A $75
discharge
10.08.010 Parking—After 2 $25 $25 $50 $25
inch Snow
10.08.020 Dumping Snow in $20 $25 $50 $20
Page 7 of 12
Street
IVC-3-401 No valid registration N/A $50 $75 $50
IVC-3-413 No front/rear N/A $50 $75 $50
(a) registration plate
IVC-3-413 Tinted/obscured N/A $50 $75 $50
(b) license plate covers
IVC-3-413 Operation of vehicle
( w/expired N/A $50 $75 $50
registration
IVC-3-701 Inoperable odometer N/A $50 $75 $50
under mileage plates
IVC-5-1- Miscellaneous
100 et seq. Traffic Code N/A $50 $75 $50
Violations
IVC-5-11- Jay Walking $20 $25 $50 $25
1303.(a).l.b.
IVC-5-I1- Handicapped Zone $250 $250 $375 $250
1301.3 Parking
IVC-5-11- Parked Blocking $20 $25 $50 $25
1303.(a).l.b. Sidewalk
IVC-5-11- Parked Within 15 $20 $25 $50 $25
1303.(a).2.b. feet of Fire Hydrant
IVC-5-11-- Parked Within 20 $20 $25 $50 $25
1303.(a).2.c. feet of Crosswalk
IVC-5-11- Parked Within 30
feet of Traffic $20 $25 $50 $25
1303.(a).2.d. Control Device
IVC-5-11- Parking Where $20 $25 $50 $25
1303.(a).3.b. Prohibited
IVC-5-11- Parking in Loading $20 $25 $50 $25
1303.(a).3.b. Zone
IVC-5-I1- Parking over 12 $20 $25 $50 $25
1304.a. inches from Curb
IVC-5-I1- Parking -Left Wheels $20 $25 $50 $25
1304.a. to Curb
IVC-6-112 Driver's license not N/A $50 $75 $50
on person
Failure to notify
IVC-6-116 Secretary of State— N/A $50 $75 $50
change of address
IVC 12-713 properly marked N/A $50 $75 $50
vehicles — Contractor
IVC-12-101 Unsafe equipment $25 $50 $75 $50
Page 8 of 12
IVC-12-201 Driving motorcycle
(a) w/out lighted $25 $50 $75 $50
headlight
IVC-12-201 Driving w/out lights $25 $50 $75 $50
(b) when required
IVC-12-201 Only one tail light $25 $50 $75 $50
(b)
IVC-12-201 No rear license plate $25 $50 $75 $50
(c) light
Improper lamp or
IVC-12-204 flag on projected $25 $50 $75 $50
load
Improper use of spot
IVC-12-207 lamp/aux driving N/A $50 $75 $50
lamps
IVC-12-208 No stop lights N/A $50 $75 $50
IVC-12-209 Defective back-up $25 $50 $75 $50
(c) lights
IVC-12-210 Failure to dim N/A $50 $75 $50
headlights
IVC-12-211 Only one headlight $25 $50 $75 $50
IVC-12-301 Defective brakes N/A $50 $75 $50
IVC-12-405 Use of unsafe tire $25 $50 $75 $50
(c)
IVC-12-502 No rear view mirror $25 $50 $75 $50
IVC-12-503 Obstructed $25 $50 $75 $50
(c) windshield
IVC-12-503 Obstructed windows $25 $50 $75 $50
(d) —snow, ice, moisture
IVC-12-503 No windshield
(d) clearing device $25 $50 $75 $50
(wipers)
IVC-12-601 Defective or no horn $25 $50 $75 $50
(a)
IVC-12-602 Loud muffler— $25 $50 $75 $50
excessive noise
No bumper or
IVC-12-608 unlawful bumper N/A $50 $75 $50
height
Illegal operation of
IVC-12-611 sound amplification - N/A $50 $75 $50
75'
No flags, flares,
IVC-12-702 warning devices $25 $50 $75 $50
carried
Inadequate or no
IVC-12-710 splash guards (mud $25 $50 $75 $50
flaps)
Page 9 of 12
BG-4- Abandoned vehicle $25 $25 $50 $25
lOLE.1. over 7 days
MIMM M
BG-11- Parking on Parkway $20 $25 $50 $25
1303.C.1. or Median
BG-11- Parking—Blocking $20 $25 $50 $25
1303.C.2.b. Driveway
BG-11- Parking in Posted $20 $25 $50 $25
1303.C.2.c. Fire Lane
BG-11- Parking on Street 2 $20 $25 $50 $25
1308.1. am to 6 am
BG-11-1311 Selling Vehicle on $20 $25 $50 $25
Street
Trees/vegetation
12.20.070 obstructing public N/A $100 $150 $100
sidewalks
Trees/vegetation
12.20.080 creating visual N/A $100 $150 $100
obstructing
13.05.110. Inspection and N/A $50 $75 $50
A.2. maintenance
13.16.020 Sprinkling Ban N/A $100 $150 $100
Violation 12-6 m
Signs Installed
14.12.010 without a Permit $20 $50 $75 $50
14.32.060 Signs Placed in the $20 $50 $75 $50
Public Right of Way
II �,
Failure to secure X2
IBC 105.1 required permit permit $200 $300 $200
(Commercial) fee up to
$1,000
Page 10 of 12
Failure to secure X2
IRC 105.1 required permit permit $50 $75 $50
to
(Residential) fee 0 0
$1, 00
i iu u
IPMC Parking on non-
302.8, as approved N/A $50 $75 $50
amended surface/grass/lawn
IPMC
302.8, as Unlicensed vehicle N/A $100 $150 $100
amended
IPMC Vehicle in a state of
302.8, as disrepair N/A $75 $125 $75
amended
IPMC 304 Property in disrepair N/A 1 $75 $125 $75
IPMC 307 Junk/Garbage/Debris N/A $75 $100 $75
on property
15.12.030 Downspout and sump N/A $75 $100 $75
pump discharges
15.20.100 Fence in Disrepair N/A $100 $150 $100
15.36.040 Renting property N/A $100 $150 $100
without a license
Failure to
15.36.060 schedule/allow rental N/A $100 $150 $100 $100
inspection
Page 11 of 12
Use or occupancy of
17.12.230 a One-Family N/A $25 $50 $25 $25
Dwelling by more
than one family
Improper
17.36.030 Recreational Vehicle $20 $50 $100 $50 $50
Parking
Improper parking of
17.36.030 a commercial $20 $25 $50 $25 $25
vehicle/Residential
District
17.36.030 Oversized Vehicle $20 $25 $50 $25 $25
Improperly
17.36.030 maintained parking $20 $50 $100 $50 $50
lots
Improperly marked
17.36.030 accessible parking $20 $50 $100 $50 $50
spaces
Page 12 of 12
2015 Compensation Program 2-E
Overview
Staff will provide a 2015 compensation program update and preliminary recommendations.
Attachments
Trustee Liaison Staff Contact
Trustee Ottenheimer Arthur Malinowski,
....Tues�d.a............J.u.1.........Y 29, 2014
........................................................................................................................D.��s�cu�s�s.�.o.n...._...Ite.m....�....�._��........................................................................................................................................................
Y,
20-Year Water Proforma -Annual Update 2-F
Overview
Attached is the annual update of the twenty year water rate pro-forma.
Attachments
20 year-2014 COW.pdf
Trustee Liaison Staff Contact
Trustee Stein Scott D Anderson,
....Tues�d.a............J.u.1.........Y 29, 2014
........................................................................................................................D.��s�cu�s�s.�.o.n...._...Ite.m....�....�._��.........................................................................................................................................................
Y,
VILIAGIE OF`
BUIFIFALO GROVE
TO: Dane C. Bragg, Village Manager
FROM: Scott D. Anderson, Finance Director
DATE: July 22, 2014
RE: FY 2014—Water Fund 20 Year Pro Forma Annual Update
Sys°t ur Status Update
In FY 2012, two water rate increases were adopted for service years 2013 and 2014. Beginning in
2015, an automatic inflation increase (4%) will be initiated. The intent of water rate increases was to
align the true cost of the system (operating, capital, and depreciation and reserve costs) with the rate
assessed to water customers. The intent of the update of the 20 year analysis is to provide either a
justification for the current rate or a recommendation to modify the water rate ordinance.
A review of the audited 2013 Water Fund performance results in the following;
• Operating income in the fund was $613,448.
• Adding in the transfer back to the General Fund for services performed on behalf of the fund
the fund is in deficit $399,407. At the same point last year the fund was in deficit
approximately$2.1 million.
• Total gallons billed were 1.27 billion (proforma estimate—1.31 billion).
• The ending cash and investment balance is$3.1 million
The rate increase in the current year was $1.21 moving the water rate from $4.05/1,000 gallons to
$5.26/1,000 gallons.
i1ate o ur°id Coiii m u° litiii ur°m lI°°it isto ur
The Village maintained a water and sewer rate of $1.80/1,000 gallons for a period of twenty three
years (1983-2005). One significant reason leading to this period of rate stability was due to the age of
the water and sewer infrastructure. During the peak growth decades of the 1980's and 1990's,
developers donated approximately 53 percent of the water and sewer system assets. Through a
combination of minimal capital expenses, receipt of building and development fees, coupled with a
period of growing water consumption, the Water Fund was able to generate strong cash reserves to
allow for a strategy of pay-as-you-go financing for future infrastructure repair. Funding for future
infrastructure replacement(funding depreciation)was never a component of the rate structure.
Beginning in 2003, a pattern of declining water usage started. In 2002, 1.63 billion gallons of water
was billed. In 2013, 1.27 billion gallons were billed, a decrease of 22 percent.There is no expectation
that the amount of water billed will reach those levels again absent a significant drought or the
addition of heavy industrial uses.
Page 1 of 5
The following chart shows the annual gallons billed since 1993.
Annual Gallons Billed
(in thousands)
1,800,000
1,600,000
1,400,000
1,200,000 — — —
1,000,000 -
800,000
600,000
400,000
200,000
S'3 9R ..,,
'� ��O �� �4' �� 00 Oy & Z" OA
, O� 04', O°� y0 ,y, yl, y3
�� ti0 ti0 �� ti� ti0 ,ti0 tip ,ti0 ,ti0 ti0 ti0 ti0 ,ti0 ti0 tip ti0 ti0 ti0
The outlier in FY 2005 was drought induced. If that year is removed from the analysis, a fairly linear
decline begins after FY 2002 and plateaus in FY 2010. Even with the decline, the Water Fund was able
to cover its operating expenses and generate a small surplus each year until 2006. A rate
recommendation was made to increase the rate by 33 percent to $2.40/1,000 gallons effective
January 1, 2007. The increase stabilized the fund but did not start building additional cash reserves
for future asset replacement. A second rate increase of 25 percent to $3.00/1,000 was implemented
for 2010. Again the increase helped to ensure that water sales would offset operating expenditures.
The next increase was to $4.05/1,000 or 35 percent in FY 2013 and the most recent increase to
$5.26/1,000 or 30 percent. The new rates begin the process of developing a fully loaded water rate
that will fund operating, capital and infrastructure reserve demands.
Last year marked the lowest amount of water billed since 1993. This year, water usage is trending
lower than previous year due to an unusally mild and wet summer to date. Factors that continue to
impact water usage include weather, conservation, mature landscaping and more efficient
appliances. The Villge's philosophy on establishing an infrastructure reserve is to cash finance system
replacement over the long term.
It is estimated, in the study, that the current fiscal year will close at 1.26 billion gallons billed. The
analysis uses an estimate of 1.31 billion gallons and will carry forward through the next 20 years.
Although there will be an increase in total consumers over the next two decades, continued
conservation efforts could partially counterbalance that growth. One factor that has not been
integrated into this analysis is any potential impact of replacing worn out meters in homes. As these
devices start to fail and are replaced, there is the potential for more accurate (higher) reads. The
Village is currently working with Siemens Industry, using a performance contracting model, that may
result in replacing all water meters in the Village. Ideally, the savings generated through more
efficient measurement will offset the cost of the capital (meters). For purposes of this analysis, the
water meter project was excluded, to be considered as a standalone project.
Page 2 of 5
t it li ii id li Inuit iiiic I
During the high growth years of the water system, the Water and Sewer Fund was able to amass a
cash balance that allowed for a reserve to address infrastructure maintenance and improvement.
Due to the relative age of the system, over a fifteen year span (1993-2007) the only capital expense
was $229,527 for the St. Mary's Road water main replacement. Since 2008, $3.3 million in
infrastructure repairs and improvements has been spent. In FY 2014, it is anticipated that another
$3.4 million will be invested in system infrastructure.
On the attached financial analysis, staff has presented a twenty year estimate of revenues, operating
expenses, Capital expenses and Operating Transfers. Revenues include all building fees and billed
amounts for water consumption. Operating expenses are those expenses related to the day to day
activities such as wholesale water purchase, labor and materials, and energy costs. Capital expenses
are those amounts spent to repair or improve capital assets and infrastructure. Operating transfers
are amounts paid to reimburse the General Fund for expenditures related to Water Fund activities.
Working cash represents 25 percent of operating expenses. Once the working cash balance reaches
the 25 percent threshold, remaining funds are then allocated as the 'net reserve' that is available for
capital and infrastructure spending. At the end of FY 2014, working cash is anticipated to be $1.039
million and the net reserve is $1.95 million. Those funds support an enterprise system valued at $.5
billion.
Also included in the analysis is a possible expansion of the public utility financing program loan limits,
which does not have a forecast rate impact.
The following chart shows the impact of the current rate structure (with 4% inflationary increases
beginning FY 2015) on the fund's cash position.
Twenty Year Cash Position
25,000,000
22,500,000
20,000,000
17,500,000
15,000,000
12,500,000
10,000,000
7,500,000
5,000,000 .... A
..
2,500,000
yh ti� tit ti� ti� LW-
O LN, L11 Llb
,LO .LO ,tiO ,tiO ,tiO .LO .LO .LO .LO .LO .LO ,tiO ,tiO ,tiO ,LO .LO .LO .LO .LO .LO
Net Reserve liWorkingCash
The Water Fund remains in a precarious financial position for the next few years. Any significant
unanticipated repairs will deplete the working cash and reserve balances.
The utility system consists of 181 linear miles of water and sewer main. The value of the water main
alone in today's dollars is approximately $200 million. The service life of the infrastructure ranges
Page 3 of 5
from 50 years for cast iron main to 75 years for ductile iron. The replacement cost of the entire
system (water and sewer main, lift stations) at the end of the 20 year study, inflated at 3% per year,
is $700 million. The assumption used for replacing any future water mains is that on any given year
where sections of the system have reached the end of their useful life 25% of the system will be
replaced. For instance, water main constructed in 1965 has a replacement cost of about $372,000;
we then forecast that$94,000 in repairs would occur in FY 2015..This cost estimate compensates for
the improbability that the entire section will be replaced. The estimates reflect rolling replacements
where in certain instances only sections are repaired. Another factor for consideration is that the
replacement cost includes a curb-to-curb street reconstruction. About 50 percent of that expense
will be charged to the Capital Projects Street Fund or the Motor Fuel Tax Fund.
Within the straight line depreciation calculation beginning with the oldest main constructed in 1929,
the first replacement should have occurred in 1979. Approximately $10 million in water mains have
'expired' but have not needed to be repaired. Estimating the actual asset life at times is more
abstract than qualitative. Pipe that is ensconced in stable soil and subjected to consistent water
pressure may have a service life that may double an engineering estimate, and conversely, weak soils
or pressure fluctuations may reduce the life by many years.
The following chart shows the pattern of construction of water main since 1929.
Water Main Construction
80,000 in linear feet
60,000
40,000 _ .
20,000
0
01 00 O N iD 00 O N � tD 00 O N � tD 00 O N � tD 00 O N � tD 00 O
N Ln lD lD lD lD r� r� r� r� r� 00 00 00 00 00 01 01 01 01 01 O O O O O
dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl dl O O O O O O
During the thirteen years spanning 1983-1996, almost 50% of the water system was constructed.
Fortunately during those years, the more resilient ductile iron was used. The cost of that original
installation was paid by developers as specified within development agreements.
The age distribution of the water main leads to the cost estimates to replace the system noted in the
graph presented below:
Page 4 of 5
Projected Infrastructure Replacement
..............................................................................................................................................................................................................................................................................................................................................................................................................................................
$100,000,000
$80,000,000 '
$60,000,000
$40,000,000
$20,0001000 ' ON ON............... n(III'll/l/a/0's ...... ....... j 1/
$p ...............
O O O O O O O O
N M Ln 00 01
O O O O O O O O
Replacement costs begin to ramp up in the 2060s and 2070s as main installed during the peak
construction years reaches seventy years of age.
Water main is only one component of the delivery system. Other assets include the sanitary sewer
main, lift stations, and booster stations. The sanitary sewer mains have roughly the same total
mileage as the water main. The service life of the sewer mains should be significantly higher than
water mains as they are not subjected to pressure. Since the Village does not treat waste there are
no treatment facilities to fund. For the purpose of the pro forma, the FY 2014-2018 Capital
Improvement Plan was added to the calculation. Beyond 2018, a flat amount is budgeted each year
to address sanitary sewer system and lift station repairs.
ate,r eats Recoismismsndations
Each year staff reviews the financial condition of the fund to determine the adequacy of current
rates. The rate is set by ordinance to increase in FY 2015 by 4 percent annually. There are no
changes recommended with this update.
The impact of infrastructure maintenance costs and the related strain on the water and sewer fund is
not unique to the Village of Buffalo Grove. All communities to varying degrees are challenged on how
to maintain and protect their system assets. A proper rate structure is the first step to ensuring that
the fund will have the resources available to maintain the integrity of the system.
Page 5 of 5
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E-Services 2-G
Overview
Staff will provide a presentation on E-services including which services are targeted to be offered on-line.
Attachments
Trustee Liaison Staff Contact
Scott D Anderson,
....Tues�d.a............J.u.1.........Y 29, 2014
........................................................................................................................D.��s�cu�s�s.�.o.n...._...Ite.m....�....�._�.......................................................................................................................................................
Y,
Economic Development Plan 2-H
Overview
One of the goals in the 2014 Strategic Plan is to develop a comprehensive economic development
strategy. The first step to create the plan is to develop an outline of the areas that the plan will
address. Below is a draft outline of the plan. The outline is not intended to be an exhaustive list of
all elements of the plan, but a guide that staff will use to write and research the plan. Staff is seeking
feedback from the Village Board to ensure that staff is including all items the Village Board would
like to see as a part of the plan. Additionally, staff would like feedback from the Village Board on
some of the potential goals listed.
Attachments
2014 July COW Economic Development Plan.pdf
Trustee Liaison Staff Contact
Trustee Terson Jennifer I Maltas,
....Tuesd.a............J.u.1.........Y 29, 2014
........................................................................................................................D.'scuss.'.o.n...._...Ite.m........2._H........................................................................................................................................................
Y,
V IL,IILAC IIIr� � 11➢�` � �o
L�' 1 I➢�`I➢�`%,IIL43 C':ff�a �
MEMORANDUM
TO: Village President& Board of Trustees
FROM: Jennifer Maltas, Deputy Village Manager
DATE: July 28, 2014
RE: Economic Development Plan
Introduction
One of the goals in the 2014 Strategic Plan is to develop a comprehensive economic
development strategy. The first step to create the plan is to develop an outline of the areas that
the plan will address. Below is a draft outline of the plan. The outline is not intended to be an
exhaustive list of all elements of the plan, but a guide that staff will use to write and research the
plan. Staff is seeking feedback from the Village Board to ensure that staff is including all items
the Village Board would like to see as a part of the plan. Additionally, staff would like feedback
from the Village Board on some of the potential goals listed.
Economic Development Plan Outline
1. Overview of current business environment — open space, industrial, commercial, office,
inventory/availability, etc. Sales tax received by square foot.
2. Market factors affecting the business environment
3. Benefits of locating in the Village of Buffalo Grove
o Schools
o Parks
o Municipal Services
o Proximity and Access to Transportation
o Access to jobs
o Tax/Utility/Cost Comparability to Nearby Areas
4. Goals of the Village of Buffalo Grove— intended to be high level
o Bedroom vs. Full Service Community?
o Destination?
o Diversification of Revenue?
o Core Competencies/Industry Clusters
5. Attraction
o Economic Incentives?
o Branding?
- 1 -
o Dedicated Staffing?
o Streamlined Processes
6. Retention
o Business Ambassador Program
o Chamber of Commerce
o Streamlined Processes
7. Targeted Areas for Redevelopment
o Milwaukee Avenue Corridor
o Dundee Road Corridor
o Buffalo Grove Golf Course
o Lake Cook Road Corridor
o Strategic Annexations
8. Resources
o Lake County Partners
o DCEO
o Cook County Bureau of Economic Development
o Public/Private Partnerships
o Financial Resources/Options
9. Measuring Success
o Business Retention Rate
o Vacant Space by category
o Sales tax by square foot, sales tax per capita, sales tax by industry segment
o Number of jobs
Feedback Points
The most important discussion point is the overall goal of what does the Village want to be?
Does the Village want to maintain its current commercial/industrial space with a focus of
redevelopment or does the Village want to be more aggressive in its approach? To be more
aggressive this may include pursing the Downtown Buffalo Grove concept in addition to
identifying potential redevelopment districts such as the Dundee Road corridor, which is
underutilized with several functionally obsolescent structures. Is the Village Board interested in
staff studying the eligibility for TIF or business improvement districts along Dundee Road?
The second area is annexations. There are several pieces of land on Milwaukee Avenue that are
interested in annexation into Buffalo Grove or the surrounding communities. At times these
annexations may not have ideal terms or the current uses may not be ideal; however, for the
purposes of long term development it may be advantageous to annex the properties and lock
down the Village's eastern border. Does the Village Board have tolerance for these annexations?
How does the Board envision a future Milwaukee Avenue corridor between Lake Cook and
Aptakisic Roads.
The last major policy area is the development of a more structured economic incentive program.
Currently, the Village considers economic incentives based on the specific project and the
- 2 -
economic conditions. Staff receives many calls from developers asking what incentives are
available for their project. Without any formal structure in place, incentives are dependent upon
the specific project and value added to the Village in the form of sales tax, property tax or other
community benefit. There are advantages and disadvantages to both approaches. Is the Village
Board interested in establishing more specific economic development incentives that could be
clearly communicated to potential developers?
- 3 -
Water Service Repairs/Replacement 2-I
Overview
Staff will discuss the feasibility and desire of the Board to assume the maintenance of water services from
the B-Box to the street,as well as possible program enhancements for the Public Utility Financing Program.
Attachments
Water Service Maintenance Memo 07-21-14.pdf
Water Service Responsibility Survey.pdf
2000-49.pdf
Trustee Liaison Staff Contact
Trustee Stein Michael J Reynolds,Public Works
....Tuesd.a............J.u.1.........Y 29, 2014
........................................................................................................................D.'scuss.'.o.n...._...Ite.m........2._L...........................................................................................................................................................
Y,
V IL,IILAC IIIr� � 11➢�` � �o
L�' 1 I➢�`I➢�`%,IIL43 C':If�a �
MEMORANDUM
TO: Dane Bragg, Village Manager
FROM: Mike Reynolds, Director of Public Works
DATE: July 21, 2014
RE: Water Service Maintenance Responsibility
Pursuant to your direction, I have conducted some background research and surveyed other
communities with respect to the subject issue and I am pleased to report the following
information and recommendations.
On June 5, 2014 Mrs. Debbie Gross, 806 Prairie Lane submitted an email inquiry to President
Braiman and Trustee Ottenheimer regarding the Village's Code requirement that property
owners are responsible for the maintenance of the water service from the connection to the
watermain to the building. On the same day, the Village Manager received an anonymous email
containing screen shots of a Facebook post from Mrs. Gross soliciting feedback on the issue.
Mrs. Gross has ponding water in her parkway between the sidewalk and the street immediately
behind the curb. Public Works responded to her service request, and a leak on the water service
line going to her house was confirmed. At this point Mrs. Gross was advised that she would be
responsible for facilitating the repair at her own expense.
Background
Village Ordinance 13.04.120 places the responsibility for the maintenance of the entire water
service on the owner of the premises served. This ordinance has been in place since 1984 and
has stood the test of time. This ordinance has been challenged several times during this time
period and the Board has stood firm in support of the Code requirement. That being said, based
upon our survey of 30 surrounding communities, the majority of the communities (23 out of 30)
maintain the water service from the main up to and including the b-box.
Similar to Buffalo Grove, the ordinances in these communities have been in place for decades
and the exact rationale for their Code decision is not known. However, generally speaking the
rationale for a community to provide this type of maintenance could be based on the following
criteria. First, the B-Box is generally located in the village right-of-way (ROW), usually within
the parkway and is a logical and finite point at which the separation of responsibility could occur
with minimal dispute. Second, because the B-Box is commonly used to shut-off water for non
payment of water bills or other enforcement action, it could be argued that this makes the B-Box
a public infrastructure asset, thus the maintenance of the asset(and the line leading to it from the
main) would be the Village's responsibility. Third, because the section of the service from the
watermain to the B-Box is generally within the ROW, the repairs could be more expensive
- 1 -
because of the presence of sidewalks, curbs, roadways, parkway trees (all village assets), and
special permitting and bonding requirements, thus creating a significantly higher financial
burden on the property owner. Finally, because the repair work would occur in the village ROW
and all of the potential conflicts with village assets as described above, it has generally been
viewed as more practical if the local municipality assumed the maintenance responsibility of the
service from the watermain up to and including the B-Box.
In contrast, the rationale for the municipality to not maintain any portion of the water service
could include the following. First, inasmuch as the service is for the sole use and benefit of the
property owner, it is logical that the maintenance of that service be the sole responsibility of that
property owner. This would be consistent with the way we treat sanitary services, driveway
aprons, service walks and other appurtenances within the ROW. This line of reasoning is also
consistent with what other utilities do with respect to their services. Second, it would not be
appropriate for the general tax paying populous to foot the bill for what is clearly a private
service repair and maintenance responsibility. Third, repairs of this type are already eligible for
a low interest loan up to a maximum loan amount of $5,000through the Village's Local Utility
Repair Financing Program (LURFP), which has been in place since 2000. Finally, the cost to
assume such a responsibility could require a water rate increase or additional staff to facilitate
the repairs. Based upon our own experience and the information provided by the survey
respondents, we could experience between 15-55 additional repairs a year, costing between
$30,000 and $220,000 in additional expense, requiring 240 — 1,760 hours to facilitate. Given our
current staffing level in the Water Division this would represent an increase in workload of as
much as 17%.
Recommendation
With regard to the Code itself, it would be our recommendation not to change the current code
requirements pertaining to the responsibility for the connection from the main to the structure.
This would be consistent with past Board action. Thus, staff identified two options for the Board
to consider, should there be a desire to provide additional support to residents facing water
service repair/replacement:
Option 1: Provide coverage for a portion of the repair.
Under this option, the resident would remain responsible for the entire repair. The Village would
provide a funding stipend of 50% of the repair cost with a reimbursement cap of$2,000, or some
other value as determined by the Board. Given the repair volume discussed above, the worst
case cost of this option could be $110,000 in any given year. This would translate to roughly
half of what it would cost for the Village to assume the responsibility for these repairs. Staff
estimates that a $0.08 per 1,000 gallon rate increase would be required to fund this option.
Should the Board choose this option, staff would recommend rescinding the Private Utility
Financing Program (LURFP) for water service repair/replacement projects.
Option 2: Expand the LURFP loan limits.
Typically service repairs can cost between $2,000 and $4,000 per occurrence. Complete service
line replacements can cost $130.00 per foot or higher depending on the site conditions. This
funding alternative would provide financial relief to property owners by increasing the loan
limits from the current $5,000 per occurrence to $10,000 per occurrence, subject to budgeted
- 2 -
funds. While this limit will not cover every scenario, it will provide access to capital for most
repairs. Based on upfront costs of expanding the program, estimated year 1 costs are estimated
to be between $75,000 and $550,000, with a declining recurring investment thereafter with loan
payment revenues to offset new loans.
Staff reviewed the impact of the loan program in the Water Fund Twenty Year Pro-forma. An
annual estimate of$250,000 in loans each year was programmed in the analysis. The repayment
terms were thirty-six months at 5 percent interest. The borrower will be billed bi-monthly as a
component of the water utility bill. Staff believes 5 percent captures both the current interest rate
investing environment(three year treasury note pays 1%)plus a premium for default risk. At the
end of the twenty year analysis, $5 million in loans will be issued, $4.5 million will be repaid,
and the Water Fund will earn $451,148 in interest (less write-offs). The first four years of the
program represent the biggest cash flow risk (significantly less money coming back in loan
repayments than being loaned out).
Please feel free to contact me if you have any questions or wish to discuss this in more detail.
c: Mike Skibbe,Deputy Public Works Director
Dave Haisma,Water Utility Superintendent
Darren Monico,Village Engineer
- 3 -
Village of Buffalo Grove
Utility Service Line Maintenance Responsibility Updated 6/19/2014
Water Service Line Sanitary Service #of Svc.
Community Main to B-Box B-Box to Building Water Meter Building to Main Repairs
Arlington Heights Municipality Property Owner Municipality Property Owner =27/Yr.
Antioch Municipality Property Owner Municipality Property Owner
Bannockburn Municipality Property Owner Municipality Property Owner
Barrington Municipality Property Owner Municipality Property Owner
Buffalo Grove Pfrterf k Property Owner Municipality Property Owner Not Tracked
Crystal Lake Municipality Property Owner Municipality Property Owner =30/Yr.
Deerfield Municipality Property Owner Municipality Property Owner =30/Yr.
Des Plaines Municipality Property Owner Minicipality Property Owner =40/Yr.
Glencoe Pfdport k + r` Property Owner Municipality Property Owner
Glenview Pf6port k + r Property Owner Municipality Property Owner
Grayslake Pf6port k + r Property Owner Municipality Property Owner
Gurnee Municipality Property Owner Municipality Property Owner
Highland Park Municipality Property Owner Municipality Property Owner
Highwood Pf6port k + r Property Owner Municipality* Property Owner =2/Yr.
Lake Forest Pf6port k + r Property Owner Municipality Property Owner
Lake Zurich Municipality Property Owner Municipality Property Owner
Libertyville Municipality Property Owner Municipality Property Owner
Lincolnshire Municipality Property Owner Municipality Property Owner
Lindenhurst Municipality Property Owner Municipality Property Owner
Mt. Prospect Municipality Property Owner Municipality Property Owner =38/Yr.
Mundelein Municipality Property Owner Municipality Property Owner
Northbrook Municipality Property Owner Municipality Property Owner
Northfield Pf dport k 0 Property Owner Municipality Property Owner Not Tracked
Palatine Municipality Property Owner Municipality Property Owner
Rolling Meadows Municipality Property Owner Municipality Both =54/Yr.
Schaumburg Municipality Property Owner Municipality Both
Waugegan Municipality Property Owner Municipality Property Owner
Wheeling Municipality Property Owner Municipality Property Owner
Wilmette Municipality Property Owner Municipality Property Owner =12/Yr.
Winnetka Municipality Property Owner Municipality Property Owner =30/Yr.
30
* At property Owner's Expense.
RESOLUTION NO. 2000- 49
A RESOLUTION ESTABLISHING A LOCAL UTILITY REPAIR FINANCING
PROGRAM FOR THE VILLAGE OF BUFFALO GROVE
WHEREAS, the Village of Buffalo Grove is a Home Rule unit pursuant to the
Illinois Constitution of 1970; and
WHEREAS, the Village of Buffalo Grove Resolution No. 78-12 set forth three
basic types of drainage improvements that the Village would financially
participate in; and
WHEREAS, the Village of Buffalo Grove further adopted Resolution No. 96-48
which set forth a fourth type of drainage improvement that the Village would
participate in; and
WHEREAS, the Village now desires to incorporate a fifth type of utility
repair that it will participate in, namely a Local Utility Repair Financing
Program; and
WHEREAS, the Village of Buffalo Grove has determined that certain utility
deficiencies that exist from time-to-time on properties, that if improved, can
serve the general public; and
WHEREAS, the Village of Buffalo Grove has determined that an overall public
purpose is served in assisting property owners with public funds to remediate
identified utility service problems; and
WHEREAS, in order to provide public funds, the Village hereby establishes
a program to assist property owners with public fund financing in order to carry
out approved utility repair improvements.
NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES, ILLINOIS the following:
Section 1. The foregoing Whereas clauses are hereby incorporated herein.
Village Resolutions No. 78-12 and No. 96-48 are hereby amended by adding
thereto a fifth type of improvement that the Village will participate in,
namely local utility repair pursuant to this Resolution. Furthermore, a
Local Utility Repair Financing Program is hereby established as identified
in Exhibit "A" to this Resolution.
Section 2. The Village of Buffalo Grove reserves the right to amend any
aspect of the Program from time to time as it deems necessary.
Section 3. The Program as identified shall be in full force and effect
from and after the passage and approval of this Resolution.
AYES: 5 - Marienthal, Braiman, Hendricks, Berman, Johnson
NAYES: 0 - None
ABSENT 1 - Glover
PASSED: October 16 ,2000.
APPROVED: October 16 ,2000.
ATTEST:
VilKa,,gg Clerk Village President
EXHIBIT "A"
VILLAGE OF BUFFALO GROVE
LOCAL UTILITY REPAIR FINANCING PROGRAM
The Village of Buffalo Grove has previously made a determination that the overall
public good is served, in certain instances, by assisting residential property
owners in improving identified drainage deficiencies that may exist on their
property. In addition, there may be specific circumstances whereby utility
services may fail and such failure could adversely impact the public good. To
that end, the Village hereby establishes a Local Utility Repair Financing
Program. This Program is established as follows:
1. The project to be improved will need to meet criterion established
by the Village for improving failed water or sewer utility services.
2. The Village will commit $50, 000 to this Program with an approved
project eligible to receive up to $5, 000; the minimum program to be
considered must be at least $1, 000. Amounts to be paid will shall
be based upon receipt by the Village of work undertaken as well as
project charges. However, the Village Board, at its discretion, may
approve other amounts based upon circumstances unique to the
project.
3. The Program will be revolving in nature with new funds provided as
outstanding balances are repaid. Programs will be considered on a
first-come-first-served basis.
4. The term of the financing will be for 36 months. Payments will be
billed semi-annually for 1/6th of the principal borrowed plus
interest accrued to date. The amount of accrued interest will be
equal to the average return paid to the Village by the Illinois
Public Treasurer's Investment Fund (Illinois Funds) for the six
month period ending as of the date of the billing on the balance
outstanding, further calculated using a 30-day month basis of
accrual. There will not be a penalty for early repayment.
5. A property owner will be required to execute both a Installment Note
and Trust Deed which will be prepared by the Village's Attorney and
recorded in the county of record. In addition, a Title Search may
be required. These documents are intended to secure the Village's
interest in the financing granted and are the form of security the
Village requires in order to assure itself that any balance due will
be received should there be a change in ownership of the property.
6. Upon evidence of final payment, the Village shall prepare a Release
Deed to clear title to the property which shall be recorded by the
property owner.
7. The cost to prepare and record any documentation, including the cost
for Proof of Ownership, shall be the obligation of the property
owner. Failure to pay any amounts due shall prevent the completion
of the final Release Deed. All fees shall be those as established
from time-to-time by the Cook or Lake County Recorders of Deeds.
The fee(s) due the Village's Attorney shall be based on actual time
and effort incurred to prepare the necessary documents. The fee(s)
due for any Title Search shall be those as billed the Village, which
shall be documented.
The Village of Buffalo Grove reserves the right to amend this Program from time-
to-time including its termination.
Audit: Management Comments 24
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Recommendation of Action
Staff recommends
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Budget Impact Fund/Account Budget Notes
Overview
At the July 7th Board Meeting,the FY 2013 Annual Financial Report(audit)was presented to the Board for
acceptance. The Village's independent auditors, Baker Tilly provided a clean opinion on the financial
statements. A clean opinion is the highest level of opinion and means the financial statements are an accurate
representation of the financial condition of the Village.
Staff will provide the management comments to the Village Board at the Committee of the Whole
meeting.
Attachments
Trustee Liaison Staff Contact
Trustee Ottenheimer Scott D Anderson,
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