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2009-10-12 - Finance Committee - Minutes Board or Commission: ❑ Finance Committee Document Type: 0 A e g nda 0 Minutes Meeting ate: 10/12/2009 Type of Meeting: ❑ Regular Meeting Minutes of the Finance Committee Meeting held 10/12/09. The meeting was called to order at 6:35 p.m in the EOC conference room. Present were President Hartstein, Trustees Jeff Braiman, DeAnn Glover, Jeff Berman, Steve Trilling, Lisa Stone, Beverly Sussman, Village Clerk Jan Sirabian, and Treasurer Joseph Tenerelli. Staff present were- Village Manager William Brimm, Deputy Village Manager Ghida Neukirch, Finance Director Scott Anderson, Police Chief Steve Balinski, Director of Public Works Greg Boysen, Sergeant Mike Szos, Village Attorney William Raysa and Assistant Finance Director Katie Skibbe. Guests included Christopher Yamaya from AECOM USA, Inc. Water Fund Capital Project- Mr. Brimm provided an overview of the new Capital Improvement Project—Well at Reservoir#7. This project involves the construction of a deep well to give the Village an emergency redundant water source if the connection to the Northwest West Water Commission(NWWC)is temporary inoperable. Brimm stated that the most recent issue regarding the replacement of an air valve demonstrated the potential exposure of the village's water supply if a more significant repair was required. Brimm indicated the NWWC is evaluating interconnects between joint venture partners that would serve to redirect water flow between communities if the main connection from Evanston failed. Trustee Trilling inquired as to how the well installation would affect the aesthetics of the area and the distance the well would project out of the ground and related maintenance issues with having the well outdoors and susceptible to the elements and vandalism. President Hartstein also expressed concerns about the security issues. Greg Boysen responded that the well will have an alarmed hatch. Trustee Braiman asked if the well would create a lot of noise and wanted to know if there was somewhere around where he could go see an example of this. Village Manager Bill Brimm responded that the unit is relatively quiet and there is currently a similar unit on the Arboretum Golf Course. The pumps would only be active upon an emergency and would not run continuously. Trustee Berman asked about the chances that the Village will spend $1 million on this project and then still have to give NWWC additional monies for their redundancy project. Trustee Glover also asked about whether the NWWC system is aged or not. Village Manager Brimm responded that NWWC has done a wonderful job of keeping up with the system, but it is aging. Trustee Trilling inquired as to whether we could share this with Long Grove and share the cost. Mr. Brimm and Mr. Raysa responded that Long Grove would then become a wholesale customer of Buffalo Grove and the Village would lose its ability to restrict extraterritorial sales of water. The Board came to a consensus that we should move ahead with the project. Capital Improvement Plan was presented by Finance Director Scott Anderson. Trustee Trilling was concerned about the price of the Buffalo Grove Golf Club HVAC unit. Since the Village pays for electricity (not the tenant), Trustee Trilling saw a benefit to purchasing an energy efficient unit. Trustee Berman requested that we make sure we continue to keep residents informed about the drainage improvement project that we are doing. President Hartstein asked what the current figures are on the Motor Fuel Tax Fund and Trustee Trilling said that our roads are extremely customer facing and something people can be proud about. Trustee Trilling also made a statement saying that once the economy turns around we need to go back and start building reserves up again. Implementation of a Utility-Based Tax was presented by Village Manager Bill Brimm. Trustee Berman said he thought they were predicting a reduction in gas prices this year and staff responded that while that is true, if the Village levied the tax on therms it would protect the Village and the residents from gas price fluctuations affecting the tax amount. Trustee Braiman requested village staff make a determination of what the average cost for each resident will be. Trustee Berman remarked that a spring implementation would be ideal so it doesn't impact residents in the heart of winter. Trustee Braiman said that if we are going to implement a new tax, we need to make sure that we are as lean as we can be on expenses and that he would prefer to tax on the therms rather than the dollar amount. Staff stated that the utility tax initially would only be replacing about 75% of the revenue currently lost to declines sales and income tax. All department directors will continue to be challenged with holding the line on expenditures. A utility tax, besides replacing lost revenue, will afford the departments some ability to continue to fund capital reserves. Trustee Braiman requested that we look into implementing a declining scale on the tax to reduce the effect the tax will have on businesses that use a lot of gas. Trustee Berman brought up that it's a struggle to implement a new tax that isn't tax deductible while property taxes are tax deductible. President Hartstein said that the furor over real estate taxes is really amazing and then while rationally it makes sense to raise property taxes, people will have a very negative reaction to it. Additionally, we may receive some property tax relief if the Illinois Legislature changes the amortization period of pension liabilities. Trustee Trilling brought up the point that a utility tax will affect people who are renting and it is based on use. General consensus was reached that Village staff should go forward with the Utility Tax. FY2010 Budget Development was presented by Village Manager Bill Brimm. All Trustees concurred that we need a pay freeze for 2010. Trustee Trilling asked if we have forecasted who may retire next year. Staff indicated that there did not appear to be many planned retirements at this point in time. Directors will continue to look for opportunities to reduce, or modify positions, as retirements warrant. Calendar 2010 Health Insurance Update was presented by Village Manager Bill Brimm. FY2009 Tax Levy— Truth in Taxation was presented by Finance Director Scott Anderson. Anderson stated that the village would have to hold a public hearing as the truth in taxation calculation represents an 8.54%increase in the 2009 levy as compared to the 2008 extension plus abatements. Some discussion ensued about the ramifications of the IL legislature passing the pension amortization bill. Old Business Adjustment to Water Rates was presented by William Brimm. A recommendation was provided to raise the water consumption rate to $3 per 1,000 gallons based upon usage declines driven primarily by weather and the effects of conservation. Trustee Berman remarked that Buffalo Grove is still low compared to other communities. A general consensus was reached to go ahead and raise the water rates. Home Rule Sales Tax—Annual Update was presented by William Brimm. A recommendation to continue was received. Automated Red Light Enforcement Program was presented by Police Chief Steve Balinski. Trustee Braiman wanted to know what the cost was based on and Chief Balinski responded that the cost to the Village is based on the number of violations. Trustee Stone wanted to know if there was any truth to the newspaper articles that say that rear-end crashes increase at red light intersections. Trustee Braiman remarked that rear-end crashes are less harmful than other crashes. Trustee Stone wanted information on crashes that take place farther than 30 feet from the intersection. Village Manager Bill Brimm said he would call Gatso for information on Palatine. Trustee Berman had questions about what intersections we would use since Cook County is not currently issuing permits and it looks like the top five intersections are in Cook County. Staff responded that the list provided isn't listed in order of most crashes and the only intersections we can't currently put cameras on are the intersections on Lake Cook Road. Trustee Stone said that these companies and their equipment are regulated in other countries, but not in the United States and inquired as to whether this concerns the Chief. Chief Balinski responded that regulations are beginning to be formed through the Illinois Chief's Association. Trustee Sussman asked whether any studies have been done to look at whether traffic decreases on the streets when red light enforcement starts and whether the businesses on those roads suffer. Chief Balinski said that he doesn't know of any studies, but he pointed to Rand Road which has several red light cameras and it still sees an extraordinary amount of traffic. Trustee Berman said that if we can't set up the red light cameras at the highest crash locations, then we are setting ourselves up to fail. Trustee Braiman said that we need the numbers of which intersections are the worst. Trustee Berman remarked that we need to move slowly to justify ourselves to the public. Trustee Braiman encouraged staff to work with Arlington Heights to get a red light camera at the Lake Cook/Arlington Heights Road intersection. A general consensus was reached to work with Gatso to get the intersection studies done. Implentation of Motor Fuel Tax was presented by Village Manager Bill Brimm. The Village Board asked if there is any way we can annex the Super America and staff said that we have looked into that. President Harstein asked what the lead time is for this tax and staff responded that it is locally administered and would not have a large lead time. Consensus was reached to keep the Motor Fuel Tax as an option recognizing that the Motor Fuel Tax is not fully funding the entire program as determined by independent pavement analysis. The meeting was adjourned at 9:35 p.m.