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2009-07-27 - Finance Committee - Minutes Board or Commission: ❑ Finance Committee Document Type: 0 A e g nda 0 Minutes Meeting ate: 07/27/2009 Type of Meeting: ❑ Regular Meeting The meeting was convened at 6:40pm 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, Deputy Building Commissioner Brian Sheehan, Deputy Building Commissioner Carol Berman, IT Director Robert Giddens, and Assistant Finance Director Katie Skibbe. Sir Month Financial Performance Report was presented by Scott Anderson. The Village's overall fiscal operations are under strain as the current economic climate has caused a decline in revenues. Staff has worked diligently to reduce expenses by deferring equipment purchases, deferring filling vacant positions, eliminating most training expenses, and reducing operating expenses where possible. Trustee Braiman asked if we were also deferring computer purchases and staff said that we were. President Harstein asked the staff to look into what other towns have a utility tax and create projections on the impact of implementing this new tax. All Trustees concurred that cost containment was a first priority before looking at new taxes, but we should have the information available. Trustee Braiman said Village employees needed to contribute more towards the health insurance plan and Trustee Berman mentioned that we needed to balance the potential of freezing wages with health insurance cost increases. Trustee Berman said that the while the situation isn't good it is manageable and is actually better than he anticipated. Discussion on Development of the Capital Improvement Plan and the 2010 Budget was presented by William Brimm. The 2010 Budget calendar was distributed along with a perspective on 2010 revenues and expenses. Discussion of Fund Balance Reserves and Policy Recommendation was presented by Scott Anderson. The current policy requires Unreserved/Undesignated Fund Balance to equal, at a minimum, 35% of the subsequent year's Corporate Fund Budget; the recommendation is to reduce the amount to 25%. Trustee Berman asked whether there was any sense in changing the policy to 30%fund balance and revisiting at the end of the year. Staff responded that fund balance will most likely be at 29% at the end of this year and would therefore be in violation of the policy if it was changed to 30%. It was also reiterated that this is only a policy and staff strives to have a fund balance over 25%to be used in future emergencies. The intent of lowering the threshold is in no means a signal to staff to eliminate constraints on spending. There was a general consensus to move forward with this initiative. Preliminary Discussion of 2009 Tax Levy was presented by Scott Anderson. Information was presented concerning the investment performance of the pension funds which will increase the tax levy for 2010. President Hartstein made a point that this is impacting all communities and residents should be aware and contact their representatives in Springfield. Trustee Braiman mentioned that residents are going to assume that their property taxes will decrease because their home value has decreased and this is not the case. Trustee Berman suggested we include something in the Village newsletter addressing this issue. Trustee Braiman suggested we might want to include something on Channel 6. January 1, 2010 Adjustment to Water Rates was presented by William Brimm. Based upon the data provided by staff that reflects changing consumption patterns, a rate increase of$.40 per 1000 gallon was recommended. The flat fee was proposed to be reduced $ .10 to $1.90. Trustee Braiman asked that Village staff do a survey of other Village's and their water rates. The modification to the rate structure was approved. January ], 2010 Adjustment to Metra Daily Parking Fees was presented by William Brimm. Metra was initially contacted to approve a rate increase of fifty cents, but Metra has responded that only a twenty-five cent increase will be allowed. The cost of the bi-monthly parking pass will not be changed. Trustee Trilling asked if the Village has any reserves to maintain the parking lot in the future and staff responded that about 160,000 was held in reserve for future site maintenance. Trustee Stone said we should work with Metra to get more trains running on the line and increase the stops so that we can fill the lot. Trustee Berman responded that Canadian National owns the line and Metra is constrained by contract to run only 22 trains a day. Metra is interested in running more trains on that line, but between financial constraints and contractual constraints it is not currently feasible. The largest cost associatied with the Metra parking lot is the lease payment to ComEd. Metra will be working with ComEd to try and reduce the obligation. Staff Report on Audit Management Letter was presented by Scott Anderson. Staff addressed all points raised by the independent auditor in the completion of the Comprehensive Annual Financial Report. Trustees Braiman and Sussman inquired about the adequacy of the financial software. Staff responded that the current platform is dated and that a CIP project is currently in the queue for an upgrade (or new system)if the conditions warrant. Overview of Contractor Registration Program was presented by Carol Berman. The registration program provides an avenue to track contractors when the Village has problems with contractors. Contractors who are not licensed by the state would be charged $100 and would need to provide a certificate of insurance prior to doing work in the Village. Trustee Stone wanted to know if this program would cover landscapers also since they frequently use hazardous chemicals. Staff responded that this would not include landscapers since it would be so difficult to enforce the program and that all companies that use pesticides and herbicides must be licensed by the state. Trustee Stone felt this would help set a standard for landscapers and we could enforce a steep penalty if they failed to register. The intent of the registration program would be contractors working on permitted type improvements. Trustee Braiman mentioned that if they are registered by the Village we need to make sure that the residents don't assume we are making any claims to the quality of work performed by the contractors. Trustee Trilling mentioned that the registrations should be done annually so you send a letter once a year and contractors aren't expected to keep track of their renewal date. Trustee Trilling also asked if this program can be administered with the current staff and Carol Berman responded that it could. Trustee Trilling suggested that if we have a problem having contractors close out open permits, the Village could require a bond deposit to give them an incentive to close the permit and get their money back. Trustee Braiman suggested we refuse to issue a transfer stamp to anyone with an outstanding permit. Reinstitution of Vehicle Sticker Program was presented by Scott Anderson. Trustee Stone mentioned that this program brings in a lot of money and could remove the need for the money from Off-Track Betting. Trustee Berman responded that the Village has already put proceeds from the original vehicle sticker program on the tax levy and we would not be reducing the tax levy by an equal amount. In addition, there was a chronic significant level of non-compliance with the program. Trustee Stone mentioned that she had gotten letters from residents asking the Village to bring back vehicle stickers instead of allowing Off-Track Betting in the Village. Trustee Berman responded that he received many more e-mails complaining about vehicle stickers when the program was in place. Trustee Braiman said it was a breach of faith to bring back vehicle stickers. Staff was advised to not reinstitute the program. House Bill 255& Video Gaming Act was presented by William Brimm. Trustee Braiman asked if we could designate an area where video gaming is legal and have the rest of the area be illegal. Staff responded that guidance on these issues hasn't been given by the state yet. President Hartstein responded that creating illegal and legal areas would create an inequitable situation between different businesses in the community. Trustee Berman asked if we needed to hurry up and do something about this or if we could wait and see what guidance we get from the state. Staff responded that most likely it will be awhile before the state sets up the master computer to police these machines. President Hartstein asked that we create a simplistic ordinance stating that you cannot install a video gaming machine without the Village Board's permission. Technology Audit—Staff Review was presented by Robert Giddens. Trustee Stone remarked that Prescient Solutions found several vulnerabilities in our system that weren't relevant. Trustee Braiman asked about Lotus Notes and whether it was a technology that needs more staff to operate. He also questioned whether we'd be able to have a smaller IT department if we changed programs. Staff responded that the Village has a very lean IT department and changing software systems would not free up any staff time. Trustee Braiman also asked if the Village would have a problem operating if any IT staff were to seek other employment Staff responded that the Village would move forward without problems because the data is more important than the house that the data is in. President Hartstein mentioned that he was concerned that the Village isn't staying ahead of the curve and we will be at a disadvantage when interfacing with other technology in the marketplace. Trustee Stone mentioned that the technology audit was done two weeks after the tower fell which was a poor time to conduct the audit. She also mentioned that Rob wasn't given a chance to speak to the audit before it was presented to the board. Staff responded that it was good idea to have someone outside of the system to review it and the IT department did learn things from the audit. Staff stated that improvements to systems can always be made, but it is a policy decision as to how much additional time and additional resources should be devoted to technology enhancements/changes. Discussion of the Amendment to Edward Hines Lumber Tax Sharing Agreement was presented by William Brimm. Staff was directed to amend the current agreement to reflect the change in the distribution formula to 60/40 (Hines/village respectively)from the current formula of 80/20. In lieu of the favorable change for the village, the village has agreed to eliminate the guaranty clause (450K) of the agreement. Implementation of Purchase Card Program was presented by Katie Skibbe. The board expressed concern over the proposed credit limits. Staff agreed to reduce the monthly credit limit to $1,000 and limit distribution to department supervisors. A consensus to move forward on a test basis with this program was reached. Compensation Study—Pay Scale Recommendations was presented by William Brimm. The Trustees were highly in favor of changing the pay plan to a merit based plan and wanted to see defined guidelines as to how the merit plan was to be implemented. The Board agreed on the basis of the study and the positioning of employees within the market (80 %ile). The Trustees wanted to know how much the pay scale changes were going to cost the Village if they were to follow the recommendation to ensure that all employees were at the proposed minimum of the plan. Staff responded $27,000. Trustee Trilling made a comment that increasing those employees who are currently below their minimum range was unfair to other employees and create animosity within departments. A consensus was reached to go forward with the next step towards creating a merit based plan and adjusting the pay scale recommendations with the assumption that the Trustees will be able to control the cost of the plan going forward. Staff reiterated that the recommendation this evening is to set the pay ranges. Other than the recommendation to reset a few positions to the minimum, no additional dollars will be released until a performance plan is in place. Other Business Staff discussed the application of web streaming board meetings and the costs that were associated with the different technologies. The Board chose to pursue the services that could be provided by our current videographer. The meeting was adjourned at 11:30.