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2002-07-29 - Finance Committee - Minutes Board or Commission: ❑ Finance committee Document Type: ❑A e g nda 0 Minutes Meeting ate: 07/29/2002 Type of Meeting: ❑ Regular Meeting The Finance Committee met Monday, July 29, 2002. Those in attendance were: Elliott Hartstein, Jeff Braiman, DeAnn Glover, Jeff Berman, Chuck Johnson, Bruce Kahn, and Steve Trilling. In addition, from staff-Bill Balling, Bill Brimm, Ghida Neukirch, Scott Anderson and Carmen Molinaro. Village Treasurer Joe Tenerelli also was in attendance. Prior to the entering into the agenda,the matter of the proposed agreement with Commonwealth Edison on undergrounding certain electric service in the Village was discussed. In addition to installation matters, the agreement would call for Edison to work with the Village in future feeder service as well as service corridor planning. There was discussion on certain of the financial considerations required within the agreement with the direction given to staff to prepare the appropriate ordinance(s) for consideration on August 5, 2002. Golf Course Six Month Report-FY 2002: Scott Anderson provided the Committee with an overview of his report as of June 30, 2002 of ongoing operations at both the Buffalo Grove Golf Club and Arboretum Golf Course. The Report will be recommended for acceptance on August 5th. Carmen provided an additional overview of first half performance and how he views operations in the second half of the year. In addition, his approach toward expense control was given should revenues fall short of expectations. Expenditure cuts suggested by golf staff will take place immediately as identified for the Committee. It was suggested that future round planning take into consideration "average"weather expectations since adverse weather conditions played such an important role in the first half results. A question of the impact of the course softening efforts at the Arboretum was asked and it was noted that the efforts have been viewed favorably by customers, helping the average player to enjoy his/her experience more as well as bettering the experience of the better golfer(in this case, due to the extension of fairways). It was suggested by some that the commitment to softening/course improvement should be ongoing, not just in reaction to complaints. A question on future pricing startegies at the Arboretum once the facilities are completed was asked. In response, it was noted that staff will continue to review pricing and any escalation, if warranted, would be over several years, not immediate. A recurring goal is to increase play levels in priority over raising rates and fees, which may have an adverse impact on total revenue. Also, recent articles have shown that while golf rounds played are down significantly, that trend has been felt most specifically at the high end courses. Care in pricing must be a priority consideration over potentially losing volume. Lastly, Carmen was asked if there should be a premium assigned to having a standing tee time. The response was that there should not be a premium and not having a premium was a positive marketing tool. There being no further questions, it was recommended to proceed with the formal presentation of August 5th to be supplemented by a presentation by Silbar&Associates. FY 2002-2003 Budget Issues: Bill Balling reviewed his budget containment letter dated July 25, 2002 going over both revenue and expenditure issues of the Corporate Fund. While several revenue enhancement options were offered, it was the consensus of the Committee to work with expenditure reductions/deferrals before instituting new taxes or fees. They did agree to adjusting fees to proper levels and staff will continue work in areas such as the review of business and liquor license fees, resident ambulance charges, fees for exempt real estate transfer tax transactions, increasing garage sale permits and the like. Any changes that might be proposed relative to the 2002 Tax Levy will be discussed as part of that process. Going forward beyond, any revenue enhancement will be part of a broader budget discussion and tied to expenditure and service controls and expectations. The use of the Village's undesignated fund balance was discussed and the Committee asked for the policy to again be distributed for their review. In addiiton, uses over the past several years will also accompany the policy. Staff was asked to continue to review long term considerations on matching recurring revenues with recurring expenditure plans. While this year's challenges may be temporary, as well they may not be. Proper planning must be ongoing and proactive rather than reactive. One revenue discussed, that being the home rule sales tax, must be carefully reviewed to make sure any increase does not put local merchants in a less than competitive posture locally; in addition the potential ramification of an increase on the Hines agreement should be understood. On a final matter, it appeared to be the consensus that proceeds from the property sale to Avis will be accounted for as revenue this fiscal year. Also, as part of an expenditure reduction plan, approval would be granted to transfer the identified FY 2001-2002 operation surplus in the Water Fund as identified by staff. Tax Levy 2002 Comments: Bill Brimm gave a very preliminary overview of what might be expected to be seen this fall as the tax levy devlopes for this year. While the operational levies are forecast to increase slightly with initial levies for debt service expected to decline, increases will be noted for the employer costs for all pension programs. The process toward the development of the levy was discussion with the indication that more will be forthcoming over the next few months. Vehicle Sticker/Revenue Diversification: Scott Anderson's memo of July 25th was reviewed. Generally, the Committee members are concerned that the Village's approach toward the enforcement of vehicle sticker sales needs to be continually improved to make sure compliance levels are as high as is practical. Additional work will be required on improving compliance levels, using tools to cross reference residents to purchasing. In addition to other fees discussed, staff was asked to make certain the building related fees were appropriate. FY 2001-2002 Water Rate Analysis: Bill Brimm's memo dated June 27, 2002 providing a final accounting of operating revenue and transfers as well as applicable water and sewer operating expenses was discussed. Various rate and fee assumptions noted in the memo were reviewed and the consensus was to retain current rate and fee policies for the remainder of FY 2002-2003 as well as FY 2003-2004, assuming that the expense profile for the Fund remains similar to that existing. Proposed Amusement Tax/Amusement Rental Tax: Ghida reviewed the proposed ordinances as well as research supporting the logic of the ordinances. After further discussion, the consensus of the Committee was to not entertain the adoption and implementation of each ordinance at this time. All research shall be retained should it become necessary in the future to reconsider. It was suggested that consideration be given to stating publically that the taxes were considered but rejected in the spirit of holding the line on new taxes and fees after review by the Finance Committee. Capital Improvement Plan: Scott reviewed the proposed calendar for the next Capital Improvement Plan cycle. It was accepted but with a suggestion that all projects be reviewed for relevancy, need and cost, considering current budgetary challenges. Update on Health Insurance: Bill Balling provided an update on the staff efforts relative to the review of the Village's health insurance program. More will be forthcoming as issues of plan design, number of options, cost and implementation date(s) are better defined.