President and Board of Trustees

123 Madison Street Village of Oak Park Oak Park, Illinois 60302 www.oak-park.us Meeting Minutes President and Board of Trustees Monday, November 14, 2016 6:30 PM Village Hall I. Call to Order Village President Abu-Taleb called the meeting to order at 6:40 P.M. II. Roll Call Village Trustee Brewer joined the meeting by phone at 7:25 P.M. Present: 4- Village Trustee Salzman, Village Trustee Abu-Taleb, Village Trustee Button Ott, and Village Trustee Lueck By Phone: 1- Village Trustee Brewer Absent: 2- Village Trustee Barber, and Village Trustee Tucker III. Agenda Approval It was moved by Village Trustee Salzman, seconded by Village Trustee Button Ott, to approve the Agenda. A voice vote was taken and the motion was approved. IV. Public Comment Chris Donovan. Mr. Donovan asked if the Village increases fire fighter and police salaries during their last four years of employment to maximize pensions. He also asked what percentage of the $8.4 million in unexpended funds in the Madison Street TIF will go to the Village and how it will be used. Simone Boutet. Ms. Boutet suggested that the language "transfers in budget object class" in the budget document be clarified. She spoke against outsourcing leave management and that the ultimate goal is getting employee back to work. In closing, she questioned the $100,000 incentive in the 2017 budget for the developers of the Lake and Forest project. V. Regular Agenda A. ID 16-338 Village Board Review of the Recommended FY17 Budget. a. Recommended FY17 Budget brief overview and general discussion of budget document b. Pensions c. Review of General Fund Revenues d. Review of General Fund Expenditures e. Review of Internal Services Funds f. Review of Enterprise Funds Village of Oak Park Page 1 Printed on 11/22/2016 President and Board of Trustees Meeting Minutes November 14, 2016 g. Review of Special Revenue Funds .End Overview Village President Abu-Taleb stated that the Finance Committee has met at least four times to discuss the budget. In addition, there have been at least two Board Meetings during which various components of the budget were discussed. All meetings were open to the public. This meeting will summarize what's been reviewed as well as get all Board members up to date with recommendations of the Finance Committee and what staff has put together. Recommended FY17 Budget Brief Overview and General Discussion of Budget Document Village Manager Pavlicek stated that she and CFO Steve Drazner will walk through a Powerpoint presentation for each fund, and summarized the agenda. She described the General Fund as the Village's operating fund. The three Enterprise Funds - Parking, Water and Sewer, and Environmental Services - operate on the user revenue they generate and do not rely on property taxes. Internal Service Funds include the Debt Service Fund, the Self Insured Retention Fund and the Health Insurance Fund. Special Revenue Funds contain miscellaneous sources of revenue such as grants, Farmers' Market, Foreign Fire Insurance and others. Village Manger Pavlicek referred to the General Fund trend, noting that expenditures should be less than revenues. Village President Abu-Taleb noted that within the last 15 years, expenditures have been more than revenue for 12 of those years. Village Trustee Lueck asked how the deficits occurred, as the budget drives revenues. Village Manager Pavlicek stated that when the budget is adopted, expenditures are authorized, but revenues, such as sales tax, etc. are estimated. While the Village does try to lower some of the items within their control, some costs are fixed, such as various contracts, or unanticipated, such as overtime expenses for snow plowing, etc. Village President Abu-Taleb stated that the Village cannot continue on this path. They have cut costs and cut staff by 20%. It has been addressed from the cost side but now needs to be addressed from the revenue side. Village Trustee Lueck discussed transfers between funds. CFO Drazner stated that he likes to justify transfers. He has simplified the interfund transfers in the budget document as well as made them more realistic. Village Manager Pavlicek indicated that the General Fund balance is being built back up. The purpose of that is for the Village to address necessary expenditures in the event of an emergency. Regarding staff, the Village has continued, without layoffs, to utilize through attrition or reorganization of current staffing to right size the organization. It has been difficult, as many departments do not have much excess staffing. Pensions CFO Drazner gave an overview of the three pension funds; IMRF, Fire Fighters and Police. Employees currently contribute 14% to IMRF. Per State Statute, employees contribute approximately 10% to both the independent Fire Fighters and Police Funds. The Village, including unfunded liability, is currently contributing 40-45%; three to four times what they contribute to IMRF. That is to reduce the unfunded liability, as per State Statute, they have to be 90% funded by 2040. The Village's goal is 100%. Village of Oak Park Page 2 Printed on 11/22/2016 President and Board of Trustees Meeting Minutes November 14, 2016 Village Manager Pavlicek commented that there are no salary bumps similar to what the school teachers receive. They receive their negotiated contractual raises, which range between 2.25% and 2.5% annually. Village Trustee Button Ott supported the recommendation of a $1.5 million contribution to the Fire Pension in order for them to catch up to Police. She asked if there was a long term plan in place in order to get to 90%. Mr. Drazner noted that this will be challenging and there is no easy solution to this other than to increase taxes. Village Manager Pavlicek added that the Finance Committee will work with the actuaries in 2017 to discuss a multi-year plan and how to reach various benchmarks. Village President Abu-Taleb commented that the Village is addressing this more aggressively than most communities. He explained that the more underfunded the pension liability, the higher the percentage the taxpayers pay. Safety and security is the prime concern in the community and taxpayers should understand that this benefit is dictated by the State. Village Trustee Lueck stated that some communities are at 10% or 20% and that the State may potentially make some changes to the law. Every time the pay is increased, the pension liability is increased. The Village has control over the number of its police officers. She asked how many the Village needs to keep the community safe and noted that Oak Park has a significantly higher number than other communities. She also asked how closing one of the fire stations would impact response time. She stated that this budget path is not sustainable long term and wanted to know what those numbers mean to the taxpayers. Village Manager responded that they will look into staffing levels during the 2017 discussions mentioned earlier. Review of General Fund Revenues CFO Drazner stated that the Village's primary revenue is property tax, which is budgeted at $15.2 million. He described other major revenues such sales tax, budgeted at $4.2 million, use tax at $1.3 million, real estate transfer tax at $3.2 million and State income tax at $5.3 million. Other sources of revenue include user fees, such as business licenses and building permits. Village Manager Pavlicek clarified that parking citation revenue also goes into the General Fund. Village Trustee Brewer joined the meeting by phone. Review of General Fund Expenditures CFO Drazner stated that the combination of Personal Services and Fringe Benefits is $45 million and is the majority of the operating expenses. Other expenditures are typical governmental organization expenses such as materials, supplies, contractual services and capital outlay. Also included are grants to various non-profits and partner agencies. Village Manager Pavlicek added that those grants will be discussed during the December 5 Board Meeting and will be consistent with previous years with the exception of the Oak Park Area Arts Council, which is being reorganized. She noted that in terms of Community Relations staffing, this was partially addressed in the 2016 adopted budget, as an intern has come on board. In addition, staff is beginning recruitment for one full time employee for that department in order to continue to be where the Village needs to be in terms of activities related to functions of Community Relations. There is also an approximately $90,000 increase under materials and supplies within the Police Department budget in order to to begin a pilot program and deploy for all on-duty staffing tasers as a less lethal option, as recommended by the Chief of Police. Village Trustee Salzman requested that a progress report and discussion be put on an Village of Oak Park Page 3 Printed on 11/22/2016 President and Board of Trustees Meeting Minutes November 14, 2016 Agenda once the Community Relations Department is fully staffed. Village Trustee Lueck asked for a similar Agenda Item regarding the role of tasers. Review of Enterprise Funds CFO Drazner stated that these funds are run similar to a business in that the user fees should cover the expenses. He added that separate debt services and capital improvements are budgeted within these funds. Environmental Services is being budgeted at a deficit of $123,000 for next year. However, there is currently a healthy fund balance of $1.4 million and a balance of $1.2 million is projected at the end of 2017. Village Manager Pavlicek clarified that this has allowed the Village to mitigate the residential rate increases with Waste Management. The fund has been allowed to build modestly, knowing that a new waste collection contract would pass on their costs. This way there is not as big of a spike in the rate that the residents are paying. CFO Drazner stated that a deficit of slightly over $1 million is budgeted for the Parking Fund. This is due to a transfer into the Self Insured Retention Fund. Ideally, that fund would receive its revenue from the General Fund, but the Parking Fund has the healthiest reserve balance. There should be $2.7 million in reserves by the end of 2017. Village Manager Pavlicek noted that there is also a $1 million transfer from the Water and Sewer Fund into the Self Insured Retention Fund. There was a discussion regarding that fund. Village Trustee Salzman noted that changing coverage does not seem to be in the Village's economic interest. Village Attorney Paul Stephanides added that the general liability is down from $2 million to $750,000. There was a discussion regarding why that fund is in the deficit position and various alternatives to change that. CFO Drazner stated that the Water and Sewer had a year end balance of $1.4 million and noted that this includes liquid assets only. A deficit of close to $1 million is budgeted and will be reduce to $.5 million at the end of 2017. Village Manager Pavlicek noted that this is capital, not operating, expense due to expenditures for the 100 year old infrastructure. Village Trustee Lueck asked about next year's water rates from Chicago. Director of Public Works John Wielebnicki stated that he has been in contact with the City of Chicago. Their rates will be raised on June 1 of the next year and be based on the past year's CPI, which is currently 1%. He is confident that the rates will be reasonable. The Village will be going into year three of a five year rate increase and the goal is to get the fund balance up to $2 million within five years. Internal Services Funds Village Manager Pavlicek stated that these are the Debt Service Fund, Health Insurance Fund and Self Insured Retention Fund. CFO Drazner stated that there is $11.5 million budgeted in the Debt Service Fund for next year's CIP Plan. A $4.5 million tax levy is also budgeted. In addition, the Village will levy $1 million on behalf of the Library and be reimbursed. He referred to the expenditures and noted that those are existing payments of bond issues. The prior year ended with a balance of $600,000 and will end this year at close to $1.8 million. By end of 2017 it should be at $2.4 million. There was a discussion regarding all taxing bodies coordinating their capital expenditures. Village of Oak Park Page 4 Printed on 11/22/2016 President and Board of Trustees Meeting Minutes November 14, 2016 CFO Drazner commented that the Health Insurance Fund's main expense is payment of claims. Revenues are employee contributions, however, the majority of the expense is funded by the Village. Village Manager Pavlicek added that per State Statute, retirees may participate but pay 100% of the premiums. CFO Drazner noted that a large portion of the Self Insured Retention Fund goes to the Village's premium payments for stop loss insurance and actual claim payouts. There is a fairly large negative reserve balance and estimates that it will be at a deficit of $2.5 to $3 million by 2017 year end. Special Revenue Funds Village Manager Pavlicek noted that these funds includes various grants and TIF funds. She noted that the Harlem-Garfield TIF ends December 31, 2016, with a final year of tax collection in 2017. Allocations from TIF Districts go to all taxing bodies on the tax bill. CFO Drazner added that the Village's portion of unexpended funds should be approximately $75,000. Village Trustee Lueck asked if the Village recouped any funds from their investment in Volvo. Director of Development Customer Services Tammie Grossman stated that pursuant to the Auto Barn redevelopment agreement, the Village will collect 100% of their sales tax revenue until they reach $50 million in sales, which she anticipates will be next year. After that, there is a split of tax revenue between them and the Village. Village Manager Pavlicek stated that the Madison Street TIF will end December 31, 2018, with final increment collection in 2019. She discussed the 2015 expenditure of $6.3 million related to an intergovernmental agreement with D97. In 2016, $8.6 million was budgeted tor economic development and initiatives. To date, only costs for engineering of the design and other remediation work has been expended. An RFP has been issued for the property at Oak Park and Madison; any anticipation related to that development is being deferred into 2017. Staff is recommending placing the appropriation in the budget in order to address this at the decision making point. There was a discussion regarding transfer of funds into the CIP Fund. For the sake of transparency, Village President Abu-Taleb discussed TIF balances and expenditures. He also noted that the Joint Review Board meets every year to discuss the TIFs. These meetings are open to the public. He added that the Village is trying to serve the community in a sincere and transparent way. CFO Drazner stated that he keeps detailed records and the yearly TIF Controller Reports are on the Village website. Village Manager Pavlicek gave a brief overview of the Downtown TIF. The increment is pledged in very specific ways pursuant to the Village's settlement agreement with the School Districts 97 and 200. The balance is projected to be slightly over $8 million in 2017. She noted that during 2015-2016, there were discussions between the Village and two school districts regarding the latest amendment to the agreement, resulting in the Village being allowed to retain $3 million of the TIF increment for environmental remediation for the Elevate Oak Park project. The Village and staff knew there was an environmental issue, however the State of Ilinois' initial direction to correct that was modified due to changes with the State Budget process. This substantially changed the cost for that. There are also a number of bond principal and interest payments that are allowed to be paid out of the TIF, primarily for the parking garage facilities in the downtown. This TIF will end December 31, 2018, with 2019 being the last year of increment coming in. She also noted that when the budget was initially presented to the Finance Committee, it included a $100,000 incentive for Vantage Oak Park. Their request has since been withdrawn and will be removed from the final budget document. Village Village of Oak Park Page 5 Printed on 11/22/2016 President and Board of Trustees Meeting Minutes November 14, 2016 President Abu-Taleb discussed sites covered by the Downtown TIF and how increments are distributed. Village Manager Pavlicek thanked all Department Directors and CFO Drazner for their work. She gave dates of future meetings, with adoption of the budget on December 5. She gave the location of the budget on the Village website. Villager President Abu-Taleb also thanked the Directors for their work. VI. Adjourn It was moved by Village Trustee Button Ott, seconded by Village Trustee Salzman, to adjourn. A voice vote was taken and the motion was approved. Meeting adjourned at 8:25 P.M., Monday, November 14, 2016. Respectfully Submitted, MaryAnn Schoenneman Deputy Village Clerk Village of Oak Park Page 6 Printed on 11/22/2016