Finance Committee Meeting

1 Finance Committee Meeting Minutes 2 Monday, July 28, 2025 3 (Approved) 4 1. Call to Order 5 The July 28, 2025 meeting of the Finance Committee was called to order by Chairperson 6 Bhirdo at 1:00 P.M. 7 8 2. Roll Call 9 Present: Chairperson Denise Bhirdo; Trustees Louise Howson and Brigid White; Citizen 10 Members Mike Laszkiewicz and Andy Woerfel (Woerfel left the meeting at 3:00 PM). 11 12 Staff: Village Administrator Julie Schmelzer, Finance Director/Treasurer Vlad Gannik, and 13 Clerk Sue Clarke 14 15 3. Approval of the Agenda 16 Motion to approve the agenda as presented made by Howson, seconded by Laszkiewicz. Motion 17 carried unanimously. 18 19 4. Approve Meeting Minutes: June 23, 2025 20 Committee members reviewed the minutes from the June 23, 2025 meeting. Laszkiewicz 21 inquired about the process for following up on open items from previous meetings. Schmelzer 22 noted that typically they go through the minutes to identify what's left and prepare for the next 23 meeting, but the minutes were approved late this time so there wasn't sufficient time to 24 complete that process. Bhirdo noted errors in the minutes. 25 26 Motion to approve the minutes as amended made by Howson, seconded by Laszkiewicz. Motion 27 carried unanimously. 28 29 5. Comments, Correspondence and Concerns from the Public 30 Nick Deviley addressed the committee regarding a proposed development project. He 31 discussed a sewer and water lateral project he has been working on with Megan Barnes, 32 Utilities Director, to bring to his farm, which he estimated would involve about $3 million in 33 infrastructure that he and his wife would be investing in the village between next spring and 34 next fall. 35 36 Deviley further discussed his development project, estimating the cost would in total be 37 between $26 million (65 units at $400,000 per unit) and $32.5 million (at $500,000 per unit). 38 He indicated the average home would range from around $275,000 on the low end to whatever 39 a 2,500 square foot house might cost on a quarter acre at the high end. Deviley asked if the 40 village would consider providing any financial assistance for the development project. 41 42 Laszkiewicz then made a lengthy commentary on the village's budget planning process. He 43 expressed concern about the substantial surplus ($557,000) reported by the auditor at the end 44 of the previous year, especially considering the near 11% tax increase that had been 45 implemented. He noted that the tax increase had been intended to raise about $400,000 in 46 revenue based on advice from financial experts who believed it was necessary to keep the 47 village financially whole. Bhirdo questioned the accuracy of a statement attributed to 48 Laszkiewicz that "financial experts" had advised raising taxes, noting that financial advisors 49 typically do not tell municipalities whether to raise taxes. 50  Finance Committee Meeting 7/28/25 -Approved 1 Laszkiewicz explained that he believed the favorable variance came from two areas: $425,000 2 from the TID (Tax Incremental District) and about $400,000 in underspending by department 3 directors. He emphasized that the budget planning process, which continued through October 4 and November, had made it difficult to forecast the year-end surplus with only two months left 5 in the fiscal year. 6 7 Laszkiewicz stressed the need for better forecasting of expenses and revenue for the TID and 8 improved budget forecasting processes for departments. Laszkiewicz noted that the financial 9 expert from Baird had advised increasing taxes because of an anticipated negative impact from 10 the TIDs, but the actual result was positive, which was difficult to understand. He emphasized 11 the importance of better budget management going forward, as residents expect better financial 12 stewardship. Bhirdo questioned whether Baird had specifically advised increasing taxes 13 because of anticipated negative impacts from the TIDs. 14 15 Chair Bhirdo suggested this discussion would be more appropriate when discussing the budget 16 later in the meeting rather than during public comments. 17 18 6. Discussion/Action Items 19 a. Update on Sales Tax/Fee Schedule 20 Gannik explained that not every item on the fee schedule is subject to sales tax. Only 21 reservations, rentals, and concessions are taxable. He noted the current practice is to back out 22 the sales tax from the posted fees rather than adding it on top of the fee. 23 24 The committee discussed how this creates inconsistency, particularly for nonprofit 25 organizations. Gannik explained that nonprofits must show documentation that they don't pay 26 tax, but currently, they end up paying slightly more than individuals because the tax is backed 27 out for individuals but nonprofits pay the full amount. 28 29 Committee members discussed whether it would be clearer to simply state fees as the base 30 amount and then add tax on top. White suggested this approach would be simpler, noting that 31 nonprofits would just pay the flat rate without tax by using the tax-exempt function during 32 processing. Howson raised a concern about reporting to the state and proper documentation of 33 tax-exempt transactions. 34 35 Motion that facility rentals and park and special rentals fees do not include sales tax (with 36 sales tax to be noted separately) made by Howson, seconded by White. Motion carried 37 unanimously. 38 39 The committee then discussed how to handle concession sales at the ice rink and marina. They 40 debated whether adding tax to small-dollar transactions (like $1 candy bars) would be practical 41 when dealing with cash transactions, especially when children are involved. Concerns were 42 raised about whether seasonal, part-time staff managing concessions could handle calculating 43 tax and making change. 44 45 Motion that Marina and Ice Rink concessions prices will be plus tax made by Bhirdo, seconded 46 by Laszkiewicz. Motion carried unanimously. 47 48 b. Update on General Fund Qtr 2, 2025 Actual to Budget 49 Gannik presented the 2nd quarter budget to actual figures. Laszkiewicz expressed appreciation 50 for the report but suggested improvements, including adding a summary with a variance 2  Finance Committee Meeting 7/28/25 -Approved 1 analysis, calendarizing the budget by month to better track progress and highlighting spending 2 variances. He felt department heads should be able to provide monthly projections. 3 4 Bhirdo responded that such detailed forecasting would be difficult without input from all 5 department heads about their planned spending for the remainder of the year. 6 7 Laszkiewicz again emphasized that the issue from the previous year was that department heads 8 ended up over 20% under budget, which wasn't known when taxes were raised. He stated the 9 village needed to hold department heads accountable for their projections, so we didn’t have a 10 surplus. 11 12 Schmelzer explained that given the village's small staff size and multiple responsibilities, 13 monthly forecasting is challenging. She explained the department heads can’t provide accurate 14 projections on a monthly basis because much of what is done is contractor contingent, and due 15 to our location, the village is at the mercy of the contractors and staff may not always know in 16 advance when the contractor will be able to provide the service. And, often times, committees 17 will add, or remove projects, which were not budgeted. 18 19 The committee discussed the financial reports presented by Gannik. Some confusion arose 20 regarding how to interpret the net revenue over expenditures and the presentation of budget 21 figures versus actuals. Gannik explained that the budget initially had a negative general fund 22 portion of $182,000, meaning expenses were higher than revenue. Additional funds had been 23 transferred from the general fund reserves to balance this. 24 25 Laszkiewicz expressed concern about why the village needed to use cash reserves if expenses 26 were under spent and revenue was recognized. He questioned whether they were getting 27 accurate forecasting of TID impact and department expenditures. 28 29 The committee also reviewed specific department budgets, noting that the Parks Department 30 was significantly under budget at the midpoint of the year. Schmelzer explained this was partly 31 due to seasonal factors, with more park wages typically occurring in the second half of the year 32 during fall events and the department being down one staff person. 33 34 Laszkiewicz spent considerable time questioning last year’s processes, which Bhirdo explained 35 had been resolved with new policies. Gannik clarified Laszkiewicz’s interpretation of a surplus 36 the past year was incorrect, and explained the budget and details revealing there really wasn’t 37 a surplus, as Laszkiewicz alleged. 38 39 Schmelzer requested the committee ‘get back on track’ and noted the agenda item was the 40 Quarter Two Actuals. 41 42 c. 2026 Budget: Preliminary Review and Discussion 43 Gannik presented the preliminary 2026 budget materials. He noted that numbers shown for 44 2026 were currently placeholders identical to the 2025 budget, pending further refinement. 45 46 Chair Bhirdo suggested the committee should aim to reduce the general property tax levy to 47 $2.4 million, which would represent a reduction from the current level. She noted this should 48 be achievable based on her review of the budget. 49 3  Finance Committee Meeting 7/28/25 -Approved 1 The committee then reviewed various revenue line items with minimal comment. They did 2 discuss liquor license revenue, building permits, and intergovernmental revenue, noting that 3 some revenue streams are seasonal and won't be evenly distributed throughout the year. 4 5 Laszkiewicz expressed alarm over the cost of the Administrator, with staff explaining that 6 category actually encompassed all ‘administration’ functions of the Administrative Offices, so 7 it was not reflective of the cost of an administrator. 8 9 The committee also examined various expense categories. They noted some departments like 10 administration were running over budget due to the need for assistance from Baird and the 11 auditor, personnel changes and separation payments for departing employees. The committee 12 discussed electric and gas costs for village buildings and whether the village was securing the 13 best rates through contracts for propane. Schmelzer commented that Gannik was skilled in 14 finding efficiencies and staff would look into whether there was a means for cost savings on 15 propane in the coming year. 16 17 Laszkiewicz expressed concern about the Fire Department and whether there might be 18 accumulated bills or unprocessed payables due to leadership changes. Chair Bhirdo assured the 19 committee that the Fire Department’s Clerk Treasurer was very competent and handling 20 finances properly. Schmelzer stated Goldstone, the interim fire chief, was keeping operations 21 going smoothly. A discrepancy in the Fire Department budget was discussed, with Schmelzer 22 explaining there was a difference of about $7,000 between what the department had requested, 23 what was discussed and approved, and what ended up in the final 2025 budget document. The 24 committee recognized the need to address this shortfall. 25 26 The committee reviewed Public Works staffing, noting that full-time wages were under budget 27 while part-time wages were over budget. Schmelzer explained this was because a staff person 28 had left and wasn't replaced; instead, existing staff received higher wages for additional duties 29 and more part-time hours were added. She noted the Parks, Property & Streets Committee 30 planned to revisit this staffing approach in November. 31 32 Laszkiewicz then questioned the TIDs. He said there was some confusion over them and their 33 numbers. White inquired how the TID monies could be used. Bhirdo explained the basics of 34 a TID and how much money was generally available, and that it is being used to repair roads. 35 36 d. 2026 CIP: Preliminary Review and Discussion 37 The committee reviewed the Capital Improvement Plan (CIP) for 2026. They discussed the 38 beginning fund balance of $3.8 million and potential new funding from bond proceeds ($1 39 million) and grants ($1 million). 40 41 Members questioned whether the beginning fund balance included funds designated for 42 broadband ($3.3 million), and Gannik clarified that only a portion of the broadband funds were 43 included in that balance, as the project spending would be spread over three years. He also 44 added that, as of 2025, the taxpayers were already being taxed for the project. The question 45 arose as to whether the money collected could be used for something else. Gannik explained 46 yes, but it was not advised, with Schmelzer clarifying that the public may see the trustees as 47 unethical to tell the taxpayers we are taxing them for high-speed internet to their door, and then 48 use the monies for something else. 49 4  Finance Committee Meeting 7/28/25 -Approved 1 Bhirdo asked for changes or corrections to the CIP, but hearing none she proceeded to identify 2 several formula errors in the spreadsheet and asked Gannik to correct them. Laszkiewicz 3 expressed that due to the length of the meeting, rather than the committee work through the 4 errors, Bhirdo and Gannik could fix them outside of the meeting. Bhirdo objected reminding 5 the committee it was their responsibility to review everything. 6 7 They discussed various capital projects including: 8 ● The Administration Building project at $3 million. Chair Bhirdo suggested increasing 9 this amount to account for construction cost increases. 10 ● The broadband project, which would use $1 million in 2026 from the previously 11 authorized bond funds. 12 ● The old Public Works building demolition at $75,000. 13 ● Village Hall future renovations at $150,000. 14 15 Laszkiewicz questioned why the village would borrow money if they had money in reserves. 16 White expressed uncertainty with having to bond to get a better credit rating. Bhirdo explained 17 why it was necessary to have restricted funds, and why the village shouldn’t deplete them. 18 19 Laszkiewicz commented that it is very difficult to follow along at the meeting since there was 20 a meeting packet with one set of numbers, and an email with more information. He suggested 21 Bhirdo meet with Gannik before the meetings to coordinate on what the meeting attachments 22 will be and what documents will be referenced. 23 24 Laszkiewicz felt the committee was ‘wasting a lot of time’ and the village needed an easier 25 budgeting process. He asked Gannik if his software was adequate. Woerfel also questioned 26 whether there was better software available and recommended the village look into tools and 27 processes to make the budgeting process more efficient. Bhirdo stated that everyone must bring 28 a computer. 29 30 Howson proposed the committee review what is in the CIP, if it is allocated in the correct year, 31 and if the dollar amount was accurate. 32 33 The committee also discussed the current administration building, with Schmelzer emphasizing 34 the need for a decision on whether to tear it down, as this would affect engineering plans for 35 road improvements in that area, which were currently underway and due in August. Chair 36 Bhirdo suggested the engineer design the roads with safety in mind, even if that meant the 37 building needed to be removed, and said what was left may need to be sold to the adjacent 38 neighbor noting it was too small for a parking lot. White suggested the engineer devise several 39 concept plans showing the road with the building, without, and the land being used as a parking 40 lot. The matter was referred to the Parks, Property & Streets Committee for further discussion. 41 42 The committee reviewed the Parks Department CIP, with Chair Bhirdo noting that the proposed 43 capital projects levy for 2026 was $1.2 million, which was $147,000 over the changes they had 44 made in early spring, and, this did not reflect the budget directive of a zero percent increase. 45 She identified changes including swapping the trail to Ephraim with the Highway 57 Trail, 46 removing Ava Hope Park, moving a lawnmower to 2027, and moving a 2005 truck replacement 47 from 2027 to 2026. 48 To reduce the Parks CIP, the committee agreed to: 49 ● Move the 2005 truck ($75,000) back to 2027 50 ● Move robot mowers to 2027 5  Finance Committee Meeting 7/28/25 -Approved 1 ● Reduce the community center warming house funding from $200,000 to $100,000 2 3 These changes would bring the Parks & Streets Department CIP to approximately $90,000 less 4 than the previous year. 5 6 e. Tax Bill Insert to revise 7 The committee discussed items to include in the tax bill insert. Suggestions included: 8 ● Information about the Administrative Assistant and Village Clerk’s departures from 9 village staff 10 ● Introduction of new staff members 11 ● Information about the new Park Maintenance Building, possibly including an open 12 house event 13 ● Dog license requirements and enforcement 14 ● Request for residents' email addresses to improve communication 15 ● Introduction of elected officials 16 ● New information about the changes in the state’s alcohol licensing for clubs, churches 17 and events 18 19 Laszkiewicz questioned why the village required dog licenses in that people don’t get dog 20 licenses; Bhirdo noted that if more people paid their license, the village would have the money 21 to upgrade the dog park. Howson offered to update the draft tax bill insert based on the 22 committee's input. 23 24 7. Matters to be Placed on a Future Agenda or Referred to a Committee, Official or 25 Employee 26 It was agreed Gannik was to make the necessary changes to the budget and CIP, replace the 27 placeholders with the actual budget data, and the committee meet again in two weeks. 28 29 8. Next Meeting 30 2026 CIP: Review and Discussion 31 2026 Budget: Review and Discussion 32 The next meeting was set for August 11, 2025. 33 34 9. Adjourn 35 Motion to adjourn meeting at 4:48 p.m. made by Howson, seconded by Bhirdo. Motion carried 36 unanimously. 37 38 [NOTE: The audio of the meeting tape was not functioning from approximately 1:30 to 2:15 39 PM] 40 41 Respectfully submitted, Sue Clarke, Village Clerk 6