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FINANCE COMMITTEE 2013/09/30 Minutes The City of Lake Forest FINANCE COMMITTEE Proceedings of the September 30, 2013 Meeting 6:00 p. m. – MS Building – Training Room I. Call to Order and Roll Call Mayor Schoenheider called the meeting to order at 6:17 p.m. Present: Chairman Pandaleon, Mayor Schoenheider, Aldermen Novit, Waldeck, Moore, Reisenberg, Tack, Palmer and Adelman. Absent: None. Quorum present. There were approximately 10 present in the audience. Staff present: Robert Kiely, Jr., City Manager; Elizabeth Holleb, Finance Director; Diane Hall, Assistant Finance Director; Michael Thomas, Director of Public Works; DeSha Kalmar, Human Resources Director; Jim Held, Police Chief; Jeff Howell, Fire Chief; Mary Van Arsdale, Director of Parks and Recreation. The Committee discussed the purpose of the meeting was to identify possible solutions to focus on for economic uncertainty in future budget years. The City is in a good position now, but will need to look for possible ways to generate additional funding or cut costs. No decisions would be made, but staff will be given options to bring back to the Committee at future dates. II. Consideration of Minutes from the Finance Committee Meeting Held on July 15, 2013 Alderman Reisenberg made a motion to approve the minutes from the Finance Committee meeting held on July 15, 2013. The motion was seconded by Alderman Novit. The motion carried unanimously by voice vote. III. Budget Calendar Review proposed budget calendar – Finance Director Elizabeth Holleb reviewed potential FY2015 budget policy questions that will be discussed with the Committee. Ms. Holleb reviewed the FY2015 proposed budget calendar, pointing out key dates and noting times were subject to change. Distribution of Budget Books – Ms. Holleb stated the distribution of Budget Books has traditionally been a hard copy and now the City has the ability to distribute as an electronic document. It was the consensus of the Committee that the FY2015 budget will be distributed electronically and Committee members will have the option to receive a hard copy as well. IV. FY2015 Mission Statement Ms. Holleb stated that as part of the annual budget process, the City Council affirms the City’s mission statement. The Committee discussed the Mission Statement and has requested City staff prepare a more concise statement to be approved at a later date. V. FY2015 Fiscal Policy Ms. Holleb stated that recommended changes to the City’s fiscal policy were on page 6. She stated the only proposed changes were to establish fund balance targets for all funds. She stated a plan would be put in place for any fund falling below established target. The Committee discussed the targets would be established based on a percentage of revenues and different funds would have different requirements based on the funds classification. Currently all funds are in line with the proposed policy. The Committee recommended moving forward with the policy and changing Capital Project funds to NA. Finance Committee Budget Meeting Minutes – September 30, 2013 VI. Long Term Financial Planning – General Fund General Fund Overview – Budgetary Considerations – Ms. Holleb reviewed the Lake Forest Strategic Plan. Ms. Holleb reviewed the 5 year forecast of the General Fund. She stated expenditures are growing faster than revenues. The City has reduced staffing, while maintaining the same high level of service to the residents. The Committee discussed the City’s high reliance on property taxes, while also discussing the impact of state revenue on the City’s budget. The FY2015 tax levy will include a 1.7% increase, but pensions will consume much of this increase. Ms. Holleb reviewed the Alternate Revenue Survey that was sent to Committee members for input. The survey included City staff’s ranking as it compares to the Committee. Ms. Holleb reviewed the effects of generating $1,000,000 in revenue for each survey option and the impact of each option on residents. General Fund Expenditures · Fire Services Study – The study results conclude it would not be in the best interest of the communities to consolidate four fire departments at this time. · Central Dispatching Study – City Manager Robert Kiely Jr. stated the study includes five options for the Committee to consider. The Committee discussed the consolidation would result in not having personnel assigned to the front desk of the Public Safety Building. Mr. Kiely stated the study would be discussed at the October 7, 2013 Committee of the Whole. · Information Technology Shared Services Study – Ms. Holleb stated the City is currently in the process of working with 12 other communities to explore combining resources to enable a bulk purchasing approach as it relates to IT services. The municipalities would be able to select from a menu of services depending on the individual needs of each community. · Fleet Service Study – Director of Public Works Michael Thomas stated the City is currently in the process of working with 4 other communities to review all aspects of the Fleet department. He stated the initial report should be ready mid-November. · Sanitation Study – Mr. Thomas reviewed a comparison of the City to Lake Bluff and Highland Park and the total costs to residents for comparable services. The Committee discussed the options of increased property taxes as it compares to adding a small monthly fee to cover services. General Fund Revenues Ms. Holleb reviewed the top four revenue sources in the General Fund. Of the top four, property taxes make up 52.5%. She reviewed a comparison of fourteen communities total tax bill. The City ranked first for the lowest total tax bill. The City ranks seventh as compared to City Services alone. She explained the City fell to seventh due to other communities having additional revenue sources, such as higher sales tax revenue. VII. Long Term Financial Planning – Capital Improvements Fund Capital Improvements Fund Overview – Budgetary considerations – Ms. Holleb reviewed the five year forecast for the Capital Improvements fund. She stated the main revenue source for this fund is Real Estate Transfer Tax. She reviewed the total projects not included in the five year forecast. The stormwater study has not been completed, thus these projects have not been included in the forecast. Capital Improvements Fund Expenditures · Stormwater Study – This topic was not discussed due to time constraints. · Golf Course Deep Well – Mr. Kiely discussed a study was completed by KemperSports as to the feasibility of installing a well at the Golf Course for irrigation. He stated a number Finance Committee Budget Meeting Minutes – September 30, 2013 of financing options have been developed. Costs for the project would be paid by the Golf Course using current water expenses for irrigation. The total cost of the project includes the well drilling, pump house and bathrooms. There is a small window to complete the project, for the summer of 2014, with the necessity of completing the drilling during the winter. The Committee discussed the needs of the well. The topic will be on the October 7th City Council meeting. A proposal from McMahon will be brought to the City Council for approval to develop a design/build cost for the December 2nd City Council meeting. · Other Major Projects anticipated in FY15 – This topic was not discussed due to time constraints. · Capital Improvement Fund Revenues – Ms. Holleb reviewed the City’s self-imposed debt cap based on an ordinance passed in 2004, and affirmed in 2008. This ordinance has kept the maximum debt service to the amount of $2,589,906. The Committee agreed in concept to utilizing an inflation factor to be applied to the original debt limit to be applied from 2004 to the present. City staff will prepare an ordinance to bring forward to the City Council for consideration. The Committee discussed creating a method to demonstrate actual savings generated by assumptions and/or options approved by the City Council. This would heighten accountability. VIII. Long Term Financial Planning – Water Fund Water Fund overview – Budgetary Considerations – This topic was not discussed due to time constraints. Water Fund Revenues – Rate Structure Considerations – Mr. Kiely stated this will be brought to a future Committee meeting and then brought to the City Council for discussion. IX. Other Business - None X. Opportunity for the Public to Address the Finance Committee: None XI. Adjournment There being no further business, Alderman Reisenberg moved, seconded by Alderman Moore, to adjourn the meeting at 9:10 p.m. The motion carried unanimously by voice vote. Respectfully Submitted, Diane Hall Assistant Finance Director