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09/25/2017COMMITTEE OF THE WHOLE – Minutes of Meeting September 25, 2017 The Village Board met as a Committee of the Whole in the Council Chambers of the Village Hall at 6:00 p.m. on Monday, September 25, 2017. In attendance were: PRESENT: Village Board Staff Harriet Rosenthal, Mayor Kent Street, Village Manager Mary Oppenheim, Trustee Andrew Lichterman, Assistant Village Manager Robert Benton, Trustee Barbara Little, Director of PW and Engineering William Seiden, Trustee Robert Phillips, Deputy Director of Public Works Barbara Struthers, Trustee Brandon Janes, WRF Superintendent Justin Keenan, Public Works Analyst John Sliozis, Police Chief Thomas Keane, Deputy Chief of Police Eric Burk, Finance Director Peter Coblentz, Village Attorney ABSENT: Trustees Tom Jester and Dan Shapiro Public Comment There was no one present for public comment. Capital Improvement Budget Planning Mayor Rosenthal noted the goal of tonight’s meeting is to provide staff direction on how to proceed with capital project funding. She asked the Board to consider how much construction impact our Village can handle and to consider the residents that report they are leaving town because costs continue to increase. She asked Finance Director Burk to summarize his budget memo. Mr. Burk noted budget revenues have been adjusted to reflect a 10% reduction to the Local Government Distributive Fund (LGDF) and a 2% administrative fee on Home-Rule sales tax. Revenues reflect a slight increase in per capita revenue due to the recent special census. 2017 is projected to end the year with a $1.5 million positive variance in the General Fund largely due to open positions, new employees selecting lower costs of health insurance and revenues out performing expenditures. This allows for a $1 million transfer to the Infrastructure Replacement Fund (IRF) to support capital projects. This also allows the Village to contribute the full budgeted amount to Police Pension Fund instead of just the actuarially determined amount. Contributing the full budgeted amount to the Police Pension Fund helps the Village continue to receive favorable comments during rating agency meetings and discussions. A 2.5% increase is proposed in the sewer fund to keep pace with increased costs. This equals $10 per year to average user (30 units). A 4% increase is proposed in the water rate, which equals $21 per year to the average user. The proposed 4% water rate increase helps offset the 5% wholesale increase the Village receives from the City of Highland C.O.W; September 25, 2017 Park. Manager Street noted that the Highland Park debt service schedule will continue to increase thru 2023; and, consequently wholesale increases are expected to continue for several more years. A 2% increase is proposed in the Refuse Fund. This rate increase equals $2 per year to the average user. Trustee Struthers inquired how much of an increase the average homeowner would see for all user fees and property tax payments. Mr. Burk estimated that a 2.5% General Fund property tax increase, along with the proposed water, sewer and refuse rate increases would result in a $200 increase to the average home. Trustee Seiden inquired about changing Village philosophy to have the entire cost of refuse service paid through the property tax instead of a user fee. Manager Street noted that shifting the entire costs of refuse service to the property tax would result in a 10% property tax increase and may cause equity issues. Mr. Burk noted that bigger homes would in effect pay more since they have a higher assessed value. Trustee Seiden agreed that charging a user fee for refuse service is the most equitable approach. Mr. Burk summarized that the Village has $2 million in recurring revenue to support the IRF plus a $1 million General Fund transfer to support capital projects. Consequently, any capital scenario in excess of $3 million would require an additional funding source. Manager Street noted that Mr. Burk has provided scenarios to show the impact of funding various options through debt, and the Public Works Department has provided a range of capital project scenarios to go along with those funding options. Deputy Director of Public Works and Engineering Bob Phillips noted that three capital project options are being presented. He noted that from a workload standpoint, all three scenarios could be accomplished. He assured the Board that staff is conscientious of the impact of construction on residents and the various projects would be physically spread out and staged appropriately to minimize neighborhood disruption. He noted that changing to a calendar year budget has had a positive impact on construction schedules since it helps staff begin projects earlier in the season (i.e. February). Mr. Phillips noted there are four major projects that are impacted in the three different funding scenarios. Scenario Street Rehabilitation Bridge Rehabilitation Water Tower Painting Richfield Pump Station Repairs Additional Revenue Required 1 $5,000,000 $335,000 $1,450,000 $230,000 $6,000,000 2 $2,500,000 $85,000 $1,450,000 Deferred $3,000,000 3 $1,000,000 $85,000 Deferred Deferred $0 The major projects that are impacted include: Street Rehabilitation, Bridge Rehabilitation, Water Tower Painting, and Richfield Pump Station. The project scenarios vary in requiring $6 million, $3 million, or $0 in additional revenue. Trustee Oppenheim C.O.W; September 25, 2017 encouraged staff to seek opportunities for State funding through State Senator Julie Morrison’s office. Mr. Phillips reviewed the three scenarios in detail noting that the Lake Cook Road Bridge Rehabilitation project remains in all three options. Mayor Rosenthal noted that the Street Rehab projects change significantly in the three scenarios ranging from $1 million to $5 million. She noted borrowing $6 million is significant and asked what happens if we spread out the pace of the Street Rehab projects. Mr. Phillips stated that many of the roads already require reconstruction so there is little impact from an operational standpoint on delaying these streets, but the challenge comes with keeping pace with the roads that can still be resurfaced. Mr. Burk noted that a $6 million bond issuance results in a $63 increase to the property tax bill of a $500,000 home for the life of the debt service. Trustee Seiden noted that he would be comfortable raising the property tax levy instead of issuing debt multiple years in a row because the interest on the debt is significant. Trustee Oppenheim stated that it makes sense to borrow for capital improvements so that future users pay for the improvements, noting that she would be comfortable with borrowing $6 million. Trustee Struthers noted that she would be comfortable with a mid- range program, as there is no need to do everything in one year. Mayor Rosenthal restated her view that borrowing $6 million is too much of a burden for taxpayers and too great an impact on motorists. Manger Street summarized staff’s findings and revenue projections for a Local Fuel Tax and Package Liquor Tax. He noted that at a rate of $0.02 per gallon the Local Fuel Tax is projected to generate $90,000 - $150,000 annually. A 1% Package Liquor Tax is projected to generate less than $20,000 annually. There was no interest from the Board in pursuing either tax at this time. Mr. Phillips summarized his report regarding a Storm Water User Fee. He noted that some of our surrounding communities already have this fee in place. He noted there are various ways to charge the fee, such as based on water consumption or based on square footage of impervious surface. The Board believed that charging a Storm Water User Fee based on an impervious surface calculation would be the most equitable and defensible approach. Manager Street confirmed there was consensus from the Board to further explore this option. He noted that staff would prepare a report for the Board to consider on a regular agenda and the storm water user fee would have tiered rates based on the square footage of the impervious surface of a property. The fee would apply to both residential and commercial property owners in the Village. Mayor Rosenthal asked the Board members to find a consensus around capital project funding. Trustee Oppenheim supported scenario #1 ($6 million bond issuance). Trustees Struthers and Benton supported scenario #2 ($3 million bond issuance). Mayor Rosenthal supported scenario #3 (no new revenue). Trustee Seiden supported increasing the C.O.W; September 25, 2017 property tax levy by $2 million instead of issuing debt. Mayor Rosenthal also noted that Trustee Jester had previously provided the Board with a memo outlining his approach. Mayor Rosenthal noted the differing opinions and pressed for consensus. She suggested a compromise would be to sell $6 million in bonds but to be spent over a period of two years. The Board concurred with this approach and directed staff to present the allocation of $6 million bond issuance in the most appropriate manner to be spent on capital projects over the next two years. Manager Street noted that staff would prepare the 2018 budget and Capital Improvement Plan to reflect this direction. Land Use Petitions – Village Retained Professional Services (Traffic Studies) Manager Street reviewed the current petitioner’s traffic study policy noting that the Village Board and Plan Commission can force petitioners to select a traffic consultant of our choosing. Trustee Seiden expressed concern with petitioners paying for traffic studies and getting the results they desire. He noted that the Village does not allow contractors to conduct their own building inspections and perhaps the Village should administer traffic studies rather than petitioners. Trustee Oppenheim noted that traffic engineers are licensed and credible professionals often working with firms that have outstanding reputations, which the Village knows well. Trustee Struthers concurred and believes the traffic engineers provide a professional objective opinion. Trustee Oppenheim noted the Village has the mechanism to exercise oversight and require an additional traffic study of our choosing if necessary. Therefore, she believes there is no need to change the current policy. Manger Street noted if the Village had to administer the traffic study on the petitioner’s behalf there would be practical challenges related to a petitioner’s privacy and managing scope changes as the petitioner deliberates on the size of a particular development. The Board’s consensus was to keep the current policy as-is. No further action is needed on this matter. Adjournment Trustee Oppenheim made a motion to adjourn. The motion was seconded by Trustee Benton. The meeting adjourned at 8:15 p.m. Respectfully submitted, Andrew Lichterman Assistant Village Manager