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10/23/20172 COMMITTEE OF THE WHOLE – Minutes of Meeting October 23, 2017 The Village Board met as a Committee of the Whole in the Council Chambers of the Village Hall at 3:00 p.m. on Monday, October 23, 2017. In attendance were: PRESENT: Village Board Staff Harriet Rosenthal, Mayor Kent Street, Village Manager Bob Benton, Trustee Andrew Lichterman, Assistant Village Manager Thomas Jester, Trustee David Fitzgerald, Management Analyst Mary Oppenheim, Trustee Barbara Little, Director of PW and Engineering Bill Seiden, Trustee Robert Phillips, Deputy Director of Public Works Dan Shapiro, Trustee Justin Keenan, Public Works Analyst Barbara Struthers, Trustee Eric Burk, Finance Director Clint Case, Code Enforcement Supervisor Kylie Cerk, Communication Specialist Brandon Janes, Wastewater Superintendent Jeff Ryckaert, Principal Planner Mary Anne Glowacz, Police Com. Supervisor Tom Keane, Deputy Police Chief Matthew Rose, Village Attorney Public Comment Mayor Rosenthal introduced Communication Specialist Kylie Cerk to the Trustees. 2018 Proposed Budget Finance Director Burk outlined the budget timeline and reviews by staff to date. He noted a budget hearing will be held on November 6, with the truth in taxation hearing for the property tax levy taking place on November 20. Mr. Burk summarized the proposed budget and how it reflects the input from the previous two Committee of the Whole meetings in July and September. The proposed tax levy is used for public safety (General Fund) and debt service on previous capital projects. The proposed levy includes a 2.5 percent ($86,244) increase for the General Fund and a 16.50 percent ($598,493) increase for debt service, resulting in an overall increase of 9.68 percent due mainly to the issuance of bonds that will fund 2018 and 2019 capital projects. He indicated the final percentage increase could be lower based on when the bonds are issued. Trustee Oppenheim asked why would the Village wait to issue the bonds. Mr. Burk noted the bonds would be issued when the money is required for a project, which would be later in the fiscal year. Mr. Burk noted this proposal would bring the Village tax rate nearly equal to the 2015 property tax rate. Mr. Burk noted that the General Fund is doing better than expected this year, which will allow the Village to transfer $1 million to fund 2018 capital improvements. C.O.W; Oct. 23, 2017 Mr. Burk reported the proposed budget includes a 2.5 percent increase in the sewer rate and a 4 percent increase in the water user rate, due to increased wholesale costs from Highland Park. He noted that revenue projections reflect non-revenue water (water lost) will be reduced by 5 percent. He also noted that the refuse fund includes a 2 percent increase in the user rate to keep pace with contract increases with Waste Management. Mr. Burk also reported revenue projections reflect changes in the State law that imposes a 2 percent administrative fee on home rule sales tax remittance from Springfield. Mayor Rosenthal reported that there was legislation proposed to reduce the fee to 1 percent, but she does not believe it will pass this legislative season. Mr. Burk summarized how various revenue projections are set. Trustee Struthers inquired about the receding telecom landline tax revenues. Mr. Burk noted that it is slowly decreasing as phone lines move online. Mayor Rosenthal noted the proposed JUF senior living facility could increase building permit fees along with some other new developments. Trustee Struthers inquired if it is possible to expand the type of businesses that require a license. Mr. Lichterman noted that license fees in the Village are modest but help achieve compliance primarily from food establishments. The Board requested additional information regarding various business license fees from comparable communities. Capital Project Review and Funding Mr. Phillips presented a two-year, $12 million capital program that would spend $6 million in each 2018 and 2019. He noted that staff reduced the scope of some projects, including the street rehabilitation project and some other capital projects. He noted that water is a priority in the capital program. Mayor Rosenthal and Trustee Oppenheim inquired if some of the deferred projects would deteriorate to a point where it would be more costly to address them later. Mr. Phillips noted that although the quality of the road may decline, the contractor would perform the same work now or later. Mr. Phillips noted the Arbor Vitae project is not include in the capital plan at this time. Trustee Jester inquired about cutting the crack sealing program from the budget, as it can extend the life of a roadway. Mr. Phillips noted that it does extend the life of a project, but stated that the Village has limited resources to allocate. Trustee Shapiro agreed that it is a matter of triage and how to best allocate resources. Trustee Jester requested that the decision to eliminate crack sealing be reevaluated. Trustee Oppenheim would like to have the option to add crack sealing to a project based on how bids for future projects come in. Mayor Rosenthal noted that she would have liked to have seen more options presented earlier in the process. Trustee Oppenheim would like to ensure that staff is looking for economies of scale when preparing the capital plan. C.O.W; Oct. 23, 2017 Mr. Lichterman reported the 630 Central project has been deferred due to budget constraints; however, he noted the Village is exploring a public-private partnership to improve the site. Mr. Phillips also noted the $230,000 Richfield Road pump station improvement project has been eliminated, as some repairs have been made by Highland Park. Trustee Oppenheim inquired about grant opportunities to help offset the cost of some projects. Mr. Street noted that many Village projects are partially funded using grants from the State and Federal governments. He noted staff tries to find as many grant funding sources as possible. Mr. Phillips reported that water loss figures are down significantly over the past two years. He noted that water loss was 23 percent two years ago, which dropped to 9 percent and now is at approximately 5 percent. Trustee Jester inquired if the figures are reflected in water billings. Mr. Burk confirmed that the Village is buying less water from Highland Park and billing a higher percentage to customers. Trustee Struthers inquired how much of the change came from replacing large commercial meters. Mr. Phillips noted that some of it was, but significant improvements came from new water main installation. Mr. Lichterman reported the staff water loss committee would meet later this week to review the newest figures and a formal report would be presented to the Village Board during the Public Works 6-month report in January. Mr. Phillips reviewed a map of project locations and identified each project in the two- year program. Manager Street reported that he and Mayor Rosenthal met with Trustee Seiden earlier in the day to discuss funding options for capital projects. Trustee Seiden discussed the funding mechanisms and debt service costs that can add up over time due to compounded interest from traditional bonding. He presented scenarios based on various interest costs and timelines. He discussed cutting into the reserves and suggested ways to stretch out the borrowing and projects over time including the use of short-term bank loans. Mayor Rosenthal questioned how the Village could finance the projects using short-term loans. Trustee Oppenheim noted that some of the projects require large sums of money and smaller, short-term loans would result in the Village not having enough money to fund projects. Trustee Seiden advocated against long-term bond issuances due to the associated interest costs. Trustee Struthers noted she would be against reducing the reserve fund below 40 percent. Trustee Jester inquired when the Water Reclamation Facility bonds would be paid off. Mr. Burk reported that some would be removed from the tax rolls in 2021with other debt expiring in 2036. Mayor Rosenthal stated that schools make-up almost 75 percent of a Deerfield resident’s tax bill but that the value of having great schools is what drives people to our community. She stated that she and the Trustees owe it to the residents to keep the Village’s portion of the property tax bill as low as possible. She noted that the Village has ways other than C.O.W; Oct. 23, 2017 property taxes to bring in revenue, where as other taxing districts, such as the school districts, do not. She noted that she is in favor of the capital plan proposal but requested that the total property tax levy not exceed a 5% increase. Trustee Jester asked how much of next year’s funding is for projects whose lifetime is more than 20 years. Mr. Phillips reported that approximately $2.5 million is in hard infrastructure costs with another $2 million in maintenance costs. Trustee Jester believes that long-lived assets should be bonded and paid overtime by those who use it. He indicated that a number of projects have an urgent need and interest rates are at historical lows. He believes the proposed capital program is a good start. Trustee Shapiro stated that interest rates are good now, but it is unclear what they may be in the future. He expressed concern with deferring projects for too long. He sees a number of important projects that need to be completed and supports the current plan. Trustee Seiden would rather pay more money now by raising the property tax levy rather than put the burden on future tax payers through a bond issuance. Manager Street stated it looks like the Board generally agrees on a two-year, $12 million capital plan partially funded through a $6 million bond issuance and a property tax increase of less than 5%.Trustee Jester noted that some of that debt could be abated to lower the property tax rate. Mr. Burk noted a delay in issuance would lessen the impact on the levy collected in 2018. Trustee Seiden stated he would oppose the $6 million in bonds required for the 2018 projects. Departmental Budget Review Public Works and Engineering Director Little outlined the changes in the budget for the Department of Public Works and Engineering. She noted that the budget includes two new electronic message boards. The cost would be spread throughout the different divisions of the department. Mayor Rosenthal stated that she is in favor of additional message boards, but would like to see them used more often to communicate information to residents. Trustee Struthers inquired if it would feasible to consider natural gas vehicles. Ms. Little noted that the economics would not work at this time as there are not many filling stations that could accommodate the vehicles and the cost of building one is too high. Ms. Little noted there is an increase in postage cost for the 2018 budget. Mayor Rosenthal inquired if there was a way to do more on-line billing and communication to reduce postage costs. Mr. Lichterman reported that staff is investigating an on-line credit card payment module that costs approximately $10,000. Staff will further investigate the option and discuss at the next Committee of the Whole. C.O.W; Oct. 23, 2017 Trustee Jester inquired about the increase in electricity costs. Ms. Little noted the increase is largely related to operations at the WRF. Mr. Burk noted that the Village’s multi-year electricity contact recently expired and that a new rate has been locked in through NIMEC, a consortium of local governments that collectively bid out the price of the commodity. Community Development Code Enforcement Supervisor Case reported that his division is fully staffed with all employees at the fully qualified level. He noted that plan reviews take about 2 to 3 weeks to complete. He reviewed the department budget noting revenues reflect basic operations with very few increases. He reported an increase in outside consultant fees, as the plumping inspection contractor is increasing their rates slightly for the first time in a number of years. Principal Planner Ryckaert reported his division’s budget is similar to last year’s, with only cost of living increases for salaries. Mr. Case presented fee increase suggestions to make the fees better match the staff time required to complete them. He requested an increase in re-inspection fees from $50 to $100. He reported that residential roofing permit fees should be lowered and no longer based on the total construction cost. He suggested a flat $100 fee would better reflect the staff time required to issue and inspect residential roofs. Mr. Case stated that he would like to increase the fee for contractors working without an approved permit. The current fine is only $100 and not much of a deterrent. Some surrounding communities double the entire building permit fee. Trustees Jester and Struthers asked for ballpark figure of the cost of a new home permit. Mr. Case noted that it is between $8,000 and $10,000 dollars, but the fee would apply to smaller projects as well. Trustee Shapiro thought the fee sounded reasonable. Trustee Shapiro would like to update the impact fees to reflect the current price of an acre of land in the Village. Police Department Deputy Chief Keane reviewed the changes in the Police Department budget from the previous year. He noted a slight increase in administrative costs due to building maintenance and improvements. He noted the Police Patrol Division salaries would need to be corrected. He reported a $20,000 increase in police pension contributions. Trustee Jester inquired about the increase, noting the Village contributed above the actuarially determined requirement in the current budget year. Mayor Rosenthal asked if the increase would improve the Village’s position when bonding. Mr. Burk noted that the increase would improve the balance of the fund and be viewed favorably by the rating agencies. Mr. Keane reported an increase in training for new sergeants and commanders. Police Communication Director Glowacz reported on upgrades to computer systems and software for the dispatch center and mobile records. C.O.W; Oct. 23, 2017 Adjournment The meeting adjourned at 6:00 p.m. Respectfully submitted, David Fitzgerald, Management Analyst