07/31/2017COMMITTEE OF THE WHOLE – Minutes of Meeting
July 31, 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, July 31, 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 Barbara Little, Director of PW and Engineering
Mary Oppenheim, Trustee Robert Phillips, Deputy Director of Public Works
Dan Shapiro, Trustee Justin Keenan, Public Works Analyst
Barbara Struthers, Trustee David Fitzgerald, Management Analyst
Desiree Van Thorre, Human Resources Coordinator
Eric Burk, Finance Director
ABSENT:
William Seiden, Trustee
Public Comment
There was no one present for public comment.
Strategic Planning: Capital Project and 2018 Preliminary Budget Plannin g
Manager Street introduced new Human Resources Coordinator Desiree Van Thorre. She
recently started in her position. Manager Street stated that the purpose of the meeting was
for the Mayor and Trustees to provide direction to staff regarding preparation of the 2018
budget. He noted that the Village is winding down a three-year capital program this year.
Finance Director Burk outlined his memo regarding preliminary budget planning. He
noted the major factors to consider include capital improvement funding, loss of revenue
due to the new State budget, increasing costs and a potential property tax freeze.
Mr. Burk noted that reductions in the Local Government Distributive Fund from the State
and new State administrative fees would reduce Village revenues by approximately
$265,000 next year. This would contrast with approximately $500,000 in operating
expense increases from commodity, contractual and personnel costs. Trustee Jester noted
that the increase cost for water would be offset by higher user fees.
Mr. Burk noted the State continues to discuss a property tax freeze for up to two to four
years. The Village self‐imposed a property tax freeze on its 2016 levy for collections in
2017. He noted that the Village’s most recent EAV increased roughly 7 percent due to
new apartment complexes and increasing property values. A $100,000 increase to the
General Fund levy would allow the Village to keep its rate approximately the same
assuming the EAV increases another 3 percent.
Trustee Jester does not believe there will be a freeze next year from Springfield. Trustee
Struthers stated she would like to increase the levy to capture the EAV from new
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developments, such as AMLI and Woodview. Trustee Oppenheim noted that a property
tax freeze is a potential threat that is important to remember. Mayor Rosenthal stated that
if property taxes are frozen by the State, they would most likely still allow for debt
service. She noted that with the state in its current position, a property tax freeze would
put the Village in a more difficult place to take on debt through bonds. She would like to
keep the reserves at 40 percent to keep the Village in a better position if the State freezes
property taxes.
Trustee Jester would like to increase the levy to capture new growth, effectively keeping
the property tax rate flat. He stated he would like to use the revenue for bonding for long-
term assets while replacing expiring debt service with new debt service. Mr. Burk noted
that a 3 percent EAV increase would bring in about $100,000, which isn’t enough to
issue bonds. Trustee Oppenheim inquired if Trustee Jester was comfortable with issuing
bonds in excess of that amount. Trustee Jester indicated he was, citing positive
expectations for sales tax growth from new development in Deerbrook Mall.
Mayor Rosenthal stated that she expects to see sales tax growth from new retail
development in the coming years, but does not believe it will be enough next year to
cover the cost of bonding. She stated that she will continue to work with the Northwest
Municipal Conference to push for e-commerce and service taxes. She stated she is not
interested in raising the prepared food and beverage tax.
Trustee Shapiro inquired about a local tax on packaged alcohol. Mr. Lichterman noted
staff would investigate that option. Trustee Struthers stated that she would like staff to
investigate a per gallon local gas tax. Mayor Rosenthal noted local gas prices are already
high and the tax may lead to more people purchasing gas outside of the Village. Mr. Burk
noted the Village does not know the per gallon gas sale figures in the Village, making
estimating revenues difficult. Mr. Lichterman reported that when staff met with gas
station owners last year when implementing the prepared food and beverage tax, the
owners noted they would strongly oppose a local gas tax because it would negatively
impact their business.
Trustee Oppenheim inquired about a storm water tax. Mr. Phillips reported that some
neighboring communities charge a tax based on the square footage of impervious surface
on their property. Trustee Struthers noted that such a tax would help to limit the amount
of impervious surface in backyards and reduce the burden on the storm water system. Ms.
Little noted that she pays about $35 per quarter in a storm water fee for her property in
Highland Park. Trustee Jester stated he does not believe the storm water costs are as great
as the sum such a tax would collect. Mayor Rosenthal stated this tax would only apply to
residents of the Village and she would prefer for visitors and non-residents to help cover
the cost of capital projects.
Mr. Phillips provided a history and description of previous capital improvement
programs. Since 2007 the Village has consistently completed between $2.2 million and
$19.5 million in capital improvements each year. He noted that staff prioritizes projects
based on the condition of a roadway surface, underground utilities, traffic volumes and
other factors. Mr. Phillips stated that public infrastructure has an estimated life cycle.
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Maintaining that infrastructure requires a steady and annual process that allows for assets
to be replaced as they reach a targeted age.
Mr. Phillips presented four options based on cost and maintaining road conditions above
a surface rating of 70.
The first option was “status quo” where the Village would continue to execute street
rehabilitation projects that are at the same level as those completed over the past 10 years.
The second option called for rehabilitating or reconstructing 5 percent of Village streets
per year. The third option would repair 7 percent of Village streets per year. The fourth
option would repair 9 percent of Village streets each year for five years.
Mayor Rosenthal inquired if the Village has the manpower to cover all of the options
without hiring extra staff. Mr. Phillips noted the Village has some other capital projects
planned and some outside help may be required. Mayor Rosenthal asked which option
would be practical for the Village to achieve. Mr. Phillips noted that the fourth option is
possibly too aggressive, but staff could manage the third option. Trustee Shapiro inquired
about the cost for outside consultants to implement the fourth option. Mr. Phillips
estimated consultant costs to be approximately $250,000.
Trustee Struthers noted that residents appreciated having their streets fixed. Trustee
Oppenheim noted there is an additional cost to residents in terms of disruption and lack
of driveway access. Trustee Benton stated residents often forget about the construction-
related disruptions after the work is completed.
Mayor Rosenthal stated she believes the fourth option is too aggressive and would stretch
thin the Village’s manpower. She does not want to add more staff. She stated she is more
comfortable with the second and third options, but would prefer to go with the second
option. Trustee Benton noted that he was comfortable with the something between the
second and third options.
Trustee Jester noted the low bond rates and inflation in the current climate may not last
much longer, making now a good time to issue bonds. Trustee Shapiro agreed. Trustee
Jester stated the Village has received very favorable bids the past few years and that is
not likely to continue for much longer.
Mr. Lichterman stated that likely only the first option can be supported with existing
funding levels and all other options would require extra funding sources.
Trustee Struthers stated she supported the third option. Trustees Oppenheim and Shapiro
both stated they supported the third option or slightly more. Mayor Rosenthal noted this
includes raising the tax levy, bonds and results in higher taxes. She stated that as the
Village takes on more debt this impacts how bond rating agencies view the Village. She
noted that although money is cheap to borrow right now, the Village still has to pay it
back. She asked the Trustees to consider that this is just for roads and not for other
infrastructure projects that would be needed in addition to roads. Trustee Oppenheim
stated roads are one of the most impactful and visible services the Village provides.
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Mr. Lichterman reviewed the 10-year chart showing the bonds, taxes, federal funds and
other ways the Village has paid for infrastructure. He stated the Village has
approximately $2 million in infrastructure replacement funds each year, but need to come
up with more than twice that per year for options three and four.
Trustee Struthers wants staff to provide more information regarding a storm water user
fee. Ms. Little noted this fee is being used by more communities. Trustee Oppenheim
noted that commercial properties have more impervious surface and the way the fee is
structured could put more tax burden on bigger, corporate facilities.
Mayor Rosenthal inquired if the MFT funds are coming in regular intervals from the
State. Mr. Burk stated that they were and noted the new population figures from the
Special Census are included. Mayor Rosenthal stated she supports utilizing fund balance
reserves for infrastructure, but wants to keep reserves at 40 percent to protect the bond
rating, especially with the status of the state. Mr. Burk stated keeping reserves at 40
percent and contributing more money into the pension fund helps the Village retain its
AAA bond rating.
Manager Street summarized that the Village will further research estimated revenues
from packaged liquor tax, local gas tax and storm water user fee. In addition, staff will
prepare a property tax levy summary that captures the EAV growth from recent
developments (AMLI/Woodview), effectively keeping the property tax rate flat. He noted
there was consensus from the Board to retain a minimum 40 percent fund balance and to
utilize balances above 40 percent to fund capital projects.
Sanitary and Storm Sewer Pilot Program
Mr. Lichterman reported the details of a sanitary and storm sewer pilot program. The
program, as proposed, would provide a 10 percent rebate to homes to disconnect their
storm sewer from the sanitary sewer system. If 650 homes participate, he estimated that it
would eliminate 15 percent of inflow and infiltration. He stated this reduction would
effectively prevent the Warwick Road pumping station from operating during most rain
events.
Trustee Oppenheim inquired how people know if they have an illegal connection. Mr.
Lichterman noted that an outside plumber could check when then come in for other work
and discuss the program with residents. He noted that previous sampling work could help
the Village determine what homes are most likely to have their sump pump connected to
the sanitary sewer system.
Mr. Lichterman asked if a 10 percent rebate would be enough of an incentive on a $5,000
project. Mayor Rosenthal stated a $1,000 incentive or 20 percent would be more
compelling. Mr. Lichterman noted that $320,000 would need to be included in next
year’s budget to fund the program. Trustee Oppenheim asked if there are any federal
grants that could help offset the costs. Ms. Little stated there are none available at this
time. Mr. Street stated staff will provide more information about the kinds of homes and
neighborhoods to bring a clearer picture to the Board and the public.
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There was consensus from the Board to move forward with the two-year pilot program
and offering a 20 percent rebate to residents that complete the work.
Adjournment
The meeting adjourned at 7:45 p.m.
Respectfully submitted,
David Fitzgerald,
Management Analyst