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04/15/09: Minutes - April 15, 2009 - Budget Workshop
The Hillcrest Village Board of Trustees met in special session Wednesday, April
15, 2009 for a Budget Workshop, at the Hillcrest Village Hall. Village
President, Richard Hicks, called the meeting to order at 6:33 P.M. Answering
roll call were Trustees Jim Mecklenburg, Rich Elliot, Michele Hardcastle, Orrie
Samp and Vicki Stewart.
OLD BUSINESS
President Hicks asked
Trustee Mecklenburg to address the Board of Trustees concerning the Fiscal Year
2009-2010 Budget.
Trustee Mecklenburg provided the Board of Trustees with
a copy of the expected revenues and expenses for the fiscal year 2010 budget.
Trustee Mecklenburg noted the proposed fiscal year 2010 budget was only the
first pass. Trustee Mecklenburg informed the Board of Trustees the revenue the
Village has been receiving is decreasing. The top three revenues (State sales
tax, State income tax and property tax - corporate) comprise 75% of our income.
Trustee Mecklenburg pointed out the property tax Hillcrest receives is a very
small portion of the homeowner’s property tax bill. The only way to increase
these types of income is to have sewer. After we have sewer, and see the
increase in revenue, that would be the time to justify having elective and
capital projects. Trustee Mecklenburg, went on to say, he had just been informed
the sales tax we receive had gone down 18% in the first quarter of this year
alone. Trustee Mecklenburg summarized the revenue by stating at present time we
can expect approximately $343,250 in general revenue for the next fiscal year.
Trustee Mecklenburg stated the general expenses are currently estimated at
$446,800. The expenses exceed revenues by $103,000 plus. Trustee Mecklenburg
stated we must reduce expenses.
Trustee Mecklenburg discussed a few of
the large items that are included in the budget; half of the back parking lot,
$10,000 for street maintenance, full time police officer and $43,000 for a
second maintenance man. Trustee Mecklenburg asked if it was necessary for the
street maintenance when we already have a motor fuel project going on.
Trustee Mecklenburg discussed items not addressed in the budget; water
projects and capital improvements for the sewer. Trustee Mecklenburg stated Rich
Elliot can update the Board on the water projects. Trustee Mecklenburg informed
the Board of Trustees the money borrowed and the grants we receive will pay for
the capital improvements for the sewer project. The money received and expenses
paid out, for the sewer project, have to be in the budget for accounting
purposes.
Trustee Mecklenburg stated the budget format was a little
different than the Board was used to seeing. The water and garbage had been
combined. The reason for this was they are both proprietary funds. Trustee
Mecklenburg explained the only difference was approximately $4,200 generated by
the garbage fund that would be taken from the general fund. Previously the
garbage revenue and expenses were accounted for in the general fund.
Trustee Mecklenburg stated the bottom of the page was how the Board had
been accustomed to seeing the budget in the past. With the general fund and
water fund combined there would only be an $86,000 deficit. Trustee Mecklenburg
explained the water fund could not cover the expenses for the general fund.
Trustee Mecklenburg stated we have to cut the $103,550 somewhere.
Trustee Mecklenburg requested everyone to look over their budget and make cuts
to come closer to the revenue. Trustee Mecklenburg explained the departments
with more money budgeted could obviously afford to cut more than the departments
with less. Trustee Mecklenburg opened the floor to comments.
Trustee Samp
stated he would like to explain the items addressed in his budget. Trustee Samp
explained even though we have construction in progress, there has to be some
money set aside for streets. Trustee Samp stated there are problems out there
with the streets and until I know for sure they will all be torn up and replaced
I have to be able to fix what’s out there. Trustee Samp stated I have to leave
something in the budget for the person who will be taking my place. If the
streets are taken care of the money could be used for the culverts or the other
half of the back parking lot. Trustee Samp stated he didn’t see the amount in
his budget going down. Trustee Samp stated the amount for the street lights was
raised in case the utilities increased, but he could take them down. Trustee
Samp stated the maintenance on the vehicles had increased from $2,000 to $5,000
because we were doing a better job of taking care of the vehicles instead of
taking them in for repairs. Trustee Samp stated only about $2,000 could be cut
from his budget. The budget is already running on a bare minimum.
Trustee
Mecklenburg agreed all departments are running on bare minimums but, we do not
have the money to cover the expenses; the only way to get the money is to have
sewer. Trustee Mecklenburg stated over the years the taxes have slowly increased
but, not as fast as the expenses to run the Village; with the revenues going
down, it puts us in a bind. Trustee Mecklenburg stated we can find ways to cut
or we can overspend; if we overspend the bank balances will continue to go down.
Trustee Samp asked what plans for seal coating still needed to be
completed. Trustee Samp stated some of the roads had been patched; there are
still some saw cut areas that still need to be cut and then there is seal
coating. Trustee Samp suggested they (Jim George and Sons) could do more
patching and skip the seal coating. Treasurer Kilmer reminded Trustee Samp the
cost for the project was under Motor Fuel Tax funds. Clerk Adams reminded the
Board of Trustees they had already signed a contract and the bid had been
awarded so, they couldn’t back out of the contract. President Hicks stated
that’s what he was working on.
Trustee Samp asked for suggestions on his
budget.
Clerk Adams reminded the Board of Trustees the Village had
received two grants from FEMA. This is included in the budget as revenue but, we
can’t count on that again. Treasurer Kilmer stated the FEMA grants were not
listed in the fiscal year 2010 budget.
Trustee Mecklenburg stated anyone
can turn on the television and see that everyone is in a hard way; we are going
to have to make some unpopular cuts. Trustee Mecklenburg stated it certainly
isn’t because I want it this way; I would love to say let’s do the projects we
have been putting off for the last ten years however, if we haven’t got the
money then we haven’t got the money.
Trustee Samp stated we normally
average three to four thousand dollars on salt every year. The last two years we
have spent $10,000. President Hicks stated we had just signed on a state program
with Curtis Cook for salt; the amount we need to reserve would only cost about
$4,500.
Trustee Elliot asked how many streets would be ripped up with the
sewer project. Trustee Elliot suggested using gravel instead of all of the salt.
Trustee Samp and President Hicks responded all of the streets. Trustee Samp
stated adding gravel makes a mess. Clerk Adams stated we are already using a
mixture of sand and salt.
Trustee Stewart asked how much the Village had
spent on salt so far this year. Trustee Samp responded $10,600. Trustee Samp
stated he could cut the salt down to $5,000. Clerk Adams stated the price of
salt went up about three times from last winter. Clerk Adams stated the new
program should take the price back down to about $45 per ton as long as we get
the same cost as when the paperwork was submitted; if the cost goes up then it
goes up.
Trustee Stewart discussed the back parking lot. Trustee Stewart
stated the main reasons for the back parking lot were the big vehicles using it
and the recycling container. Trustee Stewart stated the recycling container
cannot sit on the asphalt or it leaves big holes in the parking lot; the
recycling container needs a concrete slab to sit on. Trustee Stewart stated she
was still waiting on bids for concrete but, while contractors were here she
thought they should get the concrete barrier on the sidewalks.
Trustee
Mecklenburg stated there were some things to consider concerning the back
parking lot. Trustee Mecklenburg stated the increased traffic and heavy
equipment driving into the back parking lot with the sewer project could tear up
the new parking lot we put in.
Clerk Adams suggested having the concrete
slab for the dumpster and the curbing done this year.
Trustee Stewart
stated she had been given a couple of quotes from President Hicks for concrete
bids; the bids provided by President Hicks were not over $5,000. Trustee Stewart
stated the whole parking lot could wait; she could cut $15,000 out of the budget
and leave in $5,000 for the concrete pad.
Trustee Samp asked what needed
to be done to the building. President Hicks stated the garage doors needed to be
painted. After a short discussion on the garage doors Trustee Samp cut $1,000
from the building maintenance.
Clerk Adams reminded the Board that Robert
(maintenance man) still wanted to build a racking system. Trustee Mecklenburg
reminded the Board the elective projects are part of the $103,000
problem.
A discussion took place concerning a sales tax increase.
President Hicks suggested raising the sales tax. Clerk Adams stated we get ½ of
1% back from the State. Trustee Elliot asked what our current sales tax rate is.
President Hicks stated the current sales tax rate is 6.25% and we receive ½ of
1% of that from the State. Trustee Mecklenburg said we need to do whatever we
can to increase our revenue and decrease our spending. Trustee Mecklenburg
stated year to date we have received $372,000 in revenues and spent $404,000 in
expenses; that means we have exceeded our revenues by $55,000. Trustee
Mecklenburg stated the Village still anticipates $73,000 in revenues but,
payroll will take care of that. Trustee Mecklenburg stated the Village has only
got $17,700 left in our budget this year; we need to stop all elective spending
now. Trustee Mecklenburg stated the more we spend, the more we are eating into
our bank account; our bank accounts are going down. President Hicks stated the
Village needs to raise the sales tax and designate the extra money we receive to
the street department. Trustee Mecklenburg stated it’s a step in the right
direction. President Hicks added sales tax is a steady income.
Trustee
Mecklenburg asked President Hicks when the Village gets the loan to cover the
surveying and engineering costs, will the Village get the money back. President
Hicks responded yes, we will get 100% of the money back. Trustee Mecklenburg
stated when the Village makes a commitment for $15 million or $4 million the
Village will have to make two payments of $140,000 a year; that equals $240,000
a year. President Hicks stated the Village wouldn’t have to start the payments
until January 2011. Trustee Mecklenburg stated the Village has to generate
revenue to make those payments. Trustee Mecklenburg stated he hoped the
developer had ideas on how to get started on those payments.
President
Hicks stated sales tax needs to be raised and the money allocated to certain
items. President Hicks suggested allocating the revenue to the street department
and police department. Trustee Mecklenburg stated if the Village allocates the
money to streets, it stays in the general fund then, we can relieve the street
department and use that money in other departments. President Hicks stated the
sales tax issue will be on next month’s agenda. Trustee Stewart stated if we
raise the sales tax to 7% that would be a ¾% increase; would the State take any
of the money? President Hicks stated no, the Village would receive all of the
money. President Hicks stated he would like a 1% increase in sales tax. Trustee
Elliot stated a whole 1% more, until prices go up, would bring in an extra
$248,000. Trustee Elliot questioned whether that was a lot to ask from the
public or not. Trustee Samp stated our sales tax should not be higher than
Rochelle. Trustee Elliot stated it may help, down the road, to draw customers if
our taxes are lower. Trustee Mecklenburg stated the allocation should be split
between police and streets. Clerk Adams added, 90% should go to streets and the
rest could be spread between buildings and grounds and health and
welfare.
President Hick asked Trustee Stewart if she had any budget cuts.
Trustee Stewart stated $15,000.
Trustee Mecklenburg stated finance can
cut something but, it goes across the board. Trustee Mecklenburg stated all
overtime could stop. Trustee Mecklenburg explained compensatory time off could
be given when employees are required to work extra. Trustee Mecklenburg stated
as an example, when Treasurer Kilmer has to attend a meeting for two hours she
could work in the office for only 38 hours that week; the same goes for Robert
(maintenance man) if he has to work overnight plowing, he could work less hours
during the day to compensate for that time. President Hicks stated having no
overtime would not work; what about emergencies.
Trustee Stewart stated
doesn’t the Village have a schedule for the maintenance man already; if he works
twelve hours in one day then, he already has overtime. Treasurer Kilmer informed
Trustee Stewart overtime was paid after forty hours only, not on a per day
basis.
Trustee Mecklenburg stated the only way to cut finance is to cut
hours; all associated costs for salaries have to be taken into consideration.
Trustee Mecklenburg went on to say there is $86,000 in the budget for a
full-time officer and a second maintenance man. President Hicks stated there is
only $43,000 for the police department. Trustee Mecklenburg stated there is
$43,000 for the police and $43,000 for the second maintenance man, which is a
total of $86,000 Trustee Mecklenburg stated he was not saying those two items
are what needed to be cut but, they are large money items; all cuts of that sort
are a decision for the Board to make.
Trustee Hardcastle stated she was
able to move items around in her budget; $500 has been moved from miscellaneous
to the storm warning system, for a total of $1,500 for the storm warning system.
Trustee Hardcastle suggested cutting all donations from the budget.
Trustee Samp stated the new storm warning system is leaning a little.
Trustee Hardcastle stated she hadn’t noticed.
President Hicks stated he
could cut $6,750 from the administration budget.
Trustee Samp asked if
there was going to be a need for engineering in the street department. President
Hicks responded no.
Trustee Mecklenburg asked what the total cuts were
so far; I get a total of $37,000. Trustee Mecklenburg went on to say $66,000 was
still left to be cut from the budget.
Trustee Mecklenburg asked what the
process was for raising the sales tax. Clerk Adams stated there had to be a
public hearing and notices have to be sent out, the process is similar to the
annexation process. Clerk Adams stated there was not enough time to do
everything that needed to be done in time for the May board meeting. President
Hicks stated he only wanted the discussion on the agenda for the May board
meeting.
Trustee Mecklenburg stated with the economy the Village needs
to cut every dollar we can; all discretionary spending has to decrease. Trustee
Mecklenburg stated with unemployment on the rise, people are spending less and
saving more.
Trustee Samp stated it is interesting, the amount the
Village spent on fuel for the street department has been cut approximately in
half; for the past three or four years we have spent approximately three to four
thousand dollars in fuel. Trustee Samp stated this current fiscal year we have
only spent $2,000. Trustee Samp attributed the extra fuel usage to a lot of
driving around. President Hicks stated the Village is now saving about 35 to 40
cents per gallon on the price of fuel.
Trustee Mecklenburg stated in the
future, when revenues increase, the Village may want to consider purchasing a
pickup truck rather than using the big truck; in the long run it may save more
money.
President Hicks stated we have seven miles of sewer pipe. Clerk
Adams stated Robert (maintenance man) and Trustee Elliot reworked the water
route, which cuts about an hour or two off of the water reading time. Trustee
Stewart suggested using a tractor with a cart on the back to pick up trash
around the Village. President Hicks stated a golf cart would get about 400 miles
for one tank of gas.
Trustee Mecklenburg stated he would like the Board
to reexamine each department’s budget. Trustee Mecklenburg appealed to all Board
members to look at the finance department but, cautioned the finance budget all
had to do with payroll.
Trustee Mecklenburg stated that this year the
engineering and legal fees had been the biggest drain on the budget; the Village
could say we can get rid of our attorney but, we would have to replace him with
someone else and we can’t get around the engineering fees. President Hicks
stated after the big project those items should calm down and we will have all
new streets.
Trustee Mecklenburg stated we will have to make the two
payments of $140,000 a year. Trustee Mecklenburg stated when the Village is done
with the sewer we can work on bringing in retail business to increase our
revenue.
President Hicks stated our two big expenses; the attorney and
engineering fees will go down after the sewer project is complete. President
Hicks stated the Village shouldn’t have any more engineering fees for a while,
maybe five years or so. President Hicks stated the attorney was another story.
President Hicks asked the Board of Trustees if they would like to have
the next budget workshop before or after the next board meeting. The consensus
of the Board of Trustees was to have the next budget workshop May 20, 2009 at
7:00 pm.
Trustee Elliot updated the Board of Trustees on water tower
projects for the year. Trustee Elliot stated Jerry Bever suggested not having
the proposed water tower projects done this year. Clerk Adams asked if the photo
cell and lights were going to be fixed. Trustee Elliot instructed Clerk Adams to
call Mascal Electric. Clerk Adams asked if Trustee Elliot wanted aviation lights
installed. President Hicks stated yes. Clerk Adams asked if the photo cell was
to be replaced. Trustee Elliot stated Mascal Electric should check the
electrical from the box to the tower.
PUBLIC COMMENT
No public
comment at this time.
There being no further business to transact, a
motion to adjourn was made by Trustee Elliot; Trustee Stewart seconded the
motion. Vote was as follows: Mecklenburg – yes, Elliot – yes, Hardcastle – yes,
Samp – yes, Stewart - yes. The vote passed unanimously. The workshop was
adjourned at 7:40 pm.
Respectfully submitted,
Sarah D.
Kilmer
Recording Secretary
Posted: 4/15/2009 |
Updated: 4/15/2009