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04/15/10: Minutes - March 31, 2010 - Budget Workshop
The Hillcrest Village Board of Trustees met in special session Wednesday, March
31, 2010 for a Budget Workshop, at the Hillcrest Village Hall. Village
President, Rich Hicks, called the meeting to order at 7:03 p.m. Answering the
roll call were Trustees Jim Mecklenburg, Rich Elliott, Randal Salsbury and Vicki
Stewart. Trustee Jim McMullin was absent due to a conflict with his place of
employment and Trustee Trevor Unger was on vacation.
President Hicks
stated at last month’s budget meeting Trustee Mecklenburg gave everyone a copy
of the Village’s revenues and expenses, budgets for each of your departments
along with various other reports; hopefully everyone has had an opportunity to
get started and with that being said President Hicks turned the meeting over to
Trustee Mecklenburg.
Trustee Mecklenburg gave a brief summary of the
economy and shared how that impacted his place of employment; due to the economy
university is expected to have to cut $250,000 out of the budget by June of this
year and next year the university is expecting to have to but $500,000 from the
budget. Trustee Mecklenburg stated the economy is down and revenues are down
everywhere the State still owes the university fifty-five million dollars for
this fiscal year which represents approximately one-half of the entire
appropriation. Trustee Mecklenburg stated that he is trying to help the Board of
Trustees put things into perspective. Trustee Mecklenburg stated the Village is
no different from any other municipality or government funded agency; for the
Village this means cutting one hundred thousand dollars out of last year’s
budget in order to continue to operate in the black.
Trustee Mecklenburg
stated I am sure you have all reviewed your budgets and you are thinking that
there is no way to cut your budgets any further but; the fact is that the
Village is going to have less money to operate on and we can’t pay out what we
don’t have. Trustee Mecklenburg stated that Buildings & Grounds, Ordinances
and Health & Welfare do not have much in their budgets to cut and the Water
Department is an enterprise fund. Trustee Mecklenburg stated revenues from the
Water Department keep the water system up and running but; the Village really
doesn’t make any money off of water sales; the motor fuel tax fund helps the
Village maintain the streets and everything else comes from the general
fund.
Trustee Mecklenburg stated the reason that the budget numbers look
as good as they do is because the Village has been without a treasurer for the
last eleven months which represents approximately $20,000 and the Village has
been without a police officer too and that represents approximately $18,000 for
a total savings of $38,000 this fiscal year. Trustee Mecklenburg stated that
when the Village lets employees go the budget should be reduced to reflect those
changes because that is the only way to keep the budget balanced. Trustee
Mecklenburg stated that he is concerned about a comment that was made in a
previous meeting that there is money for a certain line item because it was
allocated and budgeted so, that money can be spent. Trustee Mecklenburg stated
normally that would be true however; revenues are not coming in as expected.
Trustee Mecklenburg stated the budget hinges on the projected revenues coming in
as expected and also budgeting revenues and expenses correctly.
Trustee
Mecklenburg stated that he wanted to discuss two of the Village’s major
expenses: Baxter & Woodman Consulting Engineers and Drinker, Biddle &
Reath, LLP. Trustee Mecklenburg stated that four years ago the Board of Trustees
approved the sewer project that is why payments to Baxter & Woodman
Consulting Engineers have not come before the Board of Trustees for individual
approval; as it stands today the Village owes Baxter & Woodman Consulting
Engineers approximately $275,000 and if you look at the last treasurer’s report
the general fund has $200,000 in it which means the Village is $75,000 short.
Trustee Mecklenburg stated that would be a problem if the Village had to pay
this debt off all at once however; Baxter & Woodman Consulting Engineers
understands that it takes time to find financing, to get everything in place and
to get it approved so, they have agreed to take monthly installments of $5,000
with no interest charges. Trustee Mecklenburg stated that once everything for
the sewer lines up and the Village has all of the necessary approvals then that
is when the Village goes to the bank and we pay Baxter & Woodman Consulting
Engineers with that money and then the Village pays the bank with the revenue
from the sewer. Trustee Mecklenburg stated that this is not unusual this is all
part of financing infrastructure. Trustee Stewart stated that is paying down the
initial debt, correct. Trustee Mecklenburg stated yes and if Baxter &
Woodman Consulting Engineers were charging the Village interest the monthly
installments would be higher.
Trustee Salsbury asked if the Village pays
$60,000 in the next two years and the Village gets a grant will the Village get
that money back. President Hicks stated yes, the Village has to show that as a
cost and then we will be reimbursed. President Hicks stated that the Village
needs to budget for that $100,000 stimulus money that State Representative, Bob
Pritchard said the Village is going to get because if we don’t budget for it we
can’t spend it. Trustee Mecklenburg stated that he had not seen any letter
promising the Village money. President Hicks stated the Village received a
letter about six months ago from Bob Prichard stating that the Village would
receive $100,000. Clerk Adams confirmed that the Village did receive a letter
from Representative Pritchard. President Hicks insisted that the $100,000 be
added to the upcoming budget. Trustee Mecklenburg stated that the Village cannot
count on promises; we did not see any of the stimulus money that we were told to
expect however; if the Village should receive this $100,000 then we can amend
the budget at that point.
Trustee Mecklenburg stated that Attorney Temple
had brought it to his attention that there is a Village ordinance that says that
the Village has to pay its bills within thirty days. Clerk Adams stated that
Attorney Temple had mentioned in an executive session that state statue dictates
that municipalities have to pay their bills in a timely manner which is thirty
days. Trustee Mecklenburg stated at any rate this is an infrastructure bill that
takes years to pay off just like your mortgage. Trustee Mecklenburg stated that
he wants to make sure that the Village isn’t violating some state
statue.
Trustee Mecklenburg explained that the Village’s expenses can run
approximately $400,000 per year and since we have to pay Baxter & Woodman
Consulting Engineers $60,000 that means we still have $400,000 in expenses and
only $340,000 in revenue so, we are going to have to get serious about cutting
expenses. Trustee Mecklenburg stated the Village also owes Drinker, Biddle &
Reath, LLP approximately $19,000 plus the Village is being billed approximately
$1,500 to $1,600 per month and we still don’t have a contract. Trustee
Mecklenburg stated that with $60,000 for Baxter & Woodman Consulting
Engineers and $19,000 for Drinker, Biddle & Reath, LLP that is almost
$80,000 taken off the top from the Village’s revenue streams.
Trustee
Mecklenburg stated that the Village’s new hire for the police department has
punched in every morning this week at 8:00 a.m. and he isn’t even suppose to be
on the payroll until the first of April. Trustee Mecklenburg cautioned the Board
about keeping a close eye on the expenses concerning the police department.
Trustee Elliott stated that Chief Messer had talked about possible grant money,
grant money for what. Clerk Adams stated that Chief Messer told her that he may
be able to secure a grant to pay the salary of one full-time officer. Once again
Trustee Mecklenburg cautioned the Board of Trustees about spending in the police
department.
Trustee Mecklenburg pointed out that the Village saved
$20,000 by letting the treasurer go but, the Village has to replace the
treasurer at some point. Trustee Mecklenburg stated it is getting very busy in
the Clerk’s office due to all the new changes in the FOIA laws, often the Clerk
has to take time out to work on various projects and pull information together
for the engineers or for one of us and it puts her behind in her other duties.
Trustee Mecklenburg stated he would like for the Board of Trustees to start
thinking about hiring a Deputy Clerk even if it is for ten hours a week that way
when the Clerk takes vacation the office doesn’t shut down.
Trustee
Mecklenburg stated of course another way of cutting costs is to let somebody go
there was a brief discussion concerning all classes of employees and where
possible cuts could be made. Trustee Mecklenburg stated that for years this
Village has operated with only one maintenance man now we have two; if the
Village were to cut one maintenance man that would be a savings of approximately
$36,000. Clerk Adams cautioned the Board of Trustees not to get to specific
concerning human resource issues in open session. President Hicks stated that he
would prefer not to get into specifics at all and changed the
subject.
Trustee Mecklenburg stated with what the Village owes Baxter
& Woodman Consulting Engineers and Drinker, Biddle & Reath, LLP and the
treasurer’s position we are talking about approximately $99,000 off the top of
our revenue before the Board of Trustees even decides what you are going to try
to accomplish for the year. Trustee Salsbury stated how do we generate revenue.
Trustee Mecklenburg stated that is the question, well you have to build homes,
you have to generate jobs and we need to bring in new businesses.
Trustee
Salsbury asked if Metal Recyclers are paying sales tax. Clerk Adams stated that
she would have to check with the Illinois Department of Revenue concerning that
issue. Trustee Mecklenburg stated that he was not aware that there was such a
business in the Village and asked where it was located and about the zoning for
that particular property. President Hicks stated that Building and Zoning
Administrator, Casper Manheim has issued a letter to the property owner and he
has given the tenant a timeline to vacate the property.
There was a brief
discussion about the types of business within the Village and whether or not
they paid sales tax. Clerk Adams stated that two years ago when the Board of
Trustees decided to pursue home based businesses she sent a letter to Teri
Looker at the Illinois Department of Revenue to confirm who was paying sales tax
and whether the individual businesses were properly coded so that the Village
actually received the correct amount of sales tax and at that time all of the
businesses in the Village that were supposed to be paying sales tax
were.
Trustee Mecklenburg stated that Village Attorney, Shane Temple
offered to change the rates that the Village is paying for legal expenses from
an hourly rate to a flat rate of $3,000 per month. Trustee Mecklenburg explained
that the Village’s legal expenses were approximately $42,000 last year and if
the Village accepts Attorney Temple’s offer that would save $6,000 per year;
Attorney Temple has also offered to reevaluate the flat rate in six months if
the Village’s need for legal advice should decrease. After a brief discussion it
was the consensus of the Board of Trustees to accept Attorney Temple offer of
restructuring the Village’s legal fees from an hourly rate to a flat monthly
rate of $3,000.
President Hicks stated that he had reviewed his budget
and had made approximately $14,000 in cuts and then he turned his worksheets
into Trustee Mecklenburg to use to create the budget for fiscal year 2010 –
2011. Trustee Mecklenburg stated that the Board of Trustees needed to start
looking at all of the things motor fuel tax money can be used for and may be
some of the salaries for streets can be paid out of this money.
Trustee
Mecklenburg asked Clerk Adams the status of the water revenue. Clerk Adams
responded that the water rates have not increased the total of the billing as
expected. Clerk Adams stated the base rate was dropped when the new rate
structure was adopted and it caused a large number of bills to actually go down
therefore; decreasing the total billing. Clerk Adams suggested that the Board of
Trustees reinstated the base rate in order to achieve their original goal.
Trustee Mecklenburg stated that the residents should be paying for debt service.
Trustee Salsbury suggested that the Village adopt an availability fee for
residential users as well as the non-residential users. Trustee Elliott stated
that Jerry Bever of Baxter & Woodman Consulting Engineers had given him some
paperwork that compared rates of other municipalities in Northern Illinois and
it showed a special assessment for large bills. Clerk Adams explained that once
the sewer project is let out for bids and a bid is accepted then Baxter &
Woodman Consulting Engineers will have hard numbers to work with and they will
calculate the amount of debt service that each customer will have to pay. After
further discussion it was the consensus of the Board of Trustees to review the
newly adopted water rate structure.
The Board of Trustees took a ten
minute break from 8:00 p.m. to 8:10 p.m.
Clerk Adams stated that while
she does not have her own budget she has suggestions on how to cut $3,700 from
the budget. Clerk Adams suggested that the Board of Trustees cut the fall clean
up because it costs more than the spring clean up and there is not as much
participation. Clerk Adams stated that for the past four years the residents of
the Village have not paid for recycling and suggested that each water customer
be billed $1 per month to cover the cost. Trustee Mecklenburg noted Clerk Adams’
suggestions. The Board of Trustees had a brief discussion about instituting a
Hillcrest sales tax as a way to generate revenue.
Trustee Mecklenburg
stated that he wanted to come up with a reasonable estimate of what the
Village’s revenue will be and he would rather be conservative and be wrong and
make more money than to be optimistic and make less. Trustee Mecklenburg stated
once he has a good estimate of the projected revenue then he will take the
worksheets for each department adjust the budget to reflect the suggested cuts
you have all made and then that will be the number that we will have to work
with. Trustee Mecklenburg invited the Trustees to make individual appointments
with him to go over their department budgets between the hours of 6:30 p.m. and
9:30 p.m. Trustee Stewart stated that she was able to cut another $400 from her
budget and turned her worksheets into Trustee Mecklenburg. Clerk Adams stated
the Village experienced some savings this year on the purchase of road salt due
to the fact that the Village joined a joint purchasing cooperative which cut the
Village’s costs in half.
There being no further business to transact, a
motion to adjourn was made by Trustee Stewart; and was seconded by Trustee
Salsbury. Vote was as follows: Mecklenburg – yes, Elliott – yes, Salsbury – yes
and Stewart – yes. The vote passed unanimously. The workshop adjourned at 8:20
p.m.
Respectfully submitted,
Teresa J. Adams,
Village Clerk
Posted: 4/15/2010 |
Updated: 4/15/2010