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05/26/10: Minutes - May 26, 2010 - Budget Workshop
The Hillcrest Village Board of Trustees met in special session Wednesday, May
26, 2010 for a Budget Workshop at the Hillcrest Village Hall. President Pro Tem
Mecklenburg called the meeting to order at 7:01 p.m. answering the roll call was
Trustees Jim Mecklenburg, Rich Elliott, Randal Salsbury, Trevor Unger and Vicki
Stewart. President Rich Hicks and Trustee Jim McMullin were absent due to
conflicts with their places of employment.
President Pro Tem Mecklenburg
stated we are here to address the budget for fiscal year 2010 – 2011 and stated
that he had reviewed the budget worksheets that the Trustees had turned in and
he went on to say that there was not enough input from the Trustees so; he went
through all the department budgets himself. President Pro Tem Mecklenburg stated
all numbers are subject to challenge; no question is out of line just be patient
and allow enough time for the question to be researched the answer may require
use of the computer system.
President Pro Tem Mecklenburg stated if you
look at your worksheets two years ago in the 2008 – 2009 what was spent is the
actual costs. President Pro Tem Mecklenburg stated that he decided to use the
last two quarters of fiscal year 2009 – 2010 because a lot has happened during
this timeframe the stimulus money has pasted us by and our expenses keep going
up we are going to have to cut costs we just don’t have any choice. President
Pro Tem Mecklenburg stated that most of the Village’s revenue comes from the
State and the Village doesn’t know how much money it will receive and if it will
come late to give you a comparison our neighbors in DeKalb at Northern Illinois
University are still waiting for forty-three million dollars in revenue from the
State for this fiscal year which ends June 30th. President Pro Tem Mecklenburg
stated if the State pays the Village in this manner it is going to really hurt
the Village; this Board has been very frugal in the past and we must be again
because we have to.
President Pro Tem Mecklenburg stated he wanted the
Trustees to look at the numbers in the far right hand column of the page those
percentages represent the difference between last year’s budget and this year’s
budget this highlights the big changes that the Village has experienced and the
fact is each of your departments didn’t have enough money to operate on in the
first place and now we must operate on even less. President Pro Tem Mecklenburg
stated when looking at the numbers you will see an occasional zero and that
means that particular line item was dropped out of the budget. President Pro Tem
Mecklenburg stated pay particular attention to the positive numbers that is good
but, you need to understand what is driving those numbers. President Pro Tem
Mecklenburg stated if revenues are going up you should be asking why, what is
driving that number and is it sustainable, if not then we need to consider
dropping that out of the budget.
President Pro Tem Mecklenburg stated in
preparing for the meeting he took all of the information from the budget
worksheets that the Trustees turned and information from the budget comparison
analysis he went on to say that the worksheet will reflect whether there is a
loss or a profit in each department. President Pro Tem Mecklenburg asked the
Trustees to look their department budgets over carefully for anything that
stands out and to ask questions during the workshop so, that everyone has the
benefit of hearing the answer. President Pro Tem Mecklenburg stated when you
look at the worksheet you will see that the budget for 2009 – 2010 looks much
larger than the budget for 2010 – 2011 that is due to the faltering economy and
the fact that the State of Illinois is not paying their bills on time. President
Pro Tem Mecklenburg stated that he wanted to look at the big numbers first for
example the Village was counting on $100,000 of stimulus money and we now know
that the Village can’t count on that money so; it has been dropped out of the
budget for 2010 - 2011. Clerk Adams stated that President Hicks received a
letter from State Representative, Bob Pritchard that said $100,000 had been
earmarked for the Village of Hillcrest for the sewer project but, there were
certain criteria that needed to be met and then if all is well the Village would
see that money sometime in the fourth quarter of this calendar year.
President Pro Tem Mecklenburg stated the Village should not count on any
monies from Federal or State government until we actually have a check in hand.
President Pro Tem Mecklenburg stated that he did not build any promise of money
into the budget and he was very conservative when estimating revenues. President
Pro Tem Mecklenburg stated that he used the old accounting adage that you over
estimate your expenses and under estimate your revenues that way if you are
wrong you still have a positive outcome. President Pro Tem Mecklenburg stated
that Clerk Adams would be joining into the conversation at his invitation; she
sees the bills, she generates a lot of the worksheets that you have before you
and she has valuable information to contribute.
President Pro Tem
Mecklenburg explained some of the big changes in the numbers in the worksheet
for example the 770% decreased in software expenses is due to the fact that no
software will be purchased this next fiscal year. President Pro Tem Mecklenburg
stated that there was an increase in the copier rental. Clerk Adams explained
that was the lease agreement on the new color copier that allows for documents
to be scanned in color and e-mailed to the engineers.
President Pro Tem
Mecklenburg stated that he had a problem with dollar amount for water sales on
the yearly income spreadsheet that Clerk Adams had generated there is a $60,000
difference between that spreadsheet and the revenue reports. Clerk Adams
explained that the income spreadsheet does not match the revenue worksheet
generated by Locis because the due to due from accounts needed to be taken into
consideration then, things will balance out.
President Pro Tem
Mecklenburg stated another thing that had to be built into this budget is the
fact that the Village is going to have to pay a minimum of $60,000 to Baxter
& Woodman Consulting Engineers and honestly they may not be satisfied with
$60,000. President Pro Tem Mecklenburg stated quite frankly he didn’t know where
the money was going to come from. President Pro Tem Mecklenburg stated Marc
Neuerman of NBG Land Partners, LLC the developer the Village has been working
with has said a number of times that the Village will not realize any growth in
homes or in retail business until the Village can provide sewer. President Pro
Tem Mecklenburg stated that President Hicks and Mr. Neuerman had talked to
Wal-Mart in the past and were told that they would not come to a community that
did not have a sewer system because it would not grow. President Pro Tem
Mecklenburg stated if the Village cannot land a large retail store such as
Wal-Mart Hillcrest will remain a bedroom community. Trustee Stewart stated there
was a ten year clause in the sewer agreement anyway and our efforts thus far
have pretty much made us poor and we are really not any better off than we were
before. Trustee Stewart stated those giant steps that the Village was taking
have to stop and we need to take guarded baby steps. Trustee Stewart stated it
is not that the Village does not want the sewer, we still want the sewer but, we
are stuck with bills that we thought were going to be taken care of with
stimulus money and that has not been the case, right now this is just not
feasible. President Pro Tem Mecklenburg stated there is one other option which
is to wait until Illinois Environmental Protection Agency comes to the Village
and forces us to construct our own sewer system regardless of the costs because
of the large concentration of septic systems. Trustee Stewart stated that in the
conversations she has been a part of the Illinois Environmental Protection
Agency is not pushing the Village because the Village is taking a proactive
approach to solving their own problems. Trustee Salsbury stated that he stopped
in at the Ogle County Health Department and everything is status quo; there
doesn’t seem to be a problem.
President Pro Tem Mecklenburg stated that
he just wanted to open the conversation; the sewer issue is not dead the Village
still needs a sewer system it is just a matter of how and when and the fact
remains that the Village still has to pay Baxter & Woodman Consulting
Engineers so; that needs to be built into this budget. Trustee Salsbury stated
he thought that issue was resolved when we passed the water rate study. Trustee
Elliott stated the water rate study didn’t do what it was suppose to. Clerk
Adams stated she thought that Kristin Rhea the engineer on the project used the
national average for water usage and Hillcrest’s water usage is not average.
Clerk Adams stated that she had spoken with Jim Sparber of Baxter & Woodman
Consulting Engineers and told him that the water rate study did not produce the
desired results due to the fact that the residents of the Village are
conservative by nature and coupled with the fact that the nation is experiencing
a recession and therefore people are even more frugal. Clerk Adams stated the
national average is one hundred gallons of water per person per day that means a
family of two would use six thousand gallons of water a month and that she and
her husband did not use that much water and most of the senior couples that live
in the Village use one to two thousand gallons of water per
month.
President Pro Tem Mecklenburg stated if the water rate study had
done what it was suppose to do the water department would be paying the $5,000
monthly installments instead we are taking the money out of the general fund and
the general fund has less than $100,000 in it at this time; that is aside from
the Village’s investments and those certificates of deposit may have to be
cashed in soon. President Pro Tem Mecklenburg stated right now the water fund is
over $100,000 and that is a pretty healthy balance for the water department.
Trustee Elliott stated that is the highest balance he has ever seen in the water
fund. President Pro Tem Mecklenburg stated that the Village is not suppose to
make money in the water department and use it to support the general fund, the
water fund is an enterprise fund and it is suppose to be
self-sufficient.
Clerk Adams stated going back to the water rate study
and the fact that it didn’t do what it was designed to do she called Trustee
Elliott and set up a meeting to discuss the issue during that meeting they went
over some of the suggestions that had come out of the budget meetings. Clerk
Adams stated that Trustee Salsbury had suggested an availability fee for all
customers including residential customers. Clerk Adams stated that she and
Trustee Elliott felt that it was not fair to charge residential customers the
same availability fee as business customers and they discussed cutting that
availability fee in half which would make it $2.50 per residential user. Clerk
Adams stated that Baxter & Woodman Consulting Engineers did away with the
base rate of $8 for 4,000 gallons of water and it has hurt the Village
tremendously. Clerk Adams stated that in conversations with Trustees Elliott and
Mecklenburg there was discussion about having a minimum bill of $10 regardless
of usage plus the tier rate on top of that. Clerk Adams stated that would really
make the bills go up and she suggested that the base rate be reinstated at $10
for 3,000 minimum then 3,001 up to 9,000 gallons would be billed at $2.70 per
thousand gallons and anything over 9,000 would be billed at $4.05 per 1,000
gallons that would be more acceptable to our residents. Clerk Adams stated she
and Trustee Elliott also discussed recycling at this time recycling is costing
the Village approximately $3,500 per year if we billed $1 for recycling that
would cover the cost and give us a small cushion in case there is a rate
increase. Clerk Adams stated she and Trustee Elliott also discussed raising the
water deposit from $65 to $100 to cover the increase in the billing this would
only affect new water customers. Clerk Adams stated that she and Trustee Elliott
also discussed a onetime non-refundable application fee of $25 to cover the cost
of processing the application for utilities. Clerk Adams stated that due to the
economy the water department has experienced an increase in the number of
non-sufficient fund checks there has been more NSF checks in the last year than
in the previous five years combined. Clerk Adams stated that there is nothing
written in the ordinance that addresses this issue and she had spoken with
Village Attorney, Shane Temple who advised her that the Village could shut the
water off due to non-payment there was no need to write that into the ordinance.
Clerk Adams stated that she doesn’t doubt the advice she was given however; she
would feel better if she could point to a section in the water ordinance that
clearly permitted that action upon receipt of a non-sufficient funds
check.
Trustee Stewart stated residents on the termination list should be
paying with a cashier’s check. Clerk Adams stated the Village policy clearly
states on the termination notice sent to customers that a certified check or a
money order is to be tendered for payment however; customers put personal checks
in the drop box and this creates a problem. Trustee Stewart asked Clerk Adams
how long a customer has before termination is started. Clerk Adams explained
that once the bills go out customers have fifteen days to pay their bills if the
bill is not paid then a notice is sent out giving the customer another fifteen
days to pay before the water service is actually terminated. Trustee Stewart
suggested that Clerk Adams call the bank when presented with a personal check
from a customer that is on the termination list to see if funds are available
before cashing the check.
President Pro Tem Mecklenburg stated that he
would like for everyone to look at page twelve of twelve which is a summary of
the Village’s budgets from 2008 through 2010 and including the projected budget
for 2011. President Pro Tem Mecklenburg stated that this shows the revenues and
expenses from 2008 to date; it also shows whether there was a negative or a
positive balance at the end of the fiscal year. President Pro Tem Mecklenburg
stated that the projected revenue for fiscal year 2010 – 2011 is $450,310
however; that includes motor fuel tax funds which can only be used for
maintaining our streets. President Pro Tem Mecklenburg stated that he clearly
expects to rely on those funds and not the general fund for street projects.
President Pro Tem Mecklenburg stated that the $120,000 in the water department
is still not a solid number because there is a discrepancy between the
spreadsheet that tracks the Village’s revenue streams and the report from the
Locis accounting system if that $120,000 drops to $57,000 then we are going to
have to cut another $60,000 out of this already lean budget. President Pro Tem
Mecklenburg stated that if revenues come in at $450,310 as expected and we hold
expenses to $434,400 as projected then there will be a $15,910 positive balance
at the end of fiscal year 2010 – 2011.
Trustee Salsbury asked why the
expenses for Health & Welfare were so high. President Pro Tem Mecklenburg
explained that the refuse expense is in Health & Welfare and that the
revenue that is received is basically expensed to pay for the service. Clerk
Adams explained that when the deposit tickets are made everything is deposited
in the water fund and then money for the refuse is to be transferred from the
due to due from account; that is the way the Locis system works. There was a
brief discussion concerning raising the cost of refuse one dollar to pay for
other expenses. Clerk Adams remained the Trustees that the refuse fund is an
enterprise fund which means it can only be used for related purposes. Trustee
Salsbury stated then we should be able to use that money to help pay for
recycling. Clerk Adams stated that is correct. Clerk Adams asked President Pro
Tem Mecklenburg if the $40,000 in the Ordinance department was due to legal
expenses. President Pro Tem Mecklenburg stated last year we budgeted $25,400
but; there were other legal expense that is why this year’s budget is for
$40,000.
President Pro Tem Mecklenburg stated that he would like to
discuss the last page, the page that has everyone’s name and wages listed if you
look at those numbers you will notice that they only include one maintenance man
and you will also see there is no police officer. President Pro Tem Mecklenburg
explained that in his forecast he raised the remaining maintenance man hours
back up to forty per week. President Pro Tem Mecklenburg stated when you look at
the worksheet and you see the yearly wage of an employee that really is a
reflection of the straight hourly wage when there are other costs involved such
as taxes, retirement, Medicare, unemployment compensation, et cetera which
amount to another $11,000 per employee. President Pro Tem Mecklenburg stated
when you look at the total payroll for a year $142,433.28 that only includes one
clerk, one maintenance man, one building inspector, one treasurer (part-time)
and the Board of Trustees; this represent the single largest expense the Village
has. Trustee Unger asked President Pro Tem Mecklenburg why there is $7,800 in
expenses in the police department if there will not be an officer. President Pro
Tem Mecklenburg stated that in order to keep the police department operational
so that the Village can hire an officer when the money becomes available there
are membership dues and services that need to be maintained. President Pro Tem
Mecklenburg stated that President Hicks has been talking about asking Officer
Messer to work a five hour work week in order to keep the police department a
float longer; when the money is available we want to get the police department
up and running as quickly as possible. President Pro Tem Mecklenburg stated that
Officer Messer is trying to secure some grant money for the police department.
Clerk Adams stated that Officer Messer has secured $10,000 worth of
communication equipment in the form of new radios and he is fairly certain that
he will be able to secure a grant for a new squad car however; he really wants
to wait until he has some paperwork in hand before sharing that information in a
public forum. Clerk Adams stated that Officer Messer is holding off on making
any repairs to the blue squad car until he knows for sure if the Village will be
getting a new car. Clerk Adams stated President Hicks’ reasoning behind having
Officer Messer work a five hour work week is to keep the administrative side of
things going and to maintain a small police presence so our residents will see
that we still have an officer; this will also keep the Village in compliance
with the State Standards & Training Board and to make sure the dues are
being paid for ALERTS and LEADS. President Pro Tem Mecklenburg stated if Officer
Messer does work a five hour work week that will keep things going however; that
is not included in this budget yet.
President Pro Tem Mecklenburg stated
that more is going to have to be cut from this budget especially if the numbers
in the water department come down from $115,000 to $57,000. Clerk Adams stated
the utility billing that just went out was for approximately $12,000 and that is
assuming that everyone pays their bills and we all know that everyone does not
pay their bills; sixty shut off notices were just sent out. President Pro Tem
Mecklenburg stated if the numbers stay the same there will be a $15,910 surplus
at the end of fiscal year 2010 – 2011 however; if the numbers in the water
department change then we will have to cut another $34,000 just to break even.
After a brief discussion it was determined that the discrepancy of $60,000
between the revenue spreadsheet and the Locis system is due to the due to due
from account; the money from refuse needs to be transferred from the water fund
to the general fund and that will take care of the problem.
President Pro
Tem Mecklenburg reminded the Board of Trustees that this budget only includes
one maintenance man. Clerk Adams reminded the Board of Trustees that there was
discussion in the previous budget meeting about taking more of her salary out
the water department and she suggested that may be twenty-five percent of her
salary could come from health and welfare for the refuse
billing.
President Pro Tem Mecklenburg stated he wanted to bring to
everyone’s attention to one more item the projected revenue for fiscal year 2009
– 2010 is $358,261 and the expenses to date are $406,846 which leaves us with a
deficit of $48,585 which why the general fund balance is dropping. President Pro
Tem Mecklenburg stated that while everyone is watching their expenses if the
projected revenue doesn’t come in you are still going to have a deficit.
President Pro Tem Mecklenburg asked the Trustees to look the worksheets over and
make corrections, write down any questions that you may have and bring them with
you at the next regular meeting, June 9th. President Pro Tem Mecklenburg stated
that the end of June will be upon us quickly. Clerk Adams suggested that another
budget meeting be set for the week after the regular board meeting which would
be June 16, 2010 and then have a special meeting June 30th to pass the budget.
Clerk Adams stated the next step would be to pass the appropriation and the tax
levy in July. President Pro Tem Mecklenburg stated that would work provided that
he gets feedback from the Trustees if there is no feedback then he will have to
make the appropriate cuts himself.
Trustee Stewart asked Clerk Adams if
there was a law that stated the Board had to meet every month. Clerk Adams
stated that she was not sure however; the Board has to sign the bills and
approve them so, that really isn’t an option. President Pro Tem Mecklenburg
stated that there has been some very good discussion at the last three board
meetings even our attorney has stated that there has been some good discussion
about ordinances and we need to keep that going. Clerk Adams stated that some of
our residents complain that they aren’t being heard as it is so, if you were to
meet every other month I think that would make the situation worse. President
Pro Tem Mecklenburg stated that wouldn’t really accomplish anything because it
would not reduce the payroll. Trustee Stewart stated that she was thinking that
it would reduce the use of the building and therefore the utilities. Clerk Adams
stated that we only have one meeting a month with the exception of working on
the budget and that usually requires about three additional
meetings.
President Pro Tem Mecklenburg stated that general corporate tax
went up from $34,073 to $38,188. Clerk Adams explained that at one time there
were twelve homes in the Village in foreclosure we are currently down to three
foreclosures as those homes sold the property taxes were paid; what the Village
did not receive one year it got in another year making it appear as if we have
more homes but, that is not the case.
Trustee Stewart asked where the
Village is in getting its own sales tax revenue. Clerk Adams stated that was not
going to happen any time soon due to the process. Clerk Adams explained the
process and stated that she was working with Attorney Temple to move that a
long. Trustee Salsbury asked about the income tax. Clerk Adams stated that the
income tax is down due to the fact that people aren’t working and the Governor
still has not decided if he is going to reduce the income tax that comes back
into the community; if he does it will reduce the Village’s income by
approximately $28,000.
There being no further business to transact a
motion to adjourn was made by Trustee Stewart; Trustee Elliott seconded the
motion. Vote as follows: Mecklenburg – yes, Elliott – yes, Salsbury – yes, Unger
– yes and Stewart – yes. The motion passed unanimously. The meeting adjourned at
8:27 p.m. The next regular monthly meeting will be held June 9, 2010 at 7:00
p.m. at the Hillcrest Village Hall.
Respectfully submitted,
Teresa
J. Adams,
Village Clerk
Posted: 5/26/2010 |
Updated: 5/26/2010