MINUTES OF THE SPECIAL MEETING OF THE BOARD OF TRUSTEES OF THE VILLAGE OF GRAYSLAKE HELD MARCH 24, 2018

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1 MINUTES OF THE SPECIAL MEETING OF THE BOARD OF TRUSTEES OF THE VILLAGE OF GRAYSLAKE HELD MARCH 24, 2018 The Special Meeting of the Board of Trustees of the Village of Grayslake was called to order at 8:30 a.m. in the Board Room of the Grayslake Village Hall, Mayor Taylor presiding. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus - present. Also present: Village Clerk Lee, various staff members and members of the public. Mayor Taylor welcomed the Board members to the annual budget workshop. He asked Village Manager Mike Ellis to provide information on the updated Grayslake Financial Forecast and the Draft FY 18/19 operating and capital budgets. Mr. Ellis began the presentation by reviewing the meeting work plan designed to lead to direction on drafting a final budget for FY 18/19. He then reviewed the Grayslake Financial Plan including various strategies and financial approaches the Village uses to achieve financial health on an ongoing basis. The plan has eight main objectives and twelve major components. Mr. Ellis highlighted four of the components including the Village s overall defensive posture to its financial planning including how unpredictable shared revenues are used and the importance of financially stable enterprise funds. He reiterated the importance of our detailed financial forecasting and how analytics and other data are used in operations. Mr. Ellis discussed the recommended changes to the financial plan language including adding an objective and health indicator related to the Village s commitment to meeting our pension obligations, adding language on how interest earnings are handled and elimination of the Fund due to the Village s participation in the Glenview Joint Emergency Telephone Board. Board members discussed the plan and the suggested changes. Mr. Ellis provided information on major items/changes in the updated financial forecasts. These include property tax amounts continue to be forecasted including the annual COLA and 50% of new property revenues as per previous Board direction. He noted changes to the basis of commuter rail parking and aquatic center revenues, the fact that residential building activity is now limited in the forecast period, reduced forecasted annual increase in sales tax (2%) and slightly higher interest earnings. In terms of costs the forecast includes the large North Shore Water Reclamation District (NSWRD) sewer rate increases and further projects a 2.5% annual increases after FY 19/20. Mr. Ellis stated that the NSWRD/LCPW agreement does not allow for review and input on NSWRD rate decisions. The 2018 forecasts also include actual CLCJAWA FY 18/19 rates and anticipated rate declines in later years, maintains the current use level of parttime police officers, reflects the Building Department post-transition cost basis, assumes contracted financial services and the JEM aquatic center contract throughout pending Board discussion. He noted that, based on the recent resurfacing bids, the cost baseline was lowered for the annual road resurfacing program and this reduces the decline in the amount of dollars available for other capital purposes versus previous financial forecasts. He referred the Board to the chart entitled Summary of Key Financial Indicators which shows ten year projected trends of rising operating dependency on certain unpredictable revenues and a gradual decline in the amount of available capital project dollars after approved projects are paid for over the period.

2 Information was presented on the status of the Police Pension Fund including the rising asset level of the fund and the Village s annual contributions which have been consistently above the levels recommended by the Department of Insurance and our actuary. Funding level comparisons versus the state average reflect a healthy fund. Mr. Ellis noted that a continued commitment to funding these police pensions will be required in the future to meet the Village s commitments. Board members discussed the status of the police pension fund and it was noted that changing conditions over time can significantly change the outlook and our costs. Year-toyear changes can be expected due to changing actuarial assumptions and investment earnings. Trustee Shores suggested looking into the benefits of a regular annual extra contribution beyond the actuary request in terms of lowering future contributions. Mayor Taylor concurred that this study would be of value adding that a balance needs to be struck between long term savings and the loss of the benefits to current taxpayers from the use of funds for other things. Village Manager Ellis then reviewed the Village s overall financial health as depicted in the updated multi-year projections using seven financial health indicators including dependency on unpredictable utility tax and economically sensitive shared revenues for General Fund operations, total operating and resurfacing dependency on these unpredictable revenues, General Operating Fund balances versus the target, effectiveness of enterprise fund multi-year rate plans in meeting target balances, available capital dollars, and meeting fixed asset plans and pension funding levels. He provided specific information on each indicator and compared the results of this year s projections to the last two years. Overall, the forecasts continue to show the impact of the large drop in General Fund from their peaks in past years. In year ten 94% of shared revenues will be consumed by operating spending and resurfacing versus the Board target of 85% but he noted that the lower resurfacing cost baseline pushes back the time when the Board s 85% target is exceeded to FY 26/27. He noted that projected available General Capital Project Fund dollars are $6,908,042 over the next ten years which is down from the 2017 forecasts, reflecting later years where landfill host fees are no longer present. He directed the Board to projections for the General Capital Project Fund for FY 18/19 which forecasts over $1,500,000 in available dollars for 2019 projects despite the large expenditure for the Gelatin property improvements in FY 2018/19. He added that the projection does not include approximately $550,000 in potential income tax receipts that are not included in our forecasts. The Board discussed financial planning underway including a review of target balances, work on the extended financial forecasting/revenues options and an overall look of the Water/Sewer Fund. The forecast health indicators reflect a slight decline of the Village s financial position versus last year due primarily to the ending of revenues from building activity as platted subdivisions are built-out. Mayor Taylor asked Mr. Ellis to provide overview information on the draft FY 18/19 budget. Mr. Ellis stated that operating costs in the draft budget are up less than 1% to $17,792,506. He noted that operating costs excluding costs related to the NSWRD rate increase are down. Operating revenues are estimated at $19,152,212. Shared revenues (sales/use tax/income tax/electricity/natural gas/ telecommunications) are budgeted down $87,616 and Mr. Ellis noted that many of these revenue sources are lower than in their peak years reducing General Fund revenues by over $1,000,000 per year. Operating cost controls, including an over 50% reduction of full-time non-police officer staffing and other changes have helped absorb the large revenue

3 losses. The Board reviewed information on the use of shared revenues and discussed the Village s strategy of lower dependency on unpredictable revenue sources for operations. The draft budget utilizes 44% of these revenues for General Operating Fund expenses. Total operating and capital spending is $26,599,162 with higher capital spending responsible for an increase in overall spending versus the FY 17/18 budget. Mr. Ellis reviewed revenue sources and budgeted expenses by type and stated that police related costs are budgeted to be 34% of operating expenses, public works related costs are 41%, garbage services 10%, and building department at 3%. Special services, including senior center, aquatic center and heritage center are 4%. Mayor Taylor requested a further cost information be developed on recreational activities including bike paths, parks and the special services. All other costs total 8% reflecting the fact that the Village spends most on direct services with a small amount of overhead. Mr. Ellis reviewed operating budget areas describing cost areas that have an increase or decrease in operating spending. He confirmed that in the last three years increases from rising sewer rates from Lake County Public Works and the NSWRD have contributed more to operating cost increases than anything else. Specific budget revenues and cost areas were reviewed with Board members asking questions on the various expenses included in the draft. Mr. Ellis reviewed the normal financial health indicators as they relate to the draft budget noting that the draft budget aligns with the Village s health indicators resulting in favorable grades for six of the seven indicators and with a C+ grade for rate plan sufficiency reflecting the need to adjust the water/sewer rate plan as a result of the new NSWRD rate increase. He reviewed the provided listing of all expenses that are shared between the various operating areas based on a set of specific formulas. The Board reviewed the FY 18/19 capital projects and associated expenses as included in the draft budget including previous projects not yet closed out and FY 18/19 projects as previously selected by the Board. It was noted that the included costs are based on bids or the latest project cost estimates. Budgeted Economic Development Capital Fund, Water and Sewer Capital Project Fund, resurfacing and fixed asset projects were also discussed. Trustee Davies requested that the Railroad Avenue costs be taken out of the Gelatin property improvement line and given their own line. This will be done. After discussion on various items included in the draft budget, Mayor Taylor asked the Board to consider the Grayslake Financial Plan 2018 and the recommended plan changes and the Grayslake Financial Forecasts. After discussion Trustee Vogel made a motion to accept the Grayslake Financial Plan 2018 and the 2018 Grayslake Financial Forecasts. Seconded by Trustee Nicodemus. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Mayor Taylor directed the Board s attention to the budget requests for miscellaneous projects, the Police Department forfeiture fund projects and fixed asset projects. A brief discussion was held on the proposed lists of these miscellaneous smaller projects as recommended by the operating departments. The Board consensus was to include the requested police projects, miscellaneous projects, and fixed assets in the final budget. Trustee Jarvis made a motion to

4 include the requested general capital miscellaneous projects and fixed asset projects in the final FY 18/19 budget. Seconded by Trustee Davies. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Mayor Taylor asked the Board if there were questions on the Heritage Center information and budget request. The Board consensus was to include the heritage center budget request in the final capital budget. Mayor Taylor briefly described the provided Economic Development Commission budget request information. Trustee Vogel noted that the budget was similar to past EDC requests. It was noted that the requested Grayslake Business Partnership funding would not be needed. The Board also discussed potential economic incentive arrangements noting that line items have been included but actual amounts may vary when arrangements are negotiated. Board members reviewed the EDC recommendation for a three-year extension of the economic development/promotion services contract with the Chamber of Commerce. The consensus was to include the contract extension in the final budget and to include the EDC budget requests, without the GBP funds, in the FY 18/19 budget. Board members discussed certain normal operating contracts that have been bid for FY 18/19. These cannot be executed at this time because a final budget including these contracts has yet to be adopted. The Board discussed the different contracts and the consensus of the Board was to authorize the Village Manager to execute these contracts prior to final budget approval for facility cleaning, street sweeping, public works truck and police vehicle maintenance, bike path/parking lot maintenance and tree maintenance. Trustee Jarvis inquired on the maintenance program and budget for the Prairie Crossing regional trail noting that he has heard concerns on these. Public Works Director Heinz provided information on the regular maintenance provided by the Public Works Department. He described the natural setting of the paths that cause maintenance issues at some points on the path. The budget does not include studying possible improvements at these locations to overcome impacts from surrounding wetlands but the regular budget is sufficient for regular maintenance. The Board discussed a request from District 46 for sharing of the costs of a proposed on-site bussing modification at Frederick School to reduce traffic back-ups on Frederick Road and Route 83. Board members discussed issues with traffic back-ups at certain times of day, responsibility for alleviating these issues and past District 46/Village cooperation in building Frederick Road. The consensus of the Board was to put funds in the final FY 18/19 budget equal to half the estimated cost for design Option C with design approval of Public Works Director and work with District 46 on sharing the costs of the project. The Board concurred with Mayor Taylor s recommendation to eliminate the issuance of electrical licenses. Board members discussed the current list of miscellaneous taxes, dues and contributions and a recent request for $2,500 to support a new Miss Grayslake pageant group. As part of this discussion Board members reviewed a draft community grant program prepared for Trustee Shores. Trustee Shores explained the intent is to formalize and standardize how the Village

5 handles requests for support for local community not-for-profit groups. The Board discussed the draft, the value of a legal review and the suggested budget of $10,000 starting in FY 19/20. The consensus was to finalize the document and application for the program for final discussion in the fall, inform groups of the new process, provide $2,500 for the new pageant in FY 18/19 and continue the current contributions as presented except the Illinois Government Finance Officers Association. The Board then discussed the Water and Sewer Fund multi-year rate plan and noted that the plan does not meet financial objectives due to a large increase in NSWRD sewer charges. After discussion of various presented options the consensus was to draft an ordinance using the presented Option D and to include revised figures in the final budget. Mayor Taylor referred the Board to the financial performance of the Garbage/Recycling Fund under the current multi-year rate plan. He recommended that Option B as presented, with a freeze in rates at current levels for FY 18/19, be used. The consensus of the Board was to draft an ordinance using this approach and including revised figures in the final budget. The Board discussed aquatic center rate plan and a recommendation to move back FY 18/19 rate increases for daily admissions and tot/lap swim to FY 19/20. After discussion, the consensus was to prepare an ordinance amending the current rate plan as recommended. The Board discussed the concept of a land trade along Railroad Avenue with the Board directed that efforts be made to accomplish this. The Board discussed the recently completed study on rail stoppages and directed that it be used to discuss these issues with Canadian National Railroad and appropriate federal and state officials. Trustee Waldenstrom made a motion to approve the Grayslake Highway Transportation Plan Seconded by Trustee Vogel. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Board members discussed the naming of the new Gelatin property park and the new open space area next to Millennium Court. Various suggested names were presented and discussed. After discussion the consensus was to gather input from the public on three names for the Railroad Avenue property: Village Center Park, Gelatin Park and Smokestack Park. An e-survey will be developed and information disseminated through our various communication platforms. For the space next to Millennium Court the consensus was to name the area Clocktower Commons but to wait to finalize this name pending a decision on the Gelatin park name which may make available Village Center Park for this space. Board members expressed their views on three possible logos for the Village Center. An initial informal pool of Board members showed four members favoring one design and three another. Designs, lettering, colors and configurations were discussed. After further discussion the consensus was to utilize the letters and colors of the lower portions of the first option combined with the top design of the second option. The top design will be the same green color of the first option and be of the same width as the lower part of the logo.

6 Trustee Vogel made a motion to approve a revised Ten Year General Fund Capital Improvement Program excluding Grayslake Business Partnership funding. Seconded by Trustee Waldenstrom. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. The Board discussed recommended updates to the Village s personnel policies and pay plan. Trustee Vogel made a motion to approve the changes as presented. Seconded by Trustee Shores. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Trustee Vogel made a motion to direct staff to prepare the final budget incorporating the discussion of the Board. Seconded by Trustee Davies. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Trustee Vogel made a motion to go into executive session pursuant to Section (5 ILCS 120/2(c)(1)) of the Illinois Open Meetings Act and to have Village Clerk Lee present in the session. Seconded by Trustee Waldenstrom. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Trustee Davies made a motion to reconvene into the special meeting at 12:28 p.m. Seconded by Trustee Vogel. Roll call: Mayor Taylor, Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Also present Village Clerk Lee. Trustee Jarvis made a motion to adjourn the special meeting of the Board of Trustees. Seconded by Trustee Davies. Roll call: Trustees Vogel, Jarvis, Waldenstrom, Davies, Shores, Nicodemus all aye. Motion carried. Meeting adjourned at 12:30 p.m.