Village Manager s Office Review:

Transcription

1 Date December 1, 2014 Submitted By Cara Pavlicek, Village Manager Agenda Item C Village Manager s Office Review: Agenda Item Title Village Board discussion and review of FY15 Recommended Budget as follows: 1. Enterprise Funds (20 minutes) 2. Capital Funds (20 minutes) 3. Internal Service Funds (10 minutes) 4. General Fund (20 minutes) 5. Special Revenue Funds (10 minutes) Synopsis In September the Village Manager issued the recommended FY15 Budget to the Finance Committee of the Village Board and provided a copy to the full Village Board. Additionally, FY15 Recommended Budget was posted on the Village website for public review. The Finance Committee has met five times to discuss the recommended budget and revised recommendations based upon those discussions were issued by the Village Manager on November 13, Recommendation The Village Board is asked to review and discuss the recommended FY15 budget. In addition, Board direction is necessary on whether a special meeting will be held on Thursday, December 4, 2014 to further discuss the budget and whether the budget should be scheduled for final adoption on Monday, December 8, 2014 or a week later on Monday, December 15, Fiscal Impact In Terms of expenditures, total expenditures recommended for FY15 are $124.2 million. The General Fund accounts for 41.5% of total expenditures and Enterprise Funds for Water, Sewer, Environmental Services and Parking comprise 21.6% of total expenditures. All capital funds account for 14.0% and remaining expenditures occur within the internal service funds described below under the Fund Summaries. It is noteworthy that the FY15 Recommended Budget may be characterized by the many areas where the budget proposes investments in the Village s financial future. This can be seen in terms of the economic investment in areas such as Pete s Fresh Market (to fill the retail space on Lake Street vacated by the closing of Dominick s) and the investment in redevelopment of the Lake and Forest Parking Garage with a private developer as part of a

2 larger mixed-use project. Both of these expenditures anticipated in FY15 will generate future earnings for the Village and other taxing bodies in Oak Park. Other investments proposed as a part of the budget include a commitment to Village streets and alleys, technology and the physical space at Village Hall. Background The Village fiscal year begins January 1, 2015, and ends December 31, 2015, and is comprised of 29 active funds, plus 40 grant funds. A primary goal of the recommended municipal budget is to establish a foundation for the Village s financial planning. Staff is focused on continuing the positive momentum that exists towards sustained financial stability and improving the quality of public services provided to residents and businesses. The Village currently has an underlying bond rating of AA (stable) from Standard & Poor s and Aa3 from Moody s. Within the General Fund Budget, a flat property tax rate is proposed. Based upon recent tax bills, we are also assuming a 0% growth in taxable assessed valuation. A primary goal of the recommended municipal budget is to maintain Village service levels while enhancing the quality of services provided. It is with this goal in mind that the budget does not cut operational services from the current level however reductions are recommended in areas where repeatedly actual year end revenues or expenditures are short of appropriated amounts, often as a result of lack of implementation. While the total municipal budget relies upon a number of sources of revenue, the property tax levy continues to be a focus of judging the fiscal health of the community. Property tax funded Village expenditures are proposed for FY15 as follows: Debt $ 4,111, % Police Pension $ 3,943, % Fire Pension $ 3,318, % General Fund $ 13,264, % $ 24,638,537 At the last regular meeting of the Village Board, Trustees requested a report from the Oak Park Economic Development Corporation. Funding for the Oak Park Economic Development Corporation is contained in the Development Customer Services Department budget. If further discussion is required, this item may be discussed during the General Fund budget review. Alternatives The Village Board can conclude the budget review and discussion as a part of this meeting or identify one or all of the following dates for further discussion: Thursday, December 4, 2014; Monday, December 8, 2014; and/or Monday, December 15, 2014.

3 Previous Board Action In advance of the development of the recommended budget, the Village Board held a special meeting on June 23, 2014 and the Finance Committee of the Village Board held meetings on July 14 and 28, Following distribution of the recommended budget in September, the Finance Committee met five times to discuss the recommended budget and revised recommendations based upon those discussions were issued by the Village Manager on November 13, Additionally, the Village Board held the Truth in Taxation Public Hearing on November 3, 2014 as well as considered ordinances related to various fees on November 3 and 17, Citizen Advisory Commission Action N/A. Anticipated Future Actions/Commitments The Board of Trustees must adopt the annual budget prior to the start of the Fiscal Year. Intergovernmental Cooperation Opportunities N/A. Performance Management (MAP) Alignment N/A. Attachments FY15 Recommended Budget dated November 13, 2014 Finance Committee of the Board Approved Minutes June 30, 2014 Finance Committee of the Board Approved Minutes July 14, 2014 Finance Committee of the Board Approved Minutes July 28, 2014 Finance Committee of the Board Approved Minutes October 9, 2014 Finance Committee of the Board Approved Minutes October 16, 2014 Finance Committee of the Board Approved Minutes October 23, 2014 Finance Committee of the Board Draft Minutes October 27, 2014 Finance Committee of the Board Draft Minutes November 7, 2014 Report from Oak Park Economic Development Corporation (plus powerpoint)

4 Finance Committee of the Village Board Minutes Monday, June 30, :00 pm Room 130 APPROVED MINUTES Call to order 6:31 p.m. Present were members of the Finance Committee, President Abu-Taleb, Trustee Robert Tucker, Trustees Glenn Brewer and Salzman. Staff in attendance included Village Manager Pavlicek, CFO Lesner, Village Attorney Stephanides, and Village Clerk Teresa Powell. Guests included Kevin W. McCanna and Sarah McCanna of Speer Financial, Inc. and Richard Boykin, Cook County Commissioner Elect. The minutes of the June 12, 2014 Finance Committee meeting were approved as submitted. There was one public comment from Dr. Robert O Hara, 300 block of South Taylor regarding alley conditions. New Business: Debt Analysis Manager Pavlicek explained that in advance of the budget process staff is presenting a review of the bonded indebtedness to show current debt and potential new debt. CFO Lesner and Kevin McCanna, President of Speer Financial were introduced. President Abu-Taleb asked Mr. McCanna to introduce Speer Financial. CFO Lesner reviewed current debt issues and annual debt Service chart, and highlighted the impact of potential new debt in future years. Debt abatement and property tax levy were further reviewed. Trustee Tucker introduced Mr. Richard Boykin, who joined the meeting and noted that he is expected to represent Oak Park on the Cook County Board later this year as well as an Oak Park resident. President Abu-Taleb remarked on the poor condition of streets and alleys. He further commented that the new proposed debt is not inclusive of Madison Street TIF District and there was consensus from the Committee that that this be included. It was noted that within the proposed debt for street and alley reconstruction, $10 million is stated as a placeholder only for streets and $10 million for alleys. A subsequent meeting of the Finance Committee will focus on a review by Public Works of the needs and costs related to 1

5 streets and alleys. CFO Lesner reviewed proposed new debt and the impact on overall debt service. He noted that an alternative to consider will be the structure of individual debt issues so that annual debt service can be equalized from year to year. President Abu-Taleb asked about including debt for technology improvements. It was noted that improvements in technology can lower cost of services in the longer term. Manager Pavlicek noted that FY14 includes $4.4 million in proposed debt for IT inclusive of building permitting software and GIS as well as Harrison Street lights and that the IT master plan will be available for Board review in days and following its review there will be additional information about IT needs. President Abu-Taleb asked for consideration of leasing versus buying technology services. Trustee Brewer and President Abu-Taleb asked whether the Village has in-house expertise in technology. Trustee Brewer asked about the Engineering Division s cost per alley for repairs and the budget per year. Total alley repairs in 2014 will more than double over last year due to increased funding and a green infrastructure grant. Manager Pavlicek referred to Mr. O Hara s alley repair request and noted that the index evaluating the condition of alleys is being redone. She will report in July on how many would need to be repaired to bring them to good condition; she noted that Public Works Director Wielebnicki is reviewing the capacity for annual alley reconstruction. President Abu-Taleb asked for evaluation of increasing the use fee for refuse collection to allocate funds for alley repair. Discussion of this option explored increases in water fees for funds, which would have to be allocated to related capital improvements, such as sewers, and the greater impact of refuse fees on residential users, as businesses use private collection services. Manager Pavlicek noted that consideration of franchising commercial waste hauling could be considered as well. Trustee Brewer asked about the impact of such increases on the Village s bond rating; Mr. McCanna noted that this would only be a concern if Oak Park were the highest in Cook County. Trustee Salzman noted that there should be a logical link between fees and services. President Abu-Taleb asked for information about the Village s borrowing capacity in the next 4-5 years. Mr. McCanna reviewed the various indicators that are considered by rating agencies such as liquidity. There was discussion about the balance between debt and return on investment and the need to provide public services in accordance with the vision of the Village Board. Mr. McCanna complimented the discussion about planning for debt, as well as the need to consider the Village s annual capacity for bank qualified issues which is up to $10 million. The potential for issuing new debt and refinancing current debt should be decided prior to calendar year end. 2

6 Trustee Tucker asked for additional information about street and alley improvements and the balance between taxes and fee burdens. Manager Pavlicek asked the Committee what additional information would be useful to review and there was consensus that staff provide an listing of current Village fees that could support new infrastructure investment, tax rate and levy information for comparable communities, an example of the impact of new debt to the average homeowner, Moved by Trustee Salzman to adjourn. Second by Trustee Tucker. Ayes: All. Nays None. The meeting was adjourned at 7:56. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 3

7 Finance Committee of the Village Board Minutes Monday, July 14, :30 pm Room 130 APPROVED MINUTES Call to order 7:45 p.m. Present were members of the Finance Committee, President Abu-Taleb, Trustees Tucker and Brewer. Absent: Trustee Salzman Staff in attendance included Village Manager Pavlicek, Village Attorney Paul Stephanides, Village CFO Craig Lesner and Village Clerk Powell. Guests included Public Works Director John Wielebnicki and Acting Village Engineer Bill McKenna. The minutes of the June 30, 2014 Finance Committee meeting were approved as submitted. There was no public comment. New Business Manager Pavlicek explained that in advance of the budget process, this meeting was intended to be a review of pavement conditions in streets and alleys. Alley Pavement Conditions Public Works Director Wielebnicki reviewed the life cycle of the typical alley and noted that appropriate repairs early in the life cycle can extend the life of alleys, of which there are approximately 606 in the Village. Asphalt alleys can have a 25 year life span; while concrete alleys can survive for up to 50 years. He discussed the rating of alleys and proportion within each 10-point level, noting that alleys at 80% or better are not considered in the current repair cycle. Since 2002 an average of 12 alleys per year have been reconstructed. Acting Village Engineer McKenna explained that an outside consultant rates pavement conditions in a range of 1-100; some are currently rated very low with the majority in the 40-60% range. The Village budgets approximately $800,000 annually ($700,000 from CIP and $100,000 - $150,000 from CDBG). In 2014 the amount is raised by $2 million due to grant funding, allowing for work on 30 alleys. President Abu-Taleb noted that there are about 360 alleys in bad shape and expressed concern if the rate of repair drops back to the earlier level next year. Acting Village Engineer McKenna noted that if expenditures were increased additional alleys could be completed annually. He 1

8 also explained that a rate of thirty alleys per year was optimal to accommodate local flow of traffic and relocation of cars due to this work. Public Works Director Wielebnicki added that staging this over several years could spread the rate of future repairs for the next round of replacements in 35 years or so, and noted that drainage issues hasten deterioration. Most alleys are now concrete with a 50 year life expectancy. He noted that alleys lose one point per year on average; they get less traffic than streets. Manager Pavlicek noted that the proposal is an additional $2 million in capital fund per year, or a total of $2.8 million annually, over the next five years, which could be handled with a series of bond issues over that period. Trustee Brewer supports accelerating repairs. Trustee Tucker noted that a core function of local government is maintenance of streets, always a balancing act. President Abu-Taleb asked about permeable pavement in alleys and if this could be handled with an SSA if local residents agree to contribute. Staff noted that there are areas of Oak Park that are not well-suited to permeable pavement due to soil issues and the cost of installation in such areas would be more. Trustee Tucker noted that when brick streets were offered on a cost-sharing basis there were no takers. President Abu-Taleb proposed using a portion of the environmental services fund balance to support the cost of alley reconstruction since refuse trucks contribute to alley deterioration. Attorney Stephanides noted that this can be reviewed and any fee e must relate to a direct purpose. Trustee Brewer noted that debt is less expensive now, and funds could be secured at lower cost as a way to address debt service. Public Works Director Wielebnicki noted that the alley pavement condition rating is not the only factor in determining reconstruction schedule as alleys with the same pavement condition rating may have drainage issues, for example, and as a result may be scheduled for reconstruction sooner. Street Pavement Conditions Public Works Director Wielebnicki presented pavement conditions on streets, noting the difference between major streets and local residential streets with similar ratings. Acting Village Engineer McKenna noted that there a 240 lane miles of streets (or 120 center line miles). Street pavement condition scores are similar to alleys, with separate ratings for the network, major arterial streets and local streets. 70% ratings are considered very good or better. Acting Village Engineer McKenna explained that there are two programs for street maintenance: one maintains streets in good condition through grinding, overlay, and micro-surfacing/crack filling. For more extensive repairs, reconstruction is required with deeper drilling of asphalt, as well as possible curb replacement and drainage issues. Choice of such repairs is influenced by rating, drainage, and the age of underground infrastructure. 2

9 The annual funding commitment to streets has averaged $2.7 million for the past nine years, inclusive of Federal and State funds. Road improvements of about 20 blocks per year have raised ratings about.25 annually.. Acting Village Engineer McKenna noted that State and Federal funding has been a major factor in recent street improvements. Trustee Tucker noted that streets such as Ridgeland Avenue are partially designated as state highways and qualify for such funding. Manager Pavlicek noted that prompt repairs limit damage from water filtration and noted that Oak Park repairs on perimeter streets are influenced by plans of adjacent municipalities. She also noted that planned improvements by other local governments, such as recent Park renovations, may require underground improvements to coordinate with their construction schedule rather than waiting. Acting Village Engineer McKenna explained that both fair and good streets might be repaired to extend the street life cycle. Acting Village Engineer McKenna recommended an accelerated five year plan to speed repairs of streets, taking five versus 15 years to make these needed repairs. Public Works Director Wielebnicki noted that major streets may also be eligible for Federal funding. The balancing of local and major street repairs was discussed as the focus may shift due to Federal funding, with a multi-faceted approach required to address all issues. Public Works Director Wielebnicki reported that Public Works receives 20,000 calls per year about streets; Trustee Brewer noted that failure to repair now may require more extensive repairs later. Engineering Services Public Works Director Wielebnicki reviewed the organizational structure and duties of the engineering division of the Public Works department, which handles the basis design and construction projects for the Village with outside help as additional projects are added. The total cost for Village construction activities including streets and alleys above, as well as sewers, bike lanes and others, ranges from $6 million to $10 million annually. In some cases portions of larger projects are designed in-house, as a recent Federally-funded design project saved 10% or $200,000 over the cost of contract design drawings. Acting Village Engineer McKenna explained that some projects that are larger can be completed more quickly with consultant assistance, while continuing to evaluate in-house efficiencies. In 2013 consultant engineering costs were 11.7% of total costs while in-house engineering costs were 8.4% of total costs. Manager Pavlicek explained that staff recommends maintaining a baseline of Village employees for basic projects, with consultants as additional capacity is needed without locking in additional employees in such positions. This hybrid approach is working well for Oak Park. 3

10 President Abu-Taleb asked if it was better to outsource or keep things in-house and whether every project requires design. Acting Village Engineer McKenna explained that all projects require some engineering design. Every project requires documents prepared and engineering technicians can handle routine matters. President Abu-Taleb asked what similar communities do. There was discussion of the range of solutions used by municipalities, and the fact that some communities have separate governments which manage water and sewers, for example. President Abu-Taleb asked for third party analysis of the costs of CIP or similar analysis. Trustee Tucker asked if it would be difficult to make comparisons; staff will find some comparable municipalities and report back. Public Works Director Wielebnicki discussed the importance of public works communication to the public as an example of good customer service, something consultants would not do. Manager Pavlicek discussed the payment arrangements for consultants as similar to outsourced legal services, either hourly or a percentage of total costs. Old Business Trustee Brewer asked when reports can be expected regarding the Board of Health and Dole Library as previously requested by Mr. Barber. Manager Pavlicek reported that Health and Adjudication will be presented at the July 28 meeting. The VOP-owned Dole facility will be addressed later. Trustee Tucker asked that Trustee Barber be notified when these topics are presented so that he can plan to attend, if he wishes. Moved by Trustee Tucker to adjourn. Second by Trustee Brewer. Ayes: All. Nays: None. The meeting was adjourned at 8:48 p.m. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 4

11 Finance Committee of the Village Board Minutes Monday, July 28, :30 pm Room 130 APPROVED MINUTES Call to order 6:30 p.m. Present were members of the Finance Committee, President Abu-Taleb, Trustees Salzman, Tucker and Brewer. Absent: None Staff in attendance included Village Clerk Powell, Village Manager Pavlicek, Village Attorney Stephanides, Village CFO Lesner, Deputy Village Manager Shelley, Adjudication Director Anderson, Health Director Provost-Fyfe and Environmental Health Supervisor Charley. The minutes of the July 14, 2014 Finance Committee meeting were approved as submitted. There was no public comment. New Business President Abu-Taleb announced that two services will be reviewed, Adjudication and Health. Manager Pavlicek explained that in advance of the budget process, this meeting was intended to be a review of the services provided by these two areas. Overview of the Office of Adjudication Director Anderson explained that his presentation would compare the current Adjudication process with use of the Circuit Court as an alternative. Local ordinances require compliance; when violations occur citations are issued and may require a hearing before a fine is issued. He noted that common citations include traffic, non-moving traffic, nuisance, personal, parking, curfew, damage to Village property, property and building violations. He explained that Adjudication employees do not issue citations; these are issued by other department inspections and police who monitor compliance. Employees in the Office of Adjudication maintain all records of citations and manage the process. Hearings are conducted by four contract Administrative Law Judges who are all attorneys. Under the Home Rule authority of the Village of Oak Park, these judgments are enforceable as in Circuit Court. The judicial contractor expense is $75,000 per year. The Office of Adjudication collects revenues of $2.5 million in fines, mostly for parking violations. Criminal violations and moving violations are handled not handled in the Office of Adjudication but in Circuit Court. Adjudication expenses are $541,000 from the General Fund. Director Anderson reviewed the expenses of the hearing process which includes judges, court 1

12 security officers, printing and other costs, for a total of $190,000 annually. If this function was transferred to the Circuit Court, those judges would handle hearings and court security would be handled by their bailiffs. However, all of the other functions would still need to be handled by a local administrator, including traffic compliance, such as license suspension for 10 or more unpaid tickets, booting and towing after five or more violations, functions which Adjudication now handles. Remaining costs of $300,000 would remain for the Village to manage. The impact of a return to Circuit Court on Village Departments was next reviewed by Director Anderson. Within the Adjudication process appearances by police officers are not required as hearsay is allowed; in Circuit Court this is not an option and police are often required to appear. He discussed the overtime process and frequent continuances and noted that the Police Department has projected that such costs could amount to $100, ,000 annually. Trustee Salzman asked for more detail on how this amount was determined. Manager Pavlicek said that Chief Tanksley could speak about the overtime issue and impact of police away from usual duties for court appearances. She explained that if Adjudication is not handling cases this could not be covered by an attorney in the Law Department as the Circuit Court caseload would be 4,000 to 6,000 cases annually or 800 to 1,000 cases without parking citations. It was also noted that cases currently handled in Adjudication are completed in one hearing. Alternatively, continuances are common for cases at Circuit Court. Attorney Stephanides noted that it would like require the Village Attorney only handle non-moving violations (such as no Village vehicle sticker) and moving violations would be handled by an outside legal counsel, with at least one or two court calls per week. Director Anderson noted that inspectors from many departments would also be impacted, as they would need to appear in court, possibly multiple times for the same case due to continuances for building violations, for example. He also noted that subpoenas are rarely issued for cases in Adjudication but are common in Circuit Court. He also explained that citations for failure to renew licenses for both multi-family properties and businesses have been automated and are issued when renewals are not made by the deadline. This change has led to 100% compliance for multi-family and business license renewals, reducing staff time devoted to administering these programs. The collection of fines would be impacted by removal the Circuit Court, which keeps some of the revenue. Director Anderson estimated a 53% reduction in revenue overall, noting that a $250 handicapped parking violation might be reduced at Circuit Court to offset other fees they charge with a collection of as little as $35 for the fine itself. Finance has reviewed records before Adjudication was established and determined that revenues for fines received by the Village during that period were roughly 50% of those now being collected. The Police Chief could explain in more detail the impact on overtime costs and police presence of a change to Circuit Court. The current online appeal process brings in about 20 appeals daily, as well as several walk-ups contesting tickets. These options would no longer be available and people would be required to go to court to dispute tickets. 2

13 Juvenile Court (currently one night per month), which provides therapeutic remedies and community service as recently provided for by the Board in Code revisions, would likely go away for typical violations now reviewed by Adjudication. Circuit Court would likely not review tobacco, minor cannabis and curfew violations now handled by Adjudication and juvenile night court would no longer be an option for young people and their parents. President Abu-Taleb proposed that it might be helpful for accounting purposes if the fines for parking now included in the General Fund would instead be identified as revenue streams for Adjudication. Trustee Tucker also asked for details of police budget impact and asked if CFO Lesner agreed with the numbers provided. CFO Lesner agreed that the he could provide more detail and speak to the efficacy of the process and whether collections would go down; he noted that citations are issued for Code enforcement rather than revenue generation. Trustee Tucker asked if it made sense to CFO Lesner to keep Adjudication in-house. Mr. Lesner agreed that it did. Manager Pavlicek added that there are two rationales in the process, to collect appropriate fines and to provide a positive customer service experience locally rather than requiring people to go to Circuit Court, which could reduce revenues to the Village so that both sides win. However, reviewing all aspects of the process is helpful to determine if current choices are the best. President Abu-Taleb asked how Forest Park handles citations without an Adjudication Department and whether Oak Park could do the same. Trustee Salzman asked for other alternatives by neighboring communities, the impact on policing and costs. He noted that Director Anderson does a great job and suggested that accounting might be clearer to show revenue streams. Manager Pavlicek pointed out that GASB accounting principles puts revenue into the general fund, rather than attaching it to an operating department and that the presentation of revenues by department is provided to be informative. Trustee Salzman suggested that based on the information at this meeting, the benefits do not appear to outweigh the costs. Staff will conduct further research on how other municipalities handle citations and enforcement processes. Attorney Stephanides noted that Adjudication is common in Cook County, while DuPage conducts Field Courts. Mr. Salzman asked if more categories of Code violations could be directed to Circuit Court and asked for a clear illustration of costs versus for each option. Staff will prepare a list of all ordinance violations which could go to Circuit Court. Trustee Salzman asked for additional details on the juvenile justice process as well. Director Anderson noted that under the Adjudication process no court records follow juveniles. Manager Pavlicek noted that this was the intent when the Board recently set up Juvenile Court once per month. 3

14 Trustee Salzman said that it would be important to examine departments beyond what departmental advocates present to have a firm basis of information, and asked that comparisons with other municipalities be provided. He asked whether these functions are truly necessary and how other communities handle them. Trustee Brewer asked for a quantifiable impact on other departments of changes with firm numbers from the Police Department. He noted that the law requires that 4,000 to 6,000 cases be handled internally and asked about ceasing to write local violations. Manager Pavlicek explained that the law doesn t allow the Village to ignore violations; to stop writing these the Code would have to be changed. Trustee Brewer asked for information on the impact on enforcement of the Code and the various departments. Trustee Tucker explained that it was necessary to review these issues under the microscope and thanked staff for this information. Trustee Salzman asked that Finance or other staff provide an objective quantification of these issues. Trustee Brewer suggested that comparisons be made to identify similar or hybrid arrangements, and noted that if adjudication was eliminated some services would need to be reassigned internally. He noted that revenue generated by enforcement and suggested that the customer service aspect of the process needs to be considered. President Abu-Taleb asked if Law could take over Adjudication s role. Attorney Stephanides explained that they are never combined; Law only handles prosecution of cases. Sometimes administration is assigned to Police or Finance, but still requires dedicated personnel. President Abu-Taleb asked if booting of cars could be outsourced. Director Anderson explained that this is handled by Parking Enforcement Officers and managed by Adjudication. This requires careful management providing due process as seizing of property is considered a taking. President Abu-Taleb noted that they might be losing money rather than making money. Director Anderson explained that Adjudication is an administrative hub for the enforcement efforts of other departments, not set up just to generate revenue. President Abu-Taleb asked if the department was at capacity or if it could take additional business, such as providing this service for River Forest. Director Anderson said that ultimately they could handle more, but that others are handling this for River Forest now. Manager Pavlicek explained that the Field Courts of DuPage County operate something like that. President Abu-Taleb asked how we could increase revenue. Trustee Salzman noted that juvenile records are sealed in Circuit Court. However, college and employment applications may require that applicants self-report. He suggested that the referrals now handled by Adjudication could be tweaked to be handled by the Township. Overview of Public Health Department Director Provost-Fyfe noted that a memo had been sent to the Finance Committee summarizing the duties of the Health Department and introduced Environmental Health Supervisor Mike 4

15 Charley. She explained the origin of the Health Department to protect the public from infectious disease and its certification by the State of Illinois at the time that the state decentralized public health activities to counties, but also certified local health departments in Cook County. In addition to Oak Park, the other municipalities with state-certified health departments include Evanston, Skokie and Stickney. This certification requires a Health Director with a specific medical and educational background and specifies practice standards to be eligible for state grants. PCC Wellness serves as the required Medical Consultant for Oak Park. She presented the organizational chart and noted that the Emergency Preparedness Director is part of the Health Department, funded through a grant, with joint reporting responsibilities to the Police Department as well. In this role he conducts drills for departmental coordination with outside agencies and other governments for emergencies and coordinates training of emergency medical volunteers, among other duties. Community Health Services oversees family and child health with 1 nurse and 2 part-time practitioners; these positions are primarily grant-funded. They work with Oak Park Township Senior Services, Women, Infants and Children (WIC), the Collaboration for Collaboration for Early Childhood Care and Education and Infant Welfare. Environmental Health includes rat and nuisance control, food protection and animal control. Wildlife impacts properties and traps are provided to residents. The Village has a multi-year agreement with the Animal Care League to handle stray pets arranged after other arrangements proved unsatisfactory in the past. Six part-time contractors share responsibility for overseeing operation of the Farmers Market (3 per weekend on alternating weekends) to assure coverage of the Link Card program (which also accepts credit cards) and other operations of the Farmers Market booth. The growth and success of the Farmers Market over 40 years now make it comparable to a small business and requires staffing to manage operations and vendors. The West Nile Virus intern is funded through a 12-week grant each summer to survey neighborhoods and educate the public to reduce mosquito breeding sites. Two advisory commissions (Board of Health and Farmers Market) work with the Health Department. The expenses of the Health Department were presented ($956,397 for 2015), with revenues of $420,514 ($124,869 in fees and $303,645 estimated for grants in 2015). Trustee Brewer asked what benefits and services are being provided that would otherwise be provided by the Cook County Health Department. Director Provost-Fyfe noted that the Cook County Health Department is currently severely under-staffed, limiting its services. Director Provost-Fyfe noted that the county has a broad approach; it charges $60/visit for direct services; this might or might not be an option. Without a local certified health department, the $300,000 in annual grants would not come to Oak Park but would be awarded elsewhere in the state. Certain functions such as restaurant inspections are required by state law and these functions would need to be handled by staff or outsourced with a staff supervisor. Trustee Brewer asked what Oak Park provides that other communities don t. Trustee Tucker asked if there is a charge for visits. Director Provost-Fyfe explained that nurse visits are free and we receive a grant through Medicaid for these but that there is a fee for restaurant inspections. 5

16 Trustee Salzman asked for specifics on the list of services provided; which can be outsourced to others, such as day care and senior care facilities? Director Provost-Fyfe noted that these inspections were added by action of the Village Board after the state inspections failed to provide for an adequate level of supervision of these facilities. Trustee Salzman suggested that perhaps the state inspection standards have changed as a result of a new administration. Director Provost-Fyfe noted that staff had been cut by half since the beginning of the recession. Trustee Salzman asked whether our West Niles efforts duplicate the Mosquito Abatement District s work. Director Provost-Fyfe explained that MAD does mosquito surveillance (traps mosquitoes) and the Health Department collects birds. She described the allocation of grants among various aspects of a project, including salaries and educational materials. Mr. Charley distributed information providing the initial result of a survey of other communities services and salaries for comparison. Trustee Brewer asked why these communities were selected and suggested that a broader list of municipalities be polled. Mr. Charley explained that these communities were similar in size and services to Oak Park Mr. Charley explained that restaurant inspections are ranked at three levels by risk category and may be re-inspected if needed. President Abu-Taleb asked if there are too many inspections and suggested that Oak Park is over-inspecting restaurants. Mr. Charley pointed out that while it is more than mandated by the state, Oak Park does just the number of inspections mandated by local ordinance. Mr. Charley pointed out that each inspection costs $76.34 and is fairly efficient in relation to this initial group of other communities. Trustee Brewer noted that Oak Park voluntarily added to the state mandate for inspections and asked about capacity for inspections. Does Oak Park need more help or could the Health Department provide services to other communities? Mr. Charley explained that health inspections are required by state law. Trustee Brewer asked about outsourcing of this service by other communities and wondered if Oak Park is doing excess inspections. Trustee Brewer asked if grants for health services would be available without the local Health Department certification. Director Provost-Fyfe said they would not; tax dollars would need to be used instead. Trustee Brewer asked about having non-profits provide services instead of the Village and asked if they might be eligible for grants; this may be possible. Manager Pavlicek also noted that some grants are tied to certification; Trustee Brewer asked if they could provide a list of grants tied to this certification. Trustee Brewer asked for clarification regarding Farmers Market staffing. Mr. Charley explained that there are a manager and assistant and six part-time volunteers (three per weekend alternating) as additional staff are now required to handle the LINK card (food assistance program which replaced food stamps). Trustee Brewer asked why the Farmers Market chose to accept the LINK card. Mr. Charley explained that this allows low income people access to fresh produce and requires 2 people to manage this, a third person manages sales at the Village booth. 6

17 Trustee Brewer asked about the duties of the full-time emergency preparedness response manager. Director Provost-Fyfe explained that his duties involve training and drills for all staff involved in the process (as public safety staff members conduct drills of their duties). This position reports jointly to the Health Director and Police Chief. Duties include volunteer training (Emergency Medical Corps), coordination and collaboration with other local governments, hospitals, non-profit agencies and other municipalities. The Emergency Operations Center is established at Public Works as the Command Center and has been used for snow emergencies and the NATO event in Chicago, for example. He works with IT as well, including new areas of concern such as cyber-attacks. Manager Pavlicek added that hazard mitigation is another area of concern and stated that he wrote the hazard mitigation plan which will assist in the Village accessing grant dollars. Director Provost-Fyfe also noted that he works with schools on home preparedness and with police, for emergency situations in schools. Manager Pavlicek noted that he has prepared the required emergency preparedness plans for the Village. President Abu-Taleb asked if the grant for his services makes this position cost-neutral and Manager Pavlicek confirmed that there was no cost to the Village. Trustee Brewer asked whether we could simply stop having this position. Manager Pavlicek noted that most municipalities of our size have this position. Trustee Brewer suggested that the Village might be able to do without non-core functions such as day care inspections and asked that a future meeting present a case for that. Old Business Manager Pavlicek announced that the next meeting of the Finance Committee will be on August 25 and will include the additional information requested for Water and Sewer and may also include additional information for Adjudication or Health as requested this evening. Moved by Trustee Tucker to adjourn. Second by Trustee Brewer. Ayes:All.Nays:None. The meeting was adjourned at 8:22 p.m. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 7

18 Call to order 6:31 p.m. APPROVED Finance Committee of the Village Board Minutes Thursday, October 16, :30 pm Room 130 APPROVED MINUTES Present were members of the Finance Committee, President Abu-Taleb, Trustees Brewer, Salzman (6:32) and Tucker Absent: None Staff in attendance included Deputy Village Clerk Schoenneman, Village Manager Pavlicek, Village Attorney Stephanides, Village CFO Lesner, HR Director Shamley, and Parking Director Velan. The minutes of the October 9, 2014 Finance Committee meeting were approved as submitted. There was no public comment. New Business Review of Health Insurance Fund Manager Pavlicek explained that HR Director Shamley and CFO Lesner will discuss this topic. Health Insurance Fund is an internal service fund. Revenues come from internal sources. Employees contribute 15% of premiums; retirees contribute 100% plus a 2% administrative fee of the monthly premium. Agency contributions (currently Library) provide 100% plus a 1% administrative fee. The Village contributes 85% of the employee premium from the Fund which pays the employee (Parking, Capital, Water/Sewer, or General Fund). Expenditures in this fund are for personal services, fringe benefits, and contractual services. Bills for health services are paid to insurance agencies and the Village gets the benefit of Blue Cross Blue Shield negotiated discounts. The Village pays the broker fee. CFO Lesner explained that the funds pay expenses for employees allocated to each fund. HR Director Shamley, 6.6 and 6.9 % each for PPO; HMO at 4.4%, 7% increase in premiums for PPO, in line with trends, and 5% increase for HMO. Dental employee contributions fixed for three years; costs increase 2.7% increase for a 3% increase for employees, a nominal amount. Optional employee funded vision plan, chose Vision Service Providers, a high and low plan ranging from $5 single to $23 for family coverage, a significant cost saving for employees. Life Insurance Mutual of Omaha, unchanged. Prescription drugs down 5.5% staying with Catamaran for Contracts will come to the Board on Monday, October 20 and on November 3. 1

19 CPC broker in 3 rd year, go out to bid in 2015; would like to see a more competitive approach. Not recommending plan changes this year; last year there were some changes in copays and other items. Trustee Tucker asked about other providers than BCBS. United Health Care and Cigna declined to bid this year. Staff will seek employee feedback and review of other options for future years. Committee members discussed the range of increases in health care compared to Village increases. Broker asked about stop-loss numbers. Changes in 2018 may require further analysis of PPO plans and other options. There will be a $20 increase per month for most expensive option, versus a few dollars for others, in pretax dollars. About one fourth of employees are in PPO plans, including retirees and library employees. The Village is still waiting to hear from the Library about their plans for HR Director Shamley left the meeting. Review of Risk Management Fund/Self Insured Retention Fund These two funds are managed by the Legal Department Workers Compensation, Property and Casualty Insurance. Three years ago the previous Village attorney recommended collapsing two funds into one. Risk management is funded from transfers from the self-insured retention fund up to $1 million.. The Legal Department tabulate all cases in the pipeline for legal fees, settlement costs, etc. and assign value to each case. Now the Village Attorney is considering whether pool or self-insurance concept is the best option. CFO Lesner explained how these costs are allocated, not by fund, but smoothed out to determine which fund takes a hit and maintain some stability. President Abu-Taleb asked if this was an issue for other communities. Manager Pavlicek discussed issues from 2008 and reimbursing from the Parking Fund to the General Fund and they discussed options to bring the self-insured amount down through purchase of additional insurance. It would cost $14,000 to bring fund down to $1 million, and noted that the $1 million figure was more common in other communities. If too low, this would be considered unadvisable. The case load has built over time, with public safety an increased risk. Incidents which could impact the fund were discussed. Attorney Stephanides noted that we don t have a quote from another broker yet, but hope to have something later in the year. President Abu-Taleb asked about an increase in water/sewer fees. CFO Lesner explained that fees are scheduled to continue to increase along with refuse collection and vehicle stickers. This is last year of separate funds; these funds will be merged for Review of Parking Fund Parking Director Velan explained that in 2008 the Village started looking at parking fund, at time of $10.5 million deficit with revenue of $4 million. This year we are making the last payment to the General Fund of the remaining deficit amount. Revenues are projected near $6.2 million. The Enterprise fund is now spending within budget, and will have a small fund balance. Equipment, upgrades, maintenance and bond issues are also budgeted. Bond issues are used for some garages but one comes directly from the Parking Fund. Upgrades are planned using short-term bonds to avoid drawing down the Parking Fund, and the Lake & Forest garage will use a new bond issue. 2

20 The Colt-Westgate parking garage will use dollars allocated for public parking with last downtown TIF revenues ending in New bonds will extend to 2035 to pay for new construction. The budget includes a proposed parking permit fee increase of 2.28% or $5 per quarter (or $20 per year). No hourly parking fee increases are proposed as construction has caused street parking to be maxed out. Some permit holders from Lake and Forest have gone to street lots and some lots are completely full. Decent capacity remains in Holley Court and Avenue Garage. Rates will drive utilization and those who want convenience will pay high rates. Manager Pavlicek noted that businesses are concerned about construction disruptions combined with rate increases and asked if Board members were comfortable with proposed increases in permit fees, as long as there is no surface rate increase. Trustee Tucker said it would be best not to discuss any additional parking increases at this time but permit fees are fine. President Abu-Taleb suggested that these changes may encourage greater use of garage options. Trustee Tucker agreed, but felt this wasn t the time for hourly increases. Trustee Brewer asked about the ability to charge varying fees in different lots. Director Velan confirmed this. He wondered if the surface lot was higher than Holley Court garage if more people will use it. President Abu-Taleb asked for a report on the total revenue increase with these changes and if it is worth it. This is easy to run and can be provided after the holiday season. Greatest concern will come from businesses. Ms. Velan explained that typically rate changes for January will be brought in November and free parking will be available on the Friday after Thanksgiving and on Saturdays till Christmas. Trustee Brewer suggested bringing rate changes up in February. Trustee Salzman asked about the new valet parking option on Lake Street. This would be shown under revenues and could be discussed at a future board meeting, but this revenue is not significant. President Abu-Taleb confirmed consensus to raise permit fees but not hourly rates at this time. Manager Pavlicek explained bond repayments and debt service for each garage, which includes principal and interest. Some bonds can be called when remaining amounts are small to save on interest if not already refinanced. Director Velan discussed the high-volume validation program for FFC and the Lake Theater, which did not participate. Customers are charged 50 cents per hour validated. Since program inception in 2008 this business has received a little less than $1.2 million in subsidies from the Village through this validation program, which has two hundred and two thousand validations per year. The first hour is free and FFC pays the remainder; the customer pays only 50 cents. Manager Pavlicek asked whether any change is needed in these arrangements. Trustee Brewer suggested not changing by amount, but by volume (with a lower cap) as the Village is losing significant revenue or a possible revenue-sharing program. President Abu-Taleb noted that the first two hours are free at FFC but one minute over requires payment. If it would cost another 3

21 $20 to go there monthly, customers wouldn t use it. Trustee Brewer discussed the current losses and the expectations have been established. They discussed if this is fair to all taxpayers and to other businesses. Trustee Salzman suggested that this was not the time to consider this issue given the current parking situation. With new downtown residents it s not certain that these spots will always be available. Trustee Tucker noted that other FFC facilities offer two hours of free parking and may have similar deals elsewhere. Manager Pavlicek asked how any increase would be passed on to monthly members. President Abu-Taleb suggested talking with the owner about how they can offer two hours of free parking without losing all of that revenue. Trustee Brewer expressed concern about how other businesses would feel about this arrangement. Trustee Salzman suggested that FFC members may also patronize other businesses while using the free parkingcustomers also become comfortable using the garage. Director Velan noted that Passport Parking offers a validation program for meter parking to downtown businesses. Passport constitutes 10% of what they collect for meters. Since the program began online parking pass revenue has been $46,949. Director Velan reviewed the capital budget for parking with $100,000 for resurfacing lots. A major expense this year has been Lake and Forest. Equipment updates (cameras, intercoms) are past useful life and need upgrades for Holley Court, Avenue and OPRFHS. Revenue control systems are needed for Holley Court and Avenue. Permitting software is budgeted for permits and citations and cited challenges of keeping up with technology, as current programs are now ten years old and were built in-house. New programs will allow for a monthly versus current quarterly process and will provide for a waiting list rather than coming to Village Hall using the license plate and will not require printouts and physical permits. The new technology will show the permit, vehicle sticker, and citation status. This change cannot be done on a piecemeal basis, and this upgrade is proposed rather than transferring $1 million to the benefit fund could be paid now but a five year bond is proposed to avoid depleting the fund. Trustee Salzman asked about revenue control upgrades. Director Velan said that Holley Court, Avenue Garage and pay stations now have equipment problems as they are approaching their ten year maximum life expectancy. Manager Pavlicek noted that these use old technology with magnetic stripes versus bar codes. The advantages of bar codes versus magnetic stripe cards were discussed, as well as a move from transponders to new technology. Businesses approached the Village proposing to buy multiple permits and share employee parking. This can t be done now, but new technology is more flexible. President Abu-Taleb asked if the cost of maintenance of current equipment would be reduced by adopting the new technology. Director Velan confirmed that new technology is more durable. Manager Pavlicek noted the convenience of choices to use cash costs the Village. With cash an employee must 4

22 empty the machine; there are different operating costs for each payment method. President Abu-Taleb said it would not be worth the cost unless dollars are saved in the long run. Director Velan said that they have expectations of what they are spending dollars on and worth the value of what they are paying. Review Special Revenue Funds Manager Pavlicek reviewed the Special Revenue Fund. Expenditures are $15 million. Funds were reviewed and briefly explained. At the time the Joint Review Board considers amendments to the Madison TIF she recommends ending the Garfield TIF with 100% distribution of these funds, estimated to be about $1 million. Special Service Areas were reviewed with some inactive and new ones created for diverters. State RICO is expected to provide funds. She discussed sustainability fund as part of a group. The Madison TIF has a placeholder at this time, but will need to be reviewed at a later date. Old Business None. Ayes:All.Nays:None. The meeting was adjourned at 7:37 p.m. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 5

23 Call to order 6:34 p.m. APPROVED Finance Committee of the Village Board Minutes Thursday, October 23, :30 pm Room 130 APPROVED MINUTES Present were members of the Finance Committee, Trustees Brewer, Salzman and Tucker (6:35) Absent: President Abu-Taleb Staff in attendance included Village Clerk Powell, Village Manager Pavlicek, Deputy Village Manager Shelley, Village Attorney Stephanides, Village CFO Lesner, Public Works Director John Wielebnicki, Acting Village Engineer Bill McKenna, as well as Larry Thomas and Debra K. Mathias of Stanley Consultants, Inc. The minutes of the October 9, 2014 Finance Committee meeting were approved as submitted. Public Comment Township Supervisor David Boulanger discussed the value of maintaining local adjudication for youth offenders and suggested improvements to the process. Dr. Robert O Hara referenced a petition submitted earlier for repair of the alley between the 300 S. blocks of Humphrey and Taylor Avenues and requested to see the Public Works priority list for alley repair. Trustee Tucker commented that plans are being considered to expedite alley repair in order of priority. New Business A, Review of Water/Sewer Fund: Water Rate Study Manager Pavlicek introduced consultants Larry Thomas and Debra K. Mathias of Stanley Consultants, Inc., which has conducted a water rate study for the Village. Director Wielebnicki noted that this year s focus has been on repairs caused by this year s harsh winter rather than on capital improvements. Increases in fees are needed to maintain water and sewer services as well as to reflect increases in water rates of 15% this year and five percent in future years. Capital expenditures are included in the rate proposal, along with increased utility costs and employee salaries. Another factor is declining water use, which reduces revenues. The current rate structure is uniform for water and sewer costs. There is a fixed minimum charge of $2 per month when no water is used (as when residents are away). The cost charged to residents is higher than the rate paid to the city of Chicago for several reasons. Volume of 1

24 water is reduced by 14% due leakage within old infrastructure, street cleaning and other Village uses. The Village is currently tracking pump to bill ratios to identify locations of leaks. Salaries, benefits, and contractual services are also included in the total cost of water and sewer services. Fees cover operations but are not sufficient for capital improvements. Proposed fee change alternatives were presented. This would include a flat fee of $5 or $10 per month plus usage. The proposed rate increases are based on the cost of services provided. Mr. Thomas explained that use reductions require a flat fee method which can cover fixed costs of providing water service. These two methods differentiate low, medium and high water users with the $10 flat fee impacting low users more and the $5 flat fee impacting high users. Manager Pavlicek explained the need to plan ahead for infrastructure repairs and other needs. A budget recommendation is needed in two weeks, with final adoption by December 3. Trustee Salzman asked if there was a five year plan. Manager Pavlicek said there was not, as there are different approaches. Trustee Salzman suggested that these changes could aid the current bond rating. Trustee Tucker recommended the $5 minimum fee and the five year plan proposed. Trustee Brewer asked about additional recommendations in the report. Mr. Thomas explained that in addition to a $5 flat fee there is an option for variable fees based on meter size. Manager Pavlicek noted that she had worked in other municipalities that differentiated based on commercial versus residential and that it had a significant impact. Trustee Tucker asked how many would be impacted by the larger meter size; there would be about 500 accounts, versus 12,000 smaller users. The variable rate could be raised to $10 for the larger meters, or in proportion to the meter size. Trustee Salzman asked how this would impact current debt in this fund. Manager Pavlicek said that it would eliminate this debt, build reserves and cap costs. Director Wielebnicki said that current expenditures of $160,000 would rise to $2 million for needed repairs in the future. Large repair projects to replace sewer mains are planned over five years and the fund balance will need to grow to cover them. Mr. Thomas noted that the projection is for a $2.2 million fund balance in five years. Manager Pavlicek noted that a technology upgrade is needed within months to allow for monthly billing. Director Wielebnicki added that this will also aid in-field water conservation. CFO Lesner said that monthly utility billing will be a key element and he will begin the RFI/RFQ process soon. Engineer McKenna will be working with Director Wielebnicki on capital plans. With the current system small residential users pay at the same level as large commercial users. Ms. Mathias noted that a fixed fee billing system is helpful when large tax-exempt institutions are not contributing to taxes, but do pay utility costs. B.Review of Capital Fund Manager Pavlicek noted under the Equipment Replacement Fund topic that the Civic Information Systems Commission, Information Technology and Development Customer Services Departments through the Oak Park 2.0 technology plan are upgrading permitting and licensing. 2

25 This is a big ticket item which will be covered in detail at a later date. Mr. Wielebnicki noted that the Capital Improvement Fund as a parent fund is allocated to various smaller funds including building improvement, fleet and equipment. Certain vehicles are funded through the water department as they are used by that Enterprise Fund, and some RICO funds are used for equipment. The Parking Enforcement Officers are getting upgraded software. Alley repairs cost $2.8 million, with 100,000 of this through CDBG grants. The challenges of delayed approval of funding for street and alley repairs means that surveys cannot be done until spring and bids do not go out until July, putting the Village at a disadvantage over other communities which do bids earlier in the cycle. This has caused delays in scheduling repairs which have conflicted with the opening of the school year. It was recommended that the engineering for future projects be authorized to be done in June/July so that bids could go out in the fall for more competitive pricing on projects. Some projects have been moved to 2015 including Harrison Street lighting, traffic signals at Washington and Wisconsin (delays due to IDOT funding) as well as trees, striping and patching. Manager Pavlicek noted that on November 3 there will be items for engineering to begin contracts for In June/July 2015 the CIP document will begin a five year capital improvement process with Year 1 (2016) in December and no need to review this again. The policy recommendation is to spend consulting money for Year 1 in advance (2015) so that by 2016 the schedule will shift as described above. Director Wielebnicki noted that this will work better. Public Works is interviewing consultants for a three year contract, rather than year by year. Manager Pavlicek added that overhead costs will go down and there will be fewer weather delays. Director Wielebnicki noted building improvements, including repairs to police underground parking and replacement of the Village Hall boiler. Manager Pavlicek explained that TIF funds can be used for the police parking repairs with Board authorization by January. Additional repairs will be needed in the coming years to Village Hall facilities. Trustee Salzman asked if this would include aesthetic considerations; Manager Pavlicek noted that newer workstation designs, painting, landscaping and related improvements will cost $150,000 this year and the same amount in the coming year. Additional signage and clearer signage is planned. Trustee Brewer asked about plans regarding the gun range. Manager Pavlicek reported that Triton is working to host a number of municipalities in their district with Cook County through an IGA for municipal use with annual fees. At least ten municipalities will need to sign on for a good price. Director Wielebnicki explained that the chiller system is being used to improve air quality for the current gun range for alternate use of the space. Director Wielebnicki reported that Oak Park was just notified that Chicago would be repaving Austin Boulevard on Saturday. Director Wielebnicki noted that our process yields better results and longer life expectancy. The Board directed staff not to participate at this time. 3

26 Director Wielebnicki reported on repairs to the injector pit (sump pit) at Village Hall and the urgent need to rebuild it as a portion of the foundation is involved. The cost will be $10,000 to $22,000 instead of doing the window project. For $27,000 this can be done now; it will be on the November 3 or November 17 agenda. Director Wielebnicki reported that 23% of the fleet are beyond their useful life. Using the new MAP program this can be tracked over time. Envirionmental Services Fund Bids will go out in 2017 with a fund increase of $3.3 million. This will impact the fund balance over time. The October 27 meeting of the Finance Committee will consider Adjudication, Health, Engineering, A final Finance Committee meeting or the first Board Budget meeting will be scheduled for November 6. Old Business It was moved by Trustee Tucker, seconded by Trustee Salzman to adjourn the meeting. Ayes:All.Nays:None. The meeting was adjourned at 7:56 p.m. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 4

27 Finance Committee of the Village Board Minutes Thursday, October 9, :30 pm Room 130 APPROVED MINUTES Call to order 6:35 p.m. Present were members of the Finance Committee, President Abu-Taleb, Trustees Salzman and Tucker Absent: Trustee Brewer Staff in attendance included Village Clerk Powell, Village Manager Pavlicek, Village Attorney Stephanides, Village CFO Lesner and Assistant Village Manager Rob Cole. The minutes of the July 28, 2014 Finance Committee meeting were approved as submitted. There was no public comment. New Business CFO Lesner provided an overview of state law regarding police and fire pensions which require a review of revenue and expenses from the past year and projections for the future in order to establish the amount of the levy required to get to the pension funding amount. He noted that Fire employees contribute 9.455% and Police employees contribute 9.91% of salary. The amount of the annual levy is based on actuarial analysis. President Abu-Taleb asked the members and representatives of the Police and Fire Pension Boards attending to introduce themselves. Police Pension Board representatives were President Len Jorgensen and Tom McShane of Graystone Consulting. Fire Pension Board representatives were President Scott Bartelt, Dan McInerney, John McDonald, Attorney Carolyn Clifford, Paul Marchise of Marquette Associates and Deb Kadin, administrative assistant. Manager Pavlicek noted that setting the annual pension levy for police and fire is an important part of the budget process. She indicated that a placeholder was inserted into the draft budget to be adjusted based on Board direction. CFO Lesner explained that the Fire Pension Board is working with three actuarial reports from the State of Illinois Department of Insurance, a report commissioned by the Fire Pension Board and the Village s analysis. The Police Pension Board uses both the State Department of Insurance and Village analyses. He noted that additional assets with increased value of investments serve to reduce the overall tax burden. As salaries and benefits increase, the overall pension requirement rises as well. 1

28 This past year the General Assembly revised the law, which previously required 100% funding by 2040 to require 90% funding by The Village budget has not made use of this option in this year s budget. If the Village used it, we would still want to budget for 100% by Factors impacting pension levels include the mortality table, which measure longevity. The Illinois Department of Insurance periodically updates which mortality table it uses. The current table dates to The Village s analysis also utilizes the updated table. The analysis prepared for the Fire Pension Board uses a different mortality table more specifically geared to public safety employees. The percentage currently funded by the Village is for the Fire Pension and 60.6% for the Police Pension. Attorney Clifford noted that funding of the Fire Pension was 46.19% in 2011 and in CFO Lesner noted that the amount fluctuates with the value of investments and the contributions from the Village. Attorney Clifford provided an example from a recent Better Government Association (BGA) published report comparing different municipal pension contributions and explained why such comparisons can be deceptive. These two municipalities used different assumptions in preparing their levies making one appear among the worst in the region and the other appear better than might have been warranted. President Abu-Taleb noted that a lower discount rate makes the pension fund percentage look worse. CFO Lesner explained that the discount rate is currently at 7% and that that he has ongoing conversations with fund managers on how to balance investments. Funding must come from taxpayers if not from investment returns. He explained that a portion of the TIF surplus distributions to the Village are allocated to these two pension funds and to debt service. Trustee Tucker notes that these operate, in effect, as separate taxing bodies which receive a portion of TIF surplus distributions. CFO Lesner reported that returns this past year were 15.88% for Fire and 14.59% for Police; however there was a 12% loss in Attorney Clifford discussed how some municipalities find additional revenues to invest. Naperville instituted a new tax dedicated to funding pension investments. She also noted that newer municipalities with fewer retirees tend to have better-funded pensions. Trustee Salzman noted that those funds at 70%-90% funding are considered to be doing well. President Abu-Taleb asked what it would take to increase Village funding by 10%. Manager Pavlicek noted that it would more than double current contributions for both fire and police. Mr. McShane reported that Berwyn took out bonds to purchase investments and plans to issue bonds for $15 million for each in alternate years to improve their funding ratio, which is currently not strong. President Abu-Taleb asked how well this worked. Mr. McShane noted that the spread was skinny in general, but has worked fairly well this year. 2

29 Attorney Clifford noted that actuarial studies aim not to get the right contribution, but one that is based on sound actuarial methodology. She added that the State of Illinois uses accelerating contributions versus accepted actuarial methods of a level percentage versus level dollars. Mortality is being reevaluated along with investment returns. She encourages sound, thoughtful solid numbers as the basis for these decisions. CFO Lesner noted that the levy is rising slowly and investment returns are in line with assumptions. Increases in salaries, longevity and liability leave no place to get relief from this pattern. Attorney Clifford noted the strategy being used by the pension funds of not realizing all gains in the year received but allocating some for future years to smooth out increases. CFO Lesner noted that this can minimize big swings in the levy and provide stability and balance and reduce high and erratic tax increases. Trustee Tucker remarked that he liked this idea as well as the idea of additional bonding to achieve a smooth and reasonable increase. Attorney Clifford noted that actuarial value versus market value could be a problem. President Abu-Taleb noted that some communities use 6.5% or 6.75% to be more conservative in their projections. There was further discussion of this option. Municipalities with higher total investments (over $10 million) have the option of investing in equities subject to state statute but must consider their risk tolerance. CFO Lesner reported that equities were rebalanced and have done well this year. Caps must be maintained to keep risk down. Attorney Clifford stressed being a prudent investor and recommended against too much risk. Mr. McShane noted that new GASB rules imply keeping two sets of books. CFO Lesner noted that Moody s had downgraded Oak Park but S&P had raised the rating. Moody s had more focus on obligations but S&P was positive about other issues. President Abu-Taleb asked if GASB allowed market value versus book value and Attorney Clifford confirmed that this was the case and would apply in Attorney Clifford noted the challenge of explaining these issues to the public. Mr. McShane noted recent action by the General Assembly and subsequent court rulings which prevent reduction in benefits or greater health contributions. Such changes appear not to be an option going forward. Attorney Clifford added that these changes were ruled unconstitutional and how to address the pension burden remains a challenge for the state. Trustee Salzman asked about the recommended levy. Manager Pavlicek reported that for Fire it is $3.3 million and for Police $3.9 million. Mr. Bartelt noted that the Fire pension board recommends $3.7 million which is higher than the Village recommendation. Manager Pavlicek noted that a public hearing required by law will be held to review this issue on November 3. President Abu-Taleb noted that this would represent a tax hike of $400,000 and Mr. Bartelt confirmed this. 3

30 Manager Pavlicek announced that the Finance Committee will meet on October 16 (major funds, health insurance and parking), October 23 (capital projects, water/sewer fund and possible fee changes) and 27 (changes to Adjudication, Health and Engineering). At 7:20 p.m. there was a motion by Trustee Tucker seconded by Trustee Salzman to adjourn to executive session for the purposes of discussing the appoint, employment, compensation, discipline, performance or dismissal of specific employees of the public body pursuant to 5 ILCS120/29(c)(1). The Committee returned to public session at 7:36 p.m. It was moved by Trustee Tucker and seconded by Trustee Salzman to adjourn. Ayes:All.Nays:None. The meeting was adjourned at 7:37 p.m. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 4

31 Call to order 6:34 p.m. DRAFT Finance Committee of the Village Board Minutes Monday, October 27, :30 pm Room 130 DRAFT MINUTES Present were members of the Finance Committee, Trustees Brewer and Tucker, President Abu-Taleb Absent: Trustee Salzman Staff in attendance included Trustees Barber and Lueck, Village Clerk Powell, Village Manager Pavlicek, Deputy Village Manager Shelley, Village Attorney Stephanides, Village CFO Lesner, Police Chief Tanksley, Deputy Police Chief Ambrose, Public Works Director Wielebnicki, Adjudication Director Anderson, Health Department Director Margaret Provost-Fyfe. The minutes of the October 16, 2014, Finance Committee meetings were approved as submitted. Public Comment Victoria Scaman spoke of the benefits of and her support for keeping adjudication services, especially for young people, at Village Hall. New Business Engineering This portion of the meeting will review whether the current engineering department should be outsourced. At this time the engineering department has dedicated core staff to handle current needs and hires outside consultants for larger special projects. Trustee Tucker noted that this approach is balanced and suggested that both short-term and long term benefits of staffing should be considered. Manager Pavlicek said that the relative costs of staff or consultants include fully-loaded salaries for staff, including benefits, but still show savings over the costs of consultants. President Abu-Taleb asked for more information about the term engineer and what their jobs entail. Director Wielebnicki explained the departmental structure, which includes nine full-time and one part time engineer. Director Wielebnicki noted that the survey provided to the Board shows a similar structure for suburban communities. Benefits of in-house engineers include enhanced customer service as a resource to the Development Customer Service Department and other Village departments and most importantly, institutional knowledge regarding past capital improvement work and details of operations within the Public Works department. 1

32 Manager Pavlicek explained that duties include water delivery, maintenance of the combined sewer system, streets, alleys and sidewalks. Engineering staff support the work of the Transportation Commission and work with utility companies including Commonwealth Edison and AT&T. Trustee Barber asked about doubling of CIP numbers. Director Wielebnicki explained that this work uses consultants, as it is beyond the scope of the maintenance of current Village operations. He pointed out that Village staff routinely works with residents and have professional degrees and certifications and are very loyal and professional in their work, and serve the community well. President Abu-Taleb asked if in a perfect world the Engineering Department should be reorganized, if outsourcing more work would be beneficial, pointing to the staffing report for other communities such as Elmhurst. Director Wielebnicki explained that he had worked for 18 years in Elmhurst and explained that they do less capital work than Oak Park and do not have alleys. By reducing staff from nine to six and then increase the outsourcing, expenses would actually rise. The current model is most cost-effective for current capital projects, including catching up on street and alley repair. In five years there might be an opportunity for reductions. President Abu-Taleb asked if the Assistant Village Engineer position could be left vacant when the new position is filled; Director Wielebnicki explained that he would be hiring to fill that position. Manager Pavlicek added that with the GIS transition staff is necessary. Trustee Tucker asked if she agreed with Director Wielebnicki s proposal. She indicated that these are good models and that outsourcing would cost significantly more with possible reductions in the level of service. Trustee Tucker asked about her experience in Downers Grove. She explained that engineers were in-house and that they also worked with three consulting firms as needed. Half of the community has no sidewalks, plus there are separate storm and sanitary sewers and larger flooding issues to address. Trustee Brewer noted that the level of expertise of engineers might also be impacted by outsourcing. The Village can never be as confident of the level of expertise of consultants, where a junior engineer might be charged at a senior engineer s pricing. In essence, the Village would be paying them to train their staff. Director Wielebnicki also spoke of turnover in consultant staffing, with some jobs standard but others unique and requiring specialized skills. Trustee Brewer noted that outsourced staff will still require supervision by Village employees. Trustee Tucker noted that for best customer service and most cost-effective option may be to hire one more and outsource less. Director Wielebnicki thanked the Board for their review and the opportunity to discuss engineering functions. He assured them that all engineers stay busy and sometimes they get their best new staff from consultants. President Abu-Taleb noted that we need to be more efficient in all departments. He said that all 2

33 departments defend their departments and their comments are based on their own self-interest. The real question is whether every department is running efficiently. Trustee Lueck noted that balance is the responsibility of the Village Manager. The Board asked her to survey other communities and what has been reported does not indicate a need for change. Manager Pavlicek promised to continue review. Trustee Lueck suggested that departments will cooperate for proposed cuts when the time is right. Director Wielebnicki noted that the department had already been reduced from 18 to 6 over the past several years, with litter, refuse, and building management outsourced. These changes saved the Village $100,000, along with contracts for pavement and utilities. Trustee Barber noted that the Board trusts the Manager to oversee operations. President Abu-Taleb added that the Board must question as well. Trustee Barber noted that it is the responsibility of the Village Manager to propose wholesale changes where needed. Trustee Tucker agreed with both of them and noted that all departments need to justify their existence. Adjudication Manager Pavlicek explained that Police personnel are present tonight along with Adjudication to discuss the impact on the Police operations of the Adjudication Department. Trustee Tucker noted that the Finance Committee members have read the memo and would like Director Anderson to give a high-level overview. Chief Tanksley explained that the Fourth District Judges do not focus on community issues. Adjudication is integral to community policing to provide a venue for hearing local ordinance violations, such as curfews and marijuana use. If these cases were referred to the juvenile court they might not be accepted. In the Village such infractions may be referred for counseling services through the Time or Face-It programs. This provides an incentive to parents and children with alternatives to fines. Sending these cases out of town may cause the loss of a child as some families miss out on needed services. Adjudication also saves police time. One example is when seven or eight police cars respond to an underage drinking party. In Adjudication only one officer is needed at Court, in District Court all would need to go out of town to Maywood for court. Another example is distracted driving. Such cases are being thrown out in Maywood, along with curfew violations and swearing incidents. He referenced a recent case where an entire block was disrupted by local ordinance violations and the successful prosecution of these cases brought sanity back to the block. Abolishing Adjudication would require much time for Village attorneys to explain minor cases. Deputy Chief Ambrose noted that these are quality of life issues which save children from going into the court system and hold parents accountable. By providing court in the evenings this respects parents work responsibilities and allows them to be there at a more convenient time. 3

34 Chief Tanksley noted that first offenders are not referred to court and receive the benefit of a counseling program which may not only save their lives, but reduce police headaches as well. Trustee Tucker noted that Adjudication can be firm but the social approach is an appropriate tool. Trustee Brewer asked about overtime costs. Chief Tanksley noted that Adjudication removes initial appearance and other court appearance costs for officers. As noted earlier, at Adjudication one officer can appear not all of them. Manager Pavlicek noted that when officers must go to court on a day off they receive overtime and a minimum of four hours of pay, regardless of time involved. Chief Tanksley noted that even on-duty officers have additional travel time and this takes away from presence in the community. Trustee Lueck noted that the United States locks up more juveniles than any other country and that recidivism is 85%, an enormous monetary expenditure with no good outcomes under the guise of safety. There s a need to stop the pipeline with a first offense as the courts don t work. There is a relationship with the Township to provide services to Oak Park residents, but non-oak Park offenders are not covered by that program. Discussion is under way for the Township to get funding to handle all cases through community service and provide therapeutic remedies. Manager Pavlicek explained that the Village has an intergovernmental agreement with River Forest but that how this can be done still needs to be worked out. There are conversations with neighboring towns and the Township is working with the Village on this. President Abu-Taleb asked if Adjudication should be continued and whether it should exist alone or merge with another department. Manager Pavlicek explained that Adjudication is not a department but an office. This function needs autonomy to avoid conflict of interest, since the Legal Department represents the Village in cases before the judges and Legal also writes the laws being enforced. Trustee Brewer asked about what savings are available when Adjudication hears cases. Chief Tanksley explained that internal efficiencies have achieved payment of fines at a rate of 75% before being sent to collections. This rate is one that other municipalities aspire to. Trustee Tucker asked for more information about who pays fines and who appeals. If Adjudication were eliminated, both Legal and Police would need to go to Maywood for cases. Chief Tanksley asked what additional information should be tracked regarding costs for future reporting, such as the extra overtime costs that would have been required to go to Court. President Abu-Taleb stated that the Board must make choices and that there is only so much that the Village can do. The Board must be good stewards of public funds. 4

35 Health Department Manager Pavlicek referred to the report provided by the Health Department about Health functions including inspections, local ordinance enforcement and other functions. President Abu-Taleb asked about HIV testing. This is no longer handled by the Department as the funding for this project is now targeted elsewhere. The availability of home testing has also reduced the need for this service. Trustee Barber asked what other services have been eliminated and who now handles these. The Environmental Consulting Group and L C S contract with local health department. Director Provost-Fyfe explained that if services are outsourced, the funding will follow as well. These are discussions that must be approved at the regional level with the Illinois Department of Public Health. Trustee Barber asked if any services are duplicated elsewhere. Inspection of daycare and nursing homes are based on state standards adopted by the Village Board and there is detailed review. The Department of Children and Family Services asks for the Village reports. Trustee Lueck asked if state agencies will do as well. Manager Pavlicek noted that the Village does this to assure quality local control. Director Provost-Fyfe explained that the nurses can cite day care centers for violations to make them comply, but have not had to do so recently. President Abu-Taleb asked about revenue from the Health Department and compared this to a business that doesn t fully cover costs. Revenues come from governmental and other grants and fees. The small fees for animal licenses are at this level to ensure compliance without being a burden to residents. Rat control provides services to residents at no charge to assure that rats do not become a wider problem. Director Provost-Fyfe noted that grant funding can never fully subsidize the costs of the programs. President Abu-Taleb spoke of the $600,000 deficit between revenues and expenses and asked that costs be cut and more revenue raised to cover costs and narrow the gap. Manager Pavlicek explained that the current inspection fees for restaurants are being combined with business license fees to simplify this process, starting in the first quarter of Laws require that the fees can only match the cost of providing this service and cannot make a profit. Another option may be to outsource some animal control services to the Animal Control League. President Abu-Taleb noted that some inspections are unannounced and have a long checklist of items to review. Inspectors should do this once and trust restaurant owners to follow through. Repeat inspections only create higher costs and create inefficiency in the system. He stated that 5

36 he believes that there are more inspections in Oak Park than elsewhere and too many inspectors. The Village needs to narrow the deficit. Manager Pavlicek explained that property taxes provide revenue for the General Fund. These revenues provide for costs of departments which lack revenue sources through user fees such as parking, water and sewer. This is why there are not charges for animal licenses or rodent control, for example. CFO Lesner explained that there could be fees for such services, and that this is a philosophical difference. President Abu-Taleb suggested that public health is a luxury and that it should carry on its own to reduce the gap in the budget. CFO Lesner noted that state law does not allow the Village to make a profit on services, but only to charge the actual costs. Trustee Lueck asked whether municipalities which have outsourced such services are happy with the quality of these services. President Abu-Taleb asked how this can be fixed. Manager Pavlicek said that an enterprise fund model could be used but that services are provided to low and moderate income residents who may not be able to pay for such services. It may be possible to use more of the CDBG funds now allocated to local social service agency programs such as WIC as a priority. Trustee Lueck noted that the Village realizes cost savings by keeping people from using Cook County Hospital, which has terrible service. Our paramedics and hospitals are in a better position to deal with emergencies. President Abu-Taleb said that he didn t think the sky will fall and that the Village needs to close the gap and have people pay for services. The pressure should be kept up to reduce costs and close the gap. Trustee Tucker noted that it s important to continue to analyze options and noted that the meeting of all local governments was another effort to realize savings. Manager Pavlicek noted that there was a 25% reduction in the work force in While this was painful, it did right-size the Village work force. The Village will reduce by ten more staff and there is one request for staff still to consider. Trustee Tucker said that some of these decisions are unquantifiable as staff would say they were lean in Manager Pavlicek said that the enterprise fund option for health can be explored as a different philosophy. This can be considered in the next budget cycle. Finance Committee Calendar and Village Board Schedule for Budget Consideration Manager Pavlicek reviewed the calendar for remaining meetings of the Finance Committee and full board consideration of the budget. She will follow up to set a final meeting of the Finance Committee in the coming week. 6

37 It was moved by Trustee Tucker, seconded by Trustee Salzman to adjourn the meeting. Ayes: All. Nays: None. The meeting was adjourned at 7:56 p.m. SUBMITTED AND RECORDED IN THE OFFICE OF: Teresa Powell, Village Clerk 7

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41 OPEDC Reorganization New organization New Board of Directors New Executive Director More transaction oriented Closer coordination with VOP Mission To enhance the quality of life and economic health of Oak Park by: Expanding property tax base Increasing sales tax revenue Creating and retaining jobs

42 2014 Project Highlights Mixed-Use Development Clark Street Development Lincoln Property Development New Businesses Pete s Fresh Market Oak Park Brewing/Hamburger Mary s Carnivore Sugar Beet Lively Athletics Amore de la Terre Fleet Feet Noble Kinsmen Brewery

43 Performance Measures Return on Investment to Oak Park Community Total sales tax + property tax/opedc expenditures Net impact on jobs Square feet - leases, rehabs, new construction Private commercial investment Net impact on assessed valuation Commercial vacancy rates