Adjusted Budget 2008

Transcription

1 Adjusted Budget 2008

2 WHY THE NEED FOR BUDGET ADJUSTMENTS? Downturn in national economy impacting local revenues and local expenditures( Finance Director Brian Hanigan will outline tonight) Your Mayor and Board of Trustees are committed on behalf of our residents and businesses NOT to raise local taxes. By law the village administration must submit and manage a balanced budget. The allocation of competing resources is NEVER an easy nor mechanical process. Prior public meetings and extensive feedback part of our democratic process 2 Most important, like Oak Lawn households, your Village government must live within its means and its ability to pay as measured by tax base and growth factors locally.

3 Overall Comparison (in $ Millions) General Fund Adopted 2007 Actuals 2008 Adopted 2008 Amended 3 Revenue Expenses

4 2008 Amended Budget by function 6% 17% 29% 21% 5% 22% Public Safety includes Police, Fire and Emergency Communications 56% 4 Police Fire Public Safety Public Works & OLMEC Administrative Debt Service & Legal Fees

5 2005 Actual Spending by function 6% 19% 28% 20% 5% 22% Public Safety includes Police, Fire and Emergency Communications 55% 5 Police Fire Public Safety Public Works & OLMEC Administrative Debt Service & Legal Fees

6 General Fund Budget Gap $2.00 $1.60 $1.20 $1.75 Million (4.1% in Amendments) $0.80 $0.40 $0.00 Gap 6

7 2008 General Fund by Cost Category 3% 31% 66% Wages & Benefits Expenses Capital 7 (In February the Village Administration stated at the Board meeting further adjustments would have to come from personnel.)

8 Personnel Reductions May 2005 to Present / Recommended Adjusted 2008 Budget Department # of Employees # of Employees % of Employees Fire % Police % Public Safety Communications % Public Works % Administration %

9 LET S CLEAR UP MISINFORMATION AND MISCONCEPTIONS Our Village Public Safety IS NOT BEING JEOPARDIZED DECISIONS AND RECOMMENDATIONS BASED ON FACTS Management tools applied in the last 6 months have included civil service elimination for general employees; reorganization of several departments including shift consolidation; expense reduction; aggressive pursuit of outstanding receivables; elimination of positions through attrition; examination of selective outsourcing ALL TO AVOID LAYOFFS AS A LAST RESORT 1710 is NOT a law or a federally mandated regulation NFPA does NOT require four firefighters on all fire apparatus A KEY PROVISION OF NFPA 1710 CALLS for 14 firefighters and officers to arrive at a " FULL ALARM ASSIGNMENT" within nine minutes 90% of the time. OAK LAWN PROTOCOL IS 20! DECISIONS about whether and how to implement 1710 DO REST WITH LOCAL ELECTED OFFICIALS LOCAL CONTROL IS EMPHASIZED 9

10 Number of Employees by Function % 27% 8% 25% 33% Public Safety includes Police, Fire and Emergency Communications 66% 10 Police Fire Emergency Communications Public Works & OLMEC Administrative

11 Number of Employees by Function % 31% 7% 24% 32% Public Safety includes Police, Fire and Emergency Communications 63% P 11 Police Fire Emergency Communications Public Works & OLMEC Administrative

12 ELIMINATED POSITIONS MAY 2005 PRESENT* Department Position Date of Elimination 1. Quality Control engineering assistant 2/28/07 2. Quality Control engineering assistant 6/30/07 3. Quality Control housing sanitarian 4/30/07 4. Public works-streets heavy equipment operator 3/31/07 5. Public Works-streets equipment operator 6/30/07 6. Public Works-streets assistant street superintendent 7/01/07 7. Public works-streets heavy equipment operator 10/31/06 8. Public Works-water maintenance worker 12/31/06 9. Public Works-water equipment operator 9/01/07 10 Public works-streets crew chief 1/01/ Public works -streets maintenance worker 4/22/ Public works-fleet maintenance mechanics helper 1/01/ Public works-fleet maintenance mechanics helper 1/01/ Community development & Growth Mgt research assistant 4/22/ Finance & Administration business regulations officer 4/22/ Finance & Administration cashier 4/22/ Information Technology IT Director 4/22/ Community Services clerk typist II 4/22/ Fire Rescue firefighter 4/22/ Fire Rescue firefighter 4/22/ Fire Rescue firefighter 4/22/ Fire Rescue firefighter 4/22/ Fire Rescue firefighter-paramedic 4/22/ Fire Rescue firefighter-paramedic 4/22/ Administrative Services microfilm clerk 9/01/07 12 * In addition some functions were reassigned and some part time positions replaced full time positions across the Village organization

13 Just the Facts Oak Lawn Fire Department Average cost to put in service Oak Lawn fire fighter (Wages and Benefits) - $101,215 Base Salary of average fire fighter $74,454 Benefits for average fire fighter $26,761 52% of fire fighters received pay increases in last 12 months even after rejecting tentative agreement approved by management in June

14 Just the Facts Oak Lawn Fire Department Service and Protection Have Been Enhanced! In Fall 2007 Village went from 2 ALS and 2 BLS to 3 ALS ambulances Paramedics on staff increased from 24 to 30 New Aerial in proposed budget would be first time in 25 years Oak Lawn will have its own truck company - $750,000 (with a grant of $600,000) New Engine in proposed Budget to replace 30 year plus older technology - $350,000 New State of the Art Emergency Communications Center opened for business in August 2007 after $1.5 million renovation New Emergency Operations Center under construction plan; stage at Fire Station #2 thanks to $70,000 grant from Advocate Christ Medical Center 14

15 Just the Facts Fire Department Spending (in $ Millions) 10 8 $8.34 * 6 4 $6.92 $7.20 $7.25 $8.09 * 2 0 Spending * 2007 includes $515,267 of Capital and the 2008 Budget includes $623,000 of Capital.

16 Just the Facts OLFD Pension Costs (in $ thousands) 1,600 1,400 1,200 1, ,360 1,401 1,270 1, Village Contribution Employee Contribution 16

17 Just the Facts OLFD Overtime (in thousands) $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $358,246 $287,742 $267,033 $216,362 $38,858 $40, Mar-07 Mar-08 17

18 Just the Facts Working Injury Costs (in $ thousands) $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $343,467 $242,122 $90,717 Total Injury Costs

19 Just the Facts Oak Lawn Fire Department Legal costs by issue since , , ,000 58,567 53,074 50, ,834 14,500 Fire Contract Negotiating All Four Agreed Contracts with other Village unions Fire Grievances Fire Personnel Civil Suits Against Village * Fire Arbitration * One case since 2005 has cost the Village $316,

20 Just the Facts Oak Lawn Fire Department SICK LEAVE IN SWORN FIRE FIGHTER PERSONNEL USED AN AVERAGE OF 170 HOURS OF SICK LEAVE; ON AVERAGE THESE 59 CALLED IN SICK AND FAILED TO REPORT TO ACTIVE SCHEDULED DUTY IN 4 OF THE 12 CALENDAR MONTHS IN THE LAST 3 YEARS (2005, 2006, 2007) OLFD FIRE FIGHTER PERSONNEL HAVE USED 42,533 SICK HOURS AVERAGING OVER 150 HOURS PER EMPLOYEE PER YEAR IN 2007, ONLY 73 DAYS OUT OF THE YEAR DID FIRE FIGHTERS SCHEDULED TO REPORT TO DUTY ALL NOT CALL IN SICK 117 DAYS 2 FIRE FIGHTERS CALLED IN SICK 81 DAYS 3 FIRE FIGHTERS CALLED IN SICK 20

21 Just the Facts Oak Lawn Fire Department GOOD NEWS 19 SWORN PERSONNEL OR 20% USED ZERO SICK DAYS 8 SWORN PERSONNEL OR 8.5% USED 24 HOURS OF SICK LEAVE MESSAGE IS WE HAVE TWO DEPARTMENTS, 2 CONTRASTING WORK ETHICS! 21

22 Just the Facts Fire Rescue Department 2007 Operations All engines, ambulances, commander & squad units responded to calls for service including turnout time with an average below 6 minutes. National standard is 90% of time within 9 minutes. In 2007, there were 7,495 fire incidents of which 5,038 were rescue calls or 67%. In 2007, 76% of rescue calls resulted in treatment and transport, 13% refused aid and 11% were treated on sight and no transportation was necessary. In 2007, each ambulance averaged less than 4 transports per 24 hour tour of duty. In 2007, 90% of EMS calls were classified MODERATE or MILD and only 5% CRITICAL In 2007, there were 4 major fires and 45 structure fires with a property loss of $1,273,166. In 2007, 7% of calls were false alarms. In 2007, we were a slight exporter of mutual aid to seven or more neighboring towns. Mutual aid EMS calls were only 4% of total calls for service 22

23 23 Just the Facts Oak Lawn Fire Department Workload

24 Greater Oak Lawn Community Full Time Police Dept. Population Population per Police Officer City of Chicago 13,400 2,994, :1 Village of Evergreen Park 56 (5 PT) 20, :1 Village of Worth 24 (1 PT) 11, :1 Village of Chicago Ridge 31 14, :1 City of Blue Island 38 (22 PT) 23, :1 City of Palos Heights 28 (2 PT) 14, :1 Village of Oak Park , :1 City of Burbank 53 (2 PT) 27, :1 Village of Alsip 37 19, :1 Village of Oak Lawn , :1 Village of Orland Park 95 (8 PT) 55, :1 Village of Tinley Park 78 (26 PT) 58, :1 City of Oak Forest 40 (2 PT) 28, :1 Sources: National Directory of Law Enforcement Administrators 24

25 Northeastern Illinois Fire Department Staffing Comparison Town Population Sworn FD Personnel Ratio: Pop./Sworn FD Town Population Sworn FD Personnel Ratio: Pop./Sworn FD Elmhurst 45, , Decatur 77, Oak Forest Elmwood Park 27,970 24, Arlington Heights Gurnee 74,138 30, Normal 50, Lombard 42, Carol Stream Oak Park Bolingbrook Berwyn Champaign Palatine Buffalo Grove Evanston 40,067 50,272 69,881 50,820 73,685 67,396 43,231 75, Mount Prospect Oak Lawn Des Plaines AVERAGE RANK % +/- Averages 54,140 55,245 57,033 53, TH OF 19 (highest) 24.88% th of 19 (lowest) % 25

26 Oak Lawn Police & Fire Total Calls for Service 42,000 36,000 30,000 24,000 18,000 12,000 6, ,740 40,144 6, ,495 Police Fire 26

27 Police Calls by Type , ,099 3,703 3,208 2,966 4, Sex Offenses 1,188 1,447 1,318 1,535 Robbery & Thefts Domestic Disputes Suspicious Subjects & Vehicles Arrests Disorderly Acts

28 Just the Facts Oak Lawn Police Department Trends Juvenile crime and arrests are up 516 in 2007 Juvenile disturbances are also on the upswing 386 in 2007 (up 250% since 2005) Criminal defacement and graffiti incidents up 148 in 2007; 48 already during 1 st quarter 2008 Community alerts are up 11 already this year Bank robberies were up last year significantly but fortunately so were the arrests and convictions Marked increase in deceptive practices 507 in % increase over

29 In Summary Adjustments to Adopted 2008 Budget As Village Manager, I am obligated every year to analyze our expenses and present a balanced budget. Since 2005, the Village has reduced staff for every department but police and fire which is before you tonight for adjustment National economy still displays weak fundamentals: tight credit conditions; mounting job losses; soaring energy costs; and falling home values provide an unfavorable backdrop for consumer spending critical to Oak Lawn. We are a service business and our biggest cost factor of doing business is LABOR. Our number one PRIORITY is public safety and this proposed budget adjustment DOES NOT JEOPARDIZE OUR SAFETY. Based on the facts, we have shifted resources modestly to focus on police services in a down economy with all the reasons I have outlined. Finally, it is the people s household budget and I would like to thank the Mayor and the Trustees who have taken their stewardship of public funds seriously. 29

30 Adjustments to Adopted Budget 2008

31 Overview Presented is a Balanced Budget for 2008 which has various revenue and expense adjustments to the Budget previously adopted by the Board in December. Normal procedure in the Village and virtually every other municipality is to have adjustments to the adopted budget based on actual results for the previous year and tax estimates from the Illinois Municipal League and other revisions to projections on which the Budget is based. Significant structural issues facing the Village remain unaddressed in this budget. These structural deficits will significantly impact 2009 and 2010 Departmental Budgets and Village operations. The projected deficits based on flat revenues and contractual salary increases in 2009 and 2010 are $1.55 million and $1.72 million, respectively. 31

32 Summary - Revenue Adjustments Budgeted revenue reduced by $1.4 million from the Adopted Budget to reflect more realistic revenue estimates based on 2007 actual receipts. The Village s budgeted revenue for 2008 still exceeds 2007 s actual revenue by approximately $900,000. State sales tax revenue reduced by approximately $125,000 based on actual receipts in 2007 and the overall state of the economy. State income and use tax revenue increased by $770,000 based on the Illinois Municipal League s ( IML ) estimate received in March The IML estimate is expected to be down significantly in 2009 and Motel and Utility taxes adjusted downward by approximately $230,000 based on actual receipts for 2007, IML estimates and the overall state of the economy. Real estate transfer taxes and income from building permits reduced by $520,000 and $150,000, respectively, to reflect actual revenues received during 2007 and the depressed state of the housing market. Budgeted revenue from traffic fines and parking tickets reduced by $620,000 based on 2007 actual results and more realistic expectations for the program. The 2008 Budget does estimate $120,000 in revenue to provide some upside for the RedFlex system which has generated $80,000 of net profit to the Village during the last eight months. 32

33 2008 Budget Summary Adopted Budget approved in December 2008 $ 0 Revenue Adjustments to Adopted Budget: State Sales, Income and Use Tax Estimates 645,000 Motel and Utility Taxes (230,000) Real Estate Transfer Taxes and Building Permits (670,000) Reduction in Traffic and Parking Fines (primarily due to RedFlex System) (620,000) Vehicle Stickers offset by Miscellaneous Revenue Adjustments (425,000) Reduction in Licensing Fees (primarily liquor, tobacco and trades) (104,000) Additional Provision for Salt Replenishment (150,000) Additional Provision for Higher Fuel & Electric costs (200,000) Budget Deficit (1,754,000) Other Fund Transfers (primarily for prior billing) & Christ Grant 450,000 Personnel Cuts including benefits 548,000 Suspension of MIS Projects 220,000 Reduction in various insurance premiums primarily medical 392,000 IMRF Payroll Funding for ERI 350,000 Additional Provision for Legal Fees (265,000) Engineering Feasibility at 108 th & Central & Federal Advocacy Firm (96,000) Landscaping and Beautification Projects, net of FEMA and CDBG Grant (35,000) Estimated Additional Reduction in Overtime 100,000 Reduction in Training, Travel, Conferences, etc. and Other Expenses 90, Amended Budget Village of Oak Lawn $ 0 33

34 Spending Issues Union Contracts Police Contracts signed November 2007 (retro pay and new pay increases not included in the Adopted Budget). Fire Supervisor and Telecommunicators Contracts signed in April 2007 and September 2007, respectively. Firefighter Contract not signed (expired December 2006). AFSCME Contract not signed (expired December 2007) have since decertified and are represented by OLMEC. 34

35 Spending Adjustments 201 Legal Fees 58.9% increase of $265,894 Increase for difficult contract negotiations and ongoing litigation cost Community Services 6.1% decrease of $26,033 Corrections in Extra Help, Differential and Internet Services and Elimination of Full-time position to remain as an Independent Contractor Management Information Services 32.1% decrease of $317,452 - Elimination of MIS Director as outsourcing being strongly considered. - Suspension of large software installations like Cartegraph and Sire; deferred savings of $220,000 but technology needs remain. - Maintenance reduced where possible. - Emergency only equipment replacement plan under capital lease. 35

36 Spending Adjustments 1900 Human Resources 10.1% decrease of $31,947 Adjustment to Chief Examiner Full-time position to part-time. Significant reduction in outmoded civil service procedures and hiring restrictions. Reduction in recruiting, promotional advertising and tests for prospective hires as Village hiring expected to be down significantly Finance & Admin Services 6.6% decrease of $459,084 Consolidation of certain positions including business regulations officer, cashier with other areas to be significantly affected by technology implementation. Medical insurance premiums down by $365,000. Property, casualty and fiduciary premiums down by approximately $27,000 although police fiduciary policy will cost approximately $5,000 from that savings Full appraisal from American Appraisal provided for in the 2008 budget at a cost of $18,250; Done for the first time in twelve years to determine replacement value of Village assets. This is critically important in addressing new water contracts with other municipalities. 36

37 Spending Adjustments 2200 Police Department 3.1% increase of $304,166 New contracts settled after initial budget and retro pay not included in budget when adopted. Elimination of ESDA coordinator and the provision for separate division in the Adopted Budget. Reduction of expenses for extra help, conference and travel, subscriptions and memberships. Provided for hiring of three additional police officers for gang crimes patrol. 37

38 Spending Adjustments 2400 Fire Department 6.0% decrease of $471,322 Reduction in force as a result of attrition from retirements (3 positions) and job elimination (3 positions) representing $330,033 of decrease Minimum overtime reduction of approximately $100,000 from Adopted Budget Various other expense reductions of $41, % of the Village s actual capital spending or $515,267 went to the Fire Department in % of the Village s budgeted capital spending or $623,000 for 2008 planned for the Fire Department 38

39 Spending Adjustments 2500 Public Safety & Communications -.8% increase of $14,083 - Hiring of new operators to have significant positive impact on overtime cost to the Village Community Development & Economic Growth 2.8% decrease of $23,005 - Consolidation of positions with supply management and inventory clerk. 39

40 Spending Adjustments 2800 Public Works, Street Division 3.7% increase of $178,470 Movement of Accounting Clerk from Sewer to Streets. Salt budget increase necessary due to depleted reserves from bitter winter and large number of storm events PW, Equipment Maintenance Division No change Adjustment for higher fuel costs offset by Village savings on reduction from three full-time shifts to two Building and Grounds 4.8% increase of $55,748 Salary adjustment of $20,000 for custodians to agree with actual salaries. Additional $35,000 for Village sign and other property damage not covered by FEMA. 40

41 Pension Fund Summary 2008 Budgeted Village Pension Contributions: Village contribution per firefighter is $15,392 based on 2008 Tax Levy of $1,400,655 for 91 sworn firefighters Firefighter Pension Fund is 69.8% funded based on unfunded liability of $25.9 million Village contribution per police officer is $13,668 based on 2008 Tax Levy of $1,420,510 for 104 sworn officers Police Pension fund is 70.9% funded based on unfunded liability of $24.8 million To reach full funding for both plans over the next 10 years would require an additional $5.3 million contribution each year increasing resident property taxes by approximately 35% IMRF Pension Fund managed by the state of Illinois for the Village s remaining 165 full-time employees; Budget provides for average contribution of $10,862 per employee based on 2008 Tax Levy amount of $1,792,200 41

42 Conclusion Structural Issues Remain No significant new technology added $1.55 million deficit going into 2009 based upon flat revenue and current contractual salary increases $1.72 million deficit going into 2010 based upon flat revenue and current contractual salary increases Sales, Property and Utility Tax Increases Are Additional Options to the Spending Cuts 42