Village of Skokie. Fiscal Year 2012 (FY12) Budget Presentation. April 6, 2011

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1 Village of Skokie Fiscal Year 2012 (FY12) Budget Presentation April 6, 2011

2 FY12 Proposed Budget Village Continues to Navigate Challenging Economic Times Tradition of careful financial management Controlled budgeting and spending Frozen positions (no layoffs) Maintaining Village services Use of reserves

3 Budget Presentation Revenue Overview Expenditure Overview Capital Improvement Program (CIP)

4 Village of Skokie Financial Status & Revenue

5 Overview of Presentation Discussion of key funds for Fiscal 2012 The Punch Line: General Fund Water Fund Revenues: Fiscal 11 Experience Fiscal 12 Projections Fund Balance Scenarios

6 Overview of Presentation (Continued) Revenues (Continued) Water Fund Rate comparison charts Fire and Police Pensions

7 Fiscal 2012 General Fund and Water Fund

8 Fiscal 2012 General Fund General Fund revenues for Fiscal 2012 are projected at $49,491,113 which are sufficient to: Fund the Fiscal 2012 budget; Maintain the property tax freeze; Not require any new taxes; Maintain AAA bond rating.

9 Fiscal 2012 Water Fund Water Fund resources for Fiscal 2012 are projected at $11,925,419 which: Includes an 4.94% water rate increase The increase is 26% less than the recent five year average rate increase. Even with the increase, Skokie will now have the lowest effective rate among fifteen other local communities!

10 Fiscal 2011 Revenue Experience

11 Revenues Fiscal 2011 Overall improvement from recent recession: The 7 major Non-property tax sources are up 5.4% or $1,309,000 from last year. Fiscal 2011 is projected to outperform budget by 2.6% or $1,028,000. While there has been improvement, Skokie has not fully recovered the revenues lost to the recession.

12 Composite of Taxes - Chart Village of Skokie Non-Property Taxes (Excl. Municipal Utility Tax) $40,000,000 $37,329, Total All Taxes $35,000,000 $30,000,000 $25,000,000 $30,263, $32,154, $20,000,000 Calendar Year High Low Current

13 State Income Tax There are four major concerns: Revenues have not bottomed out; The impact of the 2010 census on Skokie s per capita distribution is unknown; The State has lagged in its payments to municipalities. At its highest, the State was four months behind owing Skokie a total of $1,906,933. The State is currently two months behind for a total of $972,599. And, worst of all

14 State Income Tax (Cont.) Springfield may eliminate distributions to municipalities! For the State s most recently completed fiscal year, this would net the State an additional $1.1 billion. Skokie would lose $5 million.

15 State Income Tax (Cont.) - Chart Village of Skokie Income Tax Total Income Taxes $6,000,000 $5,800,000 $5,600,000 $5,400,000 $5,200,000 $5,000,000 $4,800,000 $4,600,000 $4,400,000 $5,876, $4,994, $4,994, Calendar Year High-12 M onths to 2/28/ 09 Low-12 M onths to 2/ 28/ 11 Current-12 Months to 2/28/11

16 State Income Tax (Cont.) While Springfield considers elimination of municipalities share of the income tax, keep in mind Springfield has already: Increased the income tax on 1/1/11 for individuals (from 3% to 5%) and for corporations (from 4.8% to 7%); For the State s most recently completed fiscal year, the tax increase is estimated to net $7.1 billion in new revenue SOLELY to the State.

17 State Income Tax (Cont.) Municipalities were locked out of the income tax rate increase by reduction of their share from 10% to 6%/6.86%. Based on income tax receipts for the State s most recently completed fiscal year, municipalities could have received an additional $706 million. Skokie could have received an additional $3,449,000.

18 Fiscal 2012 Revenue Projections

19 Revenues Fiscal 2012 Improvement in the economy has resulted in projected revenue increases. Leading the way are non property taxes which are projected to increase 5.8% (sales, use, replacement, income, real estate transfer, hotel/motel, simplified telecommunications, local fuel, and motor fuel taxes). The Village Board will be able to continue the property tax freeze.

20 Property Tax History Chart $18,000,000 $16,000,000 $15,456,695 $15,456,695 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $

21 Property Tax With Inflation $30,000,000 $26,207,072 $25,000,000 $20,000,000 $15,000,000 $15,456,695 $15,456,695 $10,000,000 $5,000,000 $

22 General Fund Fund Balance

23 General Fund Fund Balance Skokie has a long standing fund balance goal of 25% of budget Fund balance is maintained as a buffer against adverse circumstances. During the economic downturn, the Village utilized almost $5.5 million of its fund balance. The projected fund balance at the end of Fiscal 2011 is 18%. The fund balance at the end of Fiscal 2012 is projected to be 18%.

24 Fund Balance History and Projections (* Denotes Projections) 30.00% 28.93% Fund Balance as a Percent of Budget 25.00% 20.00% 15.00% 10.00% 5.00% 22.57% 17.99% 18.39% 17.97% 16.12% 13.92% 10.18% 4.98% 0.00% * 2012* 2013* 2014* 2015* 2016* Fiscal Year

25 Fund Balance without Income Tax 30.00% Fund Balance as a Percent of Budget 20.00% 10.00% 0.00% % % % % % 7.78% FISCAL 2012 FISCAL 2013 FISCAL 2014 FISCAL 2015 FISCAL % % % % 1. Revenues are based on FY2012 estimates but exclude state income tax distributions 2. Assumes expenditure growth of 3.0%, 3.5%, 3.5% and 3.50% for fiscal years 2013 through 2016.

26 Water Fund Rate Adjustment

27 Water Fund Water Rate The water rate is recommended to increase from $29.55 to $ This is a 4.94% increase which reflects: 2% increase in the cost of water purchased from Evanston Proposed Operations and CIP Budgets Reduction in consumption With a rate of $31.01, Skokie will have the lowest effective water rate in the area.

28 Skokie (Current) * Palatine Arlington Heights * Northbrook Skokie (Proposed) * Niles * Naperville Village of Skokie Water Rate Comparison (* indicates that there is no separate sewer charge) Rolling Meadows Downers Grove Wilmette Evanston Mount Prospect Morton Grove Schaumburg Des Plaines Park Ridge Glenview

29 Village of Skokie Water Rate Comparison (* indicates that there is no separate sewer charge) $70.00 $60.00 $16.63 $50.00 $28.11 $4.63 $7.48 $8.30 $40.00 $34.40 $16.00 $9.13 $11.92 $0.00 $0.00 $30.00 $39.40 $19.60 $10.01 $5.98 $0.00 $0.00 $49.35 $50.04 $20.00 $10.00 $36.82 $24.90 $15.58 $43.99 $42.03 $34.12 $38.25 $37.78 $33.76 $23.41 $26.87 $36.67 $25.43 $31.01 $29.55 $0.00 Rolling Meadows Downers Grove Wilmette Evanston Mount Prospect Morton Grove Schaumburg Des Plaines Park Ridge Glenview Naperville Niles * Palatine Arlington Heights * Northbrook Skokie (Proposed) * Skokie (Current) * Water Rate Sewer Rate

30 Fire and Police Pension Funds

31 Fire & Police Pension Funds The funding levels of the Fire and Police Pension funds improved for the first time in over a decade. The results of the last two actuarial valuations are as follows: Fire Pension: 2009 Valuation 60.5% 2010 Valuation 61.4% Police Pension: 2009 Valuation 70.3% 2010 Valuation 78.4%

32 Fire & Police Pension Funds (Cont.) The improvement as of the 2010 valuation was due solely to improved investment earnings. Further improvement is likely as a result of the Board s adoption of the Municipal Utility Tax (MUT)in Fiscal 2011 will be the first year with contributions of the MUT to the pension funds.

33 Fire & Police Pension Funds (Cont.) The Fire and Police Pension Funds will undergo another actuarial valuation as of April 30, The results are expected in late summer.

34 Village of Skokie Fiscal Year 2012 Budget Expenditures

35 FY12 Budget by Major Fund Pension Funds $13,912,849 Water Fund $11,897,801 Economic Development Fund $586,636 Fuel Taxes $3,170,729 Self Insurance Fund $1,958,883 TIF $14,551,500 Other Funds $950,932 Debt Paym ents $8,517,766 Buildings, Equipment, Fleet $4,679,281 General Fund $48,752,208

36 FY12 General Fund Insurance $6,423,289 Village Clerk $146,501 Board of Trustees $245,602 Contingency $50,000 Grant Programming $131,410 Boards & Commissions $200,398 Corporation Counsel $664,689 Administration $2,566,389 Finance $1,066,940 Community Development $1,290,944 He alth $1,151,915 Fire $10,484,071 Public Works $10,712,881 Police $13,617,179

37 FY12 General Fund Personnel $33,748,818 Other $9,310,211 Health Insurance $5,693,179

38 FY12 General Fund General Fund Increased 1.38% or $ 664,123 Noteworthy Changes: Health Insurance $ 377,779 Recycling Contracts $ 231,302 Fuel Increase $ 55,042 Without these increases the operating budget would have been $16,998 less than the current budget.

39 FY12 Capital Improvement Program Buildings & Grounds, $594,735 Water, Sewer & Flood, $4,008,758 Equipment Replacement, $2,443,477 Public Improvements, 7,903,569 Fleet Maintenance, $1,782,304

40 Equipment Replacement Fire Pumper $ 592,250 Computer Replacement $753,550 Police Mobile Data Computers and Video $444,000 Street Sweeper $159,984 Refuse Packer $239,683

41 Capital Improvement Program FY12 FY16 Funding = $112.7 million* MFT / LFT Tax Revenue CDBG Funding TIF Revenue Economic Development Fund General Fund Revenue Water Revenues *Grant/Fed, State, County *SSA and Other $ 10.6 Million $ 1.0 Million $ 16.0 Million $ 7.8 Million $ 21.2 Million $ 15.0 Million $ 31.6 Million $ 9.5 Million *Includes funding provided by sources other than the Village

42 Continued Investment in Infrastructure Street Resurfacing $2.1 million (FY12) $19.6 million over the next five years for street improvements Corridor Improvements Oakton Street Old Orchard Road and Skokie Boulevard Intersection Improvements

43 Village of Skokie