Grundy Reporter

Channahon Village Board Special Budget Workshop met March 10.

Here is the minutes provided by the Board:

VP Moorman Schumacher called the meeting to order at 8:16 a.m. and led the Board in the Pledge of Allegiance.

Roll call was taken with Trustees Greco, Host, Perinar, Scaggs and Slocum present. Trustee McMillin was absent.

Also present were Village Administrator Thomas Durkin, Director of Community Development and Information Systems Mike Petrick, Finance Director Heather Wagonblott, Director of Public Works Ed Dolezal, Chief of Police Shane Casey and Village Clerk Kristin Hall. Village Attorney Dave Silverman was not in attendance.

Public Comment

2018-2019 Proposed Budget 

Finance Director Heather Wagonblott thanked everyone for joining us for the fiscal year 2019 budget workshop. She stated the focus of the meeting is to discuss the proposed 2018-2019 budget for each of the Village funds (General, special revenue, capital and utility). She stated she is pleased to report that Village staff has prepared a balanced budget for review and discussion. Director Wagonblott stated that the proposed budget shows progress over the past several years.

Director Wagonblott also stated that in years past, Fund 01 and Fund 11 (General Fund and General Capital Fund) has budgeted for a transfer from Fund 14 (Rebate Fund) to cover the anticipated deficits. She stated the proposed budget does not utilize Fund 14 in the way of a transfer to the other General Funds. Funds 01 and 11 are anticipated to generate enough revenue to offset the budgeted expenses. Director Wagonblott made mention that the utilization of fund reserves in Fund 14 is attributed to the payment of the bond principal and interest payments for the outstanding 2011 GO Bonds. She stated that Fund 14 reserves have been designated to pay the remaining 4 years of principal and interest payments related to the 2011 GO Bonds. She further stated that the reserves remaining in Fund 14 are sufficient to pay remaining debt payments and also will have fund reserves remaining.

The following items were discussed by Director Wagonblott as they were deemed significant and relevant to proposed budget:

1. The Board voted to set the property tax rate the same for 2017 tax levy – the rate was not increased for this year. The Village is still anticipating an increase in the property tax revenue as a result of the new construction, both residential and commercial. The amounts in the proposed budget for property tax revenues are based on the total amount levied with a minimal increase to account for an increase in EAV. 

2. State sales tax revenue has been on a roller coaster the past 3-4 years. Businesses have the ability to revise their sales tax return filings several years back which can cause reductions of the Village’s current year tax revenue. These reductions have been significant over the past two years due to a few of the rebate sales tax clients. It is anticipated that all of the major reductions have already occurred and the Village will receive sales tax revenue at a more typical amount. The state sales tax revenue in the proposed budget is an estimate based on no reductions from the Department of Revenue. 

3. A 2% administrative fee was imposed by the Village home rule sales tax, which will reduce the Village’s revenue by approximately $20,000 each year. There is pending legislation to reduce the State’s administrative fee from 2% to 1%, but as of now, the 2% administrative fee is taken out of the Village’s revenue and has been accounted for in the proposed budget. 

4. Excise tax (formerly known as telecommunications tax) is budgeted for an amount less than previous years. As the world changes from land lines to cellular telephones, this tax is becoming obsolete. A total of $250,000 is estimated in revenues with 60% of the revenue going to the General Fund 01 and 40% of the revenue going to General Capital Fund 11. 

5. Income tax revenue received from the State of Illinois is anticipated to be $1,150,000. There is current legislation to increase the municipalities’ share of this tax, however an increase has not been assumed for the proposed budget. 

6. Local use tax revenue received from the State of Illinois is expected to remain consistent with the prior year around $300,000. There are no excessive increases or decreases expected. 

7. Hotel motel taxes remain at approximately $40,000. 

8. State gaming taxes have increased over 25%. In previous years, the Village received between $40,000 and $50,000 each year. Based on the actual amounts received in the first six months of fiscal year 2018, the Village anticipates over $60,000 this year. 

9. Motor fuel taxes received from the State of Illinois are expected to decrease slightly. 

10. Building permits are estimated for 70 residential homes and one large industrial building. This estimate depends solely on the number of permits submitted. Residential building permits are estimated low to be conservative in the event that the large industrial building permit does not go through in the upcoming fiscal year.

Director Wagonblott discussed the following items which are included in the 2019 proposed budget:

1. Tree program expenses were increased to $40,000 (1/2 matched by $20,000 in revenue from residents) for the tree replacement program. The tree replacement program was doubled for this budget year, due to the high demand by residents in the past two years. 

2. An estimate of $30,000 for a Village website redesign. The current Village website is old, outdated and in need of a complete overhaul to be more user friendly. 

3. $30,000 for a building camera system to replace the existing camera system that functions sporadically and is no longer reliable.

Board Direction was to get bids that include camera systems for the Village Hall, Police Department and Public Works buildings if they were done together and separately.

4. An estimated 3% increase for all union and non-union positions – effective May 1st. Union negotiations are underway; however, the first meetings have not been set.

5. An estimate of $100,000 for removal and installation of new flooring in the Village Hall. Dolezal stated this would be for carpet squares in the entire Village Hall (both upstairs and downstairs) so that in future years when the carpet gets worn down in the high traffic areas it would cut down on the replacement costs in the future since individual carpet squares could be replaced as needed. He stated the estimate would include the replacement of the carpet and the moving of furniture to do so. He is working on getting quotes that include moving the furniture as well as installing the carpet.

6. $20,000 for beautification related expenses. 

7. Replacement if the developmental pickup truck and two marked squad cars in the police department. Casey stated he is looking into reusing equipment from these cars to put into the new ones to cut down on cost.

8. The addition of three unfilled positions – an Accountant in the Finance Department, an Office Assistant and an ESDA Coordinator. 

9. The continuation of the Dove Drive and the Bridge Street multiuse path capital projects. Wagonblott stated that these two projects are a great example of the necessary infrastructure that is made possible due to the revenue received from the Village’s fuel and diesel tax. She stated the Village is responsible for 20% of the total project costs and that is paid for by the Village’s fuel and diesel tax revenue.

10. A total of $951,900 is dedicated to the road maintenance program. 

11. Preparation of a Popular Annual Financial Report (PAFR) by an outside accounting firm (budgeted in the Audit Fund, Fund 04). This would be a new item for the Village. 

Wagonblott stated this would be $8,500, which doesn’t include printing. She also stated that the cost could go up depending on the options selected.

VP Moorman Schumacher reminded the Board that the Village previously sent out a newsletter to residents 3-4 times per year, which was approximately $5,000 each time it was sent. She suggested that the Board might want to consider household newsletter mailing to the residents again which could include information contained in a PAFR.

12. Certification in Information Technology for one staff member. 

13. Outside firm, Ruetteger & Tonelli, updating the Village’s existing GIS system with the information that is backlogged from the removal of the GIS position.

Petrick stated this includes moving to ArcGIS Online, which he stated would be more efficient for Public Works. This firm is the same one that Village of Shorewood and City of Joliet currently utilize.

Durkin stated that they are also looking into the Summer Intern Program through the GEDC/GAVC to assist in various projects within the Village Departments.

14. The east side U.S. Route 6 bike path engineering fees.

Outstanding Debt

1. The Village has a total of seven outstanding bonds. Of the seven, two are IEPA loans, one is a TIF bond, one is related to WESCOM and one is an MFT bond. The remaining two bonds are split between general funds and water/sewer funds. 

2. The 2006 MFT bond matures is two years. The last payment is due in October 2019. Wagonblott stated that the benefit in the MFT bond maturing, the money designated to pay this bond will result in additional money available for road related projects.

3. The 2013 TIF bond matures in approximately two years. The last payment is due in January 2020. 

4. The 2011 bonds mature in four years. The last payment is due in October 2021.

Wagonblott stated that the bond was split for the building of the current Village Hall and utilities.

5. The 2012 Water/Sewer bonds have seven years remaining until the bonds are paid off. 

6. The 2016 GO Refunding bonds are far from matured as these bonds were just issued for the water main and Bluff Road projects. These bonds will be partially paid by the other taxing bodies based on the intergovernmental agreement the Village entered with the taxing bodies.

Wagonblott stated that the Village’s debt will be decreasing significantly over the next 2-4 years, assuming that additional debt is not incurred. This retirement of debt will open up the respective revenue sources for other planned capital projects, operating costs or will increase the reserve balance. She stated the Village can always strive towards “zero debt”, however, there are times when capital needs are imperative and the Village has the opportunity to issue tax exempt bonds to assist in the payment of the large capital needs.

Wagonblott stated the only debt that the Village anticipates issuing in the next year is an IEPA loan at a low interest rate for the ongoing sanitary sewer expansion project.

Items Not to be Forgotten or Dismissed:

1. Total amount allocated in the FY2019 budget draft for the road program is $951,900. The total road program expenses are made up of $551,900 from Fund 22 which is where the state motor fuel tax revenues are allocated in addition to the funds received from the State as a result of taking the jurisdictional transfer of the frontage road. Additional road program expenses of $425,000 from Fund 26, which is where the Village Fuel and Diesel tax is allocated. Fund 22 has reserves from prior years that will be utilized for the proposed expenses in this fund. The proposed budget includes an additional $123,000 for the road program when compared to the 2018 budget. The goal of staff is to continue to increase the road program expenses each year, as allowed. Staff is able to work towards funding the road program at a level that will maintain the roads at a minimum level of pavement rating index of 6 on a 0-10 scale. 

2. Bills continue to be proposed to the State government to freeze the property tax levy amounts. This could significantly affect the general funds operations if the new construction is affected by any legislation passed. 

3. An additional $2.5 million will be needed to complete the middle part of the Bridge Street multiuse path. This money will need to come from grants, the Village or a combination of both.

Dolezal stated that the Village has an application submitted for a grant.

Durkin stated if we are approved for the grant the Village’s responsibility would be 20% of the total cost unless that changes.

4. An estimate of $450,000 is needed to complete the Knapp Street bridge bike path. 

5. Water infrastructure improvements of approximately $8 million over the next few years, due to aging infrastructure.

Wagonblott stated this is the IEPA loan Dolezal is in the middle of applying for.

Wagonblott gave a brief overview of the Special Revenue Funds. She further stated that the Special Revenue Funds have specifically designated revenue sources that are intended for specific expenses and can only be used for those expenses.

Any changes to the proposed budget document was requested by Director Wagonblott to be submitted prior to the March 19th Board meeting.

Trustee Scaggs made a motion to adjourn the Special Board Meeting at 10:57 p.m. Seconded by Trustee Greco.

VERBAL ROLL CALL: ALL AYES MOTION CARRIED