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Village President's Budget Message April 10, 2006 Budget Highlights The Village Board has reviewed Staff's proposed budget in detail at two workshops held on March 9 and March 20. As a result, several changes have been made (see attached report). The Budget is now in final form. The total FY 06-07 Expenditure Budget, including transfers, amounts to $14,825,310. General Fund The FY 06-07 General Fund Budget reflects a deficit of $170,500. Revenues Revenues for the FY 06-07 General Fund are projected to be $7,601,785, which is $598,835 or 8.6% more than the FY 05-06 Budget of $7,002,950, and $703,400 or 10.2% more than the FY 05-06 estimated actual of $6,898,385. The FY 06-07 Budget includes a proposed increase in the Telecommunication Tax from 4.75% to 6.00%. Expenditures The FY 06-07 Expenditures Budget is $7,772,285, which is $770,650 or 11.0% more than the FY 05-06 Expenditure Budget of $7,001,635. Several large expenditures have led to the projected deficit, including:
Special Revenue Funds E-9-1-1 Fund The E-9-1-1 Fund was established in FY 88-89. FY 06-07 surcharge revenues, based upon 12,600 per month access lines, are estimated to be $90,090. The total revenue in the E‑9‑1-1 Fund for FY 06-07 is projected to be $96,900. Expenditures for FY 06-07 are estimated at $54,075, with $234,233 set aside for future Capital Expenditures by the Burr Ridge Police Department, the Tri-State Fire Protection District and the Pleasantview Fire Protection District. MFT Fund The FY 06-07 MFT Fund Budget includes a transfer of $342,125 to the Capital Improvements Fund to help fund the 2006 Road Program. This transfer represents the available funds expected to be approved by IDOT (Illinois Department of Transportation) for the 2006 Road Program. Hotel/Motel Tax Fund The Hotel/Motel Tax Fund, a special revenue fund, was established in FY 91-92. In FY 03-04, the Hotel/Motel Tax increased from 1% to 3%. This year the increased tax will generate $282,210, the majority of which will be used to fund the marketing plan for Burr Ridge hotels and pay for gateway landscape maintenance. Capital Projects Funds Capital Improvements Fund All non-enterprise fund capital improvements are expensed out of the Capital Projects Fund. With this in mind, revenues will come from grants and transfers from other funds. The total FY 06-07 Capital Improvements Budget is $1,744,325, which includes the cost of the 2006 Road Program in the amount of $907,255 and the Phase III renovation of the Public Works facility in the amount of $250,800. The cost of the Public Works Phase III renovation is shared between the Water Fund (60%) and the Sewer Fund (40%). Sidewalk/Pathway Improvement Fund The FY 06-07 Sidewalk/Pathway Budget includes expenditures in the amount of $128,000, which includes $69,000 for the County Line Road sidewalk (at Ashton Woods), $27,000 for the 83rd Street Engineering (Phase I & II) and $32,000 for annual maintenance. A healthy fund balance of $1,174,356 for future projects is estimated to exist at the end of FY 06-07. Capital Equipment Replacement Fund The Capital Equipment Replacement Fund was established in FY 91-92. This fund currently has a beginning fund balance of $712,671 and it is anticipated that it will have an ending fund balance at the end of FY 06-07 of $686,261. Anticipated expenditures in FY 06-07 amount to $53,000. Funds were not set aside this year in the Capital Equipment Fund for future replacement of equipment due to General Fund budget constraints. Debt Service Fund The Debt Service Fund for FY 06-07 includes the payment of principal, interest and paying agent fees on G.O. Bond Series 2003 (refinanced 1996) in the amount of $503,115. This year, 50% of this cost will be abated, using Water Fund revenues. Water FundThe Water Fund Budget shows a surplus in the amount of $25,200 and includes a 7% increase in Water Rates. Projected revenues for the Water Fund in FY 06-07 are $3,067,445 or 13.6% more than the FY 05-06 Budget and $18,605 or 0.6% less than the FY 05-06 estimated actual of $3,086,050. The FY 06-07 Expenditure Budget amounts to $3,042,245 and is $4,505 or 0.1% more than the FY 05-06 Budget. Sewer Fund The Sewer Fund was established to maintain the sewer system in the Cook County portion of the Village. Revenues in the amount of $271,785 are projected for FY 06-07. Expenditures in the amount $436,270 include $63,000 for a new sewer jetter. Funds are also included to hire one full-time employee. The FY 06-07 Sewer Fund Budget shows a deficit of $164,485 and includes a rate increase in the flat rate charge from $10.67 to $15.00 per billing cycle (40.6%) for residential and from $.73 per 1,000 gallons to $1.05 per 1,000 gallons for commercial accounts. Information Technology Fund The Information Technology Fund was established in FY 96-97 to account for all costs related to delivery of information services to the internal departments of the Village. FY 06-07 revenues are estimated at $120,360, which is comprised primarily of Transfers from the General, Water, and Sewer Funds. FY 06-07 Expenditures are estimated at $106,830 and include $19,500 for the Phase III GIS implementation. Funds were not set aside this year in the Information Technology Fund for the future replacement of the system, due to budget constraints. Police Pension Fund The FY 06-07 Police Pension Fund revenues are estimated at $944,630, of which $461,360 is projected to be collected from property taxes. Total pension/disability payments equal $278,480, which is $55,660 more than budgeted in FY 05-06. Pension/ disability payments include two police officers on permanent disability and four retirees. Total Police Pension Fund expenditures equal $358,830. Details of each Budget are included in the Budget document. Administrator's Budget Message April 10, 2006 The Honorable Gary Grasso, Mayor, Board of Trustees and Citizens of Burr Ridge Dear Mayor Grasso and Board of Trustees: It is with pleasure that I submit to you the approved Five-Year Operating and Capital Improvements Budget for Fiscal Years 2006-07 through 2010-11. The format for this year’s budget has been changed somewhat from that which was approved in previous years. Performance Measures, Goals and Accomplishments, which were included in the budget several years ago in order to achieve the GFOA Budget Conformance Award, have been eliminated. A new section highlighting charts, graphs and statistical information for the Village’s three largest funds, the General Fund, Water Fund and Sewer Fund, has been added. In addition, accounting for the Water and Sewer Funds has been changed, for budgeting purposes, to utilize the cash basis of accounting method, rather than the accrual method of accounting. Depreciation expenses have been eliminated and all capital expenditures will now be accounted for in the year in which they occur. The budget that the Village Board will approve in April 2006 is for Fiscal Year 2006-07. However, in order to gain insight into what may lie ahead, projections are provided for Fiscal Years 07-08 through Fiscal Years 10-11. It should be noted that the budget is broken down into separate funds according to generally accepted accounting principles for state and local governments. You will note that in several instances, transfers are shown from one fund to another for budgetary and accounting purposes. These interfund transfers inflate the total budget of all funds by $1,451,315 or 9.8%. Return to quick reference guide The total FY 06-07 Expenditure Budget for all funds,
including transfers The FY 06-07 Budget was an extremely difficult budget for Staff to prepare, due to the continued lack of growth in available revenue sources and the inclusion of several large one-time expenditure items. Several adjustments are proposed to be made to the budget this fiscal year, which will impact future year budgets both positively and negatively. First, the FY 06-07 Budget includes proposed tax increases as follows: · General Fund – Telecommunication Tax increase from 4.75% to 6% ($161,120) · Water Rate increase of 7%, which will generate $175,930. Water Rates have not been increased since May 2004. Since that time, the Village has received 3 increases from the City of Chicago/Village of Bedford Park amounting to 12.31%. The Water Committee has recommended this increase. · Sewer Rate increase in the flat rate charge from $10.67 to $15.00 per billing cycle (40.6%). Sewer Rates have not been increased since 1991. The main purpose of this increase is to fund the cost of a full-time employee to operate the new proposed trailer-mounted Sewer Jetter and perform other Public Works related duties. Secondly, in order to help balance the General Fund Budget, transfers normally earmarked for the future purchase of equipment in the Equipment Replacement Fund ($151,890) and the Capital Reserves and Information Technology Fund ($49,860), were not made this year. However, we believe at this time that we will be able to restore these transfers in future years, depending on future operating revenue growth. Third, in order to balance the General Fund Budget, several expenditures, which would normally be found in the General Fund, were moved to other funds, including: · Public Works Phase 3 Renovation: $150,480 in Water and $100,320 in Sewer · County Line Road weed cutting south of 79th Street: $7,000 in Pathway Fund · Gateway Landscape Maintenance and Improvements: $47,645 in Hotel/Motel Tax Fund · Purchase of new vehicle for Deputy Building Commissioner: $17,000 in Equipment Replacement Fund · Purchase of a new Public Works 4 x 4 pickup truck: $13,000 in Equipment Replacement Fund (50% will be paid out of the Water Fund) It should be pointed out that the proposed Village Center project will have a major impact on the FY 06-07 Budget and future year budget projections as well. The proposed FY 06-07 Budget includes both revenues and expenditures associated with the construction of 7 new buildings within the development, along with the cost of proposed off-site improvements, which are shown to be 100% reimbursed by the developer. Future year projections include a proposed increase of $350,000 per year in new sales tax revenue. Return to quick reference guide The proposed FY 06-07 Budget includes $2,324,385 in capital items (projects and capital purchases) included in the Capital Projects Fund, Sidewalk Fund, Equipment Replacement Fund, Water Fund and General Fund. This represents 15.7% of the total budget for all funds. Return to quick reference guide The 2006 Road Program includes the following elements:
The FY 06-07 Budget also includes the following road improvements: · $335,770 for the Village’s portion of a federal grant for the 83rd Street Improvement Project. This project was re-budgeted in FY 06-07 due to delays caused by the State bidding the project out too late in the 2005 calendar year. · $50,000 for Phase I engineering improvements for the 71st Street extension project. (To be reimbursed by the developer.) · $170,000 for left-turn lane improvements on County Line Road associated with the Village Center Project. (To be reimbursed by the developer.) · $20,000 for the Village’s portion of a federal grant for the installation of a wayside horn at the Madison/97th Street grade crossing. Future year projections have been prepared to fully fund the annual Road Program, which has been reduced by approximately $250,000 per year. No stormwater projects are currently budgeted in FY 06-07 or beyond. However, ongoing maintenance work will be required at Windsor Pond to ensure the establishment of the native landscaping. $4,000 has been budgeted in the Building and Grounds, Grounds Maintenance Account, for this purpose. Return to quick reference guide The FY 06-07 Sidewalk/Pathway Fund Budget includes $69,000 for the extension of a sidewalk along County Line Road, near Ashton Woods, and $27,000 for Phase I and II engineering for the 83rd Street sidewalk. In addition, $25,000 is included for annual sidewalk repair and maintenance. Return to quick reference guide Included in the FY 06-07 Budget is $6,300 to cap an abandoned water main located at North Frontage Road near the Carriage Way Condos. No other major capital improvements are scheduled in the Water Fund for this fiscal year. No sewer system improvements have been budgeted in FY 06-07. Return to quick reference guide A report regarding the reorganization of the Public Works Department completed in FY 03-04 included recommendations concerning the need to renovate the Public Works facility. A proposed plan was presented by the Public Works Director, outlining a renovation plan to be conducted in 3 phases. The first phase was completed in FY 04-05 (office and locker room renovation). The second phase (roof and exterior site improvements) were completed in FY 05-06. The third phase includes the renovation to the warehouse portion of the Public Works facility in the amount of $250,800. Although the cost of the first two phases was split equally among the General Fund, the Water Fund and the Sewer Fund, due to budget constraints, it is recommended that the Water Fund pay 60% of the cost of the Phase 3 renovation and that the Sewer Fund pay for 40% of the cost. No additional building improvements are budgeted for in FY 06-07. Please note that the FY 06-07 Budget includes no funds for the possible construction of a new Village Hall/Police Department. The cost of this project will have to come from the sale of bonds, the sale of vacant land and/or from existing General Fund, Water Fund and/or Sewer Fund equity. Return to quick reference guide Information Technology Improvements In FY 04-05, a plan was presented by the Public Works Director outlining a strategy to develop and implement a Geographic Information System (GIS) for the Village. The first two phases of the program have been completed. The remaining phase of the program will be implemented over the fiscal year as follows: GIS System – Phase 3 – FY 07-08 and beyond (if necessary) Field
data collection (Trees, Street signs, etc.): GPS Hardware - $ 3,600 GIS Software - $ 1,500 TOTAL - $19,500 Although the cost of this project was split equally between the General Fund, the Water Fund and the Sewer Fund over the past two years, it is recommended that the Water Fund pay 60% of the cost and the Sewer Fund pay 40% of the cost. Funds from both the Water and Sewer Funds have been transferred to the Information Technology Fund where this expenditure will be made. Return to quick reference guide The FY 06-07 Budget includes several equipment replacement and new equipment items. Major Vehicle/Equipment Replacement Items Due to General Fund budget constraints, the cost of two new vehicles for which no replacement funds have been previously set aside have been transferred to the Equipment Replacement Fund. A new vehicle for the Deputy Building Commissioner ($17,000) and an additional F-250 4 x 4 pickup truck for the Public Works Department ($26,000 - 50% Water Fund and 50% Equipment Replacement Fund) have been budgeted. The Fund also includes the scheduled replacement of the Police Chief’s vehicle ($21,000). Major equipment requests over $1,000 include:
Return to quick reference guide Requests were received during the budget process from the Police Chief to hire 2 additional Patrol Officers, from the Finance Director for 1 additional Accounting Clerk and from the Public Works Director to hire an additional Public Works employee. Due to budget constraints in the General Fund, a new full-time Public Works employee has been budgeted for the first time in the Sewer Fund to help operate the proposed new trailer-mounted Sewer Jetter and a part-time accounting clerk has been budgeted in the General Fund for the Finance Department. The FY 06-07 Budget contains 2 additional Police Officers. The cost to hire a new Patrol Officer is as follows:
Since our Police emergency dispatch contract is based on a cost per officer, the Southwest Central Dispatch contract will increase by $9,170 per officer. The decision to hire 2 additional officers will place the General Fund in a deficit, requiring the use of General Fund equity to balance the budget. Return to quick reference guide Total salaries, including overtime costs, for FY 06-07 will amount to $4,212,615, which is $302,695 or 7.7% greater than the FY 05-06 Budget. The following range adjustments have been included in the FY 06-07 Budget: Non-union employees - 2% Police union employees - to be negotiated All non-union employees not at the top of the pay plan will be eligible for a merit increase. Police union employees not at the top of the pay plan will be eligible for a step increase. The total cost of the Merit/COLA/Step increases for FY 06-07 is $188,588. It should be pointed out that, after reducing merit increases by 2% last fiscal year, per the direction of the Village Board, merit increases for non-union employees were restored to prior year levels, resulting in an additional cost of $24,950. Salary increases for non-union employees are once again as follows: Exceeds Expectations - 6% Meets Expectations - 4% Average - 2% Police union employees are currently included in an 8-step pay plan and all union employees not at the top of their pay range will receive their normal step increase on their anniversary date. It is anticipated that health insurance rates would increase by 11.5%, beginning on July 1, 2006. Based on 60 employees, it is estimated that the Village will pay a total of $599,845 in health, life and dental insurance benefits in FY 06-07. Please note that, in FY 06-07, one Public Works employee who had previously chosen no coverage has now chosen Family Coverage. Due to the fact that employees currently pay 25% of dependent health and dental insurance costs, employees will pay a total of approximately $74,395 in FY 06-07 for this benefit. Return to quick reference guide The total training budget for all departments in FY 06-07 is $74,620, which is $9,935 or 15.4% more than budgeted in FY 05-06. The Special Census is planned to be conducted in the summer of 2006. $86,070 is budgeted in FY 06-07 to pay for operating costs. It is expected that, as a result of the Special Census, Income Tax revenue and Motor Fuel Tax revenues will increase. Beginning in FY 07-08, approximately $160,000 in additional revenue will be generated each year for the next 5 years. $7,500 has been budgeted for appraisal services to determine the value of Village-owned vacant land throughout the Village. $5,520 has been budgeted to establish Online bill paying and credit card services. $211,660 has been budgeted in the Hotel/Motel Tax Fund for a Hotel Marketing Plan. This represents the second year of this new program, which has increased from 40% of total revenues to 75% of total revenues. A subcommittee of the Economic Development Committee, comprised of representatives of the area hotels and the Village Administrator, will continue to advise the EDC and Board on this new initiative. $15,000 has been budgeted in the General Fund to celebrate the 50th Anniversary of the Village of Burr Ridge and $5,000 has been budgeted in the Hotel/Motel Tax Fund for 50th Anniversary banners. $10,000 has been budgeted for the Police Accreditation Process, which is scheduled to be completed in FY 06-07. This amount includes the cost of the on-site inspection and required participation at the Police Accreditation Conference, where our award is expected to be presented. $20,000 has been re-budgeted in FY 06-07 to hire a planning consultant to assist in the preparation of an amendment to the Comprehensive Plan associated with property directly surrounding the new Village Center development. Return to quick reference guide Abatement of Property Taxes for 2003 G.O. Bond Issue (1996 Refinanced) For several years, surplus funds in the General Fund were used to abate all or part of the principal and interest on the 2003 G.O. Bond Issue (Bedford Park Water Main Project). Surplus funds are no longer available in the General Fund. However, for the past two years, the Board approved a 50% Debt Service Levy utilizing equity from the Water Fund. The FY 06-07 Debt Service Fund Budget once again shows that 50% of revenues are to be received from property taxes and 50% from the transfers from the Water Fund in order to pay the Debt Service on the bonds ($503,115). FY 05-06 Estimated Actual Expenditures and Revenues In January 2006, it was reported at the Budget Workshop that the FY 05-06 Budget deficit was projected to be approximately $61,190. Upon further review, we find that, although our projections were close, we believe that the FY 05-06 Budget will include a deficit of $85,205. Budget amendments will need to be made for FY 05-06 for the payment of the IMF/PrimeCo Lawsuit ($72,505) and for the hiring of a Program Manager for the Village Hall/Police Department Project ($22,000). Return to quick reference guide
The FY 06-07 projected revenues in the amount of $7,601,785 is $598,835 more than budgeted for FY 05-06, and $703,400 or 10.2% more than the FY 05-06 Estimated Actual. Even with the proposed increase in the telecommunication tax from 4.75% to 6.0%, generating $161,120 in new revenues, total taxes of $4,717,715 are projected to be only $24,245 or 0.5% more than projected for FY 05-06 and only $285,995 or 6.5% more than the FY 05-06 estimated actual Tax Revenue Budget figure of $6,898,385. The municipal sales tax continues to be the largest single revenue source in the General Fund Budget. The FY 05-06 estimated actual of $1,665,980 once again fell short of the FY 05-06 Budget of $1,914,010 by $248,030. Sales tax revenue for FY 06-07 is projected at $1,715,960, which is a 3.0% increase over the FY 05-06 projected Estimated Actual, but $198,050 or 10.3% less than the projected budget for FY 05-06. Beginning in FY 07-08, $350,000 per year in new sales tax revenue associated with the Village Center development has been budgeted. Building permit revenue is expected to come in slightly lower than projected in FY 05-06. The FY 05-06 Estimated Actual of $482,680 was $3,610 less than what was budgeted in FY 05-06. However, the projected FY 06-07 budget of $844,425 is $358,135 more than budgeted in FY 05-06. This is due to the construction of the 7 buildings in the Village Center development, the construction of the 3rd office building in the Mars Equities development and the construction of the medical office building in the Corporate Park. This revenue source will drop down again to historic levels after this fiscal year. The Village continues to rely heavily on State Income Tax. For the first time in three years, estimated revenues from FY 05-06 exceeded projections. In FY 06-07 $831,670 is projected, which is 1.3% higher than the FY 05-06 estimated actual and 13.4% more than the FY 05-06 Budget. Income tax revenues will increase significantly again in FY 07-08, after the completion of the Special Census. Finally, it should be noted that $100,000 in reserves found in our account with the Intergovernmental Risk Management Agency (IRMA) had to be used once again ($50,000 was used in FY 05-06). These funds will be earmarked for use to pay for part of the cost for liability insurance. The bill for this insurance will not be paid until January of 2006. If revenue projections improve by that time, the use of these funds may not be necessary. Return to quick reference guide FY 06-07 Budget - Expenditures
The General Fund Expenditure Budget for FY 06-07 is $7,772,285, which is $770,650 or 11.0% more than the FY 05-06 Budget of $7,001,635 and $788,695 or 11.3% more than the FY 05-06 estimated actual of $6,983,590. Although the FY 06-07 Budget increased 11.0%, there are several large expenditures in the General Fund expenditures that created a larger than normal increase. When taking into account the following expenditures, the FY 06-07 Budget would actually be .2% less than FY 05-06: · Special Census Fees $ 86,070 · Increase in Bldg/Zoning Fees due to Village Center $179,975 · Increase in annual Road Program transfers $263,285 · Increase due to six new squad cars $110,100 · Addition of 2 new Police Officers $146,095 TOTAL $785,525 One-time building permit revenues and corresponding building inspection expenditures associated with the Village Center project have been included in the FY 06-07 Budget and sales tax revenue in the amount of $350,000 per year has been added to the budget beginning in FY 07-08. It should be pointed out that no additional Police personnel have been added to the Budget at this time to handle the additional workload associated with the opening of the downtown shopping center. Return to quick reference guide Although the FY 06-07 Budget shows a small surplus in the amount of $4,705, this is due to several adjustments that were made (see pages 1-2) and the use, for the second year in a row, of IRMA surplus funds ($100,000 in FY 06-07). Future year budget projections begin to show some improvement, as additional sales tax ($350,000 per year beginning in FY 07-08) begins to come in from the Village Center development; per capita MFT and income tax revenues increase, due to the special census; and thanks in part to the proposed increase in the telecommunication tax from 4.75% to 6%. Although expenditures decrease significantly in FY 07-08, due to the completion of several one-time large projects budgeted in FY 06-07, expenditures begin to rise again steadily in future years. The Village will need to keep a close eye on the economy, as the Village continues to increase its reliance on increasing sales tax and income tax revenues. The E-9-1-1 Fund was established in FY 88-89. In FY 01-02, a new dispatch arrangement was approved with the Southwest Central Dispatch Agency and the Southwest Central E-9-1-1 Board. The new Intergovernmental Agreement provides for the transfer of $.16 out of every $.60 collected per access line to the Southwest Central E-9-1-1 Board for E-9-1-1 services. In addition, the Village pays approximately $0.11 per phone line on a monthly basis to SBC for phone line charges, plus the cost of miscellaneous taxes and charges. In FY 06-07, $24,765 will be transferred to the Southwest Central E‑9‑1-1 Board and $16,200 will be paid to SBC. In addition, approximately $0.22 out of every $0.60 ($33,645) will be earmarked in FY 06-07 for future Police Department E-9-1-1 related expenses. To-date, approximately $168,375 has been restricted for use by the Burr Ridge Police Department to defray future 9-1-1 related expenses. Also, $0.05 per access line will be set aside for both the Tri-State Fire Protection District and the Pleasantview Fire Protection District for future E‑9‑1-1 related expenses. Return to quick reference guide The FY 06-07 MFT Fund Budget includes a transfer of $342,125 to the Capital Improvements Fund to help fund the 2006 Road Program. This transfer represents the available funds expected to be generated from our annual allotment from IDOT (Illinois Department of Transportation). Beginning in FY 07-08, $34,000 in additional revenues are expected to be received due to the completion of the Special Census. The Hotel/Motel Tax Fund, a special revenue fund, was established in FY 91-92. In FY 04-05 the Village increased the tax from 1% to 3%. A significant Hotel Marketing Plan, representing 75% of all revenue received ($211,660), has been budgeted in FY 06-07, up from the $123,460 or 48% of revenues that was budgeted in FY 05-06. The Hotel Marketing Subcommittee will present a proposed marketing plan to the Economic Development Committee and Village Board at the beginning of the fiscal year, which is anticipated to include radio ads for the first time. The balance of the expenditure budget was developed based upon many requests the Village has received in the past from the Willowbrook/Burr Ridge Chamber of Commerce, the Burr Ridge Park District, the Pleasant Dale Park District, the Flagg Creek Historical Society and the I & M Canal National Heritage Corridor. Also, for the first time, $47,645 has been budgeted for gateway landscape maintenance and improvements. This cost was originally budgeted in the General Fund, but moved to this fund to help offset the projected deficit in the General Fund. Return to quick reference guide All non-enterprise fund capital improvements are expensed out of the Capital Projects Fund. With this in mind, revenues will come from transfers from the General Fund ($500,005), the Motor Fuel Tax Fund ($342,125) and from developer donations ($373,615). A total of $1,744,325 in Capital Improvement Fund projects will be completed in FY 06-07, representing the cost of the 2006 Road Program ($907,255), the rehabilitation of the Public Works facility Phase 3 ($250,800) and the 83rd Street improvements ($335,770). Return to quick reference guide Sidewalk/Pathway Improvement Fund The beginning reserves for the Sidewalk/Pathway Fund starting May 1, 2006 are projected to be $1,255,406. As mentioned above, the FY 06-07 Sidewalk/Pathway Fund includes $128,000 for projects and maintenance, including $7,000 for weed cutting along the new sidewalk constructed on County Line Road. Capital Equipment Replacement Fund The Capital Equipment Replacement Fund was established in FY 91-92. This fund currently has beginning reserves of $712,671. Anticipated expenditures in FY 06-07 include: · Replacement Police Chief’s car $21,000· Vehicle for Deputy Bldg. Commissioner $17,000· New Public Works 4 x 4 pickup truck $13,000 (50% in Water Fund) TOTAL $51,000 Of this amount, only $21,000 was originally scheduled to be paid out of the Equipment Replacement Fund. The other expenditures represent new equipment to be paid out of this fund, due to the projected deficit in the General Fund. $719,934 is required to adequately fund future expenditures based on the normal replacement schedule and it is anticipated that, at the end of the fiscal year, only $686,261 will be available, leaving a shortfall of $33,673. With this in mind, the Capital Equipment Replacement fund is no longer fully funded. A complete replacement schedule for Village equipment is found in Section 3, pages 66 and 67. Return to quick reference guide The Debt Service Fund for FY 06-07 includes principal, interest and paying agent fees on G. O. Bond Series 2003 (1996 Series refinanced) (Bedford Park Water Main Project). As mentioned above, the FY 06-07 proposed Budget provides a 50% abatement for the principal and interest on this bond issue. With this in mind, it is anticipated that property taxes in the amount of $251,560 and $251,555 in transfers from the Water Fund will be received in FY 06-07 to cover the cost of the principal ($360,000) and Interest ($143,115) on the Bond issue. Return to quick reference guide In order for the Board to better understand the financial condition of the Water Fund, the accounting methodology in the Water Fund Budget has been changed this fiscal year, for budgeting purposes, from an accrual basis of accounting normally used in enterprise funds to a cash-based method of accounting. On a budgetary basis, depreciation expense has been eliminated and now one-time Capital Projects will be expensed in the year in which they occur. In January 2006 the cost of Lake Michigan water from the Village of Bedford Park increased from $2.01 to $2.10 or a 4.5% increase. This represents the third year that rates were increased since the Village’s last rate increase in 2004. With this in mind, the Water Committee is recommending a 7% increase in water rates, which should generate an additional $175,930. Including the proposed rate increase, the proposed FY 06-07 Budget includes revenues in the amount of $3,067,445. The FY 06-07 Expenditure Budget amounts to $3,042,245. Including the 50% Debt Service Abatement, this budget is still $239,415 or 7.3% less than the estimated actual Expenditure Budget for FY 05-06 of $3,281,660. This is due to the amount of water purchased in FY 05-06 caused by the dry summer. The proposed FY 06-07 Budget shows projected reserves of $5,994,904 in the Water Fund by the end of the year. The largest single expense in the Water Fund is the cost of Lake Michigan Water. Water purchase costs alone represent 53.8% of the entire Water Fund budget. Water purchases in FY 06-07 are projected at 778,160,000 gallons. In FY 06-07, it is anticipated the Village will sell 704,726,000 gallons of water or 8.6% less than the previous year. Return to quick reference guide Similar to the Water Fund, accounting methodology for budgeting purposes in the Sewer Fund has also changed from the accrual method to the cash basis of accounting. The Sewer Fund was established to maintain the sewer system in the Cook County Portion of the Village. For the first time since 1991, I am proposing the following per billing cycle rate increase: residential from$10.67 to $15.00; commercial from $.73 per 1,000 gallons or $26.76 per unit, whichever is greater, to $1.05 per 1,000 gallons or $40.00 per unit, whichever is greater. The purpose of this increase is to cover the ongoing cost of hiring an additional Public Works employee whose primary purpose will be to operate the Trailer-mounted Sewer Jetter that is proposed in this year’s budget and to perform other Public Works related responsibilities as necessary. Revenues of $271,785 are projected for FY 06-07 and are made up of sewer charges, tap-on fees, penalties and interest. Expenses in the amount of $436,270 are $136,665 (45.6%) more than the FY 05-06 Estimated Actual figure of $298,730. Even with a deficit of $161,830, caused by the costs associated with the DPW Phase 3 Rehabilitation project, the GIS Project and the one-time expenditure for the trailer-mounted Sewer Jetter, the proposed FY 06-07 Budget shows healthy projected reserves of $1,609,023 in the Sewer Fund. With the projected rate increase, the Sewer Fund will be in a strong financial position and will be able to accumulate revenue for future capital repairs and maintenance. The Information Technology Fund was established in FY 96-97 to better track costs associated with technology, computer and telecommunication related issues. Funds have been set aside each year in the past to cover the eventual replacement of the system. This is not the case this year, due to revenue constraints in the General Fund. However, this fund contains healthy reserves to more than adequately replace the Village’s computer system. The FY 06-07 Budget includes $106,830 in expenditures, $19,500 of which is for the GIS Phase 3 Program. Return to quick reference guide The FY 06-07 Police Pension Fund revenues are estimated at $944,630, of which $461,360 is projected to be collected from property taxes, which is represented as Employer Contributions due to a change in generally accepted accounting principles. This is an $89,730 or 19.3% increase over the FY 05-06 Budget of $386,710. Total pension/disability payments equal $278,480. Pension/disability payments include two police officers on permanent disability, four retirees and one surviving spouse of a retiree. It is anticipated that four additional officers could retire within the next few years. The FY 06-07 through FY 10-11 Operating and Capital Improvements Budget is more than just a financial document. It represents the Village’s plans for the future. Although we cannot precisely predict the future, the sooner we plan for future projects and expenditures, the sooner we can anticipate and create new sources of revenue to meet them. Return to quick reference guide The budget process, which began in November, has reached its final stage. As the Village Administrator, it is my responsibility to see to it that budgets submitted by department heads in January have been thoroughly analyzed, reviewed and prioritized in accordance with what I believe to be a reasonable schedule of programs to maintain and enhance both employee productivity and the level of services offered to our residents. Obviously, there are many recommendations for new equipment, projects and services contained within the proposed budget that have yet to be fully presented to the Board. However, as usual, background information and analysis will be presented to the Village Board for all expenditures in excess of $5,000 and no action will be taken on these expenditures prior to Board approval. The budget is now presented to you for your analysis and ultimate approval. Once it is approved, this budget will become your budget – the work plan for the entire organization for FY 06-07 and beyond. In conclusion, I would like to point out that the FY 06-07 through FY 10-11 Operating and Capital Improvement Budget could not have been prepared without the diligent efforts of Finance Director Jerry Sapp, Assistant Finance Director Amy Wulf and the entire Village Staff. Respectfully submitted, Steve Stricker Village Administrator SS:bp Return to quick reference guide
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