Title
FY2009 Budget Adjustments
History
Current Village Board approved policy requires that the Village maintain a minimum fund balance in its General Fund of 20% of annual expenditures, with a goal of 25%. Based upon the recent economic downturn and a subsequent decline in some of the Village’s major revenue sources, staff determined that the Village would have to reduce its expenditure budget for FY2009 in order to meet the established fund balance policy. After a thorough review of FY2009 budgeted expenditures for all departments and funds, it was determined that various expenditure line items could be reduced by a total of $2,646,422. In addition, staff reviewed the Village’s revenue sources and projected an overall revenue decrease in the amount of $6,114,717. A portion of the revenue decrease is transfers between various funds of the Village; the actual decrease in projected revenues received from external entities is $4,919,682. A detailed spreadsheet (by fund) of budget adjustments is attached. These proposed changes maintain the 20% minimum reserve.
The following is justification for the larger budget adjustments listed:
Revenues -
General Fund -
§ Animal licenses - reduction of $7,000 - program eliminated
§ Fine Art Fair fees and donations - reduction of $12,000 - program eliminated
§ Development related fees - reduction of $463,828 - state of the economy has slowed new development - reducing revenue estimate by 40% based on year-to-date collections of 22%
§ State income tax - reduction of $354,824 - individual income levels projected to decrease - reducing state income tax revenue estimate by 5%
§ State sales tax - reduction of $3,019,151 - reduction based on year-to-date actual collections, state of the economy
§ Rental housing inspection fees - increase of $41,725 - new program
§ Retail theft impoundment fees - increase of $45,000 - new program
Home Rule Sales Tax Fund -
§ Home rule sales tax - reduction of $1,018,314 - based on year-to-date actual collections, state of the economy
Main Street Triangle TIF Fund -
§ Transfer from Home Rule Sales Tax Fund - reduction of $750,000 - due to decrease in Home Rule Sale Tax collections
Recreation & Parks Fund -
§ Program fee revenues - reduction of $128,770 - based on year-to-date actual collections
§ Transfer from General Fund - reduction of $444,626 - based on reduction in expenditures
Expenditures -
General Fund -
§ Special events - reduction of $135,391 - cancelled or reduced number of special events.
§ Bank service charges - reduction of $13,500 - implementation of electronic deposit
§ Copier replacement - reduction of $30,000 - Finance copier Computer hardware/software - reduction of $51,230 - cancel purchase of computers for Investigations, printers, miscellaneous software and departmental computer replacements; T-1 line and phone line cost reductions
§ Transfer to Recreation & Parks Fund - reduction of $444,626 - based on reduction in Recreation & Parks Fund expenditures
§ Percent salary increases - reduction of $25,535 - reduced COLA increase from budgeted 3.75% to 3.0% for non-union and from budgeted 3.75% to 2.0% for directors
§ Postpone hiring of recently vacated positions until 1/1/10 and reduce hiring of seasonal employees.
§ Reduced ICSC spending - reduction of $7,000 - limited number of attendees, literature costs decreased
§ Reduce consulting services - reduction of $14,914 - reduces amounts budgeted in VM and DS
§ Reduce gasoline purchases - reduction of $140,000 - price per gallon decreased subsequent to budget approval
§ Reduced miscellaneous supply purchases - reduction of $21,000 - limit building supply and paper product purchases
Water Fund -
§ Percent salary increases - reduction of $2,541 - reduced COLA increase from budgeted 3.75% to 3.0% for non-union and from budgeted 3.75% to 2.0% for directors
§ Postpone hiring of recently vacated positions until 1/1/10 - reduction of $111,223.
Home Rule Sales Tax Fund -
§ Transfers Out - reduction of $750,000 - eliminated transfer to Main Street Triangle TIF Fund
Main Street Triangle TIF Fund -
§ Consulting services - increase of $500,000 - additional consulting services related to land acquisition, sale of land and developer selection
Recreation & Parks Fund -
§ Percent salary increases - reduction of $6,215 - reduced COLA increase from budgeted 3.75% to 3.0% for non-union and from budgeted 3.75% to 2.0% for directors
§ Postpone hiring of new position until 1/1/10 - reduction of $132,071 - position of Recreation Operations Manager
§ Postpone hiring of vacant positions until 1/1/10 and reduce hiring of seasonal employees - reduction of $376,637.
§ Junior High School dances - reduction of $5,856 - cancelled three junior high school dances
§ Reduce purchase of miscellaneous repair and maintenance supplies - reduction of $73,000 - reductions include playground equipment, machinery parts, miscellaneous repair supplies, stone, sand, plants, flowers, tree replacements
§ Over-budget line items - increase of $35,325 - includes Cable Internet Services, Program Instructors, Sportsplex - Machinery & Equipment Repair Services and Parts, Domestic Supplies and Light Bulbs,
§ Reduce various contractual services - reduction of $20,432 - includes armored car pickup, retention management services, contract cleaning
Financial Impact
The attached spreadsheet identifies the budget impact.
Recommended Action/Motion
I move to approve amending the FY2009 revenue budget by $6,114,717 and the FY2009 expenditure budget by $2,646,422.