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HomeMy WebLinkAboutCOMMITTEE OF THE WHOLE - 03/23/2010 - Rain Barrel Program, Economic Newslettermr- 1.. COMMITTEE OF THE WHOLE AGENDA March 23, 2010 Council Chambers Following 5:30 p.m. Executive Session NEW BUSINESS 1. Subject: Rain Barrel Program Reference: Report from Director of Health & Community Services 2. Subject: Economic Newsletter Reference: Draft of Newsletter Issue: Consideration to Continue the Rain Barrel Program Issue: Consideration of Draft Newsletter Outlining the Village's Economic Condition c.: Mayor & Board of Trustees, Village Manager, Deputy Village Manager, Assistant Village Manager, Village Attorney, Village Clerk (3/6w/o), All Department Heads (7w/o) COMMITTEE OF THE WHOLE MINUTES March 23. 2010 6:40 p.m. Present: C. Johnson; Mayor N. Czarnik; Village Trustee P. Feichter; Village Trustee J. Franke, Village Trustee S. Lissner, Village Trustee J. Petri, Village Trustee C. Prochno; Village Trustee Absent: None Staff: R. Rummel, Village Manager M. Roan, Deputy Village Manager B. Jacobsen. Assistant Village Manager G. Knickerbocker; Village Attorney J. Keegan; Village Clerk Reporters: None Solicitor Permit After a brief discussion it was the consensus of the Committee to direct the Village Attorney to prepare the necessary documents to start charging a fee of $40 for a 30-day solicitor's permit; and $15 for up to two; 30-day extensions. The fees cover the cost to create an identification badge and conduct a background check. Rain Barrels It was the consensus of Committee to discontinue the Rain Barrel subsidy program due to the limited number of participants in last year's program. _Financial Update With a few minor modifications, it was the consensus of the Committee to approve the April 2010 Financial Update Newsletter which will be sent to all businesses and residents in Elk Grove Village. The meeting was adjourned at 6:55 p.m. Date: February 22, 2010 To: Matt Roan, Deputy Village Manager From Cavallini, Director ealth & Community Services RE: RAIN BARREL SUBSIDY PROGRAM RECEIVED FEB 2 2 70in VILLAGE MANAGER'S OFFICE In 2008, the Mayor and Village Board began to explore the possibility of subsidizing the purchase of rain barrels by the residents of Elk Grove Village. To determine the interest by residents in a rain barrel subsidy program by the Village a survey was conducted in 2008-2009. Over 350 requests by residents expressing interest in rain barrels were received. As a result of the positive response, the Mayor and Village Board made the decision in 2009 to go ahead with the program. The original funding (subsidy) level was up to 400 rain barrels. Rain barrels were provided from Steiner Electric at a reduced cost of $64.00 for Village residents. The Village subsidized the cost of each rain barrel at $14.00. The residents paid $50.00 + tax for each rain barrel up to two (2). At the end of 2009 only 153 rain barrels were purchased by residents participating in the Village subsidy program. The cost to the Village was $2,142.00 (153 X $14.00). Funding for the program came from the recycling rebate program. have recently contacted Tim Benner, Account Manager for Steiner Electric. He will continue to keep the price of rain barrels for the Village at the $64.00 price level. I am requesting direction whether to continue or discontinue the rain barrel subsidy program in 2010. If the Village makes a decision to stop the subsidy, residents will still be able to purchase the rain barrels for $64.00 + tax. I have recently received inquiries by two (2) residents interested in purchasing rain barrels. Remember the original intent to subsidize rain barrels was to encourage residents to purchase rain barrels that were manufactured properly and provided adequate protection against mosquito breeding. It also provided some uniformity to the rain barrels rather than a plethora of colors, sizes and shapes. Draft #2 Page 1 of 6 MEETING THE CHALLENGE THE FINANCIAL DIRECTION OF ELK GROVE VILLAGE Pick up a newspaper or turn on the television, and one of the first things that you read is how poorly our nation's economy is doing. Almost every financial expert agrees; this is the worst period of economic progress since the Great Depression. The protracted downturn has impacted nearly every family, business, or organization in some way or another — and government entities have not been immune to the poor economy. For the past year or so, there have been numerous stories detailing how a variety of governmental bodies have been dealing with this economic downturn. From freezes to furloughs and layoffs and from contract concessions to tax increases, almost every governmental body has had to deal with the new economic reality — revenues are not what they were and no one knows if or when they will ever return to the levels that they once were. In January 2009, we mailed a special newsletter addressing, among other topics, the finances of Elk Grove Village. At the time we sent out that informational piece, many of our neighboring communities were reeling from the effects of the economic downturn. On the other hand, Elk Grove was doing well due to the weak dollar overseas and the sales tax generated from European purchases. This continued until the negative economy hit Europe. Elk Grove was operating with a surplus of several million dollars above our 4-month reserve, which was planned as a financial safety net. Unfortunately, Elk Grove Village is not immune to the financial issues around us, and in April of last year we began experiencing some of the same concerns as our neighboring communities. REVENUE SHORTFALLS Elk Grove is one of the largest sales tax producers in the State of Illinois. Sales taxes pay for a large part of our general government services such as Police, Fire, Public Works, Health, Engineering, and Building Department activities. When items are purchased in Elk Grove, the Village receives the sales tax from the State. It takes the State at least 3 months to provide Elk Grove Village with our sales taxes — sometimes longer. In April of 2009, Elk Grove began to experience a huge decrease in sales tax revenues. Sales taxes declined then rose and fell but have now stabilized at a much lower level. Looking back, we now realize that April's revenues (covering January's purchases) were the first month of sales taxes after tax increase went into effect from other governmental entities. Concurrently, the Village had planned for the effects of the stagnant housing and construction markets, as revenue from real estate transactions and building permits also began lowering considerably. At the same time, the Village's return on investments was also trending downward. In addition, Governor Quinn provided his recommended State Budget on March 10, 2010. The Governor's proposed budget calls for eliminating over $800,000 that Elk Grove Village receives in State shared income taxes. Draft #2 Page 2 of 6 The Village created a rainy day "reserve" fund to weather an economic downturn. As a result of the declining real estate transfer taxes, construction permit fees, and investment income, the Village spent down nearly $2 million of those reserves last fiscal year. Unfortunately, the Village could not foresee the reduction in sales tax, and we are now projecting the use of several million dollars of reserves to cover operating expenses in the current year's budget which ends April 30, 2010. The good news is that our reserve fund remains viable and we have reduced our 2010 budget by millions of dollars. The bad news is that the State of Illinois is now seeking to take our revenues to balance its budget. ELK GROVE'S RESPONSE - CUTTING COSTS Prior to the start of this current budget year, we began taking steps to trim operating expenses and reduce costs. Throughout the past year, the Village Board implemented cost saving plans and that resulted in significant cost savings to the community. The Village was able to reorganize operations to reduce staff. The result was the complete elimination of 7 positions, as well as leaving 18 more positions unfilled. These positions were unfilled and eliminated through retirements and attrition, no layoffs were involved. Fortunately, these changes save several million dollars. Moreover, Village employees stepped forward to accept a pay freeze. In an effort to buy time for an economic recovery, the Village took the unprecedented step of negotiating union contract concessions for the upcoming budget year. Recognizing that families and businesses are struggling in this difficult economy, we are proud that two [all three] Village unions have agreed to join all non -union and management employees by forgoing their contractual pay increases this year. At this time, the Mayor and Board of Trustees would like extend a public THANK YOU to those Union members who have agreed to a pay freeze and to all Village employees for their unselfish actions. Elk Grove considers itself a family and like your family, we are tightening our belts in hopes of surviving and thriving through these difficult economic times. In addition to the cost reductions noted above, the Village Board has also taken a look at revenue enhancements such as the recently implemented amnesty program to recoup unpaid tickets and vehicle stickers. The Village is proud to have held its property taxes at 0% for the past 3 years; however, cutting costs alone will not allow us to sustain our services if the economy does not turn around soon. MAY 1 20 10 BUDGET REDUCED — NEARLY 1 1 % The proposed May 1 budget maintains existing services at basic levels only. Overall, the 2010-11 Budget is down nearly -11% and the General Fund portion is down nearly -8% which are on the items we control. We have cut expenses as much as possible and we have tightened our belts in all areas. At the end of the fiscal year, we plan to spend down reserves by over $2.5 million during the next Fiscal Year, assuming that the State of Illinois does not take additional revenues from us. Draft #2 Page 3 of 6 WHAT TO EXPECT? Elk Grove Village has always been proud to provide high quality services at a low cost. Our best practices have led to Elk Grove being honored nationally as well as Elk Grove remaining solvent financially. As we all know, Elk Grove is the lowest cost community in which to live. We have worked diligently to keep our property tax low, and we have the lowest combined property tax rate in Cook County. Over the past decade, we have reduced our General Fund property tax rate by 7%. We are proud of our fiscal responsibility, but we cannot continue to function in this economy as we have in the past without a turnaround in the economy. Elk Grove remains a special place. The community has a true hometown character and spirit. We desire to keep Elk Grove special, to maintain low property taxes, and to keep Elk Grove Village a great place to live and work. To achieve this mission, it may be necessary for us to take action to enhance finances in the foreseeable future should the economy remain stagnant or the State take our revenues. SPECIAL EVENTS PRESERVE THE COMMUNITY FEEL While other communities have eliminated special events, we have trimmed our costs while maintaining high quality activities. Unfortunately, some have suggested that we eliminate special events, too. These suggestions fail to recognize that the special events provide Elk Grove with a small-town feeling, that the Village has reduced the cost of the events by nearly $180,000; and, the low cost of the special events due to business sponsorships, volunteer labor, and even State grants. Our special events make Elk Grove Village an Exceptional Community and a great place to work and raise a family. From the Summer Concert Series, to the Bike Race, Parade, Memorial Day, and Holiday Tree Lighting Ceremony — these events bring our residents together to enjoy affordable and fun family entertainment. Lets review each of these events: Alexian Brothers Tour of Elk Grove The Alexian Brothers Tour of Elk Grove International Bike Race is operated through business sponsorships, rider entry fees, volunteer labor, a State grant, and a special fee paid by hotels and motels strictly to fund the race. Each year, the race receives nearly $300,000 in sponsorships and another $35,000 in rider entry fees. Moreover, in the fall of 2007, the hotels in Elk Grove Village agreed to a 1% Hotel/Motel fee for the sole purpose of funding the Tour of Elk Grove which brings guests to their hotels. Furthermore, businesses sponsor the concerts and fireworks that take place on the race weekend. Finally, we have volunteers act as course marshals, sell concessions, and staff activities. Draft #2 Page 4 of 6 The Tour of Elk Grove attracts riders and spectators from around the world who bring economic activity to the Village. In addition, Comcast Sportsnet produces a two time, internationally award winning television show that is broadcast around the world. The TV program highlights our community and our business park to the world. In addition, riders stay in our hotels, eat in our restaurants, and frequent our business establishments. The Tour of Elk Grove has placed Elk Grove Village on the International map. This aids with our recruitment of businesses for economic development purposes from around the globe. We are proud of the race and are able to keep it with the help of our business community. Mid -Summer Classics Concert Series The Mid Summer Classics concert series is funded by a tobacco license fee paid by retailers who sell cigarettes/tobacco products in the community. The funding started when Elk Grove enacted stringent tobacco license fees to fund a program to market Elk Grove restaurants as smoke -free. However, once the State of Illinois acted to make all restaurants smoke -free, we were obligated to find another smoke -free venue for the use of these special marketing funds. The Summer Concert series arose from that obligation. At the concert, we provide information to the community on the benefits of not smoking while offering a smoke -free, family friendly, no cost source of family entertainment and community pride. Village Parade The annual Village Parade is planned and presented by volunteers on the Parade Committee. Community volunteer organizations building floats for the parade. Likewise, the Parade Committee recruits business sponsors who help offset the cost of funding large parade units such as bands and similar parade entertainment. Fireworks The Elk Grove Lions Club operates the annual Independence Day Fireworks Display. Moreover, residents and businesses donate approximately $5,000 each year on the water bill to help defray the cost of the fireworks display. Memorial Day/Holiday Tree Lighting The Memorial Day ceremony and Holiday Tree Lighting are staffed by volunteers such as the Lioness Club and the Boy Scouts. In addition, these are wonderful community events that bring visitors to the community and a positive image for economic development purposes. Again, these visitors may visit our restaurants and businesses and otherwise improve the business atmosphere of our community. Overall, we believe that the balance of the costs associated with our special events are nominal compared to the efforts taken to preserve our community spirit. Draft #2 Page 5 of 6 While we are continuing with our special events, we do recognize that times are difficult and sponsorship dollars are harder to find. Therefore, after reviewing the budgets for these events, we have trimmed $180,000 in cost savings on Special Events for the upcoming year. CONSTRUCTION PROJECTS We have recently had a few residents ask why we chose to invest funds into rehabilitating the Village Green and constructing a new entryway water feature at Biesterfield Road and Leicester. Please allow us to review these important projects: Village Green Fountain Rehabilitation The Village Green fountain area was constructed in 1998 by the developer of the Town Center Shopping Center. The fountain was included as an add -on to the shopping center redevelopment project. It was then donated to the Village for ownership, maintenance, and public use. Unfortunately, the original fountain was not constructed to last beyond 10 years. The brick base was crumbling from salt exposure; the plastic plumbing was failing; and the computerized pumps were in need of continual repair, maintenance and replacement. Overall, the fountain faced major renovations. The cost to rehabilitate the fountain was nearly the same price as a totally new water feature. Fortunately, the fountain area was part of the redevelopment TIF District, and capital funds from the TIF were available to construct a new fountain. TIF funds are only available for construction related activities in the TIF District. We are proud of the success of our TIF. We not only shortened the overall length of it, we are already rebating $300,000 annually to the taxing bodies. As was noted by our school districts, it is unheard of to return TIF funds to the other taxing bodies. Using TIF funds, the new fountain was built to stand the test of time. It has heavy duty plumbing, quality pumps and controls, and new energy efficient LED lighting. Finally, it was designed as a "spray park" to be both a beautiful investment in our Town Center and to function as free family entertainment. Water Feature at Biesterfield/Leicester The new water feature at Biesterfield and Leicester was planned 3 years ago in conjunction with the expansion of Alexian Brothers Medical Center. At that time, Alexian Brothers decided to make Leicester Road its main entrance while investing just under $500 million to build a state-of-the-art medical center in our community. To enhance the new entrance, Alexian Brothers planned a water feature which they constructed on their property. To favorably identify Elk Grove and to leave a positive impression upon the 500,000 patients, visitors, and workers who access ABMC each year, the Village likewise planned a new water entryway feature at this important entrance. Draft #2 Page 6 of 6 After years of planning and easement acquisition, the Village was finally able to construct the long -planned water feature at Biesterfield Road and Leicester. The water feature was constructed utilizing capital funds from the Residential Enhancement Program. These funds are strictly earmarked for capital construction projects and are not available to pay for day-to-day activities of the Village. We look forward to the activation of the new fountain with the onset of warm weather. The new fountain will enhance the image of the Village, and assist in maintaining economic development, property values, and our positive community spirit. Street Repairs/Other Infrastructure Although the Village is tightening its belt with regard to our operating budget, we will continue with other capital improvements in the coming year such as road repairs and related items. Now is the time to be move forward with construction projects. With the slow economy comes incredible prices from contractors, and that is a cost effective way to invest in our future. WHAT CAN You DO? Shop Elk Grove to Hold Down Taxes First and foremost, we encourage all of our residents and businesses to shop in Elk Grove Village. By doing so, you keep your sales tax dollars in our community which defrays property taxes. Contact Your State Senators/Representative/Governor Unfunded State Mandates and the State taking our tax dollars have serious cost implications that ultimately result in higher local taxes. Contact your State elected officials and advise them of your opinion on the people in Springfield raising local taxes to fund their projects or budget. We thank you for taking the time to read this important piece of information that impacts all of us. Sincerely, Craig B. Johnson, Mayor Nancy J. Czamik, Village Trustee Samuel L. Lissner, Village Trustee Jeffrey C. Franke, Village Trustee James P. Petri, Village Trustee Patton L. Feichter, Village Trustee Chris Prochno, Village Trustee