Village of Northbrook Board of Trustees Committee of the Whole met March 10.
Here is the minutes provided by the committee:
1. ROLL CALL
| Attendee Name | Title | Status | Arrived |
| Dan Pepoon | Trustee | Present | |
| Sandra Frum | Village President | Present | |
| Kathryn Ciesla | Trustee | Present | |
| Bob Israel | Trustee | Present | |
| Muriel Collison | Trustee | Present | |
| Heather Ross | Trustee | Present | |
| Johannah Hebl | Trustee | Present |
Board of Trustees - Committee of the Whole - Feb 25, 2020 6:00 PM
RESULT: ACCEPTED [UNANIMOUS]
MOVER: Dan Pepoon, Trustee
SECONDER: Muriel Collison, Trustee
AYES: Pepoon, Frum, Ciesla, Israel, Collison, Ross, Hebl
3. PUBLIC COMMENT TIME
None
4. DISCUSSION TOPICS
A. Third Quarter Financial Review
President Frum opened the meeting stating the Third Quarter Financial Review includes all priorities, maintains the level of service, and is balanced. President Frum asked the Board to keep in mind for later discussion, the direction for next year and philosophical issues. The Board can articulate on what they would like emphasized. It is likely that the budget will be amended during the year. Village Manager Nahrstadt, along with CFO Rowitz and Deputy CFO Petryszak are monitoring conditions closely and will recommend adjustments as necessary.
Deputy CFO Petryszak stated the FY 2019/20 Third Quarter Review began with a balanced budget for the General Fund and now predicts to have a surplus of $528,000. In November, due to favorable rates, we issued bonds to cover capital projects for two fiscal years, the current fiscal year and next fiscal year. The estimated revenues, after adjustment from the bond proceeds, are in line with the original budget. Expenditures are slightly below the budget. The estimated fund balance as a percentage of revenue is 50%, which is expected to be $4.7 million above our 40% reserve policy at April 30, 2020.
Estimated expenditures are $268,000 below the amended budget or.6%.
Personal services are $210,000 below the amended budget related to vacancies and new hires coming in at a lower salary.
Summary showed major revenue sources estimated and projection for two years as compared to prior year actual. Most were consistent but sales tax is a little bit above budget at 4% less than prior year actual. Sales tax projection for next year includes cannabis sales, which will help offset the closing of Macy’s. FY 2022 includes sales tax that the Village would receive from the new grocery store and restaurants at Northbrook Court. A new budget line was created for the new home rule cannabis tax.
Sales tax receipts for the last 18 months were close to budget. Eight months were under and six months were over. Four were on budget. Cumulative sales tax receipts for the last 18 months were 0.7% lower than budget.
Overtime report by department compared the first three quarters of the first fiscal year to the last fiscal year. Total reimbursement for fire and police are $115,000 for the current fiscal year. Overtime as compared to last year is $170,000 less. Overtime as related to police activity is $72,000 or 9% less than prior year. The Police Department will be fully staffed by April.
Trustee Hebl asked if there are comparison statistics between the Northbrook Police Department and other communities. The answer is that it would be difficult to get good comparisons due to the large number of variables in each community. Manager Nahrstadt stated that staff would follow up with comparisons between other towns on baseline numbers.
President Frum stated that the Village looked to be in good shape.
Director Poupard offered a report on market conditions. Director Poupard stated that permit applications for Northbrook Court multifamily homes will be issued in the next fiscal year. Building inspections generally lag one year behind. This year inspections are being finished for 1000 Skokie. Inspections will drop in 2020 and then spike again. Single family permits show a little bit of a drop. The concentration of tear down activity is mostly taking place in Districts 28 and 30.
Timbers Edge development is wrapping up and all permits have been issued. Anets Woods is filling in. Jacobs Homes is going slowly.
Residential market activity is stagnant, but we are better off than others are. North Shore 770 vacancy rates are hovering around 15% vacancy. The first units are becoming occupied at 1000 Skokie. Director Poupard stated that we monitor the number of new residential units being built within a five-mile radius. All of those vacancies average 13%. Wheeling is outside of the five-mile radius.
Retail vacancy is 3.5%. Permits for Northbrook Court are ready to be issued for internal renovations and face lift of the mall. The grocer is close to signing a lease. Brookfield may be the multifamily home developer.
Director Poupard is meeting with the owners of Sanders Court later this week. The Culver’s project will help to revitalize. The North suburban market vacancy is 10%. Old Navy at Village Square is listed as available property. The shopping center at Dundee and Skokie Boulevard, home to Mariano’s, has one vacancy at the corner. Dania Furniture is listed as available. Claim Company is happy in their new space.
Office vacancy rates hover around 16%. Most of the largest vacancies are on Skokie Boulevard. The Industrial market is at a historical 3.7%. Most are in Sky Harbor and Shermer Road. President Frum asked for a breakdown of industrial parks for the next meeting. Director Poupard stated that his information statistics on industrial buildings does not identify the occupants. Rents are trending upwards. The number one vacancy is Walgreens, number two vacancy is 555 Huehl and number three vacancy is 3401 Commercial Avenue.
Presentation and Discussion of FY 20/21 Draft Budget
Chief Financial Officer Jeff Rowitz began by stating FY 2020/21 draft budget abates $6 million or 55% of the property tax levy for debt service and the ordinance is on the Regular Board meeting agenda for approval tonight. The draft budget also assumes there will be a transfer of $425,000 from ambulance fees to police and fire pension funds to fund at a higher level.
Included in the packet were two-year revenue and expense projections for the General Fund. FY 2020/21 operating expenses are within 1.7% of the projections made in January of last year. Some of the new initiatives and goals that were established last summer are included in this year’s budget.
Communications; last year a part time position was funded, but has now turned in to a full time Communications Specialist. Included in business outreach, we are looking to hire a consultant to do a branding study. Board goals include continuation of Friday Night Flights and another Village event, plus adding general tree lighting. These are included in the draft budget.
Environmental/sustainability issues include $150,000 for tree planting of 700 trees through our 50/50 program. Green options are being looked at for the Village fleet. Trustee Ciesla would like green building maintenance and green construction looked at too.
Chief Financial Officer Rowitz then reviewed various revenue sources and material capital projects planned for FY 20/21. At the end of the next fiscal year, projection is to have 49% in the fund balance or $4.1 million above the policy. For April 30, 2022, the projection is 46% revenue or $2.8 million above policy.
President Frum asked for recommendations on possible reductions of excess fund balance of 40%. It is recommended to take $2 million of the excess reserves and transfer to the Capital Projects Fund for future capital projects.
Trustee Ciesla questioned when the Village would receive sales tax from cannabis sales. CFO Rowitz responded that the tax goes into effect July 1 and we would receive the first distribution in October. The State of Illinois will collect and distribute back to the Village.
CFO Rowitz stated that in 2015 the Village completed a comprehensive water and sewer rate study projecting revenues and expenses for 10 years. That study planned for a 20% rate increase in May 2020. Staff has updated the study and determined that only a 10% increase is needed at this time.
Parking rates have remained the same for 30 years. The recommendation is to increase the daily rate to $2, which would put the Village in line with other communities. This would cover operations, except for next year, when the Village will be short $32,000 due to lot resurfacing, and the planned installation of covered bicycle racks at the train station. Trustee Ciesla suggests sending out information well before the doubling of the parking rates stating that the Village is remodeling the area. President Frum wants to go forward with signage, e-newsletter, Metra and Facebook. Manager Nahrstadt will formulate a plan. Trustee Pepoon stated that two commercial trucks use the parking lot for long-term parking. President Frum stated that the code might need to be amended.
Larger capital projects in the General Fund include replacement of ambulance and building improvements. Maintenance includes resurfacing the Police Station and Village Hall parking lots, along with HVAC repairs. Trustee Ciesla questioned where we are with the facility studies and asked about setting time limits. Chief Financial Officer Rowitz stated that sites are still being identified and investigated for suitability. A broker is involved looking for suitable sites for the police department and maintenance garage. Trustee Ciesla questions digging up the police department parking lot if it may be demolished. President Frum would like all parties to meet and re-evaluate.
Major capital projects other than the General Fund include $788,000 for bicycle and pedestrian improvements, $1.7 for storm water improvement projects, $1.2 million for street maintenance and $2.8 million for water system improvements.
General Fund expenses by category for the last six years show operating expenses are stable. They are up 11% from six years ago, which averages less 2% for each year.
Surplus next year projected is $109,000 with surplus for the second year at $7,300. This includes the transfer of $425,000 each year from the ambulance fees to the police and fire pension funds.
Manager Nahrstadt will come up with a plan to prioritize the following: downtown improvements, affordable housing issues, facilities, and recommendations that come from the environmental sustainability plan.
President Frum asked if there were any questions. Trustee Hebl questioned police overtime versus offering more in salaries. She questioned the procedure for when housing inspections numbers increase. She would like Public Works to investigate the crosswalk at Culvers by Dundee and Sanders. Trustee Hebl questioned the lack of lighting by MI Homes and Lorenz Drive. She dislikes the use of blue holiday lighting in the downtown. She would like someone hired in a full time position for statistical analysis.
President Frum wants to bring back the downtown zoning piece and meet with the Plan Commission. President Frum would like to see in next year’s budget wayfaring, branding, and a path connecting Techny Prairie Park to the downtown. Manager Nahrstadt is working with the Park District on a larger plan.
Trustee Ciesla asked about overtime and overtime reports with numbers. Trustee Hebl questioned why certain times of the year were higher than others.
Trustee Pepoon referenced page 281 in the mission statement regarding investment policy or investment practice. President Frum stated that it is under the control of the Pension Boards. CFO Rowitz stated that state law dictates authorized investments.
Trustee Ross would like to see funds from the cannabis sales tax earmarked. President Frum stated that the funds go to general operations and a recommendation would be needed.
Trustee Ciesla made a motion, seconded by Trustee Israel to approve the budget as drafted at the April 14 Board meeting. The motion passed by voice vote.
5. REMARKS FOR THE GOOD OF THE ORDER
6. CLOSED SESSION
7. ADJOURN
Trustee Ciesla moved, seconded by Trustee Hebl to adjourn the meeting at 7:20 p.m. On voice vote, the motion passed.
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