Village of Northbrook Board of Trustees Committee of the Whole met Oct. 27.
Here is the minutes provided by the committee:
1. ROLL CALL
| Attendee Name | Title | Status | Arrived |
| 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 | |
| Dan Pepoon | Trustee | Present |
A. Board of Trustees - Committee of the Whole - Oct 13, 2020 6:00 PM
RESULT: ACCEPTED [UNANIMOUS]
MOVER: Bob Israel, Trustee
SECONDER: Dan Pepoon, Trustee
AYES: Frum, Ciesla, Israel, Collison, Ross, Hebl, Pepoon
3. PUBLIC COMMENT TIME
An email was received from Catherine Caporusso expressing concern for the Board during the Covid-19 crisis and hoping that budget cuts in green areas will be kept to a minimum.
4. DISCUSSION TOPICS
A. First Quarter Financial Review
A. First Quarter Financial Review
Deputy Chief Financial Officer Iwona Petryszak began her presentation with FY 2020/21- 1st Quarter.
Revenue is projected to be about $2.6 million under the original budget and expenses to be about $1.6 million under the amended budget. With the current estimates, the fund balance is expected to be about $2 million above the 40% reserve policy at April 30, 2021.
A slide showed projected major revenue sources as compared to original budget. Sales taxes are estimated to be $500,000 below budget due to a longer than expected recovery from the COVID-19 pandemic. Hotel tax is estimated to be $565,000 under the original budget, building permits $930,000 under original budget due mainly to delayed redevelopment at Northbrook Court, and grants are expected to be $300,000 above the original budget due to funding approved by Cook County of federal CARES money for COVID-19 related expenses.
A summary of estimated expenses as compared to the Amended Budget show we are estimating expenses to be $1.6 million under the amended budget. This is in addition to budget cuts that were done back in April. At that time expenses were reduced by $2 million. When looking at the $1.6 million, $870,000 comes from capital. The Village deferred purchases of a loader, aerial lift, and building improvements. Another $570,000 was related to personnel services. There were salary savings due to temporary vacancies and turnover and lower than anticipated overtime costs. Some part-time positions were not filled and a few part-time employees were laid off.
A slide compared overtime first quarter of the current fiscal year to the same period in FY 2019/20. Overtime is down about 26%.
A slide compared overtime in total FY 2018/19 to FY 2019/20. Total overtime was about 15% less in FY 2019/20.
A slide showed sales tax actual receipts compared to budget for the 18-month period of May 2019 through October 2020. There are nine months over budget, five months under budget, and a few that are almost perfect. In total for the 18-month period, sales tax receipts were 0.4% over budget.
Deputy CFO Petryszak asked if anyone had questions. President Frum stated that she was impressed with the budgets and estimates. She stated that in April 2020 the Board had no idea how Covid19 would impact revenues. President Frum stated that we have been close with the numbers.
The next update will be in February.
Trustee Ciesla stated that sales tax numbers are a little misleading. She stated that we had a large bump last month. The bump could have come from Lord & Taylor going out of business sale. Trustee Ciesla would like to streamline how we get information from staff. She asked if there was other information that the Board would like reported. Currently, the Board receives sales tax numbers.
Trustee Hebl would like to know the Greenhouse sales tax numbers specific to Northbrook. The estimated revenue was adjusted for Greenhouse because of opening later than expected. This is a separate line item because of the way it is taxed, so the number can be sourced. Ms. Petryszak stated that a separate line shows the additional tax and regular sales is included in the sales tax line. CFO Rowitz stated that we only have one cannabis store and we could back into specific sales for that location.
Trustee Hebl stated that on a national level we are hearing about ordering holiday gifts. She would like to help the December numbers in the Village. She would like to know what the presentation will be to shop local for this year. President Frum answered that the Village has plans to work with the Chamber to get the shopping local message out.
Trustee Israel believes supporting our local restaurants is important too. He stated that the environment for outdoor dining is not good.
President Frum stated that overtime in general is down except for water main breaks. President Frum would like a discussion to discuss water at the COW on December 8, 2020.
Economic Indicator Review
Director of Development and Planning Services Tom Poupard provided a summary of Northbrook economic indicators.
General construction indicators show we are below budget on building permits. It relates to the fact that Northbrook Court construction has been put on pause due to no construction of the new restaurants, grocery store and apartment building at the Macy site.
General market data shows the comparison of the value of building permits issued through the years - January through September. Director Poupard stated that we are lagging normal. We are starting to see a bit of a slowdown. Inspections are still above normal due to the large apartment complex inspections that occurred earlier in the year.
Non-residential permits show the economic consequences of the pandemic. We are lagging well behind normal as offices, and retail areas are not being altered
New single family home permits issued started strong but has tapered off. Director Poupard thinks we will issue a bunch of new permits in October, as there are currently ten such permits under review.
Only the models are left for sale at Timber Woods. With Anets Woods’s subdivision, only three lots remain. Overall the market is inching up a little bit. Director Poupard reports that it was a busy summer for home sales. Jacob’s Gateway Northbrook townhome development on Shermer Road is moving at a slow pace. M/I Homes townhome development on Techny Road is going fairly well. 27 of 84 permits have been issued. The Northbrook market for apartments is driven by our two large developments: 770 and Finger Company. We have seen volatility in market rent when units opened.
The vacancy rate for 770 is 10%. 1000 Skokie is 55% occupied. The vacancy rate overall in apartments within a 10-mile radius is about 9%. That number is expected to drop over time. Rents are expected to go up in the area.
Retail vacancy is starting to climb and is just under 5%. The biggest vacancy is 1001 Skokie Boulevard, Dania Furniture with 102,000 sq. ft. The other large vacant space is Sanders Court. Director Poupard reports that there is now an offering of the entire property for sale.
At the Northshore Center at Skokie Boulevard and Dundee there are only two spaces open; Hair Cuttery and Panda Express. Roti has reopened for carryout.
A new tenant, Napolita Pizzeria and Wine Bar will move into the former Lucky Fish space in downtown Northbrook, perhaps as early as January. Napolita likes the idea of outdoor dining and the fenced in rear area.
The office market is still not doing great. It is getting close to 16% vacancy. The Skokie Road corridor has 14% vacancy. This is an important area and needs to be watched. The largest vacancy on the list is 126,000 sq. ft. and is Lord & Taylor. Lord & Taylor might be repurposed into office space with a common center atrium. This is a permitted use with no special permit or public hearing necessary.
Industrial market in comparison to office market continues to be very strong with only 4.2% vacancy. Sky Harbor has 1.6 % vacancy and South Shermer Road has 7% vacancy. The number one vacancy is the former Walgreens on 4000 Commercial with over 200,000 sq. ft. Discussions are taking place about adaptive reuses. Hotel data shows that hotel tax is down significantly. The North Shore has 30% occupancy. Trustee Israel asked what the pre-pandemic occupancy number was. Director Poupard stated that under normal conditions the number is 70-80%.
Unemployment is hovering around 10% at the US level, State level and Northbrook. Northbrook hit 15% during the height of COVID. Northbrook unemployment is currently 10%.
Sales tax categories aggregated shows that in the 1st quarter, or one month of the pandemic, we were down almost 21%. We saw a 44% overall drop for the 2nd quarter. General merchandise is down 85%, furniture and clothing show an 81% drop. Lumber and home improvement jumped 15%.
Director Poupard reports that Finance did an excellent job of anticipating the drop.
Trustee Pepoon asked what is included in the line item titled, Agriculture. Director Poupard stated that he believes it includes landscaping sales, i.e. Red’s Garden Center.
President Frum asked what tax percentage the Chamber of Commerce receives from hotel tax. The answer is 10%. President Frum said the revenues collected will decrease significantly and would like to add this as a future discussion item.
President Frum reminded the Trustees that there are two upcoming meetings on finance. The Board will discuss the CIP and levy on November 10, 2020. There will also be a “Block of Cheese” meeting to discuss finances for next year. Trustee Ciesla would like comments and suggestions sent to her, Deputy Director Petryszak and Manager Nahrstadt by November 10th. Trustee Ciesla would like the public involved. She asked that the Trustees get the word out.
5. REMARKS FOR THE GOOD OF THE ORDER
None
6. CLOSED SESSION 7. ADJOURN
On a motion made by Trustee Ciesla and seconded by Trustee Collison the COW meeting was adjourned at 6:48 p.m.
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