Committee of the Whole

Village of Mount Prospect Committee of the Whole Meeting Agenda 50 S. Emerson St. Mount Prospect, IL 60056 October 14, 2025 Village Hall - 3rd Floor Board Room 6:00 PM 1. CALL TO ORDER 2. ROLL CALL 3. APPROVAL OF MINUTES 3.1. Minutes of the Committee of the Whole - August 12, 2025 4. MAYOR'S COMMENT 5. CITIZENS TO BE HEARD 5.1. Individuals wishing to address the Village Board in person regarding issues not on the agenda must register to participate in the Citizens to Be Heard process. You may sign in before the meeting in person or by emailing your intent to speak to publiccomment@mountprospect.org no later than 1:00 p.m. on the day of the meeting. 6. DISCUSSION ITEMS 6.1. 2026 Annual Budget Workshop 7. VILLAGE MANAGER'S REPORT 7.1. As submitted 8. ANY OTHER BUSINESS 9. ADJOURNMENT ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A DISABILITY OR NEEDS SOME ACCOMMODATION TO PARTICIPATE, SHOULD CONTACT THE VILLAGE MANAGER'S OFFICE AT 847/392-6000, EXTENSION 5327 Page 1 of 13  DRAFT Village of Mount Prospect Committee of the Whole Tuesday, August 12, 2025 / 7:00 PM CALL TO ORDER Mayor Hoefert called the Committee of the Whole meeting to order at 6:05 p.m. in the Board Room at Village Hall, 50 S. Emerson St. ROLL CALL Members present upon a roll call by the Village Clerk: Mayor Paul Hoefert, Trustee Vincent Dante, Trustee Beth DiPrima, Trustee Terri Gens, Trustee Bill Grossi, Trustee John Matuszak, Trustee Colleen Saccotelli Absent: None APPROVAL OF MINUTES 3.1. Minutes of the Special Village Board/Committee of the Whole on the Road - July 8, 2025 Motion by Trustee Gens, second by Dante, to approve the minutes: Yea: Vincent Dante, Beth DiPrima, Terri Gens, Bill Grossi, John Matuszak, Colleen Saccotelli Nay: None Final Resolution: Motion Passed MAYORS REPORT 4.1. Mayor's Comment Mayor Hoefert stated he had no comments other than that he was looking forward to the presentations. COMMUNICATIONS AND PETITIONS - CITIZENS TO BE HEARD Pam Nelson Page 2 of 13  DRAFT Mount Prospect resident • Expressed concern regarding the presentation on community needs and what would happen in 2026 for low-income people on the north and south sides of the Village. Mayor Hoefert noted that this was the topic of the upcoming presentation. DISCUSSION ITEMS 6.1 Presentation of the Community Needs Assessment Final Report Esther Salutillo, Deputy Director of Human Services and oversees the Community Connection Center operations, introduced the agenda item. She provided a brief history of the Community Connection Center (CCC), noting that the last formal assessment was done in 2007, which led to the opening of the Center in 2009. The Center is located in South Mount Prospect, housing the Human Services Department and sharing space with the South Branch Mount Prospect Public Library. Ms. Salutillo explained that the goal has always been to increase access to social services, public health nursing, and library services for residents in South Mount Prospect, though the Center is open to all Village residents. She noted that as part of the Village's strategic plan, the needs assessment was completed to identify needs and barriers residents face in accessing services, as well as challenges with transportation and housing. Another goal was to identify potential partnerships with local agencies. Ms. Salutillo explained that Initium Health was selected through an RFP process that involved six proposals, three interviews, and final approval by the Village Board in September 2024. The assessment was funded by the American Rescue Plan Act. James Corbett, Principal of Initium Health, presented the findings of the needs assessment. He explained that his firm conducts similar assessments across the country. Mr. Corbett outlined their mixed-method approach, which included 703 surveys (about double what would be statistically significant for a community of Mount Prospect's size), five focus groups, and 27 stakeholder interviews with diverse groups across the Village. Key findings from the assessment included: • The CCC is viewed as a safe space by residents • There is strong community interest in expanded CCC services, with almost half of respondents likely to use an expanded facility • South Mount Prospect residents showed strong enthusiasm for expanded services • Services most requested for expansion included youth and senior programs, and library services • English speakers most strongly preferred senior programs while Spanish speakers prioritized youth programs • Nearly one-third of residents were unaware of the South Library services Page 3 of 13  DRAFT The assessment identified four priorities: • Physical space expansion - The current facility is too small to support multiple programs simultaneously and lacks private consultation areas. An expanded space should include dedicated areas for different age groups, telehealth capabilities, and culturally inclusive design. • Enhanced service delivery - Maintain community trust and current strengths (bilingual staff, extended hours, no wait list) while expanding multilingual services, extending weekend and evening hours, adding youth programs, enhancing senior services, and integrating physical and mental health services. • Strategic partnership implementation - Improve awareness of CCC services, maintain visibility at cultural events, implement a "no wrong door" approach for referrals, and explore transportation assistance. • Access and outreach enhancement - Develop formal partnerships to reduce service fragmentation, potentially partner with Northwest Community Hospital and other clinics for mental health and chronic care, and address long wait times for services, especially for Spanish speakers and uninsured residents. Ms. Salutillo and Mr. Corbett answered questions from the Board. Village Manager Cassady clarified that this presentation was intended to share the assessment findings, not to make specific requests or proposals yet. The next steps would involve working on prioritization. Public Comment: Pam Nelson Mount Prospect resident • Referenced the community models in Elgin and Bensenville that integrated multiple services in one facility. • Expressed concern about potential cuts to federal programs like Medicaid in 2026 and the impact on vulnerable residents. JOINT VILLAGE BOARD AND FINANCE COMMISSION WORKSHOP 7.1 Quarterly Financial Review - Second Quarter 2025 Director of Finance Amit Thakkar presented the second quarter financial review, noting that despite market volatility, the Village's finances remained strong. Key highlights included: • Total revenue collected during the second quarter was $36.1 million, bringing year- to-date collections to $67.4 million, an increase of $4.9 million compared to last year • Investment income for the year was $2.6 million • State sales tax showed 8.1% growth and income tax showed 8.4% growth, while used tax decreased by 45.6% due to a change in law Page 4 of 13  DRAFT • Second-quarter expenditures totaled $38 million and were on track as expected • Unassigned fund balance at the end of the quarter was $47.1 million or 51.8% of the annual budget Director Thakkar detailed revenue sources, expenditures by department and category, and provided updates on pension funds. Both pension funds reported positive investment income and positive change in net position for the first six months. The Police Pension Fund was 64% funded and the Fire Pension Fund was 64.6% funded. The Economic Emergency Fund had reached nearly $14 million, including interest income of $982,643 since its inception. Director Thakkar concluded that the Village was fiscally strong, with growth opportunities evident in the financials. Sales tax revenue was projected to reach $39 million, home rule sales tax $8.2 million, and income tax $10.1 million for the year, likely resulting in a year-end surplus. He also noted that the Village's strategy to achieve an AAA credit rating was underway. In response to questions from the Board, Director Thakkar explained that achieving an AAA rating would lower interest costs on debt, potentially saving $250,000 per year on $100 million in debt, or $5-6 million over 20 years. He also noted that a higher credit rating attracts quality investors and could make the Village more attractive to businesses. 7.2 Community Investment Plan - Fiscal Year 2026 – 2030 Director Thakkar introduced the Finance Commission, and upon roll call, the following were present: Chairman Ken Arndt, Commissioner Mary Rath, Commissioner Don Ocwieja, and Commissioner Cannizzaro. Director Thakkar presented the Community Investment Plan (CIP) for fiscal years 2026-2030, noting that this marked the start of the budget season. He explained that the capital budget accounts for major expenditures where the benefit extends beyond one year. The five-year CIP totaled $194.7 million, with key components including: • $74.9 million for resurfacing, sidewalks, curbs, and gutters (39% of CIP) • $26.6 million for street construction (14% of CIP) • $44.3 million for water system improvements (23% of CIP) • $10.4 million for sanitary sewer improvements (5% of CIP) • $15.9 million for public buildings (8% of CIP) The 2026 CIP budget was $58.5 million, with $21.2 million for recurring projects and $37.3 million for one-time projects. The majority (94%) of the CIP was allocated to Public Works. Director Thakkar and Public Works Director Sean Dorsey highlighted several specific projects: Page 5 of 13  DRAFT • Finance Department - ERP upgrade to Munis software at no acquisition cost, with project management services costing approximately $125,000 • Village-wide Green Building Program - $100,000 initial funding for matching grants for commercial properties • Fire Department - Power cots and load stretchers replacement at $142,500 in the current year and $142,500 in the next year • Human Services - $4.7 million placeholder for a new Community Connection Center, potentially requiring bond funding and partnership with the Mount Prospect Library • Public Works projects including: o Water system improvements ($6.5 million for 2026) o Sanitary sewer system improvements ($1 million for 2026) o Rand/Kensington/Elmhurst intersection improvements ($4 million Village share, with total Phase 3 cost of nearly $15 million) o Algonquin Road bike path improvements ($900,000 Village share, with substantial grant funding) o Pedestrian Railroad Crossing Improvement - Kensington Road stair elimination and path creation ($450,000 Village share) o Rand Road corridor street lighting ($780,000) o Busse Road reconstruction ($650,000 Village share, total project cost over $10 million) o Wolf Road improvements ($1.7 million Village share, with substantial grant funding) o Meadows/Melas Bridge project ($1.7 million Village share, total Phase 3 cost over $8.8 million) Significant discussion occurred regarding the Meadows/Melas Bridge project. Trustee DiPrima expressed concern about the timing of a final vote on the project, noting that at a previous meeting, it was stated the vote would occur in February 2026 when bids would be available. Village Manager Cassady clarified that there had been multiple votes throughout the project's development process and that the Board would have another opportunity to vote when bids are received. After the discussion, it was determined that the Board would hold a meeting the following week to discuss the bridge project. A final vote on funding will come when bids are received in February. VILLAGE MANAGER'S REPORT No additional report. ANY OTHER BUSINESS Trustee Grossi reminded everyone about the Family Health Fair scheduled for Wednesday, 6:00 to 7:30 PM at the Pocket Park (across from Village Hall). He noted that the Lions Club hearing and vision trailer would be there to provide free screenings. Page 6 of 13  DRAFT ADJOURNMENT With no additional business to conduct, Mayor Hoefert asked for a motion to adjourn. Trustee Grossi, seconded by Trustee Dante, motioned to adjourn the meeting. By unanimous voice vote, the August 12 , 2025 Committee of the Whole adjourned at 9:05 p.m. Respectfully submitted, Karen M. Agoranos Village Clerk Page 7 of 13  Item Cover Page Subject 2026 Annual Budget Workshop Meeting October 14, 2025 - MEETING OF THE MOUNT PROSPECT COMMITTEE OF THE WHOLE Category DISCUSSION ITEMS Type Budget Item Information The 2026 budget was presented to the Finance Commission on September 25. The 2026 budget began with the Village's Community Investment Plan presentation in August. This workshop will focus on the operating budget and other non-operating items. The first reading of the ordinance approving the levy, abatement, and budget will occur on October 28. The Finance Commission's recommendation on the budget is expected on October 23. The public hearing for the budget and levy will be held on November 18. The final approval of the budget, levy, and abatement ordinances is also expected on November 18. Discussion The proposed 2026 Operating Budget and Community Investment Plan totals $192.4 million, an increase of $3.3 million or 1.7 percent. The expenditure budget is proportionately larger than prior years due to a few one-time grant-funded projects, including the Melas-Meadows Bridge and Rand-Kensington-Elmhurst Road intersection improvements. The 2026 budget forecasts revenues totaling $187.6 million, an increase of $21.7 million, or 13.1 percent, attributable to federal grants for various capital projects. The major highlights of the 2026 budget are below: i. The budget proposes a zero percent property tax levy increase, making the current levy the lowest in the last eleven years. ii. The current budget includes the shift from a state grocery tax to a local grocery tax effective January 1, 2026. This is not a new tax and grocers will not experience additional taxation on groceries as a result of this shift. Items were previously taxed as a sales tax and now will be covered under the municipal grocery tax. The Village has earmarked grocery taxes to fund the public safety pensions. iii. The budget includes $7.1 million in property tax abatement. $2.9 million is allocated to public safety pensions, $3.4 million for debt service, and $1.0 million for fire protection. iv. Sales tax revenue for 2026 is expected to be $39.6 million and income tax is expected to be $9.9 million. The budget reduces use tax revenues by $1.0 million. Due to recent changes in the taxing classifications, select items previously taxed as use tax are now covered under sales tax. There is a corresponding increase in sales tax. v. Water charges are proposed to increase by 7 percent, sewer charges by 5.75 percent, and refuse charges by 3.5 percent. vi. The budget includes three new firefighters/paramedics, and these new positions are expected to help the Village in lowering the overtime expenses for the year. Page 8 of 13  vii. The General Fund budget for the year 2026 is balanced. The revenues and expenses both total $86.2 million. The General Fund is providing support for various abatements and capital projects totaling $7.7 million. Revenues The 2026 revenue budget is set at $187.6 million, which is $21.7 million or 13.0 percent higher than the previous year. The budget includes a few large grant-funded projects resulting in a higher-than-normal intergovernmental revenue budget. These items were not there in 2025 and are not expected to be repeated in future years. Additionally, inter-fund transfers for 2026 will amount to $8.7 million, representing a reduction of $4.0 million, or 31.4 percent from the 2025 budget, returning to a normal level of inter-fund transfers. The Village is actively working to reduce the burden of property taxes. The overall property tax levy for the year is proposed at $18.2 million, a 0 percent increase compared to the 2024 levy payable in 2025. The total property tax category includes the property tax levy totaling $18.2 million, tax increments to be received under two of the Village’s Tax Increment Financing Districts totaling $6.3 million, and special service area taxes of $1.0 million from serving the unincorporated Elk Grove Township. Page 9 of 13 The "other taxes" category includes various locally imposed taxes such as home-rule sales tax, hotel/motel tax, food & beverage tax, and real estate transfer tax, among others. It is projected to generate a total of $17.2 million in taxes, representing an increase of $1.6 million over the 2025 budgeted amount. Due to recent changes in the law, the Village has started collecting higher home-rule sales taxes. The Village is expected to collect $8.1 million in the home-rule sales tax in 2026. The food & beverage tax is expected to be around $1.95 million, utility taxes totaling $3.1 million and real-estate transfer tax is expected to total $1.1 million for 2026. The largest revenue category, intergovernmental revenues, is expected to total $76.7 million in 2026. Of this amount, state-shared sales tax is projected to be $39.6 million, while income tax (LGDF) is expected to account for $9.9 million. Intergovernmental revenues include $21.7 million in one-time capital project grants for various critical and infrastructure related projects. These one-time grants account for the major increase in intergovernmental revenues as well as overall revenues for the year. These projects are the Melas-Meadows Bridge, Rand- Kensington-Elmhurst intersection improvements, Algonquin Road shared use path project and Schoenbeck Road reconstruction. The Village's investment income has risen as a result of higher interest rates. The 2025 projection indicates that the investment income will reach $4.1 million, compared to the original budget of $3.9 million. The current market anticipates rate cuts by the Federal Reserve Bank, which will lower the interest income for the remainder of 2025 and for 2026. Based on the anticipated rate cuts, the current budget estimates an interest income of $3.3 million for 2026. The 2026 budget includes $50.0 million in various charges for services, $2.7 million or 5.6 percent more than the 2025 budgeted amount. The 2026 budget includes new internal service charges: $1.6 million for the building improvement fund and $783,943 for the technology replacement fund. The 2026 budget does not increase ambulance billing fees; ambulance billing fees total $4.1 million and is similar to fees collected during 2025. The water and sewer utility rates are set to increase by 7.0 percent and 5.75 percent in 2026, respectively, as Page 10 of 13 indicated in the water rate study. The other financing sources mainly include planned inter-fund transfers, as described below. Expenses The budget for 2026 expenditures totals $192.4 million, an increase of $3.3 million, or 1.7 percent, from the amended 2025 budget. The increase in spending is mainly attributable to overall inflation, cost of living adjustments, one-time Community Investment Plan (CIP) projects, and other timing differences. The 2025 budget includes carryover projects totaling $11.8 million from 2024, and one-time property purchases of $5.0 million, not expected to be repeated in 2026. The original 2025 budget included a CIP totaling $33.4 million. The proposed 2026 budget includes a CIP totaling $51.1 million, including $26.0 million in grant- funded one-time projects. The operating budget is scheduled to increase by $4.4 million, or 4.5 percent, from the 2025 amended budget. This increase is primarily due to the hiring of three additional firefighter/paramedics, higher pension contributions, cost-of-living adjustments for personnel, and inflationary adjustments to contracted services, and internal service lease payments. The 5-year CIP spending for 2026 is projected to be $51.1 million, which is $191,614 less, compared to the 2025 amended budget. The year 2026 has unusually large amounts of grant- funded capital projects, not expected to be repeated each year. A normal CIP year amounts to projects totaling $35.0 million (based on the recent average year CIP). The total debt service payments for 2025 will amount to $7.8 million. The Internal Service Fund expenditures total $15.2 million, reflecting an increase of $1.0 million compared to the 2025 amended budget. The plan also includes inter-fund transfer outs totaling $8.8 million for Page 11 of 13 2026, of which $5.1 million will be used to abate debt service and pension property tax levies. A total of $2.6 million will be used to fund various capital projects. This year's inter-fund transfers include an operating transfer of $1.1 million from the Elk Grove Rural Special Service Area Fund to the General Fund. During 2025, $4.6 million in outstanding principal debt will be repaid, while the total interest payment will be $3.2 million. The Village has not planned any new bond issuance or debt for 2026. However, the Village may amend its budget to fund some crucial capital projects and may issue bonds (if approved by the Board). The next planned bond issuance is expected during 2027 and beyond. Conclusion The 2026 budget is balanced with a planned use of cash/fund balance. There are timing differences in recognizing revenues and aligning the pertaining project expenses. The total budgeted revenues for the year will be $186.9 million, while the budgeted expenditure totals $192.4 million. This results in an accounting deficit of $5.5 million, mainly for capital project funds. Among the three capital project funds, a deficit of $3.9 million is projected, where the revenues are collected for projects in 2025 and prior; however, the project expenditures are expected to be paid out in 2026. All three capital project funds will have a positive fund balance and will be compliant with the Village’s fund balance policy. The Village is facing challenges including, inflation, possible recession and uncertain market conditions, legislative changes, deficit levels at the State of Illinois, rising pension costs, aging infrastructure, supply-chain issues, and a few more. Several of these challenges are described below. a. Chicago-area CPI-U is up 3.1 percent year-over-year (Aug 2025); core (ex-food/energy) is 3.2 percent. Wage, utilities, and materials lines remain above pre-2021 norms, so operating costs are still drifting upward, even as headline inflation has cooled. b. The Village's finances rely heavily on intergovernmental revenues, with a substantial portion coming from the State of Illinois. In the past, the State has attempted to reduce the Local Government Distributive Fund (LGDF) Income Tax. If the LGDF is further reduced, it would lead to revenue losses for the Village and could potentially put additional strain on the already burdened property tax system. While the State of Illinois has the ability to fully restore the LGDF to its original 10 percent allocation, it has not yet done so. c. The Village invests a fair amount in capital assets each year through the Community Investment Plan. Funding from various variable revenue sources and charges for services funds the new investment as well as the replacement of the existing assets. Maintaining aging infrastructures and facilities without the issuance of debt or a grant from the state or federal agency is challenging. The Village has received significant grants in recent times, but it is a challenge to receive awards while competing with other grantees. d. There is a huge demand for construction materials and vehicles in the market. The Village is dealing with high prices and supply chain issues with many capital projects. Many of the recent construction bid results have come in much higher than expected. The Village is also struggling to replace its scheduled Police, Fire, and Public Works fleet. The Village is hopeful that several measures taken by the federal and state governments will curb inflation and supply chain issues. e. The current interest rates have led to a decrease in real estate transactions. As a result, the Village's revenue from real estate transfer tax is decreasing due to fewer property closings. Although there has been a slight increase in real estate transfer tax collection compared to last year, overall, it is still 33 percent lower than its peak in 2022. The Village is hopeful for a recovery in the real estate market. In the meantime, the additional Page 12 of 13  investment income is helping offset the loss in real estate transfer tax revenues. f. The State of Illinois brought legislative changes to the pension system in 2011 and created TIER II for police, fire, and employees participating in IMRF. Recently, various legislative bills have been filed to increase the benefits under TIER II pensions. Any legislative changes that can increase the benefits under TIER II will increase the annual pension costs and the property tax burden for residents and businesses. g. The Cook County property tax system is very complex and unique. The County struggled again this year with producing the second installment tax bills in a timely manner. The Village, along with all other taxing agencies, have not yet received the second installment of property taxes. If paid on time, these dollars can be effectively used and invested by the Village. Despite the challenges mentioned above, the Village's financial position remains very strong. Reserve levels have continued to exceed expectations due to revenue growth and responsible spending. The Village’s General Fund is estimated to have a fund balance of $44.8 million, which will be 51 percent of the 2027 annual budget. It is important to note that not all fund balances are in liquid form. Some portion of the fund balance is tied up in accounts receivable and is not immediately available. Substantial reserves and balanced annual budgets are two factors contributing to the strong bond rating assigned to Village debt. The General Fund reserves remain well above the target set by the Village Board (40%) through 2025 and 2026. Staff will make a presentation on the budget at the meeting. The 2026 budget can be accessed at the link - Click Here. Alternatives 1. The staff and the Village Board to discuss the proposed 2026 Annual Budget. 2. Action at the discretion of the Village Board. Staff Recommendation Staff recommends discussion on the proposed 2026 Annual Budget. Attachments None Page 13 of 13