Administration & Finance Committee

APPROVED MINUTES OF A MEETING OF THE ADMINISTRATION & FINANCE COMMITTEE VILLAGE OF NORTHBROOK NOVEMBER 5, 2012 Trustee Scolaro called the meeting to order in the Terrace Room of the Village Hall at 6:45 PM. On roll call, present were: Trustees Karagianis and Scolaro; a quorum was present. Also present: Trustees Heller, Israel and President Frum, (Trustee Buehler arrived at 7:00 p.m.), Village Manager R. Nahrstadt, Assistant Village Manager P. Kiraly, Assistant to the Village Manager K. Maltas, Finance Director J. Rowitz, Public Works Director K. Hamill, Assistant to the Public Works Director M. Morrison, Public Works Analyst A. Letson and Recorder J. Butch. Hear from the Audience None Discussion of 2012 Property Tax Levy: Finance Director Jeff Rowitz advised the Committee that the Village has to file with the county before the last Tuesday of December and will be bringing a levy ordinance to the Board at the December 11 meeting for approval. He continued by stating that statute requires that the Village estimate the levy at least 20 days before approval and that in tonight’s packet is the staff recommendation for the 2012 tax levy. Director Rowitz asked the Committee to please note that the Village is not recommending any increase to the General Fund portion of the levy, however; there is a slight increase to the required contributions to the Police and Fire Pension Funds. In addition, Director Rowitz indicated that the planned debt service from previous bond issues was scheduled to increase approximately $400,000. However, he explained that we are estimating that number to be reduced by approximately $150,000 due to the planned refunding on November 13. Director Rowitz explained that the planned refunding is approximately $18,000,000 and will refinance the outstanding bonds from 2005, 2006, and library bonds from 2004. In addition the Village will take advantage of historically low interest rates and that the estimated savings will exceed $1,000,000. Director Rowitz emphasized that the term of the bonds would not increase. The entire savings will be due to reduced interest rates. Administration & Finance Committee November 5, 2012 Discussion of Capital Improvement Plan Village Manager Nahrstadt provided a brief overview of the entire five year CIP, which included a fairly aggressive bonding schedule. Public Works Director Kelly Hamill began by providing a brief summary of the street maintenance projects which will be targeted over the next five years. He stated that their goal was to try to keep 10% of the Village’s asphalt streets within a rating system of 1 or 2. He then explained that streets rated as “1” were considered “poor” and those rated as “2” were considered “many failures.” Director Hamill stated that currently 24% of the Village’s asphalt streets are at a 1 or 2 rating. Director Hamill then provided slides of actual streets with major maintenance issues. He stated that the Village is trying to repair these streets before having to do a total reconstruct on them which could potentially triple the cost. He emphasized that we want to catch these repairs now while it is less costly. Director Hamill presented a plan and estimated cost to catch up with asphalt road repairs Director Hamill stated that the numbers he has presented for these projects are based on this year’s construction costs. In order to complete this work construction would begin in the spring and continue into fall. He also noted that there was a difference in construction costs between spring and fall. Director Hamill reiterated that we still have 46% of our streets at a 3 rating, which we are being very proactive of re-patching these streets in order to prevent them from developing into 1 and 2 ratings. Trustee Scolaro questioned if we were to complete all these road projects and spend the $4,000,000 what would we get our street percentage rating down to? Director Hamill indicated that it would be reduced to the 10% goal for 1 &2 rated streets. Trustee Scolaro also questioned whether the State could reduce the MFT (Motor Fuel Tax) dedicated to the Village. Director Rowitz stated that there would have to be a change in legislation in order for that to occur and that the MFT is paid on a per capita basis. Trustee Karagianis questioned if there were any homeowners associations who could benefit from joining our projects at their own expense to secure the rate at the Village cost. Manager Nahrstadt stated that he doesn’t know if one contractor could add additional work onto our aggressive schedule. He continued by stating that although conceptually it makes sense, we currently are maximizing the use of the contractors already for our project. Administration & Finance Committee November 5, 2012 Storm Water Fund Director Hamill provided an update on stormwater projects which have completed and projects which are ongoing. President Frum questioned how much can we manage this year and how are we going to keep on top of it? Director Hamill explained that it will take a combination of things. Staff will be devoting a lot of time on this and the reorganization of staff and responsibilities will help. Director Hamill continued by stating that he realizes some of these are too large and will have to look at some contractual construction management assistance. Water Distribution Improvements Director Hamill provided a very detailed update on water system improvements that have been completed, current status and operation of the system, initiatives which are ongoing and possible future work Manager Nahrstadt stated that for some of these projects, and many others across various Departmental lines, staff is planning to recommend to the Board that the Village join the GIS Consortium. Manager Nahrstadt stated that it’s one of the most cost effective ways to go to develop a Geographic Information System and that a formal recommendation would come to the Board later in the winter. General Fund Assistant Village Manager Kiraly stated that the Board has seen the ERP (Enterprise Resource Program) in the CIP for the last couple of years. He then explained the function and purpose of an ERP. Assistant Manager Kiraly continued by advising the Committee that we currently do not have one integrated system, that we have many, many systems which have been created and constructed over the years. He added that the current operating system no longer is being supported and therefore, we can no longer purchase computers to operate with our current system. Assistant Manager Kiraly added that this will be a phased roll out period over three years. In addition to the implementation and conversion, it will require that the organization completely modify many of its current processes into the new system. Trustee Scolaro questioned what the payoff is for spending over $1,000,000 on such a system. Manager Nahrstadt explained that many of our systems were custom built and no longer supported. He cited an example of a recent program modification that was necessary. Staff received Administration & Finance Committee November 5, 2012 quotes of $60,000 - $70,000 with no guarantee that the system modifications would work properly. Fortunately, the retired Village employee who wrote the program agreed to make the necessary changes. Manager Nahrstadt feels this is a ticking time bomb. Manager Nahrstadt then spoke briefly about various planned major vehicle purchases and the individual justification in each one. He stated that if we went with a standard replacement schedule that did not take vehicle condition into account, we would probably have more vehicles set for replacement, but we are trying to retain vehicles as long as possible. He continued by stating that there would only be the replacement of six vehicles and that we are trying to change the philosophy of what we’ve done over the past years. Manager Nahrstadt stated that the overall size in the fleet will not increase, that we would be purchasing six vehicles, eliminating six and repurposing four. Manager Nahrstadt wrapped up the evening with a brief summary of the meeting including providing future considerations. The Board Members all had positive comments of what a valuable tool the CIP has become and were all impressed. Manager Nahrstadt acknowledged the hard work both that Kendal Maltas and Matt Morrison put into the CIP, along with staff members Phil Kiraly, Jeff Rowitz, Kelly Hamill and Andrew Letson. Adjourned 8:30 p.m. Trustee Karagianis moved, seconded by Trustee Scolaro to adjourn the meeting. On voice vote, motion carried. Respectfully submitted, /s/ Judy Butch Recorder