Submitted By
Donna M. Gayden, Interim Chief Financial Officer
Reviewed By
Ahmad Zayyad, Deputy Village Manager
Agenda Item Title
Title
Review of the Fiscal Year 2025 Proposed Budget
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Overview
Overview
This is the second review of the proposed operating budget for Fiscal Year 2025. Staff will be available to review and answer questions on any of the following budgets:
1. General Fund: Village Manager’s Office, Human Resources, Law, Finance, Adjudication, Information Technology, Police, Fire, Public Works, Development Services, Neighborhood Services, Public Health, and Village Clerk’s Office.
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Recommendation
Recommendation
N/A
Background
The meetings pertaining to and leading up to the adoption of the FY25 budget will include a review of the major Funds (i.e. General, Parking, Water/Sewer, Health Insurance, and Self-Insured Retention Funds).
The capital improvement project funds were thoroughly discussed on September 11th, September 26th, and October 16th and the CIP Document was formally adopted on November 11th. Please note that the first budget year (2025) of the five-year capital plan has been incorporated into the operating budget document.
The General Fund as presented in the FY25 Proposed First Draft Budget is balanced which includes an increased fund balance appropriation of approximately $26,288,974. This transfer is for the Capital Improvement Plan projects which includes the Oak Park Streetscape.
Other changes within the budget are as follows:
1. The balanced budget reflects a property tax levy increase of 3.06%; which equates to an overall increase of $450,575 excluding debt service. The corporate levy has a decrease of ($201,587) or (1.09%) from the tax year 2023, whereas the police pension levy has an increase of 4.01% or $294,832 and the fire pension levy has an increase of 5.53% or $357,300. Both pension increases are reflected in the current actuarial report.
2. There is an appropriation of fund balance of $32,344,959. The fund balance at the end of fiscal year 2023 was $45,878,206 and the 2023-year-end projected fund balance is estimated at $50,878,206. The current policy states that the General Fund Balance objective is to have an on-hand unreserved fund balance between 10% and 20% of the current year’s estimated operating expenditures. With this transfer, the fund balance is estimated to be $18,533,247 or 16%.
3. Other Taxes reflect an overall increase of $138,000 or approximately 0.4%. Personal Property Tax and Motor Tax Refund will have a slight increase.
4. Licenses/Permits/ Fines decreased by $389,800 or 14.3%. Building Permits reflects a decrease of $300,000 or 25%, Street Permits reflect a decrease of $50,000 and Multi-Family Dwelling License reflects a decrease of $48,000 along with various accounts with small increases.
5. Charges for Services reflect an increase of $1,543,100 or 53.8% over fiscal year 2023. The overall increase represents an increase in ambulance charges.
6. Interfund Transfers Revenue increased by $26,288,974. This transfer represents a transfer from the Fund Balance Fund for the 2025 Capital Improvement Plan.
7. Financing and Investment revenues reflect an increase of $1,297,769 in interest revenue. The current fiscal year budget for interest revenue represents a conservative projection whereas the FY25 projection is based on actual interest received.
8. Uncompleted projects reflect $4,081,394 which includes one-time expenditures from the 2024 budget that were not completed, including $600,000 for the Alternative Response Pilot Program, $250,000 for Crisis Response, $75,000 for Translation Services, $95,000 for finance long-term planning; Village Clerk’s office digitization software for $50,000, Development Services - Roosevelt Road Study at $100,000, Development Services Economic Development Planning for $100,000, Adjudication Mediation Training for $4,500, Development Services Special Events Tourism Program External Support for $25,000, Finance Non-Union Salary Comp Study for $250,000, CPOC Study Org Planning, for $100,000, External Support for various projects to be completed at $550,000, staffing not hired at $900,000 and insurance cost (family rate) for various departments at $1,300,000.
9. Finance overall increase of $25,206,611. The major increase in the transfer to CIP of $26,447,115. There were slight changes in the other transfers.
10. The police budget increased by $279,070 or 1%. The major increases are $294,832 for the police pension expense.
11. The Fire budget increased by $701,254 or 4%. The major increases are $357,330 for the fire pension expense and an increase of $445,952 for salaries and benefits.
Chapter 2 of the Municipal Code establishes the foundation for the Municipal Budget and provides:
• The Village fiscal year is January 1 - December 31 annually.
• The Board of Trustees must adopt the annual budget prior to the start of the Fiscal Year and passage of the annual budget shall be in lieu of passage of the appropriation ordinance.
• On or before the Village Board of Trustees' first regular meeting in November of each year, the Village Manager shall submit to the Board of Trustees an annual Municipal budget which contains estimates of revenues together with recommended expenditures in conformity with good fiscal management practice.
The use of fund accounting for the Village’s revenues and expenditures is required as the Village is established under State Law as a municipal corporation and the Financial Accounting Foundation (FAF) requires the use of Generally Accepted Account Principles (GAAP) established by the Government Accounting Standards Board (GASB). Among the basic principles of governmental GAAP is fund accounting. Because of the diverse nature of governmental operations and the numerous legal and fiscal constraints under which those operations must be conducted, it is impossible to record all governmental financial transactions and balances in a single accounting entity. Therefore, unlike a small private business which is accounted for as a single entity, a governmental unit is accounted for through separate funds, each of which is a fiscal and accounting entity with a self-balancing set of accounts. When compared to the private sector, fund accounting would most closely resemble a large publicly traded company that consists of a parent corporation and its subsidiaries, where each subsidiary maintains a separate set of accounting records and reports its numbers to the parent which then consolidates all the information for investor reporting.
Fiscal Impact
N/A
DEI Impact
N/A
Alternatives
N/A
Previous Board Action
N/A
Citizen Advisory Commission Action
N/A
Anticipated Future Actions/Commitments
Additional meetings of the Village Board are scheduled pertaining to the adoption of the FY25 operating budget as follows:
1. November 25, 2024: Special Village Board Meeting for continued review of the operating budget (if needed)
2. December 3, 2024: Board Adoption of Operating Budget, Levies, and Abatements
Intergovernmental Cooperation Opportunities
N/A