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HomeMy WebLinkAboutMeeting Notes 5-04-2016 1 BUDGET COMMITTEE Meeting Notes - May 4, 2016 Committee present: Eric Levine - Chairman, Bill Goodman, Pat Leary (via FaceTime) Staff present: Mike Solvig, Judy Drake, Jim Weber Others present: Meeting was called to order by Chairman Levine at: 12:05 p.m. AGENDA ITEMS: • Review and approve meeting notes from March 23, 2016. The meeting notes from March 23 were not ready to be reviewed. • Questions on Long-Term Debt and Debt Service Projections. The Committee members had no additional questions on the Long-Term Debt and Debt Service Projection schedules reviewed at the March meeting. • Review Five-Year Budget Projections. The current Five-Year Financial Projections for Fiscal Years 2017 - 2021 continue to be generally positive, with year-end unreserved fund balances in the major funds (except the Highway Fund) remaining above or near the 25% target level. ASSUMPTIONS - The projections were prepared using the following assumptions: - Salaries and wages will increase by 2% annually. Retirement and health insurance expense is assumed to increase with each year. - Expenditures for contractual services will “generally” increase by 2% annually. Petroleum products (gasoline, diesel fuel and asphalt) are projected to increase 5% annually. - Capital projects included were based on the latest available CIP schedule, with some modification to the order of the highway projects. A revised CIP schedule is currently being prepared by Public Works which will change the years in which the various projects are scheduled, but is not expected to significantly change the annual expenditures. In the General Townwide Fund and Highway Fund, capital projects will be paid for largely with current year revenues and/or fund balance. Capital projects in the Water Fund remain financed largely by issuing new long-term debt. - Property Tax Levy gradually increases from 1.5% in 2017 to 2.5% in 2021. The Levy Growth Factor increases from 0.4% for 2017 to 1.6% for 2021. The Tax Base Growth Factor is held constant at 0.74% for all years. In these projections, the annual tax levy increases will not remain under the tax cap in any year. - Water benefit fee will increase from $100/unit in 2016 to $135/unit in 2021. Sewer benefit fee will decrease from $25/unit in 2016 to $15/unit in 2018 and after. - 5% annual increase in water rates, 1% annual increase in sewer rents. - Total sales tax collections are projected to increase 2% annually over the 2016 budgeted amount of $3,000,000. 2 The budget projections are based on many assumptions which, while they seem reasonable today, will undoubtedly vary from actual conditions as we move through future years. When reviewing these projections, users are cautioned to focus on emerging trends rather than individual numbers. A total of seven (7) projections were prepared. For all of them, the total revenues and expenditures did not change. What does change is how the property tax and sales tax revenues are collected in the General Townwide Fund and Highway Fund, and the resulting changes on the property tax rates and property tax bills. All projections indicate most of the major funds will keep year-end unreserved fund balance above the 25% target level through most years. The major exception is the Highway Fund, where the unreserved fund balance decreases each year, falling below 25% in 2018 and then below 10% in 2020. BUDGET PROJECTION VERSION 1 - This projection keeps future property tax and sales tax collections unchanged from today. The property tax bill for a typical property would remain largely unchanged, decreasing from $1,424.48 in 2016 to $1,415.52 in 2021. BUDGET PROJECTION VERSION 2 - This projection keeps future years property tax levy in the Highway Fund level at $1,500,000, with any amount over that added to the property tax levy in the General Fund. The sales tax in the General Fund would be reduced by the same amount, which would then be added to the sales tax collections in the Highway Fund. Total property tax and sales tax collection amounts remain unchanged from those in Projection 1. Water benefit fees increase to $135/unit by 2021, and sewer benefit fee decrease to $15/unit by 2018 and thereafter. The property tax bill for a typical property gradually decreases from $1,424.48 in 2016 to $1,407.64 in 2021. BUDGET PROJECTION VERSION 3-A - This projection modifies Projection 2 by reducing the property tax levy in the Highway Fund by $500,000 in 2017 and future years, and adding that amount to the property tax levy in the General Fund. Total property tax and sales tax collection amounts, and water and sewer benefit fees remain unchanged from those in Projection 2. The property tax bill for a typical property would decrease from $1,424.48 in 2016 to $1,391.32 in 2017, and continue to slowly decrease to $1,383.03 by 2021. Total property taxes paid by the typical property for years 2017 - 2021 would be $6,936.25. BUDGET PROJECTION VERSION 3-B - This projection modifies Projection 3-A by reducing the property tax levy in the Highway Fund gradually, starting with a $100,000 reduction in 2017 and then an additional $100,000 in each future year, and adding that amount to the property tax levy in the General Fund. Total property tax and sales tax collection amounts, and water and sewer benefit fees remain unchanged from those in Projection 2. The property tax bill for a typical property would decrease from $1,424.48 in 2016 to $1,413.16 in 2017, and continue to gradually decrease to $1,383.03 by 2021. Total property taxes paid by the typical property for years 2017 - 2021 would be $6,989.60. BUDGET PROJECTION VERSION 4-A - This projection modifies Projection 2 by reducing the property tax levy in the Highway Fund by $1,000,000 in 2017 and future years, and adding that amount to the property tax levy in the General Fund. Total property tax and sales tax collection amounts, and water and sewer benefit fees remain unchanged from those in Projection 2. The property tax bill for a typical property would decrease from $1,424.48 in 2016 to $1,364.02 in 2017, and continue to slowly decrease to $1,358.41 by 2021. Total property taxes paid by the typical property for years 2017 - 2021 would be $6,806.23. 3 BUDGET PROJECTION VERSION 4-B - This projection modifies Projection 4-A by reducing the property tax levy in the Highway Fund gradually, starting with a $200,000 reduction in 2017 and then an additional $200,000 in each future year, and adding that amount to the property tax levy in the General Fund. Total property tax and sales tax collection amounts, and water and sewer benefit fees remain unchanged from those in Projection 2. The property tax bill for a typical property would decrease from $1,424.48 in 2016 to $1,364.02 in 2017, and continue to gradually decrease to $1,358.41 by 2021. Total property taxes paid by the typical property for years 2017 - 2021 would be $6,912.93. The Committee will present this information to the Town Board at a future study session. • Changes to 2016 Road Improvement Program. Jim Weber spoke with the Committee regarding changes to this year’s road improvement program. With the expected resignation of the Town Engineer, plus the current vacancy in one of the Engineering Tech positions, the Town’s Engineering Division will be understaffed as we move into the summer construction season. The reconstruction of upper Sand Bank Road and Town Line Road were scheduled in the 2016 Capital Budget at an estimated cost of $800,000. This was to be financed with $500,000 in current year revenue (the increased property tax levy in the Highway Fund) and $300,000 in remaining bond proceeds from the 2014 Bond Issue for Sand Bank Road. Mr. Weber explained that this year’s program, particularly the reconstruction of Sand Bank Road, will require extensive survey and design time, which our understaffed Engineering Division will not be able to commit to. The Sand Bank Road and Town Line Road projects will be put on hold at this time and rescheduled for 2018. For construction this year, we will move up the upper Bundy Road project on the capital improvement schedule. Originally scheduled for construction in 2018 at an estimated cost of $800,000, upper Bundy Road was chosen for two reasons: 1) This is a “mill-and-fill” project, requiring very little staff time for surveying and design, and 2) This 2.1 mile project requires approx. 8,000 tons of asphalt. Prices on asphalt are currently at a record low, with the Town able to complete this project at a currently estimated cost of $500,000. This is $300,000 under the originally estimated cost of $800,000. Funding for this project can be accomplished entirely with current year revenues. Changes from this year’s program as budgeted and revised are shown below: PROJECT COST PROJECT COST SAND BANK ROAD 650,000$ SAND BANK ROAD -$ TOWN LINE ROAD 150,000 TOWN LINE ROAD - BUNDY ROAD 500,000 TOTAL COST 800,000$ TOTAL COST 500,000$ FUNDING SOURCE: FUNDING SOURCE: - Current Year Revenue 500,000$ - Current Year Revenue 500,000$ - Fund Balance 300,000 - Fund Balance - TOTAL FUNDING 800,000$ TOTAL FUNDING 500,000$ 2016 HIGHWAY IMPROVEMENTS As Budgeted 2016 HIGHWAY IMPROVEMENTS As Revised 4 • Property Tax Cap and Property Tax Freeze Programs. There was no discussion on this item at the meeting. This item will remain on the Committee’s monthly agenda and will be discussed on an on-going basis as further information becomes available. • Other Items. - 2015 Audit: The auditors will be on-site the week of May 2 for field work. Dates for the court audit have not yet been set. - Additional Gate for Town Hall Parking Lot: Mr. Goodman informed the Committee that staff is looking into the purchase of another gate to control access at the Aurora Street entrance to the Town Hall parking lot. The past couple years have seen an increase in 1) the amount of vehicles attempting to cut through the parking lot to avoid the Buffalo Street/Aurora Street traffic signal, and 2) the number of unauthorized vehicles using employee only or Town vehicle only parking spaces during business hours. Vehicles attempting to bypass the Buffalo/Aurora traffic signal are presenting an increasing safety hazard, as they often enter the lot at a higher speed in attempting to cut through, find their exit blocked by the Buffalo Street gate, turn around and exit the lot, again at a higher speed to make up the “lost” time. Ms. Drake reported the cost for purchase and installation would be $7,467 for a solar powered gate, and $5,860 for an AC powered gate. We are estimating an additional $2,500 to run power for the AC powered gate. The cost for either gate includes fifty (50) new two- channel transmitters to control the gates. Because of the close proximity of the gates to each other, a single-button transmitter would activate both gates at the same time. Due to problems with shadows created by trees and the City garage, the AC powered gate is viewed as the better option. Mr. Solvig reported that there was no specific appropriation for this item in the 2016 Budget. Owing to the safety concerns associated with this, the purchase would be charged to the Risk Retention Fund. The meeting was adjourned at 1:16 p.m. Next Meeting: Wednesday, May 25, 2015 at 12:00 pm, Town Hall - Aurora Room