Operations Committee Minutes
VILLAGE OF NORTH AURORA
OPERATIONS COMMITTEE MEETING MINUTES
OCTOBER 7, 2019
CALL TO ORDER
Trustee Curtis called the meeting to order.
In attendance: Trustee Laura Curtis, Trustee Mark Carroll, Mayor Dale Berman, Village Administrator Steve Bosco and Finance Director Bill Hannah.
AUDIENCE COMMENTS – None
APPROVAL OF MINUTES
1. Approval of the Operations Committee Minutes dated August 5, 2019
Motion for approval made by Trustee Carroll and seconded by Mayor Berman to approve the meeting minutes of 8/5/19. All in favor. Motion approved.
1. Revisions to Purchasing Policy
Finance Director Bill Hannah explained that the Village is required by the statutes to declare surplus property prior to staff selling or disposing of items. There have been some questions as to whether some items are surplus property or need a designation as such. These are items with almost no value such as chairs, broken desks, old IT equipment and miscellaneous office equipment. Staff proposed that if there is a perceived value of less than $500 for an item, the Village Administrator has the authority to try and sell the item or dispose of it properly. Language has also been added that gives the Administrator the ability to give away the item to another governmental unit or charity or not for profit that can use the item.
The Operations Committee was in favor of the changes. To be brought before the next Village Board meeting for approval.
2. 2019 Property Tax Levy Estimate
Hannah stated that property taxes represent 20% of all of the General Fund revenues. The Village’s share of the actual share of the property tax bill is only 6%. Last year the village’s property tax extensions was 2.45 million dollars. Just under 50% went to fund required police pension funding and the rest went to various funding such as social security, police protection, general corporate and liability insurance. The levy being discussed will fund the budget for 2020 and 2021. The village is subject to the property tax extension limitation law and cannot increase the property tax extensions any more than the CPI factor for the previous calendar year. For 2018, it was 1.9%. Hannah noted that the village can capture the value of any new construction in the equalized assessed valuation.
Trustee Curtis said that the village did not take the increase last year and asked if the village saw any noticeable difference in its operating budget or any detriment as a result of not taking the increase. Hannah said there were a lot of factors that year. The village was able to pass a balanced budget and address some needs in the general fund. The village also had some new revenues sources that were implemented by the police department and the step down of some of the sales tax rebate agreements. This resulted in some one-time unique budgetary flexibility. Curtis asked Hannah if, in his opinion, the increase in the EAV from rising home values is offsetting the village not taking that increase. Hannah said the village had a very strong new construction number last year. This year’s number is much smaller. Curtis said that the Lincoln Valley subdivision is being built and by the village not taking the increase, asked if the village will be giving up a good amount of revenue now that we will have an increase in demand on our services. Hannah said that the village will be taking a close look at this.
Total extensions were $2.45 million. The Village estimates an increase of $46,000 due to the 1.9% CPI factor. The new construction number is just under $2 million of new EAV value. New construction allowance is only $10,000. The village’s total potential tax extension is only about 2.3% more than it was last year. Total EAV is projected to be about $568 million. It is a good increase from last year when it was $535 million. The village is seeing an increase value of about 5.8% for current property.
The May 31, 2019 police pension valuation was recently completed. Over the last several years the Village, in consultation with the actuary, has made many assumption changes including:
1. Adopted new retirement, disability and termination rates based on (delayed retirement
and lower withdrawal assumptions) (2018)
2. Adopted revised salary increase assumption tables (slightly lowers assumed future increases) (2018)
3. Lowered the Interest/Investment assumption rate from the current 7.0% to 6.5%. (2018)
4. Lowered the payroll growth rate assumption from 5% to 3% (2017) 5. Updated mortality tables (2017)
Hannah mentioned that this is the last year of the library debt service payments. The annual debt has been $540,000 a year. This upcoming levy for 2019 is the final payment and is only $413,000
Staff recommends adopting a levy of $2,550,000 which captures the full value of new construction and CPI for the general property tax levies for 2019. Even with adopting a levy capturing the full amount of CPI and new construction, the net property taxes remaining in the General Fund after Police Pension purposes will decline by 9.7%.
The next step is the Village Board approval of an estimate at the first board meeting in November and then formal approval of the tax levy at the first board meeting in December.
OLD BUSINESS - None
OTHER INFORMATION - None
TRUSTEE COMMENTS - None
Motion to adjourn made by Trustee Carroll and seconded by Mayor Berman. All in favor. Motion approved.
Lori J. Murray