VILLAGE OF NORTH AURORA
COMMITTEE OF THE WHOLE MEETING MINUTES
Monday, January 16, 2023
Due to the COVID-19 pandemic, the Village Board meeting was conducted live remotely
via telecommunications.
CALL TO ORDER
Mayor Gaffino called the meeting to order.
ROLL CALL
In attendance: Mayor Mark Gaffino, Trustee Mark Carroll, Trustee Mark Guethle, Trustee Mike Lowery, Trustee Todd Niedzwiedz, Trustee Carolyn Salazar
Staff in attendance: Village Administrator Steve Bosco, Finance Director Jason Paprocki, Community & Economic Development Director Mike Toth, Village Attorney Edward Boula, Public Works Director John Laskowski, Police Chief Joe DeLeo.
AUDIENCE COMMENTS – None
TRUSTEE COMMENTS – Trustee Carroll requested that the Committee review the Village’s stance on chicken ownership. He stated that he has had residents request the review based on the current cost of eggs. Mayor Gaffino stated that he had polled the other Trustees, there was no interest in revisiting the topic. Trustees Guethle and Salazar affirmed Mayor Gaffino’s comment.
Administrator Bosco stated that he had received correspondence from a resident interested in addressing the prohibition of backyard bees. Bosco said that he informed the resident that there was no current discussion on revising the ordinance, however if a resident is interested in having an ordinance revised, they should reach out to the Mayor and the Board with their concern.
DISCUSSION
1. Mid-Year Financial Review
Financial Director Paprocki presented a mid-year financial review.
He offered a breakdown of all the funds through November 2022, which represents the halfway point for the current fiscal year. He stated that overall the Village has seen an increase of $6.9 million across all funds. The General Fund has increase just under $2.7 million. Paprocki explained that timing was an influence in the current numbers, as the year progresses and more projects are completed the numbers will likely decrease, he mentioned specifically the water and capital projects funds.
Paprocki then gave specific information on each of the individual funds.
• The General Fund
o Sales Tax Revenue
Sales tax revenue represents the largest revenue source of the General Fund, accounting for just under 50%
Revenues have increased steadily over the last five years, partly due to the implementation of the 3% cannabis tax in July 2020 and more recently the general increase of prices on retail items.
Due to recessionary concerns, sales tax revenue projections were estimated to decrease in 2023, however the Village is trending towards having another $7 million in sales tax revenue.
Early projections for next year are at $6.9 million in sales tax revenue
o Income Tax Revenue
Income Tax revenue in the General Fund has been on a steady incline for the past five years, primarily tied to strong individual and corporate tax returns.
Income Tax revenue peaked last year at $2.8 million, currently the Village was trending at $2.5 million.
Early projections for next year are in the $2.5 to $2.6 million dollar range.
o Use Tax Revenue
Use Tax Revenue has seen fluctuations due to changes in regulations of online sales taxes.
Use Tax revenue for next year is projected to be $709,000, slightly above previous years
o Property Tax Revenue
The 2021 tax levy, which funds the current 22-23 fiscal year came in at just over $2.6 million, $947,000 of that was part of the General Fund.
The recently passed tax levy to fund the 23-24 fiscal year was a total levy of $2,690,000, the increase due to the capturing of new construction because no CPI increase was applied. Projections for next year of the General Fund’s portion of the Property Tax revenue was approximately $746,000.
o Building Permit Revenue
For the first six months of the fiscal year, building permits are at $485,000
The Building Permit revenue fluctuates based on happenings in the Village, it is budgeted conservatively at around $300,000
o General Fund Expenses and Reserve
YTD expenditures are approximately $414,000 under projected however with the Police Union contract retro payment, the expenditures are expected to increase.
There is a $600,000 transfer to the Capital Projects Fund planned for this year
The General Fund Balance reserve is 69.5%, policy is 40%-50%
Staff is projecting a $1.2-$1.5 million dollar surplus in the General Fund
• TIF Funds
o Route 31 TIF saw a decrease of $236,000 in property tax revenue due to amending the boundaries within the TIF
o The 22-23 budget included an equity transfer of a million dollars from Route 31 TIF to the United TIF for the establishment of the United TIF.
o Property Tax for the United TIF was just under $113,000
o The purchase of 23 N. Lincolnway utilized TIF funds
• Capital Projects Fund
o Non-Home Rule Sales Tax
Non-Home Rule Sales Tax is the largest revenue source for the Capital Projects Fund, it is a 0.5% tax rate, not applied to vehicle sales.
Current revenue projections are just over $1.4 million, slightly down from last year
o Utility Tax
Electricity Tax was YTD $208,000, down $7,800 from last year
Gas Tax (natural gas) YTD $86,000, up significantly from last year by $29,000
o Traffic Impact Fees YTD was $490,000, primarily from The Seasons apartment complex
o Capital Projects Fund Expenses and Reserve
Major expenditures YTD and planned include the Annual Road Program, the Ridge Road Storm Sewer, PW Facility architectural/design services and the Locust, Spruce, Chestnut road improvements.
The budgeted transfer of $600,000 from the General Fund
The Fund reserve was currently at $10.4 million with no minimum reserve policy
• Water Fund Revenues
o Water sales were currently trending at $2.5 million
o Water Permits/Connection Fees YTD were $650,000
o Water Fund Expenses and Reserves
Major expenditures planned were Locust, Chestnut, Spruce water mains, and Wells number #5 and #6 improvements
Debt payment made January 1, 2023 of $428,000
The Water Fund reserve balance was just over $7.6 million on June 1, 2022 with a budgeted reserve reduction of $1.3 million
• Staffing Update
o At the April 18, 2022 Committee of the Whole meeting, staff identified certain areas of needs to address for the 22-23 budget, suggesting changes in structure within the Village, specifically with Human Resources, Police Administration, Economic Development and Code Enforcement
Plan creates one new positon and restructures others to fill multiple needs.
Plan would add a total of 1.3 full-time equivalents to the authorized position list. From 69.1 to 70.4 total full-time equivalents.
o Compensation and Classification Study
o Additional Positions that are under consideration for the FY 23-24 budget
Community Service Officer (part-time, funded by General Fund)
Streets Laborer (funded by the General Fund)
Water Laborer (funded by the Water Fund)
2. Water Rates
Administrator Bosco stated that selling and providing safe water is one of the Village’s primary functions. In order to address upcoming infrastructure needs, staff was in the process of discussing future water rates and presented the Village Board with two potential options for five year rate increase plans.
Director Paprocki walked the Board through options pertaining to the Water Fund, potential rate restructuring and foreseen infrastructure improvements.
Current Water Rate History
o August 2010 base rate increased from $10.90 to $16.00 for the first 3,000 gallons; water rate $3.41 to $3.55 per each additional 1,000 gallons
o Jun 2018 base rate unchanged; water rate of each additional 1,000 gallons from $3.55 to $3.70; sanitary sewer rate $0.35 to $0.15 per 1,000 gallons; total combined rate decreased
o Sanitary sewer rate would not be included in the evening’s discussions of water rate adjustments. Paprocki stated there was a large reserve currently and the subject may be approached at a later date.
Major Operating Expenses
o Total budgeted operating expenses-$2,913,123
o Major operating expenses include:
Personnel- $715,958
Utilities- $478,800
Facility/vehicle/equipment repair and maintenance- $487,250
Supplies and professional services- $735,040
Debt principal and interest- $496,075 (final debt payment January 1, 2032)
o Expenditures are projected to increase 2.0% to 4.5% annually
Current Status of Water Fund
o FY 2022-23 budgeted operating gain/(loss)- $371,877 (excludes capital expenses)
o Current unrestricted reserve balance- $7,626,895
Higher due to delayed central water tower project
FY 2022-23 budgeted reserve reduction of $1,334,623
o Future considerations
Lead service line inventory (estimated up to $4.0 million, possible use of $2.4 million ARPA). Administrator Bosco stated that the $4 million derives from the approximation of 400 homes at $10,000 each for service line replacement.
New laborer position in FY 2023-24 (total headcount from 5.0 FTE to 6.0 FTE)
Paprocki explained that if water rates were not adjusted, Water Fund reserves are expected to be depleted by 2025-26. He then highlighted projects that staff expects to address in the next two to ten years.
Paprocki presented two options for water rate increases over the next five years.
Option #1, the minimum charge for the first 3,000 gallons does not increase, it remains $16. The rate for each additional 1,000 gallons increases incrementally over the next five years from $3.70 to $5.94. Paprocki stated that in both rate increase options, the fund reserve would be utilized to offset what would otherwise have resulted in higher rates to consumers.
Option #2, the minimum charge for the first 3,000 gallons would increase from $16.00 to $20.00. The rate per each additional 1,000 would incrementally increase from $3.70 to $5.56 over the next five years.
Paprocki presented the Board with comparables from surrounding communities. Whether option #1 or #2 are selected, North Aurora water rates would remain the lowest of the comparables which included South Elgin, Aurora, Geneva, Oswego, Sugar Grove, Montgomery, Yorkville, St. Charles and Batavia.
Paprocki explained that staff was looking for feedback from the Village Board on how they would like to proceed. The plan would then be to present an ordinance in May to increase rates as of June 1, 2023. Beyond that the fund would be monitored and adjustments made based on need.
The Board discussed the options presented.
Trustee Carroll questioned whether or not staff had considered implementing an additional fee to the business that consume above average amounts of water. The Board discussed who that would impact, while industrial business may use excessive amounts of water, residential businesses such as assisted living facilities do as well.
Administrator Bosco broke down the amount of water consumed by users in the system. He stated that of over 6,000 users, most utilize 100,000 gallons of water or less bi-monthly; 75 users consume over 100,000 gallons bi-monthly; 8-9 users consumer over 500,000 gallons bi-monthly; 4 users consume over 1,000,000 gallons bi-monthly.
The Board debated whether electing to charge the top 5% of water users an additional fee for water usage would be more harmful than beneficial. They concluded that without specific numbers, they could not come to an accurate conclusion.
The discussion turned to surrounding municipalities, how and where they source their water from as well as the related costs. They also discussed the possibility of the Village needing an alternative source of water in the future, and the water source study the Village was currently engaged in to determine whether that will eventually be the case.
Bosco also stated that the Village is engaged in a water flow model as well. This study looks at all of the Village’s water infrastructure, the users, the pressure in different parts of the system, as well as where infrastructure may need to be upgraded.
All Trustees were in agreement with rate option #1 but would be interested in seeing what options staff could present with a tiered rate option for larger consumers of water.
EXECUTIVE SESSION – None
ADJOURNMENT
Motion to adjourn made by Trustee Lowery and seconded by Trustee Carroll. All in favor. Motion approved.
Respectfully Submitted,
Jessi Watkins
Village Clerk
