Fiscal Year 2016 Budget Proposed Budget Fiscal Year 2021 Proposed - - PowerPoint PPT Presentation

Fiscal Year 2016 Budget

Fiscal Year 2021 Proposed Budget

Fiscal Year 2021 Proposed Budget Outline

➢Fund Structure ➢Budget Process ➢Budget Goals ➢New Items in the Budget Document ➢Fiscal Year 2021 Proposed Budget Overview

Village of Chatham Governmental Funds Proprietary Funds Fiduciary Funds General Fund Special Revenue Funds Capital Projects Fund Enterprise Funds Trust Fund Permanent Fund

➢Fund Structure

The financial transactions of the Village are reported in individual funds. A Fund is a fiscal and accounting entity with a self-balancing set of accounts that records transactions that are segregated for the purpose of carrying on specific activities or attaining certain objectives. Funds are organized into three categories: governmental, proprietary, and fiduciary funds. This presentation will focus on the Village’s three Major Funds. Governmental Funds General Fund Proprietary Fund Electric Fund Water and Sewer Fund

➢Budget Process

➢ February 2020 Revenue and preliminary payroll estimates completed. Preliminary budget numbers input for operating line items using same budget amounts as in Fiscal Year 2020 budget with the exception of debt service, electric, water and sewer expense ➢ March 1, 2020 – March 11, 2020 Preliminary budget results reviewed with the Village Manager and Budget materials assembled. ➢ March 12, 2020 – The Village Management team conducted their first meeting to discuss the 2021 Budget. ➢ March 17, 2020 – May 4, 2020 Work on Budget put on hold due to the COVID-19 Pandemic ➢ May 5, 2020 – May 26, 2020 Budget worked resumed, revenue estimates were adjusted for effects

• f pandemic and vacant positions were removed from budget. Meeting held with Management team

and remainder of budget was reviewed for expenditure cuts ➢ June 9, 2020 – A budget status update is presented to the Village Board. Work on a preliminary budget document will resume ➢ June 23, 2020 – A presentation regarding the recommended Budget is presented to the Village Board ➢ July 14, 2020 - A Public Hearing is held and the Fiscal Year 2021 Appropriation Ordinance is adopted

➢Budget Goals

➢ Customer Service- Provide outstanding customer service for our residents, business community and visitors. ➢ Performance- Provide efficient and streamlined services and processes for the community that are sustainable and which effectively utilize technology. ➢ Economic Development- Continue economic development efforts to provide financial stability by attracting new businesses to the area. ➢ Quality of Life - Make Chatham a place where people want to live, work, and play and create a legacy where people want to stay in the community after they “grow-up” and raise their own children.

➢ Items in Budget Document

➢ Estimated Changes in Fund Balance and Net Position – Shows an overview of the estimated effect of the Fiscal Year 2021 budget on each Fund’s Fund Balance or Net Position. ➢ Position Summary Schedule – Shows information on budgeted positions in the past two fiscal years and proposed 2021 budgets. ➢ Debt Service – This section discusses the Village’s legal debt margin as well as

• utstanding debt issues the Village has.

➢ Budget Summary – This section contains summary schedules and graphs that include all funds of the Village. ➢ Glossary – Definitions of terms found throughout the Village’s 2021 Budget Document The Village’s Budget Document is still being assembled. The following items will be included in the final document.

Village of Chatham Fiscal Year 2018 Proposed Budget Overview

Village of Chatham Fiscal Year 2021 Proposed Budget Overview

General Fund $5,672,635 Electric Fund 11,243,055 Water and Sewer Fund 7,375,492 Capital Projects Fund 38,809 Yard Waste Recycling and Refuse Fund 354,246 Police and Public Works Utility Tax Fund 36,530 Police Pension Fund 1,137,950 Cemetery Perpetual Care Fund 83,489 Veteran's Memorial Fund 1,200 Motor Fuel Tax Fund 435,508 $26,378,914

General Fund 22% Electric Fund 43% Water and Sewer Fund 28% Capital Projects Fund Yard Waste, Recycling and Refuse Fund 1.5% Police and Public Works Utility Tax Fund Police Pension Fund 4.5% Veteran's Memorial Fund Motor Fuel Tax Fund 1%

Village of Chatham Fiscal Year 2021 Proposed Budget Overview

Although a deficiency is shown in the budget columns, these are attributable to expenditures intended to be financed with restricted cash, issuance of debt, and fund reserves if sufficient cash is not produced by annual revenues. The 2019 Actual column and 2020 Projected column show total revenues exceeding total expenditures.

2019 2019 2020 2020 2020 2020 2021 2021 Actual Actual Budgeted Budgeted Projected Projected Budgeted Budgeted Revenue Expenditure s Revenue Expenditure s Revenue Expenditure s Revenue Expenditure s Expenditures to be paid with issuance of debt 500000 51,600 11627 259,751 Accrued time payouts to be funded with Cash on Hand 141,897 631,000 160,521 692,500 Capital expenditures and special projects and interfund debt payments 132,630 362,926 132,435 207,365 Estimated Operating Expenditures 22,482,811 25,607,533 22,881,359 25,219,298 Estimated Operating Revenue 24,598,958 25,612,813 23,952,653 25,315,983

2,500,000 5,000,000 7,500,000 10,000,000 12,500,000 15,000,000 17,500,000 20,000,000 22,500,000 25,000,000 27,500,000 30,000,000

Village of Chatham Fiscal Year 2020 Proposed Budget Overview

Three Major Funds ➢ General Fund ➢ Electric Fund ➢ Water and Sewer Fund

General Fund

The following pie chart details the estimated revenue for fiscal year 2021 for the General

• Fund. The General Funds’ main Revenue Sources are Property Tax, Sales Tax and Income
• Tax. These sources represent 65% of the General Fund Revenue. The State Shared

Revenues (Income and Local Use Tax) were updated with the latest IML projections reflecting the effects of the COVID-19 pandemic from June 9, 2020. The Village is also estimating a 15% decline in Sales Tax Revenues.

Property Tax

$1,420,635 Sales Tax 807,100 Income Tax 1,118,950 Licenses, Permits and Fees 139,350 Utility Administration Fee 490,725 Local Use Tax 408,250 Video Gaming Tax 102,500 Road and Bridge Tax 24,500 Fines 68,200 Telecommunications Tax and Franchise Fees 408,100 Grants 105,550 Miscellaneous 72,610 Total Estimated Revenue $5,166,470

Property taxes 28% Sales taxes 16% Income taxes 21% Licenses, Permits & Fees 3% Miscellaneous 1% Utility Adm Fee 10% Local Use Tax 8% Video Gaming Tax 2% Road and Bridge Tax Fines 1% Grants 2% Telecom Tax & Franchise Fees 8%

General Fund Estimated Revenue for the Fiscal Year Ended 4/30/2021 $5,166,470

General Fund expenditures can be broken down into the following categories: Administration, Cemetery, Parks and Recreation, Streets, Debt Service and Public Safety. The chart above shows the allocation of financial resources between these categories as well as the allocation between Expenditure Types.

2021 Proposed By Department Budget Administration $1,013,461 Cemetery 41,505 Parks and Recreation 535,312 Streets 766,018 Police 3,277,530 Transfers 38,809 General Fund Total Appropriation $5,672,635 2021 Proposed Budget Personnel $4,423,650 Professional Services 500,707 Maintenance 261,710 Insurance 103,300 Office expense 155,750 Equipment and Supplies 129,609 Debt Service 59,100 Transfers 38,809 General Fund Appropriation $5,672,635

General Fund - Expenditures

Admin 18% Public Safety 58% Culture and Recreation 9% Public Works 13% Cemetery 1% Transfers 1%

General Fund Expenditures by Dept.

Personnel 78% Professional Services 9% Grounds and Vehicle Maintenance 5% Liability and Workmans Comp Insurance 1% Office Expense 3% Debt Service 1% Supplies and Equipment 2%

Transfers 1%

General Fund Expenditures by Type

The total appropriation of the General Fund for fiscal year 2021 is greater than the estimated revenues for fiscal year 2021 in the amount of $506,165. This deficiency is attributable to expenditures in the General Fund intended to be financed with fund reserves or restricted cash on hand. The following are items that are included in the General Fund appropriation that if incurred will likely be funded by fund reserves or restricted cash. ➢ Transfer of funds received from subdivision settlement to Capital Project Fund to complete work on sidewalks $38,809 ➢ Estimated liability related to accrued benefits - $358,500 ➢ Park development $30,000 ➢ Purchases budgeted to be expended from cash on hand in the Police Department’s restricted cash accounts $32,300 ➢ Remaining budget deficit of $46,566

General Fund - Expenditures

General Fund – Cash Balances

The graph shows General Fund cash on hand at April 30th for the last 4 years. The Government Finance Officer’s Associations best practices recommend that unrestricted fund balance should be at a minimum two months of budgetary operating expenditures. For the General Fund unrestricted Fund Balance and unrestricted cash balances are closely tied. The Village’s Financial Policies in addition to the Fund Balance policy state that the General Fund should maintain a unrestricted cash balance of at least two months to three months of budgeted annual expenditures. For the Fiscal Year 2021 budget this would equate to a balance in the range of $945,439 and $1,418,159. If the Village actually incurs the projected deficit as

well as funding all the items identified as being paid with cash on hand this would reduce the General Fund Cash Balance down to $1,544,523. This equates to just over three and a quarter months of expenditures which still meets the Village’s unrestricted cash balance requirement.

2016 2017 2018 2019

• Est. 2020

Unrestricted Cash $1,333,073 $1,377,009 $1,537,681 $1,724,522 $2,050,698

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000

UNRESTRICTED CASH BALANCES GENERAL FUND

General Fund – Budget Highlights

Administration Department ➢ Completion of the Village’s comprehensive plan ➢ Continue with process of annexations ➢ Having recently updated the Utility Office customer service manual, begin the process of developing service manuals for other Department. ➢ Continue to explore options for future municipal complex. As part of the Village’s Capital Improvement Plan the Village plans to construct a new municipal complex. The project is currently planned to be financed between multiple funds; the General Fund, Electric Fund and Water and Sewer Fund ➢ Actively work on succession plan by hiring an additional accountant during the second half of the fiscal year. Position would be paid 20% from the Administration Department in the General Fund and 40% each from the Electric Fund and Water and Sewer Fund Parks and Recreation Department ➢ Park Development costs $30,000 ➢ Scaled back recreation program, staff will produce a brochure advertising programs offered within the area with information on who to contact to sign- up.

General Fund – Budget Highlights Continued

Street Department ➢ Utilize staff to complete patching of streets and repairing sidewalks ➢ The Street Department will utilize funds from the Utility Tax Fund and General Fund if funds are available at the beginning of the fourth quarter of Fiscal Year 2021 in Utility Tax Fund and available in the General Fund Street Department Budget to purchase a Truck from Chatham Township Police Department ➢ Purchases of equipment from Police Department restricted cash $32,300 ➢ Maintain the Department’s current staffing level, filling of existing vacancies and creating of new positions has been put on hold due to the effects of COVID-19

Electric Fund - Revenues

The Electric Fund is the larger of the Village of Chatham’s two proprietary funds and only contains one Department the Electric Department. The Electric Department is responsible for providing and billing electric service to the Village’s 6,000 Electric

• customers. The Department also installs electrical infrastructure for new subdivisions

within the Village’s limits. Projected revenue includes $89,707 of Interfund Loan from the Water and Sewer Fund. Revenues: Electric Sales $10,000,000 Penalties 89,250 Other 161,390 State Utility Tax 260,000 Interfund Loan Revenue 89,707 Capital Lease Proceeds 259,751 Total $10,860,098

Electric Sales 92% Penalties 1% Other 2% State Utility Tax 2% Interfund Loan, 1% Capital Lease Proceeds, 2%

Electric Fund Estimated Revenues for the Fiscal Year Ended 4/30/2021 $10,860,098

Electric Fund - Expenditures

The largest expense category of the Electric Department is Electric Expense paid to IMEA which represents 63% of total costs. Personnel expense makes up the next highest expenditure type at 14%. Personnel costs are the second largest expenditure type in the Electric Fund and have been estimated based on rates of pay established in existing ordinances. In addition a 11.91% increase has been is included for health insurance costs. This rate is good for two years. The Village’s IMRF contribution for retirement has been estimated at a weighted average rate 13.72 % of covered wages. 2021 Proposed Budget Personnel $1,597,190 Services & Charges 857,078 Supplies 27,100 Electric Purchases 7,096,000 State Excise Tax 260,000 Capital Expenditures 1,082,187 Debt Service 323,500 Electric Fund Total Appropriation $11,243,055

Personnel 14% Capital Expenditures 10% Supplies Electric Purchases 63% State Excise Tax 2% Services & Charges 8% Debt Service 3%

Electric Fund Budgeted Expenses by Type for the Fiscal Year Ended 4/30/2021 - $11,243,055

The above graph shows the Electric Fund cash on hand at April 30th for the last 4 years. The Village’s Electric Fund should maintain a balance of at least two to three months of

• perating expenditures. For the Fiscal Year 2021 Budget, this would equate to a balance

in the range of $1,873,843 to $2,810,674. The Electric Fund’s Fiscal Year 2021 proposed budget includes the utilization of unrestricted cash on hand if incurred to cover the estimated liability for payouts of accrued time to employees in the amount of $218,500 and $70,074 of items carried forward from Fiscal Year 2020 including the remainder due

• n the siren project, purchase of a truck for the use of the Electric line foreman and a

truck bed for an existing vehicle as well as a budget deficit of $94,383. If the Village actually incurs the projected deficit as well as funding all the items identified as being paid with cash on hand this would reduce the Electric Fund Cash Balance down to $2,861,748. This equates to just over three months of expenditures which still meets the Village’s unrestricted cash balance requirement.

Electric Fund – Cash Balances

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 2016 2017 2018 2019 Est 2020 Unrestricted Cash $1,503,849 $1,848,317 $2,313,272 $2,995,248 $3,244,705

CASH AND FUND BALANCES ELECTRIC FUND

Electric Fund – Budget Highlights

➢ Due to the effects of the COVID-19 pandemic, the Electric Fund Budget is prepared based on the ability to begin assessing penalties and resuming collections procedures by August 1st. If the Village is unable to begin these actions the Village could experience $29,750 reduction per quarter in penalty income as well as additional bad debt write-offs. ➢ Carry forward a Capital lease purchase of a new line truck, purchase price estimated at $259,751 ➢ Maintain the Department’s transmission and distribution personnel at the current staffing level, filling of existing vacancies and creating of new positions in this area has been put on hold due to the effects of COVID-19 ➢ Carry forward the purchase a new vehicle in the amount of $29,957 and a truck bed for an exiting vehicle in the amount of $15,117 ➢ Complete the warning sirens project. Part of the project to be paid with by a $50,000 grant from DCEO and part from Electric Development fee assessments. Village began working on obtaining grant funding during fiscal year 2018. ➢ Begin work on the Mansion Road Project to install underground three-phase line running down Route 4 and then west on Mansion Road to Cardinal Ridge will create a create a loop in the system servicing the Northwest end of the Village. Project cost estimated at $349,000

Water and Sewer Fund – Revenue

The Village of Chatham’s Water and Sewer Fund accounts for the Village’s water and sanitary sewer operations. The Water and Sewer Department is responsible for providing and billing water and sanitary service to the Village’s 6,000 Water customers and 5,750 Sewer customers. The revenue includes a sewer rate increases of $.16 to the monthly facility charge and $.18 per 1000 gallons of sewer usage that is a result of passing along a rate increase from the Village’s sanitary sewer supplier.

Revenues: Water Sales $4,842,100 Sewer Sales 2,154,000 Penalties 61,875 Connection Fees 153,000 Other 23,400 $7,234,875

Water Sales 67% Sewer Sales 30% Penalties 1%

Connection Fees 2%

Other

Water and Sewer Fund Estimated Revenues for the Fiscal Year Ended 4/30/2021 $7,234,875

Water and Sewer Fund - Expenditures

The largest expense categories of the Water and Sewer Department are water and sewer purchases, which represents 64% of total costs. Personnel expense makes up the next highest expenditure type at 16%. Personnel costs have been estimated based on rates of pay established in existing ordinances. In addition a 11.91% increase has been is included for health insurance costs. This rate is good for two years. The Village’s IMRF contribution for retirement has been estimated at a weighted average rate 13.72 % of covered wages.

2021 Proposed Budget Personnel $1,186,729 Services & Charges 643,188 Supplies 35,900 Water Purchases 3,340,000 Sewer Purchases 1,420,000 Capital Expenditures 378,350 Debt Service 281,618 Interfund Loan Payment 89,707 Water & Sewer Fund Total Appropriation $7,375,492

Personnel 16% Capital Expenditures 5% Supplies 1% Water Purchases 45% Sewer Purchases 19% Services & Charges 9% Debt Service 4% Interfund Loan Payment 1%

Water and Sewer Fund Budgeted Expenses by Type for the Fiscal Year Ended 4/30/2021 $7,375,492

Water and Sewer Fund – Cash Balances

The above graph shows cash on hand in the Water and Sewer Fund at April 30th for the last 4 years. The Village’s Water and Sewer Fund should maintain a balance of at least two to three months of expenditures. This would equate to a balance in the range of $1,229,249 to $1,843,873. The Water and Sewer Fund’s Fiscal Year 2021 proposed budget includes the utilization of unrestricted cash on hand if incurred to cover the estimated liability for payouts of accrued time to employees in the amount of $115,500 , an interfund loan payment to the Electric Fund of $89,707. If the Village actually funds all the items identified as being paid with cash on hand this would reduce the Water and Sewer Fund Cash Balance down to $1,226,822. This equates to just under two months of expenditures which is falling slightly below the Village’s unrestricted cash balance

• requirement. If the cash balance actually falls below this recommended level the Village

will make every effort to bring the balance back up to within three years.

$0 $500,000 $1,000,000 $1,500,000 $2,000,000

2016 2017 2018 2019

• Est. 2020

Unrestricted Cash $268,180 $896,916 $1,327,191 $1,518,903 $1,367,439

UNRESTRICTED CASH BALANCES WATER AND SEWER FUND

Water and Sewer Fund – Budget Highlights

➢ Due to the effects of COVID-19 pandemic, the Water and Sewer Fund Budget is prepared based on the ability to begin assessing penalties and resuming collections procedures by August 1st. If the Village is unable to begin these actions the Village could experience $20,625 reduction per quarter in penalty income as well as additional bad debt write-offs. ➢ Pass along the rate increases from the Sangamon County Water Reclamation District resulting in a total increase to the sewer consumption charge of an additional $.18 per 1000 gallons and an increase in the monthly facility charge of $.16. ➢ If budget revenue and expense targets are achieved, during the 4th quarter of Fiscal Year 2021, the Department may purchase of a 1-ton truck in the amount of $50,000 ➢ Third year of payments in the amount of $89,707 in a four-year repayment schedule for the $358,828 advanced from the Electric Fund in Fiscal Year 2015.

Other Budget Highlights

Capital Projects Fund ➢ Utilize funds received from settlement to complete work on sidewalks $38,809 Yard Waste, Recycling and Refuse Program ➢ Budget includes 80% of the salary and benefits of one Street Department employee for the entire year to perform street sweeping ➢ The Yard Waste Supplies and Services line item includes costs of contracting out costs of leaf pickup and branch pickup amount budgeted is $220,046 ➢ Includes year two of a 5-year lease purchase agreement for the purchase of a street sweeper, budgeted capital lease payments for Fiscal Year 2021 total $37,650 Cemetery Perpetual Care Fund ➢ The Village plans to spend down $78,789 accumulated in the Fund that is committed for cemetery care to upgrade the road within the cemetery. The Village also plans to begin allocating 80% of funds received on lot sales to use for the cemetery care to build up funds to construct a mausoleum for cremations Motor Fuel Tax Fund ➢ Amount appropriated for regular Motor Fuel Tax program is $309,192 and includes, winter maintenance, drainage, sidewalks, curbs, patching, and roadside maintenance ➢ Amount appropriated from State of Illinois Rebuild Illinois program. Project not identified

Other Budget Highlights

The Village’s Draft Budget Document will contain the following additional information ➢ A Budget Summary found at the front of the document which highlights the Village’s Budget ➢ The Introduction Section has background information on the Village , the budget process, the fund structure and financial policies ➢ The Exhibits Section contains information on fees, property taxes, revenue, expenditure trends and long-term financial planning ➢ Budget Information in summary form and for each fund of the Village will be included following the exhibits section ➢ The Capital Improvement Plan is a plan for the Village’s capital investments over a 5- year period. ➢ Glossary of terms used throughout the Budget Document