April Letter to the Mayor and Board of Trustees

April 21, 2008 Letter to the Mayor and Board of Trustees: I am pleased to present to you the Fiscal Year 2008/2009 Village of Gurnee, Illinois Budget. This budget reflects our determination to allocate resources in a responsible fashion. It was prepared in accordance with the Village’s primary financial goal – the preservation of the highest possible services provided to the Village’s citizens, visitors, and businesses while keeping taxation and other charges at a minimum. In addition, the budget was complied to meet the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award program criteria. The program is designed to encourage governments to prepare budget documents of the highest quality to meet the needs of decision makers and citizens. The FY 2008/2009 budget provides the means to maintain essential village programs and services while moving forward with initiatives that ensure a positive and exciting future. Budget AwArd The budget was complied to adhere with the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award program. The Village was granted this prestigious award for the past three fiscal year budgets. The Government Finance Officers Association of the Untied States and Canada (GFOA) presented an award for Distinguished Budget Presentation to the Village of Gurnee, Illinois for its annual budget for the fiscal year beginning May 1, 2007. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communication device. The award is valid for a period of one year only. We believe our current budget continues to conform to the program requirements, and we are submitting it to GFOA to determine its eligibility for another award. Transmittal Letter Page 1 Transmittal Letter Budget Overview The total budget is slightly over $49.7 million, with the General Fund comprising $33.8 million of that total, Utility Funds totaling $7.9 million and the Capital / MFT Funds $5.2 in aggregate. The FY 2008/2009 Proposed Budget represents a General Fund - $33,824,645 6 percent increase over the FY 2007/2008 Budget of $46.9 million. The budget is Utility Funds - $7,887,215 balanced – whereby general fund revenues Capital, Impact & MFT - $5,252,000 are projected to match or exceed general Bond & SSA Funds - $1,315,900 fund expenditures - through the careful review of department requests for funding. Pension Funds - $1,023,900 The general fund revenues for FY 2008/2009 Other Funds - $449,600 are projected to exceed planned expenditures by over $248 thousand. FiscAl YeAr 2008/2009 HigHligHts NO NEW TAXES / NO PROPERTY TAX For the upcoming fiscal year, Village management is not recommending any new taxes or fees. During FY 2007/2008, several fees were adjusted to current market rates, including Liquor License fees, and the Cable Television Franchise fee percentage. With the elimination the corporate property tax levy in 2000, the Village continues to examine alternative revenue sources in an effort to continue operating without a corporate property tax. Another example of the Village’s efforts to avoid reinstituting the property tax was the 2006 Special Census which resulted in an increased share of State collected revenues that are distributed based on population, including Income Tax, Personal Property Replacement Tax, and Motor Fuel Tax. HEADCOUNT REMAINS FLAT The Village is not proposing to increase headcount for the 2008/2009 fiscal year. Village management is confident the Village can continue to provide the high-level of service that has come to be expected by our citizenry with the current workforce. The Village of Gurnee continues to focus the majority of its personnel in the area of public safety, with two-thirds of all FTEs concentrated in Police, Fire, and Emergency Dispatch operations. CAPITAL IMPROVEMENT PROGRAM The Village has budgeted $6.3 million of capital projects and improvements for FY 2008/2009 in the Utility Surplus, Motor Fuel Tax, and Capital Improvement Funds. This includes projects related to street resurfacing, water and sewer improvements, storm water management, municipal building improvements, and equipment purchases. Proposed spending in each of these areas is summarized below. Neighborhood Street Resurfacing: It is anticipated that an additional 4.9 miles of streets will be resurfaced in FY 2008/2009 under this program. This program extends the useful life of streets that only require resurfacing due to the fact that the underlying foundation is structurally sound and other street items such as sidewalk, curb and gutter, etc. are in generally good repair. Several streets in the area commonly referred to as Elysian Fields/Concord Oaks, Aberdare Estates, Winchester Estates, Heather Ridge/Fairway Ridge, the Trigg Area, and the Northeastern section of the Village will be resurfaced in FY 2008/2009. Funding in the amount of $2 million has been allocated in the budget for this initiative. Transmittal Letter Page 2 Transmittal Letter Neighborhood Water and Sewer Extension: The FY 2008/2009 Capital Improvement budget includes funding to support installation of a 12” watermain from the existing stub south of Foxworth Lane south to Lockwood Lane approximately 1,750 feet, as well as installing watermain along the east end of Country Club looping to the watermain on Florida Avenue, including a small portion of sanitary sewer on Cheyenne Avenue. In addition, funding has been allocated for the purchase of property on the westside of the Village of in order to erect a new elevated water storage tank, and for miscellaneous engineering and utility projects outside of Village staff’s scope. Funding in the amount of $773,000 has been allocated in the FY 2008/2009 Capital Improvement Fund for water and sewer initiatives. Neighborhood Stormwater and Drainage Management: The FY 2008/2009 Capital Improvement budget includes $301,000 for stormwater management and drainage projects. The Village of Gurnee maintains an extensive system of stormwater management facilities, including detention ponds, retention ponds, storm sewer systems, drainageways, pumps, inlets, manholes, and culverts. The Village has allocated funds in the FY 2008/2009 budget for purchasing residential and commercial properties located within the 100-Year Floodplain, as well as for installation of a new river level gage located at the north end of the Village along U.S. Route 41. The gauge is intended to be hooked into the Village’s telemetering system and provide automated warnings to Public Works and Police Dispatch if/when river levels increase. Municipal Buildings and Improvements: The Village is responsible for numerous facilities. To keep building and grounds in good condition, they must be maintained regularly. Notable projects budgeted in FY 2008/2009 include the installation of facilities to enable the Village to deliver data through a secured wireless solution, purchase and installation of a permit tracking system that goes beyond the Village’s current system, and roof replacements and interior modifications related to Public Works facilities. In addition, $375,000 has been budgeted for improvements in ice control facilities. This includes the construction of a second salt dome, as well as a facility to store more eco-friendly ice control substances, most notably beet juice and brine. In total, $851,000 has been allocated in the FY 2008/2009 Capital Improvement Fund for municipal buildings and improvements. Municipal Equipment: The Village of Gurnee recognizes the importance of maintaining, replacing, and purchasing new equipment and vehicles to guarantee public safety and the efficient delivery of services. The FY 2008/2009 Capital Improvement Fund includes funding for two Public Works fleet vehicles, as well as second of three payments for purchasing a replacement for Fire Engine #1312. In total, $322,000 has been budgeted in FY 2008/2009 for these purchases. PrePAring FOr tHe Future - strAtegic PlAnning initiAtive In March 2008, the Village of Gurnee, with expert assistance provided by Sikich, LLP, started a strategic planning effort. Understanding the importance of carefully monitoring its financial condition to ensure it is not adversely impacted by external trends and future events, the Village feels developing a formalized strategic plan will provide benefit by integrating operational, financial, and long-term goals. By engaging in the development of a multi-year strategic plan, the Village will garner the data and stakeholder input critical to establishing a sound base for future financial and non-financial decision-making. Strategic planning is essential because it helps determine where an organization wants to go, how it will get where it wants to, and how it will evaluate progress toward the goal. By employing a method called performance-based strategic planning, we engage Gurnee’s most knowledgeable stakeholders Transmittal Letter Page 3 Transmittal Letter (e.g. citizens, special interest groups, elected officials, and staff) in a dialogue about the organization’s purpose and desired future directions and establish accountability for the plan with action-planning and performance measurement. An internal sponsor team — drawn from management and staff in the organization — will lead the effort. After determining the stakeholders, defined as all those who have a legitimate stake in the Village’s future, Sikich will facilitate the sponsor team in activities which establish the reality of the current environment. During this stage it is important that the team has shared understandings of the past as well as present in order to develop realistic future plans. Following these stages, we will begin to collect data from the identified stakeholders, including residents, the business community, youth, and other governmental entities. Though there are numerous ways to gather input, focus groups stimulate dialogue among diverse participants, produce a wealth of in-depth information, and build strong community relations. We plan to conduct two large public focus groups with residents (up to 60 participants), and at least three other focus groups with the aforementioned stakeholder groups. Following data gathering, Sikich will proceed in developing the mission (with input from the Village Board) and vision (crafted using information from the focus groups). The mission relates the essential purpose of the organization, and the vision provides a picture of what the organization aspires to over the next three to ten years. Additionally, the sponsor team will develop core values, which are broad-based ideals intended to guide staff in carrying out the resulting objectives and goals. Next, the sponsor team begins to lay a strategic direction — outlining themes for the future and translating these into priority goals. Village-wide goals will be further defined with specific objectives, strategies, and performance targets to establish process accountability. Finally, the strategic plan will need to be deployed and communicated within the organization and published for the community. Staff will become involved in the deployment stage, to perform the action planning, where detailed objectives and performance measures are created at the department level. The result of this strategic planning effort will be a plan that identifies the ideals and ideas that are important to the Village’s future as well as alignment of these guideposts with actions. cAsH reserve & BOnd rAting One important measure of a Village’s financial strength is the level of its cash reserves. For the Fiscal Year ending April 30, 2008, the Village’s estimated General Fund cash reserves are in excess of $19 million. This represents more than half of total General Fund expenditures. As set in the Village’s General Corporate Fund Balance Policy, unreserved fund balance for the General Fund must be maintained at minimum level equal to 35% of the subsequent fiscal year’s expenditures. The Village’s bond rating is further evidence of its overall financial strength. Gurnee is rated as an Aa1 community by Moody’s Investors Service and AA+ by Standard and Poor’s. Ratings range from AAA or Aaa (highest) to D (in default). A Aa1 ratings mean the Village’s bonds are considered to be of high investment quality, resulting in lower interest rates on bonds which result in savings for Gurnee. Transmittal Letter Page 4 Transmittal Letter summArY Overall, the Village is in good financial condition. Because of our financial stability, we are better positioned than many of our peer communities to deal with the housing downturn. The Village’s reserves are strong, our debt limit is low, and commercial development continues to provide the resources needed to keep the community vibrant. This budget includes funding which keeps public safety at the forefront of Village operations, while continuing to reinvest in our infrastructure. Over the next year, we will continue to monitor expenditures and revenues to ensure we are on the path that the Village Board has chartered for the Village. Preparation of the budget is a long and demanding task. I would like to thank the Mayor, Village Board, and all of the Village citizens and staff members who participated in the preparation of the 2008/2009 Village Budget. Respectfully submitted, James T. Hayner Village Administrator Transmittal Letter Page 5 Transmittal Letter