Information
This Joint Workshop with the Village Board and the Finance Commission will be held for a review of the overall proposed 2020 budget, the departmental operating budget, and the non-departmental budget. The spending plan being presented is a responsible and transparent financial plan that incorporates key policies and priorities established by the Mayor, Board of Trustees and Finance Commission.
The Proposed Budget for 2020 totals $147,986,173, a decrease of $22.4 million or 13.13 percent from the amended 2019 Budget. The decrease was primarily the result of significant completion of major capital projects including the Police and Fire Headquarters relocation projects. The operating budget will see an increase of $2.6 million, or 3.55 percent from the 2019 Budget. Increases to debt service are related to new debt in the Water/Sewer Fund (Series 2019A) and proposed Prospect and Main TIF Fund (Series 2019B). New utility user fees and incremental revenues generated by new development will support the repayment of the new Series 2019A debt, while the TIF increment from the Prospect & Main TIF will support the repayment of the proposed series 2019B.
Other items of note regarding the Proposed 2020 Budget include:
- The General Fund expenses before transfers out are budgeted at $57.3 million, an increase of $0.7 million from the amended 2019 budget of $56.6 million before transfer. A one-time transfer of $3.4 million is budgeted from the General Fund to the Flood Control Construction Fund to support the Levee 37 Storm Water Project. Also, a $975,000 transfer is budgeted to support the annual Street Construction Project, and a $400,000 transfer is budgeted to support the small capital project through the Capital Improvement Fund. Including transfers out, the total General Fund Budget is $62.1 million, a $3.5 million or 6.00 percent increase from the 2019 amended budget. The 2020 Proposed Budget represents a planned use of cash of $3.4 million to support major capital projects, while it also maintains the fund balance for the General Fund in compliance with the fund balance policy.
- A water and sewer rate increase of 8.0 percent is also included in this Budget. The impact of this increase on a resident is estimated to be $5.72 per month. The larger than typical increase is due to implementing the long-term capital strategy as outlined in the Comprehensive Water and Sewer Rate Study completed in 2017.
- The proposed increase in the 2019 property tax levy is 2.00 percent or $381,740 from 2018 extension of $19,087,265. This 2.00 percent will be restricted for future expansion of the Fire Department in south Mount Prospect. The total 2019 proposed levy is $19,469,005. A subsidy from the General Fund to moderate the property tax increase for the 2019 levy is $210,000. This is the final of a four year plan to smooth out increases in the public safety pension levies. The increases in the property taxes are covering the increase in the debt services, pension obligations, and an anticipated increase in the Fire Department costs.
- There will not be any increases in the Refuse costs during the year 2020.
The financial position of the Village remains very strong. The Standard and Poor bond rating agency has awarded AA+ with stable outlook ratings on the most recent bond offerings of the Village. Total available balances (excluding pensions) as of December 31, 2019, are projected to be $62.2 million. Of this amount, $22.3 million are reserve balances in the General Fund, the Village’s main operating budget. The fund balance as a percent of 2019 expenditures for the General Fund is 39.0 percent. The Village’s fund balance policy calls for the General Fund to maintain a reserve level of between 20.0 and 30.0 percent. Strong reserves and annual budgets that are balanced are two factors contributing to the strong bond rating assigned to Village debt.
The Finance Commission met on October 10 to hear departmental presentations on their proposed 2020 operating budgets and a presentation on other non-departmental budgets. The Finance Commission is scheduled to meet again on October 24 to discuss the Proposed 2020 Budget further, and prepare a recommendation which will be presented to the Village Board at the November 5 Board Meeting.
The first and second readings of the proposed 2020 Budget and Property Tax Levy will be held on November 5 and November 19 Village Board Meetings. Public hearings will be held those dates to provide additional opportunities for discussion and public input.
Below is a link to the Proposed 2020 Budget Document. Copies are also available at the Mount Prospect Library, 10 S. Emerson Street and Village Clerk's Office, 50 S. Emerson Street. The Proposed 2020 Budget as well as previous years' adopted bugets are also available online at mountprospect.org/budget.
Proposed 2020 Budget
Staff will be on hand to make presentations on their departmental budgets, answer questions and facilitate discussion.
Alternatives
1. Village Board discussion on the Proposed 2020 Budget.
2. Action at the discretion of the Village Board.
Staff Recommendation
Village Board discussion on the Proposed 2020 Budget.