WILMETTE PARK DISTRICT
Date: January 5, 2011
Place: Mallinckrodt Community Center
Time: 6:30 pm
Commissioners: D. O’Malley, J. Brault, J. Crowley, D. Graham, D. Miller, M. Murdock, H. Wolff
Staff: S. Wilson, K. Bingham, J. Bowen, K. Eppelheimer, B. Lambrecht,
S. Donoghue, M. Matchen, J. Ostrem
Visitors: R. Baugher, G. Benz, J. Coughlin, T. Grisamore, T. Juliar, M. Matchen,
S. Shelly, B. Udany
Topics for Discussion:
1) President O’Malley called the meeting to order at 6:32 pm.
2) 2011 Budget Presentation:
Executive Director Steve Wilson welcomed everyone in attendance to the 2011 Budget Workshop and stated the purpose of the meeting is to review the Proposed Fiscal Year 2011 Budget in consolidated form with the goal of adopting the 2011 budget and appropriations ordinance at the January 10th Park Board meeting. He then introduced those in attendance and thanked staff for their combined efforts in putting together this manual. Our newest staff member, Ken Eppelheimer, is now the Superintendent of Finance & Personnel and he has played a very important role in the production of this information and will be reporting on the budget tonight as well.
The budget process for staff began in early August 2010 and the budget number estimates for 2011 have been reviewed and approved by each sub-committee of the Park Board. All of the detailed budget items have been combined into this budget summary.
The Budget Manual being reviewed tonight is organized into sections beginning with general information and going forward into more detail.
Fiscal Year 2010 Highlights
Steve remarked 2010 was basically a good year and included the start of the second phase of the Lakefront Master Plan and the creation of the Lakefront Commission. The Commission has met three times and will meet again at the end of January to determine a schedule for the public meetings to be held by the end of March 2011. Staff has also started the Golf Master Plan and meetings have been held with the architect several times. A first evolution of the plan will be presented at the Golf Committee meeting scheduled for Saturday, January 22. Major projects completed in 2010 include two new lots – one at Thornwood Park and one at the Early Childhood Center. In addition, the tennis courts at Community Playfield were rebuilt, a new rooftop unit was installed at the CRC, new fitness equipment was purchased, and the flooring at Lakeview Center was replaced. We also brought our Aquatic Center into compliance with the Virginia Graeme Baker Act (VGBA). There were some unbudgeted but necessary repairs made to the refrigeration system at the ice rinks and some budgeted necessary repairs to the roof at Centennial.
Weather in 2010 was much nicer than in 2009. The hot weather brought many more patrons to the beach and pool although the golf course suffered somewhat in July due to the high temperatures.
Budget Manual Review
Steve stated that the District’s primary Governmental Funds consist of the Corporate and Recreation Funds. The Corporate Fund is overseen by Bill Lambrecht and Kathy Bingham handles the Recreation and Lakefront Funds. Debt Service is under Ken Eppelheimer’s jurisdiction and the Special Revenue Facilities fall under Jeff Bowen’s area. Capital Projects and the Other Governmental Funds are also overseen by Ken as well as Administrative Services. The Internal Service/Building Maintenance Services Funds fall under Bill’s area as well.
Uniform increases were used to develop the budget including a 3% salary increase for full-time staff, a 2% increase for part-time staff, and a 1.5% user fee increase although there are exceptions in some areas. We are also budgeting for an 8% increase in health insurance. Electricity and Natural Gas are will remain flat in 2011 as these are negotiated rates and our contract is still in effect. Water will be increased by 11.5%. We also set a tax levy increase of 1.61% which is all inclusive including bond and interest.
Our Organization Chart starts at the top with Village residents who in turn elect seven members to serve on the Park Board as their representatives. The Board members hire and supervise the Executive Director who has six direct reports, four of them Superintendents. The other two director reports are Communications Manager Shelagh Donoghue and Administrative Assistant Judy Ostrem. Each department then flows downward from there. The number of full-time employees is currently at 72, which is down three positions from last year. The number of part-time and seasonal staff fluctuates so the numbers shown tonight are estimates based on the number of W-2 forms the District normally issues.
The fund structure of the Park District includes two major categories – Internal Service and Governmental Funds. The Internal Service Fund accounts for the Business Office and a portion of Superintendent Lambrecht’s department which provides general services to all aspects of the District and then funds are allocated out to each individual operation.
The Governmental Funds are the Corporate, Recreation and the Special Revenue Facilities Funds (Pool, Lakefront, Tennis, Golf and Ice). The Debt Service Fund accounts for all of our bond principal and interest payments. The Capital Projects Fund is where we account for all of our major capital projects. We also transfer funds out of each operation to pay for those projects. Lastly, we have the Other Governmental Funds that are tax supported such as the Liability Insurance, IMRF/Social Security, Audit, Police Security and Handicapped Recreation Funds.
When looking at 2009 compared to projected year-end 2010 on the All Funds Income Statement, both the revenue and expenditure amounts are a little higher with an operating surplus which is approximately $30,000 higher in 2010 than in 2009. Under Total Other Financing Uses (net), in 2009 we had about $1.5 million in capital expenditures offset by $710,000 in bond proceeds. The number in 2010 is much higher since we didn’t have any bond proceeds in 2010 to offset capital project expenditures and our expenditures were higher in 2009 as well. Looking at 2011, there is an increase in revenues of about 3.6% which is primarily driven by increases in property taxes, user fees, etc. Total expenditures are also budgeted to be an increase of 2.6%. The total expenditures combined with our capital expenditures are what generates the Budget & Appropriations Ordinance which is on the agenda for the next Board meeting on Monday, January 10. We are also planning on potentially having some bond proceeds offsetting $2 million in capital projects in 2011. Every year we have about $250,000 in non-referendum bonding authority and the plan is to issue three years of bonding authority at one time to be more efficient on rates and issuance costs. This is a budgeted item but it’s something we cannot do until the end of the year due to the nature of the bond issues. We as a group will need to look at this issuance later in the year to determine how and if we are going to issue any new bonds.
Ken reported that the participant usage information and noted that residents represent over 75% of our program usage and non-residents constitute about 24%. However, non-residents pay substantially more for our programs. There is another chart outlining our major programs and lesson participants. On the revenue and expense side, 60% of our revenue comes from fees. This indicates we are being prudent on our pricing, shows good participation by the community and shows restraint from the board on a taxing basis. On the expense side, the District is very service-related which results in a lot of salary and benefits to keep the good people and programs in Wilmette and our facilities running well.
Department Head Reports:
Superintendent Lambrecht reported the Corporate Fund covers expenses for parks maintenance which includes grounds maintenance for the parks, schools, Village properties and also snow removal for activities in outdoor park areas. Income is derived from tax receipts, replacement taxes and some minor interest income and cell tower revenues. It also includes revenue from garden plots and tree donations. This prior year we budgeted for a fourth provider on the cell tower but that did not happen. Transfers from this fund include $35,000 to the Security fund and $95,000 goes to the IMRF/Social Security fund. Also, $350,000 will be transferred to the Capital Projects fund. Expenses were down slightly this year due to some reductions in overtime and the restructuring and rescheduling of staff. In 2011 there will be no major changes except for some expenses due to the uniform budget increases that were approved by the Financial Planning Committee.
Superintendent Bingham reported that despite the economy, while still challenging, we had a decent year in the Recreation Department, although we did fall short from the 2010 budget. Revenue was down $95,000 but 2010 revenues were up $5,000 from 2009. The areas that experienced the shortfall were Early Childhood and Gymnastics. Early Childhood fell $164,000 short and Gymnastics $43,000 short. In Early Childhood, there was a 2% decrease in participation which in that area can amount to some significant numbers in terms of dollars. Despite that, however, the Recreation Fund continues to be healthy and in addition to making a full transfer to both long-term and short-term capital project funds, we were able to make an additional transfer of $115,000 to compensate a shortfall in another area. This fund also includes special events like Halloween Happening and the July 4 festivities.
Highlights for 2010 including moving Halloween Happening from Gillson Park to the Community Recreation Center which was very well received. The General Recreation area has seen some growth with new revenues from new programs which our new supervisor brought in. The Performing Arts area which has struggled in the past has seen some increases in revenue. Similar to last summer, staffing at the lakefront was increased especially to patrol the south beach area. The weather this summer was very hot and sunny and was better than in 2009. We were also able to make a full transfer from this fund of $71,000 to the Capital Projects fund. Looking forwarded to 2011, we budgeted for a 3.6% increase in revenue and the current trend is that these registration numbers will continue. We anticipate a slight decrease of $17,000 in operating revenue and we also budgeted for a decrease in tax receipts by over 26%. It is expected that we will end up with a $2.2 million fund balance which is right in line with the target balance as recommended by the Financial Planning Committee.
Superintendent Bowen reported the Special Revenue Facilities fund covers the Centennial operations (Ice, Pool and Tennis), the Golf Course and also the Lakefront Operations. We were down 3.8% in revenue from budget but we did exceed 2009 actual numbers by 1.7%. It was a hot summer and it was great for the pool and lakefront but not so good for growing grass at the golf course. The ice rink was also closed for six weeks for emergency repairs which added to the lower revenue levels and increased expenses that were not budgeted. Each facility made the full transfer to Capital Projects and Internal Services with the exception of Golf which did make a contribution of $62,500 toward capital. It had been some time since three or four of the facilities have been able to make their transfers so overall it was a good year for this fund. Total capital transfers of $582,732 came out of this fund.
On the expense side, thanks go to staff at the facilities for doing a good job of watching what they spend. Salaries is our biggest expense and they were down 1.4% and overall expenditures were down 2% from 2009. We did some reorganization at the Pool and at Golf Maintenance. For 2011 we will continue to look at new ways to do things directly for cost savings. Due to a VGBA issue, we will also be replacing the small slide by the side of the activity pool with a new water amenity in the middle of the pool. This will save money since we won’t have to cut out the bottom of the pool and will result also in one less lifeguard in 2011 which will result in a savings of $10,000/year. When comparing operating income from 2009 to 2010, there was an increase of 11%. Fees for 2011 will go up by the standard 1.5% except for some areas like golf memberships and greens fees where fees will be raised to 5%. The Special Revenue Facilities fund had a balance of $1.763 million and will end the year with $1.895 million. In the proposed 2011 budget, there is a target fund balance of $1.23 million.
Superintendent Eppelheimer reported on a few graphs which consisted of basically taking the revenue from user fees and breaking it down by facility. As a result, Tennis is doing quite well and is a very large and successful program compared to other tennis facilities in the area. Golf continues to contribute as well. On the operating side by expenditures, camps and CRC programs obviously equate to about half of our total expenditure levels followed by the other participating areas such as the lakefront, tennis, golf, and other recreation areas. The Special Revenue Funds are those tax-supported operating funds for Handicap Services, Parks, Liability Insurance, Police Security, and Social Security/IMRF.
In regard to the District’s debt, one of the charts indicates a very detailed account of outstanding issues the District currently has and includes a summary of the debt fund for making payments. With the taxes this year coming in late do not help in the long term and we are still expecting over $1 million which in the past we would have had in the bank already. The first payment of taxes in 2011 is being delayed by a month to April. We will try not to be too cash-strapped and will have to take into consideration what our investment will look like at the time.
The Debt Payment Schedule which goes up to 2026 indicates we are looking at $3.6 or $3.7 million dollar debt payments through 2015 when the first 2002 and 2004a bond issues come off the book (referendum debt).
Steve reported on capital projects and provided a summary of the Capital Reserve Fund. The beginning fund balance in 2010 was about $1.8 million. We had also budgeted $1.8 million in expenditures and then we finished the year with about $100,000 less than budgeted in our expenditures. Much of the unbudgeted expenditures in 2010 were offset by savings for the VGBA requirements at the pool which we were fortunate to not have to do as much work at the pool as originally anticipated
The five-year capital plan is broken down by facility. When someone looks at 2011 it comes down to a grand total of slightly over $2 million. This number begins to decrease starting in 2014 and 2015. This issue is discussed every year and we know that number will increase as we get closer to identifying more specific projects. Some of the projects planned for 2011 are the continuation of the Lakefront Plan, the Golf Master Plan, and two new tot lots and at Vattman and Wheeler Parks. The tot lots will also be supported with money out of the Handicapped Recreation Fund for the rubberized surfacing on the playground. We will also be installing a new boiler at the CRC and there is $135,000 budgeted for a new rooftop unit at Centennial. However, this may change since after going through the budget process, we may now be asking the Board for a repurposing of that money to commission an engineering study for a comprehensive plan that accounts for the HVAC of the facility along with a new chiller system for the ice surfaces. There will be a need for more formal discussions on this issue at the Committee and Board level.
Ken reported the Operating funds are still slightly behind target at the end of 2010 but they should come close to filling in the gap in 2011. Restricted funds are slightly below target but will end up a little above in 2011. The Capital Projects Project balance is higher than target in the presented years with some cash infusion included in 2011 with a possible debit issuance.
Steve explained the concept of the Financial Risk Management Section to the group. He said it involves looking at both surpluses and fund balances and the impact that a 1%., 3% or 5% revenue shortfall would have assuming the District did absolutely nothing to curtail expenditures in accordance with budget. This would be a “doomsday” scenario.
Communications Manager Shelagh Donoghue provided an update on her department in regard to marketing and communications. Thanks first go the Board for their confidence they have shown during the last year which started off a high note with the IPRA Agency Showcase awards we received. We are also entering the competition again this year at the end of January. Shelagh and her staff also redesigned the District’s brochure from front to back thereby cutting our production costs and making it more user-friendly. Two focus groups were invited to provide input on the brochure redesign and their input helped greatly. The newly designed book was published in the fall of 2010. The design process was also brought in-house which allowed staff to cut down on the number of pages in the book. To date, we have saved about $14,000 in production costs compared to this time last year. We also had a great response from our residents who like the book and they appreciate the fact that we tried to cut down on costs.
Other areas staff has focused on this year include posters, flyers, banners, email blasts, etc. for the various departments and facilities. The Summer With Us campaign was carried forward into 2010 by using the art on the lakefront parking decals and also repurposed it into a special events calendar. Our web site has also provided a lot of opportunities. We also started expanding the use of our new tag line – Every Season Starts Here which was showcased at the holiday parade in Wilmette.
Additional discussion followed on the analysis of our fund balances, our fund reserves, the prospect of budgeting on a monthly basis, the planned debt issuance in 2011 in relation to capital projects and operational results, and the status of our employee pension fund.
There being no further business, the meeting was adjourned at 7:30 pm.
Minutes taken by J. Ostrem.
MINUTES APPROVED ON JANUARY 10, 2011.