WILMETTE PARK DISTRICT
Date: December 5, 2012
Place: Mallinckrodt Community Center
Time: 7:00 pm
Commissioners: J. Brault, D. Graham, G. Benz, J. Crowley, M. Murdock, J. Olvany
Absent: Commissioner Shelly
Staff: S. Wilson, K. Bingham, J. Bowen, K. Eppelheimer, B. Lambrecht, S. Donoghue, S. Flynn, J. Groves, C. Heafey, M. Matchen, J. Ostrem, B. Udany
Visitors: T. Grisamore, J. Huston (TribLocal), K. Routliffe (Wilmette Life),
Topics for Discussion:
I. Meeting Called to Order
II. Recognition of Visitors
III. New Business
a. Proposed 2013 Annual Budget Presentation
i. Budget and Appropriations Ordinance 2013-O-1
b. 2012 Tax Levy Discussion
i. Ordinance 2012-O-10
ii. Reduction Resolution 2012-R-8
c. Bond Issue Notification Act (BINA) Hearing Discussion
i. Resolution 2012-R-9
IV. Old Business
President Brault called the meeting to order at 7 p.m.
Director Wilson introduced those visitors and staff in attendance.
Proposed 2013 Annual Budget Presentation
Organizational Chart/Wilmette Park District Profile: Director Wilson introduced the District’s newest staff member, Sean Flynn, Centennial Ice Rink Manager. He also thanked the Board members and Superintendents Bingham, Bowen, Eppelheimer, and Lambrecht who have been integral in the budget process. This was a team effort which resulted in the final product for review this evening. Director Wilson stated the Committee would be reviewing three main topics – the 2013 budget, 2012 tax levy and a Bond Issue Notification Act (BINA) hearing which involves the process of legally issuing debt. Superintendent Eppelheimer would then provide details on revenues and expenses, the debt schedule, tax funding, various trends, and fund balances followed by a review of the department budgets. A PowerPoint presentation followed.
Director Wilson stated the Wilmette Park District’s organization chart indicates there are currently 71 full-time staff, 425 part-time staff, and 700 seasonal staff. This year the District was down one position from 2011. Other changes primarily have been made at the CRC with the new position of General Recreation Supervisor. Other turnovers at the CRC include the replacement of the Assistant Fitness Manager, a new Gymnastics Supervisor and Gymnastics Coach. We also replaced the Ice Rink Manager. The number of seasonal and part-time employees was based on estimates of enrollment in our various classes.
2012 Results: The weather was great this year which helped at the golf course, pools and lakefront. Several projects were completed this year including the replacement of the CRC boilers, improvements to the tennis facility, and the replacement of older equipment around the District. The District received the highest score of “5” from Starguard, the outside accreditation group who conducts the audits. The District received a Historic Preservation Award for the Parks staff’s efforts on the Centennial Prairie Garden. Lastly, staff made a competition out of the Wilmette Holiday Parade and we won Best Overall Entry.
2013 Budget Basis: Staff began meetings with the Financial Planning Committee in August to review uniform increases, including a 2.5% fee increase which was applied to most programs and facilities with a few exceptions. Staff did not increase the cost of ice time contracts at the ice rink. The budget includes a lack of revenue in 2013 due to the closings of both the golf course and the ice facility for their 2013 planned projects. The capital expenditure plan totals $6.8 million and in the budget there is an issuance of debt of up to $1.4 million inclusive of three years of the debt service extension base. This also includes $500,000 which funds the user portion of the golf project.
2013 Preview: There are many capital projects starting next year including the golf course renovation scheduled to begin on July 29, 2013 and the ice rink renovation scheduled to begin on April 22, 2013. Staff is planning to start the next phase of the Lakefront Master Plan in late Spring 2013 in addition to starting construction of a paddle tennis facility in mid-2013.
The District has also partnered with Lands’ End to provide our staff with uniforms which will result in a more professional look within our new dress guidelines. The Commissioners have received some of these clothing articles for ribbon-cutting ceremonies and other special events. There is also a customer service training program planned for the Spring of 2013.
Account Structure: Director Wilson stated the flow chart displays the structure of the funds in the accounting system. All of our funds are governmental funds and currently there are three primary funds – Corporate, Recreation and Debt Service – as well as some smaller special revenues. In the past we had kept these facilities separate but a year ago when we went to the new financial software we consolidated the facilities within the Recreation Fund which resulted in their being in separate departments within the Recreation Fund.
Funds Statement 2013: The slide indicates what our fund structure would look like under the Comprehensive Annual Financial Statement format including General, Recreation, Debt Service, and Special Recreation. When looking at this statement, one can see each fund’s revenues, expenses and overhead as well as transfers to Capital Projects combined into one line. The overall deficit of $4.2 million is related to Capital Project expenditures.
Revenues and Expenditures
2013 Consolidated: Superintendent Eppelheimer provided a review of the 2011 actuals, the 2012 budget and projection, and the 2013 proposed, as well as the capital carryover projects. Staff feels these items are important so they will be placed on a separate list as they had already been appropriated in prior budget years. Moving these items would drive up our deficit a bit in 2013 but would also provide more surplus in 2012.
2013 Proposed Operating Revenues by Facility: This chart represents the total budgeted revenues and the total appropriated expenses and how they compare. The debt proceeds represent 6% of the revenue if we issued all the proposed debt of the service extension base in order to help fund the capital projects at Golf and Ice. The revenue from user fees has generated a great result while other park districts are not as successful as we are in regard to user fees. This is indicative of the strength of our programs.
Operating Expenditure: Salary and wages usually have a higher percentage but with the capital being at $6.8 million it is almost at 25%. When looking at the operating revenues of our different facilities, they are a mix of the CRC, programs, camps and older adults. With our new financial system they can now be shown as Enterprise funds.
Debt Service and Debt Payment Schedules: These charts are much more detailed in the budget book but there are important items of note – the debt schedule includes $610,000 rather than the $1.4 million proposed. The District is using only 25% of its available legal debt and this number provides room if opportunities arise in the future. The debt per capita totals about $905. Two issues were retired in 2012 and there will also be two issues retiring in another two years. These charts show the expected debt payment but since the DSEB has not yet been issued a view of the payouts has been presented.
2012 Tax Levy: The Financial Planning Committee began to review the different funds and amounts related to the Tax Levy in October. After the review, the Committee recommended they move some of the funds from the Special Recreation Fund into our Corporate Fund to take advantage of the 3% capped rate. The Committee also directed staff to keep the bottom line at zero for 2012 as compared to 2011. In April, an in-depth tax levy discussion was held with the Financial Planning & Policy Committee.
Wilmette Park District Tax Rates: This tax extension was moved out to see what it would look like assuming there will be a flat EAV for next year. The jump in 2006 was due to the fact that the EAV dropped and then over the last two years we had some decreases in the EAV resulting in an increased tax rate.
Participation Statistics Charts: This chart indicates the percentages of three years of resident and non-resident participation. It showed that our resident numbers are eroding a bit as non-residents are slowly increasing. Director Wilson stated this chart does not indicate daily visits but is the number of passes and program activities. There was a question if the chart was a participation compilation or a revenue compilation but this chart was participation.
Revenue Trends: There was a sizeable increase in fees during 2008 and 2009 and this year we ended fairly well with the golf course, the beach and the pool. In 2013, due to the construction at Golf and Ice, there will be a small decrease. In general, the tax levy does not constitute a large increase.
Target Fund Balances: In the first fund balance chart, it shows the impact of the 2012 projected and the 2013 budget on our balances. Our two operating fund balances totaled $7.7 million at the end of 2011. When staff put the budget together, there was a small deficit which brought it down to $7.6 million. That number was later adjusted by the carry-over projects which resulted in our being closer to $8.4 million. The chart is basically an estimate of what our fund balance might be when we are finished with the CAFR. What this proposal does to the fund balance is based on the deficit of slightly over $4.9 million which draws those funds way down. The last column indicates our targets of what our fund policy should be which would be in the range of three to six months of expense levels for the year. Operationally, the District is doing well financially since these are all projections.
Fund Balance Reserves: This slide provides an illustration of the District’s fund balances related to restricted, capital reserve, and the corporate and recreation funds. These funds will all go down as we use them to fund the capital projects.
Superintendent Eppelheimer stated that the rest of the budget book is a breakdown of our new operations reporting model. Each department has its own revenue and expenses listed. Finance and Administration controls the revenue streams of taxes and works with Parks and Planning on managing the capital improvement budget. This chart also indicates the total expenses and revenues without the proposed carryover projects.
2012 Tax Levy Discussion
Director Wilson reported the District levies and then Cook County adds a 2% loss in collections which creates a tax extension. As a result, when conducting the process the legal guidelines state the comparison of the levy to what the County had extended in the prior year. This shows the 2012 levy to be a 0% increase. He added President Brault had pointed out that compared to the actual dollars we levied at this time last year the levy is actually 2% more than that because of what the County adds for the tax extensions. The District is legally required to compare the levy to the tax extension.
Vice President Graham stated he thought it was a 2% extension by the County and asked why it was not always just a flat tax. Superintendent Eppelheimer replied sometimes the calculation is lowered because of new property, etc. Director Wilson stated if a resident paid $100 last year then this year they would pay $102 and the 2% is added on by the County. This 2% is also what makes the District whole in terms of dollars actually collected. President Brault stated the 2% also cushions the District and because of our good collection rate, the Board passed a resolution directing Cook County to reduce our percentage from 5% to 2%.
Capital Expenditures Review
President Brault stated that in the past when the Board was reviewing the budget, the greatest variable had been our capital expenditures. Commissioner Olvany thought it was important to consider the impact of capital expenditures and the overall 2013 budget have on fund balances. When looking at the chart on fund balance reserves, he sees that we have had fund balances in the $7 to $8 million range every year for the past five years including this year. Currently, we have a target of $4 million which was just approved and we are now looking at a budget year which takes our fund balance below our targeted $4 million. He thought it was worthwhile to bring that point up before we start going through the budget line-by-line. In summary, we are drawing down our five years of fund balances in one year. President Brault agreed and stated we have done the analysis and our “stress testing” through a variety of economic cycles. We also have collectively had fund balances that are several million dollars too high which is why we wanted to employ the capital rather than having those funds sit in the bank.
Director Wilson stated that at the last meeting with our golf course architect we talked about how those costs could be spread over multiple years starting in the summer of 2013 and finishing up in 2014. The architect provided us with a number of approximately 60% to 65% of the project which would be in year one. This means that we could move $800,000 of the $2 million to 2014 which would also bring us back up to the $4 million target fund balance. President Brault stated we should reflect the reality of what we think is going to happen. After further discussion, there were no objections to the proposed line item budget.
Commissioner Murdock asked if the compressor system project on page 2 of the capital will still be in the budget at $2 million. Director Wilson stated that when the designs are completed, we will be able to go out to bid. Other costs are also not included in the full $2 million. There will be a lot of cosmetic work done at the facility and once the compressor project is determined we can decide how much of that work we will be able to do ourselves.
Commissioner Murdock also asked about the paging system for Tennis. Superintendent Bowen replied the current system has not been working for awhile so there has been no means of communication between the office and the courts. An amount was placed in the budget for this item and it will be tied in with the Centennial Project. Commissioner Murdock asked about the Lakefront Master Plan and if we thought we would spend $350,000 for it next year. Director Wilson replied this item is when a lot of the details of the plan will be decided which includes the drawings, architectural models, etc. It is a “healthy” budget but it depends on what level of detail we want to make the master plan, including the presentation to the public.
Commissioner Murdock asked about the sailboats, kayaks and paddle boards line item which looks like we plan to spend an amount in future years. Superintendent Bingham replied this item is for the purchase of new equipment for our rental fleet along with other equipment that needs to be replaced. Staff has also discussed purchasing more stand-up paddle boards and kayaks. Commissioner Murdock asked about the Mallinckrodt tree replacement program and that $25,000 has already been spent this year. Superintendent Lambrecht replied that we lost a lot of trees over the last four years and even more need to come down as well.
Commissioner Murdock asked about the range nets line item at the golf course for $90,000 and if it would make sense for that to happen at the end of the master plan instead of the beginning. Director Wilson responded the range nets will be open while construction is taking place so staff chose to budget that for 2013 in the amount of $180,000.
Vice President Graham asked about the blinds and lobby furniture at the CRC totaling $142,000 and if that should be something we push ahead two years or possibly breaking it up into two years. Superintendent Bingham replied the lobby furniture is in very bad shape. Director Wilson added that the blinds in Early Childhood are not keeping the light beams from shining on the children during nap time and these blinds have been there since before we took over the CRC.
President Brault asked for some comments on where we currently stand compared to years past. Director Wilson responded that when staff started putting numbers into 2013 for some of these major projects, they pushed everything back into years where they felt these projects would work best. The items proposed for 2013 are what staff feels needs to be done in order to continue providing our services at the level our patrons expect.
President Brault asked about the $1.2 million for paddle tennis since he thought the last version from the architects was $1.3 million. Director Wilson replied they built those costs into certain management fees between Williams and Olson. However, we did not agree to hire Olson so Superintendent Lambrecht is trying to lower those numbers down to $1.2 million. This number reflects the amount discussed at the time the budget was approved.
Vice President Graham stated that paddle tennis is a project that has concerned him since he thinks it may be something that should be done but not in 2013. He feels very strongly there should be a hard cap and believes we should defer or spread it out over a couple of years since there are so many other projects in 2013.
Commissioner Olvany stated we did not even have paddle tennis on the five-year plan but now it is a $1.2 million project in 2013. In addition, we are reducing are revenues dramatically for the Ice and Golf projects. The paddle tennis vote was initially very close, we do not have a solid plan in place on how we are going to operate this facility, and we do not have a budget for this facility which he believes is acting very aggressively. He would prefer this project be placed in 2014 in order to provide staff a better idea of how much this is going to cost and to determine what the plan will entail.
Commissioner Murdock stated that in respect to the budget, the paddle facility had been increased in size and there were a number of excellent changes proposed. Whether these changes could take place in the original square footage estimate is unclear at this point. Commissioner Olvany stated we approved the facility but never had an actual number. In addition, there had never been a vote from the Board on an actual budgeted amount until today.
Commissioner Murdock stated that when the Board voted 4 to 3 on Paddle Tennis, the $1.2 million cost was not included in the motion. Rather, the Board voted to proceed with hiring an architect to move the project forward and to determine some numbers. Director Wilson stated the $1.2 million estimate came from staff using the square footage and cost per square foot of the facility and could be a few years old. He added there has not yet been an official vote to spend a certain amount of money on this facility. However, if the Board accepts the Budget & Appropriations Ordinance tonight that would in essence be approving that project at that dollar amount. Commissioner Murdock added that as a Board we would still need to accept the bid. The $1.2 million estimate included the construction management fees that will be taken out along with some other contingencies. If those adjustments are made, then we will be close to that $1.2 million cost estimate.
Commissioner Murdock asked Superintendent Bowen if we were operationally prepared for this facility. Superintendent Bowen stated that from his research at other park districts with paddle facilities, they had been approached by an organized group who said here is some money for the courts and then we can use your property. However, we have not yet been approached by a group which is worrisome. However, he does think the District would be able to offer a very good product eventually. It is also difficult to say whether the association model or a park district model would be better. At this point, staff plans on the park district model running the leagues at first since we do not have an organized group. Director Wilson stated if we were asked to build a paddle tennis facility, we can say that we do not currently have a plan. However, the District does currently run several facilities very well and he is confident we will get the plan in place and run the facility whether it opens in two, three or four years.
Superintendent Bowen added there were some developments in regard to liability issues such as liquor. However, we have heard from our attorney that it is not a concern. Director Wilson stated that the recommendation for someone bringing in their own alcohol was that anyone under the age of 21 would be banned as long as no one is selling it or giving it to other people.
Commissioner Benz stated that since our last Parks & Recreation Committee meeting, Glenview opened up a facility which is exactly the same size as our proposed plan which obviously might affect our potential customer base. Director Wilson stated that when the Glenview Park District first contemplated it two years ago, they were trying to get us and Northbrook to run their facility jointly but we declined.
Commissioner Olvany stated that in the paddle tennis budget there is $58,000 budgeted for a part-time professional for 10 months and that we anticipate 180 members on day one. He also researched existing park district programs. This means there were 13 or 14 teams on day one which doesn’t sound like a reasonable assumption to him.
Commissioner Murdock stated he agreed with Commissioner Olvany and Superintendent Bowen. When looking back at the forecasts, it was thought we would need between 110 players to breakeven on an operating basis and to fully fund transfers. However, he now thinks it was a different number. Director Wilson stated that the fees reflected as revenue are only half of what the individual would be paying since it would span across fiscal years. Some money would be allocated to the next year and it is important to remember that we also have additional costs related to the professional. We would need to get it organized, build the membership and form the leagues. There are no overhead or transfers in the budget since this project would be strictly operational.
Commissioner Olvany stated that we do not have a very good handle on how this facility is going to operate and the only thing he does know is that it will cost either $1.2 or $1.3 million. Maybe we should wait until the next fiscal year which he thinks would be a prudent financial decision especially since we will be reducing our revenues at Golf and Ice as well as the Lakefront Master Plan. The Financial Planning Committee indicated that when prioritizing these projects, it should be Ice first, Golf second and Paddle third.
President Brault asked if we had the operational capability to tackle and manage all of these projects with the correct amount of diligence. Vice President Graham added that assuming paddle tennis is a start-up and we do not have the requisite number of people on day one, there will be three non-performing operations within the District and he doesn’t think we have ever been in that situation. He also agrees that we do this project over time since it is basically a timing issue and could put a lot of pressure on staff and in 2013. He feels we could move paddle to 2014 which at this point is not a large capital projects year. This extra time would also help staff to review the issues of the proposed facility such as what type of model we would prefer.
Director Wilson replied that he and Superintendent Lambrecht reviewed the three projects and determined that the golf project would not take up too much of staff’s time since it would be an outside contractor doing the work. However, the ice rink project might take up a significant amount of Superintendents Lambrecht’s and Bowen’s time. Paddle tennis and the level of the project from a construction point of view would not be that difficult and we currently have staff members who have a lot of experience with buildings. From a management point of view, Superintendent Bowen will be overseeing the paddle facility since it is a winter sport and the golf course and pools are closed in the winter.
President Brault stated that in terms of the debt component for the golf course project, staff contemplates $500,000 of revenue for 25% of the project will be paid for by user fees. However, we have not yet decided how these user fees would be structured. Director Wilson responded that in terms of issuing debt, it would be a budget number for 2014. The only timing component is that a hearing is needed for the first year of the debt service extension in February in order to be on the 2012 tax levy.
Director Wilson added that in the past we have had a per-round surcharge related to debt issued for the golf clubhouse when it was replaced which would be the way he recommends we follow this time. However, what we want to do first is to propose this idea to the golfers at our next Golf Committee meeting on December 8 and hear from them if they would rather have a surcharge on their membership or on a per round basis. His recommendation would be the surcharge on a per-round basis which had worked well in the recent past.
Bond Issue Notification Act (BINA) Hearing Discussion
Superintendent Eppelheimer stated the BINA Notification Act will be on the January Board meeting agenda and will include a specific dollar amount. He added that the BINA allows the District a three-year window to execute. This is the process which basically sets the stage before going to the public. Director Wilson stated we are moving the $700,000 into 2014 for the golf project and revising our BINA for the January Board meeting.
President Brault thanked staff and recognized them for their efforts in putting all of this information together. He stated it is a tremendous amount of work to cover all of the aspects of the District. Superintendent Eppelheimer added that staff was very involved this year and they spent a lot of time working on the budget which will benefit them in the coming year.
Old Business: None
There being no further business, the meeting adjourned at 8:35 pm.
MINUTES APPROVED ON JANUARY 14, 2013 AS AMENDED.