2020 Budget Q and A

2020 Budget Q & A
Posted on 11/08/2019
Finance

In preparation for the Village Board’s review of the proposed 2020 Budget on Tuesday, November 12 at 7 p.m. and Thursday, November 14 at 7 p.m. in the Board Room, Village staff has provided responses to the following questions submitted by residents pertaining to the proposed budget:

1. Question (budget@vah.com): Is there money to pay someone to supervise tree plantings so trees are planted in accordance with industry standard specifications? Also, is there money in the budget to trim trees 4 or 5 years after planting?

Answer: The Village’s Forestry & Grounds Unit is manned by certified arborists responsible for the maintenance and trimming of 36,000 parkway trees, and the selective removal and replanting of a sustainable variety of tree species. The Forestry Unit presently replaces over 800 parkway trees annually. The Village uses a 5-year tree trimming cycle, although new plantings may require earlier maintenance or trimming. The unit also oversees contracts for tree trimming and removal, disease control, mowing and landscape of 59 acres of land on 43 Village owned sites, and 65 acres of public parkway at 56 different locations.

2. Question (Next Door): If the overall budget is decreasing by about 9.7%, why wouldn’t our exorbitant property taxes decrease by that amount?

Answer: The Village’s total 2020 Budget compared to the 2019 Budget is decreasing by about 9.7% or $19 million, due to decreases in the Village’s debt and capital costs. Last year’s budget included a onetime expense of $9.5 million to pay off the 2011 bond issue through a refunding. The 2019 Budget also included additional onetime expenses for the new Police Station and the Cypress Detention Basin using reserves. All of these larger than normal expenses in 2019 account for most of the difference in total expenses between the 2019 and 2020 Budgets. The large prior year expenses did not affect property tax related operations such as Police, Fire, Health, Building & Life Safety, and Public Works. These ongoing services are paid for through property, sales, and income taxes, as well as through a variety of licenses, fines, and fees. Of note, the Village only represents 12.6% of an average homeowner’s property tax bill, whereas school districts comprise about 67%. In the State of Illinois, school districts are separate governmental entities that are governed by their own Boards.

3. Question (Derived from Facebook comments): What is the reason for the water and sewer rate increase?

Answer: The Village has an aging water storage and distribution system. The life expectancy of a water main is 100 years, and the average age of the Village’s water mains is 65 years. In addition, the water mains that were installed during the Village’s expansion in the 1960’s are aging prematurely. Water main breaks are used as an indicator of system condition. According to the American Water Works Association, water utilities should strive for less than 25 to 30 water main breaks per 100 miles of water main per year. Due to the advanced age and condition of the Village’s water mains, the Village is presently averaging 88 breaks per 100 miles of water main. To address this issue, the Village has developed several programs over the years including an aggressive leak detection program and a surge suppressor program. The Village also continues to phase in the installation of variable frequency drives at our booster stations. Although these programs have been successful, they are preventative measures only, and aid in extending the life of our water mains. As such, these efforts are not a substitute for needed water main replacement. To attain the industry standard of a 1% water main replacement level, the 2020 Budget shows an increase in the annual water main replacement program from $2.5 million to $4.5 million. To implement this increased level in 2020 and on an annual basis thereafter, utility rates will increase over the next five years. In addition, $8.5 million of an upcoming bond issue will be used toward the water main replacement program. By taking these steps, the Village will be on a sustainable path to maintain and replace the Village’s water and sewer infrastructure.

Review the Proposed Budget for 2020 and the Budget Variances by Department, a document listing and explaining budget variances by Department for the proposed 2020 Budget.