FINANCE COMMITTEE MEETING
Tuesday, April 26, 2011 – 6:00 p.m.
I. Call to Order & Roll Call: Committee Members: Chairman Jasinski, Ald. Michalczyk, Smetana; & Others Present
II. Approval of the Minutes: March 2, 2011 & March 22, 2011.
III. Presentation of monthly Treasurer’s Report for period ended March 31,2011.
IV. Consider recommendation to execute an agreement with World Data Systems for merchant processing services.
V. Informational update on Flagg Creek Golf Course profit sharing for the Fiscal Year ended April 30, 2010.
VI. Consider recommendation to approve closing the Business District Fund and transferring remaining fund balance to the General Fund for debt service payments.
VII. Consider recommendation to allow staff to prepare a request for proposal (RFP) for banking services.
VIII. Consider recommendation to approve a resolution ceding the City’s allocated 2011 bond volume cap totaling $549,575 to the Upper Illinois River Valley Development Authority in exchange for a 1% fee.
IX. Consider recommendation to approve a supplemental appropriation resolution for the General, Motor Fuel, Business District and Commercial TIF Funds.
X. Other Business.
MINUTES OF FINANCE COMMITTEE MEETING
CITY OF COUNTRYSIDE – CITY HALL
APRIL 26, 2011 – 6:00 P.M. CHAMBER ROOM
1. Meeting called to order at 6:00 P.M. Present: Chairman Steven Jasinski, Alderman Michael Smetana (6:30 p.m.). Also present: Mayor Robert Conrad (6:20 p.m.); Assistant Administrator Sharon Peterson; Finance Director Steven Drazner; City Attorney Erik Peck; Mayor Elect Ed Krzeminski; Alderman Elect James Jasinski.
Absent: Alderman Karen Michalczyk.
Approval of the Minutes
2. The minutes of March 2, 2011 and March 22, 2011 were approved as submitted.
PRESENTATION OF MONTHLY TREASURER’S REPORT FOR PERIOD ENDED FEBRUARY 28, 2011
3. F.D. Drazner presented the Treasurer’s Report ending February 28, 2011. It was reported the General Fund, Motor Fuel Tax and Water Fund is doing well.
Chief Ruth will forward a report to the committee in response to the discussion on red light camera intersections. The report will include the number of accidents currently and prior to the red light camera installations.
CONSIDER RECOMMENDATION TO EXECUTE AN AGREEMENT WITH WORLD DATA SYSTEMS FOR MERCHANT PROCESSING SERVICES
4. F.D. Drazner completed an analysis of merchant processing services that would provide both online and in-house credit card/debit card processing services. Following the analysis, the recommendation is to enter into an agreement with World Data Systems, affiliated with the State Bank of Countryside. The fees are .07 per transaction, $189 annual fee and a Gateway set up fee of $50. There are other costs, but these are the primary costs. This would be a 3-year contract with an early termination fee of $595 that will be waived. All that is needed for termination of the contract is a written notice by the City.
If a convenience fee is assessed it is passed on to the customer for an on-line transaction. It is a fixed dollar amount on average $2.00. This amount covers the .07 transaction fee, but can be changed.
For in house transactions a convenience fee cannot be assessed. The fees will be variable depending on the type of payment, card brands and volume of transactions. It is estimated the total annual cost may be $25,000 – $50,000 depending on whether the City absorbs the cost of the online payments.
The committee members recommended a $2.00 convenience fee for on-line transactions and approval to the City Council.
INFORMATIONAL UPDATE ON FLAGG CREEK GOLF COURSE PROFIT SHARING FOR THE FISCAL YEAR ENDED APRIL 30, 2010
5. On April 1, 2011, the City received a partial payment from the Flagg Creek Golf Course of $84,000 for FY 2010. The amount is 80% of its fifty percent share of the unaudited cash balance (less withheld reserves) recorded on the Flagg Creek Golf Course books as of April 30, 2010 with the balance to be paid upon finalizing the annual audit. F.D. Drazner reported the final audit report for Flagg Creek Golf Course was prepared and the City is expecting a final payment of $26,429 within the next month.
CONSIDER RECOMMENDATION TO APPROVE CLOSING THE BUSINESS DISTRICT FUND AND TRANSFERRING REMAINING FUND BALANCE TO THE GENERAL FUND FOR DEBT SERVICE PAYMENT
6. F.D. Drazner reported the Business District Fund was created as a consequence of the presence of blight within the district which inhibited growth and development. The City then adopted the Commercial Tax Increment Financing (TIF) District. By doing so the Business District was converted into a TIF district to provide for additional financial incentives and to enhance redevelopment efforts. The total cash remaining in the Business District Fund is approximately $415,000. Beginning with the new fiscal year, the Business District Fund will no longer be required since all TIF eligible expenses will be charged to the TIF Fund, and expense related to the Series 2008 bond issue has been budgeted in the General Fund.
Staff recommended transferring the $415,000 to the General Fund to be used to pay the debt service on Series 2008 Bonds and closing the Business District Fund as of April 30, 2011.
The committee members concurred with the staff recommendation to close the Business District Fund and transfer the remaining fund balance to the General Fund for debt service payment.
CONSIDER RECOMMENDATION TO ALLOW STAFF TO PREPARE A REQUEST FOR PROPOSAL (RFP) FOR BANKING SERVICES
7. F.D. Drazner requested approval to prepare a Request for Proposal (RFP) for banking services. The City’s current banking institution is MB Financial. The current agreed upon interest rate and fee schedule with MB Financial expired on March 31, 2011 and the bank is proposing an increase to some of their fees and a reduction to their earnings interest rate.
The committee members recommended approval to prepare a Request for Proposal (RFP) for banking services and make a recommendation to the committee.
CONSIDER RECOMMENDATION TO APPROVE A RESOLUTION CEDING THE CITY’S ALLOCATED 2011 BOND VOLUME CAP TOTALING $549,575 TO THE UPPER ILLINOIS RIVER VALLEY DEVELOPMENT AUTHORITY IN EXCHANGE FOR A 1% FEE
8. On an annual basis the Federal government allocates a certain dollar amount to each state for tax exempt financing. In Illinois, the state allocates that money to municipalities on a per capita basis. For the calendar year 2011, the per capita amount of the bond volume cap is $95.00 and based on Countryside’s population of 5,785, the City’s total bond volume cap calculates to $549,575. These funds can be offered to a Countryside business that needs a low interest loan, but because the value is under 1million it makes sense to give this amount to another agency. If the bond cap is not issued by May 1, 2011 it reverts back to the State of Illinois.
The only agency who contacted the City was Upper Illinois River Valley Development Authority (UIRVDA). This agency will pay the City one-percent or $5,495 if it issues a tax exempt bond to a borrower. UIRVDA assists business development and expansion by providing low interest financing opportunities.
Staff recommended adopting a resolution to cede the funds to UIRVDA in exchange for $5,495 if the ceded bond cap is issued to a borrower.
CONSIDER RECOMMENDATION TO APPROVE A SUPPLEMENTAL APPROPRIATION RESOLUTION FOR THE GENERAL, MOTOR FUEL, BUSINESS DISTRICT AND COMMERCIAL TIF FUNDS
9. State of Illinois law requires municipalities appropriate sufficient funds during the fiscal year to cover all expenditures incurred. Special circumstances resulted in the City spending over the original appropriated amounts in certain Funds. In the General Fund, an existing economic development agreement was amended and a park was purchased. In the Motor Fuel Fund a street resurfacing project was approved. In the Business District Fund the fund will be closed and transferred to the General Fund. Funds in the Commercial TIF Fund are reclassified from the Business District.To fully comply with the Illinois statute, staff recommended approving a supplemental appropriation resolution for the described funds.
Committee members recommended approval of the supplemental appropriation resolution.
10. Committee members discussed and recommended approval of a resolution opposing the reduction of state distributed revenue.
11. No further discussion. Motion and seconded to adjourn at 6:37 p.m.
Steven Jasinski, Chair