FINANCE COMMITTEE MEETING
Tuesday, August 23, 2011 – 6:00 p.m.
I. Call to Order & Roll Call.
Committee Members: Chairman Steve Jasinski, Ald. Michalczyk, Sean McDermott & Others Present.
II. Approval of the Minutes: July 26, 2011.
III. Presentation of monthly Treasurer’s Report for July 31, 2011.
IV. Presentation of quarterly investment report as of July 31, 2011.
V. Presentation of analysis performed related to distributing electronic packets.
VI. Preliminary discussion related to Corporate Fund tax revenues.
VII. Other Business.
MINUTES OF THE FINANCE COMMITTEE MEETING
CITY OF COUNTRYSIDE – CITY HALL
AUGUST 23, 2011 – 6:00 P.M. COUNCIL CHAMBER ROOM
1. The meeting is called to order at 6:00 P.M. Present: Chairman Steven Jasinski, Alderman Karen Michalczyk, Alderman McDermott. Also present: Mayor Ed Krzeminski; City Clerk Sharon Sweeney; Alderman James Jasinski; Alderman Bob Pondelicek, Alderman John VonDrasek; Alderman Straza; City Administrator Gail Paul; Finance Director Steven Drazner.
APPROVAL OF MINUTES
2. The minutes of April 26 and July 26, 2011were approved as submitted.
PRESENTATION OF MONTHLY TREASURER’S REPORT FOR JULY 31, 2011
3. The Treasurer’s Report for July 31, 2011 was presented for review. Staff explained since this is only the third month of the fiscal year the revenues are estimated, but the expenses are on target. There is a water fund balance of $3.2 million. It shows $14 million, but it is not cash. The $14 million includes infrastructure and equipment that is capitalized. When the city was charged an increase from the City of Chicago a few years ago the residents were only billed approximately 50-60 percent of that increase.
PRESENTATION OF QUARTERLY INVESTMENT REPORT AS OF JULY 31, 2011
4. Fin. Dir. Drazner presented the City’s quarterly investment report as of July 31, 2011. The report included all the City’s investments, amount held at Illinois Funds and the Illinois Metropolitan Investment Fund (IMET) but not the operating funds or investments held by the Police Pension Fund. Since the last quarterly investment report, a total of $3.5 million in CD have matured and not renewed due to the low interest rates. All proceeds from these matured CDs have been deposited into the City’s MB Financial operating account.
Recent interest rates for US Treasury Bills, short term municipal bonds and one year certificate of deposit rates were provided. All of the rates are currently lower tha the investment rate of .40% offered by MB Financial.
Staff recommended no new CDs or other investment products be purchased until interest rates begin to recover.
PRESENTATION OF ANALYSIS PERFORMED RELATED TO DISTRIBUTING ELECTRONIC PACKETS
5. An analysis was completed comparing electronic packet cost with the current paper cost and it was found a savings of approximately $614 of paper versus electronic. The approximate cost of currently assembling packet with paper is $6,928. The process will continue of disseminating the packet in paper and an electronic agenda and minutes will be emailed. The issue will be discussed again at budget time.
PRELIMINARY DISCUSSION RELATED TO CORPORATE FUND TAX REVENUES
6. Prior to 2008 the City of Countryside relied upon the standard 1% municipal retailers’ occupation tax (sales tax) collected by the Illinois Department of Revenue. With the downturn of the economy in 2008, several car dealerships as well as a large electronics retail store closed. During this time, the city enacted new taxes to replace the general deterioration of sales tax revenue.
According to the Government Finance Officers Association (GFOA) best practices, a minimum of two months of operating expenditures should be maintained in unreserved fund balance. Since Countryside relies primarily on revenue sources which can have large fluctuations it is recommended that the absolute minimum fund balance be set to six months. At current budgeted expenditures, six months reserves would be approximately $6 million. Any significant reduction or cut to revenue could have an extremely detrimental effect to city operations.
Mayor Krzeminski referenced his campaign brochure. The residents of countryside were not told they would receive a rebate of all of their taxes; only their property taxes.
Discussion on any potential primary revenue reductions or tax repeals should begin as soon as possible to direct staff prior to the beginning of the FY 13 budget season.
7. Request for Proposal (RFP) for banking services was distributed to a total of eighteen banks to assure the city is receiving the most competitive earnings yield and fees. The eight responses received were reviewed and staff recommended the city continue with the city’s current banking institution, MB Financial.
The committee members recommended approval of a five year term with MB Financial.
8. Myor Krzeminiski stated that staff should be verifying that all Countryside businesses are listing Countryside to receive their sales tax.
9. ld. Von Drasek recommended an article in the newsletter informing the residents of the city’s financials.
10. Nofurther discussion. Motion and seconded to adjourn at 7:00 p.m.
Dated: ______________________ __________________________
Steven Jasinski, Chair