FINANCE COMMITTEE MEETING
Tuesday, October 26, 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: September 27, 2011.
III. Consider recommendation to accept the Fiscal Year 2011 Annual Audit and Management Letter. (Sikich in attendance to provide short presentation and answer any questions).
IV. Presentation of monthly Treasurer’s Report for September 30, 2011.
V. Consider recommendation to proceed with Referendum for Electric Aggregation Program and Elect to Work with the Northern Illinois Municipal Electric Cooperative.
VI. Discussion item related to Flagg Creek Intergovernmental Agreement between Pleasant Dale Park District and City.
VII. Discussion item to review preliminary Fiscal Year 2013 General Fund Budget and discuss potential Property Tax Levy.
VIII. Other Business
MINUTES OF THE FINANCE COMMITTEE MEETING
CITY OF COUNTRYSIDE – CITY HALL
OCTOBER 26, 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, Jasinski, Von Drasek, Straza. Also present: Mayor Ed Krzeminski; City Clerk Sharon Sweeney; City Administrator Gail Paul; Finance Director Steven Drazner, Police Chief Ruth, DPW Essig, Deputy Clerk Bartelt, ESDA Norman.
APPROVAL OF MINUTES
2. The minutes of September 27, 2011 were approved as submitted.
ACCEPTING THE FY’11 AUDIT AND MANAGEMENT LETTER
3. Finance Dir. Drazner briefly referred to his memo summarizing the financial report and management letter. Brian LeFevere of the auditing firm, Sikich spoke on the various points of the audit and stated there was nothing of note to bring to Council’s attention. He stated that a 6 to 9 month balance is recommended for a healthy reserve, but is a choice the Council ultimately makes. LeFevere touched upon other points in the audit that can be seen in the document. He noted that the City is making regular contributions to the Police Pension Fund. Ald. Straza noted that we were sued and required to make up pension funding payments. The Mayor inquired about the management letter comment regarding City departments providing all grant documentation to the Finance Department and staff stated that this would be addressed.
Both the Administrator and Finance Director were complimented on the accomplishment to put Countryside in the elite category of receiving the Certificate of Achievement Award for the past several years.
MONTHLY TREASURER’S REPORT
3. The Treasurer’s Report for September 30, 2011 was presented for consideration. Fin. Director Drazner commented that revenues from fines are coming in lower and the Department of Commerce and Economic Opportunity (DCEO) grant project may not begin and therefore be reimbursed until next fiscal year. Legal fees are higher due to unique situations. Report to be approved at the council meeting on October 26, 2011.
CONSIDERATION OF A REFERENDUM FOR AN ELECTRIC AGGREGATION PROGRAM & ELECT TO WORK WITH NO. ILL. MUNICIPAL ELECTRIC COOPERATIVE
4. Fin. Dir. Drazner presented the recommendation to bring forth a referendum which would allow the City to participate in an electric aggregation opt-out program which may lower electric bills for residents and qualified small businesses in town. To satisfy the deadline requirements to submit the referendum ordinanceto Cook County, City Council would need to approve such ordinance so it may be filed with the County in time to allow it on the March 2012 ballot.
Discussion ensued concerning joining WCMC electric aggregation pool rather than using NIMEC as a consultant. The Committee agreed to postpone selecting a broker/consultantbut that staff should still move forward with adopting the ordinance to approve a referendum. Mr. Drazner will investigate the WCMC aspect more, but proceed with the adoption of the referendumfor the March 2012 ballot. .
PROPOSED CHANGES TO THE FLAGG CREEK INTERGOVERNMENTAL AGREEMENT
5. Mr. Drazner referred to his recommendation whereby he summarized the suggested changes. The main issue involved amending the intergovernmental agreement which would require Flagg Creek to use the same auditing firm as the City to receive these reports in a timely manner. Mr. Drazner stated that with the Committee’s permission, he would prepare a draft agreement for review at the next Committee meeting. This is only the first step, as any changes to the existing agreement would need both City Council and Park District approval.
PRELIMINARY REVIEW OF THE FY13 GENERAL FUND BUDGET & POTENTIAL PROPERTY TAX LEVY
6. Finance Director Drazner referred to the memo reviewing the preliminary Corporate Fund FY13 Budget. He stated that currently the proposed budget has a deficit of approximately $825,000. The FY13 budget included property tax revenue of $1,474,828 to cover the GO bond debt service for 2008,several requested capital projects totaling $860,000, and grant funded projects having a City cost share of $361,000. By removing one police officer from the General Fund to the Drug Forfeiture fund reduces the preliminary deficit from $825,000 to $740,000.
Council’s attention was directed to the FY13 Capital Projectdetail report.. First amount questioned was the $25,000 vehicle replacement. It was decided to transfer one of the police cars over to ESDA rather than as a trade in. Next item was the IT Fund. It was decided to remove the $17,000 for laptops.
Police Chief Ruth stated that he could transfer the squad cars to the ETSB Fund with Council approval. The $29,500 expense for the CAPERS RMS can also be moved to the ETSB fund. He further explained that the speed trailer is unable to get replacement parts, so wished to replace it for $15,000. The $60,000 expense for squad room improvements can be transferred to the drug forfeiture fund, explaining that this area is used 24/7.
Next Jim Essig addressed the replacement of old equipment as well as infrastructure improvements such as drainage and street resurfacing He further informed the committee that the State purchase agreement for salt is set for $6.80 per ton. The Committee agreed to leave the public works capital projects in the budget until further discussion takes place at the next meeting.
The Recreation Department requested a capital project costing $90K for lighting the softball field. Committee agreed to remove this from the budget.
Based on the decisions by the Committee on capital projects, staff calculated that the deficit was reduced to approximately $509K but this included the property tax levy assessment for series 2008 bond debt service.
Treasurer Jasinski stated the Council needs to decide if abatement will be implemented. The $5 million bank loan was raised. The Administrator explained that about $4 million of that would be needed within the next few months and the remainder next Spring. . There was an inquiry on if Mr. Drazner included additional sales tax revenue for the new Harley dealership and he stated that it was factored into the budget. . Treasurer Jasinski commented we have approximately eight months of reserves in the General Fund. It was questioned if city should go down to six months reserve. Ald. VonDrasek wanted to keep reserve at same level until the revenues start coming in. Ald. Jasinski commented if a municipality relies on sales tax it is not advisable to drop to the minimum recommended reserve level. The Mayor felt that with the big restaurant chains coming in a significant amount of new sales tax could be coming in. A questions was raised if enough sales tax was received could they pay off the 2008 bonds early. Staff stated that the earliest call date on those bonds would not be until 2018? Another question was asked if a lower the reserve would cause the City’s bond rating to suffer? Staff replied that this is a possibility. Ald. Michalczyk felt no property tax rebate at this time. Further thought is needed.
It was agreed to have another Finance Committee meeting before the December meeting. The schedule will be: Finance meeting 11-15-11; Special Council meeting on 11-30-11
7. No further business to discuss. Motion and seconded to adjourn at 7:25 p.m.
Dated: ______________________ __________________________
Steven Jasinski, Chair