Finance Commission

Village of Mount Prospect Finance Commission Regular Meeting Agenda 50 S. Emerson Street Mount Prospect, IL 60056 February 27, 2025 3rd Floor Executive Conference Room 7:00 PM 1. Call to Order 2. Approval of Minutes 2.1. January 23, 2025 3. Citizens To Be Heard 4. Old Business - None 5. New Business 5.1. 2025 Work Plan 5.2. Budget Amendments (Carryover Items0 5.3. Elk Grove Rural Fire Protection District 5.4. Financial Updates 6. Other Business 7. Chair Report 8. Finance Director's Report 9. Next Meeting - To be canceled 10. Adjournment NOTE: ANY INDIVIDUAL WHO WOULD LIKE TO ATTEND THIS MEETING BUT BECAUSE OF A DISABILITY NEEDS SOME ACCOMODATION TO PARTICIPATE SHOULD CONTACT THE FINANCE DIRECTOR’S OFFICE AT 50 SOUTH EMERSON STREET, MOUNT PROSPECT, ILLINOIS 60056 OR BY PHONE AT 847-392-6000. Page 1 of 14  Finance Commission Meeting Minutes Thursday, January 23, 2025 Village Hall Council Chambers Conference Room 50 S Emerson Street Mount Prospect, IL 60056 i. Call to order The meeting was called to order at 7:00 P.M. Commission members present: Mary Rath, Sam Cannizzaro, Sinan Khamo, Ken Arndt, Vince Grochocinski, Don Ocwieja, and Edward Derfler StaƯ Present: Director of Finance Amit Thakkar, Deputy Director of Finance Jennifer Fitzgerald, and Assistant to the Village Manager Josh Allain ii. Approval of minutes a. Motion by Ken Ardnt, seconded by Don Ocwieja, to approve the minutes of the Finance Commission meeting of October 24, 2024. Edward Derfler called a voice vote. Motion passed unanimously iii. Citizens to be heard None iv. Old Business None v. New Business 5.1 Welcome – New Finance Commissioners Director Thakkar welcomed all new members of the Commission to the meeting and thanked them for the interest in village finances and for accepting the responsibility their position holds. New members contact information was shared amongst all members. Corrections and updated were made to new and existing members contact information. 5.2 Selection of Vice Chair Director Thakkar explained that the Vice Chair position and the Secretary position are appointed annually. A basic overview of responsibilities was discussed. Edward Derfler oƯered to accept the position of Vice Chair. Mary Rath seconded the appointment of Edward Derfler as the Finance Commission Vice Chair Mary Rath called a voice vote. Motion passed unanimously. Page 2 of 14 5.3 Selection of Secretary Director Thakkar repeated his earlier statement that this position is not held indefinitely, only for one year. Don Ocwieja oƯered to accept the position of Finance Commission Secretary. Edward Derfler seconded the appointment of Don Ocwieja as the Finance Commission Secretary. Ken Arndt called a voice vote. Motion passed unanimously. 5.4 2025 Work Plans Director Thakkar explained that the proposed workplan for 2025 is not “set in stone” and can be adjusted as need be. The workplan was then explained to the Committee and the members were walked through the timeline of what the year will consist of. The possibility of any meeting dates changing was also brought up. Ken asked when the joint meeting with the Village Council will occur. It was explained to Ken that the meeting with the Council will occur during the first quarter of the year. That meeting will provide an opportunity for the Board and the Commission to meet and discuss the full budget. Ken asked about the possibility of meeting with Directors in the Village and having them present at Finance Commission meetings. Director Thakkar was supportive of this idea and will look into it. 5.5 Finance Updates/Monthly Report The Committee had it explained to them that there is a three-month delay in all revenues, and that this can impact the monthly budget review. Director Thakkar explained to the Committee that the Finance Department will be meeting with auditors soon. The diƯerences between variable revenues and known revenues, the state of Village funds, and the background of many other budget items were explained to the Committee by Director Thakkar and Deputy Finance Director Jennifer Fitzgerald. Edward asked how incomes and expenses for the Village are looking for 2025. Director Thakkar explained that revenues for 2025 do not reflect what will be spent in 2025 and that this will impact what is being spent in the following year. Director Thakkar explained the Village’s investment incomes posted in the Monthly Report as well as Village practices. It was reported that investment incomes have been outperforming initial estimations. Ken asked about the Incomes from Dispensaries as well as the potential upcoming changes to the grocery tax. Director Thakkar explained that the revenues from dispensaries has been significantly lower then estimates that were originally given to the Village, and this is the situation for most other communities. Director Thakkar explained that the Village will be monitoring changes related to the change in grocery taxation from Page 3 of 14  the State. It was explained that their will be a local option that the Village would be able to implement. The Village will be monitoring all taxes related to groceries and determine what a loss in the grocery tax would mean for the Village. Ken also asked about revenues the Village is seeing related to slot machines. Director Thakkar explained that these numbers are listed in the monthly report. It was also explained that these revenues can only be spent for specific purposes. Mary Rath asked about the licensing that goes into slot machine implementation. The process for how business register for slot machines was explained to Mary. Ken asked about impacts the Village has seen from removing the vehicle stickers. Director Thakkar explained the changes the village has seen by removing the vehicle stickers. Part of this included the cost benefit analysis the Village has gone through to determine that it was costing more to administer vehicle stickers, then it did to sell the vehicle stickers. Vince Grochocinski asked about the emergency fund transfer list in the monthly report. Director Thakkar confirmed that the transfer was the item that the Finance Commission had previously discussed in 2024. Vince also asked about the Village’s water interconnect project. It was confirmed that the project is moving along as planned. Ken asked Director Thakkar about the Village’s use of ARPA funds. It was explained that these funds were used for one-time purchases and water system improvements. Funds were also given to Community Development and Public Works for special expenses. Director Thakkar finished his presentation of the monthly report. Mary asked about the COLA’s that staƯ will be receiving. Director Thakkar explained how the Village handles COLA and what was considered when allocating this to staƯ. The Committee talked about the issues residents have been experiencing with water bills. vi. Any Other Business None vii. Finance Directors Report None viii. Next Meeting – February 27, 2025 The next meeting will be held on February 27,2025 ix. Adjournment Motion by Commissioner Arndt, seconded by Commissioner Derfler, to adjourn the meeting. Mary Rath called a voice vote The motion was carried unanimously Page 4 of 14  The meeting adjourned at 7:56 P.M. Minutes Compiled By: Josh Allain, Asst. to the Village Manager Page 5 of 14 Village of Mount Prospect Finance Commission Work Plan - 2025 February 27, 2025 - Financial Updates - Budget Amendments - Elk Grove Rural FPD updates March 27, 2025 - Possible cancellation April 15, 2025 - 2023 Yearend Analysis - Q1-2025 Financial Updates - Pension Fund Updates and Strategies May 22, 2025 - Financial Updates - Human Services – Needs Assessment and Transit Study Updates - Strategic Planning Updates (If possible) June 26, 2025 - Audit & ACFR 2024 - Budget Expectation from the Finance Commission - Financial Updates and Debt Service Updates/Credit Rating Strategies July 24, 2025 - Possible cancellation - Financial Updates August 28, 2025 - Q2-2025 Financial Updates - Community Investment Plan – FY 2026-2030 September 25, 2025 - Finance Commission Budget Preview – Operating Budget 2026 October 23, 2025 - Finance Commission Recommendation – 2025 Levy, 2026 Budget, Abatements November 27, 2025 - Cancelled December 25, 2025 - Cancelled Page 6 of 14 VILLAGE OF MOUNT PROSPECT MONTHLY FINANCIAL REPORT December 31, 2024 Prepared By Amit Thakkar, CPA Director of Finance Page 7 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 TO: VILLAGE PRESIDENT, BOARD OF TRUSTEES, AND FINANCE COMMISSION FROM: AMIT THAKKAR, DIRECTOR OF FINANCE DATE: FEBRUARY 11, 2025 SUBJECT: MONTHLY FINANCIAL REPORT FOR THE MONTH OF DECEMBER 2024 In an effort to provide the most transparent and relevant financial information in a timely manner, we are submitting this report herewith. The report contains relevant data and analytical information for the Village's financial affairs. The report is prepared based on the most recent available financial information (internal and external). The report is divided into five sections, including a) Cash and Investments, b) Revenues, c) Expenses, d) Fund Balance Analysis, and e) Other Items that may contain relevant new issues and items representing and impacting the Village's financial interest and well-being. a) Cash and Investments The Village of Mount Prospect maintains a sufficient liquid cash balance at various banking and investment institutions for the smooth operation of the Village's day-to-day activities. The remainder of the cash assets are invested in multiple interest-earning accounts and investment options in accordance with the Village's Investment Policy. As of December 1, 2024, the beginning Cash and Cash Equivalents totaled $98.2 million. During the month, the Village collected cash receipts totaling $8.5 million. The investment income for the month totaled $357,212. The monthly payroll cost was $2.2 million, and accounts payable were paid in the amount of $6.7 million. The inter-fund activity increased the cash position by $2,347, while other disbursements totaled $16,494. During the month under review, investments totaling $2.8 million matured. As of December 31, 2024, the Village's Cash and Cash Equivalents totaled $100.9 million. As of December 31, 2024, the Village has $29.9 million invested in long-term investments, including U.S. Treasury, AAA+ rated money-market funds, and FDIC-insured CDs. The Cash, Cash Equivalents, and Investments totaled $130.8 million as of December 31, 2024. 2 Page 8 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 The table below summarizes the cash, cash equivalents, and investments by fund type as of December 31, 2024. In addition to the funds summarized above, the Village of Mount Prospect has $1,191,417 in escrow accounts under the umbrella of Other Trust and Agency Funds. b) Revenues The data below summarizes the revenue recognized by the Village through December 2024. The above amounts do not represent all the revenues to be recognized for the period under review. Certain state taxes, such as sales tax, home rule sales tax, and a few other taxes, will be received by the Village January 2024 and later. Additionally, during December 2024, the Village received the following revenues from the State, which relate to a period prior to December 2024. These amounts are distributed after the State administrative fee deductions of $10,724. The actual revenue recognized by the Village totaled $169.9 million through December 2024, representing 103.0 percent of the annual budget. The overall recognized revenues are trending higher compared to the 3 Page 9 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 2024 collection for the same period, except for a few categories as discussed below. Property Taxes: The Village's total levy for the year is $19,469,004. The total property tax budget, including TIF increments, is $22.0 million. The Village collected $24.4 million in property taxes through December 2024. The property taxes are due in two installments, one in March and one in August. This year, the Village received its second installment on time from Cook County Treasurer’s Office. Last year, the County significantly delayed the second installment. The collected property taxes include higher-than-expected TIF increments for the Prospect & Main TIF district. Also, the 2023 amount is after all the yearend adjustments including deferred revenue adjustments, while the same is still pending for the year 2024. Overall, reduction in the levy by 4.8 percent is the main reason for a decrease in property taxes. Other Taxes: The category of Other Taxes includes all the taxes enacted per local ordinances, including Home Rule Sales Tax, Hotel/Motel, Food and Beverage, Municipal Motor Fuel Tax, Utility Taxes, etc. As the State collects some of these taxes, there is a three-month lag between the actual sales and the tax remittance. In addition, all the local economic activities for December are reported in January or later. The YTD tax collection under this category totals $14.5 million. Currently, the unadjusted amount shows a decrease of $540,378 or 3.6 percent compared to last year’s collection. With yearend adjustments and accruals, the amount to be reported under this category is expected to surpass last year’s collection by 6% or more. The Village collected $1,736,309 in Food & Beverage Taxes and $1,016,083 in Real Estate Transfer Taxes through December 2024. The same was $1,605,888 and $956,954 last year, respectively. The Food & Beverage Tax reflects an increase of 8.1 percent over last year’s collection, while the Real Estate Transfer Tax reflects an increase of 6.2 percent over last year's collection. Intergovernmental Revenue: This category includes all the State shared taxes, including State Sales Tax, Income Tax, Use Tax, Motor Fuel Tax, and Grants. The Village is vigilantly tracking all intergovernmental revenues. As most of these taxes are collected by the State, there is a three- month lag between the actual sales and the tax remittance. The Village recognized $54.2 million in intergovernmental revenues through December 2024. The amount does not represent the total revenues to be recognized during the month, as significant revenues will be reported and collected after December 2024. The overall recognized revenues are trending higher by $1.3 million, or 2.5 percent, compared to the amount recognized last year for the same period. The 2023 amount reflects the final audited amount while 2024 amount is unadjusted and subject to accruals and yearend adjustments. The State income tax revenue is recognized on a cash basis in the month of receipt and represents a 6.3 percent growth compared to the 2023 collections. The sales tax amount for 2024 represents sales tax from January to November 2024. The December sales tax revenue and data will be available in March 2025 and the yearend adjustments will be performed once received. Licenses & Permits: The Village collected $2.0 million in license and permit fees through December 2024. This amount is trending lower by $71,538, or 3.4 percent, compared to last year’s 4 Page 10 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 collection. The overall collection represents 99.6 percent of the annual budget for the category. Charges for Services: The Village collected $41.8 million in charges for services through December 2024. The amount represents 98.9 percent of the annual budget for the category, and it is trending lower by $546,529, or 1.3 percent, compared to last year’s collection. The expected collection for the category was initially higher. However, due to timing issues with the ambulance billing fees, especially for the GEMT (Ground Emergency Medical Transport), the amount reported is significantly lower compared to the 2023 collection. This timing issue is expected to be resolved in the near future. Investment Income: The Village earned $6.5 million in investment income through December 2024, which represents 359.1 percent of the category's annual budget. The recognized revenue is trending higher by $916,230 or 16.3 percent, compared to last year’s amount. Other Categories: All other revenue categories have collectively generated $26.5 million through December 2024. The amount mainly includes $604,800 in fines and forfeitures, $4.1 million in other revenues, $921,131 in reimbursements, and $20.9 million in Other Finance Sources (inter-fund transfers and other misc. items). The Village executed various budgeted inter-fund transfers through December 2024 as below. 5 Page 11 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 c) Expenditures The data below recaps the expenditures incurred through December 2024. The above amounts do not include the expenditures for the Pension Funds, as they are separate entities. The above amounts are unaudited and subject to change with accrual/audit adjustments. Personnel Costs: The year-to-date expenditures for Personnel Costs, including benefits, are $59.3 million, or 95.7 percent of the annual budget for the category. The amount is trending higher by $2.8 million or 5 percent compared to last year’s amount, mainly due to higher pension contributions for the year and cost- of-living adjustments for wages. The overtime expense through December 2024 totaled $3.5 million, while at the same time last year, it totaled $2.7 million. The Village is staffing the Fire Station 11 engine on an overtime basis. Additionally, an increased number of worker’s compensation claims has resulted in higher overtime for the year. The above amount is before the yearend and audit adjustments. The yearend accruals and adjustments will increase the reported amount and will bring it close to 98% of the budget. Contractual Services: This category covers most contractual services, including some large line items, such as JAWA water purchases, budgeted and grant-funded engineering studies, and other contracts. The Village incurred $37.9 million in contractual services, equating to 93.5 percent of the annual budgeted amount for the category. The expenditure amount is trending higher by $283,171 or 0.8 percent, mainly due to inflationary and timing issues. Supplies: Through December 2024, the Village spent $2.2 million on supplies, which totaled 81.1 percent of the annual budget. The commodities and supplies are on track as expected and marginally trending higher by $81,457 or 3.9 percent, mainly due to inflationary adjustments. Capital Improvements: The Village initially had $36.0 million in approved capital improvement projects for 6 Page 12 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 2024. In March 2024, the Village Board approved a budget amendment to carry over $13.8 million in unfinished projects from 2023 to 2024. The Village has spent $30.9 million on capital improvement projects through December 2024. The remaining budget amount is expected to be carried over to 2025 for unfinished projects and projects with timing issues. Debt Service: Per the established debt service schedules, the Village's bond payments are due on June 1 and December 1. The Village processes these debt service payments a few days before due dates and keeps sufficient funds to execute them. The Village has paid $8.6 million in debt service expenditures through December 2024. Other Expenditure: The Other Expenditure category includes expenditures not categorized above. The budget for this category includes $21.3 million in inter-fund transfers and $4.4 million in other expenditures. The Village has incurred $24.1 million in expenditures under this category through December 2024. The expenditures include $20.8 million in inter-fund transfers and $3.3 million in other expenditures. d) Fund Balance Analysis: The fund balance is an essential tool to check the fiscal health of any governmental organization. The data below summarizes the Village's monthly unassigned/unrestricted general fund reserves. The fund balance data is unaudited. * Fund Balance is unaudited, and subject to yearend adjustments and other changes. Includes only unrestricted fund balance for the General Fund. The above fund balance analysis is not audited and is subject to change. As of December 31, 2024, the unrestricted fund balance is estimated at $39.7 million, which equates to 43 percent of the annual budget. Not all revenues and expenditures for the fiscal period are recognized, and the above amount will change as and when yearend accruals and adjustments are added. The yearend accruals and adjustments will further improve the ending unrestricted fund balance. The year-to-date financial activities have resulted in a deficit of $3.9 million. In 2023, the Village revised its Fund Balance Policy, and the new target is set to maintain the fund balance between 30 and 50 percent. Besides that, an Economic Emergency Fund was established in 2023, and a transfer of $6.5 million was executed as initial funding from the General Fund reserves. The Village funded the second installment of $6.5 million for the Economic Emergency Fund in July 2024 from the 2023 audited surplus (General Fund), reducing the overall fund balance starting in July 2024. Economic Emergency Fund The Village Board authorized the creation of a new Economic Emergency Fund in May 2023 and approved a budget amendment funding $6.5 million from the General Fund reserves as an initial funding amount. This transfer was executed in May 2023 and invested in June 2023 in a AAA-rated I-prime account. The table below summarizes the Economic Emergency Fund activities for the month. During July 2024, the Village funded the second installment of $6.5 million. Also, the Economic Emergency Fund earned an 7 Page 13 of 14 Village of Mount Prospect Monthly Financial Report – December 2024 interest income of $51,513 during December 2024. As of December 31, 2024, the Economic Emergency Fund reported an ending fund balance of $13.7 million, which comprises $13.0 million in Village Contributions from the General Fund and $691,635 in interest income. e) Other Items: a. During December 2024, the Village issued 70 real estate transfer tax stamps, of which 36 were exempt and 34 were non-exempt. During the month under review, the Village collected $48,639 in real estate transfer taxes. The average selling price for real estate was $476,802. At the same time last year (December 2023), the Village sold 85 transfer tax stamps, of which 40 were exempt and 45 were non-exempt. In the same month last year, the Village collected real estate transfer tax totaling $67,512, and the average selling price was $500,024. Respectfully Submitted, Amit Thakkar Director of Finance 8 Page 14 of 14