Finance Committee

Finance Committee Meeting Council Chambers November 7, 2012 8:00 a.m. Attendance: Committee Members Present: Mayor Robert Callero, Village Manager George Van Geem and Finance Director Scot Neukirch Committee Members Absent: Chairman Joe Lo Verde and John Johann Non Committee Members Present: Trustee Chris Hanusiak, Trustee Rosemary Palicki and Village Attorney Joe Annunzio Call To Order: Meeting opened at 8:03 a.m. George Van Geem named Acting Chairman Approval of Minutes: The approval of the minutes from the September 19, 2012 Committee meeting was postponed to the November 14, 2012 meeting due to the lack of a quorum. Accounts Payable Approval: The approval of the Accounts Payable registers for 9/14, 9/21, 9/21(wires), 9/28, 10/5, 10/12, 10/19, 10/19 (wires) and 10/26 was postponed to the November 14, 2012 meeting due to the lack of a quorum. New Business Budget Process Discussion: Finance Director Neukirch updated the Committee on the transparency issue that was questioned by one Trustee in recent open meetings. Neukirch explained that over the past couple years the openness and transparency of the budget process has been improved. Last year’s budget process included 2 full Village Board budget workshops which were open to the public, 4 Finance Committee budget discussions which were all open to the public and 1 required Budget Hearing which is designed to gather public comment on the budget. No further concerns on the transparency of the process were raised at this time by the Committee members or the non-Committee members in attendance. Neukirch explained that staff is willing to do what is necessary to make the process as open and transparent as possible. Finance Director Neukirch next addressed the topic of the Appropriation Method versus the Budget Method for filing the annual budget information with the County. Two trustees have also made comments concerning line item reporting that they felt was a characteristic of the Budget Method. Neukirch explained that both of these methods have responsibility for amendments at the “fund” level. Neither process requires amendments at the line item level. Neukirch then explained how the Village’s payment process requires more levels of approval and is more restrictive than most other towns. When requests for payments are made, explanations for over budget conditions are required and examined. After further discussion with Trustee Hanusiak, the issue seemed to be more focused at the hiring practices of the Village and how it relates to the Budget. Village Manager Van Geem explained that there are some specific staffing discussions taking place and he feels the Board will be happy with the results of these discussions. Van Geem will update the Board at a later date as to the details of the discussions related to staffing. Finance Director Neukirch also explained the improvements that have been recently made to the budget document. A 12 page summary of highlights of the document was added during the most recent budget process. Summary pages were also added before each General Fund department explaining variances in the current projected expenses to budgeted expenses and variances from the upcoming budgeted expenses to the previous year’s projected expenses. Neukirch explained that staff is working to make the document more useful to residents but also cautioned that making the document too large may be counter productive. Neukirch asked that requested for changes to the document be submitted to him and he will review the requests and do what he can to incorporate any improvements to the document.  Village Manager Van Geem recommended that the budget process be re-introduced at an upcoming meeting so that the missing Committee members have an opportunity to give their input on the topic. Police & Fire Actuarial Reports: Finance Director Neukirch presented the results from FY 2012 Police and Fire Pension Fund actuarial reports. These reports were completed about 2 months earlier than in previous years. Neukirch explained the highlights of the information found in these reports. The unfunded liability for the Police Pension Fund increased to $33,744,646 and the funded percentage dropped to 44%. The unfunded liability for the Fire Pension Fund increased to $29,558,253 and the funded percentage dropped to 47%. Neukirch explained that although the Village staff and Board have done a great job increasing the contributions to the pension funds, there have been a couple things out of the Village’s control that have negatively impacted the funding levels. Investment return which was actuarially projected to be 7.25% actually came in at .65%. Also, the State required a change in the market valuation of the assets which caused a drop in the value of the Village assets. Neukirch explained that as is outlined in pension funding plan that has been previously provided and approved by the Finance Committee and has been provided to the Village Board, staff will strive to contribute the “recommended” contribution level during the upcoming budget process. Annual Pension Report to the Board: Finance Director Neukirch presented the required annual pension report to the municipality to the Committee. Neukirch explained that the State requires that this report be provided on an annual basis to the Village Board. The report contains a summary of the financial activity for the fiscal year and current information on the funding levels of the Funds. Neukirch explained the Village has complied with the statutory requirements of this report. Published Treasurer’s Report: Finance Director Neukirch presented the required annual Treasurer’s Report. The Report was published in the Bugle Newspaper on October 25, 2012. State statutes require that this report be published within 6 months of the end of the Village’s fiscal year. The Finance Department has complied with all of the necessary reporting requirements and filings for FY 2012. Annual Joint Review Board: Finance Director Neukirch presented the required reports for the annual Joint Review Board (JRB) meetings. The JRB meetings and associated reporting are required on an annual basis for each TIF in the Village. This year’s JRB meetings will be held on Tuesday, November 20 at 10:00 am in the Trustee’s Conference Room. Neukirch explained that the Lawrencewood TIF expires at the end of 2013 and the Milwaukee/Touhy TIF expires at the end of 2019. Village Manager Van Geem explained that he is the TIF Administrator. Van Geem also explained that all of the impacted taxing districts are invited to attend the JRB meetings each year. Van Geem explained that the Village has had 5 TIFs, 3 of which were closed early. Van Geem also described the good relationship the Village has with its school districts in regards to these TIF Districts. Audit Report Information: Finance Director Neukirch had intended on handing the annual audit information to the Committee members at the October meeting. But since the meeting was delayed for various reasons the documents have since been delivered to each of the Committee members. Neukirch just left this on the agenda to confirm that all members have received the audit information in advance of next week’s Finance Committee meeting when the lead auditor will be available for questions. Revenue Sharing Agreement: Due to the lack of a quorum, this agenda item was postponed until the November 14, 2012 meeting. Other Business: None Adjournment: The meeting adjourned at 8:33 am. Next Meeting The next Finance Committee meeting is scheduled for Wednesday November 14, 2012 at 8:00 a.m. in the Trustees Conference Room. Prepared by Scot Neukirch on 11/7/2012