Finance Committee

Finance Committee Meeting Council Chambers November 14, 2012 8:00 a.m. Attendance: Committee Members Present: Chairman Joe LoVerde, Mayor Robert Callero, Village Manager George Van Geem, John Johann and Finance Director Scot Neukirch Committee Members Absent: None Non Committee Members Present: Trustee Chris Hanusiak, Village Attorney Joe Annunzio, Dan Berg from Sikich, Mike McHugh from Gallagher and Assistant Finance Director Laurie Nannini Call To Order: Meeting opened at 8:03 a.m. Approval of Minutes: The minutes from the September 19, 2012 Finance Committee meeting were up for approval, motion made and all concurred. The minutes from the November 7, 2012 Finance Committee meeting were up for approval, motion made and all concurred. 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), 10/26 and 11/2 were up for approval, motion made and all concurred. New Business FY 2012 Audit Discussion: Dan Berg from Sikich appeared before the Finance Committee to discuss the FY 2012 audit. Mr. Berg explained the audit process and provided input on the results of the Village’s audit. The Village received an unqualified opinion which means the report is free from any material misstatements. Mr. Berg explained the two minor deficiencies that were noted in the auditor’s communication to the Board. He explained that neither was a significant deficiency and the one involving the DUI and seizure funds was something that they come across quite often in other Villages. Mr. Berg stated that the Village’s General Fund is in good financial shape. He expressed the only significant concern was the funding of the pension funds which is also a concern with most other villages. Mr. Berg explained that this year went smoother than the previous year as the Village staff and staff from Sikich were much more comfortable with working with each other after having already been through one audit process together. Mr. Berg recommended that interested people review the MDA, Transmittal Letter and the Statistical Section if they are looking for an overview of the financials for the fiscal year. A discussion was had on GASB 54 and how it related to the new classifications of fund balance. Mr. Berg explained that the auditors did not experience any problems with staff and that staff was very helpful and responsive during the process. Various other questions by the Committee were fielded by Mr. Berg and staff concerning the audit. Finally, Chairman LoVerde asked Mr. Berg about the difference between the budget method and appropriation method for budget filings with the County. Mr. Berg explained the differences between the two methods. The discussion primarily focused on the issue within the appropriation method where the appropriation ordinance can be up to 20% higher than what is reflected in the budget document. Finance Director Neukirch and Mr. Berg explained that although that option is available, Niles does not appropriate for more than what is reflected in the budget document. Therefore there is no confusion between the ordinance and the document. Another important distinction between the two methods is that the budget ordinance requires the budget be approved by the start of the fiscal year. The appropriation ordinance method does not need to be approved until the end of the first quarter of the new fiscal year.  A motion was made to accept the FY 2012 Comprehensive Annual Financial Report, all concurred. 2013 Village Insurance Renewal: Mike McHugh from Arthur J. Gallagher Co. presented the proposal for the annual renewal of the Village’s liability and workers compensation insurance program. Mr. McHugh walked the Village through the proposal document and explained the entire process. Mr. McHugh explained how there still are a couple of employees who are repeatedly filing workers compensation claims, but the Village staff has done a good job in reducing its overall claims in recent years. The annual training provided by Gallagher and the quarterly meetings to review claims with each department seem to have had a very positive effective on the actual claims experience of the Village. In summary, the total program increased by approximately 2% from last year. The total cost of the 2013 program is $506,067 which is $11,353 below budget. A motion was made to accept the 2013 insurance program proposal, all concurred. 2013 Claims Mgmt Contracts: Finance Director Neukirch presented the 2013 contracts with Claims Management for administration of the liability and workers compensation claims. The Committee had no comments on the contracts. Budget Process Discussion: Chairman LoVerde received the explanation he was looking for concerning the differences between the budget method and appropriation method for annual budgets during the audit discussion. The auditor and staff previously explained that the Niles appropriation ordinance annually reflects the same amount as the budget document. Therefore there was no more discussion on this issue. Other Business: None Executive Session: The Committee went in to executive session at 9:35 a.m. to discuss specific sales tax information that can not be discussed in an open meeting per the Village’s reciprocal agreement between the Village and the State of Illinois. Adjournment: The Committee returned from executive session and the meeting adjourned at 10:10 am. Next Meeting The next Finance Committee meeting is scheduled for Wednesday December 19, 2012 at 8:00 a.m. in the Council Chambers. Prepared by Scot Neukirch on 11/14/2012