Finance Committee

Village of Niles Finance Committee Meeting Council Chambers November 16, 2016 8:00 a.m. Call To Order: Bob Callero called the meeting to order at 8:02 am. Chairman LoVerde was not present so the motion was made and all concurred that Bob would be Chairman for the meeting. Roll Call: Assistant Finance Director Nannini called the roll for Committee members: Committee Members Present: Bob Callero, Al Weel and John Johann Committee Members Absent: Chairman LoVerde and Paul Nielsen Village Staff Present: Finance Director Jeff Martynowicz, Village Manager Steve Vinezeano, Legal Assistant Kathy Thake and Assistant Finance Director Laurie Nannini Old Business: None. Approval of Minutes: The minutes from the October 19, 2016 Finance Committee meeting were up for approval, motion made and all concurred. Accounts Payable Approval: The approval of the Accounts Payable registers for 10/14, 10/21, 10/28 and 11/4 were up for approval, motion made and all concurred. New Business Vehicle Financing Options Update: Finance Director Jeff Martynowicz gave an update on the financing options for the leasing of 13 squad cars along with the changeover of those cars and a sewer vac truck discussed at the October Finance Committee meeting at a total estimated cost of $936,000. He stated that the Finance Department had looked into various options for financing these vehicles. Under a lease purchase proposal we received information from 3 banks; JP Morgan, PNC and BMO with the lowest overall cost coming from JP Morgan. The advantage of this option is that the Village can hold onto the vehicles at the end of the 5 year term. At the October meeting staff was also asked to look into an operating lease proposal. However, at the end of that 5 year term the vehicles would go back to the financing company. Jeff did suggest the internal financing alternative of paying cash using the Automotive Fund to purchase the police vehicles and the Water Fund to purchase the sewer vac truck with an internal loan from the Water Fund to the Automotive Fund and save the interest costs of approximately $27,000. He stated that if we did want to finance, the lease purchase proposal with JP Morgan would be the best alternative. Bob Callero asked if the Village would own the vehicles at the end of the lease term. Jeff did confirm that statement. Al Weel wanted clarification that this would be an installment purchase and not a lease. Jeff confirmed that this would be like an installment loan. John Johann was wondering if these costs were included in the budget. Assistant Finance Director Nannini stated that only the first year’s principal and interest are included in the current budget. Al Weel asked about the disposition of the current vehicles being replaced. Village Manager Vinezeano stated that there is a fleet plan. Public Works is trying to dispose of the worst vehicles first and they will be sold. Assistant Finance Director Nannini stated that it is her understanding that Public Works Director Mary Anderson would likely bring the purchase of these vehicles to the December Board meeting. Bob Callero inquired if there was a bid 1  process. Village Manager Vinezeano responded that there was. However, he stated that there is a strong indication to go through Golf Mill Ford. Bob Callero wanted to make sure that they meet the lowest bid and Village Manager Vinezeano concurred. A motion was made to recommend to the Board to proceed with the purchase of the vehicles utilizing the finance option. Al Weel expressed a concern regarding the interest rates presented to the Committee. With the current economic environment there is a good indication that rates will be increasing. Bob Callero recommended that the Finance Director monitor the rates to assure that the Village can lock in a rate that is fiscally prudent to the Village. All concurred with the motion made. FY16 Audit Update: Finance Director Martynowicz gave a status report on the audit. He stated that this will be the first year for GASB 68 which incorporates the pension liability on the Government Wide financial statements. Assistant Finance Director Nannini stated st that a representative from Selden Fox will be attending the December 21 Finance Committee meeting. Other Business: None. Public Comment: Resident Louella Preston had a question regarding the vehicle financing options. The last time police vehicles were purchased through Golf Mill Ford because they stated that they would meet the lowest price of the State of Illinois contract. Upon receipt of the vehicles it was noted that they were not in the condition agreed upon so additional costs were incurred. She wanted to know if the changeover costs from that purchase was the real cost or if the cost was over what was budgeted. Bob Callero directed the Finance Director and Village Manager to assure that the costs for the recommended purchase must include all changeover costs. Village Manager Vinezeano stated that the changeover process does not have to be completed by Golf Mill Ford but can be done by another company. Ms. Preston also commented on the FY16 Appropriation Amendment ordinance passed at the November 15, 2016 Board meeting. She wanted clarification on the specific items included in the ordinance. Finance Director Martynowicz provided the information. Adjournment: Motion to adjourn was made and all concurred at 8:33 am. Prepared by Laurie Nannini on December 8, 2016. 2 3