Finance Committee

Village of Niles Finance Committee Meeting Council Chambers October 20, 2017 8:00 a.m. Call To Order Chairman LoVerde called the meeting to order at 8:00 a.m. Roll Call Assistant Finance Director Nannini called the roll for Committee members: Committee Members Present: Chairman Joe LoVerde, Bob Callero, John Johann, Paul Nielsen and Al Weel Committee Members Absent: None Village Staff Present: Finance Director Jeff Martynowicz, Village Manager Steve Vinezeano, Assistant Finance Director Laurie Nannini, Assistant to the Village Manager Kathy Thake, Community Development Director Chuck Ostman, Economic Development Director Ross Klicker Old Business None Approval of Minutes The regular minutes from the August 16, 2017 Finance Committee meeting were up for approval, motion made and all concurred. Accounts Payable Approval The approval of the Accounts Payable registers for 2017 8-4, 8-11, 8-18, 8-24, 8-25, 9-1, 9-8, 9-15, 9-22, and 9-29 were up for approval, motion made and all concurred. New Business Mesirow Insurance Renewal Tom Collins with Mesirow Financial presented the renewal to the Committee. Tom presented information that showed an overall premium summary by line of coverage. The renewal is a slight decrease in the overall premium for this year from $498,268 to $489,158. Tom provided additional information on improvements that were used in the overall loss trend rates. In year 2014 and onward, claims costs have been reduced over the last three years. Initiatives with the staff on the training side, as well as revisions to the collective bargaining agreements helped to bring rates to normal. During the last three years of changes to workers' compensation, renewal went down 11% in terms of premium due to some of these efforts and the insurance company realizing that the improvements have happened and the risk is getting better. John Johann wanted to clarify when the coverage begins and Tom responded January 1, 2018. John Johann asked if the auto renewal would have a driver training program established. Tom Collins responded yes. John asked if the village also pulls the MVRs on either new hires who will be assigned a vehicle or on an ongoing basis to see if there's a potential issue. Steve Vinezeano responded that any new employee goes through a background check. John Johann wanted to clarify if driver’s license checks are done on an ongoing basis. Steve responded that he think there's a requirement from PACE and other agencies for Public Works that we have to do testing but Steve would look into that. John Johann asked during the pre- bid waiver requirements that there was a third-party administrator concern. He wanted to know if that been addressed. Tom Collins responded that it has. A motion was made to send the renewal to the Village Board. All agreed. Water Appeal 7200 Keeney Mr. Robert Ameniero of 7200 Keeney explained to the Finance Committee that his water bill is in excess of $1,400 and that over several months he has not received a bill from the Village, that the bill was going to the landlord and that the toilets were  October 20, 2017 Finance Committee leaking, a new meter was installed in February 2017, however the meter is still spinning out of control. Chairman LoVerde stated that the Village helped by having Family Services provide $300 to help with the water bill and that the Water Department installed a new meter. Mr Ameniero still believed the new meter was faulty. Chairman LoVerde asked Mr. Ameniero what kind of help he was looking for from the Village. Mr. Ameniero said he wanted the problem to be fixed. Bob Callero suggested the late fees be removed and stated Mr. Ammenero averages about $80 per quarter. Over the three quarters since Mr. Ameniero lived there the bill would be $240. The committee agreed that the Mr. Ameniero would be responsible for $240 and that the Water Department would re-check the meter. Chairman LoVerde made a motion for the $240 bill and the committee all agreed. 2017 Police and Fire Pension Actuarial Results Jeff Martynowicz introduced Todd Schroeder of the accounting firm Lauterbach and Amen, who works in the actuarial division and has completed the actuarial report for the Police and Fire pension funds. Todd stated this year the recommended contributions for the two pension funds combined are coming in about 7.7 million dollars. The $7,762,805 is the combined number between the two pension funds. Police is a little bit higher than fire. The prior year recommendation was about 7.2 million. Todd stated the increase was about a $500,000 increase in the contribution recommendations for this year. These recommendations are really for the 2019 budget year that would be coming up based on when the money is collected. From a percentage basis Todd said you are sitting at about 41% combined between the two funds. They're very similarly positioned as far as funded percentage. There's about $89 million in unfunded liability between the two pensions funds. In between the two funds you have about 106 active members as of April 30 2017 as well as 120 people who are getting paid a benefit or are entitled to a benefit that are no longer working as part of this. One of the things we look at on an annual basis is our expected returns versus the actual returns that come into the pension fund. Any difference is recognized over a five year period. We have some positive experience from fiscal 2017 with returns that exceeded expectations in the funds. Todd stated you're coming in about 7.7% and 7.8% increase in contributions between the two pension funds. Bob Callero asked about our funded status and Todd said Police was 41% and Fire 42% funded. Bob also asked the assumed rate of return for both pension funds and Todd stated 7.25%. Chairman LoVerde asked for a motion to approve the 2017 Police and Fire Actuarial reports. The committee concurred. 2017 Property Tax Levy Jeff Martynowicz explained that this is the time of year where we discuss the property tax levy. Last year an increase to the tax levy was approved at 4.9%. Ultimately, a 3.9% was approved by the Village Board. Last year was the first year where we had a levy that was specific to help funding Police and Fire Pension funds that generated an additional $243,444. Jeff explained his table from his memo in which you can see what funds receive property tax dollars. Jeff stated he was looking for feedback from the committee on where the Police or Fire Pension should be at. Jeff explained what an increase to the Police and Fire pension levy would look like on a $300,000 home. Jeff explained most of our Fire and Police pension funds are funded through a number of revenue sources, including the quarter percent sales tax, video gaming and the entire corporate fund levy goes towards police and Fire pension funds. Jeff stated he is looking for feedback so the final levy can be approved by the Village Board. 2  October 20, 2017 Finance Committee Bob Callero recommended a 4.9% increase to the pension funds due to the increase in the 2017 actuarial contribution. John Johann asked if there were any updates on pension reform. Steve Vinezeano explained there were several with the largest being a possible consolidation with IMRF. Joe LoVerde asked for a motion to approve the 2017 tax levy, Bob Callero made the motion and John Johan seconded. The committee agreed unanimously to send the levy to the Village Board. Budget Status Update Jeff stated that the report that you have in your packet is a revenue and expense report for period four ending August 31, 2017. As far as revenues for the year, total revenues to date for all of our funds, including police and fire $27,489,822. We are at 32.43% of the budget and in period four we should be about 33% of total. The General Fund percent to date is 33.43%. With all of our revenues combined we are right on track to meet our revenue projections and is comparable to where we were last year. We also do a projection on our major revenues. Right now, sales tax is trending right around the 29 to 30% level for the three line items that we have and we should be around 33% year-to-date and you can also see where we were this time last year. So in total, out of all of our major revenues over $700,000 these revenues were right on track of about 33%, and that's consistent on where we were last year. On the expense side through period four at August 31st, the General Fund, total year-to-date expenditures of $13,523,677 are 27.82% of expenditures. We should be around 33%. Last year at this time we were a little over $13 million dollars. In total all of our fund expenditures are 24.9 million and wee 25% of budget. Whereas last year at this time we were at 25.8 million which is right around 25%. Sales Tax Report to Date Jeff Martynowicz began reviewing Sales Tax figures to date. The first quarter of the 2018 budget year was just finished. The 1% portion is down .82%, down at $3,931,000. Jeff stated if you look at the actual 2017, and the actual 2016, after the first quarter, we were up 3.7% at 2.06%. Jeff stated that over the last eight months that we're up and down and really kind of running flat from where we were a prior year. The Home Rule sales tax is down for the quarter at a decrease of 2.92%. Jeff stated that Home Rule sales tax is reported at gross amounts and the 2% collection fee is recorded as expenditure. During the budget we are probably going to be in a position to recalibrate sales tax down. Other Business None Public Comment None Executive Session Chairman LoVerde made a motion to adjourn to executive session. The committee conquered to adjourn at 9:47 a.m. The committee returned from executive session at 10:19 a.m. Adjournment: Motion to adjourn was made and all concurred at 10:20 a.m. 3