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HomeMy WebLinkAbout02/24/2019 FC Minutesav was P.mspMta FINANCE COMMITTEE Minutes of the Meeting January 24, 2019 Village Hall Building 50 South Emerson 31d Floor Executive Conference Room CALL TO ORDER — ROLL CALL The meeting was called to order at 7:00 p.m. by Chairman John Kellerhals. Commissioners present included Pam Bazan, Trisha Chokshi, Vince Grochocinski, Don Ocwieja and Thomas Pekras. Staff present included Director of Finance Director David Erb, Deputy Director of Finance Lynn Jarog and Management Analyst Alexander Bertolucci. II. APPROVAL MINUTES a. Approval of Finance Commission Meeting Minutes of October 18, Commissioner Grochocinski, second by Commissioner Pekras minutes. Chairman Kellerhals called a voice vote and the minutes unanimously as amended. b. Meeting Minutes of October 25, 2018 were deferred. III. CITIZENS TO BE HEARD None. IV. OLD BUSINESS None. V. NEW BUSINESS a) Selection of Vice -Chair 2018. Motion by to approve the were approved Motion by Commissioner Pekras, second by Commissioner Ocwieja to nominate Commissioner Chokshi for Vice -Chair. Chairman Kellerhals called a voice vote and Commissioner Chokski was selected as Vice -Chair unanimously. b) Selection of Secretary Motion by Commissioner Chokski, second by Commissioner Bazan to nominate Commissioner Ocwieja for Secretary. Chairman Kellerhals called a voice vote and Commissioner Ocwieja was selected as Secretary unanimously. c) Discussion on 2019 Work Plan The preliminary 2019 Work Plan was developed through discussion between Commission members and staff. Finance Director David Erb introduced agenda items for 2019. He stated the budget schedule was modified to accommodate additional time to vet presentations. The months of February, March, May, June and September currently do not have any agenda items. Staff recommended the Commission review developing a pension funding policy which will include other post -employment benefits, since the implicit costs of retiree health insurance will need to be included on Village Financials per GASB 6768. Finance Commission Page 1 of 3 1/24/19 The following responses from staff were provided to questions from the Finance Commission: • A Police/Fire HQ budget and an overall status update would be appropriate to schedule on the work plan. • Budget update, monthly financials and cash position reports would be a way to see status of capital expenditures and tax increment financing district. • First Quarter Review will include the most current 2018 sales tax revenue figures. If State policies reduce municipal revenues, staff has a five step emergency response plan. • Community Development creates an economic development report which can be shared with the Finance Commission. • The Village currently does not fund other post -employment benefits. Retirees pay the full insurance premium. The implicit cost comes from the difference between retirees premiums and insurance premiums adjusted due to age, demand for services, etc. This liability will continue to grow and may impact Village's bond ratings. As of 12-31-2018 the amount was $12.5 million. The funds to cover other post -employment benefits would be placed in a trust. • Increasing retirees' insurance premiums would slow the growth of other post - employment benefits liability, but the village would still need to fund it. • An employee who accumulated sick leave may put a limited amount into a Retirement Health Savings account at the time of retirement. • The 2019 Work Plan has individual Community Investment Plan and Budget meetings in addition to the joint meetings with the Village Board. d) Vehicle Sticker Discussion Mr. Erb provided an overview of the Village's home rule sales tax allocation of 1 % and how the amount is quartered to fund Flood Control, Capital Improvement Fund, General Fund and Street Improvement Construction Fund. The Street Improvement Construction Fund receives $1,370,000 from the one-quarter cent home rule sales tax, $715,000 from the $0.04 per gallon local motor fuel tax, $1,650,000 from vehicle stickers, and $1,400,00 from the state motor fuel tax (per capita). He reviewed the challenges in maintaining the Vehicle Sticker program since it is the most costly revenue source to administer without natural growth in annual revenue. Deputy Director of Finance Lynn Jarog presented a hard cost analysis of the issuance of vehicle stickers. He stated staff proposes to eliminate the Vehicle Sticker Program. The $1.65 million in revenue generated would be replaced through reallocation of revenues from the General Fund and growth projected in sales and road and bridges taxes. However, the Street Improvement Construction Fund would need to be revisited in 1-3 years to ensure adequate funding. He stated next steps would be to develop a final recommendation from the Finance Commission, present to Village Board at first quarter Joint Workshop in April with final approval during discussion of the 2020 budget. The following responses from staff were provided to questions from the Finance Commission: Finance Commission Page 2 of 3 1/24/19 • Cost to administer the vehicle sticker program does not include enforcement and Finance Department's time allocated to vehicle stickers. • If a person is ticketed for not having a valid vehicle sticker and they purchase a vehicle sticker and pay the late fee then the ticket fine is waived. • The Police Department conducts vehicle sticker compliance checks. • $76,700 would be real savings from eliminating the vehicle sticker program. • Mount Prospect's vehicle sticker fee is comparable to neighboring communities which still have a sticker. • Fairly good level of confidence that revenues would continue to support reallocation. VI. ANY OTHER BUSINESS None. VII. CHAIRMAN'S REPORT None. VIII. FINANCE DIRECTOR'S REPORT None. IX. NEXT MEETING Thursday, February 28, 2018 at 7:00 p.m. at Village Hall. X. ADJOURNMENT Motion made by Commissioner Chokshi seconded by Commissioner Pekras. The meeting adjourned at 8:50 p.m. Alexander Bertolucci Management Analyst Finance Commission Page 3 of 3 1/24/19