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HomeMy WebLinkAbout06/23/2022 FC MinutesFINANCE COMMISSION — SPECIAL MEETINGrrar+n,xcr MINUTES Thursday, June 23, 2022 Executive Conference Room — V Floor, Village Hall Mount Prospect, IL 60056 Call to Order Meeting called to order at 7:00 p.m. Commission members present: Kenneth Arndt, Pam Bazan, Trisha Chokshi, Vince Grochocinski, Don Ocwieja and William Grossi. Commission members absent: Yulia Bjekic Staff present: Director of Finance Amit Thakkar, Deputy Director of Finance Jennifer Fitzgerald and Assistant to the Village Manager Alexander Bertolucci. II. Approval of Minutes a. Motion by Kenneth Arndt, seconded by William Grossi moved to approve the minutes of the Finance Commission regular meeting of May 26, 2022. Chair Chokshi called a voice vote. Motion Passed unanimously. III. Citizens to be Heard None IV. Old Business None V. New Business a) Audit & ACFR Review Mr. Thakkar explained that the Audit Committee met early in June and approved the audit. The Village Board will review the item in July. He provided an overview of the audit process. Staff was able to provide information on each item the auditors requested. Lauterbach & Amen, LLP issued the Village with a clean and unqualified opinion (highest possible) on the financial statements. Per the audit report, the financial statements are free from any material misstatement, and it fairly represents the financial condition of the Village. The financial statements are prepared in accordance with the generally accepted accounting principles and standards issued by the Government Accounting Standard Board. He presented an overview of the financial statements (assets, liabilities, fund balance) for the General Fund. He also reviewed the pension funds assets and liabilities. Mr. Thakkar provided additional information in response to questions and comments from the Finance Commission: • The two changes in the pension assumptions are included in these figures: increased life expectancy and 7.25% interest rate lowered to 7%. Pension funding ratio decrease from about 70% to 68% • Pension assumption changes cost the Village $7.8 million • The Village will we need to make up for lost interest on the unfunded pension Finance Commission Page 1 of 4 6/23/2022 amounts Mr. Thakkar shared the Auditor's Management letter and its' three suggestions: 1) Funds over budget — Business District He stated the Business District was over budget because the revenue that realized was much higher than the last budget amendment. The Village needed to share $83,000 more, but it was too late for another budget amendment. 2) Funds not in compliance with Fund Balance Policy Mr. Thakkar stated the Flood Control Construction Fund was flagged because the fund balance is not adequate. The fund balance should equal three months of expenses based on a five-year average of expenses. The Village is 99% short of the fund balance target, because there is no dedicated funding source and staff proposes projects as funds become available. 3) GASB Statement No. 87 Leases Mr. Thakkar explained that Governmental Accounting Standards Board (GASB) Statement No. 87 — Leases aims to increase the usefulness of governments' financial statements by requiring reporting of operating leases to be capitalized and amortized. Staff is reviewing leases in order to comply with this new requirement. Mr. Thakkar provided additional information in response to questions and comments from the Finance Commission: • Costco is included in the Randhurst Business District • The fund balance policy is not a GASB requirement, but it is industry standard and best practice for a fund of this size to have a 25% fund balance • The Flood Control Construction Fund's five-year expense average is higher than usual because of several major projects in the past three years • Finance is monitoring inflation • Staff started the Community Investment Plan last week and will start the operating budget next week • Illinois Municipal League is a good resource to help with financial forecasts and budgeting, inflation is a big hurdle in creating a balanced budget He stated that Vince Grochocinski, Audit Committee Chair, will present the Annual Report of the Audit Committe the Village Board at the July 19 meeting. b) Strategic Plan — (Now happening in August) Mr. Thakkar stated strategic planning process normally starts in May, but for this year, it is scheduled in August and will be finalized in October. The strategic plan is where staff identifies capital projects that are put into the budget. Mr. Thakkar stated the Commission's work plan had the Community Investment Plan discussion scheduled for June. Motion by William Grossi, seconded by Vince Grochocinski moved to defer the Community Investment Plan discussion until October. Chair Chokshi called a voice vote. Finance Commission Page 2 of 4 6/23/2022 Motion Passed unanimously. c) Budget Expectation from the Finance Commission Mr. Thakkar asked the Finance Commission about their expectations for the 2023 budget and 2023-2027 Community Investment Plan. The Finance Commission discussed the follow expectations: • Present policy issues in the larger context of the budget and economic realities • The Commission should discuss items twice before making a recommendation • The budget presentations made to the Finance Commission should focus only on next year's financials and operational challenges • It is good for the Finance Commission to have a joint session with the Village Board, however, the Commission should also have separate meetings to review the budget • Show the overall budgetary impact (i.e. property tax, water and sewer rates, solid waste. licenses, fees, etc.) of the Village Services — include as an article in the Village Newsletter • Try to show the difference between the impact of 3% inflation and current 40 - year record high inflation Mr. Thakkar responded to questions from the Finance Commission. • The telecommunications tax amount has stabilized; tax applies to calls on a cell phone but not data usage • The utility tax is based on amount consumed and not the price of the energy The Village does not tax water and sewer d) Vehicle Sticker Review (Table to July) Mr. Thakkar stated the Commission's work plan had the Vehicle Sticker Review scheduled for June. The item is not ready yet and staff recommends tabling the discussion to the regular Finance Commission meeting in July. Motion by Don Ocwieja, seconded by Pam Bazan moved to approve table the Vehicle Sticker Review to the July meeting. Chair Chokshi called a voice vote. Motion Passed unanimously. VI. Any Other Business None VII. Chairperson Report None VIII. Finance Director's Report a. Monthly Report Mr. Thakkar reviewed the monthly financial report. The Village is experiencing an increase in revenues, expenditures are $800,000 higher than last year, overtime is on par, and all other items are within the expected ranges. He noted this is the first year the Village of Mount Prospect received the GFOA Triple Crown. This recognizes governments who have received GFOA's Certificate of Achievement for Excellence in Finance Commission Page 3 of 4 6/23/2022 Financial Reporting, Popular Annual Financial Reporting Award, and the Distinguished Budget Presentation Award. Mr. Thakkar responded to questions from the Finance Commission. • There is a fee to participate in the award program; however, GFOA provides training and resources as well • It is a legislative requirement for the Village to publish the annual Treasurer's Report. Daily Herald formats the report for publishing XI. Next Meeting: July 28, 2022 IX. Adjournment: Motion by Kenneth Arndt, seconded by William Grossi moved to adjourn the meeting. Chair Chokshi called a voice vote. Motion Carried unanimously. The meeting adjourned at 8:28 pm. Alexander Bertolucci Assistant to the Village Manager Finance Commission Page 4 of 4 6/23/2022