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HomeMy WebLinkAbout03/28/2024 FC MinutesFINANCE COMMISSION iY mnt Thn±��xsct MEETING MINUTES Thursday, March 28, 2024 Executive Conference Room — 31d Floor, Village Hall Mount Prospect, IL 60056 Call to Order Meeting called to order at 7:01 p.m. Commission members present: Kenneth Arndt, Trisha Chokshi, Pam Bazan, Vince Grochocinski, and Don Ocwieja Commission members absent: Commissioner Edward Derfler Staff present: Director of Finance Amit Thakkar and Deputy Director of Finance Jennifer Fitzgerald Approval of Minutes a. Motion by Ken Arndt, seconded by Vince Grochocinski, to approve the minutes of the Finance Commission special meeting of February 22, 2024. Chair Chokshi called a voice vote. Motion Passed unanimously. Citizens to be Heard None IV. Old Business None V. New Business Pension Updates: Director Thakkar mentioned that the pension is a top priority for the Village. The Village's public safety pension costs have gone up by 42 percent over the last four years. Per the information available, twenty-nine different legislations are filed with the State. Many of them are identical and HB4099 is the major concern. This legislation reduces the retirement age from 60 to 55. It will allow the public safety employees to retire five years early, and it could add up to $33.0 million in unfunded liability for the Fire Department, and the Village has 17 years to fund this amount. With unamortized interest on this liability, the Village can see a 50 percent increase in the annual contribution, and it will increase the fire levy from $4.8 million to $7.2 million. This will be a huge burden on the Village's tax levy and the Village will not be in a position to find an alternative revenue source of this magnitude. Director Thakkar also talked about HB4699 informing the Finance Commission about a possible defined contribution vs. defined benefit plan and also a possible proposal of TIER 3. Director Thakkar mentioned that he does not believe that this bill will gain any traction. Finance Commission Chair Trisha Chokshi asked director Thakkar about the fundamental differences between Tier I and II and director Thakkar explained the difference between two tiers, with pensionable salary cap, COLA differences, and retirement age as well as differences in surviving spouse pensions. Commissioner Arndt asked if the Village has any incentives offered to existing Tier 2 Finance Commission Page 1 of 2 1/25/2024 employees, and Director Thakkar mentioned that, as of now, there is no such incentive offered by the Village. • Commission Chair Chokshi asked about the upcoming budget season and the possible impacts of this legislation. Director Thakkar responded that our position is mostly to wait and watch, and if any of these bills gain traction, we will be seeking support to oppose them through our channels. • Commissioner Grochocinski asked what would happen if the cities did not make the liability payments. Director Thakkar mentioned that as long as the pension funds are meeting their annual obligations, there are no major consequences, but if they can't, the State can intervene and take some action. • Director Thakkar also mentioned the Grocery Tax. Governor Pritzker proposed a 1 % grocery tax elimination. That would mean $875,000 less for the Village. Prescription Tax is 1%, and there are bills out there that are not gaining traction. Mr. Thakkar responded to questions from the Finance Commission: d) Financial Updates/Monthly Report Director Thakkar provided Monthly Financial Report and overviewed noteworthy items. Revenues are as expected. Higher capital spending is reported as projects are catching up from supply challenges. Mr. Thakkar responded to questions from the Finance Commission. Director Thakkar also mentioned that the Village is hopeful to see a surplus from the 2023 audit due to higher intergovernmental revenues. He also mentioned that if the Village is a AAA rated community, the Village would save around 15-20 basis points on new debt. For example, on a total of $100 million bonds, the Village would save $9-10 million in interest over 20 years. VI. Any Other Business Commissioner Grochocinski requested a revised contact list for the Finance Commission, and staff responded that they would bring the list to the next meeting. VII. Chairperson's Report None VIII. Finance Director's Report None IX. Next Meeting: Joint Workshop — April 2024 X. Adjournment: Motion by Commissioner Grochocinski, seconded by Commissioner Bazan, to adjourn the meeting. Chair Chokshi called a voice vote. The motion was carried unanimously. The meeting adjourned at 8:05 p.m. Minutes Prepared by: Amit Thakkar (Director of Finance) Jennifer Fitzgerald (Deputy Director of Finance) Finance Commission Page 2 of 2 1/25/2024