Finance & Administration Committee

 

Minutes of a regular meeting of the Finance and Administration Committee of the City of O’Fallon, held at the Public Safety Building, 285 N. Seven Hills Road, O’Fallon, Illinois on November 23, 2015.

 

CALL TO ORDER: 5:01 pm

 

ROLL CALL: COMMITTEE MEMBERS: Bennett, Chairman, Albrecht, Drolet-Absent

McCoskey, Smallheer, Roach, Kueker

NON-COMMITTEE ALDERMEN: Holden, Meile, Hagarty, Cozad, Mouser, Gerrish

STAFF LIAISON: Evans, Randall, Funk, Denton, Shekell,Cavins, Brueggemann

GUESTS/RESIDENTS: Malare, Zelms, Pitts

    

Approval Minutes: - October 26, 2015 Motion McCoskey, Second Kueker

 All Ayes. Motion carried.

   

 

Item A: Audit Review: Director of Finance introduced Henry Siekmann and Julie Visintine with Sheffel Boyle CPA’s who discussed the highlights of the FY 2015 audit. Mr. Siekmann explained the qualified opinion in the independent auditor’s report.  He informed the committee that this was due to not having an independent actuarial valuation report on the pensions including OPEB (Other Post-Employment Benefits).  Mr. Siekmann explained that this is not uncommon to have this qualified opinion and in fact, only a few of his municipal clients have an unqualified opinion.  The reason being, it is cost prohibitive, as it could be approximately $20,000 to do an actuarial study.  Mr. Siekmann continued to say this was not a negative reflection on the City and that this was the only reason for the qualified opinion, all other areas reviewed were fine. Director of Finance did mention that staff had budgeted for an actuarial study and is considering doing a RFP.  Mr. Siekmann continued his presentation commenting on various sections of the audit including the balance sheet and statement of revenues, expenditures and changes in fund balance for both the governmental funds and proprietary funds. After his review, Mr. Siekmann was asked if there was anything in the management letter that needed to be discussed.  Mr. Siekmann responded that the City does a good job and that there were only a few things that could be improved upon, such as making sure that the Finance Department receives copies of all grants so that they can be booked accordingly and staff needs to review insurance premiums received from COBRA employees to ensure that the correct amounts are being collected.   Director of Finance informed the committee that the complete audit could be found on the website and if they have any questions, to please contact staff and they would be happy to answer.

 

Item B: Tax Levy for 2015:  Director of Finance presented the proposed tax levy for tax year 2015.  The annual tax levy must be filed with the county by the last Tuesday in December. The rate setting EAV is the base for the next years estimate as provided by the county which they project to be $657,023,224, a 2.5% increase in EAV over last year.  However, with the passage of the new legislation providing 100% exemption for 70% disabled veterans, this will reduce the EAV by $18,673,000.  This amount is based on those veterans currently receiving the $5000 exemption and may increase next year. The county is also expecting to apply a 1.0082% multiplier for O’Fallon Township and a .9985% multiplier for Caseyville Township, thereby creating a 1% average multiplier increasing the EAV by approximately $6,500,000.   Due to the large number of petitions filed with the Board of Review to review property assessments resulting in possible loss of assessed values, the projected EAV was reduced by $1,725,000,000. Therefore, the estimated rate setting EAV for 2015 is $643,195,456, which is approximately a .3% increase from last year.  Staff recommends requesting close to the same amount as the previous year for all funds except for IMRF, Social Security and the library.  IMRF was increased by approximately $73, 000, Social Security by approximately $58,000 and the library by $43,500.  Director of Finance explained that the library was requesting an increase since property tax is their only revenue source and their amount has been flat for many years.  Staff mentioned they had received justification from the Library Director and was directed to forward to the committee.   Staff mentioned that when we receive the tax extension back from the County, normally at the end of March, we will most likely decline the 4% loss in collection increase since the City doesn’t normally have much in the way of bad debt.   All agreed.     Director of Finance also gave several scenarios as to what the tax levy rate would increase and how much additional a  homeowner would pay if the Aldermen were interested in increasing the General Fund in order to get additional funds for street projects..   Staff also mentioned that there is proposed legislation for a property tax freeze for the 2016 Tax levy year and if the city should consider taking action now to perhaps circumvent the proposed freeze.   The committee approved the total tax levy request of $6,576,030 for both the City and Library.   Motion to approve the proposed 2015 Tax levy made by Kueker, second by McCoskey.  All Ayes.

 

Other: Staff mentioned that the City will be meeting with Bond underwriter to look at refunding a General Obligation bond in order to save money.  Staff is not planning on increasing the amount or extending the terms of the bond but will want to move forward as quickly after the New Year as possible due to rates increasing and if a Committee meeting isn’t held in December, aldermen may see this on the council agenda without it first going to committee.

 

Motion to Adjourn: Albrecht, Second McCoskey  All Ayes. Motion carried.                                                  

Tentative Next Meeting:   TBD