WILMETTE PARK DISTRICT
Financial Planning & Policy Committee
Monday, November 30, 2015
6:30 p.m. – Village Hall Training Room
Committee/Commissioners: Chair Abbott, Anderson, Pellaton
Staff: Director Wilson, Superintendent Eppelheimer
Staff: Bingham, Bowen, Rodas, Felicicchia
I. Meeting Called to Order
Meeting called to order 6:30 p.m.
II. Approval of Minutes
A. Commissioner Pellaton moved and Commissioner Anderson seconded a motion to approve the minutes of June 22, 2015 Financial Planning & Policy Committee meeting.
Minutes were approved as amended with the following changes:
Page 2 of 3, V. 2nd paragraph, 3rd sentence should read Commissioner Abbott acknowledged…, and Page 2 of 3, VI. A., 1st paragraph, 3rd sentence should read, “If a challenge is warranted, the consortium… not District. All voted yes, the motion carried.
III. Communication and Correspondence
Director Wilson commented on a letter from the Government Finance Officers Association saying they are pleased to notify the District that their Comprehensive Annual Financial Report for Fiscal Year ending December 31, 2014 qualifies for the Certificate of Achievement for Excellence in Financial Reporting. Director Wilson pointed out that this achievement is the highest form of recognition in governmental accounting and financial reporting. This is the seventh year running that the District has received this award. Commissioner Abbott congratulated the District for their achievement.
IV. Recognition of Visitors
Eric Anderson, Piper Jaffray & Co.
Commissioner Abbott requested that the Committee discuss item VI. C since Eric Anderson is present.
VI. C. Proposed Issuance of Refunding and Limited Park Bonds
Mr. Anderson discussed and presented the report on Proposed Issuance of Refunding and Limited Park Bonds. The report outlines the District’s debt structure and assumptions for the future, total debt supported by Unlimited Tax or referendum debt and Limited Tax or non-referendum debt, non-referendum debt capacity, Debt Service Extension Base (DSEB), and Bond Issue Notification Act (BINA) hearing timelines.
Mr. Anderson commented on the possible raising rate trend that the Federal Reserve has talked about. Market participants expect an increase of 0.25% in the Fed Funds rate. Mr. Anderson outlined what the existing levy debt service looks like. Debt certificates are paid for by surplus from operations. The District has been under tax caps for about three decades. A debt service extension base of $689,970 beginning in levy year 2009 was subject to CPI. This has grown from its original value to $771,58 8 for 2015. The presentation slides are projections into the future. Mr. Anderson stated there are discussions with the state legislator to potentially freeze property taxes.
Mr. Anderson highlighted the three year solution that would generate approximately $960,000 in capital proceeds. Mr. Anderson commented on the three year duration period. The IRS stated that you have up to three years to spend 95% of the dollars that you borrow. These bonds are on a tax exempt basis.
Mr. Anderson commented on CPI and that it changes every year. CPI has averaged 2.3%, with a high of 4.1% and a low of 0.1% over the past 10 years. Changes in CPI over time could influence how debt is repaid. CPI is running at 0.2% for 2015. The Committee discussed different scenarios depending on the needs.
Mr. Anderson discussed the refinancing options with the non-referendum debt. This scenario is a calculation that has several elements to it which were outlined in the slide. Mr. Anderson explained the three year recapture for 2016-2018. Paying down debt recaptures debt limit authority each year as principal on existing debt is retired. Mr. Anderson discussed the timeline of filing with this option. Mr. Anderson commented on the three year retirement Series 2016 as outlined in the slide. The Committee discussed the refinancing and the callable date of December 1, 2016 for refinancing options.
Mr. Anderson discussed the options with the non-referendum debt service. Director Wilson pointed out that there are efficiencies to be achieved by doing refinancing options in one transaction versus doing them in separate transactions. Mr. Anderson discussed the issuance of $960,000 for 3 years. He stated that three years makes benefits sense but you could issue more or less.
Mr. Anderson discussed Series 2007B debt certificates. Mr. Anderson discussed the different options on refunding of existing limited tax bonds and issuance of new limited tax bonds. The Committee discussed series 2007B slides with Mr. Anderson. The Committee discussed the low interest rates and taking advantage of that opportunity of issuing refunding bonds against the 2007A Limited Tax bonds and even refunding of 2007B Debt Certificates.
Mr. Anderson discussed the preliminary timeline of events for the BINA hearing options. Mr. Anderson stated that the 1st scenario is a little faster pace. Director Wilson recommends the 2nd scenario which is a more standard way of doing it since there is no benefit in the fast tracking.
Commissioner Pellaton asked why you would issue additional debt of $960,000. Superintendent Eppelheimer stated that it is part of the overall capital funding plan. President Olvany stated that funding of the ongoing capital investment in the District is a necessity.
Mr. Anderson asked if the Committee would like to see additional borrowing scenarios to review. The Committee agreed to see additional information. Director Wilson will ask Mr. Anderson to complete several scenarios.
Commissioner Pellaton moved and Commissioner Anderson seconded to recommend that a public hearing be called at the December 14, 2015 Board meeting for Bond Issue Notification Act (BINA) to be held on January 11, 2016; all agreed.
V. Unfinished Business
A. Non-Resident Program Discounts
Commissioner Abbott revisited the topic from last meeting regarding Rita Raggi, a business owner in Wilmette, inquiring about program discounts as a business owner in Wilmette. The question is where to draw the line with business owners that own the property operating in Wilmette and whether they should receive non-resident program discounts. Director Wilson reached out to other park districts to see what they are implementing. He commented that there is no hard and fast way that one handles it over the other. Director Wilson pointed out that staff has varying opinions as well. He previously discussed with Commissioner Abbott an option that if someone comes in and makes a case as a normal tax payer then possibly allow them to come and petition to get resident status. Director Wilson requested the Committee choose a lane and not set up a courtroom situation. Commissioner Anderson discussed partnerships that are set up with owning land and other scenarios that do not make sense. The Committee discussed the different scenarios and decided to remain with the current policy. Director Wilson will have staff follow up with Rita Raggi.
VI. New Business
A. Tax Levy Report
Superintendent Eppelheimer reviewed and discussed fund descriptions and tax levy amounts as outlined in the tax levy report. The Committee discussed the fund amounts in more details.
i. 2015 Tax Levy Ordinance 2015-O-9
Superintendent Eppelheimer discussed the taxes to be levied by individual funds in Ordinance 2015-O-9.
Commissioner Pellaton moved and Commissioner Anderson seconded to recommend that the Tax Levy Ordinance 2015-O-9 be approved by the full Board; all agreed.
ii. 2015 Tax Reduction Resolution 2015-R-12
Superintendent Eppelheimer discussed Resolution 2015-R-12 to reduce the tax in the Corporate Fund for any over estimation as a matter of compliance with all the provisions of the tax extension limitation laws.
Commissioner Pellaton moved and Commissioner Abbott seconded to recommend that the Tax Reduction Resolution 2015-R-12 be approved by the full Board; all agreed.
B. Personnel Policy Manual Changes to Compensatory Time
Superintendent Eppelheimer commented that staff continually looks at the District’s Personnel Policy Manual. Staff feels that better structure needs to be addressed around earned compensatory time for non-exempt hourly individuals. Director Wilson stated that this new change is driven by the changes in the administrative law. This change reflects that compensatory time must be taken within 12 months of the year of which it was earned or it will be paid out. The Committee discussed the different scenarios of how compensatory time works within the District. This new policy will alleviate a huge payout upon termination.
Commissioner Abbott moved and Commissioner Anderson seconded to recommend that the Personnel Policy Manual reflect this change to compensatory time for non-exempt hourly employees and that it be approved by the full Board; all agreed.
D. Long-Range Financial Planning
Director Wilson presented and discussed on a projected five year financial outlook. The $4 million surplus threshold is basically the surplus from all funds except for capital. President Olvany commented that the Finance Committee’s role is to plan for the future. He commented that carrying a large fund balance is not in the best interest of the community. Capital expenditures can change from historical norms. He asked what the philosophy and policy may be on how to fund projects going forward. The Committee discussed different options based on the projected five year numbers. Commissioner Pellaton commented that some capital projects keep getting deferred in order to balance the budget. President Olvany commented that once the survey results come back from the Lakefront we can play with the numbers to see what fund would be needed to make improvements. Commissioner Pellaton discussed showing the community what it would take and how long to do projects with a referendum or without a referendum. The Committee agreed to continue this discussion further at its next meeting.
VII. Next Meeting
The next meeting is scheduled for January 25, 2016 at 6:30 p.m.
There being no further business to conduct, the meeting was adjourned at 9:43 p.m.