WILMETTE PARK DISTRICT
Financial Planning & Policy Committee
Date: January 27, 2014
Location: Village Training Room
Time: 6:30 p.m.
Committee: G. Benz, J. Brault, and Chair J. Olvany
Staff: S. Wilson, K. Bingham, J. Bowen, K. Eppelheimer, B. Lambrecht, S. Holloway
Visitors: Eric Anderson, BMO Capital Markets
1. Call to Order
2. Approval of Minutes
3. Communications and Correspondence
4. Recognition of Visitors
5. Old Business
6. New Business
7. Next Meeting
1) The Meeting was called to order at 6:35 p.m.
2) The Committee approved the minutes of October 30, 2013 as presented.
3) Communications and Correspondence – None.
4) Recognition of Visitors – Chair Olvany recognized Mr. Eric Anderson of BMO Capital and staff in attendance.
5) Old Business
a. Personnel Policy Manual – Staff reviewed the impact of the current payout of sick time (up to 18 days with a liability of $175,000) and the impact to retirement. Discussion then turned to the impact of vacation payout and the possible carry-over of vacations days. IMRF indicated that, in theory, if there is no pronounced spiking of salaries in the last few years of work, the fund should have enough to cover retirements. The question remained what the impact of a large number of employees retiring in a short period of time would have on the District's reserve funding. Discussion then followed on whether the District should pay for a study. The Committee was also interested in additional stress testing and wanted staff to follow-up with IMRF. Superintendent Eppelheimer shared a chart showing the past 13 years of the District's actuarial assets and liabilities and the retirement reserves. (IMRF announced that 2013 investment returns were in excess of 20% and that employer beginning reserve balances will be credited at 52%). The Personnel Policy Manual (PPM) will be reviewed for recent statutory changes including firearms conceal carry, medical marijuana and after-child birth nursing. There was no action by the Committee.
6) New Business
a. 4th Quarter Financial Results – Superintendent Eppelheimer briefed the Committee on the results through the end of December, 2013. The aggregate fund balance is down about $600,000 from the 2013 projections made for the 2014 budget in September and October. This is largely due to the increased capital spending and the recording of the Golf Course Master Plan retainage for work performed through October. These funds will be cash spent in 2014 but was needed to be recognized in our modified accrual accounting method. There was the recording of accrued payrolls of about $103,000, an additional payment to IMRF for $50,000, and additional contractual services above projections. The Committee felt this was troubling as we set Capital spending for 2014 based upon these projections and a 15% hit on the fund balance seems substantial. To budget, the miss was 2.5%. Staff will supply additional analysis of the capital impact and provide that information to the Committee and Board. No action was required by the Committee on this item.
b. Proposed 2013 Carry-Over Capital Projects – Chair Olvany asked Superintendent Eppelheimer to present the proposed 2013 Carry-Over Capital Projects. The proposed list estimates to complete projects that were appropriated in prior years. The $452,000 is less than the $597,000 amount proposed at the December Budget Committee of the Whole meeting. This in effect is a timing difference and will be used to compare the District's spending during 2014. The Committee asked questions on the seven items presented and after all answers were supplied, recommended the 2013 Capital Carry-Over Projects totaling $451,936 be approved by the full Board.
c. Review of Bonded Debt and Future Bond Actions – Chair Olvany welcomed Eric Anderson of BMO Capital and explained that Eric had been invited in regard to the status of the Lakefront Master Plan. Mr. Anderson reviewed the Bonded Debt exhibit supplied in November and he indicated rates have dropped since the document was prepared. These are base line options to work within the existing tax levy. Issues longer than 15 years begin to see higher interest rates that drive up the total debt retirement costs. Coupon rates can increase about 15 to 25 basis points in years beginning 12 through 15. Non-bank qualified debt, over $10 million issued in a single year, can have an additional cost of 15 to 25 basis points. The District could issue less than $10 million per year to keep the debt bank qualified. After a successful referendum, the District could issue debt within 45 days and up to 5 years from the referendum date. Debt amounts issued in the $11 to $14 million range could keep the total issue at less than 15 years. The Committee liked the idea of a sloping retirement line on the tax levy. Issuance expenses are more on the legal side with the Official Statement being prepared by the attorneys versus the financial advisors. The issue would be rated and Moody's does perform background surveillance. Unless several things have changed at the District since 2010, Mr. Anderson felt the Aaa rating would remain. The District has retired approximately $10 million in debt since the last rating. The Committee thanked Mr. Anderson for his input and no action was taken by the Committee at this time.
d. Chair Olvany asked about additional new business and Commissioner Brault asked about electronic devices for the Board. He stated there are obvious legal and FOIA issues with District-supplied electronic devices to the Board but these need to be weighed against the reduction of paper distributed to the Commissioners. Commissioner Benz preferred the continuation of paper distribution but a further cost benefit will be provided by staff. No action was required by the Committee at this time.
6) Next Meeting – Monday, February 24, 2014 in the Village Hall Training Room
7) Adjournment – With no further business to discuss, the Committee adjourned at 8:37 p.m.
MINUTES APPROVED ON FEBRUARY 24, 2014.