FINANCE COMMITTEE 2012/10/15 Minutes
The City of Lake Forest
FINANCE COMMITTEE
Proceedings of the October 15, 2012 Meeting
6:30 p. m. – City Hall Council Chambers
I. Call to Order and Roll Call
Acting Chairman Schoenheider called the meeting to order at 6:45 p.m. Present: Aldermen
Novit, Waldeck, Moore, Tack, Palmer and Adelman. Absent: Mayor Cowhey and Chairman
Pandaleon. Quorum present. There were approximately 13 people in the audience.
Staff present: Robert Kiely, Jr., City Manager; Elizabeth Holleb, Finance Director; Diane Hall,
Assistant Finance Director; Joe Gabanski, Assistant IT Director; Victor Filippini, City Attorney.
II. Consideration of Minutes from the Finance Committee Meeting Held on September 17, 2012.
Alderman Palmer made a motion to approve the minutes from the Finance Committee
meeting held on September 17, 2012. The motion was seconded by Alderman Novit. The
motion carried unanimously by voice vote.
III. Consideration of the FY2012 Treasurer’s Report
Ms. Elizabeth Holleb, Finance Director reviewed the State Statute requirement of filing a
Treasurer’s report with the County, as well as publishing in the local newspaper within six
months after the end of the fiscal year. She stated that the report would be published in the
Lake Forester on October 25, 2012. She discussed the current format is used to save on costs.
Following discussion, Alderman Novit moved, and seconded by Alderman Palmer to
acknowledge receipt of the FY2012 Treasurer’s Report.
IV. Potential Uses of General Fund Reserves
Ms. Holleb stated at the September Finance Committee a revised fund balance policy for the
General Fund was approved. Ms. Holleb stated at the end of FY2012 the City’s General Fund
reserves exceed the policy by $3.6 million. She stated with low interest rates, options are being
looked at to benefit the City. She discussed two possible options:
1) Advanced payment of the ERI Liability – The City and School District currently
have a liability of $4.3 million. The City’s portion of the liability is 88%. IMRF uses a
7.5% interest rate and a repayment schedule of ten years is currently projected.
Four options were discussed with the Committee. The Committee discussed
opening a dialogue with the school district regarding the different options. Ms.
Holleb stated that payments on the liability can be made any time prior to
December 31st each calendar year to adjust the IMRF rate. Ms. Holleb discussed
the staff’s recommendation of option three, which would save the City
approximately $1.6 million. The Committee discussed a possible option of issuing
bonds to cover the liability at a lower interest rate.
2) Increase liability insurance deductible – The Committee discussed increasing the
City’s deductible from $25,000 to $100,000 could potentially reduce the
membership contribution to the current insurance carrier IRMA by approximately
$48,000 annually. Ms. Holleb discussed an actuary was used to look at the City’s
loss history for the most cost effective option. The Committee discussed the
option of transferring a portion of the excess reserve to the Liability Insurance fund
or designating a portion of the General Fund reserve in the event of an atypical
claim year. The recommended reserve would be $500,000.
The Committee indicated that both options had merit and deserved further study and
consideration by the Committee.
Finance Committee Meeting
Minutes – October 15, 2012
V. 2012 Property Tax Levy
Ms. Holleb stated that the TIF district will be expiring December 31st, 2012 and the assessed
valuation of the district will be added to the City’s tax levy in the same manner as new
construction. Ms. Holleb discussed the Truth in Taxation statute requiring a public hearing if the
tax levy extension will exceed 105% of the previous year, which is typical when a TIF expires.
Ms. Holleb recommended that a new step be added to the Tax Levy process to enhance
transparency due to the impact of the TIF expiration. Ms. Holleb stated that at the November
5, 2012 City Council meeting a Tax Levy estimate will be brought forward to the City Council
and a Tax Levy public hearing date will be set. The Committee discussed adding the new step
will create a better transparency for the process.
VI. Other Business
1) September 2012 Flash Report – The Committee reviewed the Flash Report and discussed
the continued decline the Real Estate Transfer Tax revenue.
2) Debt Capacity Chart – The Committee discussed the revised Debt Capacity chart, which
has been updated to include the debt refunded in 2011. The Committee has requested
a new graph assuming the Laurel Avenue property does not sell prior to the bonds
maturing.
VII. Opportunity for the Public to Address the Finance Committee: None
Mr. Joe Gabanski. Assistant IT Director demonstrated the new option of Drop Box that will be
utilized to distribute City Council and Finance Committee packets.
VIII. Adjournment
There being no further business, Alderman Palmer moved, seconded by Alderman Novit to
adjourn the meeting at 7:25 p.m. The motion carried unanimously by voice vote.
Respectfully Submitted.
Diane Hall
Assistant Finance Director