Will County Finance Committee met April 3.
Here is the minutes provided by the Committee:
I. Call To Order / Roll Call
Chair Mike Fricilone called the meeting to order at 10:45 am
Attendee Name; Title; Status; Arrived:
Mike Fricilone Chair Present
Ray Tuminello Vice-Chair Present
Steve Balich Member Present
Darren Bennefield Member Present
Gloria Dollinger Member Absent
Kenneth E. Harris Member Present
Cory Singer Member Absent
Lauren Staley-Ferry Member Present
Jacqueline Traynere Member Present
Also Present: J. Moustis, C. Maher, H. Brooks, R. Freitag and M. Johannsen.
Present from State's Attorney's Office: M. Tatroe.
II. Pledge Of Allegiance To The Flag
Mrs. Johannsen led the Pledge of Allegiance to the Flag.
III. Approval Of Minutes
1. WC Finance Committee - Regular Meeting - Mar 6, 2018 10:00 am
Result: Approved [Unanimous]
Mover: Darren Bennefield, Member
Seconder: Ray Tuminello, Vice-Chair
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
IV. Old Business
V. New Business
1. Transferring Appropriations between Funds and Budgeting Funds on Hand in the County Clerk's Budget
(Nancy Schultz Voots)
County Clerk Voots stated I have been working with Mr. Thompson to get the vital records scanned into the new Content Manager. The documents are old and starting to get brittle. I have the money in my automation fund and would like to transfer the money to have an outside company start scanning the documents.
Mr. Fricilone asked how long will this project take?
Mrs. Voots replied three months versus years, since we don’t have the manpower or staff at Records Management. These documents are not backed up and if there was a flood the documents would be gone. This project will be done in phases; first the birth and death certificates and then the marriage licenses. The older marriage licenses are folded and it will be more expensive due to the time needed to process them. The cost for Phase 1 is $55,000. When Phase 1 is completed and I will ask to transfer more money. These documents will be leaving the building, but we can get the image within four hours. No one will have to wait. Information will be on my website. Scanning documents is the way of the future. It will also help with the amount of space needed to store documents.
Mr. Fricilone clarified this request is for the birth and death certificates only.
Result: Moved Forward [Unanimous]
To: Will County Board
Mover: Darren Bennefield, Member
Seconder: Ray Tuminello, Vice-Chair
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
2. Discussion Regarding an Increase in Vital Records Fees
(Nancy Schultz Voots)
Mrs. Voots stated there is a difference in cost for vital records at the Health Department and in my office. I had my staff do a study of what the surround counties charge. The Health Department has always charged more as they are able to change a legal document and we cannot. I am here to ask to have our fee the same as the Health Department.
Mr. Fricilone stated the Health Department has their own Board and is not part of the County. I don’t know if we can use a study they might have done, and may have to do our own study as required by statute.
Mrs. Voots stated I cannot justify spending money on a study if we already know the cost. Can we work with the Auditor and have them do a cost study?
Mrs. Traynere asked can we raise our fees to match the surrounding counties or the Health Department?
Mr. Fricilone stated by state statute if we increase fees for county functions we have to do a study. We have to see what the State’s Attorney can tell us.
Ms. Olenek stated customers are confused and don’t understand the difference in the service. I am the County Registrar for the vital records and Mrs. Voots is not. Our agency is the only one who can create the birth or death certificate. Once the document is created, a person can obtain a copy at either the Health Department or the County Clerk’s Office. At the Health Department the cost for a birth certificate is $12 and a death certificate is $16. As you can see, Will County is the lowest. We are always looking at our budget and ways to create revenue and this could help the bottom line.
Mr. Balich stated if it costs more money to do the service, then an increase is justified. I don’t want to raise our fees just because another county charges a higher fee. We are not supposed to do things for a profit.
Mrs. Voots stated I believe we need to be equal to the other counties.
Mr. Balich continued it should be based on our cost. Other counties may pay employees more and that is the reason it costs more. People pay taxes and the only way I will vote for an increase is if the cost to the County goes up, not because other Counties charge more.
Mrs. Voots stated the project to scan all the documents is costing the County money. We are using automation money and can justify why we need to raise the costs.
Mr. Bennefield stated in your memo, you are saying “that the County Clerk’s vital records fees be raised to at least match the Health Department”. Currently, you charge $9 and the Health Department $12; that would be a 30% increase between the fees. You are asking not only for us to at least match, but to possibly exceed that. Why would we need a 40% increase on the vital records? Without a study how do we really know what the fee increase should be and how to justify the fee increase?
Ms. Olenek replied I don’t know of any cost study for our fees. However, one reason for the disparity in the costs is I am the registrar. It takes us a lot more time to record a birth or death. If questions on the certificate are not answered, we have to go back to the parents, hospital or Coroner’s Office, so there a lot more work involved in recording the documents than just providing a certified copy. We charge more, because it costs us more to produce the document. I understand what Mrs. Voots is saying about spending $50,000 to do a cost study to tell us we should raise fees. Look at the staff’s salaries now versus the last time fees were raised.
Mrs. Tatroe stated there are fees set by state statute; I have not seen anything that authorizes an increase over those fees.
Mr. Fricilone asked Mrs. Tatroe to look at the statute and come back next month.
3. Appropriating Additional Grant Funds in the Health Department Budget for a Medical Reserve Corp (MRC) Challenge
(Susan Olenek)
Ms. Olenek gave a brief review of the grant to provide food pantries.
Result: Moved Forward [Unanimous]
To: Will County Board
Mover: Ray Tuminello, Vice-Chair
Seconder: Steve Balich, Member
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
4. Review of Debt Service and Bonds
(Victor Chang)
Mr. Victor Chang and Ms. Leslie Ng reviewed the attached handout.
Mr. Chang stated 3.66 was the cost of money when you came to the market in August 2016. There have been 5 rate hikes since then. The demand in the market for municipal bonds is very high. There are still people who desire municipal bonds, even with the drastic tax change.
Mr. Maher arrived at this juncture.
Discussion took place regarding possible future rate hikes and the cost of bonding.
Mr. Chang explained coupon rate and premium rate.
Mr. Fricilone stated we bonded for $175 million, had a $30 million premium and we will pay back $175 million.
Mr. Moustis added what makes these bond attractive is they are tax exempt. If the coupon rate is 3%, you receive $3 for every $100, but the tax equivalency is $4.25 because you are not paying taxes. It is attractive to high end investors and private banks. A few people will buy all of it and distribute it to their clients.
Mr. Chang stated for anyone with a tax burden, this is a cheaper way to address the tax burden.
Mr. Bennefield stated at $175 million, we received a $30 million premium; roughly 17%. Now we are at 10%, why is that?
Ms. Ng explained how the rate increase have affect the yield being paid.
Mr. Chang stated the number to focus on is the TIC or true interest cost.
Mr. Fricilone stated $100 million is the max we could bond based on the Resolution allowing us to bond up to $275 million.
Mr. Moustis asked are your projections based on the Feds raising rates 1 or 2 times this year?
Ms. Ng replied this analysis is based on the current rates. We used the MMD, Municipal Market Data curve that aggregates municipal general obligation bonds. When we price bonds we go off of that, price to that particular index, use a spread and that is the County’s spread based on what investors believe to be your credit worthiness. We used a conservative spread of 75 basis points. Our analysis is based on Wells Fargo’s projections of three more rate hikes this year. Since your last issue the 30 year rate has increased 80 basis points.
Mr. Chang stated your bond for both the 2016 issuance and the current issuance is a 20 year average life.
Ms. Ng stated the municipal supply is down 32% this year as a result of tax reform.
Mr. Moustis stated meaning entities are not going out for money, but does not mean there is not considerable demand.
Mr. Chang stated part of the tax reform there is no advanced refunding.
Ms. Ng explained refunding. June and July are the months for many bond principal and interest redemptions and there should be cash available to purchase bonds.
Mr. Moustis stated we will not spend this money until after the first quarter of 2019. The analysis comes down to what is the cost to carry the money for six to nine months versus a higher interest rate.
Mr. Tuminello asked how much money is left from the original bond proceeds?
Mrs. Johannsen indicated she would provide.
Mr. Tuminello stated there seems to be some urgency, but I have a concern about bonding right now. We started 2016 with a 20 year yield higher than what we ended in 2017, even after three rate increases. If we have money sitting, the carrying cost on that is not going to outweigh us trying to bond right away. The original deadline for the bond was three years; April 23, 2019. We have until April of next year to go out for additional bonds. We don’t know the number for current capital projects. I think we need to use up the current cash, come up with a final number and bond for what we need to finish our projects; that is more conducive than throwing out numbers.
Mr. Moustis stated I am concerned about carrying costs. We have not gotten a figure on the Health Department; I don’t think we will go beyond another $50 million. Unless the capital program is expanded to include something else, it won’t go beyond the Health Department. When it comes to the courthouse site, a lot of discussion has to happen. We could have a lot of things there, including a private sector partner with perhaps the City of Joliet and Will County going into the same building. It is an important site to the downtown redevelopment. Once we get the Health Department number, I believe we are done. We don’t want to bond more than we need. I believe it will be less than $50 million, unless we include some long term capital for major renovation of replacement of items that are replaced every 30 years.
Mr. Fricilone stated once the Resolution is up in April for bonding, we can create a new Resolution for the next bond issuances. Some stuff has to run off, because financially we cannot handle more buildings. By the time we get the estimates on the Health Department and where we are on the courthouse, we will know what we need. Sometime this year we will be ready to put this in place.
Mr. Tuminello stated we have to allow it to run off and close the previous Resolution. The original Resolution was for $275 million, but we have only bonded $175 million. We have shown we can pay up to $275 million. If we go out and bond for the final $100; we could pay for every building we need including some maintenance. I will not sign off on spending $60 million on the old courthouse. The Resolution we did, would cover the project. When we do a future Resolution, when we add the two together we should not go above that.
Mr. Moustis asked the intent of the Resolution was to bond up to $275 million, because of time restraints we were not able to get there, can we amend the Resolution and extend the time period?
Mrs. Tatroe replied you will have to do a new Resolution.
Mr. Moustis continued we already established and figured in our financial model going to $275 million. If there is $75 million left we could do another Resolution giving bonding authority up to $75 million. That does not mean you have to take it, you have the authority to do it. The issue was we could not do the projects within the timeframe. If we do bonding next year, that will take us to 2022. By 2022 we will be able to look at the old courthouse site.
Discussion of the Bonding Resolution, and the authority and spending guidelines took place.
Ms. Hennessy stated if we issue these bonds, we will have to abate them this year. Even if we don’t have a P&I payment we have to set aside money to abate. If we are talking about debt service at $2 or $3 million we have to come up with $2 or $3 million this year.
Wells Fargo Presentation April 3, 2018
(Handout)
5. Discussion Re: Budget for Health Department Building
(Mike Fricilone)
Mr. Fricilone stated after the Capital Committee officially approves Kluber, our next goal will be to get to a number and Mr. Chang will make the next move when appropriate. Once we have the architect on board, next will be the financial and design plan.
Mr. Tuminello stated with our previous projects we brought the CM in early in the process, before the SD so they could help drill down the budget. Originally, we talked about bringing in the CM after the SD, but after conferring with Mr. Moustis and the individuals, they thought it would be good to have the CM help us arrive at that number. While the architects may say here is the budget, the CM will give us a more accurate number and ensure we will not cut services and vital programs.
Mr. Moustis stated the architect is still responsible, but there is collaboration that makes the process more trying for those involved, but for the user and us, the customer, we wind up with a good result.
Mr. Moustis asked Mr. Dwyer if working with the CM in the early stages is beneficial.
Mr. Dwyer responded we had a good experience and I would recommend it. It is valuable to the process as it helps tighten up the numbers and the schedule.
Mr. Moustis stated it helps up front, but also during the construction; because there is an understanding between the design and construction teams with positive results and fewer issues.
Mr. Dwyer stated what is nice about having the CM early is the construction team gets a chance to become engaged during the design process and know the important design concepts rather than coming in later and inheriting something fully vetted. They then have a vested interest and some ownership in how it came together.
6. 2017 Final Levy Numbers
(ReShawn Howard)
Ms. ReShawn Howard reviewed the final levy numbers in the packet.
7. Transferring and Increasing Appropriations in Various County Budgets to Fund Year End Shortfalls - Attachment Added
(ReShawn Howard)
Ms. ReShawn Howard indicated this is the last cleanup for FY17.
Result: Moved Forward [Unanimous]
To: Will County Board
Mover: Steve Balich, Member
Seconder: Jacqueline Traynere, Member
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
8. Assignment of Tax Sale Certificates
(Julie Shetina)
Result: Approved [Unanimous]
To: Will County Board
Mover: Jacqueline Traynere, Member
Seconder: Steve Balich, Member
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
9. Authorizing County Executive to Execute Necessary Documents for Delinquent Tax Program
(Julie Shetina)
Result: Moved Forward [Unanimous]
To: Will County Board
Mover: Ray Tuminello, Vice-Chair
Seconder: Steve Balich, Member
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
VI. Other New Business
VII. Public Comment
VIII. Chairman's Report / Announcements
Mr. Fricilone gave a brief recap of the OPEB meeting.
Mr. Moustis added we are close to having this as a self sustaining fund.
IX. Executive Session
X. Adjournment
1. Motion to Adjourn at 11:40 am
Result: Approved [Unanimous]
Mover: Steve Balich, Member
Seconder: Ray Tuminello, Vice-Chair
Ayes: Fricilone, Tuminello, Balich, Bennefield, Harris, Staley-Ferry, Traynere
Absent: Dollinger, Singer
Next Meeting - May 1, 2018
https://willcountyil.iqm2.com/Citizens/FileOpen.aspx?Type=15&ID=2946&Inline=True
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