Will County Finance Committee met August 7.
Will County Finance Committee met Aug. 7.
Here is the minutes provided by the Committee:
I. CALL TO ORDER / ROLL CALL
Chair Mike Fricilone called the meeting to order at 10:05 AM
|Kenneth E. Harris||Member||Present|
II. PLEDGE OF ALLEGIANCE TO THE FLAG
Mr. Bennefield led the Pledge of Allegiance to the Flag.
III. APPROVAL OF MINUTES
1. WC Finance Committee - Regular Meeting - Jun 5, 2018 10:00 AM
RESULT: APPROVED [UNANIMOUS] MOVER: Darren Bennefield, Member SECONDER: Steve Balich, Member AYES: Fricilone, Tuminello, Balich, Bennefield, Dollinger, Harris, Staley-Ferry, Traynere
IV. OLD BUSINESS
1. Discussion Re: Budget for Health Department Building
(Mike Fricilone) Mr. Tuminello announced the Health Department building is tracking to $25 million.
V. OTHER OLD BUSINESS
VI. NEW BUSINESS
1. Letter from City of Joliet Re: 20 Year Payments for Courthouse
(Mike Fricilone) Mr. Fricilone read the letter in the packet from the City of Joliet.
2. Audit Process and CAFR for Fiscal Year 11/30/2017
(Karen Hennessy) Ms. Karen Hennessy introduced Mr. Nick Cavaliere of Baker Tilley, our audit firm for the past eight years, who will review the CAFR completed on May 25th.
Mr. Cavaliere stated based on the financial statements we rendered an unmodified opinion; the highest level of assurance the financial statements were prepared in accordance with generally accepted accounting principles and were materially accurate. That is the same opinion we have rendered for the past eight years.
Mr. Cavaliere gave a brief overview of the CAFR, Report on Federal Awards and Communication to those Charged with Governance and Management. There was a new accounting standard implemented during the fiscal year, related to the OPEB plan the county offers retirees. The liability is now recorded on your financial statements, because it is a long-term liability. Previously, it was a disclosure and not the same magnitude as a liability. The County’s financial statements appear to be in good order. The Building Will fund is moving along and things are in good shape. During our audit we did not identify any material weaknesses or significant deficiencies as defined by the standards.
Mr. Moustis asked what is the minimum you need to read from these reports?
Ms. Hennessy replied it depends on what you feel will give you the sense of assurance. The back of the book lists expenditures by department with comparisons with budget to actual. The beginning is a snapshot mostly focused on the corporate fund. In one part everything is together and then pulled apart to give more details.
Mr. Cavaliere added each person has different levels of financial experience; the report is large, but there are standards that must be included. Much of this is budget to actual schedules that must be included. If I had to look at one thing, it would be page 22. This is your financial statements and it focuses on your near term financial results. The first schedule is high level with specific detail budgets following. There is a deficit because of the $175 million bonds issued and construction projects including 135th Street, Weber Road and the Sheriff’s Facility.
A discussion took place regarding bank account some department had, but were unknown to the County and how the situation was rectified.
Ms. Hennessy explained the audit relative to federal funds received and how more than one department can receive a grant from the same federal agency. This is a good source if you want to know which departments receive federal funding.
Mr. Cavaliere added CDBG, Health Departments and others receiving federal grants are audited periodically. We follow a risk assessment process in the uniform guidance rules. The CDBG and Health Department have been audited in the past.
Mr. Moustis asked does CDBG and the others have compliance within the agency, separate from this? Do you reflect they are compliance with the federal government in your audit?
Mr. Cavaliere replied the programs audited this cycle did not include CDBG and we will not render an opinion this particular cycle. The Office of Management and Budget publishes a document called the Compliance Supplement and that is used in addition to the Uniform Guidance Standards to perform a series of tests and procedures over those areas. You are looking for compliance, but are also testing the controls to see that the controls are operating. If you identify any matters during the testing they are reported at the same time. Those would be reported in our documents. Other agencies might have compliance visits over the CDBG program, since the awarding agencies or pass through agency may do an audit or on-site review. They may have more things they are looking for than the auditor of the records is required to do.
Mr. Fricilone asked Ms. Hennessy to bring a different section of the CARF to the Finance Committee meetings. There are a number of pieces to this and we will be talking about GASB 7475 and how its effect on the reporting of the pension liability. That will start showing up in our reports and it will show long term, 10 years down the road, where we will be at. That will dictate how we negotiate contracts and everything in the future. Even in the three year spread Ms. Howard provided, the numbers start moving up fast. We have to get better at understanding this, so when we are voting on contracts there may come a time we cannot do raises.
Mr. Moustis stated at our OPEB meeting this morning we learned this is what we should be discussing. OPEB is basically for retiree health insurance costs funded by the county. We have a $65 million liability, $20 million in funding and our annual cost is $3.5 million. For the fund to be self-sustaining it has to be funded at $60 million. The County Board, the Finance Department and Executives’ Office approach OPEB as it is an option, if we have money left over we add it to the fund. If you want to do it correctly, it is not an option, it has to be funded every year. You have to determine at what level it must be funded to pay all the OPEB from the fund. An audit can help us with this; we have the liability and it has to be funded. If not, at some point, you will be in the same situation as the State of Illinois. When you are not funding something properly, you can’t pay it. We are reluctant because once it is in OPEB it can’t be touched. We don’t have time to do it in this budget, but in the FY2020 budget we have to determine how and at what level OPEB will be funded. Employees need to know this is for their benefit, it is money put away for their behalf. An audit has implications on how you might want to fund something moving forward and that is why we need to know the type of information you get from the audit.
Mr. Fricilone stated everyone here should understand our long term liabilities and how it affects the budget.
Mrs. Traynere asked if a government entity is spending money inappropriately, is that something an auditor would check?
Mr. Cavaliere answered it depends on what we are being engaged to perform and what you are actually testing for. If you were doing grant compliance audit you have to understand the allowable spends for those dollars. You would then sample a series of transactions and look at them to show there are controls in place to make sure the dollars are not spent on inappropriate items and at the same time test for compliance. When you are performing a test on a grant, you are making sure the grant dollars were used for the purpose of the grant. This testing is done for other items also.
Mrs. Traynere asked does that apply to the corporate fund?
Mr. Cavaliere answered no, there are fewer restrictions on the corporate fund.
Mr. Fricilone added our auditor is charged, on a day to day basis, with those same things, what is being spent within the budget and who is over budget.
Mr. Moustis stated my concern is special funds. We created special funds; are they being used correctly? Do we even need these special funds? Some special funds are created by necessity, a grant or statute, but many special funds were created by the County Board. I have concerns when special funds get off grid and have their own checking accounts, not going through our normal County procedures. I think we need to take a hard look at the special funds we created, not by grant or statutes. I see very little need for special funds, but we have a lot of them.
Ms. Hennessy stated we have a lot of funds. There are some accounts where money is managed by departments that does not belong to the County. There is a new GATB coming out that will require us to reevaluate those. If they don’t meet the fiduciary standard they will have to be pulled into the County. There are a handful of special funds we no longer use and we need to find a process to close or inactivate them with Board action.
Mr. Moustis asked Mrs. Tatroe can we take those special funds where the function still exists and put them into the corporate fund?
Mrs. Tatroe responded it depends on the fund, some are dedicated funds. I will continue to work with Ms. Hennessy.
3. Designating First Secure Community Bank of Joliet as a County Depository
RESULT: MOVED FORWARD [UNANIMOUS] TO: Will County Board MOVER: Darren Bennefield, Member SECONDER: Steve Balich, Member AYES: Fricilone, Tuminello, Balich, Bennefield, Dollinger, Harris, Staley-Ferry, Traynere ABSENT: Singer
4. 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: Darren Bennefield, Member AYES: Fricilone, Tuminello, Balich, Bennefield, Dollinger, Harris, Staley-Ferry, Traynere ABSENT: Singer
VII. OTHER NEW BUSINESS
Mrs. Dollinger stated last week I read the will be a referendum for a 1% sales tax for schools. Do we know where this originated from?
Mr. Fricilone stated it has been misquoted in the paper about Will County doing it. The State authorized that if 51% of the school districts within the county voted in the affirmative, they could go to referendum for a 1% sales tax for capital projects only at the schools, not operations. Last week one Oswego School District voted in the affirmative and that put it over 51% in Will County. That will be a referendum on the ballot. If it is passed, the school districts will get an additional 1% on every sales tax and the money will go directly to the schools. It will be broken out by populations.
Discussion took place regarding the wording of the referendum and where it could be found.
Mr. Fricilone explained the referendum and how school districts opted out, but if the referendum passes all school districts will receive the 1% sales tax. It is important for our constituents and residents to understand, it is not us, and it is the school districts.
VIII. PUBLIC COMMENT
IX. CHAIRMAN'S REPORT / ANNOUNCEMENTS
X. EXECUTIVE SESSION
1. Motion to Adjourn at 10:40 AM
RESULT: APPROVED [UNANIMOUS] MOVER: Ray Tuminello, Vice-Chair SECONDER: Darren Bennefield, Member AYES: Fricilone, Tuminello, Balich, Bennefield, Dollinger, Harris, Staley-Ferry, Traynere ABSENT: Singer