Will County Finance Committee met Feb. 5.
Here is the minutes provided by the committee:
I. CALL TO ORDER / ROLL CALL
Chair Kenneth E. Harris called the meeting to order at 10:10 AM
| Attendee Name | Title | Status |
| Kenneth E. Harris | Chair | Present |
| Jacqueline Traynere | Vice Chair | Present |
| Herbert Brooks Jr. | District 8 (D - Joliet) | Present |
| Gloria Dollinger | District 10 (R - Joliet) | Present |
| Mark Ferry | District 13 (D - Plainfield) | Present |
| Mike Fricilone | District 7 (R - Homer Glen) | Present |
| Tyler Marcum | District 10 (D - Joliet) | Present |
| Jim Moustis | District 2 (R - Frankfort) | Present |
| Rachel Ventura | District 9 (D - Joliet) | Present |
Present from State's Attorney's Office: P. Mock.
II. PLEDGE OF ALLEGIANCE TO THE FLAG
Mr. Moustis led the Pledge of Allegiance to the Flag.
III. APPROVAL OF MINUTES
1. WC Finance Committee - Special Meeting - Oct 16, 2018 9:00 AM
RESULT: APPROVED [UNANIMOUS]
MOVER: Tyler Marcum, District 10 (D - Joliet)
SECONDER: Mike Fricilone, District 7 (R - Homer Glen)
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
2. WC Finance Committee - Regular Meeting - Nov 1, 2018 10:15 AM
RESULT: APPROVED [UNANIMOUS]
MOVER: Tyler Marcum, District 10 (D - Joliet)
SECONDER: Jacqueline Traynere, Vice Chair
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
IV. OLD BUSINESS
V. NEW BUSINESS
1. Amending Resolution #18-352 - Signature Acknowledgement of County Treasurer
(Tim Brophy)
RESULT: MOVED FORWARD [UNANIMOUS]
TO: Will County Board
MOVER: Jim Moustis, District 2 (R - Frankfort)
SECONDER: Jacqueline Traynere, Vice Chair
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
2. Will County Finance Committee February 5, 2019
Amending Resolution #18-352 - Signature Acknowledgement of County Treasurer
(Tim Brophy)
Appropriating Grant Funds in the Sheriff's Budget From State Criminal Alien Assistance Program (SCAAP)
(Deputy Chief Dave Adams/Vicki Hayes)
Mr. Adams stated this is a federal grant for the State Criminal Alien Assistance Program; given to local jurisdictions housing criminal aliens for certain felony or misdemeanor convictions, whether the charges are local or not. This grant returns some money for the costs to house them. A calculation is formulated based on the number of aliens in custody, how many days housed and the conviction. The feds audit the information to ensure it is legitimate and correct. The grant has to be used for purposes of jail corrections only. In your packet is a breakdown of where we would like to spend this money.
Mrs. Traynere asked have we done this before? Is this money for last year or projected for the coming year?
Mr. Adams replied yes we have done this before and the money is for last year.
Mr. Moustis stated in the past we have asked the Sheriff’s Department for data on who they are holding and who is here illegally and we were told you don’t collect that data. We were told you were not holding people here illegally or aliens for the feds. You applied for the grant saying you provide these services, but reported to the County Board you did not do these things.
Mr. Adams stated we are holding them for local charges, not holding them for the feds. They are here for a local or state charge and happen to be illegal. The Sheriff’s Department does not determine who is here illegally or not. We submit the information to the feds and they determine who is illegal and who is not.
Mr. Moustis asked how can you give the feds data if you are not asking inmates their status?
Mr. Adams replied when someone comes into the ADF they are asked their nation of birth. We submit that information and they figure out if they are here illegally or if they have a work permit or visa. We can determine if a person is an alien, but not if they are legal or illegal, as a local jurisdiction, we don’t have access to that information.
Ms. Ventura stated you are saying this could be someone from another country, not necessarily an undocumented person.
Mr. Adams replied correct and at the county level we don’t know if they are illegal aliens or not. When they state they have a foreign nation of birth we submit their information. SCAAP is governed by the Immigration and Nationality Act; beginning in FY2007 SCAPP funds must be used for correctional purposes only. We could not spend them in the enforcement division.
Mr. Fricilone stated eventually you know who these people are because you submitted the data.
Mr. Adams stated we don’t know the person by name. We pay a firm called Justice Benefits. They take all our data, compile it and send it to the feds in the required format. They receive 15% of the grant for their services. That is part of the draw down in the Resolution.
Mr. Fricilone asked why isn’t the money going toward personnel instead of machinery and snowplows? Why not use it for the cost of housing them? If there is overtime associated with holding these people, the money should go to offset the overtime versus a capital expenses.
Mr. Adams stated it is difficult, if not impossible, to determine if this is causing overtime. A person may come for one day, two days or two months. We can’t determine which person cost overtime and which did not.
Mr. Fricilone stated we could figure a percentage. You are putting no money toward actually holding them. You have training for overtime, but no money is going into the system to pay for and reduce our labor costs. The government is giving these funds for holding them and the funds should offset our costs for holding them. Using this for labor would allow us to allocate less for labor next year.
Ms. Ventura stated you cannot balance your payroll based on projected grant money.
Mr. Fricilone stated the Sheriff’s Department goes over budget every year with their overtime. We could use this money to reduce our overtime spend. Capital expenses for a vehicle should come from the capital fund.
Mrs. Traynere stated the money should be going to the actual cost incurred. Do you get a report back listing by name and number of days held and who qualified for the grant? Is this just a number they calculate to pass on to the feds?
Mr. Adams replied we don’t get a report back with the actual names and dates held. We work up the data, present it to Justice Benefits and they submit to the feds what they believe the number should be, based on the data we provide. This year the number was just over $200,000. However, the feds pulled people out based on them having a work visa or were now a naturalized citizen. After they disqualify people from the data, they give us the final number. Justice Benefits provides the information but does not give us a breakdown.
Ms. Ventura expressed concerns on what the money is being spent on. I would entertain using it for overtime expenses. I am concerned about the snowplowing/mowing vehicle. Is the key box an item specific to corrections?
Mr. Adams answered the snow removal equipment is a tractor with a snow brush. We have a large square footage of sidewalks, walkways and parking lot surfaces around the jail. Our grounds staff shovel and spread salt by hand. This equipment will prevent staff injuries and will make it safety for the public accessing our properties. It cuts down on work comp claims, allows them to be more productive and helps cut down on the overtime.
Mr. Fricilone stated I think we need a snowplow, but it should not come from this money. If you don’t put money toward the overtime, that may have been used for these people; you can use as much as you want, go over budget and we still have to pay it. If you spend what was allocated in your capital budget, you don’t get any more unless you come back and ask for it. You can keep spending on overtime, but if we are not using this money to bring overtime down, you are allowed to keep spending it.
Mrs. Traynere stated I suggest you talk to the Sheriff and come back with a different allocation for this money.
Ms. Ventura stated unless you have a compelling argument for these things to come from this pot of money, I can’t support this.
Mrs. Traynere stated I am good with you having snowplows, but it needs to come from your capital fund and this money needs to go toward overtime.
Mr. Moustis stated this is a shell game, you are not going to use the money for operations, because when you overspend the overtime budget, we have no choice but to fund it. In my opinion, you and other department holders probably violated the state statutes, when you outspend the appropriation. This grant is to offset the cost of collecting the data and personnel costs, it should go to that area. Take another look at this.
Mr. Adams stated we are here to get your approval and your opinions matter. If we overspend our budget, it is due to staffing and that has been demonstrated. It is not a choice of ours.
Mr. Moustis stated you also know we have no choice but to fund the overtime. This goes back several administrations. The budget is being overspent by millions. Some is the way the budget has been constructed and not reflecting reality of the overtime. We have resources coming in meant to offset operational costs, and that is where the money should go versus equipment. You want to spend it on capital because you know you will get the money for operations. We are interested in funding the operations up front. Capital is a onetime expense; meant to last a long time. This grant is related to operations. It is not like you needed the funds to transport inmates or acquire a data system. It doesn’t have to go to overtime, you could use it to fund the four additional correction officers allowed in the last budget or use it to get two more CO’s which will also cut the overtime.
Mr. Fricilone stated if it goes back into the labor, it helps us meet the budget on the operations. We look at capital separately; if you need cars or equipment we look at the capital budget.
Mr. Balich gave an update on McHenry County’s ICE detention center which made a $10 million profit.
Mrs. Ogalla added in addition to labor, we also have all the costs of housing, food, laundry and medical. It would be nice to know the actual cost of housing a person.
Ms. Winfrey stated we have some money in line 304 to cover the capital expenses and move this money into the operational budget.
Mr. Harris asked can you explain the key control unit?
Mr. Adams gave an explanation of the benefits of the unit, including doing away with paper logs to provide a more detailed and accurate record of who has signed a vehicle out.
Mrs. Ogalla asked do you receive these funds annually? Mr. Adams replied yes, we receive them annually.
Mrs. Ogalla continued since it is annually, could we guess an amount of money and build that into the budget.
Ms. Hayes stated it varies so much.
Mrs. Ogalla stated but we could add something to the budget for this grant.
Mr. Adams stated this year the requirements for qualifying changed at the federal level. We lost $50,000 from our estimated number. One reason we received the amount we did is because after a Colorado city because a sanctuary city, they were not eligible to receive these benefits. It was a large facility so the feds took the money and spread it out to the remaining agencies.
Mr. Moustis asked is this something Smith Dawson could help with? Has anyone from the department talked with the lobbyist? It might be a good idea to let them know this is always on our radar and we are concerned about it. If they can help, they will. They usually get information when the funds are being cut or funds being moved from one municipality to another.
Mr. Fricilone stated my concern is when we get the money it is appropriated to the correct thing. If we continue to put it toward operations and keep it down so we are not going over, then it makes sense.
Motion to Send the Resolution back to the Sheriff's Department and have the Grant Funds go Directly Towards Operations and Capital Requests Come Separately and put it on the Executive Agenda for February 14, 2019
RESULT: APPROVED [UNANIMOUS]
MOVER: Jacqueline Traynere, Vice Chair
SECONDER: Jim Moustis, District 2 (R - Frankfort)
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
3. Other Post Employment Benefits
(Karen Hennessy)
Ms. Hennessy reviewed the handout in the agenda. We have two post- employment benefits; one is pension handled by IMRF and the other is health insurance. Retirees get health insurance from the time they retire until they reach the age of 65. The Government Account Standards Board requires us to include the liability for the expense in our financial statements. In 2011 the County established an OPEB trust and began making contributions to a fund to offset the liability. We have made contributions annually since then. We currently have $14 million in the fund. When we established the fund we did not have a Board of Trustees and the money went into a bank account and sat there. In 2016 we established the Trust Board; details of the membership was given. Those seven people are responsible for managing how the money is invested. They have no control over the benefits offered, it is only management of the fund. In 2016 the Treasurer was selected as the agent and consultant and they selected UBS to invest the trust funds. They report quarterly to the Board to let us know how the investments are doing and make recommendations and the Board act to change the allocations or move things around. Details of how AON values the account was given. A few years ago we saw a drop in the liability because people were able to get secondary insurance through the marketplace at a lower cost than the County.
The rates for spouses and family members of the retirees was given. Once people move to Medicare they can use the County insurance as a secondary; they cover the entire cost and the cost for drugs only is $10,000 per year and the rates change every year. Initially we were contributing around $2 million per year; we have scaled that back to $1 million. The reason is these are irrevocable and you cannot use them for anything but health insurance ever. We have a lot of needs at the County so we have limited resources and we dedicate what we can and can’t spend.
Mr. Moustis stated the only function of the OPEB Board is to set policy on investments and their allocations have done well. My concern is the liability. I know the OPEB Board doesn’t say what the liability is; but we should go back and look at that every few years to see if the liability number is changing. When they made changes to IMRF and other state pensions and said it was no longer available at age 55, instead it changed to 62; that affects our total liability.
Ms. Hennessy stated the statutes require an actuarial study done on a bi-annual basis so we have the study done and update it the second year. Every year our financial statements show the most current. Someone looks at it every year, but the study is done every other with an update on the off year.
Mr. Moustis asked is that a responsibility of the OPEB Board?
Ms. Hennessy replied it is not a responsibility of the trust board. It is part of the financial statements. As a Board you need to decide as the position continues to grow, there will be a point where enough will be in the fund to continue to fund the liability without a contribution. Currently, we are a pay as you go; we pay for retirees as part of our regular operations.
Mr. Moustis stated if we are going to continue to contribute to OPEB but continue to pay the costs from regular operations; what is the purpose?
Ms. Hennessy replied at some point they will be combined and come from this fund. It doesn’t make sense now, because we would wipe this out very quickly.
Mr. Moustis asked what is critical mass for us?
Ms. Hennessy responded I always felt 50% of the liability; but that liability number keeps moving. Our actuary does look at that and we will get a recommendation when the time comes.
Mrs. Johannsen stated at one time we set it at $35 million.
Mr. Fricilone asked do we show the expense we are paying in the budget for the retirees?
Ms. Hennessy replied not in the budget. We can get the number from HR, AON or Blue Cross, but it is not something in the budget.
Mr. Fricilone stated that would be a good number to know. We are doing that at the Forest Preserve. We do budget for the contribution each year; we do not necessarily do it all at once, we do dollar cost averaging over the year.
Ms. Hennessy stated the Health Department does use their trust fund to pay for benefits; they have a much smaller group of employees versus what we have. Theirs works very similar to how ours will work when we get to that point.
Mr. Fricilone stated the Forest Preserve does allocate money they put in, and they pay from the fund.
Ms. Hennessy stated that is what we will do eventually. Instead of making the contribution to the fund, we would pay into it every year’s costs for the insurance; then pay the expenses out of the fund.
Mr. Fricilone stated they are putting more in than they take out, because they are not at the critical mass.
Ms. Hennessy stated we use AON because they have access to our health insurance and it is a simpler process. I can ask them to include a schedule for us. When he did it last year; I believe contributing what we currently spend, plus this is ten years. We are not ready to go forever.
Mr. Moustis stated I think it is important to see the number being paid out to retirees. When we know the cost it would be possible to cover the cost and still add money for long term payments.
Mr. Fricilone asked is that a better way to account for it? If we are going to put $1 million to increase the fund and our expenses are $1 million does it make sense to put $2 million and pay from the fund? Which looks best on the books, especially since we have to include the liability.
Ms. Hennessy stated when you look at our financial statements the notes would explain how the fund is being used.
Ms. Ventura asked how are we budgeting for this; we have $1 million goes in and is there a second line for what we are paying?
Ms. Hennessy answered we are self-insured, we don’t pay a premium per employee, we estimate based on history what our insurance costs will be and we change that to a FT equivalent. The retirees are an add on line, we can add a line item but current we do not budget for it separately.
Mr. Moustis stated there was a time we did separate because the contract says they will pay the full cost for spouses, prescription drugs and those over 65 had to pay the full cost. It should not be blended in with the general employee population. Part was to show the cost of prescription drugs and there are better options in the private sector. Most of the retirees did move to the private sector. Those exercises are important because we are not set up to be a supplemental to Medicare. It should be 65 and you are done and we would not subsidize. We have a contract and our employees under 65 are covered for themselves. I think it is important to know the cost; even if you keep the rates blended.
Ms. Hennessy stated when the financial statements are completed we will have the most current information and can evaluate then what the cost has been.
A discussion took place regarding the money the Forest Preserve was putting into their account and the expenses.
Mrs. Traynere stated the most important part is to have the money in the account working all year long, because our expenses do not come at the beginning of the year.
Ms. Hennessy stated this could be done in the FY2020 budget. We would found out the cost of the retiree health insurance. We have to be careful because of HIPPA, we do not pay premium, we pay actual. You have to be careful there are no names associated with the cost. I can find out the total cost for retiree health care. Our contribution would then need to be that amount plus a contribution to grow the fund. Figuring out the at number and determining the level of contribution that will allow the fund to move forward indefinitely is a hard number to pin down.
Mr. Brooks stated there is a $500,000 contribution this year, what is that for?
Ms. Hennessy stated that is our contribution to the trust. The health insurance cost is blended into all the other health insurance costs.
Mr. Moustis asked could this be a FY2020 initiative?
Ms. Hennessy replied yes, if we want to do it separately.
Mr. Moustis asked Ms. Hennessy to bring the information as soon as possible to allow the committee to have a discussion.
Ms. Hennessy stated the financial statements are done in May, so they could possibly be ready for June.
4. Status Update - 2019 Bond Issuance
(Karen Hennessy)
Ms. Hennessy reviewed the attached handout.
Ms. Ventura asked if you are bonding for $58 million how do you get $65 million?
Ms. Hennessy replied the earnings on the bonds are tax exempt; so they are attractive. We are also offering a 5% interest rate and people will pay a premium for a 30 year investment. It had a huge impact on our last issuance. The market was different but we issued $175 million and we received $205 million; a $30 million premium. During the last issuance we had orders at 2.5 to 3 times what we were offering.
Mr. Moustis stated the total debt is well within our ability to pay. For this particular bond issuance are we pushing the cost further back?
Ms. Hennessy replied during the first six or seven years we reduced the principal we are paying on the 2016 debt; this was the plan from the beginning we would issue bonds multiple times; the principal due on the 2016 bonds from 12 to 8 and during the drop we will fill in with these 2019 bonds. At the end we have a balloon payment, because all the other bonds will be paid off.
Mr. Moustis stated this puts us at our limit for bonds for about 10 years.
Ms. Hennessy stated in 10 years a lot could change, our revenue sources could change.
Mr. Tuminello stated there are a few years were we are under 2.25% coverage. Is there anything we could do to move those healthy 3.5% coverage years to bolster the 2.25% years?
Ms. Hennessy replied the required coverage is 1.25% coverage and we are way ahead of that.
Mr. Fricilone stated I think it is too much for bonding. We have over $3 million in contingency for the Health Department and a big contingency on the Courthouse. We are bonding based on those numbers. I am concerned we may be taking too much, especially with the contingencies. Our bidding has gone well and continues to do so.
Mr. Tuminello stated during the Capital meeting we are going to find we had very good bidding and everything should be awarded based on our package and the Courthouse is $18 million under budget. I thought this bond issuance would be around a $38 to $42 million.
Mr. Fricilone added with the contingencies are we going to have an extra $15 million and then figure out how to spend it?
Mrs. Traynere asked is furniture considered capital? Is furniture included?
Mr. Tuminello replied furniture was included in the all in number.
Ms. Hennessy stated the numbers in the packet were reviewed by the people involved in the construction, the budget staff, finance staff and we all came to the same number.
Mr. Moustis stated we have the ability to go to bank qualified issuances for up to $10 million.
Ms. Hennessy stated it can only be done in a year when you do no other funding. We could not do it this year and could not do anything else.
Mr. Moustis stated I would have gone for less and if we needed to get a bank qualified issuance for $5 or $10 million would be the alternative. It could cost more, but maybe not because the bank would bid it and they can be pretty aggressive, especially when they are looking for portfolios for their private banks. My concern is if we have to scramble around and find ways to spend the money to avoid being in violation of IRS rules. I also don’t want to go out and spend money for the sake of spending money on things we may not have needed to do.
Mrs. Traynere stated we have already talked about the roof at the ADF and what about the Record’s Management Building? There was an issue because there is not enough space.
Mr. Moustis stated the ADF roof will be in the neighborhood of $4 to $5 million. We talked about buying a new Records building.
Mr. Fricilone stated you have three years to spend the money once it is received.
Mr. Moustis stated we should not rush; we should be prudent and not just spend money on projects just to spend. That is what tends to happen, people say we have an extra $10 million so let’s do this.
Mr. Tuminello asked can you clarify, if we go out for these bonds we can’t go out for another ten years.
Mr. Moustis replied based on our finances we can’t go for bonding.
Mr. Tuminello continued if we did $38 million and we get our numbers in better financial shape, could we go out a year or two down the line?
Ms. Hennessy stated last month we laid out what was left for the Courthouse and Health Department and what was left of the original bond. The amount we need is $65 million. There seemed to be confusion over the use of RTA funds. It was not used to fund construction, it was used to help offset the abatement for the bonds. That is where the difference between $65 million and $40 million comes from. It seems more prudent to me, when we know the environment we are in investment wise and we know the market conditions today to do it now. I don’t think we are at risk of having too much money. The expected cost of the Courthouse, from the construction people is $205 million.
Mr. Fricilone stated we could be $8 million less on the Courthouse.
Ms. Hennessy continued with a review of page 3 of the handout. We have identified, 30 years in advance, how we are going to pay for these bonds, every year. Now this can be used for the budget.
5. Appropriating Pass Thru Grant Funds
(Karen Hennessy)
Ms. Hennessy stated last year the County received a DOJ School Violence Prevention Grant. It is unusual in that we don’t get the grant. The grant is for a school district to improve security at their facilities. The school district incurs all the costs. The County is the fiscal agent, they send copies of their invoices and we reimburse them. The school district will be doing $1.4 million of improvements to their schools for security and they will receive $500,000 from the feds toward the project. This request does not increase the budget, but we are setting up a separate fund to do this.
RESULT: MOVED FORWARD [UNANIMOUS]
TO: Will County Board
MOVER: Mike Fricilone, District 7 (R - Homer Glen)
SECONDER: Tyler Marcum, District 10 (D - Joliet)
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
6. Transferring Appropriations within Various County Budgets
(ReShawn Howard)
Ms. Howard stated this is the second round of budget cleanup. This is transferring within the departments.
RESULT: MOVED FORWARD [UNANIMOUS]
TO: Will County Board
MOVER: Jim Moustis, District 2 (R - Frankfort)
SECONDER: Tyler Marcum, District 10 (D - Joliet)
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
7. Authorizing County Executive to Execute Necessary Documents for Delinquent Tax Program
(Julie Shetina - Jen Alberico)
RESULT: MOVED FORWARD [UNANIMOUS]
TO: Will County Board
MOVER: Mike Fricilone, District 7 (R - Homer Glen)
SECONDER: Jacqueline Traynere, Vice Chair
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
VI. OTHER NEW BUSINESS
VII. PUBLIC COMMENT
VIII. CHAIRMAN'S REPORT / ANNOUNCEMENTS
IX. EXECUTIVE SESSION
X. ADJOURNMENT
1. Motion to Adjourn at 11:20 AM
RESULT: APPROVED [UNANIMOUS]
MOVER: Mike Fricilone, District 7 (R - Homer Glen)
SECONDER: Jacqueline Traynere, Vice Chair
AYES: Harris, Traynere, Brooks Jr., Dollinger, Ferry, Fricilone, Marcum, Moustis, Ventura
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