Financial Planning & Policy Committee
Meeting Minutes

Date: September 19, 2011

Location: Park District Administration Offices – Conference Room

Time: 6:30 p.m.

Committee: J. Brault, G. Benz, J. Olvany, Chair D. Graham
Commissioners: M. Murdock, S. Shelly
Staff: S. Wilson, K. Bingham, B. Lambrecht, J. Bowen, K. Eppelheimer

Agenda Topics:
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
8. Adjourn

Discussion Items
1. The Meeting was called to order at 6:30 p.m.

2. The Committee approved the minutes of August 22, 2011

3. Communications and Correspondence – None

4. Recognition of Visitors – Eric Anderson, Managing Director, BMO Capital Market

5. Old Business

     a. Debt Issuance Discussion
          i. Use of Debt Service Extension Base (DSEB) – Superintendent Eppelheimer presented background of the DSEB and its general use for capital improvement projects.
          ii. Options for Placement – Eric Anderson discussed the general issuance and the unique option of self-purchase due to the very low interest rates of borrowing and investing. Placement in the private market was also discussed.  The pros and cons of the placement indicated that the rating company – Moody’s – was fine with Districts saving money on self-purchase option.  Information must clearly communicate the savings.
          iii. Size of Issue – The discussion centered on the funds use, impact on real estate taxes and the timing with future retirement of other debt. Since the funds would be used for capital improvements the Committee wanted to see more information on the capital plan. This will be supplied at the next Committee meeting.
     The impact on taxes is that this is new debt and therefore is on the tax bill, but it is replacing taxes that are currently on the tax bill (the retirement of the 2009 series).  There was discussion on how the size of this issue may align with referendum debt that is being retired over the next couple of years. The Committee wanted additional discussion and recommendations from staff in conjunction with the capital discussion.

     iv. Process of Issuance – Since there must be a Bond Issuance Notification Act hearing held before the issuance, a proposed time line was presented. This will be refined as other topics are decided.
There was no action required by the Committee at this time.

6. New Business

     a. 2011 Year-End Estimates and 2012 Proposed Budget – Superintendent Eppelheimer presented staff’s recommendation on proposed budgets in the internal service funds and other special revenue funds; debt, liability insurance, social security, retirement, audit, security and special recreation. Executive Director Wilson explained the process of closing the internal service funds and working with an overhead allocation model. The internal service model served well for the pricing model but better accountability will be obtained with comparison of bottom line expenses to a budget for general expenses.  There was no action required by the Committee.

     b. Fund Balance Policy – Superintendent Eppelheimer briefed the Committee on GASB 54 requirement to sub-divide fund balances into five categories giving the reader of the Comprehensive Annual Financial Report (CAFR) an indication of how the District will manage its reserves. The largest reserves are in the Corporate and Recreation Funds and are generally reserved for capital improvement projects and rainy day funds. The Committee discussed some of the different categories and wanted staff to recommend funding levels that could be discussed at a future meeting. There was no action required by the Committee.

     c. 2010 Tax Levy Results – Superintendent Eppelheimer presented information on the draft 2010 tax levy collected in 2011. The aggregate levy increased from 2009 by 3.65% versus the tax cap amount of 2.7% (as the county calculates an additional 2% for loss and costs). The aggregate levy was reduced by $41,500. Although the intent of the Board was not to levy for new property, the small amount of new property ($12.4 million) was offset by the 2% loss and costs and therefore resulted in the reduction. The non-capped funds moved the total levy up by 4.96% from 2009. The District’s EAV reduced by more than 10% to $2.075 billion resulting in an increase in the tax rate by 17.5%.  The average homeowner will probably see in the range of a 4% increase in the actual tax dollars on their tax bill or $2 per $1,000 in taxes.

7. Next Meeting – The next meeting was scheduled for October 12, 2011, beginning at 6:30.  There will be discussion on the five-year capital plan and possible debt issuance, continued discussion on the Fund Balance Policy, and a recommended 2011 tax levy for truth in taxation.

8. Adjournment – With no further business to discuss, the Committee adjourned at 8:34 p.m.

Minutes taken by Ken Eppelheimer