Kankakee Times

The Kankakee County Finance Committee met Tuesday, March 1.

The Kankakee County Finance Committee makes recommendations to the county board regarding all financial matters in the community. 

Here are the meeting minutes as provided by the Kankakee County Finance Committee:

Finance Committee Meeting

March 1, 2016

MINUTES

Members Present

Mr. Stauffenberg, Mr. Enz, Mr. Vickery, Mr. Payton, Mr. Einfeldt, Mr. Liehr, Ms. Peters, and Mr. Johnson

Members Absent

Mr. LaGesse, Mr. Washington, Mr. Skutt, and Mr. Reid

In Attendance

- Board Members

Mr. Bossert and Mr. Byrne

Department Heads

Jamie Boyd, Mike Downey,Lori Gadbois, Nick Allen, Erich Blair, Mark Rogers, Sandi Cianci, Debbie Woodruff, Lynn Mackin, and Tom Latham

- Media

Present

1. Call to Order

The meeting was called to order by Committee Vice-Chairman, Mr. Vickery, at 9:00 a.m. Quorum present.

2. Public Comment

3. Approval of Minutes – January 26, 2016

Ms. Peters made a motion to approve the above minutes, and Mr. Einfeldt seconded it. Motion carried.

4. County Auditor’s Office – Debbie Woodruff

- Monthly Claims

The Committee reviewed the January 2016 Highway Claims that totaled $624,132.66.

The Committee reviewed the January 2016 General & Special Funds Claims. The total General

Fund Claims was $1,718,753.30, and the total of the Special Fund Claims was $4,100,554.27,

for a grand total of $5,819,417.57.

The Committee reviewed the County Board Payroll for December 1-31, 2015.

- Credit Card Policy

Ms. Woodruff stated that she is still working on getting the credit card policy updated. At this

point, she knows they will be removing the language regarding wage garnishment as there are

too many legal issues to leave that language in, so it will be pulled completely. What she is

looking for from the committee is direction as to what restrictions, if any, they want to see applied

regarding any cardholders that would be eligible to carry, or any types of purchases (vendors,

etc.). Currently, the policy has no restrictions for either. If they want to leave it that way, that’s

fine, but she needs direction on which way they want to go.

Mr. Stauffenberg asked if there was a dollar amount restriction on any of them.

Ms. Woodruff stated that what they have right now is that each cardholder has a spending limit,

and that is determined based on the request she gets from the department heads.

Mr. Stauffenberg asked what those limits are.

Ms. Woodruff stated that it varies widely. Generally speaking, the department heads are at

$5,000, and anyone below them varies from $500 to $3,000. A couple of employees are up to

the $10,000 range just because of the volume of items that they purchase, and IT would be the

big example there. Generally speaking, everyone is below $5,000.

Mr. Bossert stated that, relatively speaking, there may be 50 cards out, but most of them are

probably locked up in someone’s drawer.

Ms. Woodruff stated that there are very few people who are actually carrying their cards on

them.

Mr. Bossert stated that the limits on any card can be bumped up instantaneously.

Ms. Woodruff stated that they closer to 150 cards that are active, however, the vast majority of

those are set at $1, so they could not actually be used. If they have someone who will be

traveling, or has something coming up where they know they are going to need it, it just takes a

phone call. The person can be standing at a cash register and, once she does the process, the

card can be run.

Mr. Bossert stated that he feels the use of cards is just like any other expense in a department.

It’s up to the department head to control how cards are used, as well as how employees are

buying anything on behalf of the county.

Mr. Vickery asked if the committee is ok with the way it is going now.

Mr. Bossert said he would say so. When there are charges on a card, sometimes it is

questioned, but generally they are answerable, and there’s nothing abusive going on.

Ms. Peters asked if the disputed charges are possibly credit cards that are sitting in a drawer

somewhere and, if so, maybe it would be prudent to get the account numbers of those cards not

being used very often. She asked if a person used their own credit card, would they be

reimbursed.

Ms. Woodruff stated yes. She also stated that that is what’s happening with the disputed

charges that they are seeing on the report - people out there online every day phishing for cards.

They have actually had disputed charges that have tried to go against cards with a $1 limit and,

obviously, they don’t go anywhere because there’s no money available. There was one that had

been turned on for an employee who was traveling and the timing was just so that they had

fraudulent charges. Those are always reimbursed.

Mr. Vickery stated that they will proceed as they have been then.

Ms. Woodruff stated that the only other thing she wanted to discuss was the joint purchasing for

the ink and toner cartridges. She had two orders in the past month, and in those two orders

alone, they saved over $300, so the program seems to be working very well.

5. Insurance/HR

- Staffing Levels Report

Ms. Mackin reviewed the report with the committee. Last month we were at 473 employees.

There have been three terminations, all full-time, one in Probation, one a Correctional officer,

and one at the State’s Attorney’s office. Our staff count, as of February 22, 2016, is 470.

- Insurance Update

Mike Lynch from MSL Benefits stated that the county is five months into the change over from

Health Alliance to United Healthcare. Going into this situation, they knew that leaving one

carrier and going to another carrier within the scope of “off-cycle” would be somewhat difficult.

When you leave one carrier, you have a period which is called a “run-off” period, which are

claims that were submitted during the effective dates of the old carrier going into a new carrier.

That is difficult enough, especially for people who have had claims with the old carrier, and are

probably going to have claims in the last three months of the year, beginning October 1. They

found about 6-7 people who had already met their maximum out-of-pocket, so they had to move

on that very quickly. He had a lot of help from Suzie Werner getting data from Health Alliance

and giving it to United Healthcare. United Healthcare ultimately was able to put the 6-7

individuals in position where their claims were picked up and paid appropriately.

6. Treasurer - Nick Allen

Mr. Enz made a motion to combine and approve the reports, and Mr. Einfeldt seconded it.

Motion carried with a voice vote.

- County Treasurer’s Report

The Committee reviewed the County Treasurer’s Report.

- County Collector’s Reports

The Committee reviewed the December 2015 & January 2016 Collector’s Reports.

- Monthly Resolutions

The Committee reviewed the February resolutions.

Mr. Allen passed out a form for the committee’s information, entitled PTAX 255. He had never

heard of this form before, and it’s an overview of the taxes extended and collected by the county

each year. It has a breakdown of where the funds went county-wide between schools, cities,

townships, fire districts, park districts, etc.

Mr. Allen discussed the Sales in Error that he had spoken to the committee about previously.

They paid out about $400,000 in Sales in Error last month and they will have more to come.

7. Finance Department – Steve McCarty

- Miscellaneous Financial Reports and Discussion

Mr. McCarty was not present at the meeting. Nicole McCarty updated the committee on what

has been going on in Finance. They have been preparing for the audit, and have been sending

the auditors everything that they need. The auditors will be in Finance the week of March 14.

She expects to be bringing a draft to the March meeting for FY15.

Ms. McCarty reviewed and discussed the various reports with the committee.

Mr. Stauffenberg asked if the $1,668,000, in parentheses, under Sales Tax, is the difference

between 2014 and 2015.

Ms. McCarty stated yes.

Mr. Stauffenberg stated that we are $1,600,000 short there in one year.

Ms. McCarty stated yes, there was a 27% decrease.

Mr. Stauffenberg stated that under Bed Rentals, there is another $1,800,000 decrease, so he

can see some of the issues we are having.

Mr. Bossert stated that Mr. Stauffenberg pointed out the one year difference, and he would also

like to point out that, in 2008, in sales tax, we were approaching $8.9 million that year. Last

year, it was $4.4 million, so we have fallen very far in sales tax revenue. In bed rental, we

topped $10 million for two years in 2012-2013, and we’re down to $6 million for last year.

8. Other Business

- Budget Amendment Discussion Items

Mr. Bossert reminded the committee that they have a list of suggested amendments that were

brought forward at the November 30, 2015, County Board Meeting when they were adopting the

final budget for the year. Last month, Mr. Johnson reminded the committee that they had not

returned to discuss some particular points that were set aside at that time.

- “1. Budget a $120,000 Inter-fund debt reduction line item, and deposit

$10,000 per month into the account. Not to be swept/borrowed

without 2/3 full board approval.”

We agreed that money would be set aside, $10,000 a month, into a special fund as part of our

general fund budget. In paragraph 4, we talked about the tax levy shift that money would be set

aside in a special fund. After discussing this issue with the outside auditors, the reaction we

received was that because the county is in its position with inter-fund borrowing and tax

anticipation warrants, there is no provision for a county to take money out of the general fund

and put it somewhere else while it’s borrowing money elsewhere. We are not getting agreement

that would happen. Of course, we did add the $120,000 to the budget as an additional

contingency, but, as far as physically taking money out of a general fund item and putting it

somewhere else, that will not happen.

- “4. Levy approximately $1.75m for the Alternate Revenue bonds in

FY2016.”

Mr. Bossert asked the committee if he is remembering correctly that this item had not been a

topic of discussion at committee prior to that meeting.

Mr. Vickery stated, no, not to his knowledge. He asked the committee if anyone had any recall

that this issue was brought forward in committee.

Mr. Bossert stated that this was a committee decision. It was brought forward by a small group

who put together the list, and it was voted on by the full board in agreement to help save Public

Safety, restore some funding, and get us on a path to solvency. At that point, we weren’t ready

for it to be brought out, but it was, so it was voted on.

Mr. Vickery said that members of a small group brought this forward, it passed, a motion was

made and seconded, and 23 people voted for it. The entire board was involved in that process.

There was a discussion, and we voted on it, so the County Board raised the taxes, not one

person. Not one person can raise the taxes. The County Board voted 23-0 in that meeting to

raise that tax.

- “11. Prioritization of accounts payable will no longer rest in the hands of

Finance or Administration. That is a board duty, and the finance

committee will perform this duty monthly.”

Before he left, Mr. McCarty prepared a narrative for the committee as to accounts payable, and

how the process goes to prioritize bills and things that are looked at in that process. There is a

goal to maintain $3 million in the cash account at any time so that there is enough reserve and

cushion to handle payroll and bills as they come along. Revenue does not flow in evenly, and is

a bit irregular. Ms. McCarty just stated that we are a couple of months behind on income tax

distribution, for instance. For that reason, we have to maintain some cash cushion. On the

average, monthly receipts for a four month running period of time is about $2.6 million. Average

payroll (meaning payroll, Social Security, and the distribution to IMRF) in recent months was

about $2 million a month. The resulting difference is $635,000, which is available to pay other

claims on a monthly basis. On page 3, he shows a check run of expenses that had to be

handled the week of February 10, being a total of $544,000 expedited and “mission critical”

invoices. Health insurance, dental insurance, workers’ comp, utilities, more insurance, a batch

of other expedited claims, fuel cards, credit cards, lease payments – things that you have to pay

on time or we disrupt operations. That $544,000 left us $91,000 that week to think about some

other claims that are on the list, and are not as high a priority.

Mr. Vickery asked if it was fair to say that we pay what we have to pay as we go along.

Mr. Bossert said yes, and Mr. McCarty is in a position to see and know what is critical. He is

receiving the phone calls from the vendors, and from the department heads trying to intervene

on behalf of vendors. Over time, he has developed an expedited list of things that have to be

paid. Beyond that, other special requests come in from time to time. A vendor is very

concerned, and the department head makes the pitch asking if we can get that one up on top of

the pile. Those things have to be accommodated. On a weekly basis, a list is reviewed by he

and Mr. McCarty, to see what can be handled beyond the expedited claims, if any. The last

page shows an ageing schedule of all of our accounts payable, as of February 1. It’s a sizable

number but we’re down $1.3 million from a year ago as far as payables.

Mr. Bossert stated that paragraph 11 is a rather broad statement that the board is going to sit

and look at a stack of accounts payable monthly and decide who is going to get paid. That is an

administrative function.

Mr. Vickery stated that, at one time, they had members of the finance committee and other

committees who met with Mr. McCarty and determined what the priorities were. Mr. McCarty

determined the priorities then the committee members looked at them and agreed with him. It

was redundant and didn’t improve the function, so they stopped doing that. It would be too

cumbersome to take it to a 12-member committee or to a 28-member board to do that. We

delegate that authority to Mr. McCarty, and if he does the job right, we’re happy with that. We

have to make payroll, keep the vendors happy, and pay the insurance.

Mr. Bossert suggested that, on a monthly basis, as part of the financial report, if the committee

would like to see a run-down of the accounts payable, or an ageing statement like Mr. McCarty

just put together for them, it would give them a bigger picture of what is going on as far as

accounts payable, at least from an information standpoint.

Mr. Johnson stated that he would appreciate the ageing report as he feels that is very

informative, and it’s a positive sign to see that it’s decreased $1.3 million from this point in the

fiscal year compared to last year. He also agrees that, as a committee, it’s their duty to review

the payables, but they leave that in the hands of the Finance Director, who they appoint, as well

as Mr. Bossert, to review those, as a representative of the board. He personally would not care

for a list of all of the payables, but the ageing report is informative and gives some idea of where

they stand with that, instead of just knowing that they’re so many days out.

- “10. End health insurance subsidy for board members and their spouses

in FY2017 (2018 for those re-elected in 2014). Chairman remains

eligible.”

Mr. Bossert feels that this is a discussion that can be brought up in a month or two when they

address the compensation levels for elected officials. That will have to be addressed by the May

Board meeting at the latest, and this can be brought up again as part of that discussion.

Mr. Vickery stated that this can be put on the agenda for May, and they’ll discuss it and take it

from the committee to the full board.

- “5. Combine Committees per The Committee of 5 Recommendation and eliminate per-diem for special sub-committees and negotiating teams.”

This topic was brought up in Executive Committee. At that point, the discussion was about

looking into combining, specifically, the Building & Grounds and Highway Committees. The

Executive Committee said they weren’t interested, and thought things were functioning well the

way they were. The concern was that, if you combine committees, you end up with super-sized

committees with huge agendas at times and it’s not conducive to good discussion when you get

too lengthy a debate. As we go through another cycle, perhaps we can bring it up again to see

what we can do in terms of controlling expenses. That’s the crux of the issue – how do we

control County Board expenses, with a per diem assigned to the board members?

- “6. Immediately implement a hiring freeze and require all staff

replacements to be approved by the full board before posting.”

Mr. Bossert stated that this was talked about previously, and, as was pointed out in various

committees, elected officials have the power within their department to hire and replace, as long

as they stay within budget, and that’s a power that we’re not going to take away from them.

We’ve had cooperation in the past on holding off on hiring trying to keep actual spending below

budget. With the budget plan in place now, some elected officials felt like they needed to move

ahead with replacing some positions, or at least getting back to a more workable staffing level.

In the end, the only real department level hiring control is over the few departments that are not

elected, and they are areas where we are holding positions open – the Planning office and the

Assessment office are two examples.

- “7. A working sub-committee with representation from all general

fund departments shall meet immediately to implement

cooperative purchasing meetings. The County Auditor shall lead

this committee, as directed by statute, and advise the Full Board

of all proposed consolidations or systemic needs. Any changes

will be approved by the full board, with information sharing to the

appropriate committee(s). Committee approval will not be

required, but recommendations are encouraged.

- "Every opportunity for cost savings must be explored in a methodical manner.”

Mr. Bossert’s question would be: Is that represented by the cooperative buying we’re doing as

part of what we’ve implemented, joint purchasing on paper and supplies? Is that where this is

going, or was there a bigger issue there about joint purchasing?

Mr. Vickery questioned the last sentence about cost savings. Does that indicate that we

haven’t? He thinks that is what we’ve been doing as we’ve cut $7.7 million out of the budget.

Our department heads have done a good job, we’ve reduced the budget, and it seems to him

that they’ve explored it in a methodical manner.

Mr. Bossert stated that if there’s another issue to look at, they can take a look. The only things

he can think of are cell phone contracts, etc., if we can unify the county. The only bulk of cell

phones being used are probably Public Safety. No other departments have broad usage. We’ll

talk with the County Auditor on that one and see if there is an opportunity there what to look into

on that topic.

Another item is line item budgeting. I think that we can hold that and get a little deeper into the

year because, in the end, that will probably be a discussion for the future budget.

- “3. If other efficiencies are found within the Sheriff’s department,

increase Sheriff’s expense budget by 4/5 of that savings amount

with 1/5 going to the Interfund debt reduction fund.”

Mr. Vickery stated that he was puzzled by this when it came up.

Mr. Bossert stated that it is unclear if that means actually increasing the budget or if it means, if

costs savings are found, then they would stay in the department.

Mr. Bossert asked Mr. Johnson what his thoughts were on this item since he was in the group.

Mr. Johnson stated that he was in the group in a limited role, so he is not 100% certain what the

idea is behind this. His assumption is, just from reading the language, the idea is that if there

are some cost saving activities found within the Sheriff’s Department, then possibly a portion of

that would be taken out of the Sheriff’s Department and put into a debt reduction fund. He

stated that possibly the cost savings would not stay within the Sheriff’s budget, but instead a

portion of that would be moved into a debt reduction budget.

Mr. Byrne stated that, as he was also a part of that group, Mr. Johnson is accurate. He stated

that, if his memory serves him right, Mr. Vickery brought up that it should entail every

department in the county, not just Public Safety. If a department finds savings, and that savings

is obviously within their budget, they keep the money. However, if they find savings, part of it

goes into a debt reduction fund. The idea is to get the debt down, and that should be the

primary focus of the board.

- Executive Session – Collective Bargaining – 5 ILCS 120/2(c)(2)

- Executive Session – Security Procedures – 5 ILCS 120/2(c)(8)

Mr. Bossert made a motion to go into executive session, and Mr. Enz seconded it. Motion

carried with a roll call vote of 9 ayes and 0 nays. Voting aye were Mr. Bossert, Mr.

Stauffenberg, Mr. Enz, Mr. Vickery, Mr. Payton, Mr. Einfeldt, Mr. Liehr, Ms. Peters, and Mr.

Johnson.

The committee went into executive session at 9:56 a.m., and came out at 10:45 a.m.

9. Old/New Business

10. Adjournment

A motion to adjourn the meeting at 10:46 a.m. was made by Mr. Stauffenberg, and was

seconded by Mr. Liehr. Motion carried.

Jim Vickery, Committee Vice-Chairman

Diane Owens, Executive Coordinator