Metro East Sun

City of Belleville Finance Committee met Oct. 10.

Here are the minutes provided by the committee:

In Attendance:

(A) Finance Committee Members

Bryan Whitaker, Alderman

Carmen Duco, Alderman

Raffi Ovian, Alderman

Shelly Schaefer, Alderman

Chris Rothweiler, Alderman

Phil Elmore, Alderman

Nora Sullivan, Alderman

(B) Guests

Michael Hagberg

Kevin Tepen, CJ Schlosser & Co.

Kara Osthoff, Alderman

(C) Staff

Jamie Maitret, Finance Director

Sarah Biermann, Treasurer

Matt Eiskant, Police Chief

Sean Harris, Police Department

Chairman Whitaker called the meeting to order at 7:00 pm. Alderman Ferguson was excused. All other committee members were present. Chairman Whitaker asked for an introduction of guests. Emergency evacuation procedures were announced.

Chairman Whitaker opened public participation. There was no public participation. Public participation was closed.

Chairman Whitaker asked for a motion to approve the minutes from the September 12, 2022 meeting.

Motion

Alderman Rothweiler made a motion to approve the minutes from September 12, 2022. Alderman Schaefer seconded. All attending members voted yes. The motion passed.

FY2022 Audit Reports

Kevin Tepen, the city’s auditor from CJ Schlosser & Co., discussed the fiscal year ending 4/30/22 audit reports. He stated that overall, the City had a very good year financially. There was a total increase in fund balance of governmental funds of about $10 million. He stated that he has seen this trend across most of his governmental clients. Income taxes and replacement taxes were up significantly everywhere. The General Fund had an increase of almost $2 million. TIF funds had an increase of about $7.4 million. For the General Fund, ending fund balance is about $9.7 million, which is about 32% of annual expenditures, or 3.8 months’ worth. This is considered a very solid balance. Sewer Fund also had a good year. There was about a $3.7 million increase in net position. The pension funds had a bad year in terms of returns on investments. They lost almost $7.5 million in return on investments. He discussed more of the financial performance. Overall, he reported that we had a very good year.

Motion

Alderman Schaefer made a motion to approve the FY2022 audit reports. Alderman Elmore seconded. Roll call vote was taken. Alderman Duco, Ovian, Schaefer, Rothweiler, Elmore, Sullivan and Whitaker all voted yes. The motion passed.

Purchase of 100 Radios for Police Department

Jamie Maitret explained that we were approached by St. Clair County, as they have negotiated a County-wide bulk purchase of radios that each municipality can participate in. Through this process, they were able to negotiate up to a 47% discount on radios purchased. This is a much better deal than going out for purchase on our own. This discounted rate comes out to about $1,900 per radio. We had not intended with the budget to purchase such a large sum of radios all at once, but it makes financial sense to take advantage of such a large discounted price. Jamie suggested that we use some of the reserves that have been banked over the last year, as just discussed with the audit presentation, to make the large one-time purchase. These radios are just for the Police Department. Jamie did mention that the Fire Department contacted her today, and they need some radios as well, but they are different than these radios, and she is not sure of the total price yet. That item may need to go straight to City Council for approval, so that the radios can all get ordered before the November 3rd deadline. Discussion followed.

Motion

Alderman Elmore made a motion to purchase 100 portable radios for the Police Department from Motorola Solutions for $189,738. Alderman Schaefer seconded. Roll call vote was taken. Alderman Duco, Ovian, Schaefer, Rothweiler, Elmore, and Sullivan all voted yes. Alderman Whitaker abstained. The motion passed.

Discussion of Electric Aggregation Program

Jamie Maitret explained what electric aggregation is, and that our current electric aggregation contract for our residents with Homefield Energy expires with the December meter read. Our consultants that represent Belleville and the other cities in our group have been working on getting bids for a new contract for several months. The energy market right now is crazy, and prices have obviously increased dramatically over the last year. The current supplier, Homefield, would not even bid on a new contract. There was one bidder, Constellation NewEnergy. The new 22-month contract would not start until February 2023, and would have a rate of 12.1 cents per kWh. This means that the residents will be reverted back to Ameren for the two months between when the current contract ends and the new one begins. While this is a bit confusing, it did help reduce the new price of the contract by not starting it until February. Ameren’s current rate is 12.23 cents per kWh. Residents will receive three letters during this process. If a resident wants to stay with the aggregation program, they do not need to do anything. Again, the City does not gain anything from residents being on this contract. This just provides them another option for their electric supplier. If Ameren’s rates would decrease to lower than the aggregation rate, residents can opt-out of the aggregation program at any time with no penalty. Discussion followed. No motion needed on this discussion.

Discussion of Pension Liabilities & Recommended Contributions and Effect on Tax Levy

Jamie Maitret explained that she just wanted to start the discussion on pension obligations and the tax levy now, so that the committee could consider all alternatives before a tax levy has to be voted on in December. As presented earlier tonight with the audit, the pension funds did not have a good year in terms of returns on investments. The Library Board is wanting to increase the amount of funds the library receives from the levy. Those funds make up 83% of their operating budget. Right now, they are losing money annually. This can’t be maintained much longer. The pension boards have updated the actuarial assumptions that go into the calculation of the pension liabilities shown in our audit. This also impacts the calculation of the recommended contribution due from the City to the pension funds. Historically, this is always funded through real estate taxes from the tax levy. The independent actuary gives a recommended contribution though. The City only has to fund to the State determined statutory minimum contribution. The City could fund to the minimum, the recommended independent actuarial amount, or somewhere in between. The pension boards are still finalizing their assumptions for the actuary, so the final number requested is not known yet. It could be anywhere in the range of an approximate $400,000 - $1,800,000 increase in requested contributions between the two pension funds. The choice on how to fund these contributions is up to the committee and City Council, but if not funded through the tax levy, a concrete alternative plan needs to be put forth that either produces a new revenue stream to cover it, or gives specific cuts that will be made to cover the contributions. The tax levy will need to be finalized in December, so please contact Jamie with questions, concerns, or recommendations well prior to that time. Discussion followed. No motion is needed at this time.

Revenue Sources

Motion to receive and file.

Motion

Alderman Schaefer made a motion to receive and file the revenue sources. Alderman Elmore seconded. All attending members voted yes. The motion passed.

Motion to Adjourn

Alderman Schaefer made a motion to adjourn at 7:59 pm. Alderman Elmore seconded. All attending members voted yes. The motion passed.