E-Help 12/19/2006
INCLUDES:
1. IMTA Certification &
Recertification
2. Regionalization
3. Warrants (Cortland)
4. New Statement on Auditing
Standards
5. Electricity Franchise Agreements (E. St.Louis)
6. Credit Monitoring
7. Pension Checks
8. Letters of Credit at 110%
“Thanks again to everyone that has contributed information in the past. If you have questions, please feel free to send me your request. If you are responding to a request, please send your response to the requester and include me as a “cc”. Thanks again!”
Michael
Peterson
mpeterson@villageofgrayslake.com
www.imtausa.org
www.aptusc.org
CERTIFICATION & RECERTIFICATION
Applications are due January
31, 2007. For more information or to see if you qualify this year, visit the
IMTA website at
www.imtausa.org/cert.htm
Penny Toppel, Certification Co-Chair
847-639-3170
p.toppel@foxrivergrove.org
Marlene Blocker, Certification Co-Chair
847-428-2861
marlene@villageofgilberts.com
REGIONALIZATION
Northern Region: Cathy Hojek chojek@lwfd.org
Central Region: Bonnie Drew bonnie.drew@cwlp.com
Southern Region: Jennifer Menz zctreas02@yahoo.com
WARRANTS
The Fall 2006 IMTA newsletter summarizes 65 ILCS 5/8-1-8, which requires that warrants drawn upon the municipal treasury be signed by the mayor and clerk and state the fund and appropriation the warrant is chargeable to and the person to whom payable. I would appreciate some input from treasurers who believe they are in compliance with this statute as to what it means and how they implement it. Any samples (in .pdf or other format) would be helpful. (Cortland is a rapid-growth municipality in northern Illinois with approximately 3,600 population, 13 full-time employees, and a $4,000,000 budget.)
Susan Dockus, Treasurer
Town of Cortland
sdockus@cortlandil.org
New STATEMENTS ON AUDITING STANDARDS
In March 2006, the Auditing Standards Board (ASB) issued eight new statements on auditing standards (SAS) intended to improve the quality and effectiveness of financial statement audits. SAS no. 104-111 all focus on the need to incorporate a rigorous risk assessment process into each financial statement audit.
Will this cost Grayslake more money?
Per my auditor we can expect 10-15% increase for the additional work. In the past the auditor’s role was to test the balances, the new SAS require that the auditors learn the design of our internal controls and test the controls.
SAS #103 changed the audit completion date from the “end of field work date” to the “report acceptance date”. If the municipality’s report is accepted by one person, such as the finance director, then upon his/her acceptance that would be the date. Example: fiscal year end is 4/30/2006, auditors complete their field work on 7/10/2006, the first draft of report is reviewed and approved by the finance director on 9/1/2006. Then 9/1/2006 becomes the completion date. This however, results in the auditors having to do additional review of our minutes and legal actions during the period 7/10 to 9/1/2006. Thus causing an increase in audit fees.
SAS #112 Eliminates the phrase “reportable condition” and replaces it with “significant deficiency and material weakness”. Of notable concern is a clause that suggests “if the auditors are preparing the year end accruals, that should be reported as a significant deficiency and material weakness.” Our auditor stated there is a gray area in the language that his firm interprets to mean “if the auditing firm’s staff determines that the municipal staff is capable of making the accruals, then there isn’t a “significant deficiency and material weakness” even though the auditor will actually be preparing the accruals. Ask your auditor for their interpretation.
ELECTRICITY FRANCHISE AGREEMENTS
During the last Treasurer's Institute, several people discussed new franchise agreements they had been offered by their local electric/power companies. Can anyone respond with their thoughts on this matter? What is the current rate being offered to municipalities by the utility companies? We are looking at a new franchise agreement now, so I would appreciate as much feedback as possible on this issue. Thank you.
Raenita Wallace
Treasurer's Office
City of East St. Louis, Illinois
raenita.wallace@cesl.us
CREDIT MONITORING
Does the Village pay for your Credit monitoring costs?
PENSION CHECKS
Yorkville will soon have its first person drawing a pension check from the police pension fund.
We have an elected Treasurer
and a separate Finance Director. The elected Treasurer is the fund's Treasurer.
I would like to know how the pension check is created and how tax withdrawals
are handled by other municipalities.
Thanks, Bill Powell Treasurer
wpnkp81@sbcglobal.net
LETTERS OF CREDIT AT 110%
Can we request our developers to provide a Letter of Credit equal to 125% of the engineer’s estimate of the public improvements?
There is a statute that prescribes that if a developer provides security in an amount of at least 110%, the municipality cannot require more than that. This statute also applies to improvements required through subdivisions (there is a cross reference to these requirements in the subdivision statute at 65 ILCS 5/11-12-8).
This statute may not apply when a municipality requires security through an annexation agreement, because of the authority these agreements provide to a municipality, and because they can choose not to annex. Consult your attorney for an opinion.
65
ILCS 5/11-39-3
WEST'S SMITH-HURD
ILLINOIS COMPILED STATUTES ANNOTATED
CHAPTER 65.
MUNICIPALITIES
ACT 5. ILLINOIS
MUNICIPAL CODE
ARTICLE 11.
CORPORATE POWERS AND FUNCTIONS
PUBLIC HEALTH,
SAFETY AND WELFARE
CONTROL OVER
BUILDING AND CONSTRUCTION
DIVISION 39.
RECORDING OF BUILDING PERMITS
Current through P.A. 94-1008 of the 2006 Reg. Sess.
5/11-39-3. Builder or developer cash bond or other surety
§ 11-39-3. Builder or developer cash bond or other surety.
(a) A municipality may not require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a builder or developer to guarantee completion of a project improvement when the builder or developer has filed with the municipal clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the municipality accepting such security, in an amount equal to or greater than 110% of the amount of the bid on each project improvement. A builder or developer has the option to utilize a cash bond, irrevocable letter of credit, surety bond, or letter of commitment, issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the municipality, to satisfy any cash bond requirement established by a municipality. Except for a municipality or county with a population of 1,000,000 or more, the municipality must approve and deem a surety or insurance company good and sufficient for the purposes set forth in this Section if the surety or insurance company is authorized by the Illinois Department of Insurance to sell and issue sureties in the State of Illinois.
(b) If a municipality receives a cash bond, irrevocable letter of credit, or surety bond from a builder or developer to guarantee completion of a project improvement, the municipality shall (i) register the bond under the address of the project and the construction permit number and (ii) give the builder or developer a receipt for the bond. The municipality shall establish and maintain a separate account for all cash bonds received from builders and developers to guarantee completion of a project improvement.
(c) The municipality shall refund a cash bond to a builder or developer, or release the irrevocable letter of credit or surety bond within 60 days after the builder or developer notifies the municipality in writing of the completion of the project improvement for which the bond was required. For these purposes, "completion" means that the municipality has determined that the project improvement for which the bond was required is complete or a licensed engineer or licensed architect has certified to the builder or developer and the municipality that the project improvement has been completed to the applicable codes and ordinances. The municipality shall pay interest to the builder or developer, beginning 60 days after builder or developer notifies the municipality in writing of the completion of the project improvement, on any bond not refunded to a builder or developer, at the rate of 1% per month.
(d) A home rule municipality may not require or maintain cash bonds, irrevocable letters of credit, surety bonds, or letters of commitment issued by a bank, savings and loan association, surety, or insurance company from builders or developers in a manner inconsistent with this Section. This Section supercedes and controls over other provisions of this Code as they apply to and guarantee completion of a project improvement that is required by the municipality, regardless of whether the project improvement is a condition of annexation agreements. This Section is a denial and limitation under subsection (i) of > Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by a home rule municipality of powers and functions exercised by the State.