E-Help 3/14/2008
INCLUDES:
1. Actuary Contact Information (Posen)
2. APT Director position
3. Attorney Fee Survey (Louisville)
4. Risk Management Survey (Pleasantview FPD)
5. US Census Data (Yorkville)
6. April 10 & 11, 2008 IMTA/IPPFA's 2nd annual Public Employees Benefit
Conference.
7. IMTA Board Of Director’s Application form
8. Response to Pension Affect for exceeding 5,000 population
9. Police Pension Property Tax Distribution update
10. Response Budget Descriptions and Breakdown
“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
www.publictreasuryinstitute.com/bookshop/catalog.do
1. ACTUARY CONTACT INFO
Please email me your actuary’s contact information. Name, Firm, City, Phone
& Email Address
Thank you,
Angelito Alzona
Village of Posen
aalzona@covad.net
2. APT POSITIONS
Dear IMTA
Members,
I know that approximately one third of your members attended the 2007 IMTA
Annual Conference where I administered the oath of office to
Bob
Mullins,
your
Officers and Directors.
I met a lot
of great people
and I can
honestly say my cheeks hurt from laughing at the end of the
conference.
It was a
memorable experience and great weekend.
Unfortunately,
I will not
be with you at your 2008 annual conference but I will attend your 2009 annual
conference. I look forward to the event.
At this
time, APT has two open positions.
I want to
emphasize how important it would be to have an IMTA member apply for an APT US&C
Board of Directors position.
As the incoming APT President I
offer
you
an
opportunity to share your energy, experience and education at the national
level.
I ask
you to
consider application for
one of
these positions.
If you
have
questions about APT Board Members role, schedule, benefits,
or would
like an application form
please call
or e-mail me anytime.
Thanks,
Jim
Bell, CPFA, CPFIM
APT President-Elect
James A. Bell, CPFA, CPFIM
Director of Finance
City of Vandalia, Ohio
PH: 937-415-2237
www.vandaliaohio.org
3. MUNICIPAL AUDITOR
Dowell is located in the very SOUTHERN part of Illinois. DuQuoin is 5 miles to
north and Carbondale15 miles to the south, I am looking for any list of
acceptable municipal auditors in my area. Please email me your auditor’s
contact information. Name, Firm, City, Phone & Email Address. Any help will be
very much appreciated. Thank you.
Anita Kreid
Treasurer
Village of Dowell
kreidtreas@mchsi.com
4. RISK MANAGEMENT MANUAL survey
Our auditors want us to have a risk analysis on every step of our financial
processes. They have quoted us a price of $22,000 to do this and we have
decided to tackle it ourselves. Has anyone else completed something like this
for their village or district? In other words, they want to see our procedures
for oversight on critical transactions, such as who oversees and approves and
are these steps followed in every procedure. They will not do our audit unless
this is in place. Any help out there.
Pat Peck
Pleasantview Fire Protection Dist
ppeck@plvw.org
5. US CENSUS DATA
Thought you might like this website. I provides US Census data for the zip
code entered. It will also report a comparison of two zip code areas.
www.zipskinny.com
Bill Powell
wpnkp81@sbcglobal.net
6. April 10 & 11, 2008 IMTA/IPPFA's 2nd annual Public Employees Benefit
Conference.
Hyatt Hotel (McDonalds Campus), Oak Brook IL
7. IMTA BOARD OF DIRECTORS
The IMTA Nominating Committee is accepting applications for IMTA Board of
Director positions. The application can be found on the IMTA homepage or by
clicking
http://www.imtausa.org/BoardApp.doc
Please return applications by June 1, 2008 to:
Michael Peterson, Nominating Committee Chair
10 South Seymour Ave
Grayslake IL 60030
mpeterson@villageofgrayslake.com
Nominating Committee:
Brad Bettenhausen, Tinley Park
Bonnie Drew, Springfield
Judy Miller, Zion
8. PENSION EFFECT WHEN YOUR POPULATION EXCEEDS 5,000
The Town of Cortland has about a population just over 4,000 now, and we are growing. We expect to pass the 5,000 mark in the 2010 census. At that point, we will be required to have a Police & Fire Pension Commission. Can someone give me a brief description of what this change will entail financially? We have IMRF now; will the police personnel be covered under a different pension system? Will the employee and employer contributions be higher? Should we set aside money ahead of time to fund the new pensions? Will there be other costs to the Town?
Thanks for your assistance.
Susan Dockus, Treasurer
Town of Cortland
815/756-9041
treasurer@cortlandil.org
RESPONSE:
Susan,
(Only concerning police)
Some points: Lincolnshire is a homerule village. I suggest you consult an attorney about all the details/legal obligations/financial obligations.
We had to have a police pension board. They had to keep records and they required an attorney knowledgeable in police pension matters. I would think you will be legally obligated to make contributions to the pension funds. The State produces an actuarial calculation that you can use but you may find it to the town's advantage to hire an independent actuary to calculate an amount to double check the states.
You probably will have to assign a rep from the town to sit on the Board to oversee their activities. Once a board starts paying out pension amounts for injuries, etc. financing the board can get expensive.
You should look for some board members to be knowledgeable about simple investing plans and securities to invest it. Once a significant amount of money is accumulated a professional money manager is recommended. Go to some pension education courses.
Just some considerations.
Stan Roelker
Finance Director
Village of Lincolnshire
Hi Susan, Yorkville made the change from IMRF to a Defined Benefit Pension Plan as required at population 5000 in 2000. Since I was elected Treasurer in 2001 I have been involved in figuring out how to track the info etc.
I was not involved in the inital set up. Our pension attorney Cary Collins cjcollins4@aol.com
847-519-0010 works with several muni's in police pension work.
There is a lot to consider and I suggest you get some legal help to set this up. I would be willing to talk with you about what I have done and some of the pitfalls. If you could come to Yorkville sometime I would buy coffee and a roll. If you prefer we can talk on the tellie.
Set up Rules and Reg's
Establish a tax EIN #
Set up elections to establish a pension board
Transfer funds from IMRF to new pension
Set up separate checking and investment accounts
File IDOI annual reports
Monthly and Annual Treasurer's report
Annual Budget
Tracking employee contributions
Tax issues: relating to Early Distributions Form 1009-R due to department
resignation & Form 1099-misc for services provided by others.
Plus other stuff...
I'm sure there are other treasurer's out there that know more than I do but let me know if I can help...
Bill Powell
Yorkville
If you have full time police officers and/or full time fire fighters… once your population is certified at 5,000 or greater, you will have to establish separate Police and Fire Pension Funds, as applicable. These are required by State Statutes and are administered by separate boards. The boards are both similarly structured with 2 representative elected from the active officers/firefighters, 1 elected from retirees (if any), and 2 appointed by the mayor/village president. The municipal treasurer is ex-officio member of each board, and custodian of the funds. Each board will then elect a President and Secretary. The Secretary is responsible for maintaining records of the participants in the fund (similar to an employee personnel files but only containing information pertinent to issuance of a pension), as well as the official records (minutes). Separate accounting funds will need to be established to track and account for these. Either/both funds will require to obtain their own Taxpayer ID separate from the municipality’s.
Once established, the officers/firefighters will have an employee contribution deducted from each paycheck toward funding their future pensions. Different rates apply for police or fire, and contributions may not be calculated on identical earnings components, although both exclude overtime pay. Not all compensation paid is pension eligible earnings or the contribution calculation. As part of the recordkeeping, it is essential to keep track of these contributions by employee – and whether the deductions were made before tax or after tax.
The municipality will also need to begin to levy a tax for funding the respective pension funds. The amount determined by actuarial calculation.
The fund(s) will also be included and reported in the municipality’s annual audit/financial report.
See 40 ILCS 5/3 for Police Pension Statute and 40 ILCS 5/4 for Fire Pension Statute. You can contact the Public Pension Division of the Illinois Department of Financial and Professional Regulation for more information or assistance in getting started. 800-207-6958 and their website link is http://www.idfpr.com/DOI/Pension/Pension.asp
If you end up with a retiree shortly after establishing the fund, this complicates things further, as the municipality may end up having to front the pension costs. I am not sure how this impacts the annual levy requirements. As to other costs, you might incur some legal costs in consulting on the establishment of the fund(s), additional audit costs, possible actuarial costs (if the Public Pension Division’s actuarial calculation is not used). The pension fund can have its own attorney separate from the municipality.
Brad L. Bettenhausen
Treasurer/Finance Director
Village of Tinley Park
9. POLICE PENSION PROPERTY TAX DISTRIBUTION
As you may know, effective 8/28/2007 Public Act 95-530 was passed.
Synopsis
Amends the Downstate Police Article of the Illinois
Pension Code. Provides that the annual property tax levied for pension purposes
shall be forwarded directly to the treasurer of the board within 30 business
days after receipt by the county. Effective immediately.
Although the language might seem quite clear that the “county” treasurer would forward the taxes to the “pension” treasurer within 30 days, not every County Treasurer interprets the language as stated above. Lake Co reports that the state’s attorney’s office interprets the language to read, the “municipal” treasurer has 30 days after receiving the taxes from the “county” treasurer to forward the funds to the “pension” treasurer. As a side note, Lake Co will forward or direct deposit the money into the police pension bank account only if the local treasurer signs an authorization document. The end result is the same, but the burden is left with local treasurer to make the request and provide update approvals each year.
The bottom line is that we have 102 county treasurers that don’t fully agree with how to interpret the law. Editor’s side note, this law for the police pension is verbatim to the fire pensions law that was passed several years ago, but who am I to claim that I know anything about the law. J
For the good news, Brad Bettenhausen of Tinley Park contacted the treasurer’s office for both Cook and Will County and these two counties have set up the police pension fund as a separate entity to insure direct payment to the police pension accounts. Great job Brad!!!
Brad’s email to me:
Just spoke with a contact in Will Co treasurer’s office and they will be sending
out paperwork/forms to set up the ACH distribution of Police Pension levy
dollars within the next month or so – prior to the final determination of tax
rates and preparation of tax bills. (Will Co mails bills end of April, with a
+/- June 1 Sept 1 due dates for the two equal installments).
Cook Co already sent me the paperwork to set up the ACH direct deposit for the new agency number they assigned for Police Pension. Cook Co First installment is always due March 1 and is always ½ of prior year tax. Based on our 2007 levy filing, they have already made adjustment for the distribution percentage allocation between Village and Pension and we received our first distribution of 2007 taxes on 20 Feb with Pension receiving a percentage directly.
So, in short, the program to effect PA 95-530 is fully engaged to proceed in my two counties.
Brad L. Bettenhausen
Treasurer/Finance Director
From:
Brad L. Bettenhausen
Subject: RE: Ehelp 2/29
Mike –
On the Pension issue… your write up was just a little off… the change for Fire
Pension levies only change a year ago (not several years ago, although it feels
like it J)
Please note that the Fire Pension Statutes were changed under Public Act 94-859 passed in June 2006. Prior to the Act, the Fire Pension Statutes section on financing (40 ILCS 5/4-118) subsection (b) contained a sentence that read, “The tax shall be forwarded directly to the treasurer of the board within 30 business days of receipt by the municipality…” Public Act 94-859 deleted the word “municipality” and replaced it with “county.” Prior to the change, the County Treasurer would forward the total municipal levy, including the fire pension levy, to the municipal treasurer. The municipal treasurer was then responsible to periodically transfer the pension tax monies to the fire pension fund. After the change, the County Treasurer was required to transfer the fire pension levy collections directly to the Fire Pension Fund. This became effective for tax year 2006 and forward for Fire Pension levies.
On the Police Pension side, the Police Pension Statutes section on financing (40 ILCS 5/3-125) was “silent” on the remittance of taxes (it did not provide any direction on the issue of remittance of taxes and thus was different than the direction found in the fire pension statutes). Because the Statute was silent on the distribution issue, as was noted above for Fire Pension levies prior to amendment, the County Treasurer distributed municipal property tax collections, including the police pension levy (remember the pension levies are part of the municipal levy…), to the municipal treasurer. The municipal treasurer was then responsible to periodically transfer the pension tax monies to the police pension fund. Public Act 95-530 which passed in August 2007 inserted the IDENTICAL sentence as was included in the fire pension code after the amendment by Public Act 94-859. (alright, it wasn’t technically identical…a parenthetical note that was at the close of the sentence in the fire pension code and which was applicable only to fire pension was not duplicated in the police pension amendment… but the primary sentence is now identical in both code sections) Here’s the sentence: “The tax shall be forwarded directly to the treasurer of the board within 30 business days of receipt by the county.” As a result, the County Treasurer is directed and REQUIRED to distribute the Police Pension levy collections directly to the Police Pension Fund instead of the municipal treasurer in the same manner as they did the year prior for fire pension. This change becomes effective for tax year 2007 and forward for Police Pension levies.
Despite the Lake County Treasurer’s apparent interpretations received from their legal counsel, this change in the manner of distribution is not optional or at the discretion of either the county or the municipality. If there is a fire or police pension levy, the County is now required to distribute collections on either/both of these levy items directly to the respective Fire or Police pension fund. If distributions are handled by ACH, the County Treasurer will need to be supplied the appropriate bank account number and routing information for the respective pension fund’s depository account.
Lake County has indicated that they will do the split distribution only if the local treasurer signs an authorization document….the authorization is obviously necessary to gather the banking information needed to effect the distributions, but Statutorily it does not appear to be at the local treasurer’s option or discretion.
With this said, I will note that Cook County has set both Fire Pension and Police Pension up as a separate taxing agency in order to accommodate the separate distribution of the pension taxes. These agencies don’t show up on the property tax bill, but they are effectively “internal” for tax distribution purposes similar to a TIF District. It is yet unclear how Will County will specifically handle this, but as noted they have indicated that they will be sending out paperwork to effect the distribution of the pension levy collections to the respective Pension Fund.
Both Counties indicated that the “split” for distribution of tax collections will be based on the ratio of the pension levy to the total municipal levy including the pension levy item(s). As many know, the Cook County tax system is vastly different than the other 101 counties in Illinois and that difference carries to the manner in which the “split” is determined with each tax installment…. The first installment tax bill is always due on March 1st (or first business day thereafter), and is calculated at 1/2 of the prior year total tax. Accordingly, the taxes from the first installment are distributed based on the ratio of the prior year’s pension levy to total levy. Once the County has made final calculations for the current year levy and produces the second installment tax bills, the distribution ratio is adjusted to be the current year’s pension levy to total levy and they make appropriate adjustment for the dollars distributed from the first installment to correspond to the current year ratio. Are you confused? If so, you are probably not alone…welcome to the Cook County tax system…which I have claimed to have been designed to intentionally confuse and confound. In any case, following this explanation, you should be able to reasonably verify the calculation of the tax splits for any tax distribution that is made by the County. The same basic principle should apply in the other counties, but without the double ratios and interim adjustments required for Cook.
If your County Treasurer does not contact you to set up the separate distribution of pension levies, please be sure to contact them so that you are compliant with the Statutes. If your County Treasurer does not feel that they have to do the split distributions for either fire or police pension, they should contact the Public Pension Division of the Illinois Department of Financial and Professional Regulation at 800-207-6958 for further information.
Now… keep in mind that both the Police and Fire pension levies are still part of the annual municipal levy. These recent changes only removes the municipal treasurer from being the “middle man” in the collection process and the ultimate transfer of the funds to the respective pension fund. These changes were instituted to address cases throughout the State where the municipal treasurer was remiss, refused, or otherwise unable to transfer the pension levy funds collected to the respective pension fund.
Because both of the pensions are still a municipal levy item, I am told that the change in distribution of the pension levy collections does not affect the manner in which they get reported in the municipal audit/financial report… They are still to be reflected “as if” received by the municipality and then immediately transferred to the respective pension fund for the external financial reporting (audit) purposes. Consult your auditing firm for further direction.
Brad L. Bettenhausen
Treasurer/Finance Director
Village of Tinley Park
10. BUDGET DESCRIPTIONS & BREAK DOWNS
Does any Village or City have description break down for ALL General Ledger
line items within the budget?
An example: You may have a general ledger number for utilities with in the various departments. Do you have in your budget
Administrative Department:
Utilities $22,000: Description Village Hall Office $12,000 for electric and $10,000 for gas. Justification, with the utility company increasing our rates this line item increased by 3% this budget year.
Park Department:
Utilities $35,000: Description Bike trail lighting $20,000, Pavilions $10,000 and Tennis Courts $5,000 for electric only. Justification, with the utility company increasing rates and the Village adding new Bike trail lighting our line item increased by 5% this budget year.
So on and so on for every line item within the budget.
It has only been suggested at this time that we start doing this. So I wanted to see just how many other Village or Cities have there budgets set up this way.
Rhonda L. Stewart
Forsyth Village Treasurer
E-mail:
rstewart@forsythvillage.us
Budget detail is a good idea. Including the detail directly with the line items may be more than a little cumbersome and can create a cluttered budget document. It is probably more appropriate to include the detail in supporting documents behind the budget itself, and not directly a part of the budget as in your example.
I will note that you are including two different types of detail in your example….
1) explanation of the purpose or use of the budgeted amounts (in your example
Description) and
2) an explanation of why the amount changed from prior year (in your example
Justification).
I would argue that as a budget document is concerned, #1 is most important. #2 is primarily of value during the review and approval process to aid the Board in evaluating the submitted request and probably should not be part of the final approved budget.
The budget detail is of great assistance once the budget is approved to guide the expenditures, monitoring expenses in relation to what was planned or expected, etc. and determining the reasons for a budget variance (+ or -).
However, I do not believe that each and every line requires detail, but as with almost anything, more detail is usually better… Items that are fairly self explanatory probably don’t need a lot of detail, but if it is readily available and easy to explain and understand, add it.
Our computerized financial system has the ability to attach as much or as little budget detail as deemed appropriate to any revenue or expense item included in the budget. (details can also be attached to balance sheet accounts, too if desired). You can even do unit extension in the detail (# tons of salt at $x per ton = $y). It also can track the changes to the budget throughout the budget approval process from budget request to committee review, and final approval (6 request/approval levels). Once the budget items are posted and update each level (and detail from one level is easily copied or transferred to the next level), the detail is retained indefinitely and viewable at any time during the year (both current and prior years).
Our department heads (or their designated staff) enter their budget requests directly into the system to initiate the process. While we have not absolutely required entry of budget details, it is strongly encouraged. As time goes on, more and more detail is becoming part of the supporting documentation of our annual budgets.
Some of the flexibility offered includes the ability to set the system parameters to require detail (we do not do this at this time), or that detail must equal the total budget request entered (without requiring detail, you may have lines where you wish to note detail of part of the budgeted total but where the detail does not equal the total).
As we are currently working on our FY09 budget, we find the detail also helps us to identify expenditures that were incorrectly allocated in relation to where the project or activity was budgeted and make the appropriate adjustments.
I recommend it.
Brad L. Bettenhausen
Treasurer/Finance Director
Village of Tinley Park