October 20, 2014 - Finance Committee Meeting

 

COUNCIL MEMBERS PRESENT:

Mike Schwab, Mayor                          Dale Fox, Council Member

Dave Godwin, Council Member         Tom Hilliard, Council Member

Chuck Hawk, Council Member          Paul Mackey, Council Member

Steven Tharp, Council Member 

VILLAGE OFFICIALS PRESENT:

Kris King, Clerk-Treasurer

Rob Pauley, Village Administrator

 

Opened by Chairman Tom Hilliard

The meeting was to review the finances through the first three quarters of 2014.

Village Clerk-Treasurer Kris King reviewed all funds in addition to the following information:

GENERAL FUND

The General Fund started fourth quarter with about $220,000. I estimate that there will be about $275,000 in expenses to finish the year.   I estimate revenues of $169,000.  This will leave approximately $114,000 for carryover. 

How does this compare to the starting balances of previous years:

2009    -           $ 107,000
2010    -           $ 111,000
2011    -           $   92,000
2012    -           $ 174,000
2013    -           $ 137,000
2014    -           $ 157,000

Variables that could affect this estimate:

• Health Insurance claims (+/-) - Those that have not met their deductibles
• Income Tax collections (+/-) - My estimate is based on the last two years collections for the last quarter.
• Sick/Vacation (+/-) - Extra coverage for the Police Department.

How can the Village ensure the General Fund can continue the services currently offered:

There are expenses that have been paid through the General Fund that were done so as a courtesy to the Fire Department in order to make sure the FD Funds stayed healthy. One of those expenses is the heating bill.  The FD has electric heat and the General Fund has been absorbing the cost through the General Fund.  The General Fund has also been absorbing the dispatch costs.  The FD Fund is currently very healthy.  This is partly due to the EMS Fund becoming a self-sufficient fund.  In the past, the contract funds were split between the Fire Fund and Ambulance Fund.  They now go strictly to the Fire Fund.  The Fire Fund is also funded by a levy and should be kept in check.  I intend to move the cost for future dispatch fees and heating bills to the FD Fund.

Street Resurfacing

In the past, this fund was used to patch roads until we were able to repave and to fix potholes. We transfer $2,000 per quarter.  This fund will be our only dedicated source for funding street maintenance if the levy doesn't pass.

Street Improvement

This fund is for the past and proposed 0.33 Street income tax revenues. We will deplete this fund with our Amherst Street Paving Project. 

Water Fund

The Water Fund is currently healthy enough to sustain the system as it is. Some items we may have to look at in the near future are the filters and the water tanks.  The filters are past their estimated life expectancy, but are in good condition due to the department's vigilant maintenance.  We are required to have a full day of capacity in above ground storage.  We may want to consider increasing our capacity by 50% for the future.  We currently have $24,000 in the Water Replacement Fund, unfortunately that would not even cover a block of water line replacement.  We may want to consider programmed small increments over 4 to 6 years.  Our system has aged well but we have to look out for our future.  If we need a loan in the future, our rates have to be at a certain level.  A rate study may be needed to make sure our rates are where they should be. I would hate to see a significant increase hit our residents because we weren't being fiscally responsible now.  We currently have one zero percent loan that will be paid off in 2021.  The annual cost is $ 1922.54.

Sewer Fund

The Sewer Fund will be receiving a rate increase starting in January. With this increase, the fund will be able to sustain itself including the loan payments for the new pump station.  The payments will be approximately $85,000 a half.  We currently have $80,000 in the Sewer Debt Fund.  We have three loans that will be paid off in 2017 with an annual cost of $63,726.12.  We may want to increase the Sewer Debt Fund's monthly deposit to match what our payments will be before the project is completed.  The next major project will be upgrading the current plant.  We will need to continue relining collection mains to help control infiltration and inflow into our system.   

Electric Fund

The Electric Fund is currently healthy enough to sustain the system as it is. Many people look at this balance and think we have a lot of money.  We have to have the funds available to repair and rebuild the system if there is a disaster.  A good example is the tornado in 2006.  We also have to have to meet the minimum balance requirement for AMP's bond issue of six months of operating expenses.  Using the first half of 2014, it is $ 2,075,000.  We are currently at $ 2,643,000.  We were able to pay off our 10 year debt of  $2,740,000 earlier this year for the substation.  On the minus side, we will need to pay $127,000 in AMPGS stranded costs in 2015 and $130,000 in AMPGS plant held reserve in 2016.  We expect to receive about $326,000 from First Energy.  We may need to use some of this to offset the cost of a structured outage for the changeover to the new Harmon Substation.

 

Meeting adjourned at 6:56pm

 

Respectfully submitted,

 

______________________________

Tom Hilliard