A representative from a Joliet, Ill. accounting firm gave a financial overview of Macomb on Monday night.
Dave Meyes, manager of Wermer, Rogers, Doran and Ruzon, LLC., explained that his firm studied the town’s financial records from the last fiscal year. In this audit, Meyer says they made sure that Macomb officials recorded taxes, like property, sales and income, correctly in their documents. To complete the process, Meyer and the firm had to work withcity staff, which he says were very cooperative.
“The staff did a great job. You should be very proud of the job they did in handling all of the transactions, as well as providing us with all the documents we needed,” Meyer said.
Among the highlights in his report, Meyer shared that Macomb entered the fiscalyear with a cash balance of $7 million. This amount would likely be a 6-month reserve, which Meyer says is a healthy balance.
“You don’t want to have too much of a cash balance because then property tax payers would wonder why you have so much of their money,” Meyer said. “But youcertainly don’t want to be living paycheck-to-paycheck as a government either.”
Macomb had $3 million more in expenses than it had in revenue. Additionally, the city passed a budget that prepared for a $1.8 million deficit, but ended up with a loss of $2 million. Meyer says these particular numbers don’t point toward a major issue, referencing improvements the city made to Randolph Street and Wigwam Hollow Road.
“I think part of it had to do with those road projects,” Meyer said. “The timing of those projects could throw you off a little bit on what you budgeted.”
Elsewhere, the city’s police pension is nearly 66 percent funded, while the firepension is funded at just 51 percent. Meyer doesn’t find those numbers to be troublesome, but says the state of Illinois will require towns to fund those pensions at 90 percent in the distant future. On the flip side, Macomb has overfunded the Illinois Municipality Retirement Fund (IMRF) by 3 percent. The IMRF is the second largest public pension system in Illinois.
Meyer explained his role as an auditor.
“We can never say anything is good or okay, we can just say we didn’t see anything bad.” he said. “We need to have an understanding of your internal controls, but we’re not going to give an opinion on how well those controls are functioning.”
Mayor Mike Inman called attention to the corruption in Dixon, Ill., where a comptroller embezzled $53 million in a 22-year period. Inman explained that the strong level of communication displayed by Macomb’s city staff was “wholly lacking” in Dixon. City Administrator Dean Torreson echoed Inman’s thoughts.
“We are in pretty good shape financially, and the mayor, city council and the staff should get credit for that,” Torreson said.
Looking forward to 2019, Macomb has until next month to make a decision on tax levies.
Torreson explained that there are two different ways to fund pensions: the statutory minimum amount and the recommended amount. Approving the statutory minimum amount would bring the pension funds to the 90 percent mark, like Meyer mentioned, while the recommended amount would reach that goal sooner.
Macomb would hold onto $700,000 if they choose the statutory minimum amount. Although the city typically chooses the recommended amount, Torreson worries about the long-term sustainability.
“We whittled it (the money) away in years past but we certainly cannot afford to do that again,” Torreson said. “If we continue with the recommended amounts, our general fund would be bankrupt within a few years.”
Under this consideration, the city could levy 5 percent from the fire pension fund and Macomb’s tax rate would increase from 1.21 percent to 1.23 percent. Torreson calculated that the bump would mean that those who own a $100,000 home would pay just $5 more per year.
Leaders in Illinois may play a factor in the council’s decision. According to Illinois policy. org, more than 400 downstate fire and police pension funds have less money than the Illinois Department ofInsurance says is appropriate. This striking trend may lead to significant pension fund reform, like combining fire and police pension funds. Inman thinks this could benefit towns in downstate Illinois.
“Having the scale of those funds combined would bea plus,” Inman said. “This should put us in a much better position to make sure those funds are taken care of going forward.”
In other developments, the council may reach acompromise regarding the loading and unloading zones outside of Lamoine Senior Living Center in downtown Macomb.
A proposal to allow designated parking around the facility has been squashed,but a new proposal would still accommodate ambulances, buses and vehicles dropping off residents. The loading and unloading zones would be on Randolph and Carroll Streets, and if the council approves the proposal, those zones would have time limits of 20 to 30 minutes.
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