The Village of South Jacksonville’s Board of Trustees meeting last Thursday was mostly filled with talk and action on the village’s finances.
The meeting began with a public hearing on the village’s FY24 appropriations budget. Village Treasurer Mindy Olson says she did her best to trim down and decrease appropriations in many of the village’s departments. She said the first way to create cost savings for the village was decreasing its annual cost in insurance. Olson says that the village administration sent a notice letter to its insurance carrier last month that they were going to begin shopping for better rates: “One of the things that [Village President] Dick Samples and I had kind of worked on behind the scenes with the insurance company and Stephen Symons (and he’ll probably come to the next meeting and give us a presentation as well) was farming out our insurance to look and see if we had any other options to help reduce our insurance [costs] a little bit. We had to formally submit a letter to our current insurance company, IML, and tell them that we were looking at sourcing out bids. They came back quite quickly, I might add, that they would like to still work with us, and have locked us in at a percentage for the next 3 years, so our percentage will not go up for the next 3 years.”
Olson says the percentage rate may not necessarily mean a decrease in the amount the village pays per year due to the village’s assets and appraisals, but it does lock in the rate.
Olson says the biggest challenge for the budget overall has been the problems in the village’s Water Department. The village has been on the City of Jacksonville’s water since early this Fall due to ongoing problems with the pumps and media at the Water Treatment Plant in Oxville. Olson says it has caused a considerable jump in appropriations for the water department in the upcoming fiscal year: “This is where we are taking the biggest hit on our budget this year. We are looking at over a half a million dollars for the water plant, water softener, the generators, and for everything that has been put off for the past 20+ years. We have to get this right. We have to get it down.”
Olson says the biggest line item appropriation in the Water Department’s budget is to the City of Jacksonville for the usage of their water: “Since the water plant has been down, that puts us on the City of Jacksonville’s water, which we have to pay for. Therefore, that line item has increased. It’s not only just the price of the actual repairs, new equipment, and that at the facility but it’s the cost of the water, too. You can see [in the budget] that it’s almost up to $450,000 in that line item for this year. That’s a big jump from last year. It went up quite a bit, almost 40%.”
Streets & Utilties Superintendent Brian English reported in the business meeting, following the public hearing, that the village can expect to remain on the City of Jacksonville’s water at least for another month while repairs are ongoing at the Water Treatment Plant.
The Public Protection budget also saw increases to their appropriations. Olson says that the village police department has several items budgeted for in the coming year that have been previously discussed: “[We] have budgeted full a force of officers this fiscal year. We are still down an officer, but we do have it in the budget for another officer to come in. We still have the building budgeted in there for $10,000 to help with some repairs and upgrades that need to be done at the police department to make it a safer environment, especially when they are doing interviews. I believe Police Chief Eric Hansell has talked to everyone about that before. It’s still an item in the budget that needs to be addressed. The other thing that happened with the police budget and the fire department budget is the 9-1-1 ETSB contract went up over 10%.”
Olson says there was also cushion left in the police department’s budget to accommodate for repairs and/or replacement of two recently damaged police cruisers due to a high-speed chase with a suspect.
The fire department also received room in their budget to purchase a new fire rescue truck in the coming year to replace the current truck that is over two decades old.
The Motor Fuel Tax fund also received an increase in funding due to material costs. Olson says that the village’s streets department received positive reviews from citizens on the recent oil and chip program that used different materials this year. The increase, she says was warranted in order to continue to use the new materials in the upcoming year.
Olson says that tourism and the village’s TIF budgets saw decreases for FY24 due to a lack of major capital outlay projects.
During the regular business meeting, the village board heard the presentation of the FY23 financial audit.
Kristi Corpin, partner of Eck, Schafer, & Punke LLP of Springfield, presented the audit. Corpin said that the audit process took place back in July, commenting that some of the information may be considered old and some corrective actions had already been taken to clear up some of the village’s outstanding problems from previous years.
Corpin says that the audit firm helped perform several adjustments to the village’s balance sheets on top of rendering an opinion on the village’s financial operations. Corpin says despite the village having several hold over recommendations from the previous year, the audit appeared to be in order: “You’ll see here that it is a clean, unmodified opinion – same as last year. That means that the financial statements are fairly presented. We took some adjustments to get there to get to that status, but it doesn’t alter our opinion.”
Corpin says that the audit had three significant findings, one of which was in the village’s internal controls: “Outside of looking at your numbers, we look at your processes. We look at your internal controls. Anytime we identify items that rise to the level of a finding, we are required to communicate those to you in writing. This is new this year. You’ll see there are 3 items that we did identify this year in our audit process that we consider material weaknesses in your internal controls. The first one being inadequate segregation of duties. There were some controls that had been established by the village that were really not consistently performed during the year. The big ones being dual signatures on all cash disbursements and mayor approval of bank reconciliations. Those are two key controls that we as auditors like to see in this organization. These really help to mitigate potential misappropriations. Those were not consistently done during the year, so we identified those in this letter in the audit.”
Corpin says the second major finding had to with the village clerk position: “There was a lack of documentation of board minutes. I think this is no surprise to anyone. The clerk position was vacant for much of the year. A lot of board minutes were not documented in written form. I think they were recorded, and there was recordings of those minutes but they were not in written form. Board minutes are important on the audit process because we read those to determine if there has been significant transactions, major events, approval of different things that happen during the year. We look at those in the audit process, but they are also important at a government level. There is municipal code that requires these items. Again, that was an issue we identified during the year. I was happy to hear at the beginning of the meeting that you were already approving meeting minutes from last month. It sounds like that has been rectified and won’t be an issue moving forward.”
Elected clerk Rebekah Pentecost resigned a month after her election back on July 13th. Village President Dick Samples acted as a clerk at several meetings until appoint Village Treasurer Mindy Olson as a temporary acting clerk in September to ensure that the duties would be completed moving forward.
Corpin says the last major finding in the audit had to do with her firm having to perform financial adjustments prior to starting the audit process: “The final finding is the financial reporting process. Anytime we are to come in and make substantial audit adjustments, it’s really hard for us not to say that there is not some kind of issue in the financial reporting process. Due to that, that’s the third finding. I will speak to some software issues and some confusion on how to process transfers. I think with the software, Mindy has gone through some training to remedy that. That should not be a problem again in this coming year.”
Corpin also said that Olson had already submitted a letter to her firm announcing the village’s corrective action plan for the findings, showing that many of the issues mentioned in the audit have already been fixed or are in the process of being completely corrected. Corpin says she does not anticipate similar findings to reappear next year.
Corpin says that the village’s overall net position was strong at $14.2 million, with a positive change year-over-year of approximately $591,000.
Corpin noted that the number would have actually been higher, but the net position was affected by the water and sewer fund’s negative net position of $617,000. Corpin says half of the negative net position was due in part to the ongoing aforementioned problems at the Water Treatment Plant.
Despite the finding and issues, the village board approved the audit as it was presented unanimously. The board is expected to approve the FY24 appropriations budget at a special meeting after their scheduled committee of the whole on November 16th. The appropriations budget is currently posted at Village Hall for inspection by the public.