October 22, 2013 Audit Finance Committee Meeting

The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 6 p.m. on Tuesday, October 22, 2013 in the Board Room (C307) at Illinois Valley Community College.

Committee Members Physically Present

Larry D. Huffman, Chair
Michael C. Driscoll

Telephonically Present

Everett J. Solon

Others Physically Present

Jerry Corcoran, President
Cheryl Roelfsema, Vice President for Business Services and Finance
Lori Scroggs, Interim Vice President for Learning and Student Development

The meeting was called to order at 6 p.m. by Dr. Huffman.

FY2013 AUDIT

The comprehensive annual financial report for fiscal year ending June 30, 2013, had been distributed to the committee members.  Mr. Randy Regan of McGladrey, LLP, reviewed portions of the report and the auditors’ opinion is unmodified which is the highest level an institution can receive.  The single audit had two or three minor items that were noted, but no problems in the system of controls or processes.  There were no deficiencies or material weaknesses.  Ms. Jill Prescher of McGladrey, LLP, reviewed the Comprehensive Annual Financial Report with no significant changes. Tests are performed by the auditors to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs, as well as to determine that the College has complied with applicable laws and regulations.  The results of the tests for the fiscal year ended June 30, 2013 identified one deficiency in the internal control structure but there were no significant violations of applicable laws and regulations. The deficiency was in the TRIO grant where the College transferred the required match, but the money had not been expended.  It is a technicality of expending the money. Controls will be put into place to make sure this is done. The business office was commended for a job well done. 

PREPARATION OF TAX LEVY 2013

The administration anticipates a 2.5 percent drop in assessed valuations for Tax Year 2013 for an estimated equalized assessed valuation (EAV) of $2,980,685,675.  The Illinois Community College Board (ICCB) has notified the College of the authority to levy .0943 as the Additional Tax (Equalization).  This is a 6.8 percent increase from the .0883 tax rate in Tax Year 2012.  The Education, Operations and Maintenance, Protection, Health and Safety, and Audit tax rates are limited.  The Bond and Interest and Social Security fund levies are not limited and the proposed levy request is similar to prior years.  It is estimated the total tax rate for 2013 will be .3663, which is 3.6 percent higher than 2012.  This is due to a decrease in EAV and the higher Additional Tax rate.  The anticipated tax extensions for Tax Year 2013 are $117,194 higher than Tax Year 2012 but $126,714 less than Tax Year 2011.  The administration proposed a tax levy of $11,260,800 be submitted to the county clerks at the end of December.  This amount is slightly under a five percent increase and will not require a public notice and hearing.  The request for a higher levy than is estimated will ensure that if the EAV is higher than the estimate, the levies for the Education and Operations and Maintenance funds will be at the tax-rate limit and maximize tax revenues for these funds.  The Audit/Finance committee was in consensus and the full Board will review the tentative tax levy at the November board meeting.

TUITION AND FEES – PART-TIME EMPLOYEES

Per Board Policy #3.29, full-time employees have the benefit of enrolling in a fitness center course and having both tuition and fees waived.  Part-time employees have the opportunity to take one IVCC credit course per semester, tuition-free (fees must be paid).  Frequently, they choose to take advantage of the on-site fitness center for their one-credit hour course tuition waiver.  In the fall of 2012, there were eight part-time employees enrolled in the fitness center class.  If they were given the opportunity to take fitness center courses for free (tuition and fees), the cost to the College would be $419.20.  The administration feels it is important for IVCC to invest in the wellness of part-time employees and providing these individuals access to the Fitness Center would be viewed positively.  There was consensus among the committee to bring this recommendation to the November board meeting.

HIGH DEDUCTIBLE HEALTH PLAN

In addressing the Affordable Care Act, the administration is recommending to offer the College’s full-time employees a high deductible plan (HDHP) in addition to the two health insurance plans now in place to reduce health insurance costs and provide an affordable option.  The College’s annual savings on employees choosing the HDHP versus Plan 2 of the current insurance would be single coverage - $2,800; employee + 1 - $5,972; and family coverage - $7,257.   The rates are estimated, but the new rates are three percent higher.   The administration would also like to contribute to a health savings account (HSA) for those employees who choose to participate in the high deductible health plan. The suggested annual contributions would be $2,000 – employee; $3,000 – employee +1; and $5,000 – family.  If the employee were to add the portion of premium savings to their HSA, it would cover the high deductible.  Employees will be able to add up to $6,500 to their HSA per year.  The HSA would be administered by a bank.  The College will prepare an RFP with the three local banks that the College currently has banking relationships with to determine the third party administrator.  Out of the six community colleges in the insurance coop, three have a HDHP and three are anticipating to having it in place for January 1.  There was consensus among the committee members that the HDHP will help both the employee and the College on costs.

COMMUNITY INSTRUCTONAL CENTER PROJECT – PHASE 3

A committee of College administrators and Steve Halm, Paul Basalay, and Mike Alstadt met to discuss Phase 3 of the Community Instructional Center (CIC) project.  There are not sufficient funds to do all of Phase 3 work so the committee gave priority to the following programs:  1) Student Life Space (estimated cost of $615,000); Emergency Medical Services lab and classrooms (estimated at $323,750); CETLA move (estimated at $72,000); conversion of the current Bursar’s office to additional library space (estimated at $54,000); and the move of the Forensic Lab and classroom (estimated at $75,000).  Many of the other vacated spaces require only minor changes to accommodate new uses.  The College’s facilities staff is very capable of  making these minor changes.  Also discussed were the funds available for Phase 3.  Monies available from Phase 1 and 2 are $273,000; the furniture and moveable equipment budget was $1,000,000 and there is an estimated $275,000 remaining.  These two amounts can only be spent on Phase 3; they cannot be appropriated for other use.  The College also has $259,000 available in Capital Renewal Funds and the elevator in Building E ($300,000) could be funded with a portion of the Protection, Health and Safety annual tax levy for a total of $1,107,000 fund available and the estimated cost is $1,139,750 without contingencies.  It was suggested to bid the project with alternates – Forensics Lab ($75,000) and the EMS classroom ($63,750).   As the project gets closer to the new estimates, options would be to drop off a priority or look for additional funds.  The committee was in consensus for the administration to return to the whole board with better numbers.