October 9, 2012 Audit/Finance Committee Meeting

The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 6:30 p.m. on Tuesday, October 9, 2012 in the Board Room (C307) at Illinois Valley Community College.

FY2012 AUDIT

A preliminary draft of the comprehensive annual financial report for fiscal year ending June 30, 2012, had been distributed to the committee members.  Mr. Randy Regan of McGladrey, LLP, reviewed portions of the report and identified no weaknesses and no instances of noncompliance in the audit.  Mr. Ragan indicated there would be no management letter and no recommendations for improvement.  The financial statements were comparable to the past year.  There were three audit adjustments made – 1) to reclassify student activities fund operating transfer to operating transfers for reporting purposes, 2) to reclassify the capitalized asbestos abatement from capital asset (outlay) to expense (Once a contract is signed, it must be recorded as a liability even if the money is not spent.) and 3) to record an accrual for asbestos abatement removal costs for construction projects occurring after year-end.  Dollar-wise these adjustments are not significant.    Tara Leja of McGladrey, LLP, reviewed the Comprehensive Annual Financial Report with no significant changes. The annual financial report will be placed on the October board agenda as an information item and will be submitted to the Illinois Community College Board by Monday, October 15. The business office was commended for a job well done.  It was moved by Dr. Driscoll and seconded by Ms. Olivero to approve the Audit, as presented.  Motion passed by voice vote.

PREPARATION OF TAX LEVY 2012

The administration anticipates a 1.5 percent decline in the district’s EAV for Tax Year 2012.  In general, all property levels will decline except for farm land.  The Additional Tax (Equalization) increased significantly and this will help the Education Fund.  The Education, Operations and Maintenance, Protection, Health and Safety, and Audit tax rates are limited, but the administration will try to maximize the tax extensions for these particular levies.  The Bond and Interest and Social Security fund levies are not limited, but will be very similar to prior years.  It is estimated the total tax rate for 2012 will be .3584, which is 1.7 percent higher than 2011.  This is due to a decrease in EAV and not because of a higher tax levy.  The anticipated tax extension for the Tax Year 2012 is $16,888 higher than Tax Year 2011 but $122,865 less than Tax Year 2010.  The administration is proposing a tax levy of $11,535,296, slightly under a five percent increase, not requiring a public notice and public hearing.  A tentative tax levy will be presented to the Board in November and the final tax levy in December.   It was suggested to prepare some points of the history of IVCC lowering its tax rate of 44 cents to 35 cents.  IVCC is probably the only college that has seen this kind of drop.  IVCC is committed to education in this community and has been good financial stewards.  Dr. Driscoll made the motion, seconded by Ms. Olivero to support this recommended tax levy to the full Board.

ATHLETIC SALARIES

As the administration finalizes salaries for the year, a 1.5 percent increase to all head coaches and assistant coaches for team sports was recommended for the 2011-2012 academic year.  Tennis is no longer funded.  This is a lesser percentage increase for those employees not affected by a labor union – 1.5 percent vs. 3 percent.  Dr. Huffman noted that the College needs to look at where it can make sacrifices and he suggested keeping the salaries frozen.  Dr. Corcoran noted that when the administration discussed this group of employees, they felt an increase was warranted.  They all do a good job across the district.  The difference between the 1.5 and 3 percent could be used for professional development for the faculty.  Dr. Driscoll thought it is a fair attempt to be frugal.  If the decision is made to continue with sports, the College is obligated to fund them fairly.  Ms. Olivero noted that with the tax levy increasing the College’s finances will be under the microscope.  She knows the percentage of increase is not much, but the College needs to hold the line and the coaching salaries would be where she would do it.  Dr. Corcoran asked the Audit/Finance Committee to accept the recommendation and the administration would be mindful when building the budget for FY2014.  The Committee was in agreement to recommend the 1.5 percent increase to the Board.

ATHLETIC INSURANCE PROPOSAL

Dr. Tracy Morris presented an athletic insurance proposal.  She has reviewed the insurance procedures and looked at other community colleges.  Currently, if a student has insurance, his or her insurance is primary and the student sends the bill to their insurance.  IVCC is the secondary insurance.  If the amount covered by the primary insurance plus what IVCC owes is more than $1,000, it is submitted to the College’s insurance.  If the amount covered by the primary insurance plus what IVCC owes is less than $1,000 total, it is not submitted to the College’s insurance; the College takes care of it.  When a student does not have insurance, the College’s insurance is primary.  IVCC pays the costs up to $1,000 and then the claim is submitted to the College’s insurance.  Most schools are similar to IVCC.  Seven of the 27 injuries in FY10 were not covered by another insurance.  Effective Fall 2013, Dr. Morris proposed all student athletes will be required to carry primary insurance, which may include a parent’s insurance.  IVCC will cover up to a $1,000 deductible and a maximum of 20 percent coverage after the deductible.   If students select a higher deductible than $1,000, they will be responsible for the difference in their deductible.  This will take care of the number of claims that are submitted to the College’s insurance and should cut down the College’s costs and the costs to the College’s insurance.  Dr. Morris was asked to look at the primary areas of injuries and to see if conditioning could eliminate or reduce the probability of muscle tears.  All athletes are given health exams.  Committee members agreed this is a good first step and it will continue to be monitored.  Currently, no other Arrowhead Conference school requires student athletes to purchase primary health insurance.  There have been discussions about what this could mean to recruiting, however, this proposal will control athletic costs.  The Committee supported the proposal and it will be taken to the full Board for approval.