REQUEST FOR FINANCE AND INFORMATION TECHNOLOGY COMMITTEE ACTION

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1 File Number: Orig. Department: File Name: BACKGROUND: BUDGET IMPACT: Village Clerk REQUESTED : Approval of the September 2, 2014 Finance and Information Technology Committee Minutes I move to approve the Minutes of the Regular Meeting of the Finance and Information Technology Committee of September 2, 2014.

2 File Number: Orig. Department: File Name: BACKGROUND: Finance Department Class Software Annual Maintenance - Expenditure Approval The MIS Division has included $25,855 in the FY 2015 budget for the Class Program and Facility Management software maintenance and support. The vendor, Active Network Inc., provides annual software updates and 24 hour per day, 7 day per week technical support. The Class system has been in use by the Recreation Department since 1997 and is the core information system used by the department. Current maintenance costs are $30, less a 15% discount in the amount of $4, for a total of $25, BUDGET IMPACT: Account # includes funds for Class Software maintenance in the amount of $25,855. REQUESTED : I move to recommend to the Village Board to approve the Active Network Inc. software maintenance expenditure in an amount not to exceed $25,855.

3 File Number: Orig. Department: File Name: BACKGROUND: Finance Department IOC Local Debt Recovery Program - IGA Amendment Public Act , signed into law in December 2011, created the Local Debt Recovery Program that allows the Illinois Office of the Comptroller (IOC) to enter into Intergovernmental Agreements (IGA) with units of local government to assist in the collection of unpaid debts due to the local government. Prior to the IOC issuing a state tax refund, commercial payment, state payroll check, or lottery check, the amount owed to the local government, plus an administrative fee, will be deducted from the payment and deposited in the Comptroller's Local Debt Recovery Trust Fund. The debtor will be provided with written notice of the action and has 60 days to protest the deduction. If no protest is made or the protest is denied, the amount owed is transferred to the local government. Once a debt is submitted to the IOC, the debt remains outstanding for a period not-to-exceed 7 years (from the initial date of issuance of the debt). In February 2012, when the IOC launched this program, the Village submitted a test file of over 19,000 outstanding parking tickets that the IOC matched against income tax refunds, commercial payments, state payroll checks and lottery payments. In summary, approximately 2,800 of the records submitted matched against payments made to the debtors, providing an offset amount (amount that would have been paid to the Village) of approximately $472,000. In July 2012, the Village Board approved an Intergovernmental Agreement (IGA) between the Village and the Illinois Office of the Comptroller allowing the Village to participate in this program. Although the Village submitted all of the forms necessary to begin our participation, a number of general issues with the program were being worked through at the IOC and implementation of our participation was stalled. Staff recently reached out to the IOC, and we are once again on track to implement our participation in time for the upcoming income tax season. Staff has been provided with the attached "Amendment Number One" to the Intergovernmental Agreement between the Illinois Office of the Comptroller and the Village of Orland Park. This amendment addresses several clarifications that were necessary based upon prior implementations. The Board must approve this Amendment Number One before the Village can begin implementation. As part of the implementation process, staff will determine which categories of debts are due to the Village that we will submit for possible collection. Categories that we can submit include outstanding parking tickets, red light violations, water bills, and miscellaneous accounts receivable that have not been liened. Staff is requesting that the Board approve this Amendment Number One to the IGA so that implementation can occur.

4 BUDGET IMPACT: As noted above, based on the initial analysis, the Village may be able to recover a significant portion of outstanding debts owed to the Village. REQUESTED : I move to recommend to the Village Board to approve Amendment Number One to the Intergovernmental Agreement Between the Illinois Office of the Comptroller and the Village of Orland Park.

5 File Number: Orig. Department: File Name: BACKGROUND: Village Manager Employee Insurance Renewal FY2015 The Horton Group completed a market analysis on behalf of Village of Orland Park and has provided final recommendations for the 01/01/2015 renewal of the following benefit programs: Medical/RX Dental Vision Life and AD&D Flexible Spending Account (FSA) Employee Assistance Program (EAP) Crisis Response Program (Community) Virgin Health Miles (Wellness Initiative) CHC Biometric Screenings (Wellness Initiative) Based on the final analysis provided by The Horton Group, the following carriers/vendors associated with each benefit offering effective 01/01/2015 are being recommended: BlueCross BlueShield of Illinois (Medical/RX) Delta Dental of Illinois (Dental) EyeMed (Vision) Dearborn National (Life/AD&D) Allied Benefit Systems (Flexible Spending Account Administration) Metro Family Services (Employee Assistance Program) Metro Family Services (Crisis Response Program - Community) Virgin HealthMiles (Pedometer and Rewards Program - Wellness Initiative) CHC (Biometric Screenings - Wellness Initiative) The Horton Group (Benefit Consultant) In addition, the Horton Group is currently completing a market and service analysis for short-term disability plan administrators and programs. The Village currently utilizes Guardian who provides advice to pay (ATP) services. Along with evaluating plan administrators, we are also evaluating if the advice to pay (ATP) program model or another program model will better meet the Village s needs in administering the short-term disability benefit. An annual expense amount is provided in the chart below for budgeting purposes. A summary of the renewal for each benefit offering is provided below.

6 Line of Coverage Annual Expense Renewal Impact Medical/Rx $5,085, % premium decrease Dental $290, % premium increase Vision $39, % premium increase Life and AD&D $63,088 0% increase FSA $3,000 0% fee increase, projects 36 wks at 5.75 pepm, & $500 adm. Short-Term Disability $30,000 Currently reviewing ATP & ASO administrators & services. Virgin HealthMiles $28,500 0% fee increase expense projects average enrollment of 100 employees CHC Wellness $38,750 $20 increase per screening expense projects 310 participants Horton Retainer $50,000 13% decrease, quarterly payments of $12,500 EAP $19,500 no change in annual cost however 12 visit annual limit per person Crisis Response $30,000 no change Actual budgeted amounts will be adjusted to reflect the number of employees, employee contributions and pre-allocated reserves. As you know, the Village Medical/Rx plan is self-funded and is administered by an insurance carrier to provide the appropriate medical networks and administrative services. Proposals for the FY2015 Medical/Rx insurance administrator renewal are based on the carriers estimations of the Village s expected claims for the year, stop loss coverage, and run-in claims. To ensure the best possible pricing, The Horton Group works on behalf of the Village to negotiate with carriers to obtain the best and final offers. BlueCross BlueShield of Illinois (BCBS) presented the most competitive proposal resulting in a decrease in total cost. The BCBS proposal accounts for expected claims, stop loss coverage, Affordable Care Act (ACA) fees and a general health insurance reserve. The proposal includes maintaining HDHP/HSA, Silver PPO, Gold PPO and HMO plan options. Slight modifications have been made to the medical plan designs in accordance with the Affordable Care Act (ACA) and collective bargaining agreements. A summary of these recommended options is attached to this agenda item for reference. Effective 01/01/2015, the HDHP/HSA plan for non-union and IBEW employees will include a $3,250/$6,500 deductible. Non-union and IBEW employee premium contributions will continue to be based on a percentage of the overall premium cost and participation by the employee and their enrolled spouse in the biometric screenings. Non-union and IBEW employee contributions are as follows for each medical plan

7 offering: HDHP/HSA 3% HMO 10% Silver Plan 10% Gold Plan - Employees will contribute the difference between the cost to the Village of the PPO (Silver) and the current PPO (Gold) which ranges from 20% for single coverage to 30% for family coverage. Employees in the AFSCME, Deputy Chief and Commanders, Metropolitan Alliance of Police, and Police Supervisors groups will make employee contributions based on flat rates which are outlined in the collective bargaining agreements effective, May 1, 2011 through April 30, These rates include a wellness incentive rate for those employees that participate in the biometric screening. In addition, $151,000 is included in the Insurance Fund for the employer funding of the HSA accounts for those employees enrolled in the High Deductible Plan. Mr. Michael Wojcik from the Horton Group will be present at the Finance Committee meeting on October 6, 2014 to explain the renewal process, results, and to answer any questions. BUDGET IMPACT: The FY2015 budget will include $5,507,678 in the Insurance Fund and $49,500 in the General Fund (EAP/Crisis Response) to cover the expenses associated with the Village s employee insurance program. This amount reflects adjustments as referenced below the summary chart. REQUESTED : I move to recommend to the Village Board to approve agreements with the recommended carriers/vendors and associated expenses effective January 1, And To retain the Horton Group s services at the recommended rate for FY2015.

8 File Number: Orig. Department: File Name: BACKGROUND: Finance Department Banking Services The Village has used Fifth Third Bank as its banking services provider since late GFOA recommends periodically reevaluating banking services to ensure state and local governments receive effective services at reasonable costs and to assist in evaluating continual changes in technology that can improve banking functions. It is the intent of staff to have all banking services with one banking institution, in order to minimize staff time devoted to bank reconciliations and to reduce bank service fees. To evaluate the Village's banking services, a Request for Proposal (RFP) was prepared for comprehensive banking services. The required services included, in summary, the following: Deposit Services, including local branch deposits, remote deposit capture, full reconciliation, file transfer, check & ACH positive pay, change/currency orders, analysis services, and direct debit of utility bills Full service on-line portal for inquiries, check return management, lockbox detailed transactions, ACH/wire initiation and approval, purchasing card maintenance and activity, custody reporting Lockbox Services Courier Services Loan Review Services Merchant Processing Safekeeping/Custody Services Procurement Cards ATM Services Village Employee Services Letters were sent to all banks located within Orland Park to determine interest in receiving the RFP. Twenty one banks responded with an interest in receiving the RFP. Eight of these banks submitted proposals by the proposal due date, including BMO Harris Bank, Fifth Third Bank, First Midwest Bank, JP Morgan Chase, MB Financial, Orland Park Bank & Trust (Wintrust), PNC Bank and Standard Bank & Trust. (See attached Request for Proposals Summary and RFP Certification Summary Sheets.) A review committee was formed to review the submitted RFPs, as well as to determine those banks that would be invited for an interview. The committee included Trustee Ruzich, the Finance Director, Assistant Finance Director, Finance Department Office Support Supervisor, and a member of the Development Services Department. Five banks were selected for the initial interview process, including BMO Harris Bank, Fifth Third Bank, Orland Park Bank & Trust (Wintrust), MB Financial and Standard Bank & Trust. Based upon initial interviews, it was determined by the committee that three

9 banks - BMO Harris Bank, Standard Bank & Trust and Orland Park Bank & Trust (Wintrust) - would be selected for additional service/cost analysis and reference checks. Based upon submitted proposals, interviews, reference checks, and responses to additional questions asked of each proposer, the committee has determined that BMO Harris Bank would offer the Village the most effective comprehensive banking services. Some of the benefits that BMO Harris Bank can offer the Village include: A central website for all banking activity, including purchasing cards, including 7 years of history A minimum earnings credit rate of 65bp for the entire five-year contract Fixed pricing for the proposed five year term and a waiver of fees during the 90 day implementation period 1% cash back on purchasing card purchases greater than $50,000 A calendar year service charge compensation cycle for the entire five-year contract which will serve to reduce overall fees paid A state of the art internal lockbox system located in Chicago Review of economic loans Advanced technology including remote deposits, immediate update of teller positive pay, ACH positive pay, payee positive pay, and automatic sweep of excess investable balances. BMO Harris Bank has four locations within Orland Park and can provide all services requested in the RFP. A devoted relationship manager that specializes in governmental entities will be assigned to the Village's accounts. Responsibilities of the relationship manager include understanding the needs of the Village on an on-going basis and providing service improvement recommendations, as well as consistent communications. Regular treasury management meetings will be scheduled with the relationship manager to offer a proactive response to the Village's needs and provide updates to new technology developments. Finance Department staff strives to take advantage of all technology advances that will streamline functions and provide cost savings. BMO Harris Bank supports a number of community events and services including the Orland Park Golf Outing, Taste of Orland, Together We Cope and the Teen Bridge Center. In addition, BMO Harris will partner with the Village for next year's Fine Arts Fair. In the current interest rate environment, the Village utilizes the earnings credit option as opposed to paying assessed service fees in full and earning interest on the full available balance. This is the recommended practice for municipal governments. The earnings credit rate option allows the Village to earn interest on available deposits and utilize these earnings to offset service charges. Of the eight banks that responded, BMO Harris Bank offered the highest earnings credit rate and agreed to lock in a minimum 65bp rate for the term of our proposed five year contract. This will allow the Village to minimize the amount required to be kept for compensating balances, freeing up excess balances for further investment.

10 Although BMO Harris has the highest total annual fees of the three finalists (approximately $98,000), the high earnings credit rate will allow the Village not to actually be assessed for any of these charges. (See attached.) Orland Park Bank & Trust annual fees are estimated at approximately $70,000 and Standard Bank & Trust annual fees are estimated at approximately $57,000. The majority of the difference is in the Deposit Administration Fees and the Retail Lockbox fees. The Deposit Administration Fee is a direct pass thru from the FDIC as a charge for providing deposit insurance and is assessed on the average collected balance in the accounts. Orland Park Bank & Trust and Standard Bank are calculating the fee on a balance of $250,000 which ties to the balance that is actually insured and waiving the remainder of the fee that they must pay the FDIC. Harris Bank is calculating the fee on the total account balances. With the lesser compensating balance requirement due to the higher earnings credit rate paid by Harris Bank, this fee will be reduced by an estimated $14,000 bringing Harris Bank s fees more in line with Orland Park Bank & Trust and Standard Bank. Harris Bank s per item retail lock box fee is significantly higher than Orland Park Bank & Trust and Standard Bank s fees but the total fee should continuously decrease as more water billing customers move towards paying their water bills online. BUDGET IMPACT: The earnings credit rate offered by BMO Harris Bank will allow the Village to offset services charges with a lesser amount of deposits. The Village will be able to further invest balances over and above the compensating balance requirement to enhance interest revenues. REQUESTED : I move to recommend to the Village Board to approve BMO Harris Bank as the Village's banking services provider.