Oak Park’s village government is entering an unprecedented time for major capital projects, and its finance committee is putting added focus on financial management and responsible oversight of these projects.
A feeling of mutual appreciation between village finance staff and trustee members of the committee was apparent during the finance committee meeting on Aug. 20 where five more draft policies were reviewed and recommended to the full board. This is an ongoing process to assess and implement about 50 to 60 policies to guide the future of village financial practices.
Kevin Bueso, Oak Park’s CFO, said these policies have already existed, but the staff is working to expand them and align them to governmental accounting standards and Government Finance Officers Association best practices. He also said the goal is to make sure everything is “practical” and that the systems they have in place will be able to manage and implement the changes.
“We’re really setting up the stage for a lot of automation, and then eventually all of these will be, you know, again set up in a way that is more status quo maintenance kind of thing,” said Bueso.
Of the five policies discussed last week, three were the main focus of the meeting. The values-based investment policy was revisited from initial conversation at the meeting on Aug. 6. The changes to the draft policy included the shift to monthly reporting and a clearer outline of seven values that financial institutions will be evaluated on as a piece of a larger, overall rubric.
The investment policy is some of the most “groundbreaking” work being done in the draft policies, and if the village board adopts the policy, it will be among the first of its kind for communities in Illinois.
“It’s a lot of work, but it can be done,” said Bueso.
The fund balance draft policy was also up for discussion and the proposal aims to create a standalone range for the general fund while also expanding to look at smaller funds such as water, sewer and parking. This policy looks to set a range of targets for cash reserves held by the village.
The standalone policy would create three different levels with the baseline being 16.67%, the operating target of 20% and an upper review threshold of 25%.
The village is currently in excess of the 25%, but Bueso said having a strong fund balance is beneficial for maintaining a strong credit rating especially while entering a period of taking on bonded indebtedness to pay for capital projects. He estimated that conversations around how to spend that excess money would be better served to take place closer to 2028.
Any decision for funds above or below the balance range would require input and direction from the full board with additional planning steps.
“I just do like to see again that this fund balance is being used intentionally, strategically, and that there is a plan,” said Bueso.
The third policy discussed was debt management which “establishes a comprehensive framework for evaluating, authorizing, structuring, issuing, administering, and refunding village debt,” according to the draft document.
It outlines a 25% goal for the Debt and Liability Carrying Charge ratio which is calculated by dividing the annual debt costs by the adjusted governmental revenues. Any new-money debt that would cause the ratio to go higher would require a strategic plan, discussion and decision by the village board.
“As the board got serious about moving forward with the largest facility project that we’ve had in 50 years of a new police station under my leadership, with the partnership with Village Manager (Kevin) Jackson, we’ve intentionally moved through this process,” said President Vicki Scaman “These have always been understood to be really big decisions.”
All draft policies can be found on the village website.