Algonquin Township Ends Fiscal Year with Almost $1.7 Million in Banks

Townships end their fiscal years on March 31st.

Algonquin Township, McHenry County’s largest by population and tied for first in size with McHenry and Nunda, had almost $1.7 million in its bank accounts at the end of March:

Balance Sheet as of March 31, 2016

Current Assets

  • Fifth Third Bank ­ Ckg. $1,004,254.22
  • FirstMerit Bk 12 Mo CD $226,122.44
  • FirstMerit Bk12 Mo.CD $79,752.15
  • Ill State Bank Savings $209,069.42
  • Home State 18 Mo CD $172,005.10

TOTAL ASSETS 1,691,203.33

During the year ending on March 31, 2016, the Township spent $1,600,830.

So, Algonquin Township has more money in the bank at the end of the year than it spent in the previous twelve months.

The Township Board will meet in the lower level conference room Wednesday night at 6:45 to decide on what next year’s budget should be.

The proposed budget is $2,440,950.

Considering what was spent over the last twelve months–$1.6 million–that sentence really deserves an exclamation point.


Comments

Algonquin Township Ends Fiscal Year with Almost $1.7 Million in Banks — 13 Comments

  1. Salaries for the next Board to be elected next year will be set soon.

    I look forward to many taxpayers attending every meeting to demand a reduction in those salaries / benefits.

    Further, I look forward to all the candidates who are going to run for Township offices next year to announce their candidacy soon and start campaigning.

    With all the attention being paid to Townships, I expect there will be no shortage of candidates, or will there?

  2. The purpose of the fund balance is to provide liquidity.

    Therefore the maximum needed fund balance can be objectively determined by examining the government’s daily cash flow and setting the fund balance equal to the greatest deficit plus a modest margin for safety.

    In most cases, this will be less than one month’s expenditures.

    Moody’s Investors Service, in fact, considers 12% (roughly one month) of expenditures to be adequate and 20% to be “excessive”.

    There is NO reason for a government to maintain a large fund balance.

    That is just over-taxing.

  3. Steve: You need to get more involved in Township government.

    To do what you say Moody’s Investors Service states, we would need to ration the property tax payments for Townships to 12 per year instead of the current two. When the second payment is made annually in Sept., the Township must have adequate funds to operate until the month of June in the following year when they get their first payment for the year. Of course Townships could be forced to operate on tax anticipation warrants which can get very messy.

    If property tax payments to government units are rationed to 12 per year, the next obvious step will be to send you and every other property owner a tax bill every month in place of one bill which requires two payments.

    I always come back to: If you do not like how your unit of government operates, run for office or get someone to run for office and change it.

  4. Since the fiscal year for townships ends on March 31 and the tax money arrives in June, why would more than two to three months money be required to get to the real estate tax distribution from the County Treasurer?

    I remember even sending out money earlier for districts that were short.

  5. Dear Conservative Voter:

    Thank you for your thoughts.

    I think one of the great services of this blog is that it permits a dialogue, and that by collaborating we can often come up with superior solutions.

    Allow me to posit the following:

    It is true that property taxes in Illinois are received in two large payments.

    But the vast majority of governments in Illinois that rely on property taxes maintain much smaller fund balances, and that includes townships.

    So it seems to me that your assertion is rebutted by the evidence.

    Even using your reasoning, there would still be no need to maintain a fund balance equal to a full year’s expenditures.

    I have two questions for you:

    1. Do you disagree that the purpose of the fund balance is to provide liquidity?

    2. Do you disagree that the proper size of the fund balance should be equal to the maximum deficit during the year plus a modest margin for safety?

    If you disagree with either, please explain why and what you propose as the method for determining the proper size of a fund balance.

    I look forward to your response.

    P.S. I am a former Township trustee.

  6. Will these hard earned profits be distributed to shareholders in the form of a divident or be booked as retained earnings.

    It is nice to see at lease a few businesses in McHenry County are prospering during this challenging economy.

    Kudos to Algonquin Township!

  7. Steve: Sorry gotta get to a meeting.

    I will respond in the a.m.

  8. We need an explanation of why we need a 12-13 month contingency for Algonquin Township.

    That seems to be excessive.

    Can someone from the Algonquin Township,Board explain the need for so high a contingency?

    I missed most of tonight’s meeting as I was attending The McHenry County Republican Convention.

    This is not intended to be accusatory.

    Merely looking for the logic behind the numbers.

    If my understanding of the numbers is incorrect, please let me know where I am wrong.

    Your input and insight is appreciated.

  9. Cal: The issue is not the March 31 to June time period, the issue is the September to June time period. September, October, November, December, January, February, March, April, May = nine months.

    Steve: By posting: “Moody’s Investors Service, in fact, considers 12% (roughly one month) of expenditures to be adequate and 20% to be “excessive”.”

    Followed up with: “There is NO reason for a government to maintain a large fund balance.

    That is just over-taxing.”

    You, in my opinion indicated an ignorance of how Townships function.

    Stating you were a Township Trustee, you knew full well that Townships (and some other local units of government) are somewhat unique because the Town, Town Insurance and the GA funds are in most cases dependent almost solely on property tax and personal property replacement tax.

    I made no specific reference to Algonquin Township relative to their budget or how much money they have in the bank at the end of the year.

    Insofar as financial advice I yield to your superior knowledge.

    My comment was relative to how Townships are forced to function – or not.

    I agree with the above question:

    “With all the attention being paid to Townships, I expect there will be no shortage of candidates, or will there?”

    I do know one area that Springfield could easily help relieve some of the excess money kept by Townships.

    That would be to remove the restriction on moving EXCESS GA funds into the General Fund.

    Currently Townships cannot.

    As a consequence when the latest recession hit, many Townships that had been ‘taxing to the max’ for GA had new administrations installed who reduced Township spending and taxing but they are literally ‘STUCK” with excess GA funds.

    Last year I note that there was actually a bill passed in Springfield to permit ONE Township to transfer its excess GA money into their General Town Fund.

    Why was this bill for only one Township?

    Just another sign of the ineptitude in Springfield?

  10. To Conservative Voter:

    I put forward the following argument:

    1) The purpose of the fund balance is to provide liquidity, to provide the amount of funds necessary to see governments through seasonal imbalances.

    2) The maximum size of the fund balance should equal to the largest deficit the government would run during the year with zero fund balance, plus a modest margin for safety.

    (BTW, this means that unless the end of the fiscal year coincides with the BEST day of the year, then the fund balance on that date should be LESS than the maximum.)

    I asked you to say whether you agree with my statement of purpose and my objective method for determination of the maximum fund balance and if you disagreed, to explain why and to put forth an alternative objective method for determining the proper size of the fund balance.

    You responded that I’m ignorant and that townships are unique.

    The first statement is offensive and irrelevant.

    The second statement is non-responsive to either of my arguments about the purpose of the fund balance and the objective method for determining the appropriate maximum fund balance.

    It is also an assertion, that is, a claim made without evidence.

    However, I decided to examine the evidence for your assertion, so I reviewed the financial reports for fiscal year 2014 for all seventeen McHenry County townships. Here’s what I found:

    Ten of McHenry County’s seventeen townships have fund balances that are less than 100% of expenditures, and they range from 25% to 69% and average 40%.

    Chemung, 14% of expenditures
    Coral, 29% of expenditures
    Dorr, 40% of expenditures
    Dunham, 43% of expenditures
    Grafton, 47% of expenditures
    Greenwood, 49% of expenditures
    Hartland, 69% of expenditures
    Hebron, 31% of expenditures
    Marengo, 56% of expenditures
    Nunda, 25% of expenditures

    It would seem that your claim that townships are unique is falsified by the evidence.

    I look forward to your rebuttal.

  11. To Conservative Voter:

    I beg your pardon, I made an error in the above tabulation. That’s my own fault for being in a hurry.

    TWELVE of the seventeen townships in McHenry County had fund balances equal to less than 100% of annual expenditures.

    And the lowest was 14.4%.

  12. OK I will make one last attempt to try and explain what my reply was to you.

    To repeat, insofar as financial advice I yield to your superior knowledge.

    The statement:

    “Moody’s Investors Service, in fact, considers 12% (roughly one month) of expenditures to be adequate and 20% to be “excessive”.

    There is NO reason for a government to maintain a large fund balance.

    That is just over-taxing.”

    was interpreted to mean that Townships should never have more than one month of forward coverage in their possession.

    My conclusion was that you were not familiar with Townships and how they are funded.

    My only point is that Township governments receive the majority of their funds twice a year and that results in fund balances at the end of most months to be more than one month’s forward coverage.

  13. To Conservative Voter:

    I apologize for my lack of clarity. I did not intend for Moody’s statement to be regarded as an absolute rule.

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