REPORT DIGEST

Financial, Compliance, and Program Audit of the

VILLAGE OF ROBBINS’

USE OF

MUNICIPAL ECONOMIC DEVELOPMENT FUNDS

Released: June 2001

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State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 East Ash Street
Springfield, IL 62703
(217) 782-6046 or
TDD: (217) 524-4646

This Report Digest is also available on the worldwide web at:
http://www.state.il.us/auditor

SYNOPSIS

The Public Utilities Act (220 ILCS 5/8-403.1) requires the Auditor General to conduct an annual financial, compliance, and program audit of distributions received by any municipality from the Municipal Economic Development Fund. Qualified solid waste energy facilities are required to pay into the Fund $0.0006 per kilowatt hour of electricity for which payment was received during the previous month.

Each audit is to be for distributions from the Fund for the immediately preceding year. This is the second audit conducted under this requirement. This audit covers distributions from the Fund during calendar year 2000.

The Village of Robbins was the only entity to receive distributions from the Fund. The audit concluded that:

  • Robbins received $196,197 from the Fund and earned $6,863 in interest income for calendar year 2000.
  • Robbins disbursed $110,660 from Fund receipts. Specific disbursements were for repairs to the elevator in the Robbins police station and to a fire truck, development of a marketing brochure, acquisition of computer equipment, demolition of an unsafe structure, installation of a fence around the public works yard, payment of expenses related to a Village festival, and acquisition of audit and legal services. Our review of documentation provided by Robbins concluded that calendar year 2000 expenditures of Fund receipts appear to be consistent with Public Utilities Act guidelines.
  • The Robbins incinerator closed in October 2000 and has not reopened as of May 2001. However, the Treasurer continued to make distributions to Robbins into 2001. Senate Bill 724, passed by the General Assembly in May 2001, amends the Public Utilities Act to allow Robbins to continue to receive Fund distributions if the incinerator is closed. As of June 15, 2001, the Governor had not signed the legislation.



 

 

Robbins was the only entity to receive distributions from the Municipal Economic Development Fund.

Robbins received $196,197 from the Fund and earned $6,863 in interest income in calendar year 2000

Robbins disbursed $110,660 in Fund receipts during calendar year 2000.

REPORT CONCLUSIONS

Robbins is the only entity to receive distributions from the Municipal Economic Development Fund. In calendar year 2000, Robbins’ cash receipts from the Fund totaled $196,197, plus $6,863 in interest income, for a total of $203,060. Robbins’ cash disbursements from Fund receipts were $110,660. Robbins began calendar year 2000 with a balance of $61,628 in its bank account for Municipal Economic Development Funds and ended the year with an account balance of $154,028.

Our review of documentation provided by Robbins concluded that calendar year 2000 expenditures of Fund receipts appear to be consistent with Public Utilities Act guidelines. Specific disbursements were made for repairs to the elevator in the Robbins police station and to a fire truck, development of a marketing brochure, acquisition of computer equipment, demolition of an unsafe structure, installation of a fence around the public works yard, payment of expenses related to a Village festival, and acquisition of audit and legal services.

The Robbins incinerator closed in October 2000 and has not reopened as of May 2001. However, the Treasurer has continued to make distributions to Robbins into 2001. Senate Bill 724, passed by the General Assembly in May 2001, amends the Public Utilities Act to allow Robbins to continue to receive Fund distributions if the incinerator is not operating. As of June 15, 2001, the Governor had not signed the legislation.

 

THE MUNICIPAL ECONOMIC DEVELOPMENT FUND

The Public Utilities Act was amended in January 1999 to create the Municipal Economic Development Fund. The Municipal Economic Development Fund is a trust fund created outside the State treasury to receive and maintain payments from qualified solid waste energy facilities that sell electricity to electric utilities.

The State Treasurer is required to make quarterly distributions from the Fund to each city, village, or incorporated town that has within its boundaries an incinerator that:

  1. uses municipal waste as its primary fuel to generate electricity;
  2. was determined by the Illinois Commerce Commission (ICC) to qualify as a qualified solid waste energy facility prior to the effective date of Public Act 89-448 (March 14, 1996); and
  3. commenced operation prior to January 1, 1998.

According to information from the Illinois Commerce Commission and the Illinois Environmental Protection Agency, Robbins had the only operating incinerator in the State that met these criteria and was entitled to receive disbursements from the Municipal Economic Development Fund. (Pages 1–2)

 

EXPENDITURE OF DISTRIBUTIONS FROM
THE MUNICIPAL ECONOMIC DEVELOPMENT FUND

Digest Exhibit 1 shows that the Treasurer made four quarterly Municipal Economic Development Fund payments to Robbins in calendar year 2000 totaling $196,197. Robbins earned an additional $6,863 in interest income on the funds received, which resulted in total cash receipts of $203,060 for calendar year 2000. Digest Exhibit 1 also shows that Robbins disbursed $110,660 in Municipal Economic Development Fund receipts during calendar year 2000.

Digest Exhibit 1
ROBBINS’ RECEIPT AND DISBURSEMENT OF MUNICIPAL ECONOMIC DEVELOPMENT FUNDS
(Calendar Year 2000)

Fund Distribution Received 01/00:
Fund Distribution Received 05/00:
Fund Distribution Received 08/00:
Fund Distribution Received 11/00:
Interest Income:
Total CY 00 Cash Receipts:

Total CY 00 Cash Disbursements:

Excess of Cash Receipts Over Cash Disbursements:

Cash Balance End of CY99:

Cash Balance as of 12/31/00:

$ 76,200
$ 22,841
$ 30,863
$ 66,293
$ 6,863
$203,060

$110,660

$ 92,400

$ 61,628

$154,028
Note: Figures rounded to nearest dollar.
Source: Village of Robbins

Specific disbursements were made for repairs to the elevator in the Robbins police station and to a fire truck, development of a marketing brochure, acquisition of computer equipment, demolition of an unsafe structure, installation of a fence around the public works yard, payment of expenses related to a Village festival, and acquisition of audit services and legal services.

Our review of documentation provided by Robbins concluded that calendar year 2000 expenditures of Fund receipts appear to be consistent with Public Utilities Act guidelines. Digest Exhibit 2 shows the amount and purpose for each of Robbins’ cash disbursements from the Municipal Economic Development Fund during calendar year 2000. (Pages 3-4)

Digest Exhibit 2
ITEMIZED ACCOUNT OF ROBBINS’ DISBURSEMENTS OF
MUNICIPAL ECONOMIC DEVELOPMENT FUNDS
(Calendar Year 2000)

Date

Amount

Purpose

3-20-00

$ 6,192.62

 Payment to contractor for repair of passenger elevator in Robbins police station.

5-17-00

$ 1,077.64

 Payment to contractor for sump pump, elevator shaft pump, and pit replacement in Robbins police station.

8-15-00

$ 5,500.00

 Payment to contractor for 25% deposit on development of a marketing brochure for Robbins.

8-21-00

$ 2,640.00

 Payment to contractor for purchase of laser printer and two computer hard drives for use in the Village’s administrative office.

8-29-00

$62,000.00*
  • $33,000 in miscellaneous expenses related to Robbins 2nd annual Back to School Festival held from September 1-3, 2000.
  • $5,000 to contractor as retainer fee to perform audit for period ending April 30, 2000.
  • $14,000 to contractor for emergency demolition of unsafe structure.
  • $10,000 to contractor for water tank replacement and additional repairs on 1973 model fire engine.

9-20-00

$ 10,000.00

Initial payment to contractor to install a galvanized chain link fence, barbed wire, and a cantilever slide gate around the Robbins public works yard.

12-13-00

$16,613.80

 Payment to law firm for legal services related to representing the Village of Robbins’ interest in incinerator bankruptcy proceedings.

12-14-00

$ 6,636.00

 Payment of remaining balance to contractor for fence (see above).

$110,660.06

* Robbins transferred this amount to its General Fund because its Municipal Economic Development Fund bank account limited the number of checks that could be written in a given month without penalty.
Source: Village of Robbins
Robbins disbursed Fund receipts for:
  • Repair of an elevator and a fire truck
  • Development of a marketing brochure
  • Acquisition of computer equipment
  • Demolition of an unsafe structure
  • Installation of a fence around the public works yard
  • Payment of expenses related to a Village festival
  • Acquisition of audit and legal services
 

The Robbins incinerator closed in October 2000. Senate Bill 724, if signed into law, would amend the Public Utilities Act to allow Robbins to continue to receive Fund distributions if the incinerator is not operating.

 

OTHER ISSUES

Robbins was entitled to Municipal Economic Development Funds because it had within its boundaries an incinerator that "uses municipal waste as its primary fuel to generate electricity" (220 ILCS 5/8-403.1 – emphasis added). However, the Robbins incinerator closed in October 2000 and had not reopened as of May 2001. When closed, the Robbins incinerator is neither using municipal waste nor generating electricity. However, the Treasurer has continued to make distributions to Robbins into 2001. Senate Bill 724, passed by the General Assembly in May 2001, amends the Public Utilities Act to allow Robbins to continue to receive Fund distributions if the incinerator is not operating. As of June 15, 2001, the Governor had not signed the legislation. (Page 5)

RECOMMENDATIONS

This report contained no recommendations.

WILLIAM G. HOLLAND
Auditor General

WGH/JK