|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Robbins was the only entity to receive distributions from the Municipal Economic Development Fund. Robbins received $263,184 from the Fund and earned $5,370 in interest income in calendar year 2001. Robbins disbursed $417,772 in Fund receipts during calendar year 2001.
Robbins should adopt more detailed policies and procedures on allowable uses of MEDF funds. |
REPORT CONCLUSIONS The Village of Robbins is the only entity to receive distributions from the Municipal Economic Development Fund. In calendar year 2001, Robbins’ cash receipts from the Municipal Economic Development Fund (MEDF) totaled $263,184, plus $5,370 in interest income, for total receipts of $268,554. Robbins’ cash disbursements from the Fund receipts totaled $417,772. Robbins began calendar year 2001 with a cash balance of $154,028 in its bank account for Municipal Economic Development Funds and ended the year with a balance of $4,810 in the account. Based on our review of documentation provided by Robbins, we concluded that calendar year 2001 expenditures of Fund receipts generally appeared to be consistent with Public Utilities Act requirements. Specific disbursements were made for repairs to the elevator in the Robbins police station, outfit and repair of fire and police vehicles, employee payroll and health insurance expenses, acquisition of furniture, Village water and waste hauling expenses, engineering services, street improvements, and acquisition of lobbying services and legal services. We did, however, question whether one expenditure met the Public Utilities Act's guidelines. That expenditure was a $46,000 payment to a plaintiff as part of a lawsuit settlement against the Village. The Public Utilities Act states that MEDF distributions may be used only to:
The Act also lists specific purposes for which the MEDF distributions cannot be used. Village officials stated that Robbins' use of the MEDF distributions is consistent with the Public Utilities Act, noting that Robbins did not use the funds for any purpose specifically prohibited by the Act. Officials also noted that the lawsuit payment is consistent with the Act's provision to allow administrative expenditures to further allowable activities. According to Robbins officials, use of the MEDF funds to pay for the lawsuit settlement has allowed the Village's attorney to focus efforts on developing a business plan for the Village which includes redeveloping the closed incinerator facility. The Public Utilities Act requires this Office to forward to the Office of the Attorney General instances where expenditures have not been made for the purposes delineated in the Public Utilities Act. Given that it is questionable whether the use of Municipal Economic Development Funds to pay for the lawsuit settlement agreement complies with the requirements of the Public Utilities Act, we will refer this matter to the Office of the Attorney General for review. The Village had adopted a policy in February 2000 on the use of Municipal Economic Development Fund monies. However, the policies provided no more detailed guidance than those delineated in the Public Utilities Act. We recommended that the Village adopt more detailed policies and procedures to ensure that Municipal Economic Development Funds are used in accordance with the requirements of the Public Utilities Act. 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:
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 1–3) EXPENDITURE OF
DISTRIBUTIONS FROM
The State Treasurer made four quarterly Municipal Economic Development Fund payments to Robbins in calendar year 2001 totaling $263,184 (see Digest Exhibit 1). Robbins earned an additional $5,370 in interest income on the funds received, which resulted in total cash receipts of $268,554 for calendar year 2001. Digest Exhibit 1 also shows that Robbins disbursed $417,772 in Municipal Economic Development Fund receipts during calendar year 2001. Specific disbursements were made for repairs to the elevator in the Robbins police station, outfit and repair of fire and police vehicles, employee payroll and health insurance expenses, acquisition of furniture, Village water and waste hauling expenses, engineering services, street improvements, payment to a plaintiff in a lawsuit against the Village, and acquisition of lobbying services and legal services. Digest Exhibit 2 shows the amount and purpose for each of Robbins’ cash disbursements from the Municipal Economic Development Fund during calendar year 2001.
Our review of documentation provided by Robbins concluded most calendar year 2001 expenditures of Fund receipts appear to be consistent with Public Utilities Act guidelines. However, we questioned whether the use of $46,000 in Fund receipts to pay a plaintiff part of an $800,000 settlement in a lawsuit against Robbins was consistent with the Act. The Act requires that funds may only be used to "promote and enhance industrial, commercial, residential, service, transportation, and recreational activities and facilities within its boundaries, thereby enhancing the employment opportunities, public health and general welfare, and economic development within the community." Robbins officials stated that they did not use MEDF funds for any of the purposes specifically prohibited by the Act and that the Act allows spending for administrative costs to further allowable activities. Further, they noted the closure of the incinerator in 2001 had a significant negative impact on the Village’s ability to function and the use of MEDF funds for the settlement payment was necessary for Robbins to maintain the confidence of the financial and legal community. Given that the expenditure of MEDF funds for a lawsuit settlement payment is a questionable use of funds under the Public Utilities Act, we will refer the matter to the Attorney General as required under the Act. Robbins’ spending policy specifically for funds received from the Municipal Economic Development Fund, adopted in February 2000, mirrors the language in the statute and does not provide additional guidance to Robbins administrators as to what appropriate uses of Municipal Economic Development Funds may be or require a justification to show how the proposed use complies with the restrictions placed by the Public Utilities Act. We recommended that Robbins adopt more detailed policies and procedures on allowable uses of Municipal Economic Development Funds. (pages 3-6) AGENCY RESPONSE This report contains one recommendation. The Village of Robbins’ response to the report is included as Appendix C of the report. ______________________________
WGH/BH |
|||||||||||||||||||||||||||||||||||||||||||||||||||
