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August 14, 2022

Sangamon Valley Public Water District – Retirement Plan Or Not – Budget or Not?

By Kirk Allen & John Kraft

On June 27, 2022

Champaign Co. (ECWd) –

We began exposing malfeasance with the Sangamon Valley Public Water District using public resources for electioneering purposes just a few weeks ago.  You can read the numerous articles we have published about them at this link

Just when you think you have seen it all, up pops more public records conflicting with each other.

We requested the minutes where a vote was taken permitting the public body to participate in a 457b Government Deferred Compensation Plan, which is a retirement plan.

The response?

“No such records Exist”

Never mind the fact the Water District Act only permits participation in the Illinois Municipal Retirement Fund. If no records exist, then the financial audit must be wrong?

“The district sponsors a defined contribution pension plan known as the Sangamon Valley Public Water District Section 457 Government Deferred Compensation Plan. The Plan was authorized by the District’s Board of Trustees and is administered by Lincoln Financial Group.” (See page 25 of the audit)

Confused Yet?

According to the Illinois Comptroller’s Annual Financial Report filed by the district, they show no pension or retirement benefits. Meghan Hennesy is listed as the appointed official responsible for the EXECUTIVE ADMINISTRATION while Kerry Gifford is the appointed official responsible for MAINTAINING THE GOVERNMENT’S FINANCIAL RECORDS.  (The District’s Pension Funds/Retirement Benefits AFR filing is at this link.)

Are you following this?

According to the Lincoln Financial Summary Reports, there is a retirement program.  (See summary reports for the pension plan at this link)

It gets better, no not really.

The Annual Financial Report states the following:

“The Sangamon Valley Public Water District does not and is not required to pass an appropriation ordinance.”  (See filing at this link)

What does the Water District Act say about an appropriation ordinance, commonly referred to as a budget?

(70 ILCS 3705/13) (from Ch. 111 2/3, par. 200)
    Sec. 13. The board of trustees shall establish the beginning and end of the fiscal year for the district, which shall constitute its budget year, and at least thirty days prior to the beginning of the first full fiscal year after the creation of the district, and annually thereafter, the general manager shall prepare and submit to the board a tentative budget which shall include all operation and maintenance expenses for the ensuing fiscal year. Such tentative budget shall be considered by the board and be subject to any revisions or amendments as may be determined by such Board, shall be adopted as the budget for the ensuing fiscal year, and no expenditures for operation and maintenance expenses in excess of the budget shall be made during such fiscal year, unless unanimously authorized and directed by the board. It shall not be necessary to include in such budget any statement of necessary expenditures for interest or principal payments on bonds or for capital outlays, but it shall be the duty of the Board to make provision for their payment as they become due.
(Source: Laws 1945, p. 1187.)

As you can see, it is clear numerous public records conflict, which begs the question, who is in charge of this place? How can you have a pension plan for trustees and employees yet no record of ever approving it?  Why report to the Comptroller that you have no plan when in fact you produced financial records proving otherwise?  How did the auditor come to the position this plan was approved by the board when those very people are unable to produce any such record?

According to the AFR filing, they don’t have an appropriation ordinance, which is a budget, even though the law mandates it.

I have asked for copies of their last 2 years’ budgets, and we will update with a new article when we get a response.

If they truly have no budget adopted as the law requires, then we would agree it’s time to elect trustees who can follow the law rather than appoint ones who can’t.

OK, one more.

According to the Annual, Financial Report found at this link, the District’s Equalized Assessed Value is ZERO!  While we understand the district does not levy a tax at this time, that does not mean the EAV is zero.  Equalized Assessed Value is the assessed value assigned to properties in the district.  According to the Village of Mahomet’s AFR filing, the EAV for Mahomet is $228,069,720.00.

If these people are unable to ensure public records are consistent and accurate then we have yet another supporting reason to elect these people rather than have the county board appoint them.

Stay tuned for more amazing findings with this one public body in Champaign County.

 

 

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4 Comments
  • Dave
    Posted at 06:38h, 28 June Reply

    Wow!

  • Pete Marwick
    Posted at 09:27h, 28 June Reply

    Following governmental accounting rules, most 457 plans would not be reported as a pension plan in a government’s financial statements. Unless the district has bonds subject to debt limitation laws, EAV is irrelevant.

    • Kirk Allen & John Kraft
      Posted at 11:33h, 28 June Reply

      The CPA we spoke with disagrees.

  • Daniel W. Ryan
    Posted at 22:29h, 28 June Reply

    457b plans are almost always voluntary for each employee and the contributions are made by voluntary payroll deduction. No public monies involved.

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