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Finance committee directs staff to draft resolution forgiving advances and restoring FICA/IMRF reserves; officials debate $2.7M transfer and capital trade-offs
Summary
Staff told the committee that forgiving interfund advances and transferring about $2.68M would restore FICA and IMRF to a five‑month reserve target; committee members asked staff to prepare a resolution and provide actuals in February. Members also discussed capital trade-offs, including a mandatory Motorola radio replacement estimated at ~$3.75M and possible use of RTA interest, capital fund balances or mixes of funding.
Finance staff told McHenry County’s Finance & Audit Committee on Dec. 4 that two special-revenue funds — FICA and IMRF — are below the county’s five‑month reserve policy and that restoring them to the policy level would require roughly $2,682,000 in transfers (or equivalent adjustments).
Staff presented fiscal year projections and said the combined transfer would return both funds to the five‑month reserve target so that interfund loans during the year would be short-term and manageable. "It will make those funds back to 5 month reserve, which is where they need to be so that if there is an interfund loan throughout the year, it's only for a month, give or take," staff said.
Committee members discussed implementation options: forgiving long-standing interfund advances (an accounting step), making a direct transfer from the general fund, or finding equivalent savings across general-fund expenditures. Finance projections show that taking $2.68M now would reduce the general fund's projected months of reserve by roughly 0.35 months (about $3.2M in dollar terms) in the near term and would increase pressure to identify budget savings for fiscal 2027.
Several members urged staff to prepare a resolution that at minimum would forgive the two interfund advances and to return with audited actuals in February for precise numbers. One member proposed stronger language committing the board to find $2.7M in savings this fiscal year; other members declined to add that specific, binding target to the resolution but widely supported drafting a resolution forgiving the advances and exploring transfers.
Committee members then moved to capital priorities. Staff briefed the committee that a countywide Motorola radio replacement is due; the project would cover more than 500 radios, with high‑end patrol radios costing about $6,700 apiece and a total program estimate near $3.75M. Options discussed included phasing, leasing/service arrangements, using capital fund balance, or applying RTA interest. Members noted that public-safety radios are mandatory and that other capital projects (for example, a police social-worker build‑out, payroll system replacement and generator control board work) could be deferred or reprioritized to free capital funds.
The committee directed staff to draft the resolution to forgive advances and to provide updated actuals and options for funding both the reserve transfers and the radio replacement at a forthcoming meeting. Transportation and capital committees would be consulted where RTA (Road and Transportation Account) funds might be used.
Next steps: staff will prepare a resolution to forgive the two advances, return with February actuals and a list of budget savings/options and provide tighter cost estimates and a prioritized capital schedule for the radio replacement and other projects.
