Village Board - Special Meeting

Good evening, everyone, and welcome to the Village of Manteno special meeting for Wednesday, May the 20th of 2026. I'd like to call the meeting to order. Would you please stand and say the Pledge of Allegiance?

I pledge allegiance to the flag of the United States of America and to

And now, Reverend Don Lesher will lead us in an invocation.

and just acknowledge that our need for you and that subjects like this are bigger than us and smarter than us, Lord, and we just need your wisdom and guidance. I pray that you'd bring a spirit of peace and understanding, that we'd be quick to listen and slow to speak and slow to get angry, Lord, and that your spirit would prevail. I pray that you would just guide us through and that in the end, Lord, we would know that you are with us. And we thank you for being here in Jesus name. Amen.

Roll call, please.

Barry. Yes. Boudreaux. Here. Vaughn. Here. Crockett. Here. Giskey. Here. Zimbelman.

Here.

All present.

I would like to postpone the public participation until after the audit is finished, and the auditors are going to ask the trustees at the end of their presentation if they have any questions, and then they may take questions from the audience. All right? And I've also been told by the videographers that no bad language is to be allowed tonight, because if that happens, the tape of our meeting will not be posted on YouTube, it will be sent away and audited to take out the bad language and we won't get it back for at least two days. So please stay calm. Don't let your emotions get the best of you. And tonight I'd like to introduce our auditors, Jim Edmonstone, Chris Edmonstone, and Taylor Rodina.

Good evening. Oh, it works. Hi. We appreciate the opportunity to do this examination for you. And I was gonna do slides, but we were talking about today, and I think it'll be easier if I just go through the report and share some highlights, and also for the trustees, and they'll be able to follow along, because they have a copy. And if you have any questions at the end, then I can highlight whatever your questions are. So let me get, let me plug this in. Why is it not showing up? It's not showing up in here. It should show up. No, but it's not. Am I on? You are. So what I'm going to do is I'm going to go through some of the highlights and some of the exhibits we talked about in our report. Our report, we focused a great deal on cash. And I was asked just before I came in to go through the difference between a financial audit, which you have every year, and what we do in this examination. We also do internal audits. So I'll go through it really briefly. So when you have a normal financial audit, they're looking at the financial statements that you've produced at the Village. and they are testing whether they're correct. And so they're testing it. And I would advise you when you go through audited financial statements, you really want to focus on the footnotes and work backwards because a lot of times it's the footnotes that tell the story of what you're looking at. We do internal audits and an internal audit would be where, and all companies do internal audits, and that's where they're going to take the policies and procedures for the department, the company, whatever it is, and they're testing whether or not the entity you're looking at is complying with the policies and procedures that are in place. What we did here in the forensic, we're brought in to do forensic audits. Sometimes, some municipalities have literally called us in to do a forensic audit believing they have no problems, and they either want one done just to have self-assurance, or in some cases, we did one in Ohio, for example, where they had a policy in place, I think it was an ordinance, that when their financial person would leave, they were required to have an audit to make sure there were no issues. And then sometimes we're brought in because there is a specific concern or allegation. We did one a couple of years ago where they already knew that somebody was using, it was a public entity and they were using the funds. And in that case, the police were already involved, but the police wanted to report from us before they decided whether they were gonna pursue the case. And we do quite a few of those. We do public ones. We also do private ones. And we also do forensic examinations of businesses. And sometimes it's because there's a dispute between two business owners. so your village is um set up with a number of different funds and we laid them out here the general fund the special community fund and i'll go through them and what we did on here is we put down the fund numbers and then you have a police pension fund but the pension fund is run by a separate board One other thing I want to do. So the way this report is put together, this is 100 and some odd pages of the findings in a discussion of the issues that we've identified as well as our recommendations. There is another report which we've already produced a draft. and we'll produce a final in a few days. I'll send it to you electronically. And those are going to be the exhibits. And I'll go through some of those exhibits as they pertain to it. But the exhibits overall, they're gonna have the details of the bank activity. Each account, we'll have the summary of activity by month for the five years and a couple of accounts we've gone further and we've laid out all of the activity for the account for example the 0214 where they run through all the checks and everything we've actually got every check that ran through there for for every activity for the five years and six years okay and um And also then we basically consolidate together so you can see if Mr. X got 10 checks over five years, then we'll have every check that he got in detail and then we'll also have a summary of how much he was paid in total. It will also have the financial statements and then we've also put in some applicable laws that we found, both federal and state, and you'll understand why in a minute. And also some other helpful information that we found, which we believe would be helpful to understanding what we've done and moving forward. This exhibit here is going through the layout of your cash. So on the left, and I know this is difficult to read, but you'll be able to read it when it's posted online better. This represents the general ledger, which is on the left side of this document, and on the right side is the corresponding bank or bank accounts. So the way you're set up is each, the fund starts with the first two digits. So for example, the general fund, the first two digits are 01, and then you're gonna have certain accounts for under the general fund. And then you're gonna have under this line here for special projects fund, okay? So the first two digits of that general ledger account is going to be 03. Then over on the right will be the actual account numbers. We've put down the account numbers. We've put down the name of the account per the bank and the entity, the bank, that the funds are deposited in. Now, excuse me, I've had a cold and I still have some leaks, as they say. I thank the treasurer for helping me put this together, because you have a lot of bank accounts, and you have a lot of cash accounts, and we'll talk through that a little bit later. And Homestar was merged with Midland, so when you see Homestar slash Midland, that's just indicating that during the beginning of the audit, the bank was called Homestar, and later it changed to Midland. And there was a merger, and then about six months after the merger, the Midlands start issuing the bank statements. And then as you'll go through to, I'll cover this right now. So as you're going through there, you'll see on our summaries, there's an interest column. and you'll see when it was one bank, it's blank, and on the other bank, it shows it. The reason is one bank included its interest in its deposits, and the other bank didn't. So in the bank that didn't, we just separated it out so it will all balance, and you can follow it easily. Okay, so I wanted to lay out a little bit about how some of the key components of how your money is invested and how the banks work. So the first one is the FDI insurance because you want to make sure your cash is protected. And it's actually kind of complicated. It's more complicated for a public entity than it is a business or for yourself. And So what we've done is we've laid out some of the key components here, and then we've given you some guidance in a thicker in some of the laws we've attached as the exhibits, and also we've given you some hyperlinks. So on a government account, and if you look at the definition here, it defines what a government account is. It's a federal government, state government, and other government bodies. First of all, they separate the policies or the rules by whether the bank, the institution is in-state or out-of-state. So in this case, of course, it would be Illinois. And the banks are treated somewhat differently if they're in-state versus out-of-state. In essence, you have more insurance if the bank is in-state. And the insurance is not that much. And so that creates problems for any, even for Manteno, and you can imagine what happens when you get to the state of Illinois, you get to agencies, you get to the city of Chicago, they're swimming in cash, and they have to figure out a way to protect the cash because they can't protect it through the FDI insurance directly. So in Illinois, if you put cash in Illinois in a bank, you have $250,000 for demand deposits and you have $250,000 of savings accounts per bank. It's not per account, it's per bank. So if you have one account or a hundred accounts, you're gonna have the same amount of insurance. If you put the money in an out of state bank, you have $250,000 period. Now, they divide the cash, they divide it between savings accounts and demand deposits. But they don't, the FDIC, it doesn't look at the way you define savings accounts. They have their own definitions. So you can have a demand deposit that pays interest, but that's considered a demand deposit and not a savings account. So a savings account would, for example, be money markets. Now, the other thing that is quite a bit different is who's insured. The village isn't insured, it's the official custodian. So the official custodian is treated as the insured depositor. If you have multiple official custodians, each one is going to have their own sets of insurance, basically. We looked at Manteno and we looked at the way you have the ordinance set up for controlling the cash and you really have a split function. So you have the trustees who decide what banks to use. Then you have the treasurer who actually moves the money and puts it into the account. So you have two separate entities I didn't mean to call you an enemy. You have two separate parts that are making one decision. So the way that we're reading the law, the government would consider that to be one official custodian. So you have two groups, one official custodian. So that means that for in-state, they have $250,000 of savings and $250,000 of demand deposit per bank. So the government, according to FDIC, they, I know that they've talked about having more insurance, but right now they're at these really, really low limits. So they will look, the FDIC will look at collateralization, and I'll run through some examples in a little bit. And basically, if the village obtains collateral from the bank, that meets the requirements of the FDIC, they'll recognize that and they'll give you more insurance, but if the collateral doesn't work, then they're not going to honor it. In the definition of what is a, official custodian, they talk about the plenary authority is to determine whether or not that person falls under the addition of official custodian. And I put in here the definition. I have a couple of definitions in here, and we pulled them out of the Cornell law. It's a good place. We use it a lot. And their stuff is pretty concise. And we also give you the hyperlink so you can look it up. But in essence, what the FDIC is saying is the fact that someone is a check signer doesn't make them official custodian. They really have to be able to make the decisions to run the accounts, open the accounts, close the accounts, move money into the accounts, move money out of the accounts, et cetera. Then this is all, what I'm quoting from here in the report that you're looking at is, from the FDIC itself, I actually pulled off pieces of it. So down here, they took, because the government's run so differently, they also put in what misconceptions will be They said, custodians for public units, as an example, may not realize that public unit deposits designated for different purposes are not separately insured. If the funds are held by the same official custodian of the same public unit, the deposits will be added together when calculating insurance coverage. One thing here, if you have separate legal entities, you can have one official custodian be an official custodian of more than one entity. So in this case, you have the village and then you have the police pension fund. Well, the police pension fund has its own board. My understanding is it's a separate legal entity. And by reading these laws, then Sheila would also have official custodian status for the pension fund. So she can be official custodians for multiple entities. funds as long as they're completely separate. And you could redesign your process to have a different, more than one official custodian. But you would have to redesign it in order to meet the requirements that the FDI set out. And then you would automatically get some more base insurance. I'm going to skip the bonding piece. I'll just talk about it a little bit. But I'm going to come back to it in a minute, our observations, because we go into more detail. The village ordinances require bonding. And I'm going to go back. I want to talk about this in more detail, so I'll do it in a few minutes when we cover our observations. Well, actually, I'll cover one little piece here. So you don't have bonds. You do not have bonds that comply with the village ordinance. What you have instead is you have a half a million dollars of employee insurance coverage. Chris went and wrote the insurance broker and they wrote back and they explained you have a half a million dollars and it covers the employees, but I don't believe it covers the trustees. And that's one of the things we think you should look at because since you're partly responsible for administering the cash, we think you should look at having coverage for it. And so here is the actual letter that Chris received from the broker, and he or she wrote this, Nika. They explained what coverage you do have. And they also explained that some municipalities still want the bonds on top of the insurance coverage. And if you want that, they're ready and willing to do it. So right now, what we see is we actually see a conflict because your ordinances say one thing and your practice is something else. And we also think $500,000 isn't near sufficient for the amount of cash that you're handling. Okay, so the ordinance 2418 defines the duties of the treasurer. And I'll go through that a little bit more in a minute. CDARSs. So one of the ways the treasurer handles your money to protect it because of the low limits is she makes agreements with banks and then what the banks do is she'll put in say a million dollars that bank takes the million dollars and they disperse it to other banks up to the 250 dollars 50 000 per bank and then my understanding is the the way the bank works is in the bank is getting money back in another transaction, so they're still whole. But that way, your insurance, you have $250,000 at those mini banks. And I have an example I'm going to run through in a minute of one of the, well, here it is right here. So in this case here, this is with the Bank of St. Anne. And she made a deal for $3,250,000. And so what that bank did is they went around and they explained to her where the money's going. So what you have here is here's each bank that they invested the money in. They divided it into small increments and they did it for the period of time that she made the major deal and this is where your money's going. And that's how, that's one of the ways that she's getting around the FDIC rule of the $250,000. And my understanding is, too, that this is run by the bank. This isn't going through a government entity. I think it's Mellon Bank that runs its InterFi, and we talk about that a little bit, and we also gave you some references where you can read more about it. Another way that you can protect the funds, and the treasurer also does this, is the Illinois funds, which are run by the state treasurer. And they have, that was created in 1975. They have 1,500 entities that are currently participating in it, 3,000 accounts, and they have net assets of over $20 billion. So if you have a lot of money and you want to protect it, that's another way to protect it. And she is using that. And here's an example that we put in the report of the Illinois fund statement. We've also quoted some of the aspects of the Public Funds Investment Act, and then from that, and the policies of what you can and cannot as a village invest in, and also the requirements. From that, the village wrote their investment policy, which I'm gonna get to in a minute. Now one of the aspects of this is that the village is supposed to go and receive copies of the last two sworn statements from the banks prior to them investing any money into them. So you'll see that all laid out here. Now, I believe it was 2001, but quite a while ago, there was a requirement that each of the public entities come up with their own ordinance, investment ordinance. But from what we saw, the Village didn't come up with an investment ordinance until 2017. And the investment policy is included in our exhibits. And we've quoted a few pieces from here. And this was also amended slightly in 2018. And this defines the role of the Village Board and the role of the treasurer. So for example, this is the actual ordinance. The President and the Board of Trustees of the Village of Manteno shall be responsible for all public funds. Thank you. They're gonna define the investment policies. They're gonna review the adequacy and need for changing the investment policy. They're gonna meet and review reports, and they're gonna select the financial institutions authorized to accept the fund assets. And if necessary, they're gonna select investment advisors and managers. The treasurer is the chief investment officer for the village and invested with the authority and responsibility to manage the investment program and establish and implement written procedures and internal controls for the operation of the investment program. And then it further defines it in our report. Go down to our observations. On the FDIC, we've already covered pretty much what we have in our observations, so we'll keep going. We did this analysis here for Another part of the report, but I'm presenting it basically twice, the same document, and I apologize, it's a little bit difficult to read. So what you're gonna see in the left column behind me, these represent the bank accounts that Mantino had during our examination period. And what you're seeing here are the last four digits of the account number. In a few cases, they're not accounts, they're investment vehicles. But the same applies. We put down here what bank it is, and what the name of the account is. And then we also put down what the bank said the name of the account is. And we put down as of July 17th, 2018, we put down the balances. Now, in some banks where there's not a lot of activity, they don't give you the balance on July 17, 2019. They give you the balance as of the last time you did something. And in some of your accounts, you may not do something for weeks at a time. But in essence, you had, at that point in time, you had $31,219,000. And if you look at it, you had And you had a $25 million investment, which was the ACWA funds. Then you had savings accounts. of $3.9 million and the rest were demand deposits. So some of the savings accounts that are labeled savings accounts in a general ledger were actually considered demand deposits, I mean they're considered demand deposits by the government. You also had some money in the Illinois funds. We'll come back to this a little bit later. Okay, bonding we talked about here. If you think about it, I just said that you had $31 million in your bank account as of 2019, and you had a half a million dollars in insurance. So if there was a problem, you really didn't have any insurance to cover it. You really weren't properly bonded. If something had happened, you would have been short. So we're recommending that you revisit this whole situation and you also look at bonding the trustees themselves because the trustees are actually making a lot of the decisions. Now, we also looked at the CDARSs and one of the things As I mentioned before, it says NFI is not an FDI-insured bank, and deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through FDIC and deposit insurance coverage to apply. And we're not commenting anymore, but I just wanted to praise you that you do need to understand what the limits are of using those. Now the requirement for receiving sworn financial statements before putting money in it, we didn't see that taking place. We also don't know, and we don't have a clear understanding at this point, whether that requirement pertains to banks that you're investing in under the CDARS process. I think that needs to be clarified. Now, with respect to collateral, we did ask and the treasurer furnished us examples of collateral statements. We've put two examples in the report. What I don't see is I don't see an overall policy and plan to make sure that you have the proper collateral as you're moving money from account to account, which we'll talk about a little bit more in a minute. Now, also, we compared the Metino investment policy to the state, and we're recommending that you go back and re-look at that and make sure that they're in sync. Now, sometimes the village may be a little bit more restrictive, but we gave an example here of the statement that material relevant decisions useful sustainability factors. We didn't see that in your investment policy. We see it as a requirement in the state policy. The most concerning issue is the written procedures. So the state requires written procedures. The The Manteno investment policy from 17 requires investment procedures, and we didn't see them and we didn't inquire about them. And my understanding is that they're now being drafted. However, I want to go through those a little bit. Right now what we see is we see a lot of authority and responsibility and accountability invested in the treasurer. We believe that her job should be somewhat split. So for example, she's reconciling the bank accounts that she's writing checks from. And a good policy would be that the bank accounts are reconciled. The statements go to a different person. That person reconciles the account. And the treasurer, that way there you have a, that's an internal control. Right now the treasurer is writing the check, she's moving the money, and she's reconciling the accounts. It's all in one person. And it's something, it does two things. First of all, it's a lack of internal controls, and if there is an issue, then you're basically putting all of the I didn't want to use the word pressure, but you're putting all the responsibility on her to defend herself, if there's a question, whereas you want to go along and you want to have it so you have one person doing this job, especially when it comes to cash, you want to split the responsibilities.

It's called segregation of duties.

Segregation of duties, thank you. You actually, then the next piece, We didn't see that every bank account has a corresponding general ledger account. In order for somebody else to be reconciling the accounts, you need to have every general ledger account and every bank account need to match. So right now, you have a payroll account with no corresponding general ledger account. The reason you have it that way is the payroll account is being treated like it's a third-party account. So it's being treated like ADP is the one processing the payroll. So you write the checks to ADP, you send the tax money to ADP, you send the pension money to ADP, and they disperse it. But you're not doing that. The bank account actually has the village's name on it. It's a village account. It needs to be in the village name. It needs to have a general ledger account. On some of the accounts, we saw that in a few cases, you have one general ledger account with multiple bank accounts going into it. That's really, really, really hard to follow and difficult. You can have one general ledger account, but then you can have sub-accounts for each bank. So if a third party's coming along like ourselves, or say the third party that's gonna be reconciling your accounts, they can go and they can trace it. They can see that if you did something on this date, you're gonna see the corresponding, entry in the general ledger on the same date. And sometimes when things are rolled over, they don't necessarily make the corresponding entry. The other thing that caught our attention are the transfers. You have a pretty good system when you write checks. So you write checks, the treasurer puts together a list of every check that she's issuing. And then each trustee meeting you meet and you go through that list of checks and you decide whether you want that check to go out. And if you don't want a check to go out, then you say, no, I don't want that check to go out. And then that is published. But when it comes to wires, You don't have, near any of the controls, you don't have a process for the wires. You have the treasurer moving the money, but really nobody approving it prior or post. It should be prior. And you're moving, the problem with wires are, even if you're moving them between banks, they're a lot of money. And a lot of times when the wire goes, it's really hard to get the money back. And some of those wires are quite large. And then, so I have some examples here. And Sheila has provided some background for some of these, but I just wanted to put the example in here. So here's one on May 18th. It says telephone transfer by Sheila Martin. So she moved $1,500,000. It's not saying that she shouldn't have moved the money, but the bank statement doesn't really tell you. It doesn't tell you what it's for. It didn't tell you where it was going. When you move the money, if you look right below that, if you move the money through the internet, their online system, then you have, you basically can say, you know it came out of this account and it tells you where it's going. Excuse me, I'm sorry for the cough. And I've also put, I won't go through, but I put in here in the report the documentation she gave us to explain that particular wire. And it's several pages. Here's another example here where a telephone transfer for $12 million. That's a lot of money to have really no explanation on the bank statement. We don't know what it was for. If that money had been going out of Vantino, it could possibly have had the same explanation. And here's another one coming in, a million dollar. So the only way to trace this is actually to go through the general ledger, but here's an example here. When you got the money from ACWA, now in this case, Aqua wired the money. So what you see here is you see $25 million deposit going into this account. And this account was created specifically for the Aqua transaction. And when the transaction was finalized, the account was closed. And then you see what is styled here are two checks for $25 million. But they're not really checks. If you look behind it, they were more like counter discussions. And it's a little bit difficult for us to understand exactly whether this was done in person, whether this was done on the phone, or how this transaction occurred. What the purpose of the transaction was is she was investing the money overnight. However, if you look at the dates, you'll see that The date that the money comes in and the date that the money goes out, there's a day lag. So what you've got in essence is you've got $25 million sitting in essence uninsured in the bank overnight. And we see that twice in this one month. Now, the next thing I wanted to talk about is there is both in the Manteno policy and in the Illinois Public Funds Investment Act, there is a specific law on corporate authorities doing business with banks where they have a personal interest either directly or indirectly. And they specifically talk about the treasurer in that, the position of the treasurer. AND THEY HAVE THREE PARTICULAR RULES. ONE, THEY CAN'T HAVE ANY, THEY CAN'T BE DOING BUSINESS WITH AN INSTITUTION THAT HAS ANY INTEREST DIRECTLY OR INDIRECTLY IN ANY OF THE VILLAGE INVESTMENTS. HAVE AN INTEREST DIRECTLY OR INDIRECTLY IN THE SELLERS, SPOUSES OR MANAGERS, SPONSORS, EXCUSE ME, SPONSORS OR MANAGERS OF THE VILLAGE INVESTMENTS OR RECEIVE IN ANY MANNER COMPENSATION OF ANY KIND. They also reference in this particular act, they reference two other acts that are not part of it where there are exceptions. So we've entered this. We've also put down what the exceptions are. Then I brought this up to... Oh, before I get there. So in this case, we found the treasurer and the village, they were doing business with banks that there were relationships with village officials. So in Homestar Bank, the treasurer's spouse was the president and the director of the bank. At Midland, when Homestar went away, then the treasurer's spouse became an executive with Midland. Later the spouse became an executive with Iroquois. And there's another bank with St. Anne's where I understand the son-in-law of the former mayor was the president of that bank. And now Now I brought this up to the treasurer and to Chris and Chris contacted the village attorney and the village attorney wrote an opinion. of what he believes, whether or not he believes there's an issue. He doesn't think his email back to Chris, which Sheila provided me after we went through the draft. And this was done back in February, but I just received it in the last week or two. He doesn't believe, according to his email, which you'll be reading, that there is an issue. But you're welcome. And I'm not sure. He's talking about this from the standpoint that we're doing business with a lot of banks. And he's also referencing an Illinois case that this came up. I believe it goes back to 1977. So we're not lawyers. We're just putting in there what we found in the statutes and in the Manteno investment policy and the village attorney's opinion. And you can get the trustees to decide where to go with that. And the treasurer also, when we were going through, we went through a draft of this before we did a final. So we sat down and we went through everything We gave the opportunity for the trustees and the treasurer and the village administrator to go back and give us some feedback, which we appreciate. And we got quite a bit of feedback from the treasurer. We've incorporated a lot of it into our report. And this is an example here of the reports that she puts together. And she provided a copy, and I've put a copy in here of one of the pages. This report has many pages, but I didn't want to drag it out. But you'll see a copy in here of the one page. And then she also provided a copy which we had of the fiscal year. And I've actually seen this exact report with other villages and cities around Illinois and basically what they've done with the money for the year. Okay. Go to the cash and the cash activity. So during the scope of the examination, We did, this is off of the financial statements prepared by the auditor. So we looked at the cash balances in total, and we've broken it down between cash and equivalence investments and the total cash according to their definition. And you went from $34.6 million back in April of 2020, and as of April 30, 2025, you're down to $12. and a half million dollars. And this basically is the journey that your cash took. It's basically decreased by about $22 million over that period. Now, what follows here is what we did is we took, as I explained a few minutes ago, we have each of the accounts we've put down by month, by year, your activity. We took the activity for, at the end of each year, we took the snapshot of that year and we put it into this overall document. So, for example, if you go down here, you'll see every account that the village had, this is per the bank, not per the books, per the bank. And what the name of the account was, how much activity, how many credits, the interest, the total debits. And if you recall, when I talked about the interest a minute ago, it's treated differently by Midland than it was. So the interest is not necessarily a true discussion of all the interest you're making. It's only the interest. that is separately stated that you have to tie into to get to the deposits. The beginning balance for the banks and the ending balance. There was one investment that we know the money exists, but we don't have the statement. So I've put that in red here, or we did, and you'll see that. But we do know, we just weren't able to see the investment. But we do know the investment exists. So we've labeled it, we've put it in there. And for this year, we were about $3 million under what the financial statements say. You're always going to have a difference because they're going by the book balance and we're going by what the banks say. And you're going to have outstanding checks and things. But it also could be indicative that we're missing one or more bank accounts. And we do believe that we are, in some cases, we're still missing bank accounts. The next year, you'll see the same activity, and this repeats, and you'll be able to see how, and this year, for example, we came up with $35 million, and they are at $35 million, so we're a pretty good match. The next year, we came up with $33 million. They came up with $33 million, they being the auditors, as the balance at the end of the year. So we feel pretty confident. The next year, we have a pretty good gap. We're quite a bit off. So we do believe we're missing statements, most likely investment statements for that year. This year was 2024. We also had a significant difference And they said, you had $18 million. We came up with $12 million. So when we say $12 million, that means we have bank statements that account for $12 million. The final year, we balance, 12 and 12. We're pretty good. OK. Take a break for a second. Now, I've covered the general operation of the cash at a pretty good level. The rest of the report, we're going to talk about specifics on three things that we looked at. And this first one has to do with the use of the aqua funds. The second one is going to talk about procurement and the bidding process. And we're going to dive into a specific some specific examples of the bidding process. And the third section is going to talk about the whole history of the golf course and how it was sold. And I want to be clear on this one here. We're going to talk about Homestar Bank. And when you look at the report, you're going to see some documents. We didn't do anything with Homestar Bank. We're only talking about the actions of the village. But in order to understand the actions of the village, we had to present information about the banks so it would be a complete picture. OK. So in 2017, at the end of the year, Homestar Bank had an audit report that the auditors expressed a going concern. They do that when the auditors don't feel they can issue a clean opinion. We have provided in our report, in the supplemental information, a complete copy of that financial statement. You can go through it. And as I mentioned before, a lot of times when you're looking at audited financial statements, you really want to look at the footnotes. The footnotes will give you a lot more background than you're going to get into actually just looking at the numbers by themselves. So without going through all the details, because you can read it, The concerns that we identified are detailed. We quote some of the concerns which we took directly from the financial statements of the bank. Now, in addition to that, the bank, prior to the village receiving the $25 million, The bank for years have been operating on the consent decree. That's public documents. You're free to pull them up on the website. We did. And there was a consent order issued in 2010. It was replaced by another consent order in 2013. That consent order was terminated on April 23, 2018. Now, that's before any money was deposited from the AQUA funds into Homestar Bank, which we're going to talk about in a minute. However, the last financial statement that the bank had would have been the bank statement issued in December of 2017. I pulled the minutes from the July 11, 2018, trustees meeting. And the minutes state that the sale of the system closed, that's the aqua sale, on July 2nd. The updated rates for Homestar Bank for CD rates had been received. Mayor Nugent and Mr. LaRocque recommend that is to invest the monies received from the sale of the system on a short-term basis as interest rates are increasing. Half of the monies would be placed in the six-month CD with interest rate of 2%, and one-half of the monies would be placed in one year with CD rates of 2.25%. This would gain enough interest to pay the garbage fee. The village will also look at investing the monies that were in the capital improvement funds for the sewer system. What we think is lacking from this, what we see, we don't see, first of all, where the village went out and they, if they did an analysis of available opportunities to invest, this is a lot of money. And also the safety and security piece, We don't see that. If that was done, it's not part of the minutes that were presented during the meeting. We see basically when they came to the meeting, from our standpoint, it looks like it was a done deal. We're going to put the money here. Now, also, I mentioned the prudent person, and I've given you that's one of the requirements for the investment policies. And the prudent person, one of the The aspects of that is you have to diversify. You're taking all $25 million and you're putting it in one bank, and we've already said that this particular bank has some concerns. This is the same, we presented this again here, but this is the same bank statement you saw before. This is the actual investment of the $25 million from Homestar. So you can see there were two CDs. One was at 1.9%, one is at 2.25%, and then those were treated as CDARs, and they were reinvested with Homestar being responsible for the reinvestments. Now, The one CD expired in January of 2019. That money was rolled over, and what I've done here is we've put in, when I say I, it's actually all of us. But when we put, they had, in one of the meetings, they put in there, and the recommendation was to just roll it over, and it was rolled over. We have some documentation on this, but we don't actually, I don't believe we have the actual statement of the rollover, and they got 2.3%. Now, while this is all going on, there's another thing that's happening too. In April 2nd, 2019, Midland Bank comes out and files a Form 8K with the Security Exchange Commission, and they announced that they're merging with Homestar Bank. And they put out in their filing in the EGRA system, they put out graphs and everything. And we've included that. And one of the things they're talking about is what they have in total deposits. And it's saying their total deposits are about $331 million. When you add 25 million and you go back to that dot that document i showed you before um if you look at all the cash that the village had on hand as of the closing of the deal the deal closed on january july 17th i think is 2019. the village had 99 97.8 i believe it is of all of its money at homestar bank that strikes us as concerning among other things. And that represented approximately 9% of all of the cash deposits that Homestar had as of the date of the closing of the sale. Now, when the sale is getting ready to close, so now we're into 19, The village is starting what to do. They're aware that the banks are gonna merge. It's very public. They have a meeting and they talk about the fact that there are options with other banks. Fine. And in this statement here on page 89, they talk about some of the banks and opportunities to put money different places. then on july 12th they they decide that they're going to split the money so what happens in essence is here's the press release with the deal closed As soon as the deal with Homestar Bank closes, they stopped moving money out of, which is now Midland, which is a much larger bank. They stopped moving significant amounts of cash out of that bank to other banks. But before, the $25 million stayed in Homestar for over a year before the deal closed. And we've also provided a timeline of the entire process. So you can understand it. We're not, we didn't look at all at before our time. We didn't look at the awkward sale or anything like that. We're just looking at what they did with the funds and, um, whether they were prudent in putting all that money in one bank and also the timeline of when they started to disperse the funds. One of the things as a takeaway from this, in addition to concentrating all this money in one local bank, There were meetings, for example, there's a meeting when they were going to move funds and they were getting bids. So one meeting says Midland's coming in and they're gonna give us a presentation on what they can do with the aqua money. And they had a special meeting, it was June 15th, I can't remember if it was 18 or 19, I think it was 18. That's well and good, but the minutes that we saw, the minutes say they had the meeting. There's no discussion in the minutes of what Midland said. And there's no discussion before they move the money. When they move the money, they have a statement saying, we've got these rates, we're gonna put the money here. We don't know if they went out and talked to 10 banks, two banks. There's nothing in the minutes about what they did and how they arrived at the conclusion to put all the money into all the money into Home Star Bank. or into another bank. As they're moving these large funds around, we don't see the process. And if we were living in this town, we love your town, by the way. But if we were living here, we see other towns, and they basically lay it all out. So when you look at, you understand the decision process, why they came to it. It's not a criticism of why they did it. It's the process of getting to it and the transparency of understanding what the process is. Now we're going to the second one, just talking about the procurement a little bit. As you know, so what we talked about, what we looked at here, one of the things we looked at We're going to go into a couple of examples. The former mayor, his family was doing business with the village. And his brother was also doing business with the village. So in this process, we've put in some information about both the state and the local and the Mentino procurement policy. But we wanted to look at some examples. So what we have done here, we've gone back and over the period of time, this is a relatively short period of time, and we looked at all the payments that went to a Nugent family business. There were three of them, but the concentration would have been Kevin Nugent Construction and Tenco. And during that period of time, there was $7.6 million paid to those businesses. And so what we did is on Tenco, we've gone back, we've actually put, these are the checks that cleared the bank. So we're also providing you copies of all of the checks. And one of the checks is over a million dollars. These are some of the ordinances you'll be able to read. and the purchasing ordinances. And I did find, we did in another village about your size some time ago, and I saw some things that were pretty similar there, including some of the discrepancy of what the administrator has the ability to do, keep going. They had a case. where they had their water system, I think, broke, and the mayor and the administrator, they had to basically make some quick decisions. And you need the flexibility to go and make the decision and then go back after the fact and document what needs to be done. In that case, they made the decision, but they hadn't documented it. And what wound up happening after our report is the trustees actually had a meeting to decide whether or not they were going to, at that point, go back, enforce the documentation, or move on with life. And they decided to move on with life. Now, in line with this, the way you're set up is the bids come in for a construction. There's an engineer. And the engineer will lay out an estimate for the project. They'll go out and they'll put it on RFP. The bids come in. They open the bids, and we'll give you some examples of that. And then the engineer will go back and compare the bids against his estimate and then make a recommendation. And we put in here also, going back to 19, that Mr. LaRock had expressed some concern about the cost of engineering and having worked for an engineering firm, it can get expensive. Now, we talk a little bit about Mr. Hill because Mr. Hill is the engineer that was involved in these particular bids that we're going to talk about. Now, he was with another firm, Novartis, and In 2023, he left that firm, and he went to work for a different firm, HR Green. And the village followed him to his new firm. But what we noted in following him, he increased his rates with the new firm substantially. We didn't see any rebidding, and we didn't see any negotiation to get his rate. I think he went from 130 to 261. That's a pretty substantial increase. And if I recall, he also increased his rates for his existing work. But the contract the village had wasn't with Mr. Hill. It's with the firm itself, the engineering firm. Mr. Hill was the person they were doing business with. And in fairness, they don't all, the village has done business with other engineering firms besides that. And we've given you some totals on that. But we wanted to focus on this one because this is tied in to the payments that went to the firms we just talked about. So during the same period, Mr. Hill's firms received $1.1 million in engineering payments. We also talked about other engineering payments. Carlisle received, which were architects, they received $421,000 during this period. Robinson Engineering received $477,000 and Tyson received $548,000. We'll talk about the Legacy Park project. So there was a, in 2024, there was an RFP put out for work on Legacy Park phase two. There was one, the estimate by Mr. Hill was for $1,707,464. There was one bidder. The bidder came in at $725,895. So in essence, the bidder came in for less than half of the engineering estimate, a lot less than half. When Mr. Hill got this, he analyzed it. Then he turned around and he, if you read this paragraph here, he says, after speaking with village staff on the project, some additional scope of work needs to be added, including lighting near the pier and enhanced landscaping for newly created berms surrounding the park. THE ADDITIONAL SCOPE LEADS ME TO RECOMMEND TO REJECT THE BID AND REBID THE PROJECT AFTER REVISING THE LAND SPEC TO REFLECT ADDITIONAL SCOPE THE VILLAGE IS LOOKING FOR. WHAT RAISED A RED FLAG FOR US IS HE DID THIS AFTER THE BID CAME IN. AFTER THE ONE BID CAME IN THAT'S $1 MILLION LESS THAN HIS PROPOSAL. This is what he provides with each bid. So if you look, you'll see on the right side is his proposal. In the middle here is the bidder, in this case Schwartz, how they broke down their costs. From this point, the village officials and Schwartz, now everybody in essence knows what Schwartz has bid for this project. they're sort of hanging out there a little bit. So in late 2024, the engineer, this happened in September, later in the year, the engineer re-estimates the project. Now he's estimating the project for, I believe it's a million two. I have that information in a minute. And let's go through this. The new bids come, the project is rebid, the new bids come in. This is the bidding form at the opening of the bid. So there are three individuals, or four, that attended this bid opening. It explains where they're from, but it doesn't have any bid amounts. There's another document from the engineer, and he has handwritten bid amounts. And it's a little unclear why there are two documents and if these were completed at the same time. Now, he then takes the bid back and he evaluates them. So now Schwartz, on the bid they provided, said their bid was $998,900. Okay. He found an error in the bid. Fine. And he fixed it and he said the actual bid's $1.2 million. TenCo wins the job. They come in, $18,000 under Schwartz. But TenCo didn't even bid the first time. So we went back on this spreadsheet right here and we analyzed the bid itself and the components that were changed from the first bid to the second bid and what the new items were. And it's clear the new estimate from the engineer was $1.2 million. So what he's saying here is his original estimate for a smaller scope of work was $1.7 million. You have a larger scope of work. His estimate dropped from $1.2 million. Where did he get that information from? Most likely, he got it from the first bid. And this caught our eye. We're presenting it. we're not commenting whether it was proper or not but we are looking at this this to us we were concerned about it now tenco and kevin nugent construction we just have a little comment here what happened was it during the scope of the examination we noticed that up to a point in time Kevin Nugent is doing business directly with the village. At some point in time, we don't see him having any more payments. We see the payments going through TenCo, which I believe is owned by his sons. And what we've done here, we presented some examples. The only way you'd see this is the final release of lien. So those were in the village files and we've provided some examples and you can see where this would be the total contract that went to tenco for example which is a million twelve the one we just talked about and of that amount um kevin nuja construction got a hundred and seven thousand dollars so now his work is being run through his sons and we've provided two or three of those here's another one where the contract was two point 2.164 million and Mr. Nugent had a contract for total $415,500. The other thing we looked at is the difference between TenCo, the winning bid, and the second bid. And here's another example here. This is on March 17, 2022. They win the bid with $994,988, and the second bidder came in at $1.1 million. So now you've seen two examples already where you have the difference between their winning bid and the runner-up is very close. Here's another waiver of lien where you have Tenco's total contract is $1,064,000, and Kevin Nugent had their piece of that contract was $330,000. We've already given you the total payments on this one. We provide, on these three contracts, we show you the total contract to TenCo and how much of that went to Kevin Nugent. They got 4.2 million and he got 852,000. Here's another example. They win with 315,000. The runner-up gets 316. And if you'll notice as you go through these a lot of times, the third and fourth bidders, there's quite a bit of difference. This one's a slightly larger one, $1,897,000, $2,135,000. They were awarded a lot of contracts in a rather tight timeframe. So we see differences of 1% for two bids and 12% of one bid. And so our summary here, we go through this a little bit between the... the ones that they were awarded considering that they were related to one of the village officials. Then we also looked at, we found it was rather interesting. So we have the engineer's estimates. Now the engineer is always estimating higher than the actual bids come in. And in one case, he was 135% higher. In one case, it's 23% higher, 6%, 21, and 11. In my experience in construction, sometimes you're higher, sometimes you're lower. But we built some pretty big plans. We don't see a great deal of transparency, which is one of the themes that's coming through this entire process in the bidding documents. We can't tell, for example, we would like to see the bids come in directly and they come right in sealed and they're opened in a more public environment because what we see is a couple of village officials in a room opening them and they're being whisked right off to the engineer. And that's the takeaway. You can see this whole process and that's the takeaway from this section a little bit. Then we're going to talk about the golf course. Okay. The golf course sale. So I'm sure you all know the history of the golf course. We studied it quite a bit. And I won't go through the history, but the land itself had, there were two deeds. And one deed went from the hospital to the state. and it came from the state to Manteno. The other deed went directly from the hospital to Manteno. The one that went to the state contained what they call a reverter clause. The Reverter Clause stated, should the City of Manteno fail to use the property for public purposes or allow non-public use, fail to improve the property within 10 years, or attempt to sell the property, the property shall revert to the State of Illinois. Now what we did is we went back and we went through the history of this situation. So, The village was aware of the reverter clause issue 20 years. And they talked about it for 20 years. And we found a lot of correspondence going back and forth about it. So they talked about, we saw here is the actual deed right here. It was actually done twice. Apparently there was an error in the first deed. Here's the deed for the other property, and here's the deed that contains the reverter clause. Why the state put the reverter clause in there, we don't know. It's there. Now, They looked at this. Here's an example of a discussion going back. What year was this? I can't tell. Quite a while ago, John Nelson was the chairman of the Finance Committee. And one of the concerns that they raised, some people raised back in the early 2000s, is if they wanted to sell the golf course, they needed to have a referendum. And several people raised it. I don't believe they had a referendum, but later that disappeared in the discussions. And I went through the documents that we did and we don't see the requirement. We didn't see the requirement for a referendum unless we missed something. And they don't say when they see the need for it, they don't say why they see the need for it. They just talk about it. And here's another, opinion from Stuart Diamond, who we've actually worked with a little bit. Going from 2004, it's quite a while ago, and he's talking about the Reverter Clause and what they have to do with it. So we see a lot of discussion about the Reverter Clause, but I'm not sure what actions the village took over the years to do anything about it.

Now,

when they decide in in 19 the village decided to get rid of the reverter clause and they went the legislative route that's and um so in february 15 2019 uh the senator sims introduced a bill uh just for mantino it was senate bill 1597 to um to authorize the state to remove the Reverter Clause. And we're providing the act. Now, during the process, the state added some other issues, they called them non-controversial, but they added some other issues to this in addition to Manteno. So you've actually got the legislation of Manteno, you've got three other pieces. Our reading of this is this didn't have a problem in the Illinois Senate, but it did have a problem in the Illinois House. And when it got to the House, they wanted to be paid, they wanted the state to be paid to remove the Reverter Clause. Now, we didn't see, at that point, we didn't see any discussion coming back to the board openly saying they want money, what are we gonna do about it? We just see them going forward So they wanted three proposals, three valuations. And they went out and they got respectable valuations, and those are in our exhibits. They got three valuations from three different firms. The valuations were procured by the village attorney. And they all came at the same time, and they all did the inspection on July 2nd. they came up with three different valuations. One for over a million dollars, one for 325 or 295, and one for 380. Now the problem with the valuations is only that they don't all appear to be using the same premise and coming up to their numbers. But they all appear to be looking at it as a golf course and not necessarily the land. In our report are the cover pages for the three valuations, little valuations or appraisals. Another comment we wanted to make here. Now, the contract apparently to obtain the valuations was made by the village attorney, but the law firm didn't pay the bills for these valuations, which came to about $20,000 in total. They were paid for directly by Mantino, but we don't believe that Mantino had the agreement with the firms. And we were wondering why the law firm didn't pay for the valuations and then, because that's, the village was dealing with the law firm, not with these firms. And our thought was that the check should have been cut by the law firm and then passed on as an expense to the village. During during the time that this is all in the Legislature. We didn't see any evidence that there were any open discussions within the village. What we did see is we saw a board meeting. On January 24 2020 where they introduced the ordinance to to buy out revert a cause to revert a clause cost the village $352,000. So if you add the reverter clause and you add the cost, excuse me, the other expenses involved, you're looking, I'm gonna use a rough number on $400,000. So that's what it costs to go through this whole process. Now, the other thing we're providing you is we're providing you with some email chains, which will help you understand the entire process of dealing between the village, dealing with the Illinois legislature and dealing with members of the village and with the village attorney on how this whole process played out. One of the things that we noticed as we were going through this is that both the mayor, we saw one reference from the mayor and many, many references from the village attorney. They're not using their official email accounts.

They're using AOL accounts.

We just wanted to bring that to your attention. Then on this page here is the actual check from the bank to buy out the reverter clause. On this page here, page 176 of our report, This is the note that leads us to believe that it was the Senate not having a problem and it was the House having the problem in wanting to see money to buy out the Reverter Clause. I'm going to go a little bit out of order here. So we've seen this big effort to get rid of the reverter clause so they can sell the land. But if the village wants to do something else, they can do a lot of things with the land. They don't need to pay a dime. They can turn it into anything. They could turn it into a lake. They could build a different park there. And in that case, as long as they're using it for a public purpose, it's only when they're selling it privately that they have to settle the reverter clause. They also had the option apparently of keeping this one track of land and selling the other one and it not costing anything. Talking about the golf course. So there was several, the village operated the golf course for a while and then there was a non-profit, it was a 501c3, took over the golf course. This is the IRS approval for the 501c3. And in 19, Mayor Lamore resigned from the nonprofit running the golf course. And that seems to have triggered the effort to get rid of the reverter clause so they could sell it. Now, what happened here is the golf course applied for the nonprofit went out and they got a PPP loan. from the government for 20, I think it's like $20,000. We have that in here a little bit. And they got the money, and they got the money because they said they had payroll expenses. And that money was forgiven. However, so while they're saying in the year that they got the money, and during the forgiveness period they're saying they had these expenses, When all this went down, they never closed the nonprofit. They just walked away from it. They never filed tax returns, the final tax returns. They've got unfiled tax returns. And then what happened was the IRS threw them out of the nonprofit status for not filing tax returns. So we see it as having unfiled tax returns, both with the feds and the states. There'd be two federal returns, the 990 and the 990T. However, at this point, they can't file those anymore because they're no longer nonprofits. So now they would be filing in 1120. But they're saying they had expenses and income. That's the basis of getting the PPP loan, but they never actually finished it up. They did transfer the money back to the village, and the village apparently inherited this issue that they should look into. And we talk about it a little bit. And then we also talk about the last time that when they actually, with the Secretary of State, when they closed business, but they didn't close it with the feds. And here we talk about the whole process of the closure. And there was also land. I mean, there was land. There was money still due on the series bond of $1.5 million, which we're assuming came out of the aqua money. Then they put the golf course up for sale. So they advertised it. So you've got this golf course with 163 acres. The sale was only advertised here. They got one bid, and I would have expected them to advertise it on a broader basis. I live in an airport, and when you see airports for sale, you see even airport homes for sale, they're advertised nationally, and there are places to do that. So they got one bid. The bid was for $600,000. The golf course was sold for $600,000. But the way it's broken down on the website for the appraiser, they actually got $570,000 to the land and $30,000 in personal assets. The personal assets would have been the items that were left, maybe the tractor, things left in the clubhouse, et cetera.

Do you want to do this?

Taylor's going to talk about, he did the analysis on this, and he's going to tell you what he did with it.

Sure. Apologies. So shortly after the golf court itself was sold, both of the parcels were split up a number of times. Now that's much more, the full details in the report, but a couple segments were split up, some were combined, but a couple of them were sold off and some of them are still retained by the original purchaser. So we were able to get the current evaluations at the time of the closure based on the Kankakee Assessor public information, we were able to retrieve. And then based on that, so let's just talk about some of the parcels were owned by Alexander Real Properties and a couple of them which were sold off. One was owned by Affordable Mini Storage, Manteno LLC, I'm sorry. Apologies for that. So I was talking a number of the parcels were split up over time and combined throughout over the past few period where this occurred. One of the parcels is still owned by Alexander Real Properties while a couple are sold off at a different rate to a full mini storage LLC and another trust. So based on the assessed value that we were able to uncover here, the parcels themselves, based on the assessor's value, which is, of course, slightly reduced, totaled just over $550,000. And that is as of 2024. Now, the sales... For the parts that were sold off, of course, were sold off at a much higher rate per acre, sometimes more, that's more fully detailed in the report itself. And this sale, now this value does not include, of course, the equipment itself, which the evaluation testing there, it's obviously we're inclusive and I will find more documentation on the evaluations of the equipment itself and what they each could have initially sold for, beyond the selling price itself. I think that covers mine.

The price per acre average, what he sold it for? Oh, sorry. What they sold it for.

So with the sale, the price, so with an average cost per acre across all the hundreds before, it was just over $1,300 per acre, $1,333 per acre. The parcels that were sold, one of them being to a main storage facility I mentioned earlier, sold on roughly $12,000 per acre, the parcel that was sold off. And that's one example we got another parcel off for a higher amount.

the bottom line is we don't think the village got full value for the uh for that property question just to confirm because i didn't understand what he was saying Yeah, okay.

It says on here, the land sold for $570,000 and the village spent near approximately $400,000 on the reverter clause and associated expenses.

That's correct.

As a result, the village realized about $1,388 per acre, including the clubhouse and related facilities. Yes. On November 18th, so-and-so sold 49.38 acres, including the clubhouse, for $646,000, or $13,000 an acre. Yeah, that's a public record.

Just to clarify then if we can ask questions. I want to clarify then too, you said realized $1,388 per acre. That doesn't mean what it was sold for, correct? You just said realized because you're already taking off the cost of the village pay. Correct. So it wasn't sold for 13.

No, no, we're saying what you got net.

Okay, I think that's a good clarification because that made it sound like we just sold it for 10,000.

No, no, no, no, no. That's what you got per.

Okay.

Yeah. Okay, that concludes the essence of our report.

Okay. I have a statement to read. Thank you, by the way, for doing a very good job reporting that when we were elected in April of 2025, we asked for a forensic audit to see where we stand. Our goals were to find out how much money we really have to note where the village money has been used. and to see if village money was handled correctly. The audit discovered several findings that have answered those three questions. The audit has found a pattern of mismanagement of village funds in which money has been used for purposes other than those that prioritize the greater good of Manteno. What will be changed based on the audit results? Number one, We can identify a need for new protocols and how money is being transacted. Who approves such transactions and an approval for the purpose? How does the greater village benefit of such financial transactions? Number two. We can identify a need for new protocols and how the bid process is conducted as the auditor highlighted an alarmingly abnormal statistic of one vendor. Amazingly, just under bidding a large percentage of all sealed bids, a statistical anomaly. And number three, we can identify a need for new protocol in how the village hires employees. Number four, spending patterns were identified that suggest that village money was often deliberately and regularly handled in ways that do not serve the greater interests of the villagers of mantino but instead were ways described by auditors as highly irregular the irregularities outlined by the auditors show a clear pattern in which village money was being manipulated and mismanaged for the apparent benefit of a select few. Moving forward, there will be changes made to correct the irregularities. None of us should be comfortable with the culture of the past. The people of Manteno deserve complete transparency as to how our money is spent. Now, Mr. Edmonstone said that he was going to take questions from the trustees first. And we would like you to keep them short, because he really didn't want to spend the night here. So if any of the trustees have a question, now is your chance to ask.

I mean, I have a lot of questions, but we can go through it. I guess we'll just start very broad. So you made this report. It's great. If we turn this into the state attorney, because this is what, to me, a forensic audit is, is anybody getting arrested?

That's not my call. I did, but I did want to say one other thing since you brought. The I brought up at one point the requirement that the board and the state had put in to have written procedures. I didn't see any evidence that that was followed up on by the trustees. Which tells me that there is a. A hole in your process. that you set out requirements and then years later it's still not done and nobody says anything until we come along and you guys should have followed up on it peggy do you have anything i got more but i got more we're just doing short questions we'll just start let's go in circles yeah turn your microphone in about the ppp loans

and how were they used for the kitchen and all that out? Can you explain that a little bit?

Well, what I can do is talk about PPP loans in general. We didn't spend a lot of time on it. There's two parts to the PPP loan. So you've got, you go, you apply for the money, and if you meet the requirements, you get the money. Back then, they were handing out the money with not a lot of oversight because the way they set it up, The government basically gave the requirements to the bank. They said, and the bank set up a PPP loan department and they handed out the money. And generally it wasn't the people that you did business with on a regular basis. It was a very specific piece. And we had some other clients that we've run into this. then there is a requirement that you met certain thresholds to get it forgiven and there's a payroll piece there's utilities piece there was specific things if you met those requirements and you could document it over a specific period of time i think it's either 12 weeks or 26 weeks then and you documented that you it was forgiven The problem that we have seen in some of our work and that also that you'll see written up in some of the cases that people applied for and they actually met the technical requirements, but they didn't need the money and they went out and they did other stuff with it. They built houses, they bought cars, and then they're getting prosecuted for it. it took years to get there in your case our concern was more with the way it was shut down and you sort of you closed it with the state but you walked away with your federal requirements and it could come back to haunt you if you don't fix it

To be clear, that's not the village. That was the Save Our Golf Course Committee, correct? Yes, it was, but the village sort of inherited it when they took it over. So to be clear on that, too, we did not receive any funds from Save Our Golf Course Committee. When they closed, they emptied their own bank account, and we never saw a dime of it.

Okay. Well, I'm bringing it to your attention.

I just want to clarify that we did not get any money, so I don't know how we would be on the hook for that loan.

Including the back insurance premiums that they owed the village.

Yeah, they still actually owed us over $28,000 in insurance premiums.

All right, let's move on to Todd. Do you have a question? Yeah, let's move on.

Yeah, I'm done.

Thank you. Jim, you had mentioned an unidentified $1 million withdrawal. You didn't have that.

Yes. What we did, we were showing the amounts of, part of it is we're showing, we're missing some of the investments, which you'll see by looking at the differences. But also we're showing the whole process of moving money. It's shown in the bank statement and the process, which is the bigger picture, of moving the money isn't really documented. There's not a procedure in place and there's no controls. And then the person who is, reconciling that it was done properly is the same person moving the money and it needs you need to have a whole system of controls what can be done when you when you couldn't identify this money dollars did you go to chris or sheila and asked rebecca we did we we did and and we gave you an example of the of one of them there so you saw that you speak

Yeah. I mean, those, as he said, uh, the actual transfers between the banks may not designate, you know, exactly what it's being used for or where it's going. It's transferring from one bank maybe to another bank. uh in two different accounts uh just like this one shows we've got the bank statement showing that the million dollars is not unidentified it's unidentified on the transfers but it is identified in the general ledger so i think he's saying in addition to the general ledger maybe you should put it on the transfers that's all but that million dollars is not missing no we're not saying it's missing right

Joel? And one other point. There was another situation we've discussed. Chris has discussed a lot with Sheila. There were about how much, seven point, the number, that whole number. 3338 or whatever it is.

37, how much was it?

Okay, so there's a series of transfers which we've talked to Sheila about this. The number that the bank is showing on the bank statements is not a number that she recognizes. The bank account number that the statement show over this period of time isn't a number that she was recognizing, but we know we were able to follow the money, but the number on the bank account didn't match a number that she was aware of. She's going to speak to that too.

I wanted to speak to that. I've sent several emails explaining that. The bank used our FEIN number. It's not an account number. It's our tax number to identify us as the village of Miantino.

Joel, did you have a question?

She's saying the number is 3724, not 5980. Okay. Okay. We didn't put it in the report. We just wanted to bring it since we were all here.

Okay. I have quite a few comments, but I'm going to try to hit two of them in one spot. We talk about the appropriation of funds and people having control and whether their family is benefiting from that. And so this is two-parted. the first one deals with our treasurer and the relationship with her husband working at the banks and being ceo etc you you had said yourself in the report that we have good controls put in place that she just transfers the money the village trustees decide where the money is going So there couldn't be a conflict of interest there because she doesn't have a decision as to which bank the money goes to. Then when it comes to in, in this one's the longer, bigger version, um, talking about 10 co in the former mayor, boy, I don't even know where to start with this. Um, first of all, again, the mayor, During your review, did you see one time that the mayor ever cast a vote to award a bid to TenCo or Kevin Nugent Construction? The answer to that is no, correct? Secondly, secondly, excuse me. I have the floor. Secondly, talk about the business being done with Kevin Nugent doing business with the village. Would it surprise you that Mr. Nugent sold that business in 2010 and has not worked since 2010 and has been retired? So there's some misinformation there. Secondly, if we look at the bids and talk about how our bids went, I spent a little time and looked at if we would went during this timeframe and awarded every single bid to the next lowest bidder, the village was spent an extra $1,000,067,000 during that timeframe. So, um, again i think that that i question if this is a little bit of a witch hunt um from from the standpoint and i was one who voted to have this audit done um i will say that i see nowhere in the reports during that time frame that we tallied up how much kvcc made how much gallagher asphalt made how much viscerine made we only focused on nugent construction in tenco I find that a bit disturbing because I don't know that we've looked at it and do we know if any of the elected officials were related to anyone that worked at any of those places? The answer is probably not. I think there's a lot of other unanswered questions, but I'll let it go on because I can go on. I've got about six pages of questions.

If I can clarify, too, on the bid process. Everyone that I ever attended at Village Hall was not just Village employees. It was the Village engineer and also every contractor that provided a bid, a sealed bid. They were in those bid openings as well. So had there been any shenanigans going on, I'm pretty sure you would have heard from some of those contractors that they did not feel it was a fair process.

Annette, do you have anything?

Can I ask another question? I got brought into it, so I'd like to, actually I have 150 questions I can ask you about this whole process, but I think you're going to be lucky to get out of this the way it is right now. You brought my name into it about using the AOL account. What was the significance of that? That's a private account. We just mentioned it. Okay. Do you know that, did you call me at all during this process to ask me about anything? Nope. All right. Did you know that I originally started my conversations with the state with my LFC LTD account?

No, I just presented what we saw. Okay.

Well, no, you selectively presented a couple of things, right? You bolded. You bolded the AOL account.

I bolded that two people use the AOL account. So bear with me here. And the one that caught my mind, my eye originally was Mr. Nugent. You're right.

No, I get it. Do you know if Mayor Nugent, by the way, used his Villagio-Mantino account from, let's see, the first day he was elected to the day he left? I just pointed out what I saw. Okay. Let me ask you another question. So I have 50, 75, a hundred emails regarding the golf course on LFC LTD. Did you know that? These are the ones that we found and they found it. And it was forwarded that those emails were forwarded. The beginning of that email chain is a Ford from the state, right? The state is emailing me, right? Did you know on April 29th, 2019, I emailed them and said, my work email was down.

No, but I will say that we did provide a draft report on April 28th, and the only response we received was from Sheila. We got a lot of information back from Sheila, and you are all welcome to provide feedback. Had you provided it, we would have included it.

Well, I just think you would have reached out to me, because I was the one dealing with the golf course, and your review of the appraisal is wrong. You said over a million dollars. If you look at page 31, I think of it, it actually appraises the property of much lower.

The appraisals were included in the background. But there again, we provided the report and all of the exhibits, and the only person we got feedback from in detail was Sheila, and we thank her for it.

Okay, CJ, you had another question.

National Bank of Manitoba, you brought that up because the son-in-law of the former mayor had an account there. Now, I want to clarify this because obviously we have multiple banks in town. You were kind of maybe alluding that we put money there because, or the village put money there because it's the son-in-law's bank. Chris, could you clarify with interest rates why we chose that bank, and did we ask the other banks in town to match that rate, meet that rate? It was mentioned in the village notes, but how that works.

Yes, when we originally were getting the 25 million dollars we did hold meetings at village Hall with mayor Nugent I'm not sure if the finance chair guess he was there for all of them, but we reached out to probably 5 or 6 different banks, including several from Chicago to see what the best vehicles were going to be to invest that money. And through those meetings, we decided that we wanted to, again, try and keep the money as local as possible. We did put it in Homestar Bank for the initial year because they gave us the best rates. Each time those CDs came due, I sent out emails to the four local banks and we got cd rates from them and their terms and then we presented them at the uh finance meetings and then the board decided where the money should go based on trying to get the best rate the most bang for our buck as we could so there was a process but the the previous board their intention was to keep the money local

And let's clarify, too, those finance meetings, those were public meetings. Anybody could have came to those meetings.

Correct. I mean, if there is not complete details in those minutes, I think if you look at our current minutes, there's probably a lot of detail missing. You know, the clerks do the best they can. There's a lot of stuff that goes on. They're not going to give you every detail that was discussed at a meeting.

Did they look at the committee minutes or just the village board meetings minutes?

Yeah. It was usually discussed at committee meetings, yes.

How long have we had money at Homestar? I couldn't tell you. I've been here 14 years. Was it before we had hired Treasurer Martin?

Oh, yes, for sure. The number that I heard, and again, the research I did was 1946 is when the village started using Homestar Bank.

was before i was born and i'm going to guess as a small town we've had trustees mayors that may have had connections to homestar i know mayor lamore what didn't your father help founder you guys were stockholders of homestar at some point my grandfather was one of the founders correct so like we it's a small town so the connections are going to be made there too i just want to make that aware too can i give you uh one other suggestion so one of the other clients of uh it's a city quite a bit larger than yours but

When they have meetings, what they do in addition to, they have the agenda and then with the agenda, and we've seen this at other clients we've had too, they have the packet. So the packet that the trustees, the public also receives. So whatever, if we were gonna present this, then our, it was a draft for example, then our draft would have been in the packet before the meeting so people that attended, whether they attended in person or not, They have information. One of the things we found is that we see the minutes, but we don't feel the minutes are always there. They're informative as to the decisions that were made, but not necessarily that you were just describing a process. They're not necessarily informative of the process that you went through to get there.

Right.

Thanks.

Thank you. You've already talking. I'm going to talk though. I have a question for you. We had $25 million in the bank. How much were we insured for?

Well, okay, so you were insured through the CDARSs. For $25 million. So what happened is they made the CDs, the CDs go to Homestar, then Homestar shows it as a deposit, but then they invested it in these other banks, and I think we gave an example of it.

we also dealt with the bank that had questionable practices correct right and and i'm we presented the whole thing but they went through the interfi and whether you got the best rates or not i have no idea because we didn't see the documentation and secondly with those bid numbers that you've given on this report here that doesn't show the extras or the overcharges of how those projects were fully completed correct

that was just on if you want to see yes actually they do for the three jobs that I presented to release a lien that would be the final cost that went through I need to go pretty soon do you want to open this up to the people who signed up to speak tonight I want to make one comment here before we do that I want to speak to a narrative that was somewhat created here between tenco excavating Kevin Nugent construction during your presentation of the I think everybody in this room knows that Tenco Excavating is an excavating contractor and Kevin Nugent Construction is a concrete contractor. They work hand in hand, right? And Tenco subcontracted Nugent Construction to do the concrete work. so it's not like tenco just paid kevin nugent construction money because of whatever reason they were an actual subcontractor on multiple projects throughout this village and that's why they were paid that money thank you all right we had some people who signed up and if you want to ask a question and come to the microphone you're welcome to have a couple minutes but not more because mr edmund stone has to leave sandy chis

Okay, Anne Gates. Please keep it very short.

Thank you for all the information that you shared. Even though I don't live in Manteno, what happens here affects where I live. So thank you, I appreciate it. And thank you, Mr. Goetzke, for voting to have this done. You were the only trustee that did, and I appreciate that, besides Mike and Peggy, of course. But I appreciate that, that shows that your desire in your heart is to be open and transparent with the people to the best of your ability. And I appreciate that. What I don't appreciate is the colorization that some people have brought to this. Numbers don't have a political identity. They don't have an agenda. They don't have any personal vendetta, they have nothing. Numbers are numbers, you follow the money. The money goes where people put it. And these people have been very gracious to do it in a very nice way. I've been involved in things like this before, and it went nothing like this. And there were people that should have been arrested. And to ask if anybody is going to be arrested really speaks to where the mindset is. We shouldn't look at this as, well, who did this evil and who did this wrong? Let's take the constructive perspective guidelines that were laid down and change what needs to be changed and move forward for the better of the town. Put your little piddly crappalanch aside because it's like high school playground stuff. We're adults here, so take the information, use it, revamp what you need to, show a little respect, for one another and show respect for the mayor because I betcha if any one of you guys bought a brand new business, you would do an audit like this to make sure that what you were taking on was fair just and legal that you weren't going to be on the line for something that you didn't do so let's pay some due respect here thank you she came in for that purpose so thank you madam mayor that you care enough about this town to want to start with a clean slate so let's go from here guys you know what mrs gates i will the next speaker is francine fatima hold on

I agree with you. I think through this process, we maybe do have to look at our processes a little bit better and maybe fine tune the processes. We're a small village. We don't have an abundance of staff to have all of these guardrails in effect. So at the end of the day, yes, I agree with you. We should probably look at the processes and maybe update them a little bit. But also at the end of the day, I don't think this proved that there's any missing money, anybody did anything illegally or fraudulently.

but nobody said that.

Well, I'm just stating. I agree with your process. See, this is the thing.

You guys are the one that's putting that out there. They're not. They're only directing to the things that need to be changed and improved. So let's not go on a witch hunt because that's not the purpose of this. The purpose is to find what's wrong and correct it.

Thank you very much. Thank you for your time, Madam Mayor. Francine, Fatima? Francine Fatima, did you want to speak? All right. Greg Olajar. Greg Olajar, are you here?

Just wanted to say a couple words. Your comment earlier about is anyone gonna go to jail, I agree with the speaker before. That's not the purpose of this. I think the purpose was to find, just because nothing was done illegally doesn't mean that things weren't mismanaged. Like you guys said, there are, processes that can get better. Um, and I hope that this board works towards that. I moved here in 2020, so I don't have a bunch of I can't really speak much on the last 10 or 15 years or whatever happened before. I don't know. Um, the one thing that really bothered me was your attitude and your three on Monday. A lot of us came here. I'm glad to see more people here today, but on Monday a lot of people came here to see the results of the audit. And the little games and charades that you guys played was unacceptable. We took time out of our day to come see what we've been waiting a long time. We didn't know. They could have found absolutely nothing wrong. You guys did a great job. And we would have applauded it.

The problem is, is talk about games and charades, the draft versus the report that's there. was a difference of about 19 pages.

Why are you?

It wasn't 19 pages added on on the end. There was content added in within here. We have to have a time to review it to be able to ask questions because you know what? I don't think we're gonna see them back here to answer questions. We've got one opportunity for our $170,000 that we spend on village money to ask questions. So yes, we did want it. And what you don't know is that there were four times four different officials who asked that we table it and move it to give us at least 48 hours to review and we were not provided that so that's why the quote-unquote games it was we wanted to be prepared to be able to ask intelligent questions

Why did you guys need that ability? But all we've heard is just what he's talked about. We didn't have 48 hours to look it over, to ask proper questions today.

I'll be honest with you. I wanted this posted on our Village website two nights ago. That would have been great. So this way, you guys would have had the same opportunity. Now, the real reason why you don't have that opportunity And Chris, you could tell me if I'm right or wrong, because the auditor didn't redact all of our bank account numbers and give us a redacted copy for us to be able to post on there for you guys to see. And we can't have our account numbers out and about. So that's what we're waiting for. And as soon as it's redacted, you will have a copy on our posted website just so you guys could see everything that's in there. I would love to hand you a copy of it right now.

Thank you. Thank you very much, Chris. The final speaker is David Bergdahl.

Good evening. Very nice presentation.

Woo, my name never came up.

Although it's pretty clear some of the documents you referred to probably were prepared by me a long time ago. What did we learn tonight? We've got some procedures that are very much out of date and need to be changed. We have personnel who perhaps need to be differently supervised. And we have trustees and a board that need to be taking a more active role in taking control of these issues. I think we learned a few good things. Money well spent. I'm not sure that we needed to run like rats on Monday night, afraid to let him make this presentation and not have to return. But the more irritating part of this for me in kicking this from Monday to tonight for those of you that aren't aware will county had a transportation public hearing tonight about the development and redevelopment of peatone wilmington road which is probably the most important road in will county dealing east west that affects us so i have to choose do i come to this meeting because you all scurried away and didn't want this presentation monday night or do i go to the transportation meeting and learn about one of the most important east west development road development projects that's going to affect us in the next 20 years needless to say i'm not getting paid to do these meetings anymore so i'm here learning some very valuable information, but the information there would have been just as valuable if not more. Thank you.

Thank you, David. I would also like to add that Monday night when the end of the meeting was canceled and we didn't get to have the audit, there were 371 people on YouTube watching, waiting for the audit, who were very, very severely disappointed. So add that to the crowd that was in here, it was over 400 people that were very disappointed they didn't get to hear this audit on Monday night. So I don't have anything else unless, oh Jim.

Hi, thank you for this opportunity. We really love working with you folks and we love your village. One other thing I want to clarify, one of the trustees said that Kevin Nugent Construction was sold Yes, but we just looked at the Secretary of State's website, and it was sold to his son, apparently. It shows up here.

You said Kevin Nugent. I understand that.

Kevin Nugent, but the president is Chad Nugent.

Thank you very much. Okay, thank you. I want to say thank you to the auditors. They've been working on this for, I think, 10 months. And for the last two months, everybody's been saying, when are we gonna find out? When are we gonna find out? Well, the day finally arrived. So thank you so much to the auditors for all your hard work. We appreciate that very much. Thank you. And I need a motion to adjourn this meeting.

Can I clarify just my comment really quick? Just why I asked.

Only if it's quick.

The reason being was just a forensic audit from everything that I've learned is looking for if there's fraud or if it's illegal. It wasn't an attack. I just wanted a clarification because that's the purpose of these audits is what I wanted. Thank you.

Motion made by Mike. Anybody else? I'll second. Second by Annette. All in favor?

Aye.

Meeting is adjourned. Thank you, everybody.