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HomeMy WebLinkAbout2005 02-01 Pre Meridian CitY Pre-Council Meetlna February 1. 2005 The Meridian City Pre-Council meeting was called to order at 6:00 P.M. on Tuesday, February 1, 2005 by Mayor Tammy de Weerd. Members Present: Christine Donnell. Mayor Tammy de Weerd, Keith Bird, Shaun Wardle, Staff Present: Bill Nary, Brad Watson, Ted Baird, Stacy Kilchenmann and Will Berg. Item 1. Roll-call Attendance: Rollcall. ---1L- Shaun Wardle -LChristine Donnell --9-- Charlie Rountree -2L-Keith Bird ---2L- Mayor Tammy de Weerd Item 2. Adoption of the Agenda: Donnell: Mr. President, I would like to move that we adopt the agenda as printed. Bird; Second. Wardle: It's been moved and seconded to adopt the agenda as published. All in favor? ALL AYES. MOTION CARRIED. Item 3. Audit Report: Kilchenmann: Our audit report results tonight are going to be presented by Mr. Kevin Smith. He's our senior partner in charge of our audit now from the firm formerly known as (inaudible) & Lindstrom now known as (inaudible) Bailey. K. Smith: Madame Mayor and members of the Council it is my pleasure to be here tonight to present the audit financial statement for the City of Meridian for September 30, 2004. This year as the same as last year, we issued an unqualified or (inaudible) opinion for the financial statements for the city. A couple things I would like to point out - one of them is this is the second year of the new pronouncement, .which gives us a little bit different format than what we are used to in the past and so I think now we have some comparative information that makes it a little more reader friendly than it was last year with just the first year. So, looking at the governmental funds especially you have a full accrual. The two main components that were added to the balance sheet, one was the Meridian City Pre-Council Meeting February 1, 2005 Page2of5 debt that was outstanding, in your case very little and then the fixed assets, which were brought onto the balance sheet, which that hadn't been the case before. So, it gives you, I think, a more meaningful financial statement to make some management decisions on. A couple things I would like to point out and I think the management discussion and analysis, which starts on page three, I will point out that this document is written by management of the city and we do not give an opinion on these first ten pages, however, we do review them for consistency with the financial statements and the information that we do give an opinion on and we have found that the amounts are consistent and agree with those and discussion also. On page three it talks about some of the financial highlights, which I think management has done a very good job in pointing some of those things out that have happened during this past year. To start out with it points out the net assets of the city has exceeded the assets (inaudible) have exceeded the liabilities by about $164 million, which seems like a large number, however, a lot of that is tied up into fixed assets or infrastructure especially in the enterprise fund there is a large amount that is tied up into infrastructure. So, that can be a bit misleading and so as you look at the financial statements, the main thing to look at is really the unrestricted net assets that's really available for spending for the city. One of the things that we have discussed with management is when you look at the net assets and what's available especially in the business type, the enterprise funds that continues to grow each year and for a good reason. There is a lot of improvements that will take place in the future. One of the recommendations that we had is just in management discussion was to come up with a plan; come up with a fairly solid plan so that as a Council you can actually designate some of those funds for some specific projects and then we can actually reserve some cash for that. That will reflect in the financial statement rather than just having the large unrestricted balance that now appears. So that in the future we would recommend that you take a real hard look at that. One of the things that also, you know, as far as the budget towards the back of the financial statement - I won't spend a lot of time thumbing through pages, but towards the back of the financial statement itself we report that the budget to actual in the governmental funds and in the general fund is you will see revenue exceeded the budget and expenses were less than the (inaudible) was less than what was budgeted. So, very good management as far as the budget went for this year as it's done in the past year. I think you know it's your fiscal responsibility to oversee that budget and monitor that budget and I think you do a very good job in spending the funds wisely. Does anyone have any questions as far as the financial statements? I know I probably get a little more excited about them than most people do and enjoy reading them, but I know that everyone doesn't have that same enjoyment at night during ball games, but - Also, we (inaudible) management letter this year and in the management letter there are basically three different levels of findings that we will report. One is a material weakness, which is the most serious and in a material weakness that means internal controls are so deficient that it could cause a material mistake in the financial statements. The next level is a reportable condition, meaning that it may not be material but it is still very serious Meridian City Pre-Council Meeting February 1, 2005 Pege3of5 and needs immediate attention and we did not report either one of those type of findings this year. We did have some other comments that we listed in the management letter and we have gone over them with management and they have responded to each of those which we have actually published in that management letter and we are satisfied with the response they gave and know that they will be mitigating factors will be put into place to overcome some of those areas of maybe a little bit of weakness, internal controls. Another one that we pointed out this year just as kind of general information rather than a weakness was there was a new pronouncement again coming out this coming year that will apply to the City of Meridian and it's Statement No. 40 in governmental arena and it is related to investments and since you guys have a large balance in your investment account and it's very diversified in the types of investments that you are in right now, it'll require some more analysis of the investment account and require additional disclosure, so you could probably - we figure that your financial statements will probably grow by about four or five pages, just related to that disclosure. Just another regulation thanks to some of the companies that have not properly reported their investments the last few years. Any questions as far as the financial statements or management letter, footnotes or anything that I could - I would be happy to answer them for you. Donnell: Mr. President. Wardle: Ms. Donnell. Donnell: On page 16, the balance sheet for governmental funds, you mentioned that we should develop a plan so that we can dedicate particular funds to whatever projects the city decides should be funded. I see at the bottom at that page that there are reserves for Parks and the Police center and fire truck purchases. Are you saying something that is more defined than even that? K. Smith: This is actually - in the general fund you actually have done a fairly good job of designating a lot of those funds and reserving those and my comment was more in reference to the enterprise funds where I think the balance is continuing to grow a little bit faster than the general fund is. De Weerd: Mr. President. Wardle: Madame Mayor. De Weerd: Just to clarify that. When we met with Mr. Smith we talked about that and we are in the final stages of developing the capital improvement plan. Stacy and Brad have been working together on that and it will be able to take those unrestricted funds in the enterprise funds, which really are (inaudible) marked and show where those are, so it will explain the amount in those reserves so you know there is a plan for them because there has to be. That's how we even set our fees, so they'll be targeted towards the planned expansion lines at the well Meridian City Pre-Council Meeting February 1, 2005 Page4of5 sites and maintenance and those kinds of things, replacement lines and those different categories. So then as a consumer even looks at it they will be able to see these monies, they may be unrestricted, but they are reserved. K. Smith: Right now it just appears that they are available for spending, which is really not the case. Wardle: Council any other questions? Bird: Mr. President. Wardle: Mr. Bird. Bird: Not just a question, Kevin, another very nice job not only for you but from our staff. This is a nice audit. Proud to say that I have been part of it and thank you again for all your hard work and the nice job you have done for us. K. Smith: I would like to echo your statement about the staff and once again we appreciate their efforts. It takes a lot of work. We are very disruptive and we want to get in and get out as fast as we can to be efficient and they do a wonderful job. They look after us, they answer the questions immediately and they provide documentation in a very timely manner and we do appreciate their efforts. Bird: Thank you very much Kevin. De Weerd: Mr. President. Wardle: Madame Mayor. De Weerd: He says that not only as our auditor, but also as one of our citizens. So, you can bet that the questions he has he wants answers. Wardle: Thank you Mr. Smith and it appears that the financial state of our city and the management of that state are in tip top shape and in good hands and we appreciate the hard work that you do on this audit and I know that the citizens and tax payers do as well. Item 4. Executive Session per Idaho State Code 67-2345(1)(b)&(f): Bird; Mr. President. Wardle: Mr. Bird. Bird: I move we go into Executive Session as per Idaho State Code 67- 2345(1 )(b)&(f). Meridian City Pre-Council Meeting February 1, 2005 Page50f5 Rountree: Second. Wardle: It's been moved and seconded that we enter into Executive Session. All in favor, say aye. Berg: Excuse me Mr. President. We need a roll call vote to go into Executive Session. If I may, roll call, Council: Bird, aye; Rountree; aye; Donnell, aye; Wardle, aye; ALL AYES. MOTION CARRIED. Wardle: I would entertain a motion to come out of Executive Session. Rountree: So moved. Bird: Second. Wardle: It's been moved and seconded. All in favor? ALL AYES. MOTION CARRIED. Wardle: Seeing that we are at the end of our agenda for the evening and our allotted time, I would entertain a motion to adjourn. Bird: Mr. President, before I make that motion let it be known that no decisions were made while in Executive Session. Then I would move that we adjourn. Rountree: Second. Wardle: It's been moved and seconded to adjourn. All in favor? ALL AYES. MOTION CARRIED. MEETING ADJOURNED AT 7:00 P.M. (TAPE ON FILE OF THESE PROCEEDINGS) APPROVED: T~