HomeMy WebLinkAbout2007 06-04 FCM JOINT SESSION WITH CITY COUNCIL. MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF BROOKLYN CENTER IN THE COUNTY
OF HENNEPIN AND THE STATE OF MINNESOTA
JOINT WORK SESSION WITH FINANCIAL COMMISSION
JUNE 4, 2007
CITY HALL - COUNCIL CHAMBERS
CALL TO ORDER
The Brooklyn Center City Council met in Joint Work Session with the Financial Commission and
was called to order by Mayor Pro Tern Kay Lasman at 6:30 p.m.
ROLL CALL
Mayor Pro Tern Kay Lasman and Councilmembers Mary O'Connor, Dan Ryan, and Mark Yelich.
Also present: City Manager Curt Boganey, Fiscal and Support Services Director Dan Jordet, and
Deputy City Clerk Camille Worley.
Mayor Tim Willson was absent and excused.
Others present were Financial Commissioners Philip Berglin, Todd Boster, Mark Nemec, Jessica
Roerick, Susan Shogren Smith, and Rex Newman.
Financial Commissioner Gene Maze was absent and unexcused.
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR 2006
AUDITOR'S OPINION AND AUDIT COMMITTEE LETTER
- HLB TAUTGES REDPATH
Andy Hering, HLB Tautges Redpath presented a PowerPoint presentation that summarized the
following information:
Reports Issued
o Opinion on Financial Statements
a Audit Committee Letter
o Report on Internal Control
o Report on Compliance with Minnesota Statutes
• Annual Financial Report
o The financial statements are the responsibility of management
o The role of the Independent Auditor is to report on the fair presentation of the
financial statements
o Audit standards followed:
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• GAAS
■ GAGAS
o "Clean opinion" on the 2006 financial statements
• Financial Results
• Budget Performance
o
Favorable General Fund budget variances
• Audit
Committee Letter
o
Audit firm responsibility under U.S.-audit standard.
o
Significant accounting policies
■ GASB 44
o
Accounting estimates
■ Depreciation expense
■ Health insurance liability
■ MCES liability
• Land held for resale (LHFR)
o
Audit Adjustments
■ Additional receivable ($93,811)
■ Adjustment to LHFR ($208,000)
■ Payable for unbilled MCES flows ($580,465)
■ Grant receivable ($39,784)
o
Disagreements with management
o
Consultations with other auditors
o
Issues discussed prior to retention of auditor
o
Difficulties encountered in performing the audit
• Report on Internal Control
o The 2006 Report is based on new standard (SAS 112)
o SAS 112 lowered the threshold for reporting of internal control matters and
established new definitions
• Report on Internal Control
o Significant Deficiency defined as "a control deficiency that adversely affects the
entity's ability to initiate, authorize, record, process, or report financial data reliably
in accordance with GAAP, such that there is more than a remote likelihood that a
misstatement to an entity's financial statements that is more than inconseauential will
not be prevented or detected"
o Six deficiencies noted:
• Approval of journal entries
• Approval of utility billing adjustments
• Determination of water consumption
• Liquor inventory adjustments
• Financial statement corrections
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• Approval for use of paid time off
•
There was discussion regarding security of the Liquor Stores including methods to prevent
shoplifting.
• State Compliance Report
o Required by Minnesota Statute Section 6.65
o OSA established a task force to develop audit guide for legal compliance
o Audit guide covers seven categories
1. Contracting and bidding
2. Deposits and investments
3. Conflicts of interest
4. Public indebtedness
5. Claims and disbursements
6. Other miscellaneous provisions
7. Tax increment provisions
o No findings of noncompliance for 2006
• Recent Standards
o Audit standards
■ SAS 103 Audit Documentation
■ SAS 104 to 111 Risk Assessment
■ SAS 112 Reporting on Internal Control
■ SAS 113 Omnibus.2006
■ SAS 114 Auditor Communication to those Charged with Governance
o Accounting standards
■ GASB 44 Statistical Section
■ GASB 45 Other Post Employment Benefits
SUMMARY OF FINANCIAL STATEMENTS INFORMATION - STAFF
Fiscal and Support Services Director Dan Jordet presented a PowerPoint presentation that included
the following information on the Comprehensive Annual Financial Report for the year ended
December 31, 2006:
Anatomy of the CAFR
• Introductory Section
o Transmittal Letter
o List of Officers
o Organizational Chart
• Financial Section
o Independent Auditor's Report (opinion)
o Management's Discussion and Analysis (MD &A)
• Government Wide Financial Statements
• Fund Financial Statements
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•
o Major funds
o Governmental Funds
o Proprietary Funds
•
Notes to the Financial Statements
•
Required Supplementary Information
•
Combining & Individual Fund Statements
o All non-maj or funds
•
Statistical Section
•
Supplemental Materials
o Report on Legal Compliance
o Report on Internal Control
o Audit Committee Letter
Government Wide Statements
•
Two Statements
o Statement of Net Assets
o Statement of Activities
•
Interfund Activity Removed
•
Total Assets $140,811,395
•
Total Liabilities 34,705,598
•
Total Net Assets $106,105,797
Notes
to the Financial Statements
•
Note 1-Summary of Accounting Policies (Pages 41-48)
o Description of the significant accounting polices and procedures of the City
•
Note 3-Stewardship, Compliance and Accountability (pages 50-52)
o Excess of Expenditure over Appropriation
o Deficit Fund Equities
•
Note 4-Capital Assets (page 55)
o Streets, Mains & Lines growing with the reconstruction projects every year
•
Note 4-Long Term Debt (pages 59-62)
o Issued $1,460,000 (GO Improvement)
o Paid $2,875,000
General Fund
• Designated Fund Balance $7,508,690
o Is 51.62% of 2007 General Fund Budget
• Revenues exceeded Expenditures by $284,239
• Details in Statement 9 of the Required Supplementary Information
There was discussion on the vacant and City acquired properties and potential developments of
such.
•
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Tax Increment District #3
• • Lower than Expected Revenues
o Rebate to Brookdale in Tax court case
o About $400,000 taxes plus interest
• Olive Garden & Cracker Barrel Acquisitions
o $2,949,642
• Additional relocation at 57th & Logan
o $513,271
• Beginnings of the Days Inn acquisition
o $7,966
Utility Funds
Enterprise Funds
Other Funds
• TIF #1 & TIF #2 = Earle. Brown TIF District
o Still calculate and reported to State as separate districts
o Closing of TIF #1 in 2008
o Closing of T1F #2 in 2010
• Capital Improvements Fund
o Park maintenance and improvements
o Golf Course Loan
• Central Garage
o Owns and maintains all vehicles of the City
o Holds reserves for vehicle replacements
2008 BUDGET OVERVIEW
City Manager Curt Boganey presented a calendar of budget events which was discussed by the City
Council and Financial Commission. It was indicated that meetings involving the Financial
Commission should begin at 6:30 p.m. and those involving only the City Council should begin at the
regular time of 6:00 p.m.
OTHER BUSINESS
There was no Other Business discussed.
ADJOURNMENT
Councilmember Yelich moved and Councilmember Ryan seconded to adjourn the Work Session at
8:50 p.m.
0 Motion passed unanimously.
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