HomeMy WebLinkAbout2003 06-16 CCM Joint Work Session with Financial Commission 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 16, 2003
COUNCIL /COMMISSION CONFERENCE ROOM
CALL TO ORDER
The Brooklyn Center City Council met for a joint Work Session with the Financial Commission and
was called to order by Mayor Myrna Kragness at 6:02 p.m.
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ROLL CALL
Mayor Myrna Kragness, Councilmembers Kay Lasman and Bob Peppe. Councilmember Kathleen
Carmody was absent and excused. Councilmember Niesen was absent and arrived at 6:05 p.m. Also
present: City Manager Michael McCauley, Assistant City Manager/Director of Operations Curt
Boganey, Fiscal and Support Services Director Doug Sell, and Deputy City Clerk Maria Rosenbaum.
Financial Commission Members present: Chair Donn Escher, Jay Hruska, Mark Nemec, Lawrence
Peterson, and Gavin Wilkinson.
Financial Commission Member Jerald Blarney arrived at 6:07 p.m.
PRESENTATION BY AUDITORS
Dave Mol, Managing Partner for HLB Tautges Redpath, Ltd., distributed and outlined a summary of
the City's 2002 Audit Review. Some of the highlights that were noted was that the City's
Comprehensive Annual Financial Report had a clean opinion for 2002; there were no compliance
findings in the State Legal Compliance Report; the City is suggested to review it's current policy and
determine if additional reserves are appropriate; and that the Debt Service Funds are in good
condition.
Mr. Mol informed that there will be a new audit standard for 2003 called SAS 99 and that GASB 34
will be implemented for the 2003 audit. The SAS 99 will require auditors to be more skeptical when
preparing audits; and GASB 34 will dramatically change the audit process.
Mayor Kragness asked that more detail be provided on the three reportable conditions noted with the
report on internal control. Mr. Mol discussed that the conditions were listed in the Schedule of
Expenditures of Federal Awards and Independent Auditor's Reports on page 9 and read the
conditions and recommendations for the three reportable conditions.
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Councilmember Niesen questioned the grant management condition and what department may have
caused this condition. Jeff Wilson, HLB Tautges Redpath, Ltd., Lead Auditor, informed that the
Police Department had several grants that had a few technical issues.
Councilmember Lasman questioned the City's Bond Rating. Mr. McCauley informed that the City's
Bond Rating did not change and that the Bond Rating is still A -1.
Mr. Mol discussed that the Council may be asked in the future to review and sign a Letter of
Representation that would indicate that no Council Member had a personal financial interest in the
sale, lease, or contract of the City; or a direct member of a family, personally benefited from any
such transaction.
Councilmember Peppe questioned the purpose of the Letter of Representation. Mr. Mol informed
that the State Auditor is requiring this to follow limited review to make sure that there are no
conflicts of interest.
Mr. McCauley informed that the 2002 Audit Report would be on the June 23, 2003, City Council
agenda for approval.
MISCELLANEOUS
Mr. Escher questioned what direction the Council would like the Financial Commission to seek
regarding the budget issues the City is facing. Mr. McCauley informed that he met with Mr. Escher
and Fiscal and Support Services Director Doug Sell last week and discussed targets. Mr. McCauley
suggested that the $1.7 Million loss be addressed, for discussion purposes, through an overall cut of
1/3 of the $1.7 Million loss in operating expenses, replacement of 1/3 of the $1.7 Million loss or
$500,000 to $600,000 so as to retain operation of the Community Center and the provision of youth
programs and some other activities, and that 1/3 of the loss be offset by removing the transfers from
the General Fund for street reconstruction and park improvements from the General Fund and the
imposition of approximately $600,000 in franchise fees dedicated exclusively to street reconstruction
costs.
Financial Commissioner Jerald Blarney questioned if a full levy would work. Mr. McCauley
discussed that if the City does not levy to the fullest for 2004, they may loose any unused levy in
2005.
Mr. McCauley reminded that the exact numbers will not be known until approximately the end of
August and that at this time there just needs to be some targets set for the Financial Commission.
Council continued discussions on levies and franchise fees.
Mayor Kragness suggested that a combination taxes, levy, and cuts, be considered.
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Councilmember Peppe expressed that the focus should be on the community impact if franchise fees
were implemented.
Councilmember Niesen expressed that Brooklyn Center residents cannot afford a tax increase.
Councilmember Lasman suggested that the three 1/3 suggestions be considered and to take care of
the bigger things first and then fine tune.
ADJOURNMENT
A motion by Councilmember Lasman, seconded by Councilmember Peppe to adjourn the j oint Work
Session at 7:30 p.m. Motion passed unanimously.
4 ' - L� City Clerk Mayor
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