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HomeMy WebLinkAbout1994 07-18 CCP Work Session C CITY COUNCIL AGENDA CITY OF BROOKLYN CENTER JULY 18, 1994 7 p.m. Council Work Session CITY "COUNCIL CHAIIBETtS 1. Call to Order 2. Roll Call 3. Updating Chapter 12, Building Maintenance and Occupancy Ordinance, to Include Domestic Abuse in Section 12 -911, Conduct on Licensed Premises 4. Proposed Five -Year Street Improvement Plan 5. Auditor's Management Letter 6. RFP for Auditor 7. Adjournment 3 TO: Gerald G. Splinter, City Manager FROM: George B. Hoffman Director of Community Development g � Y , DATE: July 15, 1994 SUBJECT: Amending Chapter 12 to Include Domestic Abuse in Section 12 -911 The council has asked that domestic abuse complaints be added to the list of activities that constitute a violation of Section 12 -911 (see attached). While it is understandable why the council might want to include such activities within the ordinance, it is the staff position that it would be counter productive. Section 12 -911 places the responsibility of the licensee to assure compliance with the ordinance on the part of the tenants. Of late we (police and community development) have served notice ono the licensee of such offenses and in turn the licensee has used such notices to evict problem tenants. It is the staff concern that the addition of domestic abuse as a violation will discourage the victim of abuse from reporting the problem. Two violations would result in an unlawful detainer against the parties and would most likely result in additional problems for the victim. To the extent that domestic abuse disturbs the peace of others, Section 12-91 le references Section 19- 202 (see attached). Such activity does constitute a violation and counts towards the two strikes and your out. It is the staff belief that the problem the council wants addressed is already covered. It is our recommendation that Section 12 -911 not be changed. Section 12 -911 CONDUCT ON LICENSED PREMISES. 1. It shall be the responsibility of the licensee to see that persons occupying the licensed premises conduct themselves in such a manner as not to cause the premises to be disorderly. For purposes of this Section, a premises is disorderly at which any of the following activities occur: a. Violation of Section 19 -1202 (Noise Abatement). b. Violation of Section 19 -1121 (Unlawful Possession, Delivery or Purchase) or violation of laws relating to the possession of controlled substances as defined in Minnesota Statutes Section 152.01, Subdivision 4. C. Violation of Section 19 -202 (Disturbing the Peace). d. The unlawful sale of intoxicating liquor or nonintoxicating malt liquor. e. Violation of laws relating to gambling. f. Violation of laws relating to prostitution as defined in Minnesota Statutes, Section 609.321, Subdivision 9, or acts relating to prostitution. g. Unlawful use or possession of a firearm in violation of Minnesota Statutes, Section 609.66, Subdivision la, 609.67, or 624.713. 2. The city manager shall be responsible for enforcement and administration of this ordinance. Authority to take any action authorized under this section may be delegated to the city manager's authorized designee. 3. Upon determination by the city manager that a licensed premises was used in a disorderly manner, as described in paragraph 1, the city manager shall give notice to the licensee of the violation and direct the licensee to take steps to prevent further violations. 4. If another instance of disorderly use of the licensed premises occurs within three (3) months of an incident for which a notice in paragraph 3 was iven g the city manager shall notify he licensee of the violation iolation and shall also require the licensee to submit a written report of the actions taken, and proposed to be taken, by the licensee to prevent further disorderly use of the premises. This written report shall be submitted to the city manager within five (5) days of receipt of the notice of disorderly use of the premises and shall detail all actions . taken by the licensee in response to all notices of disorderly use of the premises within the preceding three (3) months. 12 -911 5. If another instance of disorderly use of the licensed premises occurs within three (3) months after any two previous instances of disorderly use for which notices were given to the licensee pursuant to this section, the rental dwelling license for the premises may be denied, revoked, suspended or not renewed. An action to deny, revoke, suspend, or not renew a license under this section shall be initiated by the city manager who shall give to the licensee written notice of a hearing before the city council to consider such denial, revocation suspension or nonrenewal. Such written notice shall specify all violations of this section, and shall state the date, time, place and purpose of the hearing. The hearing shall be held no less than ten (10) days and no more than thirty (30) days after giving such notice. Following the hearing, the council may deny, revoke, suspend or decline to renew the license for all or any part or parts of the licensed premises or may grant a license upon such terms and conditions as it deems necessary to accomplish the purposes of this section. 6. No adverse license action shall be imposed where the instance of disorderly use of the licensed premises occurred during the pendency of eviction proceedings (unlawful detainer) or within thirty (30) days of notice given by the licensee to a tenant to vacate the premises where the disorderly use was related to conduct by that tenant or by other occupants or guests of the tenant's unit. Eviction proceedings shall not be a bar to adverse license action, however, unless they are diligently pursued by the licensee. Further, an action to deny, revoke, suspend, or not renew a license based upon violations of this section may be postponed or discontinued at any time if it appears that the licensee has taken appropriate measures which will prevent further instances of disorderly use. 7. A determination that the licensed premises have been used in a disorderly manner as described in paragraph 1 shall be made upon substantial evidence to support such a determination. It shall not be necessary that criminal charges be brought in order to support a determination of disorderly use, nor shall the fact of dismissal or acquittal of such a criminal charge operate as a bar to adverse license action under this section. 8. All notices given by the City under this section shall be personally served on the licensee, sent by registered mail to the licensee's last known address or, if neither method of service effects notice, by posting on a conspicuous place on the licensed premises. 9. Enforcement actions provided in this section shall not be exclusive, and the city council may take any action with'respect to a licensee, a tenant, or the licensed premises as is authorized by this Code or state law. RELATING TO PETTY OFFENSES IN THE CITY OF BROOKLYN CENTER Section 19 -201 LOITERING. Any persons who shall hereafter be found lurking, lying in wait, or concealed in any house or other building, or in any yard, premises, or street within the limits of the City of Brooklyn Center, with the intent to do any mischief, or to pilfer, or to commit any crime or misdemeanor whatever shall, on conviction thereof, be P unished Y b a fine of not more than seven hundred dollars ($700) or by imprisonment not to exceed ninety (90) days or both, together with the costs of prosecution. Section 19 -202 DISTURBING THE PEACE. Any person or persons who shall make, aid, countenance, or assist in making any noise, riot, disturbance, or improper diversion, and all persons who shall collect in bodies or crowds in said City for unlawful purposes, or to the annoyance or disturbance of the citizens or travelers, shall, for each offense, upon conviction thereof, be liable to the same fine and imprisonment provided for in Section 19 -201 of this ordinance. Section 19 -203 FIGHTING AND BRAWLING. Every person who engages in brawling or fighting shall be guilty of disorderly conduct and upon conviction thereof shall be liable to the same fine or imprisonment provided for in Section 19 -201 of the City Ordinances. Section 19 -204 ASSAULT. Every person who shall commit an assault, or an assault and battery, not amounting to a felony, upon conviction therefor, shall be liable to the same fine or imprisonment provided in Section 19 -201 of the City Ordinances. Section 19 -205 THEFT AND RELATED OFFENSES. Subdivision 1. Every person who commits a theft as defined in Section 609.52 of the Minnesota Criminal Code, Laws of 1963, as amended by Laws of 1976 which is not punishable as a felony under the State law, upon conviction therefor, shall be liable to the same fine or imprisonment as is provided in Section 19 -201, the Ordinances of the City of Brooklyn Center. Subdivision 2. Every person who receives or conceals stolen property as defined in Section 609.53 of the Minnesota Criminal Code, Laws of 1963, as amended by Laws of 1976 which is not punishable as a felony under the State law, upon conviction therefor, shall be liable to the same fine or imprisonment as is provided in Section 19 -201 of the Ordinances of the City of Brooklyn Center. Estimated Cost of Neighborhood Street Improvement Plan Years 1995 -1999 Assuming Current Special Assessment Policy (see notes) (a) (b) (c) (d) (e) (f) (g) (h) 0 (j) Res I Non -Res I Street Costs and Fund Sources Milage j Units I Units SA" % Bond Est Levy Incr JCumul Levy I MSA Total 1995 Woodbine Area 2.13 184 $ 285,200 30% $ 673,300 $ 90,000 $ 200,000 $ 958,500 MSA Streets 1.52 Humboldt 26 241,440 $ 84,121 $ 270,000 $ 423,000 73rd 16 - $ 24,800 $ 135,000 $ 288,000 57th 5 - $ 7,750 $ 404,000 $1,100,000 Noble 10 98,000 $ 23,056 $ 51,000 $ 87,000 1996 SE, Happy Hollow, Xerxes 3.2 249 15,900 $ 388,836 27% $1,051,164 $ 140,000 $ 340,000 $1,440,000 MSA Streets 1.09 67th 2 359,540 $ 68,357 • $ 148,000 $ 179,000 51st 6 - $ 9,300 $ 48,000 $ 71,000 Logan 61 13,860 $ 97,066 $ 270,000 $ 423,000 1997 E Garden City, S Northport 2.47 256 - $ 396,800 36% $ 714,700 $ 95,000 $ 435,000 $1,111,500 MSA Streets 69th 14 $ 21,700 $1,668,000 53rd 27 137,800 $ 66,861 $ 247,000 $ 403,000 .-1998 SE, NW 4.05 344 343,000 $ 595,455 33% $1,227,046 $ 164,000 $ 599,000 $1,822,500 1999': Wangstad 3.84 357 498,540 $ 643,835 37% $1,084,165 $ 145,000 $ 744,000 $1,728,000 MSA Streets 0.63 June 62 - $ 96,100 $ 269,000 $ 378,000 5 year Total MSA Residential $2,310,125 33% $4,750,375 $ 634,000 $7,060,500 'Assumes $1,550 unit assessment for residential, $0.1815/sf non - residential reconstruct, $0.0771/sf non residential overlay "Cumulative includes $110,000 levied in 1995 for 1994 street projects dfs 0 'e e column notes attached e: \eng\proj\neighfea 15- Jul -94 Estimated Cost of Neighborhood Street Improvement Plan -- - Years 1995 -1999 Assuming Current Special Assessment Policy (a) Is the total milage to be improved. (b) Is the total number of residential lots to be assessed. Assumes corner lots choose to be assessed at future date. (c) Is the assessable square feet for non - residential (multifamily and commercial) properties abutting streets to be improved. (d) Is the estimated special assessments. (e) Is the percent of total street cost to be recovered by special assessments. (f) Is the non - assessed street improvement cost - the amount to be paid for by levying bonds. (g) Is the estimated property tax levy increase needed to finance the bonds. (h) Is the cumultive levy increase over the six years of the program (1994 plus the 5 years shown). (i) Is the estimated MSA funding eligibility. (j) Is the estimated total street imrpvoement cost. 3 City of Brooklyn Center Council Meeting Date Agenda Item Number_ Request For Council Consideration • Item Description: AUDITOR'S MANAGEMENT LETTER AND MANAGEMENT RESPONSES Department Approval: Charles Hansen, Finance Director Manager's Review /Recommendation: f� No comments to supplement this report Comments below /attached Summary Explanation: (supplemental sheets attached At the June 13, 1994 City Council meeting, Cliff Hoffman of Deloitte & Touche made a presentation on the audit of city operations for the year 1993. He reviewed several reports, including a Management Letter which made five recommendations regarding administrative and operating issues. The staff also handed out a memo of Responses to the Auditor's Management Letter. Councilmembers requested that this be put on a worksession agenda for further discussion. Recommended City Council Action: Discuss the Auditor's Management Letter and the Staff Responses. • MEMORANDUM TO: Mayor Todd Paulson Councilmember Celia Scott Councilmember Dave Rosene Councilmember Barbara Kalligher Councilmember Kristen Mann FROM: Charles Hansen, Finance Director DATE: July 14, 1994 RE: RESPONSES TO THE AUDITOR'S MANAGEMENT LETTER CASH COLLATERALIZATION: Marquette Bank Brookdale maintains a level of pledged collateral sufficient to cover the balance in the City's account at all times except when tax settlements from Hennepin County are deposited. After a tax settlement is deposited at Marquette, it takes a day for them to collect the money through the banking system. We are then able to purchase investments the next day. After this comment appeared in last year's management letter, I called Marquette prior to each tax settlement and asked them to pledge additional collateral for the time that the extra money was in our account. This didn't work out for various reasons. From now on, I will hand carry the settlement check to First Bank's downtown office where we purchase our investments. This should eliminate the need for the money to sit in an account overnight. Hennepin County has advised me that in the near future they will begin to wire transfer tax settlements to cities. This will eliminate the need for hand carrying checks to the downtown bank. UNCOLLECTED PROPERTY TAXES: The City Assessor, Mark Parish, closely monitors the number and magnitude of property tax appeals that are filed. The tax appeals are coming in at a rate similar to recent years, but there has been a noticeable slow down in the granting of abatements by the tax court. That information, along with the first half 1994 tax settlement we received on July 6, give us a good indication of the shortfall we will experience this year. By doubling the first half collections, we get a good estimate of what our total collections for the year will be. This estimate is $5,688,628 for the General Fund, E.D.A Fund and H.R.A. Fund. That equals 94.54% of the $6,017,071 levied for those three funds. This is better than the 92.56% collection rate for 1993, but still is far short of our budget. In the 1994 Budget, provision was made for a 2% estimated uncollectible allowance for property taxes. We didn't expect this to be sufficient, but felt it was all the 1994 tax levy could stand. In light of the actual 1994 collections, we concur with the auditor's recommendation to increase the estimated uncollectible allowance to 3% for the 1995 tax levy. GENERAL FUND PROGRAMS: The city ransferred the vehicle maintenance y department to an internal service fund as part of the 1994 budget. This improves our cost accounting and facilitates a program budget, while moving a substantial part of the General Fund's fund balance to the internal service fund. The staff is investigating other possible transfers from the General Fund, but doesn't feel the recreation programs are a good candidate for an enterprise fund. When we did the transfer to set up the Central Garage Fund, there wasn't time to adequately analyze the size of the needed transfer. We based the transfer upon the depreciation on the historical cost of the vehicles which would have been charged if they had been in a Central Garage Fund all along. No provision was made for inflation in vehicle prices since they were last purchased. No provision was made for the fact that we now pay 6.5 % sales tax, but didn't pay that tax on most vehicles now in the fleet. We are doing that calculation now and would like to come back to the City Council with a report this summer recommending a further transfer from the General Fund to the Central Garage Fund for past inflation in vehicle prices. This would meet the Auditor's recommendation to get money out of the General Fund while also correcting the Central Garage's funding level. WORKER'S COMPENSATION SELF INSURANCE: The staff has had some very preliminary discussions of this concept with the City's insurance advisors. We believe there is merit and good potential to the concept. If the idea is pursued, the auditor's recommendations for hiring an outside administrator and charging the same worker's compensation rates that an insurance company would will be critically important to the success of the program. GOVERNMENT ACCOUNTING STANDARDS BOARD STATEMENT NO. 20: The city is in compliance with all Government Accounting Standards Board statements and pronouncements now in effect. We will comply with all future statements and pronouncements as they become effective. Deloifte & buche 400 One Financial Plaza Telephone: (612) 397 -4000 /w 120 South Sixth Street Facsimile: (612) 397 -4450 Minneapolis, Minnesota 55402 -1844 April 8, 1994 Honorable Mayor and Members of the City Council City of Brooklyn Center, Minnesota In planning and performing our audit of the general purpose financial statements of the City of Brooklyn Center (the City) for the year ended December 31, 1993, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing an opinion on the general purpose financial statements and not to provide assurance on the internal control structure. In connection therewith, we submit this Commentary Report containing our comments, observations, and recommendations concerning administrative and operating matters which resulted from our audit of the City's 1993 general purpose financial statements. Our observations and recommendations are presented under the following main captions: I. Administrative and Operating Matters II. Status of Prior -year Recommendations This report is intended solely for the information and use of the Mayor and City Council, management, and others within the organization. We will be pleased to discuss these recommendations with you and, if desired, to assist you in implementing any of them. Yours truly, r T Deloittebuche Tohmatsu International ADMINISTRATIVE AND OPERATING MATTERS Cash Collateralization: Observation: Minnesota State Statute 118.01 Subdivision 2 stipulates that the City's depository institution must collateralize deposits in excess of FDIC insurance coverage. Such collateral must have a fair market value of at least 110% of the amount of excess deposits if collateralized by qualified investments other than notes secured by first mortgages. At December 31, 1993, the City's deposits appeared to be adequately collateralized. However, on three of the four dates we selected when the City had large cash deposits, we found collateral pledged by the City's depository institution to be less than 110% of the City's excess deposits. The collateral deficiency on the dates selected was corrected within one to two days. Recommendation: We recommend the City closely monitor the adequacy of collateral on hand throughout the year, particularly when large deposits are made. i Uncollected Property Taxes: Observation: In recent years, tax abatements and delinquencies have caused the City to experience significant shortfalls in its property tax collections, compared to the amounts originally certified. These shortfalls have ranged from 2.42% to 7.44% in the last four years. In adopting the 1994 budget, the City incorporated a 2% estimated uncollectible allowance into the tax levy. In other words, the City certified an amount to Hennepin County that was 2% more than the amount recognized in the budget. Recommendation: We recommend the City continue to monitor the level of tax abatements and delinquencies and consider increasing the estimated uncollectible allowance (e.g., 3% for the 1995 budget and 4% for the 1996 budget) if the adverse experience continues. General Fund Programs: As state revenue sources are decreased, the State will be looking at cities' financial conditions in an effort to cut state spending. This procedure has already been implemented with school districts whereby the State looked at fund balances, particularly in the general fund, as an area to potentially decrease funding. The general fund of the City has a positive fund balance of $4.6 million as of December 31, 1993 which is approximately 47% of general fund expenditures, as compared to $5 million and 52% for 1992. The decrease resulted from the transfer of assets to establish the Internal Service - Central Garage Fund to account for the acquisition and maintenance of city vehicles. However, several 2 programs remain in the fund which directly or indirectly benefit the community or the City as a whole. These programs could be transferred to other fund types such as enterprise, special revenue, or internal service, where applicable. Recommendation: To avoid possible future funding decreases from the State, the City should consider moving additional programs into other funds. The City should also consider establishing internal service funds for data processing and other central services and an enterprise fund for recreation programs. These transfers would help decrease the overall general fund balance and more accurately reflect the nature of the programs. Worker's Compensation Self Insurance: Observation: Some cities self - insure for certain types of risk (i.e. worker's compensation) up to certain limits and, as a result, have experienced savings compared to purchasing standard insurance policies. However, such a program also exposes the City to higher risk and administrative work. Even with a safety program, years with high losses will occur. Settling claims with employees can become very personal, controversial, andItime consuming if handled by City staff. Despite these problems, the potential savings make this worth considering and it presents another opportunity to transfer assets from the General Fund to set up a reserve in the Self- Insurance Fund. Recommendation: We recommend the City consider the costs/benefits of a self- insurance program for worker's compensation. Such a program could be established by implementing the following procedures: 1. Contract with a third party administrator to gain insurance expertise and objectivity in settling claims. 2. Have the third party administrator calculate a reserve requirement and transfer that amount from the General Fund to set up the Self- Insurance Internal Service Fund. 3. Charge the various funds the same worker's compensation ensation rates that an insurance company P P Y would until several years experience are gained to justify lowering them. Governmental Accounting Standards Board Statement No. 20: Observation: The Governmental Accounting Standards Board (GASB) issued Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities prat Use Proprietary Fund Accounting. This statement requires that in 1994, the City adopt in its proprietary funds all FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. The City may also elect to adopt all such pronouncements issued after November 30, 1989, if it desires. 3 Recommendation: The City currently ollows all applicable guidance issued before November 3 Y pp � 0,1989. The City should consider whether to elect adoption of the pronouncements issued after November 30, 1989. 4 STATUS OF PRIOR -YEAR RECOMMENDATIONS Cash and Investments Mana g ement- In 1992, significant investments were included in Custodial Credit Risk Category 3, the greatest level of custodial risk. In 1993, the City entered into a trust arrangement and all investments currently qualify as Category 1. Cash Collateralization: The comment is repeated in the current -year letter. Submission of Outstanding Obligations to Hennepin County. In 1992, the report was submitted after the due date. In 1993, the report was submitted prior to the due date. Obtainment of Performance Bonds: In 1992, it was noted that a performance bond was not obtained for a fire engine contract. No instances of noncompliance were noted in 1993. LOGIS: In 1992, it was recommended that an audit of the general computer controls of LOGIS be requested. The City is currently considering the cost benefit of such an audit. General Fund Programs: The comment is repeated in the current -year letter. General Accounting Standards Board Statement No. 14, The Financial Reporting Entity: Requirements relating to the statement were implemented in the 1993 CAFR. 5 Council Meeting Date / - 31 City of Brooklyn Center Agenda Item Number / n Request For Council Consideration Item Description: AUDITOR REQUEST FOR PROPOSALS Department Approval: Charles Hansen, Finance Director Manager's Review /Recommendation:^ No comments to supplement this report Comments below /attached Summary Explanation: (supplemental sheets attached _) Last year, the City Council asked the staff to do a Request for Proposals (RFP) for audit services for the audit that we just completed. The subject came up so late in the year that staff recommended that it not be pursued. Instead, a one year extension was negotiated with Deloitte & Touche and the promise made that a RFP would be done this year. • The process must be started in the near future in order to do an RFP this year. Two issues need to. be decided at this time. First is whether or not to do the RFP. Councilmember Dave Rosene stated at the June 13th meeting that he was satisfied with Deloitte & Touche and that a RFP may not be needed. The second issue is determining the roles the City Council, the staff, and possibly the Financial Commission should play in the process. Those roles will have some impact on the writing of specifications for the RFP. A possible timetable could be to have the City Council approve specifications at an August council meeting, require responses from auditors in mid to late September, interviews in October, and final selection in November. There is no hard and fast rule on how long to retain the same auditors. Changing too often is inefficient since there is a great deal of extra work for both the auditors and the staff in the first year audit. Deloitte & Touche has done seven audits, which is long enough for us to have benefited from the efficiency of the repeat engagements. It is also possible to keep an auditor too long. This is especially true if the auditor fails to rotate different personnel to the engagement. Deloitte & Touche rotates its personnel. The auditor the City had prior to Deloitte & Touche was with us for well over twenty years. That was probably too long. Deloitte & Touche has known since we negotiated the one year extension that it was planned to do an RFP this year. They would like to retain the City as a client and have submitted the attached proposal. For the audit of the year ended December 31, 1993, their fee was $25,500. On page three they describe their proposed fees for the next three years. Recommended City Council Action: Discuss the Audit Request for Proposal process. Deloitte & Touche 400 One Financial Plaza Telephone: (612) 397 -4000 1 120 South Sixth Street Facsimile: (612) 397 -4450 Minneapolis, Minnesota 55402 -1844 July 8, 1994 Honorable Mayor and Members of the City Council c/o Mr. Charles Hansen Director of Finance City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 Dear City Council Members: We would like to propose to provide audit services for the City of Brooklyn Cent'er's fiscal years ending December 31, 1994, 1995, and 1996. We value this opportunity and are 'very enthusiastic about our qualifications to continue our professional relationship. We commit to continuing to provide the quality, timely service you have already experienced. We believe Deloitte & Touche is best suited to address your needs because of the broad range of services and industry expertise our local office provides. The Minneapolis office of Deloitte & Touche takes pride in having the most extensive state and local government and public school system practice in Minnesota. (See Appendix A for a list of our major governmental clients.) This position is reflective of the significant investment and commitment our office has made to properly serve Minnesota's governmental units. Our Minneapolis office has a staff of over 50 professional personnel with significant experience in the public sector to provide you with the highest quality service. We are the only firm in the Upper Midwest having this level of commitment to the governmental services industry. We are the best qualified firm to serve you for the following reasons: Continuity of Personnel: For each of our clients, we develop a long -range personnel plan which maximizes continuity on the engagement and provides for a succession plan for engagement team members at all levels. In this way we can maximize the knowledge we gain about your operations, maximize audit efficiencies, and minimize the time commitment of your personnel during the audit, thus avoiding the recurring problem of training the auditors. The members of the 1994 engagement team have previous experience working with the City of Brooklyn Center. The team will continue to be under the supervision of Cliff Hoffman, Client Service Partner. Cliff has over 20 years of experience in public accounting, including 19 years of Deloittebuche Tohmatsu International Honorable Mayor and Members of the City Council c/o Mr. Charles Hansen Director of Finance City of Brooklyn Center July 8, 1994 Page 2 service to governmental clients. He will provide ongoing communications and business consultation throughout the year with management and the City Council. Jeff Radunz will serve as the Advisory Partner. Jeff has over 14 years of experience in public accounting, including experience in serving governmental clients. Barb Diekmann will continue to serve as the Audit Manager assigned to supervise the audit field team. Barb has over seven years of experience in public accounting. (See resumes in Appendix B for further details.) Timeliness of Services: Timeliness in essence means fast response to both accounting and nonaccounting issues. Our team has a proven record in responsiveness. Responsiveness goes beyond meeting audit deadlines; it also involves our response to your business needs in other areas. The size of our governmental practice and the experience of our personnel enable us to respond to practically any needs that you may have. We Know You: Through our recent efforts in rendering services to you, we have learned much about your organization, operation, and plans. More importantly, you have been able to evaluate us and draw your conclusions about our people, service, and industry knowledge. We believe the competence and attitude of the individuals you have met is indicative of Deloitte & Touche. SCOPE OF PROFESSIONAL SERVICES Audit Scope, Reports, and Timing: Audit Scope: Our services to the City for 1994, 1995, and 1996 will include the following: • Audit of the financial statements of the various individual funds of the City in accordance with generally accepted auditing standards Honorable Mayor and Members of the City Council c/o Mr. Charles Hansen Director of Finance City of Brooklyn Center July 8, 1994 Page 3 • Organization -wide (single) audit in accordance with generally accepted governmental auditing standards, and Office of Management and Budget (OMB) Circular A -128 relating to federal funds • Audit procedures required by the Legal Compliance Audit Guide issued by the State Auditor Reports: Our reports will include the following: • Independent auditors' report for inclusion in your Comprehensive Annual Financial Report. This report will relate to individual funds, as well as to the general purpose financial statements. • A report for federal and state compliance purposes, including our reports on reviews of your systems of internal control and legal compliance matters. • A commentary letter including our observations and recommendations concernin g internal control and other matters that come to our attention during our audits. • A board presentation designed to make a complex governmental report understandable to non - accountants. Timing: The timing of the audit field work for the City will be discussed with you in the forthcoming month, and a schedule of dates will be set to accommodate your deadlines. PROFESSIONAL FEES Our professional fees are based on actual time spent on the engagement at hourly rates related to the experience of individuals assigned. Our fee estimates anticipate keeping our time to a reasonable minimum by using advanced audit techniques and maximizing participation of your personnel in the audit to the extent possible. On this basis, we estimate that our fees (inclusive of expenses) for the services described above for the year ended December 31, 1994 will be $25,900. We commit that for the subsequent two years (1995 and 1996), our fees will increase at a rate not to exceed the rise in the Consumer Price Index for the Twin Cities Metropolitan Area, absent any changes or expansion in the scope of services we are requested to perform. Honorable Mayor and Members of the City Council c/o Mr. Charles Hansen Director of Finance City of Brooklyn Center July 8, 1994 Page 4 We sincerely wish to continue our long -term relationship with the City of Brooklyn Center and consider you a most valued client in our government industry practice. Please call Cliff Hoffman or Barb Diekmann at (612) 397 -4000 if you would like further information or would like to discuss this letter in further detail. Yours truly, 3 APPENDIX A - MAJOR MINNESOTA GOVERNMENTAL CLIENTS J MAJOR MINNESOTA GOVERNMENTAL CLIENTS Our record of assisting clients in obtaining and maintaining certificates of achievement for excellence in financial reporting cannot be matched. We have consistently served more clients who have the certificate than any other Minnesota CPA firm including: • City of Blaine • City of Bloomington • City of Brooklyn Center • City of Brooklyn Park • City of Eagan • City of Minnetonka • City of Richfield • City of Robbinsdale • pee City of Shako , P • City of Winona • Hennepin County • Olmsted County • Minneapolis -St. Paul Metropolitan Airports Commission Our school district clients include: • Anoka- Hennepin • Bloomington • Columbia Heights • Minneapolis • South Washington County • Wayzata 6 APPENDIX B - RESUMES 7 RESUME OF CLIFFORD W. HOFFMAN, CPA Role in Engagement Engagement Partner Experience Twenty years of experience in managing the audits of large, complex engagements including public sector and publicly and privately held companies. Audit Partner for the Cities of Blaine, Minnetonka, Brooklyn Center, Brooklyn Park, Richfield, Chanhassen, and various school districts. Industry specialties include education, government, high - technology manufacturing, mass transit, and public utilities. Featured speaker during Minnesota State Society of CPA training courses on single audits and the new AICPA audit guide for governmental units. Practice office reviewer in Deloitte & Touche national quality control program, including the Deloitte & Touche San Jose and Boston offices. Participated in 1987 peer review of Price Waterhouse. Mr. Hoffman has four years of experience as the firm's National Audit Partner for State and Local Governments. Professional and American Institute of Certified Public Accountants Civic Activities Minnesota Society of Certified Public Accountants University of Minnesota Accounting Advisory Council Edina Rotary Minnesota Association of School Business Officials Minnesota Government Finance Officers Association Chair - Camp Enterprise Colonial Church of Edina - Chair - Board of Trustees and member of personnel committee R. Glen Berryman Award in 1984 for outstanding contributions to the continuing education program of the Minnesota Society of Certified Public Accountants Education University of Minnesota, B.S. in Accounting 8 RESUME OF JEFFERY L. RADUNZ, CPA, CMA Role in Engagement Advisory Partner Experience Mr. Radunz has over 14 years of auditing experience with emphasis in state and local government, health care, manufacturing, and not -for- profit organizations. Mr. Radunz has had overall partner responsibility on several governmental engagements including the Bloomington Public Schools, Cities of Bloomington, Eagan, Robbinsdale, and Winona, Olmsted County, and numerous governmental hospitals. He has had overall partner responsibility on federal grant programs including single audit required by OMB Circular A -128 on the Cities of Bloomington, Robbinsdale, and Winona and Bloomington Public Schools engagements and OMB Circular A -133 (formerly A -110) on several not - for - profit organizations. Mr. Radunz has been an instructor for several local and national governmental training programs. Professional and American Institute of Certified Public ed P b is Accountants Civic Activities Minnesota Society of Certified Public Accountants Member - Governmental Accounting and Auditing Committee Minnesota Government Finance Officers Association Minnesota Healthcare Financial Management Association Minnesota Association of School Business Officials Institute of Management Accountants Construction Finance Managers Association Education University of Minnesota, B.S. in Accounting 9 RESUME OF BARBARA J. DiEKMANN, CPA, CMA Role in Engagement g Bement Audrt Manager Experience Ms. Diekmann has over seven years of auditing experience since starting with Deloitte & Touche, specializing in governmental, health care, and nonprofit organizations. Relevant clients served include the City of Brooklyn Center, City of Shakopee, Hennepin County, and numerous nonprofit organizations. She has had extensive experience in single audits of federal grant programs required under OMB Circular A -128 or OMB Circular A -133. Professional and Institute of Management Accountants Civic Activities United Way of Minneapolis - Fund Distribution Committee American Institute of Certified Public Accountants Minnesota Society of Certified Public Accountants Education University of Wisconsin - Eau Claire, B.B.A. in Accounting and Finance 10