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Home My WebLink About12-23-2003 MechanicalMINUTES MECHANICAL COMMITTEE City Council Chambers @ Historic Depot December 23, 2003 - 6:30 p.m. gibers Present: Aldermen Jim Hartford, Elny Harn, Rick Reed. Absent was rman Bob Molleck who is out of state until February 1, 2004. Other Aldermen ;nt was Craig West, Les Carl, & Mary Fillingham. Alderman Sarff did not attend. ~rs Present: Mayor Jerry Bohler, City Clerk Nancy Whites, City Treasurer Patty rd Franzoni, City Attorney Ron Weber, Budget Administrator Julie Smick, tewater Supt. Joe Carruthers, Water Plant Supt. Greg Pollitt, Public Works Director O'Brien, Assistant Fire Chief Bonnie Cremer -for Fire Chief John Stanko, Police f Don Edwards, Zoning Officer Clark Wilson, Street Supt. George Spahn, Video ice Joe Ginger, WBYS Randy Weaver, Daily Ledger John Froehling. ;rs in the audience -Jim Hocker, David Flynn. Public Safety & Traffic Committee Robert Molleck, Chairman Police Report. Police Chief Don Edwards presented his report. Committee members had no comments. Fire Report. Bonnie Cremer, Assistant Fire Chief represented the Fire Chief John Stanko. The fire report was presented to the Aldermen and no questions were asked. Management Letter & Audited Financial Statement -Jim Hocker. Jim Hocker presented an Auditor's Summary of the Financial Analysis. The following is the report... Water & Sewer Funds. The Capital improvement fund assets has increased in dollars over the last 4 years. That is really good as you are generating cash flow. The number of month's expenses covered by net working capital is 5.08 months. Jim said he also wants the City to have at least minimum coverage of three months. General Fund. Now the bad news. Resources are declining you have expenditures excluding capital expenditures, covered by cash & investments of 1.35 months. The decrease in the General Fund balance from $903, 000 in 2002 to $605, 000 in 2003 primarily reflects debt repayment relating to the Police/City Building note, the two fire truck loans and the Rural Development loan. Excluding debt repayments, total tax and other operating receipts actually exceeded operating disbursements by $43, D00. The General Fund operating expenditures i. e. all expenditures except capital outlay and loan principal and interest payments, were $33, 000 or 6.8% higher than the prior year. Mechanical Committee meeting 12-23-03 Although state, federal and miscellaneous receipts only decreased about $27, 000 in fiscal 2003 these same receipts will probably decrease much more significantly in 2004 thus putting further stress on the General Fund's declining reserves. Health Care Fund Financial position The self-insured Health Care Fund has become increasingly more costly to the City as evidenced by the Fund's borrowing from the General and Working Cash Funds and subsidizing the Fund with a portion of the City's liability insurance tax levy. In 2001 and 2002 the City allocated $69, 839 and $140, 000 of the insurance tax levy, respectively, to the Health Care Fund. Over the past four years the Health Care Fund has declined as follows: Cumulative surplus (deficit) since 4/30/00 the City has had a deficit and it keeps getting higher as in 4/30/03 the amount is $390, 707. Retiree health insurance liability The City pays part or all of retirees' health insurance until the retiree reaches age 65. The cost of this benefit should be computed actuarially to determine the future cost and obligation the City is assuming. Presently the City is only funding this on a `pay-as- you" basis thus it is not aware of how much of a future burden this benefit will become. An actuarial valuation will provide a plan for setting aside monies to pay the future costs of this benefit. Effective May 1, 2004, the City will be required to implement GASB #34. GASB #34 makse significant changes to accounting and financial reporting standards. These changes will make the audited financial statements more informative and useful to all users of the statements. One critical element that will be needed to implement GASB #34 is an update of the 1996 physical inventory and valuation of the City's property, plant, and equipment. Due to the dramatic changes required by GASB #34 implementation should begin before May 1, 2004. Jim Hocker then reported on the Management letter. The first consideration of internal control... various water and sewer fund checking accounts were not reconciled for the entire year. All checks and deposits should be posted even if they are "wash " transactions. Jim Hocker then made some recommendations. City purchasing procedures should be written in detail and formally adopted as policy. Purchase order numbers should be 2 Mechanical Committee meeting 12-23-03 given to every vendor when ordering supplies, materials, and equipment in order to insure that proper purchase order procedures are followed. In-house payroll. The City currently uses an outside data processing service for payroll preparation. Per discussion with the payroll clerk, preparing the payroll in-house would actually save her time and provide the department heads with more timely payroll reports that would minimize reissuing payroll checks. Also the City would save $4, 000 to $5, 000 per year by eliminating the fee paid to the data processing service. Jim said this was a good idea. OVEREXPENDITURE OF TAX FINANCING DISTRICT #1 (TIFI) TIF l terminated effective 12/01/00 thus no longer receives any tax monies. At the beginning of the year it had a surplus of $51,903, which it used for building demolition during the current fiscal year. However, total demolition and related costs exceeded the surplus by $67, 288. The deficit in TIF 1 that was created by the $67, 288 excess expenditures is being funded by TIF4B, which is currently active and receiving tax revenues. Since TIF4B is contiguous to TIFI it is permissible for 4B to use its revenues to complete the demolition project in TIFI. The City should monitor TIF4B expenditures and not spend any of 4b's revenues until $28,117 of tax revenues is deposited into 4B during fiscal 2004. MISCELLANEOUS RECEIPTS ('Phis is a repeat of our 2002 recommendation.) Due to the amount and variety of miscellaneous revenues received, a subsidiary (detail spreadsheet) record of miscellaneous receipts by month should be prepared by the Treasurer. The Treasurer would use this spreadsheet as a "tickler" file to ensure that the City bills and collects various service charges, fees, reimbursements, rents, etc. that it is owed. Jim offered his congratulations on hiring a Budget Administrator. This is a very sound decision and especially since the individual (Julie Smick) had a CPA degree. This position will more that save added cost on your budget. Motion and second by Aldermen Reed/Harn, to refer the Management Letter & Financial Statement to the city council meeting of January 6, 2004. Voice vote, motion carried unanimously. The Public Safety & Traffic Committee adjourned at 6:55 p.m. Mechanical Committee meeting 12-23-03 Streets & Garbage Committee Jim Hartford, Chairman David Flynn -Off Premise Sign. David Flynn was present to answer any questions the Aldermen might have. Alderman Hartford said he did not like a painted sign on a house, and our ordinances are against this issue. Jim said he would not support this request. Alderman Reed said he approved of business's wanting to expand their business, but I cannot approve of using plywood for signs, and will be voting to not approve. Motion and second by Aldermen R t ~ AYESr 1 NAY,r1gABSENT Motion defeated tmg without approval. Voice vo The Streets & Garbage Committee adjourned at 7:00 p.m. Lake, Buildings & Grounds Committee Rick Reed, Chairman Resolution -Pre-Annexation Agreement for Charles & Darlene Winston. Motion and second by Aldermen Reed/Hartford, to send the resolution to the January 6, 2004 council meeting with approval. Discussion. City Attorney Ron Weber mentioned the area is in the Lake Breeze Subdivision, and when the property is adjacent to the City they will annex. Clif O'Brien mentioned the area is in the Dal Bar Addition. Voice vote, motion carried unanimously. The Lake, Buildings & Grounds Committee adjourned at 7:02 p.m. Public Works, Water & Sewer Committee Elny Harn, Chairman There are no items on the agenda for discussion or requiring any committee action, stated Alderman Harn. Mayor Bohler mentioned this is the last meeting of the year, and the next meeting will be a council meeting scheduled for January 6, 2004. Merry Christmas to all city employees and to the citizens, and a Happy New Year! Motion and second by Aldermen Hartford/Fillingham, to adjourn. Voice vote, motion carried unanimously. The regular scheduled Mechanical Committee meetings adjourned at 7:03 p.m. Recording Secretary, 4 Mechanical Committee meeting 12-23-03 ~~ Nancy Whites, ity Clerk