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HomeMy WebLinkAboutMinutes - Finance Committee - 07/21/2014 -r C•Finance Administration~tS’0 215 N.MasonLI2Floor PC Box 580 I Foft Collins CO 80522970.221.6788 970 221 6782 fax fcgov corn Council Audit &Finance Committee Minutes 7/21/14 10:00 a.m.to 12:00 noon CIC Room Council Attendees:Ross Cunniff,Bob Overbeck,Mayor Karen Weitkunat Staff:Darin Atteberry,Mike Beckstead,Kelly DiMartino,Chris Donegon,John Duval,Marty Heffernan,Mark Jackson,Travis Machalek,Jeff Mihelich,Ginny Sawyer,Jessica Ping-Small, John Voss,Katie Wiggett,Wendy Williams Others:Kevin Jones,Chamber;Kevin Smith,McGladrey Approval of the Minutes Bob Overbeck moved to approve the minutes from the May19 meeting.Ross Cunniff seconded the motion.Minutes approved unanimously. Mike Beckstead noted that the planning calendar has the “Comprehensive Fee Study”listed for the August 18 meeting.Due to the timing of the consultant’s report,Staff may need to push this item back to September or October. Auditor Report by McGladrey,LIP Kevin Smith of McGladrey presented the 2013 Audit findings.He reported that McGladrey was able to give the City an unmodified opinion,the highest level of opinions. Kevin stated McGladrey audited the business-type activities,the discretely presented component unit, each major fund and the aggregate remaining fund information provided by staff and it is McGladrey’s opinion,found on page 13 of the Cities Comprehensive Annual Financial Report,that the City’s financial statement are in accordance with all accounting principles.There were no material or significant findings related to Internal Controls or Compliance over financial reporting. He explained that,because the City receives a large amount of grant money,an audit is done examining several projects that receive grants;the findings from this audit are found in the Compliance Report. The Mason Corridor project was the largest of the projects involving grants that were audited.There were no new findings this year for any of the projects audited.Page 12 of the Compliance Report does list one finding.This is a finding from 2012,an issue of internal control with reporting.City Staff has met with HUD to resolve the issue in the first quarter of 2014 and it will not be repeated in future years. Darin Atteberry noted that he has correspondence from HUD showing the City’s progress if Council is interested in seeing that. r City ofFortCoLLins Mike Beckstead explained that in previous years the City has been considered a “high risk auditee”for the single audit because there had been findings in the past.After two years without a Material Weakness,an auditee loses the label of “high risk auditee”;after this year,the City is no longer considered a “high risk auditee.”Bob Overbeck asked if being high risk lead to a high cost per audit. Mike answered that it does not affect the cost of audit. Kevin noted that McGladrey only recommended one journal entry.This was for $2.5M from the Fort Collins/Loveland Water deal.The revenue from the deal was recorded in 2013,but actually wasn’t paid until 2014.City Staff has made this correction. Bob Overbeck asked how many hours McGladrey puts into auditing the City.Kevin answered approximately 1,000.John Voss added that City Accounting Staff focus much of their time on the audit and CAFR from January to May 1 each year. The Mayor asked what Council’s next steps are concerning the audit.Darin responded that Council has received the materials,and does not require a formal report;however Council can choose to schedule a 5 minute report.Mike Beckstead noted that a follow up to previous audit findings is scheduled for Council Finance in September 2014. Review of BOB 2.0 Potential Projects Ginny Sawyer will present BOB 2.0 Potential Projects to Council at the July22 Council meeting at which Council will work to narrow down the list of potential projects.Ginny asked Council Finance for feedback on the presentation,timeline and milestones. Ginny briefly went over the history of the two Quarter Cent Taxes that expire in 2015:the Capital ‘4 Cent (i.e. Building on the Basics or BOB)and the Street Maintenance K Cent.BOB is nearing the end of its ten year term and is expected to have generated $58 million in revenue at the end of those 10 years.The Street Maintenance tax also amounts to $58 million in its ten year term;it accounts for more than half of the street maintenance budget.Both taxes have had wide community support in the past. As Staff has worked toward renewing BOB,they have worked closely with council,developed a potential project list and utilized budget teams to rate projects against strategic outcomes.Staff projected the future of ‘/4 cent taxes at approximately $79M/10 years.Ginny showed Council Finance the following timeline for 2014-2015: uncil Meeting:RefercouncilWorkcouncilBallot Session Language Ballots Mailed Jul Aug 2014 council Work Legal Deadline session to Adopt Ballot Language City ofFortCoLLins She also gave a list of planned BOB 2.0 Milestones: •July 22:Narrow Project List ($400M to ~$250M) •July-September:Public Engagement •September Work Session:Update •October Off-Site Session:Narrow to $80-$100M •December Work Session:Finalize Package •January Regular Meeting:Refer Ballot The Mayor said that the “Potential Capital Improvement Tax Projects by Outcome Area”chart is a very helpful tool for Council as they narrow down potential projects.The Mayor suggested that projects which can be leveraged with grants or partnerships should be asterisked to highlight that potential. Ross asked about the practicality of including the cost of O&M for each project.Council Finance discussed the benefits of knowing O&M and how it would affect project ranking.In the end,they decided not to add the information to the chart,but agreed that it is an important component to consider. Bob asked when citizens could go online and rate the projects.Ginny said that the goal is to have that available by end of July.Kelly DiMartino pointed out that only the projects that come out of the July22 work session will be included online. The Mayor emphasized the importance of community buy-in for the projects chosen.The residents of Fort Collins will not vote to renew the tax if they do not support the capital improvement projects Council decides on.Darin agreed and said recommended that each Councilmember get feedback from the people in their districts.