07-22-2015 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL JULY 22, 2015 adopted no new accounting policies in 2014, therefore, the 2014 Audit results are easily comparable to the 2013 results. The 2014 Audit also provides significant accounting estimates of useful lives of capital assets, compensated absences, and collectability of receivables. Knopik reported that the auditors received full cooperation from management during the audit. Knopik reported that they are providing an unmodified or a clean opinion on the City's financial statements. There is one exception noted relative to internal controls and segregation of duties. Knopik noted, however, that given the small size of City staff this is an exception that would be difficult to avoid. He also reported that there are no exceptions noted relative to Minnesota legal compliance. Knopik then reviewed the City's financial results relative to General Fund Unreserved/Unassigned Fund Balance noting fairly consistent levels for the past five years. Months expenditures in fund balance show that the City has funds on hand to cover approximately 9 months of expenses, which provides some ability to weather any minor setbacks. Knopik noted that the State recommended minimum is 6 months. Knopik noted that General Fund Revenue balances have been fairly consistent over the past five years, and pointed out that property taxes cover approximately 75% of the City's revenues. General Fund Expenses have also been at consistent levels with Public Safety making up about 60% of these expenses. Hoffman then reviewed the fund balance of the Governmental Fund, noting that these balances fall into the categories of restricted (due to such things as debt service), assigned, and committed. Hoffman reviewed the revenue sources for Governmental Funds as well as expenditure categories. It was noted that the expenditure spike in 2010 was related to the Canabury Condo HIA Project as well as St. Jude project. Hoffman then reviewed in detail the Enterprise Funds including the unrestricted net position and operating income or loss. Factors that impacted these funds include the Metropolitan Council Environmental Services (MCES) expense decrease, decline in water usage during 2014, water tower painting, and increase in watermain repairs necessary during 2014. The City Administrator reported that an impact during 2015 will be the rebate from St. Paul Regional Water Service for overcharges to Little Canada from this period. Hoffman next reviewed projected Future Debt Service relative to current debt. The Administrator noted that there will be an impact over the short term relative to the financing of the Public Works Facility. The Administrator also noted that the City does not have a tax levy to support debt. The debt associated with the Public Works Facility is supported through the Water & Sewer Capital Replacement Fund, not driven by the 5