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I 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 C ity Counc il Regular Meeting Minutes June 26, 20 12 Page 5 operations have hi s toricall y been lower than the State average. She indicated the HRA Fund balance is $1 ,132 ,690 and the City 's HRA projects are identified in the CAFR. She advised the report on communication with tho se charged with governance contains all required communications and noted there were no difficulties encountered in performing the audit and there were no disagreements with management. She stated the City implemented GASB No. 54 during 2011 and the primary difference relate s to how the City reports fund balances in governmental funds, i.e ., non-spendable, restricted, assigned, unassigned , and committed. She thanked the Finance Department and City staff for their assistance during the audit. Councilmember Stille requested further information regarding the two findings iss ued by the auditors. Ms. Moeller explained that two finding s were re peated and the City has a new finding related to financial statement misstatements. She adv ised that this new finding is reported as a material weakness based on the materiality of the amount of the misstatement. She added this finding can be fixed and did not expect that this finding would be repeated next year. Motion by Councilmember Stille, seconded by Co uncilmember Roth , to approve the 20 II Audit as presented. Motion carried unanimously. B. Finance Department 20 I I Annual Report. Shelly Rueckert, Finance Director, presenting. Finance Director Rueckert presented the 20 II Finance Department 's Annual Report and stated the Finance Department 's role is to safeg uard the City 's assets as well as to create an efficient environment for all City departments to maintain the best bottom line possible. She advised that in 2011 , the City increased its General Fund balance by $78 ,137 and the fund balance at the end of2011 exceeded the fund balance policy by $307 ,286. She indicated the City refunded two bond iss ues during 2011 saving the C ity approximately $176,000 in future interest. She stated th e City's 2011 health care costs came in le ss than 2010 actual costs. She reviewed 2011 grant activity stating that since 1999 , the City ha s received $15 million in grants, which is $1,855 per re si dent. She stated in 2012, the City secured a contract with MWMO to provide accounting services as well as a contract to provide utility billing services to the City of Birchwood. She indicated in March 2012, the City refunded three bond issues saving the City $637 ,640 in future interest payments and issued bonds for the 2012 street improvement project. She added the City learned today that it will receive $838,000 for prior street reconstruction expenditures from MSA Advanced Encumbrance Fund. She advised that ongoing activities of the Finance Department include preparation of the 2013 budget , decertification of the Chandler TlF District, and researching of options for replacing the Ci ty 's financial software. She noted the Finance Department ha s focused its efforts on th e s ustainability of the City's financial model s, as well as ensuri ng the City's budget is structurally balanced and implementing technological tool s to gain workload capacity to accomplish the City's future se rvice needs. Mayor Faust and the City Co uncil commended Finance Director Rueckert for her efforts on behalf of the City.