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City Council Regular Meeting Minutes June 24, 2014 Page 3 1 Mr. Strommen reported that the SRA was recently able to obtain outage credits for 2 municipalities with municipal pumping stations and the City will receive a credit this month 3 from Xcel in the amount of $2,520 for its pumping stations. 4 Councilmember Stille stated that the League's annual conference included a session on LED lighting and negotiations with Xcel or other service providers to share in the cost of LED lighting and this issue is important to the City as it works to satisfy its sustainability goals. 9 Mr. Strommen stated that the SRA completed a study six years ago on competition when cities 10 are not happy with the products that Xcel provides and Xcel is currently conducting a pilot 11 program in West St. Paul. He indicated there are other providers available to cities and this 12 makes a difference in terms of contracts that can be pursued and the SRA wants Xcel to move on 13 this by offering more LED lighting. 14 15 Motion by Councilmember Roth, seconded by Councilmember Stille, to adopt Resolution 14- 16 049; a Resolution Authorizing Membership in the Suburban Rate Authority, a Joint Powers 17 Organization under Minnesota Statutes §471.59, Authorizing Execution of the Amended Joint 18 and Cooperative Agreement and Appointing Jay Hartman and Mark Casey as Director and 19 Alternate, respectively, to the Suburban Rate Authority Board. 20 21 Motion carried 4-0. 22 23 C. 2013 Audit Presentation. Peggy Moeller, HLB Taut eg s Redpath, Ltd., presenting. 24 25 Ms. Moeller explained that five reports are issued as part of the 2013 audit, including the 26 Comprehensive Annual Financial Report (CAFR), State Legal Compliance Report, Report on 27 Internal Controls, Audit Management Report, and Communication with those Charged with 28 Governance and reported that the City has received an unmodified, or clean, opinion on its 2013 29 financial statements. She stated the State Legal Compliance Report is required by statute and 30 covers seven categories and they performed tests in all categories and there were no findings of 31 noncompliance. She explained that they do not audit the City's internal controls as part of the 32 Report on Internal Control; rather, they consider the City's internal controls as they plan and 33 perform the audit and there was one finding reported for 2013 related to lack of segregation of 34 duties. She explained that this is a function of the size of the City's staff and is the most 35 common finding they give. She stated the Management Letter shows that the General Fund 36 balance increased $173,202 during 2013 and 2013 revenues came in over budget by 37 approximately $430,000 and expenditures were over budget by approximately $247,000 and the 38 General Fund balance at the end of 2013 was $2,148,539. She explained the City's minimum 39 fund balance policy of 30-35% and indicated the fund balance at December 31, 2013, was 40 sufficient to meet the City's cash flow needs. She reviewed the Water and Sewer Enterprise 41 Fund indicating that operating income for water during 2013 was $139,939 and sewer expenses 42 exceeded revenue for a loss of $71,789. She also reviewed the Liquor Fund indicating 2013 net 43 income before transfers of $490,396 and noted the City was able to transfer approximately 44 $439,000 into the General Fund and Capital Equipment Fund. She reported that the auditors 45 encountered no difficulties in performing the audit and there were no disagreements with 46 management during the audit. She advised that the City was required to include GASB 47 Statement No. 65 during the 2013 audit related to reporting of unavailable revenue as well as 48 how the City treats issuance costs on debt, adding that issuance costs were previously amortized 3