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Hugo City Council Meeting Minutes for July 2, 2018 <br />Page 2 of 8 <br />Presentation of 2017 Audit Report — Jason Miller, Smith Schafer & Associates <br />Jason Miller from the independent accounting firm of Smith Schafer & Associates provided the <br />Council with a recap of the audit of City finances for the 2017 fiscal year. Jason began by saying <br />that, once again, it was a clean, smooth audit, and the 2017 report will be submitted for the <br />Excellence in Financial Reporting Award. <br />Jason explained the goal of the audit was to assure the financial statements were in accordance <br />with accounting procedures and the financial statements were fairly stated in all material <br />respects. They tested for legal compliance, and there were no exceptions noted. He talked about <br />governmental funds with most revenue coming from property taxes. He reviewed expenditures, <br />showing public safety being the biggest expenditure followed closely by highway and streets, <br />then general government. Hugo has healthy general fund reserves at 57% last year, which is <br />important when dealing with unexpected events. The State Auditor recommends 35-50%. Jason <br />talked about the current level of bonding and the sharp decrease in debt service agreements <br />expected in the year 2021. He reviewed capital project fund expenditures and explained the <br />sewer and water fund showed positive income. He summarized by saying an unmodified audit <br />opinion was issued, and there were no Minnesota legal compliance exceptions. <br />Weidt made motion, Haas seconded, to formally accept the 2017 City Audit as presented. <br />All Ayes. Motion carried. <br />Approval of the Consent Agenda <br />Miron made motion, Klein seconded, to approve the following Consent Agenda: <br />1. Approve Claims Roster <br />2. Approve Annual Performance Review for Public Works Worker Jeff Maas <br />3. Approve Resignation of Community Development Assistant Rachel Leitz <br />4. Approve Temporary Liquor License for the Lions Club for the Tough Mudder <br />5. Approve Lawful Gambling Exempt Permit for McEwen Benefit on August 10, 2018 at <br />the Hugo American Legion <br />6. Approve Promotion of Brian Esch as Regular Firefighter <br />7. Approve Ordinance and Resolution for Findings of Fact for Rezoning of TGK <br />Automotive and Premier Bank Properties Located South of 140th Street and East of <br />Highway 61 <br />8. Approve Resolution Approving Site Plan for TGK Automotive at 13891 Forest <br />Boulevard North <br />9. Approve Reduction in the Letter of Credit for Adelaide Landing <br />10. Approve Change Order No. 1 for Waters Edge Stormwater Reuse Project <br />11. Approve Replacement of Seasonal Public Works Worker <br />12. Approve 2019 Salary Matrix and Mid -Term Salary Adjustments <br />All Ayes. Motion carried. <br />