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HomeMy WebLinkAboutMinutes - 8/7/1996 - Finance and Personnel Committee � FINANCE COMMITTEE MINUTES August 7, 1996 Members Present: Chairman Lawson, Terry Locke and Bill Baird Others Present: Mayor Cuda, City Clerk Althoff, City Administrator Jordan, City Auditor John Eder. Alderman Bolger arrived at 7:00 P.M. Alderman Lawson called the meeting to order at 6:35 P.M. Chairman Lawson informed the committee that John Eder of Eder, Riedel & Company was in attendance to review the 1995-96 audit. Copies of the audit were distributed to all persons in attendance. Mr. Eder noted as 1995-96 was the second year his firm conducted an audit for the City of McHenry this year's audit report contained compariable totals for 1994- 95 and 1995-96. He stated overall the financial statements of the City of McHenry present fairly, in all material respects, the true financial position of the City of `- McHenry as of April 30, 1996. The cash flows of its proprietary fund types and nonexpendable trust funds for the 1995-96 year are in conformity with the generally accepted accounting principles. The City of McHenry financial statements reflect a good solid financial position. Mr. Eder noted that all of last year's managment letter comments, except for developing an accounting policy and procedures manual, were addressed and corrected. Mr. Eder also drew the committee's attention to the Police Pension Fund. He noted as per GASB #25 Police Pension Fund investment values have been adjusted to reflect fair market value as oppose to cash value. This change is required by the regulatory agency for Police Pensions, the Department of Insurance. Eder also informed the committee that the police actuarial is currently being conducted every year as oppose to the previous procedure of once every other year. This allows a mor� accurate reflection of the fund level. The 1996 acturial will be conducted immediately upon the approval of this year's audit, as the actuarial requires figures and information obtained during the audit. Eder then reviewed the Government Fund and Proprietary Fund Revenue and Expenditures Statement along with the Summary Balance Sheet. He noted no individual fund stood out as a current problem and the City was in good financial position overall. \... Finance Committee Minutes `-- August 7, 1996 Page Two � In response to Alderman Locke's inquiry Mr. Eder noted the project assessment and the special assessment funds were in compliance with all required criteria. Mr. Eder referenced his management letter of July 1 st. He noted his concern with the Employee Insurance Internal Service Fund as this year's fund had an approximatley 540,000 negative fund balance at April 30, 1996. This fund is used to account for the financing of services provided by one department to other departments on a cost-reimbursement basis. It was Mr. Eder's recommendation to review this fund quarterly, but at a minimum, on a semi-annual basis. Alderman Bolger arrived at 7:00 P.M. City Clerk Althoff presented a written proposal from Mr. Eder regarding additional accounting services his firm is asked to perform on an annual intermittent basis. Mr. Eder charges S90/hour and noted these services would not cost in excess of 51 ,500. Clerk Althoff requested the committee consider and recommend to full council the approval of this proposal. The services provided would include: -audit adjustment assistance L-- -review of each fund after April 30, 1996 adjusting entries completed -review of each months financial statement to insure general ledger balance -complete a six month review of the Insurance Fund -complete a six mnth and year-end review of Pension reports and assistance with accounting transactions as required by GASB #25 It was the consensus of the committee to place the additional services proposal on the August 21 st council agenda with a recommendation for approval with a not to exceed amount of S 1500. Alderman Locke inquired as to changes in legislation allowing more flexibility in investment of certain government funds. Mr. Eder did note opportunities exist currently to invest funds at a higher level of interest, however the risk factor was greater as well. City Administrator Jordan noted currently the Parks and Recreation Fund was set up as an Enterprise Fund and he was considering changing this procedure. He recommended consideration of making the Parks and Recreation Fund part of the General Fund. Mr. Eder noted this change was an approved acceptable accounting practice, however substantial changes in the City's current accounting structure L Finance Committee Minutes `-- August 7, 1996 Page Three will be required. Mr. Eder suggested if the committee made the determination to include the Parks and Recreation Fund within the General Fund accounts it be a binding decision for a minimum of three years as substantial adjustments in the depreciation account as well as additional accounting adjustments will be required. Motion by Baird, seconded by Locke to adjourn the meeting at 7:15 P.M. Voting Aye: Baird, Locke, Lawson Voting Nay: None Absent: None Motion carried. The meeting was adjourned at 7:15 P.M. Respectfully submitted, �. - -. [/� ` b�/ � `c"�� Dav d Law \..