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WORKSESSION MINUTES

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WORKSESSION MINUTES

    CITY OF BURNSVILLE

    SPECIAL WORKSESSION MINUTES

    JUNE 5, 2007

    4:30 P.M.

Council Present: C. Crichton, E. Kautz, D. Kealey and L. Workman

    Council Absent: D. Gustafson

    Staff Present: C. Ebeling, T. Omdal, M. Brooks, K. Strey, S. Olson

    Others Present: J. Eichten, M. Hueller

Mayor Kautz called the meeting to order at 4:30 p.m.

ITEM 1. AUDIT COMMITTEE MEETING AUDITOR’S REPORT OF AUDIT RESULTS

Jim Eichten, MMKR Audit Firm, summarized the audit work completed for the 2006 CAFR

    (Comprehensive Annual Financial Report) and presented the results and preliminary reports. Final

    reports are to be presented at the June 18, 2007 Council meeting.

AUDIT SUMMARY

    ? Audit Opinion and Findings

    o Unqualified opinion on financial statements.

    o No matters involving internal control over financial reporting considered reportable

    conditions or material weaknesses.

    ? Internal controls were strengthened three years ago.

    ? Auditors do not issue an opinion of internal controls

    ? Council discussed cost/benefit analysis of a full audit of internal controls

    ? Reviewed current levels of auditing on internal controls

    o No instances of noncompliance that are required to be reported under Government Auditing

    Standards.

    o No findings on testing of the City’s compliance with Minnesota laws and regulations.

    ? Audit Comment

    o Financial Records found the City’s financial records to be in excellent condition.

    ? Did not complete the Fed because we did not reach the threshold of $500K of Federal grant monies

FUNDING CITIES IN MINNESOTA

    ? Legislation Recent legislative activity affecting the finances of Minnesota Cities:

    o Local Government Aid (LGA)

    o Market Value Homestead Credit (MVHC)

    o State Property Tax

    ? Property Taxes

    o City’s market value increased by 9.7% in 2006.

    o 2006 average tax rate as a percentage of net tax capacity was 88.1% for 2006.

    ? Lower than average (Metro Area 98.6%, Statewide 105.4%)

GOVERNMENTAL FUNDS OVERVIEW

    ? Governmental Funds Revenue

    o The City has generated more property tax revenue per capita for its governmental funds

    revenues compared to the average Minnesota city.

    o Burnsville’s revenue from property taxes are higher because of higher market values even

    though property tax rate is average.

    o Intergovernmental revenue is lower than average because we do not receive LGA.

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    June 5, 2007

ITEM 1. AUDIT COMMITTEE MEETING AUDITOR’S REPORT OF AUDIT RESULTS

    (continued)

? Governmental Funds Expenditures

    o Current Obligations - Public Safety expenditures are higher than average because we have

    full-time fire department.

    o Governmental funds current per capita expenditures is lower than state-wide averages for

    cities in the same population class.

FINANCIAL TRENDS AND ANALYSIS

    ? General Fund

    o Fluctuations in equity indicate whether we are growing or declining.

    o Total General Fund balance increased $2.6M from the prior year.

    o General Fund Revenue

    ? Increased $1.6 M from previous year’s revenue.

    ? Decertified TIF district contributed to property tax revenue over budget by $172K.

    ? Investment earnings were over budget by $481K.

    ? License and permit revenues were over budget by $150K.

    ? City’s investment results is above average compared to other cities

    o Gen Fund Expenditures

    ? Increased $1.10M from previous year.

    ? $1.17M less than the final budget.

    ? Fiscal responsibility most departments do not spend their budget.

    ? Fuel costs increased from prior year.

    ? Public Safety expenditures were largest part of increase trend for everyone.

    o Water and Sewer Fund

    o Storm Drainage Fund

    ? Increase largely due to one-time refunds issued in 2005.

    o Ice Arena Fund

    ? Deficit supported by the General Fund through operating transfers.

    ? Prior to 2004, City was not charging overhead costs and recognizing depreciation.

    o Golf Course Fund

    ? Decrease in fund mostly represents investment in capital assets

    ? Operating revenues increased approx. $18,500 from previous year.

    o Street Light Fund

    o Government wide (entity) perspective

    ? $215M total net assets includes infrastructure and debt service

ACCOUNTING AND AUDITING UPDATES

    ? GASB Statement No. 43 Financial Reporting for Post-Employment Benefits Plans Other Than

    Pension Plans and GASB Statement No. 45 Accounting and Financial Reporting by Employers for

    Post-Employment Benefits Other Than Pensions

    ? GASB Statement No. 44 Economic Condition Reporting ? GASB Statement No. 46 Net Assets Restricted by Enabling Legislation ? GASB Statement No. 47 Accounting for Termination Benefits

In summary, Mr. Eichten reported that the audit was very positive overall from both a compliance

    standpoint and a financial standpoint.

The meeting was adjourned at 5:37 p.m.

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    June 5, 2007

Respectfully submitted,

    _________________________________________ Macheal Brooks, Deputy City Clerk

     thApproved by the City Council of the City of Burnsville this 18 day of June 2007.

    __________________________________________ Elizabeth B. Kautz, Mayor

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