City Council

MARCH 21, 2016 The City Council of the City of Idaho Falls met in Special Council Meeting (Council Work Session), Monday, March 21, 2016, at the City Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls, Idaho at 3:00 p.m. There were present: Mayor Rebecca L. Noah Casper Councilmember Thomas Hally Councilmember David M. Smith Councilmember Michelle Ziel-Dingman Councilmember Barbara Ehardt Councilmember Ed Marohn Councilmember John B. Radford Also present: Kerry McCullough, Public Information Officer Bear Prairie, Idaho Falls Power Assistant General Manager Mark Hagedorn, Controller Pamela Alexander, Municipal Services Director Barb Sanderson, Accountant Julie Desimone, Partner, Moss-Adams LLP Scott Bond, Rudd & Company Kenny McOmber, Treasurer Chandra Witt, General Services Administrator Brandi Newton, Executive Director, Idaho Falls Arts Council Randy Fife, City Attorney Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 3:05 p.m. and requested City Council reports. Councilmember Hally reminded the Council of the upcoming Mayor’s Business Day. He indicated the State legislative session should be completed soon. Councilmember Radford stated the recent dive-in movie presented by Parks and Recreation (P&R) Department was well attended. The Zoo at Tautphaus Park will be opening on April 9, 2016. Councilmember Dingman added Mayor’s Business Day will be held on April 19, 2016, at Keefer’s Island. Councilmember Ehardt reminded the Council of the public meeting regarding snow removal being held on March 30, 2016. Councilmember Smith stated he will be attending American Public Power Association (APPA) meetings in Washington, DC, in the near future. Councilmember Marohn stated he is working with Director Alexander for a draft budget format. Mayor’s Report: Mayor Casper informed the Council of the following events: Chamber luncheon on March 22, with Senator Mike Crapo as guest speaker. AIC (Association of Idaho) annual meetings will be held June 22-24, in Boise, Idaho. Public snow removal meeting on March 30. Human Resources Director interviews are scheduled for March 29. Press conference for the Community to Capital (C2C) committees’ recent trip to Washington, DC, will be March 23, at 10:00 a.m. Strategic Planning is scheduled as a full day on April 15 and half-day on April 16. 1  MARCH 21, 2016 Mayor Casper stated she has requested confirmation of commitment from the Air Show committee prior to allowing any Department Director’s involvement. She briefly reviewed the status of the Urban Renewal Bill, HB606. She indicated the Internal Revenue Service (IRS) has completed their audit of the City and believes the auditor’s interest was on educating the staff. The final IRS audit report will be available in the future. Presentations: Electric Light Fund Report from Moss-Adams LLP: Director Alexander stated the Electric Light Fund is presented to Council on an annual basis. She introduced Mr. Prairie, Ms. Sanderson, and Ms. Desimone for the following presentation with general discussion throughout:  Results of audit process o Auditor’s Report – Unmodified (what you want!) o GAGAS (Generally Accepted Governmental Auditing Standards) audit and report on internal controls o Adjustments- None o Passed Adjustments- None o No Significant Control Deficiencies of Material Weaknesses to report o What is an audit? Financial Statements not Internal Controls o Fund Staff – Accounting Department was prepared, helpful and knowledgeable  Council communications o Responsibilities – Ours and Yours o Significant accounting policies – Note 2 – Nothing unusual or aggressive o Accounting estimates – Typical for the industry  Unbilled revenue, allowance for doubtful accounts and recovery period for the cost of plant, post-retirement benefit obligations o No disagreements with management, consultation with other independent accountants, inappropriate issues discussed with management prior to our appointment or difficulties o Our Independence – Our personnel and firm remained independent to the City of Idaho Falls in both fact and appearance with the highest level of independence standards – GAO (Government Accountability Office)  No financial or relationship conflicts  No dependencies – Your impact on our firm  No service conflicts  Financial highlights o Impact of GASB (Governmental Accounting Standards Board) 68 implementation o Overall cash & investment position is very positive at 9/30/2015 totaling $49.7 million o The Fund does not have any long term bond obligations as 9/30/2015, indicating Idaho Falls Power (IFP) is debt free. o Very strong margins ($6.0 million operating income for the year ended 9/30/2015) show that rates are adequately set to recover operating costs Ms. Desimone stated the GASB 68 implementation is the most significant change to the financial reporting model. Mr. Prairie expressed his appreciation to Ms. Sanders for her continued assistance with the Electric Light Fund, realizing she is transitioning to the Cayenta software conversion. 2  MARCH 21, 2016 Comprehensive Annual Financial Report (CAFR): Director Alexander introduced Mr. Bond for presentation of information with general discussion throughout. Mr. Bond recommended the Councilmembers contact him directly with any questions or concerns regarding GASB 68. He indicated the City has very little control with regard to the liability amount which will always be adjusted. Mr. Bond indicated the CAFR is a quality certification program presented to participating municipalities which contains statistical and financial information. The audit process is similar to Moss-Adams and Mr. Bond stated the most sensitive disclosures affecting the financial statements are related to the implementation of GASB 68 and the City’s participation in the Public Employee Retirement System of Idaho (PERSI). He briefly reviewed the net pension liability and the net pension asset and indicated PERSI, who pays the actuaries, is very well managed. Mr. Bond reviewed the Internal Control Documentation and stated it is recommended the City evaluate current controls, update documentation of those controls and where needed, document controls by department were no documentation currently exits. He believes this will assist with transition of new personnel. Director Alexander indicated several Standard Operating Procedures (SOP) are being finalized as prioritized by staff. Mr. Bond reviewed Cash and Investments and noted that bank reconciliations for some City accounts were not being completed in a timely manner. Director Alexander stated the reconciliation will be performed on a monthly basis and will be confirmed with the Controller’s Office. Mr. Bond stated the off-site collection of cash and the after-hour and weekend cash handling procedures used by certain departments with the City can be strengthened and improved. This refers mainly to the P&R Department. He indicated some improvements were implemented but overall, it is not sufficient. Director Alexander stated SOP will be implemented in the P&R Department as well. Mr. Bond reviewed Utility Receipts and stated this is an on-going process. He recommended the City continue to work on a process to trace the online payments to the bank statements in a timely manner. Mr. Bond reviewed Golf Inventory, recommending the inventory control be evaluated and strengthened, especially now that the City owns the inventory. Mr. Bond noted during the testing of controls over payroll that certain departments had expenditures in excess of budget. The budget is an important control as approved by the City Council. He recommended those departments exceeding their budget be monitored. He stated expenditures exceeded appropriations in the recreation fund, electric light public purpose fund, and the Golf fund which were attributed to operations and maintenance and management’s decision to move programs. Municipal Services submitted the following item: Civic Auditorium Partnership Pilot Project Proposal: Director Alexander introduced Ms. Newton and Ms. Witt for the following presentation with general discussion throughout:  Civic Auditorium dedicated on March 8, 1953  2014 Citizens Review Committee (CRC) Observations: o Promote the use of the auditorium 3  MARCH 21, 2016 o Lack of facility long-term upgrade and maintenance schedules o Facility sustainability funding o Agreement of Use with School District  Priority Based Budgeting Community Oriented Results: o Access to Culture, Recreation, Leisure, Education and Life-long Learning Opportunities  Fosters partnerships to provide diverse public art, cultural enrichment, and museums for residents and visitors  Current resources to operate Civic Auditorium: o Facility 2015/16 Annual Budget - $239,148  Salary and benefits - $157,823 (one manager, two part time janitors)  Operating supplies - $17,125  Minor Equipment - $21,000  Utilities - $1,500  Repair and maintenance - $41,700 o 2014/15 Civic Auditorium Event Total - $76,367 Director Alexander stated Ms. Newton was approached for discussion of the following:  Infusion of trusted professional arts consultation, specifically to: o Provide a forum to facilitate and foster community culture and education programs and opportunities o Develop a business model for the Civic Auditorium to evolve into a sustainable community facility  Attended Arts Community Scheduling Meeting in January  Entered into partnership discussions with the Arts Council in January  Sent Civic Auditorium Patron Letter in February Director Alexander recommended the following:  Enter into Partnership with Arts Council for a 12-month period to provide: o Event Management o Marketing o Execution of Services o $65,000 annually o Revisit partnership in six months o Amend Title 2, Chapter 9 – City Ordinance of Civic Auditorium Committee o Appoint Civic Auditorium Committee to focus on:  Review and development of a long-term facility sustainability plan as recommended in the 2014 CRC observations Director Alexander indicated this proposed agreement would initially increase the budget but believes over the course of time financial resources would be acquired due to increased events. She indicated repair and maintenance concerns would need to be addressed. Ms. Newton indicated the Arts Council would take over the administration and arrangements for all uses at the Civic Auditorium with assistance from the current City technical staff. General discussion of possible events and committee formation followed. Ms. Newton believes the Arts Council is currently in a position to provide the services of the Civic Auditorium to the community while achieving the goals of the Arts Council. After further brief discussion, the Council agreed to proceed with a Professional Services Agreement as a pilot project for formal Council approval in the near future. Discussion of Idaho Falls City Code 1-8-3 and Its Relationship to Usual City Hiring Practices and Processes: 4  MARCH 21, 2016 Mayor Casper believes the budget document is the most important document for administrative use to set priorities for hiring or dissolving of staff. She distributed Ordinance No. 3041, which was passed by Council in December of 2015, clarifying actions by Council and Mayor relative to salaries for employees. Mayor Casper reviewed the posting and hiring process for employees, including any assistance from the Human Resources (HR) Department. She stated the Attorney, the Treasurer, and the Clerk are appointed by State Statutes and all Department Directors are appointed by the Mayor with confirmation of the Council. She delegates the hiring of employees within the individual departments to the Department Directors. Councilmember Ehardt was under the impression there was a 58% increase of pay between the zoo interim director’s salary and the amount offered to the position of zoo director. Councilmember Smith clarified there was a 12% difference of the zoo director salary which was advertised and the actual salary offered. Councilmember Hally explained the accreditation process regarding the zoo and indicated Parks and Recreation (P&R) Director Greg Weitzel increased the salary amount after recommendations from the AZA (Association of Zoos and Aquariums), realizing the time sensitivity of losing the AZA accreditation. Mayor Casper stated Director Weitzel did not exceed the 2015/2016 budget document and used his professional judgment with the increased salary offer. General discussion followed regarding the budget process. Councilmember Dingman believes communication to the Councilmembers needs to be improved. Mayor Casper stated communication concerns will be a topic for a future Department Director meeting. There being no further business, it was moved by Councilmember Smith, seconded by Councilmember Marohn, to move into Executive Session at 6:10 p.m. pursuant to the provisions of Idaho Code Section 74-206(1)(c) to acquire an interest in real property which is not owned by a public agency, and not reconvene into Work Session. Roll call as follows: Aye – Councilmembers Smith, Hally, Radford, Dingman, Ehardt, Marohn. Nay – none. Motion carried. The City Council of the City of Idaho Falls met in Special Council Meeting (Executive Session), Monday, March 21, 2016, at the City Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls, Idaho at 6:15 p.m., pursuant to the provisions of Idaho Code Section 74-206(1)(c) to acquire an interest in real property which is not owned by a public agency. There were present: Mayor Rebecca L. Noah Casper Councilmember Thomas Hally Councilmember David M. Smith Councilmember Michelle Ziel-Dingman Councilmember Barbara Ehardt Councilmember Ed Marohn Councilmember John B. Radford Also present: Pamela Alexander, Municipal Services Director Randy Fife, City Attorney The meeting adjourned at 6:35 p.m. CITY CLERK MAYOR 5