Administration & Finance Committee

BOROUGH OF LANSDALE ADMINISTRATION AND FINANCE COMMITTEE MINUTES MEETING OF AUGUST 7, 2024 Members Present: Mary Fuller Borough Council President Carrie Oglesby Committee Chairman Rafia Razzack Borough Council Member John Ernst Borough Manager Jim Lathrop Finance Director Andy Krauss Electric Superintendent/ Fleet Manager Ms. Oglesby called the meeting of the Administration and Finance Committee to order at 6:30pm. 1. Action Approval of Minutes Previous Meetings Motion Ms. Fuller to approve the minutes from the Admin and Finance Committee meeting on June 5, 2024. Second Ms. Razzack. Motion carriers 3-0. 2. Financial Reports as of 07/31/2024 (1) Revenues & Expenses Mr. Lathrop- On the screen is the final reports from Caselle. It has been what you have been receiving and not a good report. As we are addressing, other issues we will get you to where you need to be. A concern is that revenue is not posted in a timely manner. We are hoping to have resolved in the prior months especially with budgets coming and using old data. We need more current info. Mr. Ernst- Right now, we are using 2022 #’s and hope to have the 2023 #’s. In some cases, we have received money and in others we haven’t received money for like crossing guards for schools. Ms. Fuller- Where are we with the audit? Mr. Lathop- Usually in a calendar year we are looking for June 30th. Do to the transition and because of the firm and we will have to let the state know that. We will probably be subject to the Single Audit. It will be a new thing with the $750k. Mr. Ernst- Jim is looking into streamline, collecting and reporting and catchup. Stuff is being done in almost a real time basis. Mr. Lathrop- I am used to creating dashboards off the website. Mr. Ernst- Jim and I talking about the educational piece in a meeting and for 5 minutes and not just managers, but Council like Civics 101. We will try to do on. Ms. Fuller- Things make more sense what is behind it. Mr. Lathrop- Engaging the citizens also. Ms. Oglesby - Any #’s of concern? Mr. Lathrop- Not really, revenue there are some items like transfers and billings and also state pension money to contribute. When I look and see off can see and look at see timely item. 3. Committee Business Items A. Use of Electronic Signatures Mr. Lathrop- When I came in to look at and we will be able to cut a check when someone is out of town and streamline the process. Ms. Fuller- If I was a signer, I could sign electronically. Mr. Ernst- My position is checks and balances. Mr. Lathrop- One of those is an item over budget, we could pick and choose. Right now, checks over $1,000 have already been done before approved. We can send a list. Ms. Fuller- My only concern is good faith, I have seen that happen. If you let signers know, I think we have more than 3 signers. Mr. Ernst- I signed the check and the Treasurer is on it. I am looking at some of these checks for $30k- $40k for equipment to $16 for bottled water. Ms. Fuller- Where I work, I can sign a check for under $3,000. Mr. Lathrop- I don’t know why we scramble. Ms. Oglesby- I think there should be a threshold. I don’t know why we approve if you already did. Ms. Fuller- I know it is an awareness thing. Mr. Ernst- What is our legal obligation and approving checks already cashed and check with Patrick. We could have consent decree having separate checks and approved separately. Ms. Fuller- Stuff that is fixed we are aware month to month. Some things like contractors is to hold accountable and not to pay. Mr. Ernst- We do have the ability on final bills from contactor. I do like idea like the idea of a threshold. What is then our legal obligation of Treasurer and do need to be independent. Ms. Fuller- I trust John and then so on, but we don’t see the Treasurer and report to. Mr. Ernst- I think this opens up a conversation.  B. Bank Accounts and monthly updates Mr. Lathrop- We are in the process next month to have all accounts and reconcile these. It becomes burdensome. There is a part of managing cash and interest rather than accounting. These are residual accounts left over. Some accounts are set up for specific purposes and not to spend. Some are big, but the total is spread across accounts. Ms. Razzack- Are you think of closing? Mr. Lathrop- We have too many bank that we are dealing with. We don’t need 30 accounts and can get it to 12 accounts. Ms. Fuller- We are under the FDIC and money is insured? Mr. Lathrop- Yes, the money has to be collateralized. We got statements from bank to show collateralization. 4. Old Business none 4. New Business A. Sale of Prudential Stock Mr. Lathrop- I got a check for dividends from Prudential stock. All policy holders got shares. The Borough must have done business. We are holding stock, but got for free and lower of cost or market and not on the financials. The value is now $160k. Some would say great investment, but we are not in the business for holding private equity. My recommendation is to sell and Council can decide like on one-time expenditures or OPEB and even pre-funding health insurance to retiree’s which is $ 5 million. The advisors do manage OPEB trust and met with them yesterday and we need to make sure that the retirees are covered. We can give lots of suggestions, but it is your suggestion. Ms. Ogelsby- Do we need $5 million? Mr. Lathrop- Looking at the rating agencies they like to see 30-50% for AAA. Most policies don’t draw against it until you get to 70%. You don’t want to wait until we get to 10-15 million. Right now, we pay as you go. What happens is stock is in the name of the Finance Director from the 1980’s We will have to work with the attorney and it can take 3-5 months to see it. Motion Ms. Fuller to start the process to move, sell for liquidation of the held stock in Prudential at the best possible rate, second Ms. Ogelsby. Motion carries 3-0. Ms. Razzack- Do we have any money in the $5 million? Mr. Lathrop- No. We have a pension, but not healthcare. We pay as we go. Ms. Oglesby- The pension is in good shape. Mr. Ernst- This is for Police and a spouse. Mr. Lathrop- The discussion will be with this money for 2025 since it will be 3-5 months. Mr. Ernst- We may come up with a recommendations, but it is your choice how to spend B. Creation of Fund Balance Policy for General Fund Only(see attachment) Mr. Lathrop- I came here and you don’t have a policy, but we should have some policy. Debt service should be % of overall revenue. This will help with next Council and not spending all of the Citizen’s money. Fund Balance is one to have policy on and recommendations and ranges. The recommendations we made are in 2022. They can look at 2023 when done and some 2024 and look at major projects like infrastructure. Guidelines from GFOA are around 35%. Ms. Fuller- How much should we have and % we need but premature to know. Mr. Ernst- Several projects are a grant and Main St. is $800k match and we could have put aside 15 years ago. We reconcile the amount of money and projects for. Mr. Lathrop- Fund balance is either permanent, restricted or unassigned. We are talking mostly unassigned, but we are talking assigned. Mr. Ernst- Each of different enterprise has own general fund balance. Electric and sewer have their own general fund. Borough has its own separated general fund. Ms. Razack- Based on what we are talking about this is not a certain # because we are waiting on the audit. Mr. Lathrop- Yes, it is in the ballpark. We may find that Electric don’t have. Ms. Fuller- We will work our way through. Mr. Ernst- Having these policies in place affect our bond rating. Without these policies, it affects the rate. Mr. Lathrop- Right now, we are an AA-, if you get to A lose insurance. If goto AA+ it decreases the interest rate. Ms. Razzack- How can we put a policy in place to change rates? Mr. Ernst- If we put in policy, how do we change? Mr. Lathrop- You used Standard & Poors. Moody’s is different and work with advisors. Ms. Fuller- It is a lot of data and we need to do an overview. Mr. Lathrop- Fund balance is not money. If you are owed a lot of money, you still have a high fund balance, but you may not have because assets-liabilities equals fund balance. Mr. Ernst- If there was a takeaway over given this policy in place is that we are within limits of guidelines for what we put in place, and we have thoughts for good fiscal policy. Ms. Fuller- Start with you and come to us. Mr. Ernst- Yes, we work with what we have from GFOA and advisors and prepared guidance from legal department and we will have before Council. Question from resident- Is this what you were talking about in front of Council? Mr. Lathrop- Sepcific #’s we have and not the entire sum because of grants. GFOA has based on total expenditures like saving 3 months salary. The policy is that we cannot spend below a certain amount. Ms. Fuller- Years ago, to avoid a tax increase that is where money is pulled from to not raise taxes. Recommendation is 30-35% and maybe do 40% instead. Ms. Olgesby- We need to deeper dive once we have these #’s. Electric, WWTP have their own money and need to look at. C. It contract for services- Darwin Zehr Mr. Ernst- If you remember, there were talks for 2024 budget and look at cost savings and one was for 3rd party IT. Early this year, we went out to RFP and got 4 responses and made recommendations for a company called Jen-Tech. We liked all that they said, looking at $30k savings, less expensive and more contracted services and local. All Covered had got bought out by a large company and not as responsive any longer as he had hoped. I would like the committee to move this forward. Motion Ms. Fuller to move the contracted IT services with Jen-Tech, second Ms. Oglesby. Motion carries 3-0. D. VMSC letter Mr. Ernst- Yesterday, I received a letter from Carolyn McCreary from Montgomery Township and this is the home base for VMSC. Montgomery Township is taking center for acknowledgment the face that first responders need to understand long-term care after accidents. If the 1st responder has long-term understanding, then could better assist victim. They want to make sure also that first responders who become victim also. They are looking for grant money. There is no resource to give and a template letter for Council to sign and interesting and benefit is the first time ever and 5 or 6. Montgomery Township will be a passthrough for the grant. Ms. Fuller- The treatment given today can improve that have victim has long-term care. Motion Ms. Fuller to provide a letter of support for the grant for VMSC to go for Montgomery Township, second Ms. Razzack. Motion carries- 3-0 Mr. Ernst- If they are successful with the grant, not sure if public they are applying for and just looking for a letter of support. Meeting adjourned at 7:27.