City Council Finance Committee Meeting

CITY OF NORMAN, OK CITY COUNCIL FINANCE COMMITTEE MEETING Municipal Building, Council Chambers, 201 West Gray, Norman, OK 73069 Thursday, December 21, 2023 at 4:00 PM MINUTES The City Council Finance Committee of the City of Norman, Cleveland County, State of Oklahoma, met at 4:00 pm in the Municipal Building Executive Conference Room on the 21st day of December, 2023, and notice of agenda of the meeting were posted in the Municipal Building at 201 West Gray, 24 hours prior to the beginning of the meeting. CALL TO ORDER PRESENT Mayor Larry Heikkila Councilmember Ward 3 Bree Montoya ABSENT Councilmember Ward 6 Elizabeth Foreman OTHERS Councilmember Helen Grant Councilmember Stephen Holman Councilmember Lauren Schueler Anthony Francisco, Director of Finance Shawn O'Leary, Director of Public Works Kathryn Walker, City Attorney Chris Mattingly, Director of Utilities Scott Sturtz, City Engineer Major Chad Vincent, Norman Police Dept. Shaakira Calnick, Internal Auditor Mayor Heikkila called the meeting to order at approximately 4:00 PM. AGENDA ITEMS 1. DISCUSSION REGARDING THE INTERNAL AUDIT PROGRAM Internal Auditor, Shaakira Calnick, announced approximately 16 projects that she has slated for audit review. Some of the projects include proper use of IntelliTime, travel card policies, fleet expenses, contract compliance, hiring processes, Public Safety Sales Tax compliance, University North Park TIF compliance, and Norman Forward compliance. Calnick said that it CITY COUNCIL FINANCE COMMITTEE MEETING - Thursday, December 21, 2023 Page |1 would be up to the Audit Committee which projects were addressed first and that she would like to look at a tri-annual, risk based audit plan due to the length of time it takes to do a thorough audit. Calnick stated, "The Audit Committee shall consist of five voting members, two Councilmembers and three at large members who shall be appointed by the City Council. The three at large members shall be residents of the City of Norman with expertise in auditing, preferably performance auditing as well as financial auditing. Minimal professional standards shall include at least five years of experience as a performance auditor, a certified public accountant, certified internal auditor, certified management accountant, or ten years of other relevant, professional experience." Anthony Francisco stated, "We had anticipated that this Finance/Audit Committee would be the Audit Committee, now if you wanted to form a separate Audit Committee that would be up to the Mayor and Council." Councilmember Schueler stated that it would be a benefit to discuss the make-up of the Audit Committee with the Oversight Committee and that she would get this on the Oversight Committee's next agenda. 2. DISCUSSION REGARDING MONTHLY REVENUE AND EXPENDITURE REPORTS Anthony Francisco gave the report. He brought up the record stock market returns from recent weeks highlighting that the City invests in the Municipal Bond and Treasury Bond market. "It is kind of unusual for the bond market to move with the stock market," Francisco said. "This has been a real good market for Municipal Bonds and the Treasury market as well and that's reflected in the investment returns that you see in these revenue reports." The General Fund is 181% above the budgeted target for investment returns, making it 250% above last year's target. The Capital Fund is 594% above last year's target. The Room Tax Fund is 1117% above budget for investment returns. "It's been a very good market and it's reflected in these investment returns," Francisco said. In looking at the budget line items, Councilmember Holman asked about "Services and Maintenance" being down -34.66% indicating that the City had not spent $981,000 that was budgeted. Francisco stated that that was a reflection of the emergency reserve, "You're going to start to see some expenditures there because we're paying for the repairs to the library out of that emergency reserve budget. It's a 1% emergency allocation that Council does in each budget. It's mandated by the Rainy Day Fund Ordinance. We always hope that we don't have to spend it." Councilmember Holman also asked, "How much of an increase have we seen since voters approved the increase in the hotel/motel tax?" Francisco replied, "We're right on budget for the room tax. Where we were just algebraically increasing the amount that we would bring in from the room tax related to the tax increase that has followed on those projections - at least so far." Councilmember Grant said, "In regards to the Rainy Day Fund that paid for the repairs to the library, do we expect to get all of that back?" Francisco replied, "We do expect to get all or some of that back but it will probably be years of litigation before we do. So we're up fronting those expenditures trying to get the library repaired and back open as quickly as we can, and then let the litigation play itself out. It may be against the architect, it may be against the subcontractor or the main contractor; we'll see how those things play out." City Attorney Kathryn Walker added, "Or maybe they will work with us without litigation. That's the hope. We're still trying to identify the root cause." With the budget process for FY25 approaching, Francisco told Councilmembers, "It's never a bad time for us (staff) to cost out things that you might want to do, if you want to pave a street or do a sidewalk in this neighborhood, that sort of thing. We will refer that to the Public Works CITY COUNCIL FINANCE COMMITTEE MEETING - Thursday, December 21, 2023 Page |2 Department to say how much that would cost and then staff can start to prepare a budget request, prioritize them for Council consideration as we move along in the budget process." ADJOURNMENT Mayor Heikkila adjourned the meeting at approximately 4:45 PM. ATTEST: ______________________________ ______________________________ City Clerk Mayor CITY COUNCIL FINANCE COMMITTEE MEETING - Thursday, December 21, 2023 Page |3