City Council

Minutes from the Petersburg City Council Special Called meeting held on: November 28, 2017 -1– ______________________________________________________________________________ The Special Called Meeting of the Petersburg City Council was held on Monday, November 28, 2017, at the Union Train Station. Mayor Parham called the Special Called meeting to order at 6:30p.m. 1. ROLL CALL: Present: Council Member Charles H. Cuthbert, Jr Council Member Annette Smith-Lee Council Member Treska Wilson-Smith Council Member Darrin Hill Vice Mayor John A. Hart, Sr. Mayor Samuel Parham Absent: Council Member W. Howard Myers Present from City Administration: City Manager Aretha Ferrell-Benavides City Attorney Joseph Preston Clerk of City Council Nykesha D. Jackson 2. PURPOSE: a. An update on the FY2017 CAFR/Audit. Mrs. Benavides stated that today they will present the 2017 Comprehensive Annual Financial Report. She stated that she will start by introducing the Chief Financial Officer, Blake Rane, who will then introduce his team that worked with the findings. She stated that they have a PowerPoint presentation and that they should have each received a copy of the PowerPoint and the Comprehensive Report. She stated that this is an opportunity to look at the previous fiscal year and get an understanding of where the City is financially. Blake Rane, Chief Financial Officer, stated that his job tonight is to introduce the team the made this possible. He stated that it is led by Michael Terry, David Foley and Myesha Beasley. Michael Terry stated that he is the project team leader for the FY2017 CAFR. He stated that he will be walking them through the PowerPoint. He stated that following his walk-through David Foley, the auditor, will take City Council through the findings and the CAFR. He stated that the purpose of today’s presentation is to provide City Council with an overview and highlights of the findings of the CAFR. He stated that he will be going through the audit opinion, financial statements and supplementary information. He stated that the audit opinion is a clean and unmodified opinion. He stated that the report of the independent auditor rendered the highest and best opinion. He stated that one way of looking at it is unqualified. He stated that often in the media it is called clean. He stated that this should say to City Council is that the financial data that they have in their CAFR is materially correct and that it can be relied on by themselves, investors or whomever. He stated that the auditor will talk more on this. He stated that they had a couple of funds that were not able to be verified by the auditor. He stated that this was public utilities and stormwater. He stated that this clean opinion covers all funds. He stated that all funds have been reviewed. He stated that they are going to talk about the basic financial statements. He stated that the government wide on Page 17 is financial statements of net position and activities that report information about the City using accounting methods similar to those used by private- sector companies. He stated that the next is governmental funds that is on Page 23. He stated that these funds provide information on the City’s usage and management of its spendable resources. He stated that the governmental funds are comprised of three funds. He stated that the general fund is the chief operating fund of the City. He stated that the capital project fund is the accounts for all construction projects of the general public improvements, excluding capital projects related to business-type activities. He stated that the non-major *Audio available  Minutes from the Petersburg City Council Special Called meeting held on: November 28, 2017 -2– ______________________________________________________________________________ government funds are accounts for and report on the use of these funds in accordance with their specific restricted purposes. He stated that the proprietary funds provide information on the City’s Public Utilities, Mass Transit and Golf Course operations. He stated that the fiduciary funds account for the resources held by the City in a trustee capacity or as agent or custodian for individuals, private organizations, other governmental units, or other funds He stated that also these funds are not available to support City services. He stated that it is always good to know what the long-term obligations are. He stated that the total general obligation bond outstanding amount as of June 30, 2017 is $42 million. He stated that this breaks down to the general fund of $30 million, public utilities in the amount of $7.9 million and the golf course at $4 million. He stated that the special revenue funds and the permanent funds total combined as of June 30, 2017 is $5.8 million. He stated that the special revenue funds are restricted or committed for specific purposes other than debt service or capital projects. He stated that the permanent funds are legally restricted to the extent that only earnings, not principal may be used for the purposes that support the City’s programs for the benefit of the government or its citizenry. He stated that the revenue drivers were significantly impacted by $5 million. He stated that this consisted of the general property taxes collections that were $1.8 million. He stated that with the expenditure drivers the impact was $2.5 million. Mr. Terry went over the graph of the fund balance. David Foley, Partner with Robinson, Farmer, Cox Associates, stated that he was the partner in charge of the 2017 Audit. He stated that in his presentation he would like to focus on the opinions and the controls and compliance. He stated that as part of the auditing for the City there are three main pieces that they do. He stated that one is that they audit the financial statements and make sure that they have been prepared in accordance with the general accepting accounting principles. He stated that there are two other pieces that they do in accordance with the government auditing standards. He stated that one is with the internal controls that the City has over the financial reporting and compliance. He stated that the third and final piece is that they look at the City’s compliance with the major federal grant program. He stated that they provide a checklist of things that the City has to comply with and carry out their federal grants. He stated that included in the CAFR there are three reports that are issued by them that report the result of the audit. He stated that the first one is the financial section. He stated that the CAFR has four main sections. He stated that they have the introductory section, financial section, statistical section and compliance section. He stated that in the financial section this is their independent audit report. He stated that in this report they state that they did perform an audit on the City’s financial statements. He stated that management is responsible for the preparation of the financial statements. He stated that it talks about their responsibilities as auditors. He stated that on page 2 it as their opinion listed. He stated that they have issued an unmodified opinion on the financial statements which is a clean opinion. He stated that this means that the financial statements have been prepared in accordance with the guidelines on accounting principles. He stated that as Mr. Terry pointed out that this is an improvement over last year’s information. He stated that this year the City was able to provide enough evidence to support the numbers. There was discussion among City Council and staff. Mayor Parham asked Mrs. Benavides what is the corrective timeframe for corrective action plan for the deficiency so that they can come back and revisit this and see how they have improved in those internal controls. Mrs. Benavides stated that in past practices what she would like to do is to take them and when they do the monthly report give consistent updates on it. She stated that for example the checks and balances on the water utility system that they see. She stated that these are policy and procedures that they are talking about. She stated that in the past they like a separation of duties. She stated that they will bring this back in a separate document just to find them and come back in January and give her action plan. She stated that she would like to do in January because she just received them today. She stated that she would like to give *Audio available  Minutes from the Petersburg City Council Special Called meeting held on: November 28, 2017 -3– ______________________________________________________________________________ monthly reports on them as well so that they can see what actions they are taking towards the issues. Mayor Parham stated that they have a lot of work for the legislative package. He stated that he wanted to see if all council members were available on Saturday for a work session on the legislative agenda. He stated that they are looking at starting at 12:00pm. There was discussion among City Council Members on their availability for the work session on December 2nd. Mayor Parham stated that they will get with the clerk regarding the meeting because they need to go over the legislative agenda. He stated that he would like to thank everyone for coming out and thank city Council for all the hard work that is being done along with the City Manager and the Finance Department and the City staff. He stated that they should all stay focused and keep moving the City forward. 3. ADJOURNMENT: City Council adjourned at 7:48 p.m. _________________________ Clerk of City Council APPROVED: _________________________ Mayor *Audio available