Informational Meeting

MINUTES Informational Meeting Monday, October 19, 2020 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Council Members Present: Pat Starr, Janet Brekke, Alex Jensen, Rick Kiley (via telecom), Marshall Selberg (via telecom), Curt Soehl Council Members Absent: Christine M. Erickson, Greg Neitzert Council Vice Chair Curt Soehl called the meeting to order at 4 p.m. He had Councilors Marshall Selberg and Rick Kiley acknowledge their presence via telecom. 2. City Council Open Discussion There was none. 3. Presentations A. September 2020 Monthly Financials by Shawn Pritchett, Director of Finance Presentation: Approximately 15 minutes followed by discussion Pritchett spoke about: Labor Force & Employment, which is down 3.4% from the June peak; Unemployment is currently at 4.2% through August, after peaking at 10.5% in April; the Insured Unemployment rate for South Dakota is 1.29%, with 5,389 continued claims, and 418,749 covered employment; Insured Unemployment Trend 2020 shows South Dakota trending lower than the country; the Percentage Change of Job Postings is up 10% from January; Inflation is up slightly at 1.4%; Building Permits YTD Building Valuations through September is at $477.3M, which is $64M less from this time last year; Sioux Falls YTD Residential Permits (Units) are showing growth over last year; Sales Tax Collections w/out Audits was down 3.4% in September, with a cumulative 12-month rolling growth rate of 1.3%; Entertainment Tax Collections w/out Audits is down 6.5% overall, with a cumulative 12-month rolling growth rate down 8.1%; the Industry Taxable Sales Data continues to fluctuate; YTD Property Tax Revenues (Current) is $37.5M, which is on pace with expectations; Lodging Tax Receipts was down 29.7%, the cumulative12-month rolling growth rate is down 15.4%; Lodging BID Tax Receipts was down 25.2%, with the cumulative 12-month rolling growth rate down 21.6%; General Fund - Revenues YTD is $138,142,866 for 79% of the budget, which includes approximately $24M in CARES Act funds; and the General Fund - Expenditures YTD is $115,720,144 for 65% of the budget. Discussion followed regarding Insured Unemployment.  B. Audit Report 19-02: Employee Payroll Deductions by Shana Nelson, Internal Audit Manager Presentation: Approximately 10 minutes followed by discussion Nelson began her presentation by explaining the background of the audit, which included the voluntary deductions that the City of Sioux Falls offers its employees. Examples of the deductions include: deferred compensation, union dues, vision insurance, charitable contributions, third party insurance, and flexible spending accounts. In 2019, of the 1,213 employees, more than 1,100 employees participated in at least one voluntary deduction for a total of $10.8M in deductions. Nelson reviewed the objectives of the audit, which were to: determine if payroll deductions are properly authorized and calculations are accurate; determine if proper internal controls are in place to ensure payroll deductions are submitted timely and accurately to the appropriate third party; and determine if an accurate and timely reconciliation is prepared between the payroll account and the general ledger. The audit revealed that the master vendor file did not contain completed forms for several payroll vendors. The City did not require vendors to register with the migration to the Munis software system. The information that had been set up in the previous financial system was used in the vendor set up in the Munis system, according to audit report. It was recommended that management ensure that ACH forms are completed, signed, and filed for all vendors that the City of Sioux Falls issues payment to electronically. Nelson said that Finance has received completed forms from all of the vendors. She concluded that: adequate controls exists over the employee payroll deduction process that is overseen by the City's Human Resources Department; appropriate authorization and documentation is being obtained and filed adequately; they did not identify any fraudulent, erroneous deductions or unauthorized transactions; and the recommendation will provide additional assurance to mitigate the risk of potential fraud in regard to ACH transactions. Discussion followed regarding nothing improper being found and expressed appreciation for the hard work of the Human Resources Department. C. Revised Audit Plan by Shana Nelson, Internal Audit Manager Presentation: Approximately 5 minutes followed by discussion Nelson said the Audit Committee meet last month and approved of a revised Audit Plan. The plan included: Audits Reported in FY 2020; Audits in Progress; Carryover Audits (Anticipated to begin in FY 2020 and report in FY 2021); Deferred Audits (To be considered for future Audit Plans); and External Audits. She said the plan will be presented to the Council as a resolution. Discussion followed regarding the External Audit for the Parking Enterprise System. 4. Public Comment Joe Kippley thanked the Council and Mayor for their public service. 5. Executive Session  A. Consulting with legal counsel or reviewing communications from legal counsel about proposed or pending litigation or contractual matters pursuant to SDCL 1-25- 2(3) The Executive Session was cancelled. 6. Adjournment Council Vice Chair Curt Soehl adjourned the meeting at 4:28 p.m. Denise D. Tucker, MMC, Assistant City Clerk