Finance Committee (Meets 4th Tuesday of each month at 4:30 p.m.)

FINANCE COMMITTEE Agenda WEDNESDAY, August 28, 2024–04:30 p.m. Government Center Room 204 VIDEO CALL LINK VIA: Microsoft Teams Click here to join the meeting Meeting ID: 296 405 566 781 Passcode: Qu7TGd Or call in (audio only) +1 872-242-8028,,491830525# United States, Chicago Phone Conference ID: 491 830 525# MISSION STATEMENT:“To have broad oversight of financial policies and procedures, and to provide the City Council and management with such financial expertise, opinion, and recommendations as will be helpful for the Council to make decisions regarding the financial stability of the City of Superior.” COMMITTEE MEMBERS: Jack Sweeney (Chair), Tylor Elm (Vice-Chair), Mike Herrick, Jenny Van Sickle (Alt) 1. ROLL CALL 2. APPROVAL OF MINUTES 3. OLD BUSINESS 3.1 Moccasin Mike Landfill Closure and Long-Term Care Contribution 3.2 Accounting Policies and Procedures Manual Review 4. NEW BUSINESS 5. RECURRING BUSINESS 6. ADJOURNMENT Notice is hereby given that a majority of the members of the Common Council may be present at the meeting, and although this may constitute a quorum of the Common Council, the Council will not take any action at this meeting. ********************************************************************************************* Pursuant to the Americans with Disabilities Act of 1990, if you are in need of an accommodation to participate in the public meeting process, please contact the City Clerk’s Office at (715) 395-7200 by 4:30 p.m. on the day prior to the scheduled meeting date (OR dial 711 for Telecommunications Relay Service). The City will attempt to accommodate any request depending on the amount of notice received. ********************************************************************************************* FINANCE COMMITTEE - 08/28/2024 Mtg (Meets monthly on the 2nd Thursday at 4:30 p.m.) Page 1 of 2 In compliance with Wisconsin Open Meetings Law, this agenda was posted on 08/23/2024 at the following locations: Superior Government Center, Douglas County Courthouse, Superior Public Library, and online at https://www.ci.superior.wi.us/agendacenter. It was also emailed to the Superior Telegram. FINANCE COMMITTEE - 08/28/2024 Mtg (Meets monthly on the 2nd Thursday at 4:30 p.m.) Page 2 of 2  Finance Department Nick Rhinehart, Finance Director Phone: (715) 395-7452 1316 N 14th Street, #235 Fax: (715) 395-7292 Superior, WI 54880 E-mail: rhinehartn@ci.superior.wi.us Website: www.ci.superior.wi.us August 23, 2024 Special Finance Committee Meeting Date: August 28, 2024 TO: Mayor Jim Paine and Members of the Finance Committee FROM: Nick Rhinehart, Finance Director RE: Moccasin Mike Landfill Closure and Long‐Term Care Contribution Introduction Per state statute, the City of Superior is required to maintain a Closure and Long‐Term Care Escrow to meet Owner Financial Responsibility. Every 10 years, the Wisconsin Department of Natural Resources (DNR) reviews a revised plan modification. As part of this review, proof of financial responsibility is also assessed. The most recent review has determined that our Long‐Term Care Escrow is underfunded by $441,311.36 and the Closure Escrow is underfunded by $3,158,607.65. The city proposes the following contribution schedule for the Long‐Term Care Escrow: 2024 $97,000.00 2025 $100,530.80 2026 $104,190.12 2027 $107,982.64 2028 $111,913.21 Please note that the total amount in the above schedule, $521,616.77, exceeds the underfunded amount of $441,311.36. This accounts for the cost of inflation and interest earnings as part of the contributions. For the Closure Escrow, the City will contribute $1,750,000 in 2024 and the remaining plus 1 year of inflation and interest cost is estimated at $1,700,000 in the first quarter of 2025. 2025 Payment will be appropriate with annual budget if needed. This plan has been approved by the DNR. Attached for your review are: 1. Modification Approval from the DNR 2. Owner Financial Responsibility Calculations Spreadsheet Recommendation I recommend the Finance Committee approve the contributions and plans for the Closure and Long‐Term Care Escrows.  OWNER FINANCIAL RESPONSIBILITY CALCULATIONS State of Wisconsin For Interest‐Bearing Mechanisms ‐ NR 520.08(1)(a) and NR 520.08(2)(a) Facility Superior (city) ‐ MM Closure Cost Calculations FID 816041600 Approved Closure Cost Estimate $7,165,230.00 Lic. 2627 Date of Cost Estimate Approval 6/19/2024 Year of Cost Estimate (for inflation) 2023 Today's Date: 7/10/2024 Compound Inflation Factor 1.0364 Closure Cost Estimate (2024 dollars) $7,426,044.37 Long‐Term Care Cost Calculations Est. Site Closure 2028 Mechanism Type Escrow LTC Period (years) 40 Mechanism ID 001050989081 Est. end of LTC period 2068 Mechanism Provider US Bank Mechanism's Weighted Avg. Ann. Return 5.64% Annual LTC Cost Estimate $140,923.00 Date of Cost Estimate Approval 6/19/2024 Mechanism Amount as of 12/31/23 $4,126,845.20 Year of Cost Estimate (for inflation) 2023 Required Balance as of today (2024) $7,285,452.85 Compound Inflation Factor 1.0364 Over (Under) Funded by: ($3,158,607.65) LTC Annual Cost (2024 dollars) $146,052.60 Closure ‐ Letter of Credit (replace) $7,696,352.39 Annual Inflation Rate (projected) 3.64% Closure ‐ Letter of Credit (supplement) $3,158,607.65 Annual Interest Rate (projected) 5.64% LTC ‐ Letter of Credit (replace) $5,842,103.89 LTC ‐ Letter of Credit (supplement) $441,311.36 Mechanism Type Escrow Mechanism ID 001050989080 Mechanism Provider US Bank Mechanism Amount as of 12/31/23 $3,105,895.64 Required Balance by 12/31/23 $3,547,207.00 Over (Under) Funded by: ($441,311.36) Years from Calendar Beg. of Year Annual Interest Deposit Needed / End of Year Years of 2024 Year Balance Expected Expected (Withdrawal) Expected Balance Expected LTC 0 2024 $3,547,207.00 $200,062.48 $0.00 $3,747,269.48 1 2025 $3,747,269.48 $211,346.00 $0.00 $3,958,615.48 2 2026 $3,958,615.48 $223,265.91 $0.00 $4,181,881.39 3 2027 $4,181,881.39 $235,858.11 $0.00 $4,417,739.50 4 2028 $4,417,739.50 $249,160.51 $0.00 $4,666,900.01 0 5 2029 $4,666,900.01 $263,213.16 ($174,641.04) $4,755,472.13 1 6 2030 $4,755,472.13 $268,208.63 ($180,997.97) $4,842,682.79 2 7 2031 $4,842,682.79 $273,127.31 ($187,586.30) $4,928,223.80 3 8 2032 $4,928,223.80 $277,951.82 ($194,414.44) $5,011,761.18 4 9 2033 $5,011,761.18 $282,663.33 ($201,491.13) $5,092,933.38 5 10 2034 $5,092,933.38 $287,241.44 ($208,825.40) $5,171,349.42 6 11 2035 $5,171,349.42 $291,664.11 ($216,426.65) $5,246,586.88 7 12 2036 $5,246,586.88 $295,907.50 ($224,304.58) $5,318,189.81 8 13 2037 $5,318,189.81 $299,945.91 ($232,469.26) $5,385,666.45 9 14 2038 $5,385,666.45 $303,751.59 ($240,931.15) $5,448,486.89 10 15 2039 $5,448,486.89 $307,294.66 ($249,701.04) $5,506,080.51 11 16 2040 $5,506,080.51 $310,542.94 ($258,790.16) $5,557,833.30 12 17 2041 $5,557,833.30 $313,461.80 ($268,210.12) $5,603,084.98 13 18 2042 $5,603,084.98 $316,013.99 ($277,972.97) $5,641,126.00 14 19 2043 $5,641,126.00 $318,159.51 ($288,091.18) $5,671,194.33 15 20 2044 $5,671,194.33 $319,855.36 ($298,577.70) $5,692,471.98 16 21 2045 $5,692,471.98 $321,055.42 ($309,445.93) $5,704,081.47 17 22 2046 $5,704,081.47 $321,710.20 ($320,709.76) $5,705,081.91 18 23 2047 $5,705,081.91 $321,766.62 ($332,383.60) $5,694,464.93 19 24 2048 $5,694,464.93 $321,167.82 ($344,482.36) $5,671,150.39 20 25 2049 $5,671,150.39 $319,852.88 ($357,021.52) $5,633,981.76 21 26 2050 $5,633,981.76 $317,756.57 ($370,017.10) $5,581,721.23 22 27 2051 $5,581,721.23 $314,809.08 ($383,485.72) $5,513,044.58 23 28 2052 $5,513,044.58 $310,935.71 ($397,444.60) $5,426,535.69 24 29 2053 $5,426,535.69 $306,056.61 ($411,911.59) $5,320,680.72 25 30 2054 $5,320,680.72 $300,086.39 ($426,905.17) $5,193,861.94 26 31 2055 $5,193,861.94 $292,933.81 ($442,444.52) $5,044,351.23 27 32 2056 $5,044,351.23 $284,501.41 ($458,549.50) $4,870,303.15 28 33 2057 $4,870,303.15 $274,685.10 ($475,240.70) $4,669,747.54 29 34 2058 $4,669,747.54 $263,373.76 ($492,539.46) $4,440,581.84 30 35 2059 $4,440,581.84 $250,448.82 ($510,467.90) $4,180,562.76 31 36 2060 $4,180,562.76 $235,783.74 ($529,048.93) $3,887,297.57 32 37 2061 $3,887,297.57 $219,243.58 ($548,306.31) $3,558,234.85 33 38 2062 $3,558,234.85 $200,684.45 ($568,264.66) $3,190,654.63 34 39 2063 $3,190,654.63 $179,952.92 ($588,949.49) $2,781,658.06 35 40 2064 $2,781,658.06 $156,885.51 ($610,387.25) $2,328,156.32 36 41 2065 $2,328,156.32 $131,308.02 ($632,605.35) $1,826,858.98 37 42 2066 $1,826,858.98 $103,034.85 ($655,632.19) $1,274,261.65 38 43 2067 $1,274,261.65 $71,868.36 ($679,497.20) $666,632.81 39 44 2068 $666,632.81 $37,598.09 ($704,230.90) $0.00 40  State of Wisconsin DEPARTMENT OF NATURAL RESOURCES Waukesha Service Center 141 NW Barstow St. Room 180 Waukesha, WI 53188 June 19, 2024 Ms. Darienne McNamara File Ref: FID #816041600 City of Superior - Moccasin Mike Sanitary Landfill Douglas County 1316 North 14th Street #200 SW/APP Superior, WI 54880 Subject: Conditional Plan of Operation Approval Modification for Revised Closure and Long-Term Care Costs for the City of Superior - Moccasin Mike Sanitary Landfill, License #2627 Dear Ms. McNamara: The Department of Natural Resources (department) has reviewed and approves the requested modification to the plan of operation for revised closure and long-term care costs at the Moccasin Mike Sanitary Landfill subject to the condition listed in the attached approval. Please include this approval in the written operating record for the landfill as specified in s. NR 506.17, Wis. Adm. Code. The plan modification request includes revised closure and long-term care costs in accordance with s. NR 520.07(1m), Wis. Adm. Code, which requires a new cost estimate for closure and long−term care during the active life of the facility once every 10 years. The closure costs reflect the most expensive area to close, which is approximately 23.1 acres. Condition 1 of this approval requires revised proof of financial responsibility for closure and long-term care be established within 60 days of the date of this approval. The revised proof of financial responsibility must be established based upon the approved costs contained in Tables 1 and 2 of the attached approval and ch. NR 520, Wis. Adm. Code. Please contact Dustin Sholly, owner financial responsibility specialist, at Dustin.Sholly@wisconsin.gov or 608-886-0154 if you have questions. Please keep in mind that this approval does not relieve you of obligations to meet all other applicable federal, state and local permits or regulatory requirements. If you have questions regarding this approval, please contact Alicia Zewicki at (262) 336-3071 or alicia.zewicki@wisconsin.gov. Sincerely, John Morris, Professional Soil Scientist, Regional Supervisor Waste and Materials Management Program Northern and West Central Regions cc: Darryl Heaps - dheaps@sehinc.com Dustin Sholly – DNR/WA (e-copy) Alicia Zewicki - DNR/WA (e-copy) Nathan Coller – DNR/WA (e-copy) dnr.wi.gov wisconsin.gov Moccasin Mike Sanitary Landfill License #2627 – Conditional Plan of Operation Modification Page 1 of 3 Approval June 19, 2024 BEFORE THE STATE OF WISCONSIN DEPARTMENT OF NATURAL RESOURCES CONDITIONAL PLAN OF OPERATION APPROVAL MODIFICATION REVISED CLOSURE AND LONG-TERM CARE COSTS FOR THE MOCCASIN MIKE SANITARY LANDFILL, LICENSE #2627 FINDINGS OF FACT The Department of Natural Resources (department) finds that: 1. The City of Superior owns and operates a solid waste disposal facility located in the S½ of the NW¼ and the N½ of the SW¼ of Section 2, T48N, R13W, City of Superior, Douglas County, Wisconsin. 2. Conditional plan of operation approvals were issued by the department for the facility on September 1, 1976, for Cell 1, August 20, 1980, for Cell 2, July 17, 1987, for Cell 4, and November 28, 2001, for Cell 3 and Cell 5. 3. On December 22, 2023, Short Elliot Hendrickson, Inc. (SEH), on behalf of the City of Superior, submitted a request to the department for modifications to their closure and long-term care cost estimates. The department received the review fee of $1,650 on January 18, 2024. 4. The information submitted in connection with the plan of operation modification request includes the following: a. A letter titled “Moccasin Mike Sanitary Landfill, FID # 816041600, Lic. #2627, SEH No. – 137194, Expedited Plan Modification for LTC & WCC Financial Responsibility 14.00” dated and received by the department on December 22, 2023. b. A May 8, 2024 SEH email containing additional information and two attachments. The attachments include “Attachment A (Revised)” and copies of invoices for laboratory analytical costs in 2023. 5. Additional documents considered in connection with the review of the plan of operation modification request includes the following: a. The department’s June 24, 2013, plan of operation approval modification which included revised closure and long-term care cost estimates. b. The department's November 28, 2001, conditional plan of operation approval. c. The department’s files pertaining to the Moccasin Mike Sanitary Landfill (License # 2627). 6. The special condition set forth below is needed to assure that the site is operated and maintained in an environmentally sound manner. If the special condition is complied with, the proposed modification will not inhibit compliance with the standards set forth in the applicable portions of chs. NR 500-538, Wis. Adm. Code. Moccasin Mike Sanitary Landfill License #2627 – Conditional Plan of Operation Modification Page 2 of 3 Approval June 19, 2024 CONCLUSIONS OF LAW 1. The department has the authority under s. 289.30(6), Wis. Stats., to modify a plan of operation approval if the modification would not inhibit compliance with the applicable portions of chs. NR 500-538, Wis. Adm. Code. 2. The department has the authority to approve a modification to the plan of operation with special conditions if the conditions are needed to ensure compliance with the applicable portions of chs. NR 500-538, Wis. Adm. Code. 3. The condition of approval set forth below is needed to ensure compliance with the applicable portions of chs. NR 500-538, Wis. Adm. Code. 4. In accordance with the foregoing, the department has the authority under s. 289.30(6), Wis. Stats., to issue the following conditional plan of operation modification approval. CONDITIONAL PLAN OF OPERATION APPROVAL MODIFICATION The department hereby approves the proposed plan of operation modification for the Moccasin Mike Sanitary Landfill, subject to compliance with chs. NR 500-538, Wis. Adm. Code, and the following condition: 1. Revised proof of financial responsibility for closure and long-term care shall be established in accordance with ch. NR 520, Wis. Adm. Code, within 60 days of the date of this approval. The proof of financial responsibility shall be established based upon the approved closure and long-term care cost estimates included in the attached Tables 1 and 2. This condition supersedes condition 1 of the department’s June 24, 2013, conditional plan of operation approval modification. Unless specifically noted, the condition of this approval does not supersede or replace any previous conditions of approval for this facility. This approval is based on the information available to the department as of the date of approval. If additional information, project changes or other circumstances indicate a possible need to modify this approval, the department may ask you to provide further information relating to this activity. Likewise, the department accepts proposals to modify approvals, as provided for in state statutes and administrative codes. NOTICE OF APPEAL RIGHTS If you believe you have a right to challenge this decision made by the department, you should know that Wisconsin statutes and administrative codes establish time periods and requirements for reviewing department decisions. To seek judicial review of the department’s decision, sections 227.52 and 227.53, Wis. Stats., establish criteria for filing a petition for judicial review. You have 30 days after the decision is mailed or otherwise served by the Moccasin Mike Sanitary Landfill License #2627 – Conditional Plan of Operation Modification Page 3 of 3 Approval June 19, 2024 department to file your petition with the appropriate circuit court and serve the petition on the department. The petition shall name the Department of Natural Resources as the respondent. Dated: ___June 19, 2024 ____ DEPARTMENT OF NATURAL RESOURCES For the Secretary __________________________________ __________________________________ John Morris, Professional Soil Scientist, Regional Supervisor Alicia Zewicki Waste and Materials Management Program Waste Management Engineer Northern and West Central Regions Southeast Region  Table 1 Moccasin Mike Sanitary Landfill (Lic# 2627) 2023 Estimate of Probable Costs For Wost Case Closure (23.1) Acres Item Units Plan Units Cost/Unit Extension 1.0 Final Cover Construction (23.1 acres) a. Grading 0.5-ft Soils (Off Site Locations) CY 18,640 $13 $242,320 b. Install 2-ft clay layer (Off Site Demo and 58th) CY 74,540 $10 $745,400 c. Install 40-mil textured LLDPE SF 1,006,240 $1 $804,992 d. Drainage layer (1-ft) CY 37,270 $44 $1,639,880 e. Install 1.5-ft rooting zone layer (off site Miller-Wagner) CY 55,910 $17 $922,515 f. Install 0.5-ft top soil layer (off-site City Garage) CY 18,640 $9 $167,760 g. Surface water/drainage layer div. berms (Off Site Demo and 58th) LF 7,740 $20 $154,800 h. Construct down slope drainage flume/fittings (HDPE Pipe) LF 508 $130 $66,040 i. Outlet Structures EACH 0 $5,000 $0 j. Cover Drainage Pipe/Perimeter Drain/Aggregate LF 2,500 $25 $62,500 k. Seed, fertilize, mulch AC 23 $7,800 $180,180 l. Borrow Site Erosion control, Restoration, Grading LS 1 $10,000 $10,000 m. Erosion Control/Haul Road Maintenance LS 1 $25,000 $25,000 n. Mobilization and demobilization LS 1 $753,208 $753,208 subtotal $5,774,595 2.0 Gas System Install a. Gas header (14-in) LF 0 $40 $0 b. Gas Header (6-in) LF 0 $30 $0 c. Gas well installation (GEW-10R, 34R, 35R, 11, 18, 20, 27, 30 and 36) LF 630 $200 $126,000 d. Well head installation/Leachate pumping system EACH 5 $5,000 $25,000 e. Lateral installation (6-in) LF 1165 $50 $58,250 f. Drip leg and manhole installation EACH 0 $10,000 $0 g. Cleanout/valve manhole installation EACH 0 $1,000 $0 h. Flare LS 1 $300,000 $300,000 subtotal $509,250 3.0 Engineering, documentation & review fees ACRE 23 $10,000 $230,000 Subtotal= $6,513,845 10% Contingency= $651,385 Total Estimated Final WCC Cover Construction Costs= $7,165,230 Cost/Acre $310,183 Notes: - Prices include loading, hauling and placement costs. - Mobilization and demobilization includes Site Preparation, Testing and Survey of 15% based on similar construction projects. - Material quantity/volumes are based on plan volumes. Adjustments for shrinkage/swell will be necessary for stockpile volumes - LFG system components reflect the stage subsequent to 2024 system installation. - Costs presented are based on 2023 current value. - Costs rounded to nearest dollar  Table 2 Moccasin Mike Sanitary Landfill (Lic# 2627) 2023 Annual Long-Term Care Estimate Item Units Plan Units Cost/Unit Extension 1.0 Land Surface Care a. Annual site inspections (8 hr/inspection) HOURS 8 $70 $560 b. Erosion repair (assume 0.5 ac of cover repaired annually) AC 0.5 $2000 $1000 c. Seed, fertilize, mulch AC 0.5 $2500 $1250 d. Road Maintenance/Snow plowing LS 1 $4000 $4000 e. Sed. Basin Inspection and Maintenance (4) LS 1 $1000 $1000 f. Settlement Hub Monitoring LS 1 $300 $300 g. Mowing LS 1 $2400 $2400 2.0 Leachate Collection System a. Annual inspection of pumps and associated infrastructure (8 hr) HOURS 8 $70 $560 b. Pump/Infrastructure Maintenance (parts, labor, etc) LS 1 $5000 $5000 c. Pump replacement (every 7 years, 5 pumps) EACH 0.75 $7500 $5625 d. GEW leachate pumping system Maintenance (parts, labor, etc) LS 1.00 $2500 $2500 e. Electricity LS 1 $1500 $1500 f. Jet clean pipelines (jet-annual,televise-5yr.) LS 1 $12500 $12500 g. Leachate treatment (3" over 48 acres) 1000/GALLON 4,086 $3 $11727 3.0 Gas Extraction System a. Flare/Blower Replacement LS 1 $7500 $7500 b. GEW Replacement (ave 1 GEW/yr @ 70 ft.) EACH 1 $15000 $15000 c. LFG Header/Lateral Repair/Well Head LS 1 $500 $500 d. Electricity LS 1 $13500 $13500 e. Monitoring LFG system, GEWs, GPs, qtly leachate head levels MONTH 12 $1200 $14400 f. Analytical costs EACH 1 $650 $650 g. Reporting LS 1 $8000 $8000 4.0 Environmental Monitoring a. Monthly leachate head elevations (3 LHW, 15 minutes each) HOUR 9 $70 $630 b. Semi-annual sampling (MWs, Lift Station, Grad Control Sump, SW) HOUR 68 $70 $4760 c. Analytical costs (semi-annual leachate) EACH 2 $550 $1100 d. Analytical costs (semi-annual MWs/SW/Gradient Control EACH 50 $75 $3750 e. MW Repair/Replacement LS 1 $1000 $1000 5.0 Administration and Reporting a. Semi-annual mtg. with laboratory and report to WDNR LS 2 $1200 $2400 b. Annual report LS 1 $5000 $5000 Subtotal= $128,112 10% Contingency (per NR520)= $12,811 Total Estimated Annual Long-Term Care Costs= $140,923 Notes: - Settlement hub monitoring required annually for 3 yrs, then once every 5 - Costs rounded to nearest dollar  Finance Department Nick Rhinehart, Finance Director Phone: (715) 395-7452 1316 N 14th Street, #235 Fax: (715) 395-7292 Superior, WI 54880 E-mail: rhinehartn@ci.superior.wi.us Website: www.ci.superior.wi.us June 24, 2024 Finance Committee Meeting Date: July 11, 2024 TO: Mayor Jim Paine and Members of the Finance Committee FROM: Nick Rhinehart, Finance Director RE: Policies and Procedures Manual Review Background The Accounting & Financial Policies and Procedures Manual, established on January 1st, 2018, mandates a biennial review in odd years. However, due to turnover within the Finance Department, the manual has not been reviewed since its creation. Objective To ensure the manual remains current and comprehensive, we will conduct a full review across six Finance Committee meetings, aiming to complete the process by the end of 2024. This review will also involve incorporating additional necessary policies. Proposal Given the anticipated changes, I propose presenting the entire revised manual to the City Council for approval upon the completion of the 2024 review during the first quarter of 2025. Review Schedule We will review approximately 7 sections per meeting. The first ten sections to be presented are as follows: 1. Introduction: Overview of the manual's purpose, scope, and authority 2. Organization Structure: Detailed description of the city's organizational hierarchy relevant to the finance department. 3. Finance Department Overview: Comprehensive outline of the finance department's roles, responsibilities, and functions. 4. Business Conduct: Standards and expectations for ethical behavior and professional conduct within the department. 5. Conflict of Interest: Policies for identifying, disclosing, and managing potential conflicts of interest. 6. Policy of Suspected Misconduct: Procedures for reporting and investigating suspected misconduct within the department.  7. Security: Measures and protocols for ensuring the security of financial data and assets. 8. General Ledger and Chart of Accounts: Guidelines for maintaining the general ledger and managing the chart of accounts. 9. Revenue Recognitions Policies for Major Sources of Revenue: Principles and procedures for recognizing and recording major revenue sources. 10. Administration of Federal Awards: Policies and procedures for managing federal grants and compliance with federal regulations. Action Plan 1. Preparation a. Distribute the first ten sections to Finance Committee members prior to the initial meeting b. Gather input and feedback from relevant stakeholders within the Finance Department. 2. Finance Committee Meetings a. Review and discuss presented policies and procedures 3. Post‐Meeting Actions a. Incorporate feedback and revision b. Compile the revised manual for committee review 4. Present completed manual to City Council for approval first quarter of 2025 INTRODUCTION The following accounting and financial manual is intended to provide an overview of the accounting and financial policies and procedures for the City of Superior, which shall be referred to as “City of Superior” or “the City” throughout this manual. The City of Superior reorganized under Wisconsin Statutes Chapter 62 providing for a Mayor/Council form of government, in April 1959, with the first meeting held April 21, 1959, under the new form of government. The City Council of the City of Superior is organized to have one alderperson elected from each of the ten Council districts. Compensation and expenses are established by the City Code Chapter 2. Councilors are elected every year, odd districts are elected in even numbered years, and even districts in odd numbered years, for two year terms. The approximate population of the City is 27,244. This manual shall document the financial operations of the City. Its primary purpose is to formalize accounting and financial policies and selected procedures for all staff who have a role in accounting processes and to document internal controls. If a particular grant or award has provisions that are more restrictive than those in this manual, the more restrictive provisions will be followed only for that grant or award. EFFECTIVE DATE(S) OF ACCOUNTING AND FINANCIAL POLICIES The effective date of all accounting and financial policies described in this manual is January 1, 2018. If a policy is added or modified subsequent to this date, the effective date of the new/revised policy will be indicated parenthetically immediately following the policy heading. The contents of this manual were approved as official policy of the City by the City Council, Finance Committee, and Finance Director. All City of Superior staff members are bound by the policies herein, and any deviation from established policy is prohibited. The Finance Committee and Finance Director will review this manual every two years, prior to December 31 in each odd year-end (i.e. 2019, 2021), for any necessary changes or updates. The City Council and Finance Committee will approve this manual every five (5) years to help ensure the financial policies and procedures of the City comply with current regulations. Effective Date of Policy: January 1, 2018 Date Last Amended: January 1, 2018 Date of Next Review (if policy requires periodic review): January 1, 2020 ADOPTION OF 2 CFR PART 200 City of Superior adopted the Federal grant regulations provide in 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including the procurement standards, effective January 1, 2018. FISCAL YEAR OF CITY City of Superior shall operate on a fiscal year that begins on January 1 and ends on December 31. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS City of Superior’s year-end government-wide, proprietary fund, and fiduciary fund financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Revenues susceptible to accrual include intergovernmental grants, intergovernmental charges for services, public charges for services and interest. Other revenues such as licenses and permits, fines and forfeits and miscellaneous revenues are recognized when received in cash or when measurable and available. As a general rule the effect of inter-fund activity has been eliminated from the government-wide financial statements. Accounting transactions will be processed and reports produced on SunGard Accounting Software. DEFINITIONS The following definitions shall apply with respect to the policies described in this manual: BID Formal written responses by vendors to the City’s solicitation for prices of goods and or services. Bids are usually in response to formal requests for proposal (RFP’s) by the City, and their formats are often specifically prescribed so as to meet precise requirements of the RFP. Information provided in a bid may be binding against the vendor. Bids are awarded based on the lowest cost bid received by a responsive/responsible bidder with exceptions as noted in the City of Superior Code of Ordinances Sec. 2-378 and Sec. 2-381. CASH Cash includes currency on hand in petty cash funds or change funds, demand deposits with banks or other financial institutions, and deposits in other kinds of accounts or cash management pools that have the general characteristics of demand deposit accounts in that the governmental entity may deposit additional cash at any time and also effectively may withdraw cash at any time without prior notice or penalty. Cash in lock boxes or on hand at December 31 but not receipted for at that date should also be reported as cash. CASH EQUIVALENTS Cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under this definition. Original maturity means the original maturity to the entity holding the investment. CONDITION A donor-imposed stipulation that specifies a future and uncertain event whose occurrence or failure to occur gives the promisor a right of return of the assets it has transferred to the City or releases the promisor from its obligation to transfer its assets. In practical terms, this means a donor has imposed some type of stipulation other than a purpose or time period stipulation (which is defined as a restriction below) and that condition has some degree of uncertainty as to whether or not it will occur, and if the condition is not met, the City is not entitled to the contribution. Conditions may or may not be within the control of the City. CONTRIBUTION An unconditional transfer of cash or other assets to the City, or a settlement or cancellation of the City's liabilities, in a voluntary nonreciprocal transfer by another entity or individual. Charitable Contributions to governmental units are tax-deductible under section 170(c)(1) of the Internal Revenue Code, if made for a public purpose. COOPERATIVE AGREEMENT A legal agreement where the City implements a program with the direct involvement of the funder. DEBT SECURITIES Instruments representing a creditor relationship with an entity. Debt securities include U.S. government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and securitized debt instruments. Unlike equity securities, debt securities have a maturity date attached. DEPOSITS Includes any government resources that could qualify for federal depository insurance. This includes checking accounts and demand deposits, savings accounts and time deposits, negotiable orders of withdrawal accounts, non-negotiable certificates of deposit, money market accounts at financial institutions, and other deposits in banks or credit unions. DOCUMENTATION Written evidence of information received from vendors. Documentation may be formal (bids received from vendors) or informal (a note written by the purchaser based on a phone conversation with a vendor). EQUITY This is a generic term used to refer to the difference between assets and liabilities. Due to the difference in reporting the basic financial statements, the components of equity will differ between the fund financial statements and the government-wide statements. Also referred to as net position, fund balance, or fund equity. EXCHANGE TRANSACTIONS A transaction in which each party receives or gives up something of approximate value. FULL ACCRUAL Proprietary funds recognize revenue from the effect of transactions, events, and interfund activities when they occur (earned), regardless of the timing of related cash flows (availability). FUND BALANCE See Equity. FUND EQUITY See Equity. GRANT A financial assistance award given to the City to carry out its programmatic purpose. INVESTMENTS A security or other asset that (a) the City holds, primarily for the purpose of obtaining income or profit and (b) has a present service capacity based solely on its ability to generate cash or to be sold to generate cash. The purpose for which an asset is acquired will determine whether it is an investment. LOCAL GOVERNMENT INVESTMENT POOL The City has investments in the Wisconsin local government investment pool (LGIP). The LGIP is part of the State Investment Fund (SIF), and is managed by the State of Wisconsin Investment Board. The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice. City funds are reported at fair value. MODIFIED ACCRUAL Governmental funds recognize revenue in the accounting period in which they become susceptible to accrual. “Susceptible to accrual” means that revenues are both measurable and available to finance expenditures of the fiscal period. Financial resources are available only to the extent that they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The availability period used for revenue recognition is 60 days. NET POSITION See Equity. NON-EXCHANGE TRANSACTION A transaction in which a party receives or gives value without directly receiving or giving equal value in return. NONRECIPROCAL TRANSFER A transaction in which an individual or entity incurs a liability or transfers assets to City of Superior without directly receiving value in exchange. PROMISE TO GIVE A written or oral agreement to contribute cash or other assets. QUOTES Informal responses by vendors to the City’s solicitation for prices of goods or services. Quotes may be written or verbal and are estimates of the price of a good or service. Quotes may be requested formally, such as a written memo to vendors, or informally, such as by phone. Prices and specification are not binding. REQUEST FOR BID (RFB) Formal request by the City for prices of goods or services. RFB’s have very specific requirements as to the information the vendors must provide, such as product features, duties to be performed by the vendor and pricing. Award decisions are based solely on lowest responsive/responsible bid received. REQUEST FOR INFORMATION (RFI) RFI’s can be prepared at any time, and do not result in a legally binding document or award. They can be used to narrow the scope of a project or define parameters, and can also be used to narrow the field of prospective vendors or prequalify vendors, in request for proposal projects. REQUEST FOR PROPOSAL (RFP) Formal request by the City for prices of goods or services. RFP’s have very specific requirements as to the information the vendors must provide, such as product features, duties to be performed by the vendor and pricing. Requests for Proposal allow for evaluation of proposals based on a specified criteria matrix. Award decisions are not based solely on lowest responsive/responsible bid received. All RFP’s shall include the City’s standard terms and conditions. RESTRICTION A donor-imposed stipulation that specifies a use for the contributed asset that is either limited to a specific future time period or is more specific than the broad limits resulting from the nature of the City, the environment in which it operates, and the purposes specified in the Articles of Incorporation and Bylaws. Restrictions on the use of an asset may be temporary or permanent. ORGANIZATIONAL STRUCTURE THE ROLE OF THE CITY COUNCIL City of Superior is governed by its City Council, which conducts its business through committee and Council meetings. Is responsible for the oversight of the Organization by: 1. Establish broad policies, including financial and personnel policies and procedures. 2. Establish programs and services for the City. 3. Enact ordinances, rules, and regulations for the City. 4. Review and adopt the annual City budget. 5. Approve all contracts and expenditures. 6. Levy taxes for the support of City government operations. 7. Approve and supervise the use of all federal and state grants. 8. Oversee City department budgets. The Department Heads shall be responsible for the day-to-day oversight and management of City of Superior. CITY COUNCIL STRUCTURE Committee meetings are open to the public and subject to the open meeting rules. The Committee of the Whole is made up of ten councilors and as needed meets immediately after the 2nd monthly Regular Council Meeting, except in April, when the Council organizes and elects their President and Vice President. Standing Committees 1. Committee of the Whole 2. Finance 3. Human Resources 4. License and Fees 5. Public Safety 6. Public Works Other Committees and Commissions Special committees may be established by three-fourths vote of the Council. The City has more than 40 Committees and Commissions which are made up of City of Superior residents, elected officials and/or City Staff. Any citizen interested in serving on the committees may contact the Mayor's Office. To view a summary of Common Council Committee appointments, visit our website at www.ci.superior.wi.us THE ROLES OF THE DEPARTMENT HEADS AND STAFF The Department Heads are appointed by the City Council. The Department Heads are responsible for department operations and the hiring and evaluation of department staff. Performance evaluations are guided by the City of Superior (Human Resources) Policy and Procedures Manual Section VII Performance Appraisals. All employees within a department shall report directly to that department’s head (or indirectly through a Manager/Supervisor), who shall be responsible for managing and evaluating all employees within the department. FINANCE DEPARTMENT OVERVIEW ORGANIZATION STRUCTURE The Finance department consists of eight (8) staff positions that manage and process financial information for City of Superior. The following positions comprise the Finance department: • Finance Director/Senior Administrative Officer • Assistant Finance Director • Accountant • Contract Analyst • Staff Accountant • Payroll Technician • Account Clerk DEPARTMENT RESPONSIBILITIES The primary responsibilities of the Finance department consist of: • General ledger transactions and reconciliations • Budgeting • Cash and investment management • Asset management • Grants and contracts administration • Purchasing • Accounts receivable and billing • Cash receipts • Accounts payable • Cash disbursements • Payroll • Financial statement processing • External reporting of financial information • Bank reconciliation • Reconciliation of subsidiary ledgers • Compliance with government financial reporting requirements • Annual financial statement audit and fiscal monitoring visits • Leases • Insurance • Fiscal records retention • STANDARDS FOR FINANCIAL MANAGEMENT SYSTEMS In accordance with 2 CFR Part 200.302(b), of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, City of Superior maintains a financial management system that provides for the following. Specific procedures to carry out these standards are detailed in the appropriate sections of this manual. 1. Identification, in all its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2 CFR Part 200.302(b)(1)) 2. Accurate, current, and complete disclosure of the financial results of each federally-sponsored project or program in accordance with the reporting requirements of 2 CFR Parts 200.327, Financial Reporting, and 200.328, Monitoring and Reporting Program Performance, and/or the award. 3. Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income, and interest and be fully supported by source documentation. 4. Effective control over and accountability for all funds, property, and other assets. City of Superior must adequately safeguard all such assets and ensure they are used solely for authorized purposes. 5. Comparison of expenditures with budget amounts for each award. 6. Information that relates financial data to performance accomplishments and demonstrates cost effective practices as required by funding sources. (2 CFR Part 301, Performance Measurement) 7. Written procedures to minimize the time elapsing between the transfer of funds and disbursement by City of Superior. Advance payments must be limited to the minimum amount needed and be timed to be in accordance with actual, immediate cash requirements. (2 CFR Part 200.305 Payment) See City of Superior’s written procedures in the Cash Drawdowns of Advances section of this manual. 8. Written procedures for determining the reasonableness, allocability, and allowability of costs in accordance with the provisions of the 2 CFR Part 200 Subpart E, Cost Principles, and the terms and conditions of the award. See City of Superior’s written procedures in the CHARGING COSTS TO FEDERAL AWARDS section of this manual. BUSINESS CONDUCT PRACTICE OF ETHICAL BEHAVIOR City of Superior requires Council members, committee members, and employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities, and all Council members, committee members, and employees to comply with all applicable laws and regulatory requirements. Unethical actions, or the appearance of unethical actions, are unacceptable under any conditions. The policies and reputation of City of Superior depend to a very large extent on the following considerations. Each Council member, committee member, and employee (referred to as “individual” in this section) acting in a City capacity must apply her or his own sense of personal ethics, which should extend beyond compliance with applicable laws and regulations in business situations, to govern behavior where no existing regulation provides a guideline. Each individual is responsible for applying common sense in business decisions where specific rules do not provide all the answers. In determining compliance with this standard in specific situations, individuals should ask themselves the following questions: 1. Is my action legal? 2. Is my action ethical? 3. Does my action comply with City of Superior policy? 4. Am I sure my action does not appear inappropriate? 5. Am I sure that I would not be embarrassed or compromised if my action became known within the City or publicly? 6. Am I sure that my action meets my personal code of ethics and behavior? 7. Would I feel comfortable defending my actions on the 6 o’clock news? Each individual should be able to answer "yes" to all of these questions before taking action. Each supervisor and management team member is responsible for the ethical business behavior of her or his subordinates. Supervisors and management team must carefully weigh all courses of action suggested in ethical, as well as economic, terms and base their final decisions on the guidelines provided by this policy, as well as their personal sense of right and wrong. COMPLIANCE WITH LAWS, REGULATIONS, AND ORGANIZATION POLICIES City of Superior does not tolerate: • The willful violation or circumvention of any federal, state, local, or foreign law by an employee during the course of that person's employment. • The disregard or circumvention of City of Superior policy or engagement in unscrupulous dealings. Employees should not attempt to accomplish by indirect means, through agents or intermediaries, that which is directly prohibited. The performance of all levels of employees will be measured against implementation of the provisions of these standards. CONFLICTS OF INTEREST INTRODUCTION In the course of business, situations may arise in which a City decision maker has a conflict of interest, or in which the process of making a decision may create an appearance of a conflict of interest. All Council members, committee members, and employees have an obligation to: 1. Avoid conflicts of interest, or the appearance of conflicts, between their personal interests and those of the City in dealing with outside entities or individuals, 2. Disclose real and apparent conflicts of interest to the City Council, and 3. Refrain from participation in any decisions on matters that involve a real conflict of interest or the appearance of a conflict. Conflicts of interest are guided by City of Superior (Human Resources) Policy and Procedures Manual Sec. IV Recruitment, Examination and Employment Standards 04.06D Conflict of Interest. HONORARIA ACCEPTANCE A City of Superior employee shall not accept an honorarium for an activity conducted where City reimbursed travel, work time, or resources are used or where the activity can be construed as having a relationship to the employee's position with City of Superior. Such activity would be considered official duty on behalf of City of Superior. A relationship exists between the activity and the employee's position with City of Superior if the employee would not participate in the activity in the same manner or capacity if he or she did not hold his or her position with City of Superior. The employee should make every attempt to avoid the appearance of impropriety. An employee may receive an honorarium for activities performed during regular non-working hours or while on annual leave if the following conditions are met: • All expenses are the total responsibility of the employee or the sponsor of the activity in which the employee is participating. • The activity has no relationship to the employee's City of Superior duties. Nothing in this policy shall be interpreted as preventing the payment to City of Superior by an outside source for actual expenses incurred by an employee in an activity, or the payment of a fee to City of Superior (in lieu of an honorarium to the individual) for the services of the employee. Any such payments made to City of Superior should be deposited to the City of Superior account and an appropriate entry should be made coded to the same program or department to which the employee’s corresponding time was charged. DISCLOSURE REQUIREMENTS A supervisor or employee who believes that he or she may be perceived as having a conflict of interest in a discussion or decision must disclose that conflict to the group making the decision. Most concerns about conflicts of interest may be resolved and appropriately addressed through prompt and complete disclosure. Therefore, City of Superior requires the following: 1. At the inception of employment or volunteer service to the City, and on an annual basis thereafter, the Finance department shall distribute a list of all contractors with whom the City has transacted business at any time during the preceding year, along with a copy of the disclosure statement to all members of the City Council, the Department Heads, other members of senior management, and employees with purchasing and/or hiring responsibilities or authority. Using the prescribed form, these individuals shall inform, in writing and with a signature, the Department Heads, the Finance Director, and the chair of the Finance Committee, of all potential reportable conflicts. 2. During the year, these individuals shall submit a signed, updated disclosure form if any new potential conflict arises. 3. The Department Head or Finance Director shall review all forms completed by employees, and the Finance Committee shall review all forms completed by Supervisors and the Department Heads and determine appropriate resolution in accordance with the next section of this policy. 4. Prior to management, Council, or committee action on a contract or transaction involving a conflict of interest, a staff, supervisor, or committee member having a conflict of interest and who is in attendance at the meeting shall disclose all facts material to the conflict of interest. Such disclosure shall be included in the minutes of the meeting. 5. A staff, supervisor, or committee member who plans to not attend a meeting at which he or she has a reason to believe that the management, Council, or committee will act on a matter in which the person has a conflict of interest shall disclose to the chair of the meeting all facts material to the conflict of interest. The chair shall report the disclosure at the meeting and the disclosure shall be reflected in the minutes of the meeting. 6. A person who has a conflict of interest shall not participate in or be permitted to hear management’s, the Council, or the committee’s discussion of the matter except to disclose material facts and to respond to questions. Such person shall not attempt to exert his or her personal influence with respect to the matter. 7. A person who has a conflict of interest with respect to a contract or transaction that will be voted on at a meeting shall not be counted in determining a quorum for purposes of the vote. The person having a conflict of interest may not vote on the contract or transaction and shall not be present in the meeting room when the vote is taken, unless the vote is by secret ballot. Such person’s ineligibility to vote and abstention from voting shall be reflected in the minutes of the meeting. For purposes of this paragraph, a member of the City Council of City of Superior has a conflict of interest when he or she stands for election as a department head or for re-election as a member of the City Council. 8. If required by Federal awarding agencies or pass-through entities, City of Superior will notify those agencies in writing of any potential conflict of interest. (2 CFR Part 200.112, Conflict of interest) 9. The City Council will review and sign the Conflicts of Interest policies of the City every two years and also have legal counsel review as well. RESOLUTION OF CONFLICTS OF INTEREST All real or apparent conflicts of interest shall be disclosed to the Finance Committee, the Department Heads, and the Finance Director. Conflicts shall be resolved as follows: • The Finance Committee shall be responsible for making all decisions concerning resolutions of conflicts involving Supervisors, the Department Heads, and other members of senior management. • The chair of the committee shall be responsible for making all decisions concerning resolutions of conflicts involving Finance Committee members. • The chair of the Council shall be responsible for making all decisions concerning resolutions of the conflict involving the chair of the Finance Committee. • The Department Heads shall be responsible for making all decisions concerning resolutions of conflicts involving employees below the senior management level, subject to the approval of the Finance Committee. An employee or supervisor may appeal the decision that a conflict (or appearance of conflict) exists as follows: • An appeal must be directed to the chair of the Council. • Appeals must be made within 30 days of the initial determination. • Resolution of the appeal shall be made by vote of the full City Council. • Council members who are the subject of the appeal, or who have a conflict of interest with respect to the subject of the appeal, shall abstain from participating in, discussing, or voting on the resolution, unless their discussion is requested by the remaining members of the Council. • DISCIPLINARY ACTION FOR VIOLATIONS OF THIS POLICY Failure to comply with the standards contained in this policy will result in disciplinary action that may include termination, referral for criminal prosecution, and reimbursement to the City or to the government, for any loss or damage resulting from the violation. As with all matters involving disciplinary action, principles of fairness will apply. Any employee charged with a violation of this policy will be afforded an opportunity to explain her or his actions before disciplinary action is taken. Disciplinary action will be taken: 1. Against any employee who authorizes or participates directly in actions that are a violation of this policy. 2. Against any employee who has deliberately failed to report a violation or deliberately withheld relevant and material information concerning a violation of this policy. 3. Against any supervisor or management team member who attempts to retaliate, directly or indirectly, or encourages others to do so, against any employee who reports a violation of this policy. PENALTY AND SANCTIONS (ORDINANCE NO.2005,9,8-2-77) Violations of any provision of this policy constitutes cause for suspension, removal from office or employment or other disciplinary action. In addition, a penalty of up to five hundred dollars ($500.00) for each act shall be imposed upon conviction under this policy. POLICY ON SUSPECTED MISCONDUCT INTRODUCTION This policy communicates the actions to be taken for suspected misconduct committed, encountered, or observed by employees and volunteers. Like all entities, City of Superior faces many risks associated with fraud, abuse, and other forms of misconduct. The impact of these acts, collectively referred to as misconduct throughout this policy, may include, but is not limited to: • Financial losses and liabilities • Loss of current and future revenue • Negative publicity and damage to the City’s good public image • Loss of employees and difficulty in attracting new personnel • Deterioration of employee morale • Harm to relationships with citizens, contractors, bankers, and subcontractors • Litigation and related costs of investigations, etc. Our City is committed to establishing and maintaining a work environment of the highest ethical standards. Achievement of this goal requires the cooperation and assistance of every employee and volunteer at all levels of the City. DEFINITIONS For purposes of this policy, misconduct includes, but is not limited to: 1. Actions that violate the City’s Code of Conduct (and any underlying policies) or any of the accounting and financial policies included in this manual. 2. Fraud (see below). 3. Forgery or alteration of checks, bank drafts, documents or other records (including electronic records). 4. Destruction, alteration, mutilation, or concealment of any document or record with the intent to obstruct or influence an investigation, or potential investigation, carried out by a department or agency of the federal government or by the City in connection with this policy. 5. Disclosure to any external party of proprietary information or confidential personal information obtained in connection with employment with or service to the City. 6. Unauthorized personal or other inappropriate (non-business) use of equipment, assets, services, personnel, or other resources. 7. Acts that violate federal, state, or local laws or regulations. 8. Accepting or seeking anything of material value from contractors or persons providing goods or services to City of Superior. Exception: gifts valued at $25 or less. 9. Impropriety of the handling or reporting of money in financial transactions. 10. Failure to report known instances of misconduct in accordance with the reporting responsibilities described herein (including tolerance by supervisory employees of misconduct of subordinates). Fraud is further defined to include, but not be limited to: • Theft, embezzlement, or other misappropriation of assets (including assets of or intended for the City, as well as those of our service recipients, subcontractors contractors, suppliers, and others with whom the City has a business relationship). • Intentional misstatements in the City’s records, including intentional misstatements of accounting records or financial statements. • Authorizing or receiving payment for goods not received or services not performed. • Authorizing or receiving payments for hours not worked. • Forgery or alteration of documents, including but not limited to checks, timesheets, contracts, purchase orders, receiving reports. City of Superior prohibits each of the preceding acts of misconduct on the part of employees, officers, executives, volunteers, and others responsible for carrying out the City’s activities. WHISTLEBLOWER PROTECTION The City will consider any reprisal against a reporting individual an act of misconduct subject to disciplinary procedures. A “reporting individual” is one who, in good faith, reported a suspected act of misconduct in accordance with this policy, or provided to a law enforcement officer any truthful information relating to the commission or possible commission of a federal offense or any other possible violation of the City’s Code of Conduct. REPORTING PROCEDURE If an employee of City of Superior has a reasonable belief that an employee or the City has engaged in any action that violates any applicable law, or regulation, including those concerning accounting and auditing, or constitutes a fraudulent practice, the employee is expected to immediately report such information by following the procedures as detailed in the personnel handbook. DISCIPLINARY ACTION Disciplinary actions are guided by City of Superior (Human Resources) Policy and Procedures Manual Sec. XBI Disciplinary Actions 16.01 DISCLOSURE TO OUTSIDE PARTIES Allegations of and information related to allegations of suspected misconduct shall not be disclosed to third parties except under the provisions described in this policy (such as disclosure to outside investigators hired by the City to aid in an investigation). However, all known frauds involving the Department Heads, senior management, or members of the City Council, as well as all material frauds involving employees below the senior management level, shall be disclosed by the Finance Committee to the City’s external auditors. The City will disclose, in a timely manner, in writing to Federal awarding agencies or pass-through entity, all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting Federal awards. (2 CFR Part 200.113 Mandatory disclosures) SECURITY FINANCE DEPARTMENT A lock will be maintained on the door leading into the City of Superior Finance Department. This door shall be closed and locked in the evenings and whenever the Finance Department is vacant. The key/combination to this lock will be provided to key accounting personnel and the Department Heads, and other personnel as approved by the Department Heads. City of Superior’s blank check stock shall be stored in a fireproof file cabinet in the Finance Department. This cabinet will be locked with a key that is kept in the Finance Department. Access to this file cabinet shall be by keys in the possession of the Finance Director, and the Accountant and the Staff Accountant. Petty cash is stored in a drawer locked with a key. The Staff Accountant and the Finance Director will be the only employees with keys to the petty cash drawer. ACCESS TO ELECTRONICALLY STORED ACCOUNTING DATA City of Superior utilizes passwords to restrict access to accounting software and data. Only duly authorized finance personnel with data input responsibilities will be assigned passwords that allow access to the system. Finance personnel are expected to keep their passwords secret and to change their passwords on a regular basis, no less frequently than every 75 days. Administration of passwords shall be performed by a responsible individual independent of programming functions. Each password enables a user to gain access to only those software and data files necessary for each employee's required duties. On an annual basis, City of Superior performs a review of accounting software users to ensure they have the appropriate access levels. Unnecessary access will be rescinded. STORAGE OF SENSITIVE DATA In addition to accounting and financial data stored in the Finance Department, other sensitive data, including protected personally identifiable information (PPII), such as social security numbers of employees and/or program participants (consumers) may be stored in areas other than the Finance Department. Locations of sensitive data include, but are not limited to: 1. Human Resources Department 2. Electronic or on-line storage The City’s policy is to minimize the storage of sensitive data by shredding documents with such data or deleting additional copies of the sensitive data from documents as soon as possible. Please see the City’s technology policies for standards for electronic and on-line storage. DESTRUCTION OF CONSUMER INFORMATION As stated earlier, all sensitive data must be securely stored and shredded when no longer needed. City of Superior will also shred all consumer information obtained by the City for any reason. Shredding will be performed on a schedule determined by each department that possesses such data, and the schedule shall be made a part of the Record Retention policy (see RECORD RETENTION section of this manual). GENERAL OFFICE SECURITY After hours, a security key is required for access to the offices of City of Superior. Keys are issued only to employees of City of Superior. GENERAL LEDGER AND CHART OF ACCOUNTS The general ledger is the collection of all asset, liability, equity, revenue, and expense accounts. It is used to accumulate all financial transactions and is supported by subsidiary ledgers that provide details for certain accounts. The general ledger is the foundation for the accumulation of data and production of reports. CHART OF ACCOUNTS OVERVIEW The chart of accounts is the framework for the general ledger system and the basis for the accounting system. The chart of accounts consists of account titles and account numbers assigned to the titles. General ledger accounts are used to accumulate transactions and the impact of these transactions on each asset, liability, net asset, revenue, expense, and gain and loss account. City of Superior’s chart of accounts is comprised of five (5) types of accounts: 1. Assets and Deferred Outflows of Resources 2. Liabilities and Deferred Inflows of Resources 3. Fund Equity and Net Position 4. Revenues and Other Financing Sources 5. Expenditures/Expenses and Other Financing Uses Each account number shall be divided into the following parts: 1. Fund 2. Department 3. Division 4. Activity Basic Account 5. Activity Sub Account 6. Element 7. Object DISTRIBUTION OF CHART OF ACCOUNTS All City of Superior employees involved with account coding or budgetary responsibilities will be provided with a current chart of accounts, or the section of the chart of accounts applicable to their department or program. As the chart of accounts is revised, an updated copy of the chart of accounts shall be promptly distributed to these individuals. CONTROL OF CHART OF ACCOUNTS The Finance Director and Assistant Finance Director monitor and control the chart of accounts, including all account maintenance, such as additions and deletions. Any additions or deletions of accounts must be approved by the Finance Director or Assistant Finance Director, who ensure that the chart of accounts is consistent with the organizational structure of City of Superior and meets the needs of each division and department. ACCOUNTING ESTIMATES City of Superior utilizes numerous estimates in the preparation of its interim and annual financial statements. Some of those estimates include: 1. Useful lives of property and equipment 2. Fair market values of investments 3. Fair market values of donated assets 4. Values of contributed services 5. Cost allocation calculations The Finance Director will reassess, review, and approve all estimates yearly. All conclusions, bases, and other elements associated with each accounting estimate shall be documented in writing. All material estimates, and changes in estimates from one year to the next, shall be disclosed to the Finance Committee, the Internal Auditor, and the external audit firm. JOURNAL ENTRIES All general ledger entries that do not originate from a subsidiary ledger shall be supported by journal vouchers or other documentation, including an explanation of each such entry. Examples of such journal entries are: 1. Recording of noncash transactions 2. Corrections of posting errors 3. Nonrecurring accruals of income and expenses Certain journal entries, called recurring journal entries, occur in every accounting period. These entries may include, but are not limited to: 1. Depreciation of fixed assets 2. Amortization of prepaid expenses 3. Accruals of recurring expenses 4. Amortization of unearned revenue Recurring journal entries shall be supported by a schedule associated with the underlying asset or liability account or, in the case of short-term recurring journal entries or immaterial items, a journal voucher. All journal entries not originating from subsidiary ledgers shall be authorized in writing by the Finance Director by initialing or signing the entries. RECONCILIATION OF ACCOUNTS To ensure the accuracy of the City’s financial reporting, the City will prepare and document reconciliations of asset and liability general ledger accounts for each reporting period. Reconciliations will prove that the balances presented in the general ledger of the City agree with independent supporting documentation (i.e. bank statements, physical inventory counts, lender records). Sub-ledger accounts will be reconciled to its general ledger account (control account) each reporting period. Reconciliations will be reviewed by the Finance Director or designated accounting staff who was not part of preparing the reconciliation or supporting documentation. Any discrepancies shall be immediately investigated and resolved in a timely manner. SPREADSHEET MANAGEMENT Spreadsheets are an integral component of the City’s information and decision-making framework to assist in the tracking and processing of financial and business information. Significant spreadsheets used by the City support the following functions: • Financial reporting– these spreadsheets directly determine financial statement transaction amounts or balances that are subsequently recorded in the general ledger, act as a key control in the financial reporting process (e.g. balancing and/or reconciling significant accounts), or create or support financial reports or disclosures. • Analytical- these spreadsheets are used to support the management decision-making process. • Operational- these spreadsheets are used to facilitate tracking and monitoring of workflow to support operational processes, such as listing of open claims, unpaid invoices, or other information. Spreadsheets that are significant to the financial process will be identified by the Finance Department, and a list of the spreadsheets, including the purpose, file location, and end-user/owner name and department will be maintained by the Finance Director and updated annually. Significant spreadsheets will have the following controls to help ensure data integrity and reduce risk of data loss: 1. Access control- significant spreadsheets will be saved on a secured corporate server and not a personal hard drive. Access to the spreadsheet will be restricted to only those with a legitimate business purpose to access the file. Spreadsheets will be password protected to provide additional security for high-risk or sensitive content. 2. Input control- data cells that calculate, summarize, or contain a formula will be locked. 3. Change control- spreadsheet changes will be logged, described, tested, and documented. Updated spreadsheets will be referenced with the version number and publication date. 4. Documentation or record control- spreadsheets that are printed to comply with record retention policies, and grant documentation requirements will include standard headers and footers that identify the City, department, spreadsheet name, date, and time. Prior to the development and implementation of complex spreadsheets to support financial calculation or information, the Finance Department will work with the Information Technology department, to evaluate whether the calculation or information extraction can be completed by the financial system. REVENUE RECOGNITION POLICIES FOR MAJOR SOURCES OF REVENUE City of Superior receives revenue from several types of transactions. Revenue from each of these types of transactions is generally recognized in the financial statements in the following manner: TAXES Tax revenues are reported in accordance with generally accepted accounting principles (GAAP) in the governmental fund financial statements and in accordance with Governmental Accounting Standards Board (GASB) Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions in the government-wide financial statements. Revenue recognition is based on actual collection activity and historical performance. Property taxes are recognized as revenues in the year for which they are levied and appropriate entries will be recorded in the fund financial statements when the revenue is not available within 60 days after fiscal year-end. Delinquent taxes are recognized as revenue in the government-wide statements of net position and activities, subject to an allowance for uncollectible amounts. Delinquent taxes will continue to be reported as unearned revenue in the fund statements. CHARGES FOR SERVICES Revenue from service charges is recognized under the modified accrual and full accrual basis of accounting, depending on the fund type. Revenue for services is recognized when the service is provided. Revenue from user fees is recognized at the time of collection. Under full accrual (proprietary, fiduciary, and government-wide financial statements), the related revenue is recognized at time of service, if the receivable is measurable. Under modified accrual (governmental fund statements), revenues are recognized if available to defray the liabilities of the current period (i.e. collectible within the coming year). Revenues deemed unavailable are not recognized in the fund financial statements, rather deferred inflows of resources is credited. This entry is eliminated and the appropriate revenue recognized for the government-wide financial statements. LICENSES AND PERMITS Licenses and permit revenue is recognized when cash is collected (cash basis). However, depending on the nature of the revenue, certain January collections may be accrued and recognized as revenue for the prior fiscal year. FINES AND FORFEITURES Revenue from fines and forfeitures is recognized when received in cash or when measurable and available or when the City has an enforceable legal claim to the amount, regardless of when cash is received. Except, when the cash settlement received in January pertains to fines imposed in the previous month and is recorded as revenue in the previous fiscal period, unless funds are restricted for specific uses or time periods, in which case, revenue will be recognized when the allowable uses or time periods occur. If the accrual-basis recognition of fines as provided above is not practicable, revenue from fines may be recognized on a cash basis GRANT INCOME Grant income is accrued monthly based on incurrence of allowable costs (for cost-reimbursement awards) or based on other terms of the award (for fixed price, unit-of-service, and other types of awards) against a fully executed grant agreement. GIFTS, DONATIONS, CONTRIBUTIONS Gifts, donations and contributions are recognized as income when received, unless accompanied by restrictions or conditions. These contributions are considered non-exchange transactions. IN-KIND CONTRIBUTIONS OR NON-FEDERAL MATCH In-kind is recognized as income when received. (See the Cost Sharing and Matching section of this manual.) PROGRAM INCOME Program income is defined as gross income generated by a supported activity or earned as a result of an award, and is recognized as a reduction in expenditures in the period in which it is received. USER FEES AND FEE-FOR-SERVICE INCOME User fees and fee-for-service income is recognized as income when services are rendered unless collection of amounts due is in question. In this case, revenue is recognized when payments are received. INTEREST INCOME Interest income is accrued monthly based on when it was earned. Other Income Immaterial categories of revenue may be recorded on the cash basis of accounting (i.e., recorded as revenue when received) as deemed appropriate by the Finance Director. ADMINISTRATION OF FEDERAL AWARDS OVERVIEW City of Superior may receive Federal financial assistance from a grantor agency through grants or cooperative agreements. Throughout this manual, federal assistance received in any of these forms will be referred to as a federal “award.” PREPARATION AND REVIEW OF PROPOSALS Individual departments are responsible for preparing proposals for projects that the department intends to pursue in accordance with City bid procedures. However, all proposals shall be reviewed by the Finance Director or Assistant Finance Director prior to submission to government agencies or other funding sources to ensure the proposed budget includes all appropriate costs. Final proposals shall be reviewed and approved in writing by the City Council and the Department Heads. POST-AWARD PROCEDURES After an award has been made, the following steps shall be taken: 1. Verify the specifications of the grant or contract. The Finance Department shall review the terms, time periods, award amounts, and expected expenditures associated with the award. A Catalog of Federal Domestic Assistance (CFDA) number shall be determined for each award. All reporting requirements under the contract or award shall be summarized. 2. Create new general ledger account numbers. New accounts shall be established for the receipt and expenditure categories in line with the grant or contract budget. 3. Gather documentation. See the following Document Administration section for details. COMPLIANCE WITH LAWS, REGULATIONS, AND PROVISIONS OF AWARDS City of Superior recognizes that as a recipient of federal funds, the City is responsible for compliance with all applicable laws, regulations, and provisions of contracts and grants. To ensure that the City meets this responsibility, the following policies apply with respect to every grant or contract received directly or indirectly from a federal agency: 1. For each federal award, an employee within the department responsible for administering the award will be designated as "grant manager.” 2. Each grant manager is encouraged to attend a training on grant management prior to beginning his or her role as a grant manager (or as early in their functioning as a grant manager as practical). Thereafter, all grant managers shall attend refresher/update courses on grant management as deemed appropriate by the applicable Department Head. 3. The grant manager shall take the following steps to identify all applicable laws, regulations, and provisions of each grant and contract: a. Read each award and prepare a summary of key compliance requirements and references to specific laws and regulations. b. Review 2 CFR Part 200 Appendix XI, Compliance Supplement (updated annually) published by the Office of Management and Budget (OMB) for compliance requirements unique to the award and for compliance requirements common to all federal awards. c. Review the section of the Catalog of Federal Domestic Assistance (CFDA) applicable to the award. d. The grant manager will communicate grant requirements to those who will be responsible for carrying them out, or are impacted by them. 4. The Finance Department shall forward copies of applicable laws and regulations to the grant manager (such as OMB regulations, pertinent sections of compliance supplements, and other regulations). 5. The grant manager and/or the Finance Department shall identify and communicate any special changes in policies and procedures necessitated by federal awards as a result of the review of each award. 6. The grant manager shall take all reasonable steps necessary to identify applicable changes in laws, regulations, and provisions of contracts and grants. Steps taken in this regard shall include, but not be limited to, reviewing subsequent grant and contract renewals, reviewing annual revisions to 2 CFR Part 200 Appendix XI, Compliance Supplement, and communications with federal awarding agency personnel. 7. The grant manager shall inform the Finance Department of applicable laws, regulations, and provisions of contracts and grants. The grant manager shall also communicate known instances of noncompliance with laws, regulations, and provisions of contracts and grants to the auditors. The Finance Department will then communicate this information to the independent auditors. DOCUMENT ADMINISTRATION For each grant/award received by City of Superior from a federal, state, or local government agency, a master file of documents applicable to the award shall be prepared and maintained. The responsibility for assembling each master file shall be assigned to the grant manager assigned to administer the program. The master file assembled for each government award shall include all of the following documents (including originals of all documents received from the awarding agency): 1. Copy of the initial application for the award and corresponding budget 2. All correspondence to and from the awarding agency post-application, leading up to the award 3. The final, approved budget and program plan, after making any modifications 4. The grant agreement and any other documents associated with the initial making of the award 5. Copies of pertinent laws and regulations, including awarding agency guidelines, associated with the award 6. Subsequent grant modifications (financial and programmatic) 7. Copies of program and financial reports 8. Subsequent correspondence to/from the awarding agency 9. Results of any monitoring visits conducted by the awarding agency, including resolution by City of Superior of any findings arising from such visits 10. Correspondence and other documents resulting from the closeout process of the award The preceding grant document file shall be organized into four sections as follows: 1. Pre-award documents 2. Post-award documents, including reports 3. Laws, regulations, and agency guidelines 4. Audit/monitoring-related documents On the inside front cover of the grant document file shall be a Summary of Critical Award Provisions, prepared by the grant manager. This summary shall include, at a minimum, the following: 1. Key compliance requirements, including citations of applicable laws and regulations 2. Important deadlines 3. Correspondence contact information at the awarding agency The original grant document file shall remain in the office of the grant manager in a locked filing cabinet. The grant manager shall maintain a separate file of frequently requested documents that shall consist of photocopies of the documents included in the secure grant document file. The purpose of this file of copied documents is to limit the potential for loss of valuable documents. Any other City of Superior employee making a valid request for access to grant documents shall be provided with the file of copied documents and shall be asked to sign this file out of the grant manager’s office. CLOSEOUT OF FEDERAL AWARDS City of Superior shall follow the closeout procedures described in 2 CFR 200.343 – 345, Closeout, and in the grant agreements as specified by the granting agency. City of Superior and all subrecipients shall liquidate all obligations incurred under the grant or contract within 90 days of the end of the grant or contract agreement.