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City of Centerville <br /> Council Meeting Minutes <br /> June 13,2018 <br /> Mayor Paar moved New Business Item #1 to this portion of the meeting due to the attendance of <br /> Ms. Ellen Paulseth, Finance Director and Ms. Bonnie Schwieger, ABDO, Eick & Meyers Audit <br /> Manager. <br /> IX. NEW BUSINESS <br /> 1. Review of Audit <br /> Ms. Bonnie Schwieger appeared before Council and provided a brief review of the Management <br /> Letter noting that they did not find any deficiencies in internal control to be considered to be <br /> material weaknesses, General Fund balances including Revenue and Expenditures, Special <br /> Revenue and Capital project funds along with Debt Service Funds. She reported that the General <br /> Fund was healthy and was 63.4% of the budget which is above the regulatory requirements and <br /> General Finance Officers Association Best Practices of 30-50%, is an increase from last year <br /> (56%) and these figures are utilized to achieve the City's bond rating along with consistencies of <br /> meeting these standards. <br /> Ms. Schwieger stated that revenues experienced a positive budget variance of$169,225 with the <br /> most significant variances being building permits ($226,195) over budget, State Fire Aid <br /> ($109,800) under budget and refund and reimbursements ($27,960) over budget. She reported <br /> that total expenditures had a variance under budget of $10,417 with the most significant <br /> variances being fire protection services ($108,800) under budget due to less than expected fire <br /> aid, capital outlay ($41,749) over budget due to the purchase of the reader board and culture and <br /> recreation ($38,416) due to higher lawn maintenance services. She stated that public safety is <br /> the largest expense of the city over the past three years equating to $335/resident but overall <br /> $652/resident which is comparable to peer groups of$616/resident. She stated that the increase <br /> was due to the reader board purchase, transfer to the Street Fund ($200,000) and Capital Outlay <br /> Fund ($50,000). <br /> Ms. Schwieger also discussed Enterprise Funds (Water, Sewer and Storm Fund) stating that they <br /> are covering operating costs with amounts well over the minimum target balance (50% of <br /> operating costs). <br /> Ms. Schwieger stated that new accounting standards have been issued and may impact the City's <br /> future financial statements accordingly (GASB75, 83, 84, 85, 86, and 87). <br /> Discussion ensued regarding transfers out of $250,000, (Street Fund & Capital Outlay), peer <br /> groups, public safety budget and the effects of the City of Lino Lakes leaving the Fire District. <br /> Additional discussion took place regarding having the ability to pay cash for expenditures, <br /> Centerville Road expenditures, the consideration of depreciation on infrastructure, downtown <br /> watermain project, Public Works salaries, a percentage, expended through Enterprise Funds, <br /> WAC and SAC fees, pond maintenance, special assessments and property tax write off <br /> capabilities. Internal controls were discussed by both Ms. Paulseth and Ms. Schwieger along <br /> with the removal of language contained in previous audits regarding lack of segregation of <br /> duties. Administrator Statz stated that administrative staff is very aware of the segregation <br /> requirements. <br /> Page 5 of 9 <br />