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<br />City Council Regular Meeting - OS/22/06 <br />Minutes - Page 15 <br /> <br />internal controls, policies and documentation in place to allow <br />City management to make appropriate internal controls and <br />monitoring; and noted that his firm had interviewed several staff <br />members as well as several Councilmembers for their <br />perspectives. Mr. Eichten noted that staff considered that the <br />City Council provided policy and direction; and noted that the <br />City Council appeared to be directing the City's financial <br />activities through their policies in an effort to provide constant <br />monitoring of financial department controls. <br /> <br />Mr. Eichten reviewed the two components of the audit: <br />compliance (laws & regulations), and financial activities (results <br />of audit). Mr. Eichten highlighted various components of the <br />audit; governmental funds, both revenue and expenses, on a per- <br />capita basis in comparison with state-wide averages by <br />population classes; and highlighted several policies and <br />benchmark comparisons. Mr. Eichten noted that the City's cost <br />per capita for debt service was very low in comparison to other <br />similarly sized communities. <br /> <br />Discussion included impacts of the Twin Lakes bond issue on <br />future debt service; additional tax base from the Rosedale Center <br />improvements; declining fund balances; interest revenues and <br />long-term recovery of those investment funds; the policy of the <br />City Council to maintain fund balances at 50% of overall <br />expenditures of the city, with current fund balances at 32.5%. <br /> <br />Mr. Eichten highlighted those policies and fund balances not in <br />compliance, and the need for the City Council to address those <br />policies; noting that Mr. Miller had advised that future Council <br />agendas would be addressing those issues. <br /> <br />Further discussion included five-year trends by function; <br />increases, similar to other communities, in public safety services; <br />the Parks and Recreation Department deficit (25% of fund <br />balance) not meeting City Council policy; Community <br />Development Department now at 13.9% expenditures, rather <br />than the City Council policy for 100% fund balance); and a <br />review of Enterprise Funds. <br />Mr. Eichten concluded that the City's financial records were <br />found in good order; all infonnation was provided by staff as <br />