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Regular City Council Meeting Monday, May 12,2014 Page 6 Councilmember Willmus suggested also using"Next Door"to get the information out to the public. b. Auditor's Report and Accept Audit Two bench handouts were provided, and entitled, "Reports on Compliance with Government Auditing Standards and Legal Compliance for the year ended De- cember 31, 2013;" "Communications Letter for the year ended December 31, 2013;" with the Comprehensive Financial Report previously provided as part of the meeting packet. Finance Director Chris Miller introduced Matt Mayer from the firm of KDV who presented audit findings, the audit process and any required disclosures, advising that it had been a very solid audit and offered his kudos to staff for their excellent preparation for this year's audit. Mr. Mayer reviewed the General Fund and each specific Enterprise Fund; noting that the General Fund Reserve balance was at 39.8%, which fell within the Policy Goal of 35%to 45%in reserves and well within the parameters established for the City. Mr. Mayer noted that the recent significant rate changes put in place for the Water Fund and Sewer Fund were immediately investing funds to address long-deferred capital needs, and were pay-as-you-go, keeping those funds debt-free. Mr. Mayer suggested keeping a close eye on the net position to ensure enough liquidity to cover operating needs and costs. Mr. Mayor advised that the only fund that appeared to be struggling over the last few years was the Golf Course Fund, even though management had done well in keeping costs level and it remained self-supporting, using profits from previous years to weather this economic storm. However, Mr. Mayor also suggested keep- ing an eye on that fund, as it could not remain sustainable over the long-term and may need subsidies in the future. Mr. Mayer also suggested consideration may be given by the City Council to including this Fund in the broader Recreation Fund in the future if it no longer qualified as an Enterprise Fund. Mr. Mayer noted that the Solid Waste Fund was performing as expected; and that the Storm Drainage Fund had allowed building a significant net position with the significant increase in the rate structure. However, Mr. Mayor noted that the fund included many major deferred items that were coming up in the near future. Overall, Mr. Mayer concluded that it was a good report with the exception of the Golf Fund, with all others moving in a positive direction. At the request of Councilmember McGehee (Comprehensive Report - Chart on top of page 20), Mr. Mayer clarified that the chart included all funds combined, including the Recreation Fund which was a higher number as that fund was most- ly fee-based.