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Home My WebLink AboutCity Council Packet 06-24-2003 SpecialAgenda City of Plymouth Special City Council Meeting Tuesday, June 24, 2003 5:30 p.m. Public Safety Training Room 1. Call to Order 2. Meet with Metropolitan Council Representative Roger Scherer 3. Review 2002 audited financial statements 4. Schedule future study session topics 5. Adj ourn Agenda Number: TO: ight D. Johnson, City Manager FROM: arty S. Jacobson, Finance Manager through Dale E. Hahn, Director of inance and Information Technology SUBJECT: 2002 Audited Comprehensive Annual Financial Report DATE: June 9, 2003 for Special City Council meeting June 24, 2003 1. PROPOSED ACTION: Meet with the auditors to review the results of the 2002 Audited Comprehensive Annual Financial Report in preparation to approve a resolution accepting the 2002 Audited Comprehensive Annual Financial Report at the council meeting. 2. BACKGROUND: The City annually contracts with an independent Certified Public Accounting firm to audit the City's Comprehensive Annual Financial Report. Kirsten Vosen, Audit Partner, from Deloitte & Touche LLP attended the April 15, 2003 special council meeting to discuss their procedures and audit results. She reviewed in more detail the audit responsibility of the City Council. In addition, we discussed the benefits of having a work session to review the results of the 2002 audit. At that time it was determined to review the audit in a study session, and place the acceptance of the audit on the consent agenda for the council meeting. The City Council Agenda item on this matter was distributed in the packets on June 13th Please refer to the items in that packet. It contained: Agenda Report 2002 Comprehensive Annual Financial Report Schedule of Expenditures of Federal Awards for the Year Ended December 31, 2002 and Independent Auditors' Reports — Attachment 1 Audit Communication Letter — Attachment 2 Management Letter — Attachment 3 Responses to Auditors' Management Letter Comments — Attachment 4 City Council Meeting Presentation — Attachment 5 3. DISCUSSION: Kirsten Vosen, Audit Partner, from Deloitte & Touche LLP will be at the June 24, 2003 study session. She will present a management summary of significant items, additional discussion on the various reports and be available for questions. O:\Accounting\RESOLINS\Ljacobson\Study session to review 2002 audit.doc Agenda Number: TO: Dwight D. Johnson, City Manager FROM: Larry S. Jacobson, Finance Manager through Dale E. Hahn, Director of Finance and Information Technology SUBJECT: 2002 Audited Comprehensive Annual Financial Report DATE: June 9, 2003 for City Council meeting June 24, 2003 1. PROPOSED MOTION: Approve the attached resolution accepting the 2002 Audited Comprehensive Annual Financial Report. 2. BACKGROUND: The City annually contracts with an independent Certified Public Accounting firm to audit the City's Comprehensive Annual Financial Report. This is the eighth year that the audit has been performed by Deloitte & Touche LLP. The audit process involves many different aspects and reporting requirements. Included in the packet to the Council are several different things, which are summarized below. Comprehensive Annual Financial Report Independent Auditors' Report The financial audit of the City is conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. In addition to expressing an opinion on the general purpose financial statements of the City in conformity with generally accepted accounting principles, the auditors' also issue reports required by Government Auditing Standards on their consideration of the City's internal control over financial reporting and their tests of the City's compliance with certain provisions of laws, regulations, contracts and grants. These reports are contained in a separately bound packet of reports discussed below. Schedule of Expenditures of Federal Awards for the Year Ended December 31, 2002 and Independent Auditors' Reports — (Attachment 1) This series of reports is required to comply with Government Auditing Standards which applies to the City due to the amount of federal financial assistance received by the City's Community Development Block Grant Program (CDBG) and the HRA's Section 8 Housing Assistance Program. The HRA and it's operational programs, which are the Section 8 Program, the HRA's General Fund Program and Plymouth Towne Square, have been included in the City's Comprehensive Annual Financial Report. 2002 Audited Comprehensive Annual Financial Report Page 2 The HRA is a separate legal entity with an independent board appointed by the City Council. Government accounting standards classify the HRA as a "component unit of City". As a component unit, the financial information of the HRA is reported in the City's Comprehensive Annual Financial Report. In addition, as a cost saving measure the HRA's audit is done as part of the City audit. As a result, the City receives additional information, such as the audit information for the Section 8 Program and Plymouth Towne Square that would not routinely be submitted to the City. Included here are the following reports: Independent Auditors' Report on Compliance and on Internal Control over Financial Reporting Based upon the Audit Performed in Accordance with Government Auditing Standards This report addresses the City's compliance under Government Auditing Standards, Minnesota Legal Compliance, any material weaknesses, and items related to internal controls over financial reporting. Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to each Major Federal Award Program and on the Schedule of Expenditures of Federal Awards This report addresses the City's compliance with specific federal program requirements that are applicable to the major federal programs of the City and the HRA, the internal control over compliance, and an opinion on the Schedule of Expenditures of Federal Awards. Audit Communication Letter — (Attachment 2) This letter is a separate communication to the Mayor and Council members, which is required by professional auditing standards. It communicates to the City Council concerning certain matters that may be of interest in fulfilling the council's obligation to oversee the financial reporting and disclosure process for which the management of the City is responsible. Management Letter — (Attachment 3) This letter addresses recommendations that the auditors' developed concerning certain matters related to the City's internal control and certain observations and recommendations on other matters that were developed while they were planning and performing the audit of the financial statements. Responses to Auditors' Management Letter Comments — (Attachment 4) This report is prepared by City staff and includes a response to the various items of recommendations made by the auditors' in their management letter. It will provide responses to any current year comments on other accounting, administrative and operating matters, and recommendations resulting from their observations during the audit. City Council Meeting Presentation — (Attachment 5) This is a copy of the information that the auditor will present at the study session. 2002 Audited Comprehensive Annual Financial Report Page 3 3. DISCUSSION: Deloitte & Touche LLP has issued an Unqualified Opinion on the City's Comprehensive Annual Financial Report for the year ended December 31, 2002. An Unqualified Opinion is the highest form of assurance a Certified Public Accounting Firm can issue. In reviewing the report, I suggest reading the Letter of Transmittal which begins on page ix, found in the Introductory Section of the report, and the Notes to the Financial Statements which begin on page 16, of the Financial Section of the report. The divider tabs in the front of each section of the report provide descriptions of the funds, which will provide a good background for the financial information in the body of the report. The statements for December 2002 did not change materially from the Unaudited Statements provided to Council in March. The City's financial position continues to strengthen in 2002. There was a General fund surplus that was used to establish additional reserves for future financial stability. The 2002 results were beneficial in putting the City in a better position to react to the funding changes enacted by the 2003 legislature which reduced the local government aid and market value homestead credit aid to be received in 2003 and future years. On June 30, 1999, the Governmental Accounting Standards Board (GASB) issued Statement of Governmental Accounting Standards (SGAS) No. 34, Basic Financial Statements and Management's Discussion and Analysis -for State and Local Governments. SGAS No. 34 changes the framework of financial reporting for state and local governments. SGAS No. 34, which the GASB has been working on for more than 15 years, represents the most important single change in the history of accounting and financial reporting for the public sector. The requirements of SGAS No. 34 are effective for the City for financial statements of periods beginning January 1, 2003. The new pronouncement will move the public sector much closer to the accounting methods followed in the private sector, including the full accrual basis of accounting and recording of depreciation expense. It is expected that "anyone with an interest in public finance - citizens, the media, bond raters, creditors, legislators, and others - will have more and easier -to -understand information." Financial reports will have information about the full cost of providing services to citizens. The City is in the process of addressing this issue and is in the process of assessing the necessary changes for the City to report under this new requirement. This matter is discussed in more detail in the Management Letter from the auditors, see attachment 4. 2002 Audited Comprehensive Annual Financial Report Page 4 Kirsten Vosen, Audit Partner, from Deloitte & Touche LLP will be at the June 24, 2003 meeting. In the study session scheduled for June 24, 2003, she will present a management summary of significant items, additional discussion on the various reports and be available for questions. The resolution to accept the 2002 Audited Comprehensive Annual Financial Report will document that the City Council has received the audit reports from the auditors. 4. RECOMMENDATION: I recommend City Council adopt the attached resolution accepting the 2002 Audited Comprehensive Annual Financial Report. 0:\Accounting\KESOLTNS\Ljacobson\2002_audit acceptance.doc CITY OF PLYMOUTH RESOLUTION NO. 2003 - ACCEPTING THE 2002 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND AUDIT WHEREAS, the City Council has received and reviewed the 2002 Comprehensive Annual Financial Report prepared by the Finance Department and the audit opinion of said report prepared by Deloitte & Touche LLP. WHEREAS, the firm of Deloitte & Touche LLP has issued an unqualified opinion as to the results of their audit; NOW, THEREFORE BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, MINNESOTA, that the 2002 Comprehensive Annual Financial Report prepared by the City's Finance Department and the audit of said report as prepared by Deloitte & Touche LLP and the same are hereby approved and accepted. Adopted by the City Council June 24, 2003. 0:\Accounting\RESOLTNS\Ljacobson\2002_audit_ acceptance.doc Agenda Number: TO: Dwight D. Johnson, City Manager FROM: Laurie Ahrens, Assistant City Manager04----,, SUBJECT: Set Future Study Sessions DATE: June 17, 2003, for City Council study session of June 24, 2003 1. ACTION REQUESTED: Review the pending study session topics list and, if desired, establish future special meetings or amend the topics list. 2. BACKGROUND: Attached is the list of pending study session topics, as well as calendars to assist in scheduling. Pending Study Session Topics at least 3 Council members have approved the following study items on the list) Pond and Drainage Issues (late summer) Council Tour of Hennepin County Workhouse (fall) Administrative fines Other requests for study session topics: OFFICIAL CITY MEETINGS June 2003 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8:00 AM TOUR 7:00 PM 7:00 PM HUMAN OF ZACHARY WATER TREATMENT PLANNING COMMISSION, Council Chambers RIGHTS COMMISSION - Council Chambers PLANT, 4425 Zachary Lane 8 9 10 11 12 13 14 7:30 PM YOUTH ADVISORY COUNCIL, Council Chambers 5:30 PM SPECIAL c MEETING:DISCUSSG:DIS IVES/JONQUILLANE DRAINAGE ISSUES, Public Safety Training Room 7:00 PM EVIRONMENTAL QUALITY COMMITTEE EQC), Plymouth Creek Center 7:00 PM PARK & REC ADVISORY COMMISSION PRAC), Council Chambers Flag Day 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 15 16 17 18 19 20 21 7:00 PM SPECIAL COUNCIL MEETING: DISCUSS BASSETT CREEK WATER MANAGEMENT ORGANIZATION; CO. RD. 73 & POSSIBLE TRANSIT GRANT, Council Chambers 7:00 PM PLANNING COMMISSION, Council Chambers 6:00 PM -8:30 PM FIRE DEPARTMENT FAMILY NIGHT, Fire Station III, 3300 Dunkirk Lane 7:00 PM HOUSING & REDEVELOPMENT AUTHORITY (HRA), Medicine Lake Room LEAGUE OF MINNESOTA CITIES ANNUAL CONFERENCE, St. Cloud Civic Center 22 23 24 25 26 27 28 7:30 PM YOUTH ADVISORY COUNCIL, Council Chambers 5:30 PM SPECIAL COUNCIL MEETING: MT WITH ME COUCIL REPT DISCUSS2gg2 AUDITED FINANCIAL STATEMENTS, Public safety Training Room 7:00 PM PLYMOUTH ADVISORY COMMITTEE ON TRANSIT (PACT) - Medicine Lake Room 9:15 AM MUSIC IN PLYMOUTH 5k RUN 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 29 2:00 PM 4:00 PM MILLENNIUM GARDEN RIBBON -CUTTING CEREMONY, Plymouth Creek Center 30 Jul 2003 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 May 2003 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 13 14 15 16 17 18 19 18 19 20 21 22 23 24 20 21 22 23 24 25 26 25 26 27 28 29 30 31 27 28 29 30 31 modified on 6/17/2003 OFFICIAL CITY MEETINGS AN 2003 Sunday I Monday Tuesday Wednesday Thursday Friday Saturday 12 1 2 3 4 5 Jun 2003 S M T W T F S 5:15 PM MUSIC COMMISSION, INDEPENDENCE IN PLYMOUTH, Council Chambers DAY - City 1 2 3 4 5 6 7 Hilde Offices Closed 8 9 10 11 12 13 14 13 Performance 15 16 17 18 15 16 17 18 19 20 21 Center 7:00 PM HOUSING 8 REDEVELOPMENT AUTHORITY (HRA), 22 23 24 25 26 27 28 COUNCIL, Council Medicine Lake Room 29 30 Chambers 6 7 8 9 10 11 12 7:00 PM REGULAR 7:00 PM PLANNING 7:00 PM PARK 8 REC ADVISORY COUNCIL COMMISSION, COMMISSION MEETING, Council Council Chambers PRAC), Council Chambers Chambers 13 14 15 16 17 18 19 7:30 PM YOUTH ADVISORY 7:00 PM HOUSING 8 REDEVELOPMENT AUTHORITY (HRA), COUNCIL, Council Medicine Lake Room Chambers 20 21 22 23 24 25 26 11:45AM PLYMOUTH-MTKA BUSINESS COUNCIL, 7:00 PM PLANNING COMMISSION, Council Chambers BORN Confermce Room, 301 Carlson Parkway, 4th floor 7:00 PM PLYMOUTH ADVISORY COMMITTEE ON TRANSIT (PACT) - 7:00 PM REGULAR Medicine Lake Room COUNCIL MEETING, Council Chambers 27 28 29 30 31 Aug 2003 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 modified on 6/17/2003 OFFICIAL CITY MEETINGS Jul 2003 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Auzust 2003 Sep 2003 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 PAI 3 4 5 5:30 PM NATIONAL NIGHT OUT 6 7:00 PM PLANNING COMMISSION, Council Chambers 7 8 9 10 11 7:30 PM YOUTH ADVISORY COUNCIL, Council Chambers 12 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 13 7:00 PM EVIRONMENTAL QUALITY COMMITTEE EQC), Plymouth Creek Center 14 7:00 PM HUMAN RIGHTS COMMISSION, Medicine Lake Room 7:00 PM PARK & REC ADVISORY COMMISSION (PRAC), Council Chambers 15 16 17 18 19 20 7:00 PM PLANNING COMMISSION, Council Chambers 21 7:00 PM HOUSING & REDEVELOPMENT AUTHORITY (HRA), Medicine Lake Room 22 23 24 25 26 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 27 7:00 PM PLYMOUTH ADVISORY COMMITTEE ON TRANSIT (PACT) - Medicine Lake Room 28 29 30 31 modified on 6/17/2003 OFFICIAL CITY MEETINGS September 2003 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 LABOR DAY - City 7:00 PM 7:00 PM HUMAN Offices Closed PLANNING RIGHTS COMMISSION, COMMISSION - Council Chambers Council Chambers 7 8 9 10 11 12 13 7:00 PM REGULAR COUNCIL MEETING, Council 7:00 PM EVIRONMENTAL QUALITY COMMITTEE 7:00 PM PARK & REC ADVISORY COMMISSION PRAC), Council Chambers EQC), Plymouth Chambers Creek Center 14 15 16 17 18 19 20 7:30 PM YOUTH ADVISORY COUNCIL, Council Chambers 7:00 PM PLANNING COMMISSION, Council Chambers 7:00 PM HOUSING & REDEVELOPMENT AUTHORITY (HRA), Medicine Lake Room 21 22 23 24 25 26 27 11:45AM PLYMOUTH-MTKA BUSINESS COUNCIL, 6ORN conference Room, 7:00 PM PLYMOUTH ADVISORY Rosh Hashanah begins at sunset Carlson Parkway, 4tN floor COMMITTEE ON TRANSIT (PACT) - Medicine Lake 7:00 PM REGULAR COUNCIL MEETING, Council Chambers Room 28 29 7:30 PM YOUTH ADVISORY COUNCIL, Council 30 Aug 2003 S M T W T F S 1 2 Oct 2003 S M T W T F S 1 2 3 4 Chambers 3 4 5 6 7 8 9 5 6 7 8 9 10 11 10 11 12 13 14 15 16 12 13 14 15 16 17 18 17 18 19 20 21 22 23 19 20 21 22 23 24 25 24 25 26 27 28 29 30 26 27 28 29 30 31 31 modified on 6/17/2003