Called City Council Meeting

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[0:04] All right, now watch it.
[0:08] I cannot believe how hard it was to get, I've never had this much trouble getting this screen.
[0:13] I had to change my password twice.
[0:22] I've stepped out. They don't need me in there for this part.
[0:28] Honestly, I think there's, is it showing now?
[0:35] Okay, can I have a motion to reconvene?
[0:38] I'll make that motion.
[0:40] Boy, that was bright together.
[0:42] I'll make that motion.
[0:44] And I'll go ahead and second.
[0:45] Okay, all in favor?
[0:47] Aye.
[0:47] Okay, motion carries. I don't know what time it is. I'm sorry.
[0:51] All right,
[0:56] and so there is no action on what was discussed in executive session.
[1:03] So we're going to hop back to our action item B to discuss discussion,
[1:10] consideration and possible action on presenting and accepting the fiscal year 22-23 audit.
[1:23] Yeah, just make sure you stick into it.
[1:27] You're very important.
[1:29] Mayor and City Council, I want to say thank you very much for allowing me to perform your audit this year.
[1:38] I want to say thank you to the staff and to Risa and really your whole team this year.
[1:43] It seemed like everybody kind of came together after last year's audit and worked together.
[1:47] There was probably the first time I've ever seen that somewhere where everybody got together
[1:52] and kind of went into control and took everything over and set up bank accounts in the right
[2:00] ways and all that kind of stuff.
[2:01] It really made a pretty big improvement and I'll show you that here in a second.
[2:06] If you'll turn to page four, really four through page six, this is the actual independent
[2:13] auditor's report.
[2:14] I think it's a little different than last year's.
[2:17] It has the opinion as the very first paragraph.
[2:20] So the AACPA basically changed the format.
[2:23] But at the end of the day, it means the same thing.
[2:25] It means that your financial statements presented within this report
[2:29] present fairly the financial position of the city as of September 30, 2023.
[2:34] So it's called a unmodified slash clean opinion.
[2:38] So it's the opinion that you were going for and accomplished.
[2:41] So congratulations.
[2:45] The next section I'd have you go to is on page 10 and page 11.
[2:51] And this is basically the condensed version of your
[2:55] government-wide financial statements.
[2:59] I like to bring this up because it kind of compares a nice
[3:03] summarized balance sheet and income statement this year to
[3:07] last year, so you can kind of see what's changed and what has been adjusted based on the previous year.
[3:14] So it's a good tool to look at to make those changes.
[3:18] But at the end of the day, you ended this year with about $7.2 million in total government-wide net position assets.
[3:30] That's basically the fund balance of everything within the city.
[3:35] if you looked at the city as if it were to be a business.
[3:38] And that's what the government-wide financial statements are. Basically,
[3:42] your capital assets within these financial statements are recorded
[3:46] and capitalized on your books and depreciated. Your debt is recorded on your books
[3:50] and written off as you make payment. So it's like looking at the city
[3:54] as if it were to be a business. So it's a little different than what you're used to seeing.
[3:59] But last year's number, to kind of put
[4:02] that comparison you probably see was about 6.2 million dollars. So there was about a million
[4:07] dollar improvement in this year from last year. And if you'll turn to page 11 you'll
[4:13] see the kind of the breakdown of that number. Last year you had net loss of about 281,000.
[4:22] This year you had a gain of about a little, right at a million dollars. A big chunk
[4:27] of that is related to some of the, I guess, right increases that took place that within
[4:35] the utility fund, a lot of property tax revenue came in. You had a little bit of grant money
[4:44] that came in as well, so it was really a pretty good year to have compared to the year before
[4:49] that. So it had a lot of growth and that's really kind of what you needed to get
[4:54] I think last year you had, if you remember, your cash in one of your funds had to be reported as a liability in order to record it because it was technically negative.
[5:08] That's all been kind of corrected and your fund balances are all positive now.
[5:16] If you'll turn to page 20,
[5:22] these are the governmental financial statements, which it looks a little different.
[5:27] I guess the number one thing is that your assets, as you buy assets, you expense them with these financial statements,
[5:35] as opposed to capitalism. When you bring on debt, it's recorded as proceeds, and the payments that you make towards that debt are expensive.
[5:44] So it's kind of like a cash flow basis of the city.
[5:47] This is what you're used to seeing.
[5:49] When you buy an asset, you expense it.
[5:51] When you pay off your debt, you expense it.
[5:53] So it's more of a flow of resources.
[5:55] But just the general fund and the other governmental funds,
[6:00] that's excluding the utility fund, which is the big one,
[6:03] you ended the year with about a million nine
[6:07] in fund balance of which about $613,000
[6:13] was the unassigned version that gets you into the new year.
[6:22] So that represents about a $22,000 increase.
[6:25] Last year you lost money in that fund.
[6:27] So that kind of puts it in comparison.
[6:31] So really overall, I just say that it was a huge improvement.
[6:37] Let me see.
[6:44] Yeah, basically all the fund balances are positive compared to last year.
[6:48] So it's really remarkable how that can change in one year, but I just want to say congratulations.
[6:55] But I found it really neat to be able to see how everybody knew that there were some issues
[7:00] that need to be worked on, and I remember all the calls that you had with different
[7:04] people all wanting to work together, so it was kind of neat to be able to see that
[7:08] from that perspective, so I think that's why that was accomplished this year.
[7:15] Starting on page 27, going almost to the end of the book.
[7:18] These are the notes of the financial statements.
[7:21] Like I say every year, the typing gets smaller and smaller.
[7:26] Some day I'm going to be able to increase this to where it's a reasonable format to see,
[7:30] but it's a lot of important information that tells you about the different accounting methodologies,
[7:35] and this begins on page 27.
[7:40] A lot of stuff that is important to read if you want to go through and learn all about
[7:44] the accounting methodologies, what's restricted, what's unrestricted, the different classifications
[7:49] of fund balance.
[7:50] But if you want to skip all of that, probably the most important section to go to begins
[7:54] on page 36, and this is the section that deals with the details on your fixed assets
[8:02] as well as the accumulated depreciation on those assets.
[8:05] more importantly on 37 this is where the debt is recorded and it actually goes
[8:13] into all the debt that you have each category and the payments to be made
[8:18] into the future. If I was going to recommend one thing to to change or
[8:26] look to enhance into the future would be some reserves and I know that's just
[8:31] going to take some time but to build some reserves within the, you don't actually have, well you've
[8:37] created one for your own purpose but usually you don't have one within the utility fund,
[8:42] but that's where most of the debt is, the bonds to create some reserves for the debt in that.
[8:49] So you have been accumulating debt and you've used that, I mean you have been accumulating
[8:55] resources and you've used those resources to pay that debt but there really should be some accumulation
[9:00] of some future resources to be able to kind of have that so but that's this is
[9:06] the first year that you actually have that use of that money to be to pay that
[9:12] debt so it's something to look forward to into the future into grow but this is
[9:19] the section that when you go to borrow money or if you decide to do some sort
[9:24] of refunding this is probably the most important section to look at this is
[9:29] what they'll go to because they'll want to see all your debt categories and the payments
[9:32] into the future and the different interest rates and that kind of stuff, but that's really
[9:37] the most important section of the notes, unless you want to spend hours reading through
[9:42] all the accounting methodology, which I would, but a lot of people don't want to do that.
[9:48] And then towards the end of the notes, there's some sections that deal with the EDC.
[9:54] If you wanted to look at the EDC financials, there wasn't a whole lot of activity,
[10:01] but you can see the financials on page 16 and page 18 and 19.
[10:08] They're just on the right-hand side of the city's financial statements.
[10:12] It's listed as a component unit, and it's kind of discreetly blended within your financial statements,
[10:18] but it's on the right-hand side, so you can see their financial statements.
[10:21] But they ended the year with about $544,000 of fund balance of which about $939,000 in
[10:31] assets and payment on their debt, they had about $314,000 in their debt.
[10:40] One final thing, I want to state, I'm sorry for moving around so much on this, but you
[10:45] had this year with your debt, you had about $9.9 million
[10:55] which you ended the year with with debt. And that began at 10
[11:00] million 312,000 and you reduced it by about $368,000 for this
[11:05] first year. And those are your standard. I'm sorry, I switched
[11:09] around. It's on page 13. It's kind of a summarized version
[11:12] of your assets and your debt but
[11:19] that's really pretty much it I mean you had
[11:23] some growth this year so it's it's a lot different picture than what it was last
[11:26] year and it was a lot cleaner this year a lot of the you've gone through I saw
[11:31] the effort where you went through and created a lot more funds and and set it
[11:37] up in a way to where the cash accounts to be reconciled because it looked like
[11:40] you were monitoring the cash like crazy to be able to to get through this
[11:44] So it, I mean there's always room to approve
[11:48] but it was a huge growth this year from my perspective.
[12:22] There are also some supplementary schedules towards the back
[12:27] that kind of break down the activity
[12:30] of the other non-major funds.
[12:37] The biggest one being the hotel fund.
[12:39] There was a transfer from the hotel fund this year
[12:41] for some expenditures that had taken place and I know we all worked together and spoke
[12:47] with your attorney about moving those out and utilizing some of that money because it never
[12:50] had been utilized. It never had been utilized to cover the expenses that normally those
[12:57] funds would have covered. So that's what that transfer reflects. That's really pretty
[13:02] much it. Does she have any questions?
[13:38] Did anybody have any additional questions, concerns, discussion?
[13:48] lot of information and stuff, but is there any way that the process, I mean, we're eight
[13:55] months out now from this snapshot in time, is there, are there ways, is there things
[14:02] that we can do differently in the transformation of information and everything to make this
[14:10] happen a little quicker or is it just the nature of the piece?
[14:15] You put a lot of controls, this past year, a lot of controls are put in place.
[14:19] It's a lot of, I know Sarisa, her team was working on cash,
[14:24] was the big thing, was the big tool to really watch the cash,
[14:30] and I think you even eliminated some of the pooled cash stuff.
[14:34] I mean, I always liked pooled cash,
[14:36] but you wanted to be able to watch it closely,
[14:39] but I think it's just gonna be a matter of
[14:41] always watching expenses and controlling expenses,
[14:47] and jump really improving whatever you have as far as reporting you see so you
[14:54] can you can watch every single month and be able to see what is occurring you
[14:58] can almost have this
[15:01] You can actually have a set of financials to tell you where you stand at, so there would
[15:06] never be a wait for the end of the year to find out where you stand at. I'm not sure exactly
[15:11] what you're seeing each month, but you can grow that. You can look at a set of financials
[15:17] and the bank statements, the reconciliation, a lot of information that can just tell you
[15:22] where you stand at. The biggest thing that I saw was some of the controls when it
[15:29] deals with the cash reduction in the expenses.
[15:34] And there was some strategies for the place
[15:36] to be able to increase some of the impact.
[15:38] And the big thing is expenses, there was a lot
[15:41] of expenditures that were occurring in the past.
[15:47] And that was kind of the way it's in the past.
[15:51] Unfortunately, we don't have the full-time payroll
[15:55] for the financial person to do that together for us.
[15:58] It would be nice, but just seeing it, I mean, we're two-thirds of the way basically through 2024 when we're seeing the snapshot time at the end of 2023.
[16:09] We have a pretty good idea because of the communication that we get, but I was just curious if there was something we could do where it wasn't eight months after the fact.
[16:22] You mean for me to come in?
[16:23] Yeah.
[16:26] Or if that's just the nature of it?
[16:27] No, no, it's, no, it's, it's something with, with me, I've eliminated a few of my clients, some of the ones that were kind of complicated.
[16:36] I had some that there was a lot of issues this past year with peer reviews and, you know, I've stopped taking any more clients because they just kept calling me and I'd add more and more and more, but I kind of held off on purpose on this one
[16:55] Because it was kind of some issues from the past that took quite a bit of work to be able to get the financials to where they're completely reconciled.
[17:06] And I'm not supposed to play any role in that.
[17:08] I'm supposed to come in and be completely ready to go.
[17:11] This year turned out to be a whole lot cleaner than it had been.
[17:17] And I think a lot of that is because you switched to a new system in the past that
[17:24] ENCODE and it had cool cash and that wasn't something you were familiar with.
[17:28] So I kind of put it off until, you know, anticipating that because I needed to be able to get a whole bunch of done at one time.
[17:37] I'll have you done sooner next year, I'll put you.
[17:40] I mean, I'll work with Sarisa to figure out exactly when you want to have it October 1st.
[17:47] I think that's the problem, too, is that, you know, when I was with Halliburton, I was the chief finance officer, and they could take two months of work to get ready for the audit that we had every year, and then I'm doing 40-something of these, and four of them are big counties.
[18:05] But, I mean, you guys have really...
[18:08] We're your only client.
[18:12] You should sell yourself, man.
[18:14] But I can move you up.
[18:19] I was just asking if there was something that we could do.
[18:22] If we can, because it doesn't concern me nearly as much when things are good,
[18:29] but I've seen enough of these where I've seen things that have taken a really bad turn for the worst.
[18:34] And we're finding out after we've gone too far down the road to make a quick correction.
[18:41] That's the only reason I'm asking.
[18:44] Well I think you've made some of those changes.
[18:46] I think you've made the changes to where it'll be a whole lot easier to get it done on my end
[18:53] to be able to come in and count on the reconciliation and be able to count on this
[18:57] and be able to put it together and give you the results a lot faster.
[19:02] I'm not going to promise I can do it in October, but I will have you ready to go.
[19:08] I just kind of put you at the end, you know, falsely because of some of the other issues
[19:18] that had taken place in the past and wanted to knock out a whole bunch of them first before
[19:23] I dealt with one that was going to take a lot of manpower.
[19:25] So what you're saying is our department heads have done fantastic.
[19:28] They've done really, really well.
[19:30] I mean, they did, I mean, like I said, I found it really neat that everyone kind of worked
[19:38] together.
[19:39] I mean, I had phone calls from every department that were all just coming together.
[19:43] I think there was even a police person that was playing a role in it that it was just
[19:48] really neat to see all of that and it,
[19:52] you know, everyone was interested in bringing
[19:58] it together and coming up with a solution and I was really surprised by the way it came out this year.
[20:03] I mean you still have some things to improve on there. You can always cut expenses and things like
[20:09] that but you've done a fantastic job of just the basic rigging the fund balances positive and
[20:18] reconcile and handle the cash appropriately where one fund is not negative cash. I mean those
[20:24] of things that you should never have to deal with and so I mean you should really be applauded
[20:29] for that.
[20:29] I think we should really congratulate our department heads for putting this together like they did
[20:37] and making it happen when you know they took it over there you know it was kind of a mess
[20:45] when they put it together and they made things happen so I think we need to thank them
[20:49] for that.
[20:51] Thank you. This is keep it going.
[21:00] Nothing like hearing clean report.
[21:05] Okay, then if there's
[21:06] no further discussion, can we make a motion to accept the audit? I'll make that motion.
[21:13] Okay. Second. I'll second. All in favor. I motion carries.
[21:22] Okay. So can we have a motion
[21:25] to adjourn? I'll make that motion. Second. I'll second it. All in favor. I motion carries.
[21:32] we are adjourned. It is seven twenty three.