City Council Minutes

Pursuant to due call and posted notice thereof, the City Council Workshop of the Victoria City Council was called to order at 5:30 p.m. by Acting Mayor Amundsen in the Council Chambers at 7951 Rose.

Council Members Present: Acting Mayor Tim Amundsen; Councilmembers: Jim Paulsen, Kim Roden and Rick Tieden.

Absent: Mayor Mary Hershberger Thun

Others Present: City Administrator Steve Sarvi; Finance Director Jylan Johnson; Aaron Nielsen, MMKR, Scott Manion Finance Committee, Hartman; and Recording Secretary Tanya Schmieg.
 

Ms. Johnson explained the purpose of the workshop is to review with the auditor the results of the 2007 year-end audit. She introduced the auditor who would be giving the presentation, Mr. Aaron Nielsen.

Mr. Nielsen presented the special purpose report and reviewed the audit summary opinions and findings. He stated the city was issued a clean opinion. Mr. Nielsen noted that there was a finding in the internal control with the overall monitoring but there were no compliance problems with the financial reporting. He noted the last finding was with the disbursements and the 35-day timeframe. Councilmember Tieden commented on the ongoing monitoring and having more than one person in that process. He asked about the internal review. Mr. Nielson explained that there weren’t any specific compliance problems and consideration is given to the city with regards to the size and the city’s segregation of duties. Mr. Manion said monitoring needed to document more regularly. Ms. Johnson noted that the issues have already been addressed.

Mr. Nielsen reviewed the outcome of the general fund revenues and expenditures. Councilmember Paulsen asked about the grand total for the expenditures in the general fund. Mr. Nielsen said they will add that to the report next year and noted the difficulty is with only considering revenues.

Mr. Nielsen talked about the importance of having sufficient equity or fund balance. Councilmember Paulsen commented on the cash balance in May 2007 and where they are and where they want to be. Mr. Manion said the Finance Committee did talk about what the appropriate level is going forward. Mr. Sarvi noted that other cities have fund balances up to 80% of revenues.

Mr. Nielsen reviewed the fund balance. Councilmember Paulsen asked whether the city was funding depreciation, and noted there is $700,000 worth of depreciation a year.

Mr. Nielsen referred to page 10 and 11 and talked about the water enterprise fund. He stated it is important to monitor the utility rates on an ongoing basis. Acting Mayor Amundsen commented on the water rate changes and the challenges for the future. Ms. Johnson noted the next bill will be in July and that will be for the outdoor water. Ms. Johnson stated the water treatment plant was built with the growth anticipated at that time.

Mr. Nielsen discussed the sewer and storm water funds and said it is also important to monitor these rates.

Mr. Nielsen reviewed the entity and government-wide financial statements. He said the Management Discussion and Analysis (MD & A) with the financial report also provides an overview. He commented on other past employment benefits e.g., continuing health insurance for retirees, and said the city is not allowed to charge a different rate than what is charged for active employees. Councilmember Paulsen asked about the implicit rate subsidy and asked what is spent per year. Ms. Johnson responded that City does not have any retirement medical plans. Mr. Sarvi commented on the fire department. Ms. Johnson said that the fire relief is a separate entity.

Ms. Johnson referred to page 16 and 17, the statement of Net Assets and Statement of activities, similar to a balance sheet and income statement. Acting Mayor Amundsen commented on the public works total. Ms. Johnson noted that total has infrastructure from developers and assessments with street projects.

Ms. Johnson talked about the water treatment plant. Staff and the City Council discussed the Field House and the park improvement fees.

Ms. Johnson commented on 2008 and the challenges, being the decline in revenues generated by development and the decline in property values. She talked about the decline in permitting fees and the impact to the General Fund and Water Enterprise Fund. She also addressed the potential impacts of the declining property values.

Ms. Johnson stated there needs to be careful planning in 2009 and 2010 to mitigate these challenges.
 

The workshop was adjourned at 6:24 p.m.

Respectfully submitted,
Tanya Schmieg
Recording Secretary