I. Call to Order
II. Roll Call
III. Approval of Minutes
December 2, 2009 (p.4)
IV. Biennial League of Women Voters Budget Survey (pp. 5 – 10)
Biennially the CBJ has conducted a budget survey through the League of Women Voters of Juneau. The League is interested in conducting the 2010 budget survey. Due to the projected funding shortfalls, they understand that this may be a critical year for obtaining citizen budget guidance. Due to the increased use of cell phones and the number of residents screening calls through answering machines, the League is proposing a mail survey as opposed to their previous telephone surveys.
In order to meet the City Manager’s budget preparation timing target of March 15, the Assembly would need to finalize the questions by January 27, so that the form could be prepared, printing company could print and mail the forms by February 8. The residents would have three weeks after that date to mail back the surveys (March 1). Data analysis would be completed by March 8, with the preliminary report prepared on March 15.
League of Women Voters members will be available to discuss conducting the survey and the content and timing.
V. FY09 Financial Reports Presentation
Enclosed with the packet are the City and Borough of Juneau’s FY09 general governmental financial reports. These reports are produced as part of the annual audit process. These reports were prepared by staff and our auditors, Elgee Rehfeld Mertz, LLC. Reports include the following–
• Letter to the Assembly (which includes comments on internal controls and operations)
• Comprehensive Annual Financial Reports (CAFR)
• State Financial Assistance Report
• Expenditures of Federal Awards Report
The Letter to the Assembly was prepared by our Auditors. The Comprehensive Annual Finance Report was prepared by the Finance Department staff. The State Financial Assistance and the Expenditures of Federal Awards Report were prepared as a joint effort. Staff prepared the single audit financial data and the Auditors prepared the opinions and findings information.
These reports contain a significant amount of detailed financial information about the CBJ’s operations. The following is a brief overview of each report-
• The Letter to the Assembly is information provided by the auditor directly to the governing body. The Letter discloses the responsibilities of the auditor, what assurances the audit provides, any disagreements with management, any auditor adjustments, any poor judgment used in financial management and an analysis on operational items coming to the attention of the Auditors during the audit. Some of this information was previously reported in an Internal Control and Operating Comments Report. The Internal Control and Operating Comments Report is no longer provided. The Letter also references issues that are opportunities for strengthening internal controls and/or operating efficiencies. There were two new and six prior year management comments contained in this year’s report.
Current year comments
? School Capital Projects Interest Allocation. This comment relates to miscommunications between the CBJ Investment Officer, Accounting Staff and the Finance Director. Staff are working to improve our communications, documentation, coordination and planning related to project cash flow, bond investment selection and project interest allocations.
? Develop and maintain Documentation of Key Financial Reporting Processes and Controls. This has been an on going issue. The PRISM project includes documentation of our systems and supporting processes.
Prior Year Follow ups Comments
? Close School District Projects and Use District-wide Major Maintenance Capital Improvement Fund. This has been an ongoing task between Finance, Engineering and the School District.
? Popular Reports for Year-end Results. The recommendation is to develop a popular (abbreviated or shorten financial report) to help communicate budget and financial condition information to the public. We have discussed the cost benefit and increased workloads of this recommendations. We currently prepare an abbreviated budget report which focuses on the general governmental tax rates and services provided. In our analysis, we are reviewing the benefit verses the cost of preparing an additional popular report. The new financial system may provide opportunities to prepare this type of information with less workload impacts. Action on this recommendation has been delayed with the additional PRISM workloads.
? Evaluate Department Charges by Internal Service Funds. The recommendation is to review and determine if the amounts being retained in the Fleet and Risk Management Funds are higher than required. The Finance Department and Human Resources and Risk Management staff meet to review the balances being maintained within the Risk Management Fund. Each year the charge structures for the Risk Fund (Healthcare, Wellness, EAP, Workers Compensation, General Liability, Property, Auto, and Special Insurance charge rates are set (based on projected need) after consideration is given to any fund balances. The Fleet Fund balances generally represent department contributions to set aside funds to pay for equipment (police, fire, streets, parks and recreation, etc.) and comply with Assembly policy. Each year as part of the budget process staff meet with each fleet contributing department to review the fleet replacement plans, projected equipment costs, contribution rates and fleet fund balances.
? Enhance Investment Policies for Investment Rating Downgrades. This comment has been resolved.
? Grant Monitoring and Compliance. Recommendation for continued training to meet the new compliance requirements. Finance is responsible for the grant accounting and financial reporting, but not for grant project management. Finance has provided, and will continue to do so, financial training to the grant administrators. Outside training has been limited due to budget constraints.
? Docks and Harbors Cruise Ship Billing Procedures. This comment has been resolved.
• The Comprehensive Annual Financial Report (CAFR) reports the results of our operations and financial balances. The Auditors’ issued a “clean opinion” regarding the CBJ’s general-purpose financial statements.
• The State Financial Assistance Report, commonly referred to as the state single audit, reports the CBJ’s compliance with the terms and conditions of grants received from the State. This report includes a listing of all State supported projects, the status of the grant funds and comments on compliance. There were no current year comments or questioned costs noted in the report.
• The Expenditure of Federal Awards Report, commonly referred to as the federal single audit, reports the CBJ’s compliance with the terms and conditions of the grants received from the federal government. This report includes a listing of all federally supported projects, the status of the grant funds and comments on compliance. There were no current year comments or questioned costs noted in the report.
Mr. Max Mertz, of Elgee Rehfeld Mertz CPAs, the audit firm that conducted the City and Borough’s annual audit will present the Comprehensive Annual Financial Report (CAFR) and accompanying reports. In addition, he will provide an overview of the process and answer questions.
The firm of Elgee Rehfeld Mertz CPAs also prepared a separate set of financial reports for the School District. These reports have been submitted to the School Board.
VI. Sealaska Heritage Institute’s request for $20,000 for Celebration 2010 (p. 11)
During the preparation of the FY08 budget, the Sealaska Heritage Institute requested that the Assembly provide $25,000 in financial assistance to host Celebration. The Assembly included in the Biennial Budget $20,000 for Celebration 2010. The identified funding consists of $10,000 in cash contributions, $9,000 for Centennial Hall Room and Equipment Rentals and $1,000 for JPD security. In a letter dated December 1, 2009, Rosita Worl, President, Sealaska Heritage Institute, is requesting the $20,000 in support. Celebration 2010 is a three day event scheduled for June 3-5, 2010. Ms. Worl’s December 1, 2009 letter is included in the packet.
VII. Assembly Member Budget Reduction Recommendations
The City Manager requested Assembly guidance in responding to the anticipated FY11 and FY12 Biennial Budget shortfalls. David Stone, Finance Committee Chair, requested that the Committee members provide him with their thoughts on budget reductions prior to the January 13, 2010 Finance Committee meeting. The Committee will discuss these thoughts and provide direction to the City Manager.