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Home My WebLink AboutAudit Committee-Minutes-3/8/2016City of Colleyville Page 1 City of Colleyville Audit Committee Agenda City Hall 100 Main Street Colleyville, Texas 76034 817.503.1000 www.colleyville.com Tuesday, March 8, 2016 4:45 p.m. City Manager’s Conference Room Third Floor – City Hall 1. CALL TO ORDER 2. PRESENTATION AND DISCUSSION 2a Discussion of the draft Fiscal Year 2015 (FY15) Audit and SAS 114 Letter 3. ADJOURNMENT I hereby certify this agenda was posted on City Hall bulletin boards Friday, March 4, 2016 by 5:00 p.m. Amy Shelley, TRMC City Secretary A quorum of the Colleyville City Council and/or any other Colleyville Board, Commission, or Committee may be in attendance at this meeting. Any matter on this agenda may, at the discretion of the governing body, be opened for public comment and discussion. If you plan to attend this public meeting and have a disability that requires special accommodations, please advise Executive Secretary at least 48 hours in advance at 817.503.1111, and reasonable accommodations will be made to assist you. City of Colleyville Page 1 City of Colleyville Audit Committee Minutes City Hall 100 Main Street Colleyville, Texas 76034 817. 503.1000 www.colleyville.com Tuesday, March 8, 2016 City Manager’s Conference Room Third Floor – City Hall Accounting Manager Karen Hines called the Audit Committee meeting to order on March 8, 2016, at 4:45 p.m. ROLL CALL: Committee members Nancy Coplen, Chuck Mogged, and Chris Putnam were present. City Manager Jennifer Fadden, Deputy City Manager Chris Fuller, Chief Financial Officer Brian Hogan, Accounting Manager Karen Hines, and City Secretary Amy Shelley were also present. 2. PRESENTATION AND DISCUSSION 2a. Discussion of the draft Fiscal Year 2015 (FY 15) Audit and SAS 114 Letter John Manning, Audit Partner, with Pattillo, Brown, & Hill presented this item and briefed the committee. Committee member Putnam asked Mr. Manning if having the auditors prepare the city’s financial statements is standard practice. Mr. Manning replied yes, as long as the city is capable of doing the financial statements themselves. Mr. Manning confirmed that the staff is competent and capable of preparing the financial statements, however, due to the time commitment to do so, the city contracts with Pattillo, Brown and Hill for that service. Committee member Putnam asked Mr. Manning if they are just formatting our own data. Mr. Manning replied yes. The staff provides a trial balance at year end that is audited and tested and then reformatted to provide the financial statements. Committee member Mogged asked Mr. Manning what investment returns are anticipated by TMRS. Mr. Manning replied it is not as bad as it used to be, but page 71 outlines that for the first one seven percent is anticipated. Committee member Mogged asked staff how much the draw down should be at this high funding. Chief Financial Officer Brian Hogan replied we are at 108 percent funded; however, over the last three years, the numbers have come down. Mr. Manning added Colleyville sends in less than any other city they work with. City Council Minutes March 8, 2016 City of Colleyville Page 2 Committee member Putnam asked Mr. Manning if we are basically catching up and this is a first time liability. Mr. Manning replied that since the City is fully funded, we report our position as a net pension asset on page 30. Instead of using the full rate, we could phase in the rate. He explained that most cities could not financially catch up and fully fund the liability in one year so they were given the option of using a phase-in rate to catch up. He stated that GASB 68 is why reporting the unfunded liability is now required. Committee member Mogged asked Mr. Manning how realistic the returns are. Mr. Manning explained the rate of expected returns on page 70. Committee member Mogged asked Mr. Manning if this is a blending of different things. Mr. Manning replied yes. Committee member Putnam stated it’s not seven percent. Committee member Mogged asked Mr. Manning if six percent is what we should be doing internally. Mr. Manning replied it is not an option. The rate is set at seven percent. Committee member Mogged asked staff about the true liabilities. Chief Financial Officer Brian Hogan replied the actuarial study is reevaluated each year, and it takes into consideration the number of employees we will have over the next few years that are eligible for retirement, the number of retirees receiving benefits, and the age and salaries of those contributing to the system, and that is used for the rate, and how they adjust those rates. City Manager Jennifer Fadden asked the Committee if they would like for TMRS to make a presentation about the current plan. Committee member Mogged agreed, and stated it could help to answer some other questions which off-set. Mr. Manning added the seven percent is not what we are going to get on the market. Committee member Putnam stated forfeited funds go against the liability. Committee member Putnam agreed it would be good to have TMRS provide a presentation. Committee member Coplen asked Mr. Manning if the actuaries are done statewide, or just for our people. Mr. Manning replied they are unique to the City, unlike the school district, which are done together. He added we do not just get that out of the portal, we also get the information from the census data, like what we report to TMRS. Committee member Mogged stated he would like to have the pages go across from each other so that headers line up. Accounting Manager Karen Hines stated the final will be one page. City Council Minutes March 8, 2016 City of Colleyville Page 3 Committee member Mogged stated the collectables and allowances for that, seemed a little higher compared to the past, is there a trend, such as getting less or losing more. Chief Financial Officer Brian Hogan replied they are about the same, and as the ad valorem taxes go up relative to the appraisal values, the receivable balances go up as well. Committee member Coplen asked staff if we use the same people as GCISD uses for collectables. Accounting Manager Karen Hines replied yes, the collection firm that both use is Perdue, Brandon, Fielder, Collins and Mott LLP. Committee member Mogged stated although it is a testament to the processes and people in the department, things may surface; however, nothing is seen with these updates. Chief Financial Officer Brian Hogan stated he did some testing with municipal courts, utility billing, and cash receipts, and found nothing abnormal, which was confirmed with the audit. Mr. Manning concurred, and added staff will put some cash reconciliation processes in place, such as a pooled cash account. Committee member Mogged expressed his appreciation to the percentage of completion. Committee member Putnam asked about the detail behind the budget transfers. Mr. Manning explained that those are outlined on page 63. City Manager Jennifer Fadden explained that at the end of the fiscal year, the City Council approved a budget amendment that transfers any excess General Fund revenue over expenditures to the Capital Projects Fund for future capital improvement projects. Accounting Manager Karen Hines stated the next Audit Committee meeting will take place on Tuesday, May 3, 2016 at 5:15, to discuss the quarterly investment report. 3. ADJOURNMENT The Audit Committee meeting adjourned at 5:26 p.m. APPROVED BY A VOTE OF 3 AYES, 0 NAYS, AND 0 ABSTENTIONS ON THIS THE 3RD DAY OF MAY 2016. Minutes taken and prepared by: Amy Shelley, TRMC City Secretary