Admin Committee Minutes 1998 11-10-98 i '
UNITED CITY OF YORKVILLE
Committee Minutes - Administration
Date of Meeting: November 10, 1998 Time Convened: 6:35 P.M.
Location: Ill W. Fox Time Adjourned: 10:35 P.M.
Attendees:
Richard Sticka
Stephen Topolinski
John Weber
Dan Thul
Richard Scheffrahn
Doug Baun
John Bradstreet
Jim Nanninga
Art Prochaska
Rose Spears
Jeff Spang
Valerie Surd
Mike Anderson
Mike Englehardt
Discussion:
1.) Additional Audit Review /Audit Management Report - Our auditors
are here to answer questions that came up at a COW and City
Council meeting. For questions 1 - 3, Topolinski said the
difference is in the long term debt group. We need to accept a
final copy of the financial statement, but we have only
received a draft copy. Spang understands that the figures have
changed. Weber said that the figures have not changed.
Usually when we vote we vote on a final not'a draft. Footnotes
have been added. Some of the beginning balanced were adjusted.
Spang thinks there should have been a correction made to the
EDC loan of about $60,000. Toplinski feels it was about
$50,000. When you find corrections that need to be made, the
mistake may have been made in previous years. This year we
sent out a letter to the banks requesting beginning and ending
balances, and payments that were received. Then they
reconciled them to what they should be. When you make
payments, the come out of the debt service fund. The debt
service fund is basically a holding fund. Nobody had an
amortization schedule, so nobody really knows where money was
applied. The bank should send a statement. An amortization
schedule is a common thing to have on a long term loan. The
City should have been sent one. Usually one per year. 96 -97
audit closed, prior to that payments were made but did not
surface that year. Books are closed April 30, the audit was
probably not completed until October 31. The paper work from
the bank may not have gone through or they may not have
responded to our request. Weber said it does bother them when
the ending and beginning balance does not match. They do not
like to make prior period year adjustments, but he feels this
is a case of the City not really knowing specifically what
their debt service actually is. Drafts are issued for review,
to review the numbers and to know if they are ok. Payments
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made in the debt service fund at year end then adjustments did
not get recorded in the debt service fund. We need to request
a statement monthly. Question 5, debits and credits do not
match. Pandolphi wishes they knew why so they could answer
that question. There are some one sided journal entries. The
City debited without crediting. Some entries reflect to
correct cash. Due to Audit and Due from Audit basically is a
catch all. Stuff that got put there were items that the
bookkeeper did not know where else to put them. There were
entries posted to the account with no explanation. There are
several debits that they did not know where or to what
account /funds these entries actually belong to. Most of these
entries are manual entries. They could not come up with an
actual number. Some entries are one sided. Corrections are
made manually. Interfunds do not usually balance within the
year, but they will balance and tie out at the end of the year.
All journal entries have been made now. Weber feels that we
are paying a clerk and she is doing a very good job. We are
not paying an accountant to do an accounting position. He
feels that we have software problems. Weber and Topolski feel
that a lot of the mistakes are made by a person. Weber wishes
that when there is a concern on where an entry needs to be
applied that someone would call and ask. Debits should equal
credits. The accountants feel that it is a combination of
human error and software problems for the figures not to
balance. If things are caught earlier it is much easier to
isolate that month. The City was lead to believe that a new
accounting system was set up last year. It would have helped
to have someone come in monthly or every two months and look
over the books. Pandolphi was not able to locate and correct
all of the entries. All the fund should have put into the
general fund until they were set up. We would have to go back
to the journal entries to track the first payment into new
accounts. A new fund will have a zero balance. There is not
just one answer here. If the funds were looked over, mistakes
would be easier to locate. With governmental accounting you
do not depreciate. In 1997 we did not budget MFT, but in 1998
we did budget it. Special revenue funds were added within the
year. The south sewer fund has funds that exceed the fund
balance so it should have a deficit. There was money
transferred in. Prochaska said we should have received revenue
to cover that deficit. You can over spend on budgeted items
as long as there is revenue to cover it. It is the
responsibility of the City Council to provide documentation to
our auditors. We need to look at a policy to make sure that
that information is provided. Pandolfi had several meetings
with Nanninga and Scheffrahn. All problem accounts were
discussed, met again got all the journal entries. They met
four or five different times. Pandolfi did issue a clean
opinion on the cash sheet. Cash ties out to the banks and bank
reconciliations. Balance sheet is looked at as a day in time.
Prochaska asked if we have gone through the interfund
borrowing? Parks owe the general fund $2,000. This is a
permanent transfer. There needs to be a trail of where the
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money comes from. Land Cash Fund, how can we track what the
developers pay and how is it distributed? Does it go into the
general fund and then to the parks? Subdivision are separated
out now. We did not do this in the past. What is in the audit
is what was collected this fiscal year. Up until a few years
ago we would have needed to go through all the building
permits. Money needs to be spent for parks. Just in the last
few years we have documented where the money comes from. We
are showing $100,000 of interest, what are we collecting this
on, or do we really have development fees laying around? You
would not really know without going through the ledgers. The
money could be from several funds. Maybe payments coming in
before it is being paid out. We received money for 50 building
permits. Amounts break down to 43 permits. The library breaks
down to 50 permits. Accountants did not make any adjustments
to this account. Nanninga will ask Kim to check into this.
2.) Tax Levy - We'are looking at a 4.2 percent increase. This
increase does not require truth and taxation. If we were to go
over five percent then we would have to include truth and
taxation. The tax cap applies to existing growth. It does not
include all new and existing, five percent would only include
existing. Rate of inflation this year is at 1.7 percent. The
EAV went up .616 percent. This means that we are still allowed
to use the 1.7 percent. There were a couple of major business
that had a decrease in their EVA. We are able to hold the
levy at .9909 which is lower then the tax cap allows.
Basically we are only gaining the amount of money to cover the
pay increases. Take to COW.
3.) Management Letter Recomm endations - Tabled.
4.) Review Pay Schedules for Committee Meeting Minute Takers -
Currently the City pays $35 per meeting and $8.50 per hour to
transcribe the minutes. Nanninga suggest to increase
transcribing to $10.50 per hour and $35 per meeting up to three
hours. If the meeting goes beyond three hours, then the minute
taker would get an additional $10 per hour. If the meeting
only last three and one half hour then the person would be paid
for the full hour. Take to COW.
5.) Capital Inventory - Tabled.
6.) Accountant Assistance - There were some problems but Pandolphi
has been able to make adjustments on most of the items. There
are still a few problems, but they think they know what they
are. Kim is working with the software people. Pandolphi is
doing a six month check up. They have been checking monthly.
Problems with two different reports that should show the same
balances. We do need to look into this because it could cause
bigger problem later on. Thul is trying to find out why things
do not balance. Kim has been asked not to post anything to
interfund borrowing accounts. We need to do something with our
software because it is not Y2K compliant. Nanninga stated that
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we should have some new hardware on Friday, then we should be
able to get the software. If we were to go back and re -enter
everything then we should be able to isolate problems. Then
Pandolphi would have to come back in and audit the new numbers.
Pandolphi can not give a fixed rate for re- entering. They
would charge an hourly amount. ByY not being able to figure
out where the money came from still bothers people and makes us
look inept. If you correct the software and train the operator
then we are hitting both issues. What is the value of
re- entering? Is it worth a squad car for two?
7.) Health Insurance - There was only a gatekeeper question. The
question was did we have any claims over $10,000. There was
one claim. It is an ongoing condition that will require
ongoing care by specialists. NYL care has been purchased by
Aetna. The course of treatment might change. If we were going
to have people decide they are not happy with HMO and change to
PPO then that could change things. If you choose an HMO there
are more benefits and it cost less money. With the police
contract we can not take away or limit it more. There could
not be any benefit changes. Comparing NYL to Blue Cross, but
you can not compare because you can not go out of the HMO.
Police have set levels of contributions. The employees seem to
prefer this plan over our current plan. We have had some
unpleasantness with NYL Care. Englehardt feels that a lot of
the problems is not understanding the plan. The employees
really need to understand how to use the plan. All the claims
are being worked out. Some of the claims were processed
incorrectly. If an employee receives a bill at home then it is
the Physicians fault. Englehardt has not had any problems with
Blue Cross. When an employee gets a bill at home they call NYL
Care and they should really call the Physicians office. Aetna
does not currently have doctors in Kendall County. American
Health Care Providers do not use brokers. They include most of
the doctors in this area. They deal with a lot of
Municipalities. We need to make a decision for everyone not
just one company. Englehardt has had problems getting a quote
from American Health Care. Spang thinks that we should check
into them. Englehardt thinks that Blue Cross is the best
choice for the money. There is no real cost savings and no
extra benefits. Come May 1, Englehardt will be handed one
renewal and there will not be any choices. We will have until
May to decide on this. If we push this off, the $3,600 savings
with Blue Cross will go away. Englehardt will try to get some
benefit information from Aetna. At least just to see.
Englehardt has ten quotes from different companies that will
not be competitive with the networks in our area. Take to COW.
Seems that we got into some side issues that Englehardt has
taken personally. He is not here just to get our business and
walk away. He feels that Blue Cross is the best selection. He
is trying to help us make a good educated decision.
S.) Tower Ordinance - Tabled.
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9.) Flag Update - Tabled.
10.) Additional Business - Longevity Pay - Most of the City Council
still has not seen a copy of the police contract. Very few
communities do this, and if they do then it is only with a
group or so. Aurora offers it to their fireman. We have
always said we would try to offer employees something
comparable. Bring back.
Minutes by: Mollie Anderson
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