HomeMy WebLinkAbout01/19/1999 Work Session
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MINUTES OF THE WORK SESSION MEETING OF
THE SPRINGFIELD CITY COUNCIL HELD
TUESDAY, JANUARY 19, 1999
The city of Springfield council met in work session in the Jesse Maine Room, 225 Fifth Street,
Springfield, Oregon, on Tuesday, January 19, 1999, at 6:20 p.m., with Mayor Maine presiding.
ATTENDANCE
Present were Mayor Maine, Councilors Ballew, Hatfield, Leiken and Simmons. Councilors Fitch and
Lundberg were absent (excused). Also present were City Manager Michael Kelly, Assistant City
Manager Gino Grimaldi, City Attorney Joe Leahy, Senior Management Analyst Rosie Pryor, City
Recorder Julie Wilson and members of the staff.
1. Museum Board of Directors Application Review.
Museum Coordinator Kathy Jensen provided brief information regarding the puppet festival. Ms.
Jensen then presented the staff report on the Museum Board of Directors issue. According to Article
I, Section 2 of the by-laws of the Springfield Museum Board of Directors, "There shall be eleven
members on the Springfield Museum Board of Directors who shall be nominated by the Springfield
Museum Board of Directors and appointed by the City Council."
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The Board's major functions are establishing policy to guide Museum operations and fundraising for
Museum operations and special projects. Both Kathie K. Hardy's extensive experience as a
volunteer and fundraiser, and Mary H. Farrington's experience in the museum field and her expertise
as a fundraiser qualify them as excellent candidates. The Springfield Museum Board of Directors
recommends appointment of both applicants to the Board.
Hardy and Farrington were recruited to fill two of the three vacant positions on the Board.
Farrington will complete John Lively's term, which ends September 30,2000. Hardy will fill one of
two new positions created when Council approved an increase in members from nine to eleven on
September 21, 1998. Hardy's term will end January 19,2003. With the appointment of Hardy and
Farrington, the Board will have ten members.
Ms. Jensen introduced both Ms. Hardy and Ms. Farrington. Ms. Jensen provided background
information on both candidates.
Ms. Jensen briefly discussed the Museum Board by-laws in general.
Mayor Maine has worked with both candidates in the past. She said the candidates had the needed
skills.
By consensus the council agreed to appoint Hardy and Farrington to the Museum Board at the
regular meeting.
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Mayor Maine provided the council with a memo regarding the status of board, committee and
commission recruitment's. Council members were encouraged to assist in seeking volunteers as
appropriate.
Work Session Meeting Minutes
January 19, 1999
Page 2
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2. 1998 Annual Financial Report and Management Letter.
Accountant Mary Jean Payne presented the staff report on this issue. In accordance with the Oregon
Statutes and the City's Charter, the city is required to complete an annual audit and financial
statement. The report will be presented to the City Council at the January 19, 1999, work session
and is presented herein for formal acceptance.
Grant Thornton, the city's independent auditors, have completed their audit of the city's 1997/98
Comprehensive Annual Financial report (CAFR) and have issued their opinion and Management
Letter thereon. Ms. Payne introduced Grant Thornton representatives. Mr. Barlow from Grant
Thornton reviewed the audit process and discussed the highlights of the CAFR and the Management
Letter.
As a preliminary summary for the Council's information, you may note that the auditors found no
arterial weaknesses in the city's internal financial controls and they issued a "clean opinion" on the
city's annual financial report. This means the city is using adequate financial control to help prevent
any improper use of those resources.
Items reviewed included the combined statement of revenues, expenditures and changes in fund
balances, figures for last year compared to totals for this year, and excess of revenue and other
financing sources.
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The report of the independent certified public accountant on the city's compliance and on internal
control over financial reporting was reviewed. This information is contained on page 147 of the
Agenda Item Summary staff report.
Page 149 of the staff report was briefly reviewed. This related to the report of the public accountants
on the city's compliance with requirements applicable to each major program and internal control
over compliance.
Grant Thornton's Management Letter identifies, for the city's benefit, three areas
where changes are occurring in either the financial reporting requirements or
expectations of internal audit capabilities. These three areas consist of four issues
concerning Y2K compliance reporting, the city's vacation policy, and financial
system security. The staffs response to each of these is included below.
Y2K Compliance
Grant Thornton's Management Letter identifies that changes are occurring in financial
reporting requirements. The Government Accounting Standards Board has recently
issued technical bulletin 98-1, Disclosures About Year 2000 Issues, requiring the city
to disclose a general description of the Year 2000 issue, as it relates to the city. The
city plans to make the required disclosures in its financial statements for the year
ending June 30, 1999.
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Work Session Meeting Minutes
January 19, 1999
Page 3
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One of Grant Thornton's suggestions for operational improvement is that the city
make greater efforts to determine the Year 2000 status of our suppliers, outside
service providers, and outside service bureaus. We completely agree with the
auditors' advice and the city has taken the action of forming a Y2K Compliance
Committee. As one of the assignments from that committee, the Finance bepartment
is planning to survey significant business associates well in advance of any potential
Year 2000 impact.
Mayor Maine noted that an area-wide Y2K Committee existed and was addressing
needs.
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City's Vacation Policy
Another suggestion by Grant Thornton recommends the city require employees to
take earned vacations each year. They also mentioned the importance of having
trained back up for positions. We agree with the auditors that regular vacations are an
important component of internal control. Finance Department employees routinely
take time off each year, however workload issues sometimes impact the timing or
length of vacations. Requiring employees to take vacations as suggested would most
likely involve labor relations issues for union employees and a change in city policy
for non-union employees. The Finance Department will discuss this with the Human
Resources Department. We strongly agree that positions should be backed-up by
other trained employees and have made an effort to ensure that Finance Department
employees are cross-trained.
Financial System Security
The last suggestion for operational improvement recommends the city make use of a
current VAX report to identify any unauthorized changes to the general ledger
system. The V AX system is secured by a password. Only a few people in the
Finance Department and one person in the IS Department are aware of the password,
which is changed periodically. This password restricts access to the financial system
to those who are authorized to enter transactions. The report mentioned by Grant
Thornton would provide the user name of a person who entered a transaction. In
addition to password restriction, we also protect the city against the recording of
unauthorized transactions by performing regular account analysis and
reconciliation's. In another 45 days, the city will be abandoning the V AX general
ledger system for the PeopleS oft general ledger system where the security controls are
completely different and will be designed appropriately.
Audit Reports
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In addition to the Report of Independent Certified Public Accountants, which gives
the city a "clean opinion," there are several other required reports issued by the
Work Session Meeting Minutes
January 19,1999
Page 4
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auditors, which are included in the financial statements. One of these, Report of
Independent Certified Public Accountants on the City's Compliance and Certain
Items Based on an Audit of Financial Statements Performed in Accordance with
Federal and State Auditing Standards, notes two exceptions. The first exception
notes there were different occasions where the city of Springfield's bank accounts
exceeded their collateral and FDIC insurance. The second exception noted that the
city did not meet the deadline for submission of the city's annual budget to the County
Assessor. We are aware that these oversights occurred and will exercise diligence to
assure that occurrences of this type do not happen again.
Staff briefly discussed the Hospital Authority and its relationship with the city. There
is no city liability related to this issue. Additional information was available on page
15 of the staff report. Staff would further research this issue and provide an update in
the next communication packet.
At the regular meeting, the council will formally accept the 1997/98 Comprehensive
Annual Financial Report and Management Letter.
ADJOURNMENT
The meeting was adjourned at 6:55 p.m.
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Minutes Recorder - Julie Wilson
Maureen M. Maine
Mayor
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Ju e Wilson
City Recorder
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