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Minutes for the Finance Committee meeting on July 17, 2003.
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Finance & Administration Committee Minutes
Thursday, July 17, 2003
5:15PM
Members Present: Alec Farmer, Darrel Dover, Jim Hargis, and Ann Williams. Councilman Harold Perrin, Mayor Brodell, and Mr. Larry Johnson were unable to attend.
Others present were: Mr. Larry Flowers, Finance Director, Mrs. Suzanne Hackney, Human Resources Director, Jim McKinnon, Grants Coordinator, Rusty Grigsby, Assistant Police Chief, Alan Young, Information Systems, Steve Kent, Purchasing Agent, Becky Sharp, City Collector, Rick Elliott, Jason Willis, Doug Crews, Chris Mackey, Doug Little, Judy Furr, Bill Ebbert and Donna Jackson, City Clerk.
Councilman Hargis moved, seconded by Councilman Dover to approve the Finance Committee minutes from June 24, 2003 as submitted. All voted aye.
457 PLAN
Ms. Hackney, Human Resources Director reported there had been a change with regard to representation by CitiStreet. Originally there were to be 2 representatives for the region, but now there would be only one representative for the City of Jonesboro and St. Bernards. It was explained that the one representative had not been hired as of yet and no timeline had been established for the employment. Ms. Hackney stated Mayor Brodell had no problems with the change especially with the Municipal League preparing the addendum. She explained the contract had been reviewed by the City Attorney and the amendments would have to accompany the ordinance and contract. Councilman Dover moved, seconded by Councilman Hargis to reaffirm negotiations with CitiStreet on the 457 Plan. All voted aye.
Councilman Dover moved, seconded by Councilman Hargis to approve the addendum with the following changes:
• Employees must wait six months prior to being eligible to join the 457 Plan.
• If employment is terminated before the age of 59½ years, for reasons other than retirement, the employee shall receive compensation sixty (60) days after termination.
• Employee may change the percentage of their deduction once a month.
• The loan provision will not be included.
All voted aye. Ms. Hackney stated she would have the City Attorney prepare the addendum and ordinance with the emergency clause.
EMERGENCY LEAVE
Councilman Dover moved, seconded by Councilman Hargis granting an emergency thirty (30) day medical leave for a police officer. Ms. Hackey explained the officer did not have any vacation or sick time left. Councilman Dover questioned if the city had a policy regarding emergency medical leave, and Ms. Hackney affirmed there was a policy and it has been done in the past. All voted aye.
Councilwoman Williams inquired about the possibility of having a telephone meeting in order to expedite emergency medical leave rather than making an employee wait until there is a regularly scheduled meeting. The suggestion was made to have Ms. Hackney research the possibility of giving the Mayor the authority to make the decision on emergency medical leave, rather than calling for a special meeting.
EXTERNAL AUDIT FIRM - BKD
Councilman Farmer introduced Ms. Cindy Hovis and Mr. Kevin Kemp of the Baird, Kurtz, and Dodson (BKD) auditing firm out of Little Rock. It was explained that an external audit is a new process for the committee and even though a general scope of work had been determined, there needed to be some clarification as to the specifics. Councilman Hargis explained Ms. Hovis and Mr. Kemp had met with the negotiations team, consisting of Mayor Brodell ( Chief Negotiator), Larry Flowers, Finance Director and himself for the purpose of determining what the City of Jonesboro would be receiving comparative to the overall cost of an audit. He explained it was difficult getting a sample report from BKD due to confidentiality about the work, and hesitations on the part of BKD about identifying specific problems due to the city not knowing which initial departments they were committed to auditing. Ms. Hovis explained at the last meeting, they (BKD and the negotiations team) had discussed three departments as a place to start to try and get an estimate on how many hours the audit would take, but needed direction as to which option should be used. She stated BKD could give an estimate based on “X” number of hours per department or so many departments for “X” number of dollars. Discussion followed regarding estimated cost comparative to the needs and expectations of the work. Finance Director Larry Flowers explained they had gone back and forth between a request for proposals based an agreed upon procedure, to particular consulting standards, and therefore he recommended a blending of the two with the committee providing a list of specific concerns, at the same time allowing BKD to look for areas that the committee may not be aware of. He explained an internal audit is a unique field in that it is more operational oriented than financial statement oriented and therefore the findings can vary greatly. Mr. Flowers provided a “Scope of Work” based on the Institute of Internal Auditing Standards and stated he hoped BKD would follow those standards. Councilman Hargis explained the negotiations team had discussed starting with the Street Department, then Sanitation Department, and finally the Parks Department agreeing on the quantity of work with a cap on the obligation of the city, with BKD providing a sample of how beneficial the audit would be for Jonesboro. Mr. Kevin Kemp, of BKD stated they were willing, if agreeable, to cap the first department audit at 200 hours at $98.00 an hour. At the end of the 200 hours, and after review, BKD would wait for direction to either stop or proceed with the audit. Mr. Kemp wanted it understood however, for audits following the street department audit, that BKD would not jeopardize its reputation by providing a deficient audit and if more than 200 hours were needed they would work beyond that initial cap. Councilman Farmer explained this is un-chartered territory and from the committees perspective they want to assure that tax-payers money is being spent wisely. He explained by state law and Jonesboro city ordinances, the mayor is responsible for negotiating the contract, however because the auditing firm would be reporting to the Finance and Administration Committee, the direction the firm should take would come from the committee. Mr. Flowers expressed concern for going over the budgeted amount of $50,000.00 so it was agreed there would be an initial cap of 200 hours at $98.00 an hour with the other two departments not to exceed the $50,000.00. Councilman Dover moved, seconded by Councilwoman Williams to recommend to the negotiating team, employment with BKD to audit the Street Department with a cap of 200 hours at $98.00 an hour with an option of auditing the Sanitation Department and Parks Department with a total cap of $50,000.00 with the site work completed by November 30, 2003 and the final report no later than the year end. Councilman Dover questioned the process for negotiations with regard to the ordinance. Councilman Farmer explained the motion was just a recommendation to the negotiations team, but Councilman Dover stated it was his understanding that Mayor Brodell did not want to negotiate. Councilman Hargis corrected that statement explaining the negotiations team had met with BKD, and Mayor Brodell preferred an internal auditor over an external audit, but agreed to do whatever the council deemed appropriate to do. Mr. Flowers then suggested amending the motion to recommend to the full council rather than the negotiations team to accept the engagement with BKD who in turn would provide an engagement letter outlining the terms of agreement. Councilman Farmer stated he wanted to make sure Mayor Brodell is kept in the loop of the negotiations and the proper process is followed according to the purchasing manual. Mr. Flowers stated the negotiations process had already been completed and Mayor Brodell did indicate if they wanted to go forward he would be behind that effort. He explained Mayor Brodell understood that a recommendation could possibly come from the Finance Committee to the full council to accept this engagement according to those terms. Mr. Flowers stated it is possible Mayor Brodell may want to reopen negotiations, but like Councilman Hargis, it was his understanding that Mayor Brodell felt the negotiation process had been completed. Mr. Flowers stated if that is true and the negotiations are over from Mayor Brodell’s view point the next step would be to make a recommendation from the negotiations team to the Finance Committee to the full council to accept the contract. City Clerk Donna Jackson questioned Mr. Flowers as to the recommendation by the negotiations team. Mr. Flowers explained that he and Councilman Hargis understood that Mayor Brodell believed negotiations had been completed with BKD, and Mayor Brodell had left it up to him and Councilman Hargis, to make the recommendation to accept the proposal of BKD to the Finance Committee, who would have to decide to recommend to the full council. The original motion and second were withdrawn by Councilman Dover, and Councilwoman Williams. Councilman Dover moved, seconded by Councilman Williams to accept the recommendation of the negotiations committee and recommend to the full council employment of BKD to audit the Street Department with a cap of 200 hours at $98.00 an hour with an option of auditing the Sanitation Department and Parks Department with a total cap of $50,000.00 with the site work completed by November 30, 2003 and the final report no later than the year end. Councilman Farmer questioned if money had been allocated for the $50,000.00 and Mr. Flowers assured him it had been allocated previously. All voted aye.
RECORDS
Mr. Flowers reported that Mayor Brodell had obtained a list of all assessed property from the county assessor’s office; however the information contains only a legal description, and does not provide an address nor assessed value of the property. Mr. Flowers explained the audit finding required a response by Mayor Brodell, as Chief Executive Officer, and from City Clerk, Donna Jackson. He stated the only thing the auditors were waiting on to close the audit was a response by Mayor Brodell, which had been sent earlier in the day. The letter sent by Mayor Brodell stated appropriate action was being taken, but did not include the specific details as to how it would be accomplished. Mr. Flowers explained the letter would satisfy the auditors temporarily, but does not address assurances that this will not show up again in future audits. Letters from City Clerk, Donna Jackson, Airport Commission, and the Forum Commission had been sent by the deadline as required. City Clerk Jackson explained in order for her to record and certify city owned property she must be provided the original deed. Discussion followed regarding what was acceptable regarding copies of deeds verses original deeds, and it was determined the auditors would have to decide if they would accept an uncertified copy as proof of city owned property. Clerk Jackson also recommended a records management program to assure this does not happen in the future. Councilman Dover presented a letter which was signed by all committee members requesting Mayor Brodell to provide all deeds to the City Clerk’s Office, and requested Mr. Flowers, Finance Director to deliver the letter to Mayor Brodell.
GASB 34
Mr. Alan Young, Information Systems Director was questioned as to why nothing has been done regarding the previously budgeted funds for financial software. Mr. Young stated he had consulted with Mayor Brodell, but no action was taken. He explained he wanted to be accurate in recommending Cardiograph, and felt fairly confident that it would work, but expressed some reservations. Mr. Young was asked to research the matter and get with Mayor Brodell in order to expedite the needs for meeting GASB 34. It was determined that bids would have to be taken, or waive the bids. It was explained that this has been talked about since February and action needed to be taken as soon as possible.
TRAVEL POLICY
Mr. Flowers reported that Mayor Brodell had recommended a change from $25.00 to $20.00 for evening meals. Councilman Dover requested a change from $10.00 to $12.00 for lunch meals. With both amendments the total for daily meals was changed to $40.00. Councilman Dover moved, seconded by Councilwoman Williams to recommend the travel policy to the full council as amended. All vote aye.
PROPOSED ORDINANCE - CONTRACTS & PURCHASES
Discussion was held regarding the proper procedure for bidding out contracts (dirt) and the difference between contracts and purchases. Mr. Kent, Purchasing Agent explained a contract is something that has to be signed by the Mayor. He also stated the auditors require dirt jobs to be bid out under $10,000.00, and state law requires a limit of $10,000.00 for anything not formally bid. Councilman Dover questioned why dirt would not be formally bid, and Mr. Kent stated vendors would not know if they could provide dirt at a specific time. Councilman Farmer pointed to the fact that dirt was bid out four times in one week during the month of May. Mr. Kent responded saying it was supply and demand and he did not remember bidding dirt out four times, and recalled it was two times in one week. Councilman Farmer stated dirt was bid out May 21st, May 23rd, May 27th, and May 29th for a total of $40,000.00.
Mr. Kent stated in the purchasing manual anything over $1,000.00 needs to be signed off on by the mayor, and recommended it be increased to $2,000.00 so he could handle it without going to the mayor. The decision was made to add a section four to the ordinance to increase the amount to $2,000.00. Councilman Dover moved, seconded by Councilman Hargis to recommend the ordinance as amended to the full council. All voted aye.
INDUSTRIAL RECRUITMENT
Councilman Farmer stated some individuals in the business community who are involved in the recruitment of industry are concerned that some of the new procedures passed by the Jonesboro City Council may hinder recruitment of new industry. He explained the concern was that the mayor would not have the latitude at a crucial moment in negotiations to do what needs to be done to secure an industry. He explained that certainly was not the intent of council members and he had requested members of the JIDC to put together a parameters on what was needed to allow the mayor to negotiate.
JAIL BILL
Councilman Dover questioned the status of the jail bill contract and committee. No was there to give a response.
PARKS GRANT
Mr. Jim McKinnon provided a copy of a resolution requesting entering into an agreement with the State Highway Department for Craighead Forest for an ATV trail, and explained it needed to go back to the Parks Committee because they did not have a quorum at their last meeting. He explained he just wanted to make sure the proper committees had reviewed the request.
CITY COLLECTOR
Ms. Becky Sharp, City Collector reported that Mayor Brodell had referred her to the Finance and Administration Committee regarding the regulation of flea markets. Ms. Sharp was informed it was an administrative issue and they needed a legal and/or administrative recommendation. Finance Director, Flowers reported that Mayor Brodell had gone home ill today.
With no further business, Councilman Dover moved, seconded by Councilman Hargis for adjournment.