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HomeMy WebLinkAbout4.5.23 LRFC Agenda Minutes and Documents Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us LONG RANGE FINANCE COMMITTEE AGENDA April 5, 2023 5:15 PM To Whom It May Concern: PLEASE NOTE the City of Oshkosh Long Range Finance Committee will meet on Wednesday, April 5, 2023, at 5:15 pm, in Room 404 at the Oshkosh City Hall, 215 Church Avenue. ROLL CALL I. Citizen Input - (Up to the first 15 minutes of meeting – can be regarding any City Finance topic) II. Approval of February 1st, 2023 Minutes III. Fund Balance for Utility Funds IV. Special Assessment Rates V. Cash Handling Policy VI. Next Meeting Date & Agenda Items – June 7, 2023 VII. Adjournment If you have any questions, please call the Finance Office at (920) 236-5005 between 8:00 am – 4:30 pm Monday – Friday. Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us MINUTES OF THE LONG RANGE FINANCE COMMITTEE February 1, 2023 The Long Range Finance Committee meeting was held on Wednesday, February 1, at 5:15pm in Room 404 at City Hall. The meeting was called to order by Matt Mugerauer at 5:15pm. Members Present: Matt Mugerauer, Karen Bowen, Koby Schellenger, John Zarbano, Adam BellCorelli, Andrew Kramp Members Absent: Mike Ford, Todd Hutchison, Joe Stephenson Staff Present: Russ Van Gompel – Director of Finance I. Citizen Input  None. II. Approval of October 5th, 2022 Minutes  MOTION TO APPROVE: Adam BellCorelli; second, Koby Schellenger.  CARRIED: Approved unanimously. III. Budget Development Policy  MOTION TO APPROVE: John Zarbano; second, Koby Schellenger.  CARRIED: Approved unanimously. IV. Discuss Fund Balance for Utility Funds  Committee reviewed the Fund Balance from 2020 and the definition of working capital from the Sewer Utility Rate Analysis. The Committee would also like to review the Storm Water Operations Cash Flow Analysis. Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us  The Finance Director was directed to provide an amendment to the Fund Balance Policy to include a section on the minimum target for working capital and present it at the next meeting. V. Review Special Assessment Rates  The Committee review the interest rate for outstanding special assessments. The Committee recommend that the interest rate be reduced from 6% to 4% in 2021. The 6% rate was in place from 2009. Prior to that the rate was 8% established in 1999 and prior to 1999 it was 10%. The committee also discussed the frequency of the review and whether the policy should be a fixed rate or establish a rate based on the interest rate of the debt issued.  The Finance Director was directed to provide a five to six year history of the interest rates on previous debt issues and an estimate for the 2023 debt issuance. The interest rate for special assessments will be discussed at the Long Range Finance Committee in April. VI. Set next meeting date and agenda items  Meeting set for April 5th, 2023 at 5:15pm.  Next agenda: o Fund Balance for Enterprise Funds o Special Assessment Rates o Cash Handling Policy VII. Adjournment  MOTION TO APPROVE: John Zarbano; second, Koby Schellenger.  CARRIED: Approved unanimously.  Meeting adjournment at 6:00pm. PURPOSE: The goal of this policy for cash handling is to ensure adequate internal controls by effectively safeguarding, depositing, and accounting for cash on behalf of the City of Oshkosh and to maintain public trust. Strong internal controls for the collections, custodianship, and deposit of cash are necessary to prevent mishandling of funds. These controls are designed to safeguard employees against inappropriate charges of mishandling funds by defining their responsibilities and providing clear accountability in the cash handling process. Ensuring the existence of policies and procedures governing all types of payments allows for the effective management of the City’s liquidity and its ability to meet all obligations, and aids in the defense against fraud. AUTHORITIES: The Director of Finance shall perform duties prescribed by the Wisconsin Statutes, particularly sections 62.09(9) and (10) thereof and shall be responsible for planning, reporting, and controlling all financial affairs of the city. The Assistant Director of Finance shall be acting Director of Finance and be responsible for the statutory duties of City Treasurer and Comptroller while the Director is absent or incapacitated. RESPONSIBILITIES: The Finance Department is responsible for the collection of all City accounts receivable, including taxes, special assessments, fees, non-moving violation fines, water, sewer, departmental earnings, etc. The Director of any City department who anticipates receiving City cash on a regular basis is responsible for assigning a person(s) to the duties that will adhere to the City’s policy. The assigned employee must be trained in proper cash handling techniques and be provided with a copy of this policy. The structure should provide for a segregation of functional responsibilities such as invoicing, receipt of payments, and record keeping. There must be sufficient staff to permit segregation of duties. The work environment must be conducive to safeguarding money. This includes, but is not limited to, proper office with counters, safes, cash boxes, cash registers/terminals, camera and video monitors, and alarm buttons. Department heads are responsible for collaborating with the Director of Finance or the Assistant Director of Finance to establish and maintain a system of procedures, documentation and reporting on receipts handling and deposit of City money. Notification to the Finance Director and/or the Assistant Finance Director of any theft is required within twenty-four hours of discovery. On-site inspections and audits of cash on hand will be performed by the Finance department for any department that retains a cash drawer or a petty cash drawer. PROCEDURES FOR RECONCILING AND DEPOSITING FUNDS: The collections department will perform a daily reconciliation of their transactions, and a deposit of any funds that exceed $500 in their drawer. A deposit slip will be completed and all cash and checks will be bound together. All cash, checks, sales slips, receipts, and other applicable documents must be secured and safeguarded. All cash and checks must be receipted by the cash register. All checks must be endorsed immediately upon receipt by the department. The total of the deposit should agree with the total of the daily receipts. Routinely, the above records need to be reviewed by someone other than the individuals involved in the above functions. All money received is to be deposited with the City’s operating bank. No money is to be withheld from a deposit in order to cash personal checks or to purchase miscellaneous items for the department. Purchases made in this manner reduce the amount of revenue and expenditures reported and weaken the internal control procedures. The practice of netting program revenue is not allowed. All overages and shortages should be reported to the supervisor as soon as they are discovered. The employee responsible for the cash must report any shortages immediately to his/her supervisor. To enhance the internal control over money, a segregation of duties within the department needs to occur whenever possible, so that errors or irregularities are prevented or promptly detected. The duties of one employee should provide a cross-check of the work of one or more employees. CONTROLS FOR CASH HANDLING: If you take payment in cash and to prevent errors and potential disputes you should: o Talk through the transaction with the customer. o Segregate bills by denomination before you count the money. o Take your time in counting cash. o If an interruption occurs during the counting process, the counting must be stopped and started again from the beginning. o Strap money when receiving a large amount of bills. o Double count large amounts and payments which involve many bills (two people should count it and an adding machine tape may be used). o Inspect large bills closely ($20, $50 and $100) for counterfeit. o Keep money received in view but out of reach of the customer until the transaction is complete. o Always receipt the same amount of cash as you place in the till. o Cash should be immediately placed in the till as soon as the transaction is complete. o Do not handle two transactions at once, i.e. don’t make change in the middle of taking a payment even for the same customer. If you take payment in cash and to prevent errors and potential disputes you should: o Checks for City revenue should be made payable to the “City of Oshkosh.” o Examine the check as follows:  Has it been altered?  Is it signed? Does preprinted name agree with the signature?  Does the numbered amount agree with the written amount?  Is the check post-dated? ~ DO NOT ACCEPT  Never agree to hold a check for anyone o Restrictively endorse the check as soon as you receive it. o Personal and company checks are accepted for the amount of sale only. o Discrepancy between Numeric and Written Amounts: When the numeric and written amounts on a check do not agree, a new check should be requested. If a corrected check cannot be obtained, steps must be taken to insure collection of the correct amount: SAFEGUARDING: Cash and checks are to be secured and safeguarded. Access to cash and checks is to be restricted to those employees who are assigned fiscal responsibility. All cash receipts are to be deposited same day or the next business day. The number of employees with knowledge of the safe combination is to be kept to an absolute minimum. All losses resulting from or involving actual or suspected theft, burglary or robbery must be reported immediately to the supervisor, the Police Department and the Finance Director even if no loss actually occurred. The supervisor shall prepare a written report documenting the events and provide a copy to the Finance Director along with the police report. All losses resulting from errors in record-keeping or making change (mysterious disappearance) where theft is not suspected shall be recorded and be available for audit upon request. CITY OF OSHKOSH CITY COUNCIL POLICY STATEMENT General Subject: Administration Date Drafted: 7/29/2020 Revised: Special Subject: Fund Balance Effective Date: General: The objectives of this policy are as follows: - Provide working capital for the City to meet cash flow needs during the year (while avoiding the need to cash flow borrow). - Preserve the credit worthiness (credit rating) of the City for borrowing funds at favorable interest rates. - Provide a comfortable margin of safety to address unanticipated expenditures / emergencies and unexpected declines in revenue due to economic downturns, natural disasters, etc. - Provide a resource to stabilize fluctuations from year to year in the property taxes paid by the (city, City, town, county) taxpayers. Policy: The City of Oshkosh has implemented Governmental Accounting Standards Council (GASB) Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. All definitions within the Fund Balance Policy will be in agreement with GASB No. 54. GASB No. 54 has identified 5 levels of restrictions on fund balance. The levels are defined below. - Nonspendable fund balance—amounts that are not in a spendable form (such as inventory) or are required to be maintained intact (such as the corpus of an endowment fund) - Restricted fund balance—amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation - Committed fund balance—amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest-level action to remove or change the constraint - Assigned fund balance—amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority - Unassigned fund balance—amounts that are available for any purpose; these amounts are reported only in the general fund. CITY OF OSHKOSH CITY COUNCIL POLICY STATEMENT General Subject: Administration Date Drafted: 7/29/2020 Revised: Special Subject: Fund Balance Effective Date: Procedures: In order to achieve the objectives of this policy, the following guidelines shall be adhered to by the City Council: 1. As part of the annual budget process, the Financed Director will estimate the surplus or deficit for the current year and prepare a projection of the year-end fund balance. Such projection will include an analysis of trends in fund balance levels on a historical and future projection basis. 2. Withdrawal of any amount of the fund balance in excess of the targeted maximum of the amount budgeted under (1) above, for the sole purpose of reducing the ensuing year’s property tax levy, may be made only upon a two- thirds vote of the City Council. 3. The City Council, by a two-thirds vote, can declare a fiscal emergency and withdraw any amount of general fund balances for purposes of addressing the fiscal emergency. Any such action must also provide for necessary appropriations to restore the general fund balance to the minimum balance with a set plan approved by the City Council 4. The unassigned general fund balance shall be maintained as of December 31 of each year equal to a minimum of 16% of the ensuing year’s budgeted general fund expenditures, with a targeted maximum of 30% of the ensuing year’s budgeted expenditures. 5. Funds in excess of 30% of the unassigned fund balance target may be considered to supplement “pay as you go” capital outlay expenditures (including reduction of anticipated debt issues) or to prepay existing debt via cash defeasance as allowable. The decision of how to use these funds will be made by the City Council. Unassigned fund balance shall not be used to support recurring operating expenditures. 6. If, at any time, the unassigned general fund balance is lower than the above stated amount, the City Council, shall implement a plan to rebuild the unassigned fund balance to the minimum level. This may include increasing the annual budget to replenish the fund (over a period of one or more years) or applying the remaining unexpended general fund resources at the end of a fiscal year. CITY OF OSHKOSH CITY COUNCIL POLICY STATEMENT General Subject: Administration Date Drafted: 7/29/2020 Revised: Special Subject: Fund Balance Effective Date: 7. The City of Oshkosh will report at the end of each fiscal year the portion of the fund balance that is not in spendable form as Non-spendable fund balance on the financial statements. 8. At the end of each fiscal year, the City will report “restricted” fund balance for amount that have applicable legal restriction per provisions of GASB #54. Normally fund balances in debt service funds and capital project funds with remaining long-term debt proceeds will be reported as “restricted”. 9. The City of Oshkosh will maintain appropriate commitments or assignments of general fund, special revenue funds, debt service funds and capital projects funds for specified purposes, including but not limited to contingencies, compensated absences, or similar items. Commitments and / or assignments of fund balance shall be made by the City Council. Balance Requirements: General Fund  The targeted unassigned fund balance restrictions shall apply to the General Fund only. The General Fund has greater bearing on the outlook of the City as a whole compared to the other City Funds. All Other City Funds  Every City Fund will have its fund balance categorized with the five categories pursuant to GASB 54. While the City encourages each fund to meet the 16% minimum balance, the General Fund is the only fund that has the requirement. The revenues, expenditures, and functions of each fund are different making the 16% minimum difficult to require. Minimum Working Capital for Enterprise Funds  Minimum targeted working capital for Enterprise Funds should equal six months of next year’s operating expenses, including depreciation, plus 100% of next year’s debt payments.