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Home My WebLink About1994.12.06_OPWA Agenda PUBLIC NOTICE OF THE MEETING OF THE OWASSO PUBLIC WORKS AUTHORITY TYPE OF MEETING: Regular DATE: December 6, 1994 TIME: 7:00 p.m. PLACE: Council Chambers, Owasso Community Center Notice and Agenda filed in the office of the City Clerk and posted on the City Hall bulletin board at 4:00 p.m. on Friday, December 2, 1994. Marcia Boutwell, City Clerk Ill W.11 1. Call to Order 2. Invocation 3. Flag Salute 4. Roll Call 5. Request Approval of the Minutes of November 15, 1994 Regular Meeting. Attachment #5 Owasso Public Works Authority December 6, 1994 Page 2 6. Request Approval of Claims Attachment #6 7. Presentation of and Appropriate Action Relating to the 1993 -94 Audit and Report Prepared as a Part of that Audit. ' Ms Bishop Ms DaVee Attachment #7 ' The firm of Stanfield & O'Dell has completed an independent audit of the financial activities of the Owasso Public Works Authority for 1993 -94. Ms DaVee, with Stanfield & O'Dell, will make a brief presentation of the audit and answer questions relating to the report. 8. Report from OPWA Manager 9. Report from OPWA Attorney Owasso Public Works Authority December 6, 1994 Page 3 10. Unfinished Business 11. New Business 12. Adjournment OWASSO PUBLIC WORKS AUTHORITY MINUTES OF REGULAR MEETING Tuesday, November 15, 1994 The Owasso Public Works Authority met in regular session on Tuesday, November 15, 1994 in the Council Chambers at the Owasso Community Center per the Notice of Public Meeting and Agenda posted on the City Hall bulletin board at 4:00 p.m. on Friday, November 11, 1994. ITEM 1: CALL TO ORDER. Chairman Duke called the meeting to order at 8:03 p.m. ITEM 2: INVOCATION The invocation was given during the City Council meeting preceding this meeting. IITEM 3: FLAG SALUTE The flag salute was held during the City Council meeting preceding this meeting. ITEM 4: ROLL CALL PRESENT ABSENT Jerry Duke, Chairperson Charles Burris, Vice Chairperson Mary Lou Barnhouse, Trustee Joe Ramey, Trustee Danny Ewing, Trustee STAFF Rodney J Ray, City Manager Ronald D Cates, Authority Attorney Marcia Boutwell, Authority Secretary A quorum was declared present. ITEM 5: REQUEST APPROVAL OF THE MINUTES OF NOVEMBER 1, 1994 REGULAR MEETING Mr Burris moved to approve the minutes as written, by reference hereto; seconded by Mr Ramey. rAYE: Burris, Ramey, Ewing, Bamhouse, Duke NAY: None Motion carried 5 -0. Owasso Public Works Authority ITEM 6: REQUEST APPROVAL OF CLAIMS November 15, 1994 1 Chairman Duke moved, seconded by Mr Burris, to approve the following claims as submitted: (1) OPWA Fund $113,362.80; (2) OPWA Capital Improvement Fund $122.88; (3) Payroll $21,734.10. AYE: Duke, Burris, Ewing, Bamhouse, Ramey NAY: None Motion carried 5 -0. ITEM 7: CONSIDERATION AND APPROPRIATE ACTION RELATING TO THE EMPLOYMENT OF A QUALIFIED FIRM TO PERFORM ARBITRAGE CALCULATIONS RELATING TO THE 1988 BOND ISSUE Ms Bishop stated that the Internal Revenue Code of 1986 requires that excess interest earned in connection with the issuance of revenue bonds, be rebated to the United States Treasury. A calculation of the amount must be made annually. Because of the complexity of that portion of the tax code, a firm specialized in that field of accounting needs to be retained to complete the calculation. The firm of Deloitte & Touche has performed the calculations for the past two years, and staff recommended that they be retained to perform the current calculation requirement. Mr Burris moved, seconded by Mr Ramey, to approve a contract in the amount of $2000 with the firm of Deloitte & Touche to provide bond rebate computation services for the 1988 Series Revenue Bonds for the period of November 22, 1988 through November 1, 1994. AYE: Burris, Ramey, Ewing, Barnhouse, Duke NAY: None Motion carried 5 -0. ITEM 8: REPORT FROM OPWA MANAGER No report. ITEM 9: REPORT FROM OPWA ATTORNEY No report. 2 Owasso Public Works Authority ITEM 10: UNFINISHED BUSINESS None ITEM 11: NEW BUSINESS None ITEM 12: ADJOURNMENT Mr Ramey moved, seconded by Mr Burris, to adjourn. AYE: Ramey, Burris, Ewing, Bamhouse, Duke NAY: None Motion carried 5 -0 and the meeting was adjourned at 8:15 p.m. Marcia Boutwell, Authority Secretary November 15, 1994 Jerry Duke, Chairperson CTT' 7 OF OWASSO OWASSO PUBLIC WORKS AUTHORTTY APAPVF PAGE: 1.= PC 4 VENDOR DESCRIPTION AMOUNT ---------- ------------------------- ------------------------- ------------- OPWA ADMINISTPATTON ------------------------------ 950023 CPS BUSINESS, INC, LICENSE FEES 217.00 9SO025 LIBERTY TULSA REVENUE BONDS 50,102.921 950 194 WESTERN PRODUCTS BUSINESS 1 MAINTENANCE 75 0.92 950217 MEMBER SERVICE LIFE FE A PRE TAX ADMTN FEE - 50.00 951.064 TREASURER PETTY CASH REIMS PETTY CASH 3.48 951074 ALL STAR ROOFING ROOF REPAIR 125.60 951086 SAM'S CLUB SUPPLIES 27.36 951087 OFFICE DEPOT-CARD PLAN SUPPLIES 136.73 951109 OKLAHOMA BUS T NESS FORMS PRINTING 0 951131. PSO lfl\.';'4 USE 45J..46 951.13? SOUTHWESTERN BELL TEI-.E. 10"..94 P•EXAF 76.51 951134 MCI TELECOMMUNICATIONS 10 94 LONG DISTANCE 3.4:1 951.135 OF TUA NATURAL GAS 10'..94 USE 29.34 DEPARTMENT TOTAL 514777.34 WATER ------------------------------ 950531 WATER PRODUCTS INC METERS 750.00 95;1,678 WATER PRODUCTS INC METERS 750.00 956892 WATER PRODUCTS INC METER= 750.00 955 866 WATER PRODUCTS INC SUPPLIES 8"i'83.21 950912 GARY MOSER METER READER 163.80 95091 ' 3 ANCHOR PAINT SUPPLIES 1'?3.50 950982 KIMBALL ACE HARDWARE SUPPLIES ?47.7.3 951033 TYRONE DINKINS METIER READER 136.35 991024 SHARON SPARKMAN METER READER 357 I .97 9510735 OSCAR MCLAURIN METER READER 45J..46 951064 TREASURER PETTY CASH REIMB PETTY CASH 5.00 951067 GO SYSTEMS 1011"94 FUEL 116.22 951.077 WATER PRODUCTS INC SUPPLIES 11071.98 951080 NAPA AUTO FARTS SUPPLIES •51087 OFFICE DEPOT CARD PLAN SUPPLIES 13.99 9511-1 pSn_ 10'.'94 USE 99.76 9511132 SOUTHWESTERN BELL TELE. 10•94 PLEXAP 25.80 9510 133 S0UTT-1WF'7RTEPN BELL. TE- E. 10`94 11 0 N E X A R 63.96 DEPARTMENT TOTAL 6,004.73 WASTEWATER ---------------- CITY OF OWASSO S:49 :14 A/P CLAIMS REPORT APAPV: pAtGE 14 PO ---------- VENDOR ------------------------- DESCRIPTION ------------------------- SAMPLE AN IT 110 I 60.00 95093R WATER, PRODUCTS; INC SUPPLIES' 50.20 90110945 GRAINGER, W 1 W �1 ric PARTS 89A.70 9509'?1? 1BOPEN/7T1iY SAFETY INC. REPAIR c;4 , 2.00 950982 FTMBALL ACE IJARD14ARE SUPPLIES 7 1 951064 TREASURER CASH PETTY -1 PEIMB PETTY CASH 991067 GO SYSTEMS 10/94 FUEL '26,64 951079 ADVANCED CHEMICAL CHLORINE 55,5' 991083 GLOBAL TNDUSTPIAL SUPPLY LOCKOTYLP/TAGOUT FIT 67,73 951085 CURTIN MATHESON SCIENTIFT SUPPLIES 564.6 -0 -951131 PSG] 10\94 USE -"016,95 9511'2 ,? SOUTHWESTERN BELL TELF, 10\94 PLEXAR . �- �' .1I 5 951133 SOUTHWESTERN BELL TELF. 10 \ -.94 NOR-PLEXAF 317,9kl 9911.34 MCI TELECOMMUNICATION'S 10\94 LONG DISTANCE .81 9511.15 OKLA NATURAL: GAS 10'%94 USE 736.94 DEPARTMENT TOTAL ====) 8146i9.31 REFUSE COLLECTIONS ------------------------------ 901081" RFT COMM. REFUSE 230.48 950940 WASTE MANAGEMENT OF OKLA TIP FEES 41254.z" 950982 ? T CE AO ARE STT) RVJAj,A .18 951064 , .1 TREASURER CASH PETTY - RETMB PETTY CASH I .-- 951-067 CO SYSTEMS 16/94 FUET, '3 A 8 , "" 4 Ti 951072 WILLIAMS REFUSE EOUTPMENT PARTS 943.06 951071 L GRATNGEP,W W INC 24.C3 9511081 WAL—MART SUPPLIES c I 0 1 081 WAL-MART S, -3 UPPT �-IES 2.78 951087 OFFICE DEPOT CARD PLAN SUPPLIES 55,5' DEPARTMENT TOTAL FPCITLF CENTER ------------------------------ 95O317 BFT 10/94 COMM REFUSE ,AA4.00 950817 BFI GLASS 90,00 950940 WASTE MANAGEMENT OF OKLA TIP FEES 0 1 . 3 0 9509,^ KIMBALL ACE HAPDWARF SUPPLIES 1.18 951 C, 6" 0 BTOCYCLE REFERENCE BOOK 5 9, 0 () 951191 PSO 10\94 USE 120.44 9511077 2- `0TTT14WFFTE9N BELL TEI,--. I0 \ 9 4 PLEXAP 20.05 T)EPARTMENT TOTAL ---------- ------------------------- ------------------------- ------------- DEPT SERVICE ______________________________ 950024 LIBERTY BANK �- TRUST OVIR8 L-OA0 3,655.28 950024 LIBFR?Y ENBK & TRUST ONFR, L OA N 24,401,67 ------------- DEPARTMENT 7O7AL WATER ----------------------------- 951128 JE9CO` II.IC, WA?S? LINE RSPC.ACGMS0? 17O,299.ski ------------- DEPARTMENT TOTAL 170,299.80 ------------- F�MD ?O7&- 198,356.75 15 CITY OF OWASSO OPWA A/P TRANSFER REPORT VENDOR DESCRIPTION AMOUNT TRANSFERS CITY GARAGE TRANSFER FROM OPWA 5,125.00 WORKERS' COMP SELF -INS TRANSFER FROM OPWA 3,842.50 GENERAL FUND TRANSFER FROM OPWA 24,062.50 TRANSFERS TOTAL 33 030 00 r OWASSO PUBLIC WORKS AUTHORITY PAYROLL PAYMENT REPORT PAY PERIOD ENDING DATE 11/12/94 DEPARTMENT AMOUNT Water 3,474.25 3,280.51 OPWA Capital Improvement 930.30 APPROVED: 12/06/94 Chairman Trustee Trustee OWASSO PUBLIC WORKS AUTHORITY PAYROLL PAYMENT REPORT PAY PERIOD ENDING DATE 11/26/94 DEPARTMENT AMOUNT 3,173.98 Refuse 3,089.67 OPWA Capital Improvement 853.45 APPROVED: 12/06/94 Chairman Trustee Trustee MEMORANDUM TO: THE HONORABLE MAYOR AND CITY COUNCIL CITY OF OWASSO CHAIR AND TRUSTEES OWASSO PUBLIC WORKS AUTHORITY FROM: SUBJECT: DATE: BACKGROUND: SHERRY BISHOP FINANCE DIRECTOR AUDIT REPORT FOR FISCAL YEAR 1993 -94 DECEMBER 2, 1994 An independent audit, performed by a certified public accountant, is required by city charter and state statutes. This is the third year that the firm of Stanfield & O'Dell has served as auditors for the City of Owasso and the Owasso Public Works Authority. There are three separately bound reports. Financial Statements and Report of Independent Certified Public Accountants Auditors' Single Audit Reports Advisory Comments Memorandum SUMMARY OBSERVATIONS: Overall, the audit process went very well. The audit report contains no surprises. The auditors did not report anything of which we were unaware. The main differences between the audited financial reports and the monthly financial reports prepared by staff are the year -end accounting accruals. AUDIT REPORT DEC 2, 1994 PAGE 2 GENERAL FUND: The original FY 94 budget utilized $20,000 from the general fund reserves. Throughout the fiscal year, the decision to expend additional general fund reserves required several budget amendments. The total budgeted deficit (or expenditure of reserves) was $132,463. The consequence of those amendments is the decision to deplete 43 % of the general fund reserves. Fortunately, not all of those expenditures were actually required. The practice of funding current operating expenses from "savings" can quickly place the city in a risky financial condition. At the end of FY 1984, the city had a cash surplus of $365,685. Two years later, the cash balance was a negative $50,187. After numerous employee layoffs and cutbacks in every department, the city finally regained a positive cash position in FY 1991. The current cash reserve is $252,763. That is adequate to provide a "cushion" for normal operations. It is not adequate to fund an emergency or a major revenue shortfall. (In FY 1984, revenues were $145,532 under budget. OPWA: The OPWA operating fund budgeted for a "profit" this year of $29,726. The actual "profit" was $29,209. The OPWA (on a cash basis) was able to increase its reserves and fund minor capital needs from current operating funds. While the OPWA is operating well financially, it is not in a "strong" financial position. The reverses should continue to increase. FINANCIAL STATEMENTS: For governmental funds, the City uses a "modified accrual basis of accounting" (defined on page 16 of the audit, note #3). Modified accrual means that next month's taxes (because they have been collected by the Oklahoma Tax Commission) are included in the year -end fund balance. (On a modified accrual basis), the "deficiency of revenues and other sources over expenditures and other uses" for the general fund is $124,993. (See page 9, column 1.) The "budget basis" fund balance (funds that could actually be appropriated for expenditure) is $252,763. (See page , column 2.) The unreserved fund balance ratio is often used as a measure of a government's financial health. It is the ratio between the resources balance) and the annual operating expenditures. between five and ten percent. The June 30, available for contingencies (unreserved fund As a general rule, cities should maintain a ratio ' 1994 fund balance of $252,763 provides an unreserved fund balance ratio of 7.0 %. This is down from 9.8% a year ago because of a budgeted expenditure of reserves and an increase in the total operating budget for FY 1994. The ' unreserved fund balance ratio at the end of FY 1995 is projected to be 6.3 %. AUDIT REPORT DEC 2, 1994 PAGE 3 The unreserved fund balance ratio will continue to decrease every year if the fund balance is maintained at the current dollar amount while the total operating expenditures increase every year. The OPWA, because it is an "enterprise fund," uses an accrual basis of accounting. The most significant differences are that depreciation and debt expenses are recorded in the OPWA but not in the General fund. Enterprise fund accounting is intended to be similar to accounting for private sector businesses. All transactions associated with the OPWA 1988 Revenue Bonds (Sales Tax account, Capital Future Fund account, bond principal and interest expense, and interest earned on those accounts) as well as, the 1993 OWRB Promissory Notes (OPWA Capital Improvements fund, and restricted water and wastewater revenue) are reported in the OPWA. These restricted accounts in the OPWA report make it difficult to get a realistic financial statement for the OPWA utility operation alone. The "net loss" in the OPWA enterprise fund is $83,944 (page 67, column 2). Excluding restricted funds, debt related expenses and funding for capital improvements, (but including depreciation) the OPWA had a net loss of $646,799. Without depreciation, the net profit is $67,597. Depreciation on property, equipment, and utility lines totals $714,396. Depreciation is the accounting method of distributing the cost of capital items to the years in which they are used rather than putting all the cost in the year of purchase. Even though depreciation is not a "cash" expense, it is a real cost of operating a business. If revenues were sufficient to fund all operating expenses including depreciation, then all OPWA fixed assets could be replaced, as needed, from operating cash. On an accounting basis similar to the General Fund, the OPWA would have an unrestricted ' operating fund balance, net of current payables, of $233,395. This is an increase of $29,209 from last year. ' Other individual funds are reported on pages 51 -52, 59 -60, 65 -67 and pages 69 -70. SINGLE AUDIT REPORTS: This document contains reports that are required (in addition to the financial statements) of all recipients of state and federal funds. Most of this report contains standard accountant "opinion" letters. The Schedule of Federal Financial Assistance is on page 4 and itemizes the grants active during the fiscal year. Two reports on "internal control structure" are on pages 5 -6 and 7 -9. The auditors report no matters that they consider to be "material weaknesses." AUDIT REPORT ' DEC 2, 1994 PAGE 4 Pages 10, 11 and 13 are reports on "compliance" with laws, regulations, contracts, grant ' requirements, etc. There were no "material instances of noncompliance" reported by the auditors. Three instances of "immaterial" noncompliance are reported by the auditors on pages ' 12 -14. All three comments are due to reporting requirements of the Oklahoma Department of Commerce CDBG grant (Max Buchanan project). The project has been completed and the grant closed out by ODOC. ADVISORY COMMENTS MEMORANDUM: This document contains the auditors comments and suggestions for the improvement of procedures and administrative controls. This report is the auditors' opportunity to comment about anything that came to their attention during the course of the audit work. These comments are not considered "material weaknesses" nor are they "material instances of noncompliance." The advisory comments are valuable in helping develop proper fiscal controls to ensure the integrity of the accounting system. We are pleased that the number and magnitude of the comments lessens each year. Staff response to each of the advisory comments is attached as a separate memorandum for your review. RECOMMENDATION: Staff recommends that the City Council and the Owasso Public Works Authority receive the audit report and direct it to be filed as required by law. 0 Note: Copies of the three reports from the auditors were delivered to council members last week. Additional copies of those reports are not included in this agenda packet. I