2013-12-16 study - audit report and council rules

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UNIVERSITY CITY COUNCIL STUDY SESSION 5th floor of City Hall 6801 Delmar December 16, 2013 5:30 p.m. th The City Council Study Session was held in the Council Chamber, 5 floor of City Hall, on December 16, 2013. Mayor Shelley Welsch called the Study Session to order at 6:01 p.m. In addition to the Mayor, the following members of the Council were present: Ms. Paulette Carr Mr. Steve Kraft Mr. Terry Crow Mr. Arthur Sharpe, Jr. Mr. Byron Price arrived at 6:20 p.m. Mr. Michael Glickert was excused. Also in attendance were City Manager Lehman Walker and Karen Lenk from Schowalter & Jabouri. Mr. Walker stated the first item on the agenda was the year end audit report. He turned the presentation over to Karen Lenk, an Audit Manager at Schowalter & Jabouri. They performed the 2013 year ended audit for the City of University City. The reason for the audit is to provide reasonable assurance that the financial statements are free of material misstatements. Ms. Lenk said the Finance Department this year prepared a comprehensive financial report which went above and beyond the requirement of governmental financial statements. The contents of the report provided conformed to the highest standards of preparing governmental financial statements. Lenk briefly summarized their results. The independent audit report was provided which gives their audit opinions on the City’s financial statements. She said Schowalter & Jabouri t have issued unmodified opinions which means in their opinion the financial statements presented conformed to the accounting principles accepted in the United States. Management discussion and analysis was provided in which management provided an overall review of the City. Ms. Lenk stated under the GASB 34 model there are two sets of financial statements: Government Wide Statement and the Fund Financial Statement. The Government Wide Financial Statement presented the financial conditions of the City as a whole. This is prepared by using the full accrual basis of accounting, which means that all assets and liabilities of the City are included. The Government Wide assets of the City exceeded its liabilities by approximately 74 million dollars. This was a two million dollar increase from 2012. The Government Wide financial statement includes a statement of activities which presents the direct expenses and program revenues for each function of the City’s activities. Ms. Lenk said the net showed the extent to which the function is self-financing or drew from the General Revenue. The next set of financial statement is the Fund Financial statement which is prepared on the modified accrual basis of accounting. In this statement each major fund is shown in a separate column and all non-major funds are combined and shown in a separate column. Supplementary information shows the details of what made up the non-major funds. The City’s Governmental funds ended with a total fund balance of approximately 27 million dollars which is a $600,000 decrease from 2012. The unassigned fund balance is approximately 17 million dollars or 64% of general fund expenditures. 1