TOWN OF SOUTH WINDSOR
MINUTES
TOWN COUNCIL WORK SESSION
COUNCIL CHAMBERS JANUARY 21, 2003
SOUTH WINDSOR TOWN HALL 7:00 P.M.
1. Call Meeting to Order
Deputy Mayor Streeter called the meeting to order at 7:05 p.m.
2. Roll Call
Members Present: Deputy Mayor Matthew Streeter
Councillor Barbara Barbour
Councillor Paul Burnham
Councillor Thomas Delnicki
Councillor Deborah Fine
Councillor Judith Paquin
Councillor John Pelkey
Members Absent: Mayor William Aman
Councillor Edward F. Havens
Also Present: Town Manager Matthew B. Galligan
Also Absent: Town Attorney Barry D. Guliano
3. Public Participation - None
4. Communications - None
5. Town Manager’s Report - None
6. Items for Discussion - None
A. 2001/2002 Audit Report
(See attached Exhibit A – report dated September 27, 2002 to Town Council from Scully & Wolf.)
6. A. (Continued)
The following information was provided as part of the presentation made by Jerry Paradis of Scully and Wolf, the Town’s auditor:
Volunteer Fire Department
Because of the size of the department, there have been no written procedures. The auditors, however, have suggested that procedures be developed with the help of the Town Manager and the Finance Department.
Board of Education:
Purchase orders – after the auditor’s report was issued, subsequent information was provided, which indicated that the items which had been identified as exceptions were emergency purchases. If the auditors had received that documentation prior to the issuance of the report, that item would not have been included in the report.
Financial Management System – cafeteria fund revenues are not being recorded. It would be an improvement in controls to utilize their system to its capabilities and have the revenues recorded.
General Government and Board of Education
Recording of Accounts Payable – there were some items which should have been charged back to the prior fiscal year’s budget which were not. A closer look should be given to the year-end cutoff—how things are accrued and the year with which they are associated.
Disaster Recovery and System Security – there is a need to document procedures in terms of the disaster recovery plan for the financial systems and the tax collection systems. Although there are systems that have been identified in terms of disaster recovery and security, the systems are not documented. The auditor’s concern is whether those people who would know what to do would be available if a disaster occurred.
6. A. (Continued)
Reporting Standards – GASB Statement No. 34
According to Mr. Paradis, the biggest issue facing the Town relates to GASB Statement No. 34, which is a reporting change coming in during fiscal year 2003. The year 2002 is the year of implementation for “tier 1” – cities and towns over $100 million in revenues. The year 2003 is for “tier 2” (where South Windsor falls) – between $10 million and $100 million in revenues. The year 2004 is for “tier 3” – under $10 million in revenues.
An implementation calendar was provided last year, which listed in detail those tasks which would need to be completed. The auditor will be meeting next month with the Finance Department to check the status of issues and provide support.
One of the major issues is that the financial statements are completely changing. Mr. Paradis said he envisions spending a more significant amount of time reviewing the financial statements with the Town’s Audit Committee. Many new principles are coming into play in terms of the financial statements. The biggest change will be to collapse all of the governmental activities into one column and come up with a presentation of the net assets. The fund structures will not change, so the way of budgeting will not need to be changed.
Town Manager Galligan stated that this is going to be a monumental task and that one of the issues concerning assets would be in placing values on roads. He said that after calculating values, the Council may have to come up with a program or standard as to how much money to put back into roads.
When asked how this will affect bond ratings for a community like South Windsor, Mr. Paradis said that the bond rating agencies have indicated that it will take them a while to be able to utilize the new information coming from the GASB 34 reports until they can use it in terms of seeing trends.
Through information obtained from the tier 1 cities and towns which have gone through the process, Scully & Wolf will prepare a summary in terms of valuations, estimated lives, etc., and will share that database with their existing clients.
6. A. (Continued)
When asked what the upside or downside would be in getting values placed on the roads, Mr. Paradis said that he felt it was “really neutral.” Concerning valuations, he stated that the standard allows for a lot of estimation since it is a difficult process to get historical costs on many infrastructure assets.
Mr. Paradis explained that anything given to the Town, whether through a gift or the case of a developer turning over a road, is valued at its fair market value at the time that it is donated to the Town. With regard to items owned by volunteer departments, such as the Volunteer Fire Department, Mr. Paradis said that they would look at individual items. Collections fall under a certain standard and, in some instances, values are not put on collections.
In summary, Mr. Paradis stated that the fund balance is in good shape and the collection rate last year was in a good position. He said there were no glaring issues or significant deficits which need to be discussed.
7. Executive Session
A motion was made to go into Executive Session to discuss pending claims and litigation. The motion was duly seconded and was unanimously approved.
8. Adjournment
A motion to adjourn was made at 8:00 p.m. It was duly seconded and was unanimously approved.
Respectfully submitted,
Merlyn P. Guild
Assistant to the Clerk of the Council
Attachment – Exhibit A
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