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CITY COUNCIL
OCTOBER 1, 2007
7:30 P.M.
The Council of the City of Augusta, Kansas met in regular session on October 1, 2007, with Mayor Kristey Williams presiding. Council present were Holly Harper, Douglas Marr, Michael Huddleston, Michael Wallace, Tom Leffler, Mike Rawlings, and Robert Griffith. Councilmember Roger Chrislip was absent. Also present: City Manager Bill Keefer, Assistant to the City Manager JJ Allen, City Attorney David All, City Inspector Dan Allen, and City Clerk Erica Jones. Visitors present were: Michael McDermott, Bill Morris, Julie Roller, Aaron Iverson, Ken Bratton, and Don Patterson.
Prayer: Reverend Terry Deaver, First Baptist Church gave the invocation.
Minutes Council: Minutes of the September 17, 2007 council meeting were reviewed. Marr clarified his statement on page 5, paragraph 3 to read that “Regardless of the outcome in this meeting we thank Unrein for his investment in Augusta and for being the responsible business person that he is”. Wallace made a motion to approve the minutes of the September 17, 2007 council meeting. Harper seconded the motion. Motion carried without opposition.
Appropriations:
September (9A): Council considered appropriations in the amount of $882,302.76. Harper inquired about the multiple payments to AT&T. Jones stated that the payment for $76.72 is for the wireless 911 units at the Safety Department, the $805.75 is a recurring monthly charge for E911 service, the $163.69 is for phone service at the Airport, and the $767.68 is for two months of cellular phone use for five cell phone users. Harper asked if any of the cell phones were for the Safety Department. Jones stated these are not, but that there will be a bill on the next ordinance for the Safety Department cell phones. Marr stated that the payment to El Dorado for raw water seems high. Keefer stated that Jones has been working with various staff at the City of El Dorado for nearly a year to get the bill straightened out. It was determined that there was a month in 2006 that had not been paid, so this bill is for that unpaid balance and the current bill. Marr asked if the account is current now. Jones stated that it is. Griffith inquired about the payment to Cami Baker. Keefer stated that all but one of the fees paid were $185, per the agreement. Griffith asked if there was a way to know how many of those old cases are still out there that are not covered by the agreement. Keefer stated that he is unable to say how many there could be still out there. Marr inquired about the payment to Motel 6. Keefer stated that it was for a Parks Department employee to attend training in Manhattan. Huddleston asked if there is anyway for the report to list the department that is being expensed. Jones stated that the department is listed in most instances except when multiple departments are expensed. Jones stated that she will remind her staff to list the department in the description. Marr made a motion to approve Ordinance 9A in the amount of $882,302.76. Harper seconded the motion. Motion carried without opposition.
New Business:
Audit 2006: The City’s auditor was present to review the 2006 Audit. The Council considered acceptance of the 2006 Audit for the City of Augusta. Aaron Iverson of Edward B. Stephenson and Co. was present to present the audit. Iverson reviewed the audit report and financial statements and stated that there were no findings in accordance with Kansas Statutes or any federal programs. Huddleston inquired about the review of insurance and fidelity bond coverage on page 45 and whether the City owns the property listed at 208 4th Street (the Caring Center). Jones stated that there was an error in 2006 and the City was billed for the flood insurance at that address, but that the insurance company was notified that the City does not own that property and would not be paying for the coverage at that address. Iverson stated that it was originally listed in the 2006 insurance policy and that was where he pulled his information from.
Iverson stated that in the current year there are two letters the auditors are required to give the City. Iverson stated that the first letter is a management points letter that he has given every year that lists items that management should be aware of. Iverson stated that the first item he mentioned in the letter refers to the bank reconciliation. Iverson stated that Staff has put a lot more time and effort into it this year than in the past and that it came down to a satisfied balance of an immaterial balance. Marr asked how current the reconciliations are. Iverson stated that Staff is working on them monthly as far as he is aware.
Iverson stated that the second item he listed in the letter is to continue to remind management of the importance of monitoring the outlying areas such as the Airport, Court, Swimming Pool, and Santa Fe Lake. Iverson stated that the Clerk’s staff should continue to reconcile those periodically throughout the year. Huddleston asked if Santa Fe Lake is using numbered permits now. Iverson stated that numbered permits are not being used, but that he knows Staff is working on that. Marr asked what would be considered an acceptable monitoring process. Iverson stated that you do not want to see a large amount of cash on hand at outlying locations.
Iverson stated the third thing listed in his letter is to make sure there is a complete list of insufficient checks. Iverson stated that Staff has been working on this, but there was one check left off the list which threw the bank reconciliation off. Iverson stated that it is important that a current and accurate list of insufficient checks be maintained.
Iverson stated that the fourth item listed states that there are a number of checks that have been outstanding for more than two years. Iverson stated that K.S.A. 10-816 allows checks to be cancelled and restored to the fund that was originally expensed. Iverson stated that K.S.A. 58-3935 refers to payroll checks and identifies them as unclaimed property after one year. Iverson stated that he believes Staff has addressed those checks in the current year.
Iverson stated the fifth item listed refers to the authorized signers on the City’s bank accounts being kept current. Iverson stated that an account at Bank of America still listed a departed employee as an authorized signer.
Iverson stated that the sixth item listed states that Staff did try to prepare all the documents he had requested be prepared in the engagement letter, but that there were a couple of documents that had to be worked on after the audit team arrived and a couple of documents that were not completed accurately.
Iverson stated that there is a new letter referred to as SAS 112 that he was required to present with this year’s audit. Iverson stated that he wants to point out that nothing in this letter is a result of any change internally; it is a result of new external reporting requirements. Iverson stated that it is a pretty standard letter that refers to internal control. Iverson stated that these guidelines are in accordance with what should happen with all organizations, but that the size of the organization could make a difference on how internal control is addressed.
Iverson stated that the first item he listed under significant deficiencies in internal control is an inadequate segregation of duties. Iverson stated that if he compares the City of Augusta to General Motors or another large corporation, their internal controls are of course going to be stronger because they have more people and resources available to them. Iverson stated that he has to point out where the controls are not as strong as you would like to see them and as Council members and management, it is up to your discretion to determine if it is economically feasible for an entity your size to do something. Iverson stated that he would be saying the same thing to a small entity, another city Augusta’s size, or even potentially a larger city.
Iverson stated that the second point refers to employees or management who lack adequate training to fulfill their assigned functions. Iverson stated that he feels that these are harsh words, but that they come straight out of the SAS 112. Iverson stated that there is not someone in the City that can prepare the financial statements and understand and know every disclosure that is in the notes. Iverson stated that he is not saying the City needs a CPA, but that the way the City Clerk’s job description is currently, he does not feel that the Clerk would have the opportunity to get the training necessary to be able to do that. Iverson again stated that the Council and management have to look at that and what the risk is.
Iverson stated that the third point refers to inadequate design of internal control over the preparation of the financial statements being audited. Iverson stated that this goes along with the second point.
Iverson stated that the fourth point refers to inadequate documentation of internal control. Iverson stated that the City’s procedures for internal control should be in writing.
Iverson stated that he did have to repeat the second point as a material weakness because he feels that is probably the largest risk the City has in regards to its financial statements. Iverson stated that the question is whether Staff has the time or training to prepare those in their entirety. Iverson stated that not every item in this letter can necessarily be addressed or accomplished because of the size of the City and whether the risk is enough to compensate for additional spending. Wallace asked how much training would be needed. Iverson stated that quite a bit would be needed and that in his opinion if you are going to address it you would have to lift some of the duties off the Clerk’s plate or add an additional person to the Staff.
Huddleston stated that there has always been a recommendation on the audit report that each department be billed for the utilities they use, but that it is not listed this year. Iverson stated that he did not list it this year because he felt that management had reviewed and addressed it and determined not to do that at this time. Iverson stated that he still believes that if you want to see the full financial status of each department you should bill them for their utilities.
Marr stated that fundamentally if there is objective evidence that shows that we are taking some kind of a management approach to managing the City’s funds, that is what the auditors are looking for in the areas of improvement for the Airport, Swimming Pool, Santa Fe Lake, and Court. Iverson agreed, but stated that he will probably continue to mention those again because they are on the outlying areas and need to continue to be monitored.
Keefer stated that Iverson might note that in the future there will be additional letters that will be required, including one that will be issued directly to the Governing Body that Staff will not be privy to. Iverson stated that SAS 114 has been issued, but that he has not had the opportunity to fully review it yet. Iverson stated that it appears to go along the same lines as the SAS 112 letter, but that it will be presented directly to the Council.
Marr stated that for clarification in Iverson’s comments, he is stating that employees or management lack adequate training to fulfill their assigned functions. Marr stated that what he understood him to be saying is that they lack the training to prepare the formal report. Iverson stated that in most cases that was the biggest concern.
Keefer stated that he has concern that these are one size fits all regulations. Keefer stated that there are a lot of cities where the Clerk is also the Court Clerk, takes utility payments and prepares the bills, and everything else and that these small cities are being compared equally to a large corporation. Keefer stated that it is difficult, frustrating, and challenging for us to be efficient and do all the things we need to do. Iverson stated that those small cities where the Clerk is doing all of those jobs will probably get the same comments that Augusta is getting even though our controls are probably a lot better, but that they are still lacking the internal control in comparison to what the perfect situation is.
Marr asked for an update in a future informational memorandum about the fourth point on the management points letter regarding the number of outstanding checks. Marr made a motion to accept the 2006 Audit for the City of Augusta. Harper seconded the motion. Motion carried without opposition.
Int’l Building Code: Council considered approval of an Ordinance amending the 2003 Edition of the International Building Code. Dan Allen explained that since 2006 there has been a requirement to put a weather restrictive barrier on houses. Allen stated that this will help control water damage and air leaks. Wallace stated that the ordinance does not clarify if it applies to new or remodeled properties. Leffler stated that the wording follows the code where it refers to all exterior walls, so that would address both new construction or remodeling. Rawlings stated that this should be tabled, rewritten, and cleaned up. Rawlings stated that if the Council tries to rewrite it tonight, there are going to be things left out or mistakes made. Wallace made a motion to table this issue until the Ordinance can be further clarified and include Table R703.4 as requested by Rawlings. Huddleston seconded the motion. Motion carried without opposition.
USD 402: Council considered approval of a petition for USD 402 for the extension of a sanitary sewer line to serve their new Bus Maintenance facility on East 100th Street. Wallace asked how far the line will have to be extended. Keefer stated 200 feet. Keefer stated that the cost of the improvement could be spread out as a special assessment and that he had spoken to the City’s Bond Counsel and was told that the City could finance the temporary notes internally. Marr asked if that would be roughly $20,000 spread over fifteen years. Keefer stated that was correct. Keefer stated that next spring the improvement would be permanently financed and that the City would be reimbursed for the temporary notes and a small amount of interest. Wallace made a motion to approve a petition for USD 402 for the extension of a sanitary sewer line to serve their new Bus Maintenance facility on East 100th Street. Huddleston seconded the motion. Motion carried without opposition.
Informational Memorandum & Questions:
Griffith – Griffith thanked Staff for getting the fire hydrant replaced. Keefer stated that he hopes there will be a couple of more fire hydrants installed over the next thirty days.
Williams – Williams stated that there is a busy weekend coming up with the Homecoming and the Fly-In at the Municipal Airport. Williams stated that she has received letters from High School Seniors concerning local government and issues they are concerned about, and that she will be visiting with students at the Middle School on Tuesday to discuss the City and the role of Mayor.
Wallace – Wallace stated that he would like to put a freeze on moving forward with the zoning regulations pertaining to the portable signs. Wallace stated that many of the businesses on the list are small and individually owned. Dan Allen presented photos of permanent signage and ways the businesses can make their signage permanent without a huge expense. Keefer stated that because of issues that have come up lately there has been has been an effort made to more strictly enforce the codes. Keefer states that we cannot re-write every code because a couple of people object to it.
Marr made a motion to put a moratorium on signs for POK, Jump Start, J’s Liquor, The Senior Center, Hair Emporium, Hair Fantastic, Dillons, Curves, Holiday Bowl, Augusta Flix, The Learning Center, Dream Weavers, Plaza Shopping Center, Moore Car Wash, I Storage, Crossroads Church, and Oak Tree Bar between now and December 31st and have Huddleston and Wallace provide suggested wording for the Ordinance pertaining to portable signs. Wallace seconded the motion. Motion carried with Leffler and Rawlings opposing.
Griffith suggested that there be a time set to re-visit this issue. Wallace stated that he could have his information for the next meeting. Keefer stated that he would like for Staff to have time to review the information and to have the City Attorney review the Ordinance.
Wallace asked why the waterline downtown was not being extended all the way down to 3rd Street. Keefer stated that street and curb repairs had already been done in that area. Marr stated that the area will be reworked as part of the Streetscape project at that the six inch lines that are already in place in that area are acceptable.
Wallace stated that there seems to be an agenda in the printed police reports in the Gazette. Wallace stated that some incidents list an intersection or block number, while others refer to a specific business near where the incident occurs. Wallace stated that instead of naming a specific business it should list only the block number. Keefer stated that the Gazette prints that information. Rawlings stated that a former Councilmember asked for that information to be printed. Wallace stated that he wanted to make sure that some businesses were not being highlighted under a more scrupulous eye then they should be.
Huddleston – Huddleston stated that the Informational Memorandum indicates that court costs increased by $10 in July, but that $16,600 was not paid. Huddleston stated that the amount seemed excessive. Keefer stated that the costs increased in July of 2006. Huddleston stated that the Judge had just proposed an increase in the fees. Keefer stated that the Judge had requested an increase in fines, but not in court costs. Huddleston stated that he believed some cities have contracted out their courts. JJ Allen stated that some cities in Washington do that. Keefer stated that he was not aware of any cities in Kansas that have contracted out their court.
Huddleston asked if the bricks along the curb downtown will be re-worked as part of the Streetscape project. Keefer stated that they would.
Marr – Marr stated that for further clarification the rock and concrete located on Jason Bradley’s property have been moved. Dan Allen agreed, but stated that the rock was moved to the wrong direction. Keefer stated that Staff will be working with Bradley to relocate the rock to a different area of his property.
Marr asked if the electric utility customer’s whose under-billed amounts had been forgiven have all been notified. Jones stated that they have.
Harper – Harper stated that she received calls from a neighbor on Clark about semi tractor trailers driving through that area. Harper asked for an officer to monitor the area for that activity.
Adjourn: At 8:55 p.m. Harper made a motion to adjourn. Marr seconded the motion. Motion carried without opposition.
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