MARCH 24, 2014


THE JOINT SPECIAL MEETING of the City of Port Orange City Council and the Audit & Budget Advisory Board was called to order by Mayor Allen Green at 5:30 p.m.


Pledge of Allegiance


Silent Invocation


Roll Call:                    Present:                     Sonya Laney

                                                                        Ted Noftall

                                                                        Jack Wiles

                                                                        Ivan Cosimi

                                                                        Mark Schaefer (arrived at 5:42 p.m.)

                                                                        Councilman Bob Ford

                                                                        Councilman Drew Bastian

Councilman Dennis Kennedy

                                                                        Vice Mayor Donald Burnette

                                                                        Mayor Allen Green


                                    Absent:                      Corey Berman

                                                                        Joe Fazzie


                                    Also Present:            Gregory A. Kisela, City Manager

                                                                        Margaret T. Roberts, City Attorney

                                                                        Robin Fenwick, City Clerk




4.    Responsibilities and Duties of the Audit & Budget Advisory Board


Vice Mayor Burnette would like the Board to have a mission statement to help guide them. He asked the Board Members to share their frustrations with the Council.


Member Cosimi sees the Board’s role to be reviewing the monthly finance reports as a whole and drill down to provide recommendations to Council.


Councilman Kennedy expects the Board to review and analyze budget issues, as well as provide opinions to Council on policies and audit comments.


Chairman Noftall referred to the emails he sent to Council and the Board and the Ordinance establishing the Board. He believes it is specific and provides direction to the Board.


Councilman Ford wants the Board to provide a level of trust as another set of eyes looking at the City’s finances. He wants a level of trust with the Finance Department. He also wants the Board to review the budget and help provide recommendations to Council. He asked the Board to discuss questions like: How much is charged from the water/sewer fund for police protection; do we want to rely on property taxes or diversify; what type of parks department do we want and how much to spend on it. He has concerns about the finances to cover contracts. Is Council doing all they can to address issues from the past and be sure they don’t happen again.


Member Wiles would like the Board to focus on one or two items at each meeting rather than the shot gun approach. He doesn’t want Staff to feel that he is on the Board to make anyone uncomfortable. He wants to have a positive impact and be helpful to Council.


Councilman Bastian agreed with Chairman Noftall that the Ordinance establishing the Board was specific. They also provided direction during the visioning workshop relating to the pension issue and the reporting documents from Finance.


Member Laney said the goals for the Board are large. She thinks it is impossible to provide a positive outcome because the Board only meets once a month and new items develop in between each meeting. She suggested Council provide their top two issues for the next meeting.


Member Schaefer agreed that meeting once a month is not enough to provide positive feedback. He believes the Board needs more timely and accurate information and records from Finance so they can do their research and be prepared for the meetings.


Mayor Green believes the mission is simple. Timeliness is important but Staff is trying to run a city. He suggested selecting one or two items to discuss at each meeting rather than several items. He doesn’t like the criticism of individual Staff members.


Councilman Ford asked what more needs to be done to get the type of Finance Department that he can trust. He believes Staff should be preparing the financial statements.


Mayor Green asked if the Finance Department is properly staffed.


Greg Kisela, City Manager, isn’t sure what Councilman Ford is looking for to have that level of trust. Staff is providing the monthly financial reports. Councilman Ford would also like more information regarding a holistic approach. He would like better quality reporting. Mr. Kisela said Staff is looking to the Board to provide information on the type of reporting format to be used. Wayne Saunders, Finance Director, agreed with Mr. Kisela. It would be helpful for information from Council and the Board on formatting. Councilman Ford said that’s the first task would be for the Board to work with Staff to provide a form for Finance Staff to utilize. Mr. Kisela asked Council to provide direction on the reporting. Mr. Saunders said a monthly report is already being provided, as well as a summary report. Both are posted on the website. The Board requested Staff to add a comparison on the summary report from the previous year. Staff will add that on the next report. There have been no other changes requested.


Member Schaefer asked why the summary budget reports have a different account number. Mr. Saunders said the detailed report is produced directly from the HTE system. The budget year to date divides the budget number by 12. The summary report provides a realistic number because not everything comes in in twelfths. Staff “seasonalizes” the data so that it is more in line with realistic numbers. Member Schaefer asked if the software allows for the “seasonalization” to be included on the detail report so it matches the summary report. Mr. Saunders will look into it.


Mayor Green wants to see accuracy and timeliness of the reports.


Chairman Noftall believes the numbers should be produced in the same format as the CAFR. Mr. Saunders doesn’t believe any city in the state that has the same reporting as their CAFR. There is a uniform set of accounting standards that have to be met in the way that budgets and other reports are prepared. The CAFR has its own set of rules.


Member Laney believes the City needs another employee to work directly with the Board to handle the demands of the Board and expectations of Council.


Mayor Green asked Mr. Kisela if the staffing levels are where they need to be and if there is enough space for the department. Mr. Kisela said he and Mr. Saunders have had extensive conversations throughout the last year. There has been a 60% turnover rate in Finance. He and Mr. Saunders are evaluating what resources are needed in Finance. He said information can be provided but specifics are needed. He asked the Board Members how the reformatting is going to allow for better decision making. Member Schaefer said he’s not looking for new formatting. He wants all reporting to be consistent.


Councilman Ford wants Staff to be properly credentialed.


Mr. Saunders said he has been looking at all job descriptions and job duties.


Vice Mayor Burnette would like each department to provide a presentation to the Board so that the Board can discuss the line items.


Member Schaefer left at 6:38 p.m.


Chairman Noftall read a portion of the James Moore audit report relating to internal controls. He asked who on Staff is responsible for handling the responsibility. He doesn’t believe it’s being done. He discussed the CAFR statement relating to the delays in providing documents to the auditors. Mr. Saunders believed the auditors overstated the timeliness of documents and information being provided to them. Staff was two weeks late which in turn made the auditors a month behind because of the holidays and other workload.


Mayor Green wants Staff to hit deadlines no matter what. The schedule needs to be doable and then needs to be met.


Chairman Noftall asked if Staff does accruals monthly so there aren’t several entries at the end of the year. He believes that is a significant problem. Councilman Ford asked what the progress is on reducing the excessive fund accounts. Mr. Kisela said a few have been taken care of and Staff is working on addressing the issue as reported in the audit comments.


Councilman Ford asked what has been done to help long term employees change their ways and help them grow. Mr. Kisela said policies and procedures have been put in place during 2013 which distracted Staff from their normal duties.


Councilman Kennedy believes being three months ahead of where Staff was last year as it relates to the audit, is a step in the right direction and hopes next year will be even more on track. He agreed with the establishment of a form for the reports.


Member Wiles agreed with the discussion and the need for forms. He would like to discuss each department, one at a time, as well as capital expenses.


Councilman Ford wants to see the formatting issue handled first. He also wants to see the budget well in advance of the May workshop.


Member Laney isn’t hearing how the tasks will be accomplished in a timely manner. Councilman Ford suggested subcommittees. Mr. Kisela said the May workshop is only six weeks away. Departments will be putting their requests in over the next two weeks. Mr. Kisela asked for direction from Council relating to who gets the information first. Mayor Green said each department needs to submit their information in a shorter timeline.


Chairman Noftall said the Police Pension Board had inaccuracies in benefits being paid out to plan members. He asked who at the City is handling the benefits. Mr. Kisela said City Staff does not make the calculations for the Plans. Councilman Kennedy said the final numbers are provided to the Plan Administrator and they make the calculations through the Plan, not City Staff.


Councilman Bastian wants to get the information relating to the departments’ budgets and work with the Board to build the budget.


Mayor Green said it needs to be achievable. The direction to the Board is to work on the formatting of the reports. He asked Staff to provide support to the Board.


Mr. Kisela asked how Council wants Staff to present the budget information to them. Consensus was to provide it to Council first them to the Board.


Member Laney suggested providing two or three discussion points for the Board each month so as to provide Staff the opportunity to provide accurate and timely information.


Chairman Noftall asked for the last three years’ figures and provide format choices to the Board. Mr. Kisela said the historical numbers vs. actuals can be provided.


Mr. Kisela advised that different opinions are coming out. Some are talking about big picture, while others are working in the details. He needs to know if they want to work bottom up or top down. All agreed to work top down. Mr. Kisela said the May 10th workshop will provide a top down presentation. It will be a big picture look at the budget so that Council can provide feedback.


Member Wiles asked when the proposed budget will be provided to Council and the Board members. He doesn’t understand why it will take so long for the departments to input their budgets. Mr. Kisela agreed to provide the draft budget on April 25th to Council and Board.


Chairman Noftall asked if the Board would have exit strategy meetings with the auditors. Mayor Green said they should meet with the auditors. Margaret Roberts, City Attorney, advised that the ordinance provides for the Board review and input prior to it going to Council.


Chairman Noftall agreed that the reports need to be reformatted. The functions need to be split.


Mr. Kisela asked for direction relating to providing the audit to the Board prior to it going to Council as the client first. Councilman Ford sees the Board Members as an extension of the Council. He wants feedback from the Board. Mr. Kisela said the auditors fear giving the information to the Board and/or the public before providing it to the Council.


Member Laney said there needs to be a level of independence. She said the auditors may have a hard time providing it to the Board before the Council as the Council is the client.


Ms. Roberts advised that in her practice, she will render the report to the client first unless specifically directed otherwise by the client. The Ordinance provides for a review opportunity by the Audit & Budget Advisory Board.


Councilman Ford agreed with Council having their individual meetings with the auditors first and then it going to the Board for review prior to the public meeting.


Mr. Kisela confirmed the process: Council individually first, then to the Audit & Budget Advisory Board, then the presentation in the public meeting beginning next year. All agreed.


ADJOURNMENT: 7:26 p.m.



                                                                                    Mayor Allen Green





Robin L. Fenwick, CMC, City Clerk