Loading...
City Council Packet - 08/11/1977 CITY OF TIGARD P.O. Box 23397 12420 S.W. Main, Tigard, Oregon 97223 August 10, 1977 NOTICE OF SPECIAL MEETING 0 N V V Notice is hereby given that a special meeting was called by the Mayor with the common consent of the Council for 7:30 P.M. August 11, 1977, at City Hall, 12420 SW Main Street, Tigard, Oregon,for the purpose of considering the following: ORDINANCE No. 77-71 AN ORDINANCE ESTA3LISHING AND IM- POSING A SYSTEM DEVELOPMENT CHARGE TO MAKE ADEQUATE PROVISION FOR PARKS AND RECREATION FACILITIES, FIXING AN EFFECTIVE DATE, AND DECLARING AN EMERGENCY (Second reading of ordinance) To accept and discuss the report prepared by the two man committee appointed by the City Council on July 25th to review the causes and responsibility for the unanticipated cash carry over from the fiscal year 1976-77; and to go into executive session under the provisions of ORS 192.660(b) to discuss personnel matters in regard to this report if the council so desires. Wilbur A. Bis op - Mayor TIGARD CITY COUNCIL SPECIAL MEETING MINUTES, AUGUST 119 1-9779 700 P.M. Special meeting was called to order by the Mayor with the common consent of the Council for -the purpose of considering the following: second reading of ordinance number 77-71 regarding system development charge for parks and recreation facilities; accept report prepared by two man committee appointed by City Council to review the causes and responsibil- ity for unanticipated cash carry over from the fiscal year 1976-77. Present: Mayor Wilbur A. Bishop, Councilmen John E. Cook, Alan W. Mickelson, Lynn R. Wakem, Kenneth W. Scheckla; Joe Bailey, Legal Counsel; Brute P. Clark, City Administrator; Doris Hartig, City Recorder; Special Committee members Wally Hoffman and Robert Moore 1 . ORDINANCE No. 77-71 AN ORDINANCE ESTABLISHING AND IMPOSING A .SYSTEM DEVELOPMENT CHARGE TO MAKE ADEQUATE PROVISION FOR PARKS AND RECREATION FACILITIES, FIXING AN EFFECTIVE DATE, AND DECLARING AN EMERGENCY. Second reading of Ordinance (a) Motion to adopt: Councilman Wakem, seconded by Councilman Cook. Approved by 4-1 majority vote of Council. Roll call vote as follows: Mayor Bishop, Aye; Councilman Cook Aye; Alan W. Mickelson, Aye; Lynn R. Wakem, Aye; Councilman Scheckla Nay. 2. 1976-77 UNANTICIPATED CASH CARRY OVER (a) Special committee-members Wally Hoffman and Bob Moore synopsized memo with respect to background and causes of large unanticipated cash carry over. Report indicated large unanticipated cash carry over resulted from higher than anticipated revenue and for various reasons under expenditures of 1976-77 fiscal year programs. Committee made recommendations to prevent such a situation from occurring at some future time. Recommendation includes quarterly review of departmental programs, progressive record of 'unusual revenue items", formal set of budget preparation policies and procedures, review and updating of accounting records and systems to produce more efficient and effective financial information. Council and committee discussed establishing credibility with the public and tax payer. Council expressed appreciation to committee for time spent in preparing the report. Council at 8:40 P.M. went into executive session under the provisions of ORS 192.660 (b) to discuss personnel matters in regard to the report. City Administrator discussed credibility with the citizens and tax payers; Council's relationship with the City Adminis:,�^ator and what to do to im- prove the situation. City Administrator stated that the incident of cash carry-over was not sufficient to dismiss personnel but that termination of the City Administrator was the logical start toward developing credi- bility with the voting public. Motion by Councilman Mickelson, seconded by Councilman Cook to end executive session and l go into open meeting at 9:40 P,M. Council and City Administrator further discussed problem. Ci Admin- istrator offered rest considered .rest resignation effective six months from date, tCouncil considered -resignation and the possibility of setting a probationary period rather than outright termination. City Adm'nistrator requested decision at that time. j Motion by Councilman Wakem the Ci ate services of Bruce P, Clark effectiveoSeptemberard a30 ,C1977;1moot motionsecondedley-Councilman Soheckla. Councilman Mickelson moved to include severance pay of 90 days; motion seconded by Councilman Cook. Amendment to motion passed by unanimous vote of Council. Motion as amendedassed b majority Councilmen Scheckla and Wakem voting aye; Councilman. oun ilmen�CookyandBishoMickelson voting nay. Action taken was mutually acceptable to Council and City Administrator. At City Administrators request Councilman Mickelson moved, seconded by Councilman Wakem the discussion held in executive session be made avail- able to the laublic. Motion approved by unanimous vote of Council. Meeting adjourned 10:00 P.M. F . ATTEST: CM7 Recorder--- o ar gar Page 2 - Speoiel Meeting Minutes, August 11 , 1977 To the Tigard City Council Tigard, Oregon Gentlemen: At your request we have performed a review of the City 1 of Tigard' s procedures and policies for preparation of the 1977-78 budget in an effort to determine specifically why the additional carry-over of available general fund resources from the 1976-77 budget and the additional state revenue-sharing funds were not anticipated or made known to the Council and the budget committee during the budget meetings or prior to the budget election on July 12, 1977. The results of our work have been organized in this letter as follows: 1 - Background and apparent amount of unanticipated revenues 2 - Our review procedures 3 - The results from these review procedures 4 - Tentative conclusions 5 - Recommendations and suggestions 1 - Background and Apparent Amount of Unanticipated Revenues The 1977-78 budget for the City of Tigard was prepared in a "program element" format. This format was different from previous "line-item" budgets. The purpose of this revised format was to display and describe in a clearer fashion to the average Tigard taxpayer how the public dollar is proposed to be expended. A considerable amount of time was spent by the City of Tigard personnel in preparing this budget. The budget for the 1976-77 fiscal year was also reformated by program elements to give the budget committee a comparative budget to work with. Bloom Tigard City Council Page 2 1 - Background and Apparent Amount of Unanticipated Revenues (Concluded) In preparing any budget, there is always the risk that the projected amounts (for both revenues and expenditures) will vary from the actual results at year end. The prudent budget preparer should use all available data at the time the budget is prepared to hopefully minimize the variance between the actual and projected amounts. The exact amount of the available resources (carry-over) from the 1976-77 budget will not be known until the completion of the June 30, 1977 audit of the City's financial statements by its independent public accounting firm. However, based upon prelimi- nary figures it appears that the amount is $200, 068. This is $103,588 greater than the $96,480 budgeted in the revenue projec- tions. (It is interesting to note that the $96,480 amount was revised in mid-June from a previous budget estimate of $8,911. ) The $200, 068 carry-over results from higher-than-projected revenues received and underexpenditures of various budgeted funds for the 1976-77 fiscal year. The amount of the additional state revenue-sharing funds is $23,500. 2 - Our Review Procedures The following is a brief summary of the key review procedures that we performed in our effort to determine why the additional revenue resources were not anticipated. a - Discussions with various City personnel concerning procedures and policies for preparation of the budget. Tigard City Council Page 3 2 - Our Review Procedures (Concluded) b - Review of April and June, 1977 revenue and expenditure statements and the financial summary showing the monthly change in the cash balances by fund. c - An analysis on a comparative basis of previous budgets to determine if there had been any trend of unanticipated carry-overs. d - Discussions with representatives of the City' s accounting firm concerning the City' s accounting systems and records. 3 - The Results from These Review Procedures a - The informal procedures and policies set forth for the preparation of the budget appear to be good. There is involve- ment and participation by the various department heads. b - The financial summaries for April, May, and June, 1977 indicated that the general fund had a high cash balance. These financial summaries were available to the preparers of the budget and are presented monthly to the Tigard City Council. These financial summaries should have raised a question as to the existence of additional carry-over funds. c - A review of previous budgets disclosed no trend of material unanticipated carry-overs. d - The City maintains its accounting records on a manual basis. Due to the increased volume of transactions recorded by the City, the present systems have become cumbersome to work with and difficult to obtain financial data from on a "timely" basis. j . Tigard City Council Page 4 4 - Tentative Conclusions Based upon the results of our review, we found that there was sufficient data available during the budget preparation period to project the "carry-over" at an amount closer to the actual carry-over. We found that the $23,500 additional state revenue-sharing was not known by City personnel until July 6, 1977. It also appears that this additional amount could not have been reasonably antici- pated by City personnel in the budget preparation period. The last two budget committee meetings were held on May 16, 1977 and June 16, 1977. During this time period, projected revenue resources should have been reviewed and updated wit" the latest available information. It appears that this was aot done. We recognize that this process is time-consuming and difficult with a limited number of staff available to conduct this review. However, we feel that a prudent budget preparer should have performed those procedures necessary to insure that budget projections were "reasonable" in light of current available information. We were told that in previous years' budget preparations, those procedures were performed. 5 - Recommendations and Suggestions We would like to make the following recommendations and suggestions based upon our observations during the review. a - Prepare a formal set of budget preparation policies and procedures and review with and secure approval of the budget committee. This procedure should include, but not be limited to: • Review by the City Administrator with department heads of revenue and expenditures on a quarterly basis to establish the current position of the City's finances as compared with the current budget. ti. Tigard City Council Page 5 5 - Recommendations and Suggestions (Concluded) • Maintenance of a record of "unusual" items of revenue and expenditures to assist in the determination of a possible shortfall or carry-over for the ensuing budget year. b - Assign responsibilities to various City personnel to perform those procedures called for. } c - Conduct a thorough review of the City' s accounting records and systems to determine what changes could be made to produce more efficient and effective financial information. i i Respectfully submitted, l s Walter Hoffman i Robert Moore August 10, 1977 ;. a