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06-24-13 CC Reg Mtg AgendaP #3C MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Accepting the 2012 Comprehensive Annual Financial Report Meeting Date: 6/24/13 Prepared by: Bruce DeJong, Finance Director Attachment: Draft Management Letter Draft Other Required Reports Draft Consolidated Annual Financial Report Policy Consideration: Should the City Council accept the Consolidated Annual Financial Report? Background: The 2012 audit has been completed and Andrew Berg from Abdo, Eick & Meyers, LLP will be here to present the results at the work session. The report is presented in draft form as in previous years to allow for City Council input into the final report. The audit went much smoother this year. Staff had the resources to get cash reconciled with assistance from KDV and accounts balanced prior to the audit. There remains one finding that more adjusting journal entries need to be performed by city staff. While some of these entries were completed by staff several remained for the auditors help with. These entries are primarily accruals that affect the balance sheet and have only minor impact on revenues and expenditures reported throughout the year. With the significant progress made this year, staff will be able to make all of the adjusting entries next year as the uncertainty surrounding those accounts has been cleared up. This will also allow for a clean transition of account balances and transaction history to the new software recommended in item 10A. Overall operating results for the governmental funds were positive with an increase in total fund balance of $187,305. We actually added $136,241 to fund balance in the General Fund for 2012 and did not experience a deficit. Those funds can be used to cover the existing deficit in the Southshore Center Fund. The enterprise fund operations were about as expected. The Water Fund had a positive year with net income of $102,818. The Sewer Fund lost $203,861, but that is an improvement over 2011 results. We also lost money in the Stormwater Management Fund. Council directed that a rate study be performed this year to analyze what adjustments are needed to allow these funds to cover their costs over the long run. Staff will bring a proposal back for approval in July. Financial or Budget Considerations: This report will be used as the basis for preparing the budget information for the City Council’s consideration starting in July. Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 Options: The City Council may choose to: 1.Accept the annual financial report as presented. 2.Recommend changes to the report and accept the amended report. Recommendation / Action Requested: Finance Staff recommends that City Council accept the annual financial report. Next Steps and Timelines: We will use this information as a base for future budget and capital plans. Connection to Vision / Mission: This contributes to sound financial management. 7A CITY OF SHOREWOOD 5755 COUNTRY CLUB RD PARK TOUR SHOREWOOD CITY HALL TUESDAY, JUNE 11, 2013 6:00 P.M. MINUTES PARK TOUR The Commission met at City Hall at approximately 5:45pm and departed for the second park tour 1. SKATE PARK Discussion included the following: a. Fence has been ordered and will arrive in a couple weeks. b. The skate park is a draw for younger skaters rather than the more experienced. c. Should the area along Highway 7 be kept open or screened from traffic? d. Message board had no messages. e. Skateboard Camp will be offered again this summer. f. Some sections of decking on skate ramps need to be replaced and painted. g. Only one picnic table on site while it was believed there used to be two. h. The community garden is working well although gardeners throw rocks to the edge where they can get caught up in mowers. 2. MANOR PARK a. Fan and light stolen inside park shelter. Rest rooms automatically lock. Drainage issue at shelter. Gutters needed on south side. b. Playground is 2 years old. c. Tennis court edges are not even. d. Concerns were raised about striping of tennis court for pickle ball. Not enough courts as a result. Complaint received that balls do not bounce well on the existing surface. e. Fields currently used by South Tonka Little League and soccer. f. Fountain will be installed soon in the garden. g. Despite the health of the tree, park users want it to remain. h. Pond – the level was raised with the hope that the algae would not return – this did not happen. Brown explained how the permitting process for all future requests will be very restrictive. i. Need bigger backboard at basketball court. 3. SILVERWOOD PARK a. Message board is fine but needs a lock. b. Park shelter looks good. c. Brown discussed current setbacks with lack of sufficient Public Works staffdue to sick leave and vacation usage. d. Issue rose with basketball rolling down the hill to the swamp on occasion. It was suggested a small fence be put up so the balls don’t go into the swamp. e. Concern rose about pond being green already. f. Retaining wall fence boards are loose. 4. CHRISTMAS LAKE ACCESS a. Shorewood has been taking care of the landing to this point. There is a need to clarify with the DNR who is responsible for what at the landing. PARK TOUR MINUTES TUESDAY, JUNE 11, 2013 2 PAGE 2 OF b. Signs need to be replaced/refreshed. Striping will also be done and gates need to be repaired. c. Plan for centralized system for boat inspection. d. Trying to get Carver County to do all the boat inspections. 5. CRESCENT BEACH a. Public Works from Shorewood and Tonka Bay perform maintenance on alternate weeks as the ownership is shared. 6. GIDEON GLEN a. Plan for 2-3 parking stalls and possibly making room for a bus to park for educational field trips. b. Path is overgrown – mark the trail and mow low to keep it more natural. c. Watershed responsible for the vegetation. d. It would be nice to have a wooden platform and a place to sit. e. Orange erosion fencing needs to be removed. 7. RECAP a. Create a work plan to include what we saw on the tour. b. Plan for parking lot at Gideon Glen will be presented at next meeting. c. Find out about the edging at the Manor Park tennis court. d. Request for a budget update at next meeting e. Manager at Joey Nova’s would like to make a presentation at next meeting about his interest in becoming involved in the Movie in the Park event in September. f. Lacrosse group would like to install irrigation system at Badger Park. g. Park users at Freeman are very concerned about parking and access to and from the park. 8. ADJOURN The Park Tour of June 11, 2013 ended at 7:30 p.m. Motion carried. RESPECTFULLY SUBMITTED, Clare T. Link Recorder #10A MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Authorize Expenditure of Funds for a Financial Software Package Meeting Date: 6/24/13 Prepared by: Bruce DeJong, Finance Director Attachment: Springbrook Proposal Policy Consideration: Should the City license new financial software? Background: The City currently utilizes InCode from Tyler Technologies which features budget, general ledger, payroll, accounts payable, utility billing, fixed assets, check reconciliation, and project accounting. While all of these systems were licensed, the fixed assets, check reconciliation, and project accounting were never integrated into the accounting processes of the city. The system itself has limitations primarily due to the age of the programming. Tyler has given us notice that the version we use will no longer be supported starting July 1, 2014. There is an update to the program, but it is primarily a cosmetic upgrade to the front end of the program. Some of the programs remain written in COBOL and are unwieldy to update. The reporting features are basically hard-coded into the software and don’t offer much flexibility or ability to export to Excel for further manipulation. The structure of our current chart of accounts does not meet current financial reporting needs by allowing us to track revenues and expenditures by program or activity which will require a full conversion process even if we upgrade The City has planned on replacing the existing system for several years. A Capital Improvement Plan budget of $90,000 has been set aside through the Equipment Replacement Fund for this purpose. Analysis In 2012, the Finance Department began evaluating enterprise resource planning (ERP) software. Staff has discussed software with vendors who have fully integrated programs and some “best of breed” programs that can interface with the primary software package. Staff surveyed finance departments of other Minnesota cities for their satisfaction, and evaluated several software packages. The vendors initially screened included 4-Gov cloud software, Banyon, BS&A, Civic Systems, Infor (Lawson), Intacct, LOGIS, Munis, New World Systems, Springbrook, and UBMax. Staff decided that the best fit would be an enterprise resource planning (ERP) software system where one vendor supplies all of the software in an integrated package, with a similar look and feel for each of the selected software functions. With a small staff, this provides the best way of familiarizing employees with a broad spectrum of the software functions. Staff also desired for the vendor to have existing clients in Minnesota because there are a large number of specific reporting requirements for PERA, Office of the State Auditor, Department of Revenue, Department of Employment and Economic Development, and other state specific reports that need to be integrated into the software. Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 The Finance Director participated in extensive demonstrations that the City of Chaska used to evaluate software. The firms were selected using a structured process from the Government Finance Officers Association – Technology Consulting Services. The two providers that stood out were evaluated through in person presentations at City Hall. Those software packages were Munis – the upgrade path from Tyler Technologies - and Springbrook. Review of the cost estimates of the providers revealed the following: Software Package Licensing Implementation & Total First Year Annual Conversion Maintenance Munis $ 57,550 $ 84,125 $ 141,675 $ 13,695 Springbrook $ 34,375 $ 69,000 $ 103,375 $ 7,521 Both firms have a good understanding of the project and submitted proposals which meet the objectives. These two vendors were required to provide detailed demonstrations of the proposed application software. The two 6-hour presentations were very thorough and provided Staff with significant insight on the power of the programs. Upon completion of the demonstrations, Staff reviewed the benefits of each system. Since both packages met the business process needs of Shorewood, the Springbrook product was chosen as the cost competitive product. The goals that this software licensing will accomplish include internet access to utility account information and bill payment. Employee self-service allows staff access to their payroll and tax information. We will have extensive report writing capability, with drill-down access to detailed supporting information directly from the summary reports. We will also have an integrated cash management process that will allow payments to be taken at the front counter with system generated receipts. Springbrook was also the only vendor who has exhibited a willingness to support other agencies within the software – and in fact has a long time shared service setup with the City of Roseville and other northeast metro cities sharing resources on Roseville’s system. Staff continued to work with Springbrook on the pricing of the software and have ended at $34,375 for licensing and $51,000 training & implementation, $18,000 conversion costs, totaling $103,375 and $13,398 annual maintenance cost. Springbrook provided a 25% discount on the license cost of $37,500 and a 50% discount on the $9,813 first year support cost for a total discount of $14,281 off their regular pricing. Springbrook does have an active user base of similar cities in Minnesota with 10-15 clients coming to meetings held every three to six months depending on the topics and support needs. The user groups are currently run by the City of Chanhassen staff, but the responsibility does shift around. Shorewood staff intends to participate in the user group meetings to learn user tips and techniques for getting the most out of the software. Financial or Budget Considerations: This software does exceed the amount in the CIP by $13,375. There will also be some travel expense for the training staff to come on site, but we will use video hookup and staff from Springbrook’s Minnesota office where possible. Options: The City Council may choose to: 1.Accept the Springbrook proposal. 2.Direct staff to research other potential vendors. 3.Decline to purchase new software. Recommendation / Action Requested: Finance Staff is recommending Council authorize the execution of a contract with Springbrook to provide an ERP financial system. Next Steps and Timelines: With a signed contract, work will begin to prepare an implementation plan with a go live goal of January, 2014. Connection to Vision / Mission: This program contributes to sound financial management and improved customer service. V7 (.NET) "Cloud" Pricing for:City of Shorewood, MN 21-Jun-13 ApplicationTraining, Imp. Application/ProductsLicense Fees& Consulting Finance Suite (GL, AP, ACH, Bank Rec, Bdgt)$10,500$9,000 $1,000 Extended Budgeting & ForecastingIncluded $1,000 CAFR & GASB Rpt'g via Query Manager & Visual Rpt'g ToolsIncluded AP Electronic Check SignatureIncludedIncluded AP MICR Code -1 CheckIncludedIncluded AP Positive Pay - Standard ExportIncludedIncluded Payroll$9,500$9,000 $1,000 On-Line Employee Self-Service** Included $1,000 Decentralized Time EntryIncluded PR Electonic Check SignatureIncludedIncluded Payroll MICR Code - 1 CheckIncludedIncluded Payroll Positive Pay - Standard ExportIncludedIncluded Central Cash Management/Point Of Sale$5,500$1,500 (Training is at City Hall) Utility Billing Suite$8,500$12,000 Service Order Request ManagementIncluded Meter Inventory and HistoryIncluded Meter Reading Interface$3,500$250 Hosted Web UB Payments, e-statements & Inquiry* No Upfront FeesIncluded Separate contract required Misc. Work Flow Processing Set-up If Rqst'd - TBD Document Attachment & Cataloging IncludedIncluded Business Analytics (up to 3 Analytics) IncludedIncluded Integrated Report Archival IncludedIncluded Sub Total$37,500$35,750 Application Server Tier (5 Users Shorewood)$3,750 Business Process Study $4,800 Access Agents for 'Casual' Users$2,500 Project Management$10,450 Total Other$21,500 Summarized Conversion Est. - Shorewood$18,000 25% Software Discount - Incode V8 Replacement-$9,375 Total Estimated Project Costs$103,375 6- Total Named Users (Application Server) 100 - Casual Users via Access Agents * .05/active account/month + $1.00 per transaction + (normal credit card processing fees) * If customer pays transaction fee special Utility rates may not apply Services are estimates. Approved project plan will confirm final implementation strategy Conversion Estimate for:City of Shorewood, MN Conversion Application to be converted Estimate Chart of Accounts $2,400 GL Transaction Balances* $2,400 Accounts Payable Vendor Master$2,400 Build Manually Payroll Masters - Employee Data (Does not include History) Utility Billing Masters -Customers$3,600 Utility Billing Financial History - 3 Years $3,600 Utility Billing Meter History - 3 Years $3,600 Total Estimated Conversion Costs$18,000 CONVERSION, continued: CONVERSION, continued: Annual Maintenance for:City of Shorewood, MN Intial Database 1st YearSubscription Maintenance Fees Application/Products Finance Suite$2,310 Payroll$2,090 Central Cash Management$1,210 Utility Billing Suite$1,870 Standard Meter Reading Interface$770 Hosted UB Web Payments - (2,900 Accts)$1,740 Enhanced Maintenance (1 interversion upgrade/year)$875 Total Springbrook$8,250$2,615 Application Server Tier$938n/a Access Agents$625n/a Total Database Related Fees$1,563$0 $9,813 Total 1st Year Maintenance Costs-from date of Contract Execution -$4,906 1/2 of 1st Year Maintenance Costs Waived* $4,906$2,615 Total Maint. for 1st Full Year from date of Contract Execution Total 2nd Year Costs$10,303$2,746 Total 3rd Year Costs$10,818$2,883 Total 4th Year Costs$11,359$3,027 Total 5th Year Costs$11,927$3,179 MEMORANDUM Date: June 24, 2013 To: Mayor Zerby Council Members From: Bruce DeJong, Finance Director Re: May, 2013 General Fund Monthly Budget Report ______________________________________________________________ The 2013 General Fund continues to track about where we would expect. Revenues are a little ahead and expenditures are a little behind 2012, but not by any amount that would cause concern at this point in the year. The City Council may wish to consider amending the budget in Administration and City Engineer. These changes would reflect the decisions made at the end of last year and at the retreat to contract for services rather than hire employees in those positions. GENERAL FUND REVENUES  Miscellaneous Revenues – This is the category where we budgeted the revenues from water tower cell phone leases. Most of those are paid early in the year, so we should be ahead of last year since this is the first year we have budgeted for all the cell tower leases in the General Fund. GENERAL FUND EXPENDITURES  Snow and Ice – This budget exceeds the prior year because the snow season was significantly more active and longer than what we have recently experienced.  Recreation Programs – This budget is higher than last year primarily because we actually had an ice skating season that required rink attendants while no rink attendants were hired in 2012 because of the warm weather and poor ice conditions. Please contact me or Mr. Joynes if you have any questions. Attachment: May Budget Spreadsheet Monthly Budget Report May 31, 2013 YTDYTD2013% of 2013ExpectedVariance 2012MayAdoptedAnnual% of 2013(Negative) Year to Date OverviewActual2013BudgetBudgetBudgetor Positive REVENUE Property Taxes - - 4,763,3190.0%0.0% Licenses and Permits 53,557 60,053 124,20048.4%51.0% Intergovernmental 35,400 35,239 70,40150.1%48.7% Charges for Service 29,617 19,230 35,15054.7%62.7% Fines and Forfeitures 27,042 13,584 57,00023.8%37.7% Miscellaneous 18,126 148,454 213,90069.4%29.0% TOTAL 163,742 276,560 5,263,970 5.3%$73,427.85 EXPENDITURES Department Council Personnel 6,997 6,997 16,80041.6%42.0% Materials and Supplies 82 270 2,00013.5%79.0% Support and Services 11,128 17,804 72,45024.6%26.0% Transfers 47,700 Total 18,207 25,071 138,95018.0%$2,402.00 Administration 359,671 Personnel 185,321 88,77324.7%40.3% 18,450 Materials and Supplies 7,929 5,1970.0%31.7% 42,175 Support and Services 11,438 48,269114.4%47.3% - Capital Outlay Total 204,688 142,239 420,29633.8%$28,505.84 Finance 132,929 Personnel 71,264 49,21137.0%39.3% 8,400 Materials and Supplies 7,903 8,18797.5%89.7% 11,600 Support and Services 2,817 3,51730.3%34.7% - Capital Outlay - 322 Total 81,984 61,237 152,92940.0%$2,564.10 Professional Services 76,784 98,908 203,39048.6%49.3%$1,431.07 Planning and Zoning 170,666 Personnel 79,955 60,89835.7%37.7% 650 Materials and Supplies - 19029.2%34.7% 7,400 Support and Services 2,241 3,17342.9%49.0% 200 Capital Outlay - -0.0%0.0% Total 82,196 64,261 178,91635.9%$3,874.53 Municipal Building - City Hall 22,130 Materials and Supplies 10,378 13,54361.2%56.0% 164,800 Support and Services 130,222 119,59972.6%72.0% Capital Outlay 352 - -26.3% Transfers - - 100,4500.0%0.0% Total 140,952 133,142 287,38046.3%($2,093.20) Police Materials and Supplies - - Support Services 412,201 423,505 1,015,07741.7%42.0% Capital (Public Safety Bldg) 112,566 113,882 235,43748.4%50.0% Total 524,767 537,387 1,250,51443.0%$6,663.84 Fire Support Services 165,993 172,864 349,58249.4%50.7% Capital (Public Safety Bldg) 138,953 143,828 287,64350.0%49.3% Total 304,946 316,692 637,22549.7%$2,354.07 Inspections Personnel 51,887 41,996 120,58834.8%38.7% Materials and Supplies - - 2000.0%18.7% Support and Services 631 1,638 5,30030.9%15.0% Total 52,518 43,634 126,08834.6%$3,865.96 City Engineer Personnel 34,952 460 92,5490.5%38.3% Materials and Supplies 104 - 2000.0%10.0% Support and Services 7,017 23,612 11,220210.4%19.9% Capital Outlay - - -0.0% Total 42,073 24,072 103,96923.2%$13,627.05 Public Works Service Personnel 158,395 121,505 428,77528.3%47.7% Materials and Supplies 79,066 29,457 171,30017.2%37.3% Support and Services 36,454 32,874 139,75023.5%42.7% Transfers - - 772,5000.0% Total 273,915 183,836 1,512,32512.2%$144,257.83 Snow and Ice Personnel 15,989 31,548 56,66255.7%54.7% Materials and Supplies 10,247 21,369 45,00047.5%37.7% Total 26,236 52,917 101,66252.1%($4,957.89) Parks Maintenance Personnel 45,225 23,506 103,35822.7%38.0% Materials and Supplies 10,361 8,985 19,30046.6%42.0% Support and Services 13,802 11,009 30,91035.6%50.7% Transfers - - -0.0% Total 69,388 43,500 153,56828.3%$19,553.41 Recreation Programs Personnel 17,358 28,739 36,36079.0%38.0% Materials and Supplies 764 2,298 1,500153.2%42.0% Support and Services 10,006 9,596 20,14547.6%50.7% Transfers - - 42,0000.0%0.0% Total 28,128 40,633 100,00540.6%($15,972.69) Unallocated 87,779 -0.0% Total Expenditures 5,367,217 1,926,782 1,855,30834.6%$206,076 Net Revenue less Expenditures (103,247) (1,763,040) (1,578,748) Note: The balanced budget includes the use of $103,247 of fund balance in Transfers in the Revenue section.