The City Council of the City of Abilene, Texas, met in Financial Workshop at 11:00 a.m., immediately following the Regular City Council meeting on March 13, 2003 in the City Council Chambers of City Hall. Mayor Grady Barr was present and presiding with Councilmen Norm Archibald, Kris Southward, Anthony Williams, John Hill, Jimmy McNeil, and Councilwoman Kay Alexander. Also present were City Manager Larry Gilley, Assistant City Manager Kathy Merrill, City Attorney Sharon Hicks, City Secretary Jo Moore, and various members of the City staff.

Mayor Barr recognized David Wright, Director of Finance, who briefed the Council on the workshop’s agenda items, which included the review and acceptance of Financial and Investment Policies and FY 2002 Financial Report; review of the FY 2003 Financial Status; and the Capital Improvements Program. Mr. Wright introduced auditor Scott McDonald of Davis, Kinard & Co.

5.4a Mr. Wright reviewed the 2001-2002 General Fund Approved Revised Budget, Revised Budget With Adjustments, Budget With Adjustments, and Animal Control Improvements. Mr. Wright briefed the Council on Governmental Accounting Standards Board (GASB) 33, stating the City incorporated GASB 33 in the FY 02 report. Basically, this required that the City report in its accounts receivable and revenue accounts sales tax, court fines, franchise fees, hotel/motel taxes, and unbilled refuse charges of the first two months of FY 03 as available at September 30, 2002. This is an accounting adjustment and does not change the City's cash position at year-end but does make the balance sheet for the General Fund reflect an annual adjustment in the amount of $3,284,591 in fund balance. However, those two months are considered revenue in the FY 03 Budget, and the FY 01 does not reflect GASB 33 conversion. Mr. Wright explained this is an accounting event and not an accounting function and noted an additional change will occur in FY03 when the City incorporates GASB 34.

Mr. Wright stated he would be glad to answer any questions Council may have on the Water & Sewer Fund Revenues and Expenditures September 30, 2002, and the Transmittal Letter to the Audit Report, including the Financial and Investment Policies.

Council and staff discussion included: 1) due to an $820,000 shortage, 2-1/2 cents on the tax rate would be required to start the upcoming budget process; 2) sales tax projection for FY 2003; 3) financial policies being goals, 4) 3 months operating costs; and 5) 2002 Congressional earmarked funds being in the Capital Project Funds.

Scott McDonald, auditor for Davis, Kinard & Co., P.C., briefed the Council on the Independent Auditor’s Opinion Letter, Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133, and Schedule of Expenditures of Federal and State Awards. Mr. McDonald then reviewed the schedule of findings and the advisory comments concerning the new GASB Pronouncement on Financial Statement Reporting and the new Government Auditing Standards on Independence.

Councilman Archibald made a motion to accept and reaffirm the Financial and Investment Policies and the Comprehensive Annual Financial Report (CAFR) for FY 2002, as presented by staff. Councilman Southward seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Williams, Hill, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

5.4b Mr. Wright reviewed the FY 2003 Financial Status Update, which included the General Fund and Water Utility Revenue by Category, Property Tax Collections, Sales Tax Performance, FY02 vs. FY03 Comparison of Revenues and Expenses outside of sales & property taxes, and Summary of Revenue & Expenditures for Budget Fiscal Year 2003 as of January 31, 2003 and provided a February update for General Fund and Water Utility. Mr. Wright then introduced his staff.

No Council action was required.

5.4c Mr. Gilley introduced Andy Anderson, Director of Public Works, who distributed the 2003 Certificates of Obligation Departmental Recommended projects as follows:

Mr. Anderson then briefed the Council on the Capital Improvements Program (CIP), stating in late 2002 Departments went through a two-part process: 1) define and list new projects, to include in the CIP; and 2) identify the most important projects within their departments. Mr. Anderson stated a list was prepared from those projects and that list went to the Planning & Zoning Commission, where it was reviewed. Planning & Zoning felt it was important to allocate additional funds for S. 14^th improvements in the amount of $400,000. A second project entitled "Ready Willing Able Shelter" was discussed. Staff recommended that project go through the CDBG process so it is not included on the list before Council today.

Mr. Anderson concluded by stating the list of projects is presented today to provide Council the opportunity to ask philosophical questions and/or specific projects either on the list or that Council would like to add to the list.

Council and staff discussion included: 1) City Hall renovation being reimbursed to the General fund with this year's CO sale as approved last year; 2) flood or flood prevention funding opportunities are being looked at; 3) $700,000 is all that is needed on the City Hall renovation as the budget is currently laid out; 4) S. 14^th project has been funded but additional funding is needed to address problems; 5) the Canyon Rock railroad right of way; 6) N. 10^th St. extension toward Industrial Park could be delayed for 2-3 years; and 7) $2.8 million is the maximum CO amount Council can issue this year.

Mr. Anderson identified S. 14^th, Ambler Phase III, and N. 1^st as the most critical projects in his opinion.

Council requested a 2-3 sentence description on each project, a list of the 35 projects that were narrowed down to the current list, and that the current list be prioritized.

Mr. Anderson clarified for Council the makeup of the 35 original projects. Mr. Anderson stated staff is looking to Council today to provide guidance on whether funding should be provided for as many of the listed projects as possible, and if there are other issues staff should be looking at for CO utilization.

Mr. Gilley stated a management committee for other departments can help provide priorities and present a recommendation to Council based on the amount of COs that are available. An entire list with staff recommendation also will be provided to Council for their review and/or changes. Mayor Barr requested Council be provided that information prior to the day a Council decision is needed.

No Council action was taken.

There being no further business, the meeting was adjourned at 12:35 p.m.

 

_____________________________	______________________________
Jo Moore	Grady Barr
City Secretary	Mayor