HomeMy WebLinkAboutMINUTES Audit Committee 2015-05-21 Town of Estes Park, Larimer County, Colorado, May 21, 2015
Minutes of a meeting of the AUDIT COMMITTEE of the Town of Estes
Park, Larimer County, Colorado. Meeting held in the Municipal
Building in said Town of Estes Park on the 21st day of May, 2015.
Committee: Mayor Bill Pinkham, Committee Chairman/Trustee John
Ericson, Town Administrator Frank Lancaster, Finance
Officer Steve McFarland
Attending: Committee: Mayor Pinkham, Trustee Ericson, Town
Administrator Lancaster, and Finance Officer McFarland
Non-Committee: Mary Donovan of Cutwater Asset
Management (investment advisor for Town).
Absent: None.
Chairman Ericson called the meeting to order at 10:00 a.m.
NEW BUSINESS
1. Cutwater Asset Management (CAM) provided a handout, divided into 3
sections. These 3 sections covered the following:
a. Market Environments and Strategies Approximately 10 pages of
charts and graphs communicated the message that, with interest
rates likely to rise sometime in 2015, sound portfolio strategy
involves positions of short-term duration of 2 years or less.
b. Portfolio Activity and Performance Review Approximately 1/3
(~$8.7m as of April 30, 2015) of the Town portfolio is invested with,
and managed by, CAM. This includes ~$3.1m in US Treasuries and
$5.6m in US Instrumentalities. The remaining 2/3 (~$16.0m) of the
portfolio is housed in municipal money market pools, primarily
ColoTrust. The managed portion of the portfolio is currently yielding
0.80%, whereas the money market portion is yielding 0.12%. The
Town has been reluctant to “tie up” more cash because of the
uncertainty of the cash flow needs of flood-related expenditures and
associated reimbursements.
c. Investment Policy Review The Town’s Investment Policy was last
updated May 8, 2001. A “redlined” copy of the Policy, along with a
copy of the appropriate State Statutes, was provided. Proposed
updates involve the following sections:
i. Authorized Financial Dealers and Institutions
ii. Suitable and Authorized investments
iii. Investment Parameters
iv. Policy considerations
Proposed policy changes were accepted by the Committee and are to
be forwarded to Town Board at the June 9th, 2015, Board Meeting for
consideration/adoption.
d. Discussion of contract extension CAM and the Town recently
completed a 5-year agreement for investment services. CAM has
Audit Committee – May 21, 2015 – Page 2
provided investment services to the Town since 2002, with both
parties being satisfied with the relationship. At present, the Town
and CAM are operating on a month-to-month agreement, with no
change to the 2011-15 contract (10 basis points). The annual fees are
~ $9,000. The Town is currently revising its purchasing policy, which
currently no longer requires an RFP for investment services.
Meanwhile, CAM was purchased / absorbed by BNY – Mellon
towards the end of 2014. CAM is currently in the process of
evaluating their client base. Both CAM and the Town have continued
to operate on a month–to-month basis until such time as the Town’s
purchasing policy is revised, and at such time that CAM has
determined their client base needs under BNY – Mellon direction.
The Committee agreed with this strategy.
2. Update on CAFR (Comprehensive Annual Financial Report)/Single Audit
CliftonLarsenAllen, the Town’s auditors, have completed their field audit,
but continue to work with Finance Staff to collect data necessary to
complete the CAFR. The CAFR is slated for delivery to Town Board at the
June 23rd, 2015 Board meeting. The Audit Committee has asked that
CliftonLarsonAllen meet with the Audit Committee the week prior
(preferably Monday June 15th, 2015) to review the audit findings. The CAFR
is now still in preliminary stages of completion, but Staff believes that the
auditors currently do not have any major concerns with the CAFR material.
As is the case with last year, the Single Audit will not be completed at the
same time as the rest of the CAFR. The Single Audit reports on grant-
related activities when a Municipality exceeds $500,000 in Federal
expenditures in a calendar year. The Single Audit will be filed with
appropriate authorities at the Federal and State levels by September 30,
2015. The results of the Single Audit will be presented to the Town Board
separately at a date prior to the September 30, 2015, due date.
3. Update on GASB 67/68 - PERA/OPEB The Town was directed this past
winter by PERA to complete an audit on PERA activities for the purpose of
determining PERA liability. This is a Nation-wide effort on PERA’s behalf to
assess financial shortfalls in the PERA system, and to have participating
entities acknowledge those liabilities. CliftonLarsonAllen has recently
completed their audit. PERA is expected to announce findings sometime
this summer, with participating entities incorporating the shortfalls into
their financial reports in 2015.
OTHER NEW BUSINESS
There was no other new business.
There being no further business, Chairman Ericson adjourned the meeting at 11:30 a.m.
s/ Steve McFarland, Finance Officer