HomeMy WebLinkAboutMINUTES Audit Committee 08-23-2018Town of Estes Park, Larimer County, Colorado, August 23, 2018
Minutes of a Regular 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 23rd day of August 2018.
IN
Committee: Mayor Jirsa, Mayor Pro Walker, Trustee Cenac, Town
Administrator Lancaster, Finance Director Hudson, and
Accounting Manager Garcia
Attending: Mayor Jirsa, Trustee Cenac, Trustee Zornes, Town
Administrator Lancaster, Finance Director Hudson,
Accounting Manager Garcia, Accountant Johnson, Town
Clerk Williamson, and representatives of Anton Collins
Mitchell LLP Tyra Litzau and Steven Bolz
Absent: Mayor Pro Tem Walker
Chair Jirsa called the meeting to order at 8:00 a.m.
2017 CAFR AND SINGLE AUDIT REVIEW.
Ms. Litzau reviewed the audit and stated the auditors provided an unmodified opinion, a
clean opinion, of the financial statements and an unmodified opinion of the Town’s
internal control over financial reporting and compliance with laws, regulations, contracts
and grant agreements in accordance with Governmental Auditing Standards for the year
ending December 31, 2017. The auditors indicated no material weaknesses and no
instances of noncompliance or other matters requiring reporting. The single audit was
completed and no noted material weakness were identified and the testing disclosed no
instances of noncompliance. The Town’s financial statement documents demonstrated
an overall increase from 2016 to a net position of $111.6 million, capital assets of
$106.6 million and long-term liabilities of $17.1 million. PERA increased the Town’s
cost sharing for pension liability over the prior year from $11.3 million to $15 million for
2017. The auditors did not encounter any difficulties in completing the audit and
suggested adjustments to the staff during the process. Nothing of substance was
exposed during the audit; however, some internal controls were noted.
The auditors provided suggestions for improving the existing internal controls which did
not affect the fair presentation of the financial statements, including: 1) meeting the
Davis Bacon Grant requirements to obtain certified payroll reports from contractors and
subcontractor for all weeks of a project even when no work is being performed; and 2)
thirteen months of open space revenue was recorded in 2017 which included a month
from 2016, therefore, overstating the revenues by $40,000.
The auditors indicated the GASB Statement 75 would require the Town to report on
post-employment benefits other than pensions. The Town currently offers all
employees employed prior to July 1, 2016 post-employment health insurance benefits
for employees who have worked for 15 years and retire at age 60. The Town would
also be required to report a portion of the PERA health plan liability. PERA would
provide the Town with the information for the 2018 audit. GASB Statement 86 would
require reporting of debt extinguishment issues. GASB Statement 87 would require the
Town to report operating leases as of December 2020.
A report entitled “Beyond the Numbers” was reviewed with the committee. The report
compiled data from three municipalities, Steamboat Springs, Glenwood Springs and
Telluride and compared the Town’s position on net position as a percentage of net
position, revenue coverage ratio, unrestricted net position as a percent of current year
revenue, accumulated depreciation as a percent of depreciable capital assets, liquidity
Audit Committee – August 23, 2018 – Page 2
ratio, debt to assets leverage ratio, total debt per capita, tax revenue per capita, total
grants, contributions and other intergovernmental revenue as a percent of total revenue,
total expense per capita, total general government expense per capita, total public
safety expense per capita, total interest expense per capita, total debit service
expenditures as a percent of total revenues, capital outlay expenditures as a percent of
total expenditures, unassigned fund balance as a percent of total revenues,
intergovernmental revenues as a percent of total revenue, and transfers-in as a percent
of total revenues and transfers-in.
The auditors reviewed the comparison and addressed significant differences in the
Town’s position relative to the peer communities. Comments have been summarized:
change in net position was due to large capital projects completed in the past couple of
years; unrestricted net position went down significantly with the continued costs of flood
recovery projects which require a delay of grant or FEMA reimbursements; CGOFA
recommends a standard reserve of two months operating funds, however, other peer
communities have up to 7.5 months in reserve; assets are aging and older than peer
communities; debt to asset ratio demonstrates the other communities are borrowing
money to pay for new assets; the Town has a debt per capita lower than other
communities; taxes per citizen is 15% lower; and general government and police
services costs are higher, however, the peer communities may not provide the same
services; and transfers-in are significantly high.
The Board requested the auditor provide additional clarity on the numbers and how
each impacts the Town’s overall financial situation, including the impact of retirement
liability from the peer communities on the net position and expenses per capita;
additional clarity on property tax rates and sales tax rates; and added footnotes would
provide clarity for the Board and the citizens.
The audit firm has been working with Visit Estes Park to complete their audit. The audit
would not be completed until September and the MD&A has been completed. The
auditors stated no material weakness were addressed; however, there were procedural
issues to address.
The committee thanked Director Hudson and his staff for addressing previous year
concerns and for completing this year’s audit.
There being no further business, Mayor Jirsa adjourned the meeting at 9:30 a.m.
/s/Jackie Williamson, Town Clerk