2018-06-13 Audit Committee Minutes

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y orq i e Town of Reading Meeting Minutes RECEIVED TOWN CLERK Moa.o. REA,oimC, SAA. Board - Committee - Commission - Council: 2020 JpN 14 PM 5 26 Audit Committee Date: 2018-06-13 Time: 7:30 PM Building: Reading Town Hall Location: Berger Room Address: 16 Lowell Street Purpose: FY17 Audit Results and FY18 Audit Planning Attendees: Members - Present: Barry Berman, Phil B. Pacino, Peter Lydecker and Stephen Herrick Members - Not Present: Nick Boivin, Paul McNeice and Elaine Webb Others Present: Sharon Angstrom, Ed Boyd and Scott McIntire Minutes Respectfully Submitted By: Sharon Angstrom Topics of Discussion: Mr. Lydecker called the meeting to order and asked the Committee If they had an opportunity to review the minutes from May 5, 2016. Mr. Pacino made a motion to accept the minutes as written which was seconded by Mr. Berman. The Audit Committee voted 4- 0-0 to accept the minutes as written. Mr. Lydecker instructed Mr. McIntire to begin the review of the FY17 audit results. Mr. McIntire started by saying that in his opinion the audit went very well. He pointed out that no material journal entries were proposed and that the records are in good working order. He noted that the auditor's opinion is found on pages 1-3 of the financial statements. He stated the opinion is that the financial statements present fairly in all material respects, the financial position of governmental and business-type activities of the Town of Reading. Mr. McIntire then directs the Committee Members to turn to page 4 where the Manager Discussion and Analysis begins. He points out that this section gives a snapshot of the General Fund. It is a great resource as it summarizes the key elements of the General Fund. Mr. McIntire then directs the Committee to turn to pages 15-17. He notes that the Statement of Net Position and The Statement of Activities provide a long-term perspective. He points out on the Statement of Net Position the unrestricted Is -$26.6 million. The negative balance is attributable to the net pension liability of$29.6 million for governmental and $44.5 million with enterprise included. The full liability was added to the balance sheet 2 years ago in accordance with GASB 68. McIntire points out that bond rating agencies are not shocked to see this liability as this in not a new liability it has been shown in the disclosures all along. He also comments that the Town's $44.8 million in pension liability is smaller than many similar size communities. Mr. McIntire then points out the Town's pension liability is 73% funded according to its most recent valuation and is on track to fully fund this liability by 2029. Mr. McIntire pointed out on page 15 that the town's net OPEB obligation for governmental is $19.7 million and $20.3 million in total including enterprise funds. He further explained that these figures do not represent the full OPEB liability but represent the shortfalls from the Page 1 1