2004-12-15 Audit Committee Minutes

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. 'QED ;CLERK . NGP MASS_ r Audit Committee Meeting Jet( 2 P 12: 31 December 15, 2004 The meeting convened at 7:40 p.m. in the Town Hall Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Finance Committee Chairman and Chairman of the Audit Committee Jim Francis, Finance Committee Member Andrew Grimes, RMLD Member Phil Pacino, School Committee Members Pete Dahl and Lisa Gibbs, and Board of Selectmen Vice Chairman Camille Anthony. Also present were representatives Scott McIntire and Eric Demos from Melanson and Heath, Town Manager Peter Hechenbleikner, Town Accountant Richard Foley and Finance Director Beth Klepeis. Jim Francis opened the meeting and introduced the parties. He asked Melanson and Heath to review the audit. Scott McIntire indicated that overall it was a very positive audit and a very positive fiscal year. The audit went well. The fiscal year books closed in a timely manner. The fund levels are good. Increases in net assets are evident from the GASB 34 statements. The auditors issued a clean audit opinion. Scott McIntire went over Page 3 of the audit - Management Discussion and Analysis. On the bottom half of the page are the highlights. Major events were the $4.5 million override, establishment of a stabilization fund, revenues in excess of anticipation, expenses less than budget, and the discussion of the D.O.R. opinion on the school capital expenses. Scott McIntire went over Page 8 on the General Fund Balances from June 30, 2000 - June 30, 2004. The general fund balances trended down from 2000 - 2003. The balances then increased by $1.6 million which represents 10% of the FY 2000 for expenses. Pete Dahl noted that this was an excellent chart. The question was raised as to what "reserve by a State statute is, and Scott McIntire and Richard Foley explained how these numbers are developed. On Page 39, the last column notes that the premiums,on a $35 million bond ($1.3 million) charges ($1,046,000 including $650,000 from the schools) yields a $2.3 million reserve by State statute. The stabilization fund is also an element. Camille Anthony asked if the School Department under expended by $650,000 and how that relates to the $683,000 number. It was noted that $650,000 is part of the $683,000. On Page 10, there is an analysis of long-term debt. The debt is $74.4 million up from $38 million. This is because of the sale of the High School debt. The question was raised as to whether or not this debt is utilized as a ratio for a bond rating. It was noted that sometimes there is a ratio debt per capita, or percentage of overall expenses. Moody's uses an 8% figure. Also, look at how quickly debt is paid off. Page 11 is the GASB 34 statements. The unrestricted net assets are going up which is a positive factor. It shows the unrestricted net assets on a compared basis. It was requested that we expand this report to include more years and Scott McIntire will review this..