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GOOD AFTERNOON AND WELCOME TO THE FEBRUARY 6TH, 2024 MEETING OF THE UCHIN COUNTY FINANCE AND AUDIT COMMITTEE, AN ABSENCE OF OFFICERS.
I, UH, THE CARPENTER COUNTY ADMINISTRATOR WILL CALL THIS MEETING TO ORDER.
UM, I'M GONNA START WITH ASKING THE MEMBERS OF THIS COMMITTEE IF YOU'VE HAD A CHANCE.
HOPEFULLY, IF NOT, I ASK YOU TO MAKE SURE THAT YOU REVIEW THE CHARTER OF THIS COMMITTEE AS INCLUDED IN YOUR AGENDA PACKET.
IT KIND OF EXPLAINS THE PURPOSE AND THE RESPONSIBILITY TO THIS COMMITTEE AS WELL.
IF YOU'VE, UH, TAKEN TIME TO LOOK AT THAT, IF YOU HAVE ANY QUESTIONS.
IF NOT, THEN WE'LL MOVE ON AND WE'LL MOVE ON TO THE ELECTION OF OFFICERS OF THIS COMMITTEE.
UH, THIS COMMITTEE IS A COMMITTEE THAT IS APPOINTED BY THE, UH, BOARD OF SUPERVISORS.
WE HAVE THREE MEMBERS THAT HAVE BEEN APPOINTED TO SERVE ON IT.
UH, WE HAVE MR. S, WE HAVE MR. WINFREY, AND WE HAVE, UM, MS. CHRISTIE.
AND, UH, SO, UH, WHAT I'LL DO NOW IS, UH, WE WILL OPEN THE PROCESS FOR, UH, NOMINATION FOR THE OFFICE OF CHAIR.
DO I HAVE A MOTION, UM, TO NOMINATE SOMEONE FOR THE POSITION OF CHAIRMAN I MOTION? UH, TOM WINFREY.
ALRIGHT, DO WE HAVE ANY OTHER NOMINATIONS? SEEING NONE, I WILL CLOSE THE FLOOR.
UH, ALL IN FAVOR OF MR. WINFREY AS CHAIR.
OPPOSED? MR. WINFREY, UH, CONGRATULATIONS.
MOVING ON TO THE OFFICE OF VICE CHAIR.
UH, DO I HAVE A MOTION, UH, FOR THE OFFICE OF VICE CHAIR? I MOTION CHARLIE VOS.
ANY OTHER NOMINATIONS? SAY NONE.
ALL IN FAVOR OF MR. VOS AS VICE CHAIR.
OPPOSED? UH, MR. VOS IS ELECTED CHAIR.
I'LL NOW TURN THE GAVEL OVER TO, UH, TO VICE CHAIR.
ALRIGHT, NOW TURN THE GAVEL OVER TO MR. WINFREY.
THIS CHAIRMAN, TURN THE MEETING OVER AGAIN.
UH, WELL FIRST OFF, UH, I, I'M SURE ALL OF YOU ALL KNOW WHO ELSE IS IN THIS ROOM, BUT I'M NOT SURE I DO.
COULD WE GO AROUND THE ROOM AND INTRODUCE OURSELVES AND BEGIN OUR PROCESS OF GETTING TO KNOW ONE ANOTHER? OH, SURE.
SANDY WARWICK GLAND ON MY MIND.
BISHOP KENNY, ATTORNEY DEBBIE Y UH, TWO FINANCE OFFICER SCHOOLS.
JEN STROGER, OILVILLE, VIRGINIA RESIDENT.
CARLA CA, FINANCE DIRECTOR COUNTY ANNE OFFERING GO SOCIAL SERVICES.
CHARLIE LAUS, BOARD SUPERVISOR.
I'M THE CARPENTER COUNTY ADMINISTRATOR.
JASON MAYOR AT THE SHERIFF'S OFFICE.
UH, NOW WE HAVE IN FRONT OF US THE MINUTES OF THE DECEMBER 5TH FINANCE AUDIT COMMITTEE.
UH, I THINK WE'VE ALL HAD POSSESSION OF THOSE TO HAVE A MOTION TO ACCEPT THEM AS PRESENTED OR IF THERE IN SALUTE.
ANY FURTHER DISCUSSION? ALL FAVOR SAY AYE.
UH, NOW WE HAVE A REQUEST FOR PROPOSAL FOR NEW COUNTY AUDITORS.
UH, MS. CAVE, CAN YOU GIVE US A BRIEF UPDATE ON THE PROCESS WE WILL FOLLOW? SURE.
WE WERE UNDER CONTRACT WITH OUR LAST AUDITORS PB MAYORS FOR FIVE YEARS.
THAT CONTRACT EX EXPIRED, UM, END OF FY 23.
SO WE JUST PUT A UM, RFP OUT A COUPLE WEEKS AGO.
THE RESPONSES ARE DUE BY THIS THURSDAY AT 2:00 PM AND I, I THINK WE'RE ONLY EXPECTING TO GET ABOUT THREE FIRMS TO RESPOND.
UM, AND WE'LL SET UP INTERVIEWS AND UM, CONTRACT FOR A THREE YEAR AGREEMENT WITH A NEW FIRM AND IT COULD BE THE SAME FIRM, UM, WITH A POSSIBLE TWO YEAR EXTENSION.
WE'VE BEEN VERY HAPPY WITH PB MAYORS, SO, YOU KNOW, WE WOULDN'T MIND HAVING THEM AGAIN, BUT WE'LL SEE WHAT WE GET IN AND, UH, LOOK FORWARD TO THE NEXT YEAR.
ALRIGHT, NOW THE, UH, FINANCIAL POLICIES, UM, WE'VE HAD AN OPPORTUNITY TO REVIEW THOSE.
DID YOU WANNA LEAD US THROUGH ANY DISCUSSION REVIEW ON IT? ANYTHING OR ANYONE? I'LL LET, UH, MR. VADER CHIME IN AND VIC IF THEY WANT TO, BUT WE, WE HAVE REVIEWED THESE POLICIES PROBABLY THREE OR FOUR MONTHS IN A ROW.
UM, THEY WENT BEFORE THE BOARD OF SUPERVISORS, UM, WITH THE LAST FEW ROUNDS OF CHANGES WITH THEY WERE MARKED UP IN RED.
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BUT UM, NO, THEY'RE JUST THE COUNTY'S BASIC FINANCIAL POLICIES.UH, AND IF THERE'S EVER ANYTHING YOU REVIEW AND WANNA DISCUSS, WE CAN DEFINITELY GET INTO THE WEEDS WITH IT.
BUT, UH, WE'VE ALREADY DONE THAT RECENTLY.
SO AM I LOOKING BRAND NEW EYES LOOKING ON ME? YES, I KNOW.
UH, THIS APPEARS TO ME TO BE CONSERVATIVE.
YEAH, THEY'RE VERY MUCH FOCUSED ON MAKING SURE THAT WE MAINTAIN THE FUNDAMENTAL POLICIES, THAT PURPOSE OF THE POSITION WE'RE RIGHT AND CERTAIN LIMITS, UH, BEYOND WHICH WE WON'T GO, WHATEVER WE HAVE STOP GAPS AND ALL THAT SORT OF THING.
THESE WERE APPROVED BY THE BOARD IN DECEMBER, SO THEY'RE THE APPROVED POLICY.
ANY, ANY DISCUSSION ON ANY QUESTIONS? UM, ALRIGHT, UH, NOW THE SECOND FLOOR PROJECTIONS.
SO THEY ARE ON THE VERY BACK OF THIS PACKET AND SO WE PULL NUMBERS THROUGH THE END OF DECEMBER FOR THE SECOND QUARTER PROJECTIONS AND THAT'S WHERE THESE NUMBERS STAND.
UH, AS OF DECEMBER 31ST, UM, WE ARE LOOKING AT SLIGHTLY HIGHER REVENUES THAN WE BUDGETED, UM, TO THE TUNE OF $2.4 MILLION.
MOST OF THAT IS DUE TO THE HIGHER INTEREST THAT WE'RE EARNING, UM, MUCH HIGHER INTEREST RATE THAN WE HAD BUDGETED FOR.
ALSO, UM, WE HAD ASSUMED A 20% DECLINE IN ASSESSED VALUE WHEN WE CREATED OUR BUDGET FOR PERSONAL PROPERTY LIKE CARS.
UM, SO WE FACTORED THAT IN AND WE'RE NOT SEEING THAT QUITE AS DRASTICALLY AS WE THOUGHT.
SO PERSONAL PROPERTY AND INTEREST ARE CONTRIBUTING TO OUR REVENUE INCREASE.
AND THEN FOR ON THE EXPENSES, THIS IS JUST A ROUGH ESTIMATE, WE'RE ONLY HALFWAY THROUGH THE YEAR, BUT UM, IT LOOKS LIKE DEPARTMENTS ULTIMATELY WILL TURN IN A LITTLE UNDER $2 MILLION DUE TO VACANCIES.
UM, SOME PADDING AND THINGS LIKE OPERATIONS AND MAINTENANCE THAT WE HADN'T HAD TO LUCKILY HAD TO USE.
AND UM, SO OPERATING WISE WE ARE LOOKING AT A SURPLUS OF 12.7 MILLION.
AND THEN ONCE WE FUND OUR CIP PROJECTS THAT WE'VE APPROVED, UM, AND A SLIGHT TRANSFER TO OUR CSA FUND, WE ARE LOOKING AT THIS 889,000 AT THE BOTTOM AND HOPEFULLY EVERYONE'S FOLLOWING ALONG IN THAT YEAR END PROJECTED COLUMN.
THAT 8 89 IS WHAT WE'RE THINKING WILL BE RETURNED TO THE GENERAL FUND AT JUNE 30 AFTER ALL IS SAID AND DONE.
SO AS A REMINDER, THE BULK OF, UM, WHERE THOSE SURPLUS FUNDS GO IS INTO OUR CIP PROGRAMS. SO IT STARTS OFF WITH SURPLUS, BUT THAT IS THE TRANSFER OF OUR CIP PROGRAMS, WHICH OBVIOUSLY IS WHERE WE BUY OUR VEHICLES OR OUR BUILDINGS, THINGS LIKE THAT.
SO, SO YOU AND I, THIS IS A LOT OF FIGURES HERE, BUT IF YOU HAVE ANY, ANY QUESTIONS, FEEL FREE.
YOU AND I HAD A DISCUSSION ABOUT SORT AN UNPLANNED DEMAND ON OUR FUNDING.
BECAUSE OF FINANCING YOU THAT, UH, IS THAT THE TACO SERVICE DISTRICT ON THERE? TCSD IS NOT INCLUDED IN THIS AT ALL.
SO THIS FOCUS THAT WE PUT BEFORE THE BOARD JUST FOCUSES ON THE GENERAL FUND AND WHAT WILL BE RETURNED.
WE CALL IT THE SURPLUS AT THE END OF THE YEAR.
SO THIS IS STRICTLY GENERAL FUND.
UM, THE ONLY RELATION THAT THE GENERAL FUND HAS WITH TCSD IS WE DO GIVE, WE DO A 55% SHARING ON OUR REAL ESTATE REVENUE.
IT'S PORTIONS, IT'S NOT OUR ENTIRE REVENUE, IT'S PIECES OF, UM, ASSESSED LAND WITHIN OUR WHOLE ASSESSMENT THAT WE TRANSFER TO TCSD EVERY YEAR.
SO, AND THAT'S TO HELP PAY OFF TCSD DEBT.
BUT THE TCSD FUND AND ALL THE UTILITIES FUNDS ARE KEPT TOTALLY SEPARATE WITH THE EXCEPTION OF THAT ONE.
SO THIS IS JUST OUR GENERAL FUNDS NOT SCHOOLS, IT'S NOT UM, ANY OF THOSE SEPARATE FUNDS OF THE CANADA YEAH, THIS IS OUR MAIN OPERATING DAY TO DAY OPERATING FUNDS.
BUT AREN'T WE TALKING ABOUT SOME, I MEAN WE WERE EARNING TOO MUCH, UH, FROM SOME OF OUR INVESTMENTS AND ARBITRAGE.
SO WE ORIGINALLY, I WAS TALKING TO MR. WINFREY JUST TO SUMMARIZE WHAT WE WERE TALKING ABOUT, ABOUT AN ARBITRAGE LIABILITY THAT OUR AUDITORS BROUGHT TO OUR ATTENTION DURING THE LAST AUDIT.
THIS IS THE FIRST TIME WE'VE EVER DEALT WITH THIS.
WE HAVE SO MUCH, UM, MONEY SITTING IN OUR BANK EARNING INTEREST BECAUSE WE HAD BORROWED FOR THE FUTURE ELEMENTARY SCHOOL AND UM, FIRE THE FIRE STATION TOO.
AND WE ARE EARNING OVER 5% INTEREST.
THAT'S ABOVE THE, THE LIMIT THAT YOU'RE ALLOWED TO EARN.
I DON'T KNOW WHY I'M FOCUSING ON YOU, BUT, UM, EVENTUALLY, AND IT'S CONSIDERED LONG-TERM DEBT BECAUSE IT'S NOT ANYTIME SOON, BUT WE WILL HAVE TO PAY ARBITRAGE BACK TO THE IRS BECAUSE WE'RE EARNING SUCH A HIGH INTEREST RATE.
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THAT IN OUR AUDIT AS A LIABILITY AND AN EXPENSE.SO I WAS TALKING TO MR. WINFREY ABOUT WHETHER THAT EXPENSE TO BE IN THE ACTUAL FUND, WHICH WOULD DESTROY OUR BUDGET WOULD BE $2 MILLION.
BUT, UM, I DID TALK TO THE AUDITOR AND BECAUSE IT'S CONSIDERED A LONG-TERM LIABILITY, WE DON'T HAVE TO PAY IT WITHIN THE NEXT YEAR.
WE DON'T HAVE TO BUDGET FOR IT.
WE WON'T BE WRITING A CHECK ANYTIME SOON.
SO THAT'S NOT A PART OF ANY OF THOSE.
AND IT WON'T BE FOR THE FY 25 BUDGET EITHER.
IS THE ARBITRAGE, IS THAT BASICALLY ANYTHING OVER THAT 5%? YEAH, WELL IT'S ANYTHING OVER AN AMOUNT LOWER THAN 5%.
IT'S A SET RATE WHEN YOU BORROW IT.
AND IF WE, IF WE EARN MORE THAN THAT, WE HAVE TO RETURN IT.
IT'S NOT A BAD, SO IT'S JUST YEAH.
SO IT'S JUST RETURNING AND THERE'S NOT AN UH, IT DOESN'T GO BEYOND THAT, RIGHT? YEAH, THERE'S NO PENALTY.
IT MAKES ME WONDER BUT ALL THE YEARS WE WERE EARNING BELOW THIS THRESHOLD TAX BONDS.
SO BECAUSE THEIR TAX FREE BONDS, THEN THAT MONEY WAS INVESTED AT A HIGHER INTEREST RATE THAN WE WERE EARNING ON TAX FREE BONDS.
THAT'S WHEN THE IRS WILL ULTIMATELY STEP IN AND TRY TO GET SOME DRAWBACK FROM US.
SO THAT'S ONLY WHAT DRIVES THAT.
IF THE BONDS ARE BEEN STRUCTURED DIFFERENTLY WHERE THEY WANT TAX FREE, THEN WE WOULDN'T BE ON THE HOOK.
AND, AND I CAN TELL YOU THERE WERE MANY, MANY YEARS WHEN THERE WAS NO INTEREST INCOME, SO WE SAT WITH MONEY IN THE BANK AND EARNED NOTHING.
SO IT, IT IS A NICE POSITION TO BE IN WHERE WE CAN ACTUALLY EARN SO MUCH THAT WE GOTTA GET SOME OF IT BACK.
SO I WOULD MUCH RATHER BE IN THAT CONDITIONER THAN WHERE WE BEEN IN WHERE WE EARN NOTHING ON OUR MONEY.
UM, ALRIGHT, NOW THE PAUSE OPEN FOR ANY NEW BUSINESS THAT MAY BE BROUGHT BEFORE THE COMMITTEE HAVE ANYTHING FOR THE GOOD OF THE CAUSE TO BRING TO THE COMMITTEE.
THIS COULD VERY WELL BE THE SHORTEST COMMITTEE MEETING THAT WE UH, I THINK WE HAD ONE THREE MINUTES.
NOW OPEN ANY PUBLIC COMMENTS? NO.
DO WE OPEN IT OFFICIALLY LIKE A OPEN IF LIKE THE CHAIRMAN DOES FOR THE BOARD WHO OPEN A PUBLIC COMMENT SECTION, IT'S GENERALLY A LITTLE LESS FORMAL, BUT WE WOULD STILL HAVE THE SAME RULES FOR COMMENTS THAT WE WOULD DO.
WE HAVE PUBLIC COMMENT? ANYONE? UM, SO SEEING NO PUBLIC COMMENTS AND NO FURTHER BUSINESS, UH, DO WE HAVE A MOTION TO ADJOURN MR. CHAIR? I MOVE THAT WE ADJOURN TO OUR NEXT MEETING ON MAY 7TH.
DO WE HAVE A SECOND? ALL IN FAVOR SAY AYE.
YOU, YOU'RE EASY ON ME THIS TIME.