Town Board Meeing Minutes 03-08-10

Town Of Rhinebeck Fiscal Workshop Meeting Minutes

March 8, 2010

At 6:45 Supervisor Tom Traudt called this meeting to order and led the audience in the Pledge of Allegiance.  .

In Attendance: Town Board members Gina Fox, Joe Gelb, Dan Staley and Bruce Washburn,  Sedore & Co. CPA Linda Hannigan, Tom Murphy from M&T Bank

Office Manager Shelly Day, along with Finance & Controls Committee members Justin Cole, Bob Babirad, Deborah Mimosa, Peter Hammond and Alex Sabo.

The Supervisor explained that adoption of fiscal reforms by the Town Board over last 2 years have been achieved under the guidance of the Finance and Controls Committee in an effort to reform financial procedures. These actions attempt to develop solid and ethical financial practices of the Town Board as well as for the overall municipal government for the future.

                        A:        Procurement policy

                        B:        Purchase order policy                     

C:        Investment policy adoption

                        D:        Ethics policy adoption

                        E:        Engagement of CPA firm (Sedore & Co)

The general concept is for a Capital Plan which would allow us to consolidate and organize Capital Project lines and place them where they would be needed or invested. This will be developed by the Committee in the future.  The current Town Board is trying to creating future resources for everyone to follow.  The Town Board's makeup changes over the years and there needs to be continuity for the staff to follow.

He then introduced Linda Hannigan, a partner with our accounting firm Sedore & Co.  She explained that her firm has been handling municipality accounting for 30 years and she personally has been doing this for 20 years.  Our firm has 4 CPA's which deal with municipalities.    Ms. Hannigan will address the following issues:           

                                    A:        2008 & 2009 Audits

B:        2009 AUD (Annual Update Document)

C:        Internal Controls Document

Gina asked why the 2008 audit is so late in being presented and Linda explained there were scheduling issues and we still don't have a letter from Town Attorney.  Joe asked if Gellert & Klein has been notified and Linda said she has left several messages for Scott and the Town Supervisor and has not heard back.  Tom said he will follow up with Mr. Volkman tomorrow.  Joe certainly hopes that 2009 is a speedier process.  Bruce Washburn pointed out that the last state audit was done in 1996.  Linda feels 2008 was a learning experience for both Sedore and the bookkeeping department since it had been so long since an audit was done in Rhinebeck.  The fund balance is in very good shape.  The Annual Update Document preparation work will be done by the end of March. 

Joe is concerned about the bonding ability for the Town.  He feels the inability of having a clean financial statement may drive up the cost of bonding and Linda replied bonding rates are based on the fund balances, so the Town is in good shape.  Joe is still bothered that the Board gets detailed financial reports and they are very difficult to interpret if you are not an accountant.  What do other Towns do?  Is there a simplified report we could be looking at?   Linda said the software needs to be formatted and the bookkeeping office is looking at upgrades from RDA.  Bruce wants to know who sets the close of the fiscal year and Linda stated that is determined by when the payables have been received. 

Gina asked Linda how comfortable Sedore is with the Town's accounting and she said they are very comfortable with the Town's practices and bookkeeping.   There are no major deficiencies. 

Tom Murphy from M&T Bank discussed a possible Purchasing card for the Town.  Certain employees will have cards which have dollar limits placed on them.  You can also restrict to merchant code, it is a very live and active system.  It will also streamline purchasing and save administrative costs and help in identifying spending patterns.  A consolidated billing statement with all cardholder's transactions is produced each month.  The controls are set by the Town as to who and how much can be put on the card.  The Supervisor explained there had been some concern about certain credit cards being issued; all Sam's Club cards have been terminated.  At this point Staple and Lowe's are used for the Maintenance department.  Gina said the Web Committee wants the ability to pay online; can we look into this possibility?  Bruce feels with a purchasing card the Town would be approving payment before the purchase is made and he doesn't feel this is legal, you can't front money.  Justin Cole from the Finance and Control Committee said you can keep the cards at zero until the cardholder needs to purchase an item.  It is definitely a better system than is now in place. 

Mr. Murphy also updated the Board on fraud control and assured them the Town's bank accounts cannot be tampered with.  There have been some fraudulent wire transfers at a local municipality but M & T doesn't handle wire transfers.  Rhinebeck uses web banking with a token card which generates random numbers which protect the Town.  Rhinebeck is in great shape, the only debt service the Town has is the salt shed at the highway garage.

Mr. Gelb asked if our deposits were backed by FDIC and Tom Murphy explained that the Bank of New York - Mellon holds the collateral securing Town funds at M&T Bank and the collateral is adjusted daily so yes your funds are secure. 

Bob Babirad from Finance & Controls Committee said this committee had been tasked to look at current procedures, investment policy and procurement policies.  Those have now been developed and we are working on the implementation.  He commended the Board for looking at their finances.  We are all going through growing pains since there were no previous accounting audits. 

Bob feels the Town is using outdated software.  There is an RDA upgrade that Shelly has looked at which would cost about $16,500.  We can tailor reports to what the Town Board wants.  A lot of issues have been rectified.  The bank reconciliations will be on the computer.  Gina asked if other software had been looked at and Bob said absolutely.  A brand new system would be around $50,000.  She asked if Quik Book would work and Bob doesn't recommend that system.  Bruce asked if multiply desks will be available on the RDA upgrade and Shelly said yes.  Shelly also told the Board that the Trust & Agency is being put on the computer.  Bruce wants to see the money flow all the way through the system.  There seems to be a break in the flow.  If the transfer is in, it should show and currently it is not.  Then expenses would show up when the checks are written.  He thinks Quik Book could work.  Linda agrees with Bob and feels Quik Book is better for smaller municipalities; there are too many different funds here.  Gina asked what the Town is getting for the $16, 500 and Shelly explained there will be electronic storage cabinets, user training, data conversion, new modules for financial management, vendor payments, and payroll/leave management.  Gina wants to make sure Shelly is happy with RDA and Shelly stated she is.  Gina wondered who is negotiating with RDA and can we get a better price.  She and Tom will look into this.    

Bob said the segregation of duties is also being worked on.  The Committee recommends a part time purchasing position be established, possibly 16 hours per week.  Bruce thinks the purchasing position would take the purchase order and centralize the system which would take it out of the bookkeeping department.  This person could also load the purchasing card.  We need one person responsible for the best pricing.  They would take the specifications from all requests and get 3 bids which would match up to our procurement policy.  Joe feels a purchasing department can be a waste of time and money.  Any large item the Town Board needs to address.

Joe asked about an asset listing; is the Committee looking at this.  Bob said yes and the highway, maintenance and cemetery already have a partial list of heavy equipment.  Joe asked if the Board members were willing to each take their departments or certain areas of the Town and walk around and get an inventory listing of assets.   Linda suggested a company come in and do an in depth inventory and then the Town can manage their inventory from that point forward.  Bob will speak with Linda and we will research the cost of an inventory.  He also asked the Town Board to consider what type of reporting they want and get back to the Finance and Controls Committee.  Bob will also get together with Tom Murphy and have him do a webonair presentation.    

The Supervisor thanked Linda, Tom Murphy and the Finance & Controls Committee for being here tonight.  Hopefully some issues have been cleared up.

2. Dan motioned Bruce seconded to appoint Jonathan Mensch and Sue Hartshorn to Open Space Affordable Housing Committee, terms to expire 12/31/2011.  Motion carried unanimously.
3. On motion from Dan and second from Bruce the Supervisor was authorized to sign the contract with Arold Construction Co, Inc to furnish, install and make operational two separate wastewater treatment facilities at the north and south field at Vanderburgh Cove for $811,450.00.  All labor and materials to be furnished by contractor.  Performance Bond has been received form Arold Construction.   Motion carried unanimously.

At this point Joe wants to discuss the proposed indemnity local law.  We need to resolve the issues about criminal coverage and the 10 day notice of suit requirements to obtain indemnity.  Bruce is in favor of eliminating criminal coverage as was Gina.  The general consensus was to eliminate the criminal coverage and stick with the requirement of a 10 day notice to Town with no waiver.  The Town Clerk will need to re-notice a new public hearing since the language is changing.  On motion from Joe and second from Gina, a public hearing will be held on March 22^nd at 7:00.  Motion carried unanimously.

Bruce also wants it noted that only Arold and DEC are to be involved at Vanderburgh Cove project.    

At 8:59 Joe motioned and Gina seconded to go into Executive Session to discuss pending litigation.  All were in favor.

  At 9:35 on motion from Gina and second from Dan this meeting unanimously adjourned.

Respectfully submitted

Barbara Cunningham

Town Clerk