HomeMy WebLinkAboutSpecial Council Minutes - March 14, 2025Special City Council Meeting Minutes — March 14, 2025
Mayor Jerry Merrill
Council Members:
Bryanna Johnson Eric Erickson
Robert Chambers David Reeser
Colin Erickson Mikel Walker
(208) 359-3020
35 North V East
Rexburg, ID 83440
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City Staff:
Spencer Rammell — City Attorney
Matt Nielson — Finance Officer
Keith Davidson — Public Works Director
Alan Parkinson — Planning & Zoning Administrator
Scott Johnson — Economic Development Director
Deborah Lovejoy — City Clerk
i2:oo P.M. City Hall Front Conference Room — Roll Call
Roll Call of Council Members:
Attending: Council Member Chambers, Council Member C. Erickson, Council Member E.
Erickson, Council President Walker and Mayor Merrill.
Review Audit for Fiscal Year 2024 — Matt Nielson and Rudd and Company
Theresa Flannery explained she has been an auditor for two decades and currently works with Rudd
and Company. There are only three pieces of the audit report that belong to Rudd and Company, the
rest of the report belongs to the city. She reviewed page one of the report.
Finance Officer Nielson reviewed page 4 labeled Management's Discussion and Analysis. The City
Council expresses interest in the General Fund, it ended the year with a fund balance of about 5.8
million dollars or 38.5%, which is a significant decrease in percentage from prior years. The city has a
policy that they try to keep the General Fund between 25 and 33%; however, in the last five years it has
been in the 40s to high 30s percentages. He said to balance the fiscal year 2026 budget, the city had to
carry forward one million dollars to balance the General Fund.
Finance Officer Nielson reviewed the bottom of page 5. In the net position it illustrates where the
increase occurred, which is in Governmental Activities. When determining what those governmental
activities are, it is everything except wastewater, sanitation and water. The business types of activities
are wastewater, sanitation, water, some operating funds and construction funds. It also includes capital
reserve funds where the city saves the capacity fees to add capacity. Both the governmental and
business type of activities went up close to 9%.
Finance Officer Nielson mentioned page 6 the Large Capital Item Expenses and reviewed page 8
Changes to Long -Term Liabilities. He said from the end of fiscal year 2023 and the end of fiscal year
2024 illustrates what kind of debt the city paid and what kind of debt was paid down. Looking at the
governmental activities, the accrued compensated absences, such as vacation accrual, sick leave accrual
vehicle leases which are substantially made-up of police vehicles, finance purchase obligations that have
to do with the golf course which are the golf carts, and the net pension liability with PERSI.
Finance Officer Nielson continued to review page 8 under the heading business -type Activities. The
city currently owes 6.9 million dollars in the water DEQ Loan and in the next year the city will pay
$200,000 of that loan. He believes the city could potentially pay down that loan a little faster; however,
he does not recommend it be paid down because the city only pays 1.75% interest on a 3o-year loan. The
wastewater revenue bond, the city has one more year to finish paying that $790,000 bond, which is a
good thing because there are a lot of forecasted wastewater capital improvement projects. The city
received bids for the wastewater headworks project today and the bid came in at over six million
dollars.
Discussion regarding the long-term liabilities. Some of the long-term liabilities include the police
vehicles. Council Member Chambers asked Finance Officer Nielson if the city is anticipating the need
for more enterprise funds because there are less grants. Finance Officer Nielson explained the capital
improvement plan for wastewater is indicating the city may need a bond for those projects sometime in
the next three years. The city will possibly only need judicial confirmation and not a bond that is voted
upon by the residents because the city can pay for the bond. In the capital improvement plan, there is
an estimated 30 million dollars of water system projects. The city's reserves have been built up well in
water and wastewater because they have been preparing for these big projects and as long as the grants
go through the city will not need to bond.
Finance Officer Nielson reviewed pages 11 and 13. Council Member E. Erickson asked about the
county participating in the purchase of the fire trucks. Finance Officer Nielson said the county does not
participate in the purchase of the fire trucks because they buy their own ambulances; however, the
purchase of the fire trucks is a 50/50 split between the Fire District and city.
Discussion regarding the irrigation systems at the golf courses. Finance Officer Nielson reviewed page
14 in the third paragraph stating utility operations funds the 1.5 million dollars sanitation cash and
investments a large portion of those funds were carried over and are going to be spent on the new
sanitation building.
Finance Officer Nielson said also in the utility operations to keep in mind, the capital is the money
the city is saving for new projects and those funds come from charging fees for depreciation.
Discussion regarding the sanitation tipping fee increase.
Finance Officer Nielson reviewed page 18 the actual total expense, page 19 actual total revenue,
page 20 actual operating expenses, and page 21 actual operating revenue. Council Member E. Erickson
said it would be helpful to include the percentages in the graphs.
Ms. Flannery reviewed the basic financial statements starting on page 22. There are two sets of
statements, on a full accrual basis, which are like what you'd find in a normal company. All the city's
liabilities, assets are shown and then the governmental, which are day-to-day, which is a modified equal
basis. The big difference between the two sets of statements is one of the statements shows the capital
assets debt pension and PERSI, which are on a cash basis determining how much the city is going to
pay now. On the full approval basis, they are looking forward to the future determining how much the
city is going to pay on it eventually. She said she likes to focus on the city's cash and investments, these
funds should be kept healthy and strong.
Ms. Flannery reviewed page 24 balance sheet -governmental funds. Some of the items on page 24 that
are not shown on page 22 are the committed or assigned funds, and those categories really give you a lot
of perspective into whether those funds are externally restricted. Some governments will commit or
assign every dollar, and others will put money into a fund to pull from in times of need or in times of
concern.
Ms. Flannery reviewed page 23 statement of activities government wide. Most City Council Members
receive questions from the residents as to why they must pay certain fees. This statement helps explain
that the general administrative costs of 8.8 million dollars are charges for services and all those funds
collected are going directly to support those general administrative costs. The fees only cover 7.7 million
dollars, creating a deficit of 1.1 million dollars. The fees and the direct charges do not cover the full
expense. The amount not being covered by the fees is being covered through more general revenues
which are property, sales taxes and any earnings.
Council Member Chambers asked what the city assets are referred to in the receivables,
government activities. Ms. Flannery replied, some of those receivables include property taxes that have
yet to come in, Local Improvement District money, receipts from utility billings and a lot of different
pieces.
Ms. Flannery reviewed page 26 statement of revenues, expenditures, and changes in fund balance —
government funds. These funds are day to day, as auditors they focus on what they call the major funds
These are the funds where most of the expenditures, most of the revenues or the large assets are all
involved, and the auditors use calculations to figure out what belongs in those categories. The city has
five major funds.
Ms. Flannery reviewed page 67 budgetary comparison schedule general fund. The general fund
column is pulled over from page 26 to page 67. On page 67 it is in comparison to the budget which was
amended for expenditures. The only danger in these funds is if the city were to go over budget without
intending to; however, the Finance Department has built in contingencies to make sure the budget is
balanced.
Ms. Flannery reviewed page 28 statement of net position — proprietary funds. These funds are
identical to those funds on page 22 because they are both on a full accrual basis. These funds are
supposed to be covering all their own expenses and incorporating enough funds into the future to
handle their own construction and other costs or bonding for those items. When Finance Officer
Nielson said depreciation is a way to build in the future that is exactly what it is intended for. When
looking at the city's net position all the funds are restricted, there is not an unrestricted category when
referring to these funds because if money is collected for water that money can only be used for water.
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Finance Officer Nielson mentioned he does not include the DEQ loan payment in the fees because they
could have paid off the loan.
Ms. Flannery reviewed page 30 statement of cash flows — proprietary funds. All the city's cash
balances are strong at the beginning of the year and at the end of the year they were even better. The
city is in a strong position.
Ms. Flannery reviewed page 38 notes to financial statements. Every year, there are new accounting
pronouncements; however, for the last 20 years, Gatsby did not have any major changes, now they have
some major changes. These changes could have an impact on larger organizations.
Ms. Flannery reviewed page 66 notes to financial statements. There were some corrections last year
for a few items. The biggest change that happened in the 2023 financial statements was the
presentation of leases receivable was completed at the government wide level but not at the fund level.
They made corrections to some of the major funds.
Ms. Flannery reviewed pages 75 through 85 combining balance sheets with non -major governmental
funds. They test these funds as one unit.
Discussion regarding the Shop with a Cop fund and the Airport fund.
Ms. Flannery said there are three pieces of the audit report that belong to the auditors and the rest
belong to the city. Two of those pieces are on pages 87 through 89 and 93•
Adjournment i:o9 P.M.
r;ROVED, er 11, ayor
Attest:
'Marianna Gonzalez, City Deputy Clerk