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HomeMy WebLinkAboutCity Council Item 14CITY OF LADE LSINOIJE DREAM EXTREMEn CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BARBARA LEIBOLD, CITY ATTORNEY DATE: MARCH 22, 2011 SUBJECT: ADOPTION OF REVISED CITY COUNCIL POLICY NO. 200-7 (CITY TREASURER DUTIES) AND PROPOSED POLICY NO. 300-1 (BUDGET AND AUDIT COMMITTEE) BACKGROUND The City Council is charged with the responsibility of establishing the laws of the City of Lake Elsinore through the enactment of ordinances, resolutions and official policies. Council Policies are an expression of City Council's opinion as to the conduct of City business and are intended guide the various functions of the City and, where necessary, to establish procedures by which functions are performed in a fair and consistent manner. In September 2006, the City Council adopted a revised City Council Policy Manual following a comprehensive review of the City's policies. DISCUSSION City Treasurer Baldwin participates in the Council budget committee meetings and in that capacity has suggested a new City Council Policy be adopted formalizing the establishment and duties of the City Budget and Audit Committee. City Treasurer Baldwin has also suggested revisions to Policy No. 200-7 (City Treasurer Duties). City Treasurer Baldwin prepared proposed policies for discussion by the Budget Committee and review by the City Attorney. The attached revised Policy No. 200-7 and Policy No. 300-1 incorporate the comments by the Committee members and the City Attorney. FISCAL IMPACT None. AGENDA ITEM NO. 14 Page 1 of 12 REPORT TO CITY COUNCIL MARCH 22, 2011 PAGE 2 RECOMMENDATIONS That the City Council adopt Resolution No. 2011-020 approving revised City Council Policy No. 200-7 (City Treasurer Duties) and City Council Policy No. 300-1 (Budget and Audit Committee). PREPARED BY: BARBARA LEIBOLD, CITY ATTORNEY APPROVED FOR AGENDA LISTING: BOB BRADY, CITY MANAGER Attachments: City Council Resolution No. 2011-020 Revised City Council Policy No. 200-7 City Council Policy No. 300-1 Page 2 of 12 RESOLUTION NO. 2011-020 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE ADOPTING REVISED CITY COUNCIL POLICY NO. 200-7 (CITY TREASURER DUTIES) AND CITY COUNCIL POLICY NO. 300-1 (BUDGET AND AUDIT COMMITTEE) WHEREAS, the City Council of the City of Lake Elsinore is charged with the responsibility of establishing the laws of the City of Lake Elsinore through the enactment of ordinances, resolutions and official policies; and WHEREAS, City Council Policies are an expression of City Council's opinion as to the conduct of City business enacted to guide the various functions of the City and, where necessary, to establish procedures by which functions are performed in a fair and consistent manner; and WHEREAS, the City Council desires to adopt and amend specific policies as recommended by the City Treasurer to be included in the City of Lake Elsinore City Council Policy Manual. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The City Council of the City of Lake Elsinore hereby adopts the revised City Council Policy No. 200-7 (City Treasurer Duties) and City Council Policy No. 300-1 (Budget and Audit Committee) as presented to the City Council on March 22, 2011. The revised Policy No. 200-7 shall supersede and replace the existing Policy No. 200-7 in its entirety. SECTION 2. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 22nd day of March, 2011 by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Amy Bhutta, Mayor City of Lake Elsinore Page 3 of 12 CITY COUNCIL RESOLUTION NO. 2011-020 PAGE 2 OF 2 ATTEST: Virginia Bloom, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Leibold, City Attorney City of Lake Elsinore Page 4 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: City Treasurer Duties Policy No. 200-7 Effective Date 10/10/89 Revised: 3/22/11 Page No. 1 of 4 PURPOSE The City Treasurer is elected to a four (4) year term. The statutory duties of the Treasurer are set forth in Government Code Sections 41001-41007. The establishment of this Policy will insure that, upon inquiry, the public, the Council and the Treasurer will clearly understand responsibilities as related to the aforementioned Government Code Sections 41001-41007. POLICY Section 41001. The city treasurer shall receive and safely keep all money coming into his hands as treasurer. Section 41001, written many decades ago, assumed that the city treasurer would collect taxes, fees, fines, and other monies due the City. That is no longer the case. City revenues flow directly to the City or are allocated to the City by the County of Riverside and the State of California. Accordingly, the City Council is responsible for adopting the City budget and directing the investment, appropriation and expenditure of all City monies with the support of the City Manager and qualified professional Administrative Service Director and staff who perform the daily finance and accounting functions of the City. The Lake Elsinore City Treasurer does not handle or manage such monies. Section 41002. He shall comply with all laws governing the deposit and securing ofpublic funds and the handling of trust funds in his possession. See explanation to Section 41001 above. The City Treasurer does not possess or control any public funds. Section 41003. He shall pay out money only on warrants signed by legally designated persons. As noted above, the City Treasurer does not possess or control any public funds. Payments of public funds are authorized by the City Council and the City Manager and are processed by the City's Department of Administrative Services. The Treasurer does not sign or authorize City payments. Page 5 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: City Treasurer Duties Policy No. 200-7 Page No. 2 of 4 Section 41004. Regularly, at least once each month, the city treasurer shall submit to the city clerk a written report and accounting of all receipts, disbursements, and fund balances. He shall file a copy with the legislative body. As noted above, the City Treasurer does not possess or control any public funds. Section 41005. The city treasurer shall perform such duties relative to the collection of city taxes and license fees as are prescribed by ordinance. As noted above, the City Treasurer is not involved in the collection of any public funds. Section 41006. The city treasurer may appoint deputies for whose acts he and his bondsmen are responsible. No such appointments are necessary because the City Treasurer is not involved in the collection, possession or control of any public funds. The City's qualified professional staff perform the daily finance and accounting functions of the City consistent with the City Council's adopted budget, the Lake Elsinore Municipal Code, applicable state laws and City Council direction. Section 41007. The deputies shall hold office at the pleasure of the city treasurer and receive such compensation as is provided by the legislative body. See explanation to Section 41006 above. GUIDELINES FOR INTERACTION WITH CITY STAFF The Treasurer may not direct City staff, but shall be permitted to coordinate any requests for staff or consultant time and/or materials (i.e. City Manager, Director of Administrative Services, etc.). The Treasurer shall use good judgment when contacting staff and requesting time and materials from them. Said requests must be made in the best interest of the community and the City Manager shall be responsible to inform the Page 6 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: City Treasurer Duties Policy No. 200-7 Page No. 3 of 4 City Council of these requests. Furthermore, the City Manager shall seek direction from the City Council if such requests for time conflict with other City Council priorities. The Treasurer, City staff and City Council shall work together as a team to promote openness and trust in the area of Public Finance. ADDITIONAL GUIDELINES The City Council hereby establishes the following additional guidelines for the Office of City Treasurer. 1) That the Administrative Services Director and County of Riverside performs the day-to-day duties related to the collection, custody and disbursement of funds in compliance with State law. 2) That the City Treasurer shall be kept currently apprized by the Administrative Services Director of City budget, audits, etc. prior to adoption of the City's financial transactions and be in the distribution flow of financial reports. 3) The City Treasurer shall be available for consultation with City Staff in areas of treasury management as necessary. 4) The Treasurer shall be included as a member of the City's Finance Team and shall be invited to attend Finance Team meetings. 5) The Treasurer shall be provided access to annual and capital budget information upon reasonable request to the City Manager. 6) The Treasurer shall observe the Council Policy on decorum and must be recognized by the Mayor/meeting chair before speaking. 7) The Treasurer's department budget shall be set annually by the City Council. The Treasurer may not expend funds on behalf of the City without prior consent of the City Council. Page 7 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: City Treasurer Duties Policy No. 200-7 Page No. 4 of 4 8) The Treasurer shall upon reasonable request to the City Manager be allowed access to Redevelopment Agency, Public Finance Authority and Recreation Authority records, budgets and financial statements. 9) The Treasurer shall serve as a member of the City's Budget and Audit Committee pursuant to City Council Policy No. 300-1. HISTORY Adopted 10/10/89 Amended by Minute Action 4/27/04 Amended by Resolution No. 2011-020 3/22/11 Page 8 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Budget and Audit Committee Policy No. 300-1 Effective Date 3/22/2011 Page No. I of 4 PURPOSE The primary role of the Budget and Audit Committee ("Committee") is to instill confidence that the funds entrusted to the City of Lake Elsinore and its Redevelopment Agency are used in a manner consistent with good financial practice and assist the City Council in fulfilling its responsibilities as to accounting policies and reporting practices of the City. The Committee shall work cooperatively with the City Manager, Administrative Services Director, employees and the independent auditor in making recommendation to the City Council to insure prudent financial oversight of the City's municipal finances. The Committee shall oversee and advise the City Council and management on the selection of independent auditors. The Committee shall strive to strengthen the stewardship reporting function of the City Council and improve communication between the independent auditor and management. The Committee shall be the City Council's principal agent in ensuring the independence of the City's independent auditors, the integrity of management, and the adequacy of disclosures to the public. The Budget and Audit Committee shall consist of the following five (5) [three (3)] members: 1. Chairperson 2. Vice-Chairperson 3. City Treasurer The Chairperson and Vice-Chairperson shall be appointed by the Mayor and shall be members of the City Council. The Mayor may elect to appoint himself or herself as Chairperson. The Chairperson and Vice-Chairperson shall serve for a term of one year concurrent with the term of the Mayor and no member of the City Council shall serve on the Committee for more than two consecutive years. Page 9 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Budget and Audit Committee Policy No. 300-1 Page No. 2 of 4 The Chairperson shall preside at all meetings. The Vice-Chairperson shall preside at all meetings in which the Chairperson is absent. The Committee shall meet as needed as determined by the Chairperson, but no less than four times a year. STAFF The City Manager and the Director of Administrative Services shall serve as principal staff to the Budget and Audit Committee and shall attend all Committee meetings. DUTIES WITH RESPECT TO THE INDEPENDENT AUDITOR 1. Oversee and participate in the selection process of the independent auditor. The Committee Members shall meet with each candidate seeking to serve as independent auditor prior to making a recommendation to the City Council. 2. Recommend to the City Council the selection or retention of the independent auditor. The firm selected as independent auditor shall not serve the City for more than five consecutive years or such lesser period as provided by State law. 3. Conduct a meeting by the Committee Members and the independent auditor to review the scope and general extent of the independent auditor's planned examination. The meeting should entail an understanding from the independent auditor of the factors considered by the auditor in determining the audit scope. 4. Review with management the auditor's fees on an annual basis. 5. Review with management and the independent auditor,, upon completion of its audit, draft financial results for the year. The Committee's review is to encompass the City's annual financial report, including the financial statements and footnote disclosures and supplemental disclosures required by generally accepted accounting principles. 6. Evaluate the cooperation received by the independent auditor during its audit, including its access to all requested records, data, and information. Solicit the comments of management regarding the responsiveness of the independent auditor to the City's needs. Page 10 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Budget and Audit Committee Policy No. 300-1 Page No. 3 of 4 7. Inquire of the independent auditor whether there have been any disagreements with management that, if not satisfactorily resolved, would have caused the independent auditor to issue a nonstandard report on the City's financial statements. 8. Review with management and the independent auditor the City's policies and procedures to reasonably ensure the adequacy of internal controls over accounting; administration, compliance with laws and regulations, and financial reporting. 9. Conduct an "exit meeting" with the independent auditor regarding the auditor "letter of comments and recommendations," the quality of the City's financial and accounting process and any recommendations that the independent auditor may have. Topics to be considered during this discussion include improving internal financial controls, controls over compliance with laws and regulations, the selection of accounting principles, and management reporting systems. 10. Review written responses of management to "letter of comments and recommendations" from the independent auditor and discuss with management the status of implementation of prior-period recommendations and corrective action plans. 11. Ensure that the "letter of comments and recommendations" from the independent auditor and the management response is available for review on the City's website. DUTIES WITH RESPECT TO FINANCIAL REPORTING AND BUDGETS 1. Have familiarity, through the individual efforts of its members, with the accounting and reporting principles and practices applied by the City in preparing its financial statements. Further, the Committee is to make, or cause to be made, all necessary inquiries of management and the independent auditor concerning established standards of conduct and performance, and deviations therefrom. 2. Review, quarterly, the City's financial statements. 3. Work with City staff to establish a process for developing the annual budget and long-term financial plan. Page 11 of 12 CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Budget and Audit Committee Policy No. 300-1 Page No. 4 of 4 4. Review the draft City Comprehensive Annual Financial Report (CAFR) or other annual financial statements. DUTIES WITH RESPECT TO THE CITY'S INVESTMENT POLICY 1. Annually review the City's Investment Policy and recommend any changes to the City Council. 2. Review, quarterly, compliance with the City's Investment Policy. OTHER DUTIES 1. Recommend to the City Council any appropriate extensions or changes in the duties of the Committee. 2. Work on special projects, as directed by the City Council. 3. Apprise the City Council, through agenda transmittals and special presentations as necessary, of significant developments in the course of performing the above duties. HISTORY Adopted by Resolution No. 2011-020 3/22/2011 Page 12 of 12