Does City Finance Dept. Have Certain Requisite Information That It Should Have?
From:”Ted Noftall” <Ted@TedNoftall.com>
To:”Wayne Saunders” <wsaunders@port-orange.org>
If I were asking for information not on topic I would have great understanding as to the time required to prepare same , But that is not the case, these questions are on your recent work product or what should have been your recent work product, AND BY now it is obvious to even a casual observer that Finance either does not have certain requisite information that it should have, OR it has no intention of sharing that information until the last possible moment. Either scenario is unacceptable.
These questions are not going away until they have been answered. Accordingly
Cash reserve percentages
*) Your cash reserve percentages are derived after deducting various commitments. Can you provide a document breaking out the restricted, committed and assigned components for the funds you are reporting on.
Revised Budget, Personnel Projections and Internal Control Spreadsheet
1, 2 and 6) These documents need to be distributed when complete not at the next Council meeting which is over a week away. Delays until arbitrary dates are likely to trigger FOI requests which should be un-necessary.
Pension contribution expenses
3) If the object of this budget is to convey meaningful information then you need to either un-comingle the combined pension expense for defined benefits and defined contribution plans, OR provide a note disclosing same.
Beyond that your explanation needs some clarification because what you are saying is that – the Actuary calculates the required pension contribution by applying his contribution rate to the ‘estimated salaries’ , AND – this budget calculates the required pension contribution by applying the Actuary’s rate to the ‘budgeted salaries’ and arrives at a far higher amount. What are the relevant ‘estimated and budgeted salaries’ and why are the ‘budgeted salaries’ so much higher ???
These pension contributions are being artificially overstated to the detriment of taxpayers as evidenced by huge overpayments that escalated from a net underpayment of $25,249 in FY 2010 to a net overpayment of $ 614,023 in FY 2012 and you are proposing an even greater overpayment for FY 2014. WHAT IS GOING ON HERE ??
Taxpayers are getting a double wammy here in that salaries are being over budgeted at 100% filled plus overtime even though the City’s historical turnover rate is such that 100 % filled is rarely met. Has your staff calculated that that turn-over rate ??
AND THEN the pension expense which is based on a rate that is approaching or exceeding 100% of payroll is applied to a payroll that is itself overstated ……. Such that $1 dollar of overstated payroll is costing taxpayers $ 2 dollars in additional taxes on average.
The unfunded component of these defined benefits pensions is a bottomless pit that can never be filled and jacking the cost of the Police and Fire budgets by 11% and 19% as this year’s budget does is as unsustainable over the long run as the pensions themselves.
Please provide all calculations in support of your proposed pension expenses.
Property Tax & Water and Sewer Fees
4) Was any un-collectable reserve booked against that $908,894 back billing to Daytona Beach Shores ??
Pension Reserves
5) Not being able to produce requisite schedules and proper authorizations calls into direct question the competence of the finance staff responsible for booking this transaction whenever it supposedly occurred.
Organizational Chart
7) I will look forward to receiving this document.
Ted Noftall
—–Original Message—–
From: Saunders, Wayne [mailto:wsaunders@port-orange.org]
Sent: Friday, July 26, 2013 4:44 PM
To: Ted Noftall
Cc: Kisela, Greg; Fenwick, Robin; Bob Ford; Kennedy, Dennis; don@amlsfl.com; Drew Bastian; Green, Allen; Corey Berman; Ivan Cosimi; Jack Wiles; Joe Fazzie; Laney, Sonya; Mark Schaefer
Subject: RE: Information Requested
Ted, please see below for responses.
Wayne Saunders
From: Ted Noftall [mailto:Ted@TedNoftall.com]
Sent: Thursday, July 25, 2013 7:11 AM
To: Saunders, Wayne
Cc: Kisela, Greg; Fenwick, Robin; Bob Ford; Kennedy, Dennis; don@amlsfl.com; Drew Bastian; Green, Allen; Corey Berman; Ivan Cosimi; Jack Wiles; Joe Fazzie; Laney, Sonya; Mark Schaefer
Subject: Information Requested
Wayne,
There are times when financial approximations are most useful in keeping fast paced conversations moving. There are also times such as when requested, or when presenting a financial report when great accuracy is required. Accordingly
- I would request that you supplement your financial report for the 3rd quarter of FY 2013 by disclosing the relevant cash reserve percentages for the General, Water & Sewer and Solid Waste funds reported on in that report.
General Fund=32.9%, Water & Sewer =34.7%, Solid Waste=28.1%. This is based on the proposed budget as presented at the workshop. These percentages will change as the budget is amended as directed to reflect the rolled-back rate and associated expenditure reductions. For future reference, to determine the new percentage as the budget is modified, simply divide the Ending Reserves by the total Expenditures as shown in the budget document for each fund to determine the percentage of reserves for that fund.
I believe the next meeting of the A&B Advisory Board is slated for Aug 5th and I would again urge you to release information as it becomes available to facilitate greater time for review rather that release material in bulk closer to or on the day of an event.
It would be most helpful if you would provide the following as it is prepared.
The revised budget. Will be distributed to Council and Committee when completed
- The revised personnel projections including totals for Sick and Vacation buy-backs Will be distributed to Counciland Committee when completed
- A reconciliation of budgeted pension contributions to the Actuaries required pension contributions for Fire, Police and General. I will provide a detail on this once we revise the budget with the proposed changes since these numbers may change. Please keep in mind that the Retirement Contributions line item shown in the budget document will not be the same number as shown in the Actuary report for a couple of reasons. First of all the Actuary projects an estimated dollar amount for the contribution based on the estimated salaries. They also provide a required percentage. The amount in the budget is based on the percentage times the actual budgeted salaries. Secondly, the amount shown on the Retirement Contributions line item also includes other required retirement contributions that are not a part of the defined benefit plans included in the Actuarial Reports.
- An analysis in support of those major revenue sources such as Property Tax and Water and Sewer fees where you are budgeting lower revenues in FY 2014 than were actually received in FY 2012 Property Tax: Current year taxable value of 2,309,317,147 X 4.8051 proposed millage = $11,096,500 total taxes less $96,807 for two CRAs =$10,999,692 X 96.5% = $10,614,703 as shown in proposed budget. Please keep in mind that the 2012 millage rate was higher than the current rate which would have generated more revenue. Water and Sewer Fees: Fees (Physical Environment per budget document p.45) for FY 14 are projected at $755,013 less than Actual for 2012. The major difference is that $908,894.02 was properly recorded in FY12 as an accrual which means it was recorded as a Revenue and an Accounts Receivable in FY2012. This is associated with the Daytona Beach Shores under-billing. If you deduct the accrual from the FY2012 ($24,857,113 – 908,894=23,948,219) you will see that the FY14 projected revenues are $153,881 greater than the Actual FY12 less the adjustment. (24,102,100-23,948,219=153,881)
5) A detailed analysis of the assigned reserves for police $ 208,166 fire $ 165,971 and general $ 122,121 indicating by year both additions and deletions if any, from those balances. Please indicate how these allocation amounts were determined and if they were approved by any resolution of Council. I do not have the history on this readily available but will research as time permits. As previously stated, the amounts proposed to be used in the FY14 will deplete these assigned reserves.
6) The Mayor’s requested spreadsheet analyzing prior years audit recommendations. City Manager Kisela stated at the last meeting that this would available and presented to the Council at the next Council meeting.
7) The organizational chart for Finance indicating employees, their positions and the job description and duties of those positions. I will provide an org chart and job descriptions under a separate email.
Thank you
Ted Noftall
From: Ted Noftall [mailto:Ted@TedNoftall.com]
Sent: Thursday, July 25, 2013 7:11 AM
To: ‘Saunders, Wayne’
Cc: ‘Kisela, Greg’; ‘Fenwick, Robin’; Bob Ford (rford37@cfl.rr.com); Dennis Kennedy (dkennedy@port-orange.org); don@amlsfl.com; Drew Bastian (db2070@cfl.rr.com); Mayor Green (agreen@port-orange.org); Corey Berman (realtorcor@aol.com); Ivan Cosimi (icosimi@smabehavioral.org); Jack Wiles (jackwilesrealtor@gmail.com); Joe Fazzie (jafazz62@aol.com); Laney, Sonya; Mark Schaefer (mark@mark-schaefer.com)
Subject: Information Requested
Wayne,
There are times when financial approximations are most useful in keeping fast paced conversations moving. There are also times such as when requested, or when presenting a financial report when great accuracy is required. Accordingly
- I would request that you supplement your financial report for the 3rd quarter of FY 2013 by disclosing the relevant cash reserve percentages for the General, Water & Sewer and Solid Waste funds reported on in that report.
I believe the next meeting of the A&B Advisory Board is slated for Aug 5th and I would again urge you to release information as it becomes available to facilitate greater time for review rather that release material in bulk closer to or on the day of an event.
It would be most helpful if you would provide the following as it is prepared.
1) The revised budget.
2) The revised personnel projections including totals for Sick and Vacation buy-backs
3) A reconciliation of budgeted pension contributions to the Actuaries required pension contributions for Fire, Police and General.
4) An analysis in support of those major revenue sources such as Property Tax and Water and Sewer fees where you are budgeting lower revenues in FY 2014 than were actually received in FY 2012
5) A detailed analysis of the assigned reserves for police $ 208,166 fire $ 165,971 and general $ 122,121 indicating by year both additions and deletions if any, from those balances. Please indicate how these allocation amounts were determined and if they were approved by any resolution of Council.
6) The Mayor’s requested spreadsheet analyzing prior years audit recommendations.
7) The organizational chart for Finance indicating employees, their positions and the job description and duties of those positions.
Thank you
Ted Noftall