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01-598ORIGINA� Presented By: E -- t� Referred To: RESOLUTION OF SAINT PAUL, MINNESOTA Council Fife # O \ � S4� Green Sheet# 113462 �S Committee: Date z W HEREAS, in June 1999, the Govemment Accounting Standards Board (GASB) issued Statement No. 34 s which estahlished a new framework for financial reports of state and local govemments, and s W HEREAS, in the State Auditors Management and Compliance Report fos fiscai year ended December 31, s 1999, the auditors highlighted some of the significant changes required by GASB Statement No. 34, which � put the city's management on notice that resources would be needed to implement this accounting s pronouncement, and io WHEREAS, the requirements of GASB Statement No. 34, Basic Financial Statements - and Management's ii Discussion and Analysis - for State and Local Governments, are effective for the city's December 31, 2002 i2 Comprehensive Annual Financial Report (CAFR), and 73 ,a W HEREAS, currently the financial reports provide information about funds and account groups, and ie is W HEREAS, the new model under GASB Statement No. 34, the fund-based financial reports are to be n complemented by a set of governmentwide financial statements that, for the first time, present the government ia as a single, unified entity comparable in many ways to a consolidated, private-sector business ,s enterprise, and zo zi W HEREAS, the city`s Accounting Improvement Committee (AIC) wrote a request for proposai (RFP) zz seeking responses from properly licensed certified public accounting firms to study our current zs practices, make recommendations for projects that must be completed, and assist in the implementation za of the project to assure full compliance with GASB Statement No. 34 for the 2002 financial statements, zs and zs z� WHEREAS, if the requirements of GASB Statement No. 34 are not met, the city would receive an za adverse auditor's opinion which indicates that the city's financial statements do not fairly present the zs city's financial position and results of operations in conformance with generally accepted accou�ting so principles (GAAP), and 37 �z W HEREAS, an adverse opinion could affect the city's bond raiing and result in higher bond interest costs, 33 and 34 35 W HEREAS, four certified public accounting firms have submitted proposals in response to the RFP, 36 and 37 sa W HEREAS, AIC staff reviewed the proposals and interviewed two firms whose proposals aligned up 39 best with the intent of the RFP, and 40 ai W HEREAS, upon meeting with the two firms, the estimated cost of the project by the firms is $600,000, az and � aa W NEREAS, the Mayor, pursuant to Seetion 10.07.1 of the City Charter, certifies that there are funds of as $541,908 available for appropriation in excess of those estimated in the 2001 budget, and when as added to the funding of $36,484 from the Regional Water Services, the city's operating budgets will a� be changed in total by $578,392, and aa as THEREFORE BE IT RESOLVED, that the Council of the City of Saint Paul approves these changes so and amends the city's operating budget, in the following manner: si sz Page 1 of 4 53 Council File # O�— Sq� Green Sheet# 113462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To; Committee: Date sa ss Current Amended ss Bu t n e Budaet s� sa General Fund ss Financing Plan so s� 001 - 00000 - 9830 Use of Fund Balance 5,857,799 354,161 6,211,960 sz 001 - 00000 - 7302 TranfrfrEnterpriseFd 0 92,142 92,142 ss 001 - 00000 - 7303 Tranfr fr internal Srvc Fd 2,500 5,313 7,813 sa 001 - 00000 - 7305 Tranfr fr Spec+al Rev Fd 0 126,776 126,776 ss All Other Financing 161 854 559 4 161,$�4 �,Q ss s� Total General Fund Spending 167,714,858 578,392 168.293,250 sa ss Generei Fund �o Spending Plan 7� 7z Finan�al Service� �s 001 - 00125 - 0219 Professional Services 0 600,000 600,000 �a �s Public Libraries �s 001 - 03401 - 0275 Off Equip Mtce Contract 20,200 (12,191) 8,009 n za Parks & Recreation 7s 0�1 - �3100 - 0211 Fees - Architects 9,674 (9,417) 257 eo ai All Other Spending 167 684,984 Q 167 684.984 az ss Total General Fund Spending 167,714,858 578,392 168,293,250 ea 85 as Special Funds s� as Planning and Economic Development - PED Operations Fund as Financing Plan so si 126 - 36075 - 9830 Use of Fund Balance 0 64,672 64,672 qz All Financing Sources 8,709 86g Q 8.709.868 93 sa Total Fund 126 Financing 8,709,868 64,672 8,774,540 ss ss s� Planning and Economic Development - PED Operations Fund se Spending Plan ss ioo 126 - 36075 - Q557 Transfer to General Fund 0 64,672 64,672 ioi All Other Spending $ 709•868 Q $,7p9.g68 ,oz ios Total Fund 126 Spending 8.709.868 64,672 8,774,540 i oa ios Page 2 of 4 ,os Council File # O �-S� Green Sheet# 173462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To: Committee: Date im ios Public Works - Sewer Utility Current Amended ioe Financing Plan Budaet h n Budaet iia iii 260 - 22207 - 9925 Use of Retained Earnings 0 55,658 55,658 n2 Ali Financing Sources 44.466.707 Q 44 466 707 173 iia Total Fund 260 Financing 44,466.707 55.658 44,522.365 iis i�s Public Works - Sewer Utility in Spending Plan 178 iis 260 - 22207 - 0557 Transferto General Fund 1,143 55,655 56,801 �2o All Other Spending 44 465 564 Q 44 465 564 121 �zz Total Fund 260 Spending 44,466 707 55,658 44,522,365 123 iza Public Works - Street Repair and Cleaning ize Financing Plan izs i2� 225 - 42310 - 9930 Use of Fund Balance 102,416 62,104 164,520 ize All Financing Sources 17.707 048 Q 17 707 048 izs iso Total Fund 225 Financing 17,809 464 62,104 17,871,568 131 isz Public Works - Street Repair and Cleaning ia� Spending Plan i� ias 225 - 42310 - 0557 Transferto Generai Fund 75,035 62,104 137,139 �ss Ali Other Spending 17 734.429 Q 17 734 429 137 ,sa Total Fund 225 Spending 17,809 464 62,104 17,871.568 139 iao Public Works -Traffic, Signal, & Lighting iai Financing Plan i a2 ias 240 - 12005 - 9925 Use of Retained Eamings 0 1,771 1,771 iaa 240 - 12006 - 9925 Use of Retained Earnings 243,455 1,771 245,226 ,as 240 - 12007 - 9925 Use of Retained Earnings 218,956 1,771 220,727 ias All Financing Sources 7 7 4 7 Q Z,579 437 i a� ,na Total Fund 240 Financing 8.041,848 5,313 8.047.161 i as iso Public Works -Traffic, Signal, & Lighiing �si Spending Plan , sz 153 240 - 12005 - 0557 Transfer to General Fund 2,836 1,771 4,607 +sa 240 - 12006 - 0557 TransfertoGeneralFund 0 1,771 1,771 ,as 240 - 12007 - 0557 TransfertoGeneralFund 1,143 1,771 2,914 +ss All Other Spending $,93I,_$f $ 4 � Q37,869 157 isa Total Fund 240 Spending 8,041,848 5,313 8.047,161 �ss Page 3 of 4 Council File # 0 � • $'�' Green Sheet# 773462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To: Committee: Date iso tis, Gurrent Amended isz B et h e Bu t 163 764 165 iss Regional Water Services - Water lftility Fund is� Financing Plan i ss iss Ali Financing Sources 34,730,785 0 34,730,785 no ni Regional Water Services - Water Utility Fund i�z Spending Plan 173 na 850 - 28938 - 0219 Professional Services 35,000 (15,484) 19,516 ns 850 - 28131 - 0216 Fees - Acctg & Auditing 21,000 (21,000) 0 ns 850 - 28000 - 0557 Transfer to General Fund 0 36,484 36,484 m All Other Spending 34 674 785 4 34.674JS5 ne i�s Total Fund 850 Spending 34.730,785 0 34,730,785 780 181 182 183 184 185 186 187 788 189 790 isi Page 4 of 4 Requested by Department of: BY� `� ��_ ?� �'--��-° � � Approved by Mayor: Date �j �11.Q a� �/ By: e o •: - f : i i� /, 1��L �� I � Approval Recommended by FSO - Director: By: �..�.��, �� Form ��d by City Attorney: By: � Approved by ayor for Submis ion to Council: BY� � "A J"f'N" �i�� FinancialServices (Q:ffiM1arM�FSO\ GASBX[G .WK6) Adopted by Council: Date 7 aa o Adoption Certified by Council Secretary: ntrae�nmarro�c�omaca DATE/N111ATID p \ �S�' officeofF�nanciatservices 5-30-01 GREEN SHEET NO. 113462 �� COMACTPASOC�&PH�NE O �BMIMEM�RECRIR O QlY�DUNCrt. GeorgeSplichal 266-8819 ��„ Q cararroxr�r� 0 crn Q MUSTBEONCOUNfA.AGFNpABY(DA]'� � OI FINANCIAI.SERVIC6DIA `" O FW.SE4VICFSOFF/A�(,Tf. �3 iuwYOA(ORASSLSTANt) a5 CFIgFACCOUNfANf TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACRON REQUfS"1'm Approval of Council Resolution to amend [he financing and spending plans in the 2001 budget for the establishment of a budget to usist in the implementation of the requirements of the Govemment Accounting Standards Board (GASB) Statement Number 34. xECOnv.�ia�wnons: a�.o.wcn>mxy�xcW PERSONAL SERVICE CONTRACPS MUSf ANSWER THE FOLLOWING Qi7ESTIONS: zLwrvwG mtw.uSSloc+ I. Has tlils peisodCvm ever worked under a contract for this depaitment? _cmCOt.�nrr� YES NO _CNll.SERNCECOtM9SSI0N 2. Hac tbis petson/fixm werbeen a city employee? _ YES NO 3. Dces this peison/6impossess a skill not nmmally possessed by any curtent city employee? YES NO 4. Is this person / fiml a tazgeted veudor? YES NO (Esplain all yes answers on separate sheet and attach to green shee4) IMTfATING PROB[.EM. LSSVE, OPPORTUNI'IY (0.30. What �4 �f+�. �Y): GASB established a new framework for financial reporting in order that the city's financial statements aze presented as a single, unified enflty compazable in many ways [o a consolidated, priva[�sector business. Also required by GASB Statement No. 34 is presenting the city's capital infrastructure at cost and depreciating all of the infrastructure as part of consolidated financial statements. GASB sets the govemment accounting standazds that must be met for azty govemment agency [o meet generally accepted accounting s[andards (GAAP). Rating agencies will be ]ooldag for coaformance with the GASB Statement No. 34 requiremenYS. The cosT allocation of this project is based on city depar[menPs shaze of the 2001 Capital Improvement Budget. APVANTACFS IF APPROVED. The city wID be in conformance with genexally accepYed accounting principles (GAAP). Users oF the Comprehensive Aanual Financial Report (CAPR) wIll be able to rely on the accuracy of the financial statements as to [he city's financial posi6on and condiGOn. The city will receive the needed assistance in evaluating [he city's capital mfrastructure (streets, sidewalks, curbs, lighring systems, etc.). OISADVAMAGES&APPROVE�: VW�� R6S�GlFb1� �VCY{ri� None. JUN 0 ",.� 2001 �ISADVANlAGES OF NOTAPPROVID: \ � The city's fmancial statements would receive an adverse auditors opinion which indicates Yhat tUe ciry's financial sYatements do not fairly present the ciry's financial position and results of operations in conformance wi[h generally accepted accounting principles. The city's credit nting could be adversely affected which could result in higher interest costs for future borrowings. TOTALAMOUNTOFTRANSACTfON_� S7H�392 COST/ItEVENUEBUDGETEO(CIACLEONE) YES NO .,�,��so,a�E General and Special Funds w�rv�Tr��a various FWANCW.MFOxMAT10N: (LRR1✓P� v Financial5ervices (G:laM1areNFSW GI�S6#3i .WK6) Office of The Mayor Office of Financial Services City of Saint Paul Norm Coleman, Mayor May 31, 2001 Council President Dan Bostrom and City Councilmembers 310 City Hall 15 West Kellogg Boulevard Saint Paul, MN 55102 Aeaz Councilmembers: a�-sqr Peter Hames, DireMOr I60 Ciry Ha11 IS West%Z[ogg Bou[evmd Saint Pau1, Minnesota 55102-1631 Telephane: (65I) 266-8800 Farsimile: (651) 266-854I The purpose of this memorandum is to share with you our plan for meeting the reporting requirements of GASB Statement No. 34. The Governmental Accounting Standards Board (GASB) of the Financial Accounting Foundation sets reporting standazds for the prepazation of financial reports for state and local governments. In June 1999, the Board issued Statement No. 34 which established a new framework for financial reports of state and local governments. This new framework, or financial reporting model, represents the biggest single change in the history of governmental accounting and financial reporting. The requirements of GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, aze effective for the city's December 31, 2002 Comprehensive Annual Financial Report (CAFR). If the requirements of GASB Statement No. 34 aze not met, the city would receive an adverse auditor's opinion which indicates that the city's financial statements do not present fairly the city's financial position and results of operations in conformance with generally accepted accounting principles (GAAP). The financial statements would, in effect, be unreliable for the users of these statements. This could affect the city's bond rating and result in higher bond interest costs. In addition, an adverse opinion would result in the loss of the Government Finance Officers Association's (GFOA) Certificate of Achievement for Excellence in Financial Reporting which we have received for the last twenty-three consecutive yeazs. The Certificate of Achievement is a prestigious national awazd recognizing conformance with the highest standazds for preparation of state and local government fmancial reports. In the State Auditors Management and Compiiance Report for fiscal yeaz ended December 31, 1999, the auditors highlighted some of the significant changes required by GASB Statement No. 34. This report called to the attention of city management the fact that unplementing this accounting pronouncement will require a significant inveshnent of city resources. Specifically identified were costs for consultants needed to complete an all-inclusive review of the standazds, establishment of an overall implementation plan and time frame, flowcharting the process, conducting surveys, and prioritizing tasks. o�-sqr Annual governmental financial reports currently provide information about funds and account groups. Most funds aze established by the goveming body to show restrictions on the planned use of resources or to measure, in the short term, the revenues and eapenditures from certain activities. Statement No. 34 requires govemments to continue to present financial information on funds. VJith the new model, however, these fund-based presentations aze complemented by a set of governmentwide financial statements that, for the fust time, present the govemment as a single, unified entity comparable in many ways to a consolidated, private-sector business enterprise. The city's Accounting Improvement Committee (AIC) has established a subcommittee to write a request for proposal (RFP) seeking responses from properly licensed certified public accounting firms to assist city staff with the implementation of GASB Statement No. 34. It is our iYtent to contract with a qualified firm to study our current practices, make recommendations for projects that must be completed, and assist in the implementation of the project to assure full compliance with GASB Statement No. 34 for our 2002 financial statements. The RFP development process is in its fmal stage and is scheduled to be completed by January 15, 2001. The AIC decided to issue an RFP for this project for several reasons. Because GASB Statement No. 34 includes numerous accoun6ng reporting changes, it was determined that, given the city department accountants' current workload, it would be impractical to complete this project with our current resources without outside technical assistance. In addition, one of the largest requirements of GASB Statement No. 34 deals with the reporting of infrastructure assets in the governmentwide financial statements. Currently, infrastruchue assets such as streets, roads, curbs and gutters, sidewalks, and lighting systems aze not required to be reported in the city's financial statements. However, GA5B Statement No. 34 will require the city to report these assets at tustorical cost with related accumulated depreciation. This is a major task and the AIC decided the city would need outside technical assistance to meet this requirement. It should be noted that, generally, sma11 cities and counties in large metropolitan azeas do not acquire a large amount of these type of infrastnxcture assets and, therefore, do not face a significant challenge of determining the historical cost and accumulated depreciation on these assets. Most large cifies, on the other hand, have taken on the responsibility to provide and maintain these infrastructure assets. It is anUcipated that the project will be completed in four phases. Phase I includes the planning and design phase, Phase II, the implementation phase, Phase III, the restatement of the 2001 CAFR, and Phase IV, the prepazation of the 2002 CAFR using the new reporting methodology. This proposed schedule is tentative and may be adjusted after discussions with the consultants. We will ha�e to consider the consultanYs projecUtask time lines which aze required to be provided in accordance with the RFP. o �- SvY The following are estimated time lines for specific tasks: Request for Proposals Mailed Deadline for VJritten Questions from Consultants Responses to Questions Mailed Deadline for Proposals Interviews With Consuitants (Presentations) Deadline for Consultant Selection Contract Execution Project Commences Phase I- Planning and Design Phase II - Implementazion Phase III - Restate 2001 CAFR Phase IV - Use New Reporting Methodology For 2002 CAFR Project Completion January 29, 2001 February 20, 2001 February 27, 2001 Mazch 21, 2001 April 30 - May 8, 2001 June 15, 2001 June 20, 2001 July 1- September 30, 2001 October 1- December 31, 2001 July 1- December 31, 2002 January 1- June 30, 2003 June 30, 2003 Attached is a council resolution amending the 2001 General Fund and Special Funds' budgets in order to implement GASB Statement No. 34. Cordially, / � ' �i �, ��l//! ! . Peter Hames cc: Mayor Norm Coleman Accounting Improvement Committee Deparhnentand Office Directors G:\USers\Splichal\ W PFILES\Counci105312001.wpd ORIGINA� Presented By: E -- t� Referred To: RESOLUTION OF SAINT PAUL, MINNESOTA Council Fife # O \ � S4� Green Sheet# 113462 �S Committee: Date z W HEREAS, in June 1999, the Govemment Accounting Standards Board (GASB) issued Statement No. 34 s which estahlished a new framework for financial reports of state and local govemments, and s W HEREAS, in the State Auditors Management and Compliance Report fos fiscai year ended December 31, s 1999, the auditors highlighted some of the significant changes required by GASB Statement No. 34, which � put the city's management on notice that resources would be needed to implement this accounting s pronouncement, and io WHEREAS, the requirements of GASB Statement No. 34, Basic Financial Statements - and Management's ii Discussion and Analysis - for State and Local Governments, are effective for the city's December 31, 2002 i2 Comprehensive Annual Financial Report (CAFR), and 73 ,a W HEREAS, currently the financial reports provide information about funds and account groups, and ie is W HEREAS, the new model under GASB Statement No. 34, the fund-based financial reports are to be n complemented by a set of governmentwide financial statements that, for the first time, present the government ia as a single, unified entity comparable in many ways to a consolidated, private-sector business ,s enterprise, and zo zi W HEREAS, the city`s Accounting Improvement Committee (AIC) wrote a request for proposai (RFP) zz seeking responses from properly licensed certified public accounting firms to study our current zs practices, make recommendations for projects that must be completed, and assist in the implementation za of the project to assure full compliance with GASB Statement No. 34 for the 2002 financial statements, zs and zs z� WHEREAS, if the requirements of GASB Statement No. 34 are not met, the city would receive an za adverse auditor's opinion which indicates that the city's financial statements do not fairly present the zs city's financial position and results of operations in conformance with generally accepted accou�ting so principles (GAAP), and 37 �z W HEREAS, an adverse opinion could affect the city's bond raiing and result in higher bond interest costs, 33 and 34 35 W HEREAS, four certified public accounting firms have submitted proposals in response to the RFP, 36 and 37 sa W HEREAS, AIC staff reviewed the proposals and interviewed two firms whose proposals aligned up 39 best with the intent of the RFP, and 40 ai W HEREAS, upon meeting with the two firms, the estimated cost of the project by the firms is $600,000, az and � aa W NEREAS, the Mayor, pursuant to Seetion 10.07.1 of the City Charter, certifies that there are funds of as $541,908 available for appropriation in excess of those estimated in the 2001 budget, and when as added to the funding of $36,484 from the Regional Water Services, the city's operating budgets will a� be changed in total by $578,392, and aa as THEREFORE BE IT RESOLVED, that the Council of the City of Saint Paul approves these changes so and amends the city's operating budget, in the following manner: si sz Page 1 of 4 53 Council File # O�— Sq� Green Sheet# 113462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To; Committee: Date sa ss Current Amended ss Bu t n e Budaet s� sa General Fund ss Financing Plan so s� 001 - 00000 - 9830 Use of Fund Balance 5,857,799 354,161 6,211,960 sz 001 - 00000 - 7302 TranfrfrEnterpriseFd 0 92,142 92,142 ss 001 - 00000 - 7303 Tranfr fr internal Srvc Fd 2,500 5,313 7,813 sa 001 - 00000 - 7305 Tranfr fr Spec+al Rev Fd 0 126,776 126,776 ss All Other Financing 161 854 559 4 161,$�4 �,Q ss s� Total General Fund Spending 167,714,858 578,392 168.293,250 sa ss Generei Fund �o Spending Plan 7� 7z Finan�al Service� �s 001 - 00125 - 0219 Professional Services 0 600,000 600,000 �a �s Public Libraries �s 001 - 03401 - 0275 Off Equip Mtce Contract 20,200 (12,191) 8,009 n za Parks & Recreation 7s 0�1 - �3100 - 0211 Fees - Architects 9,674 (9,417) 257 eo ai All Other Spending 167 684,984 Q 167 684.984 az ss Total General Fund Spending 167,714,858 578,392 168,293,250 ea 85 as Special Funds s� as Planning and Economic Development - PED Operations Fund as Financing Plan so si 126 - 36075 - 9830 Use of Fund Balance 0 64,672 64,672 qz All Financing Sources 8,709 86g Q 8.709.868 93 sa Total Fund 126 Financing 8,709,868 64,672 8,774,540 ss ss s� Planning and Economic Development - PED Operations Fund se Spending Plan ss ioo 126 - 36075 - Q557 Transfer to General Fund 0 64,672 64,672 ioi All Other Spending $ 709•868 Q $,7p9.g68 ,oz ios Total Fund 126 Spending 8.709.868 64,672 8,774,540 i oa ios Page 2 of 4 ,os Council File # O �-S� Green Sheet# 173462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To: Committee: Date im ios Public Works - Sewer Utility Current Amended ioe Financing Plan Budaet h n Budaet iia iii 260 - 22207 - 9925 Use of Retained Earnings 0 55,658 55,658 n2 Ali Financing Sources 44.466.707 Q 44 466 707 173 iia Total Fund 260 Financing 44,466.707 55.658 44,522.365 iis i�s Public Works - Sewer Utility in Spending Plan 178 iis 260 - 22207 - 0557 Transferto General Fund 1,143 55,655 56,801 �2o All Other Spending 44 465 564 Q 44 465 564 121 �zz Total Fund 260 Spending 44,466 707 55,658 44,522,365 123 iza Public Works - Street Repair and Cleaning ize Financing Plan izs i2� 225 - 42310 - 9930 Use of Fund Balance 102,416 62,104 164,520 ize All Financing Sources 17.707 048 Q 17 707 048 izs iso Total Fund 225 Financing 17,809 464 62,104 17,871,568 131 isz Public Works - Street Repair and Cleaning ia� Spending Plan i� ias 225 - 42310 - 0557 Transferto Generai Fund 75,035 62,104 137,139 �ss Ali Other Spending 17 734.429 Q 17 734 429 137 ,sa Total Fund 225 Spending 17,809 464 62,104 17,871.568 139 iao Public Works -Traffic, Signal, & Lighting iai Financing Plan i a2 ias 240 - 12005 - 9925 Use of Retained Eamings 0 1,771 1,771 iaa 240 - 12006 - 9925 Use of Retained Earnings 243,455 1,771 245,226 ,as 240 - 12007 - 9925 Use of Retained Earnings 218,956 1,771 220,727 ias All Financing Sources 7 7 4 7 Q Z,579 437 i a� ,na Total Fund 240 Financing 8.041,848 5,313 8.047.161 i as iso Public Works -Traffic, Signal, & Lighiing �si Spending Plan , sz 153 240 - 12005 - 0557 Transfer to General Fund 2,836 1,771 4,607 +sa 240 - 12006 - 0557 TransfertoGeneralFund 0 1,771 1,771 ,as 240 - 12007 - 0557 TransfertoGeneralFund 1,143 1,771 2,914 +ss All Other Spending $,93I,_$f $ 4 � Q37,869 157 isa Total Fund 240 Spending 8,041,848 5,313 8.047,161 �ss Page 3 of 4 Council File # 0 � • $'�' Green Sheet# 773462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To: Committee: Date iso tis, Gurrent Amended isz B et h e Bu t 163 764 165 iss Regional Water Services - Water lftility Fund is� Financing Plan i ss iss Ali Financing Sources 34,730,785 0 34,730,785 no ni Regional Water Services - Water Utility Fund i�z Spending Plan 173 na 850 - 28938 - 0219 Professional Services 35,000 (15,484) 19,516 ns 850 - 28131 - 0216 Fees - Acctg & Auditing 21,000 (21,000) 0 ns 850 - 28000 - 0557 Transfer to General Fund 0 36,484 36,484 m All Other Spending 34 674 785 4 34.674JS5 ne i�s Total Fund 850 Spending 34.730,785 0 34,730,785 780 181 182 183 184 185 186 187 788 189 790 isi Page 4 of 4 Requested by Department of: BY� `� ��_ ?� �'--��-° � � Approved by Mayor: Date �j �11.Q a� �/ By: e o •: - f : i i� /, 1��L �� I � Approval Recommended by FSO - Director: By: �..�.��, �� Form ��d by City Attorney: By: � Approved by ayor for Submis ion to Council: BY� � "A J"f'N" �i�� FinancialServices (Q:ffiM1arM�FSO\ GASBX[G .WK6) Adopted by Council: Date 7 aa o Adoption Certified by Council Secretary: ntrae�nmarro�c�omaca DATE/N111ATID p \ �S�' officeofF�nanciatservices 5-30-01 GREEN SHEET NO. 113462 �� COMACTPASOC�&PH�NE O �BMIMEM�RECRIR O QlY�DUNCrt. GeorgeSplichal 266-8819 ��„ Q cararroxr�r� 0 crn Q MUSTBEONCOUNfA.AGFNpABY(DA]'� � OI FINANCIAI.SERVIC6DIA `" O FW.SE4VICFSOFF/A�(,Tf. �3 iuwYOA(ORASSLSTANt) a5 CFIgFACCOUNfANf TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACRON REQUfS"1'm Approval of Council Resolution to amend [he financing and spending plans in the 2001 budget for the establishment of a budget to usist in the implementation of the requirements of the Govemment Accounting Standards Board (GASB) Statement Number 34. xECOnv.�ia�wnons: a�.o.wcn>mxy�xcW PERSONAL SERVICE CONTRACPS MUSf ANSWER THE FOLLOWING Qi7ESTIONS: zLwrvwG mtw.uSSloc+ I. Has tlils peisodCvm ever worked under a contract for this depaitment? _cmCOt.�nrr� YES NO _CNll.SERNCECOtM9SSI0N 2. Hac tbis petson/fixm werbeen a city employee? _ YES NO 3. Dces this peison/6impossess a skill not nmmally possessed by any curtent city employee? YES NO 4. Is this person / fiml a tazgeted veudor? YES NO (Esplain all yes answers on separate sheet and attach to green shee4) IMTfATING PROB[.EM. LSSVE, OPPORTUNI'IY (0.30. What �4 �f+�. �Y): GASB established a new framework for financial reporting in order that the city's financial statements aze presented as a single, unified enflty compazable in many ways [o a consolidated, priva[�sector business. Also required by GASB Statement No. 34 is presenting the city's capital infrastructure at cost and depreciating all of the infrastructure as part of consolidated financial statements. GASB sets the govemment accounting standazds that must be met for azty govemment agency [o meet generally accepted accounting s[andards (GAAP). Rating agencies will be ]ooldag for coaformance with the GASB Statement No. 34 requiremenYS. The cosT allocation of this project is based on city depar[menPs shaze of the 2001 Capital Improvement Budget. APVANTACFS IF APPROVED. The city wID be in conformance with genexally accepYed accounting principles (GAAP). Users oF the Comprehensive Aanual Financial Report (CAPR) wIll be able to rely on the accuracy of the financial statements as to [he city's financial posi6on and condiGOn. The city will receive the needed assistance in evaluating [he city's capital mfrastructure (streets, sidewalks, curbs, lighring systems, etc.). OISADVAMAGES&APPROVE�: VW�� R6S�GlFb1� �VCY{ri� None. JUN 0 ",.� 2001 �ISADVANlAGES OF NOTAPPROVID: \ � The city's fmancial statements would receive an adverse auditors opinion which indicates Yhat tUe ciry's financial sYatements do not fairly present the ciry's financial position and results of operations in conformance wi[h generally accepted accounting principles. The city's credit nting could be adversely affected which could result in higher interest costs for future borrowings. TOTALAMOUNTOFTRANSACTfON_� S7H�392 COST/ItEVENUEBUDGETEO(CIACLEONE) YES NO .,�,��so,a�E General and Special Funds w�rv�Tr��a various FWANCW.MFOxMAT10N: (LRR1✓P� v Financial5ervices (G:laM1areNFSW GI�S6#3i .WK6) Office of The Mayor Office of Financial Services City of Saint Paul Norm Coleman, Mayor May 31, 2001 Council President Dan Bostrom and City Councilmembers 310 City Hall 15 West Kellogg Boulevard Saint Paul, MN 55102 Aeaz Councilmembers: a�-sqr Peter Hames, DireMOr I60 Ciry Ha11 IS West%Z[ogg Bou[evmd Saint Pau1, Minnesota 55102-1631 Telephane: (65I) 266-8800 Farsimile: (651) 266-854I The purpose of this memorandum is to share with you our plan for meeting the reporting requirements of GASB Statement No. 34. The Governmental Accounting Standards Board (GASB) of the Financial Accounting Foundation sets reporting standazds for the prepazation of financial reports for state and local governments. In June 1999, the Board issued Statement No. 34 which established a new framework for financial reports of state and local governments. This new framework, or financial reporting model, represents the biggest single change in the history of governmental accounting and financial reporting. The requirements of GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, aze effective for the city's December 31, 2002 Comprehensive Annual Financial Report (CAFR). If the requirements of GASB Statement No. 34 aze not met, the city would receive an adverse auditor's opinion which indicates that the city's financial statements do not present fairly the city's financial position and results of operations in conformance with generally accepted accounting principles (GAAP). The financial statements would, in effect, be unreliable for the users of these statements. This could affect the city's bond rating and result in higher bond interest costs. In addition, an adverse opinion would result in the loss of the Government Finance Officers Association's (GFOA) Certificate of Achievement for Excellence in Financial Reporting which we have received for the last twenty-three consecutive yeazs. The Certificate of Achievement is a prestigious national awazd recognizing conformance with the highest standazds for preparation of state and local government fmancial reports. In the State Auditors Management and Compiiance Report for fiscal yeaz ended December 31, 1999, the auditors highlighted some of the significant changes required by GASB Statement No. 34. This report called to the attention of city management the fact that unplementing this accounting pronouncement will require a significant inveshnent of city resources. Specifically identified were costs for consultants needed to complete an all-inclusive review of the standazds, establishment of an overall implementation plan and time frame, flowcharting the process, conducting surveys, and prioritizing tasks. o�-sqr Annual governmental financial reports currently provide information about funds and account groups. Most funds aze established by the goveming body to show restrictions on the planned use of resources or to measure, in the short term, the revenues and eapenditures from certain activities. Statement No. 34 requires govemments to continue to present financial information on funds. VJith the new model, however, these fund-based presentations aze complemented by a set of governmentwide financial statements that, for the fust time, present the govemment as a single, unified entity comparable in many ways to a consolidated, private-sector business enterprise. The city's Accounting Improvement Committee (AIC) has established a subcommittee to write a request for proposal (RFP) seeking responses from properly licensed certified public accounting firms to assist city staff with the implementation of GASB Statement No. 34. It is our iYtent to contract with a qualified firm to study our current practices, make recommendations for projects that must be completed, and assist in the implementation of the project to assure full compliance with GASB Statement No. 34 for our 2002 financial statements. The RFP development process is in its fmal stage and is scheduled to be completed by January 15, 2001. The AIC decided to issue an RFP for this project for several reasons. Because GASB Statement No. 34 includes numerous accoun6ng reporting changes, it was determined that, given the city department accountants' current workload, it would be impractical to complete this project with our current resources without outside technical assistance. In addition, one of the largest requirements of GASB Statement No. 34 deals with the reporting of infrastructure assets in the governmentwide financial statements. Currently, infrastruchue assets such as streets, roads, curbs and gutters, sidewalks, and lighting systems aze not required to be reported in the city's financial statements. However, GA5B Statement No. 34 will require the city to report these assets at tustorical cost with related accumulated depreciation. This is a major task and the AIC decided the city would need outside technical assistance to meet this requirement. It should be noted that, generally, sma11 cities and counties in large metropolitan azeas do not acquire a large amount of these type of infrastnxcture assets and, therefore, do not face a significant challenge of determining the historical cost and accumulated depreciation on these assets. Most large cifies, on the other hand, have taken on the responsibility to provide and maintain these infrastructure assets. It is anUcipated that the project will be completed in four phases. Phase I includes the planning and design phase, Phase II, the implementation phase, Phase III, the restatement of the 2001 CAFR, and Phase IV, the prepazation of the 2002 CAFR using the new reporting methodology. This proposed schedule is tentative and may be adjusted after discussions with the consultants. We will ha�e to consider the consultanYs projecUtask time lines which aze required to be provided in accordance with the RFP. o �- SvY The following are estimated time lines for specific tasks: Request for Proposals Mailed Deadline for VJritten Questions from Consultants Responses to Questions Mailed Deadline for Proposals Interviews With Consuitants (Presentations) Deadline for Consultant Selection Contract Execution Project Commences Phase I- Planning and Design Phase II - Implementazion Phase III - Restate 2001 CAFR Phase IV - Use New Reporting Methodology For 2002 CAFR Project Completion January 29, 2001 February 20, 2001 February 27, 2001 Mazch 21, 2001 April 30 - May 8, 2001 June 15, 2001 June 20, 2001 July 1- September 30, 2001 October 1- December 31, 2001 July 1- December 31, 2002 January 1- June 30, 2003 June 30, 2003 Attached is a council resolution amending the 2001 General Fund and Special Funds' budgets in order to implement GASB Statement No. 34. Cordially, / � ' �i �, ��l//! ! . Peter Hames cc: Mayor Norm Coleman Accounting Improvement Committee Deparhnentand Office Directors G:\USers\Splichal\ W PFILES\Counci105312001.wpd ORIGINA� Presented By: E -- t� Referred To: RESOLUTION OF SAINT PAUL, MINNESOTA Council Fife # O \ � S4� Green Sheet# 113462 �S Committee: Date z W HEREAS, in June 1999, the Govemment Accounting Standards Board (GASB) issued Statement No. 34 s which estahlished a new framework for financial reports of state and local govemments, and s W HEREAS, in the State Auditors Management and Compliance Report fos fiscai year ended December 31, s 1999, the auditors highlighted some of the significant changes required by GASB Statement No. 34, which � put the city's management on notice that resources would be needed to implement this accounting s pronouncement, and io WHEREAS, the requirements of GASB Statement No. 34, Basic Financial Statements - and Management's ii Discussion and Analysis - for State and Local Governments, are effective for the city's December 31, 2002 i2 Comprehensive Annual Financial Report (CAFR), and 73 ,a W HEREAS, currently the financial reports provide information about funds and account groups, and ie is W HEREAS, the new model under GASB Statement No. 34, the fund-based financial reports are to be n complemented by a set of governmentwide financial statements that, for the first time, present the government ia as a single, unified entity comparable in many ways to a consolidated, private-sector business ,s enterprise, and zo zi W HEREAS, the city`s Accounting Improvement Committee (AIC) wrote a request for proposai (RFP) zz seeking responses from properly licensed certified public accounting firms to study our current zs practices, make recommendations for projects that must be completed, and assist in the implementation za of the project to assure full compliance with GASB Statement No. 34 for the 2002 financial statements, zs and zs z� WHEREAS, if the requirements of GASB Statement No. 34 are not met, the city would receive an za adverse auditor's opinion which indicates that the city's financial statements do not fairly present the zs city's financial position and results of operations in conformance with generally accepted accou�ting so principles (GAAP), and 37 �z W HEREAS, an adverse opinion could affect the city's bond raiing and result in higher bond interest costs, 33 and 34 35 W HEREAS, four certified public accounting firms have submitted proposals in response to the RFP, 36 and 37 sa W HEREAS, AIC staff reviewed the proposals and interviewed two firms whose proposals aligned up 39 best with the intent of the RFP, and 40 ai W HEREAS, upon meeting with the two firms, the estimated cost of the project by the firms is $600,000, az and � aa W NEREAS, the Mayor, pursuant to Seetion 10.07.1 of the City Charter, certifies that there are funds of as $541,908 available for appropriation in excess of those estimated in the 2001 budget, and when as added to the funding of $36,484 from the Regional Water Services, the city's operating budgets will a� be changed in total by $578,392, and aa as THEREFORE BE IT RESOLVED, that the Council of the City of Saint Paul approves these changes so and amends the city's operating budget, in the following manner: si sz Page 1 of 4 53 Council File # O�— Sq� Green Sheet# 113462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To; Committee: Date sa ss Current Amended ss Bu t n e Budaet s� sa General Fund ss Financing Plan so s� 001 - 00000 - 9830 Use of Fund Balance 5,857,799 354,161 6,211,960 sz 001 - 00000 - 7302 TranfrfrEnterpriseFd 0 92,142 92,142 ss 001 - 00000 - 7303 Tranfr fr internal Srvc Fd 2,500 5,313 7,813 sa 001 - 00000 - 7305 Tranfr fr Spec+al Rev Fd 0 126,776 126,776 ss All Other Financing 161 854 559 4 161,$�4 �,Q ss s� Total General Fund Spending 167,714,858 578,392 168.293,250 sa ss Generei Fund �o Spending Plan 7� 7z Finan�al Service� �s 001 - 00125 - 0219 Professional Services 0 600,000 600,000 �a �s Public Libraries �s 001 - 03401 - 0275 Off Equip Mtce Contract 20,200 (12,191) 8,009 n za Parks & Recreation 7s 0�1 - �3100 - 0211 Fees - Architects 9,674 (9,417) 257 eo ai All Other Spending 167 684,984 Q 167 684.984 az ss Total General Fund Spending 167,714,858 578,392 168,293,250 ea 85 as Special Funds s� as Planning and Economic Development - PED Operations Fund as Financing Plan so si 126 - 36075 - 9830 Use of Fund Balance 0 64,672 64,672 qz All Financing Sources 8,709 86g Q 8.709.868 93 sa Total Fund 126 Financing 8,709,868 64,672 8,774,540 ss ss s� Planning and Economic Development - PED Operations Fund se Spending Plan ss ioo 126 - 36075 - Q557 Transfer to General Fund 0 64,672 64,672 ioi All Other Spending $ 709•868 Q $,7p9.g68 ,oz ios Total Fund 126 Spending 8.709.868 64,672 8,774,540 i oa ios Page 2 of 4 ,os Council File # O �-S� Green Sheet# 173462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To: Committee: Date im ios Public Works - Sewer Utility Current Amended ioe Financing Plan Budaet h n Budaet iia iii 260 - 22207 - 9925 Use of Retained Earnings 0 55,658 55,658 n2 Ali Financing Sources 44.466.707 Q 44 466 707 173 iia Total Fund 260 Financing 44,466.707 55.658 44,522.365 iis i�s Public Works - Sewer Utility in Spending Plan 178 iis 260 - 22207 - 0557 Transferto General Fund 1,143 55,655 56,801 �2o All Other Spending 44 465 564 Q 44 465 564 121 �zz Total Fund 260 Spending 44,466 707 55,658 44,522,365 123 iza Public Works - Street Repair and Cleaning ize Financing Plan izs i2� 225 - 42310 - 9930 Use of Fund Balance 102,416 62,104 164,520 ize All Financing Sources 17.707 048 Q 17 707 048 izs iso Total Fund 225 Financing 17,809 464 62,104 17,871,568 131 isz Public Works - Street Repair and Cleaning ia� Spending Plan i� ias 225 - 42310 - 0557 Transferto Generai Fund 75,035 62,104 137,139 �ss Ali Other Spending 17 734.429 Q 17 734 429 137 ,sa Total Fund 225 Spending 17,809 464 62,104 17,871.568 139 iao Public Works -Traffic, Signal, & Lighting iai Financing Plan i a2 ias 240 - 12005 - 9925 Use of Retained Eamings 0 1,771 1,771 iaa 240 - 12006 - 9925 Use of Retained Earnings 243,455 1,771 245,226 ,as 240 - 12007 - 9925 Use of Retained Earnings 218,956 1,771 220,727 ias All Financing Sources 7 7 4 7 Q Z,579 437 i a� ,na Total Fund 240 Financing 8.041,848 5,313 8.047.161 i as iso Public Works -Traffic, Signal, & Lighiing �si Spending Plan , sz 153 240 - 12005 - 0557 Transfer to General Fund 2,836 1,771 4,607 +sa 240 - 12006 - 0557 TransfertoGeneralFund 0 1,771 1,771 ,as 240 - 12007 - 0557 TransfertoGeneralFund 1,143 1,771 2,914 +ss All Other Spending $,93I,_$f $ 4 � Q37,869 157 isa Total Fund 240 Spending 8,041,848 5,313 8.047,161 �ss Page 3 of 4 Council File # 0 � • $'�' Green Sheet# 773462 RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented By: Referred To: Committee: Date iso tis, Gurrent Amended isz B et h e Bu t 163 764 165 iss Regional Water Services - Water lftility Fund is� Financing Plan i ss iss Ali Financing Sources 34,730,785 0 34,730,785 no ni Regional Water Services - Water Utility Fund i�z Spending Plan 173 na 850 - 28938 - 0219 Professional Services 35,000 (15,484) 19,516 ns 850 - 28131 - 0216 Fees - Acctg & Auditing 21,000 (21,000) 0 ns 850 - 28000 - 0557 Transfer to General Fund 0 36,484 36,484 m All Other Spending 34 674 785 4 34.674JS5 ne i�s Total Fund 850 Spending 34.730,785 0 34,730,785 780 181 182 183 184 185 186 187 788 189 790 isi Page 4 of 4 Requested by Department of: BY� `� ��_ ?� �'--��-° � � Approved by Mayor: Date �j �11.Q a� �/ By: e o •: - f : i i� /, 1��L �� I � Approval Recommended by FSO - Director: By: �..�.��, �� Form ��d by City Attorney: By: � Approved by ayor for Submis ion to Council: BY� � "A J"f'N" �i�� FinancialServices (Q:ffiM1arM�FSO\ GASBX[G .WK6) Adopted by Council: Date 7 aa o Adoption Certified by Council Secretary: ntrae�nmarro�c�omaca DATE/N111ATID p \ �S�' officeofF�nanciatservices 5-30-01 GREEN SHEET NO. 113462 �� COMACTPASOC�&PH�NE O �BMIMEM�RECRIR O QlY�DUNCrt. GeorgeSplichal 266-8819 ��„ Q cararroxr�r� 0 crn Q MUSTBEONCOUNfA.AGFNpABY(DA]'� � OI FINANCIAI.SERVIC6DIA `" O FW.SE4VICFSOFF/A�(,Tf. �3 iuwYOA(ORASSLSTANt) a5 CFIgFACCOUNfANf TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACRON REQUfS"1'm Approval of Council Resolution to amend [he financing and spending plans in the 2001 budget for the establishment of a budget to usist in the implementation of the requirements of the Govemment Accounting Standards Board (GASB) Statement Number 34. xECOnv.�ia�wnons: a�.o.wcn>mxy�xcW PERSONAL SERVICE CONTRACPS MUSf ANSWER THE FOLLOWING Qi7ESTIONS: zLwrvwG mtw.uSSloc+ I. Has tlils peisodCvm ever worked under a contract for this depaitment? _cmCOt.�nrr� YES NO _CNll.SERNCECOtM9SSI0N 2. Hac tbis petson/fixm werbeen a city employee? _ YES NO 3. Dces this peison/6impossess a skill not nmmally possessed by any curtent city employee? YES NO 4. Is this person / fiml a tazgeted veudor? YES NO (Esplain all yes answers on separate sheet and attach to green shee4) IMTfATING PROB[.EM. LSSVE, OPPORTUNI'IY (0.30. What �4 �f+�. �Y): GASB established a new framework for financial reporting in order that the city's financial statements aze presented as a single, unified enflty compazable in many ways [o a consolidated, priva[�sector business. Also required by GASB Statement No. 34 is presenting the city's capital infrastructure at cost and depreciating all of the infrastructure as part of consolidated financial statements. GASB sets the govemment accounting standazds that must be met for azty govemment agency [o meet generally accepted accounting s[andards (GAAP). Rating agencies will be ]ooldag for coaformance with the GASB Statement No. 34 requiremenYS. The cosT allocation of this project is based on city depar[menPs shaze of the 2001 Capital Improvement Budget. APVANTACFS IF APPROVED. The city wID be in conformance with genexally accepYed accounting principles (GAAP). Users oF the Comprehensive Aanual Financial Report (CAPR) wIll be able to rely on the accuracy of the financial statements as to [he city's financial posi6on and condiGOn. The city will receive the needed assistance in evaluating [he city's capital mfrastructure (streets, sidewalks, curbs, lighring systems, etc.). OISADVAMAGES&APPROVE�: VW�� R6S�GlFb1� �VCY{ri� None. JUN 0 ",.� 2001 �ISADVANlAGES OF NOTAPPROVID: \ � The city's fmancial statements would receive an adverse auditors opinion which indicates Yhat tUe ciry's financial sYatements do not fairly present the ciry's financial position and results of operations in conformance wi[h generally accepted accounting principles. The city's credit nting could be adversely affected which could result in higher interest costs for future borrowings. TOTALAMOUNTOFTRANSACTfON_� S7H�392 COST/ItEVENUEBUDGETEO(CIACLEONE) YES NO .,�,��so,a�E General and Special Funds w�rv�Tr��a various FWANCW.MFOxMAT10N: (LRR1✓P� v Financial5ervices (G:laM1areNFSW GI�S6#3i .WK6) Office of The Mayor Office of Financial Services City of Saint Paul Norm Coleman, Mayor May 31, 2001 Council President Dan Bostrom and City Councilmembers 310 City Hall 15 West Kellogg Boulevard Saint Paul, MN 55102 Aeaz Councilmembers: a�-sqr Peter Hames, DireMOr I60 Ciry Ha11 IS West%Z[ogg Bou[evmd Saint Pau1, Minnesota 55102-1631 Telephane: (65I) 266-8800 Farsimile: (651) 266-854I The purpose of this memorandum is to share with you our plan for meeting the reporting requirements of GASB Statement No. 34. The Governmental Accounting Standards Board (GASB) of the Financial Accounting Foundation sets reporting standazds for the prepazation of financial reports for state and local governments. In June 1999, the Board issued Statement No. 34 which established a new framework for financial reports of state and local governments. This new framework, or financial reporting model, represents the biggest single change in the history of governmental accounting and financial reporting. The requirements of GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, aze effective for the city's December 31, 2002 Comprehensive Annual Financial Report (CAFR). If the requirements of GASB Statement No. 34 aze not met, the city would receive an adverse auditor's opinion which indicates that the city's financial statements do not present fairly the city's financial position and results of operations in conformance with generally accepted accounting principles (GAAP). The financial statements would, in effect, be unreliable for the users of these statements. This could affect the city's bond rating and result in higher bond interest costs. In addition, an adverse opinion would result in the loss of the Government Finance Officers Association's (GFOA) Certificate of Achievement for Excellence in Financial Reporting which we have received for the last twenty-three consecutive yeazs. The Certificate of Achievement is a prestigious national awazd recognizing conformance with the highest standazds for preparation of state and local government fmancial reports. In the State Auditors Management and Compiiance Report for fiscal yeaz ended December 31, 1999, the auditors highlighted some of the significant changes required by GASB Statement No. 34. This report called to the attention of city management the fact that unplementing this accounting pronouncement will require a significant inveshnent of city resources. Specifically identified were costs for consultants needed to complete an all-inclusive review of the standazds, establishment of an overall implementation plan and time frame, flowcharting the process, conducting surveys, and prioritizing tasks. o�-sqr Annual governmental financial reports currently provide information about funds and account groups. Most funds aze established by the goveming body to show restrictions on the planned use of resources or to measure, in the short term, the revenues and eapenditures from certain activities. Statement No. 34 requires govemments to continue to present financial information on funds. VJith the new model, however, these fund-based presentations aze complemented by a set of governmentwide financial statements that, for the fust time, present the govemment as a single, unified entity comparable in many ways to a consolidated, private-sector business enterprise. The city's Accounting Improvement Committee (AIC) has established a subcommittee to write a request for proposal (RFP) seeking responses from properly licensed certified public accounting firms to assist city staff with the implementation of GASB Statement No. 34. It is our iYtent to contract with a qualified firm to study our current practices, make recommendations for projects that must be completed, and assist in the implementation of the project to assure full compliance with GASB Statement No. 34 for our 2002 financial statements. The RFP development process is in its fmal stage and is scheduled to be completed by January 15, 2001. The AIC decided to issue an RFP for this project for several reasons. Because GASB Statement No. 34 includes numerous accoun6ng reporting changes, it was determined that, given the city department accountants' current workload, it would be impractical to complete this project with our current resources without outside technical assistance. In addition, one of the largest requirements of GASB Statement No. 34 deals with the reporting of infrastructure assets in the governmentwide financial statements. Currently, infrastruchue assets such as streets, roads, curbs and gutters, sidewalks, and lighting systems aze not required to be reported in the city's financial statements. However, GA5B Statement No. 34 will require the city to report these assets at tustorical cost with related accumulated depreciation. This is a major task and the AIC decided the city would need outside technical assistance to meet this requirement. It should be noted that, generally, sma11 cities and counties in large metropolitan azeas do not acquire a large amount of these type of infrastnxcture assets and, therefore, do not face a significant challenge of determining the historical cost and accumulated depreciation on these assets. Most large cifies, on the other hand, have taken on the responsibility to provide and maintain these infrastructure assets. It is anUcipated that the project will be completed in four phases. Phase I includes the planning and design phase, Phase II, the implementation phase, Phase III, the restatement of the 2001 CAFR, and Phase IV, the prepazation of the 2002 CAFR using the new reporting methodology. This proposed schedule is tentative and may be adjusted after discussions with the consultants. We will ha�e to consider the consultanYs projecUtask time lines which aze required to be provided in accordance with the RFP. o �- SvY The following are estimated time lines for specific tasks: Request for Proposals Mailed Deadline for VJritten Questions from Consultants Responses to Questions Mailed Deadline for Proposals Interviews With Consuitants (Presentations) Deadline for Consultant Selection Contract Execution Project Commences Phase I- Planning and Design Phase II - Implementazion Phase III - Restate 2001 CAFR Phase IV - Use New Reporting Methodology For 2002 CAFR Project Completion January 29, 2001 February 20, 2001 February 27, 2001 Mazch 21, 2001 April 30 - May 8, 2001 June 15, 2001 June 20, 2001 July 1- September 30, 2001 October 1- December 31, 2001 July 1- December 31, 2002 January 1- June 30, 2003 June 30, 2003 Attached is a council resolution amending the 2001 General Fund and Special Funds' budgets in order to implement GASB Statement No. 34. Cordially, / � ' �i �, ��l//! ! . Peter Hames cc: Mayor Norm Coleman Accounting Improvement Committee Deparhnentand Office Directors G:\USers\Splichal\ W PFILES\Counci105312001.wpd