HomeMy Public PortalAbout14-8765 Government Accounting Standards Board Sponsored by: City Manager
RESOLUTION NO. 14-8765
A RESOLUTION OF THE CITY COMMISSION OF THE CITY
OF OPA-LOCKA, AUTHORIZING THE CITY MANAGER TO
ENTER INTO AN AGREEMENT WITH FLORIDA LEAGUE OF
CITIES,INC.,FOR THE PREPARATION OF THE ACTUARIAL
CALCULATIONS REQUIRED BY THE GOVERNMENT
ACCOUNTING STANDARDS BOARD (GASB), STATEMENT
NO.45 (GASB 45),FOR FISCAL YEAR 2014,PAYABLE FROM
ACCOUNT NUMBER 17-513312. A BUDGETED ITEM;
PROVIDING FOR INCORPORATION OF RECITALS;
PROVIDING FOR AN EFFECTIVE DATE
WHEREAS,the Florida League of Cities,Inc.,("FLOC")has been requested by the City of
Opa-locka to provide the actuarial calculations,required by Governmental Accounting Standards
Board Statement No. 45 ("GASB 45"); and
WHEREAS,Statement 45 of the Government Accounting Standards Board("GASB")will
report annual other post-employment benefits ("OPEB") cost and unfunded actuarial accrued
liabilities for past service costs,which will improve accountability and provide a better foundation
for informed policy decisions about the level and types of benefits provided,and potential methods
of financing employees benefits; and
WHEREAS, the City of Opa-locka has approximately 188 active employees who
potentially may become eligible for post-employment benefits; and
WHEREAS,the City recommends the use of an actuary to prepare the required reports that
will enable the City to calculate the correct amount of accrued post employment benefits for the
past and current fiscal period; and
WHEREAS,the City Commission of the City of Opa-locka desires to authorize the City
Manager to enter into an agreement with Florida League of Cities, Inc., for the preparation of the
actuarial calculations required by the GASB, Statement No. 45.
Resolution No. 14-8765
NOW,THEREFORE,BE IT DULY RESOLVED BY THE CITY COMMISSION OF
THE CITY OF OPA-LOCKA:
Section 1. The recitals to the preamble are hereby incorporated by reference.
Section 2. The City Commission of the City of Opa-locka authorizes the City Manager to
enter into an agreement with Florida League of Cities, Inc., for the preparation of the actuarial
calculations required by the GASB, Statement No. 45, for fiscal year 2014, in an amount not to
exceed $6,000,payable from account number 17-513312, a budgeted item.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED this 26th day of Febru::►, 2014/
J
/ MY,' • TAYLOR
VI YOR
Attest:
r:)10.k.)----
J el;nna Flores
City Clerk
Approved as o fo I and le.al •fficiency:
ti
Jos", S.`.eller, E '4.
G r! EN I'OON MARDER, PA
C y Attorney
Moved by: COMMISSIONER HOLMES
Seconded by: COMMISSIONER JOHNSON
Commission Vote: 5-0
Commissioner Holmes: YES
Commissioner Johnson: YES
Commissioner Santiago: YES
Vice-Mayor Kelley: YES
Mayor Taylor: YES
p-OCK
O
City of Opa-Locka
Agenda Cover Memo
Commission Meeting 2/26/2014 Item Type:
Date: X
(EnterXin box)
Fiscal Impact: - x - - Ordinance Reading:
(EnterXin box) (EnterXin box)
X I... Public Hearing: ' � =
(EnterXin box) X X
Funding Source: (Enter Fund&Dept) Advertising Requirement:
17-513312 (EnterXin box) X
ITEM BUDGETED:
YES X_
NO
Contract/P.O.Required: RFP/RFQ/Bid#:
(EnterXin box) X N/A
Strategic Plan Related Strategic Plan Priority Area: Strategic Plan Obj./Strategy: Out the
(Enter X in box) }{ specific objective/strategy this item will address)
Enhance Organizational 0
Bus.&Economic Dev 0
Public Safety El
Quality of Education El
Qual.of Life&City Image El
Communcation 0
Sponsor Name Department:
Kelvin L. Baker City Manager
A resolution of the City of Opa-locka, Florida authorizing the City Manager to enter into and execute an
agreement with Florida League of Cities, Inc., for the preparation of the actuarial calculations required by the
Government Accounting Standards Board (GASB), Statement No.45 (GASB 45) for Fiscal Year 2014. This is a
budgeted item.
Staff Summary:
Staff recommends approval.
Agenda Cover—Commission Meeting 2/26/2014
Page 2
• Copy of city's audit findings regarding OPEB
• Letter from Florida League of Cities, Inc. (dated February 03, 2014)outlining fee and scope of work
iorKa
Memorandum
TO: Mayor Myra L. Taylor
Vice Mayor Joseph L.Kelley
Commissioner Timot y Holme
Commissioner Doroth, John •
Commissioner Luis B. San • �o
FROM: Kelvin L. Baker, Sr., City Mana:•
DATE: February 18, 2014
RE: Actuarial Services—Preparation of Other Post Employment Benefits(OPEB)
Fiscal Year 2014
Request: A resolution of the City of Opa-locka, Florida authorizing the City Manager to
enter into and execute an agreement with Florida League of Cities, Inc., for the
preparation of the actuarial calculations required by the Government Accounting
Standards Board (GASB), Statement No.45 (GASB 45) for Fiscal Year 2014.
This is a budgeted item.
Description: Based on the city's audit findings, Other Post Employment Benefits (OPEB) for
benefits such as health care is required to be accounted for and accrued as it is
earned by employees during their employment.
Account Number: 17-513312
Financial Impact: Fixed retainer fee of$6,000.00.A budgeted item.
Implementation Time Line: Immediately
Legislative History: N/A
Analysis: N/A
Recommendation(s): Staff recommends approval.
Attachments: Copy of auditors' findings,and letter dated February 03,2014 from Florida
League of Cities, Inc. outlining fee and scope of work.
Prepared by: Susan Gooding-Liburd, Finance Director.
End of Memorandum
1
opN.�w.GUE Of r'rt
W e A
FLORIDA LEAGUE OF CITIES, INC.
301 South Bronough Street, Suite 300 • Post Office Box 1757 • Tallahassee, FL 32302-1757
(850) 222-9684 • Fax (850) 222-3806 • Web site:www.flcities.com
February 3, 2014
Susan Gooding-Liburd
City of Opalocka
Re: Preparation of GASB 45 Disclosures for the City of Opalocka
Dear Ms. Gooding-Liburd:
Pursuant to your request, I have set forth below our fee to provide the actuarial calculations required by
Governmental Accounting Standards Board Statement No. 45 (GASB 45), along with a detailed listing of the
services covered by the fee.
It is my understanding that the City currently: (i) has approximately 188 active employees who potentially
may become eligible for post-employment benefits; (ii) has approximately 0 individuals who are receiving
post-employment healthcare coverage; and (iii) provides fully-insured post-employment healthcare benefits.
Based on our email conversation and my understanding of the number of employees and retirees entitled to
post-employment benefits, as well as the type of post-employment benefits currently offered by the City of
Opalocka, I have prepared the following fee quotation.
Our fixed retainer fee will be $6,000.00 for the following services:
1. Preparation of an annual actuarial valuation report as of October 1, 2013 which will be used to develop the
GASB 45 liabilities and expense for the fiscal years ending September 30, 2013 and September 30, 2014,
complete with all necessary calculations, information, and disclosures as required by GASB 45 and other
applicable actuarial professional standards, including the following:
a. A summary of current plan provisions;
b. A summary of all assumptions and methods applied in developing the plan expense and liabilities;
c. Liabilities and expenses by employee group based on covered medical benefits;
d. Liabilities by active, deferred vested, retiree, and beneficiary status; and
e. A projection of the cash flows to provide a forward-looking estimate of the financial impact to the City
of Opalocka of retiree health care costs, liabilities, and contributions.
2. Up to 15 bound copies of the final valuation report prepared as described in item 1.
3. Miscellaneous telephone calls between our actuary, Charles Carr at Southern Actuarial Services and any
City employees or other professionals connected with the cited work, including conference telephone calls
as needed to discuss the assumptions used in the calculations and to explain the results of the valuation to
City officials.
The report will be provided approximately 12 weeks from the date on which we receive all necessary
information, including but not limited to employee and retiree data, claims experience (if applicable), retiree
premiums, City contributions and/or premiums, and other information set forth in our standard data request
letter.
In addition, if you would like for the actuary to attend a meeting in person to discuss the results of the
valuation, the fee will be $2,500.00. The cited meeting attendance fee includes all associated travel
expenses. The $2,500.00 fee is in addition to the fixed retainer fee of$6,000.00.
If you have any questions concerning the above, please do not hesitate to call me.
If you agree to this proposal, please have this signed and dated by the appropriate official and send a copy to
me.
Signature Title
Printed Name Date
Sincerely,
Vry E.. 16,0771y
Jeff Blomeley
Investment and Retirement Services Manager
Florida League of Cities, Inc.
P.O. Box 1757
Tallahassee, FL 32302
800-616-1513 x 3614
CITY OF OPA LOCKA, FLORIDA
Summary Schedule of Findings and Questioned Costs
For the Year Ended September 30,2012
SECTION III—FINANCIAL STATEMENT FINDINGS(Continued)
Control Deficiencies
2012-02-Material Weakness-Interim Reporting
Effect
Without proper interim financial information, management may not be able to make prudent
financial decisions or plans.
Recommendation
We recommend that after the proper reconciliation procedures have been adopted as noted in finding
2012-02, the financial reports be prepared and made available for management's meetings and
discussions on an interim basis.
View of Responsible Officials and Planned Corrective Actions
Management agrees with this recommendation and will commence issuing monthly financial
statements to the commissioners.
2012-03-Material Weakness-Other Post Employment Benefits(OPEB)
Condition
Other post employment benefits(OPEB) for benefits such as health care, is required to be accounted
for and accrued as it is earned by employees during their employment.
Criteria
In order to comply with generally accepting accounting principles, benefits that apply to the post
employment of employees must be accrued in order to match the expense to the fiscal year in which
it is earned..
Cause
OPEB is not being accrued by the City.
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CITY OF OPA LOCKA,FLORIDA
Summary Schedule of Findings and Questioned Costs -
For the Year Ended September 30,2012
SECTION III—FINANCIAL STATEMENT FINDINGS(Continued)
Control Deficiencies
Effect
The result of OPEB not being properly accrued will reflect in understated liabilities in the financial
statements and in any interim reports used for management discussion purposes.
Recommendation
We recommend the City engage an actuary to prepare the required report that will enable the City to
accrue for the correct amount of post employment benefits for both the past fiscal periods and the
current fiscal period. That amount should then be recorded as both governmental long term debt for
the total of those funds affected and as business type long term debt for the funds reported as such.
View of Responsible Officials and Planned Corrective Actions
Management concurs and will solicit for actuarial services to prepare this report going forward.
2012-04-Significant Deficiency-Account Reconciliations
Condition
We noted during the course of the audit that many of the financial statement accounts which include
due to/from other funds, were not properly reconciled to reflect the appropriate balance as of year
end.
Criteria
In order to make the financial reports generated by the accounting system as meaningful as possible,
the City should reconcile the general ledger accounts on a monthly basis. A benefit of monthly
reconciliations is that errors do not accumulate but can be identified and attributed to a particular
period,which makes it easier to perform future reconciliations.
Cause
Financial statement accounts are not being reconciled in a timely manner.
SECTION III—FINANCIAL STATEMENT FINDINGS(Continued)
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