07-09-2024 (Workshop - Audit Report)HUTCHINSON CITY COUNCIL
REVIEW OF 2023 FINANCIAL REPORT WORKSHOP
MINUTES
TUESDAY, JULY 9, 2024, AT 4:30 PM
CITY CENTER — COUNCIL CHAMBERS
1. Call to Order
Mayor Forcier called the workshop to order at 4:30 p.m. Members present included Dave
Sebesta, Pat May, Tim Burley and Chad Czmowski. Others present were Matt Jaunich, City
Administrator, Andy Reid, Finance Director, and Justin Juergensen, Assistant Finance Director.
REVIEW OF 2023 FINANCIAL REPORT
2. 2023 Financial Report
Abby Schmidt of Abdo (City's auditing firm) introduced herself to the Council and presented the
City's 2023 audited financial report.
Ms. Schmidt explained that the auditing firm completes an audit opinion which includes a testing
of Minnesota legal compliance, internal controls over financial reporting and other law
provisions, regulations, contracts and grant agreements. The audit opinion on the financial
statements is clean with only one finding of having a Uniform Guidance Policy. There was one
instance of noncompliance with OMB Compliance Supplement requirements.
Ms. Schmidt reviewed general fund fund balances. Items reviewed were unrestricted fund
balance, budget and fund balance policy at 40%. The unrestricted fund balance was at 54.9% for
2023. Ms. Schmidt also reviewed the general fund revenues by type, special revenue fund
balances, capital projects fund balances, debt service funds, and debt service. Ms. Schmidt also
reviewed the capital projects fund balances, special revenue fund balances, and debt service
funds. Most of the funds in the special revenue fund balances are restricted. Ms. Schmidt then
reviewed the enterprise funds and reviewed the cash flows from operations and cash balances in
the water fund, sewer fund, refuse fund, composting fund, public utilities commission fund, storm
water fund, and the liquor fund. Ms. Schmidt reminded the group that the purpose/main goal of
the liquor fund is to transfer out to the general fund, which was $550,000 in 2023. All funds have
healthy cash balances. Ms. Schmidt reviewed comparisons of key performance indicators with
other class three cities and other cities in McLeod County related to tax rates, taxes per capita,
long term debt per capita, debt service expenditures as a percentage of current expenditures,
current expenditures per capita, and capital expenditures per capita.
Overall the report shows that the City is fiscally healthy.
Andy Reid, Finance Director, noted that building permit fees came in lower than what was
budgeted in 2023 and the police/fire wages increased. He also noted that the interest revenue in
the 2024 budget is being very conservative.
3. Adjournment
Motion by Czmowski, second by May, to adjourn the workshop at 4:55 p.m. Motion carried
unanimously.