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HomeMy WebLinkAbout2007-06-11AUDIT COMMITTEE MINUTES JUNE 11, 2007 CITY OF KITCHENER The Audit Committee met this date commencing at 4:07 p.m. Present: Mayor C. Zehr and Councillors J. Smola, B. Vrbanovic, J, Gazzola, K. Galloway and G. Lorentz Staff: C. Ladd, Chief Administrative Office P. Houston, General Manager, Financial Services & City Treasurer R. Browning, General Manager, Development & Technical Services & Fire Chief T. Speck, General Manager, Corporate Services A. Pappert, General Manager, Community Services D. Chapman, Director of Financial Planning M. May, Director, Communications/Marketing R. Lebrun, Manager, Financial Planning C. Tasker, Performance Measurement & Internal Auditor R. Gosse, Director of Legislated Services and City Clerk 1. 2006 ANNUAL FINANCIAL REPORT The Committee considered Financial Services Department report FIN-06-074, dated May 24, 2006 [Note: Typographical error in report, the report should be FIN-07-074-1 dated May 24, 2007], concerning the 2006 Annual Financial Report. Copies of the report were circulated this date Mr. D. Chapman gave a presentation highlighting various aspects of the Financial Report. He reviewed the consolidated revenue and current and capital expenditures, noting that tax receivables are continuing to decrease due to an aggressive tax collection policy. Councillor J. Gazzola pointed out that the report includes gas revenues and requested that information be provided with those revenues taken out. Mr. Chapman then reviewed the key financial indicators being: surplus balances; unexpended capital balance; reserves and discretionary reserve funds; debt per capita; and, taxes receivable. He noted that the increase of unexpended capital was due in large part to delays in two large projects. He also noted that the decrease in reserve funds is attributable in part to the anticipated expenditures for the Gaukel Street remediation project. It was noted that in regard to the reserve and the reserve fund benchmarks, the per household amount for the City is close to half of the provincial median and when enquiries were made with the Province, information was provided that many municipalities that received grants had placed those funds in their reserve accounts pending future capital projects. It is expected that the provincial median will be reduced and comparable with the City's. Mr. Chapman provided information on two new reporting standards, PS2700 -Segment Disclosures and PS3150 -Tangible Capital Assets which will be effective in 2008 and 2009 respectively. He advised that the Segment Disclosures report will contain the same level of detail that is currently being reported by municipalities but now all the information will be contained in one statement. With respect to the Tangible Capital Assets report, this will require reporting on capital assets at costs less accumulated depreciation and depreciation expense. He pointed out that this will require a comprehensive inventory and evaluation of all capital assets owned by the City. Mayor C. Zehr advised that there has been information circulated that the new standard may have an impact on taxes. Mr. Chapman pointed out that this may be true but the Province will need to amend the Municipal Act to allow municipalities to show a deficit on the books to account for the reporting of the depreciation. Mr. Tom Mennill, Partner, KPMG, attended to present the Audit findings report for the year ending December 31, 2006. Mr. Mennill provided an overview of the auditing process and highlighted three significant matters: the `works to be invoiced' account; firefighter wage accrual; and emerging and controversial accounting policies. Councillor Gazzola pointed out that smart metering was referred to in the Kitchener-Wilmot Hydro Audit and asked if Hydro was moving towards implementing smart meters. Mayor Zehr advised that smart meters are currently being investigated by K-W Hydro and revenues are being collected for this purpose which must be expended on smart meters. On motion by Councillor J. Smola, It was resolved: "That the 2006 Annual Financial Report of the City of Kitchener be received." AUDIT COMMITTEE MINUTES JUNE 11, 2007 - 4 - CITY OF KITCHENER 2. UPDATE ON REVIEW RECOMMENDATIONS FOR COMMUNICATIONS & MARKETING DIVISION The Committee considered Chief Administrative Office report CAO-07-026 dated June 6, 2007 regarding the Corporate Communications and Marketing Audit Update. Mr. M. May provided background with respect to the Corporate Communications and Marketing Division Audit that was undertaken in 2005. The results of the audit were presented to the Audit Committee in January 2006. Mr. May noted that in the audit report there were 20 recommendations in 6 categories and at that meeting staff was asked to bring back a proposal regarding communication services to Council. Mr. May gave a brief overview of the proposed services to Council shown as Appendix `D' on the report. He then reviewed the 6 different categories for the recommendations: mandate development and role clarification; staff development; media relations; publications and advertisements; council recommended initiatives; and, evaluation of communications and marketing efforts. He advised that to date the Division has responded or taken action on 16 of the 20 recommendations and in the coming months, the Division will continue to work in response to the Audit recommendations. He then reviewed the proposed next steps for the Division adding that one project which has begun is the improvement to the web site. Councillor B. Vrbanovic asked if the web site improvement project will be linked with the 2008 budget process. Mr. May responded that the web site project will be linked with the customer service strategy with the day for implementation of that strategy has not yet been finalized. Several members of the Committee expressed concern with the current web site suggesting that this project be given high priority. On motion by Councillor K. Galloway, It was resolved: "That the proposed communications, marketing and graphic design support services for members of Council as outlined in Appendix `D' of staff report CAO-07-026 be received." 3. 2006 PERFORMANCE MEASUREMENT REPORT Council considered Chief Administrative Officers report CAO-07-030 dated June 11, 2007 regarding Performance Measurement status Update and 2006 Results. Ms. C. Tasker advised that the intent of this report is to give an update of the implementation of the performance measurement program and how this fits into the business planning process and secondly to provide samples of the 2006 Divisional metrics and results. Ms. Tasker advised that 14 Divisions have successfully implemented the Performance Measurement Program, three are in the process of implementing the program and another four will be doing so in the latter half of 2007. Ms. Tasker explained how the performance metrics will play a part in the new business planning process which will roll out to form the basis of the City of Kitchener Corporate Strategic Plan. She added that an annual business plan update will be presented to Council in February or March each year highlighting the status of initiative and performance metrics from the previous year. The intent is to have a comprehensive annual report card to measure the progress and outcomes of the City of Kitchener Corporate Strategic Plan. Ms. Tasker then reviewed a sampling of performance measurements results in order to show how these measurements will be provided in future reports and how they can be used in order to make necessary changes within various divisions. 5. ADJOURNMENT On motion, the meeting adjourned at 5:10 p.m. Randy Gosse Committee Administrator