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05-26-20 Regular Commission Meeting Adopted minutesMINUTES Regular City Commission Meeting Tuesday, May 26, 2020 - 6:30 PM via Videoconference INVOCATION AND PLEDGE OF ALLEGIANCE Commissioner Anderson led the invocation. CALL TO ORDER: Mayor Glasser called the meeting to order at 6:30 PM. City Clerk Bartle called the roll: ATTENDANCE: Present: Also Present: Ellen Glasser, Mayor - Seat 1 Cindy Anderson, Commissioner - Seat 2 (District 1308) Blythe Waters, Commissioner - Seat 3 (District 1307) — arrived at 6:35p.m. Candace Kelly, Commissioner - Seat 4 (District 1306) Brittany Norris, Mayor Pro Tem / Commissioner - Seat 5 (District 1312) Shane Corbin, City Manager (CM) Brenna Durden, City Attorney (CA) Donna Bartle, City Clerk (CC) Kevin Hogencamp, Deputy City Manager (DCM) Lori Diaz, Deputy City Clerk Pursuant to Governor DeSantis' Executive Order and COAB Emergency Order this meeting will be held via videoconference. 1 APPROVAL OF MINUTES 1A. Approve minutes of the Commission Workshop on January 27, 2020. 1B. Approve minutes of the Special Electronic City Commission Meeting on March 31, 2020. Commissioner Waters arrived at 6:35 PM) Mayor Glasser asked if there were any corrections or changes needed. There were no corrections to the minutes. Mayor Glasser stated the minutes stand as submitted. 2 COURTESY OF FLOOR TO VISITORS PUBLIC COMMENT Mayor Glasser asked if there were any speakers who wished to speak. There were none. Mayor Glasser asked if there were any written comments. There were none. Regular City Commission May 26, 2020 Mayor Glasser closed Courtesy of the Floor. 3 CITY MANAGER REPORTS 3A. City Manager's Report Seminole Road project is underway. Russell Park basketball court has been completed. 12th Street Dune walkover has been completed. Selva Marina Drive initial treatment for odor control to begin next week. Summer camp will proceed with limited number of students. First come first serve. 18th Street project continues will be coming back to Commission for considerations. We plan to have the next Regular Commission meeting, June 8, 2020 in person. Interim Chief Vic Gualillo reported on Memorial Day weekend activity. He reported the biggest concern was parking at the beach. He spoke about a sand bar which has developed about 100 yards off our beach, most notably in front of One Ocean. He reported three assists, two of which required towed in by Sea Doo due to swimming out to the sand bar. Will continue to monitor the situation. Discussion and questions ensued regarding summer camp. It was suggested to hire additional teens/counselors for the ability to provide the essential service without limiting attendance. CM Corbin to look into the possibility of doing that. 3B. Accept the 90 -Day Calendar There was CONSENSUS to accept the 90 -Day calendar. 4 UNFINISHED BUSINESS FROM PREVIOUS MEETINGS None. 5 REPORTS AND/OR REQUESTS FROM CITY COMMISSIONERS Commissioner Anderson spoke regarding the Memorial Day ceremony and the bike safety program. Commissioner Kelly spoke regarding the Memorial Day ceremony, face masks and bike volume. Commissioner Norris spoke regarding the Memorial Day ceremony. Mayor Glasser spoke regarding the Memorial Day ceremony, meetings with COAB businesses, and face masks. She reported ten positive COVID cases in COAB. 6 CONSENT AGENDA Mayor Glasser read the Consent Agenda. Regular City Commission May 26, 2020 6A. Accept the water and sewer infrastructure at Preserve at Atlantic Beach subdivision for ownership and maintenance by the City of Atlantic Beach. 6B. Acknowledge receipt of the Monthly Finance Report for April 2020. ACTION: To pull Item 6A and Item 6B for discussion. Commissioner Kelly pulled Item 6A for discussion on impacts to the General Fund and Expenditures. CM Corbin and Finance Director (FD) Melissa Burns report the largest anticipated impacts will be to our intergovernmental revenues. It is too soon for a detailed analysis. Commissioner Anderson inquired about impacts to the Pension Funds. FD Burns reported, if needed, adjustments to contributions would not happen until next Fiscal Year. The investments are rebounding. CM Corbin to provide an example of a Fund Balance Policy and a report on the recent Actuarial Reports on the next meeting's agenda. Commissioner Kelly pulled 6B for discussion on the impacts/costs associated with COAB maintaining the water and sewer infrastructure of the development. CM Corbin and City Engineer Steve Swann reported that a system development fee and a component of resident's monthly bill will go towards improvements needed and long term maintenance of the system. MOTION: To approve Consent Agenda Items 6A and 6B as read. Motion: Brittany Norris Second: Blythe Waters Ellen Glasser For Cindy Anderson For Blythe Waters (Seconded By) For Candace Kelly For Brittany Norris (Moved By) For Motion passed S to 0. 7 COMMITTEE REPORTS None. 8 ACTION ON RESOLUTIONS 8A. RESOLUTION NO. 20-18 A RESOLUTION OF THE CITY OF ATLANTIC BEACH, FLORIDA, AUTHORIZING THE CITY TO ENTER INTO THE 2019 JUSTICE ASSISTANCE GRANT PROGRAM Mayor Glasser read the Resolution by title. Interim Police Chief Gualillo provided a summary of the recommendation as detailed Regular City Commission May 26, 2020 in the staff report included in the agenda packet. All questions were answered. MOTION: Approve Resolution No. 20-18 as read by title. Motion: Brittany Norris Second: Candace Kelly Ellen Glasser For Cindy Anderson For Blythe Waters For Candace Kelly (Seconded By) For Brittany Norris (Moved By) For Motion passed 5 to 0. 9 ACTION ON ORDINANCES 9A. ORDINANCE NO. 20-20-156 Introduction and First Reading AN ORDINANCE AMENDING THE OPERATING BUDGET FOR THE CITY OF ATLANTIC BEACH, FLORIDA FOR FISCAL YEAR BEGINNING OCTOBER 1, 2019 AND ENDING SEPTEMBER 30, 2020, AND PROVIDING AN EFFECTIVE DATE. Mayor Glasser read the Ordinance by title. CM Corbin provided a summary of the Ordinance as detailed in the agenda packet. Discussion and questions ensued regarding the extra expenditures for the Police Department, budgeting of Special Pay and improper budgeting by previous Finance Director. There was additional discussion regarding each department being aware that the money is there for what they need and the accuracy of using a previous year's budget amount. MOTION: Approve Ordinance No. 20-20-156 as read. Motion: Candace Kelly Second: Brittany Norris Mayor Glasser suggests a placeholder for this so it will not be overlooked next year. Ellen Glasser For Cindy Anderson For Blythe Waters For Candace Kelly (Moved By) For Brittany Norris (Seconded By) For Motion passed 5 to 0. Regular City Commission May 26, 2020 9B. ORDINANCE NO. 75-20-24 Introduction and First Reading AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, AMENDING CHAPTER 21, TRAFFIC AND MOTOR VEHICLES, ARTICLE II, STOPPING, STANDING AND PARKING ON PUBLIC PROPERTY, SECTION 21-44, METERED PARKING CHARGES; PROVIDING FOR CONFLICT, FOR SEVERABILITY, AND FOR AN EFFECTIVE DATE. Mayor Glasser read the Ordinance by title. CM Corbin provided a brief background and summary of the Ordinance as detailed in the agenda packet. Planning and Community Development Director (PCDD) Amanda Askew presented slides that reviewed results from the May 18, 2020 Commission Workshop regarding the Beaches Town Center Pay for Parking Program. As a result, Ordinance No. 75-20-24 modifies the Pay for Parking Program with the following: Changes parking rates to three (3) free hours of parking for registered residents in COAB. Provides one 15 minute parking space for take-out parking. Memorializes the first thirty (30) minutes free. Discussion and questions ensued regarding the 15 minute parking space, how to park for the three free hours and how to register for the program. For registration go to www.northbeachesparking.com, staff will assist residents with registering if needed. MOTION: To adopt Ordinance No. 75-20-24 as read. Motion: Candace Kelly Second: Cindy Anderson Ellen Glasser For Cindy Anderson (Seconded By) For Blythe Waters For Candace Kelly (Moved By) For Brittany Norris For Motion passed 5 to 0. 10 MISCELLANEOUS BUSINESS 10A. Audit Finding 17-1 Update CM Corbin provided a summary of the staff report as detailed in the agenda packet. FD Burns presented a PowerPoint regarding Audit Finding 17-1 (which is attached hereto and made part of this Official Record as ATTACHMENT A). Mayor Glasser explained Commission to discuss and provide direction to CM Corbin for next steps. Discussion and questions ensued regarding the timeline of the unreconciled amount, Regular City Commission May 26, 2020 forensic audit costs, errors or malfeasance, approaching a former FD for assistance/insight, and whether money is a surplus or a deficit. FD Burns stated it is still yet to be determined and requires further review. There was further discussion for options to close the issue and State requirements. There was CONSENSUS for CM Corbin to proceed with reaching out to our local resources who are knowledgeable about our books between 2014 and 2105 for assistance/insight. CM Corbin to report back to Commission in six (6) weeks. ATTACHMENT A - Update on Audit Finding 17-1 - Timeliness and Accuracy of Bank Reconciliations 11 CITY ATTORNEY/CITY CLERK REPORTS AND/OR REQUESTS CA Durden - Reminded Commission of mandatory Ethics Training. A class is offered on June 18 by the Florida League of Cities. 12 CLOSING COMMENTS BY CITY COMMISSIONERS AND CITY MANAGER Mayor Glasser - Zoom meeting with Beaches Watch on June 4. 13 ADJOURNMENT There being no further discussion, Mayor Glasser declared the meeting adjourned at 8:08 PM. Attest: Donna L. Bartle, City Clerk EIlen Glasser, Mayor BiL4/2o20 Date Approved Regular City Commission May 26, 2020 ATTACHMENT A May 26, 2020 Minutes Update on Audit Finding 17-1 — Timeliness and Accuracy of Bank Reconciliations ATTACHMENT A May 26, 2020 Minutes INDEPENDENT AUDITOR'S REPORT Gray& Purvis omany Auditors Responsibility Express opinions on these financial statements based on our audit. Conduct audit in accordance with Government Auditing Standards issued by the Comptroller General of the United States Plan and perform audit to obtain reasonable assurance about whether financial statements are free from material misstatement ATTACHMENT A May 26, 2020 Minutes The audit results cited 6 separate conditions that need improvement. Area of concern where a condition was found. Condition — Defines the problem and the underlying issue that caused it. Recommendation—Auditors proposed solution to the issue. The City has adopted procedures that resolve 5 of the 6 separate conditions identified. ATTACHMENT A May 26, 2020 Minutes 17-1 Timeliness and Accuracy of Bank Reconciliations Condition—The timely reconciliation of bank accounts is one of the key components of a sound system of internal controls. During the audit we noted that bank reconciliations for September 2017 had not been completed as of December 2017. The bank reconciliation was provided during final fieldwork in February 2018, but we noted errors in the reconciling items. Management made corrections to the September 2017 bank reconciliation, however, there remains a $10,000 unreconciled difference. Effect—Inaccurate or delayed bank reconciliations result in an increased risk that errors or irregularities will go undetected for extended periods of time. Recommendation—We recommend that the City implement procedures to ensure that all bank accounts are reconciled within 20 days of month-end. FY18 Update—At the commencement of the audit, the City had material unreconciled balances in excess of $500,000, which were uncorrected for a significant time period. This also resulted in the delay and completion of the audit. As of September 30, 2019, the City had an unreconciled difference of $105,000. The City will need to continue to investigate this significant variance and determine the source of the difference. ATTACHMENT A May 26, 2020 Minutes Accounting 101: Journal Entries A journal entry is a record of the business transactions in the accounting books of a business. A properly documented journal entry consists of the correct date, amounts to be debited and credited, description of the transaction and a unique reference number. A journal entry is the first step in the accounting cycle. A journal details all financial transactions of a business and makes a note of the accounts that are affected. Since most businesses use a double - entry accounting system, every financial transaction impact at least two accounts, while one account is debited, another account is credited. This means that a journal entry has equal debit and credit amounts. ATTACHMENT A May 26, 2020 Minutes Accounting 101: Journal Entries A journal is a record of transactions listed as they occur that shows the specific accounts affected by the transaction. Used in a double - entry accounting system, journal entries require both a debit and a credit to complete each entry. So, when you buy goods, it increases both the inventory as well as the accounts payable accounts. Journal entries are the foundation for all other financial reports. They provide important information that are used by auditors to analyze how financial transactions impact a business. The journalized entries are then posted to the general ledger. ATTACHMENT A May 26, 2020 Minutes Accounting 101: Journal Entries A journal entry requires the following elements: A header which includes the date of the entry A reference number or a journal entry number that can be used to index and retrieve the journal when required The account number and name. These are recorded in the first column into which the entry is recorded The debit amount is entered in the second column The credit amount is entered in the third column The description of the journal entry in the footer ATTACHMENT A May 26, 2020 Minutes Accounting 101: Journal Entries Example of a journal entry: HTE info Group type (F4) AJ Adjusting joumal Group date 09/30/19 Accounting period 12 Accounting year 2019 Group description RECLASS TO CORRECT ACCOUNT Create document N (Y=Yes: N=No) Count entered 2 Debit amount entered 231.44 Credit amount entered 231.44 Transaction date 09/30/19 Group number 9999 HEALTH/COMMUNICATIONS Page: 1 of 1 Account number Debit Credit 001 - 2005 - 562 41 00 231.44 PUBLIC SAFETY/COMMUNICATONS 001 - 2005 - 521 . 41 - 00 231.44 Batch Count: 2 Control Total 231.44 231.44 Explanation: Reclass communications charges from public safety division to animal control division The total amount entered in the debit column equals the total amount entered in the credit column. ATTACHMENT A May 26, 2020 Minutes Accounting 101: Pooled Cash Pooled cash is maintaining one account at the bank instead of a separate account for each fund. The City of Atlantic Beach currently maintains 26 separate funds the first account in each fund is titled "Assets/Pooled Cash Account". This account tracks the cash that belongs to that fund. ATTACHMENT A May 26, 2020 Minutes Reconciling Process At the end of the year Cash and Investments has to match the sum of the Assets/Pooled Cash Accounts of all funds. At FY18 year end there was a $555,053.56 difference between the Cash/Investments and the total of all Assets/Pooled Cash account of all funds (they have to match). ATTACHMENT A May 26, 2020 Minutes Reconciling Process There were differences in multiple accounts which were investigated and corrected. The differences were caused by journal entries that were either done incorrectly, or duplicated The result of correcting those items was Cash & Investments having $110,043.65 more than it should. ATTACHMENT A May 26, 2020 Minutes Reconciling Process Finance staff has been reviewing journal entries from Fiscal Year 2018 The unreconciled difference is extremely likely to be an incorrect journal entry. Going through the reconciling process, have discovered many posted and reversed journal entries. Could also be related to the AS 400 (also known as green screen) in the way it processes the journal entries. ATTACHMENT A May 26, 2020 Minutes Reconciling Process Very recently, Finance staff noticed something within Green Screen that leads us to believe that it is an incorrect journal entry Staff went back prior to 2015 to determine if this kind of difference had occurred in any other fiscal year. ATTACHMENT A May 26, 2020 Minutes GM200IO2 CITY OF ATLANTIC BEACH 5/18/20 Fiscal year 2014 Account Balance Inquiry 15:17:41 Account number . . : 800-0000-100.00-00 Db/C: 0 Fund 800 POOLED CASH/ I l:titi e:- I ;•f FUND Department 00 Division 00 Activity basic 10 ASSETS Sub activity . 0 INTERNAL CLEARING Element 00 Object 00 Debits Credits Account balance Current .00 .00 Unposted 0 .00 .00 Total .00 .00 F7=Project data FB=Mist inquiry 1C 10 F9=Mist update FlO=Detail trans F11=Account activity F12=Cancel F16=Pending trans F24=More keys This is the account that is currently out of balance. This is from Fiscal Year 2014; Debit have to equal Credits, they do here. ATTACHMENT A May 26, 2020 Minutes 6M200IO2 CITY OF ATLANTIC BEACH Fiscal year 2015 Account Balance Inquiry Account number . . : 800-0000-100.00-00 Db/Cr . . u Fund 800 POOLED CASH/INVESTM FUND Department 00 Division 00 Activity basic . 10 ASSETS Sub activity . . 0 INTERNAL CLEARING Element 00 Object 00 Debits 18/20 15:19:44 Credits Account balance 103,528.07 Current 13,040.80 116,568.86 Unposted 12,000.00 12,000.00 Total 25,040.80 128,568.86 .01 F7=Project data F8=Misc inquiry F9=Misc update FlO=Detail trans F11=Account activity F12=Cancel F16=Pending trans F24=More keys This is a screen shot from Fiscal Year 2015; debits and credits do not match therefore we start looking for the cause ATTACHMENT A May 26, 2020 Minutes GM200IO2 CITY OF ATLANTIC BEACH 5/18/20 Fiscal year 2019 Account Balance Inquiry 15:41:35 Account number . . : 800-L)000-.1. Fund 800 POOLED CASH/INUESTM FUND Department 00 Division 00 Activity basic 10 ASSETS Sub activity . 0 INTERNAL CLEARING Element 00 Object 00 Debits Credits Account balance 114,649.79 Current .00 .00 Unposted 399,128.74 399.128.74 Total 399,128.74 399,128.74 114.649.79 F7=Project data FB=Misc inquiry F9=Misc update FlO=Detail trans F11=Account activity F12=Cancel F16=Pending trans F24=More keys This is a screen shot from Fiscal Year 2019; debits and credits match; still in the audit process ATTACHMENT A May 26, 2020 Minutes Next Steps Involving accounting consultant to assist in working through this new theory Following the trail from Fiscal Year 2015-2018 Could be more than one item Which accounts are affected and how Involve auditor when theory is tested and a proposed correction is determined By September 30, 2020 all possibilities will have been examined ATTACHMENT A May 26, 2020 Minutes After September 30th If the $110,043.65 is still not found Commission can decide to: Write off amount to the General Fund Perform investigation through forensic audit or other means ATTACHMENT A Cityof Atlantic eac "Ctode of Ordinances Sec. 64. - Investigations The city commission, or any committee thereof, the city manager or any advisory board appointed by the city commission for such purpose, shall have power at any time to cause the affairs of any department or the conduct of any officer or employee under their jurisdiction to be investigated; and for such purpose shall have power to compel the attendance of witnesses and the production of books, papers and other evidence; and for that purpose may issue subpoenas which shall be signed by the president or chairman of the body, or by the officer making the investigation, and shall be served by an officer authorized to serve such process. The authority making such investigation shall have power to cause the testimony to be given under oath, such oath to be administered by some officer having authority under the law of the state to administer oaths. Failure to obey such subpoena or to produce books, papers, or other evidence as ordered under the provisions of this section shall constitute a violation of the municipal ordinance and shall be punishable by a fine not to exceed five hundred dollars 500.00) or by imprisonment not to exceed sixty days, or both. Enforcement of any violation of this municipal ordinance shall be by the State Attorney's office. Ord. No. 33-15-19, § 1(Exh. A), 5-11-15)