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Finance Committee Meeting Minutes Wednesday, May 15, 2019

For your consideration, please read the minutes from the Finance Committee Meeting held on Wednesday, May 15, 2019 at 1:30 p.m.

Finance Committee Meeting Minutes 5-15-19 with Attachments

To read the minutes please open or download the pdf from the link above, or you may see more below.

Brunswick-Glynn County Joint Water & Sewer Commission

1703 Gloucester Street, Brunswick, GA 31520

Commission Meeting Room

Wednesday, May 15, 2019 at 1:30 PM 

FINANCE COMMITTEE MINUTES

MEMBERS PRESENT:        

Steve Copeland, Committee Chairman

Donald Elliott, Commissioner

Tripp Stephens, Commissioner

Andrew Burroughs, Interim Executive Director                                  

ALSO PRESENT:                 

Ben Turnipseed, Commissioner

Bob Duncan, Commissioner

Cornell Harvey, Commissioner

John Donaghy, Chief Financial Officer

LaDonnah Roberts, Senior Financial Analyst

Pam Crosby, Director of Procurement

Janice Meridith, Executive Commission Admin.

MEDIA PRESENT:               

Taylor Cooper, The Brunswick News

Pamela Permar-Shierling, The Islander                                

Chairman Copeland called the meeting to order at 1:40 PM.

PUBLIC COMMENT PERIOD

Charlie Lee, Account History

Mr. Charlie Lee made a public comment regarding the history of his account, reasons for previous payment history, cut-off of his JWSC services, and pending litigation.

There being no additional citizens that wished to address the committee, Chairman Copeland closed the Public Comment Period.

APPROVAL

  1. Minutes from April 17, 2019 Finance Committee Meeting

Commissioner Elliott made a motion seconded by Chairman Copeland to approve the minutes from the April 17, 2019 Finance Committee Meeting.  Motion carried 2-0-1.  (Commissioner Stephens was not in the room for the vote.)

2. Appointment of Auditor – J. Donaghy

John Donaghy provided a memo to the committee recommending the appointment of Mauldin & Jenkins to perform that annual audit for the year ending June 30, 2019.  He advised that Mauldin & Jenkins had been awarded the contract at the beginning of 2018 with an initial year plus two additional years after.  Each of the three years was priced at $19,900.  Commissioner Copeland asked about the services having been defined as to what will be done in performing the audit.  Mr. Donaghy advised that they will perform the audit based on their evaluation of JWSC’s internal controls and an assessment of risks involved in the audit and schedule their work to give them reasonable satisfaction that our financial statements are fairly presented in all material respects. Commissioner Copeland said that he would like to see in Mauldin & Jenkin’s schedule of services for the contract that there be some detail on the purpose of the audit and what we want them to look at so they don’t just choose what they want to look at and give us back an audit and we review it.  He stated he would like to see the details of what they are going to look for.  Mr. Donaghy advised that the auditors work for the Board of Commissioners and they could form an audit committee to meet with the auditors and discuss with them the particular areas the Commission would like for them to focus on.  Commissioner Copeland indicated he would like to see the schedule of services that was provided in the RFP, and Mr. Donaghy will provide that for the full Commission to review.  Commissioner Elliott also requested for a copy of the last audit to be provided.

Commissioner Elliott made a motion seconded by Commissioner Copeland to move that the Finance Committee recommend to move this forward to the full Commission. Motion carried 3-0-0.

  1. Banking Resolution Signature Cards – J. Donaghy

John Donaghy advised that with the departure of Mr. Junkin, his name needed to be removed from the bank signature cards as an authorized signatory on the bank accounts.  He requested adding Andrew Burroughs as an authorized signatory for checks requiring two signatures that are $5,000 or over.

Commissioner Elliott made a motion seconded by Commissioner Stephens to move that the Finance Committee of the Brunswick-Glynn County Joint Water and Sewer Commission recommend to the JWSC Commission the approval of the addition of the Acting Executive Director as an authorized signatory on the bank accounts of the JWSC and that the Chairman, Vice-Chairman, Acting Executive Director, Director of Finance and Senior Financial Analyst be authorized to execute the necessary banking resolutions and signature cards with BB&T Bank.  Motion carried 3-0-0.

DISCUSSION

Andrew Burroughs requested to move the discussion on inventory up to be the first item since Pam Crosby was in attendance to present that discussion to the committee.

Commissioner Elliott made a motion seconded by Commissioner Stephens to change the agenda and move the Inventory item number six to be number one on the discussion.  Motion carried 3-0-0. 

  1. Inventory – P. Crosby

Pam Crosby informed the committee that every year the inventory is part of the audit process and preparation for that counts is done.  She explained that the auditor will come in and take a sample of the inventory items and perform some stock count checks.  She recalled from last year there some notes that suggested they may want to look at those inventory policies and procedures, and discrepancies in those items.  Earlier this year, they assigned the inventory responsibility duties at the Systems Pumping & Maintenance location to her.  In preparation for this year’s audit individual unit variances, internal controls on cycle counts, etc. were looked at.  Mrs. Crosby noted that there are some variances seen in the current cycle counts and staff is working through some changes in the process such as segregation of the duties between the staff, and also changes in the receiving policy, etc.  She also advised that at the SP&M location there are over 1,700 items in inventory of which the top 300 items in value represent about 88% of the total dollar value of the inventory.  Staff decided to look at these top 300 items and verify those counts, and on the initial counts it does appear that there could be some significant variances.  It was explained that the variances are not necessarily due to missing inventory, but are more likely due to lack of following proper procedures, documentation and system entries.  Mrs. Crosby then highlighted some of the areas where the controls, procedures and processes will be changed as well as retraining of staff.  As a final note, she did provide that the warehouse on St. Simons contains a much smaller inventory but does appear to be in good shape regarding the inventory counts and controls.

  1. Customer Deposit Refunds – A. Burroughs

Commissioner Stephens requested an update on the status of customer deposit refunds for residential and commercial accounts.  Andrew Burroughs provided that customer deposits are being refunded on residential accounts in good standing with a strong payment history.  Currently JWSC does not have an automated system to handle deposit refunds, so this is a tedious manual process.  Mr. Burroughs also noted that the Ordinances at this time do not allow for commercial account deposit refunds, however the County is in the process of rewriting the Ordinances and this is one of the items that JWSC will request to be changed.  Commissioner Elliott requested that Mr. Burroughs and JWSC staff prepare a list of changes needed in the Ordinances and present it to the Commissioners for review.

  1. Cut-Off Policy – A. Burroughs

Mr. Burroughs advised that the volume of cut-off has significantly lowered.  He referenced two flowcharts.  One that provided the steps of the cut-off process and the second which detailed the proposed late fee waiver for payment arrangements.  He explained the various steps for the committee.  Mr. Burroughs also recalled for the committee that as part of the Rate Resolution, all past due accounts are charged a 1.5% late fee.  He informed the Commissioners that as part of the new Rate Resolution, staff would like to include language that states if a customer is on an active payment plan, they will no longer receive late fees added to their account.  He noted that for the past-due accounts with high balances the late fees can add up to $120 per month or more and this makes it very difficult for customer with high past due balances to pay off the account.  Mr. Burroughs advised that starting July 1, 2019 with the Rate Resolution change regarding no late fees being added, for customers with a substantial balance, and on an active payment plan, and pay their bills for six consecutive months as required by the policy, the accrued late fees that have been added to their bills will be removed from their account.  He provided that this is a means of JWSC helping the customers pay off their accounts, however the customer will still have to pay for all of the actual water used.  The customer must pay their bills as required for six consecutive months and all the late fees that have accrued since the account was last at a zero balance will be removed.  This is a JWSC policy and will not require any changes to Ordinances.  The committee then discussed the need to strictly enforce the Cut-Off Policy for customers who do not pay their bills, the future reduced need for payment arrangements, that past due accounts not on a payment arrangement will incur the 1.5% late fee being added to the account, and the benefit this change to the Rate Resolution will give to customers with high past due balances who are making a good faith effort to pay off their accounts.

  1. Financial Policies – J. Donaghy

John Donaghy provided a draft of the Financial Policies for each of the Commissioners.  He highlighted the recent revisions to the draft.  Mr. Donaghy explained that process mapping will be incorporated and that he has been working closely with Mrs. Crosby on the flow charting for inventory control in putting together what is needed for financial controls, what she is going to need for the physical controls and getting those put together into one flowchart.  Commissioner Elliott noted some details he would like to see added for specificity such as details as to form/type of reports to be sent, timing, functions, descriptions, etc.  He also provided that this should be a living document to be revised as necessary.  The committee will provide their mark-ups and suggestions to Mr. Donaghy for revisions.  Mr. Donaghy will set-up a meeting for the further discussion and edits to the Financial Policies draft.

  1. Rate Resolution Fees – A. Burroughs

Mr. Burroughs referenced the list of fees on Appendix “A” of the Rate Resolution from 2018-2019 and commented that there is a model which was used by the previous financial advisor which reflects how those Rate Resolution fees were calculated.  Mr. Burroughs advised that staff will be going through the list of fees and looking at the validity of how those fees were calculated.  Staff will also look at how things may have changed since those calculations were made, such as operational things that may be done differently now.  He provided an example of how a task or job may only take an hour, but the current fee in the Rate Resolution may reflect that two hours are required and noted this may be revised.  Mr. Burroughs confirmed for Chairman Turnipseed that TSS and BOD will be calculated on actual cost.

  1. Future Banking Services RFP’s – T. Stephens

Commissioner Stephens said that he had done some research on banking services and had interest in the RFP process and learning more about it.  Realizing that many things have changed in recent years, he inquired with Mr. Donaghy about the timing of a new RFP for banking services.  Mr. Donaghy provided that the last RFP for banking services was done in October of 2014 and was awarded to BB&T Bank.  It was for banking services for the year of 2015 with three option years which would be 2016, 2017 and 2018.  He indicated that while it is now overdue to place a new RFP for banking services, the conscious decision was made to stay with BB&T Bank for 2019 due to the number of things that were in process at that time such as implementing banking services that are necessary for customer service such as getting Lockbox set-up, getting online payments through the web portal set-up between Harris and BB&T Bank, and switching over credit card services at the counters from the previous provider to BB&T Bank which, he noted, has saved a significant amount of money.  Rather than possibly bringing in a new bank to start over with those processes, staff did not place this service out for bid last year.  Mr. Donaghy said that the only thing still in process with BB&T Bank now is the implementation of the purchasing cards.  When this is done, most all of the banking services should be in place and give the full range of banking services that will need to be included in the new RFP.  Mr. Donaghy agreed with Commissioner Stephens in that banking services have changed in the last five years, and he added our banking needs have changed and our usage of the bank has increased tremendously since the RFP last went out for bid.  It was noted that late summer will be a good time to begin preparing and working on the new RFP. 

  1. Financial Statements – Month End April 2019

John Donaghy presented the financial statements for the month ending April 2019 to the committee.  After some discussion, Commissioner Elliott requested Mr. Donaghy to provide a pro-forma balance sheet income statement with the changes that are planned for cut-offs and removal of late fees for the next Finance Committee meeting.  An estimate will be provided.

Andrew Burroughs provided for the Commissioners that the overtime has been greatly reduced and highlighted the various changes that have been made in order to reduce those costs.

There being no further business, Chairman Copeland adjourned the meeting at 3:10 p.m.

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Brunswick - Glynn Joint Water & Sewer Commission - 1703 Gloucester Street Brunswick, GA 31520 - 912-261-7100