Dukes County Commission Meeting Minutes
Wednesday, March 10, 2010
County Administration Building
Call to Order
Chairman Carlene Gatting called the County Commissioner's meeting to order at 5:05 p.m. Commissioners Tom Hallahan, Lenny Jason, Melinda Loberg and Les Leland were present.
Also in attendance were County Manager Russell Smith and Joanie Ames of MVTV.
Auditor’s Report – Richard Bienvenue
This was their first year auditing Dukes County and they had to gain an overall understanding how the County works and had a more global approach. They went through the process in key departments and in the future they will take that and look into more detail. The financial statements came from the County’s general ledger, the only thing created by the auditor is the first page – the Independent Auditor’s Report. They also did a single audit needed due to the County receiving federal funds, primarily the Airport. This audit is focused on compliance with federal rules and regulations and internal controls for financial reporting. The Management Letter is a bi-part of the audit. Mr. Bienvenue went over the Financial Statements and explained the overview of the financial situation of the County. He pointed out that FY2009 is the first year when
the County needs to show the Other Post-Employment Benefit (OPEB) obligations, which has not been done in the past. The prorated portion for FY2009 is $642,971, which brings the unrestricted assets to a negative $474,107 under the government part. If reported without the OPEB liability it would be a positive number. Carlene asked if we are responsible for the OPEB liability for the Sheriff’s employees. Noreen said that we are not obligated for the Sheriff’s Office employees and retirees. The number will lower by about 55-60% after the new actuary study is done. Mr. Bienvenue said it use to be as you go system. There is still no requirements to fund it by a certain date but there might be reasons why you want it funded just like the pension funds. You could lower the liability by adopting a funding mechanism as you will be able to invest the funds. Russell added that Noreen worked with the towns and filed legislation to be allowed to create a pool fund where the towns and the County
could address this issue collaboratively. The unreserved general fund balance is $203,172. At the beginning of the year it was at $213,103 so the net change was about $10,000 on a $1.5 million budget. On page 28 there is a schedule of revenue and expenditures on budgetary basis showing the original budget, the final budget, the actual revenue and expenditures and the variance in correspondence to the final budget. On revenue side there are savings of about $150K and on the expense side of about $20K. Originally the County budgeted $105,594 shortfall but actually ended only with $9,931 shortfall, which shows as $95,663 surplus compared to the budget. The fund balance at the end of the year is $187,478. Noreen said that the big savings under the Departmental and other was the extra check from the Cape & Islands License Plates. On page 6 & 7 there are statements in regards to the Airport. The change in net assets of $1,097,105 is caused by depreciation $1,282,576 and
post-employment benefits $208,656 which are non-cash expenses that governments are not typically funding in their budget and are not collected revenue to replace that as the Airport is funded largely by FAA, grants etc. Discussion about funding retirement and post-retirement benefits followed. Mr. Bienvenue said that we have until 2028 to fully fund the retirement system. Russell said that our retirement system originally was scheduling to be fully funded by 2023 and we were about 65% funded but since the turn of the financial market, we had to extend the date to 2028 and we are little less then 65% funded. Noreen said that there is a legislation filed and the governor proposed to extend the deadline to 2040.
In the single audit report the Auditor comments on the internal controls and found that the County has no material weaknesses; and on compliance with rules and regulations where the Auditor found no instances of noncompliance. This is a federal requirement with a $500K threshold and it was triggered by the capital improvements project at the Airport. The Management Letter is a summary of a status of prior year comments and current year comments and suggestions, so there is always a history trail there.
Tom asked about the rent at the Courthouse being not all paid by the State and why would that not show up at the audit. Noreen said that the State could take the building over through legislation just the way they took over the Sheriff’s buildings. Melinda asked where do we get the money to cover the rest of the unpaid bills. Noreen said that it goes from the County revenues. We are responsible for 20% of the building expense as we operate the Registry of Deeds where. Carlene asked if the Registry reimburses the County for the use of the building. Noreen said no. Mr. Bienvenue said that some of the comments in the Management Letter are in relation to reconciliation, which seems to be a problem especially on the withholding account since the new accounting software was put in place couple years back. The final reconciliation of cash had a
variance of approx. $13K and they are working with the Treasurer to address it. He informed the Commissioners that the County should have documented financial policies and procedures to document specific internal controls and how it is monitored so a third person can also see that it was done. This also applies for development of a written disaster recovery procedures. The Auditor also recommends that the Commissioners formally vote and approve the Registry of Deeds budget as well as the percentage that is supposed to be utilized from these funds. The recommendation is that the Treasurer should have at least oversight over the Registry accounts if not custody. The amounts should be also reflected on the counties financial statements as cash we hold and liability to the State. One comment on the Airport’s finances is in the process of the allocation of cost, which the FAA is very particular about and the Airport should approve those before the FAA does and not post it at the
end of the year. Melinda asked if they know what they would like to focus next year. Mr. Bienvenue said that he already reviewed all the leases at the Airport Business Part and he would like to get into the provisions of some of these leases. The Airport is trying to modify it where they can as the leases are right now not consistent with each other. Carlene asked what the Board should be doing to address the comments in Management Letter. Mr. Bienvenue said that the Auditor receives the Management Responses and takes it from there. Lenny asked if there is a list of grant assurances that the County gave for the Airport grants and if these assurances expire. Mr. Bienvenue said that it is possible that the assurances are in place until all loans that are associated with acquiring the asset are terminated but these contingent liabilities are not being reflected as part of the audit. Lenny said he would like to know how much it would cost the County to get out of under the grant
assurances. Carlene suggest for Russell to have a conversation on this topic with Sean. Commissioners thanked Mr. Bienvenue for the work and for coming to the meeting. Lenny suggested for Russell to meet with Noreen and to come up with a timeline for when the Management Letter will be addressed and then report quarterly on the progress. Carlene also suggested revisiting a creation of a Financial Sub-committee at the next meeting.
Carlene Gatting re-appointed Chris Knowles as Associate Commissioner for Public Health for another year.
Appointment to the Pilgrim RC & D
Carlene suggested to wait with this appointment after the FY2011 budget is presented to the County Commissioners.
Evaluation of County Manager
Melinda said that the Committee that reviewed the input from other County Commissioners, other county officials and employees and from town managers consisted of Les Leland, Lenny Jason and herself. She read a letter prepared by the Committee attached to these minutes. Russell thanked the Commissioner for the positive review. Carlene said that she would like to address the compensation issue associated with the evaluation at the time when they look at the budget for next year. She would like to do visioning at the next meeting to give Russell better sense of priorities. Lenny said some of it is already addressed at the evaluation letter.
FY2011 budget worksheets are due from the Department Heads and he hopes to have a preliminary FY2011 budget ready for the next meeting. This year the budget is subject to approval by County Advisory Board only. Lenny asked about the comment in the Management Letter saying that the County Commissioners supposed to review the Registry of Deeds budget. Russell said that this year we will include a line item Registry of Deeds budget as part of the FY2011 budget.
The all island selectmen’s meeting in on March 11th at 7pm at the Edgartown Selectmen’s room and there will be a presentation by a company that is trying to bring a fiber optic cable across the Buzzards Bay to the island. It would improve TV, internet and telephone service on the island. Right now we are getting it to the island through microwave through the air, which is much slower. They would like to negotiate right-if-ways for the use of island roads island-wide through the County instead with each town separately. The County supports this project but will not proceed unless agreed by the towns. This service should decrease the cost of these services on the island.
Lenny/Les moved to adjourn the meeting at 6:35 p.m. All in favor.
Respectfully Submitted by:
JOSEPH E. SOLLITTO JR., Clerk of the Courts
Evaluation Letter to County Manager
March 10, 2010
Mr. Russell Smith, Manager
County of Dukes County
PO Box 190
Edgartown, Ma. 02539
The Dukes County Commissioners have completed the evaluation of your work for the past year and are pleased to report our satisfaction with the work you have done for the County. We are unanimously in favor of offering you continued employment as the County Manager for the coming year.
The evaluation process as established last year included individual assessments by each commissioner, interviews with County Department Heads and outreach to managers of towns and regional entities across the island. We also kept in mind the goals we mutually established during last year’s evaluation.
The Commissioners believe you have met expectations in all categories of job-related skills. We would like to highlight your capacity to show the County in a positive light for its real accomplishments and improve public perception of the County. The County has benefited from your familiarity with the legislative process and local leaders both on island and off. Your problem-solving abilities, engineering background and willingness to tackle projects in a hands-on manner have been useful in repairs to the courthouse, Eastville and State Beaches, bridge construction projects and the new Animal Shelter of Martha’s Vineyard. Your timely intercession during the transition of the Sheriff’s Office protected the interests of the island and saved money for the County. And your initiative with the
proposed fiber optic cable project is notable and will potentially save money for the island while bringing a much-needed source of County funding and tax-payer relief to islanders.
Your first year and a half, Russell, have been successful in carrying out many of the mandates of the Charter Study Commission and putting the County on solid ground in the eyes of the island community. Now, the Commissioners look forward to working with you to move County Government to the next level. We want to strengthen the Executive functions of the manager’s role. This includes increased involvement in the budgeting process, more focus on management with department heads and staff, leading an analysis of personnel needs and deployment of staff, continued outreach to island leaders, regional bodies and town managers, and setting goals and implementing timetables for their achievement.
The County Commissioners are enthusiastic supporters of your work on behalf of the County and pleased with your genuine devotion to the island and work ethic on its behalf. We look forward to our upcoming visioning process and the setting of shared goals and strategies for the coming year.
Carlene Gatting, Chair
Leonard Jason Jr.