Okaloosa County BOCC — May 7, 2013 (meeting #1140) — reading text

May 7, 2013 Regular Tuesday Meeting The regular Tuesday meeting of the Okaloosa County Board of County Commissioners was called to order at 6:03 p.m. at the Crestview Courthouse. Members present were Don R. Amunds, Chairman; Dave Parisot, Vice Chairman; Wayne Harris; Nathan Boyles; and Kelly Windes. Also present were Gary J. Stanford, Finance Director, Clerk’s Office; John Dowd, County Attorney; Ernie Padgett, County Administrator; and members of the press. PUBLIC INFORMATION OFFICER UPDATES Mrs. Kathy Newby, Public Information Officer, opened with a promo for the Okaloosa Today program which airs on Cox Channel 6. She highlighted the following items: e The Okaloosa County Website received an A+ rating for transparency from Sunshine Review. e Okaloosa Emergency Management now has an app for your cell phones. e A HAZMAT exercise was organized by the District I Local Emergency Planning Committee and the West Florida Regional Planning Council. It was held last month at the Okaloosa EOC with participants from Eglin Air Force Base and Santa Rosa, Okaloosa, Bay, and Escambia Counties. e A ribbon cutting ceremony will be scheduled for completion of the Western Destin Beach Restoration Project. e Residents may enter their gardens which honor individuals in the Viva Florida campaign. Recently, a Crestview garden located off Highway 85 South was dedicated to County Forester John McMahon. e May is Military Appreciation Month. e The American Heart Association has recognized Okaloosa County for promoting employee health and fitness. Moment in history: Mrs. Newby reviewed a newspaper article appearing approximately twenty years ago which reported a meeting in which the commissioners discussed hiring a County Manager for two hours. The Board then voted 4 to 1 in favor. COUNTY ADMINISTRATOR UPDATES Mr. Padgett reported his first three weeks on the job have been busy. He said he has attended several meetings--meeting with May 7, 2013 -1- Minute Book 69, Page 104 Okaloosa County Board of County Commissioners Auditor General personnel, department heads, Constitutional Officers and he had lunch with Judge Stone and with John Dowd. Mr. Padgett noted that he has met with people both inside and outside of government. He has also attended two Chamber of Commerce breakfast meetings and been interviewed by Cari Barlow with Northwest Florida Daily News. Mr. Padgett identified other meetings and events he has attended (Tallahassee regarding RESTORE Act funds; TDC meeting) but said he still has a lot more to do to get up to speed. His meetings with county employees and comments from individuals on the outside have led him to believe the quality of employees is good. He said he will continue to evaluate the structure and hierarchy of departments and he plans to bring recommendations to the Board on restructuring. Mr. Padgett commented that it has been a good three weeks and he believes this is a good fit. COMMISSIONER’ S MINUTE Mr. Harris advised that he has nothing. Mr. Windes pointed out the firm of Carr, Riggs & Ingram have been hired for internal audit services. He said he wants to bring forward discussion on directing them to look at the Airports Department to determine if there are any problems or risks. Mr. Windes expressed concern about the tenants who are in arrears. Mr. Amunds recommended the commissioners be given the opportunity to think on this issue and will bring it back later in the meeting for discussion, Upon inquiry by Mr. Parisot, Mr. Amunds said the request would require a motion. Mr. Parisot pointed out there is an item on the agenda tonight regarding appointments to the RESTORE Act Advisory Committee. He said there are still open slots for environmental, tourism, and two citizen-at-large positions. He encouraged interested citizens to complete the two-page application on the county's website if they are interested in serving in this capacity. Mr. Parisot referred to his trips to Tallahassee concerning RESTORE Act funds and said the federal act has prevailed. Mr. Boyles felt tonight’s meeting might be long. He said that while shopping for his son he found some items which might be appropriate and bought his fellow commissioners a gift. Mr. May 7, 2013 -2- Minute Book 69, Page 105 Okaloosa County Board of County Commissioners Boyles distributed ant farms and told the commissioners it is to help them get in practice. PRESENTATION - BLUE STAR MOTHERS OF AMERICA MONTH PROCLAMATION Mr. Amunds asked the representatives of the Northwest Florida Chapter of Blue Star Mothers of America, Chapter 7, to come forward, He read a proclamation (approved April 16, 2013) designating May as Blue Star Mothers of America Month. Both chapter representatives thanked the Board for this recognition and for its support. One referenced the Blue Star Flags which fly at the Courthouses during the month of May. She also drew attention to the Gold Star Mothers whose children have made the ultimate sacrifice during war time. VISITOR - ANGELA BALENT, O’SULLIVAN CREEL, PRESENTATION OF CAFR AND ANNUAL INVESTMENT REPORT BY FINANCE DIRECTOR Ms. Angela Balent, partner with O’Sullivan Creel, LLP (Warren Averett, LLC) stated she will provide a brief final audit report for the fiscal year ended September 30, 2012. The Comprehensive Annual Financial Report (CAFR) must be filed with the Board within thirty days after delivery. The CAFR provides final information for not only the Board of County Commissioners but the Constitutional Officers as well. Ms. Balent said the auditors’ responsibility is to express opinions on whether financial statements, prepared by management, conform to generally accepted accounting practices (GAAP). She noted copies of the audit were distributed to all parties. Ms. Balent reported there were no difficulties encountered in the audit and no disagreements with management. She said they express unqualified opinions with respect to the financial Statements and with respect to compliance for major federal and state programs. Two instances of material weaknesses in internal control over financial reporting were reported. One was related to the Board and the other to the Clerk of Courts. Both dealt with advertising. No instances of material weaknesses in internal control over major federal awards and State projects were cited. With regard to the Board issue, Ms. Balent said the finding was that of a lack of support for advertising invoices approved and submitted for payment for the Tourist Development Special Revenue Fund, the Conference Center Enterprise Fund, and the Airport Enterprise Fund. The Tourist Development invoices are May 7, 2013 -~3- Minute Book 69, Page 106 Okaloosa County Board of County Commissioners related to the BP oil spill awards expended for services not provided or campaigns not approved by the Board as disclosed in the Auditor General’s report. There was no evidence of unauthorized transactions in the Airport Enterprise Fund based on the sample. She said they have recommended Airports Department personnel work with the advertising firm involved to get the necessary backup to support the invoices. They also recommend additional training for Board and Clerk personnel involved in advertising transactions. Ms. Balent stated the actions taken by the Board include changes in the Tourist Development Operations and Procedures Manual and to seek recovery of the inappropriate expenditures. She said it is her understanding Airports personnel are doing a complete post audit. Additionally, changes have been made in the purchasing and disbursement process extending to all county departments to allow effective pre-audit by the Clerk’s Finance employees. Ms. Balent said the Clerk’s BCC Finance employees’. should strengthen controls to reduce its susceptibility to improper payments. These employees should conduct a prepayment audit and monitor contract provisions to ensure disbursement requests are in accordance with contract terms and supported by adequate documentation. Summary of Auditor's Results, Recommendation to Management e Airports should not engage in advertising campaigns that involve card giveaways or allocation of resources. to private entities due to the discretionary nature of such activities. e P card purchases of the deputy directors, administrative manager and the Chief of Airport Police should be approved by the Airport Director or acting Director or his designee e Airport master lease schedule should be reviewed each month by the Airports Properties Specialist and updated for new leases, as well as renewals and cancellations of existing leases. Ms. Balent referred to the discovery in 2009 of significant under billing for one tenant. This year a test revealed a new lease which was not on the Master Lease Schedule. e BCC department heads/directors should strengthen disbursement request procedures to ensure contract provisions are monitored and the disbursement packages submitted for payment contain proper support for effective pre-audit by the Clerk’s BCC finance function personnel. May 7, 2013 -4- Minute Book 69, Page 107 Okaloosa County Board of County Commissioners e The Water & Sewer Department has consolidated the duties of its IT Supervisor and Customer Service Manager. We recommend the positions be separated. e The Water & Sewer Finance Manager should work with the Clerk's BCC finance function personnel to document year-end procedures and reports. e Formally document enterprise risk assessment. Auditor will help management identify control gaps, strengthen controls and remove redundancies where possible. e BCC, Clerk, Tax Collector, Sheriff, Property Appraiser, and Supervisor of Elections could strengthen their anti-fraud program by adopting periodic documentation of fraud risk assessments, a written fraud response program, and training for county employees for the warning signs of fraud. Ms. Balent stated the Auditors are pleased the Board has moved forward with an internal audit. She noted the Clerk has already taken action to engage his internal auditor. Ms. Balent remarked the Whistle Blower Policy has worked and there have been no newspaper-worthy issues. The next portion of Ms. Balent’s presentation included explanations of charts and graphs dealing with Reserves and Fund Balances; General Fund Balance, Revenue and Expenditures; Ad Valorem Property Tax Revenue (2008-2012); Governmental Activities Revenue and Expenses; Business-Type Activities Revenue and Expenses; Net Assets; and Long-Term Debt, She stated Mr. Stanford will present the Annual Investment Summary Report. Mr. Stanford advised the report is presented in accordance with Section X, paragraph C of the County’s Investment and Portfolio Policies. The following items will be highlighted: e Total portfolio composition at September 30, 2012 by graph and table for 2008-2012 e Comparable portfolio composition by graph e Total long-term and short-term composition by graph e Cash and investment balances and interest earnings by table for 1978-2012 e Annual interest earnings for the last ten years by graph e Cumulative interest earnings since inception of Pooled Cash by graph from 1978-2012 e Performance comparison by graph showing average over last five years and over last ten years May 7, 2013 -5- Minute Book 69, Page 108 Okaloosa County Board of County Commissioners Mr. Stanford explained the priority in the Clerk’s policy is diversification. He reported $104 Million in cash and investments. Mr. Stanford pointed out the reduction in investments was because of the economic times. However, he said the yield still outperforms our benchmarks. Upon inquiry by Mr. Parisot, Mr. Stanford provided more details about the State Pool and included an explanation of the 2007 event involving unsecured investments which were moved into the Fund B Pool. Mr. Stanford compared the county’s portfolio with the State Pool and advised we are outperforming the State Pool.