Council Meeting Minutes 08-08-2023

CITY OF SOUTHSIDE
COUNTY OF ETOWAH
STATE OF ALABAMA

The City Council of the City of Southside convened in regular public session at the Southside city hall on Tuesday, August 8, 2023. Prior notice of this meeting was given in compliance with Resolution No. 0-035-2005 of the City of Southside, Alabama and the Alabama Open Meetings Act. Mayor Dana Snyder called the meeting to order at 4:00 p.m., with Don Steward leading in prayer.

The following council members were present: Mayor Dana Snyder, Council Members: Joseph Hutchins, Don Steward, Keith Clay and Genny Ball. John Hatley was not in attendance. With a quorum being present, the meeting was opened for the transaction of business. The council recessed to the work session at 4:02 p.m., and reconvened the council meeting at 4:27 p.m.

Mayor Snyder inquired of the council if there were any corrections or additions to the council minutes from the meeting held on July 25, 2023. A motion was made by Genny Ball to approve the minutes as presented. A second of the motion to approve was made by Don Steward. Roll call vote: All ayes. The mayor declared the motion carried unanimously.

Mayor Snyder inquired of the council if there were any corrections or additions to the minutes from the special-called council meeting held on July 28,2023. A motion was made by Joseph Hutchens to approve the minutes as presented. A second of the motion to approve was made by Don Steward. Roll call vote: All ayes. The mayor declared the motion carried unanimously.

The next agenda item was an Ordinance to amend the 2015 wrecker ordinance. The council was briefed during the work session by Lieutenant Jason Patty of the City of Southside Police Department on the changes to the Ordinance. They include: (1) Changing rates that the towing companies are allowed to charge per hour to reflect current pricing, (2) Adding an emergency clause to allow emergency personnel to deviate from the rotation in extenuating circumstances (such as accidents that will require search warrants as part of an investigation) and, (3) Changing the verbiage of the current Ordinance to require a company on the City of Southside rotation to be on the ALEA rotation list, with exception for those already on the ALEA wait list. Joseph Hutchins made a motion to accept the Ordinance amending the Ordinance (#0-006-2015), Don Steward provided a second. The roll call vote was all ayes. Mayor Snyder declared the motion carried unanimously.

Next on the agenda was an item added during the work session; A sponsorship request from the United Way of Etowah County. After discussion during the work session which established the fact that this was a sponsorship that was included in the budget at the beginning of the FY 2022-2023 year, Councilman Don Steward made a motion to make a $750.00 “bronze” sponsorship contribution to the United Way. The motion was seconded by Genny Ball. The roll call vote was all ayes. The mayor declared the motion carried unanimously.

The next agenda item was a request for sponsorship from Southside High School FFA to help send ten deserving students to the National FFA Convention in September. The council discussed in the work session the importance of helping local organizations first, and referred back to the July 11 meeting, where FFA sponsor, Allison Heald and FFA members had presented to the council some of their projects and their benefits to the community. Joseph Hutchens made a motion to contribute $1000.00 to the Southside High School FFA. Genny Ball seconded the motion. The roll call vote was all ayes. Mayor Snyder declared the motion carried unanimously.

Next on the agenda, was Mr. Mike Sewell, from McClure, Sewell, Johnson, INC. Certified Public Accountants, with the presentation of the FY 2021-2022 Independent Auditors Report for the City of Southside. Mr. Sewell read the auditor’s opinion, which states, “In our opinion, the financial statements present fairly in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2022, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.”

He stated that audit entries were discussed with the mayor and finance director and he is not aware of any other adjustments that need to be made. He explained there are two different sets of financial statements, government wide and fund statements. The mayor and council review the fund statements during the year. During the audit a conversion has to be made for the fund statements to go to government wide statements. “It is an ‘accrual basis’ look at the city. Governmental Accounting is different from normal accounting.”

Statement of Net Position: Mr. Sewell stated there were two major funds this year, the General Fund and the American Rescue Plan Fund. All other funds are calculated together as Other Governmental Funds. Total assets are $6,465,973.00, of which the majority is in cash; total liabilities are $1,523,667.00. The majority of this is called unearned income (relating to ARPA money 1.3 million). “Unearned income is not reported as income until it has been spent. It is reported as a liability until you spend it because if you do not spend it, you have to give it back.” Of cash, the fund balance is assets minus liabilities, so the fund balance is $4,486,554.00. Some of this cash is restricted, committed or assigned to particular areas, based on law. Mr. Sewell stated that the total change in the fund balance is a decrease of $308,004.00 through September 30, 2022. The general fund had a decrease of $308,603.00, the American Rescue Plan Fund had a decrease of $3,137.00 and the other governmental funds had an increase of $3,736.00.

Mr. Sewell said that one of the biggest differences, compared to the prior year, is in the column “other financing sources and uses”. “There is an item listed as issuance of General Obligation Debt in the amount of $1,104,132.00. Government’s borrowing money is income because the expenditure (the garbage trucks) that were bought in the amount of 1.1 million were financed. This shows as an expense because you purchased the trucks, but shows up as income because you borrowed the money. What is hard to understand about governmental accounting is that it is “fund basis”, so issuing debt is income, even though you are repaying it at some point. The other fact is that you did a lot of capital improvements this year; sanitation equipment at 1.1 million, public safety vehicles, etc., so the total capital outlay and improvements is right at 2.9 million.” He offered to sit down with the council one on one if they had any questions after looking through the audit report.

Debt: “On the fund basis, debt is not reported as a liability because it is a long-term thing.” The General Obligation Warrants total $2,862,339.00. The new debt with Bancorp South for the garbage equipment is $1,104,131.00. The total long-term debt at the end of September 2022 is $3,966,470.00. “Highlighting the maturity schedule, this shows the next five years and then in five-year groupings what the principal and interest are that you are paying. For example, 9/30/23 debt service is $673,186 in principal and $116,228 in interest. Each year these change a little bit. There is a drop based on your debt in 2027, debt service will drop considerably because one of the obligations will be paid off. That is something from a cash flow standpoint that you are monitoring.” He stated that the mayor had discussed with him a five-year budget projection. “It is a management tool and you can project out what your cash flow is going to be and easily monitor it throughout the year. It is a good tool for planning future projects. Debt Service (principal and interest) in government is an expense, unlike a business where you are paying a liability.”

Subsequent event: issuance of additional debt for fire station, 3.9 million.

Budgetary Comparison Schedule: Mr. Sewell discussed the total budget (original and final) and what was actually spent versus the approved budget and amendments and if it varied. The variance was primarily due to the garbage trucks, because they were not budgeted. However, they were approved by resolution and financed. The other variance was due to American Rescue Plan funds approved and spent.

Mr. Sewell stated there were no difficulties performing the audit. He appreciated the mayor and staff for helping with the audit requests. He discussed two material weaknesses that were noted in the audit. He stated the first one is common on most audits. The city does not prepare the financial statements as it makes more sense for the auditor to prepare them. The second one is that they had to do an audit adjustment to record the issuance of the new debt related to the purchase of the garbage trucks. Mr. Sewell stated he discussed this and recommendations with finance and the mayor for the future.

At this time Don Steward made a motion to accept the audit as presented by Mr. Sewell. Joseph Hutchens seconded the motion. The roll-call vote was all ayes. They mayor declared the motion passed unanimously.

The following announcements were made by Mayor Snyder:

• The next Planning Commission meeting is scheduled for September 11, 2023 beginning at 6:00 p.m. in the council chambers at Southside City Hall.
• The next City Council meeting will be held September 12, 2023 at 4:00 p.m. in the council chambers at Southside City Hall.
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With there being no further business to discuss, a motion was made by Joseph Hutchins to adjourn at 4:49 p.m., with a second of the motion by Don Steward. The Meeting was adjourned at 4:50 p.m.

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Dana Snyder, Mayor
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Cindy Beshears, Acting City Clerk