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Malloy stated the sewer utility enterprise fund is in a similar healthy condition. He stated the <br />streetlight fund is also in good financial condition and the recycling fund has a small fund <br />balance and profit for each year. Mr. Malloy noted the accounting and auditing updates and <br />pointed out that at year end 2004, the City's financial report will need to include the City's <br />depreciation and debt, and more information for management and analysis of the City's <br />operations. He stated GASB will place a burden on the financial staff and commented on the <br />need to support staff as that conversion takes place. <br /> <br />Councilmember Zimmerman asked if the replacement costs are contained in a separate statement. <br /> <br />Mr. Malloy explained that the fixed assets will be recorded tike a commercial entity with <br />historical costs and depreciation. <br /> <br />Councilmember Zimmerman asked if replacements will also be included. <br /> <br />Mr. Malloy stated that replacement costs will be included. <br /> <br />Mayor Gamec asked when GASB will take affect. <br /> <br />Mr. Malloy stated in 2004, it must be totally implemented but what typically happens is that you <br />need to get all starting balances as of January 1, 2004, to capture the revenue/expenditure <br />information. <br /> <br />Mayor Gamec stated he attended a meeting with AMM where this issue was discussed. He noted <br />that many cities are starting implementation now so employees are educated about the needed <br />changes. <br /> <br />Mr. Malloy stated the infrastructure area will be a challenge as well as for cities that have <br />implementation staged for different years. However, cities can implement GASB earlier if they <br />want. <br /> <br />Mayor Gamec asked Finance Director Lund to provide a recommendation on when this will be <br />implemented, time involved, and staffing needs. <br /> <br />Chairperson Hendriksen stated several years ago Ramsey's financial controls did not include the <br />use of purchase orders. He asked if that was unusual in a city. <br /> <br />Mr. Malloy stated it is not unusual if there are other controls. He noted that cities are controlled <br />by budget and departmental structures so purchase orders are sometimes not as effective. He <br />stated that the larger the organization of a city, the more appropriate the use of purchase orders <br />may be. <br /> <br />Chairperson Hendriksen stated he thought purchase orders would be useful in tracking <br />information on a purchase or expenditure. <br /> <br />Finance Committee/June 11, 2002 <br /> Page 3 of 5 <br /> <br /> <br />