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1. City Finance in Minnesota/Legislative Trends 2. Financial Trends and Conditions of Your City 3. Accounting and Reporting Comments 4. Accounting and Auditing Updates 5. Formal Required Communications Ken Malloy of Malloy, Montague, Karnowski, Radosevich and Co., P.A., reviewed the financial report and commentated on a few items contained in the report. He stated that the financial statements were acceptable and in compliance with state laws except for one minor finding that was addressed. Mayor Gamec questioned if they are seeing fewer cities use the line item budgeting. Mr. Malloy stated that most cities are using a line item budget, but the performance-based budget is supposed to be the way of the future. Mayor Gamec questioned when the sewer system charges would be caught up. Finance Officer Lund stated that this is the last quarter catch-up and that the fees should balance out in the year 2000. Councilmember Zimmerman questioned if the sewer fee should be increased. Mr. Malloy responded that the 1998 expenditures are not reflective of what the costs will be in the future. Mayor Gamec suggested that it should balance out. Finance Officer Lund stated that the City was billed two years later and that is why the sewer costs are so high. Mr. Malloy suggested comparing sewer rates with other cities noting that the League of Minnesota Cities has great resources on sewer rates. Motion by Councilmember Hendriksen and seconded by Councilmember Anderson to recommend that City Council accept the 1998 Comprehensive Annual Financial Report and authorize the Finance Officer to submit it to the State of Minnesota Department of Revenue and other agencies, as required, and to submit the report with application for the Certificate to the Government Finance Officers Association of the United States and Canada. Motion carried. Voting Yes: Mayor Gamec, Councilmembers Hendricksen, Anderson, and Zimmerman. Voting No: None. Absent: None. Finance Committee/June 8, 1999 Page 2 of 4