COMMITTEE ON BUDGET AND APPROPRIATIONS

MINUTES - OCTOBER 6, 1997

1:00 P.M.

B&A MEMBERS: Wishnie, Swanson, Young, LaMotte, Delfino, Darcy, Abinanti

OTHERS: C.E.’s Office: Gina Angiulo-IGR; Budget Dept.: Joe

Phelan; DPW: Commissioner Landi; Planning: Commissioner Oliva, Fran McLoughlin; Law Department: Greg Meehan, CBAC: George Hosey, Barbara Strauss; LWV: Anne Nelson, Jo Brill; BKS: Les Storch; Finance: Commissioner Langeloh, Kate Tooher, Thurston Hartford; BOL: Robert J. Boland-Budget Analyst, Glenn Guzi- Program Specialist, Dan Rodriguez, Tina Seckerson- Secretary to Committee

Co-Chairs Swanson and Wishnie called the meeting to order at 1:15 p.m.

On motion of Legislator LaMotte, seconded by Legislator Darcy, the motion to approve the Minutes of September 30, 1997 was carried by a vote of 6-0. (Legislator Abinanti out for vote)

An Act which would amend the 1997 Capital Budget and a related Bond Act. The Capital Budget amendment creates a new project appropriation for the project entitled County Courthouse and Annex in the amount of $5,000,000.

• Commissioner Oliva stated that the County had to conduct a coordinated review in which they had to get in contact with the other lead agencies involved. She informed the Committee that the City of White Plains has reviewed the documentation and they are satisfied. The City of White Plains has concurred that the County will be the lead agency.
• Mr. Young expressed his concern with regard to the hiring practices of the Dormitory Authority of Minority and Women owned businesses.

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• Commissioner Landi stated that the Dormitory Authority has an Affirmative Action Plan and has been very successful with it. Mr. Young stated that he is looking for information regarding their past practices not just a plan written on paper.

On motion of Legislator Darcy, seconded by Legislator Young, the motion to approve this item was carried by a vote of 7-0.

Mr. Oros informed the Committee that in addition to the Bond Act, Judge Lippman requested a resolution showing the Board’s intention authorizing the County Executive to enter into an agreement with the Dormitory Authority to provide technical and financial services in conjunction with the Courthouse. Mr. Oros reviewed the resolution he drafted.

On motion of Legislator Darcy, seconded by Legislator Wishnie, the motion to approve the resolution was carried by a vote of 5-2 with Legislators Young and Abinanti recorded in the negative.

9. Acceptance of a gift from Brenda and John Fareri of a temporary, one-story building at WCMC to be used as a Development Center for the Children’s Hospital.

Mr. Darcy requested a memo be written to the Administration to direct DPW perform an inspection of the building to assure compliance with such factors as construction standards.

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(NOTE: Both the BKS Management Letter and the Finance Commissioner’s Response are on file)

• Mr. Storch stated that they found there are no material weaknesses.
• Mr. Storch explained that the Governmental Accounting Standards Board (GASB) has been evaluating the effectiveness and adequacy of the government financial reporting model. GASB research has indicated that one of the strengths of the current financial reporting model for activities reported in governmental funds is that it provides information to help users perform the following: comparison of actual financial results with the legally adopted budget and the assistance in determining compliance with finance related laws, rules and regulations. The current model, however, was not designed to meet these needs when considering the governmental entity as a whole. Consequently, GASB concluded that a dual perspective approach was necessary. A top level or aggregated financial statements will be required in addition to the fund type information. Implementation will not occur before the Year 2000. The entity-wide perspective financial statements will be prepared on a significantly different accounting basis than used at the fund level. The dual perspective financial reporting requirements will add technical requirements as well as additional time for staff to gather, evaluate and record the additional data in the form required. The scope of the audit will require expansion to test the estimates and fairness of presentation. Although the additional internal and external costs are not estimable until issuance of the financial statement, it is clear that additional resources will be required to satisfy the mandate. The auditors recommend the County voice it’s opinions to GASB or through the State Comptroller’s Office. The Finance Commissioner is in agreement with the Auditors on this matter.
• Commissioner Langeloh stated that there are approximately 15 issues with which the County and the Auditors disagree philosophically.
• Fund Establishment: The Departments of Finance and Planning concur with the BKS recommendations and will discontinue the Section 8 Investment Fund and account for all activities of the program within the Trust and Grant Program.
• Dept. of Community Mental Health: Pursuant to the BKS recommendation, the Dept., of Community Mental Health has retained an accountant to be responsible for tracking revenues and determining distributions.
• Health Benefits: Finance Commissioner disagrees with BKS and does not see the need to establish separate expense accounts for each HMO.

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• Sewer District Operation: Industrial user charges which remain uncollected at each year end, will be set up as receivables at year end for each respective sewer district.
• Generally Accepted Accounting Principles (GAAP): The Auditors believe that full GAAP reporting would fulfill the County’s obligation to be accountable to the user, and accurately measure financial performance. County disagrees. At least 2 times per year the County enters the financial market for either TANS and/or bonds. The agencies are fully aware of the County’s methods of reporting and those methods accurately measure the County’s financial performance. According to the Finance Commissioner these methods are generally considered to be more conservative than GAAP.
• Debt Service Fund: Auditors suggest that since the requirements for a debt service fund have been satisfied, the County should establish a debt service fund to comply with professional and legal requirements. Mr. Storch stated that according to Section 36 of the General Municipal Law, if certain criteria are met then you have to establish a debt service fund. Mr. Langeloh disagreed with the Auditor’s interpretation of that Section, stating that the creation of a debt service fund only serves the purpose of recording the same expenditure twice.
• Capital Projects Fund: The Auditors believe that revenues should be reflected when they are billed to the reimbursing agency. This would require the Department of Finance maintain a file of all claims submitted as well as evidence of the amount paid. Mr. Langeloh replied that Federal and State aid claims for capital projects are monitored by DPW or DEF. Finance contacts the departments to inform them as to the amount received so they initiate follow-up action if the amount received does not agree with the claim submitted. Mr. Darcy asked how the amounts are tracked if there are no vouchers. Mr. Langeloh stated that the amounts have to be matched with the initial filing and are tracked by DPW and DEF.
• Project Reporting: Auditors recommend the County consider either a budget to actual reporting format or a project-length report presentation, when preparing its annual financial report to demonstrate adherence to legal and budgetary provisions. Response from Finance: GAAP does not require budget to actual reporting for multi-year capital projects. Budget to actual reporting is only meaningful on a project by project basis. Finance and other departments are continuing to review enhancements in the capital project management process.

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• Education & Transportation of Handicapped Children: The Auditors feel that the Department of Health should begin gathering information necessary for development of a Westchester County utilization rate. They also suggested that the Department of Health be required to continue to budget and account for revenues and expenditures utilizing the basis employed in 1996. Mr. Langeloh stated that the Budget Department and the County will continue to improve a system and a program which is essentially a State program. Mr. Boland stated that although this is a mandate there should be more control by the County in this matter.
• Compensated Absences: Auditors stated that the liability for such compensated absences should be calculated based the pay or salary rates in effect at the balance sheet date or at a lower amount as established by contract, regulation or policy. They further feel that all amounts are not directly traceable to an employee’s leave records and suggest that the current system be modified to reflect a formalized process for valuation of accumulated leave. According to the Finance Department, the suitability of the formula currently used is appropriate but they will continue to explore other methodologies with the Auditors. Mr. Boland inquired as to the increase in the reserve this year. It was explained that this was due in part to the sick leave buy-out.
• Retirement Billings & Charges: Auditors recommend that the County reconcile retirement expenditures on a county-wide basis annually. Response from Finance: The County does reconcile the billing for retirement system charges on a County-wide basis and for each fiscal year. The auditor recommends that adjustment to those billings for actual expenses be made to all cost centers and trust accounts by year end. The County will explore the cost benefit of this approach for adjustments at year end.
• Services to Indigent Defendants: The Commissioner of Finance stated that an audit plan will be developed to better track these claims.
• Pre-Paid Expense: Auditor’s recommendation is to establish a pre-paid expenditure for the NYS Local Employees Retirement System billing represents an accounting entry only, and has no budgetary impact. Finance Department believes there should be no problem in complying at year end.
• Payroll Trust: The Finance Department concurs with the Auditor’s recommendation and will analyze for reconciliation on a quarterly basis.

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A Resolution stating the Board’s present opposition to the possibility of a consolidation or centralization of the Family Courts of Westchester.

Mr. Wishnie expressed his concern that there may be some centralization of the Family Courts that may be helpful and/or enhance services and suggested the resolution be amended to by removing the word "centralization". The Committee agreed.

On motion of Legislator Wishnie, seconded by Legislator LaMotte, the motion to approve this item, as amended, was carried by a vote of 7-0 with Legislator Darcy signing "Without Prejudice".

The Committee Co-Chairs recessed the meeting at 3:10 p.m. to the call of the chair.

The Committee Co-Chairs reconvened the meeting at 8:59 p.m. There being no further items for discussion, on motion of Legislator Swanson, seconded by Legislator Darcy, the meeting was adjourned at 9:00 p.m.