The Becker City Council met Tuesday to discuss the industrial park, first quarter financials, a generator replacement, a rail service grant, a cable franchise agreement and an audit of 2018 from BerganKDV.

 

 

Nancy Schulzetenberg, CPA with Bergan KDV, presented an audit to council on the 2018 financial statements. 

 

Schulzetenberg said her organization identified certain deficiencies in internal control that they considered to be material weaknesses. 

 

“During our audit, we also became aware of a deficiency in internal control other than significant deficiencies or material weaknesses, and other matters that are opportunities for strengthening internal controls and operating efficiency,” she said.

 

Schulzetenberg said she  proposed a number of audit adjustments that she considered both individually and in the aggregate, to be quantitatively material to the financial statements. 

 

A prior period adjustment was made to increase beginning fund balance in the general fund related to accounts receivable not recorded at Dec. 31, 2017. A prior period adjustment was made to decrease beginning fund balance in the community center fund related to unearned revenue for membership fees not recorded at Dec. 31, 2017. 

 

A prior period adjustment was made to increase beginning net position in the sewer fund related to a note receivable for future debt service payments not recorded at Dec. 31, 2017.  

 

Schulzetenberg said during the year ended Dec. 31, 2018, the city had a lack of segregation of accounting duties due to a limited number of office employees. This lack of adequate segregation of accounting duties could adversely affect the city's ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. 

 

During KDV’s audit, they reviewed the golf course receipts collection process. They noted several instances where the credit card sales per the point of sale reports differed from the amounts wired into the city's bank account. 

 

Although differences were not significant, Schulzetenberg recommends the city implement additional oversight procedures and segregate golf receipting duties where possible, as well as investigate the differences to ensure amounts receipted into the city's bank account are accurate and complete. 

 

Schulzetenberg said KDV evaluated the key factors and assumptions used to develop the accounting estimates in determining that they are reasonable in relation to the financial statements taken as a whole. 

 

The financial statement disclosures were neutral, consistent, and clear and they encountered no significant difficulties in dealing with management relating to the performance of the audit. 

 

 

City Engineer Randy Sabart of SEH presented information from the published 2019 Business Park Expansion feasibility report. The report analyzes the feasibility of providing new trunk sanitary sewer and trunk water main  improvements to the property south of Hwy. 10. 

 

The report breaks down the expansion concepts into three phases. 

 

Phase 1 provides sanitary sewer service to the existing parcels as well as the initial Sherco 1 and Sherco 2 development sites. Estimated costs for Phase I are totaled at nearly $22 million.

 

Phase 2 provides a trunk sanitary sewer to address the ultimate sanitary service needs of the Sherco 1 and Sherco 2 development sites. Estimated costs for Phase II are totaled at nearly $11 million.

 

The Ultimate Phase provides two auxiliary lift stations to serve the ultimate development of the remainder of the business park. Estimated costs for Phase III are totaled at nearly $16 million.

 

All phases include lift stations to serve the Sherco I and Sherco II sites and all include a lift station in the business park adjacent to Hwy. 10 to convey all flows from the new developments north across Hwy. 10 and through the City of Becker to the domestic treatment train at the City's Wastewater Treatment Plant (WWTP).

 

Based upon capacity, all phases of development should sufficiently serve the business area, Sabart said.  All force main flow velocities remain beneath the acceptable threshold of six feet per second and all gravity flow depths remain below the acceptable d/D value of 0.6.    

 

 

Connie Robinson presented the 2019 first quarter financials and said the report was reviewed and approved by the budget and finance committee in April.

 

Robinson said the financials are at or below budgeted numbers.

 

 

Chris Lisson said the current Kohler portable generator is 25 years old and is scheduled for replacement on the CIP. Staff would expect a piece of equipment like this to provide 15 years of service life.

 

Lisson says he and staff are recommending replacement before any major issues develop. In addition, the Kohler unit has a gas engine and has been prone to carburetor issues, Lisson said.

 

“Due to the emergency nature of this equipment, its age and the fact  that it is a gas engine, staff are recommending replacement before any major issues occur,” he said.

 

Staff obtained two quotes for replacement generators, one from Blue Star generator (Advanced Power Services, Inc.) for $59,200 minus trade-in for existing generator of $2,750 for a total of $56,450, and CAT  generator (Ziegler Power Systems) for $67,095 minus trade-in for existing generator of $1,000 for a total of $66,095. Lisson said he and staff are recommending the Blue Star Generator based on its features including a diesel engine with 24 hour run capability. The price is within the budgeted amount and the Blue Star generator is assembled in Minnesota.

 

Council approved.

 

 

Marie Pflipsen said the City of Becker applied for and received a grant from the Minnesota Dept. of Transportation to assist in the construction of the rail spur to serve the new Northern Metals Recycling facility. 

 

She said the grant requires an agreement between the City and MnDOT for the completion of the proposed project. The actual construction of the rail spur will be the responsibility of Northern Metals Recycling, so the city will be acting as a pass-through for the funds.

 

 

Greg Pruszinske discussed and asked for approval to grant a franchise agreement with Midcontinent Communications to maintain a cable communications system in the City of Becker for the next 15 years.

 

The ordinance sets forth conditions and provides for regulation and use of the system and prescribing penalties for the violations of its provisions.

 

 

Pruszinske presented the consent agenda, which included hiring and termination notices for public services, Pebble Creek, community development, public works, the BCC and the police department. Part of the hiring included the commission of Phil Knutson to be fulltime public services director. Knutson had been a long-time employee (29 years) with Becker Furniture World and is a former city council member.

 

The rest of the consent agenda included a change for city council meeting times during the summer months from 6 p.m. to 5 p.m. (Memorial Day to Labor Day). Also, a temporary liquor license for the Becker Lions, an agreement with Midwest CAD Solutions, an amendment to the antenna site lease agreement with Sprint and a control panel replacement for Well #4.

 

 

The next Becker City Council meeting is May 21 at 6 p.m.