Submitted by Suanne Z. Thamm
Reporter – News Analyst
March 24, 2015 8:40 a.m.

At the March 17, 2015 Fernandina Beach City Commission meeting, commissioners considered and discussed several matters relating to city finances.

Annual Audit

Mr. Ryan Tucker from Purvis Gray and Company presented the Fernandina Beach City Commission (FBCC) with the city’s Annual Audit Report for the Fiscal Year ending September 30, 2014. He said that the results of the audit were very positive and touched on a few highlights of the 73-page report. This report is available in its entirety on the city’s website:

Audit highlights


Ryan Tucker walks FBCC through September 2014 Audit Report.
Ryan Tucker walks FBCC through September 2014 Audit Report.

He noted that the process began in October with a team of CPAs who visited the city to conduct preliminary fieldwork. Final fieldwork was completed in January. The audit went very smoothly, he said, and thanked City Comptroller Patti Clifford and her staff for assembling materials and responding to their needs throughout the process.

In their management letter, the auditors said that they had no recommendations to improve the city’s financial management. Also, they found no instances of noncompliance with city contracts or grant agreements or any abuses that would warrant attention by the FBCC.

Vice Mayor Johnny Miller raised questions about new reporting requirements in handling pension fund issues. Tucker said that the bond rating agencies already knew where this information appeared, although it did not appear on the annual financial statement. “These are long term liabilities for the next 30 years that will have to be moved onto cities’ balance sheets,” he said. He added that many cities are looking at pension reforms to reduce those liability amounts.

The FBCC voted unanimously to accept the audit.

Pension Concerns

Vice Mayor Johnny Miller listens to Roy Smith's concerns about the city's pension liabilities.
Vice Mayor Johnny Miller listens to Roy Smith’s concerns about the city’s pension liabilities.

During Public Comment, Roy Smith expressed concern over the pension liability issue. He said that as a small city, Fernandina Beach is carrying a $17M pension liability that cannot be compared to Jacksonville. Mayor Boner asked about the pension study that is underway. City Attorney Tammi Bach said that a meeting would take place on March 18 during which the city’s pension attorney will meet with staff to narrow options. Once that is done, the actuary will run numbers. City Manager Joe Gerrity said that the city is already implementing measures to improve the situation, so options are more limited. City employees covered by the general fund already contribute 6.5 percent into the pension fund, while police contribute 7.7 percent. City pensions contain no COLAs or health benefits.

Utility System Subordinate Refunding Revenue Note

Later in the meeting commissioners considered Resolution 2015-54 approving the execution of various documents pertaining to the Utility System Subordinate Refunding Revenue Note. The original note of more than $5M was issued to finance the payments of the futures system with the purchase of the water utility from Florida Public Utility in 2003.

Ed Stull explains complexities of utility system revenue note to FBCC.
Ed Stull explains complexities of utility system revenue note to FBCC.

Ed Stull of First Southwest, the city’s financial advisor, made a brief presentation explaining that after receiving four responses to an RFP issued to refinance existing revenue bonds, Series 2010, he and city staff were recommending that the FBCC accept the proposal from Ameris Bank. The new bank loan carries an interest rate of 2.19 percent as opposed to 4.59 percent for the current debt with a maturity date of September 1, 2014. The present value of the interest savings is $631,000.

The commissioners approved the item unanimously, thanking Stull for his work.

Suanne Thamm 4Editor’s Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne’s many contributions to the Fernandina Observer.

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