HomeMy WebLinkAboutAgenda Budget Oversight 022306CITY OF PALM BEACH GARDENS
10500 N Military Trail
Palm Beach Gardens, Fl 33410
BUDGET OVERSIGHT COMMITTEE
NOTICE OF MEETING AND AGENDA
Please take notice that the Budget Oversight Committee of the City of
Palm beach Gardens will conduct a meeting of the committee at the
above location on February 23, 2006 at 8:30 AM in Council Chambers.
I. Roll Call
II. Review and discussion of draft report on pensions submitted by
John Chaplik
III. Update on status of budget preparation process
IV. Adjournment
DISABILITY INFORMATION
In accordance with the Disabilities Act and F.S.S 286.26, persons with
disabilities needing special accommodation to participate in this proceeding
should contact the Human Resource Department no later then seven days
subsequent to the proceeding at (561) 799 -4223 for assistance, if hearing
impaired, telephone the Florida Relay Service Number at 800 - 955 -8770
(voice) for assistance.
APPEAL NOTICE
If a person decides to appeal any decision made by the board, with
respect to any matter considered at such meeting or hearing, he will need to
ensure that a verbatim record of the proceedings is made, which record
includes the testimony and evidence upon which the appeal is to be based.
THE WALL STREET JOURNAL. � �s /rte
THE ECONOMY
Public Pensions Press State Budgets
SdP Study Notes Shorts aaUs
And Warns That Stresses
Threaten Creditworthiness
By Dmmmm Sou mm
Underfunded public - employee pen-
sion plans are straining state budgets
just as states face other rising ex-
penses and steep debt levels, according
to a Standard & Poor's Corp. analysis
to be released today.
The report said pension plan short by about $284
It 2004, the latest year for which data are
available, leaving the plans in need of
hefty contributions. The budgetary
Stress Mid ultimately hurt states' credit -
warfbiness, leading to higher borrowing
costs for debt to finance all governments, which sell
types of projects, such
as roads and schools.
"Me big picture is that funding levels
hVe them, and we think that they may
fall a IM bit more," bald parry Young, a
director with S&P in New Yank.
While state revenue grow is straug+er,
than if bas been in the past five years.
Stain LIM a "do le- whammy" of dee in-
iHg f fund assets and rift lidbilt-
am which Means they must Contribute
more may, a0cording to the report,
As of June 30, 2004, the value of public
pension fund assets fell to 84% of pro-
jected liabilities from i00% or more in the
late 19902, according to the report. The
Felling Behind
PW* pension funds are under- funded by about
$284 tolion nedoremde. States with the bast and
rwuhstpeneron funding in fWat 2004, by funded
robo (ratlo of fund wets to tlabilifies);
Fins Worst
V tYbginia X43.996 i�fingy .
omshoma 57.0 �t0li)
Rhode hind X59.4
connectlout 59.9.
tY *4 59.9 i
Fite am :
FWda
NOM Carolbha 108.1
Georgia 101.0
No* York 99.7
South Dakoa 97.7
sar W swvftw a Pours
drop stems from several factors, includ-
ing the bursting of the stock - market bub-
ble, the promise of entranced benefits
and weak financial em bibutions by state
and local governments.
Most public pension funds get mo1w
tary contributions from state and local
governments and also make money off
Investments in the stock market. Many
funds were flush during the 19901 as big
Investment gains bloated pension plans.
leading some state and local govern.
merits to scale back ftir contributions
and grant enhanced benefits.
When the stock market bubble burst
earl' this decade, pension finds saw their
funding levels sink, and state and local
governments were on the book to make up
the difference. As a result, states have had
to boast their c wtribution rates.
But many still have large holes to fill
before their pension plans are fully
funded. Among the most underfunded
plans in fiscal.2004 were Wiest Virginia,
Oklahoma and Rhode Island.
The need 'to oontribute more motley
comes as states face other budgetary pres-
sures, including skyrocketing costs for
Medicaid, the federal -state healttl- m pro-
gram for the pool. C *s are rising at about
7% a year; State and focal governments will
also have to start setting aside money to
pay for retiree health benefits as the result
of a pending a000umting change; for the
first time. pvemments will be required to
disclose these obligations, States are also
carrying an enormous debt load of =8
billion. which they must finance in both the
long and short term.
Because of the rising budget pres-
sures, ratings firms such as S&P want to
see pension asset- to- liablitty ratios reach
90% or more so that contribution rates
can level off and states can afford to
matte their debt payments.
"Pension liabititles.,.must be managed
so as not to adversely affect the empbyer's
cwt p�toflle." the report said. If they are
ignored or If they hurt a state's financial
position, it added, that Could "exert down-
ward pressure on the state c redltwortht-
neas at least over the intermediate term."
a'a40 ovens,
�s
u pendan ea�ptions alree�r �
gotten a number of publie entities —arch as the
cit.Y of San Diego SW the arODk rada and
mints -into eaonomie MvAty. trope ow will
:td if these brvacfical ass are not
reined tn. This part year, I have served as a
member of the audit mmittee e1vuled with
twes"gadng and reaaediaft Aftifions of
probkms ei I*MdMg San flleg S penilM.fatlds
and fipanoes. I have seen Dtsdiand how devastat
ing apparent exams of bad pension acQount-
ing and ntiamapag+ement can be, and low vital
twrreettng both are to the overall health of the
capital markets and the retirements of tent of
muttons of workers am-red".
untangling the web of problems plaguing the
automotive and airline indwtcies, as. well as
those of muntcip831ties and states, has not been
eM Putdog,th0ir 1 in and finances on
aoWid foottng will requite great aacriiice for all
affected: investors, employees. management
and citttens. To mid'tke pain that Delphi -and
San Diego are w4vgpiog,: we must now place
defined -bw"t po" plans on mid ground.
Doing so may be ditria it for many ettles and
co�npsnies. But it will be very SwO for America.
Mr. Lovett r ArrW doom d Ne SWI
tE WALL STREET JOURNAL. OPINION THURSDAY, Nov :MBER 10, 2005
the profession's significant contribution to
the launch of the IRS disaster relief project.
Finally, the Firm Volunteer Center, a
PCPS initiative, made it possible for CPAs to
help their fellow practitioners by providing
offices and supplies, technology support,
hosting of e -mail servers, help with critical
filings, support in reaching clients and even
temporary employment and housing.
RESOURCES FOR NPOS AND
AUDIT COMMITTEES
CPAs who work with small businesses
often also serve smaller not - for - profit or-
ganizations (NPOs) —many of which
ok to their CPAs for advice on how to
rengthen their audit committees. To help,
e AICPA Audit Committee Toolkit for
Not - for - Profit Organizations was devel-
oped to provide a comprehensive set of
best practices that audit committees can
adopt (www.aicpa.org/audcommctr/tool
ldtsnpo).
In response to the Sarbanes -Oxley Act,
the Institute also developed a tool kit for
audit committees of public companies. It
covers a wealth of governance topics, from
how to develop an audit committee char-
ter and hire a chief audit executive to how
to improve executive sessions and evalu-
ate independent auditors. It's available free
from the AICPA Audit Committee Effec-
tiveness Center at www.aicpa.org/aud
co mctr�-
Tool vh et�lj
ENHANCED BUSINESS
REPORTING
As business practices evolve, small com-
panies must keep pace with larger organ-
izations. To that end, the AICPA Private
Company Enhanced Business Reporting
(EBR) Task Force has developed a series
of sample reports illustrating what EBR for
privately held companies would look like.
EBR attempts to shift the focus of finan-
cial reports from historical information to
a model that incorporates both financial
and nonfinancial data, including leading
economic indicators. The private compa-
ny task force wants to ensure EBR guide-
lines are workable for small businesses.
The task force has designed an online
survey to gather the opinions of preparers
SPECIAL REPORT
and users of business reports on the rele-
vance, usefulness and effectiveness of the
sample reports. Once results are in, it will
conduct focus groups, modify the sample
reports based on the feedback and devel-
op a private - company EBR framework
based on the existing large company
model. Sample reports for private and
public companies and the survey can be
found at www.ebr360.org/ContentPage.
aspx? ContentPageId =8.
AICPA RESOURCES
Audit Committee
Effectiveness Center
The Institute's comprehen-
sive online source of guid-
ance and tools helps mem-
bers and their clients
implement audit committee
best practices (www.aicpa.
org /audcommctr). The site
also provides practical ad-
vice on recruitment and other
aspects of audit committee
operations that members can
share with clients. Among
these is the Audit Committee
Matching System (ACMS),
which lists qualified, creden-
tialed candidates to serve on
boards of directors and audit
committees. Members can
add their names to the list or
promote the system to
clients seeking qualified
board members. (Note: The
ACMS (www.alcps.org /Info/
committees/index.asp) is not
just for SEC - registrant com-
panies but also for other enti-
ties and individual AICPA
members.)
Auditing literature for
nonissuers
AICPA authoritative literature
and interpretations related to
the audit reports of nonis-
suers are available free of
charge at www.aicps.org/
members /div /suditstd /outh
_lit_for_nonissuers.htm.
CPE self -study courses
■ AICPA's Guide to
Reporting and Disclosure
Problems for Small
Businesses (# 734334JA).
AWEALTH OF RESOURCES
Wherever issues arise that will affect small busi-
nesses --in Washington or the state houses or
among standard setters or practitioners —the
Institute keeps an eye on developments and
works to form a response in the interest of the
public and the profession. The AICPA also de-
signs resources to help practitioners better serve
these clients. These initiatives and products en-
able you to offer the highest - quality services to
your small business clients. ❖
■ Analytical Procedures for
Small Business Engage-
ments (# 730551 JA).
■ Small Business Audits:
Balancing Risk,
Effectiveness and Efficiency
in Today's World
(# 7324311A).
■ AICPA s Guide to
Financing the Growing
Small Business: Sources,
Strategies and Disclosures
(# 7304831A).
■ Profit - Building Techniques
for Small Businesses
(# 7324111A).
■ Innovative Tax Planning
for Small Businesses:
Corporations, Partnerships
& LLCs (# 745518JA).
JofA articles
■ "Second- CPA -Firm
Update, JofA, Sep.05, page
61, www.aicpa.org /pubs/
jofa /sep2005 /dennis.htm.
■ "Small Firms: Think Big l"
JofA, Jun.04, page 22,
www.aicpa.org /pubs /jofa/
iun2004 /dennis.htm.
For PCPS members only
■ The PCPS Web site
(www.aicpa.org /pcps) offers
information on joining
PCPS, a membership
section of 6,000 local and
regional firms whose
interests the AICPA
represents to the
profession, regulators and
standard setters. PCPS
provides practical guidance
and quick access to critical
information on issues
affecting members' quality,
professionalism and
profitability.
■ The TIC Alert (http://
pcps.aicpa.org /Resources/T
ethnical +Issues+
Committee +and+
Communications /Monthly+
TIC +Alerts), a publication
for PCPS members, keeps
readers informed about new
and developing standards
and their potential impact on
small business clients.
■ "Not- for - Profit Board
Member Orientation, a
PowerPoint presentation for
use with clients and
prospects, educates board
members on what their
duties are, how to be more
effective, the governance
roles and responsibilities of
board members and how
they can manage and
measure success
(http: / /pcps.aicpa.org/
Resources /Not- for - Profit/
Not -for Profft +Board+
Member +Orientation.htm).
Publications
■ The CPA's Guide to
Retirement Plans for Small
Businesses (# 017237JA).
■ The CPA's Guide to
Small Business Financing
(# 091013JA).
■ How to Prevent Deter
and Detect Fraud in Your
Business (# 016200JA).
■ Not - for - Profit
Organizations -AICPA Audit
and Accounting Guide
(# 012645JA).
For more information or to
order, go to www.cpa2biz.
com or call the Institute at
888 - 777 -7077.
March 2006 Journal of Accountancy 41
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