Minutes. Oral Requests and Communications from the Audience/Staff None

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1 Page 1 Board of Directors Regular Meeting Wednesday,, 6:30 p.m. Bob Keefer Center for Sports and Recreation 250 S. 32 nd Street, Springfield, Oregon Call to Order President Greg James called the meeting to order at 6:30 p.m. Roll Call Superintendent Vincent Martorello called the roll. Present were President James, Directors Anne Ballew, Lee Beyer, and Gary Ross. Director Denise Bean was absent (excused). Staff present were Mr. Martorello, Pam Caples, Michael Wargo, Eric Wold, Bill Kunerth, Nicole Gibson, and Rita Grimes Others present were Legal Counsel KC Hoffman, Peter Bejarano, Pauly Rogers & Co., CPA Flag Salute President James led the group in the flag salute Adjustments to the Agenda Oral Requests and Communications from the Audience/Staff Consent Calendar Regular Board Meeting of October 12, 2016 Claims 10/06/16 through 11/10/16 Disbursements for Approval Checks # through # Resolutions a. Resolution # Appointment of Secretary Pro Tempore b. Resolution # Appointment of Trustees to Retirement and Deferred Compensation Plans Director Beyer, moved, seconded by Director Ross, to approve the Consent Calendar as presented. The motion passed unanimously 4:0.

2 Page 2 Unfinished Business 1. Fiscal Year 2016 Audit Report Administrative Services Assistant Superintendent Pam Caples introduced Pete Bejarano, of Pauly, Rogers and Company, PC who presented the highlights of the district s FY 16 financial audit. Ms. Caples noted that the Audit Committee met prior to the meeting to review the audit in detail. Mr. Bejarano was very complimentary of the district s financial staff and the Board s financial stewardship saying the audit resulted in an unqualified opinion of the financial statements. Significant Deficiencies, again, related to concern about the limited number of staff in the department to adequately segregate duties and concern that both the Accountant and the Administrative Services Director have full access to the accounting software. Significant Deficiencies in Best Practices were fidelity insurance coverage, and trust fund balances that exceed the amount insured by the Securities Investor Protection Corporation. Ms. Caples addressed the Significant Deficiencies stating that, for redundancy purposes, staff believes that having two individuals available to address accounting software needs is in the best interest of the district. When one of the staff named is on vacation or unable to work for an extended period, it is advantageous to have another management/executive level employee having full access to the software. In addition, human resources duties has been separated from payroll function. Once again, she encouraged the Board to ask questions regarding fraud and accounting practices and noted that dates of bank reconciliations and tax filings are included in the quarterly summary reports the Board receives throughout the year. Mr. Bejarano suggested benchmarking the financial reports with other like agencies Mr. Bejarano noted that both the retirement program and the district has more cash on hand than insurance coverage and Ms. Caples responded that the district currently has $500,000 in fidelity insurance. Coverage and risk in past years have been reviewed and it was determined that the amount of coverage is adequate. Mr. James congratulated Ms. Caples and her finance staff on a clean audit. Director Ballew moved, seconded by Director Ross to approve the FY 16 Audit Report, as presented. The motion passed unanimously, 4:0 2. Fiscal Year st Quarter Financial Report District Accountant Robert Cussins presented the FY 17 first quarter report. Revenue-General No currently levied taxes have been received as of September 30, The audit numbers reflect a beginning fund balance of $2,391,720 which is $91,720 more than the budgeted amount of $2,300,000. Assessed value information received from the County is on target with the budgeted amount. The FY 2017 budget is based on assessed value growing at 3.0%. Information from the County reflects an overall growth rate of assessed value in the District of 3.0%. Administrative Services Division Subsidy used this year is 24.93% vs. 23.0% last fiscal year.

3 Page 3 Recreation Services Division Aquatics Department Total Aquatics revenues increased by approximately $13,000 during the first quarter from the same time period last fiscal year. Expenses for the same time period have decreased by approximately $19,000. Total subsidy used this fiscal year is 16% vs. 19% last fiscal year during the same time period. Recreation Services Division All Other Recreation Departments Revenues have increased approximately $123,000 over last year and expenses have decreased approximately $92,000 in the same period. Revenue comparisons to last year show two areas with significant revenue increases: Early Childhood & Youth Programs revenue is up $65,000 from last fiscal year and Special Events revenue is up by $23,000. The decrease in expenses is due to the transfer of facility maintenance costs to the parks and facility maintenance division. Total subsidy used for the entire Recreation Services Division this fiscal year is 15.24% vs % last year. This is a significant improvement over the same time period last fiscal year. Park Services Division Subsidy used this year is 24.28% vs. 27.8% last fiscal year. Camp Putt The FY 2017 financial activity for Camp Putt is included in the Recreation Services Division. Expenses and revenue through October 31 indicate $30,500 to the good. Audit Compliance All bank reconciliations and tax payments were completed on time. Administrative Services is not aware of any fraudulent activities occurring in the district. Ms. Ballew asked about the slight difference in subsidy for Administrative Services. Ms. Caples suggested that it may be cross over between Mr. Keefer s retirement and Mr. Martorello s taking on the superintendent s job. Mr. Beyer commented that whenever there are swings in revenue and expense, such as Aquatics, he likes to know what happened. Recreation Services Assistant Superintendent Michael Wargo suggested it might be the slight increase in out of district fees as well as adjusting hours and staffing. Pool usage is up and staff are doing a better job of monitoring who s coming into the facilities. In addition, Resource Development is bringing in more sponsorships. Pool staff have embraced changes made and monitor their budgets on a weekly basis. They have also become frugal with expenditures; Director Beyer moved, seconded by Director Ballew, to approve the FY 17 First Quarter Financial Report, as presented. The motion passed unanimously 4:0. 3. Five-Year Financial Plan Update Ms. Caples presented the five-year financial plan update noting, again, that Assessed Value came in on target at 3.0%, which the adopted budget was based on, and that the year ended better than expected with the ending fund balance for the period ended June 30, 2016 at $2,391,721 approximately $91,721 over the budgeted amount.

4 Page 4 Mr. James asked when the Swanson Mill and International Paper go back on the tax rolls and Ms. Caples indicated that it would be fiscal year Ms. Caples did not change any assumptions for this update and suggested that the Board may want to look at assessed value in February. Currently, everything is looking good with the ending balance in five years projected to be $98,000 as result of paying off debt 14% of ending balance in that final year. She should have the health insurance bill next month which she does not expect to go up but did budget for an 8% increase. Ms. Caples went on to say that the district will have to deal with minimum wage again and she assumes that it will feather it in as was done last year. The raise in minimum wage was not included in any assumption last year as Recreation Services Division covered it with fees but may not be able to do so in the future. Director Ross moved, seconded by Director Ballew, to accept the updated Five-Year Financial Plan Update, as presented. The motion passed unanimously 4:0. 4. Audit Contract Ms. Caples presented this topic saying that this was the sixth year of using Pauly Rogers & Co., CPAs as auditors and that it was time to go out with a Request for Proposals. Two proposals were received for a three year contract with the option to renew for two more years from Pauly Rogers & Co., PC and Moss Adams, LLP. Mr. James, Ms. Ballew, Superintendent Bob Keefer, district account Robert Cussins and Ms. Caples evaluated the proposals on the criteria published in the RFP. She indicated that all firms were very well qualified to perform the audit. Price to perform the audit ranged from a low of $20,900 from Pauly Rogers and Co., PC to a high of $27,500 from Moss Adams LLP. The average ranking (out of a maximum score of 500) for each of the firms from the committee was: Moss Adams LLC 402 and Pauly Rogers and Co. PC 436 Ms. Caples recommended awarding the audit contract to Pauly Rogers and Co., PC. Director Beyer moved, seconded by Director Ross, to award the audit contract to Pauly Rogers and Co., PC for fiscal years 2017, 2018, and 2019 with an option to extend to fiscal years 2020 and The motion passed unanimously 4:0. Business from Legal Counsel Standing and Special Committee Reports Ms. Ballew announced that the Willamalane Parks Foundation made almost $1,800 at the McKenzie Cider and Craft Beer Festival. Mr. James reported that everything is going well at LCOG and their next meeting will be in December in Florence. Superintendent s Business 1. Superintendent s Reports - #189 dated October 31, 2016

5 Page 5 2. Staff Updates Mr. Martorello announced that the Mill Race Path grand opening will be January 19, Other updates: P&D staff are about to go out with a Request for Proposals for external signage for the Bob Keefer Center. Changes are being made to internal signage and the website, Activenet and to building stationery and staff are now referring to the facility as Bob Keefer Center. Making all the changes is a huge undertaking. Staff had the first review of the needs assessment survey with Community Workshop at UO. Staff will give feedback on how the information should be presented and will, then, present to the Board in a couple of months. Mr. Martorello reviewed the process used for getting survey input through an online presence, pop-up surveys at events, as well as surveys distributed to the community. Mr. Wargo indicated the assessment reached almost every demographic in the district. Mr. Martorello is working with a facilitator for the Board Retreat. She will meet with him alone, then with Management Team, and then with the Board to discuss the topics and logistics of the retreat which will be held in January or February. The goal is to do visioning for the next three to five years. Mr. Beyer indicated he will not be available in February due to the legislative session. 3. Upcoming Meetings/Work Sessions/Events Board President (5 min) November 16 Party on the Plaza Les Schwab Sports Park, 4-5:30 p.m. November 16 Regular Board Meeting, Heron Room, 6:30 p.m. November 24 Turkey Stuffer, Lively Park, 8:30 a.m. November Thanksgiving Holiday, offices closed December 3 Springfield Christmas Parade, downtown Springfield, 1 p.m. December 6-7 Holiday Marketplace, WAAC, 9 a.m.-6 p.m. December 8 SpringFilm Animal House, Wildish Theater, 6:30 p.m. December 9 Island Park Gallery Reception for Gayle Balsalobre: Nature Captured/Memories Forever, WAAC, 5 p.m. December 14 Regular Board Meeting, Heron Room, 6:30 p.m. December 26 Christmas Day Observed Offices Closed January 2, 2017 New Year s Day Observed Offices Closed Remarks from the Directors Ms. Ballew complimented staff for the good job publicizing the Veterans Plaza event. Mr. Martorello gave Landscape Architect Simon Daws credit for his work coordinating the project. Mr. Beyer said he heard lots of kudos for the Springfield Education Foundation fundraising event and the McKenzie Cider and Craft Beer Festival held at Bob Keefer Center although he said the sound system doesn t work well nor did the Wi-Fi system. Mr. Martorello concurred and noted that staff are having conversations about the sound system which may come back as a CIP request. Mr. Ross read a poem he had written in honor of Ms. Caples pending retirement. Mr. James passed around a card received from Christi Keefer about Bob Keefer s retirement event.

6 Page 6 Messages and Papers from the President Adjournment The meeting was adjourned at 7:31 p.m. Vincent Martorello, Secretary Rita F. Grimes, Recording Secretary