DITHI PASA  Byglluth OPasadena  7047 SUNSET DRIVE SOUTH SOUTH PASADENA, FLORIDA33707 PH: (727)347-4171 FAX: (727)345-0518 WWW.MYSOUTHPASADENA.COM  PLACEINTHE corporated)  AGENDA  SPECIAL COMMISSION MEETING SOUTH PASADENA, FLORIDA  TUESDAY, JUNE 25, 2019  COMMISSION CHAMBERS 9:00 A.M.  CALL TO ORDER INVOCATION PLEDGE OF ALLEGIANCE ROLL CALL PEOPLE'S FORUM AGENDA COMMENT  DISCUSSION ITEM  RESOLUTION NO. 2019-04 - A RESOLUTION OF THE CITY OF SOUTH PASADENA, FLORIDA, RETAINING WELLS, HOUSER & SCHATZEL, P.A. TO AUDIT THE CITY'S FINANCIAL RECORDS AND PROVIDE SUPPORT FOR FISCAL YEAR ENDING SEPTEMBER  30, 2019.  ADJOURN  This meeting is open to the public. Ordinances may be inspected by the public in the office of the City Clerk at City Hall from 8:00 a.m. to 4:00 p.m. Monday through Friday with the exception of holidays. Any person who decides to appeal any decision of the City Commission with respect to any matter considered at this meeting will need a record of the proceedings, and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence The City of South Pasadena is committed to providing reasonable accommodation for access for the disabled. In accordance with the Americans with Disabilities Act and F.S. 286.26, anyone needing assistance with regard to this meeting should contact the City Clerk's Office in writing at least 48 hours prior to the meeting. For more information or assistance please contact the City Clerk's office at 727-347-4171.  upon which the appeal is to be based.    RESOLUTION NO. 2019-04  A RESOLUTION OF THE CITY OF SOUTH PASADENA, FLORIDA, RETAINING WELLS, HOUSER & SCHATZEL, P.A. TO AUDIT THE CITY'S FINANCIAL RECORDS AND PROVIDE SUPPORT FOR FISCAL YEAR ENDING  SEPTEMBER 30, 2019.  WHEREAS, Wells, Houser & Schatzel P.A. have performed the City audit for the past 28 years and the City has found their work to be  satistactory; and  WHEREAS, after discussion at their June 21, 2019 meeting, the Auditor Selection Committee has recommended that Wells, Houser & Schatzel be retained for auditing services for fiscal year 2019. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of South Pasadena that Wells, Houser & Schatzel, P.A. is retained as the auditor of the City and shall perform the duties and functions thereof for fiscal year beginning October 1, 2018 and ending September 30, 2019 for a total cost not to exceed $24,000. In addition, the City agrees to pay $150.00 per hour for the services of a partner and $90.00 per hour for the services of a staff accountant to assist the City in matters which are unrelated to the audit. A copy of Wells, Houser & Schatzel's engagement  letter is attached hereto marked as Exhibit A.  PASSED AND ADOPTED THIS  DAY OF  2019.  Arthur Penny, Mayor  ATTEST:  Carley Lewis, City Clerk  THIS RESOLUTION HAS BEEN APPROVED AS TO FORM AND CONTENT BY THE  CITY ATTORNEY.  RES 2019-04  w    WELLS, HOUSER & SCHATZEL, P.A.  John B. Houser, CPA Peter C. Schatzel, CPA Peter B. Wells, CPA  CPAAND CONSULTING FIRM  May 26, 2019  The Honorable Mayor and Members oft the City Commission  City of South Pasadena, Florida 7047 Sunset Drive South South Pasadena, Florida 33707  We are pleased to confirm our understanding of the services we are to provide the City of South Pasadena, Florida (the City) for the year ended September 30, 2019. We will audit the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information, including the related notes to the financial statements, which collectively comprise the basic financial statements oft the City of South Pasadena as ofand Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement the City's basic financial statements. Such information, although not a part oft thel basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the City's RSI in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSIi is required by U.S. generally accepted accounting principles and  fort the year ended September 30, 2019.  will be subjected to certain limited procedures, but will: not be audited.  1) Management's) Discussion and Analysis  We have also been engaged to report on supplementary information other than RSI and analysis that accompanies the City's financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America and will provide an opinion on it in relation to  the financial statements as a whole:  1) Budgetary Comparison Schedule - General Fund  2) Firefighters' Retirement Fund and Retiree Health Care Plan Schedules  3) Budgetary Comparison Schedules - Capital Improvements Fund, Sewer Fund, and Reclaimed  Water Fund  4) Combining Financial Statements forl Fiduciary Funds  5) Schedule of Revenues and Expenses - Deepwater Horizon - BP Oil Spill Settlement  MA&s  RES. NO. 2019-04 Exhibit A  500 94th Avenue North . St. Petersburg, Florida 33702-2406 Phone: (727)578-1040- Fax: (727). 578-1041 . Online: www.whspa.com  Members: American) Institute of Certified Public Accountants Florida Institute of Certified Public Accountants    6) Comparative Balance Sheet- General Fund 7) Comparative Balance Sheet- - Capital Improvements Fund  8) Reconciliation ofTotal Fund Balance for the Governmental Funds to' Total Net Position for 9) Reconciliation ofNet Change in Fund Balances fort the Governmental Funds to Change in) Net The Introductory and Statistical Sections accompanying the financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and our auditor's report will not provide an opinion or any assurance on that other information. Our responsibility for this other information included in documents containing the audited financial statements and auditor's report does not extend beyond the financial information identified in the report. We have no responsibility for determining whether the information contained in these  Governmental Activities Position for Governmental Activities  documents is properly stated. Audit Objectives  The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles, and to report on the fairness of the supplementary information referred toi in the second paragraph when considered in relation to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government. Auditing Standards, issued by the Comptroller General ofthe United States, and will include tests oft the accounting records of the City and other procedures we consider necessary to enable us to express such opinions. We will issue a written report upon completion of the City of South Pasadena's financial statements that will be addressed to the City Commission. We cannot provide assurance that unmodified opinions will be expressed. Çircumstances may arise in which it is necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If our opinions on the financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to express opinions or1 to issue ai report as ai result of this engagement. We will also provide a report (that does not include an opinion) on internal control related to the financial statements and compliance with the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The reports on internal control and compliance will each include aj paragraph that states that the purpose oft the report is solely to describe the scope of testing of internal control over financial reporting and compliance, and the result of that testing, and not toj provide an opinion on the effectiveness ofi internal control over financial reporting or on compliance, and that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance. The paragraph will also state that the report is not suitable for any other purpose. If during our audit we become aware that the City is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards may  not satisfy the relevant legal, regulatory, or contractual requirements.  Audit Procedures--General  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the  2    appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We will plan and perform the audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us, even though the audit is] properly planned and performed in accordance with U.S. generally accepted auditing standards and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform the appropriate level of management of any material errors, any fraudulent financial reporting; or misappropriation of assets that come to our attention. We will also inform the appropriate level of management ofa any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential, and of any material abuse that comes to our attention. Our responsibility as auditors is limited to the period covered by our audit and does not extend to later periods for which Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about your responsibility for the financial statements, compliance with laws, regulations, contracts, and grant agreements and other responsibilities required by generally accepted auditing standards.  detecting abuse.  we are: not engaged as auditors.  Audit Procedures--Internal Control  Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, ifp performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government. Auditing Standards. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the City's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective ofo our audit  Audit Procdures-Complance  3    will not be to provide an opinion on overall compliance and we will not express such an opinion in  our report on compliance issued pursuant to Government. Auditing Standards.  Other Services  We will also assist in preparing the financial statements and related notes oft the Çity in conformity with U.S. generally accepted accounting principles based on information provided by you. These nonaudit services do not constitute an audit under Government Auditing Standards and such services will not be conducted in accordance with Government Auditing Standards. We will perform the services in accordance with applicable professional standards. The other services are limited to the financial statement services previously defined. We, in our sole professional judgment, reserve the right to refuse to perform any procedure or take any action that could be Other services that we will perform as part of our engagement for which you will not be billed any additional fee, as well as other conditions that we agree to abide by, are as follows: 1. The audit shall be conducted in accordance with Government. Auditing Standards as issued by the Comptroller General ofthe United States, the Rules oft the Auditor General, the American Institute of Certified! Public. Accountants (AICPA). Audit and. Accounting Guide for State and Local Governments and, ifapplicable, the AICPA Government. Auditing Standards and Single Audits, as well as Florida Statutes sections 11.45 and 218.39. We will also be responsible for performing certain limited procedures involving the supplementary information required by 2. If applicable, a Single Audit conducted in accordance with the provisions of the Uniform Guidance of Title 2 U.S. Code of Federal Regulations Part 200 and the Compliance Supplement as issued by the U.S. Office of Management and Budget in the event that Federal 3. Ifapplicable, a Single Audit conducted in accordance with the provisions oft the Florida Single 4. AI Management Letter addressing the requirements of Chapter 10.550 - Rules of the Auditor 5. Ar report regarding compliance with the requirements of the Rules the Auditor General Chapter 6. As part ofthe audit, we assist in the preparation ofy your financial statements and related notes. In accordance with Government Auditing Standards, you will be required to review and 7. Prepare, in draft form, the statistical tables required to be included in the Comprehensive Annual Financial Report based upon the audited financial statements and based on other 8. Prepare the Local Highway Finance Report in draft form for submission to the Florida Department ofTransportation based upon the audited financial statements. 9. Prepare the Annual Local Government Financial Report in draft form for submission to the Department ofFinancial Services based upon the audited financial statements. 10. Present the audited financial statements to the City Commission and also review the audit 11. As part of our engagement, we will maintain capital asset depreciation schedules based on management providing the necessary information regarding capital asset additions and  construed as assuming management: responsibilities.  generally accepted accounting principles.  award expenditures exceed $750,000.  Audit. Act. General. 10.556(10).  approve those financial statements.  information provided to us by City personnel.  findings and recommendations.  deletions as well as the appropriate useful lives fort the additions.  4    Management Responsibilities  Management is responsible for designing, implementing, establishing, and maintaining effective internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, and for evaluating and monitoring ongoing activities to help ensure that appropriate goals and objectives are: met; following laws and regulations; and ensuring that management and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws, regulations, contracts, and grant agreements. You are also responsible for the selection and application of accounting principles, for the preparation and fair presentation of the financial statements and all accompanying information in conformity with U.S. generally accepted accounting principles, and for compliance with applicable laws and regulations Management is also responsible for making all financial records and related information available to us and for the accuracy and completeness of that information. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation oft the financial statements, (2) additional information that we: may request for the purpose of the audit, and (3) unrestricted access to persons within the government Your responsibilities include adjusting the financial statements to correct material misstatements and for confirming to us in the written representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the government complies with applicable laws, regulations, contracts, agreements, and grants and for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of laws, You are responsible for the preparation of the supplementary information, which we have been engaged toi report on, in conformity with U.S. generally accepted accounting principles. You agree toinclude our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (1)you are responsible for presentation of the supplementary information in accordance with GAAP; (2) you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible fori identifying and providing report copies of previous financial audits, attestation engagements, performance audits or other studies related to the objectives discussed in the Audit Objectives section of this letter. This  and thej provisions of contracts and grant agreements.  from whom we determine it necessary to obtain audit evidence.  asa whole.  regulations, contracts or grant agreements, or abuse that we report.  underlying the measurement or presentation oft the supplementary information.  5    responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or other studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions, for the report, and for the timing and format for providing that information. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to distribute information and, therefore, we are not required toi read thei information contained in these sites or to consider the consistency ofotheri information ini the electronic site with the original document. You agree to assume all management responsibilities relating to the financial statements and related notes and any other nonaudit services we provide. You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements and related notes and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. Further, you agree to oversee the nonaudit services by designating an individual, preferably from senior management, with suitable skill, knowledge, or experience; evaluate the adequacy and results of those services;  and accept responsibility for them. Engagement. Administration, Fees, and Other documents selected by us for testing.  Administration  We understand that your employees will prepare all confirmations we request and will locate any We will provide copies of our reports to the City; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available The audit documentation for this engagement is the property ofWells, Houser & Schatzel, P.A. and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to an oversight agency, awarding agency or pass-through entity or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Wells, Houser & Schatzel, P.A. personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental The audit documentation for this engagement will be retained for ai minimum of five years after the report release date or for any additional period requested by an oversight agency, awarding agency or pass-through entity or its designee. Ifwe are aware that ai federal awarding agency or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for guidance  for public inspection.  agencies.  prior to destroying the audit documentation.  Timing of Audit  We will complete our preliminary audit planning and test of controls fieldwork by October 31, 2019 and will begin year-end field work by February 17,2020 with the assurance that the audit will We will schedule the engagement based in part on deadlines, working conditions, and the availability of your key personnel. We will plan the engagement based on the assumption that your personnel will cooperate and provide assistance by performing tasks such as preparing requested  be completed and our reports delivered by March 30, 2020.  6    schedules, retrieving supporting documents, and preparing confirmations. If for whatever reason your personnel are unavailable to provide the necessary assistance in a timely manner, it may substantially increase the work we have to do to complete the engagement within the established deadlines, resulting in a delay in the completion of the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new estimated completion date before we Peter Schatzel is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. Our fee for these services will not exceed $24,000. In recent years, our audit fee has been $23,400 for September 30, 2018, $22,800 for September 30, 2017 and 2016, $21,900 for September 30, 2015, and was $21,060 for the three years prior to 2015. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. The hourly rates for additional services would be as follows: Peter Schatzel and John Houser- $150 per hour and Staff Accountants $90 per hour. Our fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. Ifsignificant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the  incur the additional time. Audit Fee  additional costs. Other  Government Auditing Standards require that we provide you with a copy ofo our most recent quality This agreement is renewable on an annual basis with the consent of both parties provided both parties are mutually agreeable to the terms oft this engagement and the proposed audit fee. This agreement can be cancelled prior to commencement of the audit by either party giving sixty (60) days written noticed (or other time period ifs stipulated by the City). We appreciate the opportunity to be ofs service to the City of South Pasadena and believe this letter accurately summarizes the significant terms of our engagement. Ifyou have any questions, please let us know. Ify you agree with the terms of our engagement as described in this letter, please sign  review report. Our 2017 peer review report accompanies this letter.  the enclosed copy in the space provided below and: return it to us.  Sincerely yours, Wells, Houser & Schatzel, P.A Rii C. belilyp Peter C. Schatzel Certified Public. Accountant  RESPONSE: pages).  The City of South Pasadena is in agreement with the terms oft the above letter (consisting of7  Management signature: Title: Date:  7    Gregory, Sharer & Stuart, P.A.  Accountants  (ASS9  Certified. Public  and Business Consultants  Report on the Firm's System of Quality Control  December 13, 2017  Tot the Shareholders of Wells, Houser & Schatzel, P.A. Andt the Peer Review Committee oft the Florida Institute ofCPAs  We have reviewed the system of quality control for the accounting and auditing practice of Wells, Houser & Schatzel, P.A. (the firm) in effect for the year ended June 30, 2017. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at wAcpagtprummar The summary alsoi includes an explanation ofhow engagements identified as not performed or reported in conformity with applicable professional standards, if  American Institute ofCertified] Public Accountants (Standards).  any, are evaluated by a peer reviewer to determine aj peer review rating.  Firm's) Responsibility  The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions toj promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating  weaknesses ini its system of quality control, ifany. Peer Reviewer's Responsibility therewith based on our review. Required Selections and Considerations  Our responsibility is to express an opinion on the design oft thes system of quality control and the firm's compliance  Engagements selected for review included engagements performed under Government. Auditing Standards including As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if  ac compliance audit under the Single Audit Act and an audit of an employee benefit plan.  applicable, in determining the nature and extent of our procedures.  Opinion  In our opinion, the system of quality control for the accounting and auditing practice of Wells, Houser & Schatzel, P.A. in effect for the year ended June 30, 2017, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies), orj fail. Wells, Houser & Schatzel,  P.A. has received a peer review rating of pass. Prczilan Gregory, Sharer & Stuart, P.A.  * Ssk, RA-  100 Second Avenue South, Suite 600 ISt. Petersburg, Florida 33701-4336 (727) 821-6161 I Fax (727) 822-4573 I gsscpa.com linfo@gsscpa.com