9.4. SR 11-07-2005
Item # 9.4.
MEMORANDUM
TO: Mayor and City Council
FROM: Lori Johnson, Finance and Administrative Services Director and
Interim City Administrator
DATE: November 7,2005
SUBJECT: Presentation from Steve McDonald-Abdo, Eick, and Meyers
Councilmember Dietz and I requested that Steve McDonald of Abdo, Eick and Meyers
provide an update to the Council and answer questions regarding the embezzlement from
Elk River Municipal Utilities (ERMU). Abdo, Eick, and Meyers audits both the City and
ERMU.
As you know, even though the City has no oversight or control over the fmancial operations
of ERMU, the Water and Electric Departments are departments of the City like the
Wastewater and Liquor Departments except they are governed by a separate commission.
Therefore, the fmancial and management activities ofERMU are included in the City's
Annual Financial Report, the Management Letter, and fmancial reports and publications
required by the Office of the State Auditor.
Lori Ziemer, Assistant Finance Director, and I work closely with our auditors at year-end to
deal with issues related to ERMU's audit, how to treat various transactions, and to ensure
that ERMU's information is consistent with ours. However, we are only able to offer input
and make suggestions; we cannot require ERMU to make changes. It is important for the
Council to understand that relationship, as it ultimately affects the City.
Action Requested
This is an informational discussion so that the Council may ask Mr. McDonald questions
about this issue.
s: \ Council\Lori\2005 \AdboPresentation.doc