GRIFFIN & COMPANY, LLC · 2020-07-22 · GRIFFIN & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS Robert...

GRIFFIN & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS

Robert J. Furman, CPA

Independent Auditors' Report

To the Honorable Phillip Bickham and Members of the Board of Aldermen Village of Folsom, Louisiana

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Village of Folsom, Louisiana (the Village) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements as listed in the table of contents.

Manasement's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as welf as evaluating the overaff presentation of the Unanciaf statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the Unanciaf statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Folsom, Louisiana, as of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

POST OFFICE BOX 983 • MANDEVILLE, LA 70470 PHONE: (985) 727-9924 FAX: (985) 727-9975 850 NORTH CAUSEWAY BLVD., SUITE 200 • MANDEVILLE, LA 70448 V^MW.GRIFFINANDCO.COM

' t •fl Ti

157,272 77.

't

year, tne

(Capital (iovernineiital Business-Tj'jie

B!isiness-t\3>e activities

in net position

666.468 - 4A)QU (662,468) - (662,468)

151,02.1 141,198 112,666 77,613 38,518 40,684 28,753

21,887 5,171

- 12,062 (29,882)

2,166 (28,753)

12,062 (29,882)

2,166 (28,753)

330,960 259,495 27,058

1

(44,407)

997,428 259,495 31,058 (662,468) (44,407) (706,875)

$ 670,193 77,611 48,036 17,747 13,119

494 (36,058)

140 36,058

670,193 77,611 48,036 17,747 13,119

634

791,142 36,198 827,340

128,674 (8,209) 120,465

1,499,541 1,785,965 3,285,506

$ 1,628,215 1.777,756 3,405,971

See accompanjing notes to tiie financia! statements.

Total assets

IJabili

IJabili

Jnassigned

Total fund balances

31,23.

345.042

37S.S10

10,231

15,427

1,5.427

1.5,427

15.427

10,231

10,662 9,317

for governmental activities in the different because:

in govs resources and, therefore, are not reported

Long-term liabilities are not due and payable in the current

'ompensated absences do not require the use of financial

Net position of governmental activities

See accompanying notes to the financial statements.

77,i

U67

523,970 (152.

nmg 01 vear

Fiind balance, end of year

amount by which depreciation exceeded capital outlays charged In the

1,222,560 1,069,227

13,815 1.777,75'

11,749 1."

,815 1.777,

iNet increase in cash and cash equivalents

7.793

zmnms oi vear 7,527 279.

provided by (used in) operatlug activities

55,

m other receivables

/o

>•2%

k/ a 'J 1-1

year are reierred to as

after ago 55 with at least 20 years of creditable service, or at any age with at least

Oil

years oi creditaDle serv

installments of S1435, with interest at 4.5% per

11.741 19,272 4, 12,311 18.702 4, 12,908 18,104 4. 13,535 17,477 4, 14,192 16,820 4,

124 9,496 15.865 313 9,307 16,624 511 9,109 17,419 718 8,902 18,253 935 8,685 19,127

28,768 28,009 27,213 26,379 25,505

81.988 73,072 28, 103,918 51.142 35, 131,715 23,345 44.

28.167 707 55, 26,

293 39,808 110.281 417 32,684 139,335 334 23,766 176,049 497 12,603 83,664 484 1.308 26.484

112,880 83,826 47,111 13,310 1.308

Budeetarv C

Revenues:

Grant revi Other revenues

!22

Total other finandna sources t2;s» t2iL

6,2'

2,5

172

24,

14,500

11. 2,

2, 2,953

1,180

27.359

cc hcaith insurance cc pension 4A 4.i

in fund balance $

GRIFFIN & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS


INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A EDITING STANDARDS


We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Folsom, Louisiana (the Village), as of and for the year then ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements and have issued our report thereon dated December 17, 2014.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Village of Folsom, Louisiana's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for their purpose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, we do not express an opinion on the effectiveness of the Village's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify a deficiency in internal control, described in the accompanying schedule of findings and management corrective action plan that we consider to be a significant deficiency - 20I4-I.

POST OFFICE BOX 983 • MANDEVILLE, LA 70470 PHONE: (985) 727-9924 FAX: (985) 727-9975 850 NORTH CAUSEWAY BLVD., SUITE 200 • MANDEVILLE, LA 70448 V^MW.GRIFFINANDCO.COM

40

Management Corrective Action: In response to the finding, management feels that it is a prudent

year engagement, we

•ii y

year, we note

yUDtge cffofsom 8237s June Street

Mayor - TfUlBp Stc^m folsom, Louisiana 70437 TUmnie "ISeauT XiUrngswortfi M&rwoman ~ JiLLMatfiies (gss) 796-5G07 CfUefofToGce M&rman-'Dona££'Burris (9S5) 796-5017 fax S%aanyfi£Se^Munic^C(er1t

A££ermanr£ance 'WUBe

VILLAGE OF FOLSOM. LOUISIANA STATUS OF PRIOR AUDIT FINDINGS

FOR THE YEAR ENDED JUNE 30,2014

Finding 2014-1:

CRITERIA; Management is responsible for developing internal controls related to the preparation of financial statements as well as preparing financial statements in accordance with accounting principles generally accepted in the United States of America.

CONDITION AND CAUSE: AS is common in small organizations, management has chosen to engage the auditor to propose certain year-end adjusting entries and to prepare the Village's annual financial statements. This condition is intentional by management based upon the cost effectiveness of acquiring the ability to prepare financial statements in accordance with generally accepted accounting principles. Consistent with this decision, internal controls over the preparation of year-end adjusting entries and annual financial statements, complete with notes, in accordance with generally accepted accounting principles, have not been established. Under generally accepted auditing standards, this condition represents a significant deficiency in internal controls. Recently issued Statement on Auditing (SAS) 115 requires that we report the above condition as a control deficiency. The SAS does not provide exceptions to reporting deficiencies that are adequately mitigated with nonaudit services rendered by the auditor for which the remedy would be cost prohibitive or othenwise impractical.

RECOMMENDATION: As mentioned above, whether or not it would be cost effective to cure a control deficiency is not a factor in applying SAS 115's reporting requirements. Because prudent management requires that the potential benefit from an internal control must exceed its cost, it may not be practical to correct all the deficiencies an auditor reports under SAS 115. In this case we do not believe that curing the significant deficiency described above would be cost effective or practical and accordingly do not believe any corrective action is necessary.

MANAGEMENT CORRECTIVE ACTION: In response to the finding, management feels that it is a prudent use of funds to engage the auditor to prepare the Village's annual financial reports. We therefore agree with the auditors' recommendation that no correction action is necessary.

^ TquaC Opportunity Trtynfjoyer

49

Finding 2014-2:

CRITERIA: Management is responsible for the prevention and detection of fraud and implementing intemal controls that safeguard the assets of the Village.

CONDITION AND CAUSE: During our prior year engagement we noted that there was numerous fuel charges related to the vehicle used by the Mayor. We were not able to obtain documentation if the vehicle was being used for Village use or personal use.

RECOMMENDATION: We recommend the Village perform a detailed review of the fuel charges and request from the Mayor an accounting of the use of the vehicle to determine if the Village was paying for fuel related to personal use of the Mayor. If so, we recommend the Village recover the funds from the Mayor.

MANAGEMENT CORRECTIVE ACTION: This matter is still under Investigation. Management will attempt to determine the amount of use which was personal and the amount of reimbursement due, if any. Management had suggested that the Mayor meet with the independent auditor to attempt to arrive at a figure. The Board of Aldermen did not want to be responsible for calculating the amount due, if any.

Finding 2014-3:

CRITERIA: Management is responsible for the prevention and detection of fraud and implementing intemal controls that safeguard the assets of the Village.

CONDITION AND CAUSE: During our prior year engagement, we were informed by management that there were suspicions that fraud may have occurred during the fiscal year. Per review of journal entries and customer histories it appeared that the sanitation and sewer account of one of the Village Alderman was credited $445. The journal entries were described as "Charges were disputed CPA wrote off. However, per discussion with the Village Clerk the account was credited under the direction of the Village Mayor and there was no involvement from a CPA.

RECOMMENDATION: We recommend the Village perform a detailed review of the

2

50

account to determine if there was fraudulent activity and if so report the activity to the proper authorities.

MANAGEMENT CORRECTIVE ACTION: The most cost effective way to handle these bills would seem to be to ask the Louisiana Municipal Advisory and Technical Services Bureau to review them and take any appropriate action. Please see attached letter of December 9. 2014, from the Village Attorney to Robert J. Furman, CPA.

Yours very truly,

Delbert G. Talley (#12635j Attorney for the Village of Folsom

Approved:

MAYOR PHILLIP BICKHAM

ALDERMAN DONALD BURRIS

AL^ERWOMAN J ILL MATHIES

ALDERMAN LANCE WIUIE

51

Delbert G. Talley Attorney for the Village of Folsom

P.O. Box 2608 Covington, LA 70434-2608

Physical Location: 82337 June Street, Folsom, LA 70437 Telephone: 985-796-3455 - Fax: 985-796-3432

deltallevCfrvahoo.cQm December 9,2014

Robert J. Furman, CPA Griffin & Company, LLC 850 North Causeway Blvd., Ste. 200 Mandeville, LA 70448

Re: Prior Year Finding U13

Dear Mr. Furman:

In response to your email of November 19,2014,1 offer the following:

With regard to Finding 2013-12 and 2013-8 there has been no resolution. Considering the amount of money involved it does not seem cost effective to hire an attorney to file suit. With regard to the fuel charges, I asked Mayor Bickham to meet with Mr. Griffin to attempt to determine the amount of charges which may have been for personal use of the vehicle. The Board of Aldermen needs to know what the amount in question is. Regarding Alderman Donald Burris and the utility bills issue, the most cost effective way to handle this would seem to be to ask the Louisiana Municipal Advisory and Technical Services Bureau to pursue it. On April 10, 2000, the Village of Folsom adopted an ordinance which provided for the imposition of a collection fee for delinquent service charges or user fees when collected through the Offset Claims Program, as authorized by Louisiana Revised Statute 47:299.1 et seq. paragraph one of Section 16.22 of said ordinance reads as follows:

'Any charges levied herein which remain unpaid for thirty (30) days past the due date shall be subject to collection through the Louisiana Mimicipal Advisory and Technical Services Bureau Corporation Offset Claims Program. Overdue charges will be offset from the individual income tax refund of the consumer. Should payment be collected through the Offset Claims Program, a fee of Twenty-Five Dollars ($25.00) will be charged the consumer in addition to all other charges, interest, and penalties collected. Pursuant to Louisiana Revised Statute 33:361, the Agreement with the Louisiana Municipal Advisory and Technical Services Bureau Corporation for participation in the Offset Claims Program in the form attached hereto is approved, and the Mayor is authorized to execute it.'

Regarding your question as to whether or not there were any subsequent events that relate back to the previous year, we are not aware of any. Likewise, we are not aware of any transactions with related parties since year end.

We are not aware of any changes in commitments or contingencies since July 2014;

52

however, there was another sewer backup at the Pittman residence on March 23, 2014, which prompted an amended petition in the case of Faye Pittman, et al vs. Chain Electric, et al No. 2012-1118 on the docket of the 22nd JDC for the Parish of St. Tammany. This was filed on April 29, 2014. Likewise, an amended petition involving the same matter was filed in the case on October 15, 2014, entitled St. Farm Insurance vs. Chain Electric, et al No. 2012-1119 on the docket of the 22nd JDC for the Parish of St. Tammany.

A suit was also filed by Progressive Insurance on June 18, 2014, entitled Progressive Security Insurance Co. V5. Village of Folsom No. 2014-12089 on the docket of the 22nd JDC for the Parish of St. Tammany. This suit alleges damages to a vehicle caused by rocks thrown from a tractor mowing along Hwy. 25 on May 8, 2013. The estimated damages are $2,534.40 plus interest and costs.

We are not aware of any transactions regarding unrecorded liabilities since September 23, 2014, that relate to June 30,2014.

Finally, with regard to the franchise fee for water customers, we attach St. Tammany Parish Ordinance No. 543, St. Tammany Parish Ordinance No. 2847 and St. Tammany Parish Ordinance 0-32597-1. We are checking our records to make sure that all customers outside the Village are being charged the appropriate rate. We have not been able to find any documentation as to how the rate was established or who was responsible for setting the rate. The rate is an additional 4% of the monthly bill for service.

Yours very truly,

Delbeit G. Talley (^2635)

APPROVED:

MAYOR PHILLIP BICKHAM

ALDE^AN DONALD BURRIS

ALDERWOMAN JILL MATHIES

-C ALDERMAN LANCE WILLIE

DGT/clr enclosures cc: Mayor-Elect Bettye M. Hoggs

Aiderwoman-Elect Pauiette A. Lee

53

ORDINANCE NO.

An Ordinance granting unto the Village of Folsom, Its successors and astlgns* the noit'excluslve franchise, right and privilege For a period of 40 years from the date of the adoption hereof, to conduct and carry on In that part of St. Tammany Parish, more fully hereinafter described, and the inhabitants thereof, or to any person, finn or corporation, and to acquire, construct, operate and maintain such systems, plants, vvelis, structures, v«8ter transmission and distribution systems and equipment as may be useful or necessary for the production, transportation, distribution and sale oF v.ater, and the right to lay, construct, re-construct, replace, extend, repair, Operate and maintain rtialns, pipes, conductors, meters, connections and any and all otlier applicances useFul or necessary For the transportation, distribution and sale of water. In, over, under, along, upon and across all of the present and future streets, roads, highv^ays, alleys and public places, of those portions of St. Tainreny Parish, Louisiana, more fully hereinafter described, not within the limits ot any Incorporated city, town or village, and the right to excavate therein for the purpose of laying, repairing, repldclno, or removing sucn pipes, facilities, structures and appliances or any portion thereof.

SECTION ONE. BE IT ORDAINED, by the Policy Jury of the Parish of St. Tanmany, Louisiana, In regular session duly convened, chat the Parish of St. Tanvnany, Louisiana, hereinafter called the "parish," grants and there is hereby granted to the Village of folsom, Its successors and assigns, herein after called the "Village," a non-exclusive franchise, right and privilege for a period of 40 years from the date or adoption hereof, to conduct and carry on In that portion of St. Tammany Parish, Louisiana, more fully described on Exhibit "A," attached hereto and made part hereof.

All for the business of transmitting, distributing and selling water within the boundaries herein described, and the inhabitants thereof, or to any persorv firm or corporation, and to acquire or construct, operate and maintain such systems, plants, wells, structures, water transmission and distrloution and sale of water within the boundaries herein described, and the right to lay, construct, reconstruct, replace, extend, repair, operate and maintain, mains, pipes, conductors, ntecers, connections, and any and all other appliances useful or necessary for the transportation, distribution and sale of water In, over, under, along, upon and across all of the present and future streets, roads, hlghv«ay&, alleys, and public places of certain portions of the parish of St. Tansnany, Louisiana, not witnin the limits of any incorporated city, toivn or village, and the right to excavate therein for the purpose of laying, repairing, replacing and removing such pipes, faciiitles, structures and appliances, or any portion thereof, and the right to connect any such pipes or mains to any other mains or pipes for the purpose of supplying water through or beyond the boundaries of the Parish.

SECTION IVIQ, BE IT FURTHER ORDAINED, etc., that this hon-excluslve franchise is granted upon and subject to the following provisions.

54

(1) Ho work shall be undertaken by the Village on any State HIcfhway without the written tbnscnt of the State Highway Engineer in accordance witK/the provisions of Act No. 95 of 192].

(2) In maintaining Its properties .the Village shall not necessarily or unreasonable Impair or obstruct the streets, roads, highways, alleys, sidewalks and public grounds, and the Village shall, at Its own expense, with* out unreasonable delay, make all necessary repairs to reM;.dy any damage or remove any obstruction caused by Its opera* tions hereunder.

(3) The Village shall use reasonable precautions to avoid damage or Injury to persons or.property and shall hold and save harmless the parish from all dam* ages, losses, or expense caused by the negligence ofvChe VTllage, its agents or employees, with exercising any,.of the rights herein granted.

SECTION THREE. BE IT FURTHER ORDAINED, etc.. that the Parish shall make, adopt and enforce all ordl* nances necessary to protect the property and property rights of the Village owned end opera-ted under this fran* chTse and the parish will not in any way; interfere with the full legal.use by the Village of the property which it now maintains or may hereafter maintain In the Parish.

SECTION FOUR. BE IT FURTHER OROAINEO, etc.. that this Ordinance, the public health and welfare and public necessity requiring it, shall take effect from,and after Its adoption.

SECTION FIVE. BE IT FURTHER ORDAINED, etc.,; that this franchise shall be for a period of AO years from date hereof and upon exercise by the Village of any of the privileges granted by this franchise, it shallibe i rrevocable.

This day of I972.

IKESIDEHT

JANtS B. STEIN, SECRETARY

55

ST. TAMMANY PARISH POLICE JURY

ORDINANCE

ORDINANCE CALENDAR NO. 2847

ORDINANCE POLICE JURY SERIES NO. 97-2621

INTRODUCED BY MR. DAVIS, SECONDED BY MR.PEPPERMAN ON THE

20TH DAY OP MARCH, 1997.

AN ORDINANCE TO RATIFY A REVISION TO THE NONEXCLUSIVE FRANCHISE AGREEMENT BY AND BETWEEN THE ST. TAMMANY PARISH POLICE JURY AND THE VILLAGE OF FOLSOM, ALL FOR THE PURPOSE OF AMENDING THE BOUNDARY OF THE FRANCHISE SERVICE AREA AND ESTABLISHING TERMS AND CONDITIONS WHICH RELATE TO SUCH, AND TO PROVIDE FOR OTHER MATTERS IN CONNECTION THEREWITH

WHEREAS, Ordinance No. 543 adopted by the St. Taomiany Parish Police Jury ("Police Jury") on October 19, 1972 grants a 40-year, nonexclusive franchise to the Village of Polsom ("Polsom") for the purpose of providing potable water service to that portion of the unincorporated area of St. Tammany Parish which is located outside and in proximity to the corporate boundary of Folsom; and

WHEREAS, Folsom desires to amend the boundary of the franchise service area for the purpose of complying with provisions set forth in a Letter of Conditions issued by the U.S.D.A. Rural Development Administration, the effect of which relates to the funding of improvements to and extension of the water system owned and operated by Folsom inside or external of its corporate limits; and

WHEREAS, Ordinance No. 91-1545 adopted by the Police Jury on December 19, 1991 transfers all rights, interests, obligations, and responsibilities for the monitoring, enforcement, and supervision of all existing and future franchise agreements relative to sewerage and water systems ' from the Police Jury to the Environmental Services Commission ("Cotwnission"); and

WHEREAS, the Commission met in open and public session on March 25, 1997, a quorum present and voting, and duly amended the boundary of the franchise service area to the extent requested by Folsom and incorporated in the subject enactment all of the terms and conditions set forth by the Police Jury, a copy of such ESC Ordinance No. O-032597-1 is attached hereto and made a part hereof.

NOW, THEREFORE, BE IT ORDAINED BY THE POLICE JURY OF THE PARISH OF ST. TAMMANY, ACTING AS THE GOVERNING AUTHORITY THEREOF, THAT;

SECTION 1. The Police Jury ratifies the action of the Commission which amends the nonexclusive franchise agreement by and between the Police Jury emd Folsom, all for the purpose of amending the boundary of the franchise service area smd establishing terms and conditions which relate to such.

SECTION 2. Steve Stefancik, President of the Police Jury, is authorized to execute any and all documents or agreements which may be necessary to effect the provisions of this ordinance.

SECTION 3. If any provision of this ordinance shall be held to be invalid, such invalidity shall not effect other provisions herein which can be given effect without the invalid provision euid, to this end, the provisions of this ordinamce are hereby declared to be severable.

SECTION 4. The provisions of this ordinance shall become effective immediately upon adoption and execution of an agreement by an amongst the Police Jury, Folsom, and the Commission, the purpose of which effects the provisions set forth or otherwise conten^lated in SECTION 1 of this ordinance.

56

ORDINANCE CALENDAR NO. 2847

ORDINANCE P.J.S. NO. 97-2621

PAGE 2 OF 2

MOVED FOR TkDOPTION BY MR. WILLIE, SECONDED BY MR. DOHERTY.

WHEREUPON THIS ORDINANCE WAS SUBMITTED TO A VOTE AND RESULTED

IN THE FOLLOWING:

YEA: MESSRS. GLASS, WILLIE, THOMPSON, GRIFFIN, HARWELL, SINGLETARY, DOHERTY, PEPPERMAN, STEFANCIK, & DAVIS

NAY: NONE

ABSTAIN: NONE

ABSENT: MRS. GLOCfCNER AND MESSRS. BAGERT, THOMAS, & SMITH

THIS ORDINANCE WAS DECLARED DULY ADOPTED IN SLIDELL, LA,

THE 17TH DAY OF APRIL, 1997; AND BECOMES ORDINANCE

POLICE JURY SERIES NO. 97-2621.

ATTEST:

SxDENT HHPOLICE JURY

1 DIANE HUESCHteN, SECRETARY ST. TAMMANY PARISH POLICE JURY

57

Environmental Services Commission of St. Tammany Parish

Ordinance No. 0-032597-1

AN ORDINANCE OF THE ENVIRONMENTAL SERVICES COMMISSION OF ST. TAMMANY PARISH TO AMEND THE NONEXCLUSIVE FRANCHISE AGREEMENT BY AND BETWEEN THE ST. TAMMANY PARISH POLICE JURY AND THE VILLAGE OF FOLSOM, ALL FOR THE PURPOSE OF AMENDING THE BOUNDARY OF THE FRANCHISE SERVICE AREA AND ESTABLISHING TERMS AND CONDITIONS WHICH RELATE TO SUCH, AND TO PROVIDE FOR OTHER MATTERS IN CONNECTION THEREWITH

WHEREAS, LA R.S. 33: 4064.6(B), sets forth, in part, that the Environmental Services Commission of St. Tammany Parish, the governing authority for all sewerage and water systems located in the unincorporated portion of St. Tammany Parish, "shall have-sole authority to franchise, on an exclusive or nonexclusive basis, construction or operation of sewerage and water systems in the unincorporated portion of St. Tammany Parish. Existing franchise agreements shall remain in full force and shall comply with provisions of existing franchise agreements. The commission shall be responsible for the monitoring, enforcement, and supervision of all existing franchise agreements relative to sewerage and water systems."; and

WHEREAS, Ordinance No. 543 adopted by the St. Tammany Parish Police Jury ("Police Jury") on October 19, 1972 grants a 40-year, nonexclusive franchise to the Village of Folsom ("Folsom") for the purpose of providing potable water service to that portion of the unincorporated area of St. Tammany Parish which is located outside and in proximity to the corporate boundary of Folsom; and

WHEREAS, Ordinance No. 91'^1545 adopted by the Police Jury on December 19, 1991 transfers all rights, interests, obligations, and responsibilities for the monitoring, enforcement, and supervision of all existing and future franchise agreements relative to sewerage and water systems from the Police Jury to the Environmental Services Commission of St. Tammany Parish; and

WHEREAS, Folsom desires to amend the boundary of the franchise service area for the purpose of complying with provisions set forth in a Letter of Conditions issued by the U.S.D.A. Rural Development Administration, the effect of which relates to the funding of improvements to and extension of the water system owned and operated by Folsom inside or external of its corporate limits.

NOW, THEREFORE, BE IT ORDAINED by the Environmental Services Commission of St. Tammany Parish ("Parish"), pursuant to the provisions of Chapter 9, Part II, Subpart F, Title 33 of the Louisiana Revised Statutes of 1950 (LA R.S. 33:4064.1 - 4064.6, as amended) ; other constitutional and statutory authority supplemental thereto; and Police Jury Ordinances Nos. 543 and 91-1545, that:

58

1 SECTION 1. The Parish hereby amends the boundary of the 2 franchise service area set forth in said Ordinance No. 543 to 3 include the following: 4 5 Franchise Service Area (FSA) e 7 Beginning at a point which is coincident with the western 8 boundary of St, Tammany Parish (center of Tchefuncte 9 River) and 300' south of LA Highway 40, proceed easterly 10 300 feet south of and parallel to LA Highway 40 to its 11 intersection with Morgan Branch; thence easterly along 12 the centerline of Morgan Branch to the confluence of 13 Morgan Branch and Bogue Palaya River; thence northerly 14 along the centerline of Bogue Falaya River to a point 15 which is 300' north of Joseph Road; thence westerly along 16 a line which is parallel to and north of Joseph Road to-17 a point which is 300' east of LA Highway 25; thence 18 northerly along a line which is parallel to and 300' east 19 of LA Highway 25 to a point which is 300' north of 20 Stonehill Road; thence westerly along a line which is 21 parallel to and 300' north of Stonehill Road to its 22 intersection with the centerline of Hornsby Branch; 23 thence southerly along the centerline of Homsby Branch 24 to its confluence with the Tchefuncte River; thence 25 southerly along the centerline of Tchefuncte River (which 26 is the western boundary of St. Tammany Parish) back to 27 the point of beginning, any or all of which is located in 28 the unincorporated portion of St. Tammany Parish. 29 30 SECTION 2. Within the FSA, Folsom shall have the right to 31 construct and maintain a water system pipeline and any and all 32 other associated appurtenances and equipment ("Water System") at 33 its sole expense within any right of way owned by the Police Jury, 34 subject to the prior approval of the Police Jury's Department of 35 Public Works ("DPW") and any other appropriate regulatory agency. 36 37 SECTION 3. At its sole expense, Folsom shall restore any such 38 right of way to its original or inproved condition upon completion 39 of any construction which is authorized in SECTION 2 hereof, and 40 shall reimburse the Police Jury for its cost to repair any damage 41 to the right of way or to any infrastructure (e.g. roadway, 42 shoulder, signage, marking, drainage way, culvert, etc.) located 43 thereon which the DPW determines was caused by the construction or 44 maintenance of any such Water System by Folsom. 45 46 SECTION 4. To assure its free and reasonable use of any Police 47 Jury-owned right of way located in the FSA, the DPW may require 48 Folsom to relocate any such Water System, and Folsom in a timely 49 manner shall effect such relocation at its sole expense. 50 51 SECTION 5. Folsom shall agree to defend, indemnify, and hold 52 harmless the Police Jury and the Parish from and against any and

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1 all demands, causes of action, suits, liability or responsibility 2 arising out of any action or inaction of Folsom under this 3 ordinance and all other indemnifiable damages of the Police Jury 4 and the Parish. For this purpose, "indemnifiable damages" of the 5 Parish shall mean the aggregate of all expenses, losses, costs, 6 deficiencies, liabilities, and damages (including attorneys fees, 7 witnesses fees, including expert witnesses fees, and court costs 8 expended to enforce this indemnification provision) incurred or 9 suffered by the Police Jury or the Parish or any of their 10 directors, agents, and employees as a result of or in connection 11 with any damages, claims, demands, etc. arising out of the 12 construction, use, or operation by Folsom of any Water System which 13 is owned and/or operated by Folsom in the FSA. 14 15 SECTION 6. Any right or privilege set forth in this ordinance 16 shall not be assigned by Folsom to another person, firm, or 17 corporation without the prior written approval of the Parish. 16 19 SECTION 7. In consideration of the Parish amending the boundary 20 of the FSA, Folsom agrees that its nonexclusive franchise agreement 21 set forth in said Ordinance No. 543 shall be amended to include the 22 establishment of a franchise fee as set forth below. Folsom shall 23 collect from all of its users and subscribers of the potable water 24 service in the FSA who will connect to the Water System subsequent 25 to the effective date of this ordinance (hereinafter referred to as 26 "Customers") an assessment, the amount of which shall equal four 27 percent (4%) of the monthly gross billing amount collected for all 28 potable water service which is provided to the Customers in the FSA 29 by Folsom (hereinafter referred to as "the Franchise Pee"). Folsom 30 shall remit to the St. Tammany Parish Recreation District No. 12 on 31 a no less than a quarterly basis one-half of the amount of the 32 Franchise Fee which is collected during the corresponding billing 33 period(s) ,• and shall remit to the Parish on a no less than a 34 quarterly basis one-half of the amount of the Franchise Fee which 35 is collected during the corresponding billing period(s). 36 37 SECTION 8. The effective date of this ordinance shall be the 38 effective date of an enabling agreement which is executed by the 39 Parish, Folsom, and the Police Jury, the term for which shall be 40 concurrent with the remainder of the terra of the nonexclusive 41 franchise agreement set forth in said Ordinance No. 543. 42 43 SECTION 9. If any provision of this ordinance shall be held to 44 be invalid, such invalidity shall not effect other provisions 45 herein which can be given effect without the invalid provision and, 46 to this end, the provisions of this ordinance are hereby declared 47 to be severable. 48 49 SECTION 10. Leo L. Ehrhardt, Jr., Chairman of the Environmental 50 Services Commission of St. Tammany Parish, is authorized tq execute 51 any document which may be necessary to effect the provisions of 52 this ordinance.

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The ordinance was moved for introduction on 3/25/97 by Mr. Doherty and seconded by Mr. Randolph. It was then moved by Mr. Doherty and seconded by Mr, Randolph that the provisions of Section 109(C) (2) of Title 2 of the Rules and Regulations of the Commission be suspended and the proposed ordinance be considered for adoption.

Whereupon the ordinance was submitted to a vote which resulted in the following;

Yea; Messrs. Ehrhardt, Doherty, Keyser, and Randolph, and Mrs. Brister

Nay: None

Abstain; None

Absent: Hattier

And the ordinance was declared duly adopted this 25th day of March, 1997.

Leo L. Ehrhardt, Jr., Chairman

Attest:

Bill Hattier, Secretary

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GRIFFIN & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS ^PA



We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Village of Folsom, Louisiana (the Village) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements and have issued our report thereon dated December 17, 2014. In planning and performing our audit of the financial statements of the Village, we considered the Village's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, we do not express an opinion on the effectiveness of the Village's internal control.

During out audit we noted certain matters involving internal control and other operational matters that are presented for your consideration. A separate report dated December 31, 2014, contains our report on significant deficiencies in the Village's internal control. This letter does not affect our report dated December 17, 2014, on the financial statements of the Village. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended to improve internal control or result in other operating efficiencies and are summarized as follows:

2014-1 Utility Franchise Fees

Observation: In the prior year we recommended the Village review accounts being charged a "franchise fee" to determine why the fee is charged and if it is being charged to all accounts to which it applies. It is our understanding that management has determined the fee is a surcharge that should be applied to water customers that established accounts subsequent to March 25, 1997. It is also our understanding that there maybe accounts that have been added to the system that are not being charged the franchise fee.

Recommendation: We recommend management review all accounts and assess the franchise fee to all customers to which it applies.

Management's Response: The Village of Folsom will charge a 4% fee for all customers outside the Village connected to the Village water system on or after March 25,1997, as per the agreement with the parish as per Parish Ordinance No. 543, St. Tammany Ordinance No. 2841, and St. Tammany Parish Ordinance No. 0-32597-1.

2014-2 Compensated Absences for Governmental Funds

Observation: We noted that adjusting journal entries were made at the end of the year to establish a compensated absences liability for the general, police, and sales tax funds. This is the only entry posted to governmental funds that converts the governmental funds to a full accrual basis. All other fixed asset and debt balances were not recorded.

Recommendation: We recommend the Village either convert all funds to a full accrual basis or remove these liabilities and report governmental funds on a modified accrual basis.

POST OFFICE BOX 983 • MANDEVILLE, LA 70470 PHONE: (985) 727-9924 FAX: (985) 727-9975 850 NORTH CAUSEWAY BLVD., SUITE 200 • MANDEVILLE, LA 70448 WWW.GRIFFiNANDCO.COM

Managemenfs Response: The Village will ask the accountant to covert all funds to a full accrual basis or remove the liabilities and report governmental funds on a modified accrual basis.

2014-3 Sewer Customer Deposit Fund

Observation: The Village maintains a Quickbooks file entitled the "Sewer Customer Deposit Fund". This fund recorded the activity associated with the sales tax collect that is restricted for public works a specified growth management area.

Recommendation: We recommend these accounts either be transferred to the Sales Tax Fund and labeled accordingly or the file be renamed to more accurately reflect the underlying activity.

Managemenfs Response: The Village will ask the accountant to either transfer these accounts to the Sales Tax Fund or label them accordingly or rename the file to more accurately reflect the underlying activity.

Our audit procedures are designed primarily to enable us to form an opinion on the financial statements, and therefore may not bring to light all weaknesses in policies or procedures that may exist. We aim, however, to use our knowledge of the Village's organization gained during our work to make comments and suggestions that we hoe will be useful to you.

We would be pleased to discuss these comments and recommendations with you at any time.

The Village's written response to our comments and recommendations has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly we express no opinion on it.

This report is intended solely for the information and use of the Mayor, members of the Board of Aldermen, management, and the Louisiana Legislative Auditor and is not intended to be and should not be used by anyone other than these specified parties.

(puffin (£ Company, JUJHC

December 17, 2014

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