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Home My WebLink About1969CITY )F WHEAT RIDGE BUDGE,-' IiEPJitT FY 1969 1FN :R,,L FU,' REVENn- LH:.SI:1U!+T1Ut., dg ;way Users Tax Iro^erty Taxes Oalss Taxes Cigarette Taxes ranchite 'faxes—. ubo-or., o vccui,atiorai Tax— Iel. Liluor Licenses -usinesn Licenses—Cios. i er: dts Fines . P?i DI'LRi, S 7egielative & Legal ,'.unicinal Court City Clerk Records S Elections In-turance & Bonds "it,r Trea curer A& dn, Services & Supply Personnel iurchasing Tra£iic otreet Maint Police Public Services— Street Limhtinb E%in,tmring building Inspection EST. RECEIFTi —C- -0- 18,000. 0 —0- 9,cco. 1,800, 250. 1,000. 2, 75C. 322800. BUDGET 1,500. 500. 1,200.E 1,000 1,000. -0- 200. 900. 3,000. —0- -0- 1.5,000. 8,000. —0- 500. 32,goO gj89 7 J.O. —.n 'ONE City Treasurer .k= 1969 REVISED BUDGET REVENUE Acct. Code REVENUE CIASSIFICATION 312 Cigarette Tav f,000 314 Franchise Taxe_ -- Telephone occupational Tax 9,000 Power and Gas Franchise 89500 331 Liquor LicenFes (State) 50 332 License= -- Liquor 4,900 Cigarette Busines- 500 333 Building Permits 1,500 340 Fines 1 500 $4 TOTAL ,950 DISBURSEMENTS 410 Leg. & Legal Attorney Rstainer $1, X" Prosecutio & Expense 750 ✓s 411 'Murnicipal td-d'R Judge, Fee 500 ✓ Clerk (Inc. 7% PERA $60 Blue Cross)1,140 413 City Clerb Salar,, Ux,ss 7% PERA, Blue Cross) 1, '00 { .Records, .,lectiori Ly Part-time -lerk 100 • :l 415 Planner (Inc. 7% PERA, Blue Cross) 1,400 421 Finance -- City Tre<surer Part-time 150 Part-tim( Bookkeeper 625 °+ ' ' L) / Clerk (Inc. 7% PERA, Blue Cross) 1,023 ' 430 Administ-ative Services -- Salary (Xc err«ld) (1,375) Services and Supplies 600 442 Buildinc Inspection, Fees Personnel 600 ✓ 450 Police -Purchasing & Contracting 11,000 472 Legal P»blication and Adv. 1,000 _ 43 Indepenien* Auditor 500 5 V "7 475 Streer 3 ';anal Lighting 9,9000 - 0s - 67 476 insurarc, 47 3 Equipment - `.ity Hall Furniture 750 483 Manaaew?nt Contingency 102 Municipal League Z 494 Buil(+ings-!:ity Hall Improvements 750 TOTAL $+950 Deferred + PERA (1,375) REVWJE Acct. Code 312 314 Dz S BURS FYIENT S REVEI, C.iaa- Franc TelF -hono ir, ' inn,i 1 v Pow„ t l rii' 4'r- i v hi v Li-ior I. (St -,t'= Li [ -lunr acre. r_ :3u ini- F3uiIdin,: i< rmit" F'ine- '11 11'r11. 410 Lea. l ea,j I Attorney i i_ner $1 Prosecution e. 4xoense 411 Muni c ipa 1 i'o,irt -- Judge, FPe (, Clerk ( Tn, 7t PERA $60 Blue ros:) 1,14( 413 City Clerk Salar. ( I w- ; = 79 PERA, Blue Record:;, Election Part -t i ,-', rk 1 (, 415 Fl ,nner tln-. 74. PERA, Blue "-r0 1,4 1. 421 Finance -- '-.ity Trear-.irer 1•,-irt-time i>1 Part-(ime 90"kke-per F25 ' 1 e r k, .n,-. -1% 1ERA , Blue 'rocs) :3 4,0 Admini -trat Services -- Salar', (Lk f ,-r d) (1,375) Services and S,ippiies F()0 442 Building ln-pection, Fees Personnel F;0( 45C Police -Purchasing & Contracting 16,000 I 472 legal Puhl it t ion and Adv. 17 4 7i TnienPndr't ".,ldltor 5(10 47S ,mal 1 inhtina_ P,QOf 476 in.-ur,,K c 9r,n 4'/9 Equipm-nt - I_ity Hall Furn to-P 7 n 483 (-ontinaency 1('-2 Mun-irin-il Te-raue 494 B,Ii 1 1N1-.- t, H- 11 imnrov-m-nr, k,r c,r r,"j } <, A 1 7ti Proposed revision to 1969 budget Income Total Adjustment Nov. Dec. , Oct. v 6,000 NO t jlo2 Cig tax q,000 8,500 up 8v500 g,50o Iq PSC Franchise 99000 Tp. Occup Tax 9.000 u 15O 5 J 4.,9 0 .,95o P 3, !_ Li . 0 m 250 is Z- q• Lic 50 ego Cip Bus Lie 50 33 500 1,000 1,5no u"P 500 1213 Permits 500 1, ;00 -1. 50 5na 500 ° Fines 0 up 8,150 340 TOTAL 12,SO0 15,500 12'650 11,141 4.0,4* Expenses 16,272 13147 —024' d 1,500 1 FOX Sal` ale 500 5' 0 57 B• acid Leg. 50 Nieto 'i t 250 250 I Pros. and Exp 500 Zarlengo l66 166 166 J , Judge s U5 Turner `t r eeh -171 36 r t450 w C3 S Cty Cler J p i 6 0 qo 50 J Sb Par T 1e k Malone 0 50,c 6 J City Treas• v 5 625 < 2a8 z09 rMartY 208 % f 4 p; T. Bookkeepet Yf Clerks 300 60p 300 81d I nsp44,qvrk 3 r. Q6 J%) 1,140 / 380 3 o f s . I p v Ct. t/ 380 1,400 700 700 1 Planner (511) (t.,3 5) Johnson (Deferred) / sere. 5) (550) 36 Adm. ap$°es 3 3 7 2,28 3 3_.___ — —'—o 04 Total le s s Lt Q q00 k 10400?3 AK f t 1,400 ,°" Records, Elec 333 333 q a U its. Bonds 600 Ct / 300 200 100'.". 43 d Serv, SupP1Id 5 ,000 5 $ 000 Polk `aid `t , 000 2 200 St. Lights200 9, 9p0 N'7 750. Iy 1 (' 75 t L 1 L C9 ty Hall0 0 '(p 600 200 aGo f o Off. Equip 200400 .w ` 5b0 pub, A.dv 1 Page 14 CITY OF WHEAT RIDGE ANNUAL BUDGET General Fund Capital Facilities Account Nos. 490-498 Acct. No. Classification 1969 1970 490 Street, 11ew & Rehabilitation 0 $139,897* 0 493 Signs and Signal 0 28 8@8- 7- 494 Buildings and Equipment 750 201000 496 Storm, Sewer, Drainage 0 5,000 497 Lands 0 8,000 498 Building Reserve 0 10 TOTAL 750 r i -The County is expected to collect $46,760 in the first half of 1970 in Highway User (gasoline) Taxes based on 4iheat Ridge streets and vehicle registration and it is assumed this will be expended on Wheat Ridge streets. If the county shares half of its current roads and bridge mill levy with the City and the mill levy is not changed, an added $103,480 for streets and bridges will accrue to Wheat Ridge. Highway expenditures could be: Engineering Division $ 36,700 Traffic Division 15,150 Streets Division 53',754 Shop Division 32150 Street, New & Rehab. 4 a Sign and Signal Storm Drainage 5;000 First Half Gasoline 46,760 z County Levy 1039480I/ The pro-rata share of 1969 county road funds for Wheat Midge was: Construction $2369308 Equipment, Maintenance, Operation 46,816 Capital Outlay 343532 Administration 25,200 Engineering, Traffic Control 60,576 $4032432 Page 3 1969-70 Revenue Commentary Annual Budget General Fund City of Wheat Ridge Account 310. The Highway Users Tax is distributed by the state based upon a formula which takes into account street mileage and the number of registered vehicles. Jefferson County will receive this money through Fiscal Year 1970 (June 1970) based on providing the state with county mileage and vehicle registrations in May 1969. At that time, Wheat Ridge was unincorporated. Since this mcney will be received based upon Wheat Ridge data a prorata share should be spent on Wheat Ridge streets, but this figure is not included in this budget. Jim Lee, Plans and Research Division, Division of Highways, State Highway Department, says Wheat Ridge will get the money in Fiscal Year 1971 (July 1970 and after) if data on mileage and vehicle registration is provided. He will compute this mileage for us if we provide him two maps. We will need to ask the county to provide full year 1969 vehicle registration in the city of Wheat Ridge. If the county lacks personnel to get accurate registration data, the City of Wheat Ridge will need to make the count from public records. Special License Fee data is based on an estimated 18,000 vehicles. 'Not included as income, but projected as expenditure is a possible $103,480, which is the Wheat Ridge portion of the Jefferson County Road and Birdge Fund if county levy remains at 3.83 mills and if the county continues to make half of the money collected in Wheat Ridge available for Wheat Ridge streets and bridges. Account 311. Property tax estimate is based on 5.46 (five and forty six one hundredths mills) on an assessed valuation of $55,'225, 220 and 95°! collection. Auto property tax estimate is based on 18,000 vehicles. Account 312. Sales tax revenue is based on the assumption that voters will pass the sales tax at the November 4 election with collection starting in July 1970. The two cent per pack cigarette tax was passed in 1969. Account 314. The Telephone Occupational Tax was effective August 20, 1969, and a franchise agreement on gas and electric service was near finalization in October. Account 331. Thi, account _ ents 15% city retention of State Liquor license coller:uic q. Account 332. Estimated license income is based on the assumption council will pass required oi'. 'nnnces prior to start of the calendar year. Account 333. Estimated revenue is based on the assumption council will pass required ordinances prior to start of the calendar year. Page 3a Account 340. Fines are based on the assumption the city will be able to implement its plans for the city law enforcement and a municipal court. Account 347. I4ormal city experience on interest income is assumed. Account 390. Required legislation prior to January 1970 is assumed. Also assumed is city assumption of recreational responsibilities of Wheat Ridge Youth Council on a cooperative basis. If one mill Recreation Districts are continued for one year, they may budget for this activity. P . Page 4 CITY OF WHEAT RIDGE ANNUAL BUDGET General Fund Legislative and Legal Account No. 410 1969 1970 Acct. No. Classification Budget Budget 410.00 Fees, Elected Officials 410.02 Mayor 0 159000 410.02 Councilmen 0 15,000 410.10 Official Expense 0 2,000 410.30 City Attorney, Retainer 10500 70800 410,31 Prosecutor 500 2,400 410.32 Leg. Contingency 0 49200 410.50 Fees and Boards 0 700 410.60 Reg. and Elect 1940" 189000 410.90 Other 0 200 TOTAL BUDGET 3,�� 65, 00 Program Description: Since the Mayor and Council under the statuatory form of government have elected to handle city management without a city administrator, frequent meetings are expected through 1970. Pay adopted is $25 per meeting for councilmen but with expenditure limited by the budget to $15,000 per year for council ($2,500 per councilman) regardless o° the number or duration of meetings. Only 27 full time personnel are scheduled to be hired plus contract personnel. A meeting is any full business meeting of Council as called by the Mayor. General Fund Acct. No. 411.00 411.10 411.30 411.40 411.70 411.80 411.90 Program Description Page 5 CITY OF WHEAT RIDGE ANNUAL BUDGET Municipal Court Account No. 411 1969 1970 Classification Budget Budget Salaries 13000 41560 Personnel Expenses 140 800 Fee Personnel 500 101250 Supplies 0 1,200 Facility Maintenance 0 50 Capital Equipment 0 12300 Other 0 800 TOTAL BUDGET 1,640 18,960 1970 Personnel costs include Judge at $600 fee basis, other fee personnel he requires and a court clerk. The city is adopting the model traffic ordinance and Golden's general offense ordinances and expects to have contract police capability thru 1970. Page 6 CITY OF 14HEAT RIDGE ANNUAL BUDGET General Fund City Clerk Account No. 413 1969 1970 Acct. No. Classification Budget Budget 413.00 Salaries 2,650 101800 413.10 Personnel Expenses 186 11500 413.40 Supplies 0 5,600 413.70 Facility Maintenance 0 40 413.80 Equipment 0 750 413.90 Other 0 50 TOTAL BUDGET 27836 18,740 City Clerks salary has been set at $500 per month and her deputy at $400 per month. Page ; CITY OF WHEAT RIDGE ANNUAL BUDGET General Fund Recreation Account `10. 4;!: 196Q 19'r, Aect, No. Classification Budget Budget 414.00 Salaries 0 12,000 414.10 Personnel E;penses 0 .'_,OOC 414.20 Supplies 0 9,000 414.30 Fee Personnel 0 140000 414.70 Facility Maintenance 0 6,000 414.80 Equipment 0 4,000 414.90 Other 0 13 000 TOTAL 0 60t0 Provides two full-time park personnel at $550 and $450 per mont<< plus numerous fee personnel for summer park work and recreation pro,;rans. Recreation program expenditure is set at $4,775. :account No. 41.4.90 funds may be used outside the City if a legal means is found. Page 8 CITY OF WHEAT RIDGE ANNUAL BUDGET General Fund Planning Account No. 415 1969 1970 Acct. No. Classification Budget Budget 415.00 Salaries 19300 221500 415.10 Personnel Expenses 100 2,500 415.40 Supplies 0 2,800 415.70 Facility Maintenance 0 " 50 415.80 Equipment 0 11900 415.90 Other 0 '100 TOTAL BUDGET 12400 29,850 Planning staff will include a director with salary up to $1,000 per month, a planner at $700 and a planning technician the last half of the year at $525 per month. Page 9 CITY OF IMEAT RIDGE ANNUAL BUDGET General Fund City Treasurer Account Nos. 420-21-22 1969 1970 Acct. No. Classification Budget Budget City Treasurer 420.00 Salary 150 3,600 420.10 Personnel Expenses 0 500 420.40 Supplies 0 275 420.70 Facility Maintenance 0 50 420.80 Capital Equipment 0 600 420.90 Other 0 30 TOTAL 150 51055 Finance 421.00 Salary 500 14,592 421.10 Personnel Expenses 0 11500 421.40 Supplies 0 900 421.70 Facility Maintenance 0 200 421.80 Capital Equipment 0 780 421.90 Other 0 50 TOTAL 500 182022 Purchasing 422.00 Salary 11200 29400 422.10 Personnel Expenses 145 400 422.40 Supplies 0 510 422.70 Facility Maintenance 0 50 422.80 Captial Equipment 0 380 422.90 Other 0 50 TOTAL 1,345 3,790 The finance and purchasing functions are under the supervision of the elected city treasurer whose salary is set at 8?300 per month. He will supervise a combination purchasing -finance officer, a bookkeeper and a finance clerk, the latte-• to be hired in July. Salary of the finance officer -purchasing agent is set at $750 per month. A part-time bookkeeper will be hired in 1969. Page 10 CITY OF WHEAT RIDGE ANNUAL BUDGET General Fund Administrative Services Account Nos. 430-431 1969 1970 Acct. No. Classification Budget Budget 430 Administrative Services Salary 0 17,895 Personnel Expense 0 1,900 Supplies 600 500 Facility Maintenance 0 100 Capital Equipment 0 29000 Other 0 11000 600 23,395 431 Personnel Salary 0 0 Personnel Expense 0 0 Supplies 0 19200 Facility Maintenance 0 0 Capital Equipment 0 200 Other 0 0 0 19400 Administrative Services Director will perform the publication and administrative services functions in support of the Mayor and staff and the personnel function. Salary includes $1,375 deferred for 1969 services (2i months at $550). Staff available to the Director, Mayor, and Council includes a secretary and a clerk -receptionist. General Fund Acct. No. 440 441.00 441.10 441.40 441.70 441.8(' t+41,9r CITY OF hIIE,U RIDE ANNUAL BUDGE,-: Public Service Classification Public Services Engineering Salaries Personnel Expense Supplies Facilities Maintenance Equipment Other TOTnL Page it Account No ' ':!) '+5 196° l() -n 0 0 3,00 ) 0 2,35n 0 1,000 0 2,,no 0 ;0 --a 36,700 Building Inspection 442.00 Salaries 0 1i725P 442.01 Fee Fersonnel 00 2,4-'1 442,10 Personnel Expense ,400 442,40 Supplies ],67; 442.70 Facilities Haintenance 0 1,35C 't42.80 Equipment 0 1,710 =: ^_,9n ether 0 1` IC U 600 21102 Traffic !,43.00 Salaries 0 443.10 Personnel Expense 0 11000 443.40 Supplies 0 1,500 443.70 Facilities :i.iitt�nanee 0 2,000 443.8^. G,pitat Enulp::,en 0 2,3 %;'-3.90 n_hc:•r 0 O ()1AL 15,150 Spree, 44'..0p Sal; Ccs r �gnn t ,,•,. i ei ^onnei F.;:pense " ro 444..' Inventories nnr' 44u,40 supplics '1 444.70 Facilities Mainten.ince C, 39 444.80 Capital Equipment 0 '-�,30- 1(:IAL ;5,9 5 '. Page lla Shop 445.00 Salaries 0 0 445.10 Personnel Expense 0 0 445.20 Inventories 0 2,000 445.40 Supplies 0 -150 445.70 Facilities Maintenance 0 0 445.80 Capital Equipment 0 11000 TOTAL 3,150 The City Engineer will also head the Public Services Department when hired in July. In the interim and on a trial basis all functions may be assigned to the Director of Plans for supervision with possible ultimate adoption of this functional arrangement on a permanent basis. A total of 9 personnel are provided with five to be hired in July. The staff includes the City Engineer, a Jr. Engineer, 2 clerical, one full-time building inspector supported by fee personnel, a traffic technician, a draftsman and two maintenance personnel for street work. Except for street patching, salting, sanding and other routine work, contracting is contemplated for streets. Page 12 CITY OF ;9HEAT RIDGE ANNUAL BUDGET Generalrlmd Police Acct. Nose 450-52 Accte Noa Classification 1969 1970 Budget Budqet 450 Police Auxiliary Services Available for County Patrol 451040 Supplies 1,000 8,0".0,�0 451.SU Contract 8,9e,6 189,,{�u6 451.70 Facility I%aintenance 310 3,000 451.80 Capital Equipment 4,000 6,U00 451.90 Other 21784 1,600 17,000 )08,206 452 Detective Available for County A pending contract with the county provides two patrol cars with five men each in January and February, three March through June, and five July through December in addition to one patrol car 24 hours per day provided from the county general fund. In addition, the county and city will share in the salary of a lieutenant, Page 13 CITY OF 14HEAT RIDGE ANNUAL BUDGET General Fund Other Administrative Account Nov. 470-483 1969 1970 Acct. No. Classification Budget Budget 471 City Hall Maintenance 0 11500 472 Legal Publication and Adv. 1,000 6,000 473 Independent Audits 0 31500 475 Street, Signal Lights 82967 36,000 476 Insurance & Bonds 11160 40000 478 Equipment 750 0 480 Civil Defense 0 200 481 Other 0 49000 483 Management Contingency 102 1 000 112979 5�6,2-00 489 Contingency Fund 0 302000 Program Description Budget for Street and Signal lights includes up to $6,000 for signal lights and balance for 628 street lights. A "r I General Fund Acct. No. CITY OF WHEAT RIDGE ANNUAL BUDGET Capital Facilities Classification Page 14 Account Nos. 490-498 1969 1970 490 Street, New & Rehabilitation 0 $1409679 493 Signs and Signal 0 219000 494 Buildings and Equipment 500 209000 496 Store, Sewer, Drainage 0 59000 497 Lande 0 89000 498 Building Reserve 0 0 TOTAL ,67 The County is expected to collect $46,760 in the first half of 1970 in Highway User (gasoline) Taxes based on Wheat Ridge streets and vehicle registration and it is assumed this will be expended on Wheat Ridge streets. If the County shares half of its current roads and bridge mill levy with the City and the mill levy is not changed, an added $103,480 for streets and bridges will accrue to Wheat Ridge. Highway expenditures could be: Engineering Division $ 369700 Traffic Division 159150 Streets Division 559954 Shop Division 39150 Street, New & Rehab. 1409679 Sign and Signal 21,000 Storm Drainage 59000 First Half Gasoline 469760 County Levy 103.480 2 7 , The pro-rata share of 1969 county road funds for Wheat Ridge was: Construction $2360308 Equipment, Maintenance, Operation 469816 capital Outlay 349532 Adeinistratior 250200 Engineering, Traffic Control 60,576 $403P432 AUDITORS' REPORT CITY OF WHEAT RIDGE, COLORADO December 31, 1969 TABLE OF CONTENTS Page AUDITORS' REPORT REPORT LETTER 3 BALANCE SHEET - GENERAL FUND 4 ANALYSIS OF CHANGES IN FUND BALANCE (DEFICIT) - GENERAL FUND 5 STATEMENT OF REVENUE - ESTIMATED AND ACTUAL - GENERAL FUND 6 STATEMENT OF EXPENDITURES COMPARED WITH AUTHORIZATIONS - GENERAL FUND 7 STATEMENT OF GENERAL FIXED ASSETS 8 STATEMENT OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTIONS AND ACTIVITIES 9 NOTES TO FINANCIAL STATEMENTS 10 SUPPLEMENTAL STATEMENT EXPENDITURES - COMPARED WITH AUTHORIZATIONS - GENERAL FUND - BY FUNCTIONS AND ACTIVITIES 12 AT,EXANI)El? & ��OtiIY.A\l" CERTIPIFD PUBLIC ACCOUNTANTS Imo[ O LIN( ULN ',IRE ET DENVER,COLORADO 80203 The Honorable Albert E. Anderson, Mayor Members of the City Council City of Wheat Ridge, Colorado We have examined the balance sheet - general fund and the statement of general fixed assets of the CITY OF WHEAT RIDGE, COLORADO as of December 31, 1969, and the re- lated statements of operations for the period August 20, 1969 through December 31, 1969. Our examination was made in ac- cordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying financial state- ments present fairly the financial position of the general fund and balanced account groups for the City of Wheat Ridge, Colorado at December 31, 1969, and the results of their op- erations for the period then ended, in conformity with gen- erally accepted accounting principles. The supplemental statement, as listed in the attached table of contents, for the period ended December 31, 1969, has been subjected to the tests and other auditing pro- cedures applied in the examination of the financial statements mentioned above and, in our opinion, is fairly stated in all material respects in relation to the basic financial state- ments taken as a whole. As explained in note C, expenditures for general government exceeded amounts appropriated by $6 for the period ended December 31, 1969. This may constitute a violation of provisions of the Colorado Statutes. Denver, Colorado February 20, 1970 3 City of Wheat Ridge, Colorado General Fund BALANCE SHEET December 31, 1969 ASSETS Cash $ 9,731 Prepaid expenses 11730 $ 11,461 LIABILITIES, RESERVES AND FUND BALANCE (DEFICIT) Liabilities Loan payable - First Westland National Bank (note B) $ 19,000 Accounts payable 2,734 Accrued expenses Salaries $ 2,375 Payroll taxes 872 Rent 400 31647 Total liabilities 257381 Reserve for encumbrances - Fund balance (deficit) (13,920) $ 11,461 The accompanying notes are an integral part of this statement. 0 City of Wheat Ridge, Colorado General Fund ANALYSIS OF CHANGES IN FUND BALANCE (DEFICIT) Period ended December 31, 1969 Fund balance - August 20, 1969 Excess (deficiency) of revenue over expenditures Revenue Expenditures Fund balance (deficit) - December 31, 1969 27,445 41,365 (13,920) $ (13,920) The accompanying notes are an integral part of this statement. 5 City of Wheat Ridge, Colorado General Fund STATEMENT OF REVENUE - ESTIMATED AND ACTUAL Period ended December 31, 1969 Taxes Cigarette Franchise Telephone Licenses State liquor Cigarette Contractors Permits Building Fines Fines Miscellaneous Zoning Liquor hearing Miscellaneous TOTAL REVENUE Estimated Actual revenue over revised Actual (under) (note C) revenue estimated $ 9,500 $ 12,476 $ 2,976 91000 91000 - 375 739 364 700 685 (15) 1,500 21450 950 27575 31874 1,299 500 65 (435) 500 671 171 500 590 90 600 600 - 175 169 (6) 1,275 11359 84 $ 23,350 $ 27,445 $ 4,095 The accompanying notes are an integral part of this statement. 6 City of Wheat Ridge, Colorado General Fund STATEMENT OF EXPENDITURES COMPARED WITH AUTHORIZATIONS Period ended December 31, 1969 Appropriations Actual revised over (under) (note C) Expenditures appropriations General government Legislative and legal $ 3,160 $ 2,874 $ (286) Municipal court 1,615 29622 11007 City clerk 33436 31141 (295) Planning 25 1,394 11369 City treasurer 11567 1,490 (77) Administrative services 2,000 27479 479 Other administrative 141250 11,843 (2,407) Capital outlays 1,200 11416 216 279253 27,259 6 Public safety Police 14,000 13,529 (471) Public service 750 577 (173) 142750 141106 (644) TOTAL EXPENDI- TURES $ 42,003 $ 41,365 $ 638) The accompanying notes are an integral part of this statement. 7 City of Wheat Ridge, Colorado STATEMENT OF GENERAL FIXED ASSETS December 31, 1969 GENERAL FIXED ASSETS Equipment Police department City hall Improvements - city hall INVESTMENT IN GENERAL FIXED ASSETS General Fund revenues $ 3,833 686 $ 4,519 1,416 $ 5,935 $ 5,935 The accompanying notes are an integral part of this statement. City of Wheat Ridge, Colorado STATEMENT OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTIONS AND ACTIVITIES Period ended December 31, 1969 General fixed assets - August 20, 1969 Additions General government City hall Equipment $ 686 Improvements 1,416 2,102 Public safety Police department equipment 3,833 Deductions General fixed assets - December 31, 1969 The accompanying notes are an integral part of this statement. 5,935 $ 5,935 E City of Wheat Ridge, Colorado NOTES TO FINANCIAL STATEMENTS December 31, 1969 NOTE A - INCORPORATION OF CITY On June 20, 19697 The District Court in and for the County of Jefferson, State of Colorado, ordered, adjudged and decreed that the incorporation of the City of Wheat Ridge, Colorado was complete. The election of the first officers of the City took place on August 19, 1969. On their qualifying and enter- ing office on August 20, 1969, the incorporation was final and complete. NOTE B - LOAN PAYABLE - FIRST WESTLAND NATIONAL BANK The City Council authorized the issuance of anticipation war- rants up to $25,000. Rather than issuing anticipation warrants, however, the First Westland National Bank loaned the City $19,000. This loan is noninterest bearing and is payable from the first revenues of the City available for the payment of City debts. NOTE C - APPROPRIATIONS Budgeted amounts included in the accompanying financial state- ments are based on the budget as finally revised by the City Council. Original and revised budgets were adopted during the year as follows: Revenue Expenditures Original budget - September 11, 1969 $ 329800 $ 32,800 Various revisions 90550 9,203 Revised $ 42,350 $ 42,003 By resolution in February, 1970, the Council authorized the payment of $1,375 in salaries earned in 1969 to a city em- ployee. This resulted in an overexpenditure of $6 of 1969 general government appropriations. 10 4 U MENTAL 'jTAI EAIEVF'' City of Wheat Ridge, Colorado General Fund EXPENDITURES - COMPARED WITH AUTHORIZATIONS - BY FUNCTIONS AND ACTIVITIES Period ended December 31, 1969 Appropriations Actual revised over (under) (note C) Expenditures appropriations GENERAL GOVERNMENT Legislative and legal City attorney $ 1,500 $ 1,500 $ - Prosecution 410 400 (10) Election 15250 974 (276) 37160 27874 (286) Municipal court Judge 500 17500 1,000 Clerical salaries 11115 11071 (44) Payroll taxes - 51 51 11615 2,622 11007 City clerk City clerk - salary 1,500 11500 - Clerical salary 11336 990 (346) Inspector 600 531 (69) Payroll taxes - 120 120 39436 31141 (295) Planning Salaries - 17375 11375 Supplies 25 19 (6) 25 11394 11369 City treasurer City treasurer - salary 150 150 - Clerical salaries 11417 17272 (145) Payroll taxes - 68 68 17567 11490 (77) Administrative services Supplies 21000 21079 79 Rent - 400 400 27000 2,479 479 The accompanying notes are an integral part of this statement. 12 City of Wheat Ridge, Colorado General Fund EXPENDITURES - COMPARED WITH AUTHORIZATIONS - BY FUNCTIONS AND ACTIVITIES (CONTINUED) Period ended December 31, 1969 GENERAL GOVERNMENT (CONTINUED) Other administrative Legal publications and advertising Independent audits Insurance and bonds City hall equipment Management contingency* Salaries Contract labor Tree limb disposal Supplies Payroll taxes Capital outlays City hall improvements Total general government Appropriations Actual revised over (under) (note C) Expenditures appropriations $ 4,000 $ 3,457 $ (543) - 250 250 2,750 1,038 (1,712) 1,000 686 (314) - 4,167 - - 1,180 - - 636 - - 229 - - 200 - 6,500 6,412 (88) 141250 111843 (2,407) 11200 11416 216 27,253 27,259 6 * The management contingency account provided for the collection and disposal of broken tree limbs in the City of Wheat Ridge during October and November, 1969. The accompanying notes are an integral part of this statement. 13 City of Wheat Ridge, Colorado General Fund EXPENDITURES - COMPARED WITH AUTHORIZATIONS - BY FUNCTIONS AND ACTIVITIES (CONTINUED) Period ended December 31, 1969 Appropriations Actual revised over (under) (note C) Expenditures appropriations PUBLIC SAFETY Police Contract services $ - $ 91007 $ - Capital equipment - 32833 - Payroll taxes - 432 - Supplies - 257 - 14,000 131529 (471) Public service Building inspector fees 750 577 (173) Total public safety 14,750 141106 (644) TOTAL EXPENDI- TURES $ 42,003 $ 41,365 $ 638) The accompanying notes are an integral part of this statement. 14 A R T H U R YOUNG & COMPANY SECURITY LIFE BUILDING DENVER COLORADO 80202 October 15, 1979 City Council The City of Wheat Ridge P.O. Box 638 Wheat Ridge, Colorado 80033 _ Attention: Mr. James 0. Malone, City Treasurer Gentlemen: We are pleased to respond to your request for a proposal to .. provide accounting and auditing services to the City of Wheat Ridge. We are confident our firm can provide the high quality service you require from your independent certified public accountants. We have prepared our statement of qualifications to be responsive to the selection criteria expressed in your request for proposal. The relevant experience of our firm and the Denver Office personnel we would assign to serve the City of Wheat Ridge are described in this proposal. In it we emphasize a uniquely qualified client service team with a long record of effective service to our governmental clientele. Our proposal is organized in the following manner: I. Scope and Timing of Services II. Our Qualifications and Resources Ill. Our Engagement Team IV. Our Approach to the Audit V. Estimated Hours and Fees We are prepared to complete the audit and issue the final reports prior to March 31, 1980. ARTHUR YOUNG & COMPANY We are qualified to render outstanding service to the City of Wheat Ridge, and we are prepared to commit whatever resources of our firm may be necessary to serve the City's interests and objectives in the area of our professional competence. In short, we would be proud to serve the City and stand ready to do so without delay. We appreciate your consideration of Arthur Young & Company and welcome this opportunity to present our qualifications. Should yo have any questions concerning our qualifications, please contact Mr. Earl E. Mackey at 2100 Security Life Building, Denver, Colorado 80202, telephone number 534-0621. Mr. Mackey is a general partner in our firm and is authorized to represent Arthur Young & Company in its dealings with the City of Wheat Ridge. Very truly yours, TABLE OF CONTENTS Page I. SCOPE AND TIMING OF SERVICES 1 Services to be Performed 1 Timing 2 II. OUR QUALIFICATIONS AND RESOURCES 3 Introducing Arthur Young 3 Arthur Young in Denver 4 Our Clients 5 Our Consulting Experience with Local Government 7 III. OUR ENGAGEMENT TEAM 11 IV. OUR APPROACH TO THE AUDIT 19 V. ESTIMATED HOURS AND FEES 23 I. SCOPE AND TIMING OF SERVICES SERVICES TO BE PERFORMED The auditing and reporting work for the year ended December 31, 1979 to be performed for the City of Wheat Ridge includes the following funds: General Fund Sales Tax Improvement Fund Revenue Sharing Fund Conservation Trust Fund Public Works Escrow Fund Parkland Acquisition Fund Police Pension Fund Other Special Funds Our examination of the financial statements of these funds would be made in accordance with generally accepted auditing standards, and would accordingly include such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. This examination would be designed to enable us to express an opinion as to the fairness of the presentation of the financial statements of the General Fund and various other funds of the City. It appears that existing procedures, policies and controls are adequate ' enough to permit us to place a reasonable degree of reliance thereon. Should we be appointed as auditors, we would arrange to observe the taking of a physical inventory and to confirm selected accounts receivable as soon as practicable. In addition, we would prepare a Management Letter as we consider the development and issuance of meaningful, comprehensive Management Letter reports an integral part of our basic audit services. We believe that your management and Council should have the benefit of the additional assurance that -1- comes from an independent review of the systems and procedures of the enterprise for which they are responsible, and that your management will benefit from the ideas that emanate from such a review with respect to improving operational efficiency and policies, as well as internal controls and accounting procedures. Typically, our Management Letter suggestions are first discussed with the operating manager directly involved with the problem, and all higher levels of management are fully informed about our recommendations before they are.committed to a formal document. This procedure has three advantages: (1) it provides all members of management with an opportunity to participate in the development of the information and encourages them to think constructively about the issues involved; (2) is assures a full understanding of the facts on our part; and (3) it frequently results in more timely implementation of improvements. In summary, we believe that two key factors distinguish Arthur Young's Management Letters from those of other CPA firms: • Because of our "businessman's approach" to auditing, we develop comments pertaining to the client's continuing success as a fiscally sound enterprise. • Our personnel are experienced in using the Management Letter as part of a continuing dialogue with top management. It is part of our overall commitment to establish an effective communications network between ourselves and all levels of client management. TIMING We are prepared to work within your requested timetable, leading to completion of the audit and issuance of our reports prior to March 31, 1980. -2- II. OUR QUALIFICATIONS AND RESOURCES This statement describes, under the following headings, the resources and capabilities of Arthur Young & Company which, we believe, makes us exceptionally well qualified to serve as the independent auditors for the City of Wheat Ridge. • Introducing Arthur Young -- some facts about our firm. • Arthur Young in Denver -- our people, our practice. our objectives. • Our clients. • Our consulting experience with local governments. INTRODUCING ARTHUR YOUNG Arthur Young & Company is one of the largest professional service firms in the world, with a reputation for high quality professional work and distinguished service to its clients. The following statistics comprise a brief profile of the firm today: • A general partnership with 582 partners in the United States. • Client service offices in 68 cities in the United States. - • Outside the United States, offices in 180 cities in 52 countries. • Total U.S. personnel - 6,000. Of these, 4,500 are professional, client -servicing personnel. Outside the U.S., another 8,000 professional personnel. • In terms of professional personnel, our U.S. practice currently divides as follows: 68% auditing and accounting, 19% tax services, 13% management consulting services. -3- Our audit clients include some of the largest and most successful business enterprises in the world. We are equally proud of the many government entities, schools and universities, utility enterprises, social and cultural organizations, professional service firms, and philanthropic organizations that we number among our clients. Some of the governmental clients we serve are listed on the following pages. ARTHUR YOUNG IN DENVER The practice of Arthur Young & Company in Denver dates back to 1955 when we merged in the practice of a prestigious local firm established in 1915. In keeping with the firm's organizational philosophy, the Denver Office has retained a _ strong local identity, and the composition of our skills and the style of our practice reflect the Denver environment. Today we employ more than 75 professional people. - We are committed to the philosophy that our office should develop and maintain, on a permanent, resident basis, all the - resources of professional and technical knowledge and experience required to meet the normal needs of clients and prospective clients in our community. This approach, in our experience, benefits our clients in several important ways: • Our resident professionals tend to have a greater interest in, and a much more thorough understanding of, the objectives, operations, people, and special concerns of client organizations than would otherwise be the case. • Through their close communications and frequent contact with client personnel, our resident professionals are able not only to satisfy their clients' audit needs but to provide them with valuable ideas for and assistance in increasing the efficiency of their operations. • Perhaps most important, we believe that the sense of personal responsibility -- and responsiveness -- of local client service personnel is bound to be greater than that of regionally or nationally based specialists whose relationship to any particular client must, of necessity, be of a transient nature. -4- The overall objective of our Denver Office is to provide the finest auditing, tax, and management advisory services obtainable in the area we serve. OUR CLIENTS Arthur Young & Company serves many governmental and related institutions in Denver and nationally. The Denver Office of Arthur Young & Company has served or is serving the following: State, county or local governments Cheyenne Board of Public Utilities City and County of Denver _ City of Boulder, Colorado Pueblo West Metropolitan District Denver General Hospital Colorado State Hospital - Pueblo Colorado Department of Social Services Colorado Department of Local Affairs Colorado State Highway Department Colorado Division of Rehabilitation Denver District Court City of Arvada Montana State University University of Montana Programs financed by the Federal Government The Housing Authority of the City of Pueblo, Colorado The Housing Authority of the City of Helena, Montana The Housing Authority of the City of Anaconda, Montana HUD 701 Grants to Colorado Planning and Management Regions Park East Comprehensive Community Mental Health Center, Inc. City of Wheat Ridge EDA Grant Funds In addition, we serve various school districts, water districts, state departments, counties, and federal agencies. We have also provided management consulting services in a variety of -5- special projects for numerous governmental agencies, several of which are described later in this section. The following is a representative listing of some of the over 500 commercial clients served by the Denver Office. American Snowblast Corp. American Television and Communications Corporation Asamera Oil Co. Bayly Corp. Bekins Van & Storage Boulder Medical Center Denver Club Denver Union Corp. Denver Wood Products Co. Dixson, Inc. Elder -Guinn & McGill El Pomar Foundation Fulenwider, Inc. Greeley Gas Company Homestead House Kerr Management Corp. Key Savings & Loan Larimer Square, Inc. Mentor Corporation Pepsi -Cola of Denver Phipps Foundation Public Service Co. of Colorado Reserve Oil and Gas Co. Rocky Mountain Natural Gas Rocky Mountain Empire Sports, Inc. Ryall Electric Supply Co. Stanley Aviation Corp. Times -Call Publishing Timpte Industries, Inc. University of Denver Van Schaack & Co. Wyott Corporation Nationally, our clients include some of the largest enterprises in the world. Some are publicly -held corporations, many others are private and public institutions. Where the need arises, we are able to draw on the experiences of other offices to improve our ability to serve our clients in Denver. A representative listing of our municipal clients fellows: City of Anaheim, California City of Buffalo, New York City of Dallas, Texas City of Fort Worth, Texas yCity of Indianapolis, Indiana City of Portland, Maine City of San Diego, California City of San Francisco, California City of San Jose, California ,City of Tampa, Florida The following is a representative listing of some of Arthur Young's commercial clients. We are proud of the growing list of Fortune 500 companies we have been named to serve and the many thousands of other clients with whom we are associated. -6- 1 ti r r R i x Amerada Hess American Airlines American Express American Standard AMF Avco Brown & Williamson Tobacco Campbell Taggart Cessna Aircraft Chesebrough-Pond's Chubb Continental Oil Encyclopaedia Britannica Esmark Fedders Financial Federation Fluor Corporation Forbes, Inc. General Cable General Instrument Heublein Imperial Corporation of America INA Indian Head International Minerals & Chemical Kinney National Service Lockheed Aircraft Madison Square Garden Corp. Marathon Manufacturing McCulloch Oil McDonald's McGraw-Hill Mennen Company Mobil Oil Owens-Illinois Paine, Webber, Jackson & Curtis PepsiCo Phillips Petroleum Piper Aircraft Pullman RCA Republic National Bank of Dallas Rockefeller Foundation A.O. Smith Southwestern Bell Sperry Rand Texas Instruments Textron Thiokol Chemical Todd Shipyards United Telecommunications Universal Leaf Tobacco Warner Communications Western Electric Williams Companies Wm. Wrigley, Jr. OUR CONSULTING EXPERIENCE WITH LOCAL GOVERNMENT Arthur Young & Company, in addition to its auditing and tax practice, is one of the largest management consulting firms in the country. We have over 500 full-time management consultants in our domestic offices, with over 60% dedicated to serving our government clients. We have found that a growing need exists in the local government area for the following types of consulting services: • Internal systems (accounting systems, accountability �- control, organization, etc.) that are basically necessary to administer application of Federal funds (and which can support audit by public or private agents). • Program control and evaluation systems, such as grants management, program reporting methodologies, and ongoing ! evaluation, that are peculiar to the specific program (CETA, Highway Safety, Community Development, Criminal Justice, etc.). -7- III. OUR ENGAGEMENT TEAM We have selected an Arthur Young team from our Denver Office to serve the City of Wheat Ridge which represents an unusually strong combination of the engagement management ability, professional skills, experience in serving other cities and clients in the local government field, and personal qualifications that the Council and management should expect of their independent accountants. The members of our team would bring to this engagement a vigorous, business -minded approach to the City's independent audit as well as constructive and creative advice and assistance in other areas of our competence as requested. Later in this section we present brief resumes of the qualifications and experience of each member of our team. _ Before these individual resumes, however, we present on the following pages brief descriptions of the role of each member of the Arthur Young engagement management team. These descriptions are followed by an organization chart, which can be folded out for easy reference as you read the role descriptions. Roles of Key Personnel - Coordinating Partner - Earl E. Mack To assure the very highest level of commitment in the performance of your audit, Earl Mackey will serve as Coordinating Partner. Earl Mackey will be directly responsible for the quality of all services we provide to the City. He will maintain the primary relationship with management and will be concerned with the planning and decisions on all important matters. He will be responsible for coordinating the -11- activities of the audit team assigned. Additionally, he will coordinate the participation of any management consulting services provided to the City. Audit Colleague - Harris Cohn It is our practice to assign a colleague partner on all major audit engagements for quality assurance purposes. As Audit Colleague on this assignment, Harris Cohn will be responsible for reviewing the approach to each major phase of the audit and for providing any additional technical expertise and assistance that may be required by the Coordinating Partner or other members of our engagement management team. He will keep himself sufficiently familiar with the progress of our audit and with the affairs of the City that he can take the place of the Coordinating Partner at any time that may be necessary. Audit Manar-er - Kenneth D. Anderson As Audit Manager on this engagement, Ken Anderson will be directly responsible to the coordinating partner for the planning, staffing and reviewing of the examination of the financial statements of the City of Wheat Ridge. He will monitor the conduct of the examination on site, resolve problems by appropriate consultation with City personnel, the coordinating partner, the audit senior and other personnel, and coordinate the work of the audit team. Computer Auditing - Keith J. Miller Senior of computer auditing in our Denver Office, Keith Miller will serve as Computer Audit Specialist on this engagement. He will plan and coordinate all our computer -related auditing activities for the City. He will report to and work closely with Audit Manager, Ken Anderson. -12- Audit Test Specialist - William H. Weiskopf As Audit Test Specialist, Mr. Weiskopf is knowledgeable in all the firm's mathematical testing techniques, particularly statistical sampling. fie will function as a consultant in determining the appropriate circumstances where applying these techniques will be advantageous. -13- ARTHUR YOUNG'S TEAM FROM OUR DENVER OFFICE TO SERVE THE CITY OF WHEAT RIDGE COORDINATING PARTNER Earl E. Mackey AUDIT COLLEAGUE Harris Cohn JAUDIT TEST SPECIALIST I I AUDIT MANAGER I I COMPUTER AUDITING William H. Weiskopf I I Kenneth D. Anderson I I Keith J. Miller AUDIT STAFF E. MACKEY COORDINATING PARTNER Mr. Mackey is an audit partner in our Denver Office. He has been in public accounting twenty-eight years. As an audit partner he has had the overall responsibility for auditing, tax and management services for various entities in diversified industries, including governmental and service industries. His experience includes: • Audit supervisor, as coordinating partner, of all of our _ services to The Housing Authority of the City of Helena, Anaconda and Butte, Montana, The Housing Authority of the City of Pueblo, Colorado, City and County of Denver Employees' Retirement Plan, Pueblo West Metropolitan District, George W. Clayton Trust Commission, Colorado Department of Local Affairs, Park East Comprehensive Community Mental Health Center, Montana State University, University of Montana, as well as numerous other governmental and educational institutions. _ • Coordinating partner for all services to a number of our major commercial clients. Duties include the overall responsibility for auditing, SEC reporting, tax and management services provided. Mr. Mackey is a graduate of the University of Denver (B.A. 1951). He is member of the Municipal Finance Officers Association, American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants and has served as the 1976-77 President of the latter organization. -14- HARRIS COHN COLLEAGUE PARTNER Mr. Cohn is the Denver Office Partner in Charge of Accounting and Auditing. Mr. Cohn also serves as the SEC consultant for the Denver Office, having worked in our Home Office as an SEC and research consultant. He has had twenty-four years experience in public accounting and has overall responsibility for audit, tax and management services to many public and privately held companies in the manufacturing and distribution industries as well as governmental entities. Prior to joining Arthur Young & Company, Mr. Cohn held various financial control and managerial positions in private industry. His public accounting experience includes: • Coordinating partner responsible for audit, tax and management services provided to a number of our major clients, including University of Denver and Regis College. Duties include overall responsibility for auditing, SEC reporting, tax and management services provided. Mr. Cohn is a graduate of the University of Denver and is a member of the American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants where he has served on the Board of Directors, Chairman of the Committee on Accounting and Auditing Procedures, and editor of the Accounting and Auditing Developments of the CPA Report. -15- KENNETH D. ANDERSON AUDIT MANAGER Mr. Anderson is a certified public accountant with ten years experience in public accounting. He is a manager in the Denver Office of Arthur Young & Company. He is a member of the American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants. He is a graduate of Moorhead State University, Moorhead, Minnesota. Prior to his public accounting career, Mr. Anderson was employed for three years by North Dakota State University as Assistant Financial Aid Officer. His responsibilities in this position included designing and maintaining an accounting system for grant, scholarship, and loan funds and the preparation of all reports for these funds, loan collection for NDSL funds; and special projects for the University accounting office. His public accounting experience has included: • Audit management responsibility for Rocky Mountain Natural Gas, American Snowblast, Western Crude Oil, and Information Handling Services. In this capacity, he is responsible for planning, supervision, and coordination of services provided these clients. • Audit management responsibility for City of Wheat Ridge EDA Grant Funds and City of Aurora Community Block Grant. • Mr. Anderson has also participated in audits of other governmental agencies, contractors, and financial institutions. -16- KEITH J. MILLER COMPUTER AUDIT SPECIALIST Mr. Miller is a certified public accountant with over three years experience in public accounting. He is a member of the American Institute of Certified Public Accountants, the Colorado Society of Certified Public Accountants and the Denver chapters of the EDP Auditor's Association and the Institute of Internal Auditors. He has B.S. and M.B.A. degrees from the University of Colorado. During the past two years, Mr. Miller has devoted a large portion of his time to computer auditing. He has participated in _ numerous seminars sponsored by Arthur Young and has extensive hands-on experience in the computer audit field. He is presently the Denver Office Coordinator of Computer Auditing. In addition to his audit responsibilities, Mr. Miller has _ been involved in computer audit services with clients including Montana State University, University of Montana, Public Service Company of Colorado, Western Electric, and Homestead House. His computer audit work has included reviews of EDP systems along with the preparation of compliance tests using various firm - developed and custom application programs. Siva WILLIAM H. WEISKOPF AUDIT TEST SPECIALIST Mr. Weiskopf is an Audit Partner in our Denver Office. He has management responsibility for the audit test specialist activities for the office. He is a certified public accountant with six years of financial accounting and management experience in industry and twelve years of experience in public accounting. His experience relevant to this engagement includes: • Audit principal of services to two of our major publicly held clients. Duties include review of financial statements and required reports, including those for inclusion in SEC registration statements, and consultation with client _ personnel and others on accounting and reporting matters. • Serves as the Denver Office audit tests specialist and serves as an instructor for firm seminars on statistical sampling. A graduate of Northwestern University (B.S. and M.B.A.), he is a member of the American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants, where is is serving as Chairman of the Federal Government Auditing Committee. -18- IV. OUR APPROACH TO THE AUDIT Our principal objective as the independent auditors of the City of Wheat Ridge will be to express an.opinion on the fairness of its financial statements. The auditing procedures followed in examining these financial statements will be selected and applied within the framework of generally accepted auditing standards. The selection of auditing procedures within the framework of these standards is a matter of the auditor's professional judgment, guided by our firm's policies and preferences and our "businessman's approach" to audit problems, and problems within the specialized environment of your industry. Our objectives, also of major importance, include: • To be alert to areas of operations, not necessarily limited to accounting, where suggestions can be made for improving controls and reporting, improving operating efficiency, enhancing revenues, or reducing costs. • To be alert to other matters which should receive your attention and to be sure that they are brought to the attention of appropriate City personnel on a timely basis. Our audit approach will include the following elements: • Concentrated advance planning and review with key financial accounting personnel and operating department heads to assure efficiency and coordination and to reach timely agreement with respect to policy matters and areas of mutual cooperation in performing the audit. • Timely review of interim audit plans and findings with management to assure that our planned activities are compatible with their concerns. • Extensive reliance on unique computer -oriented and computer - assisted auditing methods developed by our firm. -1.9- • The use of analytical techniques such as systems documentation, flowcharting, comparison analyses, and statistical sampling (attribute and dollar -value) in addition to traditional auditing procedures. • Concentration on our "businessman's approach" to auditing so that our Management Letter, a by-product of the audit activities, will stress practical ways to improve operating efficiency and reduce costs as well as improve financial controls and reporting. • The use of a team of professional auditors and specialists qualified in the above -described areas, all of whom are presently committed to this enagement. The points emphasized above are developed in our formal client service planning activity, which is described below. CLIENT SERVICE PLANNING Client service planning is a method of organizing and motivating our client service teams to identify client needs and to coordinate our audit and consulting skills so that they are brought to bear most effectively on those needs. Our approach to service recognizes that clients have differing needs and expectations. We have developed a formal approach to client service planning to assure the delivery of needed professional services in minimum response time. We believe that the benefits of this approach include a more knowledgeable client service team, more responsive service, lower cost, and greater acceptance by the client of the results. TECHNICAL APPROACH The purpose of this subsection is to describe the major work ' tasks we will perform in conducting an audit of the City's financial statements. This tailored approach will provide a basis for the City to evaluate our firm's ability to competently perform the services required. Our experience in similar situations has shown that the careful examination of a proposed approach to the work can be of invaluable assistance in determining a potential contractor's understanding of the task to be performed and his ability to efficiently perform the required work. --)0- Our overall approach has been divided into basic tasks and subtasks as shown in Exhibit A. The basic tasks are: TASK 1 - Perform Survey of the City's Operations TASK 2 - Develop Detailed Audit Plan TASK 3 - Develop Audit Testing Plans TASK 4 - Perform Interim Audit Work TASK 5 - Perform Year-end Audit Work TASK 6 - Review Financial Statements There follows a discussion on two important aspects of our - audit approach, namely: • Computer auditing • Statistical sampling COMPUTER AUDITING Computer auditing, as practiced by Arthur Young & Company, is not a discipline separate and distinct from auditing itself. Rather, basic EDP and computer auditing concepts and techniques are a requisite part of the auditor's operating knowledge. Thus, our computer audit personnel are auditors first and computer technicians second. Computer auditing is staffed and managed within our audit department. Responsibilities for planning, execution, and review of computer audit activities remain with field and management audit personnel, rather than isolating EDP from the audit team by employing a cadre of nonaudit technicians. STATISTICAL SAMPLING We contemplate extensive use of statistical sampling techniques in our audits. Our statistical sampling methods will enable us to evaluate the internal controls in selected systems and to verify certain account balance within certain confidence limits with a specified degree of precision more economically _ than the traditional judgmental approach to audit sampling permits. Whenever possible we use both attribute and dollar - value sampling. --21- a i a �> s o a sa.s p9 N40 q 000000m ° D i n i a o a o K u .°. y y GO F ^1 < d O O Y cgi O p C O N1 o O n O M •� w U• �+ U 1 1• V m 00 U4 ° OK rt« V mL a wn � yJ Y4 p✓d YH V00 _4 . F °� O J dM 6 < w L ! M • W p f N fw C "Sm M✓ q4 «q 00 W Oq`• ydN NY nC «„ W n KNC iq CN N 0.n b NmN 4R V) Vl U6 l.dl V Vi✓ h0.t} N G < F y' ✓ w j w 4 g j W Y ..Di S9w y� 'n JDO,✓u 9N 4y • sm >P ccs9Rv nM IK< °.8 ^y KM 4WGbR «H IDC M.4i LY1 .d.4 0.wpj0 �w `y] 6C uNa 4J u u<y4 Uw GM py4 � f OU.+ �° 4RdOO .>iu fNn ryr� Z K w U.0.6 N pin N.RV�f N KGI N K!< N q(i R _ F G9 0 U�<4ti0<. m Q .+me�9 mp NO < N yti.� yd 4yM yy�� '^p6p44W4 Oui q0.� C��O°N y0. 5 ONN04 Db U4 F46 A 4w 90 C � w U~ 'n ]t QnK uOp n [L�l p? un NO ; uGm FO 966 mU Z C o U°O VmYn rn.n .� <pC9 4Cr M MMMB g tig0 yuc � < 6t Y fWal 0.0.< wNi U41f Ai CpYC C 4 E GD ~ VV 0 •u DTi py Y ^ C atlpm. my 000.Nb✓ Uw4<4p69 Cw. W>lFp N9M n0 n Wu r]gVyb wdd 4p Y M ^ Yq W Y 6 D tl Y W✓] O r w O DD N • M ] >n 644m4 .J( ¢y gw O q OLR j uW9 a6 •q �4 J yU U U OOu 4 m � y yy Q r 'vU O rF+ ✓W p V upA 4 yq p u < V • V,„ U • •• •• w i � A Yy� pU qN e O Otl f ✓N GL .E vy N^ r 0.r btl bq 6w4 O] O w. D SE ` u'J t^ n 4 Wd 6L UO gO ^ F NU 0 < qw0. 64 W > uNv •.w OV r qy U0. Wy V`V FC F <r f V9 ((�; ♦ 09m >u �. . . ". WG li Ll N NW M OWF n O< CI M1Wp p CS N O F M e m p � � e ooe$aev 4 m NF Vm qe <a y m96<�4ltl6 f y p0 nU -4 .l 0 4K q1K ! 4 ^<V • yp q < VV 6 « «w q 4^ KEr WVY N4 MO p py< 0. rP roU 4O.V v.0i ✓KG O 6 � f 9 q Om q M OY p 6W� A mb y C N f .m`i✓ yq Ob wip m 4y °yV OM •~< V< m 00 E`✓ W PO0. �,� r o oa m ioa°a ✓.°n am w 'nia'N Yu ar; mV qd YV 40O V+°i Z �T n'¢4 " �➢ bd6�a i0 W IL +C1 00 6V �C N0. F - In addition to developing and applying statistical sampling plans, the responsibilities of the statistical sampling specialist assigned to this engagement will include: • Consulting with other assigned audit staff in situations where statistical theoretical or technical problems arise; • Working closely with the computer audit specialists assigned to the engagement in the development of computerized random sampling techniques; • Keeping up to date with respect to evolving advanced statistical theory and application techniques; and • Communicating such techniques to our management team. -22- V. OUR ESTIMATED HOURS AND FEES Although we believe that our billing rates are comparable to those of other CPA firms, we have found that billing rates alone are not the most significant factor in determining fees. Rather, the costs of professional services are substantially influenced by the firm's philosophy and approach to client service, the careful matching of skills and experience levels for the tasks to " be performed, and disciplined planning and control of engagements. In Arthur Young we strive to achieve the lowest possible fees consistent with quality professional services through the following approaches. • Client service planning and communication with the client to assure that our focus is on matters that are significant and relevant to the tasks at hand. • Thorough engagement planning, including work plans with estimated time requirements for each task. • Application of modern techniques employing computers and statistical sampling methods whenever possible and appropriate. • Maximum participation during the audit of City personnel, consistent with our requirement to maintain independence. Based on the billing rates, audit approach, schedules and preliminary procedures, and after taking into consideration a governmental adjustment, our hours, fees and expenses for examining the December 31, 1979 financial statements of the City of Wheat Ridge and its various funds and issuing a management letter are estimated as follows: -23- Total hours 180 Estimated out-of-pocket expenses $ 250 Estimated fees 5,400 Total estimated costs ("E65a The above amounts contemplate the full level, quality and scope of services that it is our understanding you desire based on our discussion, and includes the application of audit procedures, evaluation of controls and development of management letters for the City of Wheat Ridge along with our opinion on the fairness of presentation of the City's financial statements. We are prepared to work with the City to assure that the fees for our work are commensurate with the nature and quality of the professional services provided. -24-