Morenci city council receives good audit report 11.12.08

Written by David Green.

By DAVID GREEN

Finally, some good financial news for city officials during the annual audit.

Auditor Philip Rubley gave city council a positive review of its budget for the fiscal year ending June 30, 2008. The good news ended deficit problems that arose in previous audits.

“This is the best report you’ve had in long, long time,” Rubley said. “You took a deficit of $32,776 and turned it into an excess of $110,967. You’re making good progress.”

That’s an important step in the right direction, he said, but still short of where he would like to see the city’s financial standing. He recommends a fund balance of 25 percent of the general fund and the current standing puts the city about halfway there.

“You actually reduced your expenditures by $92,410 in one year,” he noted.

Revenues came in at $18,557 more than predicted, creating the fund balance of nearly $111,000.

Looking at state funding—the source of nearly a quarter of the city revenue—Rubley cautioned council to prepare for a “less mode.”

“It’s important to keep [the budget] in shape during these tough times,” Rubley said, “but you’ve done a great job.”

Rubley said the non-major funds were in good shape with the exception of the Town and Country Festival fund. A deficit of $9,000—some from costs in the previous year—will have to be covered by the general fund or another source of revenue.

The Local Streets fund ended with a balance of $59,484; Major Streets ended at $40,018; Fire Equipment at $44,373; and Morenci Area EMS at $26,008.

Utilities funds are often a source of trouble for communities, Rubley said, but Morenci’s shows an income of $102,144.

“You’re covering your costs,” he said. “You’re in good shape.”

The Internal Service fund—showing the costs and usage of city equipment—indicates good utilization.

Rubley said the city follows good accounting practices that give a fair presentation of finances to the public.

The audit’s general comments included a concern about “segregation of duties” in which one person has control over two or more phases of a transaction or accounting function.

That’s due to the small size of the staff, he said, and with the oversight practiced, he doesn’t see the situation as a problem. The only other recourse is to hire another employee.

Rubley also mentioned the city’s fund deposit policy, noting that three-fourths of the city’s bank deposits would be at risk in the case of bank failure. Auditors are required to discuss the issue, he said, and council should remain aware of the situation.

LOANS—Council member Keith Pennington asked Rubley if the city should continue with short-term financing rather than paying off debt. Rubley suggested continuing with financing.

“There’s too much unknown,” he said. “It’s great to pay off debt, but the way things are now, I’d think you’d be better to keep your cash position strong.”

LIBRARY—Library director Colleen Leddy noted that the city’s good financial standing is due in part to the library being required to use about $20,000 of its own funds to pay for expenses last year, due to budget reductions.

“The audit shows that money was given to the library,” she said, “but it doesn’t show that $20,000 came from the library. Will that eventually come back to the library?”

Rubley said that wasn’t a question for him to answer and no answer came from council, either.

CURRENT STANDING—Pennington stated after the meeting that it’s important for taxpayers to remember that the audit gives a picture of city finances at the conclusion of the fiscal year in June.

“It’s not any reflection of where we are today,” he said. “It’s not a correct assumption that those kind of savings will be realized this year.”

The city has incurred some added expenses, such as bringing police officer Frank Cordts back to full-time status, and Pennington estimates that the actual savings available in the current budget year could be half of what was presented by Rubley.

“The good report was a result of the drastic measures the council and the previous administration took to curb expenses,” he said, referring to layoffs and budget-cutting at the library and fire department.

Taking out loans for equipment purchases also helped improve the city’s standing, but at the beginning of the current fiscal year, about $50,000 was still owed.

  • Girls.on.ride
    NADIYA YORK and Aniston Valentine take a spin on the Casino, one of the rides offered at Wakefield Park during Morenci’s Town and Country Festival. This year’s festival remained dry but with plenty of heat during the three-day run. Additional photographs are inside this week’s Observer.
  • Front.softball
    Angela Davis (2) and teammate Allison VanBrandt break into a jig after Morenci's softball team won its third consecutive regional title.
  • Front.art.park
    ART PARK—A design created by Poggemeyer Design Group shows a “pocket art park” in the green space south of the State Line Observer building. The proposal includes a 12-foot sculpture based on a design created by Morenci sixth grade student Klara Wesley through a school and library collaboration. A wooden band shell is located at the back of the lot. The Observer wall would be covered with a synthetic stucco material. City council members are considering ways to fund the estimated $125,000 project and perhaps tackling construction one step at a time.
  • Front.train
    WRECKAGE—Morenci Fire Department member Taylor Schisler walks past the smoking wreckage of a semi-truck tractor on the north side of the Norfolk and Southern Railroad tracks on Ranger Highway. The truck trailer was on the south side of the tracks
  • Funcolor
    LEONIE LEAHY was one of three local hair stylists who volunteered time Friday at the Morenci PTO Fun Night. Her customer, Aubrey Sandusky, looks up at her mother while her hair takes on a perfect match to her outfit. Leahy said she had a great time at the event—nothing but happy clients.
  • KayseInField
    IN THE FIELD—2004 Morenci graduate Kayse Onweller works in a test plot of wheat in Texas. She’s part of Bayer CropScience’s North American wheat breeding program based in Nebraska, where she completed post-graduate work in plant breeding and genetics.
  • Front.soccer.balls
    BEVY OF BALLS—Stair District Library Summer Reading Program VolunTeens, including Libby Rorick, back left and Ty Kruse, back right, threw a dozen inflatable soccer balls into the crowd during a reading of “Sergio Saves the Game.” The sports-themed program continues on Wednesdays through July 27.

Weekly newspaper serving SE Michigan and NW Ohio - State Line Observer ©2006-2016