Morenci city council receives good audit report 11.12.08

Written 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.

  • Front.cowboy
    A PERFORMER named Biligbaatar, a member of the AnDa Union troupe from Inner Mongolia, dances at Stair District Library last week during a visit to the Midwest. The nine-member group blends a variety of traditions from Inner and Outer Mongolia. The music is described as drawing from “all the Mongol tribes that Genghis Khan unified.” The group considers itself music gatherers whose goal is to preserve traditional sounds of Mongolia. Biligbaatar grew up among traditional herders who live in yurts. Additional photos are on the back page of this week’s Observer.
  • Front.base Ball
    UMPIRE Thomas Henthorn tosses the bat between team captains Mikayla Price and Chuck Piskoti of Flint’s Lumber City Base Ball Club. Following the 1860 rules, after the bat was grabbed by the captains, captains’ hands advanced to the top of the bat—one hand on top of the other. The captain whose hand ended up on top decided who would bat first. Additional photos of Sunday’s game appear on page 12 of this week’s Observer. The contest was organized in conjunction with Stair District Library’s Hometown Teams exhibit that runs through Nov. 20.
    VALUE OF ATHLETICS—Morenci graduate John Bancroft (center) takes a turn at the microphone during a chat session at the opening of the Hometown Teams exhibit at Stair District Library. Clockwise to his left is John Dillon, Jed Hall, Jim Bauer, Joe Farquhar, George Hollstein, George Vereecke and Mike McDowell. Thomas Henthorn (at the podium) kicked off the conversation. Henthorn, a University of Michigan–Flint professor, will return to Morenci this Sunday to lead a game of vintage base ball at the school softball field.
  • Front.cross
    HUDSON RUNNER Jacob Morgan looks toward the top of the hill with dismay during the tough finish at Harrison Lake State Park. Fayette runner Jacob Garrow focuses on the summit, also, during the Eagle Invitational cross country run Saturday morning. Continuing rain and drizzle made the course even more challenging. Results of the race are in this week’s Observer.
  • Front.bear
    HOLDEN HUTCHISON gives a hug to a black bear cub—the product of a taxidermist’s skills—at the Michigan DNR’s Great Youth Jamboree. The event on Sunday marked the fourth year of the Jamboree. Additional photos are on page 12.
  • Front.hose Testing
    HOSE safety—The FireCatt hose testing company from Troy put Morenci Fire Department hose to the test Monday morning when Mill Street was closed to traffic. The company also checks nozzles and ladders for wear in an effort to keep fire fighters safe while on calls.

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