CITY AUDIT SHOWS WITHOUT UTILITY FUND TRANSFERS, CITY WOULD BE BROKE

August 23, 2015

 There have been complaints about the cost of Monticello’s utilities (water, gas, and electric) for as long as anyone can remember. However, if rates are lowered, the city would have to increase its property tax collections by same the amount or lower expenses by the same amount.

The 2014 City audit shows that without the utility fund transfers, Monticello would be insolvent.

 Electric System per the audit:

2014 CityElec2More detailed audit information shows Electric brought in $2.9M and paid out $2.7M to electric suppliers. This fund had other expenses and transferred $89,000 to the general fund and ended up with a $1600 overall loss for the year. The fund had $5,600 at the end of the year (12/31/14).

Water & Sewer fund per audit:

2014CityWaterMore detailed audit information shows Water & Sewer brought in $1.2M and paid out $400,000 to suppliers. This fund had other expenses and transferred $269,000 to the general fund and ended up with a $10,000 overall profit for the year. The fund had $374,000 at the end of the year (12/31/14).  Based on the auditor’s report, the Cash balance is only $3,000.

Natural Gas Fund per audit:

2014CityGas  More detailed audit information shows Natural Gas brought in $3.1M and paid out $2.6M to suppliers. This fund had other expenses and transferred $395,000 to the general fund and ended up with a $252 overall loss for the year. The fund had $500 at the end of the year (12/31/14).

When these utility funds transfer all their profits and reserves to the General Fund, the only things left to do if upgrades or major repairs are needed are 1) raise rates, 2) borrow money, or 3) increase property taxes.

It is up the citizens of the City to know how much money is being taken in and to watch how the money is being spent.

The audit shows the following for money brought in and spent by the City of Monticello in 2014:

Money received (rounded):

Taxes                             $898,000

Charges for service      $315,000

Licenses & Permits       $ 22,000

Other                             $206,000

Total received                                 $1,441,000

 Money spent (rounded):

General gov’t                $576,000

Police                            $557,000

Public works                 $634,000

Other                             $127,000

Total Spent                                      $1,894,000

 Overspent                                       $( 453,000)

Transfer In                                         $742,000

Transfer Out                                        ($325,000)

Spent over Received                            $( 36,000)

Fund balance is only $47,000.

The City Council must make some hard decisions soon to stay solvent.  In 2015 there will be no city police department; this may keep the City funds from ending in a deficit.

TWG

http://www.taxdogs.wordpress.com

http://www.facebook.com/taxdogs

 

 

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One Response to CITY AUDIT SHOWS WITHOUT UTILITY FUND TRANSFERS, CITY WOULD BE BROKE

  1. Time To Trim Some Fat says:

    Not only does the city need a proper financial manger who can advise on unwarranted debt, but access to the services of an engineer who understands the needs and costs of infrastructure as well.
    In addition, a lot less hot air and more fiscal restraint from the city council would go a long ways toward returning the city to solvency. It’s nigh time those publicly elected and employed, who are responsible for the expenditure taxpayers money act so.

    “City Manager Peggy Billerman pointed out that no one brought into the discussion back then that the electrical system would have to be expanded, or it could have been part of the agreement. As it is, the city must bear the cost itself. The facility will bring jobs and visitors to the city, so there will be money associated with it, but the up front expense is all the city’s.

    Now the city has to pay a contractor $27,575 for work the city cannot do, and provide the materials which total more than $8,000.
    The funds will come from the Municipal Competitive Trust Fund as they are no where in the budget.
    (The hospice is a conditional use in the residential area, it is not zoned commercial.)

    http://themonticellonews.com/council-approves-expenditures-p11891-1.htm

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