Small Cities Assistance Program

city manager contract

budget amendment sample Just some of the hundreds of thousands of dollars of last-minute shifting council approved on Monday night . . .

Recommendations, and city’s response from the State Auditor’s reports:

Recommendation

We recommend the City’s elected officials and management establish a formal, written comprehensive plan to address its financial condition. In addition, they should monitor and evaluate the City’s financial condition to ensure the plan is followed and the desired results are achieved. The plan should be revised as needed to resolve financial issues.

We further recommend the City’s elected officials establish and maintain debt repayment schedules to ensure repayment of the inter-fund loans.

City’s Response

The City concurs with the concerns outlined in the audit finding and recommendation. The City Council, management and staff are also very concerned about the City’s financial condition. As such, we are committed to working toward increasing revenues, reducing expenditures and rebuilding reserve balances. In 2010, the City took the drastic step of laying off 10 employees and requiring other non-public safety employees to take 27 unpaid “furlough” days. Also, in 2010, the City successfully sought voter

The State Auditor’s office today released reports on Ocean Shores.

Excerpt I:

The City continues to make expenditures in excess of its appropriations, putting it at risk of not being able to pay its obligations.

Description of Condition

During the 2006, 2007 and 2008 audits, we communicated concerns to City management regarding expenditures in excess of its appropriations. The audit for 2009 also found the City made expenditures in excess of its appropriations in seven funds, totaling $68,502, the largest being $37,698 in the Water Utility Fund.

We also noted concerns regarding the City’s financial condition during the 2006, 2007 and 2008 audits. These concerns continue.

The City’s ending cash balance for the General Fund continues to decline . . .

Excerpt II:

Debt repayment expenditures are 20 percent of the City’s budget. The City anticipates issuing a $45 million bond by the end of fiscal year 2010 to finance the cost of a Local Improvement District for street improvements. This bond includes refunding $39,689,914 in bond anticipation notes included in the figures in the table above. The $5 million difference between the $45 million bond and $39,689,914 in refunding the bond anticipation notes will result in a net increase in the City’s debt.

The City has issued inter-fund loans to 11 funds from the Water Capital Improvement fund to offset negative fund balances during 2007 through 2009. The City’s outstanding inter-fund loan balances are approximately $1.2 million as of December 31, 2009. Five of the 11 funds had a negative fund balance of $373,350 as of October 31, 2010.

In addition, the City did not properly authorize inter-fund loans, by Council resolution, to the Convention and Tourism Fund in 2007 and 2009 for $90,150 and $40,870, respectively. Furthermore, the City does not maintain debt repayment schedules for inter-fund loans.

Link to findings and reports

From p. 18 of the Proposed 2011 O.S. Budget, City Council total costs:

2008: $61,331

2009: $47,729

2010:  $46,957

2011:  $71,216

The biggest reason: $15,000 for equipment (a program to take minutes, apparently). The total is a 51% increase, over this year’s budget figure. Even without the $15,000 equipment addition, it would be a 20% increase, 2011 v. 2010.

City Council/Mayor plan: Cut General Fund budget by 5% = $274,980

My plan: Cut property taxes by 10 percent = $236,500

Hmmmm . . .

Lynn, Broadbent and Farra all wanted across-the-board budget cuts to create more reserve funds and/or help pay the Interfund Loans. Lynn and Broadbent asked for budget cuts of 5%. Farra wanted 20%, which Lynn and Broadbent thought was too much to ask for.

French: “We accept 5 percent. We’ll go do it.”

Asked for his input, Creighton said: “I got nothing.
This is the first year we’ve been shown every single thing in the budget. There’s

Time/date: Thursday, Dec. 2, 1-2:30 p.m. Starring: Gordon Broadbent, Dave Creighton, Bob Crumpacker, Jackie Farra and John Lynn, as the Council. (Absent: Peggy Berry, as usual, and Dick Skewis.) Garland French, as the Substitute Mayor. Mike Folkers, as the Villain.  To paraphrase Folkers, the finance director: “Um, remember the $1.2 million in ‘Interfund Loans’ you guys have been approving? Well, you really need to start paying them back . . .” (See: North Coast News Guest Editorial by Jim Dutt.) The Convention Center has tapped the Interfund Loans (from utilities, kind of like the ol’ Interfund transfers) to the tune of just under a half-million dollars, over the last three years.

Shockingly, the Scanlon START! plan to cut taxes by 10 percent was not discussed . . . More to come . . .

Ocean Shores has been spending about $250,000 per year in overtime. The Police and Fire/EMS overtime is clearly marked as “permanent overtime” in budget listings. It’s tougher to find out what is going on in the various Public Works departments. A recent North Coast News public records request shows the Public Works overtime for the first two quarters of 2010 was around $25,000, on pace to be slightly below last year’s $54,000.

2010 city-wide partial total: $175,177 (first two quarters, Public Works; first three quarters, Police, Fire, EMS)
2009 city-wide total: $291,910
2008 city-wide total:  $233,744 (not including Public Works) The breakdowns: