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Thursday, May 26, 2016

Monett audit reflects solid budget practices

Wednesday, January 6, 2010

Monett City Hall in snow.

Careful handling of finances and better budget management were evident in the City of Monett's recent audit for the fiscal year ending March 31, 2009. This was the first audit reflecting oversight by City Administrator Dennis Pyle, and a number of positive signs were evident.

Steps were taken to increase savings income. The city pools unused cash from its various funds to increase investments. Uncommitted funds added up to $1.6 million that were combined to draw interest.

The city had more than $8.1 million in cash and investments by the end of the fiscal year. Almost half was money restricted for a specific use, primarily for the water, sewer and electric systems. Investments rose by $370,000 over the previous year.

According to the audit, the city keeps all highly liquid investments in packages that mature every three months, leaving a maximum amount available on short notice while still drawing the highest interest rates.

At the end of the fiscal year, the city had $27,134,917 in outstanding long-term debt. The amount reflected a decrease of $1.4 million from the previous year.

The city's moneymaking operations were comparable to the previous year. The electric department, which generates most of the city's income, left a profit of $2.4 million for the year, plus another $108,565 from miscellaneous charges.

Funds for the various utilities grew over the year by a grand total of $647,600. The sewer department ran a deficit of $528,567 if $1 million in depreciation is included. Both the water and sewer departments increased spending by around $300,000 for repairs and maintenance over the previous year.

Operations from the city utilities generated $3.9 million during the audit year. From that total, $2.1 million went to fund other city programs and expenses.

Some funds have a very specific use. For example, the fiber optics operation generates close to $90,000 a year in profit. During the audit year, $84,390 of that was transferred to the electric department to help pay back the loan that got the fiber program started. Pyle said the fiber debt has $360,000 more to repay.

One difficulty that shows up annually in the audit is how well individual departments can stick to their budgets. With Pyle overseeing city finances, department budgets ended the year much closer to projections than has been generally the case in the past.

Pyle told The Times he likes to set realistic budgets. Some departments have more predictable spending patterns than others.

The street department, which often has a large budget for repairs and maintenance that is seldom spent, held very close to spending projections this time and stayed under budget.

Spending for the golf course, a long shot in the past, came in $18,000 under budget in the audit year. Golf course income of $305,270 was up almost $20,000 from the previous year. Golf course operations ran in the red by $314,467, an improvement of more than $100,000 over the previous year.

Spending at the airport was also under budget. On balance the airport ran a deficit of $121,495, almost $40,000 more than the previous year. Fuel sales were down by about $40,000 as well, though sales exceeded expectations by $6,000.

Generally salaries and wages stayed the same in the various departments. Pay fora fireman who returned from Iraq boosted the fire department's salary total, as did the addition of Pyle to the administration budget. The biggest exception was an increase in wage spending for the communications division of the police department.

The city participates in the Missouri Local Government Employees Retirement System (LAGERS). Administrators of the system calculate what the city must pay into the program each year, depending on projections for retirement on each employee.

At the time of the audit, the city had paid into LAGERS more than was needed to fully fund the city's obligations. The next LAGERS calculation reflected the stock market drop, impacting LAGERS investments. Pyle said the city was told to increase its payment into LAGERS for 2010. The stock market recovery will not affect the city's LAGERS payments until the 2011 fiscal year.

At the monthly city council meeting where the audit was accepted, Mayor Jim Orr said The CPA Group, which did the audit, found no exceptions and had no negative comments about the city's financial records.

"They were very positive on the condition of city funds," Orr said. "They were extremely pleased with our inventory system and how we have physical control over the city's property."

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