"They thought we were doing a better job controling our money and our inventory," Orr said.
Total city assets increased by $1.5 million for the year that ended on March 31. Less than a fifth of the increase came from the city's business activities that raise revenues, like utilities. The rest came from governmental activities.
City Administrator Dennis Pyle said the city's year-end general fund balance was $1,389,996, up by more than $600,000 over the previous year. Auditors attributed the increase to a reduction in operating costs and reduced capital outlay.
Pyle said much of the increase could be credited to the $651,000 in settlements from cell phone companies for payment of back taxes.
The settlements enabled the city to establish a reserve for its general fund for the first time. Council members authorized setting $500,000 aside to cover future general expenses should there be an unexpected drain due to expenses or a shortfall in revenues.
|With the completion of the audit, council members were also able to apply the formula for setting an amount of utilities revenue aside into a reserve for future utility needs. Pyle said the formula would add $268,920 to the existing reserve of $617,120.||The utilities reserve is available to address emergency expenses. Pyle recalled that the city had to absorb more than $1 million in costs from the 2007 ice storm, repairing downed utility lines, replacing broken utility poles and covering labor costs, when no such reserve existed.|
Pyle said the city's total debt load during the audit year dropped from $27.1 million at the beginning of the fiscal year to $24.2 million by the end. Principal on the debt was paid down by nearly $3 million.
Running the city's governmental activities cost a little over $100,000 more than the previous year. Net costs for what the city has to pay were up by more than $1 million, mostly in public works expenses.
Capital improvements finished during the year included:
* The new parking lot where the police station had been at 212 Fifth St., $17,060.
* Acquisition of a thermal imager for the fire department, $8,100.
* Finishing work on the Eisenhower and Clear Creek bridges, $308,749.
* Replacing the roof on the street department building after storm damage, $41,923.
* Finishing the Greenways project from the golf course to Eisenhower, $49,218.
* Work on Highway 60 through the first Tax Increment Financing program, $141,836.
* Acquiring 24 golf carts, $103,190.
* Replacing the roof on the mechanic's building after storm damage, $19,312.
* Electric system improvements, $101,764.
* Sewer system improvements, $158,706.
* Land purchased for the sanitation department, $12,100.
* Heavy equipment, including a Vermeer Clipper for $33,840 for the street department and a $20,000 Kubota tractor for the South Park.
Depreciation in utilities
The money-making operations of the city had relative success during the year. Electric operations recorded a net income of $645,957. Auditors indicated revenues from charges for service decreased $8,159 over the previous year. Operating expenses decreased by $130,277 due to reduced electricity purchases.
Water system operating expenses were up by $168,038 due to increases in repairs and maintenance. Sewer revenues increased by $222,219 while operating expenses decreased by $153,164 due to less depreciation.
Determining the bottom line for utility expenses is heavily dependent on balancing depreciation costs. Pyle said replacement of all the equipment is calculated over its expected life span. Some is figured to last three to five years, others over as long as 50 years. A schedule breaking down the total cost per year is worked into the analysis.
During the audited year, the water system would have made $170,572. After depreciation was figured, the operation for the year ran a loss of $79,138. The sewer system would have shown a profit of $291,264, but after depreciation the service ran a net loss of $518,236. Revenues for electricity would have run $169,300 higher without depreciation added.
Another trend that will become increasingly evident is the cost of running the 911 system. The city has been transferring $25,000 a year into the 911 system, Pyle said. Now that the land line surcharge for Barry County has been dropped, cutting income by around $64,000 a year, the $126,017 balance in the 911 fund will drop. In time Pyle said the reserve will all be spent and 911 will likely become another general fund expense.
The value of property in the city was calculated by county assessors at $134,100,335. Due to the elimination of the city's property tax, Pyle said city residents did not have to pay $212,000 in property taxes based on the old 34-cent per $100 assessment formula. Pyle referred to the amount as tax relief for the citizens, due to the city operating primarily on its utilities income and sales tax revenues.
The full audit is available for review on the city's website at www.cityofmonett.com.