Council gets positive audit
Thursday, May 29, 2014 8:56 AM
Thomas Wente of Smith Schafer Associates of Rochester presented the 2013 audit report to the Spring Grove City Council on May 20.
Wente reported that the city is doing well, with an unassigned fund balance of $763,989 at the end of 2013. That translates into nearly 95 percent of 2013 general fund expenditures, or about a year's worth of GF spending. Accounting firms generally recommend that cities maintain from 30 percent to 50 percent worth of yearly general fund expenditures in reserve, he added.
"We broke out every single fund in your financial statements..." Wente said. "We issued a clean opinion."
Since the market value credit ended in 2011, property taxes have provided more revenue to the city than LGA (local government aid), he noted. Property taxes represented $516,627 (33%) of total governmental revenues last year, while LGA only provided 23 percent. However, in 2014 Spring Grove's LGA will increase by $43,550.
All bond payments have been made on a timely basis, Wente stated. Over the next five years, debt service payments (general obligation bonds and revenue notes) will increase from less than $300,000 to approximately $400,000.
The city's water fund is "generating sufficient cash flow for (both) cash flow and capital outlay needs," and the electric fund "generates sufficient cash flow for payment in lieu of tax of $130,000 and continues to build a cash reserve," Wente said. Sewer operations will need to generate enough income to service $2,166,00 in outstanding bonds. The liquor store fund saw $1,083 of income generated and did not make a payment in lieu of tax.
Wente said that "unnecessary city funds" should be closed and remaining reserves transferred to an "appropriate fund," Wente said. An example would be closing the Aquatic Center Capital Fund and transferring those monies to the Aquatic Center Debt Service Fund.
"My overall assessment is that the city is in very good financial shape," he concluded.
Council Member Nancy Nelson asked Wente to determine what the company would charge to consult with city representatives on financial matters, such as consolidating funds.
'Landscape Partnership' update
Cooperative efforts with MnDOT aimed at beautifying the Main Street corridor are about to bear fruit, city clerk/treasurer Erin Konkel reported. "We are looking at a planting date of June 16," she said. "We have six beds on our approved list, but if we're under budget we can plant additional beds.
Benches, trashcans and planters for the Main Street project will arrive within three weeks. Trees should arrive within two weeks. Sod is also coming to fill in "green spaces." Striping along the road, including crosswalks, is also planned, but no firm dates were provided on that work.
On a related note, members voted to relocate a planter from near the Legion to a spot near Wilmington Mutual. The motion included the acceptance of a donation of flowers for the container offered by Kathy Roverud.
The council voted 3-2 to absorb a .5 percent increase in electric rates until budgeting later this summer. Members Lorilyn Dehning and Robert Vogel cast the dissenting ballots.
Another vote approved some additional part time hiring (two bartenders for the Corner Store and one busboy for the Fest Building). No specific individuals were named as yet.
The council voted to go into closed session for talks with city attorney Joe Hammell, who reported that the hearing "involved some activity by personnel at the liquor store that's under investigation.... I've advised the council that until that investigation is complete, you can't act. Therefore we're awaiting final completion of that investigation by our police department."
The purchase of software and hardware needed to install a new firewall for city computers was approved. Up to $2500 was earmarked for that project.
A spare tornado siren will be offered for sale to an unnamed community. Members were told that Police Chief Paul Folz had received an inquiry from a city that does not have a tornado siren, and the city of Spring Grove has a used unit left over from an earlier replacement cycle. The request to sell the old unit was approved by unanimous vote.
Another motion was passed which directed Folz to inform persons who are parking illegally in a closed-off section of Southeast Alley that the practice will no longer be allowed.
Finally, up to $800 in city funds was approved for sprinklers at the football field.