Mayor warns accounting issues cloud September financials as council reviews revenue and costs

The mayor reviewed the city's September financial reports and flagged unreconciled accounting entries that may be distorting the city's fiscal picture.

The mayor said sales tax for the period came in at $982,000 and noted that used-tax and tobacco-tax receipts were also up in the most recent reports. She told the council that clerical problems in the city's accounting system, Cassell, have delayed reconciliation of some accounts and that staff are working to correct the records.

The concern matters because unresolved ledger items and year-to-year transfers can change whether the city appears to be operating with a deficit or a balanced budget. "We still have Oct. 0 and Nov. 0, and we're in this Dec. 0," the mayor said while urging council members to review the documents closely. She also said staff will meet with the finance director to sort capital-account entries that currently appear incorrect.

Blair, who identified themselves as an auditor in the meeting, told council members that on initial review they did not have "reasonable assurance" the financial statements were presenting a true picture. "As an auditor, my job is to go in and look at the financial statements and audit those financial statements ... right now ... I don't even have reasonable assurance," Blair said. The auditor and staff said the October reports are likely to show a clearer position once reconciliations are complete.

Council and staff discussed specific revenue and expense items. The mayor noted the city's long-term average sales-tax intake is near $978,000, up from a historical average of about $775,000; used-tax receipts were cited as roughly $7,200 higher than the comparable last-month figure; tobacco-tax receipts were reported to be up about $1,100. On the expense side, staff highlighted increased workmen's compensation costs tied to prior-year claims, higher-than-expected repair and maintenance spending, and utility costs that the city continues to pay for city-owned facilities and parks.

Councilmembers and staff also discussed operational areas the city can influence, including building-permit collections, fire-assessment fees and permit-processing accuracy. The mayor urged members to mark items requiring follow-up and to raise questions so staff can investigate errors or miskeys that may be affecting totals.

Councilmember Laurie Bradshaw, Councilmember Charles Strum and Councilmember Joanna Strobacher were present for the discussion. The mayor said she will meet with the finance director and that staff will return when reconciliations are complete. Blair and finance staff recommended awaiting the October financials for a clearer view before drawing final conclusions.

Less-critical details noted during the review included: department heads were told to cut overtime where possible; some capital-project amounts appear on the wrong year and may need transfers; park capital outlay shows an unspent amount (about $93,000) that staff said they will verify against prior-year transfers.

Councilmembers were told donor and miscellaneous donation accounts exist that can be used for non-general-fund payouts, and staff said they would provide follow-up answers on several line items. The mayor closed by asking council members to highlight questions directly on the reports so staff can research and report back.