City manager says consultant—s finance recommendations will guide audit fixes; committee debates warrant timing

Charlie (City Manager) told the Finance Committee that consultant Sue Lessard has finished a phase 1 recommendations report and staff have reviewed it with Deputy City Manager Sarah. He said the phase 1 work plan is intended to —attack the audit report— by grouping Sue—s recommendations into buckets for ordinance updates, policy changes, training and a new finance policies-and-procedures manual.

The manager said some recommendations will require City Council votes while others can be handled through committee discussion or administrative changes. He said the goal is to have reconciled, documented processes in place before the next audit cycle so staff can deliver consistent files to RHR Smith for the FY25 audit.

Steve (Finance Committee member) warned that auditors will scrutinize records regardless of how well staff prepare. "Auditors are here to dig whether you've got the best books or the worst books," he said, underscoring that a cleaner accounting system will nevertheless make issues easier to find and resolve.

Staff reported progress reconciling tax, water and sewer accounts and said Sue will help with hands-on reconciliation so auditors do not have to "go on treasure hunts" for supporting documents. The manager said better records will also help the council assess the effect of unexpected expenditures and referenced a potential upcoming payment related to the Karsk family that could be in the low six figures; he said staff will identify which reserve or fund would cover it.

Committee members also discussed how the warrant for vendor payments should be handled now that the city is on a four-day work week. Staff moved to an electronic distribution after the finance meeting; some committee members said they prefer the warrant be available during the Thursday meeting or distributed earlier (for example Wednesday evening) so members can review invoices and call staff with questions before signatures are requested. Staff said timing and processing constraints could be adjusted but would require schedule changes in the week to ensure timely vendor payments.

A committee member asked for information about REPICs (referred to in the meeting as REPIC/REPIX), an agreement structure for tax-foreclosed properties that allows a former owner to remain and pay current taxes while working on back taxes. The manager said staff will research how many such contracts are active in Ellsworth and report back; committee members asked for a clear description of the local process and any applicable Maine Municipal Association guidance.

What happens next: staff will produce timelines and deliverables for policy, ordinance and training buckets, produce a draft policies-and-procedures manual for the finance department, and provide the committee a written follow-up on REPIC activity and the proposed approach to warrant timing and distribution.