Posted: 9/8/04
By Clark Natalie
The financial audit of the City of Harris from 2003 shows marked improvement in the opinion of one of the accountants that worked on the audit.
Dennis Oberloh of Oberloh and Associates pointed out to the council during the regular meeting Sept. 2 that the cityís financial standing has improved dramatically over the past few years.
About two years ago, the cityís former treasurer pleaded guilty to embezzling money and since then the city has discovered several inconsistencies in bookkeeping done by the treasurer. Those inconsistencies, including missing documents, had created a situation in which the cityís budgeting and financial books were less stable than they seemed.
The audit reflected an opinion which was a ìqualified clean opinion.î
The opinion means the city conducted business according to generally accepted accounting practices (GAAP).
Oberloh said the city lacked in only one area according to the practices.
The GAAP requires that the balance sheet carry a list of the valuation of the fixed assets of the city.
Harris, like many smaller cities in Minnesota, had created such a list. Therefore, Oberloh told the council he could not render a clean opinion on that category.
However, Oberloh did say the City has taken steps to rectify that point for the 2004 audit.
He said the city has done an inventory of all the fixed assets, and that information will be included on the 2004 financial statement. By next year the city will have an unqualified clean audit, Oberloh told the council.
Oberloh also reviewed the compliance audit for Harris and told the council he found a couple areas the city needs to address in order to get a clean report in the 2004 audit.
He said the city had not been providing monthly financial reports as required but that the city had taken actions to make sure that was done.
There was a problem with proper fund accounting, but in 2004 that has been corrected.
The state requires him to check mandatory compliance actions. This includes contract and bidding, deposits and investments, conflict of interest and claims and disclosures.
The only problem he saw all year was that at the end of 2003, in deposits and investments, the city had exceeded the federally insured amount in one account by $32,000.
Oberloh went on to explain that when the City deposits funds the money must be guaranteed federally or by the bank pledging securities to secure the funds.
Oberloh pointed out making sure the money it deposits is protected is the cityís responsibility and not the bankís.
Oberloh also indicated that enterprise funds, like sewer and water, are doing well and are bringing in the required amounts.
The long term debt was $395,000 for the fire station which is included in the total $610,000 liabilities.
The city has equity of $1.05 million which will increase when the fixed asset inventory figures are included in 2004.
Later in the evening, the City Attorney, Kevin Shoeberg, reviewed the proposed City budget for 2005.
He indicated that the levy for 2005 will stay the same as it was in 2004.
Although insurance costs have gone up, the city is finding ways to cut costs elsewhere, Shoeberg said.
One major cost savings was the purchase of a used truck instead of a new one previously budgeted.
City maintenance manager Mike Kriz and Shoeberg found a truck the city could buy for less than the budgeted amount. The used truck has fewer than 35,000 miles on it.
Shoeberg also said the cityís Local Government Aid which is provided by the state will increase from $82,000 in 2003 to $98,870 in 2004.
This is because the city did not have a larger budget and, therefore, qualified for more money from the state, Shoeberg said.
Shoeberg asked the council to approve a levy of $270,000 so it can be turned into the county auditor by September 16.
He indicated the council can adjust the levy amount later by setting it lower, but that the city is bound by law to not raise the levy amount it presents to the county.
There will be a public meeting to review the proposed budget in November to get resident input on the budget and levy. The date of the meeting tentatively was set for two weeks after the general election and notices will be posted.
In the public comment portion of the meeting, Pete Molin brought up the problems with holding the school board meeting at the Harris City Hall.
The school board has implemented a program to reach out more to Harris and Stacy areas by holding an occasional meeting ñ probably no more than two a year ñ in each town.
When the meeting was to be held Aug. 12, no one was at City Hall to open the building for the school board.
He said as a resident of Harris he was embarrassed by the occurrence. Molin said his impression was that it showed Harris had a total disregard for the school system, and he ìcould not believe how pathetic Harris has become.î
Molin said he believed that the city owed the school board an apology.
Mayor Richard Hanson assured Molin he was right.
Marlys Cleveland asked about the procedure for developers providing concept plans to the city attorney and where the money came from to pay for Shoebergís time.
Shoeberg told her and the rest of the people in attendance that when a concept plan is presented to the city any time he spends on it would be billed to the developer.
An escrow account is created through the city and funded by the developer and the costs would be billed through it, Shoeberg said.
The city is not funding development of concept plans. Shoeberg assured her that he works for the city and not for developers.
In other action:
The council:
ï Approved a one day beer license for the Stacy Lions at the Fire Hall for the Fire Departmentís Fall Festival on October 2nd. This is contingent upon the Lions club providing the required insurance.
ï Approved a variance application of Scott Bigak to locate a building 30 feet from the lot line instead of 60 feet, because the lay of the land would not allow him to meet code.
ï At the request of business owners will put Sunday Liquor License question on the upcoming ballet.
There will be nominal cost, as it will just be the cost of adding to existing ballot.
ï Passed a motion to allow resident who permanently shuts off water and sewer to their property to not have to pay monthly base fees.
Each request would be considered on a case by case basis, and would not be used for short term vacancies.
ï Set a worksession for Sept 30 at 6 p.m. with the council and planning commission to review progress of zoning ordinances.
ï Reviewed the information from Mike Kriz about the problems in the Cemetery, where kids have been throwing garbage around.
The Chisago County Sheriffís Office will patrol on a irregular basis, both in the cemetery and ball parks.
The Harris City Council will meet next on Oct. 7 at 7 p.m. in City Hall.
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