Harris City Council briefs

The following actions and discussion points were addressed at the June 10 Harris City Council meeting:

City audit raises no 

red flags

The city’s auditor presented the 2012 audit to the Harris City Council. This time, the usual is a good thing.

The auditor, Dennis Oberloh of Oberloh and Associates, said the audit found that the financial statement represents a fair and accurate reflection of the financial standing of the city. He added that the audit was done using accepted government audit standards.

The city was given a clean audit, except for minor items not in compliance with internal controls.

Oberloh explained some of the information from the audit. In the general fund, the revenues were $531,000. Of this amount, 54 percent is from taxes, and 34 percent is from Local Government Aid from the state. As LGA has continued to drop, the amount of revenue from taxes has increased. Last year the percentage went up to the 54 percent from 52 percent the previous year. Expenses decreased in 2012, from $380,000 to $354,000. While debt service has remained stable, capital outlays have gone down.

The fund balance is in very good shape. Oberloh said that for a city the size of Harris, there should be 35-50 percent of annual expenditures in the fund. This is because the city operates six months without any income from taxes.

After Oberloh had presented the audit to the council, City Treasurer Marlys Balfany presented an option to the City Council to reduce some of the debt. Balfany said that, per the audit, their fund balance was high enough that they could pay early on two obligation loans and not affect the financial stability of the city. There is a Public Facilities Authority loan that originated with the water revolving fund. It accrues interest at the rate of 3.29 percent and the city will pay an additional $6,382 over the remainder of the obligation. The Northwoods Bank equipment certificate could also be paid. It accrues interest at the rate of 4.25 percent, but because of the remaining term, there remains only $4,101 to pay. The council elected to pay off the balance on the PFA loan, even though it has less dollar amount of interest.

Once the city receives the LGA for 2013, the council can then decide whether to pay off the Northwoods equipment obligation, as there is no restriction as to when that payment can be made.

Rough roads

Another lengthy discussion point that evening centered on what could be done about the roads in Harris.

The council identified 33 roads that needed some type of repair or resurfacing. Of these, the council identified the 10 most in need of repairs. Many have culverts that need replacing; most have a need of gravel. But the problem was whether to do a short fix, such as been done in the past or take the time to figure out what needed to be done to permanently change the roads so they are brought up to a standard and stay there. Mayor Diane Miller said repeatedly that patchwork repairs have been done because no one knowledgeable about roads has indicated what work needs to be done in each situation.

City Engineer Chuck Schwartz said that there is an Agstar grant available for a feasibility study for roads, provided it would equate to a commercial benefit for the city. Schwartz said he thought the Sink Hole Road and 420th Street intersection and Harder Avenue would possibly qualify for this grant. That would allow detailed information on what has to be done to those roads to permanently improve them. Schwartz said he will inspect the roads and prepare the grant application as part of his services already paid by the city. Schwartz will also review some of the other problem situations and report back to the city as to what could be done. It is Schwartz’s intention to have a few respected local contractors that are knowledgeable in road construction and repair with him during the inspections.

In other news

The council approved the law enforcement contract with the Chisago County Sheriff’s Office. The contract was relatively the same as last year’s, except the cost went to $52.28 per hour up from $49.97 for 20 hours of dedicated time.

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