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Thursday, Dec. 18, 2014

Accountants praise city books

Tuesday, March 6, 2012

McCOOK, Nebraska -- The City of McCook received praise from the accounting firm that performed their annual audit of financial statements, Monday evening, during the McCook City Council's semi-monthly meeting at council chambers. Terry Galloway with Almquist Maltzahn Galloway & Luth of Grand Island, Nebraska, said the city had done an excellent job of holding down spending, budgeting and the way they kept costs down.

During a review of the departmental expenses that compared each of the 15 city departments to a per capita "best practice," Galloway pointed out that all departments had kept expenses under the target. "It is really unusual for a Nebraska city to not see any of them over the best practice amount," said Galloway.

General obligation debt for the city, which includes water and sewer loans, economic development bonds and other items, are at an "outstanding" level according to Galloway. Auditing practices target less than five percent as a good level and less than three percent is categorized as excellent. The city audit showed McCook was at .30 percent, less than one percent.

The audit did show that the city needed to increase unassigned fund balances in the general fund and cash reserves by $3.1 million, in accordance with newly adopted Governmental Accounting Standards Board requirements. Galloway said the additional funds were something that needed to be worked towards and accomplished over time, answering inquiries from City Councilman Bruce McDonald by saying there was no penalty for not hitting the requirements, unless the balances of the fund became negative. City Manager Jeff Hancock added that it could have a negative impact on the city's bond rating.

The audit also recommended consideration of future increases to the water and sewer rates.

Sales tax numbers showed the city had a good retail trade and property tax numbers were less than other communities of similar population, according to Galloway, who added that state funds received was also higher than the per capita best practice. "You're doing a great job at budgeting and giving tax payers property tax relief," said Galloway.

Councilors adopted a new process of introducing and approving ordinances. The new process eliminated unnecessary steps in the introduction of ordinances that had previously created scenarios where councilors were forced to second proposed items or vote for approval of the title of an ordinance, so that they could then vote against the item.

City Councilman Mike Gonzales motioned for an amendment to the process, which was subsequently approved, that added structure to who introduced and read agenda items.

Councilors granted approval to apply for grant funding to update the City Comprehensive Plan. The project was approved for up to $31,000 in city expense, paid out of the council contingency account within the General Fund. The McCook Economic Development Corporation previously identified a grant source that would cover almost half of the estimated $71,000 expense of updating the plan and completing an additional upgraded housing study.

MEDC has also agreed to cover half of the $10,000 housing study expense portion of the project and MEDC Executive Director Rex Nelson told councilors he was excited to be working with the city on the project.

Other items on the consent and regular agenda:

* Councilors went into executive session to discuss a potential real estate purchase for the cation waste disposal system. According to a Nebraska Department of Environmental Quality the report the waste water treatment plant fails to meet toxicity requirements during periods of high flow and the slow rinse cation waste water stream at the waste water treatment plant will be replaced by two new retention lagoons to alleviate this, which will require taking 10 acres of farmland out of production.

* Century Link was granted permission to occupy City of McCook right of way to install underground fiber optic cable along West 10th Street, from West J Street to the cell tower located west of West M Street. According to a representative from the company the project is for a private company and won't effect or enhance overall service in the area.

* Bid specifications for renovations at the Fox Theatre were approved. The total renovation project is estimated to cost more than $300,000 and has received a $252,000 grant to assist with the expense. The project includes renovations to the lobby, restrooms, ticket booth, stage and seating areas, in addition to electrical, heating and other improvements.

* MO Dough LLC was approved for a special liquor license for a bull riding event at Kiplinger Arena, April 13 and 14.


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Great audit report! The city has no bonded debt. Property tax is at only $129 per person instead of the average of like-sized Nebraska cities of $170 per person. Propery tax makes up only 12% of the revenue collected by the city. City administration, fire, cemetery, ambulance, airport, public transportation, pool, parks, library, civil defense, planning, police, senior center, public buildings, and public works--every catogory in the city is below the average of what other cities spend. And the city spent $1.2 MILLION dollars LESS than budgeted. The auditor is correct that the taxpayers are getting a great deal living in McCook.

-- Posted by dennis on Tue, Mar 6, 2012, at 3:46 PM

dennis,

Remember? We do have bonded debt in the Public Safety Center project. It is bonded against the sales tax revenues and must be repaid on time and with interest just as it would be if it were bonded against something like property taxes.

This was an overview of the Fiscal Year 2010/2011 budget and as stated by the accountant at the meeting, the $1.2 million we didn't spend includes the projects or portions of projects that were budgeted but not completed for that Fiscal Year. Some examples of the projects we had that year that did not get completed would be our estimated portion of the H Street project for $187,000; Monument signs for $25,000; Library elevator for $200,000; Development of cation waste disposal for $500,000.

It's not as though the city came $1.2 million dollars under budget for all its projects. Various projects and expenditures came in under budget in many cases, over budget in others but mostly, it didn't spend money on particular projects that were budgeted but carried over to the next year's budget. I only mention it because saying we spent $1.2 million less than we budgeted may lead a person to believe we have a surplus of $1.2 million when we actually don't have that money available as a true budgeting surplus would be available. Much of that amount involves projects that were simply rolled over into the new budget. So what wasn't spent in the 2010/2011 budget will still be spent but it will be done in the 2011/2012 budget.

-- Posted by Aaron Kircher on Tue, Mar 6, 2012, at 5:10 PM

No bonded debt against property. The bond is against sales tax which means there is/was no increase in property taxes (or any tax) to pay off the bond. The $1.2 million was for the most part dollars that were designated to projects that were not completed in the last fiscal audit year which left that money as carry-over or to use another term, surplus. I guess the audit is in the eyes of the beholder despite the auditor indicating it was very positive. I apologize if my exuberance over the fiscal status of the city offended anyone.

-- Posted by dennis on Wed, Mar 7, 2012, at 7:45 AM

Just nice to know the facts

-- Posted by ruby4 on Wed, Mar 7, 2012, at 5:52 PM

Aaron, that is actually quite helpful. I believe that the fact that a budget is figured correctly rather than inflated is a benefit to the tax payers. I think what you are saying is that the budget was indeed figured correctly, NOT over budget, (Which is a very positive thing) and that the City of McCook didn't inflate the budget but rather weren't obligated to spend the money budgeted for 2011 and that will, by extension, roll over the unspent budget to the 2012 year.

That is a good bit of explanation so that citizens won't be lead to believe that the City is hoarding money.

-- Posted by Nick Mercy on Wed, Mar 7, 2012, at 6:29 PM


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