January 18, 2011 by wcobserver
WEST FORK, ARKANSAS
18 JAN 2010
Due to the circumstances regarding the City’s audit situation, the State of the City will be presented in two parts, with the second occurring at the February meeting where I will discuss the 2011 budget.
Audits for the years 2004 and 2005 found unapproved expenditures. When an audit is sent to the Legislative Audit Committee for review, unapproved expenditures automatically trigger actions by the Legislative Audit Committee. In the first week of January I received a letter from the Arkansas Legislative Audit Committee requesting we contact their personnel. I was told that two audits per year was not sufficient progress. We would not be in compliance until 2014. In effect, we are out of time and must complete our audits as soon as possible. To be certain of the Audit Committee’s position, I requested our City Attorney, Mr. Hudson, speak with the Legislative Audit Committee. I also spoke with Municipal League attorneys. Our current five years of non-compliance with the state’s requirement that we have no unaudited accounts beyond eighteen months, cannot be projected forward to assure we actually do have a balanced budget. The Budget for 2011 was presented in December 2010 as a balanced budget in accordance with state law prohibiting deficit spending. A representative of the Arkansas’s Legislative Audit Committee agrees. Other than the legal requirement that audits be current to within eighteen months, there are three additional and equally important reasons why we should be in compliance with Arkansas’s Accounting Law. First, we are not practicing “Due Diligence”.
The Bond issued by the state of Arkansas does not cover us in the event of theft. There is a copy of the law from the Bonding office in your Council Packet. Note item number four. If theft has occurred, I believe we will be held personally liable. Secondly, the City must present current audited financial statements when applying for capital improvements funds, bonds and other sources of revenue which we need in order to improve our City and expand our water and sewer infrastructure. Our current water situation is in fiscal deficit and our numerous sewer problems, including the one we recently solved for $20,000, indicate more requests for money could occur. Finally, we could have state “turnback funds” withheld until we come into compliance. The City cannot afford the absence of those funds, even temporarily.
While in Little Rock last week, I visited with a representative of the Legislative Audit Committee and was told the Audit Committee will do our audits at no cost to the City. That is a significant savings for our City. At the end of this Address, I will be asking the Council to approve a letter by me to request the Legislative Audit Committee do our audits.
Due to the current audit situation and to more closely monitor our budget, I am assuming the duties and responsibilities accorded the Mayor under Arkansas statute 14-58-303, which gives the Mayor or authorized representative, exclusive power to conduct the business of the City. Under Arkansas statute 14-58-303, the Mayor is responsible for the budget and finances of the City. The activities associated with that responsibility can be assigned to another by the Mayor but the Mayor is the one who is held accountable. I have already asked our current auditor to help us with Policies and Procedures for accounting. That process is scheduled to begin sometime in May of 2011.
FACTORS NEGATIVELY AFFECTING OUR 2011-2012 BUDGET:
Our Budget is our future. As a result of a declining tax base, including the effect of the state lottery, and rising fuel costs which impact our purchases, the City can expect a shortfall of revenues for several years. Once again, in order to remain balanced, we can expect to make more cuts in the City’s budget. In addition to our audit problem, traditional ways of raising funds are now more difficult to obtain or have been lost completely. While the strength of banking seems to be improving, loans remain difficult to obtain, Municipal Bonds (once thought to be safe and gave good returns on the investment) are now considered risky by most investors. Cities are now one of the least desirable investments.
Our Audit problem will no doubt lessen our desirability. Stimulus monies are also predicted to decline dramatically in 2011 and the competition for grant monies are predicted to become even more competitive. I tell you this because we need to be thinking proactively with regard to where monies can be obtained.
We are well over budget with regard to managing stray animals. As yet, the Washington County Quorum Court has not approved the 1.5 million dollars estimated for the construction of a county animal shelter. If funding is approved, completion of the shelter would not occur until sometime in 2012. Costs for services by the proposed county shelter as well as other policies such as guaranteed acceptance of animals have not yet been defined.
In a meeting with Judge Edwards and other Mayors, we discussed ways in which some cities are currently dealing with stray animals and some positive suggestions were made. Our Contract with Noah’s Ark expires in several months. I have visited with Dr. Ford and will work with her to develop a new contract as well as resolve some of the past logistical problems. Continued contracted services with Noah’s Ark $85.00 an animal with the unknown costs of the County Shelter, calls for the development of a contingency plan and budget. I have initiated a volunteer “Animal Rescue Committee”. The members have an interest in and experience with this issue. One member has, and continues to be, involved with the Washington County’s Animal Shelter Committee. Another maintains a small shelter and locates “forever homes” for animals and another has had experience with managing animal shelters in other cities. The Animal Rescue Committee will be responsible for helping create the contingency plan.
We have a number of abandoned and unoccupied structures in West Fork. The effect of the subprime housing market is on our doorstep. Most of the homes are in now disrepair with open doors and broken windows. The homes provide shelter for vermin and invite vandalism. They also affect the property value of neighboring homes. Studies of communities with properties like I have described, also have an equivalent increase in crime, declining property values and an out-migration of people and dollars to other more desirable communities, as well as an in-migration of problems not mentioned tonight. The City’s cost to determine the ownership of, and to enforce the repair or removal of unsafe structures is not one we can afford.
WEST FORK’S FUTURE:
The right business, just one, will bring almost as much revenue as our property taxes. Our growth and development is almost totally dependent upon water and sewer capabilities. Our waste treatment plant will need to be improved or replaced very soon, or we will need to consider obtaining sewer services from Fayetteville. Regardless of the decision, it will require funding. In order to bring commerce and tax dollars to West Fork, the reduction of water loss and improvements to our water and sewer systems are essential. Economic development is an important goal and we need the full attention of the Water and Sewer Commission and Mr. Bartholomew.
THE PAST ISSUE OF CITY CLERK AND MINUTES:
The City Clerk is an elected official just as the Mayor and Council is. We modified the job description for our City Clerk but the majority of the Clerk’s job is regulated by state statutes which cannot be conducted by any other individual. The new City Clerk has my support. Until Policies and Procedures are developed regarding how summary Minutes will be written, I have asked that summary Minutes be presented to the Council by the Clerk in a format she will select from a professional handbook with acceptable examples. There are also Arkansas laws regarding the recording of Minutes to assure pertinent information is recorded. Archive Minutes as a verbatim hard-copy will be provided to me by the Clerk as a back-up to the tape. Until we are clear as to the law regarding how tapes are kept, I have asked the Clerk to preserve tapes along with hard-copies of meetings.
FOIA AND OTHER PRINTING COSTS
To facilitate the public’s access to public information and save City dollars, I have asked that Minutes of the Council as well as minutes of Committees and Commissions, along with the Council’s Packet which usually has handouts, can be scanned onto a disk. We have a scanner. If it functions well, I hope to have the procedure in place by March, thereby reducing labor and paper costs.
We can quickly copy the scanned information onto a CD and charge $1.25 for the CD, or mail the CD with postage costs. Best of all, we can send the entire Council Packet by email. For those who still want a printed copy, we could perhaps charge ten-cents a page for copies over ten pages and charge for the cost of mailing. This is in compliance with FOIA. A written policy will be established for how much to charge and for what. Under FOIA, tapes must also be available for distribution. We can charge for $4.00 for the tape plus any related mailing costs.
The manual, Guide for Municipal Officials, is found in many of our City offices. Tonight, Council members are being provided copies of the 2009 Guide, as well as a FOIA manual.
West Fork’s Municipal Code Book has our ordinances which are filed by areas such as Fire and Police. The Municipal Code and other pertinent information will be included in a Council Handbook. No Council Member should have to ask, “Do we have a sign ordinance?” With the Council Handbook, Council members can better serve their constituents by being able to answer and ask relevant questions. West Fork’s adopted “Community Development Plan” will also be included in the Council Handbook.
I believe it is important for the Council to attend Municipal League meetings as part of professional development. The next meeting is this summer, and if we can find the funds I will promote and support attendance by as many Council members as possible. I will also support the professional development of employees. I believe they should have the tools they need to do their jobs, including the use of technology and technological applications.
Most importantly, we must remember that we work in a government building. We are government employees. The citizens of West Fork own this building, everything inside this building and more. As government employees, we have additional regulations of our behavior and more stringent expected outcomes of our behavior. Just as anyone else in government service, we are called to a higher standard. I have faith that we can meet the challenge.
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