3/17/2023 11:21:00 AM Taylors Falls 2022 audit, good and bad news
The Taylors Falls City Council heard Monday night this week; that it was a good thing the city had healthy reserves (balances) and also took in extra federal recovery act funds, because the city spent much more in 2022 than it took in. The audit was presented by Abdo accounting associate Brad Faltysek. He told the council the audit also showed a number of municipal accounting shortcomings likely resulting from staff chaos. He advised that the state of Minnesota is not going to be coming to the city assessing any fines, as long as the state sees “you are going in the right direction,” he declared.
The audit is provided to the state with the deadline March 31.
The next budget-setting cycle is going to be key, the new Mayor Brandon Weiberg observed. “I challenge the council to set a budget and stick to it.” Taylors Falls ended 2022 by spending $1,268 per capita but revenues were only $1,059.
Certain circumstances were acknowledged for spending money which decision-makers really had little control over. The personnel situation included emergency stop-gap hires and legal and overtime hours, and there were unbudgeted costs for outside investigations of data privacy violations. There also was a major push on some public works projects ie: sidewalk repair, that ate up balances. Faltysek noted the sale of a city owned lot, which is still pending resolution, seemed to be anticipated in softening the expenditures blow.
(As an aside— the hotel developer who paid a down payment for the downtown lot but hasn’t finalized the purchase, has expressed a desire to meet with the city. Notification the city attorney sent to Amy Dill, of being in default of the purchase agreement, was still in its 30-day notice time period.)
Overall, while there are deficiencies in the city accounting and minutes-keeping procedures the audit shows no massive liabilities. Problems with payroll taxes have been worked out, reconciliation is “caught up” and claims will be included on every city council agenda for council to approve.
The city was cautioned to keep quotes in hard copy form for documentation. The receipts/invoices for purchases also need to be retained and better-organized, as Abdo was unable to find a good portion of the receipts it looked for to match with expenses.
Faltysek said the newly-hired city clerk is working with accountants and he feels the fiscal matters are getting ironed out after apparently not being tended to for a while.
One compliance finding is common in small cities and that’s there ideally should be a second set of eyes on statements, bills, checks, etc. “Segregation of duties” is a common shortcoming in small cities, council was told.
The city’s debt service is on-schedule, and there are no problems in the “enterprise accounts” which is the category of self-sustaining entries like waste and potable water utilities.
The city does have some “ARPA’ recovery act monies left, which need to be utilized or at least committed by 2024. Contrary to rumors—covid-aid items purchased so far have been documented and accounted for, the audit presentation concluded.
The next budgeting hurdle will be to build the reserves. Taylors Falls eroded balances in 2022 to the point the reserves are down to 17 percent. Ideally they should be around 50 percent of annual expenses Here again unexpected projects like watermain breaks required reserves to spent down. The city may need to review water rates to boost operating revenues, council was told.
The other main piece of business Monday night was a request for a Community Garden.
Council supported the concept and agreed to have parks committee members meet with garden boosters on location and logistics. The idea is to prep this year and have the site ready for residents to acquire plots in 2024.