Poole Pleased with Findings in City Audit Report

December 21, 2010
by: 
Dwayne Page

The City of Smithville apparently gets good marks in it's latest audit report.

John Poole, Hendersonville CPA, who performed the annual audit for the city, addressed the mayor and aldermen Monday night.

Poole said there were no major deficiencies. "We didn't see any unusual expenditures during the year. We review a vast majority of the city's expenditures and there were no unusual items purchased. All items seemed appropriate for city business. The city does a pretty good job in the way that it pays it's bills. In my opinion, the city of Smithville and this board and boards that have served before you, have always been good stewards of the people's money. The city has very good reserves. If catastrophic things were to happen, the city has really good reserves that it could use to do the things it wanted to do. Not only do we have adequate reserves, but as far as the debt, the city literally has only two loans, one for some vehicles that we leased/loaned which the state considers a loan; and the other is the last year of a bond on the water system. All of these loans will basically be paid off next year so the city will almost be debt free. That is a great place to be in."

Poole said while the city showed a deficit in the water and sewer fund, the problem should be resolved next year, now that the city has raised water and sewer rates. "The area where most cities are having difficulties now in this economic slowdown we're in is in the utilities fund and that is no different here in the city of Smithville. This board is aware that the state has a requirement that at least every other year, you have to show a profit. In other words, you can't show a deficit two years in a row. So for the year ending June 30th, 2010, you can see we had a deficit of $81,000 (water and sewer fund). That has been very unusual for the city. The city, generally speaking, has shown surpluses. But it's just one of those things (that happened) because we haven't had a rate increase in a long time and we've seen all major areas of expenses go up including the cost of electricity, which went up 20% last year or eighteen months ago. Employee benefit costs, health insurance, we've seen increases in those. So that's really gotten us to this point. But I know this board has already taken action (to increase water and sewer rates) so that in 2011 that will not be a concern. You are to be commended. It's a tough thing to do (raise rates) but the state requires it and as this board is aware if you didn't do it, the state would have stepped in next year and done it for you and they would have set a much higher rate increase than what you would have because from their standpoint, they (state) don't want to see you back for the next ten years. In my opinion this board did exactly what it needed to do and you did it in a timely manner and I don't expect it to be a concern next year."

Poole said the city will also have to keep an eye on it's rate of water loss, which is currently at 19%. "There's something new this year. The state is concerned with utility operations, especially those that have water, in what they call unaccounted for water or water loss. The state has been gathering information for a couple of years and this is the first year that we have a standard that this board will have to be very concerned about going forward and that is unaccounted for water. Your rate of unaccounted for water is 19% which is very good. The state standard is 35%. In other words, if you're in excess of 35% you are a concern to them (state). But needless to say, being at 19% that is really good news. If you were over that percentage (35%) the state would ask you to start spending money to try and reduce that percentage. You should take great pride because 19% is an exceptional number and that is one of the things that I would be holding my water and sewer departments responsible for and if that number starts to creep up near 30% we would want to know what's going on and try to take action to reduce that but at 19% it's of no concern whatsoever."

In other business, the aldermen set the dates for all regular meetings of the city council for the calendar year 2011. The meetings will be held on the first and third Monday nights of each month at 7:00 p.m. on the top floor of the city hall building. The only exceptions are for Dr. Martin Luther King, Jr. day in January; the fourth of July; and for Labor Day. No meetings will be held on those dates.

Public Works Director Kevin Robinson gave a brief update. "Within the next two weeks we're going to have the water tanks serviced and check the water level indicators on the tank. The one on Miller Road is not working correctly so we're going to have all those checked. We also fixed part of the street in front of the post office where the vehicles are rutting the pavement out. We've fixed that with concrete. And holiday garbage pickup. We're off on December 24th and 27th so garbage will be picked up on December 28th. We're also off on December 31st and that garbage pickup will be on January 3rd."

Gary Durham, city resident and taxpayer, addressed the mayor and aldermen asking that he be placed on the agenda at the next meeting to try and convince them to start working on a new 20 year plan. Durham said the city should establish a 20 year plan which would put the city in a better position to prepare for future needs regarding maintenance and or expansion of city services. The city had a long range plan covering the period 1984-2004 but Durham said it seems that nothing has been done in recent years to update or follow it.

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