Purdy reserves show growth

Wednesday, December 17, 2014

Brakes on spending significantly reduce maintenance

By Murray Bishoff

Cassville Democrat

The annual audit for the audit for the City of Purdy showed a dramatic shift in city spending practices over the past year.

Reserves grew and maintenance projects shrank compared to the previous year.

Dawnata Hopkins, auditor for The CPA Group in Monett, reported the city received an unmodified opinion, the positive report city leaders want.

For the fiscal year that ended on June 30, the city ended the period with cash balances of $439,251. The general fund held $222,063.41 in cash, and $35,883.76 in funds restricted for street maintenance. The business account had $181,304 generated by water and sewer sales, restricted for utility use.

Hopkins observed the city spent $206,608 in general expenses during the audited year, compared to more than $384,000 in the previous year, when street paving and the purchase of playground equipment boosted the total.

Spending on the utility system showed a similar pattern. Hopkins noted the city spent a little over $295,000 in the audited year, compared to $343,900 in the previous year. The reduction in spending boosted overall income by 27 percent.

Revenues for the period ran even with the previous year. The general fund received income of $212,737, compared to spending of $174,765. The sales tax for street maintenance generated $67,802, and of that, only $31,918 was spent. The water and sewer fund had net income of $808,406. Revenues rose by $27,000 from the previous year, when major repairs and interior and exterior renovations were made on the well No. 2 water tower.

Mayor Steve Roden conceded that in light of the city's ongoing litigation over its sewer system with the Missouri Department of Natural Resources (DNR), the city council may have chosen to put brakes on all spending, even if not intentionally. The uncertainty of DNR's requirements to resolve the sewer issue, an issue still under negotiation, may have had a cooling effect on all city plans.

In response to Roden's request for recommendations, Hopkins suggested raising the capitalization rate. Any item purchased for $1,000 or more has to go through depreciation over 20 years. She suggested setting the capitalization rate at $2,500, like most cities. Hopkins also suggested spreading liability on signing checks for accounts from the clerk. Other towns have two aldermen sign checks as a check and balance.

Hopkins offered no objections to paying routine bills online. She also suggested the city accept credit card payments for court fines, which puts liability on the payer.

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