Auditors were pleased with progress for Alexander City’s financial reporting.
Representatives from Carr, Riggs & Ingram (CRI) were at a work session of the Alexander City City Council on Tuesday to go over the city’s audit of fiscal year 2017.
The council in its regular meeting approved changes to personnel structure in wastewater treatment to create efficiencies to allow more maintenance and cost savings.
CRI’s Jason Harpe said the audits are getting progressively better as city leaders get caught up on financial reporting and audits.
“A lot of internal controls did not exist in 2015 and 2016,” Harpe said. “Bank reconciliation was not being done on a regular basis among other things.”
The majority of the current city council and Mayor Tommy Spraggins did not take office until November 2016 which would be the second month of the fiscal year 2017 audit.
Harpe said many of the measures taken sped things up to allow better monthly reporting to the council and make audits faster.
“Once you get (processes) in place, it gets faster,” Harpe said. “There are fewer adjustments and what (the council) is getting on a monthly basis is more accurate. (The city’s) internal control measures Sandy (Stanbrough) implemented is a positive step forward.”
The balance sheet at the end of 2017 showed a $1.6 million loss in the general fund primarily due to $1.8 million spending in capital outlay. Harpe said the enterprise operations of the water, sewer, gas and golf course saw net losses while the electric department had a $616,000 profit. Hart said it is not uncommon for sewer to be seen as a loss as the lost money is often covered by the water operation. He suggested the city look at a rate study because no rate increase has been enacted since 2008.
Spraggins said Jackson Thornton was doing a rate study to look at water, sewer, gas and electric rates.
Harpe advised the council to monitor those operations as year after year losses could be devastating.
“Keep your eye on it,” Harpe told the councilmembers. “You don’t want it to continue. Revenue is what really affects this. It is notable if you have year-to-year losses.”
Harpe warned the council changes to accounting rules are forcing the city to recognize a $10 million liability for unfunded pensions.
“It will not be due tomorrow,” Harpe said. “It will be paid over time. (Retirement Systems of Alabama) hitting the mark helps with the liability.”
Councilmember Eric Brown inquired about getting caught up with audits by the time municipal elections come around late this summer. Stanbrough said work is underway on the 2018 audit but the 2019 audit will likely not be completed by then.
“I think it will be completed by the time 2020 is due,” Stanbrough said.
Harpe said the audits are more easily completed now.
“Controls are so much better than what they were,” Harpe said. “Staying current is most important. It allows things to happen more quickly.”
Sugar Creek Wastewater Treatment Plant superintendent Lynn Miller and city human resources director Kathy Railey presented a plan to the council to combine the lead plant operator and the lab manager position and create a second maintenance position.
Miller held the lone maintenance position before being promoted to superintendent. Railey said while in the maintenance position, Miller had to call on others to help with the sewer treatment system’s three plants and 21 lift stations.
“He was a one-man show,” Railey said. “He would have to call in a plant operator that was off to help.”
Railey said the staffing situation created overtime but the new arrangement will avoid adding people or costs. In fact, savings could be seen in the long run.
“It will allow for better preventive maintenance programs,” Miller said. “It will allow us more time to work on pumps and do things such as oil changes on a more regular basis getting more life out of equipment.”
In other action the council:
• Awarded a bid for hot-mix patching not to exceed $152,250 to James Paving Co. of Pelham. The patching will be used to fill in utility cuts and other patches as necessary to get streets ready for paving.
• Approved a resolution to declare a Ford Crown Victoria and a Chevrolet Tahoe as surplus and sell to the Coosa County Sheriff’s Office. The vehicles were in the inventory of the Alexander City Police Department and were set to be sold on GovDeals.com. The vehicles need a good bit of work according to city officials and will be sold to Coosa County for a total of $2,000, a price similar to what the city would have obtained from GovDeals.com. Coosa County is aware of the maintenance issues with the vehicles but needs them to replace wrecked patrol vehicles.
• Approved a license request to allow a citizen to keep a covered bridge on city right-of-way that benefits the city covering sewer and water pipes.
• Approved a request for the Fourth Annual Stop the Violence Picnic on April 11 at the Cooper Recreation Center.
The next meeting of the Alexander City City Council is 5:30 p.m. Monday, Feb. 3.