An independent audit of Owensville finances showed the city paid down $3 million in debt during the period ending June of 2012.
“Not a bad year,” said City Administrator John Tracy this week.
Aldermen heard a report from Molly Malone of the Rolla-based firm of Verkamp & Malone, LLC, CPA, during their meeting Jan. 7.
Malone called the city’s statement of net assets “a very healthy balance sheet.”
She noted the city began the audit period with outstanding long-term debt of $9,795,384. During the period July 1, 2011, to June 30, 2012, the city refinanced outstanding street bonds and certificates of participation for a new water tower which added $3,726,488 to the debt total.
Through refinancing and paying off on bond indebtedness, the city realized a $6,795,050 reduction in its long-term debt obligation to end the previous fiscal year owing $6,726,822.
Through these refinancing actions, Tracy said the city effectively trimmed its long-term obligations by just over $3 million. Included in those funding plans enacted last year, the city also saved a combined $520,000 outright on financing costs over the terms of funding methods for the new water tower project on the city’s west side and street bonds from the early 2000s.
“It was a pretty busy year,” said Tracy. “It wasn’t a bad year. We got rid of about a third of our debt.”
When the city closed out its Light and Power plant account — after finalizing the sale of the transmission system to Ameren Missouri — the city was able to transfer $967,991 into its General Revenue account. Tracy said those funds, along with $588,437 from the Sewer and Water Department account, are placed into a “reserves” account. The Water and Sewer Department reserve fund is restricted for water and sewer projects, he noted.
“This is the last year you will see Light and Power in your audit,” Malone told the full board and mayor. “It’s the last time you’ll ever see Light and Power for the city of Owensville.”
The auditors once again stated they would like to see additional staffing to handle accounting issues “in accordance with generally accepted accounting principals” (GAAP) and improve “segregation of duties.”
Auditors also suggested the city develop a “formal investment policy that addresses custodial risk” but noted “all deposits were adequately insured or secured by pledged collateral” in accordance with state statute.
Tracy said cost for the audit was $13,000. “It’s probably the best audit we’ve ever received,” he told The Republican.
“Once again, you received what they call a ‘clean opinion,’” said Malone. “Your employees are good to work with.”
Also on Jan. 7, the board heard a report from Tracy that the city’s request for cost-share funding with the Missouri Department of Transportation is progressing as expected. The city is scheduled to have its request for a $525,527 loan from the Missouri Transportation Fund Committee considered for final approval on Feb. 5.
As proposed the loan would be paid off over a 5-year period at 1.6 percent interest costing $21,216.17. The city will use this funding to pay half of the estimated $1 million to install a center turn lane on Highway 28 from Krausetown Road to the upper entrance drive to Walmart. Surveying for the project began this week.
Construction on the project is expected to begin in early 2014.
Aldermen approved Ordinance No. 1138 on a 4-0 vote authorizing the mayor to enter into a cost-share agreement with Missouri Highways and Transportation Commission for the project. The agreement will be submitted with the request for loan funds from the MTFC.
The city was approved for the cost-share project (No. J5P3006) on Nov. 19, 2012.
Cost estimates for the entire project are listed at $1,051,054.
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