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Latest financial audit warns of negative balances in four city funds

A recently released audit report of the city’s finances completed by the EFPR Group for the 2015-2016 fiscal year warned the general fund balance at the end of that fiscal year was negative $3.8 million. In addition, the audit showed negative balances of $761,019 in the transportation fund, $481,153 in the golf course fund, and $46,687 in the special grant fund.

At a Common Council meeting on Tuesday, Controller Matt Agresta said, “The situation we are in is not the rosiest. We have some deficit fund balances in some of the funds for the city, which we’re going to have to look at long and hard to put a plan together on how to rectify that.”

Agresta asked the council for ideas on solutions and Alderman Jim Martuscello scheduled a finance committee meeting for Thursday October 26 in order to discuss the situation further.

Mayor Michael Villa addressed the council and said that the purpose of hiring the Freed Maxick accounting firm last year to help reconcile the city’s bank accounts was so that the city would have accurate numbers for the auditors and to show the city’s financial situation accurately.

“We were all elected to fix the problem, not to cast blame, not to point fingers,” said Villa. “We have to do this in a judicious manner, collectively as a group – come to some decisions that are going to have an impact on our tax paying base whether it be increasing the tax cap – all these things have to be in play. So going forward we have to be as frugal as possible when we address any expenditures.”

“In light of this, it does not mean that we stop the economic growth that has been occurring in the city over the past two years. We can’t put our heads in the sand and say we are going to stop all the good things that have happened in this city. We’re not going to cut our nose to spite our face, so to speak…we have to look down the road past this hurdle and see there is a light at the end of the tunnel.”

While the negative balances are a problem, Agresta said the findings do not necessarily mean the city is facing a cash shortage. While Agresta said that the balance could potentially cause a cash flow problem at some point in time, he does not currently see any issues with the city being able to pay its bills.

In response to audit report, Villa said he has already instituted a hiring freeze. Agresta said he has instituted a policy by which any purchase over $500 has to be approved by his office and has to be justified as absolutely necessary.

About Tim Becker

Tim Becker is the owner of AnthemWebsites.com LLC which publishes The Compass. He serves as both editor and a writer.

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