Mar

14

Council hears good news from auditor

Posted by : Erik Walsh | On : March 14, 2013

By Russell Slaton
The News Staff

MALAKOFF–Malakoff’s financial footing is firm, the city’s auditor told the city council at its monthly meeting Monday, March 11.

Reporting on the fiscal year ending Sept. 30, 2012, Frank Steele of Anderson, Marx & Bohl, an association of certified public accountants in Corsicana, told the council that it was a “year of progress from a liquidity standpoint.”

“You’re doing OK,” Steele said. “If you are putting back into the fund balance, then you are doing better than most.”

Malakoff’s general fund pretty much broke even, increasing by about $7,000, Steele said, raising the overall general fund balance (assets minus liabilities) to $1,303,000 from $1,296,000 the previous year. He noted that the general fund within the 2012 fiscal year had $450,000 in cash, with a fund balance of $400,000. The city’s water and sewer fund had $327,000 in cash and $3.8 million in the fund balance, Steele said, including an increase in operating income to $151,000, which was $100,000 more than last fiscal year.

That excess revenue from the water and sewer fund will be invested in a $100,000 certificate of deposit through First State Bank-Athens’ branch in Malakoff, an agenda item that later was affirmed at the meeting by the council. This certificate of deposit purchase was the city’s first in about a decade, Steele said.

Certificates of deposit through banks are backed by the federal government via the Federal Deposit Insurance Corp. Such purchases are standard procedure for government entities, according to City Administrator Ann Barker.
As for debt, the general fund carried $138,000 in notes that was paid down to $96,000, Steele said. The water and sewer fund took on $400,000 in debt last fiscal year for water storage facility improvements, he added, which increased overall water and sewer debt to $1,260,000.

One issue brought up by Steele during his fiscal report to the council was “bank reconciliation,” which is similar to the balancing of a checkbook. When asked by Mayor Pro-Tem Tim Trimble to explain, Steele said, “Last year, the final audit adjustments either didn’t get posted or it was lost being sent over.” That adjustment accounted for the final difference in the city’s balance, Steele said. Council member Jeanette King noted after Steele’s presentation that bank reconciliations are done by the city “every month.”

In other business, the council approved the low bid of $86,363 for Malakoff’s public works department to purchase a third backhoe for the utilities division. This backhoe will be used to help fix ongoing drainage issues and to tear down substandard structures within the city limits, Public Works Director Tim Whitley told the council.

The new backhoe will be a 2013 Case Model 580SN. The department currently owns two backhoes, a 1998 model Case and a 2002 Caterpillar. “The backhoe is something we use every day,” Whitley said, noting that recent creek improvements have put a strain on the department. To pay for the new backhoe, the department “could stay within its means (budget) without increasing costs,” he said.

Whitley told the council that more creek drainage work needs to be done near Pennsylvania Street and Washington Avenue, as well as near the water treatment plant on the city’s west side.

Within the past month, the city has cleared the same creek near Cole and Moss streets, and plans more creek drainage improvements northeasterly toward the city’s Community Center, park and fire department at the intersection of State Highway 198 and Farm-to-Market Road 3062 (Star Harbor Road).

When asked by Council member Vincent Bailey Jr. whether the purchase could cause any budget problems for the public works department, Whitley reiterated, “No, we can put our heads together and keep it in budget. We aren’t coming after (the council) for anything, we’re pretty well set.”

After the item was approved unanimously, Trimble told those present that “we have had flooding problems in our city. If we ever get heavy water like in past years, it will help keep the creeks clean. It’s nothing but a plus for us.”

The new backhoe will be ready for use within the next month, according to Whitley. Bids for the backhoe were sought through the city’s membership in the Houston-Galveston Area Council (H-GAC) buy board, a regional council of governments co-op.

The H-GAC Board awards all contracts, which can then be made available to local governments nationwide through HGACBuy, according to the HGACBuy website. The greater bulk purchasing power of HGACBuy allows cities, like Malakoff, to get a better deal, Whitley said.

The city council also approved the minutes of February’s regular meeting, as well as the specially called meeting Feb. 15. In addition, the council authorized paying the city’s financial obligations for February. The council’s next scheduled monthly meeting is Monday, April 8.

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