City finances in good shape

West Liberty has surplus funds of $13.3 million


The City of West Liberty is in great financial shape.

So says auditor Taylor Johnson of Bowman and Miller PC of Marshalltown, providing the West Liberty City Council on Tuesday, July 20, with the a 62-page independent auditor’s report that included basic financial statements and a schedule of findings at a special work session meeting previous to their regular meeting.

Johnson said the city has $13.3 million in surplus funds and grew their fund balance by $1.6 million in the past fiscal year, although pointing out flaws in accounting systems that included under-billing water customers, including the West Liberty Foods plant, and finding flaws in a 28E Agreement with the Rural Fire District in not getting proper billing accomplished in a timely manner.

Johnson first went over yearly comparisons of department funds for the past four years, noting a total of nearly $1.6 million in increases including $507,000 in debt service, $271,000 in the library fund, $168,000 in parks and recreation, $112,000 in road use as well as $94,000 in solid waste.

The only decrease came as $57,000 in health insurance due to having fewer employees.

By hiring a new auditor, the city hopefully has resolved an issue with tardy auditor reports that have come as late as two months before the next report is authorized, Mayor Robert Hartman noting the city didn’t have time to react in correcting some of the flaws found “eight to 10 months down the road.”

The auditor said the city needs to continue to test financial systems, including water rates, under-billed to local residents to the tune of about $40,000 from July 1, 2019 through June 30 of 2020, including a $130,000 bill to the city’s biggest industry, West Liberty Foods.

The council has to make a decision on what to do about the faulty invoicing procedures which city clerk Lee Geertz says have been corrected with measures put in place “to make sure it doesn’t happen again.”

The auditor also reported some minor payroll problems that have also been corrected although noting one employee was not getting a benefit that would help pay for health insurance, provided after 10 years of service to the city.

The auditor did note a problem with a 28E Agreement with the Rural Fire Department when invoices for reimbursement of funds was not issued for four months in 2020 and invoices were not sent out before the 10th of the month as required.

The auditor insisted the city get “detailed receipts” on expenditures and asked employees to “follow the purchasing policy.”

Johnson said everything he talked about was “very correctable” and said the city is “on the right track” in getting things cleaned up in their accounting, noting the city has been through a lot of changes in the past couple of years, including leadership, personnel, the derecho, the pandemic, moving city hall and more.

The audtor reported a disaster recovery plan has been put in place for the city to continue financial continuity.

Hartman said he appreciated the auditor looking as far back in the books as 2016, calling the procedure “very enlightening” as things were brought to the attention of city officials that had never been realized.

Geertz said policies and procedures have been instituted by the city to “correct these things” and the auditor agreed the city is “trending in the right direction” in getting things corrected.

Asked by the mayor if this was a “typical audit,” Johnson said, “You guys have a lot going on for a small town,” pointing out the fact there aren’t many communities the size of West Liberty that have their own electrical department and utility services offered.

The mayor asked specifically if the auditor found any embezzlement or fraud in his evaluations for the city, specifically to the fire department fund, and Johnson said he didn’t find anything in that area.