Prior to the regular meeting on Sept. 5, the council held a work session with Taylor Johnson of Bowman & Miller P.C. accounting firm, which performed the city’s annual audit for 2021-2022. Johnson summarized the 62-page report, comparing the city’s financials for the last four fiscal years.
“You’re in a good financial state,” said Johnson, noting that the city has experience steady financial growth, from an $11.7 million fund total balance four years ago, to a fund balance of $14.3 million at the end of fiscal year 2022.
He noted a decrease in the road use tax (RUT) fund, due to decreased funding from the state. He also pointed out an increase in the local option sales tax (LOST) fund, which he attributed to economic growth in West Liberty. Revenue from tax increment financing (TIF) also increased, as new economic development projects came on-line during the year. Johnson reported total revenue for the city to be at $15.7 million, which continued an upward trend.
Expenses for the city were up, due to equipment purchases for public safety and public works, including AirPaks for the fire department and ambulance service, and a 2022 Freightliner 108S truck for the public works department. There was also a significant increase in spending for capital projects, due to the remodeling at city hall. Total expenses for the year came out at $15.5 million.
“Cash wise and financial wise, I think you guys are sitting in pretty good shape for a city your size,” said Johnson.
The audit recommended better segregation of duties, a repeat recommendation from last year. Johnson said this is a frequent reminder in smaller communities, due to the size of city staff. He also reminded the council to do their due diligence with oversight, and to ask questions throughout the year about financial reports as they were presented. “Ultimately, the buck stops with the council.”
Johnson added that bank reports were not being reconciled every month for the financial reports. He said the firm contacted city manager Lee Geertz and city clerk Shari Hoffert, and the statements were re-reconciled for all 12 months prior to the completion of the audit. “I do think progress is being made on this,” he said, adding that Geertz and Hoffert were working through the existing statements for 2023. Geertz gave credit to Hoffert for her work during the Geertz’s transition to city manager earlier this year.
The audit noted 30 lunch meals at JB’s Grub & Pub, totaling $321, were paid for with city money. Johnson said that, unless a city employee was traveling or otherwise granted a per diem, taxpayer funds should generally not be used for this purpose. “The thinking is, they’re going to have to eat whether they’re working for the city or not,” he said. The audit recommended the city establish a policy for meals.