The Ottumwa Courier

October 31, 2013

Concerns over Blakesburg debt obligations aired at meeting

By HELEN HANNAN
Courier correspondent

---- — BLAKESBURG — Even though the purpose of the special City Council meeting on Tuesday was moving forward with Phase II of the sewer improvement project, much of the meeting concerned a recent petition.

On Oct. 14, former mayor Randy Burton presented a petition requesting a city and fire department audit, accompanied by a letter he had signed listing a series of concerns including debt obligations that may have exceeded city maximum debt service allowable by law, current administration accounting practices, continuous and constant errors in water and sewer billing, failure to impose and collect late and shut-off fees resulting in loss of revenue, cemetery fund and much more.

Mayor Jason Myers told the audience on Tuesday that the petition had been forwarded to the state as required by law. He explained that a few days after the petition was submitted to state, it was declared invalid because several of the people who signed the petition withdrew their names by written request when they learned of the erroneous content of the petition. Those who withdrew their names had not read the petition but signed based on false representation by the person circulating the petition. Burton secured enough additional names to validate the petition a second time, after which it was forwarded to state as required, Myers said.

The city is allowed by law to have the audit done by an accounting firm of the council’s choice. The city is not required to have a state audit as Burton requested, but is allowed to choose either the state or an accounting firm.

Meyers reminded the council and the audience that the last city audit was performed on the Burton administration for fiscal year 2010-11. City Council received the audit report on May 23. He said the council is in the process of correcting many of the accounting mistakes noted in the audit, including a lack of checks and balances of city finances. As recommended by the Anderson-Larkin audit, a new program is now in place that automatically separates expenses and income, keeping a running account of each department by recording check number and amount paid to each department.

Of special note is the unauthorized over payment of more than $2,500 to Burton during his administration. To date he has made no repayment. During audience comment time, Patty Rowland presented an in-depth rebuttal, first commenting that according to the recent audit report concerning the Burton administration financial records were not kept in accordance with generally recognized accounting principals and lacked appropriate checks and balances. Using public documents obtained from the city, Rowland challenged some of the figures listed in the petition and why they were listed as a debt service issue.

According to Burton, substantial capital spending such as the $41,000 police car, $80,000 firetrucks, $700,000 sewer project and $24,000 water tower work along with pre-existing debt obligations may have exceeded city maximum debt service allowable by law. Debt service is the cash required for a particular time period to cover the repayment of interest and principal on a debt. The Iowa Constitution limits the amount of general obligation debt to 5 percent of the assessed value of all taxable property within the city’s corporate limits. The city’s total debt service load of only $62,000 for fiscal year 2012-13 was well below the $210,070 allowed Blakesburg in the same fiscal year. Rowland explained the police car and firetruck totals of $66,622.80 financed over five years are well below the $121,000 amount noted in Burton’s concerns.

According to Rowland, Burton’s worry concerning the $24,000 water tower project plus related expenses was also irrelevant because the bills were paid outright and no debt was incurred.

None of the $700,000 sewer project goes toward debt service because it is totally funded with grants and SRF loans, Rowland explained.

Addressing Burton’s concern about cemetery funding, Rowland commented for the first time in many years the cemetery fund was projected to begin operating “in the black.” The October 2011 deficit of $8,907 had been wiped out. Rowland offered anyone who was interested the opportunity to review the numerous documents she had obtained from city hall to support her comments.

After hearing a report on work completed in Phase I of the sewer improvement project, the council approved moving forward with Phase II of the project. The $680,000 project will include relining and repair of sewer not included in Phase I of the project as well as lagoon dredging and related work, which will be funded with a CDBG Community Development Block grant and loan from the DNR State Revolving Fund.

In other business the council:

• Approved a council work session to work out the details of selection and duties of a finance officer in compliance with the 2010-11 audit recommendation received in May of this year.

• Approved the second reading of the ordnance to increase mayor and city council compensation.

• Agreed to a special council meeting Monday to resolve the dog issue. Myers said that according to Wapello County officials, the American bulldog was not in the pit bull family, as some people had believed.