Audit: Morgan finances in good order, but city should lower garbage rates, increase water fees

Nov 20 2010 - 12:43am

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MORGAN -- Morgan city's finances are in good order, according to a recent independent audit of its $1.3 million budget.

"We've been talking a lot about internal controls," said Lynn Wood, an auditor with the CPA firm of Wood Richards & Associates based in Ogden.

"It's like locking doors. It keeps honest people out, but often the dishonest people find a way to get in."

The best way to keep everyone honest is to have a separation of duties so no one person sees a single transaction through from beginning to end, he said.

For example, the main accountant should not be the person opening and reviewing the bank statement.

Wood said that while the electric fund is in good shape, the city's water fund is struggling.

To make up for deficits in the water fund, the city transferred $85,000 from the electric fund.

"Morgan city is in the electric business. It's half of all the revenue you have," Wood said. "But the water fund is underwater. We need to help get it back on its feet again."

Wood suggested lowering garbage rates but increasing water fees.

He also recommended reviewing city policies for personnel and purchasing and spending the $92,350 in redevelopment agency money as soon as possible.

Sales tax revenue clearly shows the effect the recession has had on the city.

In 2008, the city brought in $480,000 in sales tax. In 2009, it fell to $435,000; it is now at $410,000.

But property taxes are on the increase. Since 2001 -- when city property taxes brought in $152,000 -- those taxes have doubled to $304,000 in 2010.

Impact fees collected by the city have been inconsistent.

"Impact fees have been feast and famine, and have kind of disappeared," Wood said.

The "wonderful years" of 2005 to 2007 saw impact fees of up to $175,000. However, now it is more like $10,000 per year, or "awful," in Woods' words.

Building permits have followed the trend of impact fees, with $200,000 in revenue in 2006 to $35,000 now.

The telephone tax that began in 2006 has been a good new source of revenue to the tune of about $69,000 this year, Wood said.

He suggested monitoring the phone tax receipts monthly to make sure the city and county are getting the correct percentages of that tax.

"You can't rely on the state to do it correctly," Wood said. "They make huge mistakes. It's worthwhile to monitor that."

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