MARCO ISLAND — A team tasked with uncovering how $4 million seemingly disappeared from the city’s ledgers, gave its report Monday to Marco Island’s City Council. City Manager Jim Riviere appointed staff representatives who studied the deficit and presented the report.
While creating a revenue sufficiency study, consultants from Burton & Associates brought to light a cash shortfall in the utilities’ Fund 400, a melting pot of money related to the Septic Tank Replacement Program. The team began untangling the fund by returning to its 2009 origins as a single entity.
In 2010, the fund was divided into nine sub-funds. The money in each sub-fund entered from a different source such as grants, impact fees and resurfacing surcharges. Creating one account in 2009 and nine subdivided funds in 2010 made it difficult to determine which receivables should be applied to the general fund and what money went to other categories.
The billing cycle for sewer assessments compounded the problem. Bills were mailed in September with payments due in late October. However, the city repaid STRP money borrowed through bond issues on October 1. Repayment required the city temporarily borrow from the surcharge account to make payments. By borrowing money, a deficit was created in that fund’s total.
The missing money was recouped when sewer assessments were paid, but auditing accounts in the interim would have resulted in a perceived shortfall. If the city had not borrowed from its own accounts, the city would have needed to use short-term financing to cover bond repayments, said Patricia Bliss, city finance director. Borrowing to cover bond loans would have cost the city additional interest charges.
Earlier this year, City Council Chairman Larry Magel asked for an independent audit of the utility funds by the Collier County Clerk. On Tuesday, he said he had not seen the results of that audit.
“We haven’t lost the money,” he said. “It was comingled from surcharges to make bond payments. That’s why I wanted an accounting audit independent of staff.”
Bliss suggested a minimum balance in the water and sewer fund could eliminate the need to temporarily borrow from other areas. Council also discussed creating a rate sufficiency study every one to two years, purchasing new software for better accountability and changing the timing of cash transfers.
In other financial information, the city manager presented his 2012 mid-year report. The city has collected 95 percent of its property taxes in the first six months with revenues exceeding expenses by about $7 million as of March 30. At the midway point, operating expenses for the city and utilities are below 50 percent of budget. Sewer revenues have increase 2 percent, but water revenues are down 2 percent.
The city’s complete 2011 annual audit will be presented at council’s May 21 meeting.
The city has created new interactive online programs to assist residents and businesses using city services. New programs include a sewer assessment mapping site for payment information and account balances, a program for tracking building permits, and a site that compiles the voting records of city councilors by issue.
Council unanimously passed on second reading a natural gas franchise with Tampa Electric Company and approved two resolutions for variances. The first will allow a 35-foot flagpole for a single-family residence at 1572 Shores Court. The property was deemed unique since it was originally considered as a site for a marina.
The second provided Joey’s Pizza and Past House with two variances: one to move a legal non-conforming shed to allow for a recycling dumpster and one to vary a side yard setback for construction of an overhead retractable awning.