Projected city surplus eaten up by accounting shuffle

• Bed tax, Pioneer improvements also high on agenda
By Carey Restino
Homer Tribune

A projected $300,000 surplus in the city’s general fund vanished this month as auditors found two accounting errors that ate the extra money up.
In his city manager’s report, Walt Wrede told the Homer City Council that auditors reviewing the city’s books noticed property tax revenue from the oil drilling rig Endeavor had not been transferred to the city’s Permanent Fund, as it should have been. That transfer wiped out half of the city’s surplus.
Councilman Beau Burgess questioned Wrede as to why the transfer of the drill rig revenues to the Permanent Fund as per the city’s policy with “windfall” or unexpected funds had not been made.
“It was just an oversight,” Wrede said, “We have corrected the issue.”
The second half of the surplus was eaten up when a payment for jail contract services was found to have been allocated to 2013 when it was received, but should have been booked as revenue for FY 2014.
Wrede said in his report that he had been hoping to see the money go toward depreciation, as well as “providing some relief to the employees.” A worksession scheduled for June 9 to talk about how to appropriate the surplus was canceled.
At last Tuesday’s meeting, the council initiated a discussion regarding a bed tax proposal being floated for the entire Kenai Peninsula Borough. According to Wrede, the Kenai Peninsula Tourism Marketing Council is heading up the boroughwide tax proposal. He explained that the bed tax might be structured so that the city would receive its portion of the tax it collects to do with as it pleases, and the collected bed tax could be used to cover any expense related to providing services for tourists, including facilities and safety services.
“The money doesn’t have to be directed to marketing,” he said. “It could be used for anything that benefits tourists while they are here — ports, parks, police, anything.”
Wrede said the idea still needs to be fleshed out and defined, but he wanted residents to have a heads up that it was coming. He said if it moves forward, it will be put forward for a vote.
Wrede also updated the council on improvements planned for Pioneer Avenue that were funded in this year’s Department of Transportation budget. The improvements aren’t everything that the council was asking for, but they did include creating a bike lane along the side of the street as well as pedestrian crosswalks and a flashing stoplight at Pioneer Avenue and Main Street.

In other news, the council:

• Heard testimony about the need for traffic calming measures on Bunnell Avenue. Citizens testified that cars racing to and from the beach pose a continued danger to pedestrians who frequently walk along the sides of the narrow road.

• Heard from Robert Archibald with the Homer Parks and Recreation Commission about concerns regarding cars parking along the sides of the road leading to Karen Hornaday Park. Archibald said the road becomes too narrow when cars are lining the drive, and youth darting in and out between cars is a dangerous combination. Archibald said the commission recommended putting up some signs to discourage parking along the road, and City Public Works Director Carey Meyer was planning to expand the parking lot to allow more parking.

• Heard a mayor’s proclamation making June 6 Mary Epperson Day and recognizing Epperson for her contribution to the advancement of the arts, noting not only her contributions to guiding and supporting organizations such as the Homer Council on the Arts and the Kenai Peninsula Orchestra, but also her loving heart and warm smile.

• Bid adieu to outgoing human resources director Andrea Petersen who is leaving her job with the city. Many council members wished Petersen well, and Wrede noted that she did an excellent job while handling the contentious and difficult task of dealing with the city’s need to change its health insurance plan for employees due to skyrocketing costs. In a exit interview memo, Petersen commented to Wrede that as the city grows, a workforce strategy is not in place “resulting in overworked employees” which she predicts will cause increased turnover. She recommended the city create a workforce strategic plan to allocate resources and anticipate and manage risks.

The council’s next meeting will be Monday, June 9.

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Posted by on Jun 3rd, 2014 and filed under Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Response for “Projected city surplus eaten up by accounting shuffle”

  1. LMV says:

    Accounting errors totaling $300,000.00 are major errors – not oversights as stated by City Manager, Walt Wrede. I can understand the new Finance Director taking time to get up to speed on the various issues such as what goes into the Permanent Fund. However, booking revenue into the correct fiscal period is covered in beginning accounting classes. Again, these are not oversights – they are major mistakes. Council needs to take a hard look at what is still going on in the finance department and how competent their staff really is and if the City Manager can properly manage the department. The employees responsible for these mistakes need to give appropriate explanations and not excuses, and if they can’t what are they doing in positions that allow them to misstate the financial records of the City by over $300,000? In the private sector, this type of negligence would not be tolerated; so why do we tolerate this continuing negligence here in our local government?

    Julie K.

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