The Quincy city commission held its regular meeting on Tuesday, March 25, 2014 and the big news came about near the end of the meeting when the board voted 3-2 to oust city manager Jack McLean. But another topic of interest was the city’s audit.
Quincy officials finally held the city’s 2012 audit in their hands. It showed that the city has had deficits in spendable net assets (fund balance), caused by the impact of a warmer winter and cooler summer than usual, some businesses leaving the city, and some resulting from corrections to longstanding accounting inaccuracies, some dating back as far as 1994.
“Overall, the largest factor was the loss of utility revenue of approximately $5.5 million over 2011 and 2012,” states the audit.
“The most dramatic data presented is the business utilities revenue drop from a high of $25 million in 2010 to $18.8 million in 2012 ... the lack of sufficient revenue on a year-to-year basis makes for difficulty covering the (city’s) basic operations, repairs and inflation. The short term goal is to reduce payables to less than half a month (of revenues), or below $1 million. (The city collects about $2 million of revenues per month),” says the audit explanation.
Interim finance director Jeff Williams said a five-year review of financial activity showed that Quincy had lost money every year except 2010. “The city needs to reverse that trend. It’s not going to be reversed overnight, but needs to be (worked on). You had a big loss in utility revenues that resulted in deficits in 2011 and 2012. Expenses didn’t change as much as revenues,” said Williams.
“The sooner you can take control over accounting, the quicker things will improve. You need training, simplification,” said Williams about the city’s multiple bank accounts. “You’re really susceptible to variations in revenues, and really need to watch revenues in those business activities.”
“Right now, we have a cash flow problem. It’s hard to put money into reserves. (You also had) staff turnovers, especially in the finance department,” said Williams, explaining that that would be hard to overcome.
McLean said city expenses overall held nearly the same for 2008 through 2012, excluding 2011, or around $700,000+. “Expenses of $1.3 million in 2011 were likely due to write-offs (of uncollectible revenues),” he said.
Williams cautioned the board that when staffing is lower, the city saves money but sacrifices quality. “You need continuity of staff,” he said. He also said that customers are becoming more weather-savvy, using caulk and energy conservation.
Commissioners expressed concern about the numbers in the unqualified (clean) audit. Williams said the clean audit is a good one. The city should make each utility take in revenues that meet its costs to provide the service, he said. “The city has certainly stayed within its budget. I haven’t seen any expenditures greater than revenues,” said Williams.
“We can’t rely solely on utilities - we have to control expenditures. Revenues are decreasing, expenditures are either staying the same or going up. Nobody wants to increase utilities but we have to make cuts in spending and live within our means, or we will always find ourselves in this quandary,” said Commissioner Derrick Elias.
Commissioners also approved on 1st reading a resolution transferring land on Pat Thomas Parkway to the Tallahassee Community College (TCC) for a new Quincy campus. The four parcels encompass 1.69 acres at the corner of Kent and Clark Streets. Elias and Commissioner Andy Gay both wanted the approval to include a five-year timeframe for TCC to start the project or the land would revert to the city. McLean advised that TCC’s estimate was that the project would be completed within 18 months.
The board also gave approval on 1st reading to an ordinance annexing property on Pat Thomas Parkway that serves as home to the IFAS/NFREC research station. IFAS requested the voluntary annexation.