Town of Menahga completes 2021 audit, so as not to lose local government assistance – Park Rapids Enterprise
Menahga City Council approved its 2021 audit last week.
This is a major achievement given that earlier this year the city struggled to find a certified public accountant willing to work with them following staff departures, unpaid bills, accounts incomplete information and allegations from council members.
In February, after the city received no proposals from potential auditors, the council decided to retain the Office of the State Auditor (OSA) for the position, but the OSA responded that it did not didn’t have the staff.
The audit was scheduled to take place on June 30, 2022. The city was granted an extension.
After the city rehired Betty Thomsen as interim city administrator and Alvina Kytta as temporary assistant clerk, Dean Birkeland, a CPA at CarlsonSV of Fergus Falls, agreed to do the 2021 audit. Kytta was deputy clerk of Menahga from 2012 to January 2019.
According to the audit, the main highlights of 2021 were:
- The City’s assets and deferred resource outflows exceeded its liabilities and deferred resource inflows by $6,075,175 (net position), as of December 31, 2021. Of this amount, $1,863,981 (unrestricted net position) can be used to meet the needs of the City. ongoing obligations to citizens and creditors.
- The city’s total net position decreased by $1,034.
- Government-wide revenues were $3,064,460 while expenses totaled $3,056,494.
- As of the end of the current fiscal year, City Government Funds reported combined closing balances of $738,862, a decrease of $1,188,133.
- The city’s total bond debt decreased by $1,779,000.
The audit report continues: “A large portion of the City’s net position (57%) reflects its investments in capital assets (e.g. land, land improvements, buildings, equipment and infrastructure) , less any related debt used to acquire those assets which is still exceptional.
“An additional portion of the city’s net position (12%) represents resources subject to external restrictions on how they can be used. The remaining balance of the unrestricted net position can be used to meet the city’s ongoing obligations to citizens and creditors.
Property taxes and intergovernmental revenue accounted for 29% of total revenue in 2021, according to the audit.
The net position decreased by $163,613 in the City’s water fund and $13,804 in its sewage fund. The Liquor Stores fund net position increased by $146,661.
As for the city budget, actual revenue was $73,970 higher than expected “primarily due to unbudgeted camping and park rental fees and a Small Town Assistance Grant received from the state.” . Actual expenditures were $125,807 higher than planned. This is due to higher than expected administrative expenses.
At the end of fiscal 2021, the city had long-term debt of $6,860,000.
Cash Balance Clarification
Thomsen responded to a rumor that money was missing from City Hall.
” It is a small city. It’s like “Telephone”. … The cash balance at the end of 2020 was $328,000 lower. I didn’t mean the money wasn’t there; it just wasn’t allocated in the right areas,” she said.
Thomsen said she was aware there was a ‘scuttling’ over the cost of ‘us ladies here at City Hall’, referring to herself, Kytta and Dustyne Hewitt, who is city secretary.
Thomsen stressed that they have redone the work of 2021, while respecting the current finances.
“Alvina made absolutely every trade made in 2021. She found all but $17,000 of that money. It’s phenomenal,” Thomsen said, adding, “We’ve had rough treatment here, very rude citizens towards us. It hasn’t been fun. When you do the work in pairs, it’s not fun either. I just want people to understand, when you hear things on the street, please come here. We can show you in black and white what the truth is.
Rude behavior brought Kytta to tears on several occasions, she said.
The previous city administration and some council members blamed Banyon for the city’s financial mess. It is an accounting software used by many cities in Minnesota.
“I would like to put this in very simplistic language,” Thomsen said. “If you take your car to have the oil changed and they put the oil in the radiator, would you say it’s the car’s fault?” Blame the radiator? Or would you say it’s the operator’s fault? That’s how Banyon works. It is a computer program. We manually insert this information. Banyon works.
Thomsen praised Kytta for her knowledge and help in correcting accounting errors.
Temporary administrative assistant Jensine Kurtti discovered four empty municipal lots that could be sold and put back on the tax rolls.
Kurtti discovered that the city had three lots in Odland’s Pine Acres fourth addition and one in Odland’s fifth addition. They have city utilities and no special assessments. The value of the land ranges from $18,200 to $18,700.
Looking at a map, Kurtti wondered who owned the four undeveloped lots. “To my surprise, the city of Menahga owns it.”
In the 1980s, she says, the city bought the land in case it wanted to expand the cemetery. One problem, however, is that large trees exist between the lots and the cemetery. Kurtti said there was room elsewhere for the cemetery to expand, and most burials are cremations these days.
Thomsen said council could declare the lots surplus municipal property and sell them. She said she would prepare a resolution.
In other cases, the council did the following:
- Approval of a salary increase for municipal campground manager Ralph Cox. Since September 1, his salary has increased to $19 an hour.
- Approved the purchase of a ton of washed beach sand, at $21 per yard, for the city beach.
- Agreed to donate the city’s 2011 Caterpillar road grader, for $200,000, to the Wadena County Highway Department.
- Learned that the Minnesota Department of Transportation has said the city can paint the US Interstate sidewalk. 71 and State Highway. 87 to limit parking within 30 feet of stop signs.