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Auditor tells council city finances look to be in good shape

Lebanon’s municipal finances are in good order, an auditor told City Council members at their monthly meeting Wednesday, April 10, at the Santiam Travel Center.

Steve Tuchscherer of Umpqua Valley Financial turned in an audit of the city’s finances through June 30, 2018.

Tuchscherer delivered the audit this week, telling the council Wednesday that it was more difficult than anticipated due to a collaborative effort between his firm and city staff to correct previously recorded errors and to get the City’s books in line with generally accepted accounting principles.

Tuchscherer apologized for the delays, holding up three massive books that he said were the most recent rules in the field.

“The complexity has added to the amount of work,” he said, adding that most of what is taking place “has nothing to do with what you guys do, which is budget stuff.”

Rather, he said, most of the complexity has to do with the city’s debts, its capital assets – for which values and depreciation have to be determined, and dealing with PERS and other retirement benefits.

He and city Finance Director Matt Apken said that the effort to clean up the books would be ongoing in a move to meet the state’s reporting requirements.

Tuchscherer said the audit went well.

“When you look at this, you can rely on these numbers to be without material misstatement,” he told the council. “That doesn’t mean the report is perfect, but we’ve done our darndest to make sure it’s better than the past. You can rely on it to make decisions.

He said one of the complications in producing the audit have been due to the fact that it wasn’t until 2000-01 that the state began requiring cities to value their capital assets such as pipelines and streets and other infrastructure, real estate buildings, major equipment, real estate. Hence, he said, a lot of the capital assets that Lebanon owns were not valued previous to that time and state rules now require that.

“There are many complications,” he said. “The rule requires that we put value on them, estimate their historical cost. Depreciation is another aspect.

“There’s a whole, huge method of determining value, how that value should be assessed,” he said, adding that some cities send employees out to count the cracks in streets. “No kidding.”

The city has some 4,000 assets on its books, some of which were missing, he said, which contributed to the slowdown in the producing the audit.

Also, Tuchscherer and Apken told the council, they are working to combine some of what once was about 80 different funds into a lower number, which is also a state requirement.

“I think over years this city has created funds that could and should be merged,” Tuchscherer said. “The conversation could continue. Adding all of those to this report also added tidy sum of work to be done.”

Apken said the number of funds now is down in the 50s, and many of the funds could be further combined.

Councilors suggested the possibility of hiring a consulting firm to help with that process and  Councilor Rebecca Grizzle asked if Tuchscherer’s firm could do it.

Apken said that typically, “we usually try to keep the auditors separate from consulting.”

He told the council that, as finance director, he’s learned “it’s a lot different reviewing budgets than putting one together.”

Councilor Wayne Rieskamp asked Apken to produce a cost analysis of what hiring a consultant would entail.

On the suggestion of Mayor Paul Aziz, Councilors Jasen Bolen, Robert Furlow, Grizzle, Rieskamp and Michelle Steinhebel voted unanimously to postpone discussion of the audit for a month since they had just received it. Councilor Karin Stauder was absent.

In other action, the council:

n Approved a two-year contract extension, through the end of June 2021, for Gerald D. Waite to serve as Municipal Court judge.

Apken noted that Waite had not requested an increase. Waite is paid $3,700 per month. Municipal Court is typically held shall be held all day on every Wednesday and the second and fourth Tuesdays of every month subject to the discretion of the Municipal Judge and needs of the court. In addition, Waite will be on call for arraignments and to decide other judicial or administrative matters of the court from time to time.

n Approved an off-premises liquor license for Shaggy’s Den Smoke Shop, 455 Weldwood Drive.

n Heard Aziz proclaim April 26 as City of Lebanon “Arbor Day.”

n Heard Aziz proclaim the month of May as Mental Health Awareness Month in Lebanon  and “call upon the community to commit to increasing awareness and understanding of mental health, the steps we can take to protect our mental health, and the need for appropriate and accessible services for those in need.”

n Heard Aziz proclaim the month of May as Older Americans Month.

n Heard Aziz proclaim the week of April 7-13 as Volunteer Week in Lebanon.

“We have so many volunteers in Lebanon,” Aziz said. “Without volunteers, I don’t know where we’d be.”

n Heard a report from Downtown Association’s Main Street Manager Cassie Cruz, who told councilors that her first few months in the position have been focused on “getting up to speed.”

Cruz said she was “quite impressed with the work that has been done” in LDA, but it has become evident to her that the 10 hours a week the position entails is inadequate for the work that needs to be done.

“My fear is that LDA will be less effective if we continue on this path,” she said, adding that the association has applied for grant funding. “Right now, with 10 hours, I’m not capable of doing a lot.”

LDA President Yvette Meyer told the council that the organization needs a minimum of $25,000.

“Our big ask tonight is that we need your help if we want to continue on with our vision for the city.”

Aziz told them that their timing was “perfect” because they needed to bring the request to the Budget Committee.

The Budget Committee is scheduled to meet at noon on May 17 at the Santiam Travel Station, 750 3rd St. The meeting is open to the public.