• Auditor says Mona City needs to tighten purse strings

• Dip in road causing controversy in Mona City

• Budget crunch will delay certain projects in Mona

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By Myrna Trauntvein
Times-News Correspondent

Mona needs to watch the city budget carefully.

Greg Ogden, CPA, Springville, independent auditor, gave the council the audit report on the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of Mona for the year ended June 30, 2017, at council meeting on Tuesday.

“This is the earliest we have ever done the audit,” said Ogden. “We were working to get done early this year.”

The total net position for the city as a whole decreased by $8,685; the total unrestricted net position for the city as a whole decreased by $94,290; the total net position for governmental activities increased by $130,982; and the total net position for business-type activities decreased by $139,666.

“The capital projects fund is down because of this nice building,” said Ogden. “Money needs to be added to the fund.”

He said that the city council needed to tighten the metaphoric belt and keep additional spending at a bare minimum.

The city ended up paying more for the building than originally planned because the property, already owned by the city, was required to be listed as a $90,000 expense.

Newton said the city had $300,000 in the capital improvements fund, owned the property which amounted to a $90,000 value, had a loan from CIB for $180,000 at 2 percent interest and a grant of $178,000 which will never require repayment.

“The building was estimated at a cost of approximately $685,000,” said Newton. “But because it is being done by the local building authority, there will not be an increase in taxes since the money being used by the building authority does not need to come from a dedicated revenue stream.”

The city has an on-going expense which is attributed to the depreciation on the sewer plant, said Ogden.

“Every single year,” he said, “the city pays $450,000 in depreciation on the sewer plant. It is using more funds than it is replacing which causes a deficit in the budget.”

This past year, that deficit was $265,375 and that meant that the system had to transfer into that fund from another fund in order to keep the budget balanced.

The plan is that funds will be set aside to pay for the eventual replacement. However, the deficit keeps that from happening.

He would not suggest that fees to users be raised because he knew it would get the council lynched, however, eventually the topic would need to be discussed. As the city grows and more users attach, the revenue should increase.

“It is not a cash cow,” said Jeff Hearty, council member.

It is not, said Ogden, however, the natural gas fund is. That fund has $71,841. Natural gas had an expense of $229,438 and $301,280 charges for services.

“The water, sewer and natural gas funds are business-type activities funds,” Ogden said.

The water fund had $156,870 in expenses and $194,967 in charges for services. That left a revenue of $50,065.

“You need to watch your spending,” said Ogden.

The projects funded by the Mona Capital Projects Budget are often essential to the city’s future, reflecting how the city will evolve in the coming years.

Despite the amount of dollars involved and the critical nature of the projects being selected for capital funding, many people have little knowledge of how the capital budget is developed and implemented.

It is important to have money in the capital projects fund in case of an emergency or of some other surprise project that needs to be addressed immediately.

Mona’s total current assets are $23,875, 229; liabilities are $382,925 and non-current liabilities are $7,098,926.

Newton said that November would arrive and property taxes would be paid. That would improve the city’s financial outlook. In 2017, the city collected $69,057 in property tax. An added revenue was the sales tax which the city was paid as a distribution from the state on a quarterly basis.

There is no money left to spend in the water department, the sewer department had to have money transferred in to balance the budget, and there is very little cash in the general fund.

“You are in the hole in the capital projects fund,” said Everd Squire, city finance director.

“Is a sinking fund limited?” asked Jeff Hearty, council member.

A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt.

“No,” said Ogden. “However, a general fund is.”

Ogden also cautioned the council to make certain that public hearings were advertised at least seven days prior to the hearing. One hearing had slipped by and was advertised only five days prior.