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Up and down year for city’s fiscal affairs

By Staff
Enterprise funds improve; billing error brings about an overcharge of $170,000
By MIKE VOSS, Contributing Editor
The Washington Daily News is counting down the top 10 stories of 2007 as compiled by its staff. Here are the number nine and 10 stories.
When 2007 began, the City of Washington’s financial health was suffering. By the end of the year, that suffering had eased.
The city began 2007 by carrying over a fiscal problem from 2006. In October of that year, the City Council increased the city’s electric rates by 5.25 percent to avoid a projected $1.6 million shortfall between wholesale power purchased by Washington and revenue from retail power sales in the remainder of the current fiscal year, which began July 1, 2006, and ended June 30, 2007.
If it were not for a nearly $1.2 million payment from the Moss Landing project to the city during fiscal year 2006-2007, the city’s electric fund would have been in trouble during the 2006-2007 fiscal year, City Manager James C. Smith said in November. That $1.2 million was placed in the electric fund, from which the city borrowed money several years ago to buy the former Moss Planning Mill property. The Moss Landing project is being built on most of that property.
After receiving the audit report for the fiscal year that ended June 30, 2006, the council determined the city needed to find ways to “do business better.”
That report shows the city’s sewer, electric, stormwater and airport funds operated at a loss during the fiscal year that ran from July 1, 2005, to June 30, 2006. The water fund was the only enterprise fund that did not lose money during that period.
In early 2007, the city hired James Tripp as its enterprise-funds controller in an effort to make the city’s enterprise funds more self-sufficient.
In November, the city received an audit report for the fiscal year that ran from July 1, 2006, until June 30, 2007. It showed the city’s financial situation had improved. Enough so that the council gave City Manager James C. Smith a $4,000 bonus.
Washington officials, when they were cobbling the budget for fiscal year 2006-2007, expected the city would have to borrow $826,000 from its rainy-day fund to balance that budget. The city didn’t have to borrow any money.
Each of the city’s department came in under budget for fiscal year 2006-2007, resulting in the city being able to add $1.05 million to its rainy-day fund at the end of that fiscal year. Without the departments coming in under budget, the city would have added about $300,000 to its fund balance, Smith said.
That fund, according to the audit report, was at $7,936,920 at the end of the fiscal year.
In fiscal year 2006-2007, the city’s general fund took in more money ($11,419,590) than it spent ($10,847,256), according to the latest audit report. In the previous fiscal year, the city’s general fund spent more money ($11,208,756) than it took in ($10,516,785), according to the audit report.
Although three of the city’s six enterprise funds — on a cash basis — lost money in the 2006-2007 fiscal year, all of those funds are showing continued improvement during the past several years, according to the audit report.
The water fund lost $49,393. The sewer fund lost $38,582. The airport fund lost $1,317.
The electric fund made $21,752, after it transferred $1,239,532 to other funds. The stormwater fund made $49,875. The solid waste fund made $135,816.
There remains much work to do to make them more efficient, Smith said in November.
In September 2007, the City Council learned the city had overcharged LifeStyles Medical Fitness Center at Beaufort County Hospital $169,185.56 for water and wastewater treatment.
An account audit discovered the billing error, according to city officials. The error was attributed to a software problem.
The city and hospital are working together to find an equitable solution to the problem.