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CAFR passes preliminary perusal with council

By Staff | May 15, 2012

The city of Cape Coral may not have dotted all its Is or crossed all its Ts, but there were no major problems with its financial procedures last year.

That was the opinion of an independent auditor who looked at the city’s Comprehensive Annual Financial Report presented by Victoria Bateman at the city council’s workshop meeting Monday at City Hall.

Clifton Larson Allen, the auditors of the report, said there were no material weaknesses in its financial reporting, though there were some deficiencies in internal controls and reporting.

As for the numbers, Bateman said the city did a good job doing more with less, ending the year with only a $511,798 decrease in fund balance in spite of $11 million fewer in taxes.

“We funded everything and our reserves increased to 3.13 months,” Bateman said. “Our funds decreased $511,000 out of a $445 million budget with a decrease in revenue of $11 million. The city did a great job.”

Expenditures increased by $3.4 million, most of it attributed to the decision to have LCEC underground lines in the downtown, while total assets were $709.3 million, down from nearly $730 million in 2010.

Most of that was caused by the OPEB obligations and the issuance of Special Obligation Debt and $3.8 million in commercial paper used to fund the extra cost associated with undergrounding the lines instead of going overhead.

There also were some issues the auditors felt the city needed to address, though they were of a procedural nature.

Staff addressed all issues from the 2010 CAFR but one, the maintenance and monitoring of financial reporting of grants, with those procedures to be implemented this year.

Among the issues in 2011 were internal controls, especially with year-end closing procedures which staff will implement before the end of the fiscal year.

“All issues are closed but the grants. There are no material weaknesses,” Bateman said.

Despite a mostly clean sheet, council was still a little concerned, especially after what some thought was some sloppy bookkeeping of years past.

“We’ve had these things since 2006. Will this get fixed?” Mayor John Sullivan asked. “Our utility billing was inaccurate. Has it been reconciled? I want to make sure. At least it’s not a lack of oversight.”

“Those utility bills issues were horrendous. This report gives me peace of mind,” Councilmember Kevin McGrail said.

The line item that got Chris Chulakes-Leetz’s attention was about the pension funds.

“The state froze pensions in 2008, was that an option?” Leetz asked.

“We can’t take those benefits lower than what they were in 1999,” Bateman said.

She also added that with future hires, police and fire will have to share in funding their own retirement and that the pension liabilities are temporary.

The city and the unions will hold negotiations in June about those very subjects, Bateman said.

Councilmember Lenny Nesta praised Bateman and her staff for a job well done, while Rana Erbrick said many of the issues of last year have been resolved.

“We could always do things better. Measures were taken and that put things to bed,” Erbrick said. “We’re in good shape considering the downturn.”

Bateman turned the praise to her staff.

“The city did a great job We can still get capital for our new cars and fire trucks,” Bateman said. “The problem is we’ve gone so long without. We have to slowly plan to recoup.”