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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Marinette Council Agrees To Seek Water Rate Hike

Issue Date: September 11, 2013

At a marathon session Monday evening, Sept. 9 Marinette City Council heard a somewhat disturbing audit report for the city and its Water and Wastewater Utility, and unhappily agreed they must apply soon to the Wisconsin Public Service Commission for a sewer rate increase that apparently is long overdue. Amount of increase is not known at this time.

A long portion of the session that began at 4:30 p.m. and ended nearly four hours later was a joint meeting with the Water and Wastewater Utility Commission. And approval of a motion to aplply to WPSC for a rate increase was unanimously approved by both boards.

The series of meetings at the Water Utility building on Water Street began with a meeting of the Civic Affairs, Cemetery, Traffic & Lights Committee, which led to contoversial recommendations to pledge continued support for the Logging and Heritage Festival despite objections to lack of fireworks and parade on the Fourth of July; agreement, with a dissenting vote cast by Alderman Shirley Kaufman, to turn over most of the care and maintenance of the Catholic portion of Woodlawn and Calvary cemeteries to Holy Family Parish of Marinette; and discussion of improvements to Menekaunee Heritage Park as explained by former Alderman Sandy Saunier.

At the 5:30 p.m. special joint meeting of the City Council and the Water and Wastewater Utility, Tom Karman, CPA with Schenck , SC Government Services, reported they were able to issue clean financial condition relports for both entities. However, he said, they are required to look at the system of checks and balances, which led to a finding of a problem with reconciliations of the Utility accounts.

There were a number of accounts in the general ledger that were not reconciled back to accounts. Stressing that he was not saying this had happened, Karman cautioned that without propler reconciliation, There is a danger that there could be potential misappropriations by employees that do not get caught. He said as management, the Council and Commission members look at what is in the ledger and do not know if the money is in the account.

The finding Karman referred to noted that accounting for the utilities had been rexponsibility of the Utilities staff, and for calendar year 2012 they did not reconcile the various general ledger account balances to supporting documentation. The Utilities’ staff previously responsible for maintaining the general ledger and reconcilin of account balances retired and current staff did not complete the reconciliations.

Effect of this, the report stated, was that, Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities.Also, financial information as recorded in the general ledger may no accurately present the financial condition of the Utilities. Recommendation was to have reconciliations completed on a monthly basis.

How did this get so out of control? demanded Alderman John Marx. He said there were always mlonthly reconciliations in 2007/2008 when he chjaired the Utility Commission, and added, It concerns me that we do not ever get into this condition again.

This is a pkroblem and these things will be corrected, agreed Commission Chair Jeff Zeratsly.

Kathy Cleven, the city’s new financial director, assured the joint meeting that she has taken the problem in hand, and steps have been taken to be sure the plroblem does not repeat itself in 2013. Utility staff responsible for financial record keeping are now working under her supervision. Cleven said accounts have now been reconciled through June, and once they are caught up they will be reconciled monthly, before going to the Commission.

The city’s general fund balance ended 2012 wih a healthy $5,762,705 balance, up slightly from $5,411,648 at the end of 2011.

Financial situation for the utilities was bleak, with income declines largely attributable to a large drop in use by Waupaca Foundry. The Water utility showed a $52,509 positive balance at the end of 2011, and a $441,104 deficit at the end of 2012.

The Wastewater Utility showed an operating loss of $383,210 in 2011 and $456,479 in 2012.

The Storm Water utility had operating expenses of $626,411 in 2011 and $697,548 in 2012, but operating explenses were $889,370 in 2012, complared with $117,331 a year earlier, resulting in a loss of $191,218 for 2012 operations.

Money collected by the Water and Wastewater utility for city ourposes such as the Storm Sewers, garbage collection and other fees have not been paid to the city.

In addition to applying for the rate increase the Commission will apply for long-term loans as recommended by Karman. Karman exlained that utilities actually should borrow for improvements explected to last a generation or more so that they are paid for by the people who use them. Karman said the Utilities had been paying in cash for things that should be financed, and part of that money consisted of money that should have been paid to the city.

There are many issues involved, urged Mayor Denise Ruleau. Let’s not point fingers. Let’s fix this and make sure it doesn’t ever happen again!

Decison was to go for long term tax free bond issues to pay long term bills, and do a short term bocrrowing to replay the city, with a total of $1.5 million discussed.

The utility is also taking expenses to cut expenses, particularly overtime costs that several aldermen declared appeared to be out of control.


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