Auditors review aspects of Evart city budget

Water/sewer fund a concern with average annual loss of $164,000

EVART — The city of Evart is running as expected, though concerns about revenue flow are still present — especially within the water/sewer fund.

Baird, Cotter and Bishop representatives Angie Roelfs and Connie Underhill were present at the Dec. 15 Evart City Council meeting to provide information regarding audits of the general fund, water/sewer fund, the Evart Downtown Development Authority and Evart's Local Development Finance Authority.

The water fund is the subject of most concern for the city, Roelfs said. When looking at a five-year average, the city's average operating loss per year is $164,000, which spells trouble.

"You're going to run out of money," Roelfs said to council members regarding the utilities. "You're all painfully aware of that."

Operating revenue for the water fund is consistent and steadily increasing, but operating expenses show an increase because of the harsh winter conditions in early 2014. However, Roelfs said she believes the increased water rates will help bridge the gap.

The sewer fund is in the same situation as the water fund, she said, with an average loss of $122,000 a year. Increased city rates will assist to bridge that gap as well.

The LDFA is another area of concern for the city, as the entity lost $20,000 this year. Roelfs said the group cannot afford a similar loss next year, with only $16,000 left in its fund balance. If the pattern continues, the LDFA will fall into a deficit. She encouraged city council members to keep an eye on the LDFA budget.

The DDA budget, however, has stayed consistent with last year's numbers.

Concerning the general fund, Roelfs said revenue is comparable to last year at $1.9 million and the city has about $574,000 in its ending fund balance.