The Skamania County city of North Bonneville’s failure to properly manage financial information between 2009 and 2010 resulted in an economic decline that led to deficits in its general, water and sewer funds in 2011, according to a report released by the Washington State Auditor’s Office.
In response to the report, city officials noted that a new clerk-treasurer hired in 2010 had addressed the audit’s concerns by the end of 2011, and the city would continue to work this year to ensure better oversight and fiscal responsibility.
The city’s total cash and investments declined by more than $900,000 between 2009 and Oct. 31, 2011, the audit reported, leading to anticipated deficits in several funds, which could require loans from restricted funds to continue operations.
“The city is at risk of not being able to meet financial obligations or maintain services at its current levels,” the report noted.
The auditor’s report cited several instances where North Bonneville, population 956, failed to produce reliable financial statements, noting that the city was unable to determine how much of its total cash and investments were restricted and not available for general spending.
The auditor’s report criticized the city’s mayor, Donald Stevens, and city council for not monitoring financial information to ensure its accuracy and completeness. The report urged them to create a written strategy for achieving and maintaining a positive fund balance.
City officials disagreed with auditor’s suggestions that they had not taken an active role in making sure financial information was not accurate and complete.
The city’s total cash and investments dwindled from around $1.2 million in 2009 to $743,099 in 2010 to $258,696 as of Oct. 31, 2011.
Investments in a sewage treatment plant and resolutions to personnel matters contributed to the downturn, city officials reported to the auditor’s office.
This year’s budget projects revenue surpluses in every fund, city officials noted, citing spending and staffing decreases and a 1 percentage point increase in utility tax rates, all of which will improve the city’s financial situation.