Auditor suggests water rate hike in Burlingame

BURLINGAME — John R. Welch, certified public accountant, presented the findings from his audit April 3 to the Burlingame city council.

Under the significant findings of the audit Welch said that the council had the fiduciary duty to raise sufficient funds to cover the expenses of the water utility.

“In the case of the water department, you are short about $60,000 a year in order to fund the water improvement bonds,” said Welch. “The bonds come due in March, at that part of time you don’t have money to pay the bonds.”

The bonds were guaranteed by the general city. The city is legally required to pay out of the general fund.

“The fund was only able to generate $24,000, that means you will continually be going to be short,” said Welch. “They’re balancing the water fund at $24,000, that surplus or that amount of fund balance was between the time the bonds were paid and the end of the year. At that rate when the bonds come due again in April you will not have sufficient money to pay the $79,000. Basically that means you have to raise $60,000 a year in water rates. Basically you raise about $3,000 in the water fund and you need to raise about $3,600, which is about a 20 percent increase.”

Welch said that this had to be brought up to the council because it is a statutory violation and needed to be addressed as quickly as possible. He also discussed residual money found in the employee benefit fund.

“Statutorily the way to move that to your general fund is to pass a resolution to close that fund so that you can roll it into the general,” said Welch.

Welch told the council that if they were going to move funds from one utility to another it would require a special finding by the council.

“When your budget was done last year you showed a lot of transfers between utilities,” said Welch. “Well the first problem is that the utility is supposed to be self funded. So there shouldn’t be a need to take money into a utility. You basically have to make a positive action each time it happens.”

The only utility transfer that is allowed is of excess money to the general fund.

Welch also said the city had a lot of cash accounts. One account with $249,000 is in a bank account that doesn’t collect interest; another has only $14 in it. The municipal pool account has also had money for a very long time according to Welch; it is another account to take care of.

“There really is no reason to have all those accounts,” said Welch, “I would highly recommend you take some extra money and put it into a $200,000 account.”

The council approved paying Welch $5,000 for audit work and $2,000 for additional work.

Power plant demolition

Wesley Colson, Burlingame superintendent, said the old power plant has been torn down. There were a few unseen items beneath the building.

“I came across a few big foundations in there,” said Colson. “They must have been for old motors or something. They’re about four foot deep, one of them is about eight foot wide by 15 foot long. The other one is about eight foot wide by 10 or 12 foot long. There is also a manhole uncovered from when he took the concrete pad off.”

Vikki Demars, mayor, asked how much it would cost to remove. Jay Butterfeild offered to do the job for $2,000.

The council took no action.

Alley improvements

The city council received two bids from contractors to pave the alley leading to proposed Dollar General in Burlingame. The first bid came from the contractors working with DG, Colby Capital LLC. Colby Capital’s bid came out to $32,000 with a 50 percent match with the city, the lowest bid came from a Williamson Excavating for $24,000.

“So if we use our own contractor they’ll still pay 50/50?” asked Leslie Holman, council member.

“He said he was fine with taking the lowest bid so I suggest maybe that you go ahead and approve it tonight,” Colson said. “I tried to get him nailed down on a time we could get it done, and he said as soon as they close on their end of the deal then it could go ahead and be done.”

Holman motioned to accept the lowest bid by Williamson Excavating contingent on scheduling and agreement with Colby Capital.

West Banks road

The city council passed a motion to put a culvert on 400 block West Banks of the road near the dog kennels as long as it met the $2,000 cap.

“There’s 30 foot of culvert that needs to be replaced,” said Colson. “The water project kind of tore up the side of the road when the state detoured traffic.”

Demars asked Colson if he had taken any bids.

“They’re right at $20 a foot,” said Colson. “We’re talking $600 worth of culvert.”

In other business the council:

• approved Michelle Mullinex, council member, look for cheaper trashcans to be put in at Jones Park.

• discussed posting a notice for city wide clean up this week in Burlingame

• heard chunks of chip seal were up on West Lincoln Avenue

• heard from Kenna Burns, council member, the eighth grade graduation wanted to hold a bonfire ceremony across from the Federated Church of Burlingame. Colson suggested using the church’s parking lot.

• went into executive session five times.

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