VERO BEACH — Nearly one quarter of Tuesday’s Vero Beach City Council meeting was taken up by presentations about the city’s financials by the Finance Commission Chairman and the head of the city’s auditing team.
Peter Gorry presented the latest edition of his assessment of how Vero will look financially after a sale of the electric utility to Florida Power and Light. Gorry explained that the loss of the $5.6 million that the city transfers each year from the electric utility into the general fund, plus the general and administrative fees paid by the utility to support city hall operations will hit some departments worse than others.
Recreation and police, he said would hardly be affected because the services of those departments have little to do with the operation of the electric utility.
Other departments such as finance, the city clerk, the city attorney, human resources and the city manager’s office theoretically spend large amounts of time dealing with matters related to the electric utility, its records, its ratepayers and its employees and would need to be looked at. Those departments, however, have small staffs of two to four people, Gorry said, so it would be tough to cut back substantially.
With some creative moving around of cash to pay off some debt in the enterprise funds, Gorry proposed that the annual budget deficit in Vero’s general fund could be trimmed to $1.2 million.
The city’s auditor, Ross Cotherman, presented an overview of Vero’s Comprehensive Annual Financial Report or CAFR. Cotherman said the city staff was most cooperative in providing records and answering questions during the more than 600 hours his auditors spent at city hall working on the review of the 2011-12 fiscal year, which ended on Sept. 30.
Though the audit was fairly routine, Cotherman pointed out that two prior period adjustments were required. The adjustments are part of an ongoing effort of Finance Director Cindy Lawson to clean up and systematize the city’s outdated and sometimes lax accounting systems that were in place before she arrived in July 2011.
One expample of an adjustment was a reduction in the value of city assets on the books of $755,000 after a physical inventory of assets was completed and it was found that, though obsolete equipment and old vehicles had been properly disposed of, they had never actually been removed from the city’s list of assets. Some of those vehicles and pieces of equipment were up to 30 years old.
Lawson said the physical inventory was in part spawned by the effort to track and value assets of the electric utility as part of the sale. After all the adjustments were made, the assets of the utility were reduced by $160,000, which Lawson said was not material in relation to the $200 million assets of the utility.
No action was required with regard to the financials after the review by Cotherman.
