City receives unmodified audit

Terry Galloway, an auditor from Almquist, Maltzahn, Galloway and Luth, CPA, presented an unmodified report to the Kimball City Council at the March 21 council meeting.

“What you have received here is an unmodified report,” Galloway said. “Which is the highest level of assurance you can receive from an independent audit firm, so congratulations. Basically it means everything is true and accurate within the financial statements, themselves.”

According to Galloway’s report, the City decreased overall debt by $192,000, or by six percent, and the budget request for property taxes decreased 20 percent in the current budget year from previous years, as the City has built up the bond fund to an acceptable level.

“You don’t actually have any bonded debt in the general fund or the governmental activities,” Galloway said. “You do have bonded debt in the utility funds.”

Galloway suggested finding a way to use the bond fund to pay down the bonded debt in the utility funds and provide relief for rate payers.

“You have the money available, so you should probably just pay down some of that debt,” he concluded.

Council member James Schnell mentioned that the south substation needs about $1 million in repairs. He asked if the available money would be better used on one large project, such as the south substation, or by paying down existing debt.

Galloway suggested paying off the current debt and bonding the project for the south substation and priorities should include reducing expenditures and increasing revenue in the general fund.

“The good news in Kimball is that you always underspend the budget,” he added.

Currently the occupation tax, which fluctuates across the state from zero to 12 percent, is set at four percent in Kimball – which presents a revenue opportunity through utilities, according to Galloway.

He reported that the water, sewer and landfill departments are still working in negative numbers, and he suggests transferring funds, increasing rates and taking measures to shore those budgets up.

“In a perfect world we need about $5.6 million in the utility fund and we are sitting at only $3 million,” Galloway said. “We will have to continue to monitor those.”

Galloway further noted that there is $462,000 in the Keno trust, which, according to council members, will be used for the Underpass project when it progresses.

Following the audit report, council members heard from Nate and Heather Entingh, owners of Beer and Loathing regarding the Keno funds dispersed for community and civic projects.

“We started questioning the amount of money our bar alone pulls in for Keno and where it is going,” Heather said. “In 2016 we pulled in $355,000 in Keno, of which the City got 10 percent, so a little over $35,000 our business provided for Kimball.”

She continued that they hear a lot from the community about the lack of volunteers to do community service work and how certain city-owned businesses, such as the local swimming pool, is in debt.

“Yet we hand over thousands of dollars in prom committee funding without asking anything more than how is this going to benefit you,” she said. “My husband and I want to see if there is a way to amend the Keno grant application. Rather than have them walk in with empty hands wanting them full, see them walk in with full hands wanting to help the community.”

Entingh continued that employee retention is also a concern in the community, which leads them to believe that educating youth on the value of a dollar should be a higher priority.

Traditionally the Keno money goes to community events, and though many of those seeking this funding address the board with how each event helps the community, few of them prove community service hours.

“They are all noble, great things for our community, but when I asked for logged hours, community service or volunteer hours, there was nothing,” Entingh said. “I was taken aback by that, because we have to work so hard – we are open seven days a week; we have to keep up with licenses and fees; anybody that runs Keno has to have a background check, we have to do all this stuff, but we are just handing money over every year, not asking for help from any of the people who ask for this money.”

“Our available Keno funds are very low,” council member Kim Baliman said. “I appreciate what you guys did, bringing this to the forefront and I think it is an important conversation that we need to have.”

While council members are open to looking at suggestions, volunteer opportunities at any city property or business presents a liability.

“We need to be very careful with volunteers,” City Administrator Dan Dean said. “I love to see volunteers doing certain things, but there is a number of things they cannot do. Secondly, I have had a number of conversations about how it has been used in the past. It occurred to me that we might want to look at establishing some better ground rules going in. I recommend we set up some criteria. The third item, is that the civic clubs are mostly volunteers and frankly I wouldn’t get bogged down in tracking hours – it is a lot of work for a little payoff.”

Community service would likely need to be done via non-profit organizations, with the additional benefit of logged volunteer hours that would help the organization apply for grants as well.

Council decided to impose a moratorium for Keno grants, including those applications heard following this decision.

They also decided to form a committee to design what the program would look like and set up the ground rules for those seeking Keno funds.

Other matters before council included:

Keno grant application from Kimball Public School’s Health Office – moved to April at the request of the school

Keno grant application from Penny Hobbs, Sierra Boviall and Tri-State Grapplers – tabled until the April 18 meeting.

Granted $4,000 in Main Street Design and Improvement grant to Vince’s Corner

Agreed to fix the City of Kimball driveway at the entrance to Phoenix Conoco, First Interstate Inns and The Diner.

Added exterior doors to allowable uses for Main Street Design and Improvement grants.

Discussed permitting removing/planting trees on City of Kimball right-of-ways.