Audit brings bad news

Deidre Budahl, auditor for Casey Peterson and Associates presented her findings from the 2021 audit of the town finances to the council Monday night with warnings and advice.

“The town is, I would say, ok for right now, but, I think you guys need to make some major financial decisions in the next few years because you’re not going to be able to continue going at the rate you are,” she said.

According to the auditor, Moorcroft’s general fund was over-expended by approximately $95000 last fiscal year and the general fund receipts are “stagnant to declining” with lower proceeds from property taxes, sales and use taxes, as well as the third purpose taxes received.

The expenses against the general fund added up to approximately $119,000 over the prior year with one of the heaviest line items the MTC at a budget of almost $140,000.

“Part of the reason your expenses were up,” advised Budahl, “You had some grants and projects. You would have had money to cover those, but really if your revenues aren’t growing, your expenses should probably not grow either.”

Speaking to the negative cash balance within the general funds account, Budahl said, “If you look at this negative cash, it says to me that you borrowed money from the water and sewer [fund].”

If, in fact, this happened, the town could face consequences: “You can get into some issues if you’re essentially borrowing from your water and sewer funds because those have debt on them and you probably cannot legally be borrowing from those funds. You’ve got to be careful with that.”

She cautioned, “The budget was over expended for several functions within the general fund [and] because we draft the financial statement, we have to report the finding for that. We do submit the audit to the federal clearing house so that’s already been done [and] I’m sure Cheryl [Schneider, Clerk Treasurer] will have to send reports to the state as well.”

Budahl suggested cashing in some of the invested funds the town has as well as the USB account to inject much needed unrestricted cash into the general fund, saying, “Your investments are up $40,000, but you should maybe move some of that money…back in so you’re not borrowing from other funds.”

The council had been discussing the possibility of using ARPA funding to help cover the deficit, but Budahl advised not relying on this federal grant money too heavily.

“One of the things you have to be real careful about is that money is typically coming through states and states are putting their own twist on what kind of requirements they want to have; matching dollars is going to be problematic for the town just because you’ve got a lot of debt right now and matching programs are kind of tricky,” she said.

Council Paul Smoot asked the auditor’s opinion on the amount of cash the town should have reserved and she stated, “[With] most local governments, we suggest between 15-20%, it really just depends on what is going on at the time – if you’re getting a lot of grants where it’s [structured as] cost reimbursement, where you have to front the cost, you might want to be carrying more cash.”

The bad news did not end there, though; the town has some funds set aside in a WYOSTAR account for landfill closure costs, but is around $40,500 deficient in the funding owed to the state insurance pool, according to Budahl, who said, “I would recommend some of that money to pay that so the state will help pay for some of those costs…to be able to get assistance from the state for closure and mitigation.”

The debt service for the water and sewer funds are currently $276000 annually, but are anticipated to increase within the next few years to approximately $415000 per year. “You have quite an increase coming,” said Budahl.

Budahl commended the efforts of the town, though, saying, “The city’s come a long way from when we started…Just be mindful and conscious of how things stand.”