The city of Sunnyside still has a long way to go before it is financially secure with accounting processes that all employees understand and can use, but the current administration is continuing to make progress.
That was the summary of various reports received by the city’s subcommittee on finance and administration last night.
One major topic of discussion was the city’s accountability audit, which was recently completed. Finance Director David Layden and City Manager Don Day made it clear that the city’s next audit will still have some of the same problems.
“The changes we have made will not affect 2013’s audit,” said Day. “We’ve finished the draft policies and will be reviewing and implementing them soon.”
Councilwoman Theresa Hancock noted that previous city managers have said the same thing, yet the city is still in dire straits.
“How will the council know that these policies are being used?” she asked.
“We thought we had policies in place before, but apparently not.”
Day promised monthly reports to the finance committee and council that will detail which areas of the city have been reviewed and what policies are in place and being used.
“The risk is high in our processes,” said Day, noting that the city does not have enough employees for the checks and balances of a larger city. This means that the finance director or city manager must be maintaining oversight of all departments to prevent problems.
Day also told the committee that the financial software that the city recently switched to is not suitable for maintaining best practices in a city.
“Cash based accounting is allowed in Washington state,” he said. “It’s a very simple system, but it’s not best practice and not even allowed in most states.”
He recommends that the city move back to an accrual based accounting system as soon as it is financially feasible.
“The city signed a five-year contract with BIAS, and we’re about a year in,” said Day. “It would cost about $60,000 to get out. We will make the best of it.”
Day also said the city’s payroll is far too complicated for a city this size. He said the payroll has far too many variations due to differences in contracts.
He hopes to work toward a 26-pay period system, in which all hourly employees are paid every two weeks. However, the city will have to renegotiate contracts with some unions to make that happen.
“There’s a lot of work to do,” he said. “It took a long time to get this way. Nobody here at this table is responsible.”
The city is also continuing to work on its financial audit, with results expected in about three weeks.
Layden also reported that revenues and expenses are coming in at about the expected levels. He said the city has a cash flow problem due to property tax revenue not being received until May.
“The city needs a six-month general fund reserve to prevent this problem,” he said. He later noted it will take a few years to build up that reserve.
The city will also be making an effort to get money it is owed from 20 property owners who are seriously in arrears. Layden said that because the customers only are provided sewer services by the city, it is difficult and expensive to cut them off. The city will be putting liens on the properties if the owners do not pay what is owed, he said.