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City of Morris receives clean bill of financial health

MORRIS – The city of Morris received another clean financial audit for 2012, despite turnover in the city's finance department that could have caused a few “bumps in the road,” Derek Flanagan of accounting firm Eide Bailly told the Morris City Council on Tuesday.

In his presentation to the council, Flanagan praised Finance Director Deb Raasch who took over for long-time director Gene Krosschell last year – “It's like we never skipped a beat.”

For 2012, the city received another “clean” or unmodified audit opinion. “This is what you want and what you've traditionally received,” Flanagan said.

The city also received an unmodified opinion on a federal audit, which was triggered because the city spent more than $500,000 in federal funds – about $610,900 in total during 2012 as part of the Pacific Avenue improvement project.

Because of the size of the city, Morris is always on the edge of triggering the additional audit. The city regularly receives federal awards, but doesn't generally spend more than $500,000 unless there is a larger project, Flangan said.

Flanagan presented a number of financial statistics that reflect the city's strong financial situation.

The city's liquidity ratio or ability to pay bills as they come due, was positive. Overall, the city has a ratio of about 5.5. A ratio of one means that the city has exactly one dollar to pay of one dollar of current bills.

One financial indicator related to debt is debt per capita, or long-term debt divided by population. Right now, Morris has about $2,222 of debt per resident, down from $2,689 per resident in 2010 and $2,642 in 2011.

The average for all cities in Minnesota is $2,386 of debt per resident.

Morris' total revenue for $4.1 million, while expenses totaled $3.8 million.

One consistent area of concern is the breakdown of revenue sources in the city's general fund. Currently, Morris receives about 63 percent of its revenue from intergovernmental sources, primarily Local Government Aid.

While this is a smaller percentage than 2010 and 2011, the actual dollar amount, $2,602,744, is just in the middle.

Morris' biggest expense categories are public safety, public works and general government. Since 2008, the city's operating expenses per capita has decreased.

In 2008, the city spent about $610 for every resident of the city. In 2012, that number was only $559 per resident.

“It's good to see that in a time of uncertainty you tightened your belts and reduced this ratio,” Flanagan said.

Council discusses infrastructure request

The Morris Cooperative Association’s new agronomy center along Highway 9 just north of Morris needs both water and sewer, and management would like the city to provide the infrastructure.

On Tuesday, manager Brian Kruize told the council that the site, just outside the city limits, already has a seed warehouse and six bulk tanks. The Coop will be adding a 6,000 ton dry fertilizer plant, a crop protection warehouse and an office space to the site this spring and summer.

The site needs a lot of water to fill trucks for custom application services and city water would provide fire hydrant access for fire protection services, which is why Kruize requested the infrastructure.

The council and City Manager Blaine Hill discussed the feasibility of giving the plant access to the requested resources. The first step would involve annexing the property into the city limits.

Hill said the plant would not have the right to petition the city for services until their property was in the city. The only current entity outside of the city limits with a water line from Morris is the city of Alberta under a long-standing agreement.

After annexation, the company could then approach the council directly to initiate the project, including a feasibility study, or have every adjacent property owner sign a petition requesting resources.

After that, it would be a matter of how the project could be funded – by city taxpayers, by affected property owners, or a combination of both.

“If the city owns the entire line, who pays for it?” asked Hill. “Are we willing to invest our money in this project to run water and sewer to that one business on hope that something is going to develop in the future?”

After some discussion, the council directed Hill and city staff to conduct an informal feasibility study to look at how the project might work and run some estimates on the cost.

“I think it's worth looking into,” said council member Jeff Miller. “I'm glad you see that you're going outside [downtown Morris] with all the product that we're going to have so I want to try to work with you.”

“If we do a project like that … it’s certainly going to cost the city some money, because it’s an investment in the city,” said Mayor Sheldon Giese.

Other business

• The council approved several fund transfers including about $194,000 from the general fund to the capital outlay fund for future equipment expenses and money from both the municipal liquor fund and refuse funds into the general fund and capital outlay fund.

• The council rescheduled their first meeting in May to Tuesday, May 14 at 9 a.m. at the Morris Area High School auditorium. Following the meeting, the council has planned a tour of city facilities.

• The council gave a first reading to a new city ordinance regarding criminal history background checks for potential employees and those interested in obtaining licenses.

The city already does these checks, Hill said, but the ordinance is needed to allow the Morris Police Department to use a state system for the background checks.

There will be a public hearing on the ordinance on Tuesday, April 23 at 5:15 p.m. at the Morris Senior Center.

• The council approved a two year contract with Stevens County for assessing services. Under the contract, assessor Don Gieselman will continue to provide assessment services for the city for approximately $28,150 the first year and $29,300 the second year.

Joey Daniewicz, an intern with the Morris Sun Tribune, contributed to this story.