Ottertail council receives annual audit report

By Chad Koenen

Publisher

Revenues for the City of Ottertail exceeded expenses by just over $163,500 last year.

During its regularly scheduled meeting last week, the Ottertail City Council heard its 2023 year-end audit report from city auditor Brian Kane. 

According to Kane, the city’s general fund cash and investments were up approximately $130,000 from 2022 to 2023, while the water fund also saw an increase of about $70,000 due to an increase in water rates in the city. Kane also pointed out the fire department cash and cash investments was down about $35,000 from 2022 to 2023 due to purchasing new fire suits, equipment and a grass rig. 

“Overall, your cash is up about $230,000 from your various governmental funds,” said Kane, who applauded the council for increasing the city’s cash and investments despite all of the projects going on in the city. “All of your cash balances are on the upward swing. Even with all the different projects you are doing you are not setting yourself up on a spiral with cash.”

The lion share of revenue for Ottertail came from property taxes at $588,841. That was an increase of just over $77,000 from 2022. Other revenue last year came from lodging tax at $42,806, tax increment received at $117,639, special assessments at $12,325, licenses and permits at $23,720, intergovernmental revenues at $58,579, charges for services at $56,761 and other revenue at $283,016.

In terms of expenses, general government ($376,468), public safety ($126,045), public works ($327,424) and debt service ($171,398) made up virtually all of the city’s $1.021 million in expenses last year. 

In addition to the financial aspect of the audit, Kane walked the city council through several findings and material weaknesses within the city. Three of the findings relating to lack of segregation of duties, material journal entries and financial statement preparation, are all common notations for a vast majority of the cities of Ottertail’s size in the state. Many of the material weaknesses would not be solved unless the city were to hire a number of new people in the city office, something Kane has told the city council in the past that would not be economically feasible.

“You have an office staff of two and it is not possible to segregate the duties,” he said. “A city of your size is not going to have enough segregation of duties.”

Kane also highlighted two new findings as part of his audit. The first was a violation of city personnel policy in regards to paid time off as the city paid vacation in excess of what had been accrued. That was in violation of the city’s personnel policy. Kane said his understanding was the issue was addressed and would not occur in the future.

“I think it is an educational opportunity that has been taken care of and I think the policy is more readily understood so I don’t expect to see that one duplicated,” he said. 

The second new finding regarded the need for the city to obtain a quote for a contract estimated to be below $25,000. State statues require the city to obtain two or more quotes whenever possible. 

Kane said the city got just one bid on a project and he said moving forward the city should ensure it sends out documentation to contractors to show an effort was made to get at least two quotes, even if it just receives one formal quote back. 

“The two new (findings) this year are ones that have already been taken care of and I don’t think they will happen again this year,” he said.

In other news

• Approved a resolution to increase water rates by two percent in the City of Ottertail beginning in 2025.

• Held a pair of public hearings for Rudy and Adele Butenas for a conditional use permit to construct a garage at 151 Hilltop Road and a tax abatement hearing for Dean Wagner at 206 Wallenberg Dr. for a new house. The building permit and tax abatement was approved later in the meeting. 

• Approved a 90 day pay increase for deputy clerk Patty Hensel. 

• Approved a request from a resident on Long St. to decrease the speed from 30 mph to 20 mph to curb speeding vehicles in that residential area of town. According to state laws, a city can decrease the speed if it chooses without a speed study if reducing the speed is done to improve bicycle and pedestrian safety. 

• Heard from Randy Hutmacher about a proposed road as part of a new development in town. He is developing five more lots in Deer Run south of Donalds Lake and would like the city to take over the proposed road that has not been utilized as a conventional city road in the past. According to city policy, city clerk/treasurer Amanda Thorson said the city will need to do some testing to make sure the road is up to city specs before it can officially take over the road. Three permanent dwellings will also need to be serviced by the road. The city council will hold a work session in September to discuss potentially taking over the road.