During last week’s City Council meeting, the City’s annual fiscal audit was presented by the auditing firm of Patillo, Brown & Hill. This is the first year the Patillo firm has performed the City’s financial audit.
The purpose of the annual financial audit is to assure there are no material errors in the City’s financial statements. A material error is considered one that would impact decision making by the City Council or management.
The audit was a good, clean audit and the auditing firm found the City’s financial statements are materially correct.
In addition, the auditor conducted an audit on internal controls of how the City was handling grants from the Water Development Board, and federal dollars received under the American Rescue Plan Act of 2021, .
The auditor found no significant material non-compliance, but did find one issue with how the City was handling deferral of unspent ARPA funds. In particular, that unspent fund should not be recognized as income to the City until those funds are spent. The City still has around $7.5 Million in ARPA funds not yet spent.
They also found an issue with how the City was deferring recognition of receivables collected soon after year end. These primarily consists of court fines. The City has approximately $8.3 Million in uncollectable receivables.
There was not an issue with day-to-day processing by staff, but simply a situation of staff not realizing the issue, which they quickly corrected once it was pointed out.
The audit report was approved by a vote of 7-0.
Tax Abatement
The Council approved by a vote of 7-0 approved entering into a tax abatement agreement with Zeppelin Energy for the construction of an electric battery storage facility to be located north of 28th Street.
Zeppelin is in the business of buying excess electricity off the grid when demand is low, and selling it back when demand is high. This takes place on a daily basis in the electricity market.
Zeppelin plans to invest $160 million into the physical plan and equipment. Assistant City Manager Michael Dane presented the tax abatement proposal. It would be a three year abatement of 85% on the increase in value. Dane said they felt their needed to be a floor on the company’s investment below which the agreement would be of no effect. That number is $135 million in investment. Any less than that Council would need to reconsider. The abatement is based on a percentage, so if the investment is below $160 million the abatement would be a smaller percentage. If it exceeds $160 million Zeppelin would receive a greater abatement.
No public comment was made on the proposal.
Dane said that the $160 million planned investment would net the city $4,461,500 over the next ten years.
In Other Business
- City Council approved Tax Increment Reinvestment Zone (TIRZ) incentive requests in the amount of $184,356.12 in the South Zone and $345,135.99 in the North Zone.
- Approved zone change for 4673 Christoval Road from Heavy Commercial to Mobile Home zoning district.
- Approve zone change for 502 and 504 W. Ave. V from Single Family Residential to Neighborhood Commercial zoning district.
- Appointed Roger Horton to the Animal Services Advisory Committee.
- Appointed Ken Roberts to the Civic Events Advisory Board.
- Appointed Roderick Mayberry to the Construction Board of Adjustments and Appeals.
Future Agenda Items
Council Member Lucy Gonzales SMD 4 asked that possible carports being permitted in Paul Ann area be placed on the next agenda.
Council Member Tom Thompson SMD 2 requested training for boards and commission members be added to the agenda..
