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City council warned of possible financial trouble

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MALAKOFF–At the Aug. 12 city council meeting, the councilmembers heard from Frank Steele a financial auditor from Anderson, Marx and Bohl, PC regarding the city’s audit report for the fiscal year that ended Sept. 30, 2018.
The main concern brought to the council’s attention dealt with the general fund, which is made up of the collection of property taxes, general sales tax and serves for paying the bills dealing with the administration of the city, public safety, highway and streets and the parks. The operations revenues fell short of covering the operating expenses by $335,000 and in an effort to keep the general fund balance positive, a deposit of $150,000 was transferred from the water and sewer fund.
There has been a significant decline in the general fund balance last year and this year and is projected to decline next year as well. “You can see the year that you’re in, if this trend continued, it would be a pretty stressful situation,” said Steele. One of the possible reasons for the deficit brought up by Steele was the low tax rate that the citizens of Malakoff have, compared to other cities of their size, indicating that most other cities have a tax rate that is at least double, if not triple that of Malakoff. “So, that is the conundrum that you face. You have three options to continue, one is to cut back expenditures in the general fund, the other is to raise revenue, the third is to continue to make transfers out of the water and sewer fund,” Steele said. He went on to warn the council that by continuing to take the money from the water and sewer funds the city runs the risk of not having adequate funds available when major repairs are needed.
“So we have to make some decisions,” said councilwoman Jerrilyn Tarver. Steele agreed, going on to say, “You can’t get from A to Z in one fell swoop, but you have to start making the incremental changes.”
One incremental change that the council decided on at the council meeting was to raise the rates on the rental of the Malakoff Senior Citizens Center. Currently, those that wish to rent the center for an event, pay $100 for a deposit, $20 per hour for religious groups, $50 for everyone else and non-profit groups can get the center for no hourly cost. Now, to rent the center, everyone, including non-profits, will pay a $300 deposit and $100 per hour.  
In other business, the council:
• approved the minutes of the July 8, 2019 regular meeting.
• approved paying the city’s obligations for the month of July 2019.
• awarded Engineering and Application Services Contract the City of Malakoff 2019 TxCDBG Downtown Revitalization Fund (DRP) of the Texas Department of Agriculture-Office of Rural Affairs. This will help with things such as sidewalks and lighting.
• approved the Malakoff Planning and Zoning Board recommendation pertaining to Ricky Vieregge’s request for a specific use permit.

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