Financial statements prepared by Capable Financial Solutions show the city this year through Aug. 31 has received less money than officials forecasted. Tax revenues are off about $30,000, while total revenue, excluding funds transferred from the Water Fund, to that date is about $70,000 less than projected.
"If you look closely at the revenues, it's not a whole lot of difference compared to what we were doing last year," Jones said. "I don't think the revenue is so much the problem as it is having everything properly coded to where it comes from the proper accounts and that's the thing that we'll be working on mostly.
"If it gets to the point that we have to look at any kind of layoffs, like I've told them all along, I'll be the first to do that."
City Attorney Peter Olson said he stepped outside his normal purview to examine the financial statements, which show that expenses at the end of August were about $60,000 under budget.
"Of course the revenue gap is partially made up by the Water Fund transfer," Olson said, adding the city budgeted a total of $85,000 in those transfers for the year -- two-thirds of which is more than $56,000 -- and through August, officials had transferred $60,000. "So they were right on track. ... I think part of the concern might be that since employees had been added that the expenses might be higher for these months in the rest of the year than they were for some of the early parts of the year.
"So the tax revenue is falling about 15 percent behind and the revenue through citations and police fines is about 60 percent under projections, but the cost for administration is about running right on budget. The public safety is running $30,000, or 25 percent, below budget, and the public works budget is about $30,000 under budget, too. That's sort of the good news."
Through Aug. 31, the city had collected less than $18,500 of a projected $77,000 for the year in police fines and forfeitures. Jones points to a flawed forecast.
"Any police officer would tell you that was a totally unrealistic assessment," he said. "We would have to have police officers sitting on the main drag in our little town pulling over every resident every chance they got to get those kind of numbers. It will never happen and it just never would.
"My budget will be different."
They city typically spends more than it takes in, with Water Fund transfers making up the differences. Through the end of August, the city had made about $248,000 and spent about $308,000. That $60,000 difference was made up with profits from the city's water department.
Although Olson said the city brings in about $90,000 per year in the operation, the year-to-date financial statements show as of the end of August, the water fund had made about $35,000.
Officials had budgeted a total of $85,000 to be transferred from the fund this year, and the $60,000 transferred through Aug. 31 is about $25,000 more than the water made in profit to that date.
Olson confirmed another $10,000 was transferred from the Water Fund to the General Fund this week.
Jones said $140,000 was transferred from the Water Fund last year, and points to the city's procedural errors as the problem causing Water Fund transfers to be ahead of schedule. He said the pay of employees who perform water department functions should be funded with water profits, but those employees are now paid from the general fund. Supplies and equipment for the city's water service also are paid with general fund dollars, he said.
"This stuff should have been paid for from the water fund," Jones said. "It was paid for from the General Fund. Legally what is supposed to be happening is that the Water Fund would reimburse the General Fund the money that was allocated and that has not been done. That's where the problem is, that's where the imbalance in the accounts comes about."
Training and cross-training is needed to combat the problem, Jones said.
"What cross-training does is it allows to have checks and balances," he said. "To just have one person who's collecting the money, counting the money, writing the checks with absolutely no checks and balances, it's easy for it to get all out of whack. In the past, of course, that is what has happened."
The mayor advocated hiring a second office worker when he took office, but due to personnel changes, the city is down to one person handling the office's day-to-day operations. The council is poised to decide whether to hire another worker.
"My feeling on that is you can not afford not to have more than person. From talking to other municipalities, it's unheard of to have one person who sits behind a window and collects the money and then counts the money, takes the money to the bank every night or whenever," Jones said, adding the city's bills also have not been paid on time. " ... You've got to have somebody else in there, if nothing else, to protect the integrity of the system.
"In the past we have a substantial amount of late charges whether it was past due taxes. A lot of this stuff is just running over from 2009 and we've just not been able to get a handle on it."
Councilmen Chuck Wise, Ed Micklas and Louise Howell were contacted for comment. While Micklas declined comment, Wise and Howell did not return calls or messages seeking statements.