Ontario city staff start audit
By Andy Gates - Argus Observer
Tuesday, June 12, 2007 10:48 AM PDT
Ontario - Ontario officials are conducting an internal audit to determine if fees residents pay on their municipal water bills were misspent.
Some of the city’s elected leaders, including Mayor Joe Dominick, are concerned that revenue from Utility Capitalization Fees, or UCFs — a water tax residents pay to Ontario — may have been spent in ways not allowed under city ordinance.
The city currently places the revenue from the UCFs, which is a 17 percent charge on water bills, into the Capital Projects Fund.
The UCFs were created in a 1997 ordinance, Ontario Public Works Director Steve Gaschler confirmed last week. That ordinance, No. 2391, stipulates UCFs should be used to fund capital improvements, not routine maintenance.
UCF funds, elected and appointed leaders said previously, are not intended to be used for such projects as chip-sealing.
“UCFs are to be used for increasing capacity, if they were used for something else it would of been an oversight and not intentional,” Gaschler said Thursday in an e-mail.
Gaschler refused to discuss the UCF matter in a face-to-face interview with the Argus Observer but instead insisted all dialogue regarding the case be conducted via e-mail.
Based on a 10-year UCF report from the city provided by the mayor it appears some of the UCF money may have been used for chip-seal and crack-seal projects.
However, Ontario Finance Director Rachel Hopper told the City Council and mayor Monday during a budget work-session in city hall that there are other revenue streams besides the water based UCF tax that nourish the Capitol Projects Fund.
Transfers from the Capitol Projects Fund into the Streets Fund for chip-sealing could come from sources other than UCF revenue, Hopper said.
“The bottom line is to make sure appropriate revenue streams are used for appropriate expenditures. UCF shouldn’t be used for maintenance. That’s what we’re verifying,” Ontario City Manager Scott Trainor said.
Hopper told the city’s elected leaders it does not appear UCF funds were misspent in budgets from 2004 to 2005. The city is internally auditing transfers from 2005 to 2007, municipal officials said.
As for the 2007 to 2009 budget, the finance department is planning for a “worst-case scenario,” Trainor said.
For example, the cash on hand in the Streets Fund was reduced by $413,942 between the proposed and approved budgets for 2007 and 2009.
No transfers from the Capitol Projects Fund to the Streets Fund are listed in the most recent proposed budget.
“We don’t want to go backwards,” Hopper told the council Monday.
The city will provide the council with a report concerning the internal audit regarding UCFs when it is completed.
“Once we’re done with the review, we’ll give a full blown opinion to council,” Trainor said.
Funding for street maintenance is apparently an issue for the city.
“We don’t have a permanent funding source for street maintenance,” Trainor said.
Dominick said street maintenance is important.
“As Ontario grows, so does the demand on our streets. We hope to continue our chip seal program, as this not only makes the street look better, but adds 7 to 10 years to their life,” Dominick said in his June 2007 State of the City Speech.
The Ontario City Council tabled a UCF ordinance presented by Gaschler June 4 during a regular meeting because too many questions remained unanswered. The ordinance proposed to split where the UCF revenue would go — 10 percent to the Streets Fund and 7 percent to the Capital Projects Fund. The funding split proposal was prompted by an increased need for major street repairs, according to Gaschler’s proposed ordinance.
Another City Council budget review is scheduled for Thursday following the elected board’s regularly scheduled work session.
