The City of Salem ended fiscal year 2020 with $3.9 million less in revenue than it budgeted for, according to unaudited figures supplied to The Salem News March 25 by the city after a Sunshine Law request made in October 2020.
In fiscal year 2020, the city budgeted revenue of $15.8 million and brought in $11.9 million, according to the financial statements. The drop in revenue was mostly balanced by less expenditures, as the city spent just $12.3 million out of a budget of $15.7 million.
Much of the shortfall in budgeted revenue in 2020 is due to utility billing issues that have plagued the city since going to a new, computerized water and electric monitoring system in November of 2019. The system was purchased from NexGrid for $1.34 million. Billing has fallen behind two to three months on two occasions. Current billing is through Jan. 9.
When fiscal year 2020 ended June 30, the electric fund had budgeted revenue of $6.4 million but actual revenue of $5.3 million, over a million dollars under budget. The water fund budgeted revenue of $1.5 million and brought in $919,000. The sewer fund had budgeted revenue of $932,000 and brought in $1.1 million.
Salem also experienced a dip in utility revenue the previous year. At the end of fiscal year 2019, the electric fund had budgeted revenue of $6.7 million but actual revenue of $6.2 million, according to the financial statement sent by the city. The water fund had budgeted revenue of $1 million but actual revenue of $980,000. The sewer fund had budgeted revenue of $1 million and actual revenue of $950,000.
The documents obtained by The Salem News also show the city recording negative revenue for electric in November of 2019 for $20,055.71 and in April of 2020 for $69,699.20. Water and sewer showed a total negative revenue of $6.5 million in April of 2020. The city’s response when asked for an explanation of the negative amounts is because of the “net effect of billing and adjustments posted in those months.”
Electric revenue stabilized from May 2020 through September 2020, the last month financial statements were provided, averaging $407,000 per month.
A CPA and lawyer obtained by The Salem News have reviewed the documents and caution that these are unaudited figures. An audit has not been done on city finances since an audit for the fiscal year ending June 30 of 2019, when it was performed by K Deluca Audit Services of St. James.
The financial information sent to The Salem News is part of a Sunshine Law request sent to the city Oct. 27, 2020, asking for, among other things, “the City of Salem’s monthly financial statements for all of 2019 through September 2020. Each statement should include a balance sheet and monthly totals for income, expenses and debt.” The newspaper also asked for month by month revenue for electric, water and sewer, as well as other information that has been detailed in earlier stories in The Salem News.
The city responded in part, but as of Feb. 11 – over three months after the request – much of the information was not provided, and The Salem News filed a Sunshine Law complaint with the Missouri Attorney General’s office. The AG’s office announced an investigation into the city’s lack of response, and temporary city clerk Tammy Koller sent the remainder of the requested documents March 25.
However, given the city’s delayed response, The Salem News on March 20 sent a second Sunshine Law request asking for the same type financial information, extending the time frame through February 2021, an additional five months.
The city has continued to have utility billing issues during that time period and documents can give a clearer picture of the financial impact. After utility billing got three months behind in early 2020, customers were given three options to catch up. Billing fell behind by three months again in late 2020, but the city has not provided information on why billing is lagging or a plan to catch up.
The most current bill sent earlier this month was for Dec. 10, 2020 through Jan. 9, 2021. The unbilled months of the balance of January, all of February and March include a cold snap in February that will see the city billed approximately $1.73 million instead of the $279,000 it was billed in February 2020. City ordinance calls for that amount to be automatically passed along to consumers without action from the aldermen.
The Salem News also asked in the original Freedom of Information Act (FOI) request for dates of city administrator Ray Walden’s job evaluations in 2018, 2019 and 2020, along with who conducted those evaluations and the written process used for evaluation.
The city March 25 responded, “feedback on Mr. Walden’s performance was provided by the mayor and board members periodically throughout the mentioned time frame.” No other information was provided.
Walden, according to city ordinance, is “the chief administrative officer of the city government. Except as otherwise specified by ordinance or by the law of the State of Missouri, the city administrator shall be responsible for coordinating and generally supervising the operations of all departments” of the city.
Walden’s contract, obtained earlier through the same Sunshine Law request, reads “the board of aldermen shall review and evaluate the performance of the administrator annually based upon the performance goals established by the board in consultation with the administrator, in the winter of each year, and may evaluate such performance more frequently, if determined necessary by the board of aldermen.”
The Salem News will continue to evaluate the requested records from the city, which total 967 pages.
