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City finances can be fixed

Tuesday, March 25, 2008

Even with the City of Brazil hundreds of thousands in the red, the mayor and clerk-treasurer have a positive outlook.

Last week, Dan Hedden, CPA Principal for Umbaugh and Associates, Indianapolis, addressed the Common Council of the City of Brazil to provide an update on the progress made to correct errors in the city's accounting system.

So far, the fund accounts and deposits have been correctly set up, something which was not done when InCode, the accounting system, was originally installed in 2003.

"It is a big plus knowing exactly what we have and where we have it," Brazil Clerk-Treasurer Karen McQueen said. "Now we can move forward and get everything back on track."

When Hedden said the city is an estimated $730,000 in the hole, McQueen admitted to panicking a little, until she talked to Brazil Mayor Ann Bradshaw.

"Ann told me this isn't the first time the city has been on this level," McQueen said. "Talking to her really helped to calm my nerves."

Bradshaw told The Brazil Times the city was in bad shape before, but has always found a way to make things work out.

"Things were really bad when I first became a member of the council," she said. "It will take a little time, but we should be able to turn things around once again."

Although the city will have to wait until at least June to receive its 2008 certified budget from the state, steps have already been taken to counteract potential cutbacks.

"We have asked all department heads to try to cut 25 percent from their initial budget," Bradshaw said. "We anticipated the state to tell us to cut 10-15 percent, but by cutting a little extra we should be able to get back above water quicker."

The city is taking other measures to cut costs, even considering options which may be unpopular with employees.

"The city is currently paying 100 percent of employee insurance premiums," Brazil Insurance Administrator Judy Branham said. "We are looking at either adjusting that number or reducing insurance benefits."

Branham also said the city is encouraging employees to sign up for a YMCA membership and have been made aware of a smoking cessation course for May.

"Also, having workout equipment in the fire department may also help combat our insurance costs," she said.

Another change that the city has made is its policy on overtime.

"We are saving costs on overtime by offering comp time as an alternate option," Bradshaw said. "All of our departments have been willing to do this which has helped out a lot. It also works out better for employees who may have used their sick days for the year."

The city is also looking into applying for grants for public service to help lessen its costs on purchasing equipment. The city is only able to apply for one grant at a time, but has a grant writer working hard to find the grants that would provide the biggest benefit.

McQueen credits the eagerness to work together as the main factor for helping return the city to better days.

"In the past there appeared to be a lot of dictating going on," she said. "With the employees willing to work together, along with me and Ann keeping each other informed, has created a great team effort within the city."

With changes in recent tax legislation, the city cannot truly predict what its tax levy will be, which slightly hampers its ability to foresee problems, but Bradshaw is already preparing for the future.

"We should start initial plans on the 2009 budget next month, and we will have a huge work session with Umbaugh and the department heads," she said. "The most important thing to remember at this time is that it will all come around and work itself out."



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