After the city of Sumner acquired the Meadows Golf Links during the ’90s, it soon became apparent the greens were bleeding green.
Both improvements and day to day costs proved expensive. City councils have kept the investment alive over the years with transfer loans from other city funds in 1999, 2000 and 2008, banking on revenues eventually fattening enough to pay back the internal debt.
But if links business up to 2010 is an accurate indication of current and future revenues, the city is unable to pay back a current principal and interest of $915,000, and certainly not enough to pay back further interfund transfers. That was the finding of the team from the Washington state auditor’s office, reported to the city of Sumner at a Dec. 21 exit conference for its annual audit.
Additionally, the golf course has $2.6 million of outstanding bond debt to mature in 2018.
The golf course’s financial challenges were the top topic of the team’s accountability audit. During their visit, the auditors conducted an accountability audit, a financial statement audit, and a federal grant compliance audit.
The accountability audit examined the general fund, the police department and general disbursements; the funds most commonly mishandled, the team said.
According to the accountability audit:
• Sumner’s general fund appeared sustainable.
• Sumner Police Department does not conduct a monthly audit of its traffic citations, as required by state law.
• The police investigative fund had not been reimbursed since April 24, 2008, preventing fund expenditures from being recorded in the year they occurred.
• The police department did not have a contract with its firearms dealer. The team recommended the department have contracts with all vendors with whom they engage in trade.
• The city finance department sometimes uses approved purchase orders instead of approved invoices as the official approval for disbursements—meaning that the intent to purchase an item at an expected price was being approved, and not the actual purchase at the actual price. The audit team recommended the inclusion of signed invoices in approving purchases.
The team’s Financial Statement Audit proved to be a non-issue, finding no structural weaknesses in the city’s reporting, and no material weaknesses in financial reporting.
The Federal Grant Compliance Audit found the city’s internal controls inadequate to ensure compliance with reporting requirements under the Highway Planning and Construction Program. The city incorrectly reported $33,476 costs associated with an interlocal agreement with the city of Puyallup for reimbursement by the federal government. However, the team found no material weaknesses resulting from the city’s reporting methods.
The team recommended the city bring in a consultant to correct issues with reporting in the Highway Planning and Construction Program, at an estimated cost of $15,000 (the Office of the Auditor is a reporting agency only and does not make material recommendations for correcting deficiencies).
The mayor bristled at the idea.
“It just seems a little coldhearted to come in and say ‘do this, do that,’” he said. “It adds to the burden of operating the city.
“Isn’t there a model we can adopt (as opposed to paying $15,000)? Like, ‘this is what Woodinville does, and that will also work for your city.'”
The auditors said there was not.
City Administrator Diane Supler came out of the meeting with at least some optimism.
“There’s nothing here I’m losing sleep over,” she said.
Supler emphasized the fact that the city’s budget was balanced, and the golf course’s financial situation wasn’t anything of which they weren’t already aware. She mentioned the possibility of up to $100,000 of internal debt forgiveness on the interfund loans.
