The City Council of Webster City held a public hearing Monday on its fiscal year 2025 budget. There being no questions, comments or objections to the budget from the public — written or oral — the proposed budget passed.

The companion, updated five-year capital plan was approved at the same time.

Two additional public hearings, one to permit final approval of new bonding for the city’s electric utility, and another permitting a similar, smaller bonding for the city’s water utility, were also held; the measures were passed unanimously.

Turning first to the budget, the city plans to take in $4,838,868 in revenues for the fiscal year, which begins July 1, 2024, and ends June 30, 2025. About half of this — 45.27% — will be spent through the city’s general fund, for operation of the police, line, water, wastewater, recreation and public grounds, fire, and planning, zoning and inspection department payrolls, and other operating expenses, but not benefits. The amount budgeted for benefits is 25% of revenues, with 4% to cover insurance premiums, and 1.46% for the municipal airport.

The new electric bonds will raise $8.41 million for various projects within the electric utility, most of it going for three projects: the new Reisner Substation, new smart electric meters to be placed in every residence in Webster City, and continuation of the city’s long-range project to bury electrical supply lines underground. A 1% per year increase in electric rates, passed by the Council earlier, is projected to cover the costs of the bond financing.

A smaller bond issue, in the amount of $5.235 million will allow the water utility to buy and install new smart, automated water meters for every household, and keep the city’s aging water treatment plant running until it can be replaced. No increase in water rates is felt to be necessary at this time, given the expected costs of these programs, and projected revenues.

City Finance Director Dodie Wolfgram presented a memorandum asking the Council to allow her to enter into an agreement with Williams & Company, of Onawa, to audit the city’s financial reports and prepare annual reports for fiscal years 2024 and 2025. Wolfgram noted the Council approved additional funding of $20,500 for the fiscal year 2023 audit last June.

In her memorandum, Wolfgram included the following explanation for the higher charges: “The change order increase, in the middle of a contract, was not normal for Williams & Co., however, the accounting industry has seen fewer new accountants replacing the many who retired during or after COVID, and the need to increase pay as the ones who are graduating don’t want to live in the small Iowa communities.”

At one juncture, officials at Williams & Co. doubted they’d have staff to complete Webster City’s 2023 audit and financial annual reports, suggesting the city “try to find a different firm to perform our FY23 financial audit as they’re experiencing the same problems as the majority of accounting firms across the nation. The firm was doubtful they’d be bidding again but, if so, our costs would increase dramatically.”

Before receiving the change order request, Wolfgram contacted seven accounting firms qualified to do the auditing. While several expressed interest, none submitted a bid. One firm suggested it might bid, at a greatly increased fee, but that the work would be performed remotely. Wolfgram’s experience with remote audits during the pandemic was that they took longer compared to onsite audits, and resulted in poor communication and multiple requests for copies of the same documents.

Her next move was to contact the Iowa State Auditor’s office seeking advice. The reply confirmed Iowa’s shortage of qualified accounting professionals, is national in scope: “Across the accounting/auditing industry, there have been challenges to retain and hire accountants and auditors. This is largely due to workforce shortages within Iowa, but also nationwide, across the accounting workforce.” As a final option, the state auditor’s office agreed to complete the audit and annual report, billing the city for actual hours and mileage and travel costs expended, but could not guarantee a completion date.

Negotiations with Williams & Co. resulted in the firm agreeing to continue working with Webster City on future audits, but at higher fees.

Specifically, the fee for the FY2024 audit will increase by $2,750 to a total cost of $96,000. Since the city will be using federal funds — money from the American Rescue Plan Act — to pay for part of the new AMI meters, as well as taxiway lighting and navigation system upgrades at Webster City Municipal Airport, a separate, additional audit, costing a further $5,000 is required.

Costs for the 2025 audits will rise to $103,750.

In explaining the situation to the Council, Wolfgram said, “I know it’s costly, but I believe we’d pay even more if we could even find a firm willing to do the work for us. A lot of towns are scrambling to deal with this problem.”

In further action, the Council:

. Heard a presentation of the fire department’s annual report. The Daily Freeman Journal will cover this important report in detail in a future article.

. Passed a resolution declaring Friday, April 26, Arbor Day in Webster City. This coincides with the national celebration of the holiday, which focuses on the many benefits of planting trees. In encouraging citizens of Webster City to plant trees, and tend to trees they already have, Webster City Mayor John Hawkins noted the activity “gladdens the heart and promotes the well-being of this and future generations.”

. Granted a street closure and parade permit for the annual Hamilton County Fair on Tuesday July 24 at 6 p.m. Staging will begin at 4 p.m.

. Granted a request from the Webster City Area Chamber of Commerce to close the 500 to 700 blocks of Second Street, and 700 block of Des Moines Street on Thursdays, June through August, from 4 to 8:30 p.m. to host Webster City Market Nights. The request also asked that the north city parking lot in the 700 block of Second Street be closed as well. Chamber Director Anna Wodward said, “we expect a larger turnout this year for our classic car nights on June 20, July 18 and August 15, and believe we’ll need the additional space.”

. Voted unanimously to reject all bids for demolition of an abandoned, city-owned house at 614 First Street as they exceeded the limit of $25,000 previously approved by the Council. Thirteen of 37 sites in the structure tested positive for asbestos. The building has been ruled as unsafe. City staff will investigate the plausibility of selling the property for rehabilitation and come back to the Council with a new plan.

. Approved a $279,900 expansion of the 2024 Hot Melt Asbestos (HMA) street improvement program to improve streets in the following locations: Water Street from Funk to Prospect Street; Boone Street from Grove to Des Moines Street; East Street from about 300 feet north of Lucas Street to Des Moines; Bell Avenue and High Street from about 100 feet north of Buxton Drive to approximately 175 feet south of east Second Street, and Third Street from Grove Street to Broadway Street.

Another HMA project that would see repairs to Brewer Street from Des Moines Street to Willson Avenue, and north along Willson to the Brewer Creek bridge will be held over for work in summer 2025, which, in the opinion of Interim City Manager John Harrenstein, “will give us a longer planning horizon, and hopefully, better pricing.” Fort Dodge-based Snyder & Associates has been contracted for the HMA work, a long-time supplier to the city.

HMA projects can include various degrees of asphalt milling and repaving, curb and gutter replacement, with actual work varying by project according to site-specific needs. All streets in the expanded HMA project are rated in very poor to fair condition.