CLAYTON -- Three City Council members voted to wait for a full council to decide how to use $182,671 that was found after an outside audit.
"We knew we had an excess. We've been behind (in financial reporting), but now we know what we have," Councilman Howard Geller said after the Nov. 19 meeting.
Vice Mayor Hank Stratford wanted Geller and Councilman Jim Diaz to vote to instruct the staff to draft a proposal listing an allocation of the found funds.
Stratford read from a written list of specific amounts previously prepared by City Manager Gary Napper.
Restoration of employee furloughs, replenishing the city self-insurance fund, restoration of capital equipment reserves and setting aside money in anticipation of the coming labor negotiations with the city manager and police were among the proposed allocations.
"It is consistent with previous budget messages, Napper explained later. "These are areas where there is a need for these funds."
Geller did not want to make a motion on the budget.
"I don't have a problem with what you are saying," he told Stratford, but reasoned that he needed more information and wanted the entire council present for the discussion.
Stratford noted the money would default to the general fund reserve with no other direction, and that a staff proposal could go back to the audit subcommittee of Stratford and Diaz for discussion if necessary.
Geller held firm, and the staff was instructed to put the issue on the Dec. 3 City Council meeting agenda.
Clayton financial reports began to fall behind when the state takeover of city redevelopment agencies required extra accounting reports. Then staffing was cut to the bone, and unfamiliar, new Blackbaud computer software put in place.
Napper has previously acknowledged that it was a perfect storm of events that led to the prolonged financial reporting process.
John Cropper, CPA of Cropper Accountancy, is still working Clayton financial statements for fiscal year 2012-2013, but the use of the newly located funds will not be influenced by the outcome of that report, according Napper.
Cropper said the funds were found during the 2011-2012 unqualified audited financial statement presentation "with the assistance of Rich Sanders (interim assistant finance manager) who went back to 1998, searching origin and purposes of funds and straightened them out."
Cropper also credited outgoing Clayton finance manager Merry Pelletier for her help in preparing the data needed for the audit.
"The city went through two or three different accounting firms when rules were not adhered to or (the city was given) wrong advice."
He referenced citywide governmental, fiduciary and agency fund money that is passed on for a special purpose, such as the RDA successor agency or the general fund.
"Councils (past) instructed certain transfers that did not happen, that should have happened," Cropper said. "It has to do with cross-collateralization." He named Oak Street and the High Street Bridge as examples.
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