CRYSTAL RIVER -- The city's financial operations improved significantly during the past fiscal year, reversing a trend of sloppiness and general disorder, according to an audit released Monday.

The mostly positive report gave new hope to supporters of City Manager David Sallee. The council recently voted not to renew his contract, in part because the audit had not yet been made public.

The audit pointed to some problems, such as improper budget oversight with federal grants. But Rob Wardlow of Williams, McCranie & Sutton implied that the problems were not major and noted that the city already had taken steps to correct them. fTRASH PRIVATIZATION: Crystal River votes to turn commercial trash collection over to private haulers. Residents will retain city service. Asked to grade the city's performance for the fiscal year that ended Sept. 30, Wardlow gave Crystal River a B-plus, up from a D-minus.

The audit largely attributed the previous year's dismal performance to high employee turnover, particularly in the finance department, and the amount of staff time devoted to new, glitch-prone accounting software.

Those factors led to spotty financial records in which revenue accounting was often unclear and many city accounts were out if balanced to the tune of hundreds of thousands of dollars.

Few of those problems existed a year later, according to the 64-page audit.

The City Council discussed the report Monday night, and the atmosphere in the council chambers was rich with the themes of redemption and vindication.

Seeing an opportunity, a string of people called on the council to extend Sallee's employement, saying the fiscal improvement is proof of his skills and those of the staff he assembled.

"This says he has done an excellent job," said Hank Jatzek of Woodland Estates. "To go from a D-minus to a B-plus, I think, is amazing."

Mayor Ron Kitchen, who called the turnaround "extraordinary," effectively forced the council to face the issue surrounding the city manager.

Responding to a request from Kitchen, Ray Wallace said that, during the next meeting, he will make a motion to either fire Sallee or enter into negotiations for a new contract.

Sallee called the audit an end of a chapter. "This was the only question that remained of my accomplishments here," he said Tuesday.

"The audit report shows that staff did what needed to be done and what remains they are capable of doing," he said.

Despite the success, Crystal River had some problems during the past year. There were two major findings:

The city was violating a covenant of its 1992 water and sewer bond issue by providing water and sewer service to customers who have not paid their bills within 60 days. Past due accounts amounted to $118,000.

The auditors said the city should "increase oversight and collection efforts as well as continue to evaluate its utility billing software in order to eliminate factors that may have contributed to this condition."

The Community Redevelopment Agency was cited for not approving all purchase orders for expenditures from Community Development Block Grants, as is required.

At least $288,000 was spent without getting proper approval, the audit found. Though highly unlikely, there is a chance the money will have to be reimbursed because of this lack of procedure.

The auditors, who found no evidence of misuse of funds, said the city should adopt policies requiring purchase orders prior to the obligation of the funds.

In a letter to state Auditor General William Monroe, the city explained the reasons behind the problems and said steps have been taken to fix them.

Regarding the water and sewer issue, there has been no write-off of bad debts in at least three years, the city said.

Because the computer software produces unreliable bills, the staff did not shut off any accounts until the system was fixed.

Currently, the finance department is "aggressively" following shut-off procedures, according to the Jan. 17 letter.

"A standard operating procedure has been established regarding past-due accounts from inactive customers and bills will be either collected by (staff), sent to a collection agency or written off against the allowance for doubtful accounts."

As for the block grant money, the audit states Community Redevelopment Agency officials were not aware that procurement policies applied to grant funds.

The city is currently reviewing its overall purchasing policy, including the CRA, which is overseen by Roger Goettelmann.

"I forgot to sign them," Goettelmann said.

He added that a few years ago, the former finance director, George Zoettlein, said purchase orders were not needed because only a few people were handing the money.

"It wasn't that they weren't supervised."

St. Petersburg Times

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