BRAZORIA — A computer accounting error led city officials to believe a shortfall on their projected revenues for the 2001-02 fiscal year was much worse than is the case.

Gary Gratzer, the city’s accountant, told council Tuesday he is still reviewing numbers, but the shortfall, which city officials thought translated into a $60,000 deficit, actually only leaves the city $22,500 in the red.

“You really did not backslide as much as it appeared,” Gratzer told council.

Councilman Terry Brown said the deficit shouldn’t have a great effect on the city. The deficit is about 1 percent of the city’s $2.1 million budget, he said.

“It is never good to be in the red,” Brown said. “It is something we will be able to recover from without making any drastic measures.”

Gratzer said the computer accounting system did not register two months worth of utility revenues, making it appear as if there was a revenue shortfall of $390,000.

The city recently changed computer software programs because of problems they were experiencing. The accounting problems shouldn’t be a problem with the new software program, said City Manager Eric Kuykendall.

However, Gratzer said one glaring problem is there is not enough money in the city’s reserve fund.

City Secretary Teresa Borders said the city has about $60,000 in reserve. The city has three fund accounts that have accrued reserve money. Those fund accounts are for the general fund, utility fund and vehicle and equipment replacement fund.

However, the city should have enough cash in reserve to operate for three months, which would be about $480,000, Gratzer said.

Borders said when she was first hired 11 years ago, the city had no reserve fund. Later, one was established and it has been more than $60,000, but has never been as high as $480,000, Borders said.

Kuykendall said a way to pay off the $22,500 is to use money from the reserves.

In March, Kuykendall projected the city was on track for a $160,000 budget shortfall. In order to avoid the shortfall, the city eliminated five jobs.

Gratzer said if the cutbacks had not been made, the city would be in much worse shape.

“If you had not eliminated those positions, you would have been in dire straits,” Gratzer told council.

Gratzer said someone should have noticed there was discrepancy in the utility fund for the last quarter of the fiscal year, which ended last month.

“For the last three months, you could not have had a good measure,” he said.

Kuykendall said he did not notice any discrepancies until recently.

“Council had the same numbers I did,” Kuykendall said. “They didn’t catch it either.”

Council directed Kuykendall to begin preparing a plan to build up the reserve fund and examine the necessity of some services the city offers.

“We have to do something to start getting more cash in the bank so we can actually build a reserve fund,” Kuykendall said. “This may mean the cutting of some services or charging for others we provide.”

Kuykendall declined to comment on which services he would consider changing.

The Facts

-- Anonymous, October 18, 2002