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Preston goes with known quantity over local accounting firm

Fri, Dec 7th, 2007
Posted in Government

PRESTON - Preston City Council members approved the hiring of Smith Schafer & Associates, Rochester, to prepare this year's audit at the December 4 council meeting. Lloyd Johnson, Spring Valley, whose firm has been preparing the city's audits for several years had sold the government auditing portion of his business to Smith Schafer. Johnson encouraged the council to accept the Smith Schafer bid at $9,945, stating that the move would offer a smooth transition since Joy Pedein, his lead accountant would help this year. He would also be present to present the audit due June 30 to the council.

A local firm, Pam Ristau, CPA, had offered a bid of $8,690 to do the Preston audit. Normally the low bid would be accepted. Both firms had been researched and City Administrator Joe Hoffman suggested either firm could do just fine. Council member David Harrison noted that his wife worked for Pam Ristau. City Attorney Dwight Luhmann said that he didn't feel it was a conflict of interest and that the disclosure was sufficient.

Council member Heath Mensink questioned whether a small firm would be able to complete the audit in a timely manner. Hoffman said that the auditor can file for an extension if the audit is not ready on time. However, the state may hold up local government aid payments. City Clerk Sheila Marzolf added that the reference for the Ristau firm stated that if the audit was not done on schedule, an extension would be applied for. Mayor Kurt Reicks made note of the fact that Johnson has done a good job in the past and that experience does count for something. Mensink made a motion to stay with Johnson's recommendation through Smith Schafer because the transition offers a consistency and rapport through that firm. The council unanimously approved Smith Schafer. Luhmann added that selecting the higher bid was acceptable as the motion was supported by language explaining why. Hoffman commented that it is not easy sending business out of town.

PPEA Request for Wage Increase

The Preston Public Employee's Association (PPEA) sent a letter dated November 15, requesting a 6.5% increase in wages for 2008. Hoffman stated that he hadn't spoken to the union about their request. It was made clear that the union members were only due a Cost of Living Adjustment (COLA) to offset inflation. Reicks insisted that they were not due a wage negotiation, but only the COLA increase. Mensink moved that the PPEA members be given a 3% COLA increase for 2008. Mensink was not leaving room for negotiation. Reicks added that it is a fair offer and that Preston has averaged a 2.8% increase in each of the last five years. The actual average CPI, Consumer Price Index, in the Midwest Region for the month of October over the last five years has been 2.5%. The 3% COLA increase was approved for the PPEA for 2008. Council member Robert Sauer moved that the same increase be offered to the non-union Preston employees, mainly office staff. The increase was approved.

Joe Hoffman explained a request for a uniform allowance increase. A fifty dollar increase was approved for each of five city employees for a total of $250.

Truth In Taxation Hearing

No citizens commented at the hearing. Joe Hoffman demonstrated with a pie chart the break down of the revenues realized by the city. The tax levy provides 40% of the dollars, the Local Government Aid from the state 39%, tourism, library and park 5%, police/fire 11%, and other sources provide the remaining 5%. The greatest portion, 32% of the funds, are used for general government including employee salaries. Police and Public Works use the next two largest pieces of the pie at 18% and 16% respectively.

Hoffman noted that the hearing is held after the next years projected tax statements are sent out and is intended to allow the public to ask questions about spending.

Hoffman made it clear that most other small cities in the area are increasing their levies at a faster rate. However, Preston's "mill rate" has been higher in the recent past. He explained that the "mill rate" is the number used in a formula to calculate property taxes.


Chief Sam Stensgard of the Rushford Police Department sent a letter to the Preston-Lanesboro Police Department thanking them for their help in the days after the August flood.

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