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37c Page Four Annual Audit Jppu~ 27, 1978 I 5. I will request Council approval of about $80,000 fran the General Fund reserve to the Utility Fund to allow us to under- take imnediately the improvements to the trickling filter plant. This improvement must be done and I do not see any other source. This expenditure would reduce the reserve to about $165,000, if recommendations above are followed. 6. An item of concern to me in the audit is the $331,891 of accounts receivable. As of DecEmber 31, we had collected $75,000 of these and $92,148 of the remainder are Revenue Sharing Funds. The biggest portions of the oustanding are composed of overdue taxes ($132,082) and special assessments ($31,850). I will ask the Council for strong support in an effort to obtain as much of these accounts receivable as possible. I am sure that when we file suits over taxes you will hear about it. Nonetheless, I think it is unfair to the people who do pay, for us to allow sane not to pay. I 7. When we present the Utility Fund budget in the next few weeks, I will request sane budget adjustments in the General Fund. We have re-analyzed the percentages of people time charged to the Utility Fund and have begun puting in meters for all City facilities. As a result, ~ anticipate that between $20,000 and $30,000 previously charged to the Utility Fund or not paid into the utility Fund will have to cane out of the General Fund. This will appear as either charges to the General Fund for water use at 23 city facilities or will be increased expenditures in the General Fund as a result of salaries being charged at different percentages. \\1hen we make this proposal to the Council, I expect that the funds will cane fran the =rent General Fund reserve. 8. The audit shows several transfers fran the Capital Projects Fund to the Interest and Sinking Fund that have not as yet been made. The auditors felt we should make these transfers, if we are not going to use these funds for capital improvements. $132,243 of this amount is for streets and $21,356 is for parks. There is sane question about the limitations on the use of these funds. If they can be used and the Council is agreeable, I believe we might benefit more by using these funds than by puting them into I & S. A portion of these funds ($61,000) are 1956 Street Bonds issued by the City of San Marcos. I think it is a bit unusual that we should awn our own bonds. If we desire to undertake sane projects, we would need to sell these bonds probably at a discount since they only pay 3.2:;% interest. As a result, ~ would generate less than $61,000. We will need to do considerable research before we can make a specific recannendation to thee Council. I