SHERBURN — The Sherburn City Council met Tuesday evening and had been postponed from June 16.

The council heard a report of the audit from Greg Burkhardt of the Burkhardt Audit Company. This was the culmination of the audit. He emphasized the financial responsibility and remarked that the financial reporting kept updates current and had correct numbers. He said the audit was a “clean audit” but had some compliance concerns. A clean audit means that the numbers were backed by evidence. He said he would like to see improvement in the material audit adjustment. The financial records needed some adjustments. The cash account reconciliation was alright, but the risk of imbalance and misappropriation is always there with that account. He mentioned that the fact that only a few are responsible should spark the council members to ask questions and take responsibility. He mentioned seven compliance questions that need attention. One was the way contracts are done, and if there is an official who may have an interest, it should be treated like a conflict of interest. He discussed the printout he showed the council about how to do contracts like that. He and the city attorney agreed that the council should check state laws and exceptions, and when the council approves a contract, the official with a conflict of interest should sign an affidavit to show there is no illegality.

The second question was about six invoices not paid in time, as the State requires payment in 35 days.

The third question was about contracts over $100,000. He reminded them that they need to advertise for bids, and the bids should be sealed.

The fourth question concerned the broker for the investment account not signing an acknowledgement by the date required by the State. He did mention there were no risky investments by the city.

The fifth question was about the late reporting of Public Employee Retirement Association information.

The sixth question concerned the State Fire Aid when the city is sponsoring the Fire Department and receives dollars for the Fire Department pensions. This was late to the Fire Department.

The seventh question was about the new required communications. Burkhardt mentioned that some of these were innocent miscommunications or were innocently unaware of the requirements since the city hall staff is quite new and has not had significant training or mentoring.

The financial reports about the Cash/Investment balance were good. The construction projects in the past few years affected that. The city has $3.7 million in accounts to manage. The city is in good shape concerning the days of reserve, which are the days a city can run. Sherburn has enough for 261 days in the government or city operational fund and 150-plus days in the business or service account. Those are very good amounts. He mentioned that expenditures go up and down repeatedly.

The general fund, which shows the financial health of a city, has fund balances or net worth in assigned funds and unassigned funds. The assigned has $575,000 and the unassigned has $1.1 million. The unassigned can be appropriated and were in the negative in previous years. The State would like a city to have 40 to 60 percent of its budget in unassigned funds. Burkhardt would like 75 percent of the budget.

The profit and loss statement is in good shape concerning the budget. The city has overspent on the operating budget, but most was from the Fire Department, repair and maintenance, and construction projects. He suggested a procedure for the clerk when the Fire Department got grants. The business fund/enterprise consists of the service parts of the city government, such as water, sewer, liquor store and Temperance Lake Ridge.

This is in good shape, and these services should generate a profit. The business balances were $190,000 for water, $180,000 for sewer and the liquor store and TLR had good years. They all had positive funds. He mentioned that he was glad to see the city digging out of the negative hole they had at the liquor store, but they must be checking that fund regularly. He mentioned his team of auditors and staff who worked on the audit and suggested that the council ask any questions anytime.

One suggestion was that the auditors help with a monthly financial report/statement for each fund. The council discussed this with the Clerk, Deputy Clerk and Burkhardt, since the city hall staff is busy and it is difficult to get regular work and special reports done at the same time. The council tabled that suggestion for the next meeting. Mr. Burkhardt will have some information for the Council then.

The council meeting continued. Chief of Police Trevor Yochim reported mowing ordinance violations and concerns. There will be a Bike Rodeo on June 28 in Sherburn and Welcome. The creamery has made significant improvements. The vandalism perpetrator is paying back the ones who had damages. The public works has lowered the curb that the council asked them to work on. There is no sidewalk. The council asked that the Public Works Department do an inventory of sidewalks and report to the council. There are ruts in the bike path, and the public works are working on it. The State equipment made the ruts.

The clerk reported that there is interest in having a Farmer’s Market in Sherburn, possibly on Sundays. She will get more information. The clerk is working on a FEMA grant for the Fire Department. The Workman’s Comp audit is on track, as is the Green Step environment awareness information.

In other business:

— The council approved a raze and remove request for $2,500.

— The council approved declaring the 2003 Chevy truck as excess property and selling it.

— The council approved the Fire Department’s gambling request, as it would be used for the city’s advantage or improvement.

— The EDA requested a raise in the rent for the city shop as a five-year contract for $1,600 instead of $1350. The Council discussed it and tabled it until the next meeting. The city pays for utilities, and repairs are made by the State for the Shop.

The council went into closed session.

The next meeting of the Sherburn City Council will be at 5 p.m. on July 7 at City Hall.