Herald Journal, March 17, 2003
Waverly in good shape despite flood, auditor says
By Lynda Jensen
The City of Waverly is in very good financial shape despite the huge impact of the flood, auditor Caroline Stutsman told the Waverly City Council at its meeting Tuesday.
A conservative estimate of flood expenses to the city is about $131,000, said Clerk Deb Ryks.
The city expected $87,000 in federal funds from the Federal Emergency Management Agency and has received $41,000 so far, Ryks said.
The city is waiting for $23,000 from FEMA, she said.
Out of the $87,000 total, about $20,000 related to main lift station costs was denied by FEMA because it claimed the city could capture this money via its insurance policy. The city is checking into this, Ryks said.
The city did take out a $300,000 certificate of indebtedness in 2002, which must be paid back in two years, Stutsman said.
The certificate was taken out before the city knew what the full impact would be, and when it was considering the construction of a retaining wall at North Shore Drive, which would have cost about $900,000, Ryks said.
Currently, the city is sitting on top of $211,000, or about three-and-a-half months of reserve, Stutsman said. The auditing firm generally recommends keeping four to five months of reserves, which Waverly would have had if the flooding hadn't occurred, she said.
Stutsman noted the water fund was finally in good shape, coming back from four years in a row of operating with a fund deficit, she said. The is because of a gradual rate increase the city set into place several years ago.
The sewer fund is also doing well, she noted.
The liquor store recorded a five-year high in gross profits, Stutsman said.
Gross profit for the liquor was $132,653 in 1998, $148,403 in 1999, $150,584 in 1999, $136,381 in 2000, and $160,379, Stutsman said.
Of course, 2001 was an unusual year because of the Highway 12 construction which detoured traffic six months, she noted.
Stutsman recommended the council keep a closer eye on daily operations of the liquor store, since the city is ultimately responsible for decisions made there. "We recommend the city council and the liquor store keep the lines of communication open in order for the city council to properly oversee the store's operations," according to the audit report.
Flood insurance rumors
The council also discussed rumors about flood insurance, related to a recent public hearing.
During the meeting, several residents expressed concerns about the city passing a flood plain ordinance, which is required for homeowners to obtain their own flooding insurance.
"There was a lot of misinformation," commented planning and zoning liaison officer Adrian Duske.
Some residents asked if the ordinance would force them to buy flood insurance, or if they would have subsequent problems with mortgages or selling their homes related to the ordinance, neither of which are true.
There are no homes in the Waverly flood plain, and passing the ordinance would allow Waverly residents to purchase their own private flood insurance at their own option, Ryks said.
By passing the ordinance, the city would be participating in the National Flood Insurance Program, which will enable private insurance companies to issue flood insurance to Waverly residents.
However, Council Member Gary Olson, who lives at the north shore of Big Waverly, expressed a number of concerns.
"I don't like this," Olson said, saying there are about 110 homes that didn't get FEMA money from flooding. He asked about what flood plain lines were being used.
"If we don't adopt this, we're not allowing people to protect themselves," Council Member Ken Hausladen said, pointing out that spring flooding was coming soon.
The council decided to table the issue until the next meeting, when a written statement could be received by a hydrologist who was corresponding with Ryks.