AUDITOR DROWNS COMPLEX; KELLY: MARBLE HILL EXPLOITS POOL TRUST

The city of Marble Hill's plans to use money bequeathed for a community swimming pool to also build a municipal office complex could expose city officials to lawsuits, says Missouri Auditor Margaret Kelly.

Kelly reported her findings of an audit of the city at a meeting Wednesday night before about 100 Marble Hill citizens.

In her report, Kelly said the city complex, which would include a new city hall, police station and meeting room, isn't "within the intent" of a trust established by the gift of Larma Wisely to build a city swimming pool.

"The city hall, police station and meeting hall all are worthwhile endeavors and may be needed by the city, but we do not believe they are the purpose of the gift that was given," Kelly said.

The Larma Wisely Trust was established for the purpose of constructing a community swimming pool and improving and maintaining the Mary Pellegrino Park in Marble Hill.

Under the trust agreement, the city received nearly $650,000, which was invested until the city's Board of Aldermen and Park Board trustees of the fund decided how the money would be used.

"It is very important that the trustees making the decisions realize that the gift she made was made with strings attached," Kelly said. "If the money is not spent according to the agreement, the members of the board of trustees really open themselves, potentially, to liability."

Last year the board of aldermen voted to use the trust fund money to construct the pool and an adjacent complex of city offices. The plan calls for the city to rent the offices, with the rental proceeds earmarked to pay back the fund.

But some city residents, including Mayor Adrian Shell, have contended the money shouldn't be spent on the municipal complex. The state auditor moved in after a sufficient number of citizens last May signed a petition to prompt her audit.

The pool has since been built, but Kelly found that its size was reduced significantly in order to have sufficient funds to build the municipal complex.

"It appears that the initial recommendation regarding the size of the pool was decreased so there would be enough money left to build the municipal complex," she said.

Although some site preparation work has been done for the municipal complex, no construction has started.

The auditor also found several other problems with Marble Hill's city administration. The findings of the auditor's report include:

The water and sewer funds have been operating at a loss for several years, and the board of aldermen has not revised user charges as required by city law.

20The city has not documented procedures for evaluating or bidding continual services purchased by the city. Also, the city purchased many items from two local companies in which Alderman F.X. Peters had a significant financial interest, contrary to city and state laws. Peters was a member of the board until he died recently.

Expenditures exceeded budgeted amounts for several city funds and weren't accurately reported.

The city clerk also is the act~ing city treasurer, which doesn't allow the separation of duties needed to implement an effective internal budget control system.

Two employees last year received retroactive pay increases totalling $437, which the Missouri Constitution prohibits.

20The city keeps inadequate daily logs documenting the use of city vehicles.

Payments made to volunteer firefighters aren't established by city law or formal written policy.

The city is yet to fill the position of city administrator as provided in city laws, while the position of administrative assistant which isn't provided for has been filled.

The city has failed to prepare formal annual plans for street improvements or explanations for deviations from their projects list.

20Duties performed by the city clerk aren't adequately segregated.

The city collector doesn't prepare a detailed annual report of property taxes to summarize charges, additions, collections, abatements, and the amount of delinquent taxes to be presented to the board of aldermen.

The city doesn't have formal written contracts with its depository banks.

Kelly said her purpose for the report was to identify problems with administrative procedures in Marble Hill and to make the city aware of problems that could arise if the Wisely fund is spent inappropriately.

"In the overall scheme of things, accountability is what you're trying to achieve, and this will help you in that," she said.