LAKE STATION | The city needs to continue addressing its overdrawn cash and investment balance in its general fund, a State Board of Accounts audit stated.
That was one of the key issues in the audit released Tuesday by the state, said Charles Pride, an office supervisor for the State Board of Accounts.
The audit conducted covered finances of the city during fiscal year 2011.
"They're not supposed to run funds in the red. We consider that a serious matter," Pride said.
The criticism on the city's general fund balance doesn't come as a surprise to either Mayor Keith Soderquist or Clerk-Treasurer Brenda Samuels.
"It's getting better, but until it's resolved, the state will continue to take note," Soderquist said.
When Soderquist and Samuels took office in January 2008, the total calculated city debt was in the $3 million range, Soderquist said.
"We've chunked away over $1.3 million from that debt, including $250,000 this past year," Soderquist said.
To resolve financial problems and get the city back in the black, Soderquist said he previously hired financial consultant Umbaugh & Associates.
Samuels works with Umbaugh & Associates on a near daily basis.
"This will take years to overcome, but we will continue to lower our expenditures until we can rectify this issue," Samuels said.
Soderquist said officials have managed to cut costs by reducing the budget, and, at the same time, improve on services.
"We are bare boned. We're functioning and doing well but can't do any more reductions. We're hoping Lake County steps up on the 1 percent income tax. We're really struggling with the frozen levy and tax bill 1001," Soderquist said.
Samuels said the city has responded to other issues in the 56-page audit, including the need for Lake Station to create a promotion ordinance.
Samuels said the City Council did so Dec. 28, 2005.