Broke Oregon City Asks Citizens for Loans

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Oakridge, Oregon

Jacob Szeto of Oregon Capitol News reports on August 5, 2011 that the city of Oakridge in Oregon is so broke that the city planning commissioner George Custer is soliciting private loans from citizens.
Oakridge’s fiscal crisis began when its bank statement showed the City had $420,000 less than planned, which led to the announcement that 8 city employees — about one quarter of the staff — will be laid off to fill the yawning budget gap.
Custer is a volunteer planning commissioner for the City of Oakridge and claims he was not working on behalf of the City. Instead, he was soliciting loans for the City as a “concerned citizen.” But both the city administrator Gordon Zimmerman and the mayor Donald Hampton knew about the plan and considered it an option to keep the City from defaulting on its payments and going into bankruptcy.
Custer says that half a dozen citizens have agreed to give the City a loan if a loan from the bank does not materialize, but the list of citizens will remain anonymous for now.
Not all of the citizens solicited to loan the City money were happy. Eddie Roberts, an 87-year-old man, and well-known figure in the City of Oakridge and Westfir, says Custer, a man he has never met, asked him to loan the City money, to which he replied no. “Why would I loan them money if they can’t even balance their checkbook each month?” asked Roberts.
The City recently discovered it had far less money than officials thought. The adopted budget has the City about $420,000 richer than it actually is. For a city with a general fund budget of just over $3 million, a $420,000 budget mishap is a big deal.
The City of Oakridge has not completed an audit since 2008, something Zimmerman blames on “the difficulty in making the numbers work.” The 2009 audit currently in process has run into a number of problems, resulting in delays and the auditor’s refusal to sign off on the audit. At issue is a $67,000 temporary account with insufficient documentation. But this isn’t this first time auditors have said the City has insufficient documentation. In the 2008 audit, auditors noted a total of eight “significant deficiencies”:

  1. Lack of internal control policies;
  2. Difficulties in obtaining documentation;
  3. Untimely account balance reconciliations;
  4. Lack of compensating controls in: journal entries, bank reconciliations, cash disbursements, and utility billing revenues;
  5. No consistent process of journal entry reviews;
  6. Excessive journal entries made to correct or adjust initial journal entries;
  7. Bank reconciliations were not correctly reconciled to the general ledger;
  8. The City did not keep adequate backup for adjustments to customers’ utility accounts.

Zimmerman says most of the 2008 deficiencies have been addressed but couldn’t say which ones.

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0 responses to “Broke Oregon City Asks Citizens for Loans

  1. Mad Angel is on FB

    I say the citizens get together and use this as an opportunity to have more say in how their city is run…and who’s running it

  2. Clifton Lee West

    This might be the wake up call to other communities to check their own records. After what happened in California, one would think all local governments would be on their toes to prevent fraud and miss-handling of public funds.
    Clifton Lee West

  3. Mad Angel-now thats an idea,but I think these idiots are running obama style politics-fire them all and start with honest citizens. Oregon’s governor is an obama puppet,hopefully the people will wake up to this and save their state.


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