City councilors this week accepted the city’s annual audit report, rejected a proposal to spend $12,500 more for City Hall renovations and recognized six residents for taking pride in their properties.

The council, meeting in regular session Tuesday, heard from auditor Rebah Henderson of Ardmore’s Hulme Rahhal Henderson accounting firm. Henderson reviewed the city’s audit for fiscal year 2007, which had previously been presented to the city’s audit committee.

“The City’s economic outlook, for this reporting period, reflects a cautious optimism for continued local growth in the oil and gas industry as well as tourism. Through increased oil and gas activity, the city has seen several new hotels constructed as well as eating establishments,” the report’s Economic Outlook chapter states. “In turn, the tourism industry has also benefited by the increase in oil and gas activity in the area, which has seen room occupancy at 98 percent in the McAlester hotel industry.”

The report cautions that the industry activity is probably temporary.

“The local oil and gas and tourism industry can be cyclical in nature. For that reason, the City elected officials have taken a three-fold approach to appropriating these revenues. First, the City has attempted to budget conservatively these revenue sources, especially sales tax collections and hotel tax collections. Second, the City has continued to (operate) as efficiently as possible, thus, reducing public service costs. And, third, the City has increased its reserve fund, which benefits the City’s overall financial position and makes emergency funds available should a need arise.”

Overall, the report found the city’s financial position improved during the year, with net assets increased by $1.8 million. The report also indicated city assets exceed its liabilities.

The report noted the city has $66.7 million in negative net assets due to bonds issued for economic development and school improvements, entities not included in the city’s primary government. While the debt is to be retired with sales tax collections, “the result of reporting the long-term debt without corresponding capital assets is to report a large negative amount of unrestricted net assets,” the report states.

It also noted “a level of uncertainty on the position of the General Fund” in regards to uses for 1 cent sales taxes pledged for debt service and capital improvements.

In other business at Tuesday’s meeting, the city declined to approved an expenditure for more renovations at City Hall.

The city had previously authorized $25,000 for renovations, and City Manager Mark Roath was asking for another $12,500 to replace broken tiles, carpet and other items. Ward 3 councilman John Browne objected to the expenditure, which was on a resolution with two other budget changes, noting he had objected to the first renovation expenditure.

“I think the money could have been used elsewhere,” Browne said.

The council then voted 3-3 to remove the renovation expenditure from the resolution, a resolution that amended the city’s budget to show $9,723 in American Disability Act and $337,746 in Federal Aviation Administration grant funds had been omitted. The motion died with the tie vote.

Then, Mayor Kevin Priddle announced the council would vote on the resolution’s other two items, adding the grant amounts to the budget, and that council action was unanimous.

In other business at Tuesday’s meeting, Mayor’s Property of the Month awards were presented to:

• Mr. and Mrs. Robert Lee, 1102 E. Adams, Ward 1

• Harold and Deborah Dalton, 2012 Hardy Springs Road, Ward 2

• Mike and Debbie Dusenberry, 304 Edgewood, Ward 3

• William and Dorothy Crone, 400 W. Adams, Ward 4

• Michael Days, 2215 Sycamore, Ward 5

• Brian West, 714 E. Osage, Ward 6.

The awards are selected in conjunction with Pride in McAlester to “recognize people making an outstanding contribution to their area,” Priddle said.

In other business, the council:

• Reviewed a Powerpoint review of city revenue and expenses for September by Priddle. The report showed the city collected $3.3 million in revenue, which is $499,178 over budget, and spent $2.3 million, which is $366,464 under budget.

• Approved a resolution directing the city to develop an Identity Theft Prevention Program as required by the Federal Trade Commission. The requirement deals with protecting personal information collected for utility services and late payment collections for those services.

• Declared 131 cell phones as surplus property to be sold or given away to crime victims. Another 42 were declared as broken or surplus for disposal. The phones were made obsolete when the city switched cell service carriers. The switch followed AT&T;’s purchase of the previous carrier, and then AT&T; would not allow the city to add equipment to its account, Roath said.

• Thanked Statewide Communications for donating security cameras to replace those vandalized at Komar Park. The cameras are to broadcast directly to the police department, councilmen said.

• Announced a 6 p.m. Neighborhood Watch meeting scheduled Nov. 6 at the Girl Scout office at B and Seneca.

Contact Kandra Wells at kwells@mcalesternews.com.