Michelle Gosser with Craig Butler’s office had good news for the city council tonight — the city’s budget sheets for fiscal year 09/10 check out as OK and there are essentially no problems with the city’s finances. As a bonus on top of that, cash and investments increased in all major funds from June 30, 2009, to June 30, 2010.

The general fund balance increased from $232,334 to $503,706 — an increase of more than $271,000. The water fund increased from $341,046 to $524,898, and the sewer fund increased from $702,844 to $728,828.

There were two issues noted in the audit — one has already been fixed and the other is an issue that is always noted in every audit of a small city. One issue was that the city didn’t have the money it has with First Southern bank fully collateralized, but the city has already taken care of that, Cheri said. The other issue is that the city doesn’t employ enough people to fully segregate all job duties.

“That finding is in all small audits; I wouldn’t worry about it,” Michelle told the city council. “It will be in every year’s audit from now on. You just can’t physically afford to pay to separate duties. You wouldn’t be doing your taxpayers any benefit to hire a bunch of people to take that (finding) away.”

Brenda Powers and some city council members were complimentary of former Mayor Don Rinthen, who they credited with giving Lancaster solid financial footing. Brandon McGlone pointed out that while the audit shows Lancaster in a good situation as of June 30, 2010, that doesn’t give the city council free reign to do just anything — fiscal responsibility should still be the name of the game.

“It doesn’t mean we can go build a Disney park or anything,” Brandon said.

UPDATE: Read my raw notes from the city council meeting here.