The city of Camas overvalued assets as part of an annexation in 2015, according to a report released Monday from the Washington State Auditor’s Office.
The $5,235,170 discrepancy came from the city’s annexation of the Grand Ridge area, which the city council voted to approve on Dec. 21, 2015.
“Last time we did an annexation was in 2007, but that was mostly undeveloped property,” City Administrator Pete Capell said. “It didn’t have all the infrastructure assets. What this property is is it’s an island of unincorporated property between Vancouver and Camas.”
The city had to put a value on not just the land, but the infrastructure assets for the residential area, including streets, sidewalks and streetlights. Capell said the infrastructure was built 17 years ago with a 20-year shelf life, but the city calculated the area’s value as if all the infrastructure was new.
“It was an error in not depreciating it by 17/20, which would’ve significantly reduced the number,” Capell said. “It caused the error to be fairly significant, enough to warrant a finding.”
City officials were alerted to the finding in May and by their exit interview with the office on May 30, they had their books corrected, Capell said.
The report recommends that moving forward, city officials perform adequate reviews over managerial estimates before being recorded in the city’s general ledger, valuation of contributed capital assets is appropriate and fully supported and adequate resources are dedicated when unusual transactions occur to ensure they are accurately recorded and valued.
“Clearly, we made an error and we’ll learn from that,” Capell said. “No harm done. We hoped it wouldn’t be a finding, but because of the dollar magnitude on the asset, they had to give us a finding. We’ll take our medicine and move on.”
