County Financial Advisors Recommend Audit Of Mortgage Fund
Riley County Counselor Stan Morgan told the Riley County Commission
Monday that their Financial Advisors, George K. Baum & Company
has recommended that an be made of the 1981 joint Geary County-Riley County Single Family Mortgage Issue. The account has a $602,450
deficit as of June 11, 1998.
Morgan said the Commission will need to hold a Work Session to see if
the County wants to authorize an audit estimated to cost $25,000 to
Riley County and Geary County have two Single Family Mortgage Revenue
Bond Issues, one called the 1980A and the 1981A. The 1980A
Bonds have been called for redemption, and a substantial amount ($500,000) of outstanding mortgages and the payments thereon are now
assets of the County. Both Counties will be getting payments from the Trustee. Problems have been found in the 1981A Bond Issue.
In a February 5 letter Roger Edgar, Executive Vice President of George
K. Baum & Company stated: "The 1981A issue is a matter of concern
as prior annual reports for that issue show that the Bonds outstanding exceed the assets available to make payments thereon. We have not
been able to get enough detailed information about the issue to determine why the issue is struggling. According to our review the Program
appeared to be set up properly. Other similar programs we have reviewed under the management of different trustees did not have similar
Edgar went on to say: "Repayment of the Series 1981A Bonds is not a
direct obligation of Geary and Riley Counties. Therefore, we would not
ask the Counties to pay for this review from their budgets. The 1980 Program currently has approximately $500,000 in surplus assets. Before
Geary County and Riley County draw down and spend the money left over from the Series 1980 issue, we ask the Counties consider setting
aside a small portion of these funds to have such a review completed."