The City Council heard the final audit presentation at its meeting on Tuesday. The accounting firm identified two material weaknesses in the budget processes of the city.

The first was an outdated cost allocation plan, which makes sure that the city is charging fees that actually cover the cost of the service provided.

Additionally, shuffling money among various funds without appropriate authorization contributed significantly to current deficits.

Members of the public stepped up during the meeting to express their frustration that the inefficiencies were allowed to fester over the past several years.

In the past, members of the public pointed out problems with previous audits and how they were not addressing the deficit, said resident Michael Reilley.

“Your job as a council is to protect the assets of the city and the money that is spent by the city, and past council members have failed to do that – completely,” Reilley said.

Many called for resignations and even possible investigation into criminal liability for the previous failures, among them resident John Salyer.

“I am kind of baffled on why haven’t past finance committee members or former mayors resigned as a result of the screw-up, the fiasco or whatever you want to call it,” Salyer said.

The city should have taken steps to address its financial situation a long time ago, said Vice Mayor Mark Sorensen.

“If we’d done this ten years ago we wouldn’t be here tonight,” Sorensen said.

It became clear that difficult decisions could not be made within previous administrations due to allegiances and loyalties, and new people had to be brought in, said Mayor Scott Gruendl.

“The council hired a new administration and for the first time in the history of the city we brought someone in from the outside,” Gruendl said. “Good, bad or indifferent — it was the right thing to do.”

Gruendl apologized at the condition that the city finds itself in.

“We did let people down,” he said. “I could resign and walk away, but I don’t want to leave this mess for someone else to take responsibility for — absolutely not.”

The City Council also took action on the following items Tuesday:

· A formal policy on fraud, waste and abuse reporting was approved unanimously. Employees, residents and contractors can report incidents to a 24-hour phone line or online.

· Three new funds were created to house dollars related to: federal grant money recently awarded to the fire department, vacation and sick payouts for departing employees and capital equipment liability protection.

· A reorganization of the Public Works Department was tabled because of disputes surrounding the elimination of an urban forester position and the salary range of a park services coordinator position. These items will go back to city staff for recommendations and come back to the City Council in the future.

Bill Hall can be reached at [email protected] or @thebillhall on Twitter.