The council, which includes three recently seated members, is trying to determine how the deficit built up over time and whether past accounting practices played a role.
Harvie told the council it is possible that in the past, for example, a street project would be done and rather than the project's cost being charged to the city's street fund it would be charged to the general fund. He said it is difficult to pinpoint when such accounting might have occurred, adding it could have been years ago.
Harvie added it is not illegal or even wrong to charge the general fund for such projects if that is what city officials want to do, but it does mean the general fund would be reduced while the city's street funds would be untapped.
He said the responsibility rests with the council to make sure it is aware each month what projects are being charged to what accounts.
"Each month you review all the records," Harvie said. "If you see a charge that you do not think is where it should be, then you correct it immediately."
Mayor Larry Ritchie said city officials will plan a public workshop on the city's finances to help the council and public better understand the accounting processes.
He said in the past the council either didn't look at or wasn't provided the information to keep a watch over the finances, but he said that is changing.
The city's financial woes could mend faster with the Super 8 Motel project starting.
The project is expected to bring in about $90,000 in transient occupancy tax and $25,000 in tax increment revenue annually, said Mike Gaston, Westmorland's Redevelopment Agency director.
In addition, the motel project is expected to attract other business to the city such as a fast food restaurant.
Armed with the information from Harvie, the council found itself faced Wednesday with a street project that was to cost about $30,000 more than the $10,000 the city had for the project.
The council could have decided to use general fund money to cover the remaining cost but opted not to do so. Instead, council members said the city would do as much of the project as it could with the $10,000. The project calls for upgrading sidewalks on Third Street from C to D streets.
In other action, the council named Muriel Anne Graham as city treasurer. She will replace Sandra Pereda, who resigned in April.
>> Staff Writer Darren Simon can be reached at 337-4082.