Audit shows city reserves up again

by Tom Coombe -

Numbers, more numbers and even more numbers were presented to city council members Tuesday in the form of an annual audit report.
The end result was a clean bill of health, at least when it comes to city finances.
A review of financial records for 2016 showed that the city’s unassigned fund balance - a barometer for city finances - grew by about $300,000.
At the end of 2016, the city had $2,835,006 in unassigned fund balance.
That’s up from just over $2.5 million, and well above the $1,950,791 that would be needed in reserve to meet the city’s policy of keeping at least 50 percent of annual expenditures set aside.
“That’s very positive and favorable and something you want to keep,” said accountant Greg Knutson, who presented the audit report. “It indicates that you have a positive fund balance and that it’s grown.”
Knutson, of Virginia firm Walker, Giroux and Hahne, summarized a 70-plus-page audit in about 20 minutes Tuesday and gave the city high marks both for its fund balance and the tracking by city staff of the city’s finances.
A notable highlight was the unassigned reserve balance, which is particularly important, according to Knutson, given the flow of cash to municipalities.
“It’s normally July and December when you get your (revenue),” said Knutson. “This is important so you don’t have to borrow when it’s time to pay your bills.”
Mayor Chuck Novak agreed and pointed back to the days when the city had to borrow money to meet cash flow requirements.
“We don’t want to get into that position again,” he said.
The report showed the city’s net position improved by about $2 million last year to $19,236,881, although overall fund balances declined from $4.9 million in 2015 to $4.5 million last year.
The audit also included a look at the city’s utility operation with two of three components showing operating losses.
The electric operation lost $57,127 in 2016 and expenses exceeded revenues by $14,036 on the sewer side of the ledger. The water fund had an operating gain of $30,599.