By Staff
Washington’s books are in good shape, according to auditor
By MIKE VOSS
Contributing Editor
Although Washington has almost $8 million in its rainy-day account, only $4.3 million is unreserved and undesignated.
Of the city’s $7,936,920 surplus in its general fund, $2,625,134 has been reserved for obligations such as paying down debt. The City Council has designated that $1,013,169 be set aside for specific projects, programs and equipment purchases.
The audit document, prepared by Martin Starnes &Associates, included an unqualified opinion and reported no findings or questioned costs and identified no material internal control weaknesses. Those findings and determinations mean the city’s books are in excellent order, according to the auditors.
City Manager James C. Smith, in an interview Wednesday, said city taxpayers need to know the city doesn’t have all of the nearly $8 million surplus to spend as it wants or in the case of emergencies. Instead, it has $4,298,617 available for unexpected expenses.
Because Washington is in an area prone to hurricanes, the city needs a significant rainy-day fund to help the city pay expenses related to storm recovery, Smith said. The state’s Local Government Commission recommends local governments have a fund balance (rainy-day fund) of at least 8 percent of their general funds. The 8 percent is almost equivalent to one month’s revenues.
Because it’s prone to hurricanes that can severely damage its electric system, Washington should have a surplus that’s at least 15 percent — about two months’ worth of revenues — of its general fund, Smith said. What the city has on hand represents 40 percent.
Washington officials, when they were cobbling the budget for fiscal year 2006-2007, expected the city would have to borrow $826,000 from its rainy-day fund to balance that budget. The city didn’t have to borrow any money.
Each of the city’s department came in under budget for fiscal year 2006-2007, resulting in the city being able to add $1.05 million to its rainy-day fund at the end of that fiscal year. Without the departments coming in under budget, the city would have added about $300,000 to its fund balance, Smith said.
Jennette, in a brief interview Thursday, said she was “surprised you didn’t hear a collective sight of relief coming from the council” Monday night.
Asked if the city’s financial situation is better now that it was two years ago, Jennings said, “Absolutely.”
He believes the city’s fiscal health can be better.
Three of the city’s enterprise funds — services operated like a business — operated at a loss during fiscal year 2006-2007, according to the audit report which looked at the enterprise funds on a cash basis.
The water fund lost $49,393. The sewer fund lost $38,582. The airport fund lost $1,317.
The electric fund made $21,752, after it transferred $1,239,532 to other funds. The stormwater fund made $49,875. The solid waste fund made $135,816.
Although the enterprise funds have a history of losing money are coming closer to breaking even or making money, there remains much work to do to make them more efficient, Smith said in the interview.
The mayor agrees.
If it were not for a nearly $1.2 million payment from the Moss Landing project to the city during fiscal year 2006-2007, the city’s electric fund would have been in trouble during the 2006-2007 fiscal year, Smith said. That $1.2 million was placed in the electric fund, from which the city borrowed money several years ago to buy the former Moss Planning Mill property. The Moss Landing project is being built on most of that property.
Although the city’s revenue from property taxes increased from $3.32 million in fiscal year 2005-2006 to $3.64 million in fiscal year 2006-2007, Smith attributed most of that increase to the increase in the property-tax rate for fiscal year 2006-2007. The rate increased by five cents to 60 cents per $100 valuation that year. In the previous fiscal year, the property tax rate was 55 cents per $100 valuation.
The assessed value of properties in the city increased from $589,114,135 in fiscal year 2005-2006 to $605,185,152 in fiscal year 2006-2007, an increase in value of $1,607,017.