Clean report: Audit shows city’s rainy-day fund in excellent condition

Published 12:13 am Wednesday, January 21, 2015

Washington’s financial books are in order for the 2013-2014 fiscal year that ended June 30, 2014, and the city’s rainy-day fund is in excellent condition, according to an audit.

The audit, performed by Martin Starnes & Associates, shows the city’s general fund for the 2014 fiscal year took in more money than it spent (before transfers and debt issued), according to Crystal W. Roberts, who works for the firm. The auditors gave an unmodified opinion regarding the city’s books, the highest level of opinion the city could receive, she noted.

The audit shows the city’s general fund’s revenues came in at just over $12 million, with expenses at $11.7 million for the 2014 fiscal year (before transfers and debt issued). In fiscal year 2013, the city took in $10.8 million in revenue for its general fund (day-to-day operations) during fiscal year 2012-2013 and had $14.3 million in expenses in the general fund.

On June 30, 2014, the city’s fund balance was at $8.525 million, up from $8.045 at on June 30, 2013. The fund balance is used as a rainy-day fund, mostly to help with unexpected costs such as cleanup and recovery expenses after a disaster.

Not all of the $8.525 million may be used by the city in any way it sees fit. State law places restrictions on how some of the fund balance may be spent. The city restricts use of some of the fund balance. Of the total fund balance, the unrestricted amount is $6.644 million. Roberts said the fund balance shows good growth in recent years. For fiscal year 2005, the fund balance was at $5.935 million. The fund balance was at its highest in recent years when it reached $9.414 million in fiscal year 2009, according to the audit.

With the available fund balance at 53.37 percent of general-fund expenditures, the city more than meets the Local Government Commission’s recommendation that a local government have an amount equal to at least 8 percent of its general fund in its fund balance, or “rainy day” fund to cover unexpected expenditures.

The city’s policy is to have a fund balance that’s 16 percent of its general fund, plus another $2 million.

Councilman Doug Mercer asked Roberts about the city’s debt service decreasing by more than $2.5 million from fiscal year 2013 to 2014>

“We couldn’t put our finger on where that $2.5 million was. Some $800,000 we believe is the Impressions renovation note that we paid off. Do you have a feel for where that other million and half (dollars) is?” Mercer said.

“When we refinanced the USDA loans on fire station 2. You have to pay off that other debt,” replied Matt Rauschenbach, the city’s chief financial officer and director of administrative services.

“So, it’s the fire station refinancing. That answers that question for me,” Mercer said.

The city’s debt service was at $3.024 million in fiscal year 2013, dropping to $766,701 in fiscal year 2014.

Roberts said the audit shows no problems with the city complying with conditions that are part of federal and state grants the city has received. She also said an increase in property-tax collections played a role in the city’s general-fund revenues increasing by $1.2 million from fiscal year 2013 to fiscal year 2014.

For more information about the audit, see future editions of the Daily News.

About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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