A Positive Financial Note

The city council, earlier this month, was pleased to receive positive financial news in the form of the annual audit.

The audit was performed by the certified public accounting firm of Gilbert and Stewart. Having reviewed the City's funds, financial statements, bank accounts, reporting procedures, etc., etc., etc., the auditors awarded their "unqualified opinion," the best kind possible, stating that the City is in good financial condition and its finances are accurately stated.

I leaned over to fellow council member Dale Gunther and asked his take on this opinion. I've been reading audits for six years now, but Dale's judgment, honed in the financial industry, is without peer.

He was all smiles. "The City is strong," he beamed, "and Cathy is keeping us in good shape." Cathy Jensen is the City's chief financial officer.

The report came with three footnotes of interest.

Note 1. The deficit in the broadband fund is shrinking down to size. Revenues from marketing the City's dark fiber assets are being held in a reserve account. This reserve, together with the funds from the sale of the in-city fiber network, is projected to retire the broadband bond on schedule. The subsidy from the general fund is coming to an end.

Note 2. The City has been frugal in its use of debt. Even after issuing $49 million in PI bonds, the City's debt level remains below fifty percent of its ceiling.

Note 3. Owing to a change in accounting procedures -- namely, that revenues received within 60 days of the close of the fiscal year are now posted to the previous fiscal year -- the City suddenly finds itself with a fund balance in excess of 18 percent. The fund balance is the City's reserve account. By law, it must be kept between 5 and 18 percent. The excess will be funneled into the capital improvement fund and budgeted appropriately next year.

This news leaves me grinning from ear to ear. An 18 percent fund balance is a generous cushion. It protects the City against the unforeseen and also gives the City greater flexibility to apply for grants with matching funds.

In other news, sales tax receipts, for the first year in three, are holding steady. Last year, revenues came in twelve percent below the previous year. The previous year, revenues were eight percent below the year preceding. But this year, though they have not rebounded to pre-recession levels, revenues have held steady with what they were last year.

Thus it seems possible -- just possible -- that careful management may have brought the City through the worst of the recession. There may yet be light at the end of the tunnel.