City fund balance grows but still below state average
Published 12:00 am Wednesday, December 5, 2012
SALISBURY — Salisbury’s available fund balance — a measure of a city’s financial health — grew by $2.1 million last year but still falls below the state average, auditor Matthew Braswell said.
The city’s available fund balance jumped 53 percent, up to $5.9 million from $3.8 million. It was the largest increase Braswell said he saw among the 16 communities he audits.
The available fund balance is now 18 percent of total general fund expenditures, up from 11 percent the prior year. But the state average is 50 percent.
The city’s balance is “still significantly below state average,” said Braswell, of Martin Starnes and Associates CPA.
Salisbury’s total fund balance has reached $10.6 million, the highest level in recent years, he said.
Braswell gave an unqualified, clean opinion in his audit and cited no material weaknesses in the city’s internal controls. He singled out Assistant City Manager John Sofley, Budget Manager Teresa Harris and Finance Manager Wade Furches for praise.
“You have one of the top finance departments in the state,” Braswell said.
• Among the three enterprise funds, Salisbury-Rowan Utilities had net income of $2.2 million. Transportation had net income of $200,000.
Fibrant broke even, but only because of a $3.4 million internal loan from the water-sewer capital reserve fund.
Fibrant, the city’s new broadband utility, continues to operate at a deficit, which Braswell said he expected because the enterprise fund is young and still gaining customers.
Fibrant’s net assets fell by $4 million, including the internal loan, depreciation and bond amortization.
• General fund revenues increased by four percent and expenditures fell by six percent, meaning the city spent less than it collected. That’s a turnaround from two years ago, when the city spent more than it generated in revenue.
• Revenues totaled about $35 million, made up of property tax (50 percent), sales tax (15 percent), charges for services (18 percent) and other sources (17 percent).
• Property tax has stayed the about the same for three years. Sales tax grew by five percent from 2010 to 2011 and by 11 percent last year.
“That signals that there is a strong local economy, and we have seen this across the state,” Braswell said.
• Expenses are made up of general government (29 percent), public safety (36 percent), public transportation (12 percent) and other expenses (23 percent).
• The city’s long-term debt decreased by $1.4 million or 1.6 percent.
Overall, the city’s financial position improved in the past fiscal year, Braswell said.
Staff implemented new policies and procedures, including fiscal notes for large purchases and quarterly meetings between each department and the financial team to review expenditures.
The city also now determines the return on investment of construction projects before moving forward.
“It was a very good year financially,” Braswell said.
He recommended City Council set a goal for available fund balance and work toward it.
Councilman William “Pete” Kennedy cautioned the city against raising taxes to pad the city’s savings account and questioned the need for a 50 percent available fund balance.
Council members agreed to consider the issue during their strategic planning retreat in February.
City Manager Doug Paris praised his staff for cutting $1.6 million in costs last year.
Paris presented each council member with a masonry trowel to symbolize rebuilding the city’s financial foundation.
“You will be the City Council that turns this city’s financial ship,” he said.
Contact reporter Emily Ford at 704-797-4264.