• 37°

Cleveland audit shows funds surplus

By Sarah Campbell
scampbell@salisburypost.com
CLEVELAND ó Maintaining a fund balance of more than $2.7 million throughout the past five years, the town leads other municipalities in the county in the ratio of fund balance money that makes up general fund expenditures.
During the annual audit presentation, Eddie Carrick, a certified public accountant with Lexington-based Allred and Carrick CPAs, said the town has a current fund balance of approximately $3 million, 316 percent of general fund expenditures.
ěBasically, that means if everything just stopped you could still continue to provide services for the town for about three years,î he said. ěThat gives you some stability by having that in place.î
Clevelandís fund balance has remained steady throughout the past five years, dropping to its lowest in 2007 at $2.7 million or 202 percent.
Although the townís fund balance ratio eclipses the state average of about 65 percent, the town continues to boast the lowest property tax rate in the county at 21 cents per $100 assessed value.
Carrick said property tax rates for municipalities the size of Cleveland are usually between 33 and 35 cents.
East Spencer has a population of more than double that of Cleveland at 1,700 residents, and the highest property tax rate in the county at 63 cents per $100 assessed value, yet its fund balance made up only about 25 percent of general fund expenditures last year.
ěThe Local Government Commission of the State Treasurer’s office requires at least 8 percent and gets worried if it is less than 30 percent,î Carrick said in an e-mail to the Post.
East Spencer isnít the only town in Rowan that dipped below the 30 percent standard last year Landisí and Salisburyís fund balances were 0.3 and 14 percent of general fund expenditures, respectively.
Carrick said from a fund balance standpoint Cleveland is ěat the top of the chart,î but economically unstable of its heavy dependence on revenue from Freightliner.
ě To be financially stable, a town such as Cleveland who relies heavily on one tax payer needs to have a much higher percentage than a town whose tax/ utility use base is spread out among hundreds of businesses,î he said.
Karl Knapp, director of research and policy analysis for the N.C. League of Municipalities, said itís not uncommon for small towns to build up large fund balances.
ěDepending on the situation theyíre in, they may be potentially facing a very large expense in the event of any kind of emergency due to a natural disaster or if they have some services where the potential loss of a piece of equipment would have a significant replacement cost,î he said. ěItís prudent for them to keep a fund balance that would allow them to replace that right away.î
Although towns have the option to take out loans for emergencies, padding funds over time eliminates the financial burden.
ěThe advantage to accumulating capital is that you donít have the required ongoing commitment that you would with bonds,î he said. ěThere is also cost related to bond financing.î
Contact reporter Sarah Campbell at 704-797-7683.

Comments

Comments closed.

High School

Photo gallery: Carson girls win West Regional, headed to state championship

High School

High school basketball: Carson girls headed to state championship game

Local

Commissioners set date for public hearing on potential solar energy system rule changes

Health

Two of Rep. Sasser’s bills successfully pass through Health Committee

Local

Rep. Warren’s measure to allow removal of public notices from newspapers put on back burner

China Grove

China Grove Town Council weighs future of previously rejected housing development

Local

Salisbury City Council hears public comments, receives presentation on Main Street reconfiguration

Crime

Blotter: Man charged with felony drug offenses

Nation/World

California crash kills 13 of 25 people crammed into SUV

Nation/World

Biden vows enough vaccines by end of May

Coronavirus

State to vaccinate medically vulnerable starting March 24

Coronavirus

One new death, 20 new COVID-19 positives reported in Rowan

Kannapolis

Kannapolis man dies in moped crash

Crime

Salisbury Police chief addresses K-9 video, says officer separated from animal

Local

Rowan Rescue Squad sets record straight on fundraising typo

Local

City approves DOT agreement, Salisbury Station project could begin next year

Local

County plans to use vulture effigy, enforce violations to remedy animal carcass feeding problem

Education

Two weeks after ending enhanced protocols, Catawba has no COVID-19 cases

News

Council to hear revised version of Downtown Main Street Plan

Local

Veto override of NC school reopening bill fails in Senate

News

Political Notebook: Majority of likely voters, local legislators support school reopening bill

Coronavirus

COVID-19 vaccinations in Rowan top positives since start of pandemic

Crime

Man faces drug charges after breaking and entering call

Lifestyle

Waterworks schedules 2021 Summer ARTventures