• 55°

Salisbury gets clean bill of financial health

By Emily Ford
eford@salisburypost.com
SALISBURY ó The city of Salisbury has received a clean bill of financial health from auditors.
The annual financial report on fiscal year 2010-11 pointed out two deficits in city finances. Both the Fibrant enterprise fund and the Employee Health Care Fund operated in a deficit last year, audit manager Matt Braswell said.
Although that violates state law, ěthis finding is simply a notation in these statements and does not result in any penalty,î Braswell told City Council on Tuesday.
Fibrant is the cityís new fiber-optic utility that sells Internet, phone and cable TV services to Salisbury residents. The broadband fund operated at a $1 million loss last year, which was anticipated.
ěWe already said in the first four years, we would not break even,î City Councilman Brian Miller said. ěThatís not a surprise to anyone.î
According to documents, the city expects Fibrant to become cash-flow positive after four years. The city billed the first Fibrant customers one year ago in December 2010.
The city expects Fibrant to eliminate its deficit as more people sign up and revenues increase. The utility, which competes with private providers like Time Warner Cable, has a 13 percent market share, interim City Manager Doug Paris said, and is billing about $200,000 a month.
ěWeíre growing in what is an extremely tough market,î Paris said.
Paris said after the meeting Fibrant has about 1,600 customers. The utility needs about 4,500 to become cash-flow positive.
Fibrantís first year compares well to the first year of operation for the successful broadband utility Greenlight in Wilson, N.C., Paris said. He met with Wilson officials last week.
ěWe were in the same place after one year that they were,î he said. ěAnd we will continue to work that operation and show improvement in upcoming budgets.î
Miller said he wants the city to spend time discussing Fibrant details at the Councilís annual goal-setting retreat in February and called for a ěstate of the utilityî address.
The cityís two other enterprise funds ended the fiscal year in the black, with net income of $330,000 for Salisbury-Rowan Utilities and $22,000 for the transit system.
The Employee Health Care Fund operated with a $469,986 deficit last year due to several large claims, Braswell said.
The city, which pays the total cost of health insurance for employees, has increased premiums 11 percent this year to eliminate the deficit and cover increased claims, Assistant City Manager John Sofley said.
The city pays $52 more per month for each employee than it did last year, he said.
Sofley said the Employee Health Care Fund was never broke. The deficit was due to an estimate of what claims would have been at the end of the fiscal year, Sofley said, and the fund actually had $113,000 in cash on hand.
Sofley, who serves as the cityís finance director, said he was pleased with the audit.
ěOverall, considering the economy last year and that we set up the budget as an assumption, we felt like we ended up well in maintaining a strong financial position for the city,î he said.
Information in the audit about the two deficits, called ěfindings,î would not have been included in previous years, Braswell said. The N.C. Local Government Commission recently required auditors to publish any city fund operating at a deficit.
Itís not unusual for municipal governments to run deficits occasionally, Braswell said.
He also reported the cityís fund balance fell about 5 percent last year to $8.5 million. Of that, about $3.8 million is available to the city to spend, compared to $4.7 million in 2010.
Total revenues in the general fund were $33.5 million, while total expenditures were $34.4 million.
That means the city spent about $418,000 more than it generated in income, Sofley said. That was due to late reimbursements for several grants, including those for greenways and sidewalks, he said.
The city has about $87 million in debt, well below the legal limit of $189 million, Braswell said. The city paid off $4 million in debt last year, he said.
Property tax revenue increased slightly last year to $17.4 million, up from $17.3 million the year before. Sales tax revenue did better, increasing from $4.5 million in fiscal year 2010 to $4.7 million.
Contact reporter Emily Ford at 704-797-4264.

Comments

Comments closed.

Crime

Lawsuit: Salisbury Police, Rowan Sheriff’s Office tore woman’s shoulder during traffic stop

Business

‘Believe me, they’ll be fresh’: Patterson Farm welcomes strawberry crop

Local

City appoints more members to boards, commissions, with 9 seats left to be filled

News

Virtual play groups the new norm at Smart Start

Local

City meets in closed session to consult with attorney on two ongoing litigation cases

Education

Summit takes art out of the classroom, into the student’s home

Education

Education briefs: Gene Haas Foundation donates $12,500 to RCCC

Business

County’s restaurant grant program dishes out funding to eight local eateries

High School

High school football: Yow out as South head coach

Education

Shoutouts

Local

City moves forward on greenway extension, traffic signal upgrades

Business

State broadband survey could help fund local infrastructure

Education

Happy Roots adds to programming with Bic recycling program

Education

RCCC small business center partners 53 Ideas Pitch Competition

Nation/World

Sheriff: Deputy fatally shot Black man while serving warrant

Nation/World

Garland announces sweeping police probe after Floyd verdict

Crime

District attorney won’t bring charges against former Salisbury officer depicted in K-9 video

Coronavirus

Cooper plans to lift gathering, distancing limits by June 1

Crime

Convicted sex offender charged with having child pornography

Crime

Rowan County woman faces drug crimes for gas station incident

Crime

Blotter: Thousands of dollars in lumber taken from Newsome Road house

Local

Locals react to Chauvin verdict, reflect on work still to do

Business

With remote expansion, outsource provider FCR looks to become an ‘exceptional part’ of Rowan community

Local

City expects $1.5 million surplus in current budget, ability to raise some wages for police, public works