Landis receives ‘clean opinion’ on audit of 2020-21 budget

Published 12:08 am Tuesday, December 14, 2021

By Natalie Anderson
natalie.anderson@salisburypost.com

LANDIS — For the second year in a row, town officials on Monday received a “clean opinion” with no significant concerns in an audit of the town’s 2020-21 budget.

Tonya Thompson of the Martin Starnes and Associates auditing firm presented to town aldermen findings from an audit of the town’s budget, which she praised for its available general fund balance, the ratio of revenue and expenditures in the town’s enterprise funds, stable tax property valuation and collection and a timely submission. Thompson said the firm issued an unmodified opinion, meaning “it’s a clean opinion.”

The 2020-21 budget runs from July 1, 2020, to June 30 of this year.

Thompson indicated a significant increase in revenue received in 2020-21 compared to the prior budget year. For 2019-20, revenues amounted to $3.54 million while expenditures were at $3.94 million. In 2020-21, revenues were at $3.88 million and expenditures were at $3.86 million. That represents a 4% increase, which Thompson attributed to growth in the town.

Almost half, or 48%, of the town’s revenues come from property taxes, while 31% is unrestricted and intergovernmental revenue, 11% is sales and services and the remaining 10% includes items such as investment earnings and Powell Bill revenues from the state.

The audit showed the town received $1.82 million in property tax revenue during the 2020-21 budget year. That compares to $1.46 million in property taxes during the 2018-19 budget year and $1.75 million in 2019-20. Unrestricted funds, which mostly include local sales tax revenue, amounted to $1.22 million for the 2020-21 budget year, up from $1.03 million in 2018-19 and $1.02 million in 2019-20. The increase is attributed to a spike in sales tax from consumer spending during the pandemic.

The town’s top expense categories were public safety, 42%; debt service, 23%; general government, 12%; and transportation, 10%. Thompson said general government expenses were high during the 2019-20 budget year due to staff changes and legal expenses. They decreased slightly from $459,677 to $452,299 for the 2020-21 budget year.

Public safety expenditures were $1.64 million in the 2020-21 budget year, down from $1.69 million the prior budget year.

Thompson said increased debt service is attributed to the town deciding to pay off some of its debt early. Debt service expenses totaled $894,567 for 2020-21, up from $497,888 the prior budget year.

Overall, while $2.44 million was adopted for the general fund, the town had an available fund balance of $2.07 million after subtracting non-spendable funds. That’s an increase of $484,143 from the prior budget year. The town’s enterprise funds, including water and sewer and electric, all exceeded the Local Government Commission’s minimum ratio for revenues and expenses, which is 1. Landis’ ratio for its Sewer and Water Fund was 7.61, while its Electric Fund had a ratio of 6.

Additionally, Thompson said the LGC has modified some of the ways it measures a town’s finances. It now excludes Powell Bill funding when accounting for available fund balance because some municipalities may have a bigger pool of money that’s not needed for the fiscal year being examined, so it can skew findings.

Overall, the LGC reports a fund balance availability relative to expenditures of 45% — up from 33.7% in 2019-20 and 17.1% in 2018-19. Thompson said Landis was compared with similar municipalities that have budgets less than $10 million. The LGC has a goal of 34% for Landis and comparable towns. So, the town is in good standing.

The only concern, Thompson said, was “significant audit adjustments,” which were attributed to a number of corrections needed for the town’s financial records. Additionally, the LGC flagged Landis’ decision in the 2020-21 budget to transfer money into water and sewer funds and out of the electric fund. Thompson said the LGC will need a letter submitted from the town detailing the Finance Department turnover, whether the town will continue transferring money from its enterprise funds, and, if so, how that money will be allocated.

The audit is still awaiting final approval from the LGC, but Thompson said she doesn’t anticipate any changes. Town aldermen expect to have the completed and approved audit by their next board meeting in January.

Also during the meeting, aldermen Darrell Overcash and Tony Corriher were sworn in to their new elected terms on the board. Both ran unopposed during this year’s municipal election. Board members also voted to keep Ashley Stewart as mayor pro tem.

In other items at the meeting:

• The board voted to reappoint Mayor Meredith Smith and Mayor Pro Tem Ashley Stewart to the Transportation Advisory Committee of the Cabarrus-Rowan Metropolitan Planning Organization. Public Works Director Joe Halyburton was appointed as a member of the Technical Coordinating Committee, while Brian Brown will serve as alternate.

• Town aldermen approved the sale of an .053-acre vacant lot on the corner of Old Beatty Ford Road and Dial Street for $22,000 to Barbara Jean Watkins. The parcel is also a former D.C. Linn property. So, proceeds will go toward the Passive Park project. No upset bids were received.

• The town approved a request to waive the four-month waiting period for rezoning requests in the land development ordinance. Town Manager Diane Seaford said the waiting period was implemented as a way to allow a “cooling off” period before a developer returns with another request. Overcash recused himself from the vote, with only alderwoman Katie Sells voting in opposition.

The request comes after aldermen unanimously denied a request in November to rezone a nearly 126-acre property near Cannon Farm Road in anticipation of a future home development in the Irish Creek area. The board has since met with Lennar Carolinas on behalf of Atlantic American Properties, which owns the property adjacent to the existing Irish Creek subdivision and made the request. The request was to rezone the property, measuring 25.55 acres, from single-family residential to mixed-use district one, which allows highway commercial, urban work, detached and attached homes and multi-family units. Seaford anticipates they will return soon with another request that will account for the town’s concerns about traffic in that area.

• The town approved the sale of surplus property ranging from ethernet cables to a 2008 Chrysler Aspen Limited vehicle. Surplus sales totaled $5,707 in November, with $7,373 received so far this year.

• Town alderman approved Seaford’s recommendation to change copier providers from Toshiba to Synergy, which will save the town $41,973 from 59 months of service in the current contract.

• Town aldermen approved a budget amendment to allocate a grant of $47,000 from the state for the ongoing sewer lift station project. The town will pay Municipal Services Engineering Company $40,700 to continue its work mapping the town’s water infrastructure, provide an asset management plan and identify system leaks.

• Aldermen approved a change in the town’s longevity pay for employees, which will now exclude part-time staff. Seaford said it will cost the town $17,100 to grant longevity pay to full-time employees, with sufficient funds available in the town’s current salary line items.

• The town approved the transfer of property it owns near the bridge over Grants Creek on Kimball Road. Vaughn & Melton Consulting Engineers are assisting the state with improvements to the bridge, and has offered to purchase the town’s right-of-way for $975.

• The town approved a request to demolish a property at 306 East Ridge Avenue that is significantly damaged from a fire and uninhabitable. The town will request bids, and aldermen had several questions related to the costs the town will incur to demolish the structure. Seaford said this was an opportunity for the town to set a standard for what’s expected for property maintenance in the town, and no more than $750 of the $40,000 budgeted for code enforcement services has been used. Aldermen requested the bids be presented when they’re received so they can get more clarity on what happens if a lien is placed on the property and whether the town will be returned the cost to demolish.

• The next Passive Park Committee meeting will be held Jan. 6 at 5 p.m.