The recently completed audit of the City of Taylor’s finances by Plante Moran reaffirmed many highlights, including the fact that the City invested over $21M in infrastructure, machinery and equipment during fiscal 2018-19, which ended June 30.
Plante Moran audits the City on an annual basis. It’s team usually spends several months onsite analyzing the government finances and internal operations. This year’s audit offers and “unmodified opinion” or the highest form of assurance in its results.
Improvements in infrastructure have been at the top of Mayor Rick Sollars achievements over the past several years. Mayor Sollars created the Good to Great Neighborhood Program two years ago, an effort that focuses City departments on a single area simultaneously. It covers anything from concrete and asphalt improvements to fire hydrants, sewer lines, trees, ordinances and even public safety, with the police holding meetings with residents to discuss their concerns in a relaxed setting.
In addition, the City has invested heavily in improving every government-owned facility, from Heritage Park to the new Fletcher Discovery Trail, Sportsplex, golf courses and recreation center. The recreation center added a new high-tech spinning center; the vacant old courthouse building on the City Hall campus is being completely renovated into a new Media Center; and a new Parks & Recreation Maintenance Building is being created just north of the Petting Farm in Heritage Park.
But capital investments and improvements weren’t the only highlight of the audit. The City added another $379,000 to its unassigned fund balance, commonly known as a “rainy day fund. The unassigned account totaled $8.2M as of June 30, which translates to 20 percent of annual expenditures and represents funding for approximately 75 days of operations. Financial experts recommend an unassigned fund balance of between 15 and 30 percent annually. Before Mayor Sollars took office in late 2013, the City was in a $5M structural deficit.
In other audit notes:
- In the City’s General Fund, the main operating fund of the City, revenue decreased by approximately $1.356M from 2018, a decrease of 3.13 percent. The decrease is related to federal grant revenues which decreased by $1.819M. The SAFER (Staffing for Adequate Fire and Emergency Response) fire grant expired during fiscal year 2018 which is the reason for the decrease.
- Property tax-related revenue, which is the largest source of revenue, increased in the current year by $37,000. The City’s tax revenue will continue to be a challenge due to taxable valuation limitations set forth in Proposal A and the Headlee Amendment. Another potential concern is the uncertainty of future personal property tax reimbursements from the Local Community Stabilization Authority.
- State-shared revenue was approximately $8.3M and our second largest revenue source. Constitutional and statutory revenue sharing increased by approximately $238,000.
- Other fines and forfeitures revenue increased by approximately $1M from the prior year amount of $7.1M to approximately $8.1M for the year ended June 30, 2019. The increase can be attributable to increase in fees, ordinance enforcement, and traffic enforcement. During the year, the City resumed ALS transporting services, which increased ALS revenue by approximately $1M.
- Other revenue decreased by approximately $1.6M. A $464,000 decrease in one-time land sales, $188,000 decrease in insurance refunds and $250,000 decrease in local contribution from TCDC were the main reasons for the decrease.
- General Fund expenditures, excluding transfers out, increased by approximately $2M in the current year.
- Public Safety expenditures increased by approximately $1.1M which was related to additional police and fire personnel and new police body and car cameras. One-time capital outlay expenditures increased by approximately $747,000 One-time purchases included fire equipment/vehicles and new city wide computer technology.
- Total net position related to the City’s governmental activities at the end of the year was a deficit of approximately $124M, a $95M decrease from the prior year’s deficit of approximately $219M in net position. The net decrease is mainly due to the decrease in the net OPEB liability. The City began to pre-fund OPEB liabilities by depositing $3M into an OPEB trust which will accumulate earnings. The City has made great strides in addressing the future increases of the OPEB obligation by mandating all newly hired and future city employees participate in a health savings account, instead of the costlier retiree healthcare insurance. Also, for the most part, all future retirees eligible for retiree health care are now required to pay 20 percent cost share.
The entire audit report will be published soon on the Community Financial & Performance Dashboard of the City of Taylor website.