Annual audit shows debt decreases

Annual audit shows debt decreases

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During their Feb. 17 meeting, the Chadron City council received the report of the city’s financial statement for the year ending Sept. 30, 2019, as presented by Michael Hobak of Almquist, Maltzahn, Galloway and Luth, P.C.

According to the audit report, the assets of the City of Chadron exceeded its liabilities at the close of the most recent fiscal year by $25,088,858. Of this amount, $4,013,913 can be used to meet the government’s ongoing obligations to citizens and creditors.

At the close of the close of the fiscal year, city governmental funds reports a combined ending net positions of $19,222,062. About 13.3% of this amount—$2,562,129—is unrestricted net position. Unassigned fund balance for the General Fund was $1,064,358, or 26.6% of the total General Fund expenditures.

Hobak noted the major capital asset events—those that are individually greater than $20,000—through the year included: $261,206 for a Spartan top mount pumper truck, $702,938 for the airport storage hangar project, $417,945 for the west water tank interior rehab and $33,697 for the wastewater treatment plant hydrogen sulfide rehab.

Looking at the city’s capital assets of $27,319,106, $21,317,756 was for governmental activities, including: $19,974,149 in buildings and improvements, $1,060,163 in equipment and $283,444 in land. $6,001,350 was for business type activities, including: $5,520,702 in buildings and improvements, $460,648 in equipment and $20,000 in land.

For the year ending September 30, 2018, capital assets were $28,682,311, $22,651,427 in governmental activities and $6,030,884 in business-type activities.

At the end of the current fiscal year, the city had total bonded debt and notes payable outstanding of $9,882,757. That debt reflects $7,896,419 in governmental activities and $1,986,338 in business-type activities. However, the city’s total debt decreased by $1,087,420—9.9%—compared to the previous fiscal year’s debt of $10,970,177, due to scheduled payments.

As for economic factors and next year’s budgets and rates, the property tax asking for the year ending Sept. 30, 2020, is $1,102,857, an increase of $56,192—5.4%— from the prior year. The city is considering increasing utility rates.

In regard to governmental activities, there is total cash and certificates of deposit in the amount of $2,543,569, though there are also restricted funds of $2,574,009, so total cash is about $5.1 million for governmental activities. Total assets are $27,953,404, with $8,731,342 in total liabilities, for a total net position of about $19.2 million. Of that, about $2.5 million is unrestricted for the normal ongoing applications of the city.

For business-type activities, total cash and certificates of deposit are $1,167,754, with restricted funds of $400,000. Total assets are $8,117,825, with $2,251,029 in total liabilities, for a total net position of just $5.9 million.

Further, component units for the city and library reflect about $1.2 million in total assets and about $830,000 in total liabilities for a total net position of about $370,000.

Hobak, noted, in regard to change in net position: governmental activities decreased about $18,000, business-type activities decreased about $53,000 and component units were up about $28,000.

Total governmental fund balances included in the report state there is $1,639,702 in the General Fund, $1,064,358 of which is unassigned for normal ongoing obligations. Other balances are: $503,998 in the Street Fund; $260,542 in grants; $686,867 in Economic Development; $703,610 in Debt Service; $637,149 in the Aquatic Center; and $365,219 in Other Governmental Funds.

The total fund balance in governmental funds for the year ending Sept. 30, 2019 is $4,797,087, an increase of about $560,000 compared to the previous year’s balance of $4,237,656. Total net positions of the utility funds for the year included: $2,810,173 in the Water Fund, $3,056,623 in the Wastewater Fund and $1,003,638 in the Governmental Activities-Internal Service Fund.

Hobak congratulated to the council on controlling expenses and coming in at $417,938 under budget for the General Fund, $4,033,022 compared to the budgeted $4,450,940. The same occurred with the Street Fund, coming in at $794,086, which is $71,029 below the budgeted $865,115.

Hobak also presented a letter that reads the size of the city’s accounting and administrative staff precludes certain internal controls that would be preferred if the office staff were larger. He said every city will have that comment, as it is not feasible to have enough staff to have the true segregation of duties needed. It was also pointed out in a second letter that there were some misstatements that have been corrected, and that there are multiple old balances on governmental accounts receivable that need follow ups and either written off or turned over to collections.

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