By David Meade
During their regular monthly meeting Monday, Williamston Town Council heard a positive audit report which Mayor Mack Durham said reflected his focus to get the town in strong financial position and ready for future growth.
Ken Meadows, of Greene Finney and Horton CPA, said the town received an “unmodified opinion”, or the best they can receive, on their 2014-15 financial audit. Meadows said the town’s General Fund balance had increased by $245,000 to $2,014,000 as of June 30, 2015. A portion of that amount, $140,000 is restricted funds for the cemetery and the hospitality tax fund.
The remaining balance of $1,874,000 is unassigned and amounts to 71 percent of the town’s yearly budget. The minimum fund balance recommended by auditors to keep in reserve is 16.7 percent, or about two months expenditures.
With reserves enough to cover eight months, Meadows said, “It is a very good level to have.”
According to Meadows, a good fund balance is necessary to maintain cash flow through the year, to have for emergencies, and for possible future capital expenditures.
Contributing to the increase in the fund balance, General Fund revenues were up, amounting to $2,870,000 for 2015.
The town received more grants than in 2014, including CFund money for roads and a trail grant. Grants amounted to $196,000.
Other increasing revenues also helped the fund balance. Revenue from permits increased by $38,000 and from property tax by $31,000.
As a result, and due to conservative budgeting, revenues were $367,000 over the 2014-15 budgeted amount:
Property Tax revenues were $96,000 more than budgeted; Grants, $71,000; Franchise Fees, $56,000; Licenses and Permits $55,000 and Hospitality Tax $53,000 over what was budgeted.
Expenses were also up, totaling $2,633,000, which was $281,000 more than in 2014.
General government expenses increased $95,000; public safety increased $30,000 and public works increased by $80,000.
On the expense side, the town was $130,000 over budget.
According to Meadows, a capital outlay of $107,000 for the Mineral Spring Trail project, which was included in the grant revenue, was not budgeted. Public works was over budget by $51,000, primarily repairs and maintenance
Public safety was actually under budget by $40,000.
Also being reflected in the audit is the GASB 68 requirement for municipalities to account for state retirement pensions on their financial statements. Meadows said state pensions amount to approximately $500,000 for the town. Though the amount appears in the audit, the town is not actually liable for it.
According to Meadows, the town’s water fund is in good financial shape and the sewer fund had a negative net balance.
The water fund had revenues of $1,012,000, which was $8000 less than 2014. The water fund has a fund balance of $2,721,000, up by $11,000 from 2014.
Accounting for GASB 68 pensions amount to $199,000.
Sewer revenues were $1,070,000, $58,000 less than 2014.
Expenses were $1,112,000, up from $1,073,000 in 2014, resulting in an operating loss of $42,000.
Net postition for the sewer department was $6,470,000 in 2015, down from $7,060,000 last year. GASB 68 was a big part of that, decreasing the net position by $467,000
Meadows recommended the sewer fund net position needs to increase to allow for future infrastructure repairs and improvements.
“We would like to see that trend first and move forward to a positive position,” he said.
Commenting on the audit, Mayor Durham said he has communicated with department heads about the importance of their spending and keeping the budget “really tight.”
He said the town implemented a spending freeze during the last quarter of the year and has focused on an effort to tighten up and keep expenses under control over the last five years.
Durham said, “It has been a financial challenge for the town to begin to move in the direction we are going.”
The town is in the process of coming up with a master plan for development and growth.
“With completion of the Comprehensive Master Plan we can start to focus on projects,” the mayor said. “A strong financial position for the town will be essential for future development.”