Audit: Vernon’s finances are greatly improved
The City of Vernon’s finances are in the strongest shape that they have been in recent history.
The Vernon City Commission received the annual audit, on March 26, 2019, for the fiscal year that ended Sept. 30, 2018, and heard good news from auditor Mike Edgin, of the accounting firm Edgin, Parkman, Fleming & Fleming Inc.
“It’s good to see where the city has come from and where it is heading,” Edgin said.
The city’s unrestricted net position at the end of the fiscal year was $5,266,962.
Edgin said that the city’s net position increased by $3,354,883 — $1.3 million of that was in the General Fund and about $2 million was in the business fund.
“That’s very positive. The city has come along way in a short time,” Edgin told the commission.
He said the city has about 3 to 4 months of unencumbered cash available for an emergency. He added that about 4 years ago that reserve had dropped to less than half a month, putting the city in jeopardy.
The audit showed that the city’s total revenue during the year was $14,871,760. “A significant portion, 66%, of the city’s revenue comes from services. … 9 % comes from sales taxes, 15% from property taxes and 4% from franchise fees.” Other minor categories make up the rest of the city funding.
The total cost of all programs and services was $11,516,877. Of that 43% was costs for water, sewer and sanitation related expenses. 28% was for public safety, 9% for public works, 5% for cemetery, 3% for economic development, 8% was general government expenses.
The audit showed that while revenue for Governmental Activities was mostly flat – a 1.3% increase in revenue ($6,279,542 compared to $6,200,444 the year prior) – expenses grew by 3.7 percent ($6,543,851 compared to $6,304,327 the year prior).
On the other hand, business activity revenue increased 6.6% ($8,592,218 from $8,021,698) while expenses to generate that income fell 2.3 percent ($4,973,296 from $5,091,722 the prior year.
The audit shows the most significant fluctuations from the previous years was an increase of $429,562 in Charges for Services due to increased usage; and a sales tax receipts increasing $76,520 due to an increase in economic activity from windmill construction. Property tax receipts were down 1.5% or $36,527.
Expenses increased by $120,828 partially due to an increase in street maintenance expense.
Things to work on
Edgin did say that there were some minor issues that had been brought in previous years. He said that police citations need to be reconciled with the municipal court. That the court needs to know what citations are issued “just to make sure one department is checking what the other is doing.
The second issue was that two departments overspent their budgets by $13,000 and $9,000. He said issues with the payroll process were mostly resolved, but one department was still having an issue with time sheets. He said that another issue was that it was hard to tell from personnel files what an employee’s pay-step is.
The commission approved the audit on a motion from commissioner Justin Marsh and also approved a letter of appointment with the same firm to do next year’s audit.