The sad stories of failed small businesses and drained towns are all too common because of the pandemic, but the town of Mount Airy’s financial situation has actually improved over the past two years.
This is attested by the most recent independent audit of the city’s books which is required each year, showing that if it were a corporation, the municipality would be firmly in the dark and not in the red.
However, city officials warn that observers shouldn’t read too much into the bottom line, saying it reflects unusual factors and the delay in spending that has been canceled, which will strain future budgets.
The latest audit, for fiscal year 2020-21 which ended on June 30, shows a key barometer of Mount Airy’s finances – the balance of funds available – that is, its savings or surplus – More and more significantly compared to the previous year.
It has increased by more than $ 1.5 million, according to an audit presentation at a Mount Airy Board of Trustees meeting last week.
This is in addition to a similar disclosure from the previous fiscal year, 2019-2020, when the balance of available funds increased by nearly $ 1.7 million. This excess fund is defined as unrestricted money that can be used for any purpose.
At the end of June, it stood at about $ 12.6 million, up from $ 11 million the previous year.
Putting this into perspective, a state regulator, the Commission on Local Government, recommends that a city keep a surplus of 8% of its annual budget, covering what would be needed to keep things running for about a month. without generating income.
In the case of Mount Airy, its surplus would be enough to carry the municipality for 12.5 months, based on its 2020-2021 general fund spending of just over $ 11.7 million.
“The city is doing quite well in this area,” said Kelly Gooderham of the accounting firm Martin Starnes and Associates in Hickory, which has been auditing the city’s financial records since 2011.
It’s not your normal time
City council members appeared pleased with the results given the coronavirus crisis, although Mayor Ron Niland suggested the good performance was somewhat artificial in nature.
“There are factors underlying these numbers – as we know COVID and we are understaffed and will delay spending that we will have to look into” later, Niland explained, while also acknowledging the “good healthy report. ” present.
He was referring to unfilled vacancies, for example in the Mount Airy Police Department, corresponding to savings in wages and benefits, but causing problems with available manpower.
The total costs of the public safety category of the municipal budget, covering both the police and the fire services, have thus decreased by 7%, from $ 5.3 million for the 2019-2020 fiscal year to 4.9 M $ for the year ending June 30.
Overall expenses for 2020-2021 have decreased by more than $ 575,000, or 5%, from the previous year, while revenues have increased by $ 335,000, or 2%.
The revenue picture was boosted by the increase in property tax revenue of $ 149,000, or 2% t, which Gooderham said was due to the increase in property values. Among other audit highlights, ABC’s sales tax revenue and profit income also increased.
In response to a question from Commissioner Tom Koch, it was revealed that no federal American Rescue Plan (ARP) Act funds designated for the city government earlier this year had been included in the period of audit.
Meanwhile, the Mount Airy Sewer Operation – a user-fee-funded business fund that is kept separate from its general fund – also had a good year.
There was an upward change in its net position of $ 2.6 million in 2020-21, according to audit figures, weighing factors such as cash flow from operations and required service from debts.
City finance director Pam Stone said the sewer situation was magnified by the fact that Mount Airy supplied all of Dobson’s water needs for a three month period during the year.
Commenting on the overall results of the audit, Interim City Manager Darren Lewis pointed out that while the municipality made $ 1.5 million in the last fiscal year despite all the challenges, more are looming. horizon.
He cited $ 642,000 of expenses for unfinished and paid items for the carry-over and freezing of 13 vacant employee positions during part of the budget period.
“Once again, it’s been another great year,” added Lewis. “But that’s not going to happen this year – we’re not going to have $ 1.5 million for good.”
Lewis mentioned that about $ 1.3 million has already been committed from the balance of funds available just in the middle of fiscal year 2021-2022.
It was allocated to Spencer’s redevelopment costs, downtown projects, and a new grapple truck costing $ 185,000. The Surry Arts Council has also been designated to receive $ 400,000 for a new building. Lewis mentioned that necessary vehicles such as fire trucks, dump trucks and leaf trucks are also to be funded in the near future.
“Is it a clean audit and are there any recommendations? Asked Commissioner Joe Zalescik.
“It was an unequivocal audit,” Gooderham replied. “Everything was good.” The audit presenter praised the work of Stone, the city’s chief financial officer, which is thorough and straightforward.
There were no findings of questionable costs, Gooderham said of the Martin Starnes and Associates audit.
“We issued a clear, unmodified opinion, which is the best opinion we can provide.”