The City of Dillon received a good audit report at the council’s last meeting.
Smith Brooks of Kenneth Cobb and Company, P.C. said the city had a clean, unqualified opinion, which is the best option they can receive.
The financial highlights included the following:
• The assets of the city exceeded its liabilities at fiscal year ending June 30, 2010 by $34.1 million (net assets). Of this amount, $6.3 million may be used to meet the city’s ongoing obligations to citizens and creditors.
• The city’s total net assets increased by $185,000.
• As of the close of the current fiscal year, the city’s governmental funds reported combined ending fund balances of $3 million, an increase of $519,000 in comparison with the prior year. Approximately 67 percent of this total or $2.1 million is unreserved fund balance.
• The city’s total bonded debt decreased by $1.2 million during the current fiscal year. There was no new debt issued during the fiscal year.
According to the report, the largest portion of the city’s net assets $24.9 million reflects in fixed assets such as land, buildings, equipment, and infrastructure (road, bridges, and other immovable assets), less any related debt used to acquire those assets that is still outstanding. The city uses these fixed assets to provide services to citizens” consequentially, these assets are not available for future spending. Although the city’s investment in its fixed assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the fixed assets themselves cannot be used to liquidate these liabilities.
A portion of the city’s net assets (8 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets may be used to meet the city’s ongoing obligations to citizens and creditors. Internally imposed designations of resources are not presented as restricted net assets.
At the end of the current fiscal year, the city is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities.
Changes in Net Assets
The city’s net assets increased by $185,000. Approximately 18 percent of the city’s total revenue came from taxes, while 13 percent resulted from grants and contributions (including state and federal aid). Charges for various goods and services provided 63 percent of the total revenues. The city’s expenses cover a range of services. The largest expenses were for public safety and water and sewer.
Governmental activities
Total revenues increased $71,000 compared to the prior year. This increase was due in part to an increase in property tax collections. The property tax increase was caused mainly by the addition of the Wal-Mart shopping center to the tax roll. Total expenses decreased $197,000 compared to the prior year. This decrease was spread over all activities. The city still showed an increase in net assets of approximately $545,000.
Business-type activities
Total revenues increased $3,000 compared to the prior year. This increase was spread across all line items. Total expenses decreased $81,000. The city had a decrease in net assets of approximately $360,000.
Governmental Funds
As of the end of the current fiscal year, the city’s governmental funds reported total fund balances of $3 million. As a measure of liquidity, it may be useful to compare unreserved fund balance to total fund expenditures. An unreserved fund balance of $2.1 million represents 37 percent of total governmental fund expenditures.
The fund balance of the city’s general fund increased by $507,000 during the current fiscal year. This is a 33 percent increase over the prior year fund balance.
Fixed Assets
The city’s investment in fixed assets for its governmental and business-type activities as of June 30, 2010, amounts to $55.4 million, less accumulated depreciation of $22 million, leaving a net book value of $33.4 million. This investment in fixed assets includes land, buildings, improvements, equipment, infrastructure and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the city, such as roads, bridges, drainage systems and similar items.
The decrease in the city’s investment in fixed assets for the current fiscal year was less than 2 percent in terms of net book values. Actual expenditures to purchase or construct capital assets was $760,000 for the year. The decrease in the city’s fixed assets was caused by depreciation expense netted with the following purchases: two mowers, three police cars, storage building for recreation department, one truck, Lockemy Courtyard, and refurbishing various portions of the water and sewer system.
Debt Activity
The City of Dillon’s total debt decreased by $1.2 million during the current year.
Mayor Todd Davis commented after the presentation of the audit that the city was in the best financial condition it has been in since he had been there.
