[read complete report - pdf]

Audit Objective

Determine whether the Council and City officials adequately managed the City’s financial condition.

Key Findings

• The City’s total general fund balance decreased 68 percent from $9.9 million at July 1, 2014 to $3.2 million as of June 30, 2018, leaving an unassigned general fund deficit of $813,994 at June 30, 2018.1
• The Council issued $8 million of bonds from 2014-15 through 2016-17 and used another $2.1 million of fund balance in 2017-18 to finance recurring expenditures, increasing the general fund debt service costs to 12.27 percent of the 2017-18 revenues.
• The City Manager has not prepared a multiyear financial plan including a fiscal improvement plan, in accordance with Local Finance Law Section 10.10(e).

Key Recommendations

• Adopt structurally balanced budgets that contain realistic estimates of revenues and finance recurring expenditures with recurring operating revenues, instead of debt.
• Prepare a multiyear financial plan including a fiscal improvement plan.

We conducted two separate audits of the City, one on financial condition and the other on leave accrual payments. The City submitted a response letter that addresses the findings in both reports.

City officials had some concerns about our findings. Appendix B includes our comments to both reports regarding City officials’ concerns.