City’s finances on solid ground, audit finds

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by Mike Knaak

editor@thenewsleaders.com

The city of St. Joseph is in sound financial shape, City Council members learned during a presentation of its 2019 audit at the May 4 meeting.

The tax rate went down last year while tax capacity went up. Continuing a trend for the last five years, the city’s general fund balance increased by $192,506 in 2019.

The yearly audit was completed by Bergan KDV and presented by Steve Wischmann.

Of the city’s $3.7 million of revenue, $1.4 million comes from property taxes. City revenue increased $184,255 from 2018 to 2019. The most significant variance was an increase in miscellaneous revenues of $137,799. Part of this amount was an increase in investment income resulting from a better market rate, according to the audit.

On the expense side of the general fund, expenditures increased $208,589, or 6.5 percent, from 2018 to 2019. The most significant increases in expenditures occurred in general government, public works and culture and recreation. General government increased $74,027 because of an increase in wages and the severance payment for the city administrator who retired in 2019. Public works expenditures increased $45,530, with snow plowing making up the largest component of this increase. With the annexation of the township, there was more plowing to be done. Culture and recreation increased $65,343 because of an increase in utility costs related to Millstream Park shelter and an increase in wages.

Public safety accounts for 47 percent of general fund expenses with a total of $1,625,599. Expenses came in more than $70,000 under budget.

Of the fee-supported budgets, the refuse fund operates at a loss. Mayor Rich Schultz pointed out that the three-year refuse contract is up at the end of the year and that council might have to increase fees to stop losing money on refuse operations.

Wischmann said the unassigned general fund balance is capable of supporting 47 percent, or six months, of the city’s expenses at 2019 spending. The city’s policy calls for four to six months so the city is on target.

The audit report flagged one financial procedure. Because of the city’s small administrative staff, the same people handle several accounting duties that should be separated.

Council members asked Wischmann how current market conditions will affect the city’s investments. The city doesn’t invest in equities, he said, and that the city’s “conservative” portfolio in cash certificates limits risks and is set to ride out market peaks and valleys.

In a followup email after the meeting, City Administrator Kris Ambuehl wrote, “The city of St Joseph is in sound fiscal shape due to (Finance Director) Lori Bartlett’s exceptional work. Although we do anticipate some economic implications due to Covid-19, the city is in solid shape to weather the storm.” 

 

 

 

 

Author: Mike Knaak

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