Audit Shows City of Grand Island $2.2 Million Under Budget
Cities are required to have an audit of their financial statements each fiscal year. While most people cringe at the thought of an audit, officials with the city say this is good news after an audit of last year's spendings.
Grand Island's audit was performed by Terry Galloway, who represents the firm Almquist, Malzahn, Galloway and Luth. The firm presented the highlights of the city's financial statement to the Grand Island City Council on Tuesday.
Jaye Monter, the city's finance director, said the audit showed their general fund was under budget by about $2.2 million, and actual revenues came in at over $400,000.
"Between the two, we're in good shape," Monter said.
However, some council members were hesitant, saying the city should spend what they budget for, and some feared the under spending may have had consequences.
The finance department will look at every city department to make sure they're using the operating dollars needed.
Council member Scott Dugan says some citizens have complained about parks that aren't taken care of.
"We need to have some policy discussion as the governing body as to what we're going to do if we're giving budgetary authority," he said, "to not just cut these things, because our citizens want to see nice parks and other things."
Council member John Gericke agreed, saying they need pay closer attention to the budget.
According to the audit, Grand Island's total debt decreased by over $10 million during the current fiscal year, due to scheduled principal payments.
Of the $10 million, about $8 million came from the city's electric and water, according to Monter.
"We paid off some big expensive bonds, because they had high interest rates," he said. "We paid those off during the year and refinanced them to lower interest rates."
The decreases in debt were a combination of paying those bonds and getting lower rates. In return, the debt decreased by 18.8 percent.
The audit also found excess reserves sitting in the pension funds.
The combination of police and fire funds total $3.4 million as of Sept. 20, 2012. The money is sitting in the fire fund, but Monter said it can be used for both police and fire pensions.
"We can use those excess funds sitting over in fire," he said. "Right now, they're designated in the fire reserve, and those are excess funds that are for the total public safety pension reserve plan."
The auditors recommend transferring those funds back into the city's general fund, but city officials say they need to tackle a few more issues before that happens.
"After we calculate the liability for the six remaining pre-84 retirees, I want to calculate the liability for that," Monter said. "We will have possibly some upcoming disability police officers, so I wanted to look at those liabilities and let council know how much excess we have."
In the following weeks, council will have to decide how to sort through their budget.
"Well, you know the controversies and discussions we've had all winter long," Monter said, "so we've had the pension discussions about those reserve funds. What I wanted to recommend to council is, I want to come back to them closer to the budget time and come up with a plan to use those $3.4 million excess of cash reserves in those funds."
Budget discussions for 2014 begin April 1.
For more details about the audit, click here.