City nearly $1 million richer than it thought
Independent auditors confirmed this week the City of Henderson, which raised taxes and fees this past year, has banked nearly $1 million.
In the weeks leading up to the controversial compromise on a budget that hiked real-estate and trash tax rates in time for the start of the new fiscal year July 1, unexpected increases in city revenues were accumulating.
The city banked $960,000 by the last day of fiscal year 2013, which was June 30. That was just days after Mayor Pete O’Geary’s tie-breaking vote passed a 3.5-cent property tax hike, upped city sewer bills 1 percent and added $2 to the $27 monthly sanitation fee.
City leaders in June expressed fear that budget revenue shortfalls might put the squeeze on the city’s general savings fund, at that time assessed at $2,005,540.
Auditors with William L. Stark and Co. confirmed new city assessments that pinpointed the city general fund balance at $2,966,287 as of June 30.
“This is an increase of $960,747 over last year’s total for the available-to-you fund balance,” said Curtis Averette, a senior auditor with Stark and Co.
The previous year’s increase was $21,905, which Averette at the time said was not much, but still “the direction that we want it to go.”
There were no certain conclusions expressed during the audit report presentation for how the city came into the sharp increase to its savings. Averette pointed to several unexpected uptakes to revenue collections. Collection rates compared to totals owed slipped slightly, however.
“The tax collection rate was 93.87 percent the previous year compared to 93.59 percent for fiscal 2013,” Averette said. “This was slightly down, slightly below the prior year’s percentage.”
City Council members expressed general pleasure with the findings.
“I thought it was an excellent report,” Councilman Michael Inscoe said. “We were able to increase our general fund balance from the previous year. Sometimes you don’t know what totals are until the end of the year when you do your audit.”
Councilwoman Brenda Peace-Jenkins said she has not seen a report with as substantial a surplus before, not since she joined the council in 2007.
“This particular audit is the best I have seen since I have been on the council,” she said. “The city budgets are tight, but I see that they’re not as bad as I thought they would be.”
Inscoe said he believes the strengthening of the general savings account will impact the debate going forward on future tax increases, and he will argue against approval of any increases this year. He opposed the tax hike in June.
“It will still be a challenging year,” Inscoe said. “I personally am going to take a real hard look at the budget. I am only one vote among eight, though.”
Inscoe and Peace-Jenkins agreed that there is not likely to be a debate on any tax refund or lower rates in response to the finding.
“Had we known that this increase would be there, I think that the tax increase would have still happened, but not at the 3.5-cent level,” said Peace-Jenkins, who supported the tax hike in June. “The increase would have been less had we known. I don’t think they will be reversed.”
Peace-Jenkins said the impact from finding the increased city wealth would be a likely hold on present tax rates this year.
“I don’t think we’ll do another tax increase,” Peace-Jenkins said.
Council members congratulated Henderson’s finance director, Kathy Brafford, for producing all of the city’s budget reports ahead of the deadline this year.
The budget reports, which cover city sewer, water and general city services, showed improvement from two “material weakness” and a lesser matter of “significant deficiency” that required attention last year.
Averette said this time around, his “unqualified opinion” rating, the highest possible for accurate reporting, bore no further admonishments.
“We were happy to have the city reports on time,” Averette said. “We were able to conduct the audit fairly quickly. Our unqualified finding speaks highly of your budget.”
Doubts about the wisdom of a steep real estate and personal property tax hike expressed by several council members earlier in June were swept aside, and the fiscal year 2014 budget passed on a 5-4 vote carried by O’Geary’s tie-breaking authority on June 24.
The city’s property tax rate stands at 62 cents per $100 valuation, making the 3.5-cent hike a nearly 6-percent heavier tax burden for payers to bear. Each penny increase raises an additional $90,000, according to city budget reports.
Total assets for the city as of June 30 stood at $94,575,578 more than its liabilities, an improvement of more than $12 million over the previous year comparison.
All funding factors — including debt to savings ratios and assets to liabilities ratios — exceed by healthy margins the minimum standards set for localities, according to Averette.
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