(1/27) At the January Town Council meeting, Michelle Mills and Addie Blickenstaff, representatives of Deleon & Stang, presented the results of the Town’s approved financial audit for Fiscal Year 23/24 to the mayor and Town Council. They were tasked with verifying the Town’s financial records and determining if the Town is following correct accounting principles, as well as the accuracy of their financial statements.

The time period reviewed was July 1, 2023 through June 30, 2024. Overall, the auditors found the Town's financials to be in order, with two discrepancies. They looked at the General Fund and the Business Fund. The Town’s assets exceeded its liabilities by $631,758, also known as a net position. The biggest contributor to this increase was due to capital grants and contributions, increasing from $294,012 in FY23 to $523,520 in FY24. The Town has $5,016,015 in total debt obligations at the end of FY24.

The General Fund is the primary operating fund of the Town; it receives funds through various mechanisms, including taxes, licenses and permit fees. The General Fund is where the Town accesses funds for items such as the majority of staff payroll, insurance and pension payments, new police cars, etc.

The Business Fund is broken down further into three separate funds: the Sanitary Sewer Enterprise Fund, the Water Enterprise Fund and the Stormwater Management Enterprise Fund, with the last being a non-major fund. These funds are primarily financed through quarterly homeowner water payments and hookup fees for new homes and businesses. Money in the Water Enterprise Fund is used to pay for the upkeep of the Town’s water and sewer systems and salaries of staff who operate them and is considered self-sustaining.

Both the General Fund and Business Fund are considered separate accounts and the expenses and revenues are audited separately.

When combined, their assets, or income, total $44.4 million ($8.9 million in the General Fund and $35.5 million in the Business Fund). The Town’s liabilities, or expenses, total $7.3 million ($1 million in the General Fund and $6.3 million in the Business Fund), which is considerably less than the assets, with a total net position of $33.9 million after all funds and capital projects are considered.

Total revenues for the Town were $5,599,401, which was 14.4% higher than last fiscal year ($3,095,742 for General Fund and $2,503,659 for the Water Fund). These higher revenues were generated from increases in utility charges for both the Water and Sewer Funds’ services, as well as the $300,000 in ARPA funds that were transferred from the Capital Project Fund to the Water Fund for operating expenses. Total expenses were $4,967,643 ($2,523,336 for the General Fund and $2,444,307 for the Water Fund).

Real estate property tax is revenue listed under the General Fund, which was approved at 34 cents per $100 of assessed property value, which is consistent with prior years. The generated revenue from this rate was $878,509, an increase of $48,986 over the last fiscal year.

Operating revenues for the Business Fund were $2,038,138 (an increase of $540,316, or 36.1%, from last year) due to the transfer of ARPA funds. Utility charges in the Water and Sewer Funds increased in FY24 to $1,604,464 (up $259,208). This was primarily due to the controversial 36% water rate increase implemented earlier in the year.

Operating expenses for the Business Fund were $2,321,684 in FY24 (an increase of $235,203, or 11.3%, from last year). The increases can be contributed to the purchasing of supplies and repairs in both the Water and Sewer Funds.

The Capital Projects Fund revenues were $307,800, a decrease of 43.5% compared to FY23 due to the transfer of ARPA funds. Expenses were $677,900, a decrease of $446,600, or 39.7%. Overall, FY24 saw an increase in revenue over expenditures of $145,400 compared to a deficiency of $171,000 in FY23.

The auditors found two discrepancies in the Town’s financial records. The first was due to inadequate reporting in how the Town reports and requests reimbursements for grant funding. The second discrepancy involved the cost of Capital projects and how they are reported. These combined reduced grant revenues by $323,103 but did not affect the Town’s bottom line.