Higher than anticipated revenues boosted city finances, audit shows

The city of Cairo’s auditor presented a draft of the 2013-2014 audit this week and the report shows that city government took in more money than it anticipated, but it also reduced its spending to levels lower than what was projected to be spent.
Tom Carmichael of Carr Riggs & Ingram presented an overview of the 2013-2014 audit to the council’s finance committee and to the full council Monday.
Overall the city’s financial position is positive, according to the auditor, and the city continues to reduce it’s long-term debt.
City leaders say they continue to battle with cash flow issues, but in the year that ended June 30, 2014, the city wound up with a $33,000 surplus in the general fund compared to a $289,000 deficit last year.
General fund revenues were budgeted to be $3,935,000, but the audit indicates that actual revenue was $4,375,000, up from $3,940,000 in 2012-2013.
Carmichael said the three major factors that contributed to the increased revenue was $168,000 more in ad valorem taxes collected in 2013-2014, a $173,000 grant for the city fire department, and $126,000 in stop/loss proceeds related to the city’s self funded insurance program.
Due to the increased revenue, the city was able to lower the amount of money transferred from enterprise funds into the general fund.
In the last fiscal year the city transferred $3,988,000, which is up from $3,622,000 in 2012-2013, but lower than the $4,613,000 that was budgeted for the 2013-2014 budget.
The draft audit shows that the city’s profit from the sale of electricity improved in the last fiscal year while the water and sewer fund and the cable TV fund continue to operate at a loss.
The city’s net profit from the electric fund was $1,579,000 in 2013-2014 compared to $122,000 in 2012-2013.
Revenues from the sale of electricity jumped from $17,187,000 in 2012-2013 to $18,406,000 in the last fiscal year. Expenses also increased due to the cost of buying additional electricity, according to Carmichael.
The auditor said that the overall increase in electric sales was approximately $600,000 and an additional $630,000 was the city’s earnings from the Municipal Electric Authority of Georgia trust accounts.
The audit also indicates that water and sewer revenues improved and expenses were reduced, but the fund still recorded an operating loss of $511,000, down from $1,127,000 loss in the year prior.
Cable TV revenues were up only slightly in 2013-2014 but revenues were also slightly lower, which resulted in an operating loss of $199,000 in 2013-2014 compared to a loss of $437,000 in 2012-2013.
The cable fund’s net position at the end of the last fiscal year is a negative $3,611,000.
The city is continuing to cut its long-term debt, according to the auditor.
Total long-term debt now stands at $16,555,000, which is down from $17,143,000 in 2012-2013. Carmichael also noted that there is approximately $3 million in cash reserved to fund the long-term debt.
“There is roughly $2.1 million set aside for the landfill closure costs and about $900,000 for payment on the CNS bonds,” Carmichael said Monday night.
The auditor said that the final document will stipulate issues with internal control matters that were identified in the course of compiling the audit, but all of the issues have been addressed and are not serious, according to Carmichael.
City officials are expecting to receive the final draft next week and the council is expected to take a vote on acceptance of the audit at its Dec. 8 meeting.