By Rebecca Dopp
Times-News Correspondent
Levan Town received a pretty good grade on its annual audit report this year. However, they did receive two findings, or problems, that the town will need to address and fix for next year.
"I thought you were going to get by without a management letter this year," said Greg Ogden, CPA, "but right down at the end of the audit, the very last two things ended up being findings."
The first finding was in the water fund. It exceeded the budgeted amount by just over $19,000.
"That's your legal spending limit for any individual fund, so you really aren't supposed to spend more than has been budgeted," Ogden said. "It's just a matter of watching it closely, trying to outguess what the ending expenses are going to be and budget higher than that."
Ogden said it wasn't a very big deal, and not too far over the budgeted amount, but just something for the town to be aware of and keep a watch on.
The second finding showed that the town had too much money in the unrestricted general fund balance.
"You had approximately $36,000 too much in the general fund," he said. "They allow you to keep up to 75% of your budgeted revenues for a given year in the general fund, otherwise you need to spend that down or move it over to the capital projects fund."
The reason the state wants it lower than that is they don't want the town exceeding what the citizens ought to be paying in property taxes or other taxes. The town will either need to lower the taxes or move the surplus into the capital projects fund.
He said that was the best finding the town could have because it showed that the town is in really good financial shape.
Ogden said that the town had moved about $35,000 out, but recommended that they double that in order to stay under 75% of the budgeted revenues. If something were to come up, the town could always move the money back into the general fund.
Moving on into the financial statement portion of the audit, Ogden said that the town is doing really well. He said the net position, or what the town is worth, is around $3,117,000.
"This is what the town is worth if you paid off all of your debt and just took the value of your buildings and equipment and everything," said Ogden.
The net position is broken into four categories, two of which are restricted, one is for perpetual care (cemetery), and one is for capital projects, money set aside for Class C road money that hasn't yet been spent.
The net investment and capital assets is the total the town has already spent for buildings and equipment minus what the town still owes on debt.
"The key number there is the unrestricted net position," said Ogden. "You can see looking at the governmental activities, you have $452,000 of unrestricted in that type, and $255,000 approximately in the business type. Those are really good positions to have, $707,000 total unrestricted net position."
Further on in the financial statement, Ogden pointed out that none of the governmental activities charge enough to pay themselves, not unexpected. He said that business-type activities would be expected to pay for themselves, and according to the numbers, Levan Town is doing pretty well.
In the operating income and expenses, the net operating income or loss column showed that only the electric fund brought in enough revenues to cover all the expenses of that department. He said that the water fund, although still in the negative, had improved over last year from a deficit of $59,000 to this year a deficit of $14,000.
"You did raise your water rates during the year didn't you?" he asked.
The town did raise rates, and by doing that, the fund was less in the negative.
Ogden said that the natural gas fund stayed about the same as last year, but the cable fund increased its deficit, from last year -$6,800 to this year -$12,000.
Council members said that there was some work being done on the cable that contributed to the higher number. Ogden said they needed to watch that or they would have to consider raising rates.
Ogden reviewed the debts that the town has outstanding. There was only one debt for governmental activities, the garbage truck lease, which the town has made the final payment so next year there shouldn't be any governmental fund debt.
In business-type activity debt, the town has water revenue bonds and electric revenue bonds, both of which are low amounts.
"You are paying a rate of 3.29% on the water revenue bonds, and the electric revenue bonds are actually interest free, so that's not bad debt to have, and it's not excessive, you're keeping it in control," said Ogden.
"I think you are doing a great job with your debt, having such little debt," he said.
Ogden said the town did not amend the budget during the year, and showed that the departments stayed under budget, except the water fund.
"The budget was underpsent," he said. "I commend you for that."
