KINGSPORT – Kingsports city finances received a clean FY 2011 audit opinion for the 12th consecutive year in a row, with no material weaknesses for the third consecutive year.
Receiving a clean opinion for the 12th year in a row is an accomplishment of the entire city staff, Audit Committee Chair and Alderman Ben Mallicote said Tuesday.
Our Finance staff certainly deserves a lot of credit, but you do not earn a clean opinion without a lot of people doing a lot of things right.
In addition, FY 2011 revenue growth was stronger, with General Fund property tax revenues growing from $31.25 million to $32.37 million, while local option sales tax collections grew from $17.06 million to $17.77 million from FY 2010 to FY 2011.
We have the utmost confidence in the financial position of the City, and are pleased that we continue to receive high marks for transparency in reporting on the Citys finances, City Manager John Campbell said Tuesday. The results reflect an available reserve of $12.09 million, with strong revenues and a reasonable debt load. And we have maintained this position while also adding tremendous value in the form of new assets that will help the City continue to grow.
In addition to the $12.09 million undesignated fund balance, the City held another $7.75 million in reserve funds in the Fleet, insurance and health insurance reserve funds.
Auditors Blackburn, Childers & Steagall also found that every City department met its 2011 budget as assigned by the Board of Mayor and Aldermen.
Property values grew at a robust rate, with the assessed value of all residential and farm property moving from $542 million to $576 million, while the value of industrial and commercial property grew from $601 million to $624 million.
Meanwhile, new investment, as recorded by building permits, also picked up, rising from $56.2 million in 2010 to $65.6 million in 2011.
Along with strong reserves, we continue to pay down debt at a fair clip, and are seeing a definitive uptick in economic activity and employment in our city in 2011, Campbell said. At the same time, we continue to do our best to maintain a tight rein on operating expenditures, with our budget office reminding our departments and line managers that we must continue to get the maximum out of each dollar available.
In addition, Campbell also noted that the City recently retained its strong bond ratings, carrying a Moodys rating of Aa2, with a Standard & Poors rating of AA-, both of which are the highest bond ratings ever carried by the City.
The City also achieved its 11th consecutive Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association for the 2010 audit and financial report.
While the audit found no material weaknesses, it did find two deficiencies to address, including the water loss percentage for the water system and recommendations to change the way the city books the value of city-owned real estate.
On the matter of water loss, the City noted that the state has adopted the national American Water Works Association standard for 2013 and beyond, with which the Citys water system is in full compliance.
In addition, Public Works director Ryan McReynolds has recommended continuing ongoing water line upgrades as well as possible new measures, including metering fire lines on industrial properties, downsizing certain large meters to eliminate low-flow bypass, and instituting pressure zone metering to ascertain which districts are responsible for major losses.