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Report: Fayetteville’s finances in excellent shape

By BEN NELMS
bnelms@TheCitizenNews.com

An impression of the city’s financial stability was obvious Thursday as auditors presented Fayetteville council members with the city’s FY 2004 Comprehensive Annual Financial Report (CAFP).

Macon-based auditing firm Mauldin & Jenkins representative Miller Edwards presented the audit results to council members. He noted the city’s high level of accountability, reflective of the prior year’s report for Year Ending July 31, 2003. That report, he said, received a Certificate of Achievement for Excellence in Financial Reporting from the U.S./Canada Government Finance Officers Association. Edwards said the accountability that resulted in that citation is one that many other cities around America should emulate.

The 94-page report for Year Ending July 31, 2004 provided a breakdown of the various aspects of the city’s financial status. The report addressed areas such as Government-wide and Fund Financial Statements, Combining and Individual Fund Statements and Schedules, Special Revenue Funds, Capital Projects Funds, an internal auditor’s report on internal control measures, a variety of un-audited city-related statistical data and other information.

Edwards reminded council members that the current report was the second year of implementing a new governmental reporting model required under Governmental Accounting Standards Board (GASB) Statement #34.

The Management Discussion and Analysis (MD&A) section of the report provided many of the financial highlights of FY 2004. A sampling of the MD&A showed the city’s combined net assets increased from $20,023,595 in FY 2003 to $23,862,576 in FY 2004, or $3,838,981, representing a 19.1 percent increase.

Combined tax revenues for the reporting period accounted for $6,807,491, or 56.9 percent of all revenues from governmental activities. Service specific revenues in the form of charges for services, grants, contributions, fines and forfeitures accounted for $5,085,678, or 42.6 percent, of total revenues of $11,947,292 from governmental activities, according to the report.

City expenses related to governmental activities totaled $8,973,310. Of that amount, $5,085,678 of those expenses was offset by charges for services, grants, contributions, fines and forfeitures. General revenues of $6,861,614, coming primarily in the form of taxes, provided $3,887,632 for these services and $2,973,982 for future debt service and capital improvements, auditors reported.   

General Fund revenues were $8,208,146 for the fiscal year, representing an increase of approximately 9.3 percent over FY 2003. General Fund expenditures for FY 2004 totaled $8,863,648, a 14.02 percent increase over the previous year, the report said.

Water and sewer fund revenues totaled $4,050,701 in FY 2004 while total expenses for the same period were $4,564,018, according to auditors. Capital contributions were recorded in the amount of $1,353,804, including but not limited to donated property and the sewer proportionate share. The change in net assets after depreciation and non-operating revenues and/or expenses was $855,919 for the fiscal year end.

Relating to the General Fund, actual revenues of $8,208,146 fell short of the final budgeted amount of $8,409,417. This difference was primarily due to over-estimating revenues for property taxes and in fines and forfeitures, according to the report. Actual General Fund expenditures of $8,863,648 were less than the final budgeted amount of $9,097,861, representing a difference of $234,213. This difference was due primarily to capital expenditures not being purchased, auditors said.

Also included in the MD&A section were comments on economic and other factors. The city is estimated to have a population of 13,792. Population increases have been reflected in General Fund revenues, which have increased from $3,840,328 in 1994 to $8,208,146 in 2004. The economic outlook and condition of the city remain strong as the area is predicted to have a sustained growth pattern through 2010, the report said. Also noted was the beginning of a much slower growth in revenues, particularly in property taxes, franchise fees and building-related fees.

The city has continued to experience above average growth in local option sales tax revenues, mainly as a result of the percentage of distribution. While revenues have begun to slow, operating expenses have continued to increase. This was mainly due to providing competitive salaries and increasing health insurance costs that continue to be in line with the recent Atlanta Regional Commission Compensation Study, the report said. It was also noted that the city’s debt service has increased as a result of much needed equipment replacement and facility upgrades.