City’s total assets exceed total liabilities by more than $32 million

Adairsville gets clean audit for 2019 fiscal year

By JAMES SWIFT
Posted 12/31/69

Results of a fiscal year 2019 audit yielded no unpleasant surprises for the City of Adairsville, as Williamson and Co. CPAs partner Christian Hatch reported a clean opinion at Thursday evening’s …

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City’s total assets exceed total liabilities by more than $32 million

Adairsville gets clean audit for 2019 fiscal year

Posted
Results of a fiscal year 2019 audit yielded no unpleasant surprises for the City of Adairsville, as Williamson and Co. CPAs partner Christian Hatch reported a clean opinion at Thursday evening’s city council meeting. 

“For the year end of Dec. 31, 2019, the City received an unmodified audit opinion on its financial statements,” Hatch said, “which means its basic financial statements are fairly presented in all material respects in conformity with generally accepted accounting principles as they apply to local governments.”

Hatch likewise said the City had no “material weaknesses” in its internal controls over financial reporting, nor were any compliance violations or financial statement audit findings identified for the local government.

“At year end, total City assets exceeded total liabilities by $32.1 million,” he said. “This was an increase in net position from 2018 of $397,183.”

Hatch said all of the increase is attributable to the City’s governmental activities, which consists of all City departments and funds except for its water, sewer and gas utilities — all three of which, he said, are classified as business activities.

“The City’s combined business-type activities incurred a $565,428 loss for the audit year,” Hatch said. 

The City’s total tax revenue for the previous fiscal year, including SPLOST collections, came out to $3,834,644 — a net increase of about $47,000 over FY 2018.

“This was driven by a significant increase in sales tax collection,” Hatch told council members.

Meanwhile, the City’s governmental fund — consisting of the general fund, the hotel/motel fund, the confiscated asset fund and SPLOST fund — concluded FY 2019 with a cash balance that was more than $43,000 greater than the FY 2018 balance sheets. 

Factoring in money market accounts and certificates of deposit, Hatch said the final governmental fund balance eclipsed $2.4 million.

“Of that amount, $301,524 was externally restricted for capital projects and law enforcement activities,” Hatch said. 

Ultimately, the City concluded 2019 with a general fund balance of about $2.69 million, representing about a $65,000 increase over the final position of FY 2018.

“The total general fund revenue increased by $270,629 for the year,” Hatch said. “A full 12 months of garbage collections along with a jump in license and permit revenue were the main drivers of the revenue increases.”

At year’s end, general fund revenue exceeded the budgeted FY 2019 amount by $5,796, while total general fund expenditures came in under budget by $23,200.

The City’s enterprise fund cash balance, however, decreased by $350,389 from FY 2018, leaving the municipality’s combined cash balance at $2.5 million.

“Continued capital investment in the City’s utility system is the main factor in the business activity cash fund for 2018,” Hatch said. “Although the City put over $2 million of utility system improvements in the service in 2019, there was still $1.9 million worth of water, sewer and gas projects that were in progress at year’s end.”

Regarding the City’s long-term debt, Hatch said the municipality paid off its water fund capital lease early for a RAMVAC truck, with Adairsville’s total debt reduction on all outstanding Georgia Environmental Finance Authority (GEFA) notes clocking in at $167,606 — leaving a final GEFA note balance owed of $4,314,842.

“Your net position grew, your fund balance grew, a lot of capital investment, as you guys know, in the city,” Hatch said. “And your debt’s getting paid, so that’s good.”

Like many cities, he said Adairsville's fiscal position has improved over the last 10 or so years. But in the wake of the COVID-19 outbreak — and its corresponding economic impacts — Hatch said fiscal year 2020’s final numbers may not be as optimistic.

“After the financial crisis, we’ve all seen steady improvement year to year,” he said. “Over the next 12 months, who knows?”

In addition to approving the audit findings, members of the Adairsville City Council also approved a final general fund budget amendment for fiscal year 2019 on Thursday evening.

The public meeting concluded with council members voting unanimously to reappoint Evan King to the Adairsville Development Authority for a four-year term expiring on Sept. 15, 2024. A malt beverage and wine package license application for the Fast Track Food Mart at 7320 Adairsville Highway also received unanimous council approval.