Memo-11-08-2016-Item-13

November 8, 2016

MEMO TO:           Mayor Barber and Board of Commissioners

FROM:                  Frank A. Rush, Jr., Town Manager

SUBJECT:           Presentation – Annual Financial Reports - (Summary & Suggested Motions)

Town of Emerald Isle – June 30, 2016 Comprehensive Annual Financial Report

Williams, Scarborough, Smith, & Gray (WSSG) CPAs has completed the Town’s June 30, 2016 financial audit, and a copy of the June 30, 2016 Comprehensive Annual Financial Report (CAFR) is attached for your review. 

Charles Smith, WSSG and Laura Rotchford, Finance Director, will brief the Board on the highlights of the financial statements and audit report at the November meeting.  WSSG previously met with the Board-appointed Audit Committee (Mayor Barber, Mayor Pro-Tem Messer, and Commissioner Wright) on October 18 to review the report. 

The Town received an unmodified (a “clean”) opinion from WSSG, and I am again pleased to report that the Town maintains a solid financial position.  Town staff and I are committed to maintain and improve that financial position in the future.  WSSG also did not identify any major concerns with our financial operations, and again expressed their opinion that the Town’s assets are well-managed by our staff. 

I am also pleased to report that the Town was awarded the “Certificate of Achievement for Excellence in Financial Reporting” by the national Government Finance Officers Association for the third time for its June 30, 2015 CAFR.  In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report.  The report must satisfy both generally accepted accounting principles and applicable legal requirements. 

The attached memo from Laura Rotchford includes various highlights of the June 30, 2016 CAFR.  I do, however, want to point out a few of the most significant items that relate to the practical management of the Town’s finances:

  • the Town’s total General Fund balance at June 30, 2016 is $2,278,814, and is a $134,451 increase from the June 30, 2015 fund balance amount; this is nearly the highest General Fund balance amount in the history of the Town of Emerald Isle,

  • the Town’s General Fund balance (unassigned plus Stabilization by State Statute) has increased from approximately $1.5 million in 2001 to more than $2.2 million in 2016, and has remained relatively stable in recent years, roughly between $2 million and $2.2 million; a historical graph of General Fund balance is attached,

  • the Future Beach Nourishment Fund has a total fund balance of $1,821,465 at June 30, 2016; these funds are reserved for a future, as-yet-undetermined beach nourishment project, and are expected to cover 33% of future total project costs (with the other 67% provided by Carteret County via earmarked room occupancy tax funds),

  • there is a total of $66,599 remaining in the Bicycle and Pedestrian Fund (derived from fundraising proceeds); the Board should recall that $34,000 of this amount is earmarked for the Bogue Inlet Drive bicycle path in 2017 and $15,000 of this amount is earmarked for the recently completed new beach access walkway at The Point; the remaining balance is available for future projects at the discretion of the Board and the Bicycle and Pedestrian Advisory Committee,

  • there is a total of $7,844 remaining in the Senator Jean Preston Memorial Playground fund, and this amount is available for future park improvements at this location at the Board’s discretion,

  • there is a total of $63,954 remaining in the Special Separation Allowance Fund used to pay additional retirement benefits to sworn law enforcement officers, however, the Board should note that these funds are now presented as “committed fund balance” in the General Fund; the Town currently has one employee eligible for this benefit (recently retired Chief Waters), and

  • the Town’s tax collection percentage continues to be very high at 99.79%.

Emerald Isle EMS, Inc. – June 30, 2016 Financial Statements

As you know, the Town provides financial management services for Emerald Isle EMS, Inc. through a separate contract, and Laura Rotchford also oversees EI EMS, Inc. finances for the Town.  WSSG has also completed an audit of EI EMS, Inc. finances, and a copy of the EI EMS, Inc. financial statements is also attached.

As noted, total EI EMS, Inc. revenues were $554,241 for the fiscal year ended June 30, 2016.  Of this amount, $377,000 was provided by the Town’s General Fund, with the bulk of the remainder ($166,910) derived from service fees.  Total EI EMS, Inc. expenditures were $555,174.  The Board should note that the attached financial statements do not include funds managed separately by EI EMS, Inc. in its “volunteer” account.

The total ending cash balance for EI EMS, Inc. as of June 30, 2016 is $58,396.  These funds are intentionally being reserved for the future replacement of an existing ambulance in FY 19-20 or FY 20-21.  The estimated cost of the new ambulance is expected to be as much as $200,000, and the Joint EMS Committee is hopeful that additional annual surpluses will materialize over the next few years to increase the amount available for the new ambulance.

Finally, I want to also take this opportunity to publicly thank Laura Rotchford for her excellent work as Finance Director for the Town of Emerald Isle.  I greatly appreciate her hard work and attention to detail on the CAFR, which is a significant undertaking.

Laura Rotchford and I will be happy to answer any questions or address any concerns at the November 8 meeting.