Memo-10-13-2015 - Item 13

MEMO TO:           Mayor Barber and Board of Commissioners

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

SUBJECT:           Presentation – June 30, 2015 Comprehensive Annual Financial Report

Williams, Scarborough, Smith, & Gray (WSSG) CPAs has completed the Town’s June 30, 2015 financial audit, and a copy of the June 30, 2015 Comprehensive Annual Financial Report (CAFR) is attached for your review.

Laura Rotchford, Finance Director, will brief the Board on the highlights of the financial statements and audit report at the October meeting.  WSSG met with the Board-appointed Audit Committee (Mayor Barber, Mayor Pro-Tem Messer, and Commissioner Wright) on September 30 to review the report, and the Audit Committee indicated that Laura Rotchford could make the presentation to the full Board at the October 13 meeting.

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 second time for its June 30, 2014 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, 2015 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, 2015 is $2,080,608, and is a slight decrease from the June 30, 2014 fund balance due to the purchase of the vacant lot adjacent to the Town Administration Building; the Board should note that the Town expected to use $150,000 of fund balance for this purchase, but only needed to use $69,637 due to higher than anticipated revenues and lower than anticipated expenditures elsewhere in the General Fund budget,
  • the Town’s General Fund balance (unassigned plus Stabilization by State Statute) has increased from approximately $1.5 million in 2001 to nearly $2.1 million in 2015, and has remained relatively stable in recent years, roughly between $2 million and $2.1 million; a historical graph of General Fund balance is attached,
  • the Future Beach Nourishment Fund has a total fund balance of $1,391,580 at June 30, 2015; 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 $84,405 remaining in the Bicycle and Pedestrian Fund (derived from fundraising proceeds), and $45,000 of this amount is earmarked for decorative street lighting in the “downtown” area along the bike path and sidewalk; the balance is available for future projects at the discretion of the Board and the Bicycle and Pedestrian Advisory Committee,
  • there is a total of $44,168 remaining in the Coast Guard Road Bicycle Path Extension project fund, and $36,000 of this amount is earmarked for the Town’s cost-share for new steel traffic signal poles; if associated State funds do not materialize, these funds would be available for other uses at the Board’s discretion,
  • there is a total of $63,755 remaining in the Special Separation Allowance Fund used to pay additional retirement benefits to sworn law enforcement officers; the Town currently has one employee drawing this benefit, and his benefits will cease in March 2016, and
  • the Town’s tax collection percentage continues to be very high at 99.72%.

As you know, Laura Rotchford has served as the Town’s Finance Director since December 2014, and the June 30, 2015 CAFR is her first with Emerald Isle.  I greatly appreciate her hard work and attention to detail on the report, which is a significant undertaking.

Laura Rotchford and I will be happy to answer any questions or address any concerns at the October 13 meeting.