Annual financial report approved
San Jacinto News- Times - April 2008
SHEPHERD – Shepherd City Council members approved the city’s annual fi nancial report Monday night for the year ended Sept. 30, 2007. The audit, conducted by the certifi ed public accounting fi rm of Hereford, Lynch, Sellars and Kirkham, is designed to provide citizens, taxpayers, customers and investors and creditors with a general overview of the city’s fi nances and to demonstrate the city’s accountability for the money is receives, according to Hereford, Lynch, Sellars and Kirkham representative Debbie Kirkham. Assets of the city exceeded its liabilities at the close of the fi scal year by $4,193,701 (net assets), according to Kirkham. “Net assets refl ect $2,531,085 that is invested in capital assets, net of related debt,” she said. “During the year, the city’s governmental activities expenditures were $512,898, less than the $517,664 generated in taxes, charges for services and other revenues for governmental activities. The general fund reported a fund balance this year of $811,894, which was unreserved and undesignated, which approximates 194 percent of general fund expenditures,” Kirkham said. Kirkham said the city’s total assets of $4,943,661 are largely comprised of capital assets net of accumulated depreciation of $3,191,085, or 65 percent. Historically, infrastructure (roads, bridges, signs, etc.) has not been included in capital asset reporting for governmental activities. It is now required that all capital assets, including infrastructure, be reported in the government-wide statements. Capital assets are non-liquid assets and cannot be utilized to satisfy city obligations, she said. “Long-term liabilities of $660,000 comprise the largest portion of the city’s total liabilities of $749,960 at 88 percent. Of total long-term liabilities, $10,000 is due within one year, with the remainder $650,000 being due over a period of time greater than one year,” Kirkham said. Net assets are comprised of unrestricted net assets and invested in capital assets, net of related debt, Kirkham explained. “The $1,662,616 of unrestricted net assets represents resources available to fund the programs of the next year,” she said. The city’s total revenues were $517,664 from all governmental activities. A portion, $57,551 or 11 percent of the city’s government activities revenue comes from charges for services (primarily fines), according to Kirkham. Tax revenue accounts for $396,939, which is 77 percent of total revenue for governmental activities. The total cost of all governmental programs and services was $512,898. The general government function, which was the largest, accounted for $154,024 or 30 percent of the total. The increase in net assets for governmental activities and the decrease in net assets for business-type activities are primarily from a transfer of $100,728 between the funds. The city’s proprietary fund financial statement reflects the city’s water and sewer activities in an enterprise fund. The net decrease in fund balance during the current year in the water and sewer fund was $128,889. The decrease in fund balance is due to the transfer of funds $100,728 to the general fund and the rise in the various cost that support the water operations, despite the nine percent increase in customer accounts and the 25 percent increase in base sewer charges, according to Kirkham. Expenditures are budgeted to increase 36 percent, $149,868. The largest increments of the increase are due to the appropriation increases for law enforcement, $71,245; street department, $45,928 and library department, $14,429. Summarizing the city’s annual budget report, Kirkham praised the efforts of City Secretary Donna Pitrucha in preparing the city’s financial reports, saying she does an excellent job. On the down side, Kirkham said the city needs to see that Pitrucha obtains training from seminars to provide her with the necessary skills to review entries for the government- wide financials and the related financial statements and notes to financial statements. Kirkham reported no significant deficiencies identified that are not considered to be material weaknesses.