As the city’s auditors faced the council at the January meeting, everyone braced for the results of the annual audit. What the auditors reported may have surprised some, but Mayor David Thompson expected nothing less than what he heard.
CPA Jon Meyer of Jones Nale & Mattingly PLC, began by explaining the overall results of the audit.
“This is our opinion on your financial statements,” he told the council. “It is unmodified, which is the highest level of assurance we can give you as auditors about the accuracy of the financial statements.”
Throughout the presentation, Meyer and fellow CPA Jonathon Eade, explained numerous positive trends that have taken place over the last three years, including a decrease in the city’s long-term debt, a decrease in the city’s net loss for the year (which has dropped from 2013), a significant decrease in the General Fund net loss, and improvement over the past three years in the net loss of the Parks and Recreation fund. Finally, the auditors reported a vast improvement in the budget verses actual expenditures, of which there was a positive $38,000 net income to the budget in 2015 compared a net loss of $156,000 from the year before.
“This is a huge turnaround,” Meyer told the council.
This is Mayor David Thompson’s ninth city audit, and he says all of the audits have been about the same, sometimes a little better than others, but this year’s report was considerably better than in the past.
“I met with the auditors a while back,” said Mayor Thompson, “and they were real impressed with our numbers. The city employees were, as always, receptive and accommodating.
“At the end of the day, we got an A+ on our audit. This is largely due to the fact that we don’t owe a lot of money. Yes, we do borrow from time to time, but we’ve always paid it off, and we don’t have a large debt looming over us like many other small towns do.”
An unexpected item was added to the audit this year. This item, known as a Net Pension Liability, totaling $1.8 million for city employees and another $2.7 million for Barbourville Utility Commission employees, was explained by the auditors as a new pension reporting standard that applies to all local governments that have employees participating in the county employee retirement system. The new pension standard requires the city report that estimated portion of the county retirement system that is unfunded as a liability on its balance sheet.
“It’s not something that we have to pay now, and maybe not even in the next year or two,” said City Clerk Helen Strong, “but the state retirement system is underfunded, and somewhere down the road we could have to pay it.”
In other business, Code Enforcement Officer Corey Moren reported to the council on the positive results of the city recycling center’s unexpected site visit by the Division of Waste Management. Look for more details on this story in the next edition of the Mountain Advocate.
As the city council room was filled with residents looking for answers on the alcohol vote, City Attorney Chris Mills addressed the crowd with a statement that put a halt to questions that anyone might have for him or the council.
“We have contacted the ABC in Frankfort,” said Mills. “We’ve got to set a date for them to come down here and discuss this with us because this is new to everybody. At this point, neither myself, the council, nor the mayor have any answers for you. We’ll have more information when they come down and talk with us. We know as much as you do. There was a vote. It passed. That’s all we know at this point. There’s been no decisions made and nothing’s been done.”