The city of Laurinburg received mostly good news during an audit report for the 2012 financial year delivered to the city council on Tuesday.
Issuing an unqualified opinion — the best opinion that can be offered — Carl Head, a certified public accountant with Gustaf C. Lundin & Company, LLP, told the council that the city’s fund balance increased from $7.6 million to $8.1 million from 2011 to 2012.
“And the all-important unrestricted fund balance level — that number that the (Local Government Commission) likes to look at is … well above the eight percent threshold,” Head told council during its workshop meeting at the Barrett Building.
The city’s unrestricted fund balance increased from 29 percent to 45 percent from 2011 to 2012, Head reported.
Governments that breach that eight percent threshold come under the scrutiny of the Local Government Commission.
Head also tempered the news of the total fund balance increase by telling council that the increase “had a lot to do with loans” that were received by the city over the past year.
Of concern to Councilman JD Willis was the report that the city’s long term debt had increased by nearly $3 million over the audit period. In 2011, the city owned $3.4 million in long term debt and in 2012 it owned approximately $6.2 million.
While Head did say that the city has “very favorable interest rates” on its debt, Willis was more concerned with the size of the increase.
“Debt is debt. It makes no difference,” Willis said.
According to city Finance Director Cindy Carpenter, the debt is almost exclusively tied up in two big projects, with $2.4 million going to the ongoing and delayed automated meter reading project and a significant portion of the remainder going to the purchase of a new fire truck.
There were also substantial increases in the general fund balance and a decrease in the funds in the electric fund balance. Head said that this was due to funds being transferred from the electric fund to the general fund.
In 2012 there was also a decline in revenue, and Head credited what he said were “very mild” collections during the months of January and February last year.
Cash-flows from all of the city’s enterprise funds were positive, however.
Also during the workshop meeting, council instructed Human Resources Director Amy Martin to proceed slowly with the city’s management trainee program.
It had been proposed earlier that two of the trainee allocations might be used to fill police department needs, but that idea was put aside in favor of filling one trainee position at a time, starting with the city’s GIS program.
“In a new program like this, it might be reasonable to stagger the hirings,” said Mayor Tommy Parker, suggesting that any subsequent hirings be delayed until the kinks are worked out of the trainee program.