The Town of North Wilkesboro’s unassigned fund balance increased by about nine-fold as a result of efforts to reduce spending, according to a fiscal 2018-19 audit report shared with the town board Tuesday night.
“It was a very good year, no doubt about it,” said Craig Hopkins, manager of Winston-Salem-based Gibson & Company, the accounting firm that conducted the audit.
The audit showed that the town had an unassigned fund balance of $3.20 million when fiscal 2018-19 ended this past June 30. That was about 54% of general fund expenditures for the year.
The unassigned fund balance was $353,556 (14.58% of general fund expenditures) at the end of fiscal 2017-18.
Hopkins said the N.C. Local Government Commission recommends at least 8% for municipalities to ensure sustainable financial health.
He said increased unassigned fund balance resulted mainly from the town spending less on capital improvement projects and less road paving. The town spent about $549,000 less than what was budgeted for 2018-19, showing “great stewardship from the board’s management and from town employees,” he said.
“The town kept operating expenses as low as possible while maintaining services.”
North Wilkesboro’s total debt decreased by $394,227 in fiscal 2018-19, after decreasing by $742,085 the year prior. Debt increased by $490,310 two years ago.
Town revenues were $7.09 million and expenditures were $5.93 million in 2018-19, resulting in the total general fund balance increasing by almost $1 million to $4.49 million. In stark contrast, the general fund balance decreased by $305,000 last fiscal year.
The town’s governmental funds had a combined fund balance of $5.2 million, a net increase of just over $944,000. About 25% ($1.28 million) of this is restricted and can’t be spent by the town.
Total current assets in the town’s water and sewer fund totaled $4.17 million, versus total current liabilities of $1.04 million. “That four-to-one ratio shows the strength, I think, of the water-sewer fund here,” said Hopkins.
Water and sewer revenue was $3 million, while operating expense was $2.76 million, leaving an operating income of $240,753. A one-time write-off of $1.4 million for North Wilkesboro’s share of costs from the cancelled water intake project at W. Kerr Scott Dam and Reservoir (a debt service shared with the Town of Wilkesboro) led to a net water-sewer loss of $956,233.
The Kerr Scott write-off was the primary reason the town’s total net position decreased by $1.05 million. It decreased by about $292,000 in 2017-18 and $253,000 in 2016-17.
The town’s net assets exceeded net liabilities by $64.37 million. Last year, that net position was $64.54 million. Two years ago, it was $65.75 million.
The same as in 2017-18, said Hopkins, “no instances of noncompliance or other matter” were found that would have to be reported to the Internal Revenue Service. “It was very clean,” added Hopkins, referring to the sum of financial documents submitted by the town.
Commissioner Debbie Ferguson thanked town staff for working hard to improve the town’s financial standing. “They did a great job this past year to right the boat and steer us to a healthy place.”
The town’s 2019-20 budget approved in June includes no fund balance spending and conservative capital improvement spending. No funds for repaving streets are budgeted.
Also on Tuesday, the commissioners:
• approved a budget amendment transferring $256 to the Wilkes County Schools for court-ordered disposition of drug money seized by the North Wilkesboro Police Department;
• designated Town Manager Wilson Hooper as signatory for the elevated water tank project at the town-owned Wilkes Industrial Park on River Road-Liberty Grove Road. Discussion of the project was postponed because grant writer Emily Miller of McAdams & Associations couldn’t attend the meeting;
• appointed Holly R. Minton and Elisa Rodriguez-Valles to the town’s Housing Rehabilitation Loan Program Committee. Others on the committee are Ferguson, Town Planner Meredith Detsch, Fire Chief Jimmy Martin and Dave Barton;
• established four mayoral-appointed subcommittees for 2019-21: administration, public safety, physical environment and recreation and culture. As of Thursday, Mayor Johnson hadn’t appointed anyone to the committees;
• adopted a resolution authorizing advertising the town’s intentions to close the eastern half the town-owned right-of-way alley between Fifth and Sixth streets and Main and C streets. It’s the portion closest to Fifth Street, between Key City Antiques and Harvest Time Christian Academy;
• approved bank financing of no more than $215,000 to buy a 2020 Mack GU713 sanitation truck, which will replace a 2006 Sterling truck;
• discussed potential candidates to replace Gary Vannoy town attorney during a closed session. Vannoy retired at the end of 2019.