OREM -- A statement in an audit cover letter composed by city manager Bruce Chesnut sums up the city's financial health: the city is "in relatively sound condition" -- for the condition it's in. Which isn't exactly pretty.
While auditors do not provide an opinion, administrative services director Richard Manning noted that the general fund balance has been declining in the past three years despite sales tax increases.
"This is an area of concern," Manning noted. He also noted the self-insurance fund has only $424,000, significantly lower than it has been. "One significant accident or lawsuit to the city and it could be gone."
The worker's compensation deductible also is going up $200,000, a premium increase of 10 percent. That amount was approved by the council for transfer to the self-insurance fund to compensate for the increase.
Chesnut's cover letter warns elected officials and residents of deteriorating and ongoing concerns with funding and infrastructure maintenance.
"Revenues related to the building industry continue to be inconsistent as the current fiscal year decreased substantially from the prior fiscal year," Chesnut reports. "Revenue growth, if any, in this area will be very slow over the next few years."
He notes that the street lighting fund also continues to struggle without dedicated operational funding.
"The city's biggest challenge is finding a long-term solution to pay for the city's UTOPIA pledge obligation," Chesnut said.
While Orem's infrastructure is stable, the auditors reported that it continues to deteriorate as needed improvements or maintenance continue to get pushed into the future.
Among a long list of projects that need capital funding are the construction of a new fire station in the northern part of the city. That request has been put on hold since the 2009 budget approval. There is also great need for cemetery expansion. Water and sewer improvements in the southern part of the city are also desperately needed.
Over the past several months the accounting firm of Keddington & Christensen, LLC has been reviewing Orem's financial records and the auditor's opinion with no qualifications is a "clean" opinion for the city. But even a clean audit report won't fix the numbers. With the city in nearly a complete freeze until residents vote next November on a city property tax increase, the city coffers, infrastructure, and revenue growth will stay stagnant or continue deteriorating, leaving the city in greater financial stress. Herald Extra.com
No comments:
Post a Comment