BY TRACY LEE TATE
Times Editor
LAKE BUTLER — For another year the City of Lake Butler has received a clean audit, with few comments or findings.
Richard Powell CPA, from the firm Powell & Jones in Lake City, presented the annual audit report to the Lake Butler City Commission at its June 21, 2022 regular meeting. He said that he had found no material weaknesses in the city’s finances and/or financial recordkeeping, although his report did note that the city was sometimes a bit lax in its monthly bank reconciliations – a matter which City Manager Dale Walker addressed prior to the meeting.
Noted on the balance sheet for the year audited, Powell said he found remaining unassigned fund balances of about ½ a million dollars and reserves sufficient to cover city operations for six months. These reserves are necessary should the city face a loss of income and/or a major event (such as a serious hurricane or other storm) that would limit it’s income and cause emergency expenditures of a high level.
The city Enterprise fund, fueled by the water and sewer departments, is at an acceptable level, with about half of its net position in capital assets and restricted funds. Powell told the board that the goal was to operate off user charges and that the fund needed more incoming funds other than those provided by grants – noting that most of the grant funds were spent on capital assets (such as equipment).
On the subject of capital assets, the audit noted that about 92% of the allowable depreciation of these items (vehicles, equipment, etc.) was used up, with the city’s capital assets in other areas having already used up about 72% of their depreciation value. Powell noted that these figures were greater than that found in most cities of comparable size but said that the fund balances for available capital and reserves were good.
Powell said that the audit showed that the city was not overburdened with debt, noting the decrease in the Enterprise Fund liabilities from $1.6 million in the last audit to $1.3 million in one year.
Some of the figures from the audit report show that the city had revenues of $1,037,400, derived from a number of sources including ad valorem taxes, Enterprise Fund income and grants received by the city for various projects.
Noted was a negative balance in the Downtown Redevelopment fund in the amount of $33,537, but a note said the deficit was planned to be paid out of the coming year’s tax income.
The city as several long-term liabilities, including one outstanding water and sewer bond balance, from a bond issued in 1998, that is set to be paid out of sewer and water revenues, with an outstanding balance of $745,000 to be paid in full in 2037, A previous water and sewer revenue bond was fully paid in the 2020-21 fiscal year.
The city also has several loans including one for a truck purchase in 2019 (that will be paid off in 2024), two loans from the State Revolving Fund (both at interest rates lower than one percent, connected with the planned water treatment facility) and one from the Florida Department of Environmental Protection for clean water projects, also a very low interest loan. These long term liabilities require about $66,000 per year to keep current.
Over all, the auditor said he found no major problems, with the one most cited being the aforementioned late reconciliations of the city’s bank statements. He said that, as usual, the city hall staff were helpful, courteous and responsive to requests for information. He said that the financial statements and physical control over assets was adequate, it was in financial compliance with all loan agreements and internal controls were good.
