Although the City of Smithville spent more than it took in due to onetime general fund expenditures for the year ended June 30, 2024, it remains on sound financial footing according to the latest audit report
John Poole, Hendersonville CPA, who performed the annual audit for the city, addressed the mayor and aldermen Monday night.
Poole said the audit showed no major deficiencies.
“In doing the state audit we are really trying to do three things,” said Poole. “One is to make sure we provide the state the financial information that they require in their oversight. Another thing we do that is most important to this board is to look to make sure the city is receiving the monies it should be getting whether that’s from the annual property tax, monthly utility billings, police fines, fees from the pool and golf course, etc. Also to make sure the city is getting the monies it is supposed to be getting from the state and from the county. Once we receive these monies, we are to make sure we are handling those monies in accordance with city policies and state guidelines,” explained Poole. “The city is also involved in several grant programs so we look to make sure that the grant monies we receive are handled correctly. I do believe the city is getting the money due it. Of course you will have some folks that are delinquent in payment of property taxes but the city does a good job of tracking that. It’s the same with utilities. We have some people who don’t pay from time to time but the utility department does a good job of monitoring them and making cutoffs when appropriate. As an auditor I really feel like the city is getting the monies it is supposed to be getting,” said Poole.
“The third thing we look at is making sure the monies this board authorizes the department heads to spend is done for city business and that they are following purchasing guidelines, procedures, and the way grant funds are spent. We didn’t find anything to cause a concern as to how the monies are being spent. In our opinion as auditors, we didn’t see anything that gave us any concern,” said Poole.
According to Poole, the water and sewer fund showed a surplus for the year which meets the state’s requirement that the utility be financially self-supporting.
“The change in net position for the year is $536,142 related to water and sewer (not counting grants) so we had a surplus and you certainly met the state’s threshold. When it comes to the utility fund (water & sewer) we are required by state law to show a profit. The city can’t lose money two years in a row. That is not a concern in Smithville. From a financial standpoint your utility system is in good shape,” said Poole.
As for the general fund, Poole said the net change in position showed expenditures exceeding revenues by $722,264 for the year due primarily to large one time capital outlay investments including new emergency communication radio systems for the police and fire departments along with installation of a new irrigation system at the golf course, major swimming pool repairs, as well as replacement of the Dry Creek Bridge and paving projects. Unlike the water and sewer fund, Poole said the general fund does not have to show a profit at year’s end but in this case, the city had ample funds to cover the overage. “If you hadn’t had those significant expenditures, there would have been a huge surplus but those are things we will not be doing every year,” said Poole.
As for the financial strength of the city, Poole explained that in the checking and savings accounts the city has in the general fund $5 million and CDs of over $528,000 which totals more than $5.5 million,” he said.
In the water and sewer fund, Poole said the city has a total of $6.5 million including almost $700,000 in certificates of deposit.