If money stopped flowing into the town of Garner’s coffers right now, leaders here would have some time to figure out how to pay the bills.
According to audit figures released Tuesday night, the fund balance, or savings account, for the town’s general fund includes nearly $27 million. Of that amount, $17.9 million is unassigned, meaning the money isn’t designated for any particular use.
That unassigned fund balance would be enough money to operate the town government like normal for nearly eight months.
The figure is well above the target set by town council, which calls for the town staff to reserve a minimum of 30 percent of the town’s annual operating budget in savings.
The town has been able to amass the extra cash because of a number of factors, including an increase in the tax rate last year and increased property values following a countywide revaluation that allowed the town to collect more in property taxes than in previous years. The town’s savings also grew because money budgeted for town operations last year went unspent. That money was returned to the town’s fund balance. Revenue from sales taxes and permitting fees were also higher than expected.
When all forms of the town’s savings accounts are taken into account, the town has socked away 86 percent of what it would cost to operate the town for a year. “For towns in your population group, the average is 54 percent,” said Elsa Watts, with Martin-Starnes & Associates, who performed the town’s audit.
The audit reviewed the town’s general operating fund, which is how most of a town’s expenses are paid and where most revenues are held. According to Watts, the town reported just over $28 million in assets as of June 30, with liabilities of just under $1.5 million.
Property taxes made up the single largest portion of the town’s revenues last year, accounting for 57 percent of the town’s income. Other taxes and license fees brought in about 20 percent of the town’s revenue while money from state and federal sources accounted for 11 percent of the town’s revenue.
Public safety – police and fire services – took the lion’s share of the town’s money. The audit showed the town spent 39 percent of its money on public safety. General government services – administration, planning, engineering and the like, accounted for 24 percent of the town’s operating expenses while other expenditures such as transportation, environmental protection and debt service accounted for 27 percent of the town’s costs last year.
The town’s tax collection rate was 99.7 percent, down slightly from 99.71 percent in 2015 and just below the 99.8 percent reported by other North Carolina towns the size of Garner.
Council members had little to say regarding the audit findings, but Council member Ken Marshburn took note of the auditor’s findings.
“It appears any findings were responded to appropriately. They seem to be related to the significant turnover we had during this time. We pretty much well have that department restocked,” Marshburn said.
Auditors reported a handful of significant deficiencies in the town’s money handling processes. Most of those problems arose because of turnover within the town’s finance department, following the departure of finance director Emily Lucas. Vacancies made it difficult for the remaining staff to ensure the separation of duties that would help prevent problems.
The audit findings didn’t report any misappropriations or unusual spending, but Watts’ report said the deficiences should be corrected to limit the opportunities for errors that could go undetected. In its response, the town agreed with the auditor’s findings and, in most cases, pointed out that filling the vacancies had resolved the issues reported in the audit.