Good news in city of Farmington's annual financial audit
After a few years of struggling, Farmington's city finances seem to be on the road to recovery, according to the 2012 audit.
Findings of the audit were presented at Monday's Farmington City Council meeting by finance director Robin Hanson and Jason Miller, representative of the auditing firm of Smith-Schafer & Associates.
According to Hanson, 2012 was a good year financially for the city of Farmington. Assets of the city for all funds exceed liabilities by $112 million, she said. Of that amount, $29.2 million is unrestricted and is available to meet ongoing obligations of the community.
Farmington's total net position increased by $5.6 million in 2012, Hanson said. Within that, the bonded debt decreased by $3.1 million, thanks in part to the retirement of one series of bonds from 2001.
Governmental funds combined for an ending fund balance of $14.7 million, which reflected a 3.8 percent increase from 2011, Hanson reported. Of that, approximately $11.2 million is available for use by the city.
Over the past year, the city transferred $685,000 into the EDA, the recreation operations and the ice arena fund. In doing so, Hanson was able to eliminate negative fund balances that had accumulated in those budgets over time. In addition, all inter-fund accounts were eliminated, with the exception of an inter-fund loan from the water board to the fire department for the purchase of the new Engine 22.
"There was lots of good clean-up there," Hanson said.
Both Hanson and Miller noted that the transfers dipped the unassigned fund balance below the city council's target of 25 percent, to $2.1 million, which represented 23 percent of the general fund expenditures. However, both felt it was a good move for the future.
"I think in the long run, those were the right decisions to make and in the long run will serve to strengthen the general fund balance over the years to come," Hanson said.
Finally, Hanson noted, the city began to address deferred maintenance needs in 2012 by providing funding for seal coating, trail maintenance and, in the most recent budget, building maintenance.
Smith-Schafer & Associates gave the 2012 audit a favorable review, Miller said. In their evaluation, the auditors did not find any instances of noncompliance with accepted accounting principles, nor did they note any exceptions in regards to legal compliance, he said.
"She did a great job. It's a big project and it went as smoothly as could be expected," Miller said of the audit.
A copy of the Comprehensive Annual Financial Report is available for review at Farmington City Hall, and another copy is available at the Dakota County Library in Farmington.
The city of Farmington also received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for 2011. Hanson is completing the necessary paperwork in hopes of receiving similar distinction in 2012.