Friday, March 3, 2017

Auditor Says City Had A "Very Successful Year"

Fairhope, Alabama

Update: The audit is posted online from the city's website under Departments, Finance.

CPA Rachel Godwin at left


Lee Ann May, a CPA from the accounting firm of Hartman, Blackmon and Kilgore presented the annual financial audit to the city council for fiscal year 2016 (October 1, 2015 -- September 30, 2016) -- giving the city an overall  "unmodified opinion, the highest opinion we can give."

Highlights included:

* $8.3 million in net income
* $4.5 million in debt retired: two million of that "excess debt" over that regularly scheduled.

* Total liabilities were reduced by $3 million.

Also,  $2.5 million of new capital assets were purchased for the utilities -- and $8 million for general government.

May: "That's all great ... you are re-investing in the utilities and city. ... had a very successful year ... congratulations for that."


She added that all municipalities are facing a federal government mandate for addressing so-called 'Other Post Employment Benefits' (OPEB): health insurance for retirees not yet eligible for Medicare.

Fairhope's is currently $8.4 million: "You may want to start paying that down (next year)."


The city's population was 18,730 and per capita income $36,155.

Total revenue was $64.8 million and expenses $56.4 million.

Property tax revenue was $4.2 million.

Sales tax revenue was $7.4 million.

Lodging tax revenue was $696.4K.

Beer, wine, liquor tax revenue was $482.7K.

Total debt was $26.6 million (15.4% of the legal limit).

The city's credit rating was AA+.

Income from utilities was $7.1 million and $2.9 million of that was transfered to the city's general fund.

Property and sales tax revenue was up $985K over the previous year.

Building permits were up 23%.

The airport's long term debt was $7.1 million,  its income $304K and expenses $644K.

The airport (authority) received $428K from the city.

The library (board) received $806K from the city and revenue of $18.1K from fines; $46.1K donations; $14K state aid; and $17.3K from misc. other sources.

Library salaries totaled $505K.

There were 6,767 electric customers; 10,346 natural gas and 17,910 water/sewer.

School enrollment was 5,333 (up 5.3% over 2015)

There were 288 full time city employees, the same as in 2015.

Total pension liability was $38.3 million.


Anonymous said...

This simply can't be true, Mayor Kant and the council were all deplores with double-dealings by land owners, Fairhope simply could not have had a good year!

It will be very interesting to see how the city does this fiscal year. Oh wait, if the city does not as well it will be Jack's fault.

If you examine the reports closely, a lot of the money the city took in was fees from builders, but wait, the builders are all crooks and are killing Fairhope.

No, everything is Jack's fault, the outside accounts must have lied about the financial statements! Yeah, it's they are in with Jack and these statements are all lies!


Anonymous said...

if things are in good shape why are we firing people who helpd make it so? Just asking?

Anonymous said...

This does present a very different picture than our current mayor presents but I am not sure she can understand the report. I think she was elected because she threw out a lot of outright lies and played into people's fears. We live in a beautiful town and enjoy reasonable city services and low utility costs. How long do you think that will last when we bring in new hires at the salaries that would be paid in large cities? When our new mayor started complaining about her salary before the "inauguration" she was comparing the salary to much larger cities. Since she is so unhappy about everything it would be great if she would resign and let us have a special election. Maybe this time we could elect someone who is capable understanding the requirements of the position and willing to work to keep Fairhope the beautiful town that we all love.

Anonymous said...

Because Dipp & Ding are advising her in how best to destroy our city & she can't see beyond them!!

Anonymous said...

I am not accusing anyone of anything, but corruption and prosperity typically go hand in hand. It's much easier to pull some shenanigans when the people are at ease. Again, I'm not suggesting that's the case in Fairhope or even defending those that do. But the conditions in Fairhope right now are ripe for shady dealing. Fairhope is a gold rush right now, and the prospectors are at work.

Anonymous said...

If the city is using utilities to pay for city services, the our planes utilities are a hidden tax not voted on by the residents.

Anonymous said...

The auditors are part of dipp and ding's grand conspiracy theory. The GCP,

Anonymous said...

A lot of folks who felt slighted by the old good ole boy system are getting their payback now. Not exactly by the book though, if you know what I mean. Two wrongs do not make a right.

Anonymous said...

Mayors and councils have never gotten along here.
The only thing to do is change to the council/city manager form of government and eliminate the mayor altogether. The sooner the better!

Anonymous said...

Yep. the "Creekers" and "minority community" are getting more than their fair share lately.

Publisher said...

Many here believe using city utility profits instead of taxes to raise revenue to finance city operations has been seen as in accordance with the Single Tax Theory; it is done in many other towns in the state as well.

Other see it as Socialism.

Anonymous said...

Whats wrong with the truth!!! You haters don't like that. I LOVE IT

Anonymous said...

I do not trust that accounting firm. they always gave a lot of money to TK.

Anonymous said...

The good Reverend Williams has been up there more than anybody asking for handouts.

Anonymous said...

It looks as if we have unfunded pension and insurance liabilities in addition to the sad state of our sewer system. Obviously the auditors are friends of Kant and threw out all of the good news first hoping to deflect attention away from the bad news! Cities all over the country are going bankrupt because of mayors and city councils voting themselves such benefits as health insurance for life and defined pension payments. It appears that Mayor Wilson is trying to address some of these issues before the same thing happens to Fairhope.
I think that someone is very worried about what other facts may turn up if she keeps digging. I am totally in favor of putting all of the facts out there.

Anonymous said...

I wonder how "Mayor Wilson" would interpret this audit? Does it
need some "SPIN" on it ????

Publisher said...

The mayor was given an opportunity to comment during the presentation but declined to do so. The Times asked her about it later and she only mentioned concerns about how the utility financial reporting is being done.

Anonymous said...

I think the article and some commenters are placing too much emphasis on what a audit report does or doesn't do. An audit is not a policy document other than reviewing how well the city is managing its money to conform to acceptable accounting practices. Any city that is paying its bills and has money in the bank could be informed by their auditor that they had a good year. No one has cooked the books or run away with funds. That certainly is good news. The auditor also raised a concern about the need for the city to plan for a new health liability. That, too, is in keeping with an audit. Otherwise, policies, whether prompted by the mayor or members of the council, are irrelevant to the auditor unless it compromises the city's financial structure or integrity. Clearly from the comments there are differences of opinion about how revenue is raised and how money is spent. These would be good comments to make at a future council meeting when a specific proposal is being considered.

Anonymous said...

Income from utilities was $7.1 million and $2.9 million of that was transfered to the city's general fund. - ??? But we don't have enough money to improve the sewer system.

The airport's long term debt was $7.1 million, its income $304K and expenses $644K. - ???? No one thinks this is strange or a poor business model???

The airport (authority) received $489.9K from the city. - ???? For what?

Library salaries totaled $505K. ???? Those are some highly paid librarians.

Would appreciate the city pursing an audit firm outside of the city.

Anonymous said...

Mayor Wilson does not understand governmental accounting, but it is a specialize accounting.

My thoughts on the sewer system, if the city can't furnish the sewer then allow another outside entity to furnish the sewer.

Just about all cities have unfunded deferred pensions and insurance, this not usual or unique to Fairhope. Taking funding from area of government to pay for another is not usual, this is common practice for cities and corporations alike.

What needs to be clear to everyone is the revenue to Fairhope, the top tax revenue is Walmart, and then income from builders fees.

Fairhope needs to come to realize that once, or if growth stops, then this town will not have a library, the tennis courts, the marina, the city will not be able to afford the flowers, et cetera, etc.

The mayor's firing and hiring have politicized many of the cities employment positions, once this occurs then many individuals will not want to work for the city. Just think about this, you leave a good job to come work in Fairhope government, then in 4 years and you're out of a job.

Or why would anyone want to work their way up to become management or a director of a division if you are most likely to be fired by the incoming new mayor.

Remember, Unitization is created by bad management, the worse the management the stronger the union, the better the management then the weaker the union. Unions are created because workers fear for their jobs due to politicizing the hiring and firing of employees!

Mayor Wilson has created some issues that many just come back to haunt this city.

Publisher said...

A $13 million upgrade to the city's sewage treatment plant projected by a 2011 engineering study to handle capacity for ten years was completed last year; a phase two was always to be refurbishing the existing leaking collection system (pipes, pumps, etc) -- but no formal study was ever commissioned for that. A cost estimate we heard for that at the time was about $13 million as well.

As we understand it though, a major consideration is that the treatment plant is "landlocked," no further expansion is possible: An entirely new plant will be necessary someday, located elsewhere; it may not be possible to use all of the existing collection system ... .

Anonymous said...

I'm glad Fairhope had a good year overall, but some people are choosing to overlook the parts of the report that you mention.

Anonymous said...

Does Jack Burrell publish this blog? I find it amusing that whenever the 'news' does not reflect Burrell and Boone in a positive light that this blog tries to deflect that 'news'.

Anonymous said...

There is a big parcel of land for sale just north of the current sewer plant. Maybe the city needs to look into this.

Anonymous said...

As I remember it, financial genius Kant vetoed the sales tax , said it was not needed. We would have been $30 million in the hole if the council had not overridden it.

Anonymous said...

"Library salaries totaled $505K. ???? Those are some highly paid librarians."

They sure are, considering that their Board of Trustees doesn't care enough about the well-being of their staff members. I think it's high time the City of Fairhope replaced the current library board. The elder board chairman has been there LONG ENOUGH!

Mayor Wilson should also consider bringing the library under rule of the city. Make things equal across the board!

Anonymous said...

NO, NO, the council never overrode Kant's vetos, they were just a rubber stamp! Remember, the council knows nothing, mayor Wilson stated that the council was a rubber stamp for Kant!

Anonymous said...

Sure alot of Trumb DNA in Fairhope

Anonymous said...

According to the City of Fairhope FY2016 budget and the 2016 Comprehensive Annual Audit, the city appropriated $428,000 to the Fairhope Airport Authority, not $489,000 as listed in this article. $408,000 was for debt service. The $428,000 is listed as an expense to the city. This sum was equal to approximately 1.6% of the total of the city's expenses of $25,836,300 listed in the two reports cited above.

Overall the city's assets and deferred outflows exceeded liabilities and deferred inflows by $143,834,561.00 which resulted in an increase in the adjusted net position totaling $8,352,598.00. This budget and audit are for the previous fiscal year ending September 30, 2016.

I concur with a previous comment that "An audit is not a policy document other than reviewing how well the city is managing its money to conform to acceptable accounting practices. Any city that is paying its bills and has money in the bank could be informed by their auditor that they had a good year. No one has cooked the books or run away with funds. That certainly is good news. The auditor also raised a concern about the need for the city to plan for a new health liability. That, too, is in keeping with an audit. Otherwise, policies, whether prompted by the mayor or members of the council, are irrelevant to the auditor unless it compromises the city's financial structure or integrity. Clearly from the comments there are differences of opinion about how revenue is raised and how money is spent. These would be good comments to make at a future council meeting when a specific proposal is being considered."

GCJ said...

The library employs 24 people (7 full time) and is open for 52 hours per week with over 700 people served every single day!! The library has over 85,000 print items in the collection and circulates over 250,000 items per year. The library staff answered over 100,000 reference questions and provided computers for 45,000 users and wi-fi for 112,976 users. The library hosted 718 adult programs last year, 131 children's programs, 215 story times. The library hosted 5686 children during the Summer Reading program. The Library Director and most department heads hold Master's degrees in Library Science.

GCJ said...

How would the library or the citizens benefit by bringing the Library "under the rule of the city"? Do we really want the Fairhope Library to be subject to political favoritism and patronage?? What will the Library "be equal across the board" to ? Seems to me the city has more than enough on it's plate, and does not need to make a grab for our award-winning, much-loved Library!

Anonymous said...

700 people every single day, that would be approx. 80 people an hour, I,ve never seen more than a dozen or so in that Library at any time. Another good ole boy/girl organization trying to maintain their little private club. City needs to take over!

Anonymous said...

Some of the librarians are close relatives of board members.
Maybe to close.

Anonymous said...

Do you possibly call that working together? Much better than mayor/council not respecting others' opinions and thinking they can rule on their own... Bad for the city.

GCJ said...

Wow ! Anonymous posters can say anything .....

The Library attendance figures are based on an automatic door counter. I just walked through the entire library and there are 118 patrons in the library at 10:34 am on a Tuesday morning.

I have worked at the library for 8 years, and can say with confidence that there are no staff members who are related to a board member.

I have been involved in the hiring process for several library employees. There is no political patronage, no favoritism, no nepotism-it is not a good ole boy private club.

Again, what is the benefit by bringing the Library "under the rule of the city?"

Anonymous said...

Than why are you worried about the city having more oversite?

Anonymous said...

And all these patrons generate how much money exactly? And besides the salary, the city pays for what else? What does the library fund with the fundraising monies?

Anonymous said...

Hating on Mayor Wilson and the Fairhope library staff? More than a few posters here would benefit greatly from using our very wonderful library. It might improve their spelling and writing ability which appears to be at a second grade level. Making American greatly stupid again seems to be the motto for too many folks in Fairhope these days.

GCJ said...

@Anonymous- Public Libraries were established as community resources, accessible by the general public, and funded from public sources. There are 5 fundamental characteristics shared by public libraries -they are supported by taxes; they are governed by a board to serve the public interest; they are open to all, and every community member can access the collection; they are entirely voluntary in that no one is forced to use the services provided; and lastly, they provide services without charge. So, patrons do not "generate money" but they do freely use the library resources.

The appropriation from the city pays not only for salaries but also books, magazines, databases, public access computers, wifi, speakers, classes, materials, newspapers, licensing fees, software, printers, copiers, digital platforms and materials, DVDs, ebooks, outreach, janitorial services, projection equipment, furniture, shelving, educational materials, an annual audit, and so much more....

Fundraising monies from 501c organizations related to the library are used to fund our Summer Reading program and for required grant matching payments.

My concern is not with "more oversite" from the city. As a public institution, the city and it's citizen already have "oversite" of the library. My fear is that the self determination that allows us to be responsive to the community, and the autonomy of the library to serve the public interest could be lost under bureaucracy and political agenda should the library "come under the rule of the city." Again, please provide the benefits you envision from such a takeover.

I would like to invite you to visit the Fairhope Library to learn more about the library and the resources we have available to the Faithope community.

Anonymous said...

The library is a city building but just about everybody has a key to it, to use it for their private functions without paying. You have to be somebody's relative to work there.

Anonymous said...

"Oversite" is spelled oversight by the way - for you fine folks whose spelling and grammar skills serves to indicate that most likely you rarely visit our fine Fairhope library, and that you probably have no idea how a library operates, who it actually serves, and how it is staffed.

Donnie Huff said...

Everyone thinks their job is the most important and that other people have to have what they provide. This sounds no different.

Anonymous said...

The more I read the posts from the Libbery staff the more I don't trust them!
And yes those of us with real jobs are rushed and very often misspell something but I'd rather be a little stupid in someones mind than rude name calling.

GCJ said...

again, wow - completely unfounded and ridiculous!

Anonymous said...

How much did airplane noise increase in 2016?

Publisher said...

Let's not get into another endless 'tit for tat' exchange here: I think everyone gets the message by now.

Anonymous said...

Very interesting information in the audit, Library $1,025,236 expense, Airport $428,000 expense. Not saying close the doors, but if you compare the two wow is all I can say. I see why the library people want you to stop talking about them. Page 16 in audit

Anonymous said...

Page 24 of the audit:
Library $409,102(cash)
$78,780(capital asset)
total asset $487,882

Airport $330,184 (cash)
145,209 (grants)
$12,418,106 (land & construction)
$14,511,227(capital asset)
total asset $27,404,726

Maybe airport not so bad, looks like mayor/council needs to look at this.

Anonymous said...

I think they should get rid of the current Board members and replace them with new people. They all seem to just be in it for a title. Some of the members have served too long anyway. They don't care about the wellbeing of the staff or its patrons...Only when it looks good for a photo opportunity!

Anonymous said...

Did GCJ say they have 24 employees at the library? That's like 4 or 5 more than the utilities have for each of there department.