City In Good Financial Shape During Pandemic

Fairhope, Alabama 

 

Net position increased.

Areas of concern.

FY 2020 AUDIT RESULTS

CPA's from the Warren Averett accounting firm of Montgomery presented the FY 2020 (ending September 30) audit to the city council during its last meeting. (This was before the full effects of hurricane Sally on Sept. 11 are factored in.)

Despite the complete shutdown last spring, revenue collections actually increased (except for lodging taxes). The city's net position increased by over $15 million over the previous year.

Mayor Sullivan told the Times later she thought the city is still in "good financial shape." One area of concern is uncollected utilities (accounts payable), she said.

2020 AUDIT  HIGHLIGHTS

• Assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $185,067,814, a current year increase in net position of $15,280,780.
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• At the close of the fiscal year, the City’s combined governmental funds, including General, Capital Projects, and Other Governmental Funds, reported ending fund balances totaling $18,917,341, a decrease of $221,652 from the prior year.

• Citywide, governmental, and business-type funds cash (including restricted cash) totaled $61,643,976, an increase of $15,835,689 from the previous year.

• Revenues in the governmental funds increased approximately $2,700,000 from the previous year. Expenses decreased approximately $800,000. During fiscal 2020, revenues from the sales tax totaled $9,930,150, an increase of approximately $660,000 over the previous year. At year end, the General Fund’s sales tax reserve totaled $7 million with an additional $6 million in unreserved.

• The business-type activities, (Electric, Gas, Water and Waste Water), ended the year with income before transfers of $12,263,363, compared to $10,168,593 for fiscal 2019. Revenues increased approximately $262,000. Costs of energy and operating expenses increased $749,000. The utilities made net transfers to the General Fund of $804,101 from income, which is $833,899 more than transfers last year. 

   

  The City’s long-term debt increased by $11,695,000 during fiscal year 2020, yielding total outstanding debt of approximately $26,074,000 compared to the previous year’s $14,379,000. This increase was due primarily to the issuance of Utility Revenue Warrants of $11,565,000 in September 2020 for the purpose of refunding the 2011 Utility Revenue Warrants. 
   
  The business-type activities, (Electric, Gas, Water and Waste Water), ended the year with income before transfers of $12,263,363, compared to $10,168,593 for fiscal 2019. Revenues increased approximately $262,000. Costs of energy and operating expenses increased $749,000. The utilities made net transfers to the General Fund of $804,101 from income, which is $833,899 more than transfers last year.  
   
  The City’s business-type activities made additions to property, plant and equipment of $10,993,336. The majority of this increase was due to utility system improvements totaling $10 million.    
   
  The City’s long-term debt increased by $11,695,000 during fiscal year 2020, yielding total outstanding debt of approximately $26,074,000 compared to the previous year’s $14,379,000. This increase was due primarily to the issuance of Utility Revenue Warrants of $11,565,000 in September 2020 for the purpose of refunding the 2011 Utility Revenue Warrants. Business-type activities total debt was $23,870,000.