• City gets A-OK in latest review
BROOKINGS – The City of Brookings got a clean bill of health in its 2011 audit, councilors were told this week.
Chris Lindner, CPA and manager with the national accounting and advisory firm BKD, delivered his firm’s audit of the city’s financial statement as well as an evaluation of the internal controls for financial reporting.
“Both were clean – no deficiencies,” Lindner said.
He also delivered a “clean report” in an audit for compliance with federal regulations.
In fact, in all the checks the firm ran against city accounting operations, BKD found that Brookings required only a single audit adjustment.
Typically, said Lindner, cities Brookings’ size require adjustments “in the teens.”
He commended City Finance Officer Rita Thompson and her staff.
“Your financial records are in good hands,” the CPA told the council. “You have good people, and they’re willing and able to do the right things.”
The recently completed audit went into great detail, even including inventory counts at the city liquor store and Brookings Municipal Utilities.
“Overall, to see your tax revenues from ’09 to ’10 to ’11 steadily increase is very commendable,” Lindner said.
He noted some other indicators of the city’s economic health, including a “budgetary cushion” test that looks at the “unassigned balance” of a municipality’s general fund.
“Moody’s recommends that the number should be between 5 and 10 percent,” he said. “Brookings’ number is healthy 17.”
The ratings Moody’s Investors Service award for bond issues is still another tests of the city’s financial well-being. In 2006, Moody’s gave a Brookings bond issue a Baa1 rating; that was subsequently upgraded to A3 and then to A2. Latest issues have been assigned A2, just a few levels down from the very highest rating.
Brookings’ per capita governmental debt – the amount owed for every resident, was slightly less for Brookings than a peer group of cities – $804 to $914. The city’s total debt per capita, however was higher – $2,391 versus $2,016. Lindner explained that difference by recent bonding the city has undertaken.
Part of Lindner’s presentation involved a forecast of what’s in store for the city in terms of accounting practices, and he warned that there will be significant changes in the future.
Proposals by the Government Auditing Standards Board – otherwise known as GASB – will require greater financial disclosures by municipalities, as well as revenue and expenditure forecasting, which could result in significant extra costs for city finance departments.
Some of the highlights of Brookings’ 2011 financial report:
• The city’s assets exceeded its liabilities by $223.5 million (net assets) for the calendar year reported (2011).
• Total assets include capital assets – property and equipment – valued at $125.6 million.
• The city’s governmental activities reported total ending net assets of $74.4 million this year (2011). This compares to the prior year ending net assets of $67.6 million – an increase of $6.8 million during the calendar year.
• Municipal revenues for 2011 came to $22.36 million, the highest figure in four years.
• Operating expenditures for general governmental activities in 2011 totaled $15.28 million; that compares with $14.0 million in 2010, $13.78 million in 2009, and $19.7 million in 2008.
• The largest category for municipal operating expenses in 2011 was culture and recreation, which took 37.66 percent of the expenditures; second was public safety, which was 23.44 percent of expenditures; and third was public works, 20.77 percent.
• The city’s total valuation in 2011 approached $1 billion. Total valuation was $950.5 million, compared to $856.6 million in 2010, $846.5 million in 2009, and $777.76 million in 2008.