MORRIS, Minn. - The City of Morris received another clean financial audit for 2011.
Derek Flanagan, of Eide Bailly, told the Morris City Council Tuesday that the city had received a "clean audit opinion or an "unqualified opinion," which is "what you want and the opinion you have always received."
The city's liquidity ratio, or the city's ability to pay bills as they come due, was positive, said Flanagan. This means the city has the cash on hand to pay bills.
The city's ratio of long-term debt to population was also positive, and sits right in the middle of the ratio for other city's that Eide Bailly audits. The city will also be making a large debt payment this year, which will likely bring the ratio down even further.
Total revenues for 2011 were $3.78 million, about a $46,000 negative variance.
One area of possible concern is the fact that 65 percent of the city's revenue in 2011 came from inter-governmental sources, primarily Local Government Aid. This means that a large proportion of the city's revenue is controlled by the state, said Flanagan.
Top expenditures in 2011 were $3.8 million, a $119,000 negative variance. Top categories were public safety, public works and general government.
Other financing sources were about $50,000, resulting in a net change in the general fund balance of about $11,800.
Overall, the city had net fund balance of $2.851 million, said Flanagan. As a result, the city currently has about 8.9 months of operating expenses available in the general fund.
"If you were to shut off all your revenue sources to the general fund, you'd still be able to survive for 8.9 months," said Flanagan.
Another analysis looked at comparing operating expenses compared to population and adjusted for inflation. That analysis showed that the city has "buckled down" on operating expenditures since 2007, said Flanagan.
At the end of his presentation, Flanagan praised the work that city Finance Director Gene Krosschell and his staff had done in preparing for the audit.
"Everything is so organized - that's one of the reasons we're able to get here and present to you so early," said Flanagan.
Budget amendment for 2012 passed
Although City Manager Blaine Hill doesn't often pass budget amendments, the city council considered one as a result of big changes to wages and taxes that occurred after the original 2012 budget was passed.
During the budget process, the city received a health insurance bid that was 35 percent less than the 2011 rates. The city was then able to reach an agreement with the city unions on labor contracts.
As a result, said Hill, the city saw a reduction in health insurance costs of $82,267 for 2011 and an increase in wage and pension costs of $29,496 for a net reduction of $52,771.
There were also some minor budget tweaks in the library fund, the utility fund and for fuel sales at the airport.
All told, the revised budget includes a change in revenue from about $9.73 million to $9.83 million and a change in expenses from $9.67 million to $9.73 million.
The budget amendment was approved by Mayor Sheldon Giese and council members Jeff Miller and Bill Storck. Council members Twig Webster and Matt Carrington were absent from Tuesday's meeting.