“There are no material weaknesses or significant deficiencies” in the City of Mesquite’s financial picture according to Mike Spilker from Hinton Burdick auditing firm who reported the results of his audit to the City Council on Nov. 24.
Significant numbers in his report show that governmental activities revenues were less than governmental activities expenses by $2,507,767.
Total revenues from all sources were $31,005,093 and the total cost of all city programs was $33,840,583.
Of those numbers however, general fund revenues were more than expenditures, excluding transfers, by $193,283.
Compared to the budget approved by the Council, actual resources received in the general fund were more than budgeted by $588,477 while actual expenditures were $582,975 less than the final budget. All departments were under budget, except for Public Safety which was over budget by $233,642.
“Putting this into perspective, we have about a $5.6 million ending fund balance in our general fund,” Councilman George Rapson commented at the end of Spilker’s presentation. “At the end of the previous fiscal year 2013-14, we had a deficit of $1.2 million (in the general fund). We closed that gap this year. (The deficits) weren’t caused by the recession. We’re out of the recession. After five years of running million dollar deficits and we’ll be out of our reserves (funds).”
Rapson went on to say that the city has yet to fully account for the labor contracts signed last year with the public employee unions, mainly pension liabilities and health care costs. “This stuff is expensive and we’re running at a deficit. That $5.6 million in our piggy bank won’t last long. The Staff does a great job. But the city is still not running on ‘all eight.’ We still have work to do.”
In the fiscal year 2014-15, the City received State consolidated taxes (C-tax) totaling $7,431,454, a 2.82 percent increase over the previous year of $7,227,896. The C-tax is the city’s single largest revenue source. Other taxes combined brought in $8,021,623 for the 2014-15 budget cycle compared to the $7,790,539 received in the year before.
For the current fiscal year, the City’s property tax rate is $0.552 per $100 assessed value, a number that’s remained the same for the past 10 years. That rate combined with other state/county property taxes, results in a combined tax rate of $2.7737. That ranks as the second lowest property tax rate among the five incorporated cities in Clark County.
By percentage, the C-tax accounts for 27.1 percent of all revenues while property taxes bring in 18.9 percent of the City’s base. Charges for services like permits and fees account for 25.5 percent of revenues.
Public safety – police and fire – accounts for the largest expenditures from the city’s budget while public works like streets and building maintenance is the second largest cost.
According to the audit report, “the City established a general fund reserve policy to set aside funds that may be needed in the event of emergency or other unknown event that may adversely affect the City’s financial condition. The reserve is 10 percent of general fund operating expenditures plus one year’s debt service transfers. As of June 30, 2015, the reserve is $1,908,280.”
By law, the City adopted a new accounting rule that now shows separately its unfunded future pension liability costs. As of June 30, 2015 that equated to $18.2 million of which $16.9 million stems from general government activities and $1.3 million is attributed to the city’s sewer fund. Some employees are paid from the sewer fund rather than the general fund.