City budget process criticized

By Tom Joyce - tjoyce@civitasmedia.com
Local citizen Paul Eich, standing at right, says during a meeting of the Mount Airy Board of Commissioners earlier this week that “games” are being played with city finances. - Tom Joyce | The News

The city of Mount Airy has received a “clean” audit report, but the process that led to this is less than tidy, a local citizen charges.

Paul Eich, a frequent critic of municipal budgetary practices, reacted to the presentation of an annual audit for Mount Airy during a council meeting earlier this week by saying “games” are being played with taxpayers.

As he has previously, Eich cited his belief that the city’s financial outlook at the start of each budget year is portrayed as more dire than it actually is, a strategy discouraging property tax cuts or other steps benefiting citizens.

During a public forum portion of this week’s meeting, he once again focused on how the city’s fund balance — which also has been known as its surplus, reserves or savings — is used as a pawn with this approach.

For the most recently completed budgetary period — the 2016-2017 fiscal year that ended on June 30 — slightly more than $4 million was earmarked from the fund balance. This was deemed as needed in order to balance the city’s books without a property tax hike.

But when the final figures were in for the year, as reflected by the latest audit, $674,289 actually was used, despite several major expenditures being projected during 2016-2017.

“That’s about three and a half million dollars off,” Eich said of the $3,360,893 difference.

“Surprise, surprise,” he added sarcastically, in reference to the same trend being noted at the end of other recent fiscal years.

“I don’t appreciate this artificial number that makes it look like we’re going to have a hard time,” Eich told city officials regarding the fund balance allocation while speaking from a podium nearby.

“Quit playing games with us,” he said. “Please adopt a realistic budget.”

At the close of the last fiscal year on June 30, actual expenditures ended $2.8 million (18 percent) lower than the final budgeted amounts, according to information provided by City Manager Barbara Jones.

One reason for that wide variance was personnel costs being $728,846 under final budgeted amounts.

Surplus drops

The city’s fund balance did show a decline during the last fiscal year compared to the one before, according to the annual financial report presented this week by Michael Edwards, an audit manager with Martin Starnes & Associates.

It is a Hickory-based accounting firm that has been checking Mount Airy’s books in recent years in accordance with state law requiring independent audits of local government finances.

Mount Airy began the 2016-2017 fiscal year on July 1, 2016 with an available fund balance — funds that are unrestricted and may be appropriated for any purpose — of $11.6 million, which fell to $10.8 million by last June 30.

“So we did have a decrease of roughly $800,000,” Edwards said.

But the available fund balance remains at a healthy level in terms of its relationship to the municipality’s annual expenses.

The $10.8 million balance as a percentage of total city expenditures was 86.5 percent for 2016-2017, compared to 96.8 percent the year before with the $11.6 million figure.

Expenditures for 2016-2017 totaled $12,298,772, according to the audit report that revealed no questionable findings or costs.

“It was a clean opinion, an unmodified opinion,” Edwards said.

Local citizen Paul Eich, standing at right, says during a meeting of the Mount Airy Board of Commissioners earlier this week that “games” are being played with city finances.
https://www.mtairynews.com/wp-content/uploads/2018/01/web1_Critique-this.jpgLocal citizen Paul Eich, standing at right, says during a meeting of the Mount Airy Board of Commissioners earlier this week that “games” are being played with city finances. Tom Joyce | The News

By Tom Joyce

tjoyce@civitasmedia.com

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.