By MICHAEL KITCH, LACONIA DAILY SUN
LACONIA — The Comprehensive Annual Financial Report for the fiscal year ending in June 2016, presented to the City Council this week by Melanson Health, an independent auditor, pictures the city in sound financial condition.
Scott McIntire of the Melanson Health drew a distinction between the long-term and short-term perspectives of the city's financial condition and operations. For a long-term perspective he highlighted the net position, noting that total assets exceeded total liabilities by $62.2 million, which represents an increase an increase of $2.3 million over the prior fiscal year.
From the short-term perspective, McIntire said that the $57.7 million in revenues collected in the previous fiscal year topped the $57.1 million in revenues projected by $561,103. On the other hand, actual expenditures of $57.8 million were $249,504 less than budgeted, leaving an excess of revenues over expenditures of $810,607. With transfers from other accounts of $175,131, the positive balance came to $985,738. Less the $935,000 drawn from the unassigned fund balance and applied to the municipal budget, the city closed the year with an excess of revenues over expenditures of $50,738.
In other words, the excess revenues and operational savings were sufficient not only to offset the withdrawal from the fund balance but to add $50,738 to it. At year end the unassigned fund balance stood at $4,681,450, or 8.1 percent of total general fund expenses while the total fund balance, which includes $1.7 million in capital reserves, was 12.4 percent of general fund expenditures. McIntire said that the Governmental Accounting Standards Board recommends that unassigned fund balance represent between 5 and 10 percent of general fund expenditures.
City Manager Scott Myers said that the city's financial condition and performance reflects realistic projections of revenues and sound management of expenditures and credited department heads and their employees for closely controlling expenses. He described the unassigned fund balance as "a good number," explaining that a robust balance by easing the management of cash flow spares the cost of borrowing when the pace of obligatory expenses outruns the pace of tax collections. Together with the strength of the balance sheet, he said, that the healthy fund balance enhances the city's credit, especially with banks.