Following significant delays, city hires new auditor

LACONIA — Staffing problems for the city's former auditing firm significantly delayed necessary reporting, and city councilors learned at their meeting on Monday night that a new firm has been hired.

Glenn Smith, finance department director for the city, told councilors the city would no longer engage the services of CBIZ CPAs, and is now contracting with CliftonAllenLarson LLP.

The annual comprehensive financial report for the fiscal year ending on June 30, 2024, which was due to the city between January and February this year, was not actually delivered until October, due to staffing problems at CBIZ CPAs.

“The information I’m presenting is not, how shall we say, timely,” Smith said. “What I’m presenting tonight is just a very broad overview of our ‘24 comprehensive financial report.

“This is a report that should have been presented to you back in [the] February-March window. It was not presented to you then, because we did not get it here in the city until Oct. 31,” he continued. “It was delivered to us by the auditors on Oct. 21."

Internal staffing issues hit CBIZ CPAs in the late winter and early spring, Smith said, which delayed the audit to what he considers “an unacceptable level."

“They are no longer our auditors, and that’s partially why I am here, and not a representative of what is now known as CBIZ,” Smith said. 

The City of Laconia isn’t the only client who received delayed reports, Smith said — the county apparently received theirs only recently, from the same company, too. 

The Annual Comprehensive Financial Report of the City of Laconia, New Hampshire for the fiscal year which ended June 30, 2024, is a 109-page document. Hard copies are also available to view at the Laconia Public Library on North Main Street and at City Hall downtown on Beacon Street East.

According to the report, the city’s unassigned fund balance increased by $1.3 million, and so did long-term debt. Long-term debt increased by $2.8 million during fiscal year 2024, from $37.2 million to $40.1 million. Per-capita debt increased $150 to $2,153, and, as of June 30, 2024, the city carried debts equal to 19.2% of its legal borrowing limit. The school district carried debts equal to 3% of its legal borrowing limit.

Governmental obligations in terms of bonds have teeter-tottered over the 10-year period, in fiscal years 2015 through 2024. In fiscal year 2015, the amount was about $41 million, including the school district. In fiscal year 2024, that amount was about $37 million. As of June 30, 2024, the base valuation for the debt limit was $4.7 billion. The bonded debt limit — 3% of the base valuation — was $141 million. Net bonded debt as of June 30, 2024, was $27.2 million, leaving a margin of about $114 million. 

“Nineteen percent of its legal limit, so, as of today, we’re about a year later. Has that number gone up or down, do you think?” Ward 2 Councilor Bob Soucy asked.

“It’s gone up. This does not count any bonding that you’ve done since the close of fiscal year 2025, and there’s also bonds in practice,” Smith said. “I’d say there’s probably another [$5 million] that’s going to be added on after the close of fiscal year ‘24. It’s going up, but it’s still not anywhere near our limit.” 

“That 19.2%, the year was 19.1%, every year after that has been in the 20s, there’s a 30% in there,” City Manager Kirk Beattie said. “There’s been a lot of work to bring that down.” 

Smith said bonding runs in cycles, and the city is coming out of a cycle where lots of bonds dropped off, meaning they were paid off. The city will move into a cycle where not many bonds drop off, then the cycle will repeat.

From fiscal years 2015 to 2024, total assessed property values have increased significantly, from about $1.89 billion to $4.5 billion — that figure combines both residential and commercial properties and utilities. The tax rate, over the same period, has trended lower: in fiscal year 2015, the total tax rate was $22.40, and in fiscal year 2024, it was $13.63. 

The audit for fiscal year 2024-25 is expected for presentation in March.