Annual city audit presented as council gears up for budget planning

As Sidney continues to grow – attracting new businesses and upgrading infrastructure – a recently released audit of the city’s finances reflects those expenditures and revenues.

Every year, the city is required to have an audit conducted. In late March, an accounting firm hired by the city presented its finding to city councilors.

“They start about six months in advance of when they actually make the presentation,” Sidney City Manager Gary Person said in an interview earlier this month. “They’re very thorough. Every year they come up with suggestions that help us do our jobs better.”

City staff and elected officials want to ensure taxpayer and ratepayer dollars are spent responsibly, he added, and audits represent the end result of the checks-and-balances system.

“I think it’s an eye opener for anyone,” Person said. “We’re a city that is kind of all inclusive, as far as the amount of utilities and public services that we do offer, and consequently, you have a lot of revenue going in and out.”

The audit breaks the city’s finances into two categories: governmental activities, the day-to-day operation of the municipality’s essential functions, and business-type activities, utilities and services provided by the city that have fees or rates associated them.

“We want to make sure it works, we also want to have an eye on the future,” he said. “We have a lot of things going on right now to upgrade our systems and to expand our systems and it doesn’t come without – no pain, no gain – so we want to make sure we do that in a cost effective manner and not overwhelm the taxpayer and ratepayer.”

During fiscal year 2014, which ended on Sept. 30, governmental activity total assets increased by $8.2 million while expenses increased by $1.6 million.

Person said those numbers reflect ongoing projects within the city

“I think it’s a little skewed this past year and will be for the next two years, just because of all the street projects and bridges and those things,” he said. “You’ll see more in the governmental activities than you do in the business-type activities.”

As other projects are undertaken and completed, those numbers will continue to fluctuate.

“It will look a little different for each of the next few years than what I would say the traditional use has been over the probably last 20,” Person explained.

Within business-type activities, total assets decreased by $162,012 – 0.35 percent – and expenses increased by nearly $900,000 while revenues decreased by $458,573.

Person attributed the asset decrease to a requirement that all governments factor in depreciation schedules.

“Every asset that you have, whether it’s streets or water lines or sanitary sewer lines or a building, it all has to have a depreciation schedule,” he said. “A lot of time it looks like you’re losing value – that’s why some of your assets look like their decreasing.”

Upgrades at the golf course and the new swimming pool project, along with work on the city’s electrical system and unanticipated expenses help explain the other numbers, Person said.

“It will all result in new value being added to the community,” he said. “You’re going to have new businesses here, you’re going to have expanding businesses, you’re going to have a lot of new homes being built – just all kinds of things that are going to add to the value of our community.”

Balancing a budget that includes large infrastructure improvements and projects is a challenge, but Person said it also means the community is growing.

The annual audit helps staff and councilors ensure the city is on the right path, he said.

“It’s a good snapshot in time to analyze what went on in the past year,” he said. “The budgets are one thing, but they’re just guidelines. The end result is where you ended up, not where you projected.”

As the budget process for next fiscal year begins, Person said the audit would be reviewed.

“If you analyze the audit well, it tells you where you need to shore up, where your revenue is falling a little bit behind and where you need to go in the future,” he said. “So that’s where the process now begins.”