Aledo audit is good
A 25-minute review of Aledo's financial situation was heard during the meeting of the whole at Monday's June 18, 2012 Aledo City Council meeting. Jim Taylor of Carpentier, Mitchell, Goddard & Co., LLC, reviewed the 2011 annual audit results and said his firm's opinion letter stated the city had an unquailified opinion. "It's a good opinion," he explained. He summed the city's financial status up this way: "Overall you have good financial results for the past year."
One of the benchmarks the auditor noted was analysis of the city's revenue, which was above a 50 percent benchmark. The total of $3.3 million in revenue from all sources. Revenue from governmental sources is at 58 percent ($387,000), up from last year's 48 percent. The city also has revenue from business sources such as its water-sewer and gas funds. That area also improved, "up 6.17 percent over last year," he said. "That means you're spending less than you're bringing in -- a good result," said Taylor.
While there were some changes in fund balance classifications, the city also fared well with 10-30 percent desirable minimal level benchmark. A city needs to have at least two months worth of revenue carryover, with Aledo's audit showing 8.5 months of carryover. He noted that tax revenue didn't change from last year's revenue, which he said the city has no control over. There was also an increase in sales and income tax coming back to the city.
As for the city's business enterprises -- gas, water and sewer -- Taylor said, "We like to see self sufficiency." He said the water and sewer funds were 100 percent self sufficient, but the gas fund was a little less than 100 percent self sufficient.
Auditors also looked at the city's capital assets. He listed these at $23.2 million, with $10.9 million depreciated out this past year. "That's not too much different than last year," he said.
The city's debt service load has also declined from the previous year's audit. Non-capital interest and principal was at 18 cents on the dollar. The previous year's debt load was at 29 cents on the dollar. "This is a stronger indicator than it was last year."
He also noted the city's assets to liability ratio should be at least 2:1. The city's current ratio is 5.29 : 1. "That's a very strong indicator of liquidity," he said.
While the city's tax revenues were up, there was a decline in investment earnings. He also said the city's community development expenses were up.
In one letter the auditor noted the city needed to have someone take a second look at any manual meter reading that is going on, even though most of the meters are computer read.
Taylor finalized his report saying "the audit process went very well. You have good number results and good segregation of duties. You are covering all of the bases."
Alderman Jay Doherty asked the auditor to compare Aledo's audit with other similar sized municipalities. Taylor said the city compared very, very favorably with other municipalities.