Meridian Star

Local News

May 15, 2013

Audit: City in good financial shape

MERIDIAN —     City coffers grew by more than $4 million in fiscal year 2012, according to the results of an annual audit.

    Paul Breazeale, of Breazeale, Saunders and O'Neil Ltd. accounting firm gave the Meridian City Council and mayor a good report on Tuesday.

    The bottom line?

    "You have more assets than liabilities," Breazeale said.

    In his firm's report, Breazeale noted that the assets of the city exceeded its liabilities at the close of 2012 by $116,445,081 and of this amount, $9,143,103 are unrestricted assets, meaning that they can be used to meet the city's ongoing obligations.

    The city's total net assets increased by $4,137,022 largely because, Breazeale said, there was more than $986,000 in water and sewer capital grants, nearly $820,000 more in public works capital grants, and more than $780,000 in increased water and sewer charges while there was an approximate $1.1 million cut in culture and recreation expenses.

    By fiscal year 2012's  end, the city's ending fund balance was more than $24.8 million, an increase of almost $4 million from the year before. Approximately 30 percent of this amount, $7.5 million is available for spending at the city's discretion.

    "The city is continuing to recover from the recession," Breazeale said. "That is evidenced by the fact that your sales taxes are up. Your decreases in expenses is a good trend, and you've held the line on tax increases."

    So when all of those are factored in,  Breazeale said, the city has improved its financial outlook.

Mayor Cheri Barry was pleased with the report and thanked the Finance and Records Department, which is headed up by Ed Skipper.

    "This has been a team effort over the past four years to turn around the city budget," Barry said. "We've changed our priorities, reduced expenses, and held the line on taxes, and we are seeing the success of making those decisions."

    The city's credit rating is good, according to Breazeale, who said Moody's Investor Service bond rating was Aa3, just slightly lower than the state of Mississippi's rating, which is Aa2.

    "You want a good rating because that affects the interests when you go to borrow money," Skipper said.

The report presented by Breazeale was not only an audit, but a Comprehensive Annual Financial Report, Skipper said. It is more in-depth than an audit, he said.

    "Businesses that look at your city love to see a CAFR," Skipper said.

    Skipper added that the audit firm's presentation, as well as a copy of the audit, will be posted on the city's website at www.meridianms.org.

    George Thomas, president of the Meridian City Council, said overall the financials were good.

    "We had no major deficits in any areas. There were some slight changes in revenues and expenditures, but overall the trend was good. He didn't point out any major problems in the report to the council and to the administration. There were some paperwork issues that he brought up that can be corrected but no significant findings," Thomas said. "It was a good report for the citizens of Meridian. The city is being managed in an appropriate manner in that we don't face any major financial problems."

    There were a few recommendations for changes, including reconciliations between subsidiary ledgers and the general ledger, documentation of pay rates, golf course fund chart of accounts and the handling of checks written to the city that bounce.

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