Despite technical difficulties at the start, the Rushford Council meeting held May 10 yielded a clean audit for the city. Auditor Jason Boynton and Kali Lentz, of Smith Schafer & Associates joined the meeting virtually to present the findings, which highlighted healthy funds in an unusual year.
The city’s tax levy for 2020 was $973,000, up from $936,000 in 2019. The increase was needed for new bond debt related to the 2019 Street and Utility Improvement Project. Small increases were also directed at the Levee Project Abatement Bond and 2016 Street and Utility Improvement Bond. Both levies for the General Fund and Economic Development Authority were reduced. The levy still makes up the majority of city revenue, while Local Government Aid (LGA) remains second. The city received $621,689 in LGA funding in 2020. While Boynton noted there hasn’t been much change in LGA over the years, the amount is expected to rise slightly, just $6,995, in 2021.
Tax Increment Financing revenues are also up for 2020. With new housing in the Himlie Business Park, that district joins Scenic View Townhomes as the two TIF sources for the city. Planned Urban Development Himlie Manor saw one duplex unit built with a total of six units planned. Another housing unit is planned for 2021.
When detailing city expenditures, Boynton noted a common theme among all departments. Faced with the COVID-19 pandemic, departments attempted to cut costs where possible and minimize all spending. Police, Fire, Ambulance, Public Works, Park & Recreation, Airport, and Library Funds all saw drops in expenditures, some larger than others. Park & Recreation, in particular, saw a $40,346 drop largely due to the city pool being closed in 2020. For the Airport, a 2020 pavement project was delayed a year.
General Fund budget to actual expenditures landed the city under budget for the year by $110,573. “You held the line on expenditures. A big chunk of that was COVID,” said Boynton. With less costs, this also resulted in a rise in General Fund Reserves. The 2020 unassigned/unreserved general fund balance, as a percentage of general fund expenditures, is 121%. This was cause of some concern for the council.
The city has made a concentrated effort to build the balance since 2012 when it dipped to just 12%. Boynton noted previously that the fund is how much cash is on hand relative to operations. The goal is to have a fund healthy enough to fund expenditures for six months, prior to any revenues coming in. However, it’s not recommended that cities bank large amounts of excess funds garnered from tax levies. With a year of unexpectedly low expenditures, the city will tread carefully with funds in 2021 to not overstep spending.
“We need to be cautious,” said Mayor Terri Benson. “Expenses were way down, but we’ll have an opportunity to look at it at budget time.”
“It definitely exceeds our target for fund balance percentage. We’ll have to see how it all shakes out,” added Councilor Sally Ryman.
In debt service, the city has just over $6 million in general obligation bonds outstanding. All are being paid down on an annual basis. Revenue bonds, those supported by ratepayers in water and sewer utility funds, sit at just over $3 million.
Capital improvement fund expenditures were $636,932 in 2020. These included street engineering for Bluffview Road and Industrial Drive, Geographic Information System (GIS) mapping, and the canoe launch, as well as the Highway 30 project, street crack sealing and black topwork, parking lot repairs, new Public Works shop building addition fuel area, truck trade-ins, and equipment, police computers and programs and emergency siren work.
Enterprise Funds for electric, water, and sewer are also all healthy. The Electric Fund saw effects of 4.7% reduction in usage, but still managed to generate a surplus. The fund paid off last of its related bonds and only the amount borrowed from the Revolving Loan Fund remains. No new debt was issued for projects. The Water Fund saw an increase in usage, but was able to cover all costs. This fund has bonds outstanding over $1.6 million and a cash reserve of $1.1 million. The Sewer Fund revenue was up thanks to a recent 2% rate increase and was able to be supported by ratepayers. Another 2% rate increase takes effect this year. Outstanding debt for this fund is $1.5 million.
The next regularly scheduled council meeting is May 24, at 6:30 p.m., at city hall. It is open to the public, both in person and virtually via Zoom.