Audit Provides Clean Opinion, Financial Snapshot for Mendota Heights

The city of Mendota Heights received a clean opinion on their 2011 audit last week.

Matt Mayer of the auditing firm Kern, DeWenter and Viere presented the results to the on Tuesday.

The auditor’s job is to test city financial records and provide a measure of their reliability.

A clean opinion is the best rating a city can receive.

In addition, no negative findings were found in an audit of the city’s compliance with state statutes.

“I would consider that a successful conclusion to last year’s audit,” said Mayer.

The audit did note lack of segregation in accounting duties, a finding typical for small cities with limited staff. Limited staff prevents the ideal level of checks and balances, said Mayer.  

City Finance Snapshot:

• The city runs about a $6.5 million break-even budget.
• The city’s investment portfolio slightly exceeded budget forecasts in 2011.
• The total fund balance increased by about $63,000 due to better-than-expected revenue.
• About 80 percent of the city’s revenue comes from property taxes. Of that, 78 percent is from residential, said Mayor Sandra Krebsbach.
• The caused a one-time jump in general government spending. Over-budget spending also occurred in public safety and public works, but was offset by under-budget spending in certain categories.
• The city’s fund balance sits at about 94 percent of yearly operating expenses. The state recommends a minimum of about 42 percent, according to Mayer.

The city’s enterprise funds, which are intended to operate off their own revenue also received an inspection.

Par 3 Fund

Revenue at the dropped off 16 percent from 2010-2011. Mayer described that as an “industry-wide issue” compounded by last summer’s poor weather.

The golf course has about $19,000 in reserves to absorb any further losses, down from about $50,000 a few years ago, and is undergoing a careful inspection this season by the Par 3 Committee.

“I would like one more year of data to be able to tell exactly what the trend is because 2012 was such an anomaly with the weather,” said Mayer. 

Sewer Fund

Mayer recommended reviewing the user fees on a regular basis to ensure expenses are being met by the rate structure. Rates recently went up for the first time in several years.

Storm Water Fund

The storm water fund is in good condition. Mayer said the city is building a “rainy day fund” for capital expenditures the fund will need in the future.

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