The 2019 audit for the village of Poynette went as well as expected, as it was reviewed at the July 13 board meeting. CPAs Kevin Krysinski and Brett Hofmeister from Johnson Block & Company, Inc. were in attendance to go over the audit and answer any questions from board members.
Hofmeister highlighted a few key pieces of the audit during his brief presentation.
“It was a pretty typical year for the village,” Hofmeister said.
The village had 45% of unassigned funds, as the percent of next year’s budget.
“That’s a good position,” Hofmeister said. “Usually you want about 2-3 months leftover and you are sitting at nearly half the year, so there’s some flexibility there.”
Most funds saw an increase in 2019, as compared to the 2018 final numbers.
“Things went about as well as they could have,” Hofmeister said.
Prior to the board meeting, Village Administrator Martin Shanks sent an email to trustees, which highlighted certain items.
He saw the general fund balance as “healthy” and added that it continues to grow.
“The village’s ‘rainy day’ fund requirement is fully met (approximately $500,000),” Shanks said in the memo. “The fund also has over $300,000 above the rainy-day requirement.”
Shanks noted that the village may want to transfer some of these funds to capital projects for future use for the 2021 budget.
Another thing to note, according to Shanks, is that the village maintains its well-managed debt service load and is starting to get out of some of the debt payment that began in the last decade.
“The 2011 note will be retired this year and the 2011 bond payment will also lower substantially in 2022,” Shanks said. “Debt payment will decrease significantly in 2021 and 2022. The village has 60% of its debt capacity available, which amounts to $5 million. The village can use this available debt capacity to defray the costs of major projects or use in an emergency.”
The water and sewer utilities are now covering the costs of their operations, debt payments, paying back their loans from general funds and saving cash for future projects and adding flexibility. For many years, the utilities had no cash balances and borrowed money from the general funds (taxpayers).
“The water utility had $70,780 in unrestricted cash at the end of 2019 and the sewer utility had $59,657. Just two years ago, they both had zero,” Shanks said. “Both of these utilities are capital project intensive, meaning they often have huge project costs to manage. I will continue to emphasize the importance of frequent, but small rate increases to keep up with costs and avoid major rate increases in the future. For 2021, I will likely recommend reviewing small increases (1-3%) for both utilities.”
The stormwater utility has had a big cash balance for several years, and at the end of 2019, the fund had nearly a half-million dollars ($442,307).
“The village has completed a number of major stormwater projects over the last three years to address various priorities, including the Pearl Street area and west and east Mill Street,” Shanks said. “This year, the Washington Street project and Park Street project will eat up a large amount of the balance. This will chip away at the large balance of cash. As such, I will be recommending to the board to look to the future by updating the master plan and reviewing stormwater rates to make sure we keep this fund healthy and well managed.”
The final step is to send a letter to Shanks and after he signs it, the audit is complete.