That was the assessment of its auditor this evening as he presented Roanoke Rapids City Council its annual audit report.
Gregory T. Redman, a Tarboro-based certified public accountant, presented the panel with an audit which contained no findings, no exceptions and no recommendations.
In fielding questions from council members following his report, Redman said, “To say you’re in financial trouble, I wouldn’t say that, but you can’t budget $600,000 every year.”
The city noted in the audit, which covers the fiscal year ended June 30, 2016, its assets exceeded liabilities by $7,761,096 and its net position increased by $276,218. “As of close of the current fiscal year, the city of Roanoke Rapids’ governmental funds reported combined ending fund balances of $7,588,828 with a net decrease of $689,976 in fund balance. Approximately 45 percent of this total amount, or $3,431,808 is available for spending at the government’s discretion.”
At the end of the current fiscal year, unreserved fund balance for the general fund was $3,409,448 or 22 percent of total general fund expenditures for the fiscal year.
The state recommends local governments have between an 8 percent to 32 percent ratio, Redman said. “I see close to eight in towns. You have over three months of expenses in the bank.”
What continues to plague the city, the auditor said, is the state taking away privilege license revenues from municipalities. With the lease ending on the theater, “You have $180,000 in expenses you hadn’t had before.”
Redman said since the city doesn’t control water, sewer or electricity, “A town which uses just general fund, it’s tough to find ways to raise more money.”
At the end of June 30, the city carried a $16,500,000 balance on its theater debt, the audit shows, and $930,000 budgeted for its payments.
The city also carried a $1,805,891 balance on installment notes payable and $337,086 budgeted for the payment, an account primarily related to the fire station off Highway 125.
Mayor Emery Doughtie said following the meeting Redman’s assessment on the continued use of fund balance is something the city will have to heed as it goes into deliberations on the upcoming fiscal year budget. “We’ve got to make changes in the city’s services and programs or increase revenues to pay for them.”
Doughtie said he is still talking about a sales tax, which would have to be approved by state legislators. “It’s been on my mind since I’ve been mayor (about how to raise revenues) without having to make a significant increase in property taxes.”
Doughtie said the city also continues to look at its options for reducing its theater debt.
“I think they’re willing to have a discussion with us on options with the bond package,” City Manager Joseph Scherer said of Bank of America.