Just as the city of Ocean Shores is preparing its 2015 budget, the state Auditor’s Office released findings Monday that give the city a clean bill of financial health for 2013.
In 2013, the city operated with a $5.6 million general fund budget, and a budget of $26.3 million, including all funds, and ended with expenditures of $25.8 million, according to audit notes supplied by the city.
Just two funds ended with negative balances: Convention & Tourism (-$438.68) and the Self Insurance Fund (-$3,043.96).
“In the areas we examined, the city’s internal controls were adequate to safeguard public assets. The city also complied with state laws and regulations and its own policies and procedures in the areas we examined,” said the results of the accountability portion of the audit.
Mayor Crystal Dingler said the city was “delighted with the audit findings.”
“I hope we will stay the course and keep at it,” she told the City Council on Monday night to applause from the audience. “Altogether we are on the right track.”
Earlier, she explained that Finance Director Steve Ensley has changed some processes to better meet state requirements.
Also, the city has begun paying back the interfund loans it made in the past, which was a practice cited in some of the more critical audits.
“Together with additional cutbacks in 2012 that paid real dividends in 2013, these actions have significantly improved our ability to fully understand our finances and understand what we needed to do to recover,” Dingler said. “We still have two or three years in recovery, but the city is no longer at risk.”
Ensley told the council he met last week with the auditor for an exit interview, and noted the audit included the Public Facilities District that oversees operations of the city’s Convention Center.
“We had no findings. We had no management letters. We had nothing but compliments from the auditors,” Ensley said.
Councilman John Lynn, chair of the council’s Finance and Budget Committee, said that before he was elected to his first term five years ago, “We were having a terrible time. In my first year, I think we ended with $130,000; that’s nothing in a budget our size. The auditors had a lot of questions and each year they had a lot of suggestions, and sometimes stronger than suggestions. It was really pleasing to me to hear them say how far we have come.”
Lynn said the city this year even double-paid back some of the funds from money previously shifted in interfund loans. He commended Ensley and other staff for improving the financial operations of the city.
“We’re trying to utilize the funds that are coming in to give us a gap between revenue and expense,” he said.
Lynn explained the city is moving toward a goal of having no less than 15 percent of general fund operating revenues and general fund operating expenditures as an unrestricted general fund balance.
“In order to pay your bills on time, you need to have that plus emergency money,” Lynn said. “We have come a long way and I hope that we will continue to look at what we have done and encompass those things in the budget as we go through this year and the next years.”
Other audit notes from the city’s report:
• In 2013, the city reported total reserved fund balances of $9.3 million, with a $281,516 general fund reserve balance.
• In April 2012 the voters approved a three year EMS levy lid lift at $0.50 per thousand of assessed valuation. This levy will be in effect for 2013 through 2015.
On Aug. 7, 2012 the voters approved a two-year Library levy lid lift at $0.247 per thousand. The levy will be in effect through 2014,and voters next week will be deciding on a new levy lift.
• On March 10, 2014 the City Council passed Ordinance 939 authorizing the sale of City of Ocean Shores LTGO bonds to refund all of the outstanding Grays Harbor County Public Facilities District (PFD) related to the City of Ocean Shores Convention Center. On April 10, 2014, the City sold $9.37 million of new bonds. The closing occurred on April 24.
As part of the transaction an O&M reserve of $250,000 for the Convention Center was funded. A revised Interlocal Agreement was signed with the PFD pledging the PFD sales taxes to the payment of the new debt.
• On March 10, 2014 the City Council passed Ordinance 938 authorizing a Water Utility rate increase of 15 percent effective May 1, 2014.
The increased revenue will be used to provide funds for necessary capital improvements, scheduled debt payments and increased utility reserves.