LAYTON — The city spent less than anticipated and took in more revenue than budgeted, a recently released audit shows.
Details of the city’s 2011-2012 fiscal year audit were released recently, and they show the city generated $1.1 million more in revenue than anticipated, spent $900,000 less than projected and ended with a fund balance right at the state limit. The city showed a surplus of $2 million for the fiscal year, which created an unassigned fund balance of 18.1 percent. The state limit for a fund balance is 18 percent.
Excess funds over the limit are typically transferred to capital or other nongeneral fund accounts. The city’s unassigned fund balance is $5.3 million.
The audit was clean, meaning there were no significant findings, said Edwin Erickson, a CPA with the accounting firm of Hansen, Bradshaw, Malmrose & Erickson, of Bountiful.
Review of the audit generated some discussion about what city officials might have done if they had known they would have a surplus prior to the fiscal year.
“Why do we have so much savings? Either we have over-budgeted, or we should have spent the money,” Councilman Scott Freitag said.
City Finance Director Tracy Probert noted that more than $400,000 of the savings was generated by the city’s police department. He said some of the savings came from the department being short in personnel during the year.
All of the departments came in under budget, including the finance department, which ended $3 under budget.
City Manager Alex Jensen said the city’s financial philosophy has been the same for more than two decades.
“We assume everyone is going to save. Our philosophy is the same we’ve used for 20 years. You ask for what you need, and we don’t play any budget games in Layton City,” Jensen said.
Jensen said the city does not place restrictions on department heads or give them financial directives midyear to quit spending.
“The culture among departments is, even though they have the money in the budget, they will not spend it unless they need to,” Jensen said.
The 120-page audit painted the following picture of city finances:
• Layton has been what the auditors described as “reasonably successful” and has very low debt compared to cities of a similar size in the state.
• Revenues increased slightly for the first time in four years during the fiscal year. Sales tax revenues were up 7.2 percent from the previous years. Revenue figures, however, are still far from 2008 levels, when a recession drove down revenue.
• The city reduced its debt by $565,000 during the fiscal year. At the end of the fiscal year the city showed indebtedness totaling $4.8 million from two sales tax obligation bonds.
• The audit detailed city liabilities and assets. As of June 30, 2012, city assets exceeded liabilities by $246 million.
• Proprietary funds were all growing in value, except the refuse fund, which showed a loss of assets of $102,104 and resulted from a loss in operations. The loss was anticipated at the beginning of the new fiscal year, and a user fee increase was implemented July 1, 2012.