PALMDALE — The City a clean audit for the 2018-2019 fiscal year, part of the comprehensive annual financial report showing the city’s financial stability.
“We’ve set the city up for a really good path going forward. That’s not to say there aren’t a few headwinds out there,” City Manager James Purtee said. “All in all, a very good run on our budget.”
The financial reports were accepted by the City Council at its Dec. 3 meeting.
The city’s books were audited by independent firm Eide Bailly, and the comprehensive financial report received a certificate of achievement for excellence in financial reporting from the Government Finance Officers Association for the 29th consecutive year.
The financial reports were reviewed by the Council’s audit committee, which includes Council members Laura Bettencourt and Austin Bishop, prior to the regular Council meeting.
“We are transparent and believe in reporting the true cost of doing business,” Finance Manager Carlton Holmes said. “We try to spend within our means, establish and maintain reserves and understand that the budget versus actual is a variance that gives us an indication of how well we’re planning and then utilizing the resources.”
The financial report shows the city’s net position increased by approximately $6 million between June 30, 2018, and June 30, 2019, increasing from $845.3 million to $851.3 million, Holmes said.
The net position takes into account the city’s total assets, minus liabilities.
This increase was possible even with writing off $10 million in permits for the proposed power plant that the Council terminated last month, he said.
The $10 million spent many years ago was to be eventually repaid when the plant came to fruition, Purtee said.
“(It was) really a good year this year of watching our fiscal health, setting us up for the next several years. We’re putting money aside in different reserve funds for everything from vehicles to computers to rainy day money, additional monies to the pensions,” he said.
In terms of revenues to the city’s General Fund, which supports most of the city’s day-to-day operations, revenues increased from property, sales and other taxes, but decreased from licenses and permits, according to the report.
General Fund spending, however, also increased across the board.
Councilmember Juan Carrillo noted the report showed no change from the prior year in the $6.2 million in revenues the city took in for licenses and permits. The city is in the process of a comprehensive review of its fees, in order to ensure they recover the actual costs of items such as permits.
“I’m sure that that includes some of that cost, that $6.2 million, but perhaps we are spending more on providing those services,” he said. “While we may not be 100% recouping the costs of providing those services, there is some revenue that comes in from providing those services.”