Annual financial report presented to Hagerstown City Council

November 30, 1999|By JENNIFER FITCH

The City of Hagerstown ended its fiscal year June 30 with $188 million in net assets, almost three-quarters of which can be attributed to its lights, water and sewer services.

City officials maintain two months of expenditures ? more than $5.5 million ? in reserve as well as $10 million to make payments on time, according to analyses included in the city's comprehensive annual financial report.

That $10 million "is prudent when you think about our overall budget now approaching $130 million in that we have some reserves so that we're able to pay the bills on time, pay our employees and meet other obligations on a timely basis with fluctuating cash flows," City Finance Director Alfred E. Martin said.

The annual financial report has been audited by regional accounting firm Smith, Elliott, Kearns & Company LLC, and was presented to the city council on Tuesday.


Michael P. Manspeaker, a certified public accountant, confirmed the audit, which is required by law, provided no material weaknesses or reportable conditions that would need to be communicated to federal agencies.

The city's bonded debt increased to $31.8 million in the 2005-06 fiscal year compared to 2004-05's ending balance of $31 million. Although the city council authorized $7.1 million of water quality bonds at the end of the 2004-05 fiscal year for sewer plant improvements, it then drew down $5.5 million of that debt and paid close to $3.8 million in debt service on other existing debt.

"While we are issuing new debt, we are paying off old debt," Martin said.

The $6.1 million increase in net assets over the previous fiscal year came from a general fund surplus and the city's 28 percent cut of Washington County's excise tax imposed on new development.

"For the first time, we received a share of the county's excise tax revenues, which amounted to ... just over $1 million," Martin said.

The revenue associated with new development exceeded expectations in the past fiscal year. The city benefited by sharing in urban growth and increasing code enforcement practices that encourage new investment locally, Martin said.

"People are looking to take advantage of the urban utilities and development," Martin said.

While sewer allocations constrain the amount of new development, Martin feels they allow for a reasonable amount of growth annually.

"One of the bigger concerns, though, will be the issue of school capacity," Martin said. "We're starting to see a slowdown (in development and subdivision plan submittals) with the adequate public facilities ordinance and the lack of school capacity in the city having an impact on future years."

The issue will be analyzed soon, Martin said.

"The good news is that development has impacted us very positively. A warning sign, though, we need to be concerned about, is with this capacity restraint from school capacity with seats and the adequate public facilities ordinance," Martin said. "Is that going to stop new development that's benefiting our city taxpayers by helping to grow our tax revenue base?"

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