Audit shows Page's finances are positive and growing

The city's revenues outpaced its expenditures for the fifth straight year.

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Mayor Bill Diak and the Page City Council received the fiscal year 2016-17 audit presentation at the last city council meeting on Dec. 13. Fiscal year 2016-17 ended June 30, 2017.

The audit was conducted by independent auditors HintonBurdick CPAs and Advisors. The representative for Hinton Burdick reported to council that the City of Page’s finances were in great condition, with the city showing more revenue than deficits for the fifth year in a row.

“The City of Page is doing very, very well,” said the auditor for HintonBurdick. “We audit 70 local governments throughout Arizona, and not many of them can say that,” the auditor added during his report.

The report showed that the City of Page’s total net assets (equity) were $136.9 million as of June 30, 2017.

Page’s total net assets increased by $7.3 million during FY 2017.

Governmental-type activities – which includes general government, public safety, public works, judicial, culture and recreation, community support and interest on long-term debt – had

a net increase of $4.89 million.

Business-type activities – which includes water, sewer, sanitation, and electric – had a net increase of $2.4 million.

The auditor’s report contained other financial highlights as well. According to the report, actual resources received in the General Fund were more than the final budget by $2.39 million. The excess was mainly due to $2.3 million in city sales tax received in excess of budget, said the report.

The audit also showed that actual expenditures were $1.1 million less than the final budget.

In addition, the city’s Highway User’s Revenue Fund (HURF) balance increased by $607,370 from $1.89 million to $2.49 million.

The Debt Service fund balance increased by $2.3 million from $2.8 million to $5.1 million.

The Capital Projects Fund balance increased by $1.6 million from $415,000 to $2 million.

So what does all this positive financial news mean for the City of Page as they move forward and plan for the future?

The bottom line is that capital improvement projects, such as roads, sewer line replacements, and additional playgrounds, will get done sooner, said City Manager Crystal Dyches.

One of the city’s primary goals is to pay off its bond debt, which is due in 2026. However, the debt’s first call date, which is the city’s first opportunity to make a payment on the debt, is in 2021. The excess revenue the city has been taking in the last five years will go toward that, said Dyches.

“We’re going to pay the debt off in full in 2021, which is great news for the city,” said Dyches. “But it gets better than that. At the rate we’re going we’ll have the necessary money needed to pay the debt saved by 2018. After that excess revenue will be able to go straight into capital improvements such as replacing our streets, sewer lines, adding new playgrounds.

“This report paints a really good picture of where we’re at and where we’re going.”

Much of the city’s excess revenue is due to the city increasing the privilege tax from two percent to three percent several years ago, Linda Watson, Finance Director for City of Page.

Fifteen percent of the that additional one percent goes directly toward the city’s debt reduction.

That one percent increase in the privilege tax is set to expire July 31, 2020.  Before it expires the city council will have the option to keep it and not let it expire.

Dyches, seeing the amount of improvements and maintenance the city has ahead of it, hopes council will vote to keep the one percent privilege tax that they added years ago.

“Ninety-six percent of our roads will need to be replaced for have major reconstruction done on them in the near future,” said Dyches. “If that extra one percent privilege tax sunsets we’ll lose a third of our revenue, which comes to about $11 million annually, that could go toward those capital improvement projects.”