A one-time windfall from a large construction permit fee and an uptick in sales tax receipts helped the City of Shrewsbury end the year with a budget surplus, the city's audit shows.
The audit of the 2011 budget was performed by accounting firm RubinBrown and was presented to the Shrewsbury Board of Alderman during its regular session Tuesday night.
According to the audit, the surplus came despite the fact that the city with a deficit of nearly $180,000 in its approximately $5.6 million general fund. Instead, Shrewsbury experienced a 6.2 percent increase in revenue thanks to growth in sales tax income and $188,864 more than anticipated in building permit fees, largely due to the .
At the same time, the audit reports that the city's expenditures dropped by $259,840 compared to 2010 and also come in under the projected figures for 2011. This was achieved by reducing personnel costs and putting off capital expenditures for items such as new office computers, two mobile PCs for police vehicles and upgraded accounting software.
The surplus rises to $382,661 when the city's other funds, such as debt service, sewer lateral and capital improvements, are incorporated, which the audit again attributes to higher-than-expected tax receipts.
"The city's financial position is positive and fairly strong," said Jeff Winter, a partner with RubinBrown who helped present the audit. "Revenues and expenditures were favorable to budget and there's an increased emphasis on strengthening controls on the handling of cash."
In addition to assessing the accuracy of the Shrewsbury's financial statements, the auditors are charged with evaluating its accounting procedures. In this regard, Winter pointed to several "material weaknesses," some of which he said were already being addressed by the city's management.
Winter's recommendations in this regard focused on limiting the financial powers of department heads to do tasks such as adjust cash receipts, approve invoices or add vendors. Instead, Winter said this abilities should be exclusive to the city's finance director.
Other Budgetary Highlights
- For 2011, total revenues for Shrewsbury across all funds were $7 million and total expenditures were $6.6 million. The majority of the city's money is spent in its general fund, which had revenues of $5.8 million and expenditures of $5.6 million.
- While sales tax receipts rose by $83,100, all other sources of tax income fell with property taxes down by $41,882, utility by $14,057, gasoline by $4,996 and all other taxes by $17,538.
- The slow economic recovery also continues to take its toll on Shrewsbury's finances with sales tax income still down 10.8 percent compared to 2007.
- The city paid $879,440 toward retiring its debts in 2011. Some of these payments were shifted into the city's general fund for the 2012 budget and helped attributed to a