The City of Jacksonville’s annual financial audit gave mostly positive news to the city council on Monday night.
Adam Withee of Zumbahlen, Eyth, Surratt, Foote, and Flynn presented the shortened version of the 90+ page document to the city.
The audit had one compliance finding in which the capital improvements fund exceeded appropriations by about $700,000. Withee attributed it to the fact the city had lots of federal American Rescue Plan Act funds to spend, resulting in a single audit. In a normal year, he says the city would have likely done an amended budget closer to the end of the fiscal year to clear up the appropriations mismatch.
Withee says that the city has approximately 7 months of reserves on hand, which is a slight drop from last year. He says it is mostly due to the city’s general fund subsidizing the employees’ health insurance plan by $1 million. The subsidy, Withee says, keeps the city from having to dramatically raise the rates on employees plans. He says the high rates are due to the high rate of claims over the last 3 years.
Revenues were up by about $340,000 over the year, including improvements in revenue at the city-owned golf course. The golf revenue is at a 5-year high. The golf revenue was offset by a large amount of loss at the golf course due to repairs and the purchase of new golf carts.
The city’s total pension assets were up by $4 million compared to the previous year, helping the fund bounce back by half of significant losses that occurred in 2022. Withee says a nearly $11 million swing in the balance of the fund represents the overall volatility in the market since 2021.
One of the final pieces of good news was that last year the city demonstrated strong sales tax revenues, and there was a slight decrease in the overall tax rate due to the increase in equalized assessed valuation (EAV) outpacing the tax levy increase.
Withee says the biggest problem that continues to linger with the budget is the city’s inability to collect on fines and fees for delinquent accounts. Withee says that the city is owed nearly $700,000 in back fines and fees from delinquent customers. He says that the city needs to find a way to put teeth into getting the fines and fees collected or find a way to clear the accounts off the city’s books.
City Attorney Dan Beard says that the justice system eliminated debtor’s jail and the mechanisms to collect are different than in year’s past. He says that the city council is exploring some options: “You cannot imprison someone simply because they cannot pay their debts. Having said that, some things the city may take a look at as it presently stands: one of the enforcement tools we have is if you have an outstanding fine with the city and you are seeking to have a water account turned on that can be refused. We may go further and extend that to other types of business licenses, building permits, so forth that you have to be in good standing financially with the city to enjoy those benefits that the city has to offer.”
Beard says that the Municipal Court System wasn’t designed to be a revenue stream for the city: “The administrative court that was established with Mayor Ron Tendick and through the work of a lot of other individuals was never designed to be a money maker for the city. It is designed to try and recoup fines when possible. The primary purpose was to allow the city to get property maintenance issues before a court in a very timely fashion and get enforcement through there. That, I think, has been a ringing success for the city as far as what they’ve been able to accomplish through administrative adjudication. The fine collection is a sore point that we will continue to try and work on, but I would not anticipate we are going to make huge strides with that in the future.”
City Planner Brian Nyberg mentioned during the discussion with the city council Monday night that liens and judgments on properties through the circuit court have been recently successful in getting some of the outstanding fines collected. He said that about $12,000 in backlogged fines have been collected in recent months on delinquent property holders.
City leaders say that previous attempts to use collection agencies have been expensive and unsuccessful.
Some of the worst offenders, according to multiple city officials, have back dated fines and fees estimated above $5,000. City council members asked that Beard and the City Clerk’s Office work towards going after the city’s repeat and most egregious delinquent account holders in an attempt to get the uncollected accounts within an acceptable range.