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St. Paul Park annual audit comes up clean

For the last several years, the city of St. Paul Park’s financial status has been solid, and the audit for fiscal year 2013 showed more positive numbers.

Financial analysts at Smith Schafer and Associates earlier this week provided the city with an “unmodified opinion,” meaning the firm found no material misstatements and all items were presented in accordance with applicable financial standards. An unmodified opinion is the highest level of opinion issued.

“We work with seven other cities and I’m not exaggerating when I say yours is one of the best,” said Jill Schultz, accountant with Smith Schafer and Associates. “You’re very organized and thorough, and Kevin (Walsh) and Kim (Sommerland) and the whole finance department make our job a whole lot easier.”

Property tax revenues continue to be the biggest contributor to the general government fund. In 2013, Schultz said revenue from property taxes was just shy of $2 million, which is an increase of about 4 percent over 2012.

The increase, she explained, was mainly due to the collection of delinquent taxes, in conjunction with a slight increase in the current year levy and fiscal disparities.

The revenue from property taxes collected made up roughly 57 percent of the total revenues, excluding transfers and bond proceeds.

The city of St. Paul Park received a small helping hand from Local Government Aid, which made up just under 4 percent of the city’s total revenue in 2013.

Other revenues for the year included special assessments, fees and other charges, and earnings from the state and county.

While most revenues sources continued an upward swing, investment earnings were down in 2013. Schultz said the decrease in investment earnings is typical across the board due to the market.

“This is not anything unusual for St. Paul Park,” she said.

According to the audit, governmental expenses in 2013, which includes the mayor and City Council, administration and other city departments, represented about 19 percent of total city expenditures, excluding capital projects and debt services.

Government expenses were just under $500,000 for the year, about a 3 percent increase which Schultz attributed to a hike in legal service fees.

Similar to most surrounding cities, the St. Paul Park Public Safety Department made up roughly 48 percent of the total expenses at $1.2 million in 2013, a small decrease from 2012. Schultz said the smaller budget was due to a decrease in equipment purchase and wages and benefits for both police and fire departments.

Roughly 22 percent of the expenditures in 2013 was attributed to costs related to the street improvement projects. A 12 percent increase over 2012, Schultz said, was primarily attributed to the a jump in seal coating costs.

The city continues to hold onto a large reserve fund, about 66 percent of general fund expenses in 2013. The state auditor recommends a city to have what Schultz called a “rainy day fund” somewhere between 35 and 50 percent.

“It’s a little high in St. Paul Park but it’s better to be on the high end than on the low end,” she said.

Expenditures likely to be paid for with a reserve fund include emergency projects. With some of the city of St. Paul Park experiencing flooding, the city could dip into those coffers to cover any damage to public property if need be.

Current outstanding debt within the city sits at $4.7 million, which includes bonds, certificates and notes payable. Schultz said while there was more “types of debt” issued in 2013, the balance is significantly lower than in 2009.

City ranked

Also part of the audit each city is required to submit information to the state auditor which is used to compare and contrast cities in Minnesota. The information provided also serves as a ranking system.

As part of its audit, Smith Schafer and Associates compared St. Paul Park to three other Washington County cities of similar size — Bayport, Newport and Afton. St. Paul Park ranked 163 out of 227 cities with populations of 2,500 people or more for total expenditures per capita in 2012.

“(St. Paul Park) expenditures per capita are lower than the average of cities above 2,500,” Schultz said. “It’s kind of a weird cut off, unfortunately that means you’re ranked with cities like Minneapolis and St. Paul. But it’s still lower than the average.”

In comparison with the three cities, the total property tax revenue per capita in St. Paul Park was lower in 2010, 2011 and 2012. In 2012, the average property tax per resident was roughly $335 annually.

St. Paul Park is also has one of the lowest per capita expenses, when compared to Afton, Newport and Bayport. Average per resident expenditures was roughly $470.