The City of Isanti received a clean 2019 financial report and management letter from Steve McDonald, managing partner with Abdo, Eick, and Meyers.
McDonald shared the report via a pre-recorded presentation due to the Stay-At-Home orders during the COVID-19 pandemic.
There were no instances of compliance while preparing the report, noted McDonald. However, there was one finding for internal controls, which has also been found in previous years and is not uncommon for cities the size of Isanti, McDonald said.
Also in prior years, there were two findings that had been corrected this year. One related to material audit adjustments, which were corrections of decisions that management had made by the firm.
“We didn’t have any of those in the 2019 audit, so good progress in addressing that finding,” McDonald said. “Also, we had reported last year that there was insufficient collateral covering your bank deposits, and there were steps put in place to make sure that was monitored every month, and we do not have any issues related to collateral coverage.”
McDonald pointed out the city has a target of 50% fund balance in reserves. At this time, the city has 31% fund balance, which is below recommended minimums, he added, noting the target for most cities is 35-50%.
“Even though it is below the number, you still have an adequate cash flow to fund the first five months, but there’s not much there for out of the ordinary kind of expenses,” McDonald said.
In comparing the 2019 budgeted fund balance to the actual fund balance, the fund balance went backwards $147,000, reported McDonald.
“The city had actually planned for an increase of $598,00 when the 2019 budget was approved,” he said. “What was unique about the 2019 budget, there was almost $500,000 planned use of reserves in the 2019 budget. Going forward, 2020 and beyond, that budget is set to be a breakeven budget.”
McDonald reviewed the city’s sources of revenue and expenditures in each of the city’s different fund accounts, as well as key performance indicators for the city.
Odds and ends
In other business, the council:
•Approved a revised Memorandum of Understanding (MOU) between the city and the Cambridge-Isanti School District for providing a school resource officer during the school year. The revised MOU reflects an end date of April 1, 2020 due to school not being in session during the COVID-19 pandemic.
•Heard an update from City Administrator Josi Wood regarding the compost site and the city’s clean-up day. The compost site opened April 21, and the clean-up day will take place Saturday, May 9 from 8 a.m. to noon at the city’s public works garage.