At the Jan. 23 Finance and Administration Committee meeting, the city’s auditing firm (Stopp & Van Hoy) presented the findings of the annual audit for the fiscal year ending April 30, 2016. In stark contrast to the financial story of the state of Illinois, O’Fallon has a strong financial position.
State law requires that Illinois’ municipalities be audited by an independent agency annually to guarantee that the municipality is accountable to citizens and taxpayers and that all legal requirements were met.
The financial audit provides a detailed report of the city’s financial statements and the auditor’s reports, analysis and recommendations. I want to share with you some of the highlights.
For the 17th year in a row, the city of O’Fallon has ended the year in the black — with revenue that exceeded expenses. This is due to a detailed, professional, and an open budgeting process that includes city staff, elected officials and the O’Fallon community.
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The city of O’Fallon ended the fiscal year with $138 million in capital assets (roads, parks and buildings), $36.9 million in cash and cash equivalents and a AA+ Standard and Poor’s bond rating.
The city is in a strong and secure financial position with enough cash on hand to cover 11 1/2 months of operational expenses. Most professional auditors recommend municipalities have enough cash to cover three to 12 months of expenses. O’Fallon is at the upper end of this recommended amount, which is great! In the event of a natural disaster, the state of Illinois not fulfilling their financial obligations, or any other unforeseen event, the city will be able to financially continue operations and provide services to our residents.
The city of O’Fallon has met all of its pension liability requirements. While many government agencies “kick the can down the road” and continue to underfund pension liabilities, leaving future generations to deal with the problem, O’Fallon has not.
Another important point: all debt held by the city of O’Fallon is properly funded.
Similar to when a person acquires a loan to purchase a new home for their growing family, the city of O’Fallon has acquired loans (in the form of bonds) to pay for large capital projects to meet demands of the growing population.
Before the city ever issues debt, it is a policy to ensure that there is a revenue source to fully fund the payments. Such is the case with the projects included in Destination O’Fallon, which will be paid for using increased tax revenue collected from visitors who stay in our hotels.
An increase in O’Fallon’s hotel/motel tax is being used so that out of town visitors, not O’Fallon residents, will pay for the community investments. O’Fallon families and homeowners will experience the benefits of additional amenities and increased home values, without having to pay for it through increased sales or property taxes.
If you would like to examine the entire financial audit, it is posted on the city’s website at ofallon.org.
Structured growth, fiscal responsibility, and a bright future are yet further examples of why O’Fallon is such a great community in which to live.