Palmer city gets squeaky clean report from its auditors

The city of Palmer has aced its annual financial review, auditors told the city council at its Tuesday, Oct. 24 regular meeting.

“It was a successful audit. There were no adjustments needed. A clean opinion, with no noncompliance issues,” CPA Joy Merriner told the city council. Merriner is with the firm of BDO USA LLP.

The city is in good shape financially with a $9.8 million fund balance,” net of any outstanding obligations, she said. Palmer has an annual general fund budget of about $12 million and revenues of about $15 million, so the fund balance represents a healthy reserve against unexpected event, Merriner said.

City manager John Moosey said the annual financial review was challenging because of the large federal COVID-19 grants that came to the city without a lot of guidance from the U.S. Treasury. In fact, the rules of how the money could be used and how expenses were accounted for changed several times during the year, he told the council.

There was danger in this because if COVID grant recipients like municipalities made mistakes even unknowingly they might have had to pay funds back to the government. Palmer avoided this, Moosey said.

Many local governments hired consultants to help them navigate the shifting federal rules but Palmer was able to track the federal funds and expenditures with its in-house staff led city finance director Gina Davis, he said.

“The auditors had us under a microscope as they do every year and they found us to be good stewards,” of city funds, Moosey said. “We came out practically perfect on the audit,” he said. A completed annual audit is needed for the city to qualify for federal grants, and to sell bonds.

In other developments, Mayor Steve Carrington, in his report to the council, updated the council on progress with design and engineering of the Palmer library reconstruction. The latest presentation of the design concepts will be presented to the public in late afternoon, Nov. 15.

The library was damaged by a collapse of its roof during a heavy snowfall early this year. The schedule calls for the design to be presented to the city council on Dec. 12, and to cost estimators on January 11. The city council will see the final design on Jan. 23. The decision on whether to build a new structure or repair and upgrade existing building must also be made.

Carrington said the city has $5 million appropriated by the Legislature to help fund the repairs. The insurance settlement is expected to be around $3 million. If a new building is decided on the costs could approach $18 million, so more money would have to be raised. Palmer voters approved $10 million in city bonds for the library but this would be used only if needed, Carrington said.

“We will make every effort not to raise the city’s 3 percent sales tax or 3 mil property tax rate,” to pay for the bonds, he said. Palmer’s local taxes compare favorably with the Mat-Su Borough’s road service area and fire service assessments for properties outside the city. “This just shows why it’s good to live inside the city limits and not outside the city line,” the mayor said.

Carrington also reported on the preliminary organization of a Municipal Planning Organization for the Mat-Su, which would have Palmer, Wasilla, the borough and the state Department of Transportation and Public Facilities as members. The MPO would guide the use of federal transportation funds in the populated Palmer-Wasilla corridor.

Wasilla Mayor Glenda Ledford was chosen to be president of the new MPO based on a nomination by borough manager Mike Brown. Steve Carrington, as Palmer’s mayor, is a member of the MPO board. The new organization will be created officially by Gov. Mike Dunleavy later this year.

In its Tuesday meeting the city council did another review of the proposed 2024 budget, which will go into effect in January. Changes in the budget are minor, mostly to adjust for inflation. Total expenditures are projected at $20.65 million with total revenues estimated at $21.78 million, according to budget documents before the council.

In terms of the capital budget, for construction, “this year it has clearly come to our attention that the city has some older buildings. It might be a good time to ‘make a list and check it twice’ of what those buildings need,” in the way of upgrades,” Mayor Carrington said in his council report.

“Our police chief has started talking to us about building a new public safety building in the future. Are there any others we should be looking at? Do we need to push our capital plan out to seven or 10 years (it is now a five-year plan) to help us keep track of these?” the mayor asked.