Auditors Present Results of Annual Financial Report

On Monday, Feb. 10, Council heard a presentation by the City’s Chief Financial Officer, Eric Demas, regarding the City’s recent comprehensive annual financial report.

Also speaking were attorneys Andres Tejada and Francis Serreti, from Powers & Sullivan LLC, the City’s external auditors.

Demas started off the meeting saying that Mayor Carlo DeMaria wanted to make the Council aware of the results of the audit, even though it had not been requested.

“The mayor thought that, given the number of new members on the board, it was an opportunity to have independent auditors come in and make a presentation,” he said.

Councilors were given copies of the 133-page report detailing the City’s financial situation between June 2018 and June 2019.

The City will be submitting its report to the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting Program (CAFR). The goal of the program is to ensure that users of the City’s financial reports—citizens, media, legislators, etc.—are able to assess the financial health of the government. Everett was one of only 45 communities across the Commonwealth to apply for this certificate.

“We’re proud of that as a firm and we think you should be too,” said Serreti.

Serreti summarized the report’s findings, which included the following highlights:

•The City has maintained its bond rating of AA+ by Standard & Poor’s Investors Service. It is currently working to build up its reserves in order to be eligible for a AAA rating.

•The City’s liabilities and deferred inflows exceeded its assets and deferred outflows of resources at the close of the most recent year by $152.1 million (net position).

•At the close of the current year, the City’s general fund reported an ending fund balance of $36.0 million, a decrease of $8.9 million in comparison with the prior year. Total fund balance represents 16 percent of total general fund expenditures.

•The City transferred $899,000 to the general stabilization account in 2019. At year’s-end, the general stabilization account balance totaled $3.7 million.

•The City transferred $1.2 million to the capital improvement stabilization account and appropriated $350,000 to fund the capital improvement plan. At year-end, the capital improvement stabilization account totaled $3.4 million.

•The employee leave buy-back stabilization account did not have any activity in 2019 and the account balance totaled $8,000 at year-end.

•The City appropriated the $12.5 million balance in the community enhancement fee stabilization account to reduce the 2019 tax rate.

•The City transferred $899,000 to the other postemployment benefits (OPEB) trust fund in 2019. At year-end, the net position of the OPEB trust fund totaled $6.0 million.

•The net OPEB liability increased by $16 million during the current year and the year-end balance totaled $271.8 million.

•The net pension liability increased by $10.3 during the current year and the year-end balance totaled $106.3 million. Councilors responded positively to the summary presented, but said they would need time to look at the document in detail and would likely have questions at a later date.

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