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City of Worthington deemed in good financial shape

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City of Worthington deemed in good financial shape
Worthington Minnesota 300 11th Street / P.O. Box 639 56187

WORTHINGTON -- The Worthington City Council learned the city's finances were in good shape during last week's council meeting.

"The city is in strong financial health, and we are prudently managing the budget for the city," City Administrator Craig Clark said earlier this week. "Comparatively speaking to other communities, we have a relatively low burden on taxpayers. That's a positive thing for the city."


Wayne Drealan of Turbes, Drealan, Kvilhaug, Hoefker & Co. presented the 2012 Comprehensive Annual Financial Report to the city.

"We had a pretty decent year as far as maintaining costs and adhering to the budget," Director of Finance Brian Kolander said. "We added to the bottom line in the general fund pretty substantially, and that's always a goal.

"We try to do the best we can budgeting, but if there are circumstances where we're under the budget, we don't tell them to go spend it," Kolander added. "It gets added to the bottom line and can hopefully be used in subsequent years."

During the presentation, Drealan explained that of the 225 reporting cities, Worthington was 205 as far as tax burden on citizens.

"That was really a nice thing to hear from Wayne Drealan, but on the other graphs that he gave, we were more on the middle of the line on some of the other ones," Worthington Mayor Alan Oberloh said. "But the one that was the net effect of the levy, we were looking pretty darn good.

"In the years since I've been mayor, we've gotten a lot less state aid than we have over the years," Oberloh continued. "We would have really had a lot more in the coffers had it not been for that. But through attrition, not hiring people back, conserving where we can -- all things that should have been done all along and probably were -- now there was more of a concerted effort. There are other things this city would like to do, but we're not going out and spending."

Having funds from the sale of Worthington Regional Hospital has allowed the city to proceed with projects within the city.

"Things like the Center for Active Living came from the funds, for the most part," Kolander said. "Otherwise, it would have been something we would have bonded for and had on the levy. It's the same with the fire hall. Those are types of things where we've been able to maintain our levy but still provide nice amenities for the community."

Other projects from those funds include the fire station and the city's aquatic center.

"We got accused when we sold the hospital that we would go out and waste the money," Oberloh said. "I don't think what we've done at all is throw the money away. I would question where somebody could say we did.

"My only disagreement for what we've done with the money is we took $200,000 and paid down the levy," he added. "We used $200,000 of the hospital proceeds a few years ago so we could keep our levy lower. That money is gone. All that did was provide property tax relief. Would some say that's good? Yeah, that's good we controlled property taxes. But we didn't do anything with the money. We built the fire hall, and we have a new aquatic center."

Another aspect that helps the city keep the levy low is funds from the liquor store.

"We do make money there, but we offset the levy by $200,000 a year," Kolander said. "The transfer averages about 6.4 percent on property tax relief. That's pretty significant."

Drealan did discuss the amount of reserves the city currently has.

"That's always a challenge when we've had the LGA and those kind of challenges moving forward," Clark said. "Trying to deliver the same with less does tend to put some more strain on your reserves.

"With the economy we went through in the state and that sort of thing, it's always a bit unpredictable," he continued. "On one hand, it seems like the state looks at a community's reserves and says, 'Yep, you're fine, you have a bunch of reserves.' The other time, the state auditor is saying you need to have 30 percent reserves to effectively run a municipal government."

A year ago, the city had only 11 percent of its budget in reserves. According to the report, at the end of the fiscal year, unassigned fund balances for the general fund was 17 percent of general fund expenditures.

"Some of that had to do with those projects that were being funded out of our general fund that are going to be reimbursed from the hospital fund for the projects and the expenditures," Kolander said. "It temporarily will decrease the fund balance. We don't do the transfer until we know what the final project costs are."

Community Content Coordinator Aaron Hagen can be reached at 376-7323.