The financial audit for the fiscal year ending September 30 was presented by WDE Sansbury, who highlighted that the audit resulted in an unmodified report, which affirms a high level of assurance in the town’s financial statements. Two findings were reported: first, an issue with accounts payable during cutoff testing where several disbursements were incorrectly recorded post-year-end; second, an improper recording of ARPA funds in terms of revenue recognition. Sansbury attributed these issues to ongoing changes within the year and expressed confidence in the finance department’s ability to address them, particularly noting the positive impact of Joe’s return to the team.

The audit also involved six separate audits due to nearly $34 million in federal and state awards received, related primarily to Hurricane Ian recovery efforts. Sansbury confirmed that the funds were properly used and spent, and he commented on the town’s improved financial health, noting a net position increase of approximately $7 million, largely due to significant grants. He pointed out that intergovernmental revenues, rather than property taxes, were the largest revenue source for the general fund this year, a deviation from the norm. The overall financial outlook appeared positive, with an increase in the general fund balance partly due to a significant loan acquired during the year.

Discussion during the meeting shifted to the significant staffing turnover within the finance department, which included the departure of key positions like the finance director and accounting manager. This turnover created operational challenges, prompting the engagement of a consulting firm, Goldman and Wolf, to assist with financial functions. New hires were introduced to fill the gaps, including an accounts receivable specialist, a part-time receptionist, and a new budget manager. The finance director, who returned full-time in August, reported continued staffing challenges despite these hires. The department’s ability to complete the audit by the statutory June 30 deadline was hindered, pushing finalization to August 31 and requiring communication with the Florida Attorney General’s office.

The staffing situation also delayed account reconciliation and journal entry processes, obstructing timely financial statement production. Efforts to submit expense reimbursements for FEMA and other granting agencies were similarly impacted. The finance director noted the crucial assistance provided by Tidal Basin in prioritizing submissions for reimbursement to enhance cash flow. Additionally, the utility rate study initiated in the spring faced delays but was progressing with ongoing staffing adjustments.

The council discussed a five-year plan for new utility rates, which accounted for capital improvements and operational expense changes. The utility billing supervisor’s successful transition of the billing system to a new software amid challenges was highlighted. Although reporting issues with Lee County requirements persisted, progress was being made. The potential upgrade to a more robust version of the Tyler ERP Pro accounting system was considered, contingent on budget adjustments.

Financial updates included an emergency fund deficit of $9 million, stemming from significant expenditures related to hurricanes. Insurance proceeds and FEMA and FDM reimbursements had been received, with expectations of additional funds that could reduce the deficit. The use of ARPA funds to cover costs not eligible for FEMA reimbursement and other financial maneuvers were also noted.