Audits

show

city, PUC

in good

standing

By RON LARSEN

Journal Staff Writer

NEW ULM -- When city and utilities officials were finally able to view their audited financial statements for 2003 Tuesday, questions were more about form than substance.

There is little question that the city and New Ulm Public Utilities were healthy financially in 2003.

The city added $2.1 million in net assets. When NUPU and New Ulm Economic Development Authority are added, net assets total $2.7 million.

The city's total net assets increased to $96.9 million of which $26 million is unrestricted. The city's governmental funds reported combined ending fund balances of $11.4 million, an increase of $353,203 over 2002. The general fund wound up the fiscal year with an unreserved fund balance of $2.6 million, representing nearly 47 percent of total general fund expenditures.

And the city's total debt, excluding PUC and EDA debt, decreased by $1.3 million, representing a 5.29 percent drop. However, there were deficit fund balances in seven Tax Increment Financing District funds, as well as deficits in two capital projects funds, Mueller Park ($273,787) and 2000 Sales Tax Referendum ($6,940).

The PUC's financial condition was equally strong. Net assets totaled $47.3 million, of which $13.9 million (or 48.23 percent of total expenditures) was unrestricted. Meanwhile, the PUC's total debt decreased by $395,398 (or 1.95 percent) during the fiscal year. Its net assets rose by $740,430.

Meanwhile, the PUC invested $1.2 million in building a nearly 5-mile-long pipeline to take natural gas from Hutchinson Utilities' pipeline. It also put $500,000 into the North Express Feeder Line that connects NUPU's electrical power plant to the Northside Substation.

The auditing firm of Abdo, Eick & Meyers LLP of Mankato found no instances of noncompliance.

So, most questions directed toward Kyle Meyers concerned the government-dictated change in accounting practices, known as GASB-34 (Government Accounting Standards Board, Statement No. 34). This was the first year for using GASB-34, and it slowed down the process of preparing the financial statements, City Clerk/Treasurer Reginald Vorwerk said.

"The city had been on a modified accrual (accounting) system, and with GASB-34, it went to a full accrual system. The only big difference is in how the information is presented, but making the changeover certainly raised a lot of questions," Vorwerk said.

GASB-34 really isn't anything new, Vorwerk said.

"It's commonly used in business accounting, but governmental units like cities and counties used modified accrual practices. Now, they have to use full accrual, too."