The Warrenton Board of Aldermen received a report on their audit of their 2024 fiscal year from Allen Schulte of UHY Advisors at their July 15 meeting. 

The city recently made changes to its fiscal year which previously ran from June 30 to July 1. The city’s fiscal year now runs as a calendar year, and Schulte noted this year’s audit was the first one to fully include their new structure. 

“This year the financial statements were for the calendar year 2024, last year was the first year we did a calendar year,” said Schulte. “So now we’re kind of back into the same apples to apples mode.”

Schulte said there were not any significant changes in the city’s assets compared to previous years, but there was a decrease of nearly $4 million in long-term debt. 

He said that decrease came from loan payments on debt from tax increment financing agreements as well as the paying off of the bond for the exit 191 overpass. 

Tax increment financing agreements allow municipalities to help cover up-front development costs which are then paid back through a tax assessed on the development. The city entered into a TIF agreement to bring Rural King to the Warrenton Shoppes and assessed a half-cent sales tax to cover the costs. 

Schulte said he did not have any concerns with any remaining debt related to the tax increment financing agreement with Rural King as the city had a strong tax base to raise those funds. 

“You’re only responsible to the extent that you’ve collected the TIF taxes,” said Schulte. “I don’t see any issues going forward in paying that off. Some places don’t quite generate as much as they expect but you guys seem to be in great shape.”

He also noted that tax revenues rose during the year, largely due to an increase in sales tax revenue. 

Expenses also rose although Schulte noted there were increases in expenses related to improvements near the Route MM interchange; however those projects were paid for with bond funds and would not actually impact the city’s finances. 

Schulte said the audit noted a significant increase in water and sewer charges for service. 

He attributed the increase to a number of factors including a rate increase approved by the board in August 2023 and an increase of new connections. He did say the largest increase however was unrelated to those two factors. 

“The biggest part of it really was the increase in industrial sewer usage, that was the most significant part there,” said Schulte. 

Schulte did point out that there was still a difference of roughly $1 million between the city’s liabilities and contributions to its LAGERS account. 

LAGERS, or local government employees retirement system, is a state-run pension system for municipal employees requiring cities to pay into retirement funds. Warrenton joined LAGERS in 2015. 

Schulte said the city currently has roughly $4.6 million in liabilities and has provided $3.3 million to pay into the fund. He said that difference had remained roughly the same for several years. 

He attributed the difference to lower-than-expected returns on the city’s LAGERS investments He said since they are relatively new to the program it may take some additional time before they cover the difference. 

“All the other cities I audit are all 100% funded,” said Schulte. 

Schulte did clarify that while they were auditing the city’s finances, they are not auditing how the city spends their money, but how accurate the financial statements are. 

“You guys have really good internal controls, good segregation of duties, so there’s probably not a lot there that we would even see a weakness in,” said Schulte. 

The board voted to approve the audit report unanimously.