The city of Warrenton has received a positive review on its financial audit for the 2018-2019 fiscal year.

Allen Schulte, with accounting firm Botz, Deal and Co., delivered the annual audit report to the Warrenton Board of Aldermen Dec. 17. He said the city’s financial practices are cleanly within general standards.

“We didn’t really have any recommendation this year. The audit went really smooth, as it always does here,” Schulte told the aldermen.

In a breakdown of Warrenton’s finances, Schulte said the value of property owned by the city increased last year, thanks in large part to Warrenton’s new Pool Park and Aquatic Center being completed in late 2018.

The city’s longterm debt has decreased compared to the 2017-2018 year, Schulte said.

However, he explained that the size of the city’s debt, compared to the value of property it owns, still looks more negative than it actually is. This is because the city used a $15 million bond to pay for construction of a second Interstate 70 interchange that is now owned and maintained by the Missouri Department of Transportation.

“You all borrowed to build the interchange, but the interchange isn’t the city’s asset,” so it appears as a large negative on the city’s financial report, Schulte explained. “But you had a purpose for it, you have the revenue sources for it to pay (that debt) down. So although it looks like a big negative number, it’s really not.”

Warrenton voters approved two half-cent sales taxes in 2016 to pay off bond loans for the interchange project. Schulte said the city’s outstanding balance on the loan is just under $13 million. 

Discussing revenue that Warrenton brought in over the year audited, Schulte said property and sales tax revenues were relatively flat compared to the year before. However, payments for city services went up because the city is generating more revenue from its new aquatic center. Fines from the police department also went up, likely because the department had more staff, Schulte said.

For expenses, the boosted revenue from the new pool was accompanied by a large jump in what Warrenton spends to provide “culture and recreation” services.

“That’s the cost of running the aquatic center and things like that,” Schulte said.

He added that interest payments on outstanding debt is a shrinking portion of the city’s expenses because Warrenton has been paying down what it owes.

Schulte said the city of Warrenton ended its 2019 fiscal year with $3.3 million in reserve for its general fund. He said that represents about six months of operating expenses.

The audit also examined Warrenton’s participation in a statewide government pension program that the city joined less than 10 years ago. Schulte said city employees have built up $2.1 million in pension benefits through the Missouri Local Government Employees Retirement System (LAGERS).

At the end of June 2019, he said those benefits were 35 percent funded, but are on track to reach their funding target in the next five years.

“You guys are trying to catch up a little bit since you joined and allowed past employees to get service credit. It is going to take you guys a little time to catch up to that,” Schulte told aldermen.