Every year auditors conduct a comprehensive review of Kingsport’s finances for the prior fiscal year, which runs from July 1 to June 30. Kingsport has to submit the audit to the state by the end of the year.
This past fall, auditors reviewed 36 separate funds including the general fund, water fund, sewer fund and other minor funds as well as the finances of Kingsport City Schools. The city’s general fund covers everything from city administration to police and fire services to the parks and recreation department.
For the first time since 2010, auditors found no material weaknesses or significant deficiencies during their review of the city’s financial controls and operations.
Here are some more highlights from this year’s audit:
Rainy day fund: Increased by roughly $700,000, rising from $13.2 million in 2016 to $13.9 million in 2017. In the previous year, the increase was approximately $350,000. Under a Board of Mayor and Aldermen-imposed rule, Kingsport aims to keep $11.4 million in its unrestricted fund balance — essentially a rainy day fund to cover three to four months of operating expenses for the city.
Property taxes: Grew by $2.3 million — from $57 million to $59.3 million. In 2016, property taxes grew by $1.1 million. Kingsport’s property tax rate is $1.975 per $100 of assessed value.
Sales taxes: Rose slightly from $34.4 million to $34.6 million. In 2016, sales tax collections went up by $1.7 million. During the past decade, Kingsport has seen a drop in its year-to-year sales tax collections twice — in 2009 and in 2010.
Total debt: Increased by nearly $14 million — from $227 million to $241 million. This was due to the issuance of new bonds and draws on a state revolving loan that went to cover the raw water intake project. Kingsport made nearly $12 million in debt payments last year, roughly the same amount as in 2016.
Awards: For the 19th year, Kingsport finances received a clean opinion — the highest opinion offered — and for the 17th straight year the city received a certificate of achievement for excellence in financial reporting.
Bond ratings: Moody’s Investor Service and Standard and Poor reaffirmed their Aa2 and AA ratings for the city.
“Financial management is the fundamental building block for getting things done,” City Manager Jeff Fleming said. “If you don’t have your financial house in order, nothing else matters.”
Brown, Edwards and Company was paid $145,500 to conduct the audit.