By Kevin Boneske
Staff Writer
HOBART – An audit report with good financial news was presented to the village board Tuesday, June 2, by David Maccoux, certified public accountant with CliftonLarsonAllen.
Maccoux said Hobart had a “very strong budget year” in 2019 when the village increased its total general fund balance by around $351,000.
“The village continues to be in a strong position with $1,364,000 (in the general fund balance) that’s unassigned, in correlation to your budget of about $3.4-3.5 million,” he said.
Maccoux said the village’s other fund balances include a special revenue fund, which ended the year with $91,824 for the K-9 Fund, a debt service fund the village budgets for annually to retire debt with $161,701 and capital projects funds totaling around $3 million for capital improvements, and two Tax Incremental Financing districts with balances fluctuating as the village spends down capital bonds.
He said Hobart’s total government fund balances came to $4,949,512 on Dec. 31.
Maccoux said a five-year analysis of the village general fund balance shows an increase from just below $1.2 million in 2015 to just above $1.6 million for 2019.
“Over a five-year period, you see almost a natural progression as you’ve seen some strong budget years in those years,” he said.
The village’s debt position to end 2019, Maccoux said, included about $24 million in general obligation debt related to government activities with about another $4 million for business-type activities, such as water and sewer operations.
Based on the legal margin for debt being 5 percent of the village’s equalized value, or around $48.5 million, he said Hobart had approximately $20 million in additional debt capacity to end 2019, “still a good debt position in your general obligation debt.”
Maccoux said the village’s water system revenue bonds, which had a remaining principal of $2.715 million, are to be funded by tax increments in TIF No. 1 with water revenues as a last resort.
“Overall, when you look at your financial position in your governmental funds, we believe you continue to be in a strong position as you enter 2020,” he said.
Maccoux said Hobart’s water utility, for which rates are regulated by the state Public Service Commission, had “fairly constant revenues” the past two years with $970,712 in 2019 and $976,637 in 2018.
“If you remember last year, it was a pretty wet summer, so not a lot of people did a lot of watering of their lawns and that,” he said.
Maccoux said Hobart continues to manage its water utility operating expenses well, with nearly a $70,000 increase to $919,006, leaving an operating income of $51,706 for 2019.
Though the water utility’s rate of return dropped last year from around 5 to 2.13 percent, he said most water utilities saw decreases in 2019, with Hobart being in an “OK position looking forward.”
Maccoux said the village’s sewer utility had increases in both revenues and expenses with an operating income of $361,161 to end the year, leaving Hobart overall in a strong position.
He said the storm water utility had “fairly consistent and constant” operating results in 2019 with operating income of $235,112.
Overall, Maccoux said Hobart’s financial records “continue to be maintained in a strong condition and good order.”
“The audit went very well,” he said.
Following Maccoux’s report, the board voted to receive the audit and place it on file.
Village Administrator Aaron Kramer thanked staff members for their assistance to put together the audit.
“At the end of the day, if we’ve got money in the bank and no one’s hauled off in handcuffs, it’s a great audit,” Kramer said.