City of Covington’s annual financial report shows $4.7m carryover from fiscal year that ended in June


The City of Covington had released its preliminary Comprehensive Annual Financial Report (CAFR) showing $4.7m in carryover funds from the fiscal year that ended June 30.

Presented by the Lexington-based accounting firm RFH, PLLC CPAs and Consultants to the city’s Legislative meeting this week, the CAFR consists of the City’s FY 2016 finances and establishes a comprehensive internal control framework to adhere with Generally Accepted Accounting Principles (GAAP).

“We are extremely pleased with this year’s report.” said Lisa Desmarais, director of finance and operations for the city. “Thanks to increases in revenue and smart spending amongst departments, the City will realize an approximately $4.7 million in carryover funds.”

Total revenues of $52,396,379 exceeded the FY 16 Budget by $3,428,104, including specific increases of $1,568,298 in “Payroll License Fees” revenue. An increase in Payroll License Fees is a strong indicator of growth in the City. Over the previous fiscal year (FY15), Payroll License Fees are up 5.88% or by $1,424,919.

Lisa Desmarais
Lisa Desmarais

Additionally, total expenditures of $45,286,574 were less than the FY 16 Budget by $189,932; an indicator that department leaders are working hard to manage their budgets, according to the press release. Actual expenditures as compared with budgeted expenditures were 99.58% on target with the budget.

While details have not yet been confirmed, the City plans to align its use of the carryover funds with its Fiscal Stability Ordinance.

“First and foremost,” Desmarais said, “the City plans to use the funds for existing financial and legal obligations, including funding of the City’s two retirement plans, building up the City’s minimum reserve fund to the Government Finance Officers Association’s recommended two months of operating expenses, and funding toward the City’s two self-insured funds, liability and employee health plan.”

In December 2015, the Mayor and City Commission adopted the Fiscal Stability Ordinance outlining responsible and strategic uses for carryover funds for future years. The ordinance also defined fund accounts and laid out a formal policy to allocate funds for years when the City has carryover revenue.

“Since the Fiscal Stability Ordinance’s implementation, the City is already experiencing positive results and receiving an increase in carryover to dedicate towards our future goals,” said City Manager Larry Klein.

“The ordinance helps us to determine the best strategic use for the funds while staying the course of the City’s three themes of ‘Responsibility, Sustainability and Investment’ outlined in the City’s Spirit of Progress 2016 Vision Statement.”

The CAFR’s positive results follow other FY 16 City successes, including its elimination of the Tax Anticipation Note (TAN) and reliance on short-term debt, launch of the interactive transparency platform “OpenGov,” and in June, 2016, the City’s Moody’s rating was changed from a negative outlook to a positive outlook.

Approval of the CAFR is scheduled for the next Board of Commissioners Legislative Meeting on Tuesday, November 15. Once approved, the CAFR will be printed and made available to the public on the City’s website.


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