Audit shows city of Hills on solid financial footing; council approves 1-percent levy increase for 2021 taxes

The city of Hills will finish the year on solid financial footing if a recent audit report is any indication.
Amy Mollberg with accountants Meulebroeck, Taubert & Co. of Luverne presented the audit findings ending Dec. 31, 2019, to council members last month via telephone.
Mollberg commended officials for the city’s comfortable general fund balance and staying within the state’s recommended months of reserves.
“They like to see five or six months in your fund balance and you guys have 18,” she said. “That’s good. That’s really good.”
The audit generated an “unqualified opinion,” the highest recommendation the accountants can render.
The city of Hills ended 2019 with a positive balance of $727,700, down from $979,101 from 2018.
General fund expenses and revenues for 2019 were comparable to 2018, according to Mollberg.
Total general fund revenue was $210,047 with expenditures of $200,008, netting an increase of $35,054 in the general fund.
Each of the business-type funds — water, sewer and garbage — also netted income in 2019.
“(You did) very good on the enterprise funds, very profitable and that is good,” Mollberg said, referring to the event of any needed repairs or equipment replacement.
Revenues for the water fund were $154,436 with expenses of $104,111 and netting $50,325.
Expenditures in the sewer fund were $53,012 with revenues of $123,349. A net income of $70,337 was achieved.
The garbage fund had a net income of $10,751 from revenues of $66,411 and expenditures of $55,660.
A positive balance in parks and recreation fund continued the city’s net income with an addition of $8,870 with revenue of $41,684 and expenses of $32,994.
The city of Hills’ only overspending of $20,784 occurred in the street department with total expenditures of $208,089 and $187,305 in revenue.
“The main reason … was the capital outlay that included improvements — seal coating, water drainage project related to the streets so those things I think was the major increase in that area,” Mollberg said.
The 2019 audit will be the last for the TIF or Tax Increment Financing program as the repayment of $20,583 for economic development projects in the city. Future reporting will be included in the general fund.
She recommended not changing current city finance procedures.
“I think you should be really happy with the outcome and how things are looking,” Mollberg said. “I don’t think I would recommend changing anything at this point.”
 
Levy set to increase 1 percent
Hills Council members set the 2021 budget at $345,046, which includes a 1-percent increase. Next year city property owners will contribute $131,176 to the city budget.
Council members anticipate additional carryover of funds into 2021 from the 2020 budget.
An infrastructure project, the lining of several blocks of sanitary sewer pipes to decrease the amount of water entering the lagoon systems, won’t be completed until 2021.
The estimated $150,000 for the project will be partially paid for in 2020 and the rest when the work is completed in 2021.