Cd’A reports show clean audit, but that’s before COVID-19 hit

A pair of reports give the city of Coeur d’Alene high marks for bookkeeping and financial stability, but city officials warn the news will not stay good for long.

An audit of the city’s books gave City Hall a clean bill of health, as Toni Hackwith of Anderson Brothers CPAs of Post Falls said the state-required audit the accounting firm performed showed the city conformed with general accounting principles, starting with the city’s financial statements.

“This report is basically a report on the whole of your financial reports, on whether or not they’re fairly stated, and whether or not we could ascertain they were fairly stated,” Hackwith explained to the City Council Tuesday night.

Hackwith also said the city maintains strong internal controls over financial reporting, as well as over-compliance per federal guidelines, an additional audit necessary to all cities that spend more than $750,000 in federal funds.

The audit showed more than $9 million in discretionary funds from 2019, an amount Hackwith said was healthy to maintain.

“Your revenues aren’t consistent,” she said. “You receive your property taxes in July and January. State funds are paid quarterly, and you need a fund balance to help you in emergent situations, which we have a primary example of that currently in our society.”

Hackwith said the city was well over recommendations to maintain at least 5 to 15 percent of regular operating revenues, or no less than two months worth of regular general fund operating expenditures. Coeur d’Alene, she noted, kept 24 percent of its unassigned fund balance at 23 to 26 percent of its annual revenues over the past five years, and 72 to 89 days worth of expenditures over the past five years, including 80 days in 2019.

“I’m happy [the audit] got such great results,” Councilmember Christie Wood said.

Immediately after Hackwith’s audit results, city administrator Troy Tymesen gave a mixed message with his semi-annaul report over the city’s financial health. While he said reports coming into 2020 showed everything seemed fiscally normal, Tymesen then addressed the pandemic-driving virus in the room, one that has impacted every walk of life in Coeur d’Alene, along with the rest of the world.

“If this wasn’t a COVID year, I’d be sharing with you that we are right on track for many of these [reports] …” he said.

Tymesen’s report was likely the last normal financial statement to come before City Council for quite some time. Next month’s statements will be the first to detail the city’s revenue in the era of the coronavirus.

“We are anticipating that our sales tax revenue will be less than what we anticipated,” Tymesen said. “Gas sales tax, we anticipate, will be down. We know we’re not renting out those gazebos or many of those park facilities at this point. Wastewater will be down.”

Mayor Steve Widmyer added that, as hard as grappling with an economic slowdown will likely prove to be, an even bigger challenge might be trying to determine how the future will play out.

“One thing with revenues going to be down is going to roll over into next year’s budget,” Widmyer said. “The next year’s budget will be very challenging: in particular, the forecasting of revenues. I would anticipate our revenues may be flat or may be even a little less than what we’ve seen this year. There’s going to be a lot of work on that budget for this coming year, to be sure.”