The Park Rapids City Council received a clean audit report Tuesday, June 22 about the city’s 2020 finances.
Caroline Stutsman with the accounting firm BerganKDV presented the report, which the council will officially accept at a later date.
Stutsman said the audit received an “unmodified opinion,” the highest level of confidence that the city’s financial statements are fairly represented. The auditors found no legal compliance issues and the usual internal controls issue regarding segregation of duties.
However, Stutsman reported that a material adjustment was necessary because last year’s monthly bank reconciliations were not completed on time or accurately. Also, the auditors found two journal entries lacking the required documentation.
1/10: Stutsman's final graph depicts the repayment structure of the city's current general obligation debt. Total bond payments outstanding as of Dec. 31, 2020 were over $12.6 million, including $1.97 million in interest. (Courtesy of the BerganKDV and the City of Park Rapids)
2/10: The city's general fund balance reached a five-year high of $3.7 million at the end of 2020, an increase of $516,000 or 16 percent from 2019. Meanwhile, cash and investment balances increased more than $1 million, or 44.9 percent, from 2019 to 2020. (Courtesy of the BerganKDV and the City of Park Rapids)
3/10: The city's general fund expenditures totaled $3.97 million in 2020, an increase of $351,000 or 9.7 percent from 2019. Reasons for the increase included squad car purchases and $77,000 worth of payroll tax penalties paid for not filing 941s for 2018. (Courtesy of the BerganKDV and the City of Park Rapids)
4/10: City revenues exceeded expenditures in 2020, leaving an unassigned fund balance of $2.9 million, enough to cover 72.5 percent of operating expenses. (Courtesy of the BerganKDV and the City of Park Rapids)
5/10: The net position of the Rapids Spirits municipal liquor store increased $225,000 during 2020. (Courtesy of the BerganKDV and the City of Park Rapids)
6/10: During the last five years, the city's liquor fund has increased in profitability by 17 percent. Both sales and cost of sales increased in 2020, Stutsman said, due to the impact of COVID-19 on bars, restaurants and the liquor industry. (Courtesy of the BerganKDV and the City of Park Rapids)
7/10: The city's sewer fund posted an operating loss for the fifth consecutive year due to depreciation. (Courtesy of the BerganKDV and the City of Park Rapids)
8/10: The city's storm water fund posted an operating surplus in 2020 for the fifth year in a row. (Courtesy of the BerganKDV and the City of Park Rapids)
9/10: The city's audit report states that Park Rapids' tax capacity has increased by 5 percent in the last five years, although the tax capacity rate decreased slightly from 2019 to 2020. Meanwhile, the certified tax levy increased 14 percent over the same five years. (Courtesy of the BerganKDV and the City of Park Rapids)
10/10: The city's water fund posted an operating loss of $172,000 in 2020, including depreciation. During the past five years, operating revenues increased $5,500 while expenses increased $8,300. (Courtesy of the BerganKDV and the City of Park Rapids)
