Bude leaders review funds from Fiscal Year 2021

by Sean Dunlap

The Town of Bude’s bottom line during fiscal year 2021 — which ran from Oct. 1, 2020, to Sept. 30, 2021 — proved to have more positives than negatives as Certified Public Accountant Bernell McGehee delivered a compilation of financial statements during the Board of Aldermen meeting held Tuesday, Jan. 4.

“Because Bude is a small town, you have opted to do a compilation of the financial statements — as opposed to a full-scale audit — and it is much cheaper that way,” McGehee said. “We do have to perform an audit on what the state has in the way of financial requirements as part of this process.”

McGehee spent the better part of 20 minutes going through specifics in the 12-page document for the five-member panel, which unanimously accepted the presentation.

In terms of fiscal year 2021 assets and liabilities, Bude’s governmental funds were tallied at $677,409 while proprietary (water and sewer) funds stood at $2,492,997 — for a total of $3,170,406, which was up from $2,802,287 during fiscal year 2020.

“You had an increase in your cash, especially in your reserves — totaling $318,927 — with much of that coming from COVID-19 relief funding from the federal government,” McGehee added.

“At any rate, you will have to decide what to do with that money, and I suspect you will wind up moving most of that to the water and sewer fund because you are pretty limited in what you can spend these funds on.”

In terms of reserve totals based on McGehee’s report, Bude has $122,923 in American Recovery Plan Act funds; $49,811 in the Modernization Fund; $141,350 in the Fire Fund; and $4,843 in unemployment benefits.

Unreserved earnings for the water and sewer system during FY 21 were $1,217,216 — down from $1,283,034 in the previous fiscal year.

Liabilities for the town’s water and sewer systems were up slightly during fiscal year 2021 to $1,294,862 when compared with $1,061.371 during FY ‘20.

McGehee indicated the town’s commitment to purchase and replace water meters — at a cost of about $175,000 — played a role in the liability increase.

In regards to town revenues, Bude saw a general hike in its overall income with the exception of two areas:

• Ad valorem tax collections were down to $130,990 for the most recent fiscal year — a drop of $5,125 from totals reported in FY ‘20.

“For the last two years, we’ve seen a decline in ad valorem tax collections in the town, and that is not a position you want to find yourselves in,” McGehee said.

• License and permits collections were $2,212 — a decrease of $23,542 when compared with totals from a year earlier.

Revenues that were up in FY ‘21 included:

• Intergovernmental — $388,294 ($208,766 in FY ‘20).

• Fines and forfeitures — $22,454 ($12,103 in FY ‘20).

• Interest — $4,271 ($2,526 in FY ‘20).

Total town revenue was calculated at $569,531 for the most recent budget cycle — up for the $416,818 taken in during the previous year.

On the expenditures front, the Town of Bude spent $369,085, which included $245,446 for general government operations; $106,019 for public safety; and $17,620 for streets.

Expenses were up by $51,750 when compared with the previous budget year, including $40,264 in general government costs and $8,599 for public safety.

The town’s fund balance — the amount of money it has in the bank when revenue is compared with spending — stood at $658,328 as of Sept. 30.

That number was an improvement of $200,446 (with some restricted funds included) when compared with the fund balance from 12 months earlier.

“This is not exactly what I would call ‘whoopee’ money that you can go out and have a party with,” McGehee said. “Much of this money has restrictions and will come down to how you can legally spend those dollars based on governmental guidelines.”

In discussing the town’s water and sewer fund, McGehee noted Bude collected $279,115 for the services it provided while total operating expenses were $326,687 along with an interest net loss of $18,247 — resulting in a deficit of $65,819.

“This is another situation where you really don’t want to be losing money and need to try to break even each year,” McGehee said of the bottom line for the town’s water and sewer fund.

On the schedule of Bude’s capital assets, the town’s ending balance was $3,297,874 for the fiscal year.

Additionally, the town’s outstanding indebtedness as of Sept. 30, 2021, stood at $997,296.

The report also included a cash reconciliation of the town’s bank accounts through United Mississippi Bank and Bank of Franklin totaling $586,565 with no irregularities found.