Every year, auditors conduct a comprehensive review of Kingsport’s finances for the prior fiscal year, which runs from July 1 to June 30. Kingsport has to submit the audit to the state by the end of the year.
This past fall, Brown, Edwards and Company of Bristol, Va., reviewed 37 separate funds within the city, including the general fund, utilities, schools and other minor funds. Kingsport’s general fund covers everything from city administration to police and fire services to the parks and recreation department.
Auditors offered a “clean opinion” again this year, the highest opinion they can issue.
“Maintaining the public trust is of paramount importance, and the most fundamental metric is how we perform in finance and audit,” said City Manager Jeff Fleming. “This is a statement that our money is properly accounted for and employees are held to the highest standards of financial integrity.”
Here are some highlights from the audit:
Rainy day fund — Increased by roughly $1.7 million, going from $13.9 million in 2017 to $15.6 million in 2018. The year before that, the increase was approximately $700,00. Under a Board of Mayor and Aldermen-imposed rule, Kingsport aims to keep $11.4 million in its unrestricted fund balance — essentially a rainy day fund to cover three to four months of operating expenses for the city.
Property taxes — Shrank by $1.7 million, dropping from $59.3 million in 2017 to $57.6 million in 2018. In the previous year, property taxes increased by $2.3 million. Kingsport's property tax rate is $1.975 per $100 of assessed value.
Sales taxes — Rose by $1.3 million from $34.6 million in 2017 to $35.9 million in 2018. During the past decade, Kingsport has seen a drop in its year-to-year sales tax collections twice — in 2009 and in 2010.
Total debt — Increased by $9 million last year to $264 million. Kingsport made roughly $26 million in debt service payments.
Awards — For the 19th year, Kingsport’s finances received a clean opinion — the highest offered — and for the 18th straight year, the city received a certificate of achievement for excellence in financial reporting.
Bond ratings — Moody’s Investor Service and Standard and Poor reaffirmed their Aa2 and AA ratings for the city respectively.
Brown, Edwards and Company was paid $147,150 to conduct the audit.