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Audit reveals city on solid financial ground

Gary B. Gray • Updated Feb 16, 2017 at 9:04 PM

Johnson City’s fiscal 2016 audit includes some positive findings, including the fact the city increased its total holdings by nearly $32 million.

Blackburn, Childers & Steagall presented a summarized version of the city’s 2016 audit to Johnson City commissioners Thursday. The city’s total “net position,” which includes cash, investments and securities, closed out on June 30 at about $502 million. Of that amount, about $419 million is invested in capital assets.

Meanwhile, Johnson City’s outstanding long-term debt decreased by more than $6 million. Total debt is $88.8 million, which is a safe distance from the maximum $183.3 million allowed.

“It’s my third year on the City Commission, and it’s good to hear we’re sound financially,” said Mayor David Tomita.

Property tax revenue showed slow but steady growth with an increase of 2 percent — this following the city’s first rate hike in 14 years. In late June 2015, the City Commission approved a 25-cent property tax increase, raising the rate to $1.87 per $100 assessed value. And in 2016 (tax year 2015) the city brought in $33.7 million, a $5 million increase, or 17.4 percent.

The city’s sales tax collections also experienced a 4.8 percent increase in fiscal 2016.

Blackburn, Childers & Steagall’s audit includes news of a decrease in the unemployment rate from 6.7 percent to 5.6 percent. The year-end state average rate was 5 percent.

The firm did note one “significant deficiency” — a definition which technically is not the auditor’s opinion. That finding was that Freedom Hall Civic Center Fund expenditures last year exceeded the budget.

A response by the city’s management and staff noted the fund was included in the city’s final budget amendment due to a change in the mix of shows for the year.

Based on estimates prepared during preparation of the amendment, expenditures should have been included within the budget. However, a last-minute generator repair and retirement pay-out for a 42-year employee caused expenditures to exceed the budget, despite the amendment, according to the response.

Commissioners also approved a request by Shaw & Shanks Architects on behalf of Construction Partners LLC for a 30-day extension to complete work associated with the partial demolition and wing modifications to the former Langston High School gymnasium.

The original $577,700 contract sum will not change, but substantial completion will move to April 6.

Assistant City Manager Charlie Stahl said this week crews felt like the heavy equipment being used to clear the site might damage the original entrance built in 1925. The entrance is being transformed into a “Remembrance Arch” that will be preserved near the front of the former school.

A group interested in preserving as much of the former all-black high school as possible has been working with the architect and city officials, and some form of programming/use plan will likely be submitted soon.

Commissioners last year approved $4 million to move Johnson City School’s maintenance operations out of the old facility and into the former MINCO building, as well as demolishing and renovating part of the former high school site.

About $1.5 million to $2 million was budgeted for the latter.

Commissioners also approved a street closure request from Mountain State Health Alliance to accommodate the Run for Your Buns 5K — Colon Health Awareness road race scheduled for Saturday, March 4, from 7-11 a.m.

The start and finish will be at Franklin Woods Community Hospital. The course is the same route used by the Wellness Center’s typical 5K, which begins on Med Tech Parkway, continues on Knob Creek Road to Sunset Drive and continues on the greenbelt ending back at the hospital

Commissioners also approved four appointments to the Johnson City Industrial Development Board to fill seats expiring this month. Bobby Jobe, Gerald Thomas and Jim Thornton were re-appointed. Tony Treadway also was appointed.

Email Gary Gray at [email protected]. Like Gary B. Gray on Facebook at www.facebook.com/garybgrayjcp. Follow him on Twitter @ggrayjcpress.

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