CUMBERLAND — The city’s Comprehensive Annual Financial Report is showing some improvement in city finances, but there remains a long way to go, city officials said Tuesday.
Findings of the annual audit were presented at Tuesday’s city council meeting at City Hall by Joe Urban.
The city’s deficit was reduced by $800,000, and there was a $1.2 million in positive change in the fund balance, Urban said. The sewer income once again showed a shortfall, which is the reason sewer rates had to be increased last year, Urban said.
“A 1.2 million dollar savings can’t be overstated,” said Councilman David Kauffman, who congratulated city staff for their work.
Councilman Nick Scarpelli asked Urban about the status of the cash reserves and future goals.
Urban said, “We’re trying to build the reserves,” but something of a decline was expected because of fluctuations in tax revenue throughout the year.
Urban said that $2 million to $4 million “is a good reserve.”
The city has two more years to build reserves before debt payments will have to be increased by the city to pay for a restructured debt.
The city has been making moves in the past year to shore up finances by continuing to look for large savings by refinancing some of the $18 million in debt the city carries.
A recent refinancing of $1.7 million in debt from a 6 percent rate to 4.7 percent is expected to save more than $400,000, according to the city.
Revenues are looking to be gained by the city from its new employee health care package, which goes live on March 1.
Property taxes still remain the city’s largest source of income, at about $10 million annually. Water supply adds $5 million and sewer charges about $6.8 million each year to the city’s coffers.
In other matters, council approved an order accepting a proposal from the EADS Group for professional services associated with the demolition of buildings on the Memorial Hospital Campus in an amount not to exceed $175,000.
Because the city has worked with them on the campus before the company “has a unique insight and perspective,” City Administrator Jeff Rhodes said.
“Demolition sequencing is critical. It’s something we need to get right the first time,” he said.
Contact Matthew Bieniek at email@example.com. Staff writer Greg Larry contributed to this story.