Village of Colfax had unassigned fund balance of $592,837 as of December 31, 2022
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By LeAnn R. Ralph
COLFAX — Some members of the village board like to call it “Gary’s fund” in reference to village trustee Gary Stene, but Colfax’s unassigned fund balance contained $592,837 as of December 31, 2022.
Eric Davidson of Bauman Associates presented the village’s 2022 audit report to the Colfax Village Board at the October 9 meeting.
Lynn Niggemann, village administrator-clerk-treasurer, “does a good job” of doing the accounting for the village, Davidson said.
Other municipalities have many more adjustments that are necessary, he said.
“Adjustments” refers to the auditors having to make changes in the accounting, such as assigning payments to different funds than were initially recorded by the village.
Some of the audit is performed “remotely,” which started to be used more often during the COVID-19 pandemic, and has now become more standard for audits, Davidson said.
By “remotely,” Davidson is referring to submitting documents electronically to the auditors.
The auditors do also come to the office for some of the audit, and they ask for random information to review, he noted.
Asking for random information is part of the auditors’ efforts to make sure everything is above-board about the accounting, Davidson said.
If someone hesitates about retrieving a document or has trouble finding something specific, or if someone says they will have the document in a day or two, that can be a red flag that something is not right with the accounting, he said, adding that Niggemann is always prompt about finding the information immediately that the auditors want to review.
Niggemann said she agrees that doing much of the audit remotely is working well.
“There is not much that stands out” about the audit of Colfax’s finances, Davidson said.
Colfax “is in good shape financially and record-wise,” he said.
The village “is in great shape” with a cushion for debt, Davidson said.
Because of the property tax levy limit imposed by the state, municipalities generally have no choice but to borrow money or issue general obligation bonds to pay for capital projects, he said.
Army Corps
One area that did present some difficulty for the 2022 audit was the funds from the U.S. Army Corps of Engineers for the project to stabilize the bank of the Red Cedar River to keep the village’s wastewater treatment lagoons from washing out, Davidson said.
The question was whether the funds from the Army Corps of Engineers were subject to an audit, and it was very difficult to get information from the agency, he said.
“It’s like a secret society,” Davidson commented.
A single audit “would be a whole bunch more work,” Niggemann said.
All of the e-mail messages generated by the issue were shared back and forth, and “there was no comeback” from the state Department of Administration, the agency that distributes the funds, she said.
It “took a long time” to find out whether the single audit for the Army Corps of Engineer funds was required to be completed or was not required, Niggemann said.
In the end, the audit for the Army Corps of Engineers funding did not need to be audited.
Fund balances
Tax Increment Finance District No. 5 (TID 5) currently has a deficit, “but that is not uncommon,” Davidson said, noting that TID 5 was newly formed and that it would take a while for funds to build up.
The general fund has a positive change in the fund balance, he noted.
With more money in the unrestricted general fund balance, then the village will not have to borrow as much money for capital improvements, Davidson said.
The sewer and water utilities “are in good shape” and both had operating income, he said.
Many communities are dealing with rate increases for sewer and water, so Colfax is fortunate to not be in that position for now, Davidson said.
Colfax has all new water meters, and the village has not been experiencing very many water main breaks, he said.
Painting the water tower will be the next big project for the water utility, Niggemann said.
Painting the water tower may cost around $200,000, Davidson said.
SW&R
Niggemann also mentioned the solid waste and recycling budget.
Solid waste and recycling is a joint venture with other municipalities that have joined the Colfax Responsible Unit (for recycling), Davidson said.
Solid waste and recycling is not a fund of the village since there are other municipalities participating. All that is included in the audit report is the village’s revenues and expenditures for solid waste and recycling, he said.
The village’s financial activity for solid waste and recycling “is an investment in a joint venture,” Davidson said.
Municipalities working together to provide a service, such as solid waste and recycling, fire protection or ambulance service, is very desirable and a positive improvement, he said.
State law requires all municipalities to either be their own RU or to join another RU.
Since Colfax is the RU, the village is responsible for the administration of the program, including providing staffing, paying invoices, tracking expenses and revenues, reporting to the DNR and distributing educational materials to residents, Davidson said.
In 2022, Colfax received $21,008 related to the administrative aspect of the solid waste and recycling program, he said.
The Colfax Solid Waste and Recycling Committee, which includes representatives from each of the municipalities who belong to the RU, reviews the financial statements for solid waste and recycling that Niggemann provides.
The Village of Colfax invoices the RU for administrative costs, such as Niggemann’s services and the services of the Department of Public Works in Colfax and Elk Mound.
Niggemann’s administrative and accounting expertise single-handedly saved the municipalities and the residents in the municipalities from having to pay $60 to $80 per capita for solid waste and recycling, as would have been the cost under Dunn County’s program.
The per capita last year for the Colfax side of the RU was $28.82, and the per capita for 2024 will be $25.75, representing a decrease of $3.07 per person.
The per capita last year for the Elk Mound side of the RU was $40.78, and the per capita for 2024 will be $36.47, representing a decrease of $4.31 per person.
The Colfax and Elk Mound collection sites began operating under the Colfax RU January 1, 2020.
Municipalities that are members of the Colfax RU on the Colfax side include the Towns of Colfax, Grant, Otter Creek, Tainter, Wilson and the Village of Colfax.
Municipalities that are members of the Colfax RU on the Elk Mound side include the Village of Elk Mound and the Towns of Elk Mound and Springbrook.
Restricted funds
Here are the balances in the restricted funds. Money in a restricted fund can only be spent for the specific purpose that is named:
• Future Community Development Block Grant (CDBG) grant programs and expenditures — $36,930.
• Perpetual care of Colfax Evergreen Cemetery — $28,500.
• Future library operations — $19,021.
• Future improvements of the village hall from grants and donations — $77,912.
• Donations reserved for the village hall elevator fund — $55,233.
• Future TID No. 3 expenditures — $181,983.
Assigned fund balances
Here are the balances in the assigned funds. Money in an assigned fund is intended for a specific purpose, but the village board can transfer money out of these funds:
• Future major equipment replacement various departments — $236,959.
• Spreading garden, fencing and improvements to the cemetery — $6,663.
• Library operations — $14,345.
• Street improvements — $42,709.
• Holiday decorations — $3,229.
• Economic development — $20,000.
• Future improvements to the village hall — $67,188.
Other numbers
Here are some of the other specifics from the audit report:
• Colfax has outstanding bonds from direct borrowing and direct placements related to government activities of $603,172 and outstanding bonds from direct borrowing related to business-type activities of $1,379,220. The purpose of the governmental and business-type activities general obligation debt is to finance various capital improvements and tax incremental district planned projects.
• Colfax will have all of the current long-term debt paid off in 2032.
• Colfax has a debt limit of $3,455,750 (equalized value of $69.12 million multiplied by the 5 percent that the state sets as a debt limit). Long-term debt that applies to the debt margin is $1,597,393. Colfax has a remaining borrowing capacity of $1,858,357.
• In 2022, Colfax had an $89,994 excess of revenue over expenditures. General government was $14,497 under budget. Public safety was $37,303 under budget. Public works was $8,820 over budget. Health and human services was $10,025 under budget. Culture, recreation and education was $15,965 under budget. Conservation and development was $1,286 under budget. Debt service for principal and interest was $78,820 over budget. Capital outlay was $27,149 under budget.
• Colfax’s water utility had operating income of $62,857, and the sewer utility had operating income of $66,731.