Hamlet ‘well-planned,’ auditor says | Richmond County Daily Journal

				                                Ken Anderson speaking at the Rockingham City Council meeting last Tuesday.
                                 Matthew Sasser | Daily Journal

Ken Anderson speaking at the Rockingham City Council meeting last Tuesday.

Matthew Sasser | Daily Journal

“It was a really, really good year.” — Ken Anderson, CPA

HAMLET — The City of Hamlet has handled their finances well in light of the challenges they faced last fiscal year and leading into the current one, according to Ken Anderson, who conducted the city’s annual audit.

In his presentation to the City Council Tuesday evening, Anderson said he was surprised by Hamlet’s performance, which was due to in part to raising taxes $0.10 and cutting out all capital expenditures and other expenses — including employee raises — which made up for the blow suffered at the hands of the county in spring of 2020. The county’s change to an ad valorem sales tax distribution method came just as Hamlet was preparing for their 2020-2021 budget and resulted in a roughly $600,000 hit to Hamlet’s sales tax revenue, an annual loss that the city is still working to address with county leaders.

“It was a really, really good year,” Anderson told the Council, praising the work of Finance Officer Jill Dickens and City Manager Matthew Christian. “I think it just shows that things are really well-planned here.”

In his auditor’s report, Anderson gave the city an “unmodified opinion,” meaning a positive report with no issues in the financial information provided for the fiscal year ending June 30, 2021 that inhibited the auditing process.

Anderson, a CPA with Anderson, Smith & Wike PLLC, found that the city had a tax collection rate of about 94% in the first year of collections, compared to a state average of between 97%-98%. However, the city is at about a 99% collection rate overall when collections from prior years are taken into account, according to Anderson.

“You’re not getting it all in the first year, and that’s the number the Local Government Commission wants you to focus in on … but nevertheless you are collecting a good bit on some of these taxes that you’re not collecting in the first year,” Anderson said.

He cautioned that some of this good news is temporary, because those capital expenses such as replacing expensive, aging equipment and vehicles are still looming. The city’s various department heads have had to get creative to maintain what they have, but they can only do that for so long.

The city’s net change in fund balance for the general fund sits at $1,023,491, which Anderson said “astounded” him. Expenditures exceeded revenues in the water and sewer fund by $419,769, which was the amount appropriated to offset sales tax revenue losses in the General Fund.

Hamlet has zero debt currently, according to Anderson, though that’s likely to change in the near future.

Another impact of the county’s change to ad valorem was all of Richmond County’s municipalities being added to the Local Government Commission’s (LGC) unit assistance list, which tracks local governments in need of support with financial management. Being on this list hurts a government’s credit rating, and thus their ability to borrow money, experts told the Daily Journal earlier this year.

Anderson said that Kathy Howell of the LGC said she doesn’t believe Hamlet should still be on the list since they were only added as a result of the county’s actions. Anderson recommended that the city draft a letter to Susan McCullen, director of the State and Local Government Finance Division of the Department of State Treasurer’s Fiscal Management Section, and ask her to remove them from the list.

“They can’t guarantee you’re going to get off the list but I think it’s a good possibility,” Anderson said.