Dramatic growth here over the past year has resulted in an unusual increase in city funds. Accountant Greg Ogden of Springville told the council during an independent audit report Wednesday that the city has $193,000 more than it should in its general fund, while its cash reserves have doubled.
But officials noted that planned sewer and water upgrades may take much of the money the city has in hand.Ogden said the city will either have to spend the money or transfer it to other funds to stay in compliance with state law. The law allows $900,000 to be held in the general fund, but Spanish Fork has $1.09 million. He said the city was "being too good" in managing its finances.
Much of the cash increase came from the sale of Bow Valley land. The city bought the land for its water for $1.6 million in 1991 and sold it this year for $2.6 million, a gain of $1 million, while retaining rights that will keep city water lines wet for years to come.
As on June 30, the city had $1.5 million in its general, debt service, special revenue and capital projects funds compared with $712,222 a year earlier. Ogden said the city had earned $260,000 in interest, compared with $120,000 a year earlier. He said the city underspent its total budget by $551,000.
He said the city put its money in low-risk investments and of June 30 had $12.8 million in cash and investments, twice as much as last year. The city created a Redevelopment Agency to encourage business growth and lent the agency money to do that.
The city re-funded three water bonds during the year, eliminating them and saving the city $237,177 in debt service payments over the next 10 years, Ogden said. It also issued bonds to pay for a new fire station.
Despite its positive financial management, Ogden recommended the city increase the treasurer's bond from $500,000 to $850,000 because of its large amount of cash on hand. He also cautioned the council that it may need better controls over profit at the golf club pro shop at the Spanish Oaks, the city golf course. He said the merchandise markup was between 20 percent and 30 percent, but the gross profit was only 14 percent. Some loss could be caused by theft, he indicated.