The city’s net income increased by $13 million last year
The City of Durango announced that it had received “highest marks possible” for its comprehensive annual financial report produced by independent auditor Eide Bailly after reviewing the city’s books and records.
The audit identified only two errors in the city’s financial statements:
- A 2022 insurance premium payment incorrectly filed as accrued as of December 31, 2021.
- The absence of business improvement district taxes to be collected by the city in 2022.
Corrections were made during the audit to reflect accuracy, Eide Bailly’s Paul Kane said at the Durango City Council meeting on Tuesday.
Kane said the nine-month effort to complete the audit and final 2021 financial statements is a notable improvement in pace over the 15-month process involved in the full 2019 financial report.
“The past two years have seen longer turnaround times for the full annual financial report due to the 2020 finance department rebuild which took place after the former finance department director was found guilty of embezzlement,” the press release read.
Julie Brown, the city’s former chief financial officer, was sentenced to five years in prison in 2021 for embezzling more than $700,000 from the city over more than 11 years. She was later sentenced to 90 days in jail and 20 years probation.
Kane said financial audits have improved significantly and the team at Eide Bailly aims to have the 2022 audit completed by the end of June next year, more on schedule than the city had in place before the Brown embezzlement scandal shook things up.
He said that since 2020, Eide Bailly has carried out forensic audits and internal control reviews with the help of third-party consultants; they were hardly used during the 2020 financial audit and this year the audit was entirely carried out in-house with Eide Bailly.
“I think you’re all on track to get it done even faster next year, probably where you’re used to,” he said.
The City of Durango announced the release of its audited 2021 annual financial report on September 15, days after Durango resident John Simpson filed a lawsuit against the city after being denied access to an unaudited version of the same report.
City spokesman Tom Sluis said the timing of the audited report was unrelated to the Sept. 9 lawsuit filed by Simpson, which alleges the city violated the Colorado Open Records Act by denying him access to its unaudited 2021 financial report.
“We look forward to a decision from a judge to settle this matter,” Sluis said, referring to the lawsuit.
He said the city is confident in how it provides accurate and transparent financial data to the public on a daily basis.
Eide Bailly’s Alex Arndt said the city’s assets exceed its liabilities by nearly $365 million, meaning the city has “more than enough cash” to cover debts or unforeseen financial needs. .
He said the balances of restricted and unrestricted funds in the city’s general fund increased by about 39% in 2021, indicating a good position with reserve funds.
The city’s net income increased by more than $13 million in 2021 compared to 2020, from $18,234,341 last year to $31,603,961 last year.
He added that debts and liabilities are decreasing due to debt payments with no additional debts added in 2021.
Net income increased last year from nearly $88 million to $89 million, but net expenses also increased by about $6 million, from $69.5 million to nearly $76 million.
“Some of these increases (in expenses) were due a lot to the type of business (fund); water and sewer had larger incremental expenses than previous years, as well as the transportation fund,” Arndt said.
Kane of Eide Bailly said Durango-La Plata County Airport is also in a strong financial position. The combined balance of its restricted and unrestricted funds for 2021 was $13,101,851, or 189% of its annual expenditures.
DRO’s total revenue in 2021, nearly $8 million, was down about $4 million from 2020 due to COVID-19 funding and airport improvement programs.
“The airport is back to normal: you all know you had a great year of travel,” he said. “I feel like the whole country did it. But from all accounts it looks like Durango was just jumping off and the airport could see a boom in operating revenue as well. than an increase in operating expenses.