Montreat in 'excellent' financial status following audit

Karrigan Monk
Black Mountain News
Mayor Pro Tem Tom Widmer speaks at a Board of Commissioners meeting.

The town of Montreat is in “excellent” financial status, according to the town's 2021-22 audit.

Each year, the state of North Carolina requires municipalities to submit a balanced budget and audit.

Last year, Montreat did not get the audit to the state until June of this year.

“We had a couple rocky years in there where we had some issues,” Mayor Pro Tem Tom Widmer said. “COVID, for one, and then we had some personnel issues that did not allow us to get our state audits into the state treasurer in time.”

For the 2021-22 audit, the town submitted the audit before the October 31 deadline.

“That’s a good thing for the town,” Widmer said. “We’re back in order on our reporting to the state as well as to the people of Montreat.”

Montreat’s net position, which is the towns assets minus liabilities, increased 6.1%, or $482, 919. This brings the towns total net position to $8,408,718.

The town also increased its unassigned fund balance.

North Carolina requires municipalities to maintain an 8% unassigned fund balance. Mayor Tim Helms said this is essentially a savings account for the town.

Montreat Mayor Tim Helms speaks at a Board of Commissioners meeting.

While the state only requires 8%, Widmer said the town of Montreat has a policy that the unassigned fund balance must be 35% of the budget.

“If you’ve got an expense budget in the tens of millions … 8% is very good,” Widmer said. “But for us, 8% of $2 million … that’s not much of a savings account if something goes wrong.”

The town has not adhered to its policy for several years. Helms said the reason for this is because of construction on new town buildings.

“The reason it got so low is we built the Town Hall and then right behind it built a town services building for our employees and that changed the dynamics of the finances,” Helms said. “It’s not that we did not have money, it’s just it changed the dynamics and how it’s calculated. Now it’s back to normal.”

As of June 30, Montreat’s unassigned fund balance was well above its policy minimum at 55.2% of the general fund expenditures, or $893,598.

In addition to these funds, Widmer said Montreat still has around $150,000 of ARPA funds that have yet to be assigned.

Though the town has no official plans for these funds, Widmer said buying a new police vehicle is likely in the future. The last time the town bought a police vehicle was around eight years ago, and Widmer said the average lifespan of these vehicles is around 10 years.

Widmer said the town is without a chief financial officer and the board will be “diligently” looking for a replacement.

As for the unassigned fund balance, Widmer said the town will try to save what it can while also doing what needs to be done around town.

“I think for right now, once you build up your savings account, you don’t want to turn around and spend it all,” Widmer said. “We’re just trying to be diligent about it and as conservative as we can without deferring maintenance or deferring equipment too far out of control.”