Ferguson finance director, auditor report clean opinion and improved reserves

Ferguson Finance Director Nodrick Tankans and outside auditor Jim Smerschel told the Ferguson City Council on April 22 that the city received a clean audit opinion for the fiscal year ending June 30, 2024, and reported stronger financial reserves.

The presentation, delivered by Tankans and Smerschel during the council's meeting, included details on cash, capital spending and pension funding levels. "You all hadn't had an audit issued since '22, and that puts you a bit behind," Smerschel said, then added, "congratulations on on the clean opinion and being caught up." Tankans said the finance team is "caught up financially" and that the department now prepares audit material in-house.

The audit showed cash balances around $18.7 million and capital additions of about $3 million for the year, most of it street-related. Smerschel said the city capitalized more than $2 million in street infrastructure, including $1.25 million of ARPA funds used for roadway projects. He also pointed to equipment purchases such as a $270,000 street sweeper as part of roughly $593,000 in machinery additions.

Smerschel highlighted the city's pension strength: "In 2021 you were 112% funded ' now you're at 99.8%," he said, calling the funding level among the best for comparable regional governments. He also noted an accrued $2 million liability connected to a class-action lawsuit that had been recorded previously and is expected to be paid in fiscal 2025.

Tankans and Smerschel reviewed revenues and expenditures, saying operating expenses rose driven by personnel costs in police and fire and by capital spending on streets and parks. Smerschel said the city had roughly $3.2 million in capital grants and contributions recognized during the year, and that the single-audit required for federal funds raised no findings or material weaknesses.

Council members questioned pension investment risk and alternative retirement structures. Smerschel said auditors had seen "no evidence of any inappropriate investments" and noted the city's pension investments are managed conservatively. The city manager added the pension board presents to the council annually and can provide full investment holdings on request.

No formal vote or action was taken on the audit itself; the presentation was informational and intended to give incoming and outgoing council members a picture of the city's fiscal position.

The city manager and finance director said staff will continue to work on the next audit cycle and noted that a third audit for fiscal 2025 would be scheduled soon.

The audit packet and the city's single-audit report were on the council's meeting materials for review.