Port Orange audit finds no material issues for fiscal 2024; council discusses storm reserve and pensions

Auditors from James Moore & Company presented an unmodified opinion on the City of Port Orange’s fiscal year ended Sept. 30, 2024, and reported no audit comments, the firm told the City Council during its meeting.

"This is the earliest that the city audit has been completed… it's the cleanest audit that we've had in a number of years," Zach Shalifor, partner at James Moore & Company, said during the presentation.

The audit shows the city’s general fund reserves at roughly 43 percent of annual spending, about a five-month reserve. Shalifor noted that the city’s internal policy target is 30–35 percent and that the Government Finance Officers Association (GFOA) recommends a minimum of roughly two months (about 17 percent) but acknowledges higher reserves for communities exposed to natural disasters.

Council members used the presentation to press staff on whether some of the city’s unassigned fund balance should be moved into a committed "storm" reserve. Councilman Foley said setting aside money specifically for hurricanes or other emergencies could improve the city’s readiness and could also improve its bond rating. "We can set this money aside into committed. We can still access it anytime we want," Foley said, describing the proposal discussed with staff and the new finance director.

Finance staff and councilors emphasized that audit figures are a snapshot as of Sept. 30, 2024, and that a later storm produced additional costs and reimbursements. Councilmember Tracy cautioned that reimbursements from FEMA and other sources can take years to arrive: "Even though we may have it there, it may take 2 and a half years to have funding coming back to us to reestablish inside that." The council directed staff to schedule a workshop to consider a formal storm reserve policy.

Shalifor also reviewed pension reporting: the audit shows a net pension liability of about $28.5 million on the city’s financial statements, a figure he said is largely informational because the city’s budgetary obligation is its annual contribution. Council members noted the funded percentage improvements in some plans (for example, the fire plan’s funded ratio rising in the audit period) but stressed pensions must be managed over the long term.

Shalifor said the city also exceeded thresholds that required single-audit procedures for federal and state grant compliance; auditors identified no compliance findings. He praised the finance team for completing the audit earlier than in prior years amid system conversions and staff turnover.

Council members thanked staff for the work and asked for follow-up on a recommended fund-balance policy and the timeline for bringing a storm reserve recommendation to a workshop. No formal council vote resulted from the audit presentation.