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East Bethel council adopts 2024 audited financial report showing stronger reserves
Summary
Council accepted the city's 2024 annual financial report after a presentation by auditors, who issued an unmodified opinion and noted a larger-than-expected general fund balance driven by permit and interest revenue.
The East Bethel City Council on March 24 adopted a resolution accepting the city's 2024 audited financial report after a presentation from auditing firm ABDO.
The auditors issued an unmodified opinion saying the 2024 financial statements are presented fairly and noted no instances of noncompliance with Minnesota statutes. The council approved Resolution Number 2025-515 accepting and adopting the 2024 City of East Bethel annual financial report.
Kelsey Larson of ABDO told the council the city ended 2024 with a much larger general fund balance than budgeted. The audit showed the general fund's fund balance as a percentage of next year's budgeted expenses is well above the city's 40 percent policy, ending the year at about 75 percent. Larson said the city had planned for a $225,000 decrease in fund balance but instead recorded an increase of just over $500,000. The auditor said that higher-than-expected building permit revenues and interest income accounted for roughly $460,000 of the variance and that expenditures were about $228,000 under budget, in part because an anticipated community outreach position was not filled.
Larson walked through other fund trends, including a $100,000 increase in the street capital fund tied to transfers for current and future costs, and a near $200,000 decrease in the municipal state aid street improvement fund attributable to timing of state aid draws and project expenses. The HRA special revenue fund increased about $80,000 after receipt of local housing aid; city debt outstanding at year end was reported at just under $15 million, with both bonds maturing in 2040.
On enterprise funds, the water and sewer funds showed positive operating margins overall; the sewer fund had a heavier debt payment in 2024 tied to a reserve capacity loan but still ended the year with a positive cash balance. The ice arena fund operated at mixed margins in 2024; staff told the council the city absorbed management functions during the year and made a one-time scoreboard purchase in early 2024 that reduced cash. The city increased prime-time ice rental fees to offset costs.
Larson said the audit is not yet finalized because the firm awaits PERA's fire relief reports needed for a final pension adjustment, but she said that pending item would not change the figures presented. After brief council questions about capital asset depreciation, antenna-lease accounting and other items, the council voted to approve the resolution accepting the audit.
The council did not record a roll-call tally in the public discussion; the motion passed as announced by the mayor.
