Johnson City receives clean audit; finance director reports steady collections and event losses at Freedom Hall

Tara Finner, an audit partner with Blackburn, Childers & Stegall, told the Johnson City City Commission on March 6 that the firm issued a clean (unmodified) opinion on the city’s fiscal year 2024 financial statements and its Schedule of Expenditures of Federal Awards.

The audit partner said the city’s total net position at June 30, 2024, was $500,400,000, of which $393,000,000 was invested in capital assets. Finner reported a net position increase of $22,000,000 for the year and said the city paid down $18,800,000 in debt, including bonds, notes, capital leases and subscription contracts. She said the firm tested major federal programs — including the federal transit cluster, Coronavirus State and Local Fiscal Recovery Funds, state education funds and the highway planning and construction cluster — and found no findings on the tested grants.

Finance Director Stephanie Laus followed with an unaudited financial update as of Dec. 31, 2024. Laus said the general fund had collected about $19.3 million of the $43 million in property taxes assessed for 2024 as of that date; she said property taxes are typically collected later in the fiscal cycle and expected a significant increase by February/early spring. Laus reported the general fund at about 47% of budgeted revenues and said local sales tax receipts were trending roughly $1 million over budget for the fiscal year.

Laus also reviewed enterprise funds: water and sewer operations were slightly ahead of budgeted revenue and were forecasting a surplus, with net positions ahead of budget by roughly $1.5 million before some later-year debt service. Freedom Hall, the city’s arena and events center, was operating with a deficit of about $371,000 as of the reporting date, a shortfall Laus attributed to canceled events and lost revenue (including a cancelled Zach Williams concert and lost circus revenue). She said the Big South tournament being hosted in Johnson City and several future bookings were expected to improve Freedom Hall’s outlook.

Why it matters: The clean audit and the unaudited financial snapshot provide the Commission and residents with an independent confirmation of the city’s fiscal position and highlight both reserves and near-term budget pressures at specific facilities.

"We did have a clean audit opinion this year which is fantastic," Finner said. "…the net position increase for the year was $22,000,000. So that's great." Laus noted the timing of property tax receipts and the partial-payment program adopted earlier in the year, saying 245 taxpayers used the payment plan option.

The presentations drew brief comments of thanks from commissioners; there was no formal action on the audit or the unaudited financial report during the meeting.

The audit presentation and the finance update will be part of the record for the commission’s future budget discussions and capital planning.