High Point council hears FY2024 financial update; auditors flag RAISE grant reporting lapse

High Point Mayor Cyril Jefferson convened a special meeting of the High Point City Council for a fiscal update Thursday, and Finance Director Bobby Fishtown summarized the city’s fiscal 2024 revenues, expenditures and fund‑balance changes ahead of an evening presentation by external auditors.

Fishtown told the council that overall tax collections, including property and occupancy taxes, rose about 3% year over year and were in line with the fiscal 2024 budget. He said an accounting change in the timing of sales‑tax accruals — moving from a 60‑day to a 90‑day accrual that effectively recognized an extra month of receipts in fiscal 2024 — produced a one‑time increase of about $2.7 million in reported revenues.

The finance director said increased utility sales tax receipts and higher charges for services also contributed to revenue growth. He credited the city’s newly rebuilt City Lake Park with a “tremendous increase” in parks and recreation receipts from concessions and pool admissions. Fishtown also noted that the city earned investment income in fiscal 2024 after a long period of negligible returns, but said those gains depend on future Federal Reserve policy.

On the expenditure side, Fishtown said several accounting and policy changes make year‑over‑year comparisons appear larger than the underlying operations. He said roughly $14 million in public safety payrolls were recorded outside the general fund in fiscal 2024 because those costs were charged to ARPA (American Rescue Plan Act)‑related funding, and that new lease accounting rules cause some multi‑year equipment leases to be recorded up front — accounting that added about $5 million to reported expenditures. He also cited roughly $5 million of higher personnel costs overall.

Fishtown reported the city’s unassigned (available for appropriation) general fund balance increased about $2.7 million year over year. He said restricted balances rose by about $6 million, in part because of receivables (about $3.8 million) and noncash items such as property that cannot be appropriated. The finance director said High Point’s unassigned fund balance stood near 19% of the subsequent year’s budget; he noted guidance from the Local Government Commission (LGC) that a combined measure including debt service cash can show a 30% level used in some performance indicators.

Enterprise (proprietary) funds showed nominal revenue growth, Fishtown said, noting that electric utilities represent about $120 million of roughly $208 million in enterprise revenues. He said operating costs rose, and that excluding power‑purchase variability the increase in enterprise expenses would be higher — a reflection of inflationary pressures the city factored into the prior budget cycle.

On cash and investments, Fishtown said the city is using NC Capital Management Trust for liquidity and has been converting some holdings into short‑term government agency securities (Fannie Mae, U.S. Treasury) to lock in higher yields for two‑ to three‑year horizons while respecting the city’s risk policy. He said cash balances fall as bond proceeds are spent on capital projects and described roughly $70 million in fixed‑asset additions during the year.

Fishtown also explained that new lease accounting standards require recognition of capitalized “right‑to‑use” intangible assets for certain leases, such as body‑worn camera programs, and discussed liabilities including compensated absences and actuarially determined retirement‑related obligations that largely sit outside local control.

The external auditors identified one audit finding related to the city’s RAISE grant reporting. Fishtown said auditors discovered that quarterly reports prepared for the grant had been sent directly to the Department of Transportation rather than following the city’s required supervisory review and financial review process. He said the reports were not reimbursements, that the auditors found no material misstatements, and that no funds were drawn improperly. The city has educated the employee and department involved, prepared a response to the LGC as required, and will circulate a letter documenting that response, he said.

The council had no substantive questions beyond clarifications on accounting treatments and acknowledged the finance team and assistant finance director for their work implementing the city’s new ERP system.

Later in the meeting the council approved a motion to go into closed session under attorney‑client privilege.

The council will receive a full audit presentation from external auditors Jerry Beckert and staff later the same evening.