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Village auditor issues unmodified opinion; net position improves but unfunded pension remains
Summary
Auditor Ken Perkins presented a standard unmodified opinion for the year ended March 31, 2025, noting an increase in net position of roughly $596,000 but highlighting an unrestricted governmental deficit (~$742,000) driven largely by an unfunded pension liability (~$1.3 million) and OPEB obligations.
Ken Perkins, the auditor presenting the Village of Saint Charles financial audit, told the council Wednesday that the independent auditors issued a "standard unmodified opinion" on the village financial statements for the year ending March 31, 2025.
Perkins said the village reported an increase in total net position of about $596,000 for the year, compared with an increase of about $817,000 the prior year. "We have no exceptions to the fact that these financial statements do fairly present financial position of the village," Perkins said.
At the same time, Perkins said the governmental activities portion of the statements shows an unrestricted net position deficit of about $742,000. He attributed the deficit primarily to long-term liabilities, including an unfunded pension liability of approximately $1.3 million measured as of last December and an other post-employment benefits (OPEB) obligation of about $417,000.
"The village has been very proactive relative to its unfunded pension," Perkins said, noting the village has contributed roughly $750,000 extra into the pension over the past decade in addition to required contributions. He told the council the pension liability will be paid over the long term and that the village's month-to-month bookkeeping is sound.
Perkins reviewed fund balances and individual fund health. On a modified-accrual basis, the general fund showed a fund balance of about $1,175,000, roughly comparable to the village's annual general fund budget of about $1.2 million. Street funds were reported with combined restricted balances of roughly $740,000. For enterprise funds, Perkins said the sewer and water operations reported no operating deficits but noted the water fund has a relatively small reserve and requires careful rate and expense management.
Perkins also summarized capital financing: a 2023 bond issued for about $3.5 million financed water-system improvements, with annual debt service scheduled through 2043. "You've got enough revenue coming in to make those payments," he said, but added that the water fund is the "weakest" of the enterprise funds because of its smaller fund balance.
Council members asked follow-up questions about documentation and were told Perkins and his firm would help answer further questions as the council reviews the full audit report.
