Perry City receives clean FY2025 audit; city reports $7.4 million unrestricted net position

Perry City on Thursday acknowledged receipt of its FY2025 audited financial report after city staff and the contracted auditor presented results showing a clean opinion and overall healthy reserves.

Accountant David Rogers told the council that the city's unrestricted net position for 2025 was $7,400,000, up from about $6.6 million the prior year, while noting that capital grants and impact fees were lower than in 2024. "Unrestricted net position in 2025 is $7,400,000," Rogers said as he reviewed the management's discussion and analysis portion of the financial statements.

Auditor Chuck Palmer of the audit firm reported an unqualified opinion on the financial statements. "Our opinion is an unqualified opinion, which is the highest opinion that we can do," Palmer said, and added that the city's internal controls are generally sound for an entity of its size. Palmer said the Flood District is a component unit that had not been audited and noted two state-required findings: one related to fund-balance reporting and another tied to a cash-management reporting error (the firm reported December balances instead of June balances on a submission). Palmer characterized those findings as nonmaterial and fixable in subsequent filings.

Rogers and Palmer both pointed to identifiable drivers behind year-over-year changes: lower capital grants (including roughly $1.7 million in prior-year corridor preservation grants and a prior-year $540,000 state grant related to a building), a roughly 50% reduction in impact fees tied to permit activity, slightly lower tax collections after a mass-transit tax change, and modest expense increases tied to depreciation and wages. Rogers said the management discussion shows governmental activities and business-type activities (water and sewer) remain in workable positions and that utilities continue to cover costs overall.

Council members asked about comparisons with neighboring municipalities and controls tied to the cash-management finding. Palmer said the cash-reporting issue appeared to be an isolated user error and suggested additional review steps, and staff said they had discussed the control and would correct reporting processes to avoid recurrence.

The council took a formal motion to acknowledge the receipt of the audited financial report and approved it by roll call. The auditor and staff said the city would address the state's notes going forward and expected the audit process to run more smoothly next year as the audit firm and staff become familiar with the new arrangements.

The city's next financial steps noted in the presentation included finalizing changes tied to the 1200 West project, continuing to track grant-funded projects, and updating the capital facilities plan for sewer work and other infrastructure.