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Council accepts auditor’s report noting large loss year tied to sewer line break and infrastructure depreciation
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Summary
Independent auditors presented the FY2025 audited financial statements, flagged a significant loss year driven by a sewer-line failure and depreciation of infrastructure; the council accepted the audit and discussed policy reviews and PID liabilities.
McLendon-Chisholm — The City Council accepted the annual audited financial statements for the fiscal year ended Sept. 30, 2025, after a presentation from the city's independent auditors (MCPA PC) that described a difficult year financially driven by a sewer-line failure and higher depreciation costs.
"If you've seen the numbers, they don't look great. I mean, it was a big loss year," the auditor told the council, noting the sewer incident and the long-term implications of owning infrastructure. The auditor urged the council to consider the maintenance and liability implications of additional infrastructure projects.
Council members asked about internal policies flagged in the report; the auditor noted several city policies (investment and emergency procedures) had not been formally reviewed per the policies’ stated timelines and recommended formal approvals. Council members discussed the tax-rate context, PID assessments and options for shedding infrastructure liabilities.
City staff and the auditor suggested follow-up meetings to review specific report pages and to consider rate studies and other analytical steps for long-term fiscal planning. The council moved and seconded a resolution accepting the audit and carried the motion.
Next steps: councilmembers said they may meet with the auditor for deeper review, staff will consider updating policies noted in the audit, and council will consider the long-term fiscal impacts of PIDs and infrastructure liabilities when evaluating future projects.
