North Platte auditors report unmodified opinion; warn council to monitor warrants, forgivable loans and staffing

At a June 2 work session, the North Platte City Council heard an annual audit presentation from Marcy Luth of AMGL, who said "the audit opinion itself is an unmodified opinion" for the fiscal year ended Sept. 30, 2025. Luth walked council members through key ratios, major capital projects and a set of recommendations aimed at strengthening monitoring and internal controls.

The audit shows the city's total assets rose significantly to about $291 million, driven largely by capital investment and grant proceeds tied to the industrial wastewater project. Luth identified two large projects in construction-in-progress at year-end: roughly $20 million for the recreation center and about $35 million for the industrial wastewater project. She reported total cash for the primary government of about $92.5 million (excluding the airport authority), of which roughly $29.5 million was restricted.

Luth highlighted several balance-sheet and liquidity points: the general fund's total fund balance was about $17 million with about $12.5 million unassigned; assessment-fund warrants of about $26.1 million were recorded as liabilities at year-end; and bonds issued after year-end retired about $11 million of those warrants. Using the firm's target framework, she said an optimal governmental cash target would be about $23 million versus the city's roughly $12.6 million, while business-type funds would ideally hold about $17 million given upcoming capital needs.

On operating metrics, Luth said electric operations produced an operating income ratio of roughly 9.2% (below a 15% target the auditors use), while water and sewer funds met or exceeded that 15% target. Debt outstanding rose: the audit lists combined debt of about $77 million at year-end versus $25 million the prior year, reflecting recent borrowing for both governmental and utility activity and the construction projects noted above.

The auditors recorded several year-end adjustments: "there were seven audit adjustments which impacted the governmental funds, decreased the fund balance by 8.1 million," Luth said, and they recorded adjustments that increased business-type net position by about $6.1 million. The largest governmental adjustment involved the proper recording of warrants as liabilities rather than revenue.

Luth also discussed federal funding oversight, noting the city's single-audit work included testing of State and Local Fiscal Recovery Funds (SLFRF) and other federal programs totaling about $21.3 million; auditors found controls in place and compliance in the tested areas.

The audit letter included a set of recommendations the auditors emphasized to council members: implement routine monitoring of forgivable economic-development loans to ensure forgiveness terms are tracked and administrable; consider developing or expanding an internal-audit program as staff capacity allows; issue monthly internal financial reports to department heads; ensure expenses are coded correctly to preserve budget integrity; capitalize and track assets consistently so depreciation schedules are accurate; and review low-yield bank accounts for possible consolidation.

Luth recommended the council consider bond anticipation notes as an alternative to repeatedly issuing short-term warrants, saying the notes can reduce administrative burden while providing similar interim financing flexibility. Council member follow-up included a question from Ed about tracking forgivable loans; Luth recommended scheduled annual reviews and said Dawn on staff performs tracking and reconciliations for TIF and redevelopment projects.

Asked for a nontechnical summary of the city's financial health, Luth said the council has made significant progress building reserves over the past five years and "you guys have done a good job" but cautioned that a cluster of large projects and recent borrowing means the city should continue to monitor debt-service plans and liquidity.

No formal votes or actions were taken during the work session; the presentation was informational. The council adjourned the work session at 5:14 p.m. and planned to reconvene for the regular meeting at 5:30 p.m.