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Pulaski audit: clean opinion but council warned about low water reserves ahead of $25M project
Summary
Town auditors delivered a clean, unmodified opinion on Pulaski’s 2025 financials, but council members were warned the water fund’s reserve balance is below recommended levels as the town plans a roughly $25 million water capital improvement project that may require rate increases.
The town’s 2025 financial statements received clean, unmodified opinions across the independent auditors’ report, the state ‘yellow book’ internal-controls review and the uniform guidance federal-program report, auditor Emily Vires told the council.
Vires said reserve balances overall have grown and the town maintains healthy combined reserves, but the water enterprise fund’s unrestricted cash and reserve ratio are lower than recommended levels. She noted the firm’s reserve calculation and recommended maintaining stronger reserves than the minimum two-month (approximately 17%) guideline from the Government Finance Officers Association.
Council members and staff discussed an upcoming water capital-improvement project they described in the meeting as a roughly $25,000,000 effort focused on raw water and plant upgrades; council signaled a planned three-year rate increase intended to support debt service and referenced an assumption of about 30% principal forgiveness in their planning. Officials noted that moving unrestricted cash between sewer and water funds may be an option but requires formal accounting actions.
Vires also explained an increase in reported other post-employment benefits (OPEB) liabilities, saying that an actuarial reentry of staff insurance data and the implementation of GASB-related restatements led to higher recorded liabilities for compensated absences and OPEB.
Council members emphasized the operational need to address the distribution system and cautioned against funding debt service by drawing down fund balance. No formal budget or rate decisions were made at the meeting; council said staff will continue to refine financial projections and return with recommendations.
