Auditors give Grand Island a clean opinion, warn of rising short-term debt and shrinking reserves

Doug Zimmerman, partner with the FPR Group, told the Grand Island Town Board the firm would issue an unmodified (clean) opinion on the town’s audited financial statements for the year ended Dec. 31, 2025, and that there were no exceptions in the accounting records that would cause board concern.

Zimmerman summarized three deliverables: a required communication report to the board, an agreed-upon procedures report for the justice court and town clerk, and the full audited financial statements. "We're going to be issuing what's called an unmodified or a clean opinion," he said, adding the reports include a government-auditing-standards review of internal controls.

The auditor highlighted two drivers behind higher reported liabilities: a $36.7 million bond anticipation note in capital funds and an OPEB (other post-employment benefits) liability that approaches $20 million. "Those increased from just over $28,000,000 at the end of '24 to a little over $36,000,000 at the end of '25," Zimmerman said of bond anticipation notes.

Board members pressed on whether those figures are a short-term red flag for a town of Grand Island’s size. Zimmerman explained that bond anticipation notes are often an interim financing tool that is converted to long-term bonds and that the town would budget for interest and principal payments after conversion. He also noted constitutional limits on municipal debt and said the town was not near those limits.

The presentation also showed a material change in the town’s operating reserves: the unassigned portion of the general-fund balance fell to about $1.3 million from just over $4 million the prior year. Zimmerman called that the "biggest area of issuing concern," noting reduced flexibility for future budgets if revenues do not improve.

A council member warned bluntly during questions: "We're heading for a checkbook out of money," reflecting concern about spending trends and limited unassigned reserves. The auditor responded that the unmodified opinion covers accounting accuracy and that long-term financial viability and budgeting choices are matters for the board and staff to manage.

What happens next: the audit documents will remain in draft for review and finalization; the board and staff discussed the need to plan for converting short-term notes to long-term bonds and to monitor the general-fund balance during upcoming budget cycles.

Ending: The board thanked the auditors for the review and opened the floor to agenda items; no formal board action on the audit itself is recorded in the transcript.