City earns clean audit report on financial management

Moorhead City Council

Nancy Edmonds Hanson

The city of Moorhead has once again earned a clean audit report on its handling of public finances, finance manager Megan Zaradka told the Moorhead City Council Monday.
The annual review examines the city’s financial practices. Once again, she said, the audit by Eide Bailly is a “clean opinion” – that is, the auditors found that the financial statements were “prepared in accordance with generally accepted accounting practices, free from material misstatement and fairly presented.” The examination included both federal allocations of $11.3 million for COVID-19 state and local fiscal recovery funds and the Clean Water State Revolving Fund, and management of the city’s revenue of $25.9 million and expenditures.
One outcome of the positive audit report, which follows many previous years of similar opinions, is the city’s favorable bond rating. In recent years, Moody’s Investment Service has raised it from Aa3 to Aa2.
That will affect another action taken this week by the council. The city’s governing board authorized the issuance of general obligation sales tax bonds to finance construction of the regional library and community center for which ground was broken in mid-June. Bids for the $28.6 million in sales tax revenue bonds will be issued by Baker-Tilly Municipal Advisors, the firm that has handled the city’s previous bond sales. The sale and award of bonds to the winning bidder will take place July 8.
The bond amount reflects the anticipated return of the half-cent city sales tax overwhelmingly approved by voters in November 2022, to be collected over the next 20 years.

FMCT lease
The council approved extending the Fargo-Moorhead Community Theatre’s lease in the Hjemkomst Center through the end of 2026.
The theatre company has leased Heritage Hall since July 2021, when the nonprofit group moved its operations Moorhead after its original facility in Island Park was damaged beyond repair. It plans to occupy 4,000 square feet in the $60-million complex now under construction by the Kilbourne Group on the 600 block of NP Avenue; the building will also include 168 apartments and parking.
The FMC has used Heritage Hall as its main stage for musicals and plays, as well as education, along with a second stage for smaller events. Space on the lower level is used for dressing and meeting rooms.
The lease extension was approved on the council’s consent agenda. Annual revenue is anticipated to be $68,000.

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