SALISBURY — The Salisbury City Council received an overview of its audit for the 2017-18 fiscal year at Tuesday night’s meeting, and a “weakness” was found in its broadband services fund.

City voters in May approved leasing Fibrant to Hotwire Communications. The city transferred Fibrant to Hotwire and ended its operation and management in October.

C.J. Palmer, a senior manager at Elliott Davis PLLC who prepared the audit, said that in 2018 the city’s net position for the broadband services fund was in the negative at $7.27 million. But that’s an improvement over prior years. In 2017, the fund was negative $9.82 million, and in 2016, it was negative $10.43 million.

“We did note one finding,” Palmer said. “It was a repeat finding from the prior several years a deficit in net position in the broadband service fund.”

Wade Furches, the city’s financial manager, said Salisbury had previously supported Fibrant and the broadband services fund with general fund money. 

Councilman Brian Miller reminded residents that the financial statements reflect the state of the fiber-optic utility before the change to Hotwire.

Despite the one shortcoming with the broadband services fund, City Manager Lane Bailey said the city Finance Department is proud of the state of the general fund.

The total fund balance, which is partially a savings account for the city, has increased. For the 2017 fiscal year, the general fund was $19.5 million. In 2019, it increased to $19,770,000.

“We’re spending less money than we budgeted. That’s how the fund balance grows,” Bailey explained.

He said that, for the 2018-19 fiscal year, the city may see a decrease in its fund balance, since the city has invested in public safety with increased pay for police and firefighters and buying firetrucks. Bailey said fund balances allow a city to handle emergencies, like bad weather or if the state delays giving money to municipalities.

“This year some of the fund balance we’re appropriating may actually get spent, and if that’s the case we may see a fund balance down even if the budget finishes at break-even,” Bailey said. “I still think we’re in really good shape there.”

Mayor Al Heggins said the use of the fund balance for public safety is important and is a goal for the City Council.

For other enterprise funds, the city had a positive net position. Water and sewer was $113.76 million, and stormwater was $1.33 million. Transit was at $406,831.

Mayor Pro Tem David Post clarified how much state law says must be in the fund balance. The state requires 8 percent of revenue for the fund balance. Bailey said the city had more than 39 percent of revenues.