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The city's audit was presented to the city council last week by Loren Viere of the firm Kern, DeWenter, Viere, Ltd. The city of Paynesville is doing quite well financially, Viere told the council.

Even the city's sewer fund ran profitably, which is unusual for a city the size of Paynesville, said Viere.

City administrator Steve Helget told the council that the general fund balance as of December 31, 2002, includes a Local Government Aid payment of $280,000 that the city received in December but will use to pay for operational expenses for the first half of 2003.

Also, the city intends to pay its share of cost for the new airport from its general fund and also wants to maintain a healthy balance since the unsettled state budget could mean future cuts in state aid.

Both the capital improvement funds and the debt service funds are dedicated for certain expenditures.

The capital improvement funds, which total over $1.5 million, are for capital projects that the city will undertake. Of that total, $600,200 is earmarked for street and sidewalk improvements, $582,300 for water and sewer improvements, $91,500 for park improvements, $63,000 for police purchases, $218,800 for general improvements, $35,800 for purchases for the liquor store, $21,500 for emergency services improvements, and $33,600 for airport improvements.

If the city's amount of state aid from the state is reduced, as has been proposed, the city could move money from capital improvement funds into the general fund to help offset the loss in aid.

Debt service funds have the money to repay city bonds and loans. These funds total nearly $2.5 million. The city has ten bond issues Ð from construction projects and street projects, etc. Ð and all are doing well.

The remainder of the city's assets are held in special revenue funds and enterprise funds. Accounting practices and spending practices were scrutinized by auditors during the state-mandated audit.

City officials are pleased with the audit results, but Helget cautioned that the city is in good shape financially only because of its sound financial practices.