Auditor John Poole said Celina needs to look closely at its utility operations which saw its fund balance fall by some $300,000 in the last year.
Poole said the utility fund currently has just $97,000. Poole said the utility department must turn a profit at least every other year or the city could be subject to state oversight.
“By the time this audit is done, we certainly will have met that bad threshold,” Poole said. And sometime, late December or early spring, we’re going to receive a letter from the state asking this board to take a couple of actions.”
Poole said one of those actions is a rate study from a professional firm, which will help the city raise the rates enough to cover expenses and comply with state law. Mayor Luke Collins said the city should go ahead and get a rate study done in advance.
“We all know what’s happened with inflation over the last few years,” Collins said. “It’s no secret. And the reality is the city’s going to have to increase water rates. Now as far as by how much, that’s to be determined I guess, and a rate study is the best way to go ahead and do that.”
Poole said he would call Celina’s wastewater board to make sure they favored doing a rate study now.
Poole said a lot of the utility fund’s deficit is because state law requires cities to track depreciation, or charge themselves a certain amount every month to account for dropping values of old systems. Collins said it is a good law because it makes cities plan for future replacements.
Poole said the general fund is comprised of mostly tax revenue, and it is used to pay for services like the police and fire departments. He said the general fund is much simpler to understand, as its balance sheet mostly outlines just assets and liabilities
Poole said the general fund revenue is down to some $653,000. Poole said this is down from $1.2 million in 2024, leaving a $649,000 deficit.
“As this board is very aware, lots of repair and maintenance, lots of park improvement and those kind of things,” Poole said. “But once again, you would basically be out of money if you continued that way.”
Poole said it is hard to generate general fund revenue since many of the streams are based on citizen purchasing. The only number the city has control of is the property tax revenue, which can be adjusted by changing the property tax rate.
Poole said the state is not too concerned with deficits in the general fund, as long as cities have money in reserves. Poole said Celina’s cash is down some 50 percent from a year ago.
