City gets annual audit results

There was a lot of good news as the Rio Rancho Governing Body received the findings of the city’s annual independent audit.

CliftonLarsonAllen(CLA), a certified public accounting firm, has audited the city of Rio Rancho’s financial statements for the fiscal year ending on June 30 of last year. Every year an independent accounting firm conducts the audit, and the governing body is required to vote on a resolution accepting and approving the audit.

The governing body approved the resolution so the city is in compliance of the New Mexico Department of Finance and Administration requirements.

“This audit starts in June and really takes about six months to complete,” CLA partner Raul Anaya said.

He commended the city’s financial team, saying CLA didn’t have any audit findings this year and that the city staff do quality work.

In the Rio Rancho annual comprehensive financial report, it says the city received a Certificate of Achievement for Excellence in Financial Reporting last year and is recommended to receive it again. Last year’s certificate was the 18th consecutive award for the city.

“We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to GFOA to determine its eligibility for another certificate,” it says.

The report highlights local economy, the growth in that economy and long-term planning and policies.

“The city’s current financial condition reflects a local economy that is improving. Single-family building permits steadily increased from 2017 until 2021. In 2022, permits slowed somewhat but increased again in 2023,” the local economy section reads.

It added that permit sales increased by 27% from 2022 to 2023.

“While interest rates and inflationary pressure has slowed housing construction, 2023 permit sales are still well above 2019 levels,” it says.

It also covers unemployment rates in the metro area.

“The metro area unemployment rate has been less than the state’s rate in recent years and has declined below pre-pandemic levels to 3.5% as of September 2023,” it states.

In addition to that, it says the UNM Bureau of Business and Economic Research projects that the Albuquerque metro will add 6,336 jobs (1.6%) for calendar year 2023.

Some of the highlights in economic growth with Rio Rancho, according to the report, were with major employers, anchor institutions, retailers and in new residential construction.

The report featured northern Rio Rancho, saying the announcement of Sprouts and the addition of the HUB helped with growth.

“The city has emphasized conservative prioritization in the post-pandemic era. The city projected FY 2023 revenues with a significant measure of caution as revenues have been difficult to project since the COVID-19 pandemic, its subsequent supply chain issues and labor market shortages as well as inflation. Despite this, the city’s economy is showing considerable resiliency,” the report states.

It adds that commercial, institutional and residential construction is “steady” and redevelopment is ongoing in some key areas of the city, “bringing new retail and services to residents.”

“The Unser Gateway region continues to see commercial growth and investment with the Village at Rio Rancho, the westbound extension of Westside Boulevard, the new Joe Harris Elementary School, and the 173-acre Los Diamantes Master Plan Community. The city is also home to a new $850 million solar energy project. The project consists of a 300-megawatt solar power generation facility and a 300-megawatt energy storage facility to be located in a currently undeveloped part of the city,” it added.

The housing industry was also mentioned in the report.

“The housing industry in Rio Rancho is strong, offering homebuyers affordability, quality and value across a diverse array of housing products and styles,” it says.

According to the report, for fiscal year 2023, Rio Rancho had 576 new single-family home starts.

“Looking forward, it is estimated that new home starts will average 569 through FY25 before increasing slightly in FY26 and FY27 to 583 and 670 respectively,” it added.

Lastly, the report showed what the future holds for Rio Rancho, explaining how much money is left.

“The General Fund ended fiscal year 2023 with an unassigned fund balance of $65 million, which equals 86.4% of the fund’s annual expenditures under the modified-accrual basis of accounting (excluding transfers out). On a budgetary basis, the General Fund’s reserves ended the year at 35.8% of expenditures (excluding transfers out), which exceeds the state of New Mexico requirement of 1/12th (8.3%) of expenditures as well as the city’s newly increased policy target of 25%,” it says.

The report continues and says the city continues to budget conservatively while at the same time planning for growing needs for services and ensuring the city’s ability to recruit and retain qualified staff.

“The fiscal year 2024 General Fund budget compared to actual fiscal year 2023 results includes a $10.8 million (10.9%) increase in expenditures, which includes a 5% cost of living increases for all employee groups. An 8.5% increase to health insurance and 12 new full-time-equivalent positions is also included in the fiscal year 2024 budget. For all other governmental funds, fiscal year 2024 budgeted operating expenditures compared to actual expenditures in fiscal year 2023 are decreasing $3.7 million, or 6.9%, resulting from lower general obligation debt service payments due to the defeasance of debt in 2023,” it says.

The city’s five-year infrastructure and capital improvement plan (ICIP) includes funding for critical transportation, utility and equipment projects. The ICIP is a rolling five-year plan that identifies the city’s most important capital needs and the anticipated funding sources to pay for the various projects.

The report says the budget includes enough resources to meet annual debt service requirements and that the city complies with all of its debt covenants and obligations.

“We extend our appreciation for their ongoing commitment to excellence in financial reporting and for their continuing efforts to provide professional and outstanding service to the citizens of Rio Rancho,” it concludes.

The independent audit report notes that the financial statements made in the annual comprehensive financial report were presented fairly.

“We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions,” CLA LLP says at the start of the audit report.

The full signed final report and financial statements can be read here.