Auditing Nephi: What the city's books show

This series examines Nephi City's finances using the city's own public records: its audited financial statements, its state-filed budget and its council minutes. Each figure links to the record it comes from. ^[1][5]

Nephi runs its own water, electric, natural gas, sewer and solid waste utilities as enterprise funds. In fiscal 2025, those business-type activities reported $25,761,527 in revenue, compared with $9,425,320 for governmental activities. ^[12]

The audit

Larson & Company of Spanish Fork audited the city's fiscal 2025 financial statements and issued its report Nov. 14, 2025. It said the statements present fairly, in all material respects, the city's financial position as of June 30, 2025. ^[1]

The schedule of findings lists the opinion as unmodified and reports no material weaknesses or significant deficiencies in internal control over financial reporting. It lists one current-year state compliance finding, 2025-001, on justice court trust account reconciliations, and no prior-year findings. ^[9]

The filing is a set of basic financial statements, not an annual comprehensive financial report. ^[1]

Net position and reserves

The city's total net position rose by $6,043,766 in fiscal 2025, to $71,799,642. Of that total, $49,047,543 was net investment in capital assets, which the city says is not available for future spending. ^[2][11]

The general fund ended fiscal 2025 with a fund balance of $1,206,987, all unassigned, down $999 from the prior year. Combined governmental fund balances were $8,490,474, including $6,338,248 assigned in the capital projects fund. ^[2][3]

Debt

The city reported $28,332,748 in total debt outstanding at June 30, 2025, including compensated absences. Management's discussion lists revenue bonds for electric system improvements, a splash pad, a public works facility and a culinary water project. ^[13]

Debt payable from governmental funds totaled $4,094,759. Debt payable from proprietary funds totaled $24,237,989, including $13,706,011 in parity water revenue bonds, $8,143,000 in electric revenue bonds dated June 12, 2024, and a $2,309,000 2020 Chase loan. ^[4]

The budget

Nephi adopts a biennial budget covering July 2025 through June 2027. On Aug. 18, 2026, the council adopted Ordinance 08-18-2026, which made the interim budget presented June 16 the final fiscal 2027 budget and set a property tax levy of 0.001031. ^[10]

In the state-filed copy, the fiscal 2027 final budget lists general fund revenue and appropriations of $9,792,891 each, up from $8,713,379 in the fiscal 2026 final budget. ^[5][6]

The utility funds are budgeted separately: $11,784,964 for electric, $5,781,960 for natural gas, $2,379,906 for sewer, $1,940,559 for water and $563,706 for solid waste in fiscal 2027. ^[7]

The capital projects fund is budgeted at $5,017,360 for fiscal 2027, including $3,523,560 listed as a contribution from fund surplus. ^[8][14]

Transfers from the utilities

The general fund budget includes indirect-cost payments and dividend transfers from the utility funds. For fiscal 2027, the electric fund lines are $801,469 in indirect costs and $728,830 in dividend transfers, and the natural gas lines are $504,262 and $458,560. ^[5]

Redevelopment

The city's community redevelopment agency fund is budgeted at $240,000 for fiscal 2027, and its industrial development agency fund at $211,000. The fiscal 2025 statements report $724,771 of governmental net position restricted for redevelopment. ^[8][15]