Auditing Vernal: what the city's latest audit and budget show

Auditing Vernal is a Utah Ledger series that reads Vernal City's audits, budgets, meeting minutes and contracts and reports what they show. It covers Vernal City and its redevelopment funds, not Uintah County or other local districts. ^[1][2]

This first piece sets out the baseline from the city's most recent audited financial statements, for the fiscal year that ended June 30, 2025, and its budget for fiscal 2027, which runs from July 1, 2026 to June 30, 2027. ^[1][2]

The audit

Smuin, Rich & Marsing of Price dated its independent auditors' report Feb. 27, 2026. It said the statements "present fairly, in all material respects" the city's financial position. The auditor relied on other auditors for the city's investment in the Ashley Valley Sewer Management Board, a joint venture stated at $7,870,082. ^[1]

The audit reported three findings for fiscal 2025: untimely account reconciliations, a deficit fund balance in the capital projects fund and spending above final budget appropriations. The auditor classified them as significant deficiencies, not material weaknesses, and did not modify its opinion on the city's compliance with state requirements. A separate story in this series covers the findings. ^[1]

The city spent $9,527,723 in federal awards in fiscal 2025, most of it $7,022,329 under the Alternate Essential Air Service Program. The auditor found the city complied in all material respects with the requirements of its major federal programs and reported no federal findings. ^[1]

The general fund and reserves

The general fund, which pays for most day-to-day services, took in $14,286,983 in fiscal 2025, including $10,496,518 in taxes. It spent $12,112,205 and transferred $2,854,937 to other funds. ^[1]

Its balance fell $680,159 during the year, from $6,645,790 to $5,965,631. Of that, $5,551,316 was unassigned. These are accounting balances, not a count of cash in the bank. ^[1]

Across all governmental funds, balances totaled $13,711,224 at June 30, 2025. That total includes a negative $2,934,811 balance in the capital projects fund. ^[1]

The city's total net position, a broader measure that includes capital assets, was $71,485,927, of which $13,746,319 was unrestricted. ^[1]

Debt

The audit's management discussion says Vernal had no general obligation debt outstanding at the end of fiscal 2025, and that its bonds are secured by specified revenue sources. ^[1]

Its debt schedule lists $8,968,000 in revenue bond principal for governmental activities and $8,559,490 for business-type activities, which include the water, sewer and solid waste utility. During the year the utility added $4,087,000 in revenue bonds through the state Community Impact Board. ^[1]

In 2026 the city moved ahead with water and sewer revenue bond financing for the 100 North and 3500 West project, described at a Sept. 2 hearing as $1,937,000 in bonds. That financing came after the audit period and is covered in a separate story. ^[4]

Redevelopment

The CRA Downtown Improvement fund, one of the city's major funds, ended fiscal 2025 with a balance of $4,833,199. Of that, $1,738,102 was restricted and $3,095,097 was assigned. A separate vitalization fund recorded $246,689 in revenue and no spending, ending the year at $370,202. ^[1]

The fiscal 2027 budget

The council adopted the fiscal 2027 budget on June 17, 2026, on a 5-0 vote. Staff said it did not include a property tax increase. The council also adopted the certified property tax rate of 0.000495, which the minutes say was projected to bring in $441,027. ^[3]

The budget filed with the state lists $15,039,402 for the general fund. That includes $761,025 labeled as use of beginning fund balance and $3,080,350 in transfers, among them $2,000,000 to the capital projects fund. These are planned amounts, not spending that has happened. ^[2]

The general fund's largest budgeted revenues are $5,200,000 in general sales and use taxes, $1,800,000 in highway option tax and $1,400,000 in city option tax. ^[2]

What comes next

Later stories in this series examine the fiscal 2025 audit findings, the financing and change orders for the 100 North and 3500 West water and sewer project, the downtown façade grant program, and the 500 South paving award.