Washington’s pay-as-you-go approach when it comes to major expenses and significant capital projects appears to be working, according to city officials.

A recent audit report concerning fiscal year 2014-2015 shows the city took in more revenue than it spent (before transfers and debt issued) in the general fund, something that had not happened in nine previous fiscal years. Crystal Roberts, a certified public accountant with Martin Starnes & Associates, reviewed the report with the City Council during its meeting last week. The 2015 fiscal year ended June 30, 2015.

In FY 2015, the city took in $11,463,911 in revenue for it general fund, spending $11,087,157, according to the audit.

The report gave an unmodified opinion, the highest rating possible. The report noted there are no significant deficiencies or material weakness in internal control with the city’s finances.

The audit shows the city’s debt service in FY 2014 was at $766,701, but decreased to $264,245 in FY 2015. That decrease, coupled with other such declines, caught Councilman Doug Mercer’s attention.

“You notice that we have gone through a continual decline on that debt service. … That’s the goal that’s been established — to reduce that debt service to zero and become a pay-as-you-go organization,” Mercer said.

Roberts told the council the city continues to have a healthy fund balance in its general fund (day-to-day operations) though the total fund balance decreased from $8.52 million the prior fiscal year to $6,861,744 in FY 2015. Of that $6,861,744, the city had $1,796,411 that could not be spent because state law places restrictions on use of the fund balance. That left an available fund balance of $5,065,333 in FY 2015. The available fund balance in FY 2014 was $6,644,822, or $1,579,489 more than available in FY 2015.

The Local Government Commission, which oversees finances of local governments, recommends a local government have a fund balance of at least 8 percent of its annual general fund budget. For FY 2014, the city’s fund balance (general fund) was at 53.37 percent, dropping to 37.08 percent in FY 2015.

“Your transfers out of your general fund in fiscal year (2015) were significantly lower than in fiscal year (2014) because, if you recall, you established two internal service funds, and in fiscal year (2015) you transferred the nest egg, if you will, over to those internal service funds to establish them and start using them in your future years,” Roberts said. “The transfers to your facilities maintenance fund and your vehicle replacement fund totaled around $1.7 million in fiscal year (2015) for both of those combined.”