Silverton auditors give town a clean opinion; net position rises $2.8 million, refuge (trash) fund runs an operating loss

External auditors told the Silverton Board of Trustees that the town's 2025 financial statements earned an unmodified ("clean") audit opinion and highlighted a substantial increase in the town's reported net position.

"Your opinion is an unmodified opinion ... that's a clean opinion," auditor Jim Hinkle said, summarizing the firm's findings about internal controls and test procedures. Hinkle told trustees the audit found no significant deficiencies or material weaknesses in the town's internal control structure and that auditors had no disagreements with management.

Auditor Lorraine Troder walked trustees through the management's discussion and analysis, reporting that "the town of Silverton had a net position of over 9 million at the end of 2025 and that it increased substantially during 2025 by 2.8 million." Troder attributed much of the increase to loans and capital grants tied to major projects, including housing and sewer improvements, and said governmental funds ended the year with combined fund balances of more than $2.2 million; the general fund increased by roughly $416,000.

Troder also separated the town's business-type activities and said that while water and sewer showed improved net positions (largely because of capital grants and recent rate increases), the refuge (trash) fund continued to operate at a loss. "The refuge fund ... has charges for services in the $250,000 range, but expenses over 300,000. So, a net operating loss there," she said, and recommended trustees consider rate-setting or service changes to stop ongoing deficits.

Trustees asked auditors about reserve policy and typical targets for small towns. Troder and Hinkle described customary guidance: small municipalities often keep larger cushions, and common practice ranges from about six months to 1.5 years of operating revenues. Trustee Molina noted that Silverton's current financial policy targets six months of reserves.

On long-term debt, auditors said the key metric is cash flow coverage: bond underwriters typically look for cash flow before debt service of 1.5 to 2.0 times annual debt service to ensure the town can meet payments. The auditors pointed out that housing-related borrowing can be riskier because projects need to generate sufficient revenue to service repayment.

Auditors briefly reviewed capital asset schedules and construction-in-progress, noting substantial construction balances for housing and sewer projects and recent loan additions for those initiatives; they said some loans will be refinanced into USDA bonds when projects are completed.

The auditors said they would issue the final audit package after the board's draft review and that there were no audit adjustments required. Trustees thanked the auditors and confirmed staff would circulate the final audit to the board and to the state.