Official: City’s finances are good
Settlement drove operating deficit
Commissioner of Finance Michele Madigan provided a preliminary yearend report for 2016 during the City Council meeting on Tuesday.
Madigan said it’s a preliminary report because the city’s independent auditors need to audit the report and the 2016 books, which is expected to begin next week.
The unaudited year-end figures revealed an annual operating deficit of about $1.05 million.
However, that was driven by a $750,000 payment to settle a suit filed by The Anderson Group more than 10 years ago.
The Anderson Group sued the city in 2005, claiming it discriminated against African Americans and families with children by rezoning a tract of land TAG owned between Lake and Union avenues,
effectively blocking a 260unit residential development the group planned to build. Excluding the payment to The Anderson Group, the operating deficit was $306,000 — or 0.695 percent of the city’s $44 million 2016 adopted budget. “Taxpayers should be pleased that the city’s 2016 adopted budget was accurate, closing the year with actual results so close to those planned for in the budget,” Madigan said in a statement. “Furthermore, I have been able to achieve this with city property tax rates that are no higher now than they were when I took office in 2012.”
The actual 2016 revenue collected totaled about $42.69 million and the actual expenditures totaled about $43.74 million
“The city departments did a good job managing their 2016 budgets and I hope to see similar results for 2017,” said Madigan.
For 2017, it’s required for the city to have an unassigned, unappropriated general fund balance between $4.5 and $11.4 million. The unaudited figures show the city’s general fund balance as $9,009,362. The city has $3.3 million in restricted fund balance for retirement reserves, insurance reserves, capital reserves, tax stabilization reserves and other miscellaneous reserves. For the fifth straight year the water fund reported an operating surplus. The sewer fund had an assigned, unappropriated fund balance for 2016 of $1.8 million, which marks the seventh consecutive year of an operating surplus.
“There is a healthy list of infrastructure needs that can continue to be addressed, thanks to the prudence of Commissioner Scirocco,” said Madigan. “Under his guidance, both the water and sewer funds turned around years of year-end red to having years in the black for both funds.”
The city fortifying its reserves and resolving labor contracts has contributed to the bond rating of AA+ by Standard & Poor’s Rating Services and Aa2 by Moody’s Investor Services and helped it obtain low interest rates on bonds for capital projects. “Resolving all seven labor contracts has enabled the city to budget accurately and serve the taxpayers real and fair budgets as well as keep our high bond rating,” said Mayor Joanne Yepsen. “It’s been a challenge but a huge accomplishment for our city residents to keep taxes flat and stay within the 2 percent property tax cap.” Yepsen mentioned the important roles tourism, horse racing and economic development play in revenue, and keeping property taxes flat. Madigan said with due to the policies and practices in place, the city continues to have a strong financial position.
“Our fiscal health allows us to prepare for the future and plan for the present. The city needs to continue to be conservative when budgeting for the general, water and sewer funds, focus on spending reserves when appropriate and maintain fund balances,” said Madigan. “The city needs to be conservative in its budgeting practices for all revenues and expenditures.”