By Debra Lewis
Every two years, the city prepares its bi-annual budget. That time is now upon us. This June, City Council will be presented with a proposed two-year budget for Fiscal Years 2018-2019 (July 1 to June 30, abbreviated “FY”). FY 2017 ends June 30, 2017.
Many details are contained in the city’s 2016 audited Comprehensive Annual Financial Report (CAFR) and the city’s amended budget per the 3/17/17 council agenda. Two major trends are significant to note. The first is the drop in Total Governmental Funds (TGF), the city’s main bank account, available for future city costs and capital improvement projects. The second trend of note is the rate of growth in city expenditures that is far outpacing the city’s expected revenue.
Let me preface this discussion by assuring you that in the short term the city is fiscally sound. However, the downward trend in Total Governmental Fund balances and rising expenditures should not be ignored:
3.7 percent: City’s total cumulative revenue growth over the past ten years
Approx. 40 percent: City’s cumulative operating expenditure growth over that same period
$30,668,000: Total Governmental Funds (TGF) at end of FY 2016
$21,086,000: Projected TGF at end of FY 2017
While $21 million sounds like a lot of money (and it is) $12.6 million of that balance is kept in prudent, emergency reserves and another approximately $4 million is held in trust or restricted for designated purposes. That leaves only a total of $4.8 million left for potential Capital Improvement Projects. These projects have averaged $11 million per year over the past 10 years—$9 million if the Lantern District funding is removed.
In preparing the budget FY 2018-2019, the City Council, the city staff and the Financial Review Committee will be addressing how to manage city spending and provide funding for desired capital improvement projects. I am confident that careful consideration will be given to the city’s financial future and that fiscal responsibility will be achieved while maintaining the quality of life and resident services enjoyed by all.
Debra Lewis was elected to City Council in 2016 and serves as the city’s mayor. You can contact her at firstname.lastname@example.org.