Minutes 09/13/1988 - Laserfiche WebLink

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TUESDAY, SEPTM~BER 13, 1988 Councilman McClain presented a tabulation which indicated that the total of all City fund balances (excluding the City's Sewer Bond Fund) increased by $111,189.00 during the City's fiscal year 1987-88, noting that the total unexpended balance in all funds for that year was $1,616,770.00, or 3.95% of a total City budget of $40,863,782.00. In so doing,.Mr. McClain posed the question, "How do you budget expenditures of $1.5 million more than the revenues you budget and still have your Fund balances grow?" and, by a companion statement entitled, "Budget Questions", and in his transmittal comments thereon, Mr. McClain pointed to the current method used by the City Administration in projecting revenues and expenditures and surplus balances (or deficits) which could unnecessarily persuade Council to impose additional taxes and/or new service charges. Mr. McClain's prepared statement was as follows: General Fund Budget Surplus Projected in Budget Message for 1987-1988 as of 7/1/87 - Actual Fund balance as of 6/30/87 - Projected unappropriated surplus as of 6/30/88 - Projected Fund Balance in Budget Message for 1988-1989 as of 7/1/88 - Actual Fund balance as of 6/30/88 - $1,256,340 $1,078,288 $ 507,001 $1,766,793 $1,031,247 Conclusion: Instead of reducing accumulated surplus in General Fund by $749,339 during FY i987-1988, actual reduction was $37,041. Comment: If we are expending three quarters of a million dollars over and above our General Fund revenues as was budgeted for FY 1987-1988, I have great concern as our accumulated surplus will quickly be consumed and we, as a City, are living significantly beyond our means. If, on the other hand, we are expending only $37,041 of our accumulated surplus per year and thereby expending only that amount over and above our current revenues, I have little concern as our accumulated surplus would not be consumed for about 28 years. Again, this year, we have budgeted to expend $1,466,793 of our General Fund accumulated surplus. If that can be reduced in proportion to the utilization actually experienced last year, it would amount to only $72,600, again a reduction in the accumulated surplus with which we could live for many years.