A Dismal Future for the General Fund
Care for a shocker? As a starter you need to review the General Fund Comparative Budget Statement (page 50 in the Reader) in the proposed 2007 budget. I will enter some links for your use later to use in reviewing the following comments.
More deficit spending is occurring currently and planned for the future. Staff projects the general fund revenues will continue to increase from the $18.5 million of 2005 through 2008’s $21.0 million. Note the impact of the deficit spending as reflected in the Year End Balances shown at the bottom of the document: 2005 $11.1 million actual; 2006 $8.8 million estimated; 2007 $5.1 million estimated and 2008 $5.2 estimated.
The operating expenditures are as follows: 2005 $17.5 million actual; 2006 $18.2 million estimated; 2007 $20.4 million estimated; 2008 $21.0 million estimated. The staff is keeping the operating expenses slightly below or equal to the NEW annual revenues each year. They estimated that for 2006 the operating expenses will be less then the new revenues by $831,958. In 2007 they plan on using all of the new revenue except for $12,996.
In looking at the section below the Expenditures, another major problem becomes apparent. The amount of Intergovernmental revenue for capital improvements drops by half a million between 2006 and 2007. The repayments for the Marketplace advance from NURA drops from $669,663 to its final payment of $196,072. Two of the proposed expenditures, Capital Outlays and the subsidy to the Northglenn Neighborhood Development Corporation increase a combined $1,152,756 from 2006 to 2007. When you add in the Debt Service payment transfer and the Contingency you can see why the year end fund balance is decreasing from $8.8 to $5.1 million between 2006 and 2007.
In the second paragraph I pointed out that the proposed year end fund balances for 2007 and 2008 are almost identical. Why is this so? The staff deleted a subsidy in 2008 for NNDC and reduced the amount available for Capital Outlays from $4.9 million in 2007 to $1.3 million in 2008. If the staff had put the same effort in capital outlays in 2008 as they did in 2007, the year end balance would be $1,538,761 or 7.3% of expenditures. Guess how small 7.3% is compared to the General Fund’s expenses? It will cover operations for three weeks. The Council’s current policy is to maintain a 25% balance in the General Fund, therefore the staff will stay and the capital improvements and outlays will go.
What has the staff said in the document? There is still money available to be used before we hit the minimum 25% floor established by the Council. We will use it up in 2007 and to hell with capital improvements and outlays in 2008. In 2008 and future years we will provide the bare bone maintenance activities necessary while securing our jobs.
To see the document I am referencing either click on the title of this posting to access the available budget download on the City site (page 50 in the reader) or go to a friend’s web site: http://www.northglenn-watch.org/ I will be offering some suggestions, obviously, in another posting.
More deficit spending is occurring currently and planned for the future. Staff projects the general fund revenues will continue to increase from the $18.5 million of 2005 through 2008’s $21.0 million. Note the impact of the deficit spending as reflected in the Year End Balances shown at the bottom of the document: 2005 $11.1 million actual; 2006 $8.8 million estimated; 2007 $5.1 million estimated and 2008 $5.2 estimated.
The operating expenditures are as follows: 2005 $17.5 million actual; 2006 $18.2 million estimated; 2007 $20.4 million estimated; 2008 $21.0 million estimated. The staff is keeping the operating expenses slightly below or equal to the NEW annual revenues each year. They estimated that for 2006 the operating expenses will be less then the new revenues by $831,958. In 2007 they plan on using all of the new revenue except for $12,996.
In looking at the section below the Expenditures, another major problem becomes apparent. The amount of Intergovernmental revenue for capital improvements drops by half a million between 2006 and 2007. The repayments for the Marketplace advance from NURA drops from $669,663 to its final payment of $196,072. Two of the proposed expenditures, Capital Outlays and the subsidy to the Northglenn Neighborhood Development Corporation increase a combined $1,152,756 from 2006 to 2007. When you add in the Debt Service payment transfer and the Contingency you can see why the year end fund balance is decreasing from $8.8 to $5.1 million between 2006 and 2007.
In the second paragraph I pointed out that the proposed year end fund balances for 2007 and 2008 are almost identical. Why is this so? The staff deleted a subsidy in 2008 for NNDC and reduced the amount available for Capital Outlays from $4.9 million in 2007 to $1.3 million in 2008. If the staff had put the same effort in capital outlays in 2008 as they did in 2007, the year end balance would be $1,538,761 or 7.3% of expenditures. Guess how small 7.3% is compared to the General Fund’s expenses? It will cover operations for three weeks. The Council’s current policy is to maintain a 25% balance in the General Fund, therefore the staff will stay and the capital improvements and outlays will go.
What has the staff said in the document? There is still money available to be used before we hit the minimum 25% floor established by the Council. We will use it up in 2007 and to hell with capital improvements and outlays in 2008. In 2008 and future years we will provide the bare bone maintenance activities necessary while securing our jobs.
To see the document I am referencing either click on the title of this posting to access the available budget download on the City site (page 50 in the reader) or go to a friend’s web site: http://www.northglenn-watch.org/ I will be offering some suggestions, obviously, in another posting.
posted by Gene Wieneke at
5:02 PM
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