Finance Committee - 4/17/2019 Page 3
a little bit of perspective on those two significant numbers. But again | think in today’s what we have found in
much of our Governmental work is that at least a quick discussion about those two liabilities when you walk
through a document of this size and magnitude is important.
If | could now ask you to turn your attention over to Page 34, this is a much more of a traditional looking
balance sheet, various funds and the focus from almost all readers is going to be on Page 34. It is that first
column of numbers of your General Fund which is of course your main operating fund. The focus for readers is
in that lower third section of that first column of numbers. Your fund balances, you have non-spendable,
restricted, committed, assigned, and unassigned; and collectively those add up to the total fund balance in your
General Fund of about $54.8 million dollars. That $54.8 million dollars is increased by about $4 million dollars
over the prior year. Essentially what that means is the inflows of current dollars exceeded the outflows of
current dollars by about $4 million dollars. We will the reasons why in just a minute when we look at your
budget versus actual comparative statement.
But it is important to look not only at total fund balance, but the various components. For most readers, the key
number is that third number up from the bottom or your unassigned fund balance with a June 20, 2018 balance
of $29 million or a little bit more than $29 million dollars, your $29.1 million dollars. That number is about
$800,000.00 greater than it was the prior year and it represents a little bit more than 10% of your General Fund
Expenditures. Those are key indicators; financial institutions and rating agencies like to see a little increase in
that unassigned fund balance each year and they like to look it as a percentage of the community’s General
Fund Expenditures. Having a balance in that account of a little bit more than 10% is generally viewed as very
strong or very favorable.
When | mentioned earlier that there was a page in your MDNA, it was Page 26, a lot of what | just spoke about
with respect to your unassigned fund balance, the change in it and the percentage, is summarized in that
paragraph on Page 26 of your CAFR. So | wanted to draw that to your attention because it is a good resource
to go back to a later point in time to just as a refresher as to why some of these account balances — or what
they represent and how they have changed. You certainly have some other components of fund balance; the
assigned fund balance, much of that is some year-end encumbrances as well as fund balance that is being
applied towards the next Fiscal Year’s Budget, the next Fiscal Year’s Tax Rate. That is the assigned fund
balance the committed fund balance, much of that is the CERF or the Capital Equipment Reserve Funds, is
much of that, not all, but is in that $13 million dollars. That component of fund balance, that committed fund
balance of a little bit more than $13 million dollars, that is up about $4 million dollars over the prior year. There
were a lot of dollars that were put into the Capital Equipment Reserve Fund at year end.
Just to summarize, total fund balance of $54 million; it’s up about $4 million dollars. The unassigned fund
balance again the first place that most readers will turn is up around $800,000.00 and represents a little bit
more than 11% of expenditures; which again is going to be considered very favorably or considered strong by
rating agencies. Now | mentioned that there was both an increase in total fund balance, the unassigned fund
balance and the committed. To look at the types of activities that occurred in your Fiscal Year 18 that would
have generated those surpluses to add to those accounts; if | could turn your attention over to Page 38 just for
a moment. Page 38 is your Budget and Actual Comparative Schedule, the first two columns are your budget
as the headings indicate — the original budget and the final budget. Then you have your actual amounts on a
budgetary basis and then the final column is your variances.
If you look first in the lower right hand corner, you see a number of $6.6 million dollars, in total | would look at
that as the favorable budgetary results of operation for Fiscal Year 2018. Almost all of that is coming on the
revenue side of the equation; and even further most of the $6.6 million dollars in favorable revenue results of
operations is a direct result of the auto permits that came in almost $4.6 or a little bit more than $4.6 million
dollars better than what was expected. That favorable number on the auto permits is consistent with prior
years and is consistent with a lot of communities at the State. So the results of the operation here are fairly
consistent with many, not all, but certainly many other communities.
