By Sue Ann Douglas
I started looking into the West parking structure that was planned to cover the parking lot behind Mr. B’s in downtown Rochester, but ended up taking up more than half of Walnut Boulevard.
At the 12-15-14 City Council meeting the Certified Annual Financial Report (CAFR) was presented to the City Council. This is a governmental unit’s most significant piece of financial data. It is mandatory and must be done by an outside auditor.
The paragraph that I want you to see is on page 8 of the CAFR and is under the heading of “GOVERNMENTAL FUNDS” and is posted below:
The focus of the City of Rochester’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resource.
As of the end of the current fiscal year, the governmental funds reported combined ending fund balances of $14,032,280, a decrease of $241,261 in comparison with the prior year. The majority of this total amount, or $5,600.442, is restricted for specific purposes, which include road construction and maintenance, cemetery maintenance, downtown development, principal shopping district, law enforcement programs, debt service, and capital improvements. Also, of the total amount $8.431,838 constitutes unassigned fund balance, which is available for spending at the City’s discretion.
The General Fund is the chief operating fund of the City of Rochester. At the end of the current fiscal year, the total fund balance of the general fund was $8,431,838, all of which is unassigned. Unassigned General Fund fund balance represents 96 percent of total general fund expenditures.The fund balance of the City’s General Fund increased by $179,891 during the fiscal year.”
You can read the entire 2014 CAFR here.
The bottom line is that at the end of the 2014 fiscal year (June 30, 2014), Rochester’s unassigned General Fund balance was $8,431,838. Unallocated funds can be spent on anything and some critics would call an amount that large – SLUSH.
The report states: “Unassigned General Fund balance represents 96 percent of total general fund expenditures. The fund balance of the City’s General Fund increased by $179,891 during the fiscal year.”
An amount equaling 96% or the General Fund is an outrageous amount of money to not be designated to a specific use. Ten to twenty percent is considered reasonable fund balance by most government standards.
When you consider that the City just bonded $12 million for 2 parking structures when they had the money to easily pay cash for half of the project and still be left with a more than a respectable amount of unassigned fund balance and the amount remaining unassigned would be considered excessive by most government standards. The council could designate funds to one or all of the dedicated city funds such as Local Roads, Parking Fund, retirement health care, etc. or even create a rainy day fund.
The true bottom line is that if if the City of Rochester has nothing to spend those millions of dollars on, the taxes they are collecting are too high and should be lowered. Government is supposed to collect enough money to do their job for the community and stashing away extra cash for no good reason is not a government function. As you can see below, this is not a one-year issue; it’s been going on for years:
In addition, Rochester’s unassigned fund balance was:
$8,221,556 at the end of 2013 or 96 percent of total general fund expenditures*
$7,983,484 at the end of 2012 or 93 percent of total general fund expenditures*
$7,944,689 at the end of 2011 or 93 percent of total general fund expenditures*
* Amount of undesignated fund balance and the percentage of the general fund that it is equal to is from City of Rochester CAFRs from each year shown “Governmental funds.”
THE PARAGRAPH BELOW IS FROM THE CITY OF TROY’S 2014 CAFR:
“General Fund Balance
Fund balance of the General Fund increased by $833 thousand to a balance of $37.6 million. Of this amount, $4.4 million is nonspendable for such items as inventory and prepaid items; $1.5 million is restricted for budget stabilization, $6.6 million has been committed to the subsequent years budget and Volunteer Firefighters Incentive Reserve, and $3.2 million has been assigned for insurance claims and tax appeals. The $21.9 million remaining unassigned amount represents 44.4% of General Fund expenditures. This amount exceeds the city’s 20% to 30% target range but has been addressed in the city’s subsequent three year budget.”
I can’t wait until December to see what the next CAFR shows for the fiscal year that ended June 30, 2015.
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