City Looks at Surplus
Councilman Ted Byrd, chairman of the city’s finance committee, presented the ideas to the full council on Tuesday. A public hearing on the proposal is scheduled for City Council’s Oct. 23 meeting.
Unlike a one-time surplus generated through extra revenues or underexpenditures in a single fiscal year’s operating budget, the fund balance surplus represents undesignated money over time. It can include general fund surpluses, but also accounts for money saved from refinanced bonds or payments from real estate transactions, among other areas, City Manager Kurt Hodgen said.
According to Harrisonburg policy, the fund balance must total 16 percent of the city’s operational budget. In fiscal 2013, which began July 1, the operating budget is $199.2 million, making the required fund
balance about $32 million.
The fund balance, up to the 16 percent mark, is to be used only in emergencies. But any surplus amount above that threshold can be used at the council’s discretion, or placed back into reserves.
The fund balance figure reached $6.67 million above the requirement for fiscal 2013, and Hodgen said the time came to spend some of it.
“If the unappropriated fund balance gets too high, people start to wonder, ‘Good grief, why are you sitting on all this money?’” he said.
Officials want to use more than half of the $6.67 million surplus on capital projects that require a local match to obtain state money. If the local match were not made, Harrisonburg would lose access to the state funds.
The projects requiring a match include the expansion of Reservoir Street ($1 million), improvements around Chicago Avenue and Mount Clinton Pike ($950,000) and a new intersection at Carlton and Reservoir streets.
Byrd said leveraging local dollars with outside funding sources gives the city the most value from its surplus funds.
Other projects to receive funding are the Northend Greenway ($600,000), the first phase of the Bluestone Trail ($243,000) and grading for two soccer fields at the Smithland Road complex ($200,000).
The greenway is a proposed multiuse path that will connect the Park View area to downtown, while Bluestone is a similar path within Purcell Park that also will link Purcell to Ramblewood Park.
In addition, surplus funds will be used for employee bonuses ($750,000) and a compensation study for employees ($100,000). Hodgen said the city hasn’t conducted a salary study in 10 years.
Under the proposal, more than $1.1 million from the surplus will be unused and returned to the city’s fund balance. Officials say that although the minimum requirement is 16 percent of Harrisonburg’s budget, they like to have a “cushion” of cash above it to work with.
Contact Preston Knight at 574-6272 or firstname.lastname@example.org
From the Daily News Record online at: http://www.dnronline.com/article/101112surplus