City cash balance worse than last year
By Ben Baird
Press & Guide Newspapers
DEARBORN HEIGHTS — The city may need to borrow as much as $8.5 million from other city funds to cover general fund operating expenses like payroll and the contribution due the pension system for the fiscal year ending June 30, according to the city treasurer.
Treasurer John Riley said he predicts significantly more cash balance shortfall than last year.
This will put the city in pretty rough shape next year, he said. He made a presentation before City Council during the Jan. 11 study session. Riley said he asked Council Chair Ken Baron for time to talk because he had concerns with the city cash balance, particularly in the general fund. He said he wanted to give them an idea of where the city is at now and where it’ll be.
The numbers he presented show cash coming in and going out. Riley said he’s showing where the city was last fiscal year on Dec. 31, 2009, and how much shortfall there was, compared how much shortfall can be expected because of where the city was as of Dec. 31, 2010. He said this isn’t an exact science, but more of a generalization.
Currently the city has about $2.9 million cash available, mostly in banks. Last year at the same time the city had about $5.7 million, nearly twice as much. All of the current $2.9 million will be needed for the amount due the pension system on June 30. About $944,000 is due the general government pension and about $2.3 million is due the Act 345 pension for police and fire retirement. The cash balance following these payments is a shortfall of about $308,000.
Councilman Tom Berry asked if interest generated from the pension systems would offset this.
While there is interest, Riley said the interest would be for the pension trust and not the general fund.
Two major amounts the city is expecting to receive are about $690,000 from the Neighborhood Stabilization Program and $1.2 million from the sale of the incinerator property. The city is awaiting a refund from the NSP for money spent on its programs focused on getting foreclosed properties back on the market for low to medium income households.
Everything considered, Riley said he estimates a cash flow shortfall of either $6.5 million or $8.5 million for the current year, which are the best and worst case scenarios. Both figures include $4.1 million less from using money from the water fund last year, which he said the city has paid back to the water fund. He said the estimated shortfall is not in the fund balance, although the cash and fund balances are interrelated.
“We’re going to need more money to get through the year,” Riley said.
Source: Press and Guide Read the Full Story Here
For those out there who do not think the city is in trouble for those who think the Mayor has saved us as you can see not so much. While John Riley was giving his assessment to the council, one council member had the gull to say that “we do not want the press to get a hold of this.” and went on to say that “we do not want this to be public knowledge.” Well guess what it is the right of the public to know.
Just for the record could everyone stop talking about the incinerator property sale they gave the buyers an extension until September can we just stop putting that into the mix and deal with the facts at hand. What we have not what we might be getting maybe have no place when doing the calculations for our budget. Not from the Mayor the Council or the Treasurer let us just stick with what is in our hands not with a bunch of maybe and if we get this or if this comes back from the state.
- A Million Dollars… (dearbornheights.wordpress.com)