Traverse City Record-Eagle

Opinion

January 19, 2014

Editorial: 42% fund balance must be brought into line

Traverse City residents have heard talk of staffing shortages in the city’s police, fire and Public Works departments and the need to merge the fire department with surrounding townships to save money.

Those same city taxpayers were probably surprised, then, to hear the City Commission recently talk about, of all things, the city’s bulging fund balance. Yes, too much money.

A recent audit report showed city officials fell short of a promise to trim the fund balance in 2013; cash reserves have now reached $5.7 million, or 42 percent of the city’s $13.7 million annual budget.

Forty-two percent is way too many taxpayer dollars to have on hand and rivals the absurd 61 percent ($35.5 million) fund balance amassed by the Traverse Area Intermediate School District.

The budget adopted for the fiscal year that ended June 30 proposed to trim more than $585,000 from the cash reserve, but it was reduced by just $168,685. Revenue estimates were close, but officials way overestimated how much the city would spend.

As problems go, this sure beats being $5.7 million in the hole. And the city must maintain a fund balance to ensure it has the money to meet emergency needs. Auditors recommend a minimum fund balance of 15 to 20 percent of expenditures; commission set a laudable goal of 25 percent. But they’ve missed that target by more than $900,000 over the past two years.

Mayor Michael Estes said city services didn’t lack, but city residents may remember that when some complained sidewalks weren’t being plowed in December, City Manager Jered Ottenwess said the city had fewer people available to plow than in the past — 18 plow operators in 2006 compared to 13 now.

This hardly means the city can just go hire people. Budgets matter, and sticking to them is critical. The $5.75 million surplus wasn’t amassed in a year, and hiring even a couple people gets expensive fast; salary, health care and other benefits mount up quickly.

But a 42 percent fund balance is too much, City taxpayers may even get the crazy idea they’re paying too much ...

1
Text Only

Opinion Poll
AP Video
Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN Raw: Deadly Landslide Hits Indian Village Obama Chides House GOP for Pursuing Lawsuit New Bill Aims to Curb Sexual Assault on Campus Russia Counts Cost of New US, EU Sanctions 3Doodler Bring 3-D Printing to Your Hand Six PA Cops Indicted for Robbing Drug Dealers Britain Testing Driverless Cars on Roadways Raw: Thousands Flocking to German Crop Circle At Least 20 Chikungunya Cases in New Jersey Raw: Obama Eats Ribs in Kansas City In Virginia, the Rise of a New Space Coast Raw: Otters Enjoy Water Slides at Japan Zoo NCAA Settles Head-injury Suit, Will Change Rules Raw: Amphibious Landing Practice in Hawaii Raw: Weapons Fire Hits UN School in Gaza Raw: Rocket Launches Into Space With Cargo Ship Broken Water Main Floods UCLA