As illustrated, the General Fund’s cash balance (which is similar to the savings account of the fund) has for the first time exceeded the recommended reserve balance. This reserve balance is set at 20% of the total annual expenditures. This recommended level has been set by the government Finance Officers’ Association. It allows for a stable cash flow during months of reduced revenues and the ability to react in emergencies.
Beyond improvement within the General Fund, the Water, Wastewater and Sanitation Fund all have reserves which exceed the recommended 20% reserve. The two operating funds which do not are the Liquor Fund and the Ambulance Fund. It is very important to note that the Liquor Store has been and remains profitable. The reduction in cash balances in the Liquor Fund stem from significant onetime expenses associated with the construction of the new store (additional inventory and building costs) and the transferring of funds from the Liquor Fund into the General Fund. With the completion of the Liquor Store construction and the stopping of transfers to the General Fund, the Liquor Fund’s cash balance should steadily improve, though it will likely take several years to return to a healthy level.
The Ambulance Fund reserves were used in 2013 for the purchase of two new ambulances at a cost of nearly $300,000. Beyond that cost, the Ambulance Service ended its previous practice of outsourcing billing to a third party. This has shown a significant increase in the average call collection. During 2013, however, there was a significant time of transition. During this time, the service did not receive any proceeds from Medicare and very little from private insurers. This led to a significant increase in the Ambulance Fund’s accounts receivables. This number exceeded $1,000,000 by the end of 2013. This situation will gradually improve with each successive month.
View the entire Council presentation.