Cash and investments

17 years ago

The City of Presque Isle will receive the audited financial statements for the year ended December 31, 2006 within the next few days. In that financial statement, it indicates that the City has over $9 million in cash and investments. This is true, but only a portion of that amount is City general fund monies. This I will try to explain.
    The City has the roll of overseeing all funds in its possession. An example of this is the Cemetery Trust Fund. In the early 1900’s, various individuals gave money to the City for the perpetual care of individual cemetery plots. Over the years with additional contributions and interest earned minus expenditures, the cemetery fund has grown to over a half million dollars. In the mid 50’s, the City combined the monies from all the various trust funds that the City handled and had a single trust set up that helped the fund grow at a faster rate than the multiple savings accounts that were in existence at that time. The trust account now has a balance of over $600,000.
When the City adopted the Charter in the early 90’s, one of the requirements was that the City set aside an amount equal to 1.5% of the City’s annual net budget. These funds are earmarked for unanticipated, extraordinary needs caused by a natural disaster. At the present time, there is over 1.1 million dollars in this account. Because of having this reserve available, the City’s bond rating has improved.
The City annually budgets money for future purchases of major equipment and building repair and improvements. The budgeted amounts remain in the various accounts over a period of a few years until it is built up to the needed amount. The amounts at year end in the reserve and the accounts they are designated for are: Solid Waste equipment and post closure costs – $1,170,000; Presque Isle Industrial Park – $700,000; Presque Isle Development Fund (HUD) $1,800,000; other reserve accounts – $500,000. The financial statement reflects the amount of $333,000 in the City checking accounts per the banks. This leaves a balance of nearly three million dollars of City general fund money in investments as of year end.
Because expenses exceed revenues for the first six months of the year, these funds have been depleted as of now. The City borrowed tax anticipated money in the amount of $1,650,000 in April and those funds are now being used until the tax bills are mailed. When the tax bills go out, the City’s revenue increases three fold on a daily average.
Therefore, the majority of the funds listed as cash and investments on the City’s annual financial statements are designated for other purposes for the future benefit of the City taxpayers.
D.A. “Spike” Savage is treasurer the city for Presque Isle.