Local governments and schools maintain fund balances — essentially savings accounts — for rainy days, but Rome and Floyd County entities use their funds in different ways, and the moneys can’t be commingled or shared.
Audits for 2012 won’t be done for at least another month, but the following is a look at trends over the past several years.
Rome Finance Director Sheree Shore said she expects the city’s current fund balance to wind up close to $12 million — enough to fund city operations for approximately six months.
“Six months (in reserve) is kind of where you want to be especially for an operation this large,” she said.
The money in the bank, however, rises and falls from month to month as it’s used to cover expenses before fall property taxes come in to replenish the fund, City Manager John Bennett explained. “Just because you have a fund balance that doesn’t mean you’ve got a bunch of cash sitting around,” he said.
The last time the city’s year-end fund balance was $12 million was at the end of 2006, when it totaled $12,037,603. When the Great Recession kicked in, the city reduced its rainy day fund steadily through 2009, bottoming out at $10,507,717. The fund was increased by a little more than half a million in 2010, and then went up by $700,000 in 2011.
Shore said the city has reduced its workforce by close to 10 percent over the last six or seven years, from close to 680 employees in 2006 to fewer than 600 today.
“We actually started doing some attritioning back in 2007,” she said.
The bigger cuts initially were in water and public works, where the city did not fill spots that came open by retirement or people leaving the city for other jobs.
Rome City Schools
The Rome City Schools district is financed by the city government, unlike the Floyd County school system, which is a separate taxing authority.
Bennett said the city sends the school board a check each month to cover the system’s expenses.
“They don’t really live off a fund balance,” Bennett said. “We sell tax anticipation notes to be able to keep paying them every month.”
Bennett said the city allocates about $1.7 million a month to cover the expenses of the city system. City school fund balances have ranged from a low of $118,121 in June 2009, to as much as $3,358,158 at the end of fiscal year 2011 when federal stimulus package funding provided a temporary boost.
Bruce Jones, a member of the Rome Board of Education, said the city system has been reducing its workforce somewhat steadily over the last several years — which may be one reason the city isn’t contemplating the massive workforce reduction the county system is planning.
Floyd County government
Floyd County’s fund balance peaked at $17.7 million in 2002. It dropped a little more than $200,000 in 2003, recovered in 2004, but has been shrinking annually ever since. Unlike Rome, the county’s rainy day fund has not turned the corner. It was down to $13.2 million in 2011, the latest year totals were available Tuesday.
County Commission Chairman Irwin Bagwell said the board’s goal is to cover operational expenses with limited use of the fund balance and no tax increase. The $1.5 million drawn from savings in 2010 was the largest recent transfer to the general fund.
“If you look at the past two or three years, we haven’t used it dramatically,” Bagwell said.
The county started furloughing employees in 2009, and cut the budget by 5 percent. That was about the time the Commission told the library and recreation department to start drawing from their own fund balances to avoid tapping into the county’s general fund reserves.
“We’ve done that to avoid raising property taxes,” Bagwell said. “We’re cognizant of both businesses and individuals who don’t need any additional pressure added to them.”
Bagwell estimated that the county’s workforce is down close to 10 percent. “We don’t have any furloughs going on now and we have not had to go through a reduction in force like the school board is going through.”
Floyd County Schools
The Floyd County School system ended its last fiscal year — on June 30, 2012 — with a cash balance of $8,864,389.
Tim Hensley, assistant to the superintendent, said the primary reason the system needs a significant cash reserve is to cover operations until tax money flows to the schools in the fall.
“The school system needs approximately 8 percent of our budget in end-of-year balance to make sure we can meet obligations through the summer,” he said. “That pays salaries and everything over that period of time. If you don’t have the reserves, you’re either going to have to borrow money or get tax anticipation notes to cover that until new tax money comes in to cover those things.”
Hensley said the county system typically needs to end the fiscal year with about $7 million in savings to tide the system over until the next influx of tax revenue.