If you do not share my zeal for the study of mathematics and budgeting, I would suggest you set this week’s update aside because, while it is loaded with valuable, factual information, it is also loaded with numbers. I hope at least a few of you will find it interesting.
County budget statutes are contained in Chapter 50 of the Revised Statutes of Missouri which are available online at the following link http://revisor.mo.gov/main/Home.aspx . While there are hundreds if not thousands of moving parts in the budget, the projected budget, the actual performance, and the history of each can be analyzed with some very basic calculations. How much revenue do we expect? How large of an appropriation do we want to make? What special projects have we been saving for that we are prepared to execute this budget year? These are just some of the considerations in the budget construction. Government should not be in the business of accumulating tax dollars for an unspecified purpose. Rather, our philosophy is that we should provide as much service, etc. as possible to the community while maintaining a healthy reserve balance. Collecting and accumulating tax dollars in a vault somewhere would be a disservice to the people of this County.
To comply with everything in Chapter 50, we craft what I call a “worst case scenario” budget, characterized by conservative estimates of revenue and detailed projections of potential expenditures. It is important to resist the temptation to minimize expenditure to make a budget look good on paper, because the statutes are very strict when it comes to adding to the budget mid-year when you realize that you didn’t make a sufficient allowance for an unexpected high-ticket breakdown such as a rooftop air-conditioning unit. Having the money is not sufficient if you have not budgeted enough of an expense to cover that amount. Some folks like to dwell on projected budgets, but the true measuring stick is the ACTUAL performance. The projected budgets for at least the last 7 years have been characterized by better revenues than expected and expenses coming in significantly under projections which has resulted in a budget surplus each and every year. The lower than expected expenditures can be attributed to the TEAM effort by elected officials, department heads, and all employees to get the most out of your tax dollars.
How do all of these numbers shake out in reality? Since 2011, the General Revenue fund has started each year with an average balance of $2,362,320.81, and based on appropriations during that period, our “untouchable “reserve portion of that was an average of $1,389,194.66. In every year since 2011, our revenues have exceeded expenditures by an average of $570,672.35, creating a budget SURPLUS which has been used to pay-off debt early and maintain reserves. The average reserve balance at the end of the year has been $2,388,899.90, and, as you can see, there has been no draining of reserves, deficit spending, or other financial detriment to the County finances. To the contrary, we have maintained a healthy reserve, managed to save enough to pay cash for future large expenditures, stayed out of debt, and complied with the provisions of Chapter50!
That’s all I have time for now. As always, call, e-mail or stop by the Courthouse if you have questions. Until next week…