Do you think that the City of Danville is broke? Have you heard that Danville City Council is irresponsible with Danville’s money? Have you read a Usual Suspect saying that Danville will be bankrupt in less than five years? Tell them they’re full of horsecrap and to go fark off.
Let’s take an detailed look at what Danville’s financial statements are at the end of the past fiscal year. We call that a BreakDown…
Yes. Danville had a study from the National Resource Network that said that the city would be bankrupt in five years if nothing changed in the budget or economy. But the problem with that analysis is that EVERY DAMN THING CHANGES in the budget and the economy every year. The city is required to have a balanced budget every year based on extremely reasonably forecasted revenues. The NRN study didn’t put that into their models for the study because the results wouldn’t have been as scary sounding. I called horsecrap on that at the meeting where the NRN study was presented. i was lobbied hard by some city staff telling that I needed to realize that the study still had value despite a fundamental flaw in the compilation. That lobbying effort failed, because a fundamental flaw like “having to have a balanced budget each year” means reckless spending just won’t happen.
Anyway, some of the Usual Suspects took the horror stories of a five year out bankrupt Danville and squealed in ecstacy. Those people are full of crap.
With that being said, let’s get to some real numbers and start this BreakDown. Budgets aren’t perfect. The city has Michael Adkins, who’s one of the best Finance Directors around. He keeps everybody posted on what’s going on and there’s never any financial surprises with him on guard. The city’s fiscal year ended on June 30th this year. In the 2018 fiscal year, the city ran a budget deficit of $3.5 million. Ouch. But there was plenty in the city’s reserve fund to cover that without any problems. So what happened in the 2019 fiscal year? Danville ran a budget SURPLUS of $1.4 million. Yep, a surplus. Not another huge deficit as some would want you to think happens every year.
So what is Danville’s general fund sitting at the end of the 2019 fiscal year? Let’s take a look…
Over $40 million dollars, but let’s remember that not all of that could ever be spent. Those “assigned for” entries are mostly budgeted expenses that haven’t been paid out when the end date of the fiscal year happened. Let’s take those off the top. The school system gets to keep their unused $1,844,000 to help with next year’s expenses, so that’s off the table. And take a good look at the $3,000,000 that’s “committed to budget stabilization”. That means that is fecal matter hits the enhanced ventilation device, the city’s got $3 million to do whatever is needed to pay for whatever is needed to fix whatever is causing the problem. $3,000,000. Locked in, and you can’t touch that unless sorely needed. After all of that comes out, there’s about $31.5 million left in the pot.
That’s a lot of money. But Danville’s strong financial policies say that the city must always keep at least 20% of general fund operating revenues locked up just in case. That financial policy makes credit & bond rating companies very, very happy. So what does this really mean on the bottom line?
That means that the City of Danville, even after the $3 million budget stabilization set-aside and the $20.4 million policy set-aside has just over $11 million in the bank. ELEVEN MILLION DOLLARS.
Numbers don’t lie. The City of Danville isn’t broke nor is it going broke. Not now, and not in the next five years either. I hope this comprehensive look & discussion of the City’s general fund has taught you something…. because we call this a BreakDown.
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