Macon has budget surplus for now, audit says

An audit of Macon’s most recently completed budget cycle shows the city has climbed out of a financial hole — at least temporarily.

By the time fiscal 2008 ended June 30 of this past year, the fund balance of the general fund had shifted from a more than $3.5 million deficit to a nearly $2.1 million surplus. The general fund is the pool of money used for most of the city’s day-to-day operations. Its fund balance is not actual cash but represents the relationship of the fund’s assets to its liabilities.

Mayor Robert Reichert called a news conference Monday morning to announce this basic conclusion of the audit, which was turned into the state at the end of December. He said the finding represents a “very positive development.”

“We are absolutely delighted with that result. ... It shows and confirms the city is headed in the right direction,” he said. Reichert declined to discuss details until he more formally presents the outside analysis of city spending to City Council this month. The report shows that general fund revenues came in about $1.4 million higher than expected, and spending turned out to be $3.9 million less than budgeted.

However, Reichert said, the positive fund balance may not last. For one thing, the city benefited from SPLOST dollars that were used to pay down debt that would otherwise have come out of the general fund. That excess revenue won’t necessarily be around in the future, as the tax will expire in March.

Additionally, accounting standards that recently became effective mean the city this year must start recording anticipated costs of paying for the health-care benefits that have been promised to future retirees. That means a new liability will show up on the books in the next audit.

Finance Director Tom Barber said it will take an actuarial study and calculations of workers’ potential lifespans and expected benefits to determine the exact impact. “It’s just going to be a big number,” Barber said.

But both he and the mayor said the goal is to build the fund balance along with the city’s cash reserves. Ideally, the city should have three months’ worth of operating money tucked away for emergency use, Barber said, while the fund balance should be as large as possible.

Macon’s general fund balance first showed signs of trouble two years ago, when the fiscal 2006 audit was released. That report indicated that Macon’s method of tracking interfund transfers had caused the city to overstate by more than $15 million the value of the fund balance.

When the numbers were corrected, it swung the fund balance from a more than $10 million surplus to a $5 million deficit, which the city has worked to reduce ever since.

Council member Rick Hutto, who attended Reichert’s news conference, said city officials must remain vigilant in managing Macon’s money. But he was pleased to hear about the direction in which things appear to be headed.

“I’m certainly glad about the shift, particularly given this economy,” he said.

To contact writer Matt Barnwell, call 744-4251.