To most Mammoth Voter’s, I believe the Town’s Budget is the single most important issue before us. The Town’s Budget represents the financial foundation for what will be the Town’s work plan for the coming year. Without going into mind-boggling detail, let’s look first at the Town’s Reserve Accounts, and then at our Operational Budget.
First, our many Reserve Accounts consist of things like our Reserve for Economic Uncertainty (REU), Self Insurance Fund, Vehicle & Equipment Replacement, Employee Leave Reserve, Capital & DIF Reserves, and about 20 more, smaller reserve accounts. It is also important to keep in mind that a considerable amount of the money kept in the Town’s Reserve Accounts are, by definition, committed to future construction of Capital Projects. During just the past three years, the Town has spent around $7 million from our Reserve Accounts to continue with construction of some $44 million in several large and small Capital Projects such as the Lake Mary Bike Trail ($14 million), the Airport Runway ($10 million) and Airport Terminal building ($2 million), the purchase and remodeling of our Transit facility ($4.5 million), and others. So, the $7 million in Capital Reserve accounts was leveraged to construct $44 million in mostly grant funded, beneficial community projects.
In total, the amount of money in these various “Reserve Accounts” in 2005 was $13,703,000, and today that total is nearly the same at $13,438,788. Largely because of local development, and the resulting “economic golden years”, the amount of money in these reserve accounts ballooned to $20,321,857 and $19,915,131 during 2006 and 2007, respectively. It was that incremental $7 million gained in our Capital Reserve Accounts that was spent on the $44 million dollars of Capital Projects.
The current $13 plus million in our 20 various Reserve Accounts, compares to an overall operational budget of $16.3 million, and represents a much higher level of set-aside funding for Reserve Accounts than most other cities. Additionally, the 25% funding of the Town’s REU, is also very high when compared to other cities. Mono County by comparison has a “Reserve” of 11% of its budget, drew down around $1 million this past year, and expects to continue drawing down Reserves for the next two years. The Bottom Line is that even though the Town’s overall Reserve Account funding is not at the Peak levels of 2006 and 2007, it is still at an exceptionally high level, and represents one aspect of financial health.
Now let’s look at the Town’s Operational budget.
One year ago the adopted Council budget produced a Revenue Surplus of $91,000, which was transferred 100% into the REU. This year, the Council further lowered Revenue projections, and estimated revenues for the year at 92% of the prior year. And the final adopted budget was $16.3 million. Our 2009-2010 Budget was not only balanced, it will also result in yet another “Revenue Surplus” of something in the $100,000’s, possibly as much as $800,000. This extra $800,000 should also be put into the REU to help bring the REU back up to the historical 25% level.
This discussion is meant to help in understanding that for the past two years the Town Budgets have been balanced, and both have generated Revenue Surplus’s. It also identifies that $7 million was spent from Reserve Accounts to fund $44 million in Capital Projects. It also shows that the $13 million in our Reserve Accounts, although not at the Peak levels, are still at the 2005 levels. And more importantly, the Town’s Reserve Account funding level is substantially above what most cities and counties fund.
Can we do better? Absolutely! And we should continue to estimate our Budget Revenues conservatively, and keep expenditures low, so that the trend continues and annual Revenue Surplus’s occur.
I support a continuation for 2010-2011 of the $16.3 million dollar Operating Budget we had in 2009-2010, down from the high during the Peak budget of 2007-2008 of $17.8 million. I also support a continuation of the two Furlough Days per month, putting all of any Revenue Surplus into the REU, until it regains the 25% level, and funding our new DMO at 100% of Measure A dollars. I also support making necessary staffing cuts, so that there will be sufficient funding for our newly reorganized Parks and Recreation Department, and including the re-instatement of the three winter-time, public works, snow removal operator positions.