BreakDown: The City of Danville’s “Bank Account”

Contrary to what a lot of people say and/or think, the City of Danville is not “in debt” or “broke”. Let’s take a comprehensive look at the city’s general fund balance in this BreakDown/NumbersCentral and see exactly what the dollar amounts say.

You can’t have the NumbersCentral part of this article without numbers, so let’s see the City of Danville’s General Fund Statement as of December 31st, 2015…

Let’s start with the bottom line first. Even after the Job Bust Tobacco Commission repayments, even after regularly scheduled municipal bond payments, even after every farkin’ thing… the City of Danville still has over $13 million dollars in the bank.

Let’s take a detailed look at what we have here, and we call that a BreakDown, folks. Bring on that Big Board….

• There’s $43,519,759.32 in the general fund now, but not all that could be spent on whatever would be needed or wanted. The city’s financial policies (which has been reviewed and audited with a clean opinion every year) say that the city must keep 20% of the city’s annual budget as non-touchable under any circumstances. That comes out to be a little over $19.5 million. If something happened where that amount would have to be touched, the city would be mandated to get it back up to that 20% level immediately.
• After we take out the No-Touch Money, we’re left with a little over $32.6 million. But again, some of that money is marked non-touchable. The first category is that is “Restricted”, and that’s money that’s been assigned to departments under grant programs. That’s the first three lines for the Commonwealth Attorney’s office and the police and fire departments and it’s a little less than $200,000.
• On the bottom line, we have $346,604 set aside for outstanding invoices and things that have been prepaid..
• Now, let’s look at the “Assigned” items. I don’t know what the Sheriff’s department assigned line item is for, but it’s a relatively small $39,000 amount. The “Assigned For Encumberances” line is for debt service that’s already been obligated.
• The line item that may surprise a lot of people is the “Assigned for Tobacco Repayments”. That’s the repayments scheduled to the Tobacco Commission for all the Job Busts. Because that’s already been assigned for repayment, that $2,853,301.37 debt has already been accounted for. Accounting procedures require that you mark off known liabilities like that, so the city has done it. When the city cuts the 2016 portion of the “four easy payment plan” checks to the Tobacco Commission, it’s not going to come out of this year’s tax revenue.
• I’m definitely not saying that having to repay the Tobacco Commission is a good thing, nor am I saying that the Job Busts shouldn’t be forgotten. I am saying that the money as already been allocated for the big set of screw-ups and nothing more will come from current & future tax revenues to pay off the Job Bust issue.
• Now let’s look at the “Committed” section. Again, I don’t know what the small amount for the Sheriff’s department is, and I’ll find that answer out. Here’s what I do know… The city has locked away $3 million in case of a revenue shortfall for any reason, whether lower than expected tax collections, an emergency or a disaster. Again, that’s smart financial planning and bond rating companies like to see extra back-up set aside for extreme circumstances. The $727,000 for the school system is “committed” because the city just doesn’t dump the school’s budget allocation in their lap in a one-time payment.
• The last “committed” item is $1,500,000 for the eventual GW stadium project. That project is a long way from getting started and the engineering studies are being done now. As of now, the plan is for the city to leverage that $1,500,000 to work with matching grants, regular grants and donations to come up with the total amount of money that will be spent on building a new stadium when (if?) that happens. We all know that you’re not going to be able to build a new stadium or stadium complex for just $1.5 million. Last year, city council decided to “commit” that money and freeze it in the general fund for when the stadium plans are ready to go.
• “Committed” money like the stadium project’s $1.5 million can be “de-committed” at any time and that money could go right back into the Money We Can Spend part of the general fund balance.
• Don’t be alarmed that the current general fund balance is $43.5 million compared to the fiscal year July 1st start number of $48.0 million. The city hasn’t “lost” $4.5 million in six months. The general fund balance can vary widely over months because of the timing of income and payments.

And there you have a BreakDown of what these numbers mean. City Council and the city could go out and blow over $13,000,000 on pretty much anything they want and it wouldn’t affect the city’s credit and bond ratings one bit. But let’s get real, that’s not going to happen. The city’s been very fiscally responsible and their audits and bond ratings prove that responsibility.

The City of Danville is not broke. The City of Danville isn’t in debt. They have financial obligations that have already been budgeted and accounted for, and the city still has $13,124,663.55 left over in case the bottom falls out. That ain’t bad.

There’s your NumbersCentral. There’s your BreakDown. You won’t get articles like this from any other media source in the region, folks. Thanks for coming to SouthsideCentral!