December 04, 2013 - Oxford Village received good news from its auditor last week – the general fund's spendable cash reserves increased by $80,729 over last year.
"One of the things that we do like to look at is the total fund balance as a measure of financial health," explained Certified Public Accountant Aaron Stevens, a principal in the East Lansing-based firm of Abraham & Gaffney, P.C.
Stevens presented the village council with the 2013 audit report.
A fund balance is basically a government's savings account. It can be used to pay for things like unforeseen expenses, capital improvements and special projects or help offset revenue losses.
As of June 30, 2013, the end of the village's previous fiscal year, the general fund's total fund balance was $360,662.
That's an increase of $57,965 over last year.
Of that $360,662 total, $16,005 is considered nonspendable, leaving an unrestricted (or spendable) fund balance of $344,657.
That represents 17.1 percent of the village's total general fund expenditures ($1.79 million) and transfers out ($218,450) during the 2012-13 fiscal year.
That's a significant increase from June 30, 2012, when the spendable fund balance was at 13 percent or $263,928.
"That is an improvement over last year," Stevens said. "I think that's a good thing. It's positive news for the village."
Stevens noted he's "a little conservative," so he recommends a minimum fund balance of 20 percent, which in the village's case would equal approximately $402,000.
"The Government Finance Officers Association (GFOA) recommends (having enough cash reserves to fund) two months worth of operations," he said. "Two (months) divided by 12 (months) is 17 percent. I'm a little more conservative than that. I round up and I call it 20 (percent). But everybody's got an opinion."
Using the GFOA recommendation, the village would need to have approximately $342,000 in reserves. So, the municipality's $344,657 spendable fund balance slightly exceeds that.
Overall, revenues were up for the 2012-13 general fund budget, while expenditures decreased.
Total general fund revenues amounted to $1.835 million.
"That was an increase of about 2.6 percent over the 2012 revenue," Stevens said.
Total general fund expenditures amounted to $1.79 million, a decrease of approximately 1.5 percent from 2012.
"I find it very tantalizing that in the last two years, there has been a great improvement in terms of the way the village operates," said Councilman Elgin Nichols. "If you look back at 2008 to 2011, we're really spending more than what we're taking in. We finally are on a level where we're spending about what we're taking in, which is a lot better thing for this village to do."
"It's beginning to move in the right direction. We shouldn't stop what we're doing now, just make it better as we go along," Nichols added.
In the audit report, it was noted the biggest decrease in general fund expenditures was for public safety, i.e. police and dispatch services.
"Public safety expenditures were at their lowest point over the five-year period (starting with 2008-09)," Stevens said.
Public safety expenditures amounted to approximately $826,482 during the 2012-13 fiscal year, which is a decrease of $90,525 (or 10 percent) over the previous year.
The audit report attributed part of this to the fact that last year, as part of contract negotiations, the village and police union agreed to switch to less-costly health insurance coverage.
Overall, the village council was pleased with the audit report and the municipality's financial picture.
"(It) looks good for a change," Nichols said.
"We're moving in the right direction," said Councilman Bryan Cloutier.
CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.