I have been writing about the CAFR and sharing information on it since the 1990’s when I had a radio show at WFLA and shared how this system works along with other top issues affecting Americans. I am going to present information that is on the 2012 City of Tallahassee Comprehensive Annual Financial Report (CAFR). I want you to imagine that you make a million dollars a year, and your spouse does not know it. Now, I want you to spread out all that income into a massive accounting book.
The Spread looks like various accounts you hold, one of which is your general budget that you and your spouse run the family everyday living expenses from. That budget is $50,000.00 this year. That is what your spouse thinks you both have, and they are completely unaware that you have been taking money they have earned and been putting it in investment funds for twenty-five years. They have gotten multiple part-time jobs, worked very late hours for the family and are happy to make sure the family is healthy and happy. Now, you ask them to do more work to pay more money into the family budget because of an issue costing $10,000.00 has come up and the family needs more money.
They are already working 85 hours a week and just don’t know how much more they can do. Then, one day, they are looking for something and come across the comprehensive budget, and discover that through investments you have purchased massive holdings in every major company and put them into funds allocated for various things. They discover you have a rainy day fund of of two hundred thousand dollars! Do you think they might wonder why they need to work even harder? They also see that fund has a projected growth of $10,000.00 this year!
I imagine their first emotion is confusion because they trusted you, then it is hurt and sad, and then it is anger! Now, before they knew about this, you two were a team. They felt peace, loved you and you loved them. All was well, but when the truth was revealed that they have worked themselves very hard to support the family and keep the general budget on the plus side for twenty-fire years, it was just too much! The relationship is over and there is no recovering from the betrayal they feel, especially when they bring the books to you and ask for an explanation and you tell them, “Oh honey, that is for retirement and projects we have been working on!”
I mean, come on, if you were getting by on 50k a year and working 85 hours a week to get it, and found out you had 250k sitting aside and now your spouse wants you to add another 10 hours of work a week you might be angry. This is exactly what is happening in all the governments around America from local, state, to Federal, and the taxes keep getting raised, we are in debt, and now jobs are becoming scarce. Why exactly did the City of Tallahassee, Florida need to put a 5 cent per gallon of gas tax which will go in effect January 2014? They say they need the money, but from what I can see, they have over 259 million in unrestricted assets on the 2012 CAFR! But that is just the beginning:
This is not the full story though. It’s not just 259 million, because people will say, that’s just to run the city and meet it’s obligations. Is it? Is that all it is? You see, you need to read the CAFR to see where the money is hidden.
On page 23 of the CAFR we see how it is broken down:
An Overview of the Financial Statements:
The City’s basic financial statements comprise three components: 1) government-wide financial statements,2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementaryinformation in addition to the basic financial statements.
The government-wide financial statements of the City are divided into three categories:• Governmental activities– These include the basic services provided by the City including police, parksand recreation, public works, and general administration. Property, sales, and other taxes finance the majorityof these activities.• Business-type activities– These include services for which the City charges specific fees which are meantto cover the cost of providing the services. These include electric, gas, airport, fire protection, solid wastecollection, water, sewer, stormwater management, transit services, and the Hilaman Golf Course.• Component units– These are legally separate organizations for which the City Commission appoints thegoverning board and the City has financial reporting responsibilities. The City has one discretely presentedcomponent unit, the Downtown Improvement Authority, which is an agency created by the Florida Legislatureto regulate downtown growth. The City also has a blended component unit, the Community RedevelopmentAgency, which is blended as a major special revenue fund into the primary government (see Note I–A formore details).
FUND FINANCIAL STATEMENTS –
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregatedfor specific activities or objectives. The focus is on Major Funds, which provides detailed information about themost significant funds. The City, like other governmental entities, uses funds to ensure and demonstrate compliancewith financial requirements imposed by law, bond covenants, and local administrative and legislative actions. Allof the City’s funds can be divided into three categories: governmental funds, proprietary funds, and fiduciaryfunds.
Governmental funds are used to account for essentially the same functions as governmentalactivities in the government-wide financial statements. However, unlike the government-wide financial statements,governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well asbalances of spendable resources available at the end of the fiscal year. Since the focus of governmental funds isnarrower than that of government-wide financial statements, it is useful to compare information presented forgovernmental funds with similar information presented for governmental activities in the government-wide financialstatements.The City maintains thirteen (13) individual governmental funds. Information is presented separately in thegovernmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changesin fund balances for the General and the Community Redevelopment Agency Funds, both of which are consideredmajor funds. Data from the other eleven (11) funds are combined into a single, aggregate presentation. Individual
fund data for each of these nonmajor governmental funds is provided on pages 98 to 101 in this report
The City maintains two different types of proprietary funds.Enterprise fundsare used to report the same functionspresented as business-type activities in thegovernment-wide financial statements. The City maintains ten (10)individual enterprise funds.Internal Service Fundsare used to account for activities that provide goods and services to the City’s other programs
and activities. The City maintains thirteen (13) individual internal service funds.
Fiduciary funds are used to account for resources held for the benefit of parties outside the City.Fiduciary funds are not reflected in the government-wide financial statements because the resources of those fundsare not available to support the City’s programs and activities. The City reports two fiduciary funds. The basic
financial statements for these funds are provided on pages 44 to 45 in this report.
The following chart (p. 27) illustrates the City’s Revenues by Source for the City’s governmental activities.
GENERAL FUND BUDGETARY HIGHLIGHTSThe City’s general fund generated a positive variance of approximately $408,000 between the final amended budgetand actual results of operation. Actual revenues were less than final budgeted revenues by $2.2 million, or 1.6%;these variances were spread across most revenue sources as the City’s revenue stream continues to be impacted bythe economic environment. Actual expenditures for the year were less than final budgeted expenditures by $2.6million, or 1.9%, these variances were spread across most expenditure line items due to regular budget monitoring
and continuation of soft freezes on hiring for vacant positions.Anita Favors: City Manager
Personnel expenditures account for approximately 24.7% of the City’s Operating Budget. The City’s fiscal year2013 operating budget includes a net decrease of 44 positions, bringing the budgeted full time equivalent staff
count to 2,802. (p. 33)
A ten gallon tank at $2.00 / g cost $20.00 to fill up. A lot of people live 20 to 30 minutes from where they work, and fill up twice a week. So, when Bush left office, they were paying $40.00/ week to get around, drop children off to school, get to work and do other things. Now, they are paying $3.30/g which comes up to $33.00 per fill up and totals $66.00 / week. Times that by a round number of 4 and we get $264.00 per month the citizens of Tallahassee are paying to drive now compared to $160.00 five years ago. The City is cutting jobs, raising taxes, and lying to the Citizens.
City of Tallahassee-Leon County Blueprint 2000 Inter governmental AgencyIn October 2000, the City entered into an interlocal agreement with Leon County as authorized by Section163.01(7) Florida Statutes. This agreement created the Blueprint 2000 Intergovernmental Agency to governthe project management for the project planning and construction of a list of projects known as the Blueprint2000 projects. The Board of County Commissioners and the City Commission constitute the Blueprint2000 Intergovernmental Agency.The revenues to fund the projects under this agreement are thecollections of the local goverment infrastructure sales surtax, which began December 1, 2004. This tax wasextended pursuant to the provisions in Section 212.055, Florida Statutes, until December 31, 2019.Periodically, the Agency provides construction management services to the City. For these services theAgency and the City enter into Joint Participation Agreements (JPAs) whereby the City agrees to pay anadministrative fee to the Agency. During the fiscal year ended September 30, 2012, the City paid nothingunder these JPAs.Current audited financial statements may be obtained from Blueprint 2000, 2727 Apalachee Parkway,
Suite 200, Tallahassee, Florida 32301
In the best of times, a city government spending $2.1 million to renovate a government owned building to facilitate a restaurant would be tough to justify. But given the facts surrounding the City of Tallahassee’s venture into what is now called the Brew Pub at Cascades Park, it is hard to believe that the City Commission could vote 5-0 to move forward with such a project. Read about it here:
Let’s get back to the CAFR. I just wanted to show how YOUR money is going via the commission and Ms. Favors to their friends. How you the citizen are being charged for it, and they want to raise taxes and lay off employees.
One of the statements made in the CAFR about the funds is:
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, eventhough the latter are excluded from the government-wide financial statements. Major individual governmentalfunds and major individual enterprise funds are reported as separate columns in the fund financial statements. (p.57)
The government reports the following major governmental funds:• The General Fund is the government’s primary operating fund. It accounts for all financial resources of thegeneral government, except those required to be accounted for in another fund.• The Community Redevelopment Agency Fund accounts for the general tax revenue collected and theexpenses incurred in the redevelopment of properties in the Community Redevelopment area.The government reports the following major proprietary funds:• The Electric Fund accounts for the assets, operation and maintenance of the City-owned electric generation,transmission, and distribution system.• The Gas Fund accounts for the assets, operation and maintenance of the City-owned gas system.• The Sewer Fund accounts for the assets, operation and maintenance of the City’s wastewater system.• The Water Fund accounts for the assets, operation, and maintenance of the City’s water production anddistribution system.• The Airport Fund accounts for the assets, operation, and maintenance of the City-owned regional airport.• The Stormwater Fund accounts for the assets, operation, maintenance, and expansion of the City-ownedstormwater utility system.Additionally, the government reports the following fund types:• Internal Service Funds account for various services provided to other departments of the government and toother governments on a cost reimbursement basis. The services provided include an 800 megahertzsystem, revenue collection, information systems services, accounting operations, fleet management, employeerelations operations, employee retirement plan’s administrative operation, risk management operation, internalloans program, utility services functions, and wholesale energy operations.• The private purpose trust fund is used to account for resources legally held in trust for Florida PowerCorporation (FPC) for the future decommissioning of the Crystal River Unit 3 Utility Plant (CR3 Plant).On October 1, 1999, the City sold its interest in the CR3 Plant to FPC and was released from anydecommissioning costs in excess of the amount held in trust. The plant’s decommissioning is anticipated
to begin in 2016.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues andexpenses generally result from providing services and producing and delivering goods in connection with a proprietaryfund’s principal ongoing operations. The principal operating revenues of the enterprise funds, and of the City’sinternal service funds, are charges to customers for sales and services. The water and sewer funds also recognize asoperating revenue the portion of the tap fees intended to recover the cost of connecting new customers to thesystem. Operating expenses for enterprise funds and internal service funds include the costs of sales and services,administrative expenses, and depreciation on capital assets.All revenues and expenses that do not meet this definitionare reported as nonoperating revenue and expenses. When bothrestricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and thenunrestricted resources as they are needed.
To be Continued