The city of Greenville ended the 2015-16 fiscal year with more in cash reserves than required, leaving the city in a positive cash position, according to Kai Nelson, director of the city’s Office of Management and Budget. He said the figures were according to preliminary projections.
Nelson said the city has a requirement to keep a 20% reserve in its general fund. He said the city ended the fiscal year with a general fund balance of approximately $5.5 million over the required reserve.
“The city maintains the reserve requirement to fund working capital needs,” Nelson said. “There are about eight months out of the year when our expenses are more than our revenue because our revenue is cyclical.”
He said the city receives a bulk of its property tax and business license tax revenue in December through March. Revenues do come in in the other eight months of the year, but the expenses those months exceeds the revenue collected.
The positive cash reserve had led the city to earn a AAA credit rating from three national rating agencies. Nelson said that lends itself to additional positives for the city like lower borrowing costs for larger bond issues and no need to seek out bonds for short-term needs like paying the monthly expenses.
“If we don’t maintain adequate cash reserves, it means we have to go out and borrow money on a short-term basis,” Nelson said. “Those are revenue anticipation notes. Because of our cash reserves are where they are, we don’t need those notes.”
Nelson said the city’s special funds like the hospitality, accommodations and Sunday alcohol funds finished the fiscal year in “strong condition” allowing the city to use additional revenues to “support tourism-related activities.”
“Our city’s strong financial position is a direct result of smart decisions to invest in projects that not only make for great quality of life but also build our tax base,” said Mayor Knox White, in a statement. “We are now in a position to continue to focus on ways to make our residential neighborhoods and our commercial districts even better – and that’s our goal.”
According to Nelson, the city is preparing to take out long-term bonds for the new city fire station located on Verdae Boulevard totaling approximately $4 million and for the construction of a new public works facility on Fairforest Way. He said the cost of the public works facility is in excess of $25 million, but the long-term bond will only be for $6 million as the city has saved reserve funds to offset some of the cost of construction.
“The city has really been focused on moving those two projects forward,” Nelson said. “Since we have those complete, by a financial standpoint, it puts the city in a position to invest in other parts of the city for things like roads, streets and the city park district as well as downtown.”